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U.S. Appeals Court to Hear States' Challenge Against Healthcare Reform

Source: USA Today

Posted on 08 Jun 2011

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U.S. appeals court in Atlanta will hear a lawsuit Wednesday challenging the constitutionality of the health care reforms signed into law by President Barack Obama a year ago. Of the many legal challenges to the health care overhaul, the case brought by 26 states to be heard n Atlanta stands out.

In a lawsuit targeting the rule that all Americans buy health insurance, the states have banded together to claim that Congress exceeded its power and tread on states' domain. Other lawsuits, such as those recently argued in appeals courts in Richmond and Cincinnati, were filed by individual entities, for example, a Christian university, the single state of Virginia and a cluster of people who do not want to purchase coverage.

Further, the case to be aired Wednesday in Atlanta marks the only one in which a lower-court judge, U.S. District Judge Roger Vinson of Florida, voided the entire health care law after declaring the individual insurance mandate unconstitutional. (His ruling is on hold while appeals are pending.)

The law, signed by President Obama in March 2010, increases the availability of insurance, expands Medicaid, creates insurance exchanges and prohibits insurers from denying coverage to people because of their medical history. At the core of the national litigation is the requirement that most Americans obtain insurance by 2014 or pay a tax penalty.

Heightening the drama of the next hearing, the states will be represented by Paul Clement, a high-profile former U.S. solicitor general who is also representing NFL owners in the lockout litigation and the House of Representatives in a challenge to the Defense of Marriage Act. (The Obama administration said earlier this year that it believes the law defining marriage as only between a man and woman is unconstitutional.)

"The importance of the case is inescapable," Clement said of the health care dispute. "You have over half the states united in a single lawsuit arguing that a federal law violates basic principles of federalism," the division of power between states and the federal government.

The National Federation of Independent Business, represented by Washington lawyer Michael Carvin, is also part of the challenge to be heard by the U.S. Court of Appeals for the 11th Circuit Wednesday.

The government's case will be argued, as has been in other appeals courts, by acting U.S. Solicitor General Neal Katyal, the government's top lawyer before the Supreme Court.

He contends Congress properly used its power to regulate interstate commerce when it adopted the insurance requirement. "Regulation of the means of payment for health care services … a multibillion-dollar problem resulting from the failure of millions of uninsured patients to pay the full cost of the health care services they consume …is within Congress's commerce power," Katyal tells the 11th Circuit in his brief.

So far, five federal trial judges have ruled on the individual mandate. Three, all of whom happen to be appointees of Democratic presidents, have upheld it. Two, both Republican appointees, have struck it down.

The 78-page decision by Judge Vinson, an appointee of President Reagan, not only went far in rejecting the entire health care law, it also presented some of the most provocative rhetoric on the issue to date, including a reference to American colonists' revolt against the British tax on tea. In a follow-up order putting the case on a fast-track, Vinson observed that "the battle lines have been drawn, the relevant case law marshaled and the legal arguments refined" as the litigation heads toward its likely ultimate destination, the Supreme Court.

Hearing the appeal will be three judges selected by the circuit at random: Joel Dubina, a 1990 appointee of Republican President George H.W. Bush; and Judges Frank Hull and Stanley Marcus, both 1997 appointees of President Clinton, a Democrat.

Dubina's daughter, Martha Roby of Montgomery, Ala., is a first-term Republican member of the House of Representatives and has voted to repeal the health care law. No party to the health care case has asked Joel Dubina not to participate.

The three-judge panel will focus on Vinson's ruling that the insurance mandate exceeded Congress' power to regulate commerce because, rather than involving the usual "economic activity," it targets "inactivity," that is, a decision not to purchase insurance.

Katyal stresses in the administration's appeal that "tens of billions of dollars in annual health care costs that people without insurance fail to pay are passed on to other participants in the health care services market — a burden on interstate commerce that plainly qualifies as substantial."

Clement counters that the individual mandate forces people to pay for health care that they may not actually get in the future. "The government does not, and cannot, contend that all these individuals will necessarily participate in the health care market (much less that they will all fail to pay for any services). Some will not participate due to religious scruples or individual circumstances. …And participation in the health care market is not as truly universal as participation in the market for basic necessities, like food and clothing."