Court of Appeals Strikes Down Individual Mandate As Unconstitutional

In a major victory for opponents to President Barack Obama’s healthcare law, the United States Court of Appeals for the Eleventh Circuit in Atlanta has ruled that the individual mandate provision is unconstitutional. The decision affirmed part of a January ruling by U.S. District Judge Roger Vinson of Florida.

As expressed in prior columns, I share the concerns over federalism raised by the individual mandate. Before the law was passed, I warned that this provision was the most vulnerable and that the risk of such challenges could have been avoided by better drafting of the law. However, the Democratic leadership decided to push the law through on a thin margin without changes.

I have stated before that I believe that the cases favor Congress in the lower courts, but that there is strong precedent on both sides. Obviously, both challenging the law are emphasizing United States v. Lopez, 514 U.S. 549, 115 S. Ct. 1624, 131 L. Ed. 2d 626 (1995) and United States v. Morrison, 529 U.S. 598, 120 S. Ct. 1740, 146 L. Ed. 2d 658 (2000). The Court stated in Morrison that it would not accept “the argument that Congress may regulate noneconomic, violent criminal conduct based solely on the conduct’s aggregate effect on interstate commerce.” Id. at 617. In Lopez, the Court required more than what Professor Fried appears to demand in the nexus to support federal authority. In striking down the Gun-Free School Zones Act, the Court found that the claim could not be sustained “under our cases upholding regulations of activities that arise out of or are connected with a commercial transaction, which viewed in the aggregate, substantially affects interstate commerce.” Lopez, 514 U.S. at 561. Again, the question as stated by Chief Justice Marshall is whether this claim conforms with “the letter and spirit of the constitution.”

As I have stated, people of good faith can disagree on these points and the matter cannot be fully resolved until put before the Supreme Court. Most people anticipate that Justice Kennedy will be the swing vote on a close decision. In both Lopez and Morrison, Kennedy voted to strike down the laws. However, in his concurrence, Kennedy did note that the history and language of the Constitution “counsels great restraint before the Court determines that the Clause is insufficient to support an exercise of the national power.” Moreover, Kennedy did vote to uphold the Controlled Substances Act in Gonzalez v. Raich, 545 U.S. 1 (2005). He agreed that, absent the authority, Congress could not regulate drugs. I am frankly not convinced that the same nexus can be established here.

There is also some question over Justice Scalia’s view since he also concurred in Raich. In that decision, Scalia noted that “[u]nlike the power to regulate activities that have a substantial effect on interstate commerce, the power to enact laws enabling effective regulation of interstate commerce can only be exercised in conjunction with congressional regulation of an interstate market, and it extends only to those measures necessary to make the interstate regulation effective. . . . Congress may regulate noneconomic intrastate activities only where the failure to do so “could … undercut” its regulation of interstate commerce.” However, he also found that “[t]his is not a power that threatens to obliterate the line between “what is truly national and what is truly local emphasis added.”

I view the health care legislation as presenting a new type of federal claim and one that could leave few things as protected by federalism by expanding Congress’ enumerated powers to an unprecedented scope.

The panel gives a thoughtful and comprehensive treatment of these cases and opposing cases such as Wickard v. Filburn, 317 U.S. 111, 128 (1942).

The panel held:

In sum, the individual mandate is breathtaking in its expansive scope. It regulates those who have not entered the health care market at all. It regulates those who have entered the health care market, but have not entered the insurance market (and have no intention of doing so). It is overinclusive in when it regulates: it conflates those who presently consume health care with those who will not consume health care for many years into the future. The government’s position amounts to an argument that the mere fact of an individual’s existence substantially affects interstate commerce, and therefore Congress may regulate them at every point of their life. This theory affords no limiting principles which to confine Congress’s enumerated power.

The three judge panel ruled that “This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives.”
One judge, Stanley Marcus, dissented.

The attention will now turn to the Fourth Circuit where parties are awaiting a ruling on a challenge to the individual mandate.

Here is the 11th Circuit opinion.

Source: Yahoo

56 thoughts on “Court of Appeals Strikes Down Individual Mandate As Unconstitutional”

  1. cullheath:

    “Go figure.”

    You see who controls our elected representatives,For profit organizations.
    And they seem to have a SCOTUS backing them up.

  2. I would think it is because in the case of car insurance that by driving you are capable of causing damage to (or even killing) other specific drivers and thereby becoming liable for payments you could not possibly personally afford.

    It’s interesting that Canadians not only spend less for health insurance through a single payer system, but in the provinces where car insurance is also manged by the province rather than by private insurance companies, they also pay far less. Go figure.

    Americans are so sucked into the quasi-religious for-profit market mentality as exampled by that video (and the follow up health care one) ekeyra posted above, that we can’t imagine systems based on cooperation rather than competition ever being more sensible and/or efficient. Fortunately for Canadians they are not so adamant about the means.

  3. Somebody smarter than I am, please explain why health insurance can’t be mandated, but car insurance can. Is it just a federal vs state issue? Can states mandate car insurance and Massachusetts can mandate health insurance as states, but Congress cannot mandate health insurance on behalf of the federal government? Is there more to it?

  4. @raffles, I was partially confusing Marbury with Gibbons; however, the result is the same.

    In Gibbons the issue was whether navigation was included in the power of Congress to regulate commerce among the states. For original intent purposes the holding is unremarkable. Navigation and shipping was clearly meant to be included under Congress’ power to regulate under the Commerce clause.

    (Several proposals in the Constitutional Convention make it clear that the navigation acts were thought to be within the powers of Congress even after the Convention moved to an enumeration of powers. See Farmland, Records, 2:143 (proposal of Randolph), 169 (proposal of Wilson), 183 (proposal of Committee detail))

    Marshall relied on the definition of “commerce” as “intercourse” as set forth in Johnson’s Dictionary to show that navigation was included in the term “commerce.” (1. Commerce; exchange and 2. Communication; followed by with.)

    See also Federalist 42, 267-68 and 45, 292-93 as to the limits of the term “commerce.”

  5. Woosty:

    “A “coercive monopoly” is a business concern that can set its prices and production policies independent of the market, with immunity from competition, from the law of supply and demand. An economy dominated by such monopolies would be rigid and stagnant.

    The necessary precondition of a coercive monopoly is closed entry—the barring of all competing producers from a given field. This can be accomplished only by an act of government intervention, in the form of special regulations, subsidies, or franchises. Without government assistance, it is impossible for a would-be monopolist to set and maintain his prices and production policies independent of the rest of the economy. For if he attempted to set his prices and production at a level that would yield profits to new entrants significantly above those available in other fields, competitors would be sure to invade his industry.”

  6. Woosty:

    I am against them, the only monopoly possible is a government controled or supported monopoly.

    Contrary to what you have been told/taught.

  7. kderosa:
    “exactly, why should people be subsidised for going to the doctor to get antibiotics. Pay for that type of thing out of your own pocket and your medications too. I have a feeling Rx drugs would come way down and the doctors visit would cost $50.00 or less.”

    You’re also against subsidizing people getting vaccines I bet.

  8. kderosa,
    if the plenary power designation of Gibbons has not been overruled or waterdowned by subsequent decisions, then how can it be challenged?
    BTW, you claim (I paraphrase here) that most of the people who do not have life insurance are young people who are healthy and they don’t like it is sheer opinion. Please provide evidence of that claim when you provide evidence of how Gibbons was over turned by a subsequent decision of the Supreme Court. Thank you.

  9. Anti-Trust laws were created to stop economic suppression by the larger corporation…..To Wit…Standard Oil and the Rocky Family….

  10. Anti-trust laws are often used by one competitor against another to gain an advantage with little or no benefit to the consumers.

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  12. Roco, “Ask Puzzling, he/she has written about it and is spot on. If you think health care is expensive now just wait until there is only one provider.”
    and your take on anti-trust laws?

  13. kderosa:

    exactly, why should people be subsidised for going to the doctor to get antibiotics. Pay for that type of thing out of your own pocket and your medications too. I have a feeling Rx drugs would come way down and the doctors visit would cost $50.00 or less.

    The rich will have access to high end health care and the rest of us will have health care equivalent to that in a Mexican prison.

  14. @rafflaw,

    “Think Progress has a good discussion concerning this case and they cite the Gibbons v. Ogden case where the Supreme Court said Congress had a plenary power to regulate commerce. Is the Gibbons case still good law? ”

    Gibbons did not stand for such a broad proposition. Marshall even wrote about the decision afterward explaining what he meant by it. Subsequent case law did not go nearly as far as plenary power until the 1930s and the Progressive courts took over. I don’t have the material in front of me right now, but I will later tonight to elaborate.

  15. @Mike Appleton

    “People who have insurance subsidize those who do not, which was the logic behind the mandatory purchase requirement in the health care law.”

    Actually, most that are not insured are typically young and healthy and for them health insurance is generally a lousy deal. The individual mandate was merely a way to force the young and healthy to subsidize the old and unhealthy. Also, the reason why health insurance is so high is because as long as a third party is paying, demand for medical care will approach infinity. Further, it was the COBRA act that mandated that hospitals treat all comers regardless of insurance or ability to pay. This was a giant unfunded mandate that is just now beginning to cause problems.

    ” Moreover, Medicare was primarily a response to the fact that insurance companies are unwilling to insure the elderly.”

    I am not so sure about this. The more likely problem was that the elderly didn’t want to pay the premiums needed to pay for their increased risk.

    I had a choice when I purchased life insurance. I could pay for term insurance each year which would increase to astronomical rates as I approached my actuarial prediction of my death or I could purchase leveled term insurance in which I pay more in the beginning to keep my premium at the same rates throughout me life. I picked some of both as a compromise. I don’t see why the same types of choices wouldn’t be offered in a competitive market.

    “A program of universal coverage in some form makes sense because it expands the pool.”

    But the way the pool was structured was an awful deal for the young and healthy. Moreover, we’re not really talking about healthy insurance now are we? Health insurance is basically catastrophic insurance plus prepaid medical coverage for routine expenses. And government plan should at most cover only the catastrophic part since those are expenses that are outside the individual’s control. It’s more like health status insurance.

    “But unless your preference is that private charity should be charged with caring for the uninsured sick, it will be necessary to have a tax component in the mix.”

    That is my preference, unless health insurance were limited to catastrophic illnesses. And, health insurance should be decoupled from employment and neutralized under the tax code..

  16. Mike Appleton:

    “If private health insurance were affordable, we wouldn’t even be having this conversation. I know the monthly impact on my budget, and my income exceeds median family income in this country.”

    Yes it is. Do you know why that is so?

    Ask Puzzling, he/she has written about it and is spot on. If you think health care is expensive now just wait until there is only one provider.

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