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11th Circuit strikes down Obamacare mandate

11th Circuit strikes down Obamacare mandate

This is the big case involving 26 states.  In January, Judge Roger Vinson struck the entire law finding that the mandate could not be severed from the rest of the law.

The 11th Circuit ruled that the mandate was unconstitutional, but unlike Judge Vinson, did not throw out the entire law, finging that the mandate could be severed.  The opinion is here. [link fixed]

Here is the conclusion summarizing the various aspects of the ruling:

We first conclude that the Act’s Medicaid expansion is constitutional. Existing Supreme Court precedent does not establish that Congress’s inducements are unconstitutionally coercive, especially when the federal government will bear nearly all the costs of the program’s amplified enrollments.

Next, the individual mandate was enacted as a regulatory penalty, not a revenue-raising tax, and cannot be sustained as an exercise of Congress’s power under the Taxing and Spending Clause. The mandate is denominated as a penalty in the Act itself, and the legislative history and relevant case law confirm this reading of its function.

Further, the individual mandate exceeds Congress’s enumerated commerce power and is unconstitutional. This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives. We have not found any generally applicable, judicially enforceable limiting principle that would permit us to uphold the mandate without obliterating the boundaries inherent in the system of enumerated congressional powers. “Uniqueness” is not a constitutional principle in any antecedent Supreme Court decision. The individual mandate also finds no refuge in the aggregation doctrine, for decisions to abstain from the purchase of a product or service, whatever their cumulative effect, lack a sufficient nexus to commerce. [fn omitted]

The individual mandate, however, can be severed from the remainder of the Act’s myriad reforms. The presumption of severability is rooted in notions of judicial restraint and respect for the separation of powers in our constitutional system. The Act’s other provisions remain legally operaive after the mandate’s excision, and the high burden needed under Supreme Court precedent to rebut the presumption of severability has not been met.

Some thoughts in no particular order:

  • Once again a court rejects the belated argument by the administration that the mandate is an exercise of taxing powers.  I believe that every court that has considered the issue has ruled against Obama.  Remember, during the political debate leading up to passage the Democrats insisted they were not raising taxes with Obamacare, and now those words have come back to haunt them.
  • The main opinion is 204 pages, much of which is devoted to explaining how the law works.  When Nancy Pelosi said we had to pass it to find out what was in it, she was right.  And we need hundreds of pages of judicial decision to tell us.
  • The mandate was rejected precisely because it requires people to enter a market rather than regulating a market.  I’ll have to spend some more time to see if the court adopted the activity/no activity distinction, but this language certain sounds familiar to people who have been reading Legal Insurrection:

It cannot be denied that the individual mandate is an unprecedented exercise of congressional power. As the CBO observed, Congress “has never required people to buy any good or service as a condition of lawful residence in the United States.” CBO MANDATE MEMO, supra p.115, at 1. Never before has Congress sought to regulate commerce by compelling non-market participants to enter into commerce so that Congress may regulate them. The statutory language of the mandate is not tied to health care consumption—past, present, or in the future.

Rather, the mandate is to buy insurance now and forever. The individual mandate does not wait for market entry. (p. 167)

  • In another argument familiar to readers, the Court also pointed out that to accept the administration’s interpretation of the Commerce Clause would mean a limitless federal power:

The federal government’s assertion of power, under the Commerce Clause, to issue an economic mandate for Americans to purchase insurance from a private company for the entire duration of their lives is unprecedented, lacks cognizable limits, and imperils our federalist structure.  (p. 171)

Update:  On the activity/inactivity issue, the Court accepted that the distinction was legitimate, but found that it was not a complete answer to the health care mandate issue:

As our extensive discussion of the Supreme Court’s precedent reveals, Commerce Clause cases run the gamut of possible regulation. But the diverse fact patterns of Wickard, South-Eastern Underwriters, Heart of Atlanta Motel, Lopez, Morrison, and Raich share at least one commonality: they all involved attempts by Congress to regulate preexisting, freely chosen classes of activities.

Nevertheless, we are not persuaded that the formalistic dichotomy of activity and inactivity provides a workable or persuasive enough answer in this case. Although the Supreme Court’s Commerce Clause cases frequently speak in activity-laden terms, the Court has never expressly held that activity is a precondition for Congress’s ability to regulate commerce—perhaps, in part, because it has never been faced with the type of regulation at issue here.  (p.109)

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Comments

Hmmm… Affirmed the lower court in part and reversed in part. Interesting. Oh, well, on to the SCOTUS!

Does this contradict the case of the wheat farmer that raised wheat for self consumption but not selling it is no longer compelled to plant/not plant per commerce clause?

Professor.. what *is* interstate commerce today? Is there in fact Intrastate commerce? or has the law mutated to the point that both jurisdictions apply regardless of entities/geography involved?

    Pettifogger in reply to Steve. | August 12, 2011 at 5:58 pm

    Before reaching the question whether something is interstate commerce, you have to decide whether its commerce. Whether or not the Supremes would find anything identifiable as commerce to be intrastate, I do not know. But there are things that are demonstrably not commerce. When I walk by a bar without going in to buy a drink, is that commerce?

      iconotastic in reply to Pettifogger. | August 12, 2011 at 7:08 pm

      Of course it is commerce! The bar you are passing will have less money if don’t go in. With less revenue, the bar will purchase fewer products or products of lesser quality thereby having an impact on interstate commerce because of reduced purchases. This doesn’t even mention the impact on the merchant bank which would not have an opportunity to leverage the bar’s cash at the end of the day for loans and cash reserve.

      The only real question as far a progressives are concerned is how many drinks you must consume in the bar and how many bars you must stop in before you reach your destination.

      Also, given the issues of bar space and how important turnover is for bar revenues, the speed at which you drink or eat must also be mandated as well.

      All of actual metrics are, of course, linearly proportional to the amount of political donations made by the bar.

[…] Legal Insurrection with the latest court ruling today: […]

Wait – Are they claiming that it is severable because the constitutionally mandated separation of powers requires that everything be severable? So, in effect, they’re saying that severability is an invalid principle? That’s ridiculous.

Cowards.

    obpopulus in reply to irv. | August 12, 2011 at 2:11 pm

    Well that way whatever the Supreme Court decides the 11th Circuit will be right. It is playing both sides of the coin.

DINORightMarie | August 12, 2011 at 2:00 pm

“The presumption of severability is rooted in notions of judicial restraint and respect for the separation of powers in our constitutional system. The Act’s other provisions remain legally operative after the mandate’s excision, and the high burden needed under Supreme Court precedent to rebut the presumption of severability has not been met.

Okay. Explain it to me.

The standard for “presuming” something being “severable” in an act or law, from what I’ve read, is that the bill/act has that clause included. Either explicitly with a severability clause, or implicitly by reasonable interpretation of phrases in the law. Also, from what I’ve read, the government’s argument to Judge Vinson was that the mandate was not severable, that the individual mandate was necessary for the law to be implemented as written.

So, how does the 11th Court of appeals decide that the government’s own argument was not factually correct, by “presumption”?!, and that the “the high burden needed under Supreme Court precedent to rebut the presumption of severability has not been met”?

What is this “high burden needed” when the government clearly said that the mandate was NOT severable?!

Sounds like a pass, a cop-out; knowing their opinion was going to be just a stepping stone to the SCOTUS.

Will you be doing further examination and analysis of this ruling, Professor? I hope so. This stinks to high heaven to me.

    I thought that the “non-severable” language was in the bill, black-letter.

    Huh?

      DINORightMarie in reply to dad29. | August 12, 2011 at 4:00 pm

      As I recall from the Vinson ruling write-ups, as well as for the VA case, the severability clause was initially in the bill, but was taken out in the final draft by either the Senate or House. The final bill voted on, in the dark of night at the 11th hour, did NOT have that clause in it.

      That is why the issue of severability has been going round and round in the various courts. Since it’s not in there, how do you decide if the individual mandate is severable?

      Just one of the many flaws in this monstrosity. “You have to pass the bill to find out what is in it” were probably the most honest words Nancy Pelosi ever spoke.

      iconotastic in reply to dad29. | August 12, 2011 at 7:39 pm

      There you go applying English and common sense to topics that only a federal judge can understand. Severability in this case means that you can ignore it. It only used to mean a bill was a whole item; now it means the judge gets to decide whether or not it was a whole item.

      From my perspective, this whole business of constitutional law seems to merely be an increasingly baroque way of doing whatever the federal government wishes while redefining language along the way.

[…] Legal Insurrection has more. Posted at 10:23 am on August 12th, 2011 by […]

IANAL, but I thought the severability clause had to be in the bill in order to make portions of it severable. I know it works that way in my state (I used to work for the state legislature); why wouldn’t it work that way for the feds, too? Sounds like the 11th wimped out.

“Does this contradict the case of the wheat farmer that raised wheat for self consumption but not selling it is no longer compelled to plant/not plant per commerce clause?”

Since I am a professor as well, I took your question as a general one. 😉

I think you’re remembering Wickard v. Filburn. Also, you’re making an important point on the action versus inaction distinction that many people are discussing in regards to this mandate. Namely: “How is ‘being ordered to take an action’ any different that ‘being ordered not to take an action which is itself an action?'”

Here is a good post from a crim-law prof at MoJ discussing (and linking to Volokh) that issue: http://mirrorofjustice.blogs.com/mirrorofjustice/2011/05/action-inaction-and-control.html.

Wickard stated, essentially, that any local activity which could have substantial effects over interstate commerce could be regulated through congressional legislation. Whether Wickard and its progeny are implicated here turn on whether refusal to buy a commodity (such as health insurance) results in a substantial effect on interstate commerce such that Congress may therefore regulate it.

One of the difficult things is that while it seems common sense to say that doing something and refusing to do something are different, articulation of the difference from a legal perspective can be difficult.

    retire05 in reply to jawats. | August 12, 2011 at 3:11 pm

    If I am not mistaken, Wickard determined that by the actions of the farmer, he had, in fact, effected interstate commerce because his action (that of growing wheat for personal use) affected interstate commerce adversely by affecting the sales of wheat from other farmers. Is that correct?

    But had the farmer NOT grown any wheat at all, and not purchased any wheat, or wheat product, for personal use, the [stacked] Court at the time would not have been able to rule that way.

    The government also argued that the individual mandate was, after all, a tax, allowable via the Commerce Clause. I would like to read Greg Abbott’s brief on this case since Texas was involved. Abbott is absolutely brilliant.

    If the government has the right to force you to buy a product you would not ordinarily purchase, then it stands to reason that they can force you to buy a GM car, even if you are not in the market for a vehicle. Inactivity was considered “activing by doing nothing” by the government.

    JayDick in reply to jawats. | August 12, 2011 at 5:57 pm

    To me, the real flaw goes back to the ’30s when the Court decided that anything AFFECTING interstate commerce can be regulated. The Constitution doesn’t say that. It says Congress can regulate interstate commerce, not anything that affects it; if it’s not interstate commerce, congress can’t regulate it, the way I read the Constitution. This is the sort of judicial activism that continues to harm our country.

    Pettifogger in reply to jawats. | August 12, 2011 at 6:23 pm

    In law school I adopted the policy of never arguing with the professor, but here goes. Regarding Wickard v Filburn, what about all those people living in cities who were not growing wheat or any other crop, even those not subject to quotas. Was their failure to grow crops an act of interstate commerce?

    Steve in reply to jawats. | August 12, 2011 at 8:06 pm

    Thanks, that was indeed the case I had in mind. I think that when the interpretation of law violates common usage of language that is a symptom that the law is a bad one.

    The whole premise of public education was so that the common citizen could read and understand the law, his duties, and in general enhance his ability to participate in commerce. Increasingly regulation and law has caused this to be more difficult and entrepreneurship among those without means has become more rare. They are choking off the vine of prosperity.

    Wickard et al type decisions have basically turned the Constitution into a nullity. Using their logic they could require my failure to establish a Bank using my own money and further failing to provide loans to people for any purpose is an act of commerce and now demand that I do so under threat of sanction.

    How is this situation different from living under Caesar or Sadaam or Mussolini (other than the fact the trains aren’t running on time) ? Instead of one dictator we have 535 calling themselves Congress and 2 + (however many Czars) calling themselves the Executive branch. Maybe we should send all of them a little tiara and a can of nuts.

I don’t worry about this case at all. I simply donated $1000 to Obama’s re-election campaign, stapled to my waiver request. Even saved a stamp.

All it takes is one leg to be kicked out from under a three-legged stool for it to topple.

Nicely done!

I am not a lawyer. Just a tired old software guy, so maybe I don’t understand why the forest has trees.

Currently we have a system where the people who have insurance are paying extra premiums to cover the people who don’t. With the new system we will have a system where the people who have insurance will be paying extra premiums for those that don’t have insurance.

Begin_loop
var_kick_self = var_kick_self + 1
End_loop

    Subotai Bahadur in reply to Anchovy. | August 12, 2011 at 3:25 pm

    Ah, but you forgot the extra loop. *smile*

    It having been 40+ years since I have touched FORTRAN IV [yeah, I’m bloody old] I’ll just describe it. With the new iteration you not only get to pay forever for a new overarching bureaucracy with the efficiency of the Post Office, the compassion of the DMV, and the frugality of the Pentagon; you get to give them jurisdiction over every aspect of your life, including when and how it ends, without any right of appeal.

    Subotai Bahadur

[…] William A. Jacobson of Legal Insurrection has more details. Filed under: Capitalism, the Unknown Ideal, Liberal Fascism, The Future and its […]

Someone on another blog comment section suggested that this was also a way to keep the Supremes from “staying” the ruling on all of Obamacare until they had a chance to review it.

IANAL, so I don’t know if this is correct or not.

In any case, the sooner this whole behemoth gets struck down, the better.

Especially the individual mandate, but also the entire Student Loan takeover by the US Government….

And aren’t parts of Obamacare going to be able to be repealed with a simple majority, due to the way that parts of it were passed?

“The next interesting question is what now? I think that the Obama administration has been too clever by half in trying to delay federal court review of the healthcare law. I think that it is inevitable that the Supreme Court will step in, and do so during a time when the President will not want to remind voters of this unpopular, expensive, bloated, bureaucratic power grab. Two of the biggest red flags for Supreme Court intervention are now flying (take it from someone who, as a law clerk there, had the job of sorting through hundreds of petitions to find cases suitable for review at the High Court): a lower federal court has struck down an Act of Congress, and there is a split between the federal courts on a question of federal law. Not only is the individual mandate now unconstitutional in the southeastern United States, but the Eleventh Circuit’s decision is in direct conflict with the decision of the Sixth Circuit, which upheld Obamacare a few months back. And while the Obama administration can seek review at the “en banc” level, meaning before all of the judges of the Eleventh Circuit rather than just a panel of three judges (as in today’s decision), I think it likely the en banc court will not have a mind to overrule their brethren, meaning that the next step would be the Supreme Court, and right during the 2012 election cycle.”
John Yoo

http://ricochet.com/main-feed/11th-Circuit-Court-of-Appeals-Strikes-Down-Obamacare-s-Individual-Mandate

    DINORightMarie in reply to Viator. | August 12, 2011 at 4:18 pm

    This is excellent. Thanks for the link! I appreciate the insight from one who used to work for SCOTUS. Sounds like this hateful, unpopular ObamaCare issue might just raise it’s ugly head during the presidential election, front and center in the SCOTUS.

    Sweet!!! Will Obama push repeal of his “crowning achievement” to get elected?! Would he sacrifice his “baby” for another term?

    I wonder.

    JayDick in reply to Viator. | August 12, 2011 at 6:02 pm

    Didn’t I read somewhere that the loser in a 3-judge appeals panel decision can appeal directly to the Supreme Court, bypassing the entire appeals court? In the case of the 6th circuit, I think that has been done.

I think it’s harder for the driver to throw people under the bus when the wheels have come off. What a week.

“Once again a court rejects the belated argument by the administration that the mandate is an exercise of taxing powers. I believe that every court that has considered the issue has ruled against Obama.”

The broad powers of Congress to tax (which are enumerated in the Constitution) will no doubt be revisited in the future. Liberals are self-excluded from having any clue on how to effectively deploy a tax power to mete out social policy or to promote economic prosperity. Had democrats consulted a CPA, they would have been advised to enact an oppressive excise tax on all self-insured health care plans. Citizens would remain free to not buy health insurance, but one would pay an excise tax for electing to self-insure. Plus, since it is a revenue item, theoretically it could be pushed through the Senate on reconciliation procedures which dodge the 60 vote barrier.

Whether the electorate will stand for this kind of intrusion is another thing — hence the corrections in the 2010 mid-terms and perhaps more to come.

The dissenting judge pointed out that Congress has attained the power, through the last two centuries, to Centrally Plan the Economy.

“undeniable fact that Congress’ commerce power has grown exponentially over the past two centuries, and is now generally accepted as having afforded Congress the authority to create rules regulating large areas of our national economy.”

    obpopulus in reply to Freed Serf. | August 12, 2011 at 5:12 pm

    The dissent is basically saying that the commerce clause has grown to such a stature that most if not all of the Constitution has become meaningless. A frightening proposition.

    bobby b in reply to Freed Serf. | August 12, 2011 at 5:22 pm

    ” . . . Congress’ commerce power has grown exponentially over the past two centuries, and is now generally accepted as having afforded Congress the authority to create rules regulating large areas of our national economy.”

    This new method of “general acceptance” is so much more efficient than the old and unwieldy amendment process. I’m glad to see that we’re not bound and fettered by an anachronistic overvaluation of legalisms and tradition. Society should be free to evolve as needed. The dissenting judge didn’t specify, but I’m assuming that “general acceptance” can be shown by valid polling methods.

    Could someone please let the government know that it has now become “generally accepted” that Obama is a complete failure as a president, and so his term has been cancelled as of last Thursday? We’ll do some quick polling to see who has now been “generally accepted” as the best candidate to take over.

    And this last part is a bit awkward: will someone volunteer to approach the dissenting justice and suggest to him that it has become generally accepted that his grasp of our Constitution, or at least his adherence to it, is sadly lacking, and so it has also become generally accepted that that whole “life tenure” thing no longer applies to him?

Regarding the distinction between regulating an activity versus inactivity, if the USSC overturns the 11th Circuit, I eagerly await the passage a law requiring non-Americans to become taxpaying US citiziens, regardless of residency: Deficit solved! Just think of the possibilities!

Gayle Spencer | August 12, 2011 at 5:54 pm

Has anyone ever considered this proposition, that Wickard v. Filburn was incorrectly decided?

    JayDick in reply to Gayle Spencer. | August 12, 2011 at 6:05 pm

    Jones and Laughlin Steel v. NLRB before that (1937?) set the most damaging precedent. They said anything affecting interstate commerce can be regulated. Before that, only real interstate commerce could be regulated.

Orin Kerr predicts that SCOTUS will uphold Obamacare by at least 6-3 margin

http://www.scotusblog.com/2011/08/affordable-care-act-predictions/

    I went to your link, and I must say I’m just a bit underwhelmed at Kerr’s methodology on how he reached that 6-3 number.

    Just a bit. /sarc

    iconotastic in reply to EnerGeoPolitics. | August 12, 2011 at 7:49 pm

    Should the SCOTUS rule for the mandate it will be interesting to see if the 26 states can muster up another 6 states to call for a Constitutional Convention regarding federal abuse of the Commerce Clause.

    But I suppose then the SCOTUS would then rule that Article V really only allowed one Convention which already occurred and the states really don’t have the standing to call a Convention any longer since they are merely federal provinces and Congress is really, really too busy reworking the USA economic system and this was just domestic terrorists anyway, etc., etc.

DINORightMarie | August 12, 2011 at 6:30 pm

As I read the ruling, the Appendix A contents are all acceptable, even though they don’t necessarily involve interstate commerce. For example, how does “establish[ing] break times for nursing mothers” or “laboratory capacity grants” have to do with interstate commerce? I understand that these things were packed in there helter-skelter, without any connection to actual health care. However, they would not have been in this, or passed, without the individual mandate to fund it all – the very thing the ruling goes out of its way to say is overreach by the district court (Vinson).

None of this would have passed, or been funded, if it hadn’t been for the mandate forcing people to buy the “product” of health insurance.

The government’s arguments were excessive in the district court regarding this; this was clearly, carefully, and effectively outlined in the district court ruling. The government opened Pandora’s box; it can’t be closed now by some “presumption” that it isn’t really essential, after all.

As also noted, the Supreme Court hasn’t ruled on such a case in 75 years. This case must be decided carefully by the SCOTUS, or we will lose all our liberties, our very constitutional republic, and become slaves, or subjects, to the federal Nanny State government.

Does the Supreme court now rule on the individual mandate only or will they hear the original arguments?

Would love to see you rebut Ian Millhiser’s article at Think Progress!

“The Eleventh Circuit’s Affordable Care Act Decision Cannot Be Squared With The Constitution:”

http://thinkprogress.org/justice/2011/08/12/295196/the-eleventh-circuits-affordable-care-act-decision-cannot-be-squared-with-the-constitution/

Does any one else have a problem that the only shred of limited government we have left and we are fighting desperately to keep is the government’s ability to force us to buy a product from a company? Do the courts really believe this was the only limit the Founders meant to leave us with, if that? It’s sickening how we are holding on by a fingernail to the last piece of liberty that remains.

Our ultimate goal must be to acquire conservative supreme court justices that don’t use judicial restraint to block themselves from overturning terrible activist precedent. It gives all of the power to the liberal judges who don’t seem to be held back by any sort of conflicting axioms.

[…] Le-gal In-sur-rec-tion has highlighted  many of the major points of the Court’s opinion. We first conclude that the Act’s Medicaid expansion is constitutional. Existing Supreme Court precedent does not establish that Congress’s inducements are unconstitutionally coercive, especially when the federal government will bear nearly all the costs of the program’s amplified enrollments. […]

[…] At the Legal Insurrection blog Professor William a. Jacobson has this to […]

[…] a link to a great article by Professor William Jacobson of Cornell Law; https://legalinsurrection.com/2011/08/11th-circuit-strikes-down-obamacare-mandate/ Share this:TwitterLike this:LikeBe the first to like this […]

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