The Senate cannot make this demand because this would violate the separation of powers. And while federal law might require that she recuse herself from cases in which she was directly involved as Solicitor General, she has already promised not to sit on those cases if she is confirmed.
The Wall Street Journal speculates that Kagan probably offered an opinion on the legality of the healthcare statute -- but, of course, the editors cannot prove this. Lacking any factual basis to argue for recusal, the editors argue that Kagan should recuse herself from cases challenging the legislation because they disagree with her answer to questions regarding the Commerce Clause (which is central to the constitutional issue).
Although Kagan's statements reflect current Supreme Court doctrine, the Wall Street Journal editors accuse her of incorrectly supporting an expansive view of the commerce power. Because they disagree with an expansive view of the Commerce Clause, they believe she should recuse herself from the healthcare litigation if it reaches the Court. According to the editors, her view (with which they disagree) proves she is partial:
We also think there are grounds for recusal based on her response during her Senate hearings on the substance of the state legal challenge. The Florida case boils down to whether Congress can compel individuals to buy health insurance under the Commerce Clause. Ms. Kagan danced around the history of Commerce Clause jurisprudence, but in one response to Senator Coburn she did betray a bias for a very expansive reading of Congress's power.This is a baseless argument. In US v Lopez, one of the most important cases on the Commerce Clause, the Court held that Congress could "regulate those activities having a substantial relation to interstate commerce . . . i.e., those activities that substantially affect interstate commerce" (emphasis added). This is essentially what Kagan stated during the hearings.
The Commerce Clause has "been interpreted to apply to regulation of any instruments or instrumentalities or channels of commerce," she said, "but it's also been applied to anything that would substantially affect interstate commerce." Anything? This is the core question in the Florida case. If she already believes that the Commerce Clause justifies anything that substantially affects interstate commerce, then she has all but prejudged the individual mandate question.
While language in some cases suggests that "activities" only include "economic" activity, the Court has not indicated that this is a requirement. In Gonzales v. Raich, for example, the Court upheld enforcement of the Controlled Substances Act against an individual who consumed homegrown marijuana for medicinal purposes. The individual did not obtain marijuana on the open market. Nevertheless, the Court held that in the aggregate, homegrown marijuana could have a substantial effect on the market for marijuana (making it more available -- contrary to the purpose of the federal statute). Justice Scalia concurred and argued that so long as the activity being regulated is part of a broader statute dealing with interstate commerce, then Congress can regulate the activity pursuant to its Commerce Clause authority. Even one of the most conservative justices has embraced Kagan's view of the Commerce Clause.
The Wall Street Journal editors' demand for Kagan to recuse herself is blatantly political and without merit. Finally, it seems like the editors have conceded the point that the mandate has a substantial relation to interstate commerce. Perhaps the Supreme Court will agree.
UPDATE: Media Matters has published an extensive essay that criticizes the Wall Street Journal editorial.
UPDATE II: Think Progress also has a good article on this subject.