Does the ObamaCare individual mandate make contracts unenforceable?

posted at 11:00 am on February 28, 2012 by Ed Morrissey

I must admit that until I heard this argument from the Institute for Justice, I never considered the implications of ObamaCare requiring individuals to sign contracts for insurance coverage.  In any other context, signing a contract under threat of force constitutes duress, which negates the contract under centuries-old legal standards.  What happens when government applies the threat of force, through fines and presumably an eventual jail sentence for non-compliance?  IJ has filed an amicus brief to the Supreme Court asking this very question, and constitutional law professor Elizabeth Price Foley explains that the individual mandate violates the principle of mutual assent:

Constitutional law professor Elizabeth Price Foley, who is the executive director of the Institute’s Florida Chapter and who co-authored IJ’s brief, said, “The individual mandate violates a cardinal rule of contract law—to be enforceable, all agreements must be voluntary. The Framers understood this, and would never have given the federal government the power to force individuals into lifelong contracts of insurance. The Court should not allow the government to exercise this unprecedented and dangerous power.”

As IJ’s brief shows, the principle of mutual assent, under which both parties must consent for a contract to be valid, is a fundamental principle of contract law that was well understood during the Founding era and is still a cornerstone of contract law today. Indeed, contracts entered under duress have long been held to be invalid. Yet the mandate forces individuals to enter into contracts of insurance that would never be valid under this longstanding principle. (For a copy of IJ’s brief, visit: www.ij.org/PPACAbrief.)

If the U.S. Supreme Court fails to strike down the individual mandate, there will be nothing to stop Congress from forcing people into other contracts against their will—employment contracts or union membership, for example. If we still have a constitutional republic in which the federal government’s powers are limited, then the Court should strike down this law.

The Institute for Justice’s brief is the only amicus brief filed with the Court that examines this case in the context of the history of contract law. The brief illustrates how the Supreme Court has recognized the principle of consent in commercial relations in its Commerce Clause and Tenth Amendment cases, and it explains why the U.S. Supreme Court has a key role in acting as a check against this unconstitutional power grab by the federal government.

Bart Hinkle at the Richmond Times-Dispatch extends the background on the amicus claim:

From Hugo Grotius in the 17th century through William Story in the 19th and up to the present, legal doctrine has held that contracts are not valid unless they are entered into by mutual assent. If one party signs a contract as the result of fraud or under duress, it cannot be valid. But if Congress compels people to buy insurance policies — not as a precondition of exercising a privilege such as driving, but as a consequence of having been born — then, the institute argues, this would undermine centuries of contract law.

Supporters of the Affordable Care Act are apt to say overturning it would amount to judicial activism — that the judiciary ought to defer to the political branches. But the institute’s Clark Neily and Dick Carpenter show in their September study, “Government Unchecked,” that the courts have been, if anything, too deferential. They find that during the past half-century the Supreme Court has struck down only 103 out of the 15,817 laws passed by Congress, and less than one-twentieth of 1 percent of the more than 1 million state laws passed during the same period. In any given year, the Supremes will strike down only three out of every 5,000 laws enacted around the country.

Foley’s point in the video is well taken.  If the individual mandate passes muster because duress does not apply when the federal government applies it, then the courts will have given carte blanche to tyranny.  Where does that power end?  Buying cars certainly implicates interstate commerce; will the government have the power to force us to sign purchase contracts for Chevy Volts?  What would be the difference between that and health insurance?  Thanks to the bailouts, the government has an enduring stake in GM, and at some point in time every person needs transportation, even if they are perfectly satisfied with riding a bike or hailing a cab now.

Here’s an even more interesting question.  If coercion negates these contracts, as it should, then the insurance company won’t be under any obligation to pay for your health care, either.  After all, ObamaCare forces them to accept all applicants now, regardless of pre-existing conditions, so they too are under duress.  Americans might be buying a lot of vaporware in 2014 if a later court decides to stay on the side of centuries of precedent.


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If we still have a constitutional republic in which the federal government’s powers are limited, then the Court should strike down this law.

And if we don’t…and if the court doesn’t….must we not purchase for Obama a jeweled crown?

How soon before we experience his civilian army,with no apologies?

Why is the GOP so timid in attacking the danger to our freedom?

Why is the GOP talking about the economy only, when our very freedom is at stake-are we naive enough to think it won’t happen?

Don L on February 28, 2012 at 3:52 PM

OBAMACARE MUST BE 100% REPEALED!!!

landlines on February 28, 2012 at 3:11 PM

It almost certainly won’t be since neither of the two imbeciles leading in the GOP delegate race can be elected, least of all Ricky SaintOraProNobis. This means you would need 67 Senate votes (not counting the Rinos) an a similar majority in the House to overturn the Hussein. With either Ricky or Willard we’ll be lucky to have a majority in the House.

The only hope is that the Supreme Court will do the deed.

Annar on February 28, 2012 at 3:54 PM

Even Ginsberg will have trouble defeating the coercion argument. But she will try.

BobMbx on February 28, 2012 at 11:06 AM

You’re kidding of course. These robed lawyers -politically appointees all, created from thin air (emanations from penumbras) the right to slaughter innocent humans, (our president wants infanticide) Still we snarl at the social conservatives for seeing the evil. Few politicians are much concerned, or oenly love the evil we do. Why lose votes over a sily thing like 53 million killed?

Now they are coming for the next in line – and still we talk about money. What fools we be.

Don L on February 28, 2012 at 3:59 PM

The individual mandate violates a cardinal rule of contract law—to be enforceable, all agreements must be voluntary.

How about this- if you don’t sign the contract, then you can be left to die when you or one of your ugly kids shows up in the emergency room.

I’m tired of subsidizing the emergency care of every idiot who’s too shortsighted to buy health insurance. It’s time to stop forcing hard-working Americans to subsidize the healthcare costs of the lazy and indifferent. You don’t like paying for health insurance? Too bad- you have to take responsibility and stop expecting the rest of us to cover your medical bills.

bayam on February 28, 2012 at 4:01 PM

y’all drag the koolaid for so long you start to hallucinate. You do remember why we have government right???

Zekecorlain on February 28, 2012 at 4:02 PM

This argument is all fine and well on it’s face, but it’s an open door for single payer.

See, if the mandate is struck down on these merits, all the politicians have to do is say “ok then, I guess the govt will just have to pay all the medical bills”. No insurance needed, just the most massive increase in taxes you ever heard of. Does anyone think bayam is concerned about an increase in taxes she knows she will never have to pay?

bayam isn’t really concerned about paying the bills of others, she already gets hers paid by others. She knows obamacare only makes this situation worse by creating an entitlement that will exist for all time, thereby guaranteeing we will forever be paying her bills.

runawayyyy on February 28, 2012 at 4:30 PM

The IJ’s reasoning makes sense. But if it carried any legal weight, why hasn’t it saved workers in closed-shop states from being compelled to join unions if they want to keep their jobs?

bgoldman on February 28, 2012 at 4:33 PM

Social Security and Medicare are what if not involuntary insurance programs.

libfreeordie on February 28, 2012 at 11:47 AM

No they’re not. They’re taxes… that just happen to be used to provide some insurance programs. But make no mistake, they are ONLY taxes. It’s the only way they could get it to pass Constitutional requirements.

And they ignored half the Constitution to do that since Congress may only spend money on armies, post offices/roads, military/docs, and administrative buildings per Article I Section 8!

dominigan on February 28, 2012 at 4:37 PM

However, a liberal court would use this very argument as a basis to distinguish the old law and to create an “exception” for health care. This is part of the reason it is so difficult to overturn ongoing programs.

GaltBlvnAtty on February 28, 2012 at 12:27 PM

And this is why I sometimes feel our Republic is doomed. Exceptions should be non-existent (and illegal).

Are we equal under the Law, or not?

dominigan on February 28, 2012 at 4:47 PM

The IJ’s reasoning makes sense. But if it carried any legal weight, why hasn’t it saved workers in closed-shop states from being compelled to join unions if they want to keep their jobs?

bgoldman on February 28, 2012 at 4:33 PM

Because you can choose to work somewhere else. No one is saying you must work at Union Shop X as a condition of the fact that you breathe and are sentient.

I don’t defend the whole forced unionization thing at all, but there is a legal argument to say that you simply choose a different job if you oppose being unionized. It’s the same argument that the Dems completely miss in regards to the contraception at Catholic institutions bruhaha. These women aren’t forced to work at a Catholic institution. If they don’t like that Catholic instutions won’t offer insurance to cover their contraception, they can choose to work elsewhere. No one is forcing them to work at a Catholic hospital or school.

gravityman on February 28, 2012 at 4:48 PM

you simply choose a different job if you oppose being unionized.

Really? Try simply choosing a nonunion job in, say, broadcasting in New York.

bgoldman on February 28, 2012 at 5:21 PM

She’s awfully hot, isn’t she?

moochy on February 28, 2012 at 5:31 PM

I’m tired of subsidizing the emergency care of every idiot who’s too shortsighted to buy health insurance. It’s time to stop forcing hard-working Americans to subsidize the healthcare costs of the lazy and indifferent. You don’t like paying for health insurance? Too bad- you have to take responsibility and stop expecting the rest of us to cover your medical bills.

bayam on February 28, 2012 at 4:01 PM

I’m tired of subsidizing the emergency (and non-emergency) care of thousands of illegal aliens who stroll across the border into my state every day (unimpeded by the open-borders Obama administration). But hey, guess what, we’re all still going to be subsidizing them even if Obamacare is upheld by the SCOTUS, because they’re still going to be coming here and they’re still going to be showing up in our ER’s for their “free” treatment.

Obamacare only forces law-abiding, tax-return-filing Americans to buy health insurance; illegal aliens still won’t have it, but we’ll still have to pay for their treatments in our ER’s because of a stupid law Congress passed years ago that requires all hospitals receiving federal funds (essentially every hospital) to provide treatment to everyone who shows up in the ER, regardless of ability to pay and regardless of citizenship status.

The answer to this problem is not more stupid federal laws and federal mandates, it’s fewer.

AZCoyote on February 28, 2012 at 5:45 PM

The video reminded me of Directive 10-289 in Atlas Shrugged, where the Federal Govt laid out a set of decrees including:

1. No one can leave their job (except by consent of the unification board)
2. People had to buy the same amount and types of goods every year as they did in the basic year (that being the year the Direction went active)
3. No business could close or buy other businesses or sell itself (except by consent by the Unification Board)

It had a number of other “that-can’t-possibly-happen” directives to it, but you get the idea.

And substitute Health and Human Services for Unification Board and then think about the behind-closed-doors-criteria-but-favoring-unions conduct of HHS regarding Obamacare Waivers and it’s clear that this insanity is already upon us.

And in the book, one of the scoundrels behind Directive 10-289 says “but I am not sure the law permits this!” to which the head bureaucrat responds: “Oh, just search through all the laws we’ve already passed, I am sure you can find something that justifies it”.

Hmm, kind of like Pelosi saying “We have to pass the bill into law before we can know what’s in it.”

But what do I know, I am pro-life, I believe in the federal system (aka state and federal roles), and I believe in individual rights rather than group rights…so clearly I am a wild-eyed-radical hell bent on the destruction of everything.

Montana on February 28, 2012 at 6:06 PM

Obamacare only forces law-abiding, tax-return-filing Americans to buy health insurance; illegal aliens still won’t have it, but we’ll still have to pay for their treatments in our ER’s

You’re right. I agree that illegals shouldn’t be given a free ride either.

bayam on February 28, 2012 at 6:11 PM

Come on, people, please please please vote for Ron Paul and help us put and end to Obama/Romneycare. Let’s not replace an authoritarian Democrat with an authoritarian Republican, they are variations of the same theme. While it may appeal to some to shove the Republican brand of big-gov down the Democrats throats once again, why not take the high road and go back to an American form of government and reunite the country under the banner of freedom and liberty instead. To hell with European socialists and corporatists that have taken over our political class, let’s throw them all under the bus.

FloatingRock on February 28, 2012 at 11:13 AM

I swear to God, for the first time – If we actually have elections in November, I’m considering voting for RP. (I can’t believe I’m even saying that)

Almost certainly, the “foreign affairs” landscape will be entirely different by November, and a RP presidency might be just the ticket by then. It is in Iran’s interest to instigate war with Israel before our next president is sworn in, as BHO couldn’t present a more perfect storm of stupidity, marxism, and anti-American thought for our Islamist death-cult enemies like Iran (and their evil empire allies) to take full advantage of. He’s the perfect dupe.

Considering that it’s entirely possible that much of the middle east will be hot, smoking glass by November, it won’t matter what Ron Paul thinks of Israel, because sadly, it won’t exist anymore.

Harbingeing on February 28, 2012 at 6:32 PM

I’m tired of subsidizing the emergency care of every idiot who’s too shortsighted to buy health insurance.
bayam on February 28, 2012 at 4:01 PM

Then you should support repealing the law that forces hospitals to treat patients that can’t pay for their care.

Count to 10 on February 28, 2012 at 6:40 PM

Florida International University School of Law representin’!

Good work professor.

Hurricanes on February 28, 2012 at 6:42 PM

bayam on February 28, 2012 at 4:01 PM

And that argument can be made for any of the social welfare programs this country runs. Maybe it is time to get the Government out of everyone’s wallet for things it was never actually empowered to do.

chemman on February 28, 2012 at 7:13 PM

Even indentured servitude, still common in the days of the founders, was a voluntary contract between two parties.

thuljunior on February 28, 2012 at 9:40 PM

Doesn’t “closed shop” employment rules, where an employee must join a union in order to work, already violate the “mutual assent” rule?

If the government can force you to join a union, why can’t they force you to buy insurance?

schmuck281 on February 28, 2012 at 10:13 PM

you have no free will when it comes to your interactions with the government…

nancy’s christmas gift keeps giving and giving…

at least slaves could sometimes buy their way to freedom..or escape to another state… or be bought by a Quaker…

our underground railroad will have to go to the north pole or something as canada has socialized medecine…

mittens on February 28, 2012 at 10:24 PM

I keep telling my lib friends, be careful how much power you hand over to the government; you probably won’t always like the people running it as much as you do now. I ask them to imagine President Sarah Palin, in say, 2021, rolling out the American Self-Protection Act, mandating that every American who has no felony charges, and is considered mentally competent, buy: a handgun; ammunition; a gun safe; and obtain gun safety instruction from a licensed instructor, or pay a fine of $1200. And the precedent for this horrifying exercise in government power-grabbing? Obamacare’s individual mandate. I thought the specter of President Palin would get them to reflect, but it does no good.

smellthecoffee on February 28, 2012 at 11:56 PM

It is hard to overstate how absurd her argument is. George Washington signed into law a bill that required every able bodied male to purchase a gun and ammunition. I suppose she thinks that this was invalid too. After all, she knows much more about the Constitution than George Washington.

Of course, her argument is not specific to the federal government at all. It applies equally to any state law that might implicate her “duress” theory.

Furthermore, the insurance mandate is not a mandate to sign a contract. It is a mandate to have insurance. The vast majority of people will not have to sign any additional contract the day after it takes effect, because they will have benefits through their employer, or Medicaid, or Medicare, or through their parents (if they are children), or someone else.

To throw out such a law, one would have to say that a law is unconstitutional if it might lead some people to choose to sign a contract for the purpose of adhering to the law. Good luck with that.

jd3181 on February 29, 2012 at 12:28 AM

The Democrat Party is promoting tyranny? Who would have thunk it? /s

Contract law is based on the American Constitution which the Democrats argue shouldn’t be read on the floors of Congress. Why would they worry about being tyrannical?

There are many types of contracts. Implied, verbal, written; this is a simple case of Americans being forced AT GUN POINT to submit to the will of the dictators Americans voted into office in 2008 and they could care less if any contract was involved because they see themselves as our masters, not our democratic representatives.

According to 0bama all 0bamaScare constitutes is another tax. Everyone knows that taxes are patriotic … except for the democrats that refuse to pay theirs. /s

DannoJyd on February 29, 2012 at 3:50 AM

Rising water floats all boats, as they say.

The system of checks and balances assumes that all three branches are not colluding to increase the power of the Federal government.

Sadly, it appears that they are in fact doing that and have been doing that for well over a century.

Venril on February 29, 2012 at 11:25 AM

How about this- if you don’t sign the contract, then you can be left to die when you or one of your ugly kids shows up in the emergency room.

I’m tired of subsidizing the emergency care of every idiot who’s too shortsighted to buy health insurance. It’s time to stop forcing hard-working Americans to subsidize the healthcare costs of the lazy and indifferent. You don’t like paying for health insurance? Too bad- you have to take responsibility and stop expecting the rest of us to cover your medical bills.

bayam on February 28, 2012 at 4:01 PM

I can barely believe I’m saying this…but I agree with you. Enough with responsible people being left holding the bag for the lazy and the foolish. Too many Americans – and illegals – want to have their cake and eat it too, without paying the baker a cent. That’s just not sustainable any way you slice it.

Frankly I think that if people want the privilege of the best healthcare in the world, we have to limit it to legal citizens and require health insurance for the privilege of being treated at public healthcare facilities. Won’t go without your smokes or $10/day Starbucks coffee for health insurance? Then you’ll have to find someone dumb enough to care for you when (not if) you get sick or hurt.

And make it a privilege that can be revoked. It is disgusting that violent felons have a ‘right’ to healthcare while honest citizens go without. Might even make a good way to keep from whining about the arrangement too much – don’t like the system, LEAVE.

MelonCollie on February 29, 2012 at 2:33 PM

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