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Healthcare Court Schism Sets Up Supreme Court Review

Friday, 12 August 2011 10:22 PM EDT

A federal appeals court struck down as unconstitutional the central provision of President Barack Obama’s health-care law requiring most Americans get coverage, bringing the 2010 act ever-closer to the U.S. Supreme Court.

The 2 to 1 ruling conflicts with an earlier decision by a federal appeals panel in Cincinnati, which upheld the individual mandate. The provision exceeds Congress’s power to regulate commerce, the U.S. Court of Appeals in Atlanta ruled today, affirming in part a lower court in a lawsuit filed by 26 states.

“This guarantees that the Supreme Court will rule on the constitutionality of the individual mandate, and makes it very likely that the court’s ruling will come by the end of June 2012,” said Kevin Walsh, an assistant professor at the University of Richmond School of Law in Virginia.

The U.S. Supreme Court often decides to accept cases where two or more of the federal appeals courts are in disagreement. Plaintiffs in the Cincinnati case have already asked the high court to review that ruling. A third federal appeals panel in Richmond, Virginia, has heard arguments in two cases brought over the health care law and has yet to rule.

In today’s ruling, the majority wrote that the “mandate represents a wholly novel and potentially unbounded assertion of congressional authority.” The law requires “Americans to purchase an expensive health insurance product they have elected not to buy, and to make them repurchase that insurance product every month for their entire lives.”

While throwing out the mandate, the panel overruled the lower court’s decision in that case to reject the entire health care law as a result.

‘Fully Operative’

“Excising the individual mandate from the act does not prevent the remaining provisions from being fully operative as a law,” Chief U.S. Circuit Judge Joel Dubina, a Republican appointee, and U.S. Circuit Judge Frank M. Hull, a Democratic appointee, wrote. Hull is the first judge appointed by a Democratic president to rule against the law. Dissenting in part, U.S. Circuit Judge Stanley Marcus, a Republican lower- court appointee later elevated by President Bill Clinton, said he would have upheld the act in its entirety.

Stephanie Cutter, a deputy senior adviser to Obama, said in an Internet posting that “we strongly disagree with this decision and we are confident it will not stand.”

“The individual responsibility provision -- the main part of the law at issue in these cases -- is constitutional,” Cutter said. “Those who claim this provision exceeds Congress’ power to regulate interstate commerce are incorrect.”

‘Strongly Disagree’

“The Department of Justice believes -- as the Court of Appeals for the Sixth Circuit held, and the dissenting judge in the Eleventh Circuit concluded -- that the Affordable Care Act is constitutional,” the Justice Department said in an e-mailed statement. “We strongly disagree with the court’s decision.” The government said it’s considering the “next appropriate steps.”

The U.S. may seek a review of today’ decision by the full U.S. Court of Appeals for the Eleventh Circuit, or it may petition the U.S. Supreme Court. The mandate provision isn’t scheduled to take effect until 2014.

Florida Attorney General Pam Bondi, a Republican, said in an e-mailed statement today that the “ruling by the Eleventh Circuit Court of Appeals upholds our position that the federal health care law exceeds Congress’ power.”

The Patient Protection and Affordable Care Act was signed into law on March 23, 2010. Then-Florida Attorney General Bill McCollum sued the same day on behalf of his state and a dozen others. Thirteen more states signed on later. The health-care act bars insurers from denying coverage to people who are sick and from imposing lifetime limits on costs. It requires almost all Americans 18 and over to obtain coverage.

Exceeded Its Power

The Atlanta court upheld portions of U.S. District Judge C. Roger Vinson’s ruling in Pensacola, Florida, that Congress exceeded its power in requiring that almost every American obtain insurance starting in 2014.

The U.S. has called the mandatory-coverage provision the linchpin of the statute because it will add younger and healthier people to the pool of the insured population, making the program viable for insurers.

Vinson on Jan. 31 ruled that Congress exceeded its powers under the U.S. Constitution’s commerce clause when it created the requirement. Concluding that the mandate was integral to the rest of the legislation, he invalidated the entire act.

The Obama administration appealed Vinson’s ruling to the Eleventh Circuit. The panel, comprised of two judges originally nominated by Republican President Ronald Reagan and one picked by Democratic President Bill Clinton, heard argument on June 8.

‘Most Difficult Issue’

“The most difficult issue in the case is the individual mandate,” Dubina, first nominated to the federal bench by Reagan in 1986, said at the start of the June 8 session in Atlanta. Reagan named Marcus to the federal bench in Miami in 1985. Clinton selected him for the appellate court in 1997. Hull was a 1994 Clinton nominee.

“The question you have before you is that everyone is consuming the goods; it’s about failure to pay,” Acting U.S. Solicitor General Neal Katyal told the panel during the oral argument. The solicitor general is the Justice Department’s top courtroom attorney.

“The Commerce Clause only gives Congress the power to regulate, not to compel,” states’ attorney Paul D. Clement, a solicitor general under President George W. Bush, told the court later.

Marcus, in his dissenting opinion in today’s decision, said that while he agreed with the majority in reversing Vinson’s invalidation of the entire act, he would have upheld the mandate provision too.

‘Close Relationship’

“By ignoring the close relationship between the health insurance and health care services markets, the plaintiffs and the majority seek to avoid the hard fact that the uninsured as a class are actively consuming substantial quantities of health care services now -- not just next week, next month, or next year,” Marcus wrote, making them active participants in interstate commerce subject to federal regulation.

The Cincinnati-based U.S. Court of Appeals for the Sixth Circuit, in its 2-1 ruling on June 29, became the first appellate panel to rule in favor of the law. The court affirmed a Detroit federal judge’s decision last year to throw out a challenge by the Ann Arbor, Michigan-based Thomas More Law Center, a Christian-based public interest law firm which has sought review by the U.S. Supreme Court.

“Not every intrusive law is an unconstitutionally intrusive law,” U.S. Circuit Judge Jeffrey Sutton, the first Republican-appointed judge to back the law in litigation across the country, said in the majority opinion.

Party Lines

Lower-court rulings have broken entirely along party lines, with federal judges appointed by Republican presidents invalidating the mandate and those appointed by Democrats upholding it.

The U.S. Court of Appeals in Richmond on May 10 heard the Obama administration’s challenge to a lower court ruling that sided with Virginia Attorney General Kenneth Cuccinelli, who filed a separate lawsuit the same day as McCollum.

U.S. District Judge Henry Hudson in Richmond, appointed by Bush, a Republican, had struck down the individual mandate as unconstitutional while leaving the rest of the act standing.

Clinton Appointee

The Richmond panel also heard an appeal by Lynchburg, Virginia-based Liberty University, which sought to reverse another judge’s dismissal of its challenge to the law. That ruling was by Judge Norman K. Moon, who was appointed by Clinton.

The appellate panel hasn’t rendered a decision.

“I think this makes Supreme Court review inevitable,” A. Christopher Bryant, a University of Cincinnati law professor, said today in a phone interview. “It’s almost impossible to imagine a situation in which it would not eventually come about.”

With decisions by six U.S. appeals court judges -- three ruling to invalidate the mandate and three others voting to uphold the statutory scheme -- and four lower-court judges having issued divergent opinions on the act’s merits, Bryant said pressure is mounting for the Supreme Court to act.

“There’s enough division of authority that there’s going to need to be authoritative resolution,” he said.

Stephen Presser, a professor of law at Northwestern University in Chicago agreed, saying it was “inconceivable” that the high court would not take the case.

“It all boils down to one very, very simple point,” he said in a phone interview. “If the federal government can do this, can they do everything?”

The case is State of Florida v. U.S. Department of Health and Human Services, 11-11021, U.S. Court of Appeals for the Eleventh Circuit (Atlanta).

© Copyright 2023 Bloomberg News. All rights reserved.

A federal appeals court struck down as unconstitutional the central provision of President Barack Obama s health-care law requiring most Americans get coverage, bringing the 2010 act ever-closer to the U.S. Supreme Court.The 2 to 1 ruling conflicts with an earlier decision...
Friday, 12 August 2011 10:22 PM
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