Another Court Upholds Health Care Reform

(CN) - Congress was well within its power to pass health care reform, the D.C. Circuit ruled Tuesday, rejecting claims that the so-called individual mandate amounts to an unconstitutional extension of the commerce clause.

After confirming jurisdiction, which has been a fatal issue for dozens of other challenges to the Patient Protection and Affordable Care Act, the court agreed the financial burden to the U.S. economy caused by those without coverage justifies reform.

"Since so much has already been written by our sister circuits about the issues presented by this case - which will almost surely be decided by the Supreme Court - we shall be sparing in adding to the production of paper," Judge Laurence Silberman wrote for the majority.

"Suffice it to say that the Affordable Care Act sought to reform our nation's health insurance and health care delivery markets with the aims of improving access to those markets and reducing health care costs and uncompensated care."

Federal judges in Virginia and Florida found the law unconstitutional, but three others upheld the law. The 6th Circuit upheld the law as constitutional in June, while the 11th Circuit found otherwise two months later. The 4th Circuit overturned opposing findings as to the law's constitutionality in Virginia after finding that the commonwealth lacked standing to sue.

The latest appeal concerns the case decided in February by U.S. District Judge Gladys Kessler.

Before turning to the constitutionality of the individual mandate, the three-judge panel devoted several pages to unraveling the 4th Circuit's jurisdiction finding.

That Virginia-based panel held that the Anti-Injunction Act strips the courts of jurisdiction because the suit "constitutes a pre-enforcement action seeking to restrain the assessment of a tax."

Silberman and his concurring colleague think otherwise. "The Anti-Injunction Act only bars suits that seek to restrain the IRS's assessment and collection of taxes," the 37-page decision states. "It has never been applied to bar suits brought to enjoin regulatory requirements that bear no relation to tax revenues or enforcement. Indeed, we have held that the act does not apply to an IRS regulation that does not, by its terms, pertain to the assessment or collection of taxes."

"In short, we are not persuaded by the Fourth Circuit's reasoning," he added. "We think that the Anti-Injunction Act does not, by its terms, cover the shared responsibility payment under the term 'any tax.'"

As to the merits of the case, the majority took a more cautious approach than Kessler.

"That a direct requirement for most Americans to purchase any product or service seems an intrusive exercise of legislative power surely explains why Congress has not used this authority before - but that seems to us a political judgment rather than a recognition of constitutional limitations," he wrote. "It certainly is an encroachment on individual liberty, but it is no more so than a command that restaurants or hotels are obliged to serve all customers regardless of race, that gravely ill individuals cannot use a substance their doctors described as the only effective palliative for excruciating pain, or that a farmer cannot grow enough wheat to support his own family. The right to be free from federal regulation is not absolute, and yields to the imperative that Congress be free to forge national solutions to national problems, no matter how local - or seemingly passive - their individual origins."

Judge Harry Edwards joined Silberman's decision and wrote a one-page concurring opinion.

The third member of the panel, Judge Brett Kavanugh, wrote a 66-page dissent. Without reaching the merits, Kavanaugh said the court does not have jurisdiction to hear the case.

"The Anti-Injunction Act applies here because plaintiffs' pre-enforcement suit, if successful, would prevent the IRS from assessing or collecting tax penalties from citizens who do not have health insurance," Kavanaugh wrote. "To be sure, the Affordable Care Act labels its exaction for failure to have health insurance as a tax 'penalty' and not as a 'tax.' But the Anti-Injunction Act still applies."

"Between now and 2015, Congress might keep the mandate as is and the president may enforce it as is," the dissent concludes. "If that happens, the federal courts would resolve the resulting constitutional case by our best lights and would not shy away from a necessary constitutional decision. But history tells us to cross that bridge only if and when we need to. Unlike the majority opinion, I would adhere to the text of the Anti- Injunction Act and leave these momentous constitutional issues for another day - a day that may never come.

"I have the greatest respect for my two colleagues on this panel. But my analysis leads me decisively to the conclusion that we lack jurisdiction because of the Anti-Injunction Act. I therefore would vacate the judgment of the District Court and remand with directions that the suit be dismissed for lack of jurisdiction. I respectfully dissent."

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit