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July
12, 2011
Dear Friends and Fellow Virginians,
I wanted
to update you on the 6th Circuit's appellate ruling in the healthcare case.
There are a lot of nuances to the ruling,
so let's start at the beginning and go through them one at a time.
Before I begin, I need to offer a disclaimer. The way this case was decided, it ended up
being very complex - so please bear with me.
Process
Remember
that in an ordinary appeal (not to the Supreme Court), three judges sit together
to decide the appellate case.
There
are four appellate courts that have heard appeals in the healthcare cases: the
4th circuit (including Virginia);
the 6th circuit; the 3rd circuit; and the 11th circuit (where our 26 sister
states argued their case). Only the 6th
circuit has ruled so far. We are awaiting
rulings from the other three circuits.
Because
three judges sit on each of these cases, an important procedural rule to be
aware of is that the narrowest opinion in the majority is deemed the governing
opinion of the court. The rationale for
this rule is that the narrowest opinion is the one that everyone in the majority
agreed upon, and then other opinions 'added' to that 'base' opinion. This is a simplification of course, but that
is the governing rule of interpretation.
This
rule of interpretation is important in the 6th circuit's case because all three
judges wrote separate opinions in the case.
Guts
of the Ruling: Individual Mandate
The
three judge panel split 2-1, with two judges concluding that the individual
mandate is constitutional, at least in this case. One of those judges concluded that the mandate
is constitutional, period. However, Judge
Sutton, who wrote the narrowest prevailing opinion, said only that it was constitutional
in this case, but could be unconstitutional on a case by case basis in other
cases - a very unusual ruling indeed.
Because
of the unique approach taken by Judge Sutton, it seems unlikely that other judges
(or Justices) will follow his approach.
More
on Judge Sutton's opinion in a moment...
Other
Guts: Taxing Power
While
upholding the constitutionality of the individual mandate, the court voted 2-0
to reject the federal government's argument that the individual mandate and
accompanying penalty could be sustained under Congress' taxing power. You may ask, 'where was the third judge?' The answer is that Judge Martin did not address
the subject.
Judge
Martin reasoned that he had already upheld the individual mandate under the
commerce clause, so there was no need to address the taxing power argument.
However, both Judges Sutton and Graham
did address the subject - and both rejected the feds' claim that the penalty
was a 'tax' and thus fell under Congress' constitutional taxing power.
As a
reminder, what the feds are arguing is that the penalty you must pay if you
fail to buy the government-mandated health insurance is in fact a tax, not a
penalty. Furthermore, they say, that
Congress has broad authority to levy taxes under Article I, section 8 of the
constitution (this is certainly true). Therefore, this reasoning goes, Congress was
simply exercising its constitutional taxing power by imposing the penalty on
those who fail to obey the government diktat to buy approved health insurance.
Put
simply, the feds are saying that they can order you to do just about anything,
then assess a financial penalty against you if you fail to act, and because
they deem that penalty a tax, the whole thing is constitutional. This is the most radical claim in the whole
case - by far.
Those
of you that have heard me speak on this matter have heard me say that I am loathe
to make any specific predictions on how this case will go, but that I will predict
that no judge or justice in America will agree with the federal government's
radical taxing power argument.
So far,
so good on that prediction!
The
Scorecard
So here
is how the judges lined up in this case:
Judge
Martin: individual mandate IS constitutional; did not vote on taxing power.
Judge
Sutton: individual mandate IS constitutional (in this case); penalty is NOT
a tax.
Judge
Graham: individual mandate is NOT constitutional; penalty is NOT a tax.
Judge
Martin didn't vote on both issues because he knew that the feds only needed
to win on one to sustain the statute, so he didn't vote on the tax issue.
Judge
Sutton concluded only that the individual mandate was constitutional in
this case, so because he presumably foresaw circumstances in which the
individual mandate would not be constitutional, he proceeded to
also rule on the tax question.
My
Opinion of the Opinions
Two
of the judges (Sutton and Graham) agreed that the exercise of power by the federal
government in mandating individuals to buy government-approved health insurance
is "unprecedented." This is
consistent with my view that for the federal government to win this case, the
Supreme Court will have to go farther than it has ever gone before in expanding
the commerce power of Congress. However,
for the states to prevail, the Court need not go beyond or overturn any prior
commerce clause case.
Judges
Sutton and Graham thus agreed that it is the feds that are seeking a change
in the status of the law related to the commerce clause, and despite saying
that such a change is only for the Supreme Court to undertake, Judge Sutton
implicitly accepted the change anyway by ruling the mandate constitutional.
Judge
Sutton unusually challenged the Supreme Court to take definite action. Most strikingly he said that the Supreme Court
"either should stop saying that a meaningful limit on Congress' commerce
powers exists or prove that it is so." Amen brother!
Additionally,
both Judges Sutton and Graham spoke predictively about the 'direction' of Supreme
Court cases related to the commerce clause and federalism - a decidedly unusual
feature of a lower court opinion.
I am
unfamiliar with any case ever that saw such brazen expectations of Supreme Court
involvement explicitly written into the opinion. It seems that virtually all of the trial and
appellate judges who have touched this case are confident that it's going on
to the Supreme Court. Again, very unusual,
but I do agree.
The
two greatest weaknesses of the controlling opinion - in my humble opinion -
are the failure to effectively digest and respond to the arguments about the
distinction between regulating "activity" vs. "inactivity,"
and the mistake of not treating the case as a facial challenge to the statute.
That's all for now! As always, we'll update you on the rulings
as they come in.
Sincerely,
Ken Cuccinelli, II
Attorney General of Virginia
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