Federal Court Rules Entire Health Reform Law Unconstitutional

Unless you have been hiding under a rock — or working doubles — you have no doubt heard that U.S. District Judge Roger Vinson has ruled that the health reform law is unconstitutional.  This is the second such blow to the law, the first coming from a Virginia District Court in December 2010.  There are some important differences between these two rulings, however.

The principal provision of the law that draws substantial criticism and that has been at issue in all of the cases addressing the constitutionality of the law is the provision requiring that all individuals purchase health insurance, or “the individual mandate.”  The ostensible authority for Congress’s enactment of this provision is the Commerce Clause of the United States Constitution.  Judge Henry Hudson of the United States District Court for the Eastern District of Virginia previously held that the individual mandate exceeded the authority granted to Congress under the Commerce Clause.  By contrast, two other courts — one in the Western District of Virginia and the other in the Eastern District of Michigan — have held that it was properly within Congressional power.

Judge Vinson held that the individual mandate exceeded the authority granted to Congress under the Commerce Clause.  He observed that “[n]ever before has Congress required that everyone buy a product from a private company (essentially for life) just for being alive and residing in the United States.”  Although he was cautious to state that just because the exertion of this power was novel did not necessarily make it unconstitutional, he went to rule that Congress in fact exceeded its authority.  The basis of his ruling focused on the fact that, under the Commerce Clause Congress, has traditionally been authorized to regulate “activity” affecting interstate commerce and not “inactivity,” such as the decision not to purchase health insurance.  The heart of his rationale is as follows:

It would be a radical departure from existing case law to hold that Congress can regulate inactivity under the Commerce Clause. If it has the power to compel an otherwise passive individual into a commercial transaction with a third party merely by asserting — as was done in the Act — that compelling the actual transaction is itself “commercial and economic in nature, and substantially affects interstate commerce” [see Act § 1501(a)(1)], it is not hyperbolizing to suggest that Congress could do almost anything it wanted. 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. If Congress can penalize a passive individual for failing to engage in commerce, the enumeration of powers in the Constitution would have been in vain for it would be “difficult to perceive any limitation on federal power” [Lopez, supra, 514 U.S. at 564], and we would have a Constitution in name only. Surely this is not what the Founding Fathers could have intended. See id. at 592 (quoting Hamilton at the New York Convention that there would be just cause to reject the Constitution if it would allow the federal government to “penetrate the recesses of domestic life, and control, in all respects, the private conduct of individuals”) (Thomas, J., concurring).

Where Judge Vinson went even further than the prior Virginia District Court ruling that the individual mandate was unconstitutional was Judge Vinson’s position that the individual mandate is such an integral component of the health reform act that the entire act, rather than just the individual mandate, must be declared unconstitutional.  He observed that whether the unconstitutional individual mandate can be severed from the remainder of the act first turns on the well-established test of whether the remaining provisions “can function independently and remain ‘fully operative as a law.’”  The second component of the test is an examination of whether Congress, if presented with the statute that does not contain the stricken provision, would prefer to have no statute at all.

Judge Vinson concluded that, without the individual mandate, the broader health care reform act cannot function and would unlikely have gained passage in Congress.  He likened the entire Act to a finely crafted watch in part as follows:

In the final analysis, this Act has been analogized to a finely crafted watch, and that seems to fit. 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, and the able-to-stand-alone from the unable-to-stand-alone. Such a quasi-legislative undertaking would be particularly inappropriate in light of the fact that any statute that might conceivably be left over after this analysis is complete would plainly not serve Congress’ main purpose and primary objective in passing the Act. The statute is, after all, called “The Patient Protection and Affordable Care Act,” not “The Abstinence Education and Bone Marrow Density Testing Act.” The Act, like a defectively designed watch, needs to be redesigned and reconstructed by the watchmaker.

So if you are keeping score, it is now tied with two Courts upholding the health reform act and two holding it unconstitutional.  However, Judge Vinson’s ruling is significant because of the extra step he took in declaring the entire act, rather than simply the individual mandate, unconstitutional.  The Administration has announced plans to appeal Judge Vinson’s ruling, which will be heard by the 11th Circuit Court of Appeals.  Other appellate Courts will be hearing appeals of the other rulings.  Unless the appellate courts find a way to achieve a common ground, which would be remarkable, this issue will undoubtedly be bound for the United States Supreme Court.

Judge Vinson’s complete opinion can be found here.

Jonathan B. Stepanian, Esq.

Jon is an attorney whose practice is specialized in litigation, complex medical professional liability defense, health care, and providing legal counsel on numerous issues associated with day-to-day hospital operations. He has successfully tried several cases to verdict as first-chair trial counsel before juries in both state and federal court. Jon has also represented clients in appellate litigation, mediation, and in connection with administrative agency investigations.

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