Obamacare Loses a Round in Pennsylvania - Individual Mandate Violates Commerce Clause

HARRISBURG, Pa. -- A Pennsylvania federal judge on Sept. 13 held that the individual mandate contained in the Patient Protection and Affordable Care Act (PPACA) is an unconstitutional extension of authority granted to the federal government under the U.S. Constitution's commerce clause (Barbara Goudy-Bachman, et al. v. United States Department of Health and Human Services, et al., No. 10-763, M.D. Pa.).

Barbara Goudy-Bachman and Gregory Bachman sued the U.S. Department of Health and Human Services, Kathleen Sebelius, in her official capacity as secretary of Health and Human Services, the U.S. Department of the Treasury and Timothy Geithner, in his official capacity as secretary of the Treasury, in the U.S. District Court for the Middle District of Pennsylvania, alleging that Section 1501 of the PPACA, which requires all people to purchase and maintain qualifying health insurance, is an unconstitutional exercise of Congress' authority under the commerce clause.  The Bachmans say the individual mandate has caused them current economic and noneconomic harm, and they seek an order to enjoin enforcement of the individual mandate.

The federal government moved to dismiss the case or, alternatively, for summary judgment, saying Congress acted within its authority in passing the provision.  The plaintiffs also moved for summary judgment.

In granting summary judgment in favor of the plaintiffs, Judge Christopher C. Conner said the case is not about the need to address the country's health care system but instead concerns precise parameters of Congress' enumerated authority under the commerce clause and whether Congress can invoke its power under that clause to compel individuals to buy insurance as a condition of lawful citizenship or residency.

Congress exceeded its power under the commerce clause in enacting the mandate because the "power to regulate interstate commerce does not subsume the power to dictate a lifetime financial commitment to health insurance coverage," Judge Conner said.

"Without judicially enforceable limits, the constitutional blessing of the minimum coverage provision would effectively sanction Congress's exercise of police power under the auspices of the Commerce Clause, jeopardizing the integrity of our dual sovereignty structure," Judge Conner said.

In reaching the decision, Judge Conner rejected arguments relating to the distinction between activity and inactivity, saying such wordplay "is imprecise and unhelpful."

The extension of commerce clause power to the pre-transaction stage would eliminate "judicially enforceable boundaries," Judge Conner said.  The mandate regulates people who have not yet entered the market in anticipation of their entrance into the health care services market, and, to date, all exercises of commerce clause authority have proscribed activity by individuals already engaged in commerce who are active in the relevant interstate market.

"Congress may lawfully regulate the interstate market for health insurance and health services, but Congress cannot require individuals who choose not to purchase health insurance or individuals who are not currently seeking or receiving services in the health care market to purchase health insurance in order to stabilize the health insurance market.  Congress cannot mandate or regulate in anticipation of conduct that may or may not occur in the future," Judge Conner said.

[Editor's Note:  Full coverage will be in the Sept. 21 issue of Mealey's Managed Care Liability Report.  In the meantime, the order is available at www.mealeysonline.com or by calling the Customer Support Department at 1-800-833-9844.  Document #31-110921-007Z.  For all of your legal news needs, please visit www.lexisnexis.com/mealeys.]

For more information, e-mail editor Cheryl Keely at cheryl.keely@lexisnexis.com.

Lexis.com subscribers may search all Mealey Publications. 

Non-subscribers may search for Mealey Publications stories and documents at www.mealeysonline.com or visit www.Mealeys.com.

Lexis.com subscribers may also access the earlier decision of the court, and also the original complaint and initial motion to dismiss, in which the plaintiffs were found to have standing to challenge the PPACA in Goudy-Bachman v. United States HHS, 764 F. Supp. 2d 684 (M.D. Pa. 2011).

For more information about LexisNexis products and solutions, connect with us through our corporate site.

View the original article here

Virginia's Attack on Health Care Reform Individual Mandate in PPACA Heard by Fourth Circuit

RICHMOND, Va. - (Mealey's) The federal government argued before a panel of the Fourth Circuit U.S. Court of Appeals on May 10 that a district court judge erred in finding that the individual mandate contained in the Patient Protection and Affordable Care Act (PPACA) is unconstitutional, while the Commonwealth of Virginia urged the court to find that the individual mandate cannot be severed from the rest of the act, so the entire thing must be declared unconstitutional (Commonwealth of Virginia v. Kathleen Sebelius, Nos. 11-1057 & 11-1058, 4th Cir.).

Please click here to read the entire post, 4th Circuit Considers Whether Individual Mandate Unconstitutional.

Lexis.com subscribers can access additional Heath Care Reform Resources, including our special Health Care Reform Special Alert. The two-volume Health Care Reform Special Alert publication may also be purchased at the Store.

Subscribers may access all of the Lexis.com Health Care Research Materials in one convenient location.

For more information about LexisNexis products and solutions, connect with us through our corporate site.

View the original article here

Health Care Reform Scores a Victory: Patient Protection and Affordable Care Act’s Individual Mandate Upheld by Sixth Circuit

CINCINNATI -- (Mealey's) The individual mandate contained in the Patient Protection and Affordable Care Act (PPACA) is a valid exercise of Congress' power under the commerce clause of the U.S. Constitution, a Sixth Circuit U.S. Court of Appeals panel held June 29, (Thomas More Law Center, et al. v. Barack Hussein Obama, et al., No. 10-2388, 2011 U.S. App. LEXIS 13265, 6th Cir.), in affirming the dismissal of a case (Thomas More Law Ctr. v. Obama, 720 F. Supp. 2d 882, E.D. Mich. 2010) challenging the act.

After finding that plaintiffs Thomas More Law Center, Jann DeMars, John Ceci, Steven Hyder and Salina Hyder had standing to bring their suit challenging the PPACA against President Obama and other federal defendants, the court affirmed an order from the U.S. District Court for the Eastern District of Michigan dismissing the case.

The plaintiffs had challenged the PPACA, alleging that Congress lacked authority under the commerce clause to pass the PPACA and seeking a declaration that the individual mandate provision contained in the act is unconstitutional. The individual mandate requires most Americans to purchase health care insurance or pay a penalty, starting in 2014.

Set against the PPACA's broader statutory scheme, "the minimum coverage provision reveals itself as a regulation on the activity of participating in the national market for health care delivery, and specifically the activity of self-insuring for the cost of these services," Judge Boyce F. Martin Jr. wrote for the panel.

By regulating the practice of self-insuring for the cost of health care delivery, Judge Martin said that the minimum coverage provision is facially constitutional for two reasons:  The provision regulates economic activity that Congress has a rational basis to believe has substantial effects on interstate commerce, and Congress has a rational basis to believe that the provision is essential to a larger economic scheme reforming the interstate markets of health care and health insurance.

"The minimum provision regulates activity that is decidedly economic," Judge Martin said.

The plaintiffs conceded that Congress has the power under the commerce clause to regulate the interstate markets in health care delivery and health insurance, and the PPACA uses this power to regulate prices and protect consumer by banning certain insurance industry practices that have prevented individuals from obtaining and maintaining insurance coverage, Judge Martin said.

Judge Jeffrey S. Sutton concurred in the judgment but wrote separately to deliver the court's opinion as to the government's taxing power. The government had argued that Congress had an independent authority under its taxing power to pass the individual mandate.

The individual mandate is a regulatory penalty, not a revenue-raising tax for reasons including that Congress called the sanction for failing to obtain medical insurance a "penalty," not a tax and that legislative findings in the PPACA show that Congress invoked its commerce power and not its taxing authority, Judge Sutton said, adding that Congress' taxing power cannot sustain the constitutionality of the mandate.

Also, that Congress placed responsibility for enforcing the penalty with the Internal Revenue Service does not make the minimum-coverage provision a tax because the IRS also enforces other regulatory penalties, Judge Sutton said.  Additionally, the PPACA does not treat the mandate like a tax because it prohibits the IRS from using its most salient enforcement tools in collecting the penalty, he added.

Congress could have raised taxes on everyone in an amount equivalent to the current penalty, then offered credits to those with minimum essential insurance or imposed a lower tax rate on people with health insurance than those without, but Congress did not do these things, Judge Sutton said.

U.S. Judge James L. Graham of the Southern District of Ohio sitting by designation, concurred with the court's opinion on the taxing power of the government but wrote separately, saying he disagreed with the commerce clause analysis.

"Here, Congress's exercise of power intrudes on both the States and the people.  It brings an end to state experimentation and overrides the expressed legislative will of several states that have guaranteed to their citizens the freedom to choose not to purchase health insurance," Judge Graham said.

[Editor's Note:  Full coverage will be in the July 7 issue of Mealey's Managed Care Liability Report.  In the meantime, the order is available at Mealey's Online Research Service or by calling the Customer Support Department at 1-800-833-9844.  Document #31-110706-019Z.  For all of your legal news needs, please visit Mealey's Legal News and Litigation Reports.]

Download the document now:

Lexis.com - Document #31-110706-019Z

Mealeysonline.com - Document #31-110706-019Z

For more information, email editor Cheryl Keely at cheryl.keely@lexisnexis.com.

Lexis.com subscribers may search all Mealey's Publications.

Non-subscribers may search for Mealey's Publications stories and documents at Mealey's Online Research Service or visit Mealey's.com.

For more information about LexisNexis products and solutions, connect with us through our corporate site

View the original article here

LexisNexis® Legal News Podcast - Health Care Reform Takes a Hit - Court Rules Individual Mandate Violates Commerce Clause

A Pennsylvania federal judge finds the individual mandate in the Patient Protection and Affordable Care Act violates the Constitution, Goudy-Bachman v. United States HHS, 2011 U.S. Dist. LEXIS 102897 (M.D. Pa. Sept. 13, 2011), and, a California federal judge certifies a wage-and-hour class suing a refinery. Hear these and other stories from LexisNexis® Mealey'sTM Publications. Copyright© 2011 LexisNexis, a division of Reed Elsevier Inc. For the latest litigation news headlines, visit www.lexisnexis.com/mealeys or www.lexisnexis.com/community.

Lexis.com subscribers may also access the earlier decision of the court, and also the original complaint and initial motion to dismiss, in which the plaintiffs were found to have standing to challenge the PPACA in Goudy-Bachman v. United States HHS, 764 F. Supp. 2d 684 (M.D. Pa. 2011).

For more information about LexisNexis products and solutions, connect with us through our corporate site.

View the original article here