competitive enterprise institute

Is Obamacare’s Government Healthcare Takeover a “Civil Right”?

by Hans Bader on December 14, 2010

in Healthcare, Legal, Nanny State, Personal Liberty, Regulation

Doug Powers takes aim at the silly argument by the Obama administration that opposing Obamacare is analogous to opposing basic civil rights. As he and Michelle Malkin note, if Obamacare is such a civil right, why are employers — and even labor unions that backed the law — seeking waivers from its onerous requirements?

Yesterday, a federal judge in Richmond struck down Obamacare’s requirement that individuals buy health insurance in this ruling in Virginia v. Sebelius.  CEI joined that brief.  The judge’s ruling found that the requirement exceeded Congress’s power under the Interstate Commerce Clause, as I earlier explained.  As we previously noted, Obamacare harms medical advances, private employers, insurance-policyholders and health-insurance markets.

Ed Morrissey takes issue with another argument made by Attorney General Holder and HHS Secretary Sebelius.

Ruling in Virginia’s Challenge to Obamacare Individual Mandate Expected Today

by Hans Bader on December 13, 2010 · 1 comment

in Healthcare, Legal, Nanny State, Personal Liberty, Regulation

A ruling in Virginia’s constitutional challenge to Obamacare’s individual mandate is expected later today.  The Competitive Enterprise Institute joined in an amicus brief filed in support of Virginia’s lawsuit by the Cato Institute and constitutional law professor Randy Barnett.  You can find that amicus brief at this link.

Earlier, I discussed why the health care law’s individual mandate (requirement that individuals buy health insurance) exceeded Congress’s power under the Interstate Commerce Clause.  You can find that discussion at this link.  (I was a lawyer in the last Supreme Court case that struck down a federal law under the Commerce Clause, United States v. Morrison, 529 U.S. 598 (2000).)

The judge in the Virginia case, U.S. District Judge Henry Hudson, earlier rejected the government’s motion to dismiss Virginia’s lawsuit at a preliminary phase (a Rule 12(b)(6) motion to dismiss).

Update: Judge Hudson rules against the Obama administration, finding that the individual mandate is unconstitutional.

Earlier, I discussed some of the bad effects of Obamacare on patients, employers, consumers, and the insurance market.

Judge Lets Virginia Challenge ObamaCare’s Individual Mandate, Refusing to Dismiss Lawsuit

by Hans Bader on August 2, 2010

in Economy, Health and Illness, Healthcare, Insurance, Legal, Nanny State, Personal Liberty, Regulation

A federal judge in Virginia has allowed the state’s lawsuit challenging the federal individual health care mandate to proceed: “A judge on Monday refused to dismiss the state of Virginia’s challenge to President Barack Obama’s landmark healthcare law, a setback that will force his administration to mount a lengthy legal defense of the overhaul effort.” The judge’s ruling is here.

Ilya Shapiro of the Cato Institute, who filed a brief in support of Virginia that was joined by constitutional law professor Randy Barnett and the Competitive Enterprise Institute, issued the following statement:

Today’s ruling should finally silence those who maintain that the legal challenges to Obamacare are frivolous political ploys or sour grapes. The constitutional defects in the healthcare “reform” are very real and quite serious. Never before has the government claimed the authority to force every man, woman, and child to buy a particular product – and indeed such authority, whether claimed under the Commerce Clause or the taxing power, does not exist (as Cato’s amicus brief in the Virginia case argues). I look forward to further favorable rulings as these lawsuits progress.

I discussed Virginia’s lawsuit here, and the constitutional problems with the health care bill’s “individual mandate” here.

The so-called “individual mandate” is unprecedented and exceeds Congress’s power under the Commerce Clause of the Constitution.  As the Congressional Budget Office noted in 1994, “A mandate requiring all individuals to purchase health insurance would be an unprecedented form of federal action. The government has never required people to buy any good or service as a condition of lawful residence in the United States.”

In Supreme Court rulings issued in 1995 and 2000, “the high court said the commerce clause is limited to economic activities that substantially affect interstate trade.”  (I was an attorney in the latter ruling, United States v. Morrison (2000).)  The health care law reaches beyond that to regulate pure inactivity, namely the refusal to buy health insurance even if you don’t need it (when I was young, I went for a decade without ever going to the doctor or dentist).  As UPI once noted, “the weight of Supreme Court jurisprudence seems to favor a Commerce Clause challenge” to the healthcare legislation.

Virginia’s lawsuit only raises federalism-based objections to ObamaCare.  There are other constitutional problems not raised in its suit.

The healthcare legislation also contains potentially unconstitutional racial preferences for minority applicants, and lower standards for treatment of patients in predominantly-minority institutions.  These drew criticism from the Civil Rights Commission.

Law professor Rob Natelson has raised additional constitutional objections to ObamaCare’s individual mandate.

Here’s an additional constitutional issue that occurred to me. Would requiring people to buy health insurance — and thus disclose private medical information to insurers — under government compulsion violate the Constitution by infringing their privacy rights, under rulings like Roe v. Wade and Robinson v. Reed, 566 F.2d 911 (5th Cir. 1978), which allowed a public employee to sue over invasive questions she was compelled to answer in a race-relations seminar? In one respect, it’s a stronger case than in Robinson v. Reed, because that case involved the government acting in its proprietary capacity, where civil liberties are subject to greater restrictions (see Waters v. Churchill, 511 U.S. 661, 673 (1994)), whereas the individual mandate involves the government acting in its regulatory capacity, where its actions and restrictions on civil liberties are subject to tighter limits. (See Carepartners LLC v. Lashway, 545 F.3d 867, 880 (9th Cir. 2008)(“regulated entities” enjoy more protection than government employees).) The fact that private insurers rather than the government would be collecting the information would not automatically obviate a constitutional claim, since the government effectively compels people to provide such information through the government penalties associated with the “individual mandate.” (See Truax v. Raich, 239 U.S. 33 (1916) (although private discrimination does not constitute state action or violate the Constitution, when state law requires the private employer to discriminate, the discrimination by the private employer then does become state action and does violate the Constitution).)

Wayne Crews on Cybersecurity and the Presidential “Kill Switch”

by Ryan Lynch on June 30, 2010

in Video, Zeitgeist

[youtube:http://www.youtube.com/watch?v=ZJHmrHAxkVY 285 234]

CEI in the News for June 10, 2010

by Ryan Lynch on June 10, 2010

in Video, Zeitgeist

[youtube:http://www.youtube.com/watch?v=vYBTdSDPPm4 285 234]

CEI in the News: March 29, 2010

by Richard Morrison on March 29, 2010

in Video, Zeitgeist

[youtube:http://www.youtube.com/watch?v=FGhZZwYaxrc 285 234]

Alex Nowrasteh on National ID and Immigration Policy

by Ryan Lynch on March 17, 2010

in Video, Zeitgeist

[youtube:http://www.youtube.com/watch?v=zsgjxZ7psx0 285 234]

Horner & Horner Fight Global Warming Alarmism

by Richard Morrison on December 17, 2009

in Video, Zeitgeist

[youtube:http://www.youtube.com/watch?v=4q8hbQWGqYw 285 234]

All the Former Vice President’s Men: ClimateGate

by Richard Morrison on December 7, 2009

in Video, Zeitgeist

[youtube:http://www.youtube.com/watch?v=GCmDmMbtSb0 285 234]

Peekaboo! PCAOB More Powerful and Less Accountable than Government Claims

by Jonathan Moore on December 4, 2009 · 7 comments

in Legal

On December 7, the U.S. Supreme Court will hear Free Enterprise Fund v. Public Company Accounting Oversight Board. The case, brought by CEI and Jones Day attorneys on behalf of the Free Enterprise Fund, challenges the constitutionality of the way Public Company Accounting Oversight Board (also known as PCAOB, or not so affectionately as Peekaboo) members are appointed. The PCAOB, which was established by the Sarbanes-Oxley Act of 2002, is an independent governmental agency (according to Sarbanes-Oxley it is a private institution, but even supporters of the Board’s structure admit that it is a governmental body) whose members are selected by the SEC commissioners collectively. The lawyers arguing the case argue that this selection process violates the appointments clause of the Constitution.

The Constitution, in Article 2 sec. 2, establishes that the President “Shall have Power, by and with the Advice and Consent of the Senate to… nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.”

According to the Constitution, the President is responsible for appointing what has later been defined as “principal officers.” Further, if the officers are deemed to be “inferior officers,” Congress may give appointment power to the President, a judge, or the head of a department. Lawyers for the Free Enterprise Fund charge that regardless of whether the PCAOB members are principal or inferior, the Constitution has been violated. The President does not appoint the board members, and as such, if they are principal officers, the Constitution has been violated. If the board members, however, are inferior officers, they have not been appointed by a head of a department, rather, they have been appointed by the SEC commissioners.

Lawyers defending the constitutionality of the PCAOB have charged that the board members are inferior officers, and that the SEC commissioners collectively are the head of the SEC. Further, they claim that the SEC has complete control over the PCAOB through several powers, including the power to review all PCAOB rules, and approving the PCAOB’s budget. As such, they argue, this direct supervisory authority makes the PCAOB clear inferior officers, and since the President has control over the SEC commissioners, who have control over the PCAOB, the President has “fully effective control” over the PCAOB.

Yesterday, however, at an American Enterprise Institute event titled “Public Company Accounting Oversight Board: A Preview”, former SEC Commissioner (2002-2008) Paul Atkins provided an alternative story of the SEC’s control over the PCAOB, as well as refuting the claim that the SEC commissioners are collectively the head of the SEC.

Atkins noted several areas in which the PCAOB managed to evade SEC controls and operate very independently of the SEC. First, he stated that the PCAOB’s budget was not nearly as under control by the SEC as has been claimed. Atkins stated that the “staff at Peekaboo were not telling the truth” to the SEC about the PCAOB’s budget. His experience at the SEC led him to the conclusion that the SEC “didn’t really have the authority it supposedly did” over the PCAOB’s budget.

At one point, the SEC asked the PCAOB for a business plan regarding their operations. The PCAOB chairman informed the SEC that Sarbanes-Oxley “was his business plan” and for five years the PCAOB evaded the SEC’s demand for a business plan.

After the PCAOB produced their “Audit Standard 2”, “all five” SEC commissioners were in favor of “radical” changes to it, and yet it took the SEC years to even make “some” changes to the auditing standards due in part to PCAOB recalcitrance.

He stated that the PCAOB used “informal rulemaking” to adopt “staff-driven” rules which evaded the need to obtain SEC approval for all rules. As an example, he says that the PCAOB’s rule making regarding stock options was “not subject to any rule at all” despite functioning as a rule.

Atkins directly refuted the claim that the SEC has plenary power over the PCAOB, stating bluntly that the SEC’s “power is not plenary” regarding the PCAOB. He even said that a good analogy for SEC oversight of the PCAOB was that of “pushing on a string”.

Atkins also implied that considering the SEC commissioners as a collective head for the SEC was ignoring the realities of the day-to-day operation of the SEC. He stated that the chairman has considerably more power than the other commissioners. He noted that the 1950 Reorganization Plan 10 gave “authority over the budget” and “HR decisions” to the SEC’s chairman. He did say that consensus among the commissioners is generally important, but said that “in reality, he can still appoint whoever he wants” to critical appointment posts. And yet, this does not apply to the PCAOB, who are appointed collectively by the SEC. Further, Atkins even questioned whether or not the President had direct power over the SEC, a lynchpin of the defenders of the SEC’s argument. He stated that the SEC’s history “illustrates how difficult it is for the President to assert authority” over the SEC, much less the PCAOB.

Atkins’ telling of the SEC and PCAOB’s relationship calls much of the PCAOB’s legal defense into question. If the SEC lacks reliable control over the PCAOB, how can the President have “fully effective control” over the PCAOB? If, one wonders, the SEC chairman is treated as the appointer for other positions within the SEC, which implies that he is the head of the department, why is it that he does not have the power to appoint the PCAOB members? And why is the SEC chairman sufficiently powerful to act as the head in all other appointment cases, but when it comes to the PCAOB he must act as an equal to his fellow commissioners? And further, if the President lacks even control over the SEC, how can he truly have control over the PCAOB members, who are an additional step further down the chain of command?

These are some questions the justices should be asking on December 7.

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