In a badly-needed boost to the rule of law and the nation's much-abused new health reform, a three-judge panel on the Fourth Circuit today rejected two attacks on "Obamacare." In one case, Virginia v. Sebelius, the appeals court found that the Commonwealth of Virginia lacked standing to challenge the individual mandate provision and in the other, Liberty University v. Geithner, it ruled that a challenge to the plan's financial penalty for not purchasing individual health insurance coverage was not ready to be heard since the penalty constitutes a tax and taxes may not be challenged until after they have gone into effect and been paid. Both decisions by Circuit Judge Diana Gribbon Motz are a breath of fresh air in a legal and political environment now polluted by partisan and ideological attacks on the health plan.
The decision in the Virginia case, brought by the state's Attorney General Ken Cuccinelli, was an emphatic victory for basic rules of federalism and judicial restraint. Judge Motz found that the court could not hear the case because Virginia lacked standing under long-established jurisdictional principles. As a state, Virginia suffered no "injury in fact" because of the individual insurance mandate it was challenging; the state itself is not "burdened" by it, state officials are not "commandeered" by it, and state sovereignty is not impaired in any way by it. Virginia asserted that it had standing because of a conflict between the new law and a state statute, the "Virginia Health Care Freedom Act," a statute which was transparently cooked up by the legislature for the sole purpose of creating a conflict with the federal health reform law. This state law simply declared that no resident of Virginia "shall be required to obtain or maintain a policy of individual insurance coverage." It had no enforcement mechanism and existed solely for purposes of organizing litigation against the national government. Judge Motz correctly found that, if this kind of metaphysical declaration were enough to create standing, a state could concoct jurisdiction to challenge any federal law just by writing a "not-X" statute. I recall that opponents of the health reform introduced the same meaningless legislation in Maryland and I took great pleasure in pointing out that it had no content. At any rate, Judge Andre Davis dissented from the decision, arguing that the standing problem was no big deal; he would have simply ruled that the individual mandate provision did not exceed Congressional power under the Constitution—and, on this point, he is clearly right.
The other decision, in the Liberty University case, was based on the significant new ruling that the individual insurance mandate is actually a form of federal taxation and the federal Anti-Injunction Act prevents the court from entertaining challenges to taxes until they actually go into effect and have been paid by the litigants. "A taxpayer can always pay an assessment, seek a refund directly from the IRS, and then bring a refund action in federal court," Judge Motz wrote, but the Anti-Injunction Act bars pre-enforcement actions. It is definitely of note that Judge Motz found that, under the Act, financial penalties and exactions are to be treated like a "tax." Both supporters and critics of the decision are noting that this may mark an effort to define and defend the individual insurance mandate as a legitimate exercise of the congressional Taxing power, but this may be over-reading into the court's interpretation of the Anti-Injunction Act, which does have its own body of rules and precedents.
It's not clear yet whether the disappointed litigants will try to take the case en banc to the full right-leaning Fourth Circuit or petition for appeal directly to the Supreme Court. All roads lead to the Supremes in this case since there is currently a split between the Sixth Circuit, which upheld the constitutionality of the individual mandate, and the Eleventh Circuit, which struck it down. In addition, the DC Circuit will be hearing oral arguments in a healthcare challenge in two weeks, so it, too, may add its voice to the discussion by the end of the year. At some point next year, the justices will have to grab the bull by the horns and decide whether they want to fully revive the class-driven judicial activism of the Lochner period by knocking down laws promoting public health and welfare.
The constitutionality of the Affordable Care Act is once again in the news, as a three-judge panel of the Fourth Circuit Court of Appeals heard arguments yesterday on the constitutionality of the healthcare reform law. As reported by the Los Angeles Times:
Lawyers for Virginia struggled to explain how the state had the legal standing to challenge the healthcare mandate on behalf of its citizens. The judges said precedent did not permit states to sue on behalf of their citizens to contest federal laws.
But standing was not a problem in a second case, where lawyers for Liberty University sued on behalf of several individuals. Both lawsuits said a requirement in the new law that everyone purchase healthcare was a violation of the Constitution. ...
By their comments, members of the panel of the 4th Circuit Court of Appeals sounded as though they would reverse that decision and say Virginia Atty. Gen. Ken Cuccinelli had no standing to challenge the law.
Liberty University lost its lawsuit in federal District Court and appealed to the 4th Circuit. Mathew Staver, their lawyer, said Congress could regulate commerce but not "idleness." In this instance, he referred to the refusal of his clients to purchase health insurance.
But the judges didn't sound persuaded. They noted the Supreme Court had said Congress had broad power to regulate a national market, and the mandate was an attempt to regulate insurance. It is a "practical power," Judge Davis said, to regulate effectively.
Perhaps the judges did not sound persuaded because the far right's legal argument is so weak. It cannot be repeated too often that many of those caterwauling most loudly that the healthcare law is unconstitutional were expressing the exact opposite opinion before the corporate-funded Tea Party arose. In fact, the individual mandate was a Republican idea and originally championed by many of those who now claim that it is an unconstitutional usurpation of power by the federal government. Senators Orrin Hatch and Charles Grassley – who co-sponsored legislation during the Clinton Administration that featured an individual mandate – are among the many who have shamelessly flip-flopped on the issue.
Adding to the shamelessness, Mat Staver was one of the attorneys arguing before the court today that the law is unconstitutional. His extremism has long been reported in Right Wing Watch.