Virginia v. Sebelius

Ruling Striking Down Health Care Law Was Not “Judicial Activism”

by Hans Bader on February 3, 2011 · 2 comments

in Economy, Healthcare, Legal, Regulation

On Monday, a federal judge in Florida struck down Obamacare as unconstitutional. Judge Vinson concluded that the law’s cornerstone — a requirement that individuals buy health insurance — exceeded Congress’s power under the Interstate Commerce Clause, and Supreme Court rulings such as United States v. Morrison that limit that power to the regulation of “economic activities,” not inactivity like refusals to buy a product. He struck down the entire law, not just the individual mandate. He did this for two reasons. First, the law lacked a severability clause (a clause declaring that any unconstitutional provision should be severed from the law rather than striking down the law as a whole), even though such clauses are typically found in federal laws. Second, the individual mandate couldn’t logically be severed from the rest of the law, since Congress deemed it essential to the law’s overarching goals, and it was intertwined with the law’s other provisions.

Liberal commentators are up in arms about the decision in Florida v. HHS, to the point of hurling angry falsehoods about it. Writing in the Washington Post, Ezra Klein even claimed that the judge admitted his own ruling was wrong: “Vinson concedes that his position is activist in the extreme and a break from the court’s usual preference for limited rulings. . .”

The judge admitted nothing of the kind. As as a prominent lawyer notes, “Klein just made that up.”

There is nothing unprecedented about striking down an entire law that contains an unconstitutional provision, even when the law — unlike Obamacare — contains a severability clause designed to prevent that from happening.  (Here are some rulings in which courts, including the Supreme Court, did just that: See, e.g., Thornburgh v. American College of Obstetricians & Gynecologists, 476 U.S. 747, 764–65 (1986); Carter v. Carter Coal Co., 298 U.S. 238 (1936); American Booksellers v. Hudnut, 771 F.2d 323, 332 (7th Cir. 1985), aff’d, 475 U.S. 1001 (1986); EEOC v. CBS, 743 F.2d 969, 973 (2d Cir. 1984); and Hotel Employees v. Davis, 981 P.2d 990, 1010 (Cal. 1999).)

And Obamacare lacked a severability clause, which was an additional reason to strike down the whole law. Klein ignored the fact that “the Democrats omitted a severability clause from the health care reform statute” for a reason. Judge Vinson pointed out the importance of the absence of such a provision:

The lack of a severability clause in this case is significant because one had been included in an earlier version of the Act, but it was removed in the bill that subsequently became law.  . . . the severability clause was intentionally left out of the Act. The absence of a severability clause is further significant because the individual mandate was controversial all during the progress of the legislation and Congress was undoubtedly well aware that legal challenges were coming. . . even before the Act became law, several states had passed statutes declaring the individual mandate unconstitutional and purporting to exempt their residents from it; and Congress’ own attorneys in the CRS had basically advised that the challenges might well have legal merit as it was “unclear” if the individual mandate had “solid constitutional foundation.” . . . In light of the foregoing, Congress’ failure to include a severability clause in the Act (or, more accurately, its decision to not include one that had been included earlier) can be viewed as strong evidence that Congress recognized the Act could not operate as intended without the individual mandate.

As Judge Vinson observed, the government’s own lawyers admitted that the statute’s entire scheme of insurance regulation would fall without the individual mandate, cutting against severability:

Moreover, the defendants have conceded that the Act’s health insurance reforms cannot survive without the individual mandate, which is extremely significant because the various insurance provisions, in turn, are the very heart of the Act itself.

Earlier, a judge in Virginia declared Obamacare’s individual mandate unconstitutional, but declined to strike down the rest of the law, in Virginia v. Sebelius.

As I noted in discussing the Virginia ruling in The Washington Examiner: “To justify preserving the rest of the law, the judge” in the Virginia case “cited a 2010 Supreme Court ruling,”Free Enterprise Fund v. PCAOB, “that invalidated part of a law — but kept the rest of it in force. But that case involved a law passed almost unanimously by Congress, which would have passed it even without the challenged provision. Obamacare is totally different. It was barely passed by a divided Congress, but only as a package. Supporters admitted that the unconstitutional part of it — the insurance mandate — was the law’s heart. . .” In short, Obamacare’s individual mandate is not “volitionally severable,” as case law requires.

Moreover, the individual mandate is not the only provision in Obamacare that violates the Constitution (although it was the only violation found by Judge Vinson). In my amicus brief in the Florida case for Governors Tim Pawlenty and Donald L. Carcieri, I explained how Obamacare’s Medicaid impositions violate the Tenth Amendment by ignoring constraints on Congress’s power under the Spending Clause (a so-called Pennhurst argument.)

Regardless of whether it is constitutional, Obamacare is also harmful to the economy, medical innovation, and the healthcare system. Earlier, I discussed some of the bad effects of Obamacare on patients, employers, consumers, and the insurance market.

Obamacare Makes State Budget Problems Worse

by Hans Bader on December 21, 2010 · 1 comment

in Healthcare, Legal, Regulation

Obamacare is making state budget problems much worse, as governors now lament. Earlier, CEI filed an amicus brief in Florida v. HHS on behalf of two governors explaining how the radical changes to state Medicaid programs resulting from Obamacare violated limits on congressional power under the Constitution’s spending clause. Some of the fiscal burdens Obamacare imposes on states are obviously huge, while many others are ambiguous, unpredictable, and contingent on bureaucratic caprice, and uncertain future events.

Governors like Phil Bredesen (D-Tenn.) and Donald Carcieri (R-R.I.) warned earlier about the crippling costs of Obamacare to state budgets, but they were ignored by Obama and Congressional Democrats in their headlong rush to pass the health care bill. An adviser to Gov. Bredesen, James Blumstein (a professor of constitutional and health care law at Vanderbilt), argues that Obamacare is a violation of constitutional limits on Congress’s power under the spending clause.

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.

Reactions to Court Ruling Striking Down Part of Obamacare in Virginia v. Sebelius

by Hans Bader on December 14, 2010

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

Yesterday, a federal judge in Richmond struck down Obamacare’s requirement that individuals buy health insurance. Cato Institute’s Ilya Shapiro reacts to the decision here in an article at CNN. Ilya was the principal author of an amicus brief filed on behalf of the Cato Institute and others in support of Virginia Attorney General Kenneth Cuccinelli’s lawsuit against Obamacare.

The Competitive Enterprise Institute and law professor Randy Barnett joined that brief, which you can find here. I am listed on the brief since I made a few suggestions that were incorporated into the brief based on my past experience in handling federalism cases (such as the Supreme Court’s Morrison decision).  The brief was submitted to the court by the distinguished Richmond lawyer Patrick McSweeney, who has won landmark cases (such as a no-taxation-without-representation case in the Virginia Supreme Court called Marshall v. Northern Virginia Regional Transportation Authority, a case that I earlier discussed at this link).

At Volokh Conspiracy, there are reactions to the decision from law professors Jonathan Adler and Ilya Somin.  I earlier discussed the constitutional issue in the case here, and more recently discussed the harm Obamacare inflicts on medical innovation, employers, the public and access to quality health insurance. The U.S. Attorney General and HHS Secretary responded to the ruling as well, as you can see here.

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.

Missouri Voters Overwhelmingly Reject ObamaCare’s Individual Mandate in Referendum

by Hans Bader on August 4, 2010 · 2 comments

in Economy, Health and Illness, Healthcare, Insurance, International, Legal, Nanny State, Personal Liberty, Politics as Usual, Regulation, Sanctimony, Zeitgeist

“Missouri voters on Tuesday overwhelmingly rejected a federal mandate to purchase health insurance, rebuking President Barack Obama’s administration and giving Republicans their first political victory in a national campaign to overturn the controversial health care law passed by Congress in March.”  The referendum passed easily by a 3-to-1 margin, with nearly 73 percent of the vote.

On Monday, a federal judge let Virginia’s attorney general challenge ObamaCare as unconstitutional, refusing to dismiss a lawsuit challenging its mandate to buy health insurance. The Obama Administration says it can force people to buy insurance or other products under the federal government’s power to regulate interstate commerce, and punish them with tax and other penalties if they do not. Under Obama’s logic, every American could be forced to buy a car in order to spur interstate commerce in automobiles. The judge was skeptical of this logic, noting that “never before has the Commerce Clause . . . been extended this far,” and “no reported case” has ever “extended the Commerce Clause or Tax Clause” to punish “a person’s decision not to purchase a product.”

Obama’s health care law will reduce lifesaving medical innovation, raise taxes, drive up insurance premiums, break many campaign promises, and increase state budget deficits.  It  will jeopardize the quality of medical care, while imposing restrictions that failed when tried at the state level.  It ignores advice from doctors and federal experts, and lessons from countries with universal health care, about how to keep costs down.

It imposes many middle-class tax increases, such as taxes on uninsured individuals, on cosmetic surgery, on medical devices, and on certain health care plans.  It also increases taxes on many investors and imposes marriage penalties.

It also contains many penny-wise, pound-foolish provisions.  It spends money on frills like “cultural competency,” while cutting spending on crucial things like anesthesia.

The health care 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.

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).)

Attorney Generals Challenge ObamaCare; New Health Care Law Increases State Budget Deficits, Imposes Marriage Penalties

by Hans Bader on March 24, 2010 · 2 comments

in Deregulate to Stimulate, Economy, Features, Health and Illness, Healthcare, Insurance, Legal, Nanny State, Personal Liberty, Politics as Usual, Regulation, Sanctimony, Zeitgeist

Virginia Attorney General Ken Cuccinelli and a dozen other attorneys general have filed lawsuits challenging the new health care law signed by President Obama.  Cuccinelli rightly argues that Congress lacks the power to force people to buy health insurance under the Constitution’s Commerce Clause, which only gives it the power to regulate interstate commerce, not to force people to buy products they don’t want.

As a news story notes, 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).)  As UPI notes, “the weight of Supreme Court jurisprudence seems to favor a Commerce Clause challenge” to the health care legislation.

Earlier, Senator Orrin Hatch argued that the “individual mandate” in the healthcare bill legislation, which forces people to buy health insurance, is unconstitutional.  Florida Attorney General Bill McCollum likewise questioned whether it is constitutional to force people to do so.   McCollum and other attorneys general, like Washington’s Rob McKenna (R) and Louisiana’s James “Buddy” Caldwell (D), are now challenging ObamaCare in court as well.

This so-called “individual mandate” is unprecedented and appears to exceed 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.”

The individual mandate does not regulate activities, much less economic activities, but rather inactivity, by penalizing those who decline to buy health insurance. That exceeds Congress’s poers under the Supreme Court’s Morrison ruling, as I explained earlier.

The health care 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.

ObamaCare discriminates against married people, containing massive marriage penalties.  If you get married, your income will be hit by ObamaCare’s increased tax rates a lot faster than if you just live together without getting married.  Under the bill, you will give up your right to federal health care subsidies at a lower income level if you are married than if you are an unmarried couple.  For many “low-income and middle-income couples, it could mean a hike of $2,000 or more in annual insurance premiums the moment they say ‘I do.’”  (While Obama won the 2008 election, he narrowly lost among married people.). The new tax on investors is a classic example of the marriage penalty, since it kicks in at a lower income level if you are a married couple than if you are an unmarried couple.

ObamaCare would also impose many middle-class tax increases, such as taxes on uninsured individuals, on cosmetic surgery, on medical devices, and on certain health care plans.

Governors of both political parties assail the health-care bill as a job-killer that will drive up state deficits, increase taxes, and harm the economy.  The governors of New York and California warned that “their states will be crushed by billions in new costs.”  Virginia’s governor says the new law will cost Virginia at least a billion dollars.

Tax experts say it would dangerously expand the power and responsibilities of the IRS.  The new version of the health care bill increases cuts to Medicare Advantage by billions of dollars.

The Washington Post falsely claims that the CBO says the health care bill will save $1.2 trillion over its second decade, but the CBO says the figure is not from it (it’s from congressional Democrats).  Amazingly, the CBO, under orders from Democratic leaders, has understated the bill’s cost for the first decade by including the present fiscal year — in which ObamaCare is not yet law and thus has no costs — while excluding its last year from cost calculations.  The result was to reduce the projected price tag for the bill from $1.2 trillion to $940 billion.

While the CBO has scored the health care bill as not increasing the federal deficit, thanks to the many tax increases in the bill, it has done so only by accepting many accounting gimmicks that even pro-Obama journalists have admitted conceal the bill’s enormous cost and the fact that it will massively increase the deficit.  The New York Times‘ David Brooks, once a staunch Obama supporter, now says the bill’s drafters were “corrupted by power” and calls arguments for the bill “unbelievable” and “insane.”  The Atlantic’s Megan McArdle, who also voted for Obama, says that the bill “is a fiscal disaster waiting to happen.”

The Congressional Budget Office, which would not question Obama’s gimmicks to lowball the cost of his health care plan, nevertheless admits that “President Obama’s policies would add more than $9.7 trillion to the national debt over the next decade.”

There are $3,000,000,000,000 in tax increases in Obama’s budget.  But he’s spending money at such a furious pace that the deficit will skyrocket anyway: “The president’s budget would borrow 42 cents for each dollar spent in 2010,” and “double the national debt over the next decade.”  Obama recently ran up the largest budget deficit in history, by a huge margin.

ObamaCare would reduce medical innovation, raise taxes, drive up insurance premiums, and break campaign promises.  It  would cut the quality of  care, while imposing restrictions that failed when tried at the state level.  It ignores advice from experts about how to cut costs.