January 31, 2011
Federal Judge Rules That Health Law Violates Constitution
By KEVIN SACK
A second federal judge ruled on Monday that it was unconstitutional for Congress to enact a health care law that required Americans to obtain commercial insurance, evening the score at 2 to 2 in the lower courts as conflicting opinions begin their path to the Supreme Court.
But unlike a Virginia judge in December, Judge Roger Vinson of Federal District Court in Pensacola, Fla., concluded that the insurance requirement was so “inextricably bound” to other provisions of the Affordable Care Act that its unconstitutionality required the invalidation of the entire law.
“The act, like a defectively designed watch, needs to be redesigned and reconstructed by the watchmaker,” Judge Vinson wrote.
The judge declined to immediately enjoin, or suspend, the law pending appeals, a process that could last two years. But he wrote that the federal government should adhere to his declaratory judgment as the functional equivalent of an injunction. That left confusion about how the ruling might be interpreted in the 26 states that are parties to the legal challenge.
The insurance mandate does not take effect until 2014. But many new regulations are already operating, like requirements that insurers cover children with pre-existing health conditions and eliminate lifetime caps on benefits. States are also preparing for a major expansion of Medicaid eligibility and the introduction of health insurance exchanges in 2014.
David B. Rivkin Jr., a lawyer for the states, said the ruling relieved the plaintiff states of any obligation to comply with the health law. “With regard to all parties to this lawsuit, the statute is dead,” Mr. Rivkin said.
But White House officials declared that the opinion should not deter the continuing rollout of the law. “Implementation would continue apace,” a senior administration official said. “This is not the last word by any means.”
At the same time, Stephanie Cutter, an assistant to the president, noted in a post on the White House blog that the ruling had struck down the entire law. She called it “a plain case of judicial overreaching,” and added, “The judge’s decision puts all of the new benefits, cost savings and patient protections that were included in the law at risk.”
The Justice Department, which represents the Obama administration in the litigation, said it was exploring options to clarify the uncertainty, including requesting a stay of the decision, either from Judge Vinson or from the United States Court of Appeals for the Eleventh Circuit.
On Capitol Hill, Republicans sent out a stream of e-mails praising the ruling, while Senator Richard J. Durbin, Democrat of Illinois, said he would convene a Judiciary Committee hearing on Wednesday to examine the constitutionality of the law.
In his 78-page opinion, Judge Vinson held that the insurance requirement exceeded the regulatory powers granted to Congress under the Commerce Clause of the Constitution. He wrote that the provision could not be rescued by an associated clause in Article I that gives Congress broad authority to make laws “necessary and proper” to carrying out its designated responsibilities.
“If Congress can penalize a passive individual for failing to engage in commerce, the enumeration of powers in the Constitution would have been in vain,” the judge asserted.
In a silver lining for the Obama administration, Judge Vinson rejected a second claim that the new law violated state sovereignty by requiring states to pay for a fractional share of the planned Medicaid expansion.
The judge’s ruling came in the most prominent of more than 20 legal challenges to the sweeping health law, which was signed last March by President Obama.
The plaintiffs include governors and attorneys general from 26 states, all but one of them Republicans, as well as the National Federation of Independent Business, which represents small companies. Officials from six states joined the lawsuit in January after shifts in party control brought by November’s elections.
The ruling by Judge Vinson, a senior judge who was appointed by President Ronald Reagan, solidified the divide in the health litigation among judges named by Republicans and those named by Democrats.
In December, Judge Henry E. Hudson of Federal District Court in Richmond, Va., who was appointed by President George W. Bush, became the first to invalidate the insurance mandate. Two other federal judges named by President Bill Clinton, a Democrat, have upheld the law.
Judge Vinson’s opinion hangs on a series of Supreme Court decisions that have defined the limits of the Commerce Clause by granting Congress authority to regulate “activities that substantially affect interstate commerce.”
The plaintiffs characterized the insurance requirement as an unprecedented effort to regulate inactivity because citizens would be assessed an income tax penalty for failing to buy a product.
Justice Department lawyers responded that a choice not to obtain health insurance was itself an active decision that, taken in the aggregate, shifted the cost of caring for the uninsured to hospitals, governments and privately insured individuals.
In his decision, Judge Vinson wrote, “It would be a radical departure from existing case law to hold that Congress can regulate inactivity under the Commerce Clause.” If Congress has such power, he continued, “it is not hyperbolizing to suggest that Congress could do almost anything it wanted.”
The Pensacola case is now likely to head to the Eleventh Circuit in Atlanta, considered one of the country’s most conservative appellate benches. The Richmond case is already with another conservative court, the United States Court of Appeals for the Fourth Circuit in Richmond, which has set oral arguments for May.
That court will consider diametrically opposed rulings from courthouses situated 116 miles apart, as it was a judge in Lynchburg, Va., Norman K. Moon, who issued one of the two decisions upholding the law. Meanwhile, the United States Court of Appeals for the Sixth Circuit in Cincinnati is already receiving briefs on the other decision backing the law, which was delivered by Judge George C. Steeh in Detroit.
Judge Vinson’s ruling further arms Republicans in Congress who are waging a fierce campaign against the health care act. The new Republican majority in the House voted this year to repeal the law, a largely symbolic measure that is given no chance in the Democratic-controlled Senate.
The Obama administration argues that without the insurance mandate consumers might simply wait until they are sick to enroll, undercutting the actuarial soundness of risk pooling and leading to an industry “death spiral.”
But the mandate’s legal and political problems have prompted a few Democratic senators to join Republicans in exploring alternatives that would encourage citizens to buy insurance without requiring it.
For instance, people could be given a narrow window to enroll, and those who miss the deadline would face lengthy waiting periods for coverage.
Alternately, those who apply late and are eligible for government tax credits under the law coverage could be penalized through a reduction of their subsidies.
Sheryl Gay Stolberg contributed reporting.