Oral argument was held yesterday before the Fourth Circuit Court of Appeals in two cases involving the constitutionality of the Patient Protection and Affordable Care Act. You may listen to a recording of the oral argument here.
In late 2010 two federal district courts in Virginia ruled on the constitutionality of the Patient Protection and Affordable Care Act. The law is popularly known as "ObamaCare," although the central structure of the law grew out of proposals originally made by Bob Dole and the Heritage Foundation and adopted in Massachusetts under the leadership of Governor Mitt Romney. Instead of adopting a "single payer" model of funding health care similar to Medicare, Congress opted for a "play or pay" model relying on private health insurance companies to act as gatekeepers to health care. Insurers will negotiate rates with providers and control access by overseeing utilization. The law requires individuals and employers to maintain health insurance, with the government subsidizing its purchase through refundable tax credits to small employers and low and moderate income families.
The substantive issue in the two cases was the same – does Congress have the power under the Commerce Clause or the Necessary and Proper Clause to enact the "individual mandate" of the PPACA? In Liberty University, Inc. v. Geithner the District Court for the Western District of Virginia ruled that the law was constitutional. In Virginia v. Sebelius the District Court for the Eastern District of Virginia ruled that the "individual mandate" was unconstitutional.  But there is an important difference between the two cases on the issue of standing.
Standing
In the first case, Liberty University v. Geithner, the plaintiffs challenging the individual mandate are individuals – persons who do not wish to purchase health insurance but who prefer to pay for health care out-of-pocket. In the second case, the plaintiff challenging the individual mandate is the State of Virginia. The Virginia legislature had adopted a statute providing that individuals do not have to comply with the federal law, and the state attorney general contends that this law gives the State standing to challenge the constitutionality of the federal law. There is little doubt that individuals have standing to challenge the "individual mandate." But there is substantial doubt that the State has standing. In previous cases where the states have challenged the constitutionality of federal laws it involved situations where the state was directly affected by federal action or inaction. For example, in New York v. United States, the federal law forced the states to "take title" to nuclear waste generated within their borders, and South Dakota v. Dole the federal law withheld highway funding from states that refused to raise the drinking age to 21. The  furthest extent of "state standing" is probably in the case of Massachusetts v. Environmental Protection Agency, in which the State of Massachusetts was permitted to challenge the refusal of the EPA to address the problem of emissions of greenhouse gases, thus contributing to the effects of global warming such as rising sea levels . Even in that case, standing was predicated on the fact that the State of Massachusetts owns a substantial amount of shoreline property that was being affected by the agency's inaction – the federal government was injuring the state in a very concrete way. In contrast, in this case, the State of Virginia and other states that have enacted laws purporting to "nullify" the individual mandate cannot point to any direct harm that the individual mandate might cause to the State itself - and therefore Virginia v. Sebelius may be dismissed for lack of standing. The other case, however, will go forward and the Fourth Circuit will have to rule on the merits of the claim that Congress lacks power to enact the individual mandate.
Congress' Power under the Commerce Clause and the Necessary and Proper Clause
The district courts came to different conclusions about the central issue before the court – whether Congress has the power under the Commerce Clause to require individuals to purchase health insurance. I have addressed the arguments of both sides of this debate in several previous posts, including Health Care Financing Reform (125): An Inherent Contradiction in the Florida District Court Decision, and Health Care Financing Reform (119): Virginia Federal Court Strikes Down Individual Mandate in Health Care Reform Act.Â
Two jounalists have recorded their perceptions of yesterday's oral argument. Kevin Sack of the New York Times, in Appellate Court Hears Defense of Health Law, notes that the judges "challenged both sides with pointed questioning." Andrew Cohen at The Atlantic, in Why You Should Listen to the Affordable Care Act Appeal, thought that the appellate panel clearly signaled the probable outcome of the case:
How one-sided did the hours of argument seem to wizened observers? Thomas Goldstein, the powerhouse Washington lawyer who argues frequently before the United States Supreme Court and who oversees the prominent website Scotusblog, declared shortly after oral argument that he was "100%" certain the panel would uphold the Care Act. Before high noon Tuesday, Goldstein already had moved on to the question of whether Virginia's aggressive attorney general would ask the entire 4th Circuit to hear the case (the smart move) or try to get the Supreme Court involved directly (the likely one).
Lyle Denniston of SCOTUSBlog posted Easy Outing for Health Care Law? in which he, too, observes that the judges were "notably less skeptical" of the federal government's arguments than they were of the challengers'. Denniston states:
One thing about the fate of the new health care law emerged vividly in its first challenge Tuesday in a federal appeals court: the challengers cannot defeat the law in court unless they sharpen their argument that Congress has set out in a revolutionary new direction to control Americansâ personal lives. They have built their challenge almost entirely on the premise that Congress can regulate âactivity,â but cannot regulate âinactivity.â But that attempted distinction, so clear in the eye of the challengers, seemed fundamentally baffling â and thus probably unconvincing â to the three judges who heard just over two hours of argument in the Fourth Circuit Court in Richmond.
What is amazing to me is that the persons challenging the law are still focusing on whether the failure to purchase health insurance constitutes "activity" or "inactivity." This is a purely semantic argument. Those words are not in the Constitution, and they do not represent any fundamental constitutional value. The government requires us to engage in all sorts of conduct including purchasing insurance for various purposes. The distinction between "activity" and "inactivity" within individual behavior has never made a difference for constitutional purposes. Meanwhile, the opponents of the law continue to ignore the one argument that might convince the courts to strike down the PPACA – that this law infringes upon the power of the states. In the last 70 years that is the only argument that has worked. On four occasions in recent decades (five, if you count one case that was later overrruled) the Supreme Court has found that Congress overstepped its bounds and infringed upon the reserved powers of the states by enacting laws pursuant to the Commmerce Clause. And yet the plaintiffs in these cases prefer to make a formalist argument that has little intellectual appeal and even less emotional resonance. State sovereignty is an important constitutional value that must be taken into account. The difference between "activity" and "inactivity" is not.
In addition to the Fourth Circuit this matter will also be heard by appellate courts in the Sixth Circuit, the Eleventh Circuit, and the D.C. Circuit. From one or more of those decisions an appeal will be taken and the case will ultimately be reviewed by the Supreme Court.
Professor Huhn has taught Constitutional Law at the University of Akron for over a quarter century. You may access his websites on Constitutional Law and Health Care Financing Reform for additional materials and information about those subjects. Drafts of his scholarly work are available from his author page at ssrn: http://ssrn.com/author=83790
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I would generally agree with you that arguments regarding constitutionality should be based on the words in the Constitution and not words that don’t appear in it, although I do find it laughable that you make that suggestion, considering your inability to point to any textual support for your argument in support of the Imaginary Equal Protection Clause Doctrine (i.e., the one applicable to the federal government) or your argument that the Senate doesn’t have authority to set its own rules for duration of debate.
Given that the Supreme Court has long since abandoned the idea that Congress’s power is limited to regulation of actual interstate “commerce”, I think the Plaintiffs’ argument does the next best thing, which is to argue about the text of Supreme Court precedent. Clearly, the Court’s articulation of the limits of the Commerce Power has only recognized the Congress power extending to “activities:”
“Consistent with this structure, we have identified three broad categories of **activity** that Congress may regulate under its commerce power. . . . Finally, Congress' commerce authority includes the power to regulate those **activities** having a substantial relation to interstate commerce, i. e., those **activities** that substantially affect interstate commerce.”
Dear P.O.L.
I see your Supreme Court quotes and raise you!
“[R]egulatory legislation affecting ordinary commercial transactions is not to be pronounced unconstitutional unless in the light of the facts made known or generally assumed it is of such a character as to preclude the assumption that it rests upon some rational basis within the knowledge and experience of the legislators.”
“[T]o be constitutional … It is enough that there is an evil at hand for correction, and that it might be thought that the particular legislative measure was a rational way to correct it.”
“The doctrine that prevailed in Lochner, Coppage, Adkins, Burns, and like cases — that due process authorizes courts to hold laws unconstitutional when they believe the legislature has acted unwisely — has long since been discarded. We have returned to the original constitutional proposition that courts do not substitute their social and economic beliefs for the judgment of legislative bodies, who are elected to pass laws.”
“economic or social legislation [has] long been judged by a less strict standard than comes into play when constitutionally protected rights are involved.”
“The Minnesota Supreme Court may be correct that the Act is not a sensible means of conserving energy. But we reiterate that ‘it is up to legislatures, not courts, to decide on the wisdom and utility of legislation.’ Since in view of the evidence before the legislature, the question clearly is ‘at least debatable,’ the Minnesota Supreme Court erred in substituting its judgment for that of the legislature.”
“It is by now well established that legislative Acts adjusting the burdens and benefits of economic life come to the Court with a presumption of constitutionality, and that the burden is on one complaining of a due process violation to establish that the legislature has acted in an arbitrary and irrational way.”
“the strong deference accorded legislation in the field of national economic policy.”
All of your quotes are irrelevant to the commerce power argument. They relate to challenges to laws on 5th or 14th Amendment due process grounds, not on commerce power grounds. I am not sure if the plaintiffs made a substantive economic due process argument. If they did, I would not join it, nor will I ever advocate on this blog invalidation of a law on substantive due process grounds. There simply is no textual support for the proposition that Congress is restrained to enacting only rational laws. Congress can pass all the irrational regulations of health care it wishes, provided that they fall within one or more of its enumerated powers. The individual mandate simply doesn’t fall within one of those powers.
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