Tuesday, February 1, 2011

Individual Mandates: A Legal "Bridge Too Far"

By now you’ve all heard that “ObamaCare was struck down.” As usual, little of what you’re hearing is right. So let’s go over several points, some of which are really quite fascinating, particularly Judge Roger Vinson’s deep understanding of his role as a judge.

1. First, unlike what I pointed out in my prior article on the ruling of the District Court in Virginia, this decision involves 26 states. Moreover:

● This decision, even more so than the Virginia decision, guarantees the Supreme Court will review this issue, because of the involvement of the states attorneys general.

● This decision gives more ammo to Senate Republicans, all 47 of whom openly support repeal. It also provides cover to any Democrats looking to save their political lives by voting for repeal. Joe Manchin (WVa) and Ben Nelson (Neb) specifically have been mentioned -- though both claim they only want to fix the law rather than repeal it.
2. It is worth noting that the arguments made and the Judge’s reasoning come down exactly as predicted in my March 2010 and May 2010 articles, and that the so-called legal experts (read: liberal propagandists) were not only wrong, but were so wrong as to constitute malpractice.

3. Vinson’s decision has two parts. The first part deals with the argument Congress violated the constitutional spending principle by forcing the states to expand Medicaid to the point where it will bankrupt the states. ObamaCare defenders argued that Medicaid is a voluntary program, and thus Congress may impose such requirements because states are free to back out if they think it will cost too much. The states countered that they can’t back out because they are effectively “coerced” into staying in Medicaid. Vinson rejects the coercion argument because every other court that’s looked at Medicaid has found it to be a voluntary program.

I think Vinson is wrong on this point, but I attribute this to a failure by the plaintiffs to properly brief this matter. Vinson seems a thoughtful judge, but it looks like the states just didn’t present much of an argument. Vinson sounds unimpressed with the evidence they offered and they apparently provided him virtually no legal support for their position. In fact, they entirely avoided the stronger Ninth and Tenth Amendment arguments, which were not briefed “except in a single passing sentence.” That’s attorney failure.

4. In the second part, Vinson strikes down the individual mandate. This is where things get interesting.

First, for history/legal buffs, Vinson delves into the entire history of the Commerce Clause and how (and why) it changed over time. Such an in-depth history is rare in District Court rulings, and what he presents is highly informative and quite accurate. Click here to read the decision.

Secondly, his reasoning striking down the individual mandate is impeccable. Vinson points out the cases cited by both sides, and he explains:
● That not a single case has ever held that Congress has the power to regulate “inactivity” under the Commerce Clause; and

● He rejects the ProObamaCare argument that inactivity constitutes activity. They claimed that it’s impossible to truly opt-out of healthcare and, thus, the uninsured are merely engaging in "future cost-shifting" because someone else will ultimately have to pick up the tab for their care when they get sick. He called this too attenuated; saying it was “a bridge too far” to use a person's decision now which might one day result in future cost-shifting which might affect interstate commerce as the basis for finding the current decision to involve engaging in interstate commerce -- especially since they may be wealthy enough to self insure, or charities may pick up the tab, or they may buy insurance before that happens. Thus, there are too many "ifs". He also notes that accepting this argument would give Congress unlimited power because anything could then be considered engaging in commerce:
Congress could more directly raise too low wheat prices merely by increasing demand through mandating that every adult purchase and consume wheat bread daily, rationalized on the grounds that because everyone must participate in the market for food, non-consumers of wheat bread adversely affect prices in the wheat market. Or. . . Congress could require that people buy and consume broccoli at regular intervals, not only because the required purchases will positively impact interstate commerce, but also because people who eat healthier tend to be healthier, and are thus more productive and put less of a strain on the health care system. Similarly, because virtually no one can be divorced from the transportation market, Congress could require that everyone above a certain income threshold buy a General Motors automobile --- now partially government-owned --- because those who do not buy GM cars (or those who buy foreign cars) are adversely impacting commerce and a taxpayer-subsidized business.

Should Congress thus have power under the Commerce Clause to preemptively regulate and require individuals above a certain income level to purchase a home financed with a mortgage (and secured with mortgage guaranty insurance) in order to add stability to the housing and financial markets (and to guard against the possibility of future cost-shifting because of a defaulted mortgage), on the theory that most everyone is currently, or inevitably one day will be, active in the housing market?
* * *
The problem with this legal rationale. . . is it would essentially have unlimited application. There is quite literally no decision that, in the natural course of events, does not have an economic impact of some sort.
● The ProObamaCare people also tried to squeeze this individual mandate through the “Necessary and Proper Clause,” which allows Congress to pass all laws that are necessary and proper to carry out its duties. But Vinson correctly notes that this clause cannot be used to justify unconstitutional laws.
5. Finally, we come to the most interesting aspect of this decision -- a true moment of judicial restraint. After finding the individual mandate unconstitutional, Vinson needed to decide if the rest of the statute could go into effect without it. This involves something called severability, which is a legal doctrine that holds that if the unconstitutional provision can be severed from the rest of the law, then it should be, and the rest of the law should go into effect.

Based on the history and the functioning of the act, Vinson concludes that severability is not possible. He notes, for example, the Congressional Record is full of statements about the true purpose of this act bring insurance reform and that the individual mandate was the key element of that reform. He notes that the defendants repeatedly stressed throughout the litigation that the individual mandate is “essential” to the Act. He also notes the failure to include the severability clause in the final draft, which is not fatal in and of itself, but which suggests that Congress viewed the entire Act as one piece.

Ultimately, however, his decision comes down to the fact that Vinson considers it impossible to separate the individual mandate from the Act, while still carrying out the purpose of the Act “as Congress intended.” In other words, the statute is “a carefully-balanced and clockwork-like statutory arrangement comprised of pieces that all work toward one primary legislative goal [which] would be undermined if a central part of the legislation is found to be unconstitutional.”

Vinson then shows a deep understanding of the role of the courts, when he concludes that this makes it impossible for him to carve out the individual mandate. Not only does he say that he doubts he could actually determine which portions of the Act depend on the mandate, but he says that this is not a proper role for the courts:
Cleanly and clearly severing an unconstitutional provision is one thing, but having to re-balance a statutory scheme by engaging in quasi-legislative “line drawing” is a “‘far more serious invasion of the legislative domain’” than courts should undertake.
* * *
If Congress intends to implement health care reform --- and there would appear to be widespread agreement across the political spectrum that reform is needed --- it should do a comprehensive examination of the Act and make a legislative determination as to which of its hundreds of provisions and sections will work as intended without the individual mandate, and which will not. It is Congress that should consider and decide these quintessentially legislative questions, and not the courts.
So when the media (and the Democratic PR machine) start running around calling this judicial activism, remember this quote. This is exactly how courts are supposed to act -- with judicial restraint by leaving the legislating to the Congress.

Finally, let me point out one irony. As an attorney, one of the most common mistakes I’ve seen has been attorneys who simply cannot let go of bad arguments. If the defendants had given up on the mandate, or simply not stressed its importance, Vinson may have just struck down the mandate and left the rest of the law in place. But like so many other bad attorneys I’ve met, they were not going to give an inch of ground if it killed them. And in this case, it did. It truly became a bridge too far.


32 comments:

AndrewPrice said...

FYI, Mubarak just announced that he will not run again for President.

LawHawkRFD said...

Andrew: A very fine analysis. The decision was as well-reasoned as any I've seen in many years of practice and teaching. And your article hit the points that an intelligent non-lawyer can readily understand. Happily, the judge himself avoided arcane legalese to the extent possible, but it's still a bit of a slog if you're not prepared for the necessary legal cross-references and jargon.

I may be off by one or two, but I counted seventeen different places where the geniuses at DOJ shot themselves in the foot by repeating the same argument. They put everything down on the horse named "Individual Mandate," and made it well-nigh impossible for the judge to leave the Act in place once he had determined that that horse couldn't run. There was a small chance that the judge might have found some precedent or historical development that would have allowed him to sever the mandate from the remainder of the legislation. But absent a severability clause and given the DOJ's repeated argument that without the individual mandate the Act wouldn't work, they nailed the lid on their own coffin. Remind me never to hire one of them if I need a lawyer.

You really hit the mark by pointing out how carefully and seriously the judge discussed the history of the commerce clause. It will make it difficult for the government to argue that he had his facts wrong. I'm now only left with the question of whether the plaintiff states (27, including Virginia) will petition for an expedited Writ of Certiorari to avoid the ridiculous and expensive process of letting all the appellate jurisdictions duke it out without changing any of the basic arguments. I would love to see them do so and have the Supreme Court grant cert. Although many of the provisions of the Act don't go into effect for two to five years, the immediate massive uncertainty and its effect on the economy could be sufficient reason for the Supreme Court to do so now.

Tennessee Jed said...

wonderful summary of the decision, Andrew. While I believe SCOTUS will do the right thing, it is equally important our politicians continue their attack on repealing it. Keep the attack going on all fronts. We must also have them ready with the counter proposal. To this end, I suggest you email all members with your commenterama care proposal :-)

Happened to listen to Rush's first half hour today. If a state went back to the judge and demanded they enforce the ruling now, what do you think would happen?

AndrewPrice said...

Thanks Lawhawk.

What really makes this decision strong, in my opinion, is that the judge didn't just accept one argument and rely on that, he kept walking through the process. Thus, he didn't just say inactivity can't trigger the Commerce Clause, he went into why this inactivity can't be called activity. And even then he went on to show why even if it was activity, it still couldn't trigger the Commerce Clause. That's very solid arguing, which leaves them little to work with on appeal.

And yeah, the DOJ attorneys stunk. At several points he slams them for their contradictions and he uses their own arguments against them. Whoops. That's truly bad lawyering when a judge uses your own arguments against you.

The other thing Vinson did that was very clever was to site specific cases and quotes from each of the current Supremes -- basically using their own words to support his decision. He's made it very easy for them to just adopt his reasoning.

Unless the court changes, I think they affirm this decision.

AndrewPrice said...

Jed, I think the Supremes will affirm this decision on a 5-4 vote. And I think they will toss this into Congress's face: "if you want this put into law, fix it."

But I agree completely, we need to keep working toward repealing this monster because you can never rely on the courts. Fortunately, the Republicans are unified on that point.

In terms of enforcing it....

I think he will stay his ruling (he may already have -- I haven't checked, but I know DOJ asked). In most cases, courts actually go the other way -- they stay controversial laws until they can be decided. But because the mandate itself doesn't kick in until 2014 (I think), there's no legal reason his ruling can't be stayed until an appeal can be heard.

I know that other provisions will kick in and are kicking in, but since he didn't find those unconstitutional, he has no reason to stop those just yet.

That's my thinking, but I wouldn't put money it.

Pittsburgh Enigma said...

Nice summary! I'm glad you mentioned something that no one else is really talking about: the ability of people (especially the rich) to pay for their own healthcare, and to therefore pose no "economic burden" on taxpayers or the healthcare system. The notion that by not buying insurance we economically impact everyone else really pisses me off. That argument could be made in so many aspects of life that it would be impossible for us to do anything without impacting someone else. By mandating health insurance, you immediately discriminate against an entire large class (the rich) who are able to self insure. And then you move into the entrepreneurial class, many of whom combine high-deductible plans with HSAs to insure for only situations that would be considered catastrophic (terminal disease, organ transplant, etc.) Most of those plans would be made illegal under ObamaCare, correct?

It is so insulting to have the means to pay for something yourself, but to be forced by the government to pay for something else you neither want nor need.

AndrewPrice said...

Pitts, Thanks! I'm glad you liked it.

With regard to the point you raise, Vinson makes a rather interesting point. He notes that this same argument could be applied to any type of insurance -- healthcare, burial insurance, life insurance, home insurance, business insurance... anything that leaves you a debt that you might not be able to pay. He then points out that a large number of businesses self-insure because they have enough money or assets that they don't need insurance to make sure that a particular building or whatever can be rebuilt in the event of an accident. So the idea that everyone needs to be forced to buy insurance or they end up affecting commerce by "cost shifting" is wrong.

Moreover, it would be pretty perverse if the law held that you would be forced to buy insurance unless you were rich enough to cover your own medical bills.

He also points out that many charities exist that pay medical bills, and that individuals who don't have insurance now may still buy it before they need it. In other words, just because you don't have it now doesn't mean you won't have it when you need it. And therefore, you can't say that not having insurance now means you will affect commerce in the future.

So the whole "you will become a burden" argument is highly speculative.

What he doesn't go into, because he doesn't need to, but I would have just to finished this off, is that Congress could solve this very problem in less intrusive ways. In other words, rather than forcing everyone to buy insurance, Congress could simply make medical debts nondischargeable in bankruptcy. That would dramatically cut down on the possibility of cost shifting.

(continued)

AndrewPrice said...

(continued)

What he eventually got to, which I thought was actually brilliant point, was that what Congress is doing here is trying to impose bad regulations on insurance firms and is only imposing this unconstitutional mandate as a way to subsidize the insurance firms.

This particularly blows up on the defendants when he started talking about the Necessary and Proper Clause, because he notes that accepting the defense argument would give Congress a "perverse incentive" to make their legislation as destructive as possible, so that the unconstitutional part would be all the more necessary to balance what they did.

This was a truly insightful decision.

Joel Farnham said...

Andrew,

Nice job. This does give me hope.

AndrewPrice said...

Thanks Joel. It should. I think Judge Vinson put together a well-balanced, well-reasoned, intensely researched, decision that is both fair, reasonable and entirely consistent with law and what the parties presented. This is one of those decision you get where you just know that you aren't going to get this thing overturned on appeal. It's too solid and it covers all the bases.

Now that doesn't mean it can't be overturned, but the odds favor the decision standing on appeal.

And I think the fact the Democrats are running around screaming "judicial activism" rather than pointing out whatever flaws they could find, tell you that they haven't been able to find a hole the decision either.

So there is a lot of reason to hope.

LawHawkRFD said...

Andrew: What's interesting about the lefties crying "judicial activism" is they don't even know what it means. For fifty years we had to put up with umbras, penumbras and emanations from the Constitution being "found" by a high court creating "rights" that nobody had ever heard of before. That's judicial activism. This was a judge reading the Constitution, finding no constitutional basis for an unconstitutional act of Congress, and voiding the leftist social welfare overreach. That's called "conservatism" not "activism," but we'll never get the "living constitutionalists" to accept that. Hell, they can't even understand it, let alone accept it.

Pittsburgh Enigma said...

"I think the Supremes will affirm this decision on a 5-4 vote."

I may be naive in asking this, but why should this be such a close vote? Shouldn't such a well-reasoned decision be supported almost unanimously? Or are the "liberal" justices just so completely activist and politically motivated that it is impossible for them to ever render a "just" decision? Again, I am probably very naive in even asking this question. *sigh*

AndrewPrice said...

Lawhawk, That's very true and it bugs me to no end.

Judicial activism has a clear meaning. It means when the courts go out of their way to find new rights that can't be found anywhere in the Constitution. In fact, DOJ argued for just such an example when they suggested that Vinson should open up the Necessary and Proper Clause and read it as a catch-all to allow anything.

And over the past 50 years, judicial activism has disgraced itself -- people hate it. So as the left always does, they try to scramble the words to hide their actions. Suddenly, they're claiming that judicial activism is when courts do their job rather than letting the Congress do whatever it wants. That's not judicial activism, that's the job of the judiciary.

Once again, liberals prove that they are liars.

AndrewPrice said...

Pitts, You ask a large question. The short answer is ideology, and I mean that in two ways.

In the first way, you have a difference of opinion about the role of the court. When you break it down, liberals think the role of the court is to decide if something is a good idea or not. If it's a good idea, then the court allows it. They are also firm believers in the court acting in an "equitable" (or "fair") manner.

Conservatives, on the other hand, think the role of the court is to make sure that what the government is doing can be justified under the Constitution, and then to apply the law as written without regard to how "equitable" the result is.

This has been the tension in the law since the earliest jurists, and it truly is a fundamental difference of opinion that will never be solved -- even though the liberal view is ultimately chaotic and destructive.

But even beyond that fundamental disagreement, you get political considerations. Despite claims to the contrary, the Supreme Court has always considered the political implications of its decisions. And it's simply inconceivable that the liberal justices will allow such a cherished Democratic idea to be stopped. Thus, they will vote to protect this no matter what.

Conservatives have at times done the same thing, particularly with regard to things like the Patriot Act, where they weren't going to interfere with the President's ability to fight a war on terror.

Unfortunately, this is part of our system. It shouldn't be, but it is.

StanH said...

I love how this wiley old Southern judge used Barry’s own words against him, in a discussion in an ’08 interview calling an individual mandate un-Constitutional, his analogy to paraphrase, “it would be like ending homelessness by ordering the homeless buy houses.” Brilliant! I don’t know how pertinent that is in a court of law, but in the public square, devastating. As is pointed out by the judge this would allow the government unlimited powers, jerking our great land hard to the left. I heard an interesting caller on Rush today who made an interesting point that Barry does not want this to get near the SCOTUS, if his hallmark legislation gets struck down, his political career would be kaput. Rush quickly countered, not so fast, that an argument about the Constitution would be something Barry might relish, but I digress. But all in all it seems like an iron clad ruling and will be very tough to appeal.

I’m with Pitts on this whole damn thing, it pisses me off!

T_Rav said...

Andrew, I think the most promising part of this is that we now have a split decision from the lower courts on the constitutionality of ObamaCare: 2 in favor, 2 against. Combined with the massive public outcry last year which STILL hasn't gone away, this will put that much more pressure on the justices--namely Anthony "Coinflip" Kennedy--to bow to the will of the people and overturn this. I think a 5-4 decision against the WH is very possible.

AndrewPrice said...

Stan, Courts actually rarely use your own words against you in this context as they recognize that opinions change and rhetoric lacks substance. But in this case, the rhetoric by Obama and the Justice Department attorneys was so strong that pointing it out was appropriate. In other words, they were so openly hypocritical that it was impossible to ignore.

But even better, this judge didn't rely on any of that rhetoric. He used it with devastating effect, but then he also backed up everything he said with other facts and a truly impressive grasp of the law. This was an impressive decision -- of the type you typically only see coming from Supreme Courts.

Interestingly, I think the judge did this because (1) he knew the public was watching and so he spoke a lot to the public and (2) he worked hard to frame the issue for the Supreme Court. In fact, I'd say that his decision is head and shoulders above anything the attorneys produced and will be given considerable weight by the appellate courts.

I agree with you and Pitts, it is frustrating, especially because it's so obvious. But unless we can find a way to squeeze liberals out of the court system, we will keep running into judges who don't understand that their role is to apply the law, not make the law.

AndrewPrice said...

T_Rav, That was my initial thought, but after reading this decision, I get the feeling this one may have changed the game even more for our side. This decision is devastating and I have yet to see a single Democrat who's been able to poke holes in it other than to call it "judicial activism."

I've appeared before state Supreme Courts on several occasions and based on my experience, I can say with some certainty that this decision leaves nothing to argue on appeal except "we disagree," and that's a loser on appeal.

CrispyRice said...

Great article, Andrew!

The pundits have been saying it went down all because of the severability clause, so it was nice to read a more in depth analysis than that.

And I love this judge! Why can't we have thousands more like him?

Joel Farnham said...

Andrew,

I understand that the legal issue of Obamacare has been resolved for now. I can't help but feel that Obama is going to ignore the court. Like the EPA has ignored the courts and Congress as well as the FCC.

In other words, the rule of law will be flouted by the Obama Regime.

AndrewPrice said...

Thanks Crispy! I agree, if we had more judges like this, our court system would be as it should be.

The problem with the pundits is that most of them don't know what they're talking about and they don't want to learn before opining. They just spit out whatever is easiest to say and then rely on (1) the fact that the public won't check up on them, (2) that journalists aren't smart enough to verify what they say, and (3) that the pundit community all play the same game and so they won't call each other on it.

It's kind of a sad world when you have to go to a blog to understand what really happened! That's what the news used to provide!

Of course, it also suits the purposes of the political types to make this simple and easy and within the themes they are trying to sell. The truth is rarely simple and easy to package.

AndrewPrice said...

Joel, This still isn't over, though it's getting clearer that it's headed in our direction.

In terms of ignoring the courts, that's generally very hard to do because people can simply ignore the act's requirements, just as states can ignore it. Thus, if he tries to enforce it, people can refuse to comply -- they can also sue the agencies to stop.

The EPA issue you raise is a little different because they've simply read a statute as giving them more power than it really has, and I don't think the courts have ordered them to stop enforcing it yet -- to the contrary, the court said they could go ahead.

Tennessee Jed said...

I note my comment on your May post {sic} a figurative online foot kiss. Well, a federal judge has, in fact, done so. However, since ultimately SCOTUS has to agree, I'll wait on all of the actions I outline until then

AndrewPrice said...

Jed, LOL! Obviously, the Supremes could go the other way, but I think the odds are strongly on our side now! :-)

Ed said...

Good read! I like the result and I think the reasoning is sound. I don't know how the SOTUS can go the other way, but they often do disappoint me. I tried reading the decision because I figured it matter to my life, so it was worth knowing, but it's so damn difficult to read legaleze. Thanks for doing that for us!

AndrewPrice said...

Ed, It takes a while, but eventually you get tot he point that reading legal decisions is fairly easy. But they definitely aren't meant for the public at large. But that's why we're here!

USS Ben USN (Ret) said...

Hurray! Thank you Judge Vinson!

Kudos Andrew for a well written and well researched post!

I have nothin' to add but the schadenfreude is much sweeter knowing Judge Vinson is a Reagan appointee, LOL.

AndrewPrice said...

USS Ben, Thanks! I'm glad you liked it! I know how hard this stuff can be for people to understand, so I figured it was a good idea to break it down for everyone.

Yeah, this is a pretty good feeling! Judge Vinson could eventually be the man most responsible for saving our healthcare system -- another plus to chalk up to Ronald Reagan! :-)

Patti said...

oh andrew, when i read your legal analysis it gives me chills! (wait, was that creepy?! did i just cross a line?) i'm thrilled to read this first thing this morning. it'll give me a happy all day.

gonna link tomorrow to go along with my "activist judge" entry. thx!

AndrewPrice said...

Patti, I'm glad you liked it! It is a great feeling when a judge agrees with you, and especially when the judge provides as thorough of a decision as this one. This was a well-reasoned, hard to attack decision and I think it gives us a lot of hope for the future of this issue! :-)

Thanks for the link!

Ed said...

I hope to never reach the point where I can read legal decisions.

AndrewPrice said...

Ed, Sadly, it's too late for some of the rest of us! LOL!

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