Friday, February 25, 2011

DC healthcare case: excellent legal analysis - improper conclusion

In the first healthcare decision after the Virginia and Florida rulings striking down the individual mandate of President Obama's healthcare reform package, a Federal Judge for the United States District Court for the District of Columbia has ruled that the healthcare reform law and specifically the individual mandate are constitutional. One may criticize the ultimate ruling in the case, but Judge Kessler went to great lengths to acknowledge certain particular strengths of the plaintiffs challenging healthcare reform on a constitutional basis.

The written decision can be found here.

Readers may find my comparative analysis of the Virginia and Florida healthcare opinions here:
The plaintiffs in the case appear to be individuals who either do not access traditional healthcare services or only pay out of pocket for healthcare services, thereby making them good plaintiffs for a challenge to the constitutionality of the individual mandate.

The procedural posture of the case

Unlike the Virginia and Florida decisions, the DC case was being addressed at the Motion to Dismiss stage at the beginning of the case. Judge Hudson in Virginia and Judge Vinson in Florida at decided at the Motion to Dismiss stage that the plaintiffs had stated sufficient facts to establish justiciability and raise a constitutional question worthy of potential adjudication at trial. Essentially in both the Virginia and Florida cases there was a motion to dismiss heard and denied. At the motion to dismiss stage nearly all factual inferences will be decided in favor of the plaintiff. Whereas at the summary judgment stage, the stage at which the Virginia and Florida cases were decided, a slightly more balanced approach is taken by the court in determining the relevant facts of the case. What is interesting about Judge Kessler's decision to dismiss the DC case at the motion to dismiss stage is that the dismissal results in an automatic and early right to appeal for the plaintiffs in the DC case. In comparison, had Judge Hudson or Judge Vinson dismissed either the Commonwealth of Virginia's claim or the other 26 states’ claims at the motion to dismiss stage those cases would have been submitted to the federal appellate circuit courts in the fourth and eleventh circuits as early as nine months ago. Conceivably had that occurred the plaintiffs in the Virginia or Florida cases could have been petitioning the  Supreme Court of the United States right now having already obtained circuit court decisions.

Justiciability: do the plaintiffs have a right to sue?

Each of these lawsuits challenging the constitutionality of the healthcare reform law face a series of hurdles that could potentially prevent the individual mandate from being discussed in any given final ruling. These doctrines fall under the broad category of justiciability.  Crudely put, justiciability is an analytical doctrine designed to only allow proper parties to bring lawsuits and only in matters of actual current controversies. The doctrine of standing governs whether a party has a right to bring a lawsuit in the first place. The doctrine of ripeness governs whether or not a controversy has reached a point in which the effects of the controversy can be sufficiently felt by the plaintiff thereby giving rise to a cause of action. It is not preordained that plaintiffs in these constitutional challenges will automatically have standing as the plaintiff's will have difficulty showing that each particular plaintiff is going to be directly negatively affected by the individual mandate. It is also not preordained that plaintiffs in these cases have ripe claims as the individual mandate for all intents and purposes appears to not go into effect until 2014. Although I believe that the plaintiffs in these cases all have standing even as mere citizens of the United States of America and all have ripe claims as the individual mandate is imminent and affecting decision-making today, it is not the case that these factors will make a challenge to healthcare reform justiciable in some judge’s eyes. 

Judge Kessler in pages 12 to 25 the opinion addresses the issue of justiciability.  In one of the more thorough analyses of justiciability I have seen, she clearly and rightfully determines that the plaintiffs in this case are proper parties to bring this lawsuit, and that the imminent harm of the imposition of the individual mandate warrants addressing claims now rather than waiting until 2014. This particular analysis is quite important as it shows substantial judicial independence in refusing to dismiss the lawsuit on mere procedural grounds.

General welfare clause: the individual mandate is not a tax

The United States government has also attempted to justify the constitutionality of the individual mandate under the General Welfare clause of the United States Constitution which, in this instance, requires considering the individual mandate to be a tax. Much to her credit, on pages 57-58 of the opinion, Judge Kessler dismisses this argument as Congress specifically claimed the fine for not purchasing health insurance was a penalty and not a tax.

The Logical fallacies of the DC decision

On pages 25 to 55 of Judge Kessler's decision she addresses the constitutional basis for Congress’ authority to mandate the purchase of health insurance under the commerce clause of the United States Constitution.  Her primary contention is that the decision to not purchase an item is comparable to the decision to purchase an item.  In other words, the choice to refuse to purchase health insurance is an economic decision, a decision to use one's money for some other purpose, thereby is an action that on an individual basis and in the aggregate has a substantial effect on interstate commerce and can be regulated under the commerce clause of the United States Constitution. On pages 46 to 49 Judge Kessler does state that at some point every plaintiff will utilize health care services. There are two major logical fallacies underlying Judge Kessler's reasoning on finding the individual mandate constitutional. The first fallacy is the unreasonable belief that a decision not to act constitutes an economic choice and therefore can be regulated. The second fallacy is equating the purchase of health care with the purchase of health insurance.

A. The first fallacy: misfeasance versus nonfeasance
Understanding the difference between misfeasance and nonfeasance allows one to differentiate between an affirmative act and passive inaction. In legal terms, misfeasance is a willful or otherwise knowingly negligent action taken by a bad actor that could potentially result in harm to person or property. Examples of misfeasance include, running a red light, breaching a contract, or punching someone in the face.   Nonfeasance, on the other hand, is the willful inaction despite the knowledge that an affirmative act might prevent harm to person or property.  Examples of nonfeasance include, not stopping to help someone in an accident, not correcting the clerk who gives another customer change for a twenty dollar bill when the customer handed the clerk a ten dollar bill, or allowing your friend to enter a contract with somebody you do not feel is trustworthy. The major difference between misfeasance and nonfeasance is that misfeasance requires an affirmative action, nonfeasance is mere inaction. Generally speaking, in the United States, nonfeasance, or inaction, is not penalized. Those few types of instances in American law in which nonfeasance was penalized have been slowly phased out over the years. (There are a few notable exceptions where states or localities have attempted to penalize nonfeasance such as was humorously portrayed in the final two episodes of a 1990s sitcom). Essentially, in the United States under both state and federal law, inaction is nothing more than the choice not to act. Just because the alleged choice in this instance is the decision not to purchase a particular type of product doesn't change the fact that that choice constitutes legal inaction.

B. The second fallacy: explaining by analogy why purchasing health insurance is not the same as purchasing health care
On a basic level most people understand that purchasing health insurance is not the exact same thing as purchasing health care. Health insurance is nothing more than a system for paying for healthcare. There are advantages and disadvantages to paying for healthcare with health insurance. The commerce clause does not appear to grant authority to Congress to regulate how one must pay for necessary goods. To understand why being forced to purchase health insurance to pay for healthcare is an illogical extension of commerce clause power it is best to look at analogous situations of goods or services that all people inevitably consume.

The first example is transportation: Imagine if the federal government decided that the best way to pay for you to get from your home to work, or to visit family, or to take business trips, or to go to the doctor is to purchase transportation insurance.  This transportation insurance would then be responsible for paying for airline tickets, bus fare, car payments, gasoline, and any other incidental expenses of transportation. Clearly most people do not wish to purchase transportation insurance, as I have described because we prefer to choose the car we drive, the airline we use, or even when to ride the Metro.  Under the theory suggested in this case, as most, if not all people will require transportation, the United States Congress has the power to force individuals to purchase transportation insurance. There is an argument that perhaps people will choose to stay at home, or only walk, but it is likely inevitable that all people will at some point avail themselves of the transportation system.

Perhaps a better analogy might be food insurance. As of 2011 people in the United States of America still obtain their nutrients and calories to continue to live by eating food. Imagine now that the federal government requires you to purchase food insurance which is designed to pay for the food that you eat. Clearly all people in the United States of America consume enough food each year to have an effect on interstate commerce. Under the reasoning of this case it is entirely possible for the United States Congress to mandate that every human being in the United States purchase food insurance designed to help pay for the food consumed by that particular person. Essentially the purchase of health insurance is not the only, and arguably not even the ideal, manner to purchase health care. I think ultimately this line of reasoning is the weaker portion of the decision regarding the commerce clause. Yet it takes up substantially more of the 64 page opinion than the portion of the opinion addressing how inaction constitutes economic activity.

A note on the argument regarding freedom of religion

At the end of the opinion, Judge Kessler addresses arguments made by the plaintiffs under the Religious Freedom Restoration Act.  Judge Kessler appears to have decided that healthcare reform does not violate the religious freedoms of the plaintiffs. Having not confronted this issue before, I have no further commentary on it.

Effect on other jurisprudence

Judge Kessler is to be credited with writing a thorough opinion. She is also to be credited for acknowledging that her opinion will neither be the first nor the last word on the constitutionality of the individual mandate. Those watching these cases move through the federal court system should pay attention to see if any circuit court picks up the reasoning laid out by Judge Kessler.  This opinion is a likely sign of the relative strength of the argument in favor of finding the individual mandate constitutional.  If this is it, we are heading towards a declaration of unconstitutionality in the Supreme Court.

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