Here is an update on health care reform litigation since our last post on the topic:

No expedited Supreme Court review. The plaintiffs’ request in Sebelius to proceed directly to the Supreme Court was, as predicted, denied by the Supreme Court.

The first appellate court decision upholds the constitutionality of the individual purchase requirement. On June 29, 2011, the Sixth Circuit issued its opinion in Thomas More Law Center v. Obama, 2011 WL 2556039, a case out of the Eastern District of Michigan. The district court had upheld the constitutionality of the individual purchase requirement, and, in a split decision, the Sixth Circuit affirmed.

  • Judge Boyce F. Martin, Jr., a Carter appointee, wrote the primary opinion for the divided Court. He held that the individual purchase requirement easily passed constitutional muster under the Commerce Clause in two different ways. First, “the minimum coverage provision regulates economic activity with a substantial effect on interstate commerce,” and is therefore constitutional on a stand-alone basis. Second, “the minimum coverage provision is an essential part of a broader economic regulatory scheme” directed at reform of the market for health care services, and is therefore constitutional as one component of a larger legislative scheme that clearly affects interstate commerce.
  • Judge Jeffrey Sutton, a G.W. Bush appointee, filed a concurring opinion in which he agreed that the plaintiffs’ challenge to the legislation failed. But he based his decision on the fact that plaintiffs were making a facial challenge to the constitutionality of the statute, which requires the plaintiffs to establish there is no set of circumstances under which the statute can be a valid exercise of Congress’ power. Focusing on plaintiffs’ activity vs. inactivity argument (their argument that Congress cannot use the commerce power to regulate inactivity such as an individual’s failure to purchase health insurance), he found that the law was constitutional in certain circumstances. For example, the “inactivity” argument does not work with respect to one of the plaintiffs (DeMars) who currently has health insurance and is simply objecting to the requirement that she be required to maintain it.  Similarly, an individual who lives in a state such as Massachusetts that already requires the individual to purchase health insurance is not “inactive” in the health insurance market, although the ACA may require that individual to purchase more comprehensive coverage. Since the law is constitutional in these situations (and others noted by the judge), plaintiffs’ facial challenge fails.  Judge Sutton left open the possibility of later “as applied” challenges to the constitutionality of the individual purchase requirement, although some passages in his concurrence suggest he believes it is constitutional even as applied to those who truly are “inactive” and have not purchased insurance. He also held that the individual purchase requirement could not be upheld under Congress’ taxing power because the failure to comply with the law results in the imposition of a penalty rather than a tax, a position with which Judge Graham concurred.
  • Judge James L. Graham, a Reagan appointee (and a district court judge doing a temporary turn at the Court of Appeals) filed a dissent contending that the individual purchase requirement is unconstitutional on its face. He noted that Congress has never before affirmatively required an individual to purchase a product, and that if Congress can require this, then Congress can require essentially anything. “If the exercise of power is allowed and the mandate upheld, it is difficult to see what the limits on Congress’ Commerce Clause authority would be. What aspect of human activity would escape federal power? . . . Such a power feels very much like the general police power that the Tenth Amendment reserves to the States and the people.” He concluded that the scope of the claimed Commerce Clause power was inconsistent with the bedrock principle that the Constitution creates a federal government of specific and limited powers.

Next steps. Plaintiffs have the option of petitioning the Sixth Circuit for a rehearing en banc by all the Sixth Circuit judges. Alternatively, they can file a petition for certiorari asking the Supreme Court to review the case. Despite the fascinating and important constitutional questions involved, there is no guarantee that the Supreme Court would grant cert. at this point, since there is not yet a split in the Circuits regarding the constitutionality of the individual purchase requirement.

Status of other cases addressing merits.

  • 4th Circuit. On May 10, 2011, the Fourth Circuit heard oral argument in Liberty University, Inc. v. Geithner and Virginia ex rel. Cuccinelli v. Sebelius, conflicting decisions out of the Western and Eastern District’s of Virginia, respectively. The panel consists of Judges Diana Gribbon Motz (a Clinton appointee), Andre M. Davis (Obama), and James A. Wynn, Jr. (Obama).
  • 11th Circuit. On June 8, 2011, the Eleventh Circuit heard oral argument in Florida ex rel. Bondi v. United States Dept. of Health and Human Services, in which the Florida district court held the individual purchase requirement unconstitutional and not severable from the rest of the statute, thereby invalidating the entire ACA. The panel consists of Judges Joel F. Dubina (G.H.W. Bush), Stanley Marcus (Clinton), and Frank M. Hull (Clinton). Despite the presence of two Clinton appointees on the panel, court watchers have suggested this is the panel that is most likely to declare the individual purchase requirement unconstitutional.
  • D.C. Circuit. The D.C. Circuit will hear oral argument in Seven-Sky v. Holder (called Mead v. Holder below) on September 23, 2011. The appeal is from the District Court for the District of Columbia, which held the individual purchase requirement constitutional. The panel consists of Judges Brett Kavanaugh (G.W. Bush), Harry T. Edwards (Carter), and Laurence H. Silberman (Reagan).