Raich and Comprehensive Schemes

Raich and Comprehensive Schemes

Lopez and Morrison placed the dividing line at economic activity, and Gonzales v. Raich tested that line a decade after Lopez on facts that looked as though they fell on the wrong side of it.¹ California's Compassionate Use Act, enacted by the voters in 1996, authorizes limited marijuana use for medicinal purposes by seriously ill residents on a physician's recommendation or approval.² Angel Raich and Diane Monson were California residents who used marijuana on that basis after their physicians concluded that conventional medicines had failed. Monson grew her own plants, while Raich relied on two caregivers who grew marijuana and gave it to her at no charge.³ In August 2002, federal Drug Enforcement Administration agents seized and destroyed all six of Monson's plants, although county officials had concluded after investigation that her use complied with California law.⁴

The two women sued for an injunction against enforcing the federal Controlled Substances Act to the extent it barred them from possessing, obtaining, or growing cannabis for personal medical use. The district court denied a preliminary injunction, and the Ninth Circuit reversed, relying heavily on Lopez and Morrison to hold that this separate class of purely local, noncommercial activity was beyond federal power.⁵ The Supreme Court vacated that judgment by a vote of six to three. It held that Congress's Commerce Clause authority includes the power to prohibit the local cultivation and use of marijuana in compliance with California law.⁶ A statute that reached homegrown medical marijuana was therefore sustained a decade after the Court had struck down one reaching a gun in a school zone, and the two outcomes need an explanation.

Three ideas supply it, and each has its own subsection. The first is the class-of-activities reasoning drawn from Wickard v. Filburn, under which Congress may reach a local activity that is not itself commercial when leaving the whole class of that activity unregulated would undercut its regulation of the interstate market in the commodity. Review at that step asks only whether Congress had a rational basis for that conclusion.⁷ The second is the difference between a challenge to one provision of a comprehensive regulatory scheme and a challenge to a single-subject statute, which the majority gave as its reason that Lopez and Morrison did not control.⁸ The third is Justice Scalia's concurrence in the judgment, which grounds federal power over local activity in the Necessary and Proper Clause.⁹ The first subsection, Class of Activities, begins with the parallel the majority drew between homegrown marijuana and the wheat Roscoe Filburn grew for his own farm.

Class of Activities

The majority's first step in Raich is the class-of-activities reasoning of Wickard v. Filburn, and it needs precise statement because the home growers in Gonzales v. Raich sold nothing. Wickard establishes that Congress can regulate purely intrastate activity that is not itself commercial, in that it is not produced for sale, if Congress concludes that failure to regulate that class of activity would undercut the regulation of the interstate market in that commodity.¹⁰ Applying that reasoning, the Court held that Congress may regulate the intrastate cultivation and use of marijuana allowed by state law when the regulation is part of a comprehensive federal scheme to control interstate drug trafficking.¹¹ Two features of the rule carry the weight. The thing regulated is a class, so the inquiry looks at all growers taken together and not at one grower's patch. The justification is protective, because the local activity is reached when leaving it outside would damage a federal regulation of an interstate market.

The reason for looking at the class lies in how market regulation works. A program that controls supply or price depends on controlling every source of supply, since any source left outside becomes a route around the program. When Congress decides that the total incidence of a practice poses a threat to a national market, it may regulate the entire class.¹² If Congress had to show, grower by grower, that each one's output mattered, every grower could claim to be too small to count, and the program would unravel one exemption at a time. For that reason, when a general regulatory statute bears a substantial relation to commerce, the trivial character of individual instances arising under it is of no consequence.¹³

The Raich majority found the similarities with Wickard striking.¹⁴ Like Roscoe Filburn, the respondents were cultivating, for home consumption, a fungible commodity (one in which any unit can stand in for any other) for which there is an established, though illegal, interstate market.¹⁵ The two statutes also aim at the same variables. The Agricultural Adjustment Act was designed to control the volume of wheat moving in interstate commerce in order to avoid surpluses and thereby control price, and a primary purpose of the Controlled Substances Act is to control the supply and demand of controlled substances in both lawful and unlawful markets.¹⁶ Diane Monson's six home-grown plants, destroyed by federal agents in 2002, belonged to the class that the Act's closed system of prohibition covered, and the Court sustained the Act as applied to them.¹⁷

The link between the two cases is the risk of diversion, which means home-grown supply being drawn into the commercial market. One concern behind including home-consumed wheat in the 1938 Act was that rising market prices could draw that wheat into the interstate market and lower prices there. The parallel concern for marijuana is that high demand in the interstate market will draw home-grown marijuana into that market.¹⁸ The federal goals differ, and so does the harm diversion does. Diverted wheat frustrated the federal interest in stabilizing prices by regulating the volume of transactions, while diverted marijuana frustrates the federal interest in eliminating commercial transactions in the interstate market entirely.¹⁹ In both cases, production of the commodity meant for home consumption has a substantial effect on supply and demand in the national market for that commodity.²⁰ Fungibility is what makes the worry realistic, because a home-grown unit cannot be told apart from market supply and is never more than an instant from the market.²¹

The respondents tried to separate the two cases in three ways, and the Court's answers show how much the reasoning depends on the class and how little on the individual grower. They said that the wheat statute exempted small farms, that Filburn ran a commercial farm, and that the Wickard record showed a significant aggregate effect on prices. The Court conceded that these differences were factually accurate but denied that they diminished the force of the reasoning.²² Filburn's own impact on the market was trivial by itself, and that was no reason to remove him from federal regulation. The Secretary's decision to exempt even smaller farms said nothing about the power to regulate all those whose aggregated production was significant. The home-grown wheat was not treated as part of his commercial farming operation, and Congress's findings in the Controlled Substances Act supplied the causal connection that the Wickard record had supplied for wheat.²³

The standard of review is what makes the reasoning easy to satisfy. The Court called its task a modest one: it need not decide whether the respondents' activities, taken in the aggregate, substantially affect interstate commerce in fact, but only whether a rational basis exists for so concluding.²⁴ Rational basis review asks whether a reasonable legislator could have reached the conclusion, and the Court found that Congress could have, given the enforcement difficulties in distinguishing marijuana cultivated locally from marijuana grown elsewhere and the concerns about diversion into illicit channels. Congress therefore had a rational basis for believing that failure to regulate the intrastate manufacture and possession of marijuana would leave a "gaping hole" in the Act.²⁵ The mechanism is simple: an exemption covering a significant segment of the total market, including use by friends, neighbors, and family, would undermine enforcement of the whole scheme, so Congress's judgment to the contrary is entitled to a strong presumption of validity, and the Court called that judgment "visible to the naked eye."²⁶ The dissent would have required the Government to show in fact that homegrown medical marijuana substantially affects interstate commerce, and the difference between the two positions is the difference between a rational basis and a proven effect.²⁷

The same logic explains why the Court refused to let the challengers redraw the class. The Ninth Circuit had isolated a narrow category, the intrastate, noncommercial cultivation and use of marijuana for personal medical purposes on a physician's advice and in accordance with state law, and had held that category beyond federal reach. The Supreme Court held that Congress acted rationally in treating even this subdivided class as an essential part of the larger regulatory scheme.²⁸ If the narrow category fell outside federal power, so would personal use of any home-grown drug, for any purpose and in any State, and that sweep shows why the class cannot be cut up at will.²⁹ That the regulation ensnares some purely intrastate activity was of no moment to the majority, which refused to excise individual components of a larger scheme.³⁰ The next subsection explains why that refusal followed from the nature of the challenge.

State authorization does not change the analysis. The Supremacy Clause provides that when federal and state law conflict, federal law prevails, and the federal power over commerce is superior to the States' power to provide for the welfare of their inhabitants, however legitimate or pressing the needs they invoke.³¹ The Court reasoned that state acquiescence cannot expand the commerce power, so state action cannot narrow it either.³² If a State's choice to legalize an activity could remove it from the class, the reach of federal power would vary from State to State, and each State's permissiveness would become a gap in the national scheme. The respondents answered that California had sealed its medical marijuana off from the interstate market, but the Court called that notion dubious and, more importantly, one that Congress could rationally have rejected.³³

On an exam, the usual error is to treat the absence of any sale as the end of the analysis, because the reasoning applies precisely to activity that is not itself commercial. The question is whether the activity belongs to a class of a fungible commodity that has an interstate market, and whether Congress had a rational basis to conclude that exempting the class would leave a gap in a comprehensive scheme regulating that market. The opposite error is to treat the reasoning as available whenever a statute is broad. It protects a regulation of an interstate market in the same commodity, so it does not reach activities unconnected to such a market, a limit that the next subsection develops by returning to Lopez and Morrison.

Scheme Versus Single Statute

The respondents in Gonzales v. Raich treated the Controlled Substances Act, taken as a whole, as a valid use of the commerce power. They pressed their claim on United States v. Lopez and United States v. Morrison, which the Ninth Circuit had read to place a separate class of purely local activity beyond federal reach.³⁵ The majority replied that this reliance overlooked the larger setting of modern commerce doctrine that those cases preserved, and that it read them far too broadly.³⁶ Its reply has two parts. The first concerns the kind of challenge the respondents brought, and the second concerns the kind of statute under attack. A comparison of the three decisions needs both parts, because each part alone leaves out something the Court relied on.

The first part turns on what the challengers asked the Court to do. In both Lopez and Morrison the parties argued that a particular statute or provision fell outside Congress's commerce power in its entirety, whereas the respondents here asked the Court to excise individual applications of a concededly valid statutory scheme.³⁷ The majority called that difference pivotal, because the Court has often said that when a class of activities is regulated and the class lies within the reach of federal power, courts have no power to excise individual instances of the class as trivial.³⁸ The reason is the one that supports aggregation. A program that works by controlling a whole market depends on controlling each source of supply in it, so if a court could trim the class one application at a time, every challenger would describe their own activity narrowly enough to look insignificant, and the scheme would come apart through exemptions that each seemed harmless.³⁹ A challenge to a stand-alone statute poses a different question, since there is no valid regulatory whole to protect, and the court asks only whether the statute as a whole fits within one of the three categories. That was the question Lopez and Morrison answered against the government.

The second part turns on what each statute regulated. The Gun-Free School Zones Act at issue in Lopez was a brief, single-subject statute that made it a crime to possess a gun in a school zone, regulated no economic activity, and required no connection between the possession and past interstate activity or a predictable impact on future commercial activity.⁴⁰ Lopez had distinguished the earlier cases that let comprehensive regulatory statutes reach local conduct with little impact in isolation, and it held that the school-zone ban was not an essential part of a larger regulation of economic activity in which the scheme could be undercut unless the intrastate activity were regulated.⁴¹ The Controlled Substances Act stands at the opposite end of that spectrum. It is a lengthy and detailed statute creating a framework for regulating the production, distribution, and possession of five classes of controlled substances, and Congress itself made the initial classifications, listing 42 opiates, 22 opium derivatives, and 17 hallucinogenic substances in Schedule I, where marijuana appeared as the tenth item in the third subcategory.⁴² The majority concluded that the Act regulates quintessentially economic activities, namely the production, distribution, and consumption of commodities for which there is an established and lucrative interstate market.⁴³ Prohibiting the intrastate possession or manufacture of an article of commerce is therefore a rational means of regulating commerce in that product.⁴⁴

The pair is easy to mix up, because each is a federal criminal ban on locally possessing or growing something. Students lose the comparison when they look at the conduct each statute punishes, since that conduct looks alike. What differs is what each ban belongs to. Applying the school-zone ban to Alfonso Lopez could not be defended as one applied piece of a comprehensive program, because the statute was the entire program and had no economic regulation for the local activity to protect.⁴⁵ Applying the marijuana ban to home cultivation is part of a larger regulation of economic activity that Congress could rationally conclude would be undercut if the local activity were exempt, so the application stands.⁴⁶

That packaging is exactly what the dissent finds troubling. Justice O'Connor's dissent begins with the identification of the relevant conduct. It says the majority takes its cues from Congress and applies the commerce considerations to what the Act regulates in general, because Congress chose one comprehensive prohibition on all controlled substances and did not distinguish among forms of intrastate noncommercial marijuana use.⁴⁷{{cite:see-also:expert:cm19e0499f66298e30140c78e}} In the dissent's view, letting Congress set the terms of the constitutional debate by packaging regulation of local activity inside broader schemes amounts to removing meaningful limits on the commerce power.⁴⁸ The dissent would define the conduct as the personal cultivation, possession, and use of marijuana for medicinal purposes. It offered objective markers for doing so: federal and state law both treat medical and nonmedical drug use as realistically distinct and regulate them differently, the respondents challenged only the medical application, and the case sits in the areas of criminal law and social policy where States lay claim by right of history and expertise.⁴⁹

The sharper charge is that the majority reduces Lopez to a drafting guide.⁵⁰ If placing local activity in a comprehensive scheme confirms that the activity is essential to the scheme, then Congress could have saved the school-zone ban by describing the crime as possessing or transferring a firearm anywhere in the Nation, a description that sweeps in commercial and noncommercial activity together and clearly includes some activity with a substantial effect on commerce.⁵¹ The incentive follows from that reading. A legislature that wants to reach local conduct need only write broadly, or attach the conduct to an existing regulatory scheme, and the limit announced in Lopez would then bind only the careless drafter.⁵² The dissent did not reject the principle underneath the majority's position. It agreed that a court must look beyond the respondents' own activities, since otherwise any litigant could escape regulation by pointing out that their personal conduct has no substantial effect, and it described the task as finding a mode of analysis that lets Congress regulate more than nothing and less than everything.⁵³

What remains contested is the level of generality at which the class is defined. Lopez had cautioned that, depending on the level of generality, any activity can be looked upon as commercial, and the dissent turned that caution against the majority. It argued that the majority shifted its focus from the activity in the case to everything the Act regulates, and that the majority's definition of economic activity threatens to sweep all productive human activity into federal reach.⁵⁴ The majority held the line at the scheme. It concluded that Congress acted rationally in treating the narrowed class the Ninth Circuit had isolated, the intrastate, noncommercial cultivation and use of marijuana for personal medical purposes in accordance with state law, as an essential part of the larger regulatory scheme.⁵⁵ Each way of fixing the class carries a cost. If the challenger defines the class, anyone can escape a comprehensive scheme by naming their own activity narrowly, and the scheme fails for the reason given above. If the scheme defines the class, drafting decides how far federal power reaches, which is the dissent's complaint. The majority's answer depends on the scheme genuinely regulating an economic market whose integrity turns on the local activity.⁵⁶

Justice Scalia, concurring in the judgment, called the drafting-guide criticism unjustified. He reasoned that the power to regulate local activity in aid of an interstate regulation can be exercised only in conjunction with regulation of an interstate market, and that it extends only to measures necessary to make that regulation effective.⁵⁷ That response moves the question from how the statute is packaged to whether the local rule is necessary to the interstate one, and the next subsection develops it.

A strong answer states both of the majority's distinctions and then flags the dissent's drafting-guide objection and the level-of-generality dispute as live criticisms, because they show where an opposing argument would attack the reasoning.

Necessary and Proper Route

The majority in Gonzales v. Raich built its result on the class-of-activities reasoning of Wickard v. Filburn. Justice Scalia, concurring in the judgment, agreed that the Controlled Substances Act may validly be applied to the respondents, but he explained that his view of the doctrinal foundation was more nuanced than the Court's.⁵⁹ Because this is a concurrence in the judgment, its reasoning is an alternative route to the same result and does not state the majority's holding. It still deserves separate study for two reasons. It explains why the third commerce category needs a second constitutional source, and its Necessary and Proper theme returns when the Court later limits that clause. The concurrence begins with a criticism of how the cases are usually recited. The decisions mechanically list three categories: channels, instrumentalities and persons or things in commerce, and activities that substantially affect commerce. The first two are self-evident because they are the ingredients of interstate commerce itself, while the third is different in kind, and reciting it without explanation is misleading and incomplete.⁶⁰

The third category is misleading because of what it describes. Channels, instrumentalities, and the persons and things moving in commerce are themselves part of interstate commerce, so a power to regulate commerce reaches them directly. An activity that substantially affects commerce is not part of it, and its only tie to federal power is the effect it produces, so the text of the Commerce Clause alone does not cover it.⁶¹ A second source is required, and the last clause of Article I, Section 8 supplies it by authorizing Congress "To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof."⁶² The concurrence traces Congress's authority over intrastate activities that are not themselves part of interstate commerce, including activities with a substantial effect on it, to that clause.⁶³ The principal dissent accepted the same starting point and described the substantial-effects power as one that derives from the conjunction of the Commerce Clause and the Necessary and Proper Clause, so the disagreement between the two opinions lies in how far that conjunction reaches.⁶⁴ The conjunction matters because the clause lets Congress enact laws that carry an enumerated power into execution even when Congress could not enact them in isolation.⁶⁵

The concurrence also calls the third category incomplete, because the clause supports more than regulation of activities that substantially affect commerce. Regulation of intrastate activity can be necessary to and proper for regulating interstate commerce in two situations. In the first, the commerce power lets Congress remove potential obstructions to interstate commerce and restrict potential stimulants to it, which is the source of the decisions sustaining regulation of surface coal mining, discrimination by restaurants and hotels, and intrastate price-fixing on a substantial-effects theory.⁶⁶ In the second, Congress may regulate an intrastate activity that does not itself substantially affect commerce when the regulation is needed to make a regulation of interstate commerce effective. The concurrence found support for that second situation in United States v. Lopez itself, which recognized that noneconomic conduct could be reached as an essential part of a larger regulation of economic activity in which the scheme could be undercut unless the intrastate activity were regulated.⁶⁷ The two situations commonly overlap and may have been confused in the past, yet the regulation of an intrastate activity may be essential to a comprehensive regulation of interstate commerce even though the activity does not substantially affect commerce on its own.⁶⁸

Two older decisions show the second situation at work. In United States v. Darby Congress had adopted the policy of excluding from interstate commerce goods made under substandard labor conditions, and the Court sustained both the wage and hour rules and a requirement that employers keep employment records to show compliance.⁶⁹ The wage and hour rules rested in part on the great effect of the regulated activity, but the recordkeeping requirement, which reached even intrastate transactions, was affirmed on the sole ground that it was an appropriate means to a legitimate end.⁷⁰ In the Shreveport Rate Cases the Court said that the clause gives Congress no authority to regulate a State's internal commerce as such, but that it does allow Congress to take all measures necessary or appropriate to regulate the interstate market effectively, although intrastate transactions may thereby be controlled.⁷¹ The principle follows from how regulation works. A rule that governs only the interstate part of a market invites evasion through the part left uncovered, and a record kept for only some of an employer's transactions cannot show whether the standards are being met. Control of the local measure is therefore incidental to control of the market, which is why the concurrence treats it as a means and never as an end in itself.

Because the power reaches local activity, it needs limits, and the concurrence supplies two. The first is structural. Unlike the power over activities that substantially affect commerce, the power to enact laws enabling effective regulation of interstate commerce can be exercised only in conjunction with congressional regulation of an interstate market, and it extends only to measures necessary to make that regulation effective.⁷² The reason is that the clause is incidental by nature: it carries a principal power into execution, so when no interstate market is regulated there is nothing for a local rule to make effective. Congress may regulate noneconomic intrastate activity only where failing to do so could undercut its regulation of interstate commerce, and the concurrence reasoned that a power confined in this way does not threaten the line between what is truly national and what is truly local.⁷³ That confinement also answers the dissent's charge that the approach reduces Lopez and Morrison to a drafting guide. Attaching a local rule to a broad statute does not create necessity, because necessity is judged by whether the interstate regulation would be weakened without the local rule.⁷⁴

The second limit looks at the means and comes from McCulloch v. Maryland. Even when the end is legitimate, the means must be appropriate and plainly adapted to it, must not be otherwise prohibited, and must be consistent with the letter and spirit of the Constitution.⁷⁵ These phrases carry weight. Decisions such as Printz v. United States and New York v. United States treat a law that violates a principle of state sovereignty as not proper for carrying the commerce power into execution.⁷⁶ The two limits do different work. The first ties the local rule to a regulated market, which keeps the clause from becoming a free-standing power. The second tests the means themselves, so it protects the structure of federalism even when the market regulation is valid and the local rule would help it.

The concurrence applied these limits to the Controlled Substances Act in a few short steps. In the Act, Congress undertook to extinguish the interstate market in Schedule I controlled substances, including marijuana, and the Commerce Clause unquestionably permits that, because the power to regulate interstate commerce reaches regulations that prohibit it as well as those that aid and protect it.⁷⁷ To carry out that goal, Congress prohibited almost all intrastate activities related to Schedule I substances, both economic ones such as manufacture and distribution and noneconomic ones such as simple possession.⁷⁸ That simple possession is noneconomic is immaterial under this route, since the only question is whether each prohibition is an appropriate means of eradicating Schedule I substances from interstate commerce.⁷⁹ Fungibility answers that question. Marijuana is a fungible commodity, so controlled substances made and sold within a State cannot sensibly be separated from those made and sold across state lines, and marijuana grown at home and possessed for personal use is "never more than an instant from the interstate market," whether or not the use is medicinal or lawful under state law.⁸⁰ Congress also need not accept on faith that a State can keep a lawful medical market sealed off from the general one, because a scheme that depends on means controlled by another government is precarious.⁸¹ The second limit did not help the respondents either, since the claim that the Act regulates an area typically left to the States does not make federal regulation an inappropriate means. Congress may regulate private endeavors within the commerce power even when that preempts contrary state-law determinations.⁸² The concurrence therefore agreed that, however the class of regulated activities is subdivided, Congress could reasonably conclude that its objective of prohibiting marijuana from the interstate market could be undercut if those activities were excepted.⁸³

The same two limits explain why the route would not have rescued the statutes struck down in Lopez and United States v. Morrison. Those decisions hold that Congress may not regulate certain purely local activity within the States based solely on the attenuated effect it may have on the interstate market, but they do not place noneconomic intrastate activity categorically beyond federal reach, and neither involved congressional control of intrastate activity in connection with a more comprehensive scheme of regulation.⁸⁴ Lopez expressly disclaimed being such a case, Morrison did not discuss the possibility, and the court of appeals in Morrison made clear that it was not one.⁸⁵ In each, the statute stood alone, with no regulation of an interstate market for the local ban to make effective. The concurrence added that dismissing this distinction as formalistic misunderstands the clause, which empowers Congress to enact laws in effectuation of its enumerated powers that it could not enact in isolation.⁸⁶

The majority and the concurrence reach the same judgment by different routes, and the facts that carry each are much alike. The majority asks whether Congress had a rational basis for treating the class of home-grown marijuana as an essential part of its scheme, while the concurrence asks whether the local prohibition is an appropriate means of making the interstate regulation effective, and fungibility and the risk of diversion drive both answers.⁸⁷ The concurrence's theme did not end with Raich. When the Court later declined to sustain the individual mandate as a necessary and proper component of the Affordable Care Act's insurance reforms, it described Raich as a case about individual applications of a concededly valid statutory scheme, and it held that the clause could not be used to draw within federal regulation those who had not, by some pre-existing activity, brought themselves within it.⁸⁸ That limit is the subject of the section on the health insurance mandate, and it is the next constraint on this route.

The third step does the real work, because it is where fungibility and diversion in Raich separate the marijuana ban from the school-zone ban. The usual error is treating the Necessary and Proper Clause as a power that stands on its own. The clause carries enumerated powers into execution, so it operates only when attached to a regulation of an interstate market, and the local rule must be necessary to that regulation's effectiveness. A second error is to report this reasoning as the holding of Raich. It is the concurrence in the judgment, and the majority's rationale is the class-of-activities reasoning, although both support the result.