Sunday, December 12, 2010

Further Decision Released on ObamaCare

Another good step toward the demise of ObamaCare

In a decision released on December 13th, Judge Hudson of the United States District Court for the Eastern District of Virginia held that the requirement of ObamaCare that a minimum level of medical insurance coverage be purchased by individuals and imposing penalties for not making such purchases exceed federal authority under the Commerce, General Welfare and taxing provisions of the Constitution.

He had previously refused on February 2nd to dismiss a challenge by the Commonwealth of Virginia to the mandatory medical insurance provisions of ObamaCare, observing that [START BLOCKQUOTE]
While this case raises a host of complex constitutional issues, all seem to distill to the single question of whether or not Congress has the power to regulate — and tax — a citizen’s decision not to participate in interstate commerce. Neither the U.S. Supreme Court nor any circuit court of appeals has squarely addressed this issue. No reported case from any federal appellate court has extended the Commerce Clause or Tax Clause to include the regulation of a person’s decision not to purchase a product, notwithstanding its effect on interstate commerce. Given the presence of some authority arguably supporting the theory underlying each side’s position, this Court cannot conclude at that stage that the Complaint fails to state a cause of action. [END BLOCKQUOTE]
He then questioned Federal arguments that even if ObamaCare exceeds the limitations of the Commerce Clause, it could be salvaged by reliance on the federal government's taxing powers.

His decision released on December 13th found no material facts in issue and also found that ObamaCare is unprecedented. He cited the paragraph from his earlier decision quoted above and stated that the question presented was whether an act of Congress can require that anyone purchase health insurance; such a requirement touches everyone who is required to file a Federal income tax return.

Based on legal arguments presented following (and pretty much before as well) his February 2nd decision, he found that the Commonwealth of Virginia had made the required showing of unconstitutionality, entitling her to judgment as a matter of law. As he noted in the current decision, to come within the permissible limits of the Commerce Clause, economic "activity" must, indeed, include some activity -- an action, transaction or deed placed in motion by an individual or legal entity; not a difficult concept to grasp. By requiring the purchase of a good or service, the Congress does not itself create an economic activity. A decision not to make such a purchase is therefore beyond the reach of the Commerce Clause.

Since the individual mandate itself is outside the scope of the Commerce Clause, it is also outside the General Welfare and Taxation clauses, despite the extreme breath of the latter. The legislative history shows that the "tax" is in fact a penalty; indeed, the Congress did not use the word "tax" in connection with the mandatory purchase provision in the final legislation, even though earlier versions had used the more "politically toxic" word tax rather than penalty. In seeking popular approval before and after passage, ObamaCare proponents refrained from using the word "tax." "Tax" and "penalty" are not interchangeable.

Having found the mandatory health insurance provision and the companion penalty unconstitutional, Judge Hudson determined that some sections could stand as severable from those. In view of the extreme haste with which ObamaCare had been "rushed to the floor for a Christmas Eve vote," he found it impossible to determine whether the various other provisions would have been passed without the mandatory health insurance provision and associated penalty. He therefore severed those other provisions and allowed them to stand.

Since it was obvious that the case would proceed to appellate review, he declined to stay the effectiveness of any of the ObamaCare provisions but expressed a hope that the Executive Branch would abide by his ruling as to constitutionality, noting that a "declaratory ruling is the functional equivalent of an injunction" and sufficient to stay the Executive's hand during the pendency of an appeal.

Accordingly, Judge Hudson granted the Commonwealth's motion for summary judgment, held the various other provisions severable from the health purchase mandate and penalty, and denied the request for an injunction pending appeal.

The reactions of the usual suspects were, of course, predictable. Those who like ObamaCare claimed that Judge Hudson is a radically unwholesome "activist judge" whose decision is wrong and will be overturned on appeal. Those who dislike ObamaCare praised his constitutional scholarship and claimed that his decision will be affirmed. I think implementation of ObamaCare would be a disaster produced by a very lengthy statute generally unread prior to its very hasty passage and likely harmful not only to medical care in the United States but also bad for the economy. I hope the decision is upheld on appeal, but much can happen between now and a Supreme Court decision. The statute may be modified by the new Congress, the Supreme Court may in the interim decide another case construing the Commerce Clause differently, and/or one or more Supreme Court justices may retire to be replaced by Zeus knows whom. It's just too far away to guess. After the briefs have been submitted and oral arguments have been held it should be possible to make an informed prediction; not now.

The case will almost certainly now proceed on appeal to the Fourth Circuit Court of Appeals in Richmond Virginia or, conceivably as requested by incoming House majority leader Eric Cantor (R., Va.), directly to the Supreme Court where it will ultimately go in any event. He stated,
“To ensure an expedited process moving forward, I call on President Obama and Attorney General Holder to join Attorney General Cuccinelli in requesting that this case be sent directly to the U.S. Supreme Court. In this challenging environment, we must not burden our states, employers, and families with the costs and uncertainty created by this unconstitutional law, and we must take all steps to resolve this issue immediately.
Well, maybe.

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