LAW:

Will Supreme Court's health care ruling imperil Clean Air Act?

Within hours of yesterday's monumental Supreme Court ruling upholding the 2010 health care reform law, environmental law scholars were already pondering whether it could have an impact on the Clean Air Act.

Their answer? A qualified "yes."

They focused on two elements of the decision.

First was the court's ruling on a 7-2 vote that the federal government cannot take away all of a state's Medicaid funding if it declines to implement new provisions that were introduced under the reform law.

The second was the conservative majority's finding on a 5-4 vote that the Affordable Care Act's "individual mandate" requiring people to buy health insurance was unconstitutional under the Commerce Clause of the Constitution (the court ultimately upheld the individual mandate, but only on the basis that the penalty faced by nonparticipants is a tax).

Some see similarities between the Medicaid provisions in the health care law and how the federal government interacts with states over of their role in enforcing the Clean Air Act via so-called state implementation plans, known in U.S. EPA lingo as SIPs.

The federal government has in the past sought to withhold highway funding unless a state plays ball, although disputes have always been settled, according to environmental law experts.

Chief Justice John Roberts wrote in his majority opinion that the Medicaid section of the law was unconstitutional if existing funding was withdrawn if a state didn't want to expand its Medicaid program as part of the 2010 reforms.

"Congress has no authority to order the states to regulate according to its instructions," he wrote. "Congress may offer the states grants and require the states to comply with accompanying conditions, but the states must have a genuine choice whether to accept the offer."

Congress cannot "penalize states that choose not to participate in that new program by taking away their existing Medicaid funding," Roberts concluded.

Jonathan Adler, a law professor at Case Western Reserve University School of Law, was quick to see a link to the Clean Air Act. He wrote a blog post within an hour of the ruling in which he noted that parts of the Clean Air Act "are likely to be challenged on these grounds."

In a follow-up email, Adler wrote that Roberts had "put some teeth" into a previous ruling, South Dakota v. Dole, that touched on the question in the context of a federal law that withheld highway funding from states that lowered the legal drinking age. In that case, the court upheld the law but concluded that there were limits on what kinds of coercion the federal government could use.

In the health care case, Congress' message to the states was not an inducement but rather "a gun to the head," Roberts wrote in his opinion.

As Adler noted, he has always thought that "the use of conditional spending as an enforcement/inducement measure in some environmental statutes was potentially problematic under South Dakota v. Dole."

After yesterday's ruling, "there's a good chance we'll find out whether I'm correct," he added, partly in reference to the willingness of some state attorneys general, including Greg Abbott (R) of Texas, to challenge EPA authority.

Ann Carlson, a professor at the University of California, Los Angeles, School of Law, also raised the Medicaid issue in the Clean Air Act context yesterday.

"The question now is whether that condition -- enact a comprehensive and legitimate SIP or lose highway funds -- is constitutional in the wake of the health care case," Carlson noted in her own blog post.

Some states are currently battling EPA over SIPs. For example, Texas and Wyoming have challenged EPA's move to take over their greenhouse gas permitting authority. That case is currently before the U.S. Court of Appeals for the District of Columbia Circuit (E&ENews PM, June 5).

John Elwood, an attorney with Vinson & Elkins in Washington, said legal challenges citing the Medicaid section of the health care decision in relation to the Clean Air Act are only a matter of time.

The only question is "how soon the suits are brought," he added.

Lower courts will then have to "draw the lines of where acceptable incentives become unconstitutional coercion," Elwood said.

Commerce Clause debate

What's less clear at this point is whether the court's discussion of the Constitution's Commerce Clause, which is often used as the underpinning of acts of Congress, has any bearing on environmental law.

The majority held on that point that the health care law was in fact unconstitutional under the Commerce Clause, which allows Congress to regulate interstate commerce. Roberts raised in his opinion the distinction between regulating existing economic activity and forcing people to enter the market, which is how the chief justice viewed the individual mandate.

In the future, the debate over what kind of activity can be regulated under the Commerce Clause will only intensify, legal scholars predict.

In the environmental context, David Driesen, a professor at Syracuse University College of Law, posed a hypothetical question in yet another blog post: "Under the Clean Air Act, the government has the authority to order a company to install a pollution control device. Does use of this authority compel a firm inactive in the market to become a market participant against their will in violation of the health care ruling?"

Driesen, however, concluded that there is plenty of evidence the Supreme Court decision "will not invalidate all of the many regulations that compel action."

Pollution controls regulate "an ongoing activity ... even if it does so by ordering a product purchase," he added.

This is only the beginning of the analysis of the health care decision as it relates to environmental law, a point that Jonathan Zasloff, another UCLA law professor, made in a blog post responding to Carlson's.

"This is all very preliminary, of course," he wrote. "And have no fear: oceans of ink will be spilled on this stuff."

Click here to read the Supreme Court's health care ruling.

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