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.

Is the individual mandate penalty a tax? Analysis of the 4th Circuit briefs regarding the Anti Injunction Act

In originally proposing the individual mandate as part of the PPACA, Congress and the President took great pains to ensure that no portion of the bill be referred to (or enacted as) a tax.  Of course once threatened litigation hit the Federal Courts lawyers for the Federal government argued that the penalty for not obtaining insurance pursuant to the individual mandate is a tax.  This is because the penalty pursuant to the individual mandate is more likely to be considered Constitutional if it is a tax, than if it is a mere regulatory penalty promulgated pursuant to the commerce clause in Article I § 8 of the Constitution.

On May 23, 2011, nearly two weeks after oral argument in the two Virginia cases (Commonwealth v. Sebelius and Liberty U. v. Geithner ), the Fourth Circuit ordered additional briefing on the application of the Anti Injunction Act [AIA], and if the penalty for meeting the terms of the individual mandate constitutes a tax under the AIA.  This was a strong signal that the Fourth Circuit panel that heard oral argument not only believes the penalty is a tax, but that the parties are not allowed to come to court to challenge that tax until after the tax is assessed and collected in another couple years.

Virginia, and the Liberty U. Plaintiffs submitted substantially different briefs due to the procedural effects on each party of the AIA.  The Federal government submitted a nearly identical brief in both cases, and argued something quite surprising.

Below is an analysis of the briefs submitted on May 31, 2011, and the potential effect they will have on each case.

Virginia’s brief correctly lays out the inapplicability of the AIA

The AIA does not apply to Virginia in this type of situation.  As I laid out here on May 24, 2011, and here on May 26, 2011, The AIA, for the most part, does not apply to states.  In short, the AIA does not apply to Virginia, as there is no alternative remedy given by the AIA.  Further, the AIA generally does not apply to the states under traditional statutory construction principles.  On pages 2-4 of the brief Virginia applies a version of my analysis from May 24, 2011, and on pages 4-6 Virginia applies a version of my May 26, 2011 analysis.  Both are accurate and controlling, and the Fourth Circuit panel will likely find the AIA simply does not apply to Virginia.  Unfortunately, as I indicated on May 10, 2011 I believe Virginia is likely to lose at the Fourth Circuit due to standing.

Liberty U.’s brief impressively lays out not only a major exception to the AIA, but also how the penalty truly is not a tax

In a simple summary the brief starts, in part, with the following:

“The AIA deprives a court of jurisdiction only if the suit seeks to restrain the assessment or collection of a tax. Even then, the AIA does not apply if (1) it is clear that under no circumstances could the Government ultimately prevail, and (2) equity jurisdiction exists otherwise.”

Equity jurisdiction in this instance is injunctive relief based on a court ordered declaration that the PPACA is unconstitutional.  The first part of the test is self explanatory.  Nonetheless, I presume the Fourth Circuit panel still feels the penalty is Constitutional.   

And the Federal government capitulates?

Far and away the most surprising arguments came from the Federal government.  On page 2 of each brief they state:

“In the district courts, the government argued for dismissal of these actions under the AIA. On further reflection, and on consideration of the decisions rendered thus far in the ACA litigation, the United States has concluded that the AIA does not foreclose the exercise of jurisdiction in these cases.”

The Federal Government expressly attempts to waive the argument of the applicability of the AIA.  They go to great lengths to reemphasize that the penalty is Constitutional as it is a tax.  Later on page seven they argue:

“. . .Congress delayed the effective date of the minimum coverage provision, thus dramatically mitigating the risk of disruption to ongoing administration of the tax code that the AIA is intended to prevent. The AIA’s purpose is to prevent anyone from interfering with the federal government’s administration of the Tax Code, from forcing it by judicial fiat to treat a particular taxpayer or group of taxpayers differently than others, and from compelling it to stop or alter the ongoing business of tax enforcement. This broad challenge to the constitutionality of the minimum coverage provision, which was brought nearly four years before the minimum coverage provision is to be implemented, five years before any tax is to be paid and the IRS begins assessing and collecting those taxes, and well before the IRS has even set up the systems to administer the provision, poses no realistic threat of such disruption -- in contrast to the threat of disruption to the administration of the ACA that postponing review would raise.”

In short, they want this issue resolved well in advance to avoid disruption of the PPACA years down the road.

But isn’t this a change of heart?  In my opinion, yes.  The Federal government has changed its strategy, but not because of fear of disruption in 2015.  I believe the strategy, up until now has been to delay as long as possible, even if that means procedural dismissals (such as a dismissal based on standing or ripeness) in order for the PPACA be too far along for courts to want to disrupt implementation.  But, given the makeup of this Fourth Circuit panel, the Federal government wants a substantive (rather than procedural) victory to carry to the 6th and 11th Circuits to support their other cases.

The result

The Fourth Circuit could ignore all the briefs and rule as it deems fit.  Unfortunately, given the not so subtle signals from the Federal Government I fear we are headed towards a dismissal of Virginia’s claim based on standing, and a loss for the Liberty U. Plaintiffs on the substance of the PPACA.

Virginia's supplemental brief on the Anti Injunction Act

No time to analyze, just links to uploaded copies of

Virginia's Supplemental Brief in Commonwealth v. Sebelius 

The Federal Government's Brief in Commonwealth v. Sebelius

The Federal Government's Brief in Liberty v. Geithner

The Plaintiffs' Brief in Liberty v. Geithner

regarding the status of the individual mandate penalty as a tax and the application of the Anti Injunction Act.

Provided as a public service.

My previous coverage of PPACA/Individual mandate challenges can be found here.

Virginia challengers of the individual mandate have a bad day in court

"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.

This was a bad day for those challenging the individual mandate.  For months we have known that two cases challenging the individual mandate of the PPACA (also known as Obamacare) would be argued back to back in the U.S. Court of Appeals for the Fourth Circuit.

The day begins with unfavorable news

The argument was to be heard before two President Obama nominees and a President Clinton nominee.  The arguments are made before a three Judge panel.  The parties do not know the makeup of the panel until the morning of the argument.  The federal cases involving the individual mandate have been decided in favor of the party of the President that nominated the Judge, i.e. all Democratic nominees have found the individual mandate Constitutional, and all Republican nominees have found the individual mandate unconstitutional.  Most observers readily state that the makeup of the panel has significant effect on the outcome.

A rocky time for Liberty U.

The matter of Liberty U. v. Geithner, Record No. 10-2347, a case where the individual mandate was upheld in the Western District of Virginia, went first.  Based on reports, this portion was not very favorable to the parties challenging the individual mandate, but at least the three Judge panel acknowledged their right to reach the merits of the case.

Virginia - who are you to sue the federal government?

The panel did not allow Virginia to address the merits as the entire argument surrounded whether Virginia had a right to sue in the first place.  A party that has a legal right to sue in a given case is said to have "standing."  The three Judge panel did not appear at all to feel Virginia had standing to bring its case.  I discuss standing here, and here, and here with regard to the individual mandate, and here with regard to redistricting.  Up until today, Virginia has suggested that it has standing, in part, because Virginia passed Va. Code § 38.2-3430.1:1 stating that no citizen is required to buy health insurance.  The states in the Florida case did not have such a statute (that I know of).  Yet both the states in the Florida case and Virginia claim standing under a general theory of the right to sue on behalf of citizens . . . until today. 

When pressed at oral argument about whether Virginia is only relying on Va. Code § 38.2-3430.1:1 or a claim of general jurisdiction, Virginia's Solicitor General said

"They [the states in the Florida case] claim there is a general jurisdiction.  I'm not claiming that. I'm claim.  I'm resting my claim on my statute."

All "standing" arguments for the Commonwealth of Virginia were boiled down to reliance on Va. Code § 38.2-3430.1:1.  This must have been a strategic decision, and not one that is on its face incorrect.  Nonetheless, I would have preferred Virginia leave the door open for other ways to establish standing.  Although, Virginia may get a clean slate with the Supreme Court, if the full Fourth Circuit hears this case en banc (all of the Judges), Virginia is probably going to have to stick with that one argument.

What should we hope for . . .

Given the makeup of the Court and the perceived positions of the Judges, for those opposed to the individual mandate, the best thing we can hope for is a split decision (loss) that comes quickly, and a win in Atlanta for the appeal in the Florida case.  The Supreme Court will then likely take the case, and we can fight it out there.

Sources

First hand account: Washington Examiner.

Primary sources: Recordings of oral arguments.

 Click here. for my previous posts regarding the individual mandate.

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.
http://northernvirginialawyer.blogspot.com/2011/03/while-individual-mandate-is-challenged.html

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:

http://www.scribd.com/doc/49899901/Liberty-v-Geithner

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:

http://northernvirginialawyer.blogspot.com/2011/02/dc-healthcare-case-excellent-legal.html

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

http://northernvirginialawyer.blogspot.com/2011/01/virginia-and-florida-healthcare-rulings.html

Posts regarding the DC healthcare ruling

http://northernvirginialawyer.blogspot.com/2011/02/dc-healthcare-case-excellent-legal.html

http://northernvirginialawyer.blogspot.com/2011/02/dc-healthcare-case-second-analysis.html

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:

http://northernvirginialawyer.blogspot.com/2011/01/virginia-and-florida-healthcare-rulings.html

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.

Virginia and Florida healthcare rulings nearly identical

Judge Vinson in the federal court for the Northern District of Florida has declared the federal health care law unconstitutional and void in total.  Opinion here.  The Florida case began with much broader and more numerous grounds for the unconstitutionality of the law than the other successful lawsuit (for the time being) in Virginia. 

Judge Vinson, in October, dramatically reduced the scope of the Florida lawsuit, but allowed it the case to continue on two major grounds.  Opinion here.

1. Did the health care reform package violate the constitution in imposing additional unfunded burdens on the states through Medicaid?;

and

2. Is the individual mandate unconstitutional?

The largest difference between the Florida and the Virginia case is the challenge based on Medicaid coverage.  This was the portion of the lawsuit that brought 26 states together in the Florida case.  The Plaintiffs in the Florida case lost this issue, it did not even appear close.  Judge Vinson makes reference to the Plaintiffs barely arguing a major legal test, and points to the critical factor that Medicaid participation by states is optional.

That being set aside, the only thing left to rule upon is the individual mandate:

In today's opinion, Judge Vinson ruled (just as in the Virginia decision) that the individual mandate is unconstitutional.

In today's opinion, Judge Vinson (just as in the Virginia decision) decided an injunction against enforcement of the law is unnecessary as declaratory judgment against the government works essentially the same person.

So what was the difference?  Severability.