Obamacare's Destiny: The Supreme Court

By David Kopel

The New Ledger

Oct. 20, 2010

The most important lawsuit challenging the Obama health control law won a major victory on last Thursday. Florida federal district court Senior Judge Roger Vinson rejected the Obama administration's motion to dismiss the case, which has been brought by 20 states.

Some portions of Judge Vinson's decision provided a final ruling on legal issues. As the court noted, Congress went out of its way to repeatedly specify that the penalty for disobeying the health insurance mandate is not a tax. Accordingly, the court rejected the administration's post-hoc argument that Congress can take over of everyone's health care choices, impose a fine for not buying the kind of health insurance that Congress likes, and then justify the whole thing based on the constitutional power "to lay and collect taxes."

Second, the court ruled that it is proper for the plaintiffs--including the states and the National Federation of Independent Business--to be heard now in their challenge to the mandate, which goes into effect in 2014. To have "standing" in federal court, plaintiffs must have a real injury. Merely having a theoretical objection to the law is not enough.

The court cited extensive precedent showing that when a future harm--such as the expense of paying for 2014 mandate--is certain, courts can act in the present to protect plaintiffs from that harm.

Judge Vinson denied the states' complaint about the new rules for the kind of health benefits that state governments must provide to state employees. The states contended that the rules violate their sovereignty, which is protected by the Tenth Amendment. However, as the court noted, the law simply treats states like other large employers. So making states provide the same health benefits as other large employers is no different from making states pay the same minimum wage as all other employers. The Supreme Court has held that federal minimum wage laws may be imposed on state governments. (Garcia v. San Antonio.)

In 1987, the Supreme Court ruled that Congress could sets conditions on financial grants to states--such as by withholding a small portion of federal highway aid if states did not raise the drinking age to 21. (South Dakota v. Dole.) The South Dakota Court said, however, that "in some circumstances the financial inducement offered by Congress might be so coercive as to pass the point at which ‘pressure turns into compulsion.'"

As Judge Vinson noted, the health control law does appear to turn pressure into compulsion, which would violate the Ninth and Tenth Amendments: States must increase their own Medicaid spending by billions of dollars on millions more people, or the states will lose all funding for the traditional Medicaid program. Although the judge allowed the compulsion claim to proceed to trial, he appeared skeptical that the states would win on the merits, since the precedents from federal courts of appeal have been hostile to compulsion arguments.

The judge also allowed another claim to go forward: that congressional power to "regulate Commerce…among the several states" does not mean that Congress can force people to buy a type of health insurance policy that they don't want.

Here, the court's analysis suggested that there is good chance that the states and the NFIB will win when the court issues a final decision in several months. The court pointed out that the individual mandate was "unprecedented." Significantly, the court rejected the Obama administration's attempted analogy to the Civil Rights Act of 1964. That law, which was upheld by the Supreme Court said that most businesses, including motels, could not discriminate against customers on the basis of race. (Heart of Atlanta Motel v. U.S.).

As Judge Vinson explained, if "you choose to engage in the activity of operating a motel," then you can be regulated as to how you engage in the activity. If the motel owner wanted to stop operating the motel, he was "not required to be in the motel business."

In contrast, the health control mandate is "something very different. The individual mandate applies across the board. People have no choice and there is no way to avoid it….It is not based on an activity that they make the choice to undertake. Rather, it is based solely on citizenship and on being alive."

Indeed, the fact that for over two centuries Congress had never attempted to exercise a power to use the interstate commerce clause to force people to buy certain products is strong evidence that there is no such power, suggested Judge Vinson.

Ultimately, the final decision will probably be made by the Supreme Court, as Justice Breyer has predicted. It is significant that the Obama administration has failed to delay the cases, so they will likely get to the Court before President Obama can pack the Court with more Justices who have been vetted to favor the federal law.

For now, the Florida case, like a parallel case filed by the Virginia Attorney General, and which also survived the Obama administration's attempt get the suit dismissed, answers one important question. When House Speaker Nancy Pelosi was asked if the health control law is constitutional, she contemptuously asked back, "Are you serious?" The answer, the federal judges are saying, is "Yes."

David B. Kopel is Adjunct Professor of Advanced Constitutional Law at Denver University, and Research Director of the Independence Institute, in Colorado. He recently joined the Washington Legal Foundation's amicus brief in Virginia v. Sebelius, arguing that the health control law is unconstitutional.

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