One week from today, the Sixth Circuit will hear oral arguments in the high-profile appeal involving a constitutional challenge to the mandate requiring individuals to purchase health insurance under the recently enacted Patient Protection and Affordable Care Act, Public Law 111-148See Thomas More Law Center, et al. v. Obama, et al. (Sixth Circuit, Case No. 10-2388).  The three-judge panel scheduled to hear oral arguments on Wednesday, June 1, 2011 at 1:30 p.m., will include Sixth Circuit Judges Boyce F. Martin, Jr. and Jeffrey S. Sutton, and United States District Judge James L. Graham (Southern District of Ohio), sitting by designation.

In mid-May, the Sixth Circuit sent a letter to the parties requesting them to submit letter briefs addressing several standing/ripeness issues, including whether the plaintiffs have alleged an injury in fact, and if not, whether they have alleged an “imminent injury” creating a case of actual controversy, even though the penalty provision of the individual mandate under the health care statute does not take effect until 2014.  The Sixth Circuit also inquired about enforcement mechanisms available to the IRS.  Finally, the Sixth Circuit sought views on whether the plaintiffs’ Commerce Clause challenge was a facial one and, if so, whether the plaintiffs have to prove “that no set of circumstances exists under which the Act would be valid.”  United States v. Salerno, 481 U.S. 739, 745 (1987).

On Monday, the plaintiffs submitted their letter brief.  See Plaintiffs' May 23, 2011 Letter Brief (PDF).  The plaintiff argued that they had standing to challenge the health care statute because they “alleged a personal injury—they are subject to regulation by an unconstitutional statute that is causing present economic injury and a change in behavior with a ‘significant possibility’ of future harm—that is unquestionably traceable to the passage of the Act and likely to be redressed by the relief requested in this lawsuit (declaratory and injunctive relief).”  They also argued that "short of judicial relief or Congress repealing the Act . . . the Individual Mandate and its penalty provisions hang over Plaintiffs’ heads like the sword over Damocles, creating a here-and-now subservience.”  With regard to the ripeness doctrine, the plaintiffs argued that their constitutional claims were ripe for review because, among reasons, the imposition of the individual mandate is “highly probable,” if not “inevitable,” and the government needs to know “sooner, rather than later, whether an essential part of its multi-billion (if not trillion) dollar program regulating the national healthcare market is constitutional, particularly in light of the fact that the program is going to cost taxpayers an additional $115 billion to simply implement.” 

With respect to penalty enforcement mechanisms available to the IRS, the plaintiffs pointed out to the Court that the individual mandate penalty is payable on notice and demand of the Treasury Secretary, and automatically attaches to the plaintiffs’ property, and that the IRS has the authority to assess interest and other penalties on any unpaid amounts, including via tax refund offsets, automatic tax lien foreclosures, and reprioritization of tax payments. 

Finally, the plaintiffs argued that it does not matter whether their Commerce Clause challenge is construed as a “facial” or as an “as-applied” challenge because “[t]his case presents a purely legal question addressing Congress’ authority to enact the challenged legislation (i.e., Individual Mandate) at its inception,” and “[c]onsequently, Salerno has no legal—nor practical—application.”  As plaintiffs argued, if Congress lacks enumerated authority to pass legislation at its inception, there would be no set of circumstances under which the statute would be valid, and there would be no conceivable set of circumstances under which the statute could be enforced because there was no authority to enact the legislation in the first instance.  The law would be “legally stillborn” (to quote Virginia District Court Judge Henry Hudson’s December 13, 2010 decision declaring unconstitutional the individual mandate under the health care statute).  See Commonwealth of Virginia v. Sebelius, 728 F. Supp. 2d 768 (E.D. Va. 2010) (PDF).

The appellees also submitted a supplemental letter brief.  See Appellees’ May 23, 2011 Letter Brief (PDF).  While the appellees acknowledged that “we view the question as close and recognize that the Court must reach its own independent judgment on jurisdictional issues,” the appellees conceded that the plaintiffs have established Article III standing to sue.  In addition, while stating that “prudential considerations present an even closer issue,” the appellees agreed that prudential considerations favored addressing the plaintiffs’ constitutional challenge because “the minimum coverage provision implicates millions of private transactions that would be difficult to unravel if deferring consideration to those challenges resulted in their not being decided until the provision has been implemented.” 

With regard to plaintiffs’ Commerce Clause claim, the appellees argued that because the individual mandate does not take effect for many years, the plaintiffs are challenging the provision on its face.  The appellees argued that Salerno remains good law, and they highlighted how the U.S. Supreme Court in recent years has expressed increasing skepticism of facial challenges.  The appellees argued that while the plaintiffs purport to challenge the individual mandate provision on its face, the plaintiffs’ own legal theory would not render the individual mandate invalid in all of its applications given that many persons move in and out of the health insurance market are thus are “active” under the plaintiffs’ conception of market activity.  Finally, the appellees argued that “[t]he minimum coverage provision validly regulates a class of persons whose economic conduct, in the aggregate, substantially affects interstate commerce,” and [t]hus, the provision is valid both facially and in all of its applications.”

It is highly unusual for the Sixth Circuit to request such letter briefing before oral argument, and it indicates that the panel has some key concerns.  This appeal is really starting to heat up, and the Court will get to weigh in next Wednesday during oral arguments.  We will stay on top of the developments.