The Constitutionality of Health Care Reform (A Continuing Update)
By Bruce F. Howell, J.D., M.S., Bryan Cave LLP, Dallas, TX
The enactment of the Patient Protection and Affordability Act of 2010 (“PPACA” or the “Act”) brought an instantaneous response from Attorneys General of several states and other groups questioning the constitutionality of certain provisions of the Act.1 Suits were filed in Florida, Michigan, Ohio, and Virginia seeking to overturn the Act on, inter alia, the grounds that the provisions which mandated the purchase of health insurance by individuals (the “Individual Mandate”) violated provisions of the United States Constitution, specifically the Commerce clause.2 Several of the United States District Courts have already heard the cases and rendered various rulings in each.3 In certain cases, appeals are being filed by State Attorneys General.
This article is the first in a series of articles designed to examine the arguments and follow each of these cases as they migrate through the appellate process.4 This article, being the first installment in this series, will provide a general background of the Commerce clause, a summary of the posture of each case challenging the individual mandate, and the arguments made in each case.5
I. The Commerce Clause
The Commerce clause is an enumerated power set forth in Article 1, Section 8, Clause 3 of the Constitution.6 The clause states that the Congress shall have the power to “regulate commerce with foreign nations, and among the several states, and with the Indian Tribes.”7 Central to the challenges to PPACA is the second phrase, which is referred to as the “Interstate Commerce” clause.8
At the center of the debate between strict constructionists and those who take a broader view is the interpretation of the “Necessary and Proper” clause which states that Congress has the power “To make all laws which shall be necessary and proper for carrying into execution the foregoing Powers, and all other Powers vested by the Constitution in the Government of the United States, or in any Department or Officer thereof” (emphasis added).9
Cases over the past two hundred years have sought to interpret the reach of the Commerce clause. The sixteen words of the Commerce clause have been applied to situations as diverse as civil rights and the growing of marijuana. The healthcare reform cases will also add to this body of law.10
II. The Virginia Case
The first case challenging the healthcare reform law arose in the District Court for the Eastern District of Virginia. This case has been decided and will be appealed to the Fourth Circuit.11 After having heard the government’s Motion to Dismiss on August 2, 2010, United States District Judge Henry E. Hudson issued his Memorandum Opinion on the Cross-Motions for Summary Judgment filed by the Commonwealth of Virginia and the Secretary of the Department of Health and Human Services.12
In his Opinion, Judge Hudson came to the conclusion that the Individual Mandate was unconstitutional.13 This decision was based on Judge Hudson’s interpretation of the Commerce clause as well as the Necessary and Proper Clause.14 In addition, Judge Hudson struck down the Individual Mandate on the grounds that the Constitution did not allow the Federal Government permissible taxation power to enforce the Individual Mandate.15
As to the Commerce clause, Judge Hudson’s analysis of the issues focused on the distinction between “action” and “inaction;” i.e. the Commerce clause cannot regulate the failure of a person to not do an act.16 Judge Hudson’s analysis stated that the parties had briefed and argued only the third power of Congress under the Commerce clause. As such, Judge Hudson accepted the Commonwealth of Virginia’s argument that a decision not to purchase a product, such as health insurance, is not an economic activity.17 Thus, since the power of Congress does not extend to the regulation of inactivity (i.e., an enumerated power), the Individual Mandate is not saved by the Necessary and Proper Clause.18
III. The Florida Case
The Florida case was one of the first cases filed, by the Attorney General State of Florida and nineteen (19) other Attorneys General and other persons against the U.S. Department of Health and Human Services. On October 14, 2010 the Florida case was decided in part when the Court (United States District Judge Roger Vinson) allowed the suit by the plaintiffs to proceed by rejection of the Motion to Dismiss by the Federal government.19 Cross-motions for summary judgment seeking a declaratory judgment were filed by the parties arguing the constitutionality of the Individual Mandate, and on January 31, 2011, Judge Vinson issued his ruling granting summary judgment.20
Based upon the Court’s interpretation of the Commerce clause (i.e., that such clause cannot be used to regulate inactivity – in this case, to purchase health insurance21), the Court ruled that the entire PPACA was unconstitutional because the Individual Mandate was “inextricably bound” to the other provisions of the law.22 While the Court declined to issue an injunction against the government proceeding with its promulgation of regulations, the Court stated that its declaratory judgment should, in essence, be treated as an injunction by the parties to the suit.23
IV. The Michigan, Ohio and Virginia (Liberty) Cases
There are other cases that have been filed and are in different states of posture including the Michigan, Ohio and Virginia (Liberty) cases.
In the Michigan case, the Individual Mandate was upheld as being constitutional. Noting the unusual healthcare insurance market as being “unlike other markets” the Michigan Court distinguished the “inactivity” argument relied upon by the Virginia Court (cited above) and uphold the constitutionality of the Individual Mandate.24 The court cited the potential need of all persons to have access to health care across state lines and concluded that such need provided a sufficient basis to allow the federal government to regulate such commerce.25
Contrary to the Michigan case, in Ohio, a United States District Court Judge refused to dismiss the legal challenge concerning the Individual Mandate to buy insurance.26 The grounds for rejecting the government’s Motion to Dismiss were based on the fact that other Courts, such as Virginia and Florida, are considering the same matter.27
Lastly, in Virginia, Liberty University, Inc. filed a lawsuit (Virginia (Liberty)) against PPACA on the grounds that the Individual Mandate would require federal funding of abortions.28 The Virginia Court, in dismissing the action, stated that such requirement was not within the Individual Mandate.29 This case has now been appealed to the United States Court of Appeals for the Fourth Circuit.
So now the score is 2-2. As each of these cases move through the appellate process30, and, as some predict, to the United States Supreme Court, the question of whether or not the federal government can impose an Individual Mandate through the interpretation of the Commerce clause will certainly be central to the arguments. The subsequent articles on this topic will examine more in depth the arguments surrounding the Commerce clause as well as other cases that may impact or provide precedent for consideration by the courts.
The Appeals and The Analysis
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