A federal judge in Florida,  in a ruling that displays deep doubt about the constitutionality of the new federal law’s mandate to buy health insurance, cleared the way on Thursday for a challenge to go forward.  Allowing that claim to proceed, Senior U.S. District Judge Roger Vinson of Pensacola, ruled, “is not even a close call.”  In his 65-page decision — found here — the judge also allowed 16 states to move ahead with their claim that the new law’s major expansion of Medicaid health benefits for the poor coerces them unconstitutionally.

At the same time, the judge dismissed four other challenges that had been mounted in one of the most sweeping lawsuits against the signature domestic program of the Obama Administration.  One of those counts was an alternative complaint about the individual buy-or-be-penalized insurance mandate, but that dismissal will make little difference to the mandate’s ultimate fate in Judge Vinson’s Court.

The judge also threw out a claim that the penalty that is to be assessed for failure to buy individual health insurance by the year 2015 was — if considered to be a tax — an unconstitutional form of taxation.  The judge found that Congress did not intend to create a new tax, but to adopt a penalty.  In allowing the challengers to go forward with a constitutional challenge to the mandate, the judge will be permitting an accompanying challenge to the penalty itself as beyond Congress’s legislative power.

Among claims that the judge refused to keep alive were arguments that state governments as employers should not have to provide the same kind of health insurance for state workers as private companies must for their employees, and that the states make a voluntary choice about whether to participate in a new form of “health insurance exchange” to give individuals more options on coverage.

Judge Vinson’s ruling was the third by a federal judge in cases challenging the broad new health reform package passed by Congress.  It was the second to allow at least some parts of the challenges — and, in both cases, the complaints about the insurance mandate — to go ahead.  The third ruling that has emerged so far actually upheld that mandate, but it was plain that Judge Vinson was not even close to being persuaded by that decision.

In fact, throughout much of the lengthy opinion, the Florida jurist used language that conveyed a deep skepticism about the claims made for the broad new health plan, even while providing assurances that he was not making any final decisions at this point about the constitutionality of any provision that he will be reviewing.

The next stage before Judge Vinson will be the filing by both sides, on Nov. 4, of motions to decide the case on the basis of the written briefs, without a trial.  The briefing on those summary judgment motions is to be completed by Dec. 6, and the judge will hold an oral argument on Dec. 16.  Thus, a final ruling is not likely by year’s end.

As the challenge proceeds on the insurance mandate and the attached penalty for not complying, the issue the judge will face is whether those provisions go beyond Congress’s power to pass laws to regulate economic activity among the states.  Saying that he was familiar with all of the Supreme Court’s major precedents on Congress’s authority under the Commerce Clause, Judge Vinson added that none of those provided conclusive guidance.

“The power that the individual mandate seeks to harness is simply without prior precedent,” the judge wrote. He pointed to a Congressional Research Service study done last year, before the new law was passed, expressing doubs about whether there was “a solid constitutional foundation” for such a provision.

In discussing the mandate’s sweep, the judge noted that “the individual mandate applies across the board.  People have no choice and there is no way to avoid it.  Those who fall under the individual mandate either comply with it, or they are penalized.  It is not based on an activity that they make the choice to undertake. Rather, it is based solely on citizenship and on being alive.”

The judge closed that part of his opinion with a reaffirmation of the duty of the federal courts not to give license to “extraconstitutional government.”   So far, the judge said, he had not attempted to decide whether a line between constitutional and unconstitutional government had been crossed.  That will come later, he said, after additional argument and evidence is before him.

“I am only saying,” he commented, “that (with respect to two of the particular causes of action discussed above) the plaintiffs have at least stated a plausible claim that the line has been crossed.”

His ruling in favor of further review of the individual insurance mandate clealry will stir controversy among the new plan’s supporters.  But also controversial was the constitutional reasoning he used in allowing the 16 states to go ahead to try to make a case that the wide expansion of Medicaid benefits under the plan will intrude on their sovereignty as states.

For that part of his ruling, the judge relied upon a theory that has been mentioned only briefly by the Supreme Court, and that has been widely criticized by most of the federal appeals courts.  That theory is that, when the government provides funding for a program that carries with it such heavy burdens on the states, at some point it could reach the level of unconstitutional coercion.

That notion was contained in a single sentence in the Court’s 1987 decision in South Dakota v. Dole.  “In some circumstances,” the sentence read, “the financial inducement offered by Congress might be so coercive as to pass the point at which pressure turns into compulsion.”  (In the Dole decision, the Supreme Court upheld a 1984 law that ordered the government to withhold 5 percent of federal highway funds from states that did not set the drinking age minimum at 21 years.)

The Dole Court traced the idea to a 1937 decision, Steward Machine Co. v. Davis.  That ruling upheld the then-new federal tax on employers that was designed to induce states to set up systems to provide compensation for unemployed workers.  It was considered a major endorsement of Congress’s power to influence the activity of states.

Judge Vinson took note of the widespread criticism of the concept of state coercion through federal funding mechanisms, and commented that “its entire underpinning is shaky.”  He nevertheless concluded that the Eleventh Circuit Court (his Circuit) has not yet directly foreclosed the argument, so making it was a “plausible claim” that could proceed.

The expansion of the Medicaid program for the poor, the judge said, put the states “in an extremely difficult situation.”  They either have to accept sweeping changes in Medicine, which could bust their state budgets, or else withdraw from the system, which would mean the loss of health benefits for the neediest citizens.

Overall, Judge Vinson resolved ten specific issues in the case brought to him by 16 states, four state governors, two individuals and an organization that represents small businesses.  He ruled that the two individuals and the small business group had the legal right to press their claim against the individual mandate and the penalty, and that, since they had to start making financial plans to deal with the mandate, the issue was “ripe” for court review.

He ruled that the 16 states had a legal right to challenge the Medicaid expansion.

It is expected that the next decision by a federal court on the new health reform law will come from a federal judge in Richmond, VA, District Judge Henry E.  Hudson.  In a preliminary ruling on August 2, Judge Hudson cleared the way for the state of Virginia to challenge the individual insurance mandate and the penalty.  He, too, expressed doubts about its constitutionality.  He is to hold a hearing next Monday on summary judgment motions.

Because that District Court has a reputation for speedy rulings (on its so-called “rocket docket”), a prompt decision is expected.

Posted in Cases in the Pipeline, Health Care

Recommended Citation: Lyle Denniston, Deep doubts on health mandate, SCOTUSblog (Oct. 14, 2010, 7:26 PM), http://www.scotusblog.com/2010/10/deep-doubts-on-health-mandate/