Battleground Virginia: Gay Marriage to become primary topic in Virginia's gubernatorial election

The ACLU is about to ensure that gay marriage becomes a major issue in Virginia's 2013 election.

Today, the ACLU of Virginia announced that it would be challenging Virginia's ban on Gay marriage in federal court.  This is part of a three pronged effort in Pennsylvania, North Carolina, and Virginia to challenge restrictions on gay marriage.  Virginia's ban, known as the Marshall-Newman amendment was passed in 2006 by a 57-43% margin. 

The Supreme Court's ruling

On June 26, 2013 the Supreme Court issued two rulings regarding gay marriage.  The California Proposition 8 case was dismissed for lack of standing, and was sent back to California for enforcement of the District Court ruling.  More importantly, the Defense of Marriage Act decision struck down a key component of DOMA in United States v. Windsor. (My curt analysis of U.S. v. Windsor can be found in my previous article).

These two decisions represented big wins for gay marriage proponents.  As of this morning, I expected these victories to have a severe negative affect on liberal turnout in November.  Hence, this would benefit Ken Cuccinelli.

What this means for Ken Cuccinelli

This lawsuit will have a huge negative effect for Ken Cuccinelli.

Ken Cuccinelli was one of the patrons of the Marshall-Newman amendment and one of its strongest proponents.  Ken Cuccinelli is also the sitting Attorney General for the Commonwealth of Virginia as well as the current Republican candidate for Virginia Governor.  In modern history, sitting Attorneys' General in Virginia resign from office during the election year in order to run for Governor.  Ken Cuccinelli decided to forego that trend, which has caused some complications.  Specifically the Attorney General's office has felt the need to withdraw from two different matters involving (at least tangentially) a company called Star Scientific. 

Now, the Attorney General's office will be in the thick of arguing in support of the Marshall-Newman amendment.  Whether Cuccinelli wants to, or not, he will be the face of the opposition to gay marriage.  Many voters pay little attention to political campaigns until the key campaign season between Labor day and election day. The ACLU lawsuit will probably be prepared for summary judgment or a motion to dismiss to be argued in court in late September or early October.  Any attempt by Cuccinelli to avoid discussion of social issues will be easily brought back to the issue du jour in Virginia, which will be gay marriage. 

Terry McAuliffe does not need to focus on the issue of gay marriage.  He simply needs to state his support (which he has) and allow debate moderators, and or the media to force Cuccinelli to repeatedly discuss his dogged defense of the Marshall-Newman amendment. 

This all comes down to turnout

Virginia has off year statewide elections.  The country focuses on Virginia and New Jersey each year after a presidential election.  New Jersey's race is widely considered to be uninteresting, leaving Virginia at the forefront of national news.

Cuccinelli's base is motivated.  No amount of criticism is going to decrease the turnout of the base. 

McAuliffe's base is unmotivated.  Although many liberals are motivated by *dislike* of Cuccinelli, few actually care for McAuliffe.  This enthusiasm gap is cured if McAuliffe has this social issue to run on.

Independents and right/left leaning voters, in my opinion, either support gay marriage, just do not care, or wish the government would just get out of the business altogether.  All three of these demographics will be turned off by the Cuccinelli's media manufactured focus on gay marriage, even if they opposed gay marriage in 2006.  This is because they would rather the governor focus on the economy, and jobs.

And then there is money.  With no nationwide initiative in the next six months, unlimited campaign contributions in Virginia, and an "anti-gay" crusader on the statewide ballot, gay marriage supporters can voice their concerns with their money.

The bottom line

Make no mistake, Ken Cuccinelli is not afraid to stand up for what he believes in, but winning statewide office in Virginia requires him to focus on something more than a divisive social issue. 

The nature and timing of this lawsuit may very well be the reason McAuliffe wins in November.

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.

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.

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

UPDATE: Judge Cacheris reconsiders his previous ruling, coverage here.

On May 29, 2011 I explained the nature of Judge Cacheris’ decision in U.S. v. Danielczyk, Case No. 1:11cr85, and how the portion reported in the media is only a small portion of a 52 page substantial opinion. 

Some commentary from learned observers prompts me to explain why in my estimation this opinion will have little effect on the electoral landscape.

Is the opinion subject to being overturned?

For the opinion to be overturned it must be appealed.  Only in certain specific and uncommon circumstances can a decision be appealed before a case has been resolved.  U.S. v. Danielczyk does not have a final decision, and can not be currently appealed.  There is a trial set for July 6, 2011.  No appeal will be happening at least until after trial, sentencing, and post trial motions.

Moreover, many criminal cases do not reach an appeal stage.  The case is a criminal matter with an indictment that has at least five counts that survived the Defendants’ motions to dismiss.  If there is any reasonable possibility of both actual guilt of the Defendants, and success on any count by the prosecution, the parties will probably reach a deal.  If there is a plea bargain the case will not be appealed, and the ruling will stand.

Professor Rick Hasen who runs the Election Law Blog believes the case will be overturned on appeal, or at least be reconsidered.  In this post, Prof Hasen points out that Judge Cacheris failed to address an earlier Supreme Court case, FEC v. Beaumont, that supports the Constitutionality of the ban on corporate giving.   

It would be odd that Judge Cacheris failed to mention this case, except, as suggested by Prof. Hasen, the federal government did not mention it in their brief.  As indicated, I do not think an appeal is likely, although I do believe this is grounds for reconsideration so Judge Cacheris can write an additional paragraph about how FEC v. Beaumont although not specifically overturned, was functionally overturned in Citizens United.

So if no appeal occurs do we have a corporate fundraising free-for-all?

In my last post I suggested, through a series of rhetorical questions, that a corporate fundraising free-for-all is unlikely for practical reasons.  In reality, as long as this decision is not appealed, a corporate fundraising free-for-all remains legally perilous for candidates and corporations alike.

In Roll Call on May 28, 2011 in an article entitled Campaign Finance Experts See Few Implications for Virginia Ruling, the author states the following:

“The interpretations of Thursday's U.S. District Court decision by Judge James C. Cacheris vary. Campaign finance lawyers believe the decision applies to only a small section of the country, would allow federal candidates to raise donations only from Virginia companies and even those contributions would be subject to donation limits.”

This is mostly accurate.  To understand how this works the reader needs to understand the jurisdictional effect of federal precedent.  In simpler terms, “if a court says something, who geographically is affected?”  For Supreme Court cases, the opinions affect the entire country.  For Federal appeals court cases, (Circuit Courts) the cases affect all of the states and territories within the Circuit. For example the Fourth Circuit encompasses the following states, MD, WV, VA, NC, and SC, and all of those states would be affected by a Fourth Circuit ruling.  For these reasons it is possible to have conflicting rulings in different parts of the country.

The article seems to suggest that the ruling of a District Court Judge will be binding on the entire District.  This is simply not the case.  The rulings of District Court Judges are binding only on the facts, circumstances, and parties of the exact case before the Court.  The other Judges in the Eastern District of Virginia re not even bound by Judge Cacheris’ ruling outside of the actual case of U.S. v. Danielczyk.  Any federal candidate or federal corporation engaging in direct solicitation or contribution, even in the Eastern District of Virginia, is doing so at the highly likely peril of prosecution, assignment to a Judge other than Judge Cacheris, and criminal sanctions.  Not even Judge Cacheris is technically bound by his previous decision, and could decide in a contrary manner for the next similar Defendants in his courtroom.

So if the decision is not appealed, does it matter at all?

Yes.  Any ruling declaring a law unconstitutional will be used by future litigants in an attempt to invalidate the law in other courtrooms.  Eventually this issue will make it to one or more Circuit Courts, and perhaps back to the Supreme Court.  This is just a very early skirmish in a very long litigation battle.  Corporations are far from being able to donate directly to federal candidates. 

For those interested in seeing how an alternative campaign finance system works with no limits, but full disclosure, look into Virginia’s state level campaign finance regulatory scheme.

Some basic sources can be found here:

http://www.vpap.org/

http://www.sbe.virginia.gov/cms/Campaign_Finance_Disclosure/Index.html

Unexpected Orders in the Fourth Circuit challenges to the individual mandate still bad, but not as awful as originally thought

On Monday May 23, 2011 the Fourth Circuit issued two identical orders in Commonwealth v. Sebelius and Liberty U. v. Geithner requiring additional briefing on the issue of the Anti Injunction Act [AIA].  As indicated here, my opinion is that this reflects a strong preference among the Fourth Circuit panel of judges deciding these cases to declare that the penalty under the individual mandate is a tax.

In all of our (commentators') haste to analyze the unexpected demands of the Fourth Circuit in Commonwealth v. Sebelius and Liberty U. v. Geithner, there was a dearth of analysis as to the different effect the AIA might have on the Liberty U. Plaintiffs as opposed to the Commonwealth of Virginia.  Upon further reflection, Monday’s orders still reflect an unexpected setback, but not as much for the Commonwealth of Virginia.  The reason for the lack of effect on the great Commonwealth can be found in a 1984 Supreme Court decision regarding the ever interesting subject of the taxation of interest on state issued bonds.  (seriously, do not read the whole decision unless you are having trouble sleeping).   

Does the AIA apply to the states?

In the matter of South Carolina v. Regan, the Supreme Court addressed an instance in which the federal government sought to bar a state from pursing a remedy due to the AIA. 465 U.S. 367 (1984).  In Regan the Supreme Court stated “the Anti-Injunction Act's purpose and the circumstances of its enactment indicate that Congress did not intend the Act to apply to actions brought by aggrieved parties for whom it has not provided an alternative remedy.”  465 U.S. at 378.  Further the AIA “was intended to apply only when Congress has provided an alternative avenue for an aggrieved party to litigate its claims on its own behalf.”  465 U.S. at 381.

Virginia has no alternative avenue to litigate these claims.  The short version of the holding on the issue relevant to Virginia in Commonwealth v. Sebelius is as follows: If Virginia could never itself pay the tax and then seek a refund as suggested under 26 U.S.C. § 7422, then the AIA does not apply and Virginia may proceed with this lawsuit.  Perhaps in an oversimplification of the holding one could say “the AIA does not apply to the states.”

What does this mean for the Commonwealth of Virginia?

The negative consequences indicated here will not befall the Commonwealth.  Instead the Fourth Circuit will likely throw out Virginia’s claims on standing grounds as indicated in oral argument (I explained this here).

What does this mean for the Liberty U. Plaintiffs?

The Fourth Circuit is seriously considering the individual mandate a tax and dismissing the Liberty U. case pursuant to the AIA.

What does this mean for substantive rulings on the individual mandate?

If the Fourth Circuit finds against the Commonwealth on standing and against the Liberty U. Plaintiffs under the AIA, then the Fourth Circuit will have avoided ruling on the substance of the individual mandate in the PPACA.  The Supreme Court can then still deny certiorari for the Fourth Circuit cases without affecting the Constitutionality of the individual mandate.  The only hope in this situation is that the Commonwealth can convince the Supreme Court that the issue of standing for states is just as important as the Constitutionality of the PPACA, and argue both standing and the Constitutionality of the individual mandate in the Supreme Court.

The second reason the Commonwealth of Virginia should be less concerned about the additional briefing orders can be found here.

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