The Junk Food Marketing Debate: A First Amendment Right or Just Making Sure Kids Aren’t What They Eat?

Remember the Omnibus Appropriations Act of 2009 (H.R. 1105) that President Obama signed on March 11, 2009?   No?  Good, me neither, but my excuse is that I was busy applying to law schools.  If you and I had been paying closer/any (take your pick) attention, we would have seen that the Act included, among other things, a provision calling for the Federal Trade Commission, the Centers for Disease Control and Prevention, the Food and Drug Administration, and the Department of Agriculture to create an Interagency Working Group on Marketed Food to Children (”Working Group”) composed of representatives from each agency.  The Working Group would research and recommend standards for the marketing and advertising of food to children age 17 years and younger.   These recommendations would be presented to Congress down the road.

Well, a couple of years passed, but in April 2011 the Working Group released its 26-page “Preliminary Proposed Nutrition Principles to Guide Industry Self-Regulatory Efforts” for public comment (which you can submit by clicking here before July 14). The Working Group notes that

… in the FTC’s 2008 study on Marketing Food to Children and Adolescents, three food categories — breakfast cereal, restaurant foods, and snack foods — represented approximately 70% of food marketing expenditures directed to children under 12. Similarly, three categories of foods — carbonated beverages, restaurant foods, and non-carbonated beverages — represented 69% of the food marketing expenditures for adolescents ages 12-17 year….  [Overall] [t]he categories most heavily marketed to children and adolescents, ages 2 -17 years are: breakfast cereals; snack foods; candy; dairy products; baked goods; carbonated beverages; fruit juice and non-carbonated beverages; prepared foods and meals; frozen and chilled deserts; and restaurant foods. The Working Group is therefore recommending that the food industry focus its efforts on ensuring that any advertising or marketing of food products within these ten categories meet the nutrition principles set out below. (Emphasis added.)

The Working Group focuses on two nutritional principles “that both improve the nutritional quality of foods marketed to children and can be feasibly implemented by industry with sufficient time to accomplish reformulation,” namely, “Meaningful Contribution to a Healthful Diet” (Principle A)  and “Nutrients with Negative Impact on Health or Weight”  (Principle B).  Principle A ensures that foods marketed to children contain two or more of the following food groups: “fruit, vegetable, whole grain, fat-free or low-fat milk products, fish, extra lean meat or poultry, eggs, nuts and seeds, or beans.”  Principle B ensures that foods marketed to children have limited amounts of saturated fat, trans fat, sodium, and added sugars.  The Working Group makes sure to point out (several times in fact) that its recommendation are based on the 2010 Dietary Guidelines for Americans.

Really, this all sounds quite sensible, if not a little over-protective… but considering, as The Washington Post has reported, that Type 2 diabetes has significantly increased among people age 20 years and younger, what else can this country do to curb obesity and poor eating habits?  Even if we could reduce the cost of nutrient-rich and quality foods so that everyone could afford them, how do we neutralize the marketing of junk food to children?  In a report last month, NPR noted how

[the Working Group] broke from the past by seeking to include 12- to 17-year-olds in its guidelines. Traditionally, limits on marketing focused on the very young. But the government sought to expand them to older children, in part because they are heavy consumers of social media, cell phone messages and online games — the new frontier for ads.

That new frontier of advertising to children through online games — also known as “advergaming” (forgive my use of Wikipedia but Merriam-Webster doesn’t list the word) — includes Asylum 626 and Hotel 626, two advergames sponsored by Doritos.  As NPR reported,

“[w]hat we’re talking about are very complicated and very subtle forms of marketing that aren’t always clear as such,” says Kathryn Montgomery, a professor of communications at American University and an advocate for limiting food ads to teens.

[...]

Montgomery says such ads work subliminally and use friends to influence other friends.

But efforts to restrict ads to teens draw lots of opposition from the food and advertising industries. The industries say the overlap between teen and adult audiences makes the proposed restrictions impractical.

Critics, including the U.S. Chamber of Commerce, have questioned the constitutionality and logic of the Working Group’s nutritional proposals.  The Hill’s Healthwatch has reported that some critics see a First Amendment issue because

“[w]hat they’re doing is trying to simultaneously … suppress speech, while insulating it from judicial review,” said Northwestern law Professor Martin Redish, one of the panelists at a Chamber of Commerce discussion Thursday. “Because if these regulations were truly just advisory, there would be no case or controversy.”

[...]

“Industry’s rights are being violated here,” Redish said, “but there’s something deeper and darker that’s going on: The government is treating us like sheep.”

While constrained to commercial speech, Redish said that attitude has broader implications. People, he said, “can’t be sheep in the commercial realm and then all of a sudden, in the political realm, they’re free-thinking adults who can make basic choices.”

NPR has reported that other critics question the logic behind the proposal and the implicated age range.

Elaine Kolish directs an industry-funded program called the Children’s Food and Beverage Advertising Initiative. For the past five years this initiative sponsored its own voluntary standards that focus only on the 12-and-under set.

“You know, we let kids drive and we let them hold jobs when they’re 16. They can get married in some states, and they can join the military with permission, and they can be held criminally responsible for their actions in a number of situations,” she says. “So I think that the notion that you’d have to have nutrition standards that say you can’t let a kid see an ad for a french fry but you can let them join the military doesn’t really make a lot of sense.”

So where do we go from here?  Is industry self-regulation the answer to making products that better fit on MyPlate?  As I’ve noted in a previous post about McDonald’s Happy Meal toys, sometimes the answer can be stricter parenting (just say “no”).  Yet how can parents instill and maintain healthy eating habits in their kids when advertisements for unhealthy food bombard them through television, social media, and online games?

Florida, Full Speed Ahead

The Associated Press reports that the 11^th Circuit Court of Appeals has agreed to expedite hearing on Judge Vinson’s recent ruling in Florida– which found the Health Care Law unconstitutional. Judge Vinson’s Opinion in the case has been described as “A Tea Party Manifesto” on the pages of this blog. The 11^th Circuit set an even faster hearing track than the government requested. According to A.P.,

the federal government must file its first set of court papers on the issues in the case by April 4, and the state of Florida has until May 4 to file its papers. The federal government would file additional papers by May 18.

The appeals court said it had not made a decision on a request that the initial review be held before all 10 federal judges.

Sooner rather than later we’ll come to know the power of the Commerce Clause coupled with “Necessary and Proper.”

For further elucidation on the subject, I highly recommend Professor Mark Hall’s commentary, Commerce Clause Challenges to Health Care Reform.

The Individual Mandate, a Brief History — Part II, The Republican Alternative (1993-1994)

When President Clinton announced his “Task Force on National Health Reform” in late January, 1993, Republicans (at least initially) felt the need to offer voters a conservative counterpoint. Their primary concern was countering the “employer mandate” proposals, which the right has long opposed as a job-killer. The stakes were raised when, for various reasons, the Task Force’s activities became a political liability for the new President. (The PBS Newshour’s website provides a useful timeline for the entire “Hillarycare” fiasco.)

Politicians on both sides recognized many of the same problems with American health insurance. But without employer mandates or government-run plans at their disposal, Republicans needed a more direct means of containing the cost of health coverage and protecting the insured from “free riders.”

Solutions from the Pauly and Heritage plans soon found their way into Republican- and Democrat-sponsored health bills-including the individual mandate that was vital to both. Lately, liberal pundits have been pushing this fact as some great dramatic irony: Republicans, some of whom are still in office today, loved the mandate back when it was an alternative to President Clinton’s proposals.

That’s a bit of an exaggeration. However much Republicans liked it, conservative legislators wanted to focus on how their bills would enable individuals to choose the insurance they wanted, rather than the consequences for failing to do so.

The “Health Equity and Access Reform Today Act of 1993,” sponsored by Republican Senator John Chafee, was probably the most thorough proposal of the bunch, and even enjoyed some bipartisan support. As has been noted, the bill shared several common elements with the ACA, and would have required all citizens and resident aliens to possess qualifying health coverage by 2005. (This is also the only bill I know of to call this requirement an “individual mandate.”)

Like the ACA, but unlike the think-tank plans or competing Republican proposals, the Chafee bill excludes those with religious objections from the mandate. This proposal didn’t so much enforce the mandate as attempt to make compliance financially attractive-only by possessing qualifying coverage could one take advantage of increased tax credits.

One rejoinder to this history lesson is that two bills without mandates, Representative Rick Santorum and Senator Phil Gramm’s “Comprehensive Family Health Access And Savings Act” and Representative Cliff Stearns and Senator Don Nickels’s “Consumer Choice Health Security Act”, were both more popular among Republicans than the Chafee bill. This is true insofar as neither bill contained a specific provision requiring Americans possess health coverage, but untrue in every other respect.

Based on the Heritage plan, the Stearns-Nickels bill terminated the employer health plan exclusion, and the medical expense and self-employed health insurance deductions. The tax credits and other benefits designed to defray the cost of health care expenses were withheld from those who failed to possess “federally qualified” coverage, as were both itemized health care deductions and even standardized deductions. The Consumer Choice Act would also have followed through with a version of the think tank proposals’ enforcement mechanism, creating state programs to provide coverage “to any individual who . . . who refuses to voluntarily purchase such insurance coverage privately.”^[1]

As with other 1990s reform bills, the Consumer Choice Act didn’t devote a specific provision to spelling out an individual mandate; yet no less an authority than the Heritage Foundation considered the bill to possess an individual mandate as per their own design. Soon after the introduction of Nickels-Stearns, Heritage scholar and conservative health care guru Robert E. Moffitt delivered an eloquent and  detailed apologetic in its support. Moffitt’s reasoning would be echoed, years later, in the Government’s own defense of ACA § 1501(b).

The Santorum-Gramm bill was, at once, more draconian and less detailed than any competing proposal. Title VI of that bill stated that “Any individual with family income exceeding [100%] of the official poverty line^[2] . . . but who fails to purchase [the required] coverage . . . within 1 year of the date of the enactment of this Act, shall not be eligible for the insurance pool program under title V of this Act.” Title V established subsidized insurance pools for those with pre-existing conditions. In addition, “No provision of Federal, State, or local law shall apply that prohibits the use of any statutory procedure for the collection of unpaid debts for medical expenses incurred by [these] individuals . . . .”

In other words, under Senator Gramm’s plan, not only would you suffer the same tax disadvantages in the similarly-structured Stearns bill, but noncompliance at any point apparently nullifies whatever bankruptcy protections that would help relieve medical debt. The uninsured and underinsured would also risk the possibility that a health condition would price you out of health coverage for either a year or until you aged into Medicare (the bill is unclear as to which). That may be a valid exercise of the commerce power, but it’s also begging a closer look at the Eighth Amendment’s use of the phrase “cruel and unusual.”

There were a few conservative and libertarian criticisms of these mandate proposals, but they were comparatively tame to what we hear now. Nobody seemed to consider the individual mandate a constitutional problem of any kind.^[3] The main concern about Stearns-Nickels, it seems, was not that it required states to forcibly insure hold-outs, but that it permitted (but did not require) this by way of state-run plans. At a March, 1994, Heritage Foundation meeting, Senator Nickels promised to delete the provision. But neither Nickels nor Representative Stearns ever altered it.^[4]

This disinterest continued even after Democrats reintroduced the “Health Security Act” in July, 1994. That bill had an express individual mandate, was authored by liberal superhero Ted Kennedy, and would have issued Americans spooky-sounding “Health Security Cards.” Amazingly, at the height of Newt Gingrich’s revolution against government overreach, not a constitutional concern seems to have been raised.

At any rate, all Republican bills were left for dead by the end of 1994. Various forces (including Bill Kristol’s infamous memo) convinced the party that any compromise on health care reform would be good for President Clinton and thus bad for them. Colorado senator Hank Brown went so far as to rescind his co-sponsorship of the Chafee bill a month before the midterm election. The problem wasn’t the individual mandate, itself, but its incompatibility with the new message: there wasn’t a health care crisis in America to begin with.

[Read "The Individual Mandate a Brief History--Part I, Conservative Origins"]

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^[1] Stearns-Nickels § 131(b).

^[2] Note, the original text reads “exceeding 200 percent of the income official poverty line . . . or who is eligible for a partial or full credit to purchase a catastrophic health insurance plan under such section.”  Said tax credits are calculated as “100 percent reduced (but not below zero percent) by 1 percentage point for each 1 percentage point (or portion thereof) the qualified individual’s family income exceeds 100 percent of the income official poverty line . . . .”  Thus, if your income is 101% or greater, you’re subject to the bill’s penalties.

^[3] William Saffire, Let’s Make a Deal on Health, N.Y. Times (May 23, 1994) (available online at http://select.nytimes.com/gst/abstract.html?res=F00713FC355C0C708EDDAC0894DC494D81&scp=10&sq=safire%20health%20care%20let’s%20make%20a%20deal&st=cse); Michael D. Tanner, Health Care Reform: The Good, the Bad, and the Ugly, Cato Institute Policy Analysis No. 184 (Nov. 24, 1992) (available online at http://www.cato.org/pubs/pas/pa184.pdf); Miller, supra.

^[4] Tom Miller, Nickles-Stearns Is Not the Market Choice for Health Care Reform, Cato Institute Policy Analysis No. 210 (June 13, 1994) (available online at http://www.cato.org/pubs/pas/pa210.pdf).

The Individual Mandate, a Brief History — Part I, Conservative Origins

In recent years, politicians of every stripe have eaten their words about the wisdom of requiring all Americans to possess health coverage. This hasn’t been real news since the 2007 Democratic primary debates, when candidate Obama claimed his reasons for opposing the mandate were similar to those expressed by Hillary some 15 years ago.

A few years later it was President Obama’s turn. And by 2010, the entire Republican party performed a synchronized heel-face turn, virulently opposing the solution they advocated decades earlier. All of this culminated with the recent passage of the “Repealing the Job-Killing Health Care Law Act” in the House, by which point the mandate had become a 21st century Intolerable Act.

The media have dutifully reported each foible as if such strategic backpedaling were something new under the sun. But the 22-year path to ACA § 1501(b) is a story in its own right, a sort of philosophical history of American health reform policy.

The think-tank solutions (1989 - 1992)

Back in the late 1980s, the individual mandate wasn’t controversial at all–just another idea being kicked around in conservative think tanks. Although economist Mark V. Pauly, an adviser to the first Bush administration, is often cited as the mandate’s creator, conservative thinkers Stuart M. Butler and Edmund F. Haislmaier were dreaming up similar proposals at the Heritage Foundation as early as 1989.

While Democrats debated the choice between employer mandates and single-payer, Pauly and other conservatives looked for market-based remedies to what all agreed was a national “health care crisis.”  The problem with the health insurance market was that it operated more or less like normal accident insurance. As Butler once framed it:

If a young man wrecks his Porsche and has not had the foresight to obtain insurance . . . society feels no obligation to repair his car. But health care is different. If a man is struck down by a heart attack in the street, Americans will care for him whether or not he has insurance. If we find that he has spent his money on other things rather than insurance, we may be angry but we will not deny him services . . . .

A mandate on individuals recognizes this implicit contract. . . . [E]ach household has the obligation, to the extent it is able, to avoid placing demands on society by protecting itself.^[1]

Like the ACA, Butler’s proposed mandate operated through the tax code, using tax credits to make individual insurance more affordable for those who needed the help. Butler’s idea was to replace the tax exclusion for “company-based” plans with above-the-line tax credits: Butler’s plan gave a 20% tax credit to anyone with a health plan meeting basic coverage requirements, along with a “steeply rising” credit for out-of-pocket expenses in relation to household income.^[2]

Later versions of the Heritage plan went further and actively discouraged employer-run plans by turning them into normal health plans, subject to the same proposed federal requirements–including the requirement to accept any applicant, employee or not.^[3] Butler disliked the income exclusion because it was, first of all, unfair to those who had to purchase their own plans; the exclusion also perpetuated what he felt was an arbitrary emphasis on health insurance as an employment benefit. So long as insurers could deny applicants with preexisting conditions, the employer-centric status quo also discouraged workers from switching jobs–a concern eventually answered by HIPAA in 1996.

Butler predicted that people would gradually leave their employer plans for small groups, such as union-administered plans, Farm Bureau plans, and local HMOs. The small groups, bolstered by the formerly uninsured now required by law to join, would gain bargaining power with size. The higher premiums of those with preexisting conditions were answered with larger tax credits and state-operated subsidized high-risk pools, while low risk individuals enjoyed the benefits of fierce competition between plans intended for their lucrative demographic.^[4]

Mark Pauly’s individual mandate operated much like the Heritage plan’s, but served a slightly different reform scheme. Pauly, too, would cease exempting the value of employer-provided health benefits from taxable income, although self-insured employers could otherwise continue to operate much as they do now. There were other differences, such as the Pauly plan’s less generous tax credit system; but the individual mandate played essentially the same market-stuffing role in both proposals.^[5]

The primary difference between these conservative think tank mandates and the ACA is how they are enforced. Under the Pauly and Heritage proposals, you simply would possess whatever minimum coverage the federal government required. The 1992 version tasked state programs with randomly assigning the voluntarily uninsured to existing plans.^[6] This is considerably more invasive than the ACA:  following the lapse of the three-month grace period, failure to comply with the mandate results in a “personal responsibility payment,” but no actual health coverage.

In 2011, the Pauly and Heritage plans seem surprisingly bold. Such an abrupt shift from the employer-provided model would likely have been more difficult and costly than either Heritage or Pauly let on. For example, the CBO predicted doing so would slow future wage growth for many workers.^[7] But, at least in theory, the shift would benefit many low-income households, which would receive the same insurance tax credit everyone else did. And for the young invincibles, the proposed out-of-pocket deductions would make the lower-premium, higher out-of-pocket plans less risky.

These proposals met with few questions about government power, federalism, or individual liberties. Years later, Heritage scholar Robert E. Moffitt hammered libertarian critics for ignoring the disastrous economic effects of “free riders” on responsible citizens by focusing on “metaphysical abstractions.”

“An individual mandate for insurance, then, is not simply to assure other people protection from the ravages of a serious illness, however socially desirable that may be; it is also to protect ourselves. Such self protection is justified within the context of individual freedom; the precedent for this view can be traced to none other than John Stuart Mill. It does not necessarily follow, however, that we would have a right to prescribe anything beyond our own self-protection.”^[8]

Still, any legislation adopting the think tank mandates would need to smooth out their harsher aspects-e.g., they’d need exclusions for religious objectors and extreme hardships. But these proposals were realistic, enforceable, and rooted in a genuinely conservative emphasis on personal responsibility.

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^[1] Start M. Butler, Assuring Affordable Health Care for All Americans, Heritage Lectures 218, p. 8(1989).

^[2] Butler, supra, at 4, 6.

^[3] A Qualitative Analysis of the Heritage Foundation and Pauly Group Proposals to Restructure the Health Insurance System (”CBO Analysis”), CBO Memorandum, p. 4 (April 1994) (available online at http://www.cbo.gov/ftpdocs/48xx/doc4896/doc23.pdf).

^[4] Butler, supra, at 5-7.

^[5] CBO Analysis, supra, at 17-23.

^[6] Stuart M. Butler, A Policy Maker’s Guide to the Health Care Crisis Part II: The Heritage Consumer Plan (”Guide Part II”), Heritage Talking Points, p. 12 (1992) (available online at http://s3.amazonaws.com/thf_media/1992/pdf/APolicyMakers%20GuidetoTheHealthCareCrisisPart2-S%20Butler.pdf).

^[7] CBO Analysis, supra, at 22.

^[8] Robert E. Moffit, Perspectives: Personal Freedom, Respnsibility, and Mandates, 13 Health Affairs 101, 103-4 (1994) (available online at http://content.healthaffairs.org/content/13/2/101.full.pdf+html).

Recommended Reading: Interesting Takes on the Individual Mandate

In her pithy, provocative essay The Freedom of Health (forthcoming in the University of Pennsylvania Law Review), Abigail Moncrieff argues that there exists a nascent constitutional right to “freedom of health” — that is, to “individual autonomy in healthcare decision-making.”  The right is primarily a negative one, a “freedom to reject care” not to demand it (in contrast to the international human “right to the highest attainable standard of health”).  But Professor Moncrieff argues that there is also a “freedom to obtain care” that is “implicit in and therefore tethered to the [Supreme] Court’s reproductive rights jurisprudence” but which “also gained five non-precedential votes in the assisted suicide case.”  Among other implications, Professor Moncrieff argues that the freedom of health complicates the analysis of the constitutionality of the Patient Protection and Affordable Care Act’s individual mandate.  She explains that

“today’s insurance contracts are not mere risk pools, gathering and distributing funds for healthcare consumption at the discretion of the insured.  Instead, today’s contracts give insurers variable amounts of discretion, under ‘medical necessity’ review, to decide whether or not their insured can buy various kinds of healthcare with the pool’s money.  That is, insurance companies today use their contracts to steer individuals towards certain healthcare consumption decisions, often refusing to cover treatments that they deem ineffective, unnecessary, or even just inordinately costly. … There seems, therefore to be a colorable claim that the mandate infringes the freedom of health by requiring individuals to enter discretion-limiting insurance contracts–requiring individuals to give a third-party insurer the power to influence or even to direct their healthcare spending.”

While Professor Moncrieff ultimately concludes that PPACA’s individual mandate does not unconstitutionally impinge on the freedom of health because it is narrowly tailored to achieve the compelling government interests in “[e]xpanding health insurance coverage and decreasing costs of insurance on the individual market,” this in no way diminishes the timeliness or relevance of her essay.  It seems inevitable that we will confront much closer cases in the not-too-distant future.

Theodore Ruger’s Can a Patient-Centered Ethos Be Other-Regarding?  Ought It Be? (published as part of a symposium on patient-centered health and ethics at 45 Wake Forest L. Rev. 1513 (2010)) also takes on the individual mandate, explaining that it “reflect[s] the principle of group solidarity” in that it “will drive more healthy Americans into larger private risk pools, and the prices they pay will in many cases be higher than is appropriate for their own age- and health-adjusted actuarial risk; this mandate will effectively result in a redistributive tax on youth and good health.”  Professor Ruger’s essay explores the tension between, on the one hand, the principle of group solidarity reflected in the individual mandate and elsewhere in PPACA and, on the other, the “preference for individualization in American medicine” and “the correlative resistance to therapeutic standardization among providers and patients.”  Professor Ruger notes that there is a “normative clash” between those who believe “medicine could be, or ought to be, standardized through collectivized expert agencies” and those who favor a “patient-centered conception of decisional authority.”  Disputes like the controversy in late 2009 over the United States Preventive Services Task Force’s breast cancer screening recommendations, are “bound to recur in a system that is becoming increasingly interconnected, particularly given the scholarly and bureaucratic interest in giving greater prominence to expert cost-effectiveness research and best-practices standardization.”  Professor Ruger discusses several ways that “concern for broader systemic goals” might be incorporated into a “patient-centered ethos of medical care,” but is skeptical that medical ethics will, or ought to be, dislodged from its individualistic focus.  Instead, he concludes his thought-provoking essay by raising the possibility of “enhanc[ing] sensitivity to patient concerns on the part of the public and private institutions that in future decades will exert more standardizing and collectivizing pressures on the individual therapeutic relationship[.]“

Judge Vinson’s Tea Party Manifesto

On first read, the most striking aspect of Judge Vinson’s ruling today is not its remedy — striking the Affordable Care Act in its entirety — but the impression one gets that the opinion was written in part as a Tea Party Manifesto.  At least half of the relevant part of the opinion is devoted to discussing what Hamilton, Madison, Jefferson and other Founding Fathers would have thought about the individual mandate, including the following remarkably telling passage (p. 42):

It is difficult to imagine that a nation which began, at least in part, as the result of opposition to a British mandate giving the East India Company a monopoly and imposing a nominal tax on all tea sold in America would have set out to create a government with the power to force people to buy tea in the first place.

As I’ve written elsewhere, the same Founders wrote a Constitution that allowed the federal government to take property from unwilling sellers and passive owners, when needed to construct highways, bridges and canals.  But Judge Vinson dismissed those and other examples with the briefest of parenthetical asides:  “(all of [these] are obviously distinguishable)” (p. 39).    Instead, he twice cites and quotes the lower court opinion in Schechter Poultry (pp. 53, 55), which struck down the National Industrial Recovery Act, at the height of the Great Depression and the pinnacle of Lochner jurisprudence.

Still, it’s fair enough to conclude, absent controlling precedent, that being uninsured might not constitute interstate commerce.   What’s harder to swallow is the judge’s rejection of the Necessary and Proper Clause.  In refusing to sever the individual mandate, he not only concedes the mandate “is indisputably necessary to the Act’s insurance market reforms, which are, in turn, indisputably necessary to . . . what Congress was ultimately seeking to accomplish,” he astonishingly devotes about ten pages (63-74) to hammering home the mandate’s necessity, explaining, for instance, that:

this Act has been analogized to a finely crafted watch . . . . It has approximately 450 separate pieces, but one essential piece (the individual mandate) is defective and must be removed. It cannot function as originally designed. There are simply too many moving parts in the Act and too many provisions dependent (directly and indirectly) on the individual mandate and other health insurance provisions — which, as noted, were the chief engines that drove the entire legislative effort — for me to try and dissect out the proper from the improper

So if the mandate is so clearly necessary, why is it not “proper.”  The answer, as in Virginia’s Judge Hudson’s opinion, is a virtual tautology:  because the Commerce Clause does not permit it.  Here are critical excerpts:

the Clause is not an independent source of federal power (p. 58) . . . Ultimately, the Necessary and Proper Clause vests Congress with the power and authority to exercise means which may not in and of themselves fall within an enumerated power, to accomplish ends that must be within an enumerated power. (p. 60)

In light of [United States v. South-Eastern Underwriters], the “end” of regulating the health care insurance industry (including preventing insurers from excluding or charging higher rates to people with pre-existing conditions) is clearly “legitimate” and “within the scope of the constitution.” But, the means used to serve that end must be “appropriate,” “plainly adapted,” and not “prohibited” or inconsistent “with the letter and spirit of the constitution.” . . . The Necessary and Proper Clause cannot be utilized to “pass laws for the accomplishment of objects” that are not within Congress’ enumerated powers.  (p. 62)

The defendants have asserted again and again that the individual mandate is absolutely “necessary” and “essential” for the Act to operate as it was intended by Congress. I accept that it is.   Nevertheless, the individual mandate falls outside the boundary of Congress’ Commerce Clause authority and cannot be reconciled with a limited government of enumerated powers. By definition, it cannot be “proper.”  (p. 63)

My full rebuttal is here, but in brief: none of this is consistent with Comstock, which allows the federal government to commit mentally ill former prisoners to civil treatment, despite the clear absence of any general federal civil commitment power.  And this is inconsistent with Lopez and with Justice Scalia’s concurrence in Raich, which note that regulation, otherwise forbidden, of local noneconomic activities, can be justified when this is “an essential part of a larger regulation of economic activity, in which the regulatory scheme could be undercut unless the intrastate activity were regulated.”  Thus, we still await a convincing explanation of why rejecting the “necessary and proper” defense is consistent with recent Supreme Court opinions, authored or joined by most of the conservative justices.

Commerce Clause Challenges to Health Care Reform

The following article, forthcoming in U. Penn. L. Rev., pinpoints the strongest arguments for and against federal power under the Commerce Clause to mandate the purchase of health insurance:   http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1747189

Among the key points I make in defense of this federal law are:

1.            The “commerce” in question is simply health insurance, and not the non-purchase of insurance as challengers have framed it.  Because “regulate” clearly allows both prohibitions and mandates of behavior, mandating purchase is lexically just as valid an application of the clause as is prohibiting purchase or mandating the sale of insurance.

2.            Although existing precedent might allow a line to be drawn between economic activity and inactivity, there is no reason in principle or theory why such a line should be drawn in order to preserve state sovereignty.  Purchase mandates, after all, are as rare under state law as under federal law.

3.            Challengers do not seriously dispute the constitutional validity of the ACA’s regulation of insurers or the economic necessity of the mandate in order for that regulation to be effective.  In fact, they essentially concede the mandate’s necessity by asking to strike the entire law if it is declared invalid.  Accordingly, the mandate would pass the tests for constitutional necessity articulated by at least seven of the Justices in the Comstock opinion last year, and might even pass the necessity test embraced by Justices Thomas and Scalia.

4.            An important challenge, not yet clearly discussed by court opinions to date, is that the mandate does not, strictly speaking, simply “carry into execution” Congress’ other regulatory powers, but is the exercise of a distinct power.  However, both modern and historical precedents under the Necessary and Proper Clause are not limited narrowly to merely implementation measures.  Both Comstock and a series of decisions under the Postal Power are good examples to the contrary since they authorize independent federal powers that expand the range of purposes and measures permitted by express Congressional powers.

5.            There is no coherent basis for declaring a purchase mandate to be constitutionally “improper,” and a categorical ban on regulating inactivity would contradict the implicit reasoning underlying several other established precedents — such as those upholding the draft and the Congressional subpoena power.   Also, federal eminent domain allows compelled transactions justified in part by the Necessary and Proper clause’s expansion of the commerce power, when applied, for instance, to citizen’s refusal to sell land for use in constructing highways, bridges, and canals.

6.            Using the 10th Amendment to justify a categorical prohibition of purchase mandates (as Randy Barnett has argued) would be no more convincing than using the 9th or 5th Amendments (substantive due process).  Instead, such a move would, for the first time and contrary to precedent, make the 10th a protector of individual liberties rather than just federalism concerns, and would radically enforce an absolute right to economic liberty, regardless of level of legislative justification or judicial scrutiny (see point 9).

7.            Slippery slope concerns are no greater here than for any other of a range of expansive federal powers.  Instead, the novelty of the mandate subjects it to greater political constraint, and so “parade of horribles” concerns may be even more unrealistic than similar settings where the Court has rejected them.

8.            Grounding the mandate in the Necessary and Proper clause helps to confine its precedential effect by emphasizing it’s necessary role in the ACA’s particular regulatory scheme that, in other respects, clearly resides within the core of the conventional commerce power.  This essential supportive and interconnected role is not shared by free-standing mandates to purchase American cars or broccoli, for instance.

9.            Counteracting imaginary slippery slope concerns about absurd hypothetical laws are the legitimate concerns about insurmountable barriers that a prohibition of purchase mandates would erect.  Forbidding Congress from any purchase mandate could cripple necessary efforts, for instance, to require preventive measures in the face of a massive pandemic that threatened tens of millions of lives.

Reform Rodeo

1. The Health Care Blog has an important piece on the role of HIT in Accountable Care Organizations (ACOs) and whether they will be open networks or walled gardens.

Will ACO (accountable care organization) IT models be walled gardens or open platforms?  i.e., will ACO IT platforms focus on exchanging information within the provider network of the ACO, or will they also be able to exchange information with providers outside the ACO network?

2. Kaiser Health News  discusses rules proposed by the Obama administration that would require health insurers to justify double-digit increases in premium rates.

Under the proposal, the flagged premium increases would be subject to review by the states – or the federal government in some cases – to determine if they are unreasonable.

In following years, the Department of Health and Human Services will adjust the specific percentage threshold for each individual state. Thresholds would vary partly because medical costs vary by state.

3. The New York Times has run a piece on a new antitrust lawsuit filed against Blue Cross Blue Shield of Michigan.

Federal prosecutors contend that Blue Cross in Michigan thwarts competitors by pressuring hospitals to charge rival insurers more to provide care, a practice prosecutors say has made health care extremely expensive in a state that can’t afford it.

4.  Tim Jost provides an overview at Health Affairs of the current state of the argument over the constitutionality of the individual mandate — including the recent decision by a federal judge in Virginia ruling the mandate unconstitutional.

Virginia adopted a statute purporting to nullify the minimum essential coverage requirement even before Congress enacted the Affordable Care Act, and the lawsuit was brought to enforce this statute.  Judge Hudson had earlier this year denied a Justice Department motion to dismiss the Virginia case, holding that the Commonwealth had standing to defend its legislation.  In his earlier decision, Judge Hudson had also held that the Commonwealth had an arguable claim that the minimum coverage requirement was unconstitutional.  Subsequent briefs filed by the Justice Department and by amici (interested parties who file as “friends of the court,” or amici curiae) supporting the reform law apparently failed to change Judge Hudson’s mind.

5. The Wall Street Journal has a story outlining the tremendous pecuniary benefits that certain spine doctors are receiving for conducting spine surgeries that some question as unnecessary.

The five surgeons are also among the largest recipients nationwide of payments from medical-device giant Medtronic Inc. In the first nine months of this year alone, the surgeons—Steven Glassman, Mitchell Campbell, John Johnson, John Dimar and Rolando Puno—received more than $7 million from the Fridley, Minn., company.

Interviews with Virginia Attorney General and White House Health Reform Director

In case you missed it: courtesy of PBS, a minute and 45 seconds of recap and then interviews with White House health reform director Nancy-Ann DeParle and Virginia Attorney General Ken Cuccinelli on the constitutionality (or lack thereof) of the individual mandate. Attorney General Cuccinelli brought the suit against the mandate that won in Virginia federal court last week. (It takes a moment or two to buffer).

From Justice Story: A Postal Power Parable on Mandating Health Insurance

This just in:  Stirred by the arguments of Randy Barnett, Ilya Somin, Judge Hudson and others, Justice Joseph Story — miraculously from the grave! — has filed an amicus brief in the 4^th Circuit appeal on the constitutionality of mandating the purchase of health insurance.  Of note, he wrote his brief in the form of a parable about Congress’ power under the postal clause to build roads — an issue that was hotly contested 2 centuries ago.   Defenders of states’ rights argued that the power to “establish Post Offices and post Roads” conveyed only the power to designate which existing state roads to use for postal routes, and not the power to acquire land and build new federal roads.  From the faint echoes of this historical debate, Justice Story appears to suggest there are lessons to learn about the modern Commerce Clause (emphases added):

The grounds of the [more restrictive position] seem to be as follows. The power given under the confederation never practically received any other construction. Congress never undertook to make any roads, but merely designated those existing roads, on which the mail should pass. At the adoption of the constitution there is not the slightest evidence, that a different arrangement, as to the limits of the power, was contemplated. . . . when a road is declared by law to be a mail-road, the United States have a right of way over it; . . . It was thought necessary to insert an express provision in the constitution, enabling the government to exercise jurisdiction over ten miles square for a seat of government, and of such places, as should be ceded by the states for forts, arsenals, and other similar purposes. It is incredible, that such solicitude should have been expressed for such inconsiderable spots, and yet, that at the same time, the constitution intended to convey by implication the power to construct roads throughout the whole country, with the consequent right to use the timber and soil, and to exercise jurisdiction over them . . .  The terms of the constitution are perfectly satisfied by this limited construction, and the power of congress to make whatever roads they may please, in any state, would be a most serious inroad upon the rights and jurisdiction of the states. It never could have been contemplated. . . . The power to create the office does not necessarily include the power to carry the mail, or regulate the conveyance of letters, or employ carriers. The one may exist independently of the other. A state might without absurdity possess the right to carry the mail, while the United States might possess the right to designate the post-offices, . . .

Yet, no man ever imagined such a construction to be justifiable.  And why not? Plainly, because constitutions of government are not instruments to be scrutinized, and weighed, upon metaphysical or grammatical niceties. They do not turn upon ingenious subtleties; but are adapted to the business and exigencies of human society; and the powers given are understood in a large sense, in order to secure the public interests. Common sense becomes the guide, and prevents men from dealing with mere logical abstractions. . . .

Under the constitution congress has, without any questioning, given a liberal construction to the power to establish post-offices and post-roads. It has been truly said, that in a strict sense, “this power is executed by the single act of making the establishment. But from this has been inferred the power and duty of carrying the mail along the post-road from one post-office to another. And from this implied power has been again inferred the right to punish those, who steal letters from the post-office, or rob the mail. It may be said with some plausibility, that the right to carry the mail, and to punish those, who rob it, is not indispensably necessary to the establishment of a post-office and a post-road. This right is indeed essential to the beneficial exercise of the power; but not indispensably necessary to its existence.” . . .  If the practice of the government is, therefore, of any weight in giving a constitutional interpretation, it is in favour of the liberal interpretation of the clause.

The fact, if true, that congress have not hitherto made any roads for the carrying of the mail, would not affect the right, or touch the question. . . . But the argument would have it, that, because this exercise of the power, clearly within its scope, has been hitherto restrained to making existing roads post-roads, therefore congress cannot proceed constitutionally to make a post-road, where no road now exists. This is clearly what lawyers call a non sequitur. It might with just as much propriety be urged, that, because congress had not hitherto used a particular means to execute any other given power, therefore it could not now do it. If, for instance, congress had never provided a ship for the navy, except by purchase, they could not now authorize ships to be built for a navy, or à converso. . . . If they had never erected a custom-house, or court-house, they could not now do it. Such a mode of reasoning would be deemed by all persons wholly indefensible. . . .

It is said, that there is no reason, why congress should be invested with such a power, seeing that the state roads may, and will furnish convenient routes for the mail. When the state-roads do furnish such routes, there can certainly be no sound policy in congress making other routes. But there is a great difference between the policy of exercising a power, and the right of exercising it. But, suppose the state-roads do not furnish . . . suitable routes for the mails, what is then to be done? Is the power of the general government to be paralyzed? Suppose a mail-road is out of repair and founderous, cannot congress authorize the repair of it? If they can, why then not make it originally? Is the one more a means to an end, than the other? If not, then the power to carry the mails may be obstructed; nay, may be annihilated by the neglect of a state. . .

The supposed silence of the Federalist proves nothing. That work was principally designed to meet objections, and remove prejudices. . . .

Judge Hudson, Bartleby the Scrivener and the “Tribeless, Lawless, Hearthless One”

As I think about Judge Hudson’s decision in Virginia, I’m struck by the espoused (and yesterday winning) concept of the individual mandate to procure health  insurance (if not exempted for religious belief) as an unprecedented  regulation of “inactivity.” As I consider this choice of supposed “inactivity,” I’m struck by the insistence to supposedly not engage in the social contract: to reap the benefit of social structure in a medical sense– to have the piece of mind which comes with knowing that EMTALA, a valid law passed by a duly constructed governing body,  insures that an emergency room may not shun you if you darken its doorway, but to insist, when it comes time to make arrangements to pay to keep those doors open, that like Melville’s Bartleby the Scrivener, you’d simply “prefer not to.”  It is perhaps constructive to remember that Bartleby ultimately exercises whatever free will he has into his own starvation  inside a prison of his own preference– or more aptly, as the result of his “preferring not to” engage in activity.

In a moral sense I suppose we may consider this justification of opting  out of the individual mandate as a form of persistent objection wrought from consent based theories of governance.  The argument stems from a concept of individual liberty. But as the Supreme Court has often said, ours is a system of “ordered liberty.” It must be. Every conscription to war has told us so– in the starkest terms possible.

And given the social nature of our existence, the inter-dependence– who but Homer’s and Aristotle’s “Tribeless, lawless, hearthless one” can claim to have not reaped the benefits of the social contract? In a medical sense? Research? To oversimplify through analogy, can you drive down the road each day, but object to pay the tax for its construction and upkeep? Which is to say, can you partake of the benefit without obliging yourself?

Governing inactivity? If you fail to shovel your walkway full of snow, may you not be fined for causing a potential public harm? If you fail to provide for the regular education of  your 12 year old daughter, will there not be legal consequences? The failure to shovel or educate both qualify as inactivity– we regulate inactivity for the public good all the time. These examples leave much to be desired as matters of commerce to be governed federally, but of course, health care itself is not “regular” commerce– the economics of healthcare are essentially different from the economics of standard market transactions.The economics of healthcare are, as Professor Frank Pasquale has written here, “unconventional.”

Professor Brad Joondeph over at ACA Litigation blog, makes the point that

perhaps the biggest single legal challenge for the administration will be to convince judges that the health insurance market is unlike any other market, and that Congress’s use of the commerce power to enact 1501(b) will not justify the compulsion of Americans to purchase any other good or service.

I think that’s right.

Having said that, there is some precedent regarding the mandate to procure in defense of the common weal. For those who refer to the individual mandate to have health insurance as an “unprecedented” federal mandate, we’ve already covered that misnomer here on HRW with Bradley Latino’s piece on the “The Original Individual Mandate, Circa 1792.” For those of you unfamiliar, it may be worth quickly recapping:

The Militia Acts of 1792, passed by the Second Congress and signed into law by President Washington, [which] required every able-bodied white male citizen to enroll in his state’s militia and mandated that he “provide himself” with various goods for the common weal:

[E]ach and every free able-bodied white male citizen of the respective States . . . shall severally and respectively be enrolled in the militia . . . .provid[ing] himself with a good musket or firelock, a sufficient bayonet and belt, two spare flints, and a knapsack, a pouch, with a box therein . . . and shall appear so armed, accoutred and provided, when called out to exercise or into service

As we further wrote:

Of course, the procurement of supplies under the Militia Acts did require Americans to engage in commerce, and, perhaps, Interstate Commerce. But it is not particularly tenable to cite the Commerce Clause as the power under which Congress and President Washington moved. More apt would be the Militia Clause, wherein Congress may “call forth the Militia” coupled with the Necessary and Proper Clause:  ”Let the end be legitimate, let it be within the scope of the constitution,” as Justice Marshall famously wrote in McCulloch v. Maryland “and all means which are appropriate, which are plainly adapted to that end . . . are constitutional.”   Importantly, McCulloch is still good law (for some idea of the breadth of the Necessary and Proper Clause power, See U.S. v. Comstock, recently decided by the Supreme Court). And yes, the Necessary and Proper Clause may work in tandem with the Commerce Clause.

What is “Necessary and Proper” to the execution of one power (Militia Clause), however, may not be ultimately determined by the Court to be constitutionally so for another (Commerce Clause). But as Constitutional Law Professor Edward Hartnett of Seton Hall Law has pointedly queried, “At least so long as McCulloch v. Maryland is good law, why would the necessary and proper clause in aid of the militia power allow for an individual mandate, while the necessary and proper clause in aid of the commerce power would not?”

I don’t believe Judge Hudson has answered that question to satisfaction. But perhaps he would prefer not to.

What’s Surprising about the Virginia Ruling Striking the Individual Mandate?

Most everyone expected district Judge Hudson in Richmond VA to strike the individual mandate as unconstitutional, so the outcome of today’s decision is hardly surprising.  What was uncertain is: 1) what remedy he would grant; and 2) how he would handle the government’s strongest argument, which is based on the “necessary and proper” clause.  On both points, he either punted or fumbled.  (See also here and here.)

For the remedy, the tough choice is whether to strike most or all of the Affordable Care Act, realizing that the Act lacks a severability provision and that Congress obviously never would have enacted it without an individual mandate.  Banning medical underwriting without an individual mandate will wreak havoc on the market for individual insurance, perhaps causing many or most insurers to withdraw, as they’ve already done in the market for child-only insurance.  Despite all of that, the judge severed and struck only the individual mandate, leaving to Congress or administrative agencies the task of avoiding the train wreck of potential market collapse.

Other courts might not be so cavalier (subtle pun intended, for those from UVA), even if they were inclined to agree on the merits.  But then they would have to strike most or all of the ACA — a much bolder move.  Both the state and the federal government agreed that severing the individual mandate was not the right move — conceding, in effect, that the mandate is inextricably intertwined with the ACA’s regulation of insurance.  That naturally leads to the next issue: whether the mandate is necessary and proper.

On that question, the Richmond court reasoned inscrutably (p. 24) that

“Because an individual’s personal decision to purchase–or decline to purchase–health insurance from a private provider is beyond the historical reach of the Commerce Clause, the Necessary and Proper Clause does not provide a safe sanctuary.”

What??  I thought the whole point of the N&P clause was to expand powers beyond those enumerated.  If the Commerce Clause itself provided the power, then we wouldn’t need N&P; thus, the ONLY time we need N&P is when the power in question is beyond enumerated powers.

The court continued:

“This clause grants Congress broad authority to pass laws in furtherance of its constitutionally-enumerated powers. This authority may only be constitutionally deployed when tethered to a lawful exercise of an enumerated power. . . . The Minimum Essential Coverage Provision is neither within the letter nor the spirit of the Constitution. Therefore, the Necessary and Proper Clause may not be employed to implement this affirmative duty to engage in private commerce.”

What!?  (I’m channeling Jon Stewart here).  Doesn’t this reason that the power in question is untethered because it’s not tethered to itself?  Shouldn’t we be looking to link to OTHER powers or objectives that ARE within the Commerce Clause?  The government’s clearly stated position, summarized by the court itself, is obviously that regulating how insurance is offered and sold is easily within the core of the commerce power.  That forms the anchor to which the individual mandate is tethered - a straightforward position to which the court never responded.

Other quirks:  Although the court nodded to the challengers’ burden of persuasion and the presumption in favor of constitutionality, it emphasized the lack of any “specifically articulated constitutional authority . . . to mandate the purchase of health insurance” (p. 20).  And although the case was about government powers rather than constitutionally-protected individual rights, the judge said (p. 37) that, “At its core this dispute is . . . about an individual’s right to choose” to be uninsured.

These parts of the opinion read to me as someone determined to strike the mandate regardless of the force of argument in the way.

[Read here Professor Hall's prior articles in Health Reform Watch on the individual mandate : "Is it Unconstitutional to Mandate Health Insurance?" and "Are the Attorneys General's Constitutional Claims Bogus."]

Mark A. Hall, J.D., is the Fred D. & Elizabeth L. Turnage Professor of Law at Wake Forest University School of Law. He is one of the nation’s leading scholars in the areas of health care law and policy and medical and bioethics and a contributor to Health Reform Watch. The author or editor of fifteen books, including Making Medical Spending Decisions (Oxford University Press), and Health Care Law and Ethics (Aspen), he is currently engaged in research in the areas of consumer-driven health care, doctor/patient trust, insurance regulation, and genetics. He has published scholarship in the law reviews at Berkeley, Chicago, Duke, Michigan, Pennsylvania, and Stanford, and his articles have been reprinted in a dozen casebooks and anthologies.

Professor Hall also teaches in the MBA program at the Babcock School and is on the research faculty at Wake Forest’s Medical School. He regularly consults with government officials, foundations and think tanks about health care public policy issues, and was recently awarded the American Society of Law, Medicine and Ethics distinguished teaching award.

Just What the Doctor’s Health Lawyer Ordered: An ACA Litigation Blog

In what promises to be a tremendous resource for all keeping score on the health reform law litigation front, Brad Joondeph, Professor of Law at Santa Clara University School of Law, has put together a blog which features updates on  PPACA litigation as well as a compilation of the pertinent documents in such cases. Described as  “A place to find news updates, legal analysis, and all official documents related to the states’ constitutional challenges to the Patient Protection and Affordable Care Act (as amended by the Health Care and Education Reconciliation Act of 2010),” it is.

You can find the ACA Litigation Blog here. Going forward, HRW will gladly feature it as a live RSS feed in the far right sidebar.

(Tip of the hat to the HealthLawProf Blog for pointing it out)

Election Fallout and Why State Initiatives to Exempt Residents from Health Care Law are Not Just Symbolic

As the election results filter in and America finds itself trying on some level to read tea leaves, analysts and pollsters are hard at work trying to get a sense of why things fell out the way they did. Most pertinent to this blog, of course, is just what kind of role the health care law played in these elections. The Wall Street Journal’s Health Blog writes:

Official exit polls put health care as the second-most important issue driving votes, with 19% of those surveyed by Edison Research (for media organizations) saying it was their key issue, Politico reports. That paled, however, to the 62% who said the economy was most important.

Time Magazine’s Swampland Blog has a quick and effective breakdown of the health reform impact on a number of candidates. Entitled “Mixed Results on the Health  Reform Referendum,” you can find that here.

I have, however, issue with one aspect of the Time piece. It states:

Voters in Arizona, Colorado and Oklahoma also had a chance to weigh in on symbolic ballot initiatives to amend their state constitutions to exempts residents from portions of the Affordable Care Act. These are symbolic because federal law trumps state law — the point of the initiatives is basically to send a message of opposition. Oklahoma voters resoundingly approved their measure. (Missouri voters acted similarly in August.) It’s still early, but Colorado voters look like they are more split, with 55% of voter voting against the measure with 24% of precincts reporting. In Arizona, even fewer votes have been tallied — the count stands at 56% approving the measure with 14% of precincts reporting. (emphasis added).

I do not discount that these initiatives have symbolic value, but as I’ve noted before on this blog, such initiatives are not wholly symbolic. When the AMA’s Amed News wrote a similar story regarding the similar Missouri initiative, I noted that a federal judge in Virginia found standing in a challenge against the health care law based upon just such an initiative. I wrote:

Generalities aside, as is best in this regard, it strikes me that the Missouri initiative may have more than just symbolic value. Importantly, in the recent federal court decision regarding Virginia’s suit against the individual mandate, the judge in that case found standing for the state of Virginia–an exceedingly important, though procedural, ruling. It is exceedingly important because without standing the case could simply not go forward. The judge in the case found standing for Virginia’s 10th Amendment claim largely based upon a law passed subsequent by the state of Virginia. Regarding that matter I wrote:

In deciding the standing issue, Judge Hudson, according to Professor Jack Balkin, made much of the “Virginia Health Care Freedom Act– which asserts that no Virgina citizen may be forced to purchase health care insurance; that this law conflicts with the federal Affordable Care Act, and therefore Virginia has standing to challenge the act under the 10th amendment.”

Virginia’s Act was passed subsequent to the federal law in question; other states challenging the individual mandate do not, at present, have such a law to rely on. As Professor Balkin points out, however, the Virginia Act being deemed sufficient to buttress standing in a States’ rights Tenth Amendment claim is interesting– to say the least. It begs the question.

In more than just symbolic terms, Missouri may have just answered that question–at least in terms of 10^th Amendment standing–if, of course, its federal district court sees the matter in the same way as did Judge Hudson. Certainly not guaranteed– the Missouri Federal Court is not bound by the Federal Court of Virginia– but nonetheless, Missourian’s just laid claim to an argument that has won elsewhere.

Arizona, Colorado and Oklahoma may have just done the same.

Health Care Law Challenges Move Toward Supreme Court: Michigan Suit Denied as Florida Suit Moves Forward

Just a week after a Michigan judge prevented a suit challenging the Patient Protection and Affordable Care Act from moving forward, a Florida judge allowed a similar challenge to be judged on its merits. Both cases, Thomas More Law Center v. Obama and Florida v. U.S. Department of Health and Human Services, challenge the new health care law. Specifically, the suits alleged that the individual mandate provision of the health care law, which is scheduled to go into effect in 2014 and would require every individual (except for a number exempted) in the U.S. to purchase health care, violates the constitution. In Michigan, a judge held that it does not. In Florida, a judge held that, due to its unprecedented nature, it could violate the constitution and denied the motion to dismiss, which will allow the case to move forward based on its merits.

Many commentators believe these lawsuits and others, like Virginia v. Sebelius in Virginia and Kinder v. Geithner in Missouri, will ultimately end up in the U.S. Supreme Court.

Florida v. Department of Health and Human Services

The Florida suit alleged that the statute violates the U.S. Constitution by mandating that every American purchase health care or else pay a penalty. The six-count complaint charged that the statute exceeded congressional authority under the commerce clause, violated due process and otherwise interfered with states’ sovereignty rights.

The 65-page opinion begins by determining whether, for analytical purposes, the prescribed payment for non-compliance with the individual mandate was a penalty or a tax. The court considered it a penalty, therefore holding that the statute cannot be considered constitutional based only on the federal government’s taxation powers.

The court also considered whether the plaintiffs had standing to pursue the litigation, which, in short, requires that a plaintiff has suffered a concrete harm  by the defendant which is capable of being redressed by the court. The court held that it did because while the individual mandate provision will not take effect until 2014, the injury is impending and will occur in due time.

Addressing the merits of the case, the court dismissed plaintiffs’ claim that the law interfered with the individual states’ (19 others joined Florida in the suit) sovereignty rights as employers. The court also dismissed plaintiffs argument that the individual mandate violates due process rights, holding that the freedom to decide whether or not to buy health care is not a “fundamental right.”

The plaintiffs argued that the federal government exceeded its power over the states by “coercing” them to expand Medicare. The court ruled that the argument was “shaky,” but nevertheless allowed it to move forward because little law in the Fourth Circuit (which includes Florida) addresses the coercion theory: that is the theory that the federal government may induce states to participate in federal programs through financial incentives, but it cannot put the states in a position where rejecting a federal program would be so burdensome as to tip the scale from mere inducement to actual coercion. The theory came from the Supreme Court’s decision in South Dakota v. Dole.

Finally, the court addressed plaintiffs’ claim that the statute improperly expands the commerce clause of the U.S. Constitution. The court reasoned that the individual mandate is unprecedented in history (apparently not having read Bradley Latino’s article, “The Original Individual Mandate, Circa 1792“), which alone does not make it unconstitutional. However, the court held that the unprecedented nature and novelty of the commerce clause justification makes the question as to whether the statute is an unconstitutional expansion of the commerce clause, at the very least, enough to state a claim for relief. Hence, the court ruled, the litigation may move forward. Which is to say that the plaintiffs claim survived in part the motion to dismiss for failure to state a claim. A first, but important hurdle, though governed by a deferential standard in favor of the plaintiffs. Barring the unforeseen, the next hurdle will be the motion for summary judgment.

“In American legal practice summary judgment can be awarded by the court prior to trial, effectively holding that no trial will be necessary. Issuance of summary judgment can be based only upon the court’s finding that: 1) there are no issues of “material” fact requiring a trial for their resolution, and 2) in applying the law to the undisputed facts, one party is clearly entitled to judgment.”

Thomas More Law Center v. Obama

On Oct. 7, just a week before the Florida ruling, a Michigan judge, deciding on the merits of the case, found for the defendants in a suit challenging the individual mandate to buy health insurance in the Patient Protection and Affordable Care Act. The opinion, written by Judge Steeh, found that the Plaintiffs, the Thomas More Law Center and other individually named plaintiffs, had standing even though they have not been penalized under the law for not buying health care. This provision does not take effect until 2014.

The judge ruled that the plaintiffs had standing because, even though the challenged provision of the bill does not go into effect for four more years, they suffered an immediate harm because they could be taking an action, or arranging their affairs,  such as saving money in anticipation of the mandate.

In Virginia v. Sebelius, the court also found standing for the plaintiff in a challenge to the statute. There, however, the court ruled that the plaintiff, the Commonwealth of Virginia, had standing because the commonwealth made its own statute prohibiting any individual mandates to purchase health insurance. The claim survived a motion to dismiss and will move forward.

Here, however, the motion was dismissed on other grounds. Judge Steeh rejected plaintiffs’ argument that refraining from purchasing insurance was economic “inactivity” and therefore could not be subject to federal control under the commerce clause of the U.S. Constitution. Instead, the judge reasoned that plaintiffs were making an “economic decision” to pay for healthcare services later, out of pocket, rather than sooner, by purchasing a health insurance plan.

Finally, the judge reasoned that the individual mandate is essential to a broader regulatory scheme. Citing Gonzalez v. Raich, where the Supreme Court sustained Congress’s authority to prohibit the possession of homegrown marijuana for personal use because of its impact upon the aggregate, the court noted that the individual mandate on healthcare was essential to a broader regulatory scheme. Like in Raich, the statute would not work without a mandate to purchase health insurance, the court noted, because, “the most costly individuals would be in the insurance system and the least costly would be outside it.” The court concluded that the individual mandate is a reasonable or rational means of carrying out Congress’s goal.

The Florida court’s ruling on standing makes it the third court to allow a suit challenging the individual mandate to overcome the standing argument, a procedural hurdle some commentators did not believe those opposed to the individual mandate could overcome. Having said that, the Michigan court’s decision is the first of the suits to be decided on the merits– and the Individual Mandate prevailed.

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