Gay Marriage case on course to affect Virginia's Governor's race

The first Virginia case after the landmark U.S. v. Windsor ruling on gay marriage has undergone some recent changes that will truly push the matter to the forefront immediately before November's elections.

A New Complaint

Bostic & London have filed an Amended Complaint adding two additional plaintiffs, Carol Schall and Mary Townley.  Taking a cue from the ACLU case, they added Janet Rainey, the State Registrar of Vital Records, as a Defendant.

What happened to Cuccinelli?

Gov. McDonnell and AG Cuccinelli have been voluntarily dismissed as Defendants.  In these types of cases, you have to figure out the correct state actors to sue.  It is not always obvious which actors a court expects to be listed as a defendant.  This probably looks like a good thing for Cuccinelli as he is no longer listed as a defendant, it may appear to have less effect on him before the election.  But, the Commonwealth has intervened in the case as an "interested party."  This means that AG Cuccinelli's office will still be submitting briefs and taking stances before the election.  Cuccinelli will have to defend these actions.

The ACLU case does not appear to be moving to the forefront

The ACLU of Virginia finally got around to filing a class action lawsuit challenging Virginia's ban on same-sex marriage.  The opposing parties have filed motions to dismiss, and the ACLU has filed a motion to certify all members as a class.  This lawsuit was filed in the U.S. District Court for the Western District of Virginia which is reasonably fast, but not known for the haste in which the Eastern District proceeds. 

None of the motions have been scheduled for a hearing, and given the tremendous effort it takes to obtain a class action certification, any public fight in this case in the next two months will likely center on this boring procedural step, which will have substantially less political effect on the Governor's race.

With all these delays will this case still have any effect on the election?

This is where the Bostic case gets interesting.  The parties submitted an agreed order setting response schedules for the amended complaint and a briefing schedule for summary judgment motions.  Summary judgment is the means by which this case will be adjudicated in total.  It is the equivalent of a trial in this matter. 

Here is the schedule:

Initial summary judgment motions from all parties are due September 30, 2013.

Response briefs are due October 24, 2013.

Final reply briefs are due October 31, 2013.

The election is November 5, 2013

AG Cuccinelli's office, on behalf of the Commonwealth will have to file major briefs 36 days, 12 days, and 5 days before the gubernatorial election.  October is the most critical time of the election season.  Cuccinelli will be held accountable for every word in these briefs.

This makes it easy to stand by my initial prediction that this will have a substantial negative impact on Cuccinelli.

Individual mandate unlikely to be struck down

In the waning hours before release of the opinion, I am compelled to make my prediction regarding the Supreme Court ruling on Obamacare.

I believe the individual mandate will not be struck down.

Specifically, one or more of the following, on stare decisis grounds or on the grounds that it is a political question, will rule that the government with a rational basis may compel the purchase of a product pursuant to the commerce clause: Scalia, Roberts, or Kennedy.

I believe the states themselves will be considered to not have standing to challenge the individual mandate, and this will likely be a 6-3 or 7-2 decision.

I believe that the states' challenge on Medicaid grounds will be defeated unanimously.

I believe one or more of the following will rule against the challengers to the individual mandate due to either a lack of ripeness, failure to comply with the anti tax injunction act, or complete lack of standing: Ginsburg, Sotomayor, Breyer, Kagan, or Kennedy.

If all of the above happens, then the individual mandate will not be struck down, but will not be deemed constitutional.  The fight will be left for another day.

I hope I am incorrect...

Why Virginia will not be invited to the dance (the Supreme Court battle over the individual mandate)

In 2012 the Supreme Court will decide for the first time if Congress has the power to force the purchase of a good or service under Article I § 8 of the Constitution, and Virginia will be left watching from home.

President Obama signed the PPACA, a sweeping overhaul of America's healthcare system, into law in March 2010.  Litigants, including high profile state attorneys general lined up to challenge the new law, specifically the individual mandate.  A strategic decision to bring suit separately by the Commonwealth of Virginia was a tremendous gamble, and is about to become a losing bet.

On September 8, 2011 the U.S. Court of Appeals for the Fourth Circuit overturned Virginia's challenge to the individual mandate in Commonwealth v. Sebelius.  The fact the 4th Circuit upheld the individual mandate was not surprising given the expectations from the panel selected.  The concerning element of the ruling was the reason for the dismissal, standing.  Standing is the doctrine that one must be the party actually injured before you are allowed to bring a lawsuit, the concept is derived from Article III § 2 Cl. 1 of the Constitution.  Further discussion of standing can be found here.

Decisions from the 6th, 11th, and now 4th Circuit are ready to be appealed to the Supreme Court.  Other courts are not far behind.  Because of the nature of the 4th Circuit ruling in the Virginia case, I predict the Supreme Court will not invite the Commonwealth of Virginia to argue in one of the most important cases of our era.

Did Virginia make a mistake by going it alone?

In a word, no.

A bare minority of states decided before the PPACA was passed to sue to invalidate Obamacare once it was passed.  This became the successful Florida and 11th Circuit cases.  Virginia declined to participate in that lawsuit.  I believe there are three major reasons why Virginia pursued this matter separately.

1. Speed:  Virginia could file in the U.S. District Court for the Eastern District of Virginia also known as the "Rocket Docket."  It is called this because statistically the E.D. Va. is the fastest federal court for adjudicating civil cases in the country.  By suing in the E.D. Va. Virginia could likely get a decision sooner, be in the appeals court sooner, and be the first to appeal to the Supreme Court.  The Fourth Circuit is also known for being fairly swift.

2. Medicaid:  The other states wanted to pursue another argument regarding the unconstitutionality of Obamacare due to additional burdens placed on state Medicaid programs.  When the federal government gives money to the states it can do so with strings attached.  There are some minor limitations to this principle, but they did not apply in this instance.  Despite winning in both the district court and the 11th Circuit on the issue of the individual mandate, the other states lost the Medicaid argument before all of these judges.  This was a bad argument, and watered down an otherwise strong and more important argument invalidating the individual mandate.

3. VHCFA: Virginia passed the Virginia Health Care Freedom Act ("VHCFA") shortly before the passage of Obamacare.  This act says in short: "No resident of this Commonwealth, . . . shall be required to obtain or maintain a policy of individual insurance coverage . . ."  Va. Code § 38.2-3430.1:1.  This law provided Virginia a unique opportunity to challenge a federal law as being in direct contravention of a state law.

These are all good reasons.

Many will speculate as to the additional reasons Virginia filed separately.  The purpose of this article is not to speculate as to those additional reasons.

Did something go awry in the District Court?

No.

Virginia, for the most part won at the District Court level.  The little Virginia lost (conceivably a large loss), allowed Virginia to control the timing of appeal.  Virginia did what it planned and successfully used the speed of the rocket docket to reach the 4th Circuit first.

Should Virginia have merged its case in the 4th Circuit?

Probably not.

A case from the Western District of Virginia also reached the 4th Circuit at about the same time.  This case, Liberty U. v. Geithner, was brought on behalf of a university and a handful of individuals on commerce clause grounds, and religious liberty grounds.  The plaintiffs in Liberty U. lost at an early stage in their case in the district court.  In the 4th Circuit the cases were to be heard on the same day by the same judges, but were to remain separate.  Virginia made no attempt to merge the two cases.

The Liberty U. plaintiffs had problems showing standing, and their religious liberty arguments were fairly weak.  Virginia, as a governmental entity, came into the 4th Circuit in a strong position, and made a good strategic decision not to tie its fate to the Liberty U. plaintiffs.

Virginia lays the groundwork for its loss.

After all the briefing, and preparation, Virginia laid out the basis for its loss at oral argument.  The 4th Circuit panel selection was unfavorable for Virginia.  Virginia made things worse as the panel hammered counsel on the issue of standing, and counsel for Virginia ultimately rested their entire basis for standing on the VHCFA.  Stating in no uncertain terms:

"I'm resting my claim on my statute." - Va. Solicitor General at oral argument on Commonwealth v. Sebelius, Record No. 11-1057, U.S. Court of Appeals for the Fourth Circuit, May 10, 2011.

For a detailed discussion of oral argument see my post here.

Intervening trouble

After the 4th Circuit argument, the 6th and 11th Circuit's hear oral arguments in similar cases.  The 4th Circuit then orders Virginia to perform additional briefing, delaying the potential date for a decision.  The 6th Circuit turns around a decision in approximately one month upholding the individual mandate.  Virginia has now lost the advantage of speed.  The 11th Circuit then rules, striking down the individual mandate and dismissing the Medicaid challenge without fanfare.  Virginia lost its second reason for going it alone.  The 4th Circuit does not rule until September. 

Virginia took just enough rope . . .

Relying on Virginia's steadfast unwavering statement that the VHCFA is the only basis Virginia has for standing, the panel reversed the district court and dismissed Virginia's case for lack of standing.  The panel did not even explore any other possibilities for standing because Virginia chose only one.  Regardless of the panel, this was always a mediocre legal argument, but a good argument in the media.  Yet, the case is not tried in the media.  The last reason to go it alone was gone.

But how did the other states survive this hurdle?

In a little discussed portion of the 11th Circuit opinion, the court examined the nature of the parties in the 11th Circuit case.  By that time, 11th Circuit case involved over 25 states, the NFIB, and a handful of individuals.  The 11th Circuit analysis indicates

"Although the question of the state plaintiffs’ standing to challenge the individual mandate is an interesting and difficult one, in the posture of this case, it is purely academic and one we need not confront today. The law is abundantly clear that so long as at least one plaintiff has standing to raise each claim—as is the case here—we need not address whether the remaining plaintiffs have standing. See, e.g., Watt v. Energy Action Educ. Found., 454 U.S. 151, 160, 102 S. Ct. 205, 212 (1981) . . ."  p. 10.

The 11th Circuit determined that at least one individual plaintiff had standing, and as such all the plaintiffs may proceed.  No such individual plaintiffs were joined with Virginia in its lawsuit, and it would have been difficult to predict this outcome.

If Virginia lost due to lack of standing, do they still get to go to the Supreme Court?

I believe the answer to this question will be no.

Standing is a procedural issue.  A decision on the Constitutionality of the individual mandate is a substantive ruling.  The Supreme Court takes only a small proportion of all cases appealed.  One of the major factors it looks for when deciding to take cases is a circuit split, a disagreement between circuit courts on a major issue.  There is currently a circuit split between the 6th and 11th Circuits on the Constitutionality of the individual mandate.  The 4th Circuit dismissed Virginia's case on procedural grounds, and did so on an issue that is nonexistent in all the other cases.  The Supreme Court will likely take the appeals of the 6th and 11th Circuits and may even join in the Liberty U. case and cases not yet decided in the 3d, 9th, and D.C. Circuits. 

If the Supreme Court allows Virginia to proceed, it will add a substantial additional complicated standing issue for which there is no current circuit split.  For this reason I expect that Virginia will not be invited to the dance and will have to watch the litigation play out with the rest of us.

Where was the mistake made and what can be done?

At some point extremely early in the litigation, during the first motion to dismiss filed by the federal government in the district court, Virginia made the decision to use this argument, and only this argument to create standing.  Judge Hudson agreed with Virginia’s reasoning, and Virginia did not have to face this issue again until the appeal. 

Little can be done to add to the existing arguments.  The same argument was brought at both the trial and appellate levels and the petition for writ of certiorari has already been filed.

Making this argument was a huge risk.  If successful, it would provide an avenue for extensive 10th Amendment litigation driven by federalist attorneys general.  This would possibly be an even bigger victory than simply overturning Obamacare.  If unsuccessful, Virginia ran the outside risk that it would be left out of a Supreme Court battle that may decide the scope of Congressional power for decades to come.

If Virginia does not get before the Supreme Court, it is time to bring the next 10th Amendment case, and then the next one.  Still, in Commonwealth v. Sebelius Virginia took the risk, and it looks like it is about to come up on the short side of history. 

My previous analysis of litigation regarding the individual mandate can be found here.

First Federal Court of Appeals declares individual mandate unconstitutional

Early this afternoon the 11th Circuit Court of Appeals declared the individual mandate of the PPACA unconstitutional in a 2-1 decision.

The case, Florida v. U.S. Department of Health and Human Services, is the matter filed on behalf of 26 states, the NFIB, and a handful of individual plaintiffs.  Most notably the lower court decision in this case was one of only two declaring the individual mandate unconstitutional, and the only case declaring the entirety of Obamacare unconstitutional as a result.

My previous analysis from January 2011 of the lower court ruling can be found here. 

What this means for the Supreme Court

The Supreme Court now has two competing appellate decisions from different parts of the country on the same issue: the earlier decision from the 6th Circuit upholding the individual mandate, and now this decision from the 11th Circuit declaring the individual mandate unconstitutional.  This "circuit split" is one of the strong factors considered by the Supreme Court when deciding to take a case.

What this means for the challengers in the 11th Circuit

There was always a danger that the 11th Circuit challengers might win this case, but that the government might seek and obtain en banc review (review by the entire appellate court).  This would have delayed a petition to the Supreme Court for months and months.  Instead the challengers lost on a couple of issues, and may file a petition for Writ of Certiorari as soon as they are ready.

Introduction to the opinion

The opinion is a monstrous 304 pages (including the brief appendix).  Below is an analysis primarily of the majority decision, and what it means for challengers of the individual mandate throughout the country.  Judges Dubina and Hull wrote for the majority, while Judge Marcus wrote the dissent.

Findings and Medicaid - the first 67 pages

Most of the first 67 pages are devoted to stating factual findings, primarily reciting the legislative history of the PPACA, Congressional findings regarding the bill, and actual terms of the bill.

Did you know the suit filed by the states challenged Congressional authority to expand the mandates within Medicaid?  This is the portion of the lawsuit in which Virginia did not also file a similar action.  The states actually lost on this issue in the lower court and the decision was the same here before the 11th Circuit.  The short version of how Medicaid works is that states may opt out of the program, and so any constraint placed on the program by Congress are inherently not coercive, and coercion equals unconstitutionality.

The history of the Commerce Clause and explanation of the necessary and proper clause

The Commerce Clause is one of the enumerated powers under Article 1 § 8 of the U.S. Constitution allowing Congress to write laws "To regulate Commerce with foreign Nations, and among the several States . . ."  The majority goes to great lengths to detail commerce clause jurisprudence in pages 67-92 of the opinion.  A Constitutional law course on the Commerce Clause could be taught from this portion of the brief.

Pages 92-99 are devoted to explaining the Necessary and Proper Clause also of Article 1 § 8 of the U.S. Constitution allowing Congress "to make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States . . ."

The individual mandate exceeds the powers allowed under the Commerce Clause

Given the length of the opinion I will allow the judges to speak for themselves:

In commenting on the court's need to intervene: "When Congress oversteps those outer limits [of the Commerce Clause], the Constitution requires judicial engagement, not judicial abdication." p. 104.

On the issue of activity v. inactivity: "[T]he Supreme Court has always described the commerce power as operating on already existing or ongoing activity."  p. 108.  Nonetheless, "we are not persuaded that the formalistic dichotomy of activity and inactivity provides a workable or persuasive enough answer in this case."  p. 109.  The decision is not made based on the concept that not buying health insurance constitutes activity or inactivity.

What the Court views as the actual legal question: "We perceive the question before us to be whether the federal government can issue a mandate that Americans purchase and maintain health insurance from a private company for the entirety of their lives." p. 112. 

On the unprecedented nature of behavioral mandates (economic or otherwise): "Given the attractiveness of the power to compel behavior in order to solve important problems, we find it illuminating that Americans have, historically, been subject only to a limited set of personal mandates: serving on juries, registering for the draft, filing tax returns, and responding to the census." p. 119.  "[T]he individual mandate is a sharp departure from all prior exercises of federal power." p. 120.

Why looking at the decision to not purchase health insurance by everyone (i.e. in the aggregate) is not a justification for the individual mandate:  "Applying aggregation principles to an individual’s decision not to purchase a product would expand the substantial effects doctrine to one of unlimited scope." p. 124.  "Although any decision not to purchase a good or service entails commercial consequences, this does not warrant the facile conclusion that Congress may therefore regulate these decisions pursuant to the Commerce Clause."  p. 125. 

On what is actually being regulated: "But the individual mandate does not regulate behavior at the point of consumption . . . Instead, the language of the individual mandate in fact regulates a related, but different, subject matter: when health insurance is purchased."  p. 130 (internal quotations omitted). 

Why the federal government's analysis of Commerce Clause Jurisdiction is incorrect

On the nefarious reason why the federal government chooses to argue that the individual mandate is Constitutional under the Commerce Clause because it regulates the consumption of healthcare (as opposed to health insurance):  "Because an individual’s decision to forego purchasing a product is so incongruent with the “activities” previously reached by Congress’s commerce power, the government attempts to limit the individual mandate’s far-reaching implications.  Accordingly, the government adroitly and narrowly redefines the regulated activity as the uninsured’s health care consumption and attendant cost-shifting, or the timing and method of payment for such consumption."  pp. 135-136.

On the issue of the uniqueness of the healthcare system as the government's argument for allowing this one infringement of the bounds of the Commerce Clause:  "The government’s five factual elements of “uniqueness,” proposed as constitutional limiting principles, are nowhere to be found in Supreme Court precedent. Rather, they are ad hoc, devoid of constitutional substance, incapable of judicial administration—and, consequently, illusory."  p. 168.  Translated this means the government's argument that healthcare is a special area of the economy and has different Constitutional limitations has absolutely no basis in law.

The other concerns of the Court and the thrilling conclusion

The Court acknowledged that insurance is traditionally an area of state concern and this increases the Constitutional concerns.  The Court also indicates that striking the individual mandate will not hinder the ability of Congress to regulate insurance companies. 

And most importantly the sweeping conclusion!  "The federal government’s assertion of power, under the Commerce Clause, to issue an economic mandate for Americans to purchase insurance from a private company for the entire duration of their lives is unprecedented, lacks cognizable limits, and imperils our federalist structure." p. 171. 

The individual mandate is not a tax

If the penalty from the individual mandate is a tax it is much easier for the government to show that it is Constitutional.  The Court noted that no Court has upheld the individual mandate penalty because it is considered a tax.  "It is not surprising to us that all of the federal courts, which have otherwise reached sharply divergent conclusions on the constitutionality of the individual mandate, have spoken on this issue with clarion uniformity." p. 173.  And later the Court concludes, "The plain language of the statute and well-settled principles of statutory construction overwhelmingly establish that the individual mandate is not a tax, but rather a penalty." p. 174.

And the challengers suffer a major loss

The individual mandate was found to be severable from the remainder of Obamacare.  Essentially courts are required to leave a statute intact, and simply remove the unconstitutional portions if at all possible.  The lower court found that the individual mandate was not severable from the remainder of the Act and therefore struck down the whole of Obamacare.  The 11th Circuit has reversed that decision, and merely determined the individual mandate itself was unconstitutional.

Judge Marcus's dissent

Judge Marcus wrote an over 80 page dissent determining that the individual mandate is Constitutional under the Commerce Clause.  I may go back later and pull quotes from this section to show differences in thought form other judges that upheld the individual mandate.

Conclusion

This was a great day for challengers of the individual mandate.  A victory was obtained in a federal appellate court accompanied by sound reasoning.  This nearly assures that the Constitutionality of the individual mandate will be decided by the Supreme Court.

I may, over the next week, explain the standing ruling in the 11th Circuit and why it does not bode well for the Commonwealth of Virginia.

My previous analysis of litigation regarding the individual mandate can be found here.

Other federal lawsuits challenging the individual mandate are catching up while we await rulings in the claims made by states

There have been two true victories for opponents of the individual mandate, one in Virginia, and the second in Florida.  These matters have been appealed by the federal government.  At the same time, Plaintiffs have filed another dozen substantive claims in various courts throughout the country.  Of those that have been ruled upon at the trial level, challengers to Obamacare have lost in every other District Court.  See coverage of the other cases Liberty University v. Geithner, here, and Seven-Sky v. Holder, here.

Only one Federal Court of Appeals has ruled, and it found the individual mandate Constitutional by a vote of 2-1 (the ruling is far more complicated than the mere 2-1 vote suggests, and I explained the details here).

Where are we headed?

If you read the articles of any major news organization, it is presumed this litigation will ultimately be decided in the Supreme Court.  But, there simply is no guarantee the Supreme Court will weigh in on this issue.  Before the Supreme Court takes a case, they usually must see an egregious miscarriage of justice, or a conflict amongst appellate courts, or both.  Right now we have one appellate opinion.  For the challenges to the individual mandate to have a reasonable chance of being adjudicated in the Supreme Court there will likely need to be at least one victory for opponents of Obamacare before the Supreme Court is willing to take the case.

The most likely victories

The most likely victories will come from the Fourth or the Eleventh Circuits.  These are the two Circuits in which the lawsuits filed by Virginia and the other 26 states respectively are being adjudicated.  These are also the Circuits adjudicating the only victories so far.  Unfortunately it looks like the Fourth Circuit is likely to uphold the individual mandate, as explained here.  The Eleventh Circuit though appears to have a mixed panel, and there is a better chance of success.

Both the Fourth and Eleventh Circuits have completed briefing and oral argument and have been pending written decisions for over a month.

The rise of other opportunities

Because of the passage of time, two lesser known appeals have caught up.  In the Third Circuit, New Jersey Physicians v. Obama is now pending a decision.  In the Ninth Circuit, the matter of Baldwin v. Sebelius is pending a decision.

Both cases were dismissed due to a lack of standing for the Plaintiffs.  Although originally standing was thought to be a large hindrance to these types of cases, the courts have been fairly responsive to the need to find standing and proceed to the merits in other jurisdictions.  In fact, the Sixth Circuit Court of Appeals ruling upholding the individual mandate still goes to great lengths to explain why plaintiffs have standing in these types of cases.  The victory opponents of the individual mandate are looking for may be coming any day, but it may surprisingly be coming from the Third or the Ninth Circuits. 

Keep an eye on the Courts, any day now we will see our next ruling, and be one more step closer to convincing the Supreme Court to take on this major Constitutional issue.

For previous posts regarding the individual mandate please click here.

Opportunity for corporations to donate directly to federal candidates possible: Eighth Circuit grants en banc review for Swanson case

Excitement in the world of campaign finance litigation yesterday!* 

On July 12, 2011 the U.S. Court of Appeals for the Eight Circuit granted en banc review in the case of Minnesota Citizens Concerned for Life, Inc. v. Swanson, Record No. 10-3126.  This means that all of the Judges of the Eight Circuit will rule upon the issue of whether the Constitution allows the government to prevent corporations form making direct contributions to candidates.  

What is this about?

In May and June 2011 I covered the details of an Eastern District of Virginia case referred to generally as Danielczyk.  Coverage here.  In short the major issue of concern is whether a federal ban on contributions from corporations directly to federal candidates is Constitutional.  Judge Cacheris in the Eastern District of Virginia said the ban is unconstitutional.  The federal government has now appealed the Danielczyk decision.  Three federal appellate courts said a ban is Constitutional . . . until July 12.  On July 12, 2011 the Eight Circuit Court of appeals vacated their holding of Constitutionality, and now all the judges on the Circuit will have an opportunity to weigh in.

How does En banc review work?

When a case goes to a U.S. Court of Appeals it generally will go before a randomly selected panel of three appellate judges for that particular circuit.  Those three judges render an opinion, that then becomes the opinion of the entire circuit.  Litigants dissatisfied with a ruling by a panel may petition for rehearing (asking the same three judges to change their minds) or petition for a rehearing en banc.  A rehearing en banc is when all of the judges sit, hear argument, and rule upon a case.  Successful petitions for rehearing and petitions for rehearing en banc are very uncommon, and publicly available statistics for these procedures are unavailable (outside of the Federal Circuit).  Under Fed. R. App. P. 35(b) a rehearing en banc should only be granted in instances where the panel decision conflicts with a decision of the Supreme Court, or another decision from the same circuit, or if the case involves an issue of exceptional importance that can be concisely stated.  The petition is limited to 15 pages, and will often be narrowly focused on the major issue(s) in order to make an important point in a small amount of space.

Once en banc review is granted, the court may, in its discretion, order additional briefing.  This does not appear to have been done in this case.

What does this grant of en banc review mean?

1) It likely means a number of judges at the Eighth Circuit have serious misgivings about the Constitutionality of a ban on direct contributions from corporations to candidates.

2) More importantly, the judges of the Eighth Circuit likely believe this is an issue that will not be settled once and for all in the Courts of Appeals.  This issue is likely headed back to the Supreme Court where the scope of the January 2010 Citizens United Ruling will have to be clarified.

I just hope our Fourth Circuit Judges get a chance to opine before the Supreme Court sets the matter straight.

*I know campaign finance law and appellate procedure are not fun for everyone, but that is okay.  I think there is room enough in the world for all of us.

Ken Cuccinelli's take on the 6th Circuit upholding the Constitutionality of the individual mandate

Wherein Virginia Attorney General Ken Cuccinelli agrees with most of my analysis regarding the effect of the 6th Circuit opinion upholding the Constitutionality of the individual mandate:

From the Cuccinelli Compass July 12, 2011

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

_________________________________________

My analysis on the opinion from June 29, 2011:

http://northernvirginialawyer.blogspot.com/2011/06/sixth-circuit-sortof-upholds.html

There is an apparent dissimilarity between the two analyses, I may explain it when I have more time.

Major Fourth Circuit case barely critiques Virginia candidacy petition requirements

In the matter of Lux v. Judd, the Fourth Circuit today ruled that a portion of Va. Code § 24.2-506 may be unconstitutional.  I wish I had a clearer ruling then that, but that is all we have . . .

Why couldn't Herb Lux be on the ballot?

Herb Lux, a candidate for Virginia's Seventh Congressional District, was kept off the ballot in 2010 despite submitting the proper declaration of candidacy form, and total number of signatures of voters within the district.  It turns out that the petitions containing signatures of voters within the district must be witnessed by a resident of the district pursuant to Va. Code § 24.2-506.  Herb Lux, witnessed all but 15% of the necessary signatures for him to be on the ballot.  But Herb Lux was not a resident of the Seventh Congressional District.  He was kept off the ballot in 2010, his federal case was dismissed, and today's ruling is the result of his appeal.

The argument below: relying on old precedent

Relying on old, but binding precedent, the District Court Judge determined that the residency requirement for witnessing signatures was Constitutional as it shows the government interest of requiring "some indication of geographic as well as numerical support."  p. 11 (citing Libertarian Party of Va. v. Davis, 766 F.2d 865, 869-870 (4th Cir. 1985)).  Since that time, two Supreme Court decisions, both analyzing Colorado law, determined that a residency requirement for witnessing signatures is not necessary to show geographic or numerical support when there is a requirement for a critical mass of signatures on the petitions themselves.

Today's ruling resolves few rights

The end result was that this case was reversed and remanded.  The District Court Judge is to apply the proper standard of review, and take new evidence on the importance of the state interest in passing Va. Code § 24.2-506.  The Commonwealth of Virginia may now present new arguments to support the Constitutionality of the statute just as long as the argument is not "proof of geographic or numerical support."

What does this mean for Herb Lux?

He did not get to run in 2010.  He has been mired in litigation since July 13, 2010.  He may still lose this case.  It is not clear where Congressional lines for 2012 will be, so who knows if he can witness his own collected signatures.

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A special thanks to Bopp, Coleson & Bostrom, of Terre Haute, Indiana for bringing exciting election law cases to the Commonwealth of Virginia, and for keeping the two party system on its toes.  We hope to see them back in the Fourth Circuit soon perhaps filing an amicus brief in the Danielczyk case.

Sixth Circuit (sortof) upholds Constitutionality of the individual mandate (and clearly states the penalty is not a tax)

Today the Sixth Circuit Court of Appeals upheld the individual mandate in the PPACA.  Below is a synopsis of the findings of the court and the likely procedural effects on all litigation regarding the individual mandate.  Contrary to the headlines, this is far from a loss for believers in the Constitution.  We just need to dig through the details.

The decision can be found here.

The determination of the Court by a 2-1 decision is as follows:

The individual mandate is not facially unconstitutional. 

This does not mean that the individual mandate is Constitutional in all instances.  It does mean that the challengers to the individual mandate lost, today.

Who came to this decision?

Federal Circuit Court cases are decided (in almost all instances) by a panel of three judges.  In this instance two Circuit Court Judges, Martin and Sutton, and a District Court Judge, Graham, sitting by designation.  Each Judge issued a separate opinion agreeing on a handful of issues and explaining their disagreements on the remainder.

Judge Boyce F. Martin, Jr. determined the individual mandate is Constitutionally permissible under the Commerce Clause

Judge Martin determines that "Virtually everyone participates in the market for health care delivery, and they finance these services by either purchasing an insurance policy or by self-insuring."  p. 17.  His argument essentially runs downhill from there.  As soon as he accepted intellectually that not buying insurance constitutes an affirmative economic action of "self insurance" it is virtually guaranteed he will determine the individual mandate to be Constitutional.

Judge Jeffrey S. Sutton determined that The individual mandate is not facially unconstitutional

In a well thought out and explained opinion Judge Sutton determined first that the Plaintiffs were only bringing a facial challenge, which bears a very high burden.  This burden requires a showing that a law is unconstitutional in all applications.  Even, for example, in a state that already has an individual mandate like (Mitt Romney's) Massachusetts.  This is a very high standard to meet.  The Plaintiffs were unable to show that the individual mandate is unconstitutional in all applications, and therefore their appeal is denied.

Judge Sutton, despite dismissing the challenge, invited future litigants back to the Court to decide this issue in more particularized cases, stating:

"While future challenges to the law have hills to climb, nothing about this view of the case precludes individuals from bringing as-applied challenges to the mandate . . . Just as courts should refrain from needlessly pre-judging the invalidity of a law’s many applications, they should refrain from doing the same with respect to their validity."  pp. 52-53.

The combination of Judge Martin's and Judge Sutton's opinions means the challengers to the individual mandate lost 2-1.  But in such instances as when a majority requires the inclusion of different reasoning, the narrowest reading constitutes the holding of the court.  In this instance Judge Sutton's narrower procedural ruling that the Plaintiffs had not met their burden of proof for a facial challenge constitutes the holding.  The Sixth Circuit has only determined that The individual mandate is not facially unconstitutional.

Judge James L. Graham determined the individual mandate is an unconstitutional regulation of inactivity

I could quote most of Judge Graham's dissenting opinion, but will simply state that I agree with it.

Instead please consider Judge Graham's admonishment that Judges should not fear using the Constitution to overturn political decisions by the legislature stating:

"We must not lose sight of the fact however that the Constitution we interpret and apply itself embodies a resolution of powerful competing political ideologies, including the extent of the power of the federal government – a resolution that the States and the people accepted in the ratification process." p. 63.

Do not overlook some major important victories where all three Judges agreed

1. The Plaintiffs have standing.

2. The case is ripe.

3. The Anti-Injunction Act does not apply.

4. The penalty for not complying with the individual mandate is not a tax.

What does this mean in the Sixth Circuit

The Plaintiffs may seek en banc review where all the judges in the Circuit may hear the case, or there will be a direct appeal to the Supreme Court.  The decision is the hands of the challengers to the individual mandate.

What does this mean for the other challenges to the individual mandate

This outcome is generally good news for the other challenges.  The diverse opinions of the three Judges begs for intervention by the Supreme Court.  The Fourth and Eleventh Circuits where other matters are awaiting a ruling can not rely on the Sixth Circuit opinion to say there is a clear outcome with which they agree.  These cases will likely result in divergent opinions necessitating a ruling from the Supreme Court.  Challengers to the individual mandate should remember that without differing opinions between the Circuit Courts we are far from guaranteed an audience in the Supreme Court.

For my previous posts regarding challenges to the individual mandate click here.

The educated politico’s guide to U.S. v. Danielczyk: Or rather how to pay attention to a Constitutional campaign finance lawsuit

It has come to my attention that in my haste to write interesting articles about Federal Constitutional law, federal procedure, and the jurisdictional effect of federal rulings, that my commentary has become overly legalistic and therefore less accessible to my primary audience (other than lawyers): politicos, educated professionals, academics, and non-lawyer legal professionals. To that end, I need to provide an accessible explanation of the importance of U.S. v. Danielczyk (a case I have been covering for weeks).  The following is that explanation simplified by the extraction of excessive legal terminology, and otherwise provided without citation. Due to the lack of citation, I will more readily comment about the political ramifications of the case.

It all starts with Citizens United

For decades in the area of federal campaign finance law Americans have labored under a system that was previously nonexistent until the latter half of the 20th century. Soon, political power brokers and upstarts discovered that advantage can be gained from enacting federal campaign finance restrictions, and challenging such restrictions in court alleging violations of the Constitution.  Ultimately laws were passed banning outright federal campaign spending by corporations.  Although attempts were made to erode this ban, it was maintained for decades until 2010.

In January of 2010, the Supreme Court issued its ruling in the case of Citizens United.  The Citizens United ruling allowed for unlimited soft money contributions expenditures from corporations, just as individuals were allowed to make. Essentially, the Supreme Court stated that for purposes of political speech a Corporation is afforded the same rights as an individual person under the First Amendment of the Constitution.

Soft money simply means money spent during the campaign that is not coordinated directly with a particular candidate. This is often referred to as issue advocacy. Hard money donations would be money given directly to a candidate for federal office or spent at the direction of a federal candidate's campaign. The theory behind the ethics of allowing unlimited soft money donations is that a soft money donation will inure to the benefit of the donor, but may not be 100% consistent with the narrative the federal candidate, supposedly benefited by the soft-money, is attempting to portray.

What has been happening since Citizens United?

Aside from the expected hemming and hawing in the news media, on the left, and very quietly by the corporate elite, the battle over federal campaign finance restrictions continues to rage in Federal Courts. Since the issuance of the opinion in Citizens United three federal appellate courts (these are the courts just beneath the Supreme Court) have ruled explicitly or implicitly that corporations are still banned from making monetary contributions to federal candidates.  It is important to note that federal appellate courts may not rule on an issue unless it is brought before the court in a case with active participants. It is surprising that in a mere year and a half three federal appellate courts have already ruled on this issue. Nonetheless, in late May 2011 a federal judge in Virginia determined that the ban on direct corporate contributions to federal candidates was unconstitutional, relying on the Citizens United decision.  There was nothing in particular about this case that would lead one to believe that a decision would result in a major controversy over Constitutional law.  This is the decision in Danielczyk issued by Judge Cacheris sitting in the U.S. District Court for the Eastern District of Virginia.

What is the Danielczyk case about?

Boiled down to a simple level some individuals have been accused of criminally violating federal campaign finance laws in arranging for the payment of money to federal candidates without the persons paying the money legally having been allowed to do so, and without disclosing who the people were who actually paid money. No trial has occurred and the defendants remain innocent until proven guilty.

The reaction to Danielczyk

There are essentially two major reactions to this decision: 1. Vocal opposition from the media and left of center/good government advocates; and 2. Silence from right of center advocates and corporate decision-makers.

1. Vocal opposition from the media, although widespread, has been focused heavily on the political consequences of the ruling rather than the legal underpinnings or consequences of the ruling. This has resulted in certain mistakes regarding the description of the ruling and its effects. Vocal opposition from outside the media has run the gamut from knee-jerk reactions from those who see little more than political consequences, to well thought out, reasoned, and potentially persuasive reactions from legal scholars.

2. Silence from right of center advocates is likely predicated on the fact that many establishment politicos do not actually want the hassle and negative publicity of soliciting contributions directly from corporations. Corporate decision makers have actually been quietly advocating to maintain the ban on corporate donations for years. Large corporations do not want the dual problem of appearing to directly buy off members of Congress thereby alienating potential customers, but more importantly their shareholders.  Large corporations also do not want members of Congress functionally extorting the corporations for campaign dollars. If the CEO of a Corporation gives money to a campaign most people may not notice, but if the corporation itself started giving money to only one political party supporters of the opposite political party may decide to boycott for political reasons.

Is there anyone out there advocating for the expansion of freedom of monetary political speech?

Yes.  A handful of generally right of center groups advocate for the position that spending political dollars is an exercise of the first amendment. There is also a major attorney, not directly affiliated with a major political party, in this particular field who appears repeatedly in these campaign finance cases.

So what were my posts all about?

I have written six posts about the Danielczyk decision.  These posts were primarily intended for readers either with a strong background in Federal Constitutional law, federal campaign finance law or federal procedure. In particular I found that the coverage in the mainstream media was missing important points about the legal aspects of the case through mistake or neglect.  Following each link is a brief description of each post:

Virginia Federal Court paves the way for direct corporate contributions to federal with candidates, and it does not matter

A federal judge ruled that the ban on direct contributions from corporations to federal candidates is unconstitutional. Most of the criminal case remains intact. The court spent very little time addressing this one particular controversial issue. All of this does not really matter because corporations and politicians do not want to engage in direct corporate donations because of the appearance of corruption.

Why the real fallout of Judge Cacheris’ expansion of the Citizen’s United case will be minimal

The ruling by one judge in this particular court actually has extraordinarily little binding affect. Any Corporation who donates directly to a federal candidate, or any federal candidate who solicits donations from corporations because of the Danielczyk decision is begging to be thrown in jail.  This post is likely the most complicated, but it is also the most important post to understand. I have yet to see the mainstream media indicate they have understood what I conveyed in this post.

Judge Cacheris reconsidering critique of Citizens United?

The judge who issued the Danielczyk decision is so concerned this decision is not thorough enough he decides he wants the parties to submit additional briefs and appear for argument all on a short time frame. It appears the main reason the judge did not consider a major case is because the federal prosecutors did not mention it in their original brief.  Following the line of logic of a major first amendment case, and a related procedural case, it appears more likely than not that Judge Cacheris should declare the federal statute Constitutional.  There are ways to write an opinion that still declares the statute unconstitutional, but the opinion must be detailed and well cited to withstand scrutiny. Motions for reconsideration are rare and even rarer is the occasion when a judge decides to reconsider his own ruling without any party asking him to do so. 

Ban on corporate donations to candidates declared unconstitutional (again)

After reconsidering his previous decision the judge rules the same way. This time he provides a lengthy and detailed analysis.

Ban on direct corporate contributions to candidates upheld in Ninth Circuit

This was largely an acknowledgment of the third appellate case ruling contrary to the decision in Danielczyk.

More procedural hurdles for the appeal of Judge Cacheris’ Citizens United ruling

This post merely identified a major procedural problem facing the US government after they decided to appeal the Danielczyk case.  Essentially the government needed to stop the trial from occurring on the remaining criminal charges, or the appeal would not matter. Before anyone had a chance to concern themselves too much with this problem, Judge Cacheris delayed the trial on the remaining charges so the appeal could go forward.

Where to go for more information:

The best source for additional legal information is at the Election Law Blog, a link to the matters involving Danielczyk can be found here.