Unconstitutionality of health care bill in other states could affect Colorado

By Marianne Goodland
THE COLORADO STATESMAN

Colorado Attorney General John Suthers hopes that a Florida federal judge this week will decide that the federal health care reform act is unconstitutional, the same conclusion reached earlier this week by a federal judge in Virginia.

And Suthers is cheering the ruling by Judge Henry Hudson of the Eastern District of Virginia. On Monday, Hudson declared the Patient Protection and Affordable Care Act (ACA) unconstitutional but he denied a request for an injunction that would block the law’s implementation.

Thursday, Judge Roger Vinson in the Northern District of Florida (Pensacola) heard oral arguments on the related lawsuit, known in that state as McCollum v. Sebelius. Vinson, a 1983 appointee of President Ronald Reagan, previously ruled in October that the case could go forward, but dismissed four of the six claims in the lawsuit originally filed by Florida Attorney General Bill McCollum. Suthers is one of more than a dozen attorneys general and other plaintiffs representing 20 states in the suit, which also includes the National Federation of Independent Business (NFIB).

NFIB Executive Director Karen Harned spoke to The Colorado Statesman minutes after the hearing concluded. “We feel very good about how it went,” she said.

Harned said Vinson seemed to understand the plaintiffs’ argument on the individual mandate. For example, she said, Vinson asked the government’s attorneys questions on whether the government could force people to buy shoes or broccoli. The government has the right to regulate insurance but forcing people to buy it is new, Harned said. She also said Vinson seems open to an injunction, where Hudson deferred that decision to the appellate courts or the U.S. Supreme Court.

According to Harned, Vinson gave no date for a decision but said he would rule “as soon as possible.”

The ruling in the eastern Virginia court comes from one of four lawsuits filed around the nation challenging the Affordable Care Act (ACA). And one of the bill’s authors continues to maintain that the lawsuits are unnecessary, because a provision in the ACA allows states to opt out of parts of the bill, including the individual mandate, if they can come up with their own plans that satisfy the ACA’s coverage requirements.

The rulings in the cases so far appear to fall along political lines, with judges appointed by Democratic presidents ruling in favor of the Obama administration, and those appointed by Republicans ruling against.

Hudson, an appointee of President George W. Bush, said in his ruling Monday that the individual mandate, known as section 1501 in the bill, “exceeds the constitutional boundaries of congressional power.” The lawsuit challenged the ACA’s assertion that Congress could require individuals to purchase health insurance under the Commerce Clause of the U.S. Constitution, beginning in 2014. Hudson wrote that Congress lacked the power under the Commerce Clause “to compel an individual to involuntarily engage in a private commercial transaction” as contemplated by section 1501. “Neither the Supreme Court or any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market,” Hudson wrote. The case was filed by Virginia Attorney General Kenneth Cuccinelli in the U.S. District Court for the Eastern District of Virginia, and is Commonwealth of Virginia v. Sibelius.

According to Suthers’ spokesman Mike Saccone, “We are pleased to see that the Virginia court has agreed with what Attorney General Suthers has been saying all along: that there are serious constitutional issues with the individual mandate.” Saccone said that courts all over the country are considering this question, and the case will “assuredly go to the appellate courts and to the Supreme Court.”

Hudson’s ruling joins two others made in the last two months on the health care reform issue, but those judges reached the opposite conclusion.

The first decision came down Oct. 7 in Michigan. Judge George C. Steeh of the Federal District Court in the Eastern District of Michigan (Detroit) ruled against the Thomas More Law Center, a conservative law firm, and four individual clients. The Center sought a preliminary injunction to block implementation of the law; that case, like all the others, was filed on March 23, moments after President Barack Obama signed the bill into law. Steeh was appointed by the bench by President Bill Clinton.

Like the cases in Florida and Virginia, the plaintiffs not only sought a ruling that Congress lacked the authority under the Commerce Clause, but they also insisted that the penalty provision of the Act was an unconstitutional tax. That penalty provision says that those who fail to purchase health insurance and don’t quality for some of the limited exceptions would be assessed a penalty, to be levied against their tax returns. In the Michigan case, the plaintiffs also said the ACA violated due process and states’ rights under the Fifth and Tenth amendments, a claim echoed in the Florida lawsuit.

The individual clients represented by the Thomas More center maintained that they did not have private insurance, and that the financial penalty for not obtaining such insurance would go into the federal government’s “General Fund” and could be used to pay for abortions. The individuals also said they would have to make adjustments to their financial affairs in order to pay for health insurance, but Steeh rejected that argument, stating that “the court is not required to determine if every financial decision made by plaintiffs is caused by the Individual Mandate.”

Regarding the Commerce Clause, Steeh noted that the plaintiffs insist that the federal government “has never attempted to regulate inactivity, or a person’s mere existence within our Nation’s boundaries, under the auspices of the Commerce Clause. It is plaintiffs’ position that if the Act is found constitutional, the Commerce Clause would provide Congress with the authority to regulate every aspect of our lives, including our choice to refrain from acting.”

In rejecting that argument, Steeh cited two Supreme Court cases that he said addressed the issue of commerce, explaining that not having insurance has a substantial impact on commerce. In pointing to Wickard v. Filburn (1942) and Gonzales v. Raich (2005), Steeh wrote that the Supreme Court “sustained Congress’s power to impose obligations on individuals who claimed not to participate in interstate commerce, because those obligations were components of broad schemes regulating interstate commerce.”

“The Supreme Court has consistently rejected claims that individuals who choose not to engage in commerce thereby place themselves beyond the reach of the Commerce Clause,” Steeh wrote. “Similarly, plaintiffs in this case are participants in the health care services market. They are not outside the market. While plaintiffs describe the Commerce Clause power as reaching economic activity, the government’s characterization of the Commerce Clause reaching economic decisions is more accurate.”

On Nov. 30, Judge Norman Moon, in the U.S. District Court for the Western District of Virignia (Lynchburg), dismissed a lawsuit filed by Liberty University challenging the individual mandate. Moon also is a Clinton appointee to the bench.

As with the Michigan case, the plaintiffs in Liberty cited abortion services as a reason for fighting the law; in this case however, it was because the Act did not protect “against mandatory insurance payments being used to fund abortion coverage.” Moon pointed out that the Act states that plans are not required to fund abortion services, and in every state’s health benefit exchange, there must be at least one plan that will not provide abortion services except in cases of rape or incest. And states could pass legislation prohibiting all plans in the state exchange from offering abortion services, Moon wrote.

Moon wrote that he believed Congress had the necessary authority under the Commerce Clause to pass the ACA, citing the same cases that were used in the Steeh ruling. “There is a rational basis for Congress to conclude that individuals’ decision about how and when to pay for health care are activities that in the aggregate substantially affect the interstate health care market.”

Moon also cited Steeh’s October ruling in his decision regarding whether the individual plaintiffs had suffered harm from the ACA, pointing out that those plaintiffs, who claimed they did not have insurance, could not anticipate what their status would be in 2014, and Moon suggested they could acquire insurance through employment, Medicare or Medicaid, or qualify for an exemption by 2014.

The Thursday hearing in Florida will focus primarily on the constitutionality of the individual mandate under the Commerce Clause.

On Oct. 14, Vinson issued a preliminary ruling, dismissing four of the six claims. He rejected the claim that the penalties assessed for those who do not obtain health care coverage are instead a tax. Vinson also dismissed a claim that said the individual mandate violated the due process amendment in the U.S. Constitution.

However, following the Oct. 14 hearing The New York Times reported that Vinson appeared to show sympathy for the plaintiffs’ arguments regarding the individual mandate.

Sen. Ron Wyden, D-OR, says all the fuss over the individual mandate, and the lawsuits challenging it, are unnecessary, because the ACA contains a provision allowing states to apply for a waiver that would exempt them from the individual mandate. In a September fact sheet regarding misconceptions about the waiver, Wyden wrote that the current health reform law included a section that would allow states to opt out of the some of the provisions of the law, including the individual mandate that has been at the heart of every lawsuit filed to date. Wyden’s reason for including the opt out was because what works in Florida might not work so well in Oregon, he wrote. The waiver should be granted for those states that could “find a way to do a better job of covering their state’s citizens,” and would be granted by the Secretary of Health and Human Services and the Secretary of the Treasury.

Wyden said his amendment, which is contained in section 1332 of the ACA, allows states to apply for waivers beginning in 2017. He has since then introduced another bill, with Sen. Scott Brown, R-Mass., to move that waiver up to 2014, the same year that the individual mandate goes into effect. He acknowledged that a 2017 waiver date would not be cost effective for states to implement their own plans if they also had to pay to implement the federally mandated program in 2014.

Wyden Press Secretary Tom Caiazza told The Statesman that Wyden’s position has not changed since September, or in the wake of the court rulings. “States have the option to innovate rather than litigate,” he said this week.

According to Saccone, Suthers was unaware of the waiver option when contacted by The Statesman this week. Saccone said that the Attorney General’s office contacted their colleagues in Florida, who were also unaware of an opt-out provision regarding the individual mandate.

In a later statement to The Statesman after a review of the pertinent sections, Saccone pointed out that “it would appear based on the language of the law that the only way to truly opt out — i.e. to enact coverage on par with the requirements of the legislation — would be to adopt a true single-payer system. This sort of coercion of the states does not alter in any way the states’ constitutional point that Congress has imposed a mandate on the states and their citizens beyond the scope of its authority under the 10th Amendment.”

In addition, Saccone said, “nobody, including the administration, has to our knowledge advanced the argument that this affects the constitutional question.” And he also pointed out that the plain language of the law says that the waivers are good only for five years unless the state seeks a continuation of the waiver. As a result, “any such waiver would be by definition temporary and …not be a permanent opt-out. The plain language of the bill also bars the granting of any waiver prior to 2017. Thus, Colorado is covered by the mandate until then,” he wrote.

NFIB Executive Director Karen Harned, in a statement issued prior to the beginning of Thursday’s oral arguments, said “Forcing Americans to purchase a private product, just because they are alive, is simply not a power granted to Congress. …[the federal government has] been unable to cite a single case supporting their arguments. The fact is that the Supreme Court has never upheld a law like this — one that applies the Commerce Clause to decisions made by Americans to refrain from participating in a certain market.”

“The government should not regulate citizens into action,” Harned continued. “If our decisions to do nothing can be regulated, then there will effectively be no limits on what Congress can force Americans to do. That’s why this case is about much more than just healthcare. It is about the limits of power established by the Constitution.”

Harned told The Statesman Thursday that prior to the rulings in Michigan and western Virginia, there had not been one case where a judge or the U.S. Supreme court had rules that the Commerce Clause covered inactivity. “That’s the distinction,” she said.

Marianne@coloradostatesman.com