September 13, 2011
District Judge Rules Individual Mandate Unconstitutional
Judge Christopher C. Conner (M.D. Penn.) ruled today in Goudy-Bachman v. Sebelius that the so-called individual health insurance mandate in the Affordable Care Act exceeds Congress's authority under the Commerce Clause and the Necessary and Proper Clause. Judge Conner also ruled that the mandate is severable from the rest of the ACA, except the guarantee issue and preexisting conditions provisions (which require insurers to take all comers) because the mandate partially funds those provisions. Thus according to the ruling, all three provisions--the individual mandate, the guarantee issue, and the preexisting conditions--are unconstitutional.
Judge Conner wrote that he didn't find particularly helpful the familiar distinction (and favorite among opponents) between regulating "action" and regulating "inaction." He said that the Court had previously adopted--and later abandoned--similarly unhelpful distinctions. He didn't want to go down that road here.
But yet his own analysis then turned on exactly this kind of distinction--between an "anticipatory" regulation, and a regulation of ongoing behavior. Judge Conner wrote that the principal problem with the individual mandate is that it required insurance before the purchaser enters the market for insurance or the market for health care. He wrote that this kind of "anticipatory" requirement is unprecedented and exceeds congressional authority, but he didn't well explain why his distinction is any more helpful or determinate than the action/inaction distinction. (In fact, it seems nearly exactly the same as the action/inaction distinction: all "action" is non-anticipatory, by definition, and vice versa. Similarly, "anticipatory" is necessarily "inaction." It's not at all clear why Judge Connor's new language helps untie this knot.)
Judge Conner also expressed concern that the government's theory of authority knows no bounds and would lead to a generalized federal police power.
The ruling comes just a week after the Fourth Circuit ruled in Virginia v. Sebelius that Virginia lacked standing to sue. (Virginia's theory of standing--that the individual mandate interfered with its sovereign right to protect its own citizens from such a mandate--was very different than the plaintiffs' theory of standing here.)
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Do all of the cases that invalidate the individual mandate, including this latest Pennsylvania district court decision, use highly unusual legal reasoning, or as least reasoning that used to be unusual? Before these cases, reputable legal scholars found it a “no brainer” that the ACA individual mandate was constitutional under the Commerce Clause. If the tiny bit of commerce that was marihuana grown for private use (the facts of Harris, the closest precedent) could be regulated by Congress, then certainly the huge health care and health insurance markets—commerce valued in the multiple billions—could be regulated. But now several federal judges see it differently. This latest Pennsylvania case adds a novel aspect that I find particularly noteworthy. This court, perhaps unwittingly, revives the discredited “Lockner Era” version of the Commerce Clause, through which the U.S. Supreme Court struck down much of Roosevelt’s New Deal legislation.
Most recent cases dealing with the individual mandate have cited an old 1922 case, Bailey v. Drexel Furniture Co (the Child Labor Tax Case) for its test for distinguishing a “tax” from a “penalty.” In Bailey the court held that Congress attempted to discourage child labor by penalizing the products of that labor while improperly calling that penalty a tax. The rule derived from Bailey is still good law when sited for that proposition. But the Pennsylvania court did not use Bailey for any “tax vs. penalty” analysis. Rather, on page 43 we find a long block quote from Bailey in which the court assigns to itself a solemn duty it must perform when confronted with “a law passed with the highest and most noble intentions.” The “high duty and function of this court” is to strike down laws “dealing with subjects not intrusted [sic] to Congress, but left or committed by the supreme law of the land to the control of the states.”
But the Pennsylvania court failed to recognize is that THIS “high duty” is the old Lockner Era reasoning, that certain “state concerns,” such as police powers and public health, were reserved for the states and could not be interfered with by the federal government. Bailey makes this perfectly clear in the following section with reference to the notorious Hammer v. Dagenheart case:
(“[T]his case cannot be distinguished from [Dagenheart] . . . The analogy of the Dagenhart Case is clear. The congressional power over interstate commerce is . . . just as complete and unlimited as the congressional power to tax . . . Yet when Congress threatened to stop interstate commerce in ordinary and necessary commodities, unobjectionable as subjects of transportation, and to deny the same to the people of a state in order to coerce them into compliance with Congress' regulation of state concerns, the court said this was not in fact regulation of interstate commerce, but rather that of state concerns and was invalid. So here the so-called tax is a penalty to coerce people of a state to act as Congress wishes them to act in respect of a matter completely the business of the state government under the federal Constitution.. . . ”) (emphasis added) Dagenheart was, of course, explicitly overruled in 1941 by U.S. v. Darby.
Thus, what the Pennsylvania court apparently believed to be harmless dicta was, in reality, an invocation of an overruled doctrine from Dagenheart. I find it annoying, not to mention embarrassing, that a District court judge invalidated a law while citing a doctrine overruled seventy (70) years ago. I supply my small voice to this discussion in hopes of exposing the shoddy legal thought upholding many of these decisions. But I am a patent lawyer, not a Constitutional scholar. Am I missing something?
Posted by: Scott Houtteman | Sep 14, 2011 10:02:18 AM