Affordable Care Act pushes limits of constitutionality

21 June 2011. Health Care News

By David B. Kopel

Within a few weeks, the federal courts of appeal may begin handing down their decisions in the constitutional challenges to President Obama's "Patient Protection and Affordable Care Act." (PPACA). By now, almost everyone agrees that one or more of these cases is headed to the U.S. Supreme Court.

When the PPACA was moving through Congress, there was a lot of bluster from proponents of the law, who insisted that there were absolutely no potential constitutional problems. Most famously, House Speaker Nancy Pelosi scoffed "Are you serious?" to a journalist's question about the law's constitutionality.

As it turns out, there are a lot of serious questions. Rather than being solidly grounded in established constitutional law doctrine, the PPACA pushes into several gray areas. That doesn't mean that the appellate courts and then the Supreme Court will rule against the PPACA, but it does mean that to uphold the PPACA, courts will have to break new doctrinal ground.

Although there have been many suits filed over the PPACA, let's focus on the cases that have advanced to the appellate courts, and that appear to have the best chance of eventually being granted a writ of certiorari by the Supreme Court. (A writ of certiorari is an order by the U.S. Supreme Court, or the Colorado Supreme Court, telling a lower court to send to the supreme court a certified, complete record of the case, so that the supreme court can decide the case. The U.S. and Colorado Supreme Courts both have almost complete freedom to choose which cases they will hear, and the writ of certiorari is the formal mechanism by which they exercise that choice.)

Thomas More Law Center v. Obama.Oral argument has already taken place before a three-judge panel of the Sixth Circuit Court of Appeals. (There are 12 federal circuit courts of appeal, each of which covers a particular region of the U.S. Here in Colorado, we are in the 10th Circuit; the Sixth Circuit covers Michigan, Ohio, Kentucky, and Tennessee.) The plaintiffs are appealing from the federal district court (trial court) decision upholding the PPACA.

Cases that are appealed to a federal circuit court are heard by a three-judge panel, which is randomly selected from 10 or more federal appellate judges in that circuit. Making predictions about case results based on oral argument is risky, but based on the oral argument, observers think that there is some possibility that the three-judge Sixth Circuit panel might rule against the PPACA.

Virginia v. Sebelius. Brought by the Attorney General of Virginia, and based in part on the conflict between the PPACA's individual mandate and a Virginia statute, which protects people from being forced to buy health insurance. The trial court ruled against the individual mandate. The Fourth Circuit (covering Maryland to South Carolina, but not D.C.) tends to be very friendly to government power at all levels, and the oral argument indicated that the circuit judges were inclined to uphold the PPACA.

In an interesting twist after oral argument, the Fourth Circuit asked for additional briefing, which suggests that the court may not reach the merits of the PPACA.

The main argument in favor of the individual mandate is that it is an exercise of the power that the Constitution grants Congress "To regulate Commerce…among the several States."

As a backup theory, the U.S. Department of Justice has argued that the penalty for not buying the type of insurance required by the individual mandate is an exercise of Congress's enumerated power "To lay and collect Taxes." This argument has been a loser in all the district courts, rejected even by district court judges who upheld the mandate under the interstate commerce power.

The Fourth Circuit, however, appears more sympathetic. The Tax Anti-Injunction Act is a federal statute, enacted in 1867, which essentially says that most challenges to the legality of a federal tax cannot be considered by a court until the tax is actually due. Because the mandate does not go into effect until 2014, a legal challenge to the mandate in 2011 might be premature. (Assuming that the penalty for not obeying the mandate really is a tax,  even though the PPACA itself calls the penalty a "penalty" and not a tax; an earlier version of the bill had characterized the penalty as a "tax," but this was changed in the version that was enacted by Congress.)

The Fourth Circuit's request for additional briefing on the Tax Anti-Injunction Act indicates that the Circuit may throw the case out as premature.

In the Fourth Circuit, Virginia v. Sebelius has been consolidated with Liberty University v. Geithner. Liberty University, founded by the late Jerry Falwell, lost this case in the district court.

Florida v. Department of Health and Human ServicesFlorida and 25 other states, including Colorado (led by Colorado Attorney General John Suthers), as well as the National Federation of Independent Businesses, won the case in the district court. Oral argument before the 11th Circuit (Florida, Georgia, Alabama) indicates that this case is the most likely one to produce an appellate decision against the PPACA.

Besides the individual mandate issue, the Florida case also challenges the PPACA's requirement that states must either dramatically expand their Medicaid programs, or face a complete cut-off of all federal funds, even for current levels of Medicaid.

The 1987 Supreme Court case South Dakota v. Dole upheld a federal law that cut federal highway grants by 10 percent for states that did not raise their drinking age to 21. Chief Justice Rehnquist's opinion for the Court said that conditional federal grants to states were permissible, but warned that some grants might be so coercive as to violate the 10th Amendment and principles of federalism.

Since 1987, no court has found any conditional federal grant to be invalid under South Dakota v. Dole, but no case until now has involved such vast sums of money, or funding which has become such a major part of state budgets.

To the surprise of many, the 11th Circuit judge's questions during oral argument indicated that they were taking the South Dakota problem very seriously.

Finally, there is Seven-Sky v. Holder, in the federal Circuit Court of Appeals for the District of Columbia. Oral argument will not take place until September. The cases raises not only the standard issue (whether Congress can impose the individual mandate via its interstate commerce power or its tax power), but also a First Amendment question.

All the Seven-Sky plaintiffs are individuals who, for one reason or another, have religious objections to using the standard services of western medicine. The PPACA contains no exemption for such people. The PPACA has an exemption for some persons in certain "Health Sharing Ministries," and also has a narrow clause for conscientious objectors; the Amish are exempt, but Christian Scientists are not, nor are members of any religion which was created after 1950.

The Seven-Sky lawyers are from the American Center for Law and Justice, a public interest law firm with a long record of success in religious liberty cases, including in the Supreme Court. They argue that the mandate violates the First Amendment's guarantee of free exercise of religion, as protected by a federal statute called the Religious Freedom Restoration Act (RFRA). That 1993 law provides that the federal "Government shall not substantially burden a person's exercise of religion even if the burden results from a rule of general applicability."

Under RFRA, the federal government may substantially burden religious freedom only in "furtherance of a compelling government interest," and even then, only when the burden is the least restrictive means of furthering that compelling interest. The Seven-Sky plaintiffs argue that the PPACA's refusal to exempt genuine conscientious objectors who do not fit into PPACA's narrow exemption categories violates RFRA.

What next? When you lose a case before a three-judge Circuit Court of Appeals panel, you have the option of petitioning for a rehearing "en banc." An en banc rehearing of the case takes place before all or most of the appellate judges for the Circuit. (E.g.,  in the 11th Circuit, all 11 circuit judges would hear an en banc case.)

Because there are so many judges involved, it can take a long time for an en banchearing to be scheduled.

The grant of en banc rehearing is purely discretionary, and requires a vote of the majority of the judges in the circuit. (E.g., 6 of the 11 judges of the 11th Circuit.)

Instead of requesting an en banc rehearing, a losing party may simply petition the Supreme Court for a writ of certiorari.

Of course a party can request an en banc, and if the en banc request is denied, the party can then attempt to go the Supreme Court. If the Circuit does grant an en banc rehearing, whoever loses that hearing can then ask the Supreme Court to take the case.

In the PPACA litigation, the Obama administration has been doing everything possible to slow the cases down. The longer the delay, the greater the window of opportunity for President Obama to appoint another Supreme Court Justice. So if the PPACA loses in any Circuit Court, the administration will almost certainly petition for en banc rehearing.

Conversely, the various plaintiffs would, if they lost in a Circuit Court, almost certainly skip the en banc, and would immediately file a petition for a writ of certiorari to the Supreme Court.

Thus, although losses in the Circuit Courts of Appeals would be terrible for PPACA supporters in terms of public opinion, losses would give the Obama administration the tactical freedom to use en banc rehearings to keep the cases away from the Supreme Court for up to one additional year.

However, the winning plaintiffs could have one important additional tool to keep the cases moving forward. If they win on some but not all of the issues they raise, they could, as the losing party on some issues, try to go directly to the Supreme Court. The Supreme Court, if it decided to hear a particular case, would then have the option of considering all the issues, regardless of who won or lost in the lower courts.

So the most likely outcome is that at least one of the cases discussed above will be ready for the Supreme Court to consider sometime during its next term, which begins in October 2011, and will end in June 2012.

David Kopel is research director for the  Independence Institute and adjunct professor of advanced constitutional law at the University of  Denver Sturm College of Law.


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