Individual Mandate now 2-1 in Courts

The blogs are alive with the news that Henry Hudson, federal judge in Virginia, has issued an opinion finding the individual mandate of the PPACA unconstitutional. Opinion in Virginia v. Sebelius is here. but the key paragraph (per the Washpo) seems to be this:

"Neither the Supreme Court nor 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," he wrote. "In doing so, enactment of the [individual mandate] exceeds the Commerce Clause powers vested in Congress under Article I.

This is the first ruling against the health insurance reform law which passed Congress in early 2010. A federal trial judge in Michigan had previously ruled that the individual mandate is authorized by the commerce clause in Article I §8 of the Constitution. Another federal judge, this time in the Western District of Virginia, has upheld the constitutionality of the Minimum Essential Coverage Provision, aka individual mandate. That case, Liberty University v. Geithner and Virginia v. Sebelius must be reconciled by the Fourth Circuit.

Health Care Legislative Tactics Doomed 2010 Democrats

The New York Times is out with a poll today from which they draw the conclusion that the demographic coalition that elected President Obama is splintering at the margins, turning Obama voters into Republican or non-voters. Certainly the data tell that story, but I think the more important story is the reason that voters give for abandoning the Democratic party after one of its most successful legislative sessions it has ever had.

The NYT article includes the anecdote gleaned from a post-survey interview of one voter:

Judy Berg, an independent from Morton Grove, Ill., said she voted for Mr. Obama in 2008 because she was “looking for a change,” adding, “the change that ensued was not the change I was looking for but something totally out of left field.”

What was the largest gap between the Obama's campaign sloganeering and the reality of the legislation passed into law? The stimulus package was a campaign promise. TARP was well-publicized and generally acknowledged as a policy that Obama would continue. Financial regulation was a centerpiece of speeches after the collapse of Lehman Brothers in early October 2008. The Lilly Ledbetter Fair Pay Act was a campaign promise, though honestly, nobody is talking about it. Similarly while President Obama has not made good on his pledge to end DADT or close the dubiously legal prison at Guantanamo Bay, most voters aren't driven primarily by these issues (not to mention the electoral alternative is demonstrably worse to anybody who is unhappy about the lack of progress).

On Health Insurance and Fire Departments

This last week, the blogs were alive with the sound of a house burning down. The fire department allowed the fire to reduce the Cranick family home in Obion County to embers because the owners had failed to pay the $75 fire service subscription fee to the nearby town of South Fulton. Firefighters did not respond to the scene when the fire was first reported because the family had not paid for the fire prevention service. When a neighbor who had paid his firefighting fee called, the firefighters loaded up their trucks and drove out to the site to prevent the fire from spreading to the neighbor's property.

I would assume that the family also did not have fire insurance on their house. And even if they had, it would likely be void. Failing to take the needful steps to protect your house from fire is certainly negligent. The refusal to pay a fire subscription fee is tantamount to failing to and I suspect that homeowners' insurance would not cover such willful negligence.

Fire insurance pays to replace possessions and real estate that was damaged by fire. However, health insurance does not compensate the patient for the damage that a disease causes her. Health insurance is used to pay for the procedures which prevent the disease from wreaking havoc on the body. It is in a way a medical tool which determines the outcome of a health problem. Similarly, paying for fire service subscription determines the outcome of a fire threatening your house.

An NPR reporter collected opinions from residents of South Fulton, two of whom replied that it would be wrong to let a house burn to the ground, regardless of whether the owner has paid for fire prevention service.

So how do you solve the moral conundrum of having to decide whether to put out the fire or sacrifice the meaning of the fire subscription fee? Well, you could mandate fire coverage, like every city does. Fire is a dangerous phenomenon, and its effects are not limited to those who choose to accept its risk. Cities desperately need to prevent fires from spreading building-to-building, so they do not allow a fire to get out of hand. City dwellers are mandated to pay for fire service. Municipalities tax their residents to ensure the public safety.

When a disease becomes an epidemic, the common saying is that it is "spreading like wildfire". Public health has the same goals as fire prevention: to provide security to citizens. To further this goal, it is sometimes necessary to restrict the set of decisions that a person can make. A person with a highly infectious disease cannot be allowed to promenade through a city. She must be treated. There are times when living in a society requires significant sacrifices of "individual liberty". Health is one of these areas, as is fire.

PPACA: No Way Around Commerce Clause Precedent

Late today, a federal judge in Michigan's Eastern District ruled that the individual mandate is constitutional, and is authorized by the commerce clause. In Thomas Moore Law Center et al. v. Obama (pdf), the plaintiffs seek a preliminary injunction against the enactment of the individual mandate. This is a slightly different issue from the States' claims in FL v. DHHS, but the commerce clause logic should work the same. As a spokesperson for the Department of Justice points out, this is the first time in which the merits of challenges to the Patient Protection and Affordable Care Act have been grounds for a decision.

Plaintiffs, two individuals and a public interest group, have standing. The issue is ripe for judicial decision. The remedy is allowed for under the Anti-Injunction Act. Let's play ball!

Plaintiffs argued that Congress has never had the power to regulate commercial inactivity, whereas the individual mandate seeks to penalize individuals who do not purchase health insurance. The district court finds that the authority of Congress to mandate individual coverage is found in the doctrine stated in US v. Lopez, 514 U.S. 549 558-559 (1995): "Those activities that substantially affect interstate commerce." The court dutifully follows instructions from Gonzales v. Raich 545, U.S. 1, 22 (2005) that it merely should look to whether there is a reasonable basis for the belief that such a relationship between the activity and interstate commerce exists.

So, Does the PPACA Exceed Congressional Power?

As part of my effort to analyze the litigation attempting to block the Patient Protection and Affordable Care Act from taking effect, I've been walking through the recent Commerce Clause doctrine. I think we have enough background on the Court's opinions thus far to wade into the main issue of FL et al v. DHHS:

Does Congress have the authority to compel individuals to enter into an economic transaction?

This is precisely the question that Rivkin and Casey want the court to rule on. As noted in A Healthy Debate, the Congressional Research Service believes it is a novel question. In their words, the individual mandate is an "affirmative federal command that parties engage in a particular commercial activity." So, does Article I section 8 or any other part of the constitution allow the government to compel an economic transaction?

If we all think really hard, and have memories that last longer than 5 months, I think we can see a well-accepted constitutional example of such a transaction. Each year, nearly all Americans send the federal government a check, under threat of criminal prosecution, fines, and jail time. Though this is the language plaintiffs forward in their complaint to a federal judge, "The Act thus compels persons to perform an affirmative act or incur a penalty, simply on the basis that they exist and reside in the United States," taxation, surely, cannot be what Rivkin and Casey object to. What they must mean is: Can Congress compel through indirect means an economic transactions between individuals and a third party?

Rivkin and Casey forward the idea that because the activity that Congress is seeking to regulate on an individual level is a non-activity, it cannot be subject to federal action. Based on my reading of Lopez, Morrison, and Raich, the Court will not find this argument satisfying.

Health Care Reform Bump Starts Today

A lot of very smart popular-opinion prognosticators (say that 5 times fast) predicted that the final passage of the PPACA this spring would bring about a "bump" in popularity of the bill and the democrats. When polls showed no improvement in the numbers of Americans who thought the PPACA would help them and no help to Democratic numbers on health care or approval scores in general, a lot of them--including Bill Clinton recently--started to eat their hats.

The Conventional Wisdom that emerged was that public perception of the health care bill was still dogged by various myths and outright lies which characterized the Republican strategy against its passage. Ten key provisions of the PPACA went into effect yesterday, and the effects are starting to show up. Howard Pollack posts the letter which he received from his employer today which outlines what the health care reform battle means to the actual citizens of this country. I humbly suggest that as this type of letter is disseminated by private employers across the country this week that we might finally see a turning point in the support of the PPACA, which as many commentators continue to note, is unpopular at large, but contains some extremely popular components.

The Commerce Clause, Taxing, and the General Welfare

I have in my hot little hands a debate published in the Pennsylvania University Law Review about the Individual Mandate.  No less, the side that argues that te individual mandate is an unlawful power grab is written by the very same David Rivkin and Lee Casey who are arguing the plaintiff's case in Florida et al v. US DHHS: A Healthy Debate. The debate took place before final passage of the PPACA, so there is some uncertainty in the exact language at play.

Rivkin and Casey start out where I would in the Commerce Clause debate, noting that the Supreme Court has held that Congress has the power to pass laws to regulate "activities, [which] taken in the aggregate, substantially affect interstate commerce." Gonzales v. Raich, 545 U.S. 1,22 (2005). This standard was first applied in defense of a law which prevented a farmer from growing, but not selling wheat in Wickard v. Filburn, 317 U.S. 111 (1942).  Because the hoarding of wheat would drive prices down if every farmer did it, Congress could regulate the practice.

A Republican Form of Government

I've been liveblogging my reading of the twenty-state challenge to the health care reforms that Congress passed into law this year.  The Patient Protection and Affordable Care Act is undergoing a court challenge with arguments being heard today in Florida.

One of the least compelling arguments in the Florida et al. v United States Dept of Health and Human Services complaint thus far is paragraph 57:

57. By effectively co-opting the Plaintiffs’ control over their budgetary processes and legislative agendas through compelling them to assume costs they cannot afford, and by requiring them to establish health insurance exchanges, the Act deprives them of their sovereignty and their right to a republican form of government, in violation of Article IV, section 4 of the Constitution of the United States. 

It doesn't take much to see why this claim is ludicrous. Firstly, there is no reason to believe that unfunded mandates on the States are unconstitutional. In fact, they are a common way of accomplishing national goals. Their ubiquity has often led to grumbling from state legislators, but it goes to show that they are well-accepted by Congress and all Constitutional actors. Secondly, the structure of the Constitution suggests that this clause is not a limitation on the federal government. All limitations on Congressional prerogative are located in Article I, sec 9. This is not proof positive that the Republican Form of Government guarantee cannot be an injunction against the state, but it is a clue that McCollum might be barking up the wrong tree.

Health Care Reform in the Courts

I had intended to provide an omnibus discussion of Florida et al. v United States Department of Health and Human Services, the lawsuit on behalf of twenty states challenging the Patient Protection and Affordable Care Act being argued today in the United States District Court for the Northern District of Florida.

Reading through the plaintiff's complaint (pdf), authored by Florida AG Bill McCollum is proving an interesting exercise. Basically, there are three alleged issues:

1. The PPACA encroaches on individual liberty to choose to engage (or not to engage) in economic transactions with private corporations, exceeding Congressional Article I, sec. 8 authority.
2. The tax on individuals which enforces the mandate is an unlawful capitation under Article I, secs. 2 & 9.
3. Finally, the PPACA in its changes to Medicaid, represents an unlawful encroachment on State Sovereignty.

I will try, as the day goes on and I read more, to outline the debate surrounding this case as well as the analyze the arguments before the Court.  In a sense, I'm liveblogging my reading of the motions, case law, and relevant history.  Stay tuned to this space for an emerging story that I hope will be coherent as this case is important for the future of Commerce Clause authority.