By Simon Lazarus and Sergio Munoz. Lazarus, author of an ACS issue brief, "Mandatory Health Insurance: Is It Constitutional?," and Munoz are attorneys with the Federal Rights Project of the National Senior Citizens Law Center.
In the first judicial decision on the various pending constitutional challenges to the Patient Protection and Affordable Care Act, Pub. L. No. 11-148 (2010) ("Affordable Care Act," "the Act," or "ACA"), Judge Henry E. Hudson of the Eastern District of Virginia District Court denied the Justice Department's motion to dismiss the Commonwealth of Virginia's challenge to Section 1501 of the Act. Cuccinelli v. Sebelius, No. 3:10cv188-HEH (E.D.Va.) (August 2, 2010). Section 1501 requires that most Americans carry minimum levels of health insurance coverage or pay a tax penalty. Judge Hudson's ruling is procedural; it allows the case to proceed to an examination of the merits of Virginia Attorney General Kenneth Cuccinelli's complaint and of the Department's defense that the section is a lawful exercise of Congress' authority under the Commerce, Necessary and Proper, and General Welfare (tax and spend) Clauses of Article I of the Constitution.
The section challenged has been variously styled the "individual mandate," the "minimum coverage provision," and the "shared responsibility provision," the latter of which we will use here. As spelled out in the Department's briefs, statutory findings written into the Act, an amicus curiae brief submitted in the case by the National Senior Citizens Law Center and the Center for American Progress on behalf of 17 patient and health groups, and ACS' issue brief on the subject, the shared responsibility provision "is essential to make effective a prohibition on exclusion from coverage based on pre-existing medical conditions," to ensure that this and other health insurance reforms prescribed by the Act do not "cause premium rates to skyrocket," and to prevent the shifting of uncompensated costs of care for uninsured patients to every other participant in the system, totaling $43 billion annually or $1,100 per family in insurance premium costs. Hence, as acknowledged even in Attorney General Cuccinelli's complaint, the shared responsibility provision is indispensable to the overall structure of the ACA.
Virginia challenged Section 1501 on the grounds that it exceeds Congressional authority under the Commerce and General Welfare Clauses. The state asserted standing to challenge the provision - which applies only to individuals, not the state itself - primarily on the basis that it has a right to defend a state law, the Virginia Health Care Freedom Act ("VHCFA"), enacted shortly before the ACA itself became law, that purports to exempt Virginians from the shared responsibility provision. In her motion to dismiss, the U.S. Secretary of Health and Human Services challenged Virginia's standing to bring this lawsuit, the ripeness of the claims, and the court's jurisdiction under the Anti-Injunction Act. The district court accepted Virginia's standing argument and held that its arguments on the merits had sufficient substance to survive a motion to dismiss.
Judge Hudson first held that the VHCFA conferred standing on Virginia to defend its provisions, under precedents in which the Supreme Court has held that states may bring declaratory and injunctive actions to test the validity of state laws arguably preempted by federal laws; his decision rejected the Department's contention that all these rulings concerned state statutory regimes that had not, like the VHCFA, been attempts at "jurisdictional alchemy" enacted solely to nullify a federal law or in a time period virtually coterminous with the enactment of the conflicting federal law. As for the Anti-Injunction Act's bar to lawsuits seeking to escape federal taxes, the district court cited a little used exception to the act that permits such proceedings if a plaintiff does not otherwise have an alternative remedy. The district court also found the challenge to be ripe for judicial review, despite its effect on only "scores of people," because its effects were to be felt by Virginia and its citizens in preparation for lawful compliance with the ACA in "the near future" and the legal issues raised by the lawsuit were already framed.
Perhaps the most remarkable aspect of the district court's procedural ruling, however, was its first attempt at examining the substantive merits of the Commerce Clause challenge for the purpose of discerning if Virginia could articulate a plausible claim. Despite the Secretary's prior briefing that uninsured individuals' use of heath care is a significant cost to the system, and one that is spread amongst the majority of Americans through increased premiums in a system that occupies almost 1/5 of the American economy, the district court repeatedly accepted Virginia's framing of decisions not to purchase health insurance as "inactivity" - echoing the line repeated over and over by conservative legal advocates, politicians, and pamphleteers. The judge ritualistically acknowledged, but did not incorporate into his analysis of the issues at stake, the Department's contention that decisions to forego insurance are in effect affirmative decisions to shift the cost of uninsured care to other participants in the system - providers, hospitals, insured individuals and families, and taxpayers. Further, Judge Hudson seemed to assert that the state's characterization of foregoing insurance as "inactivity" could put it beyond, not only Congress' authority to regulate commerce, but beyond its authority to tax and spend for the general welfare as well - even though it has been established law at least since U.S. v. Butler, 297 U.S. 1, 66 (1936), that general welfare authority is not bounded by constraints of the other enumerated powers.
In short, while Judge Hudson was careful to emphasize that his ruling is purely procedural and simply permits the case to move forward toward a final factual and legal resolution, the manner in which he has characterized the issues appears to accept the frame proposed by opponents of ACA, which seriously misstates longstanding bedrock principles of constitutional law. As one of us has recently noted, such positions effectively call for rewriting the Constitution as it has been understood and applied at least since the New Deal.