Thursday, March 3, 2011

The other Virginia healthcare lawsuit: is the individual mandate constitutional in the Western part of Virginia?

UPDATED: Link to post on court Order requiring oral argument to occur on the same day.

In light of the fact that the Commonwealth of Virginia's Constitutional challenge to the individual mandate is likely to be argued in two months before the US Court of Appeals for the Fourth Circuit, it is important to remember that in another case adjudicated in federal court in Virginia the individual mandate was determined to be Constitutional.

Judge Moon sitting in the US District Court for the Western district of Virginia determined in November of 2010 that the individual mandate is constitutional and dismissed a case filed by liberty University and a half dozen individual plaintiffs. 

Decision here:

This decision, although it did not gain much traction in the press, will increase in importance in the next few months. Both the healthcare challenge filed by the Commonwealth of Virginia in the US District Court for the Eastern district of Virginia and the challenge decided that the Western District of Virginia are being appealed to the Fourth Circuit. In my opinion it is highly likely these cases will either be consolidated by the Judges on the Fourth Circuit or at least briefed and argued before the same three-Judge panels at the exact same time. Given the likelihood that both decisions will be considered concurrently or in tandem it is important to understand not only Judge Hudson’s decision in favor of constitutional limitations, but also the reasoning provided by Judge Moon in allowing broad Constitutional regulatory authority to Congress.

Procedural status at the time of dismissal

Judge Moon dismissed the Western district of Virginia healthcare case at the initial motion stage. He addressed issues of standing, and ripeness. Judge Moon's conclusions regarding standing and ripeness are similar, although not exactly the same, as those of Judge Kessler in the DC healthcare case. A description of the nature of the procedural posture of the DC healthcare case as well as standing and ripeness arguments can be found here:

Extraneous discussion

Pages 34 to 53 of the 54 page decision primarily address constitutional challenges based on freedom of religion. I would suggest that although such arguments merit further exploration in the courts, I have severe doubts that even the conservative members of the Supreme Court are likely to find the individual mandate unconstitutional on religious freedom grounds.

Judge Moon declares the individual mandate Constitutional

It is important to understand that Judge Moon declares the individual mandate constitutional as a valid exercise of Congress's power under the commerce clause of the Constitution. The language from Judge Moon's decision is actually slightly more dangerous than that of Judge Kessler's decision. Importantly Judge Moon states “Far from ‘inactivity,’ by choosing to forgo insurance, Plaintiffs are making an economic decision to try to pay for health care services later, out of pocket, rather than now, through the purchase of insurance.” P. 27 (citation omitted).  Judge Moon goes on to state, " . . . the choice of individuals to go uninsured affects national market conditions for health insurance, reducing the supply of consumers of health insurance who are in good health, and thereby increasing the cost of covering the insured population.”  P. 29.

Although my suggestions regarding the fallacies of these types of arguments are spelled out in my post regarding the DC healthcare case, I am compelled to argue by analogy to show the absurdity of the determinations herein.  Judge Moon is fundamentally stating that if Congress merely feels there is a rational basis for doing so, Congress may force all people to purchase a particular product to increase the economies of scale and thereby reduce the purchasing price for everyone. To give an analogous comparison, Congress would now be allowed to force all individuals to purchase a hybrid vehicle so the per item manufacturing cost of hybrid vehicles goes down and the members of the public that always wanted to buy a hybrid vehicle but could not afford to pay a premium for such a vehicle would now be able to purchase the hybrid vehicle at a lower price.

The reason Judge Moon's decision appears palatable to most people is because most people have already accepted that health care should be purchased with health insurance, and already engage in the market for health insurance. If instead Congress passed a law requiring all people to purchase healthcare, and the purchase could only be used to obtain benefits through federally owned and operated health care facilities, it becomes much more apparent to the casual observer that such a mandated purchase would not be permissible under the commerce clause. On a fundamental level the commerce clause simply does not allow the Congress to require people to purchase any one particular thing, regardless of how many people it allegedly helps.

What to expect in the Fourth Circuit

Although the Commonwealth of Virginia has requested the Supreme Court address Judge Hudson’s ruling without requiring the Fourth Circuit to opine, it is far more likely both of these federal matters in Virginia will end up in the Fourth Circuit at the same time. For this reason, parties seeking to challenge the Constitutionality of the individual mandate through direct participation as parties in either case or through the use of amicus briefs should be mindful of both decisions and not just the victory rendered before Judge Hudson.
For additional reading please see my other posts below.

Comparison of the Virginia and Florida healthcare rulings

Posts regarding the DC healthcare ruling

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