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October 15th, 2010
By Dan Miller
In an order released on October 14 in State of Florida, et al v. Dept. of Health and Human Services, et al , Judge Vinson of the U.S. District Court for the Northern District of Florida, Pensacola Division, permitted an action by twenty states challenging the mandatory health insurance provisions of ObamaCare to go forward. As noted here,
In his ruling, Vinson criticized Democrats for seeking to have it both ways when it comes to defending the mandate to buy insurance. During the legislative debate, Republicans chastised the proposal as a new tax on the middle class. Obama defended the payment as a penalty and not a tax, but the Justice Department has argued that legally, it’s a tax.
Beyond Judge Vinson’s apt characterization of the government’s approach as an “‘Alice in Wonderland’ tack” (see below) the most interesting part of the decision deals with the difference between between a tax and a penalty and why it matters. The Congress knows how to impose a tax when that is what it intends. Judge Vinson observed that since the mandatory insurance provisions were not referred to in the legislation as a “tax” but as a “penalty,” as well as for additional reasons (including, for one example, the tanning facility tax, clearly intended as a tax and labeled as such), it is “manifestly clear” that the Congress intended to impose a penalty rather than a tax.
This distinction is crucial, because rather than purport to rely on its rather broad taxing power under the Constitution, the Congress relied exclusively upon its somewhat less broad Constitutional power to regulate interstate commerce among the several states in enacting the mandatory health insurance provisions of ObamaCare:
Perhaps most significantly, the Act does not mention any revenue generating purpose that is to be served by the individual mandate penalty, even though such a purpose is required. … Nowhere in the statute is the penalty provision identified or even mentioned as raising revenue and offsetting the Act’s costs. …
Reviewing courts cannot cannot look beyond a statute and inquire whether meant something different than what it said. …
I have no choice but to find that the penalty is not a tax.
Judge Vinson continued, noting that by declaring the provision a penalty rather than a tax the Congress reaped a political advantage:
Congress should not be permitted to secure and cast politically difficult votes on controversial legislation by deliberately calling something one thing, after which the defenders of that legislation take an “Alice in Wonderland” tack and argue in court that the Congress really meant something else entirely, thereby circumventing the safeguard that exists to keep their broad powers in check.
Judge Vinson then disposed of questions of ripeness and standing in favor of the Plaintiffs but rejected the plaintiffs’ contentions that requiring employers, including state governments, to provide health insurance for their employees and requiring states either to provide health insurance exchanges or have the Federal Government “develop and implement” such exchanges for them unduly infringed upon state sovereignty. However, he found that the states had presented plausible arguments as to compulsion under certain funding provisions for Medicaid (which he characterized as a close question).
Judge Vinson then proceeded with a preliminary analysis of the legitimacy of the mandatory health provision under the Commerce clause, the essential part of the decision. Noting that the Federal Government had never before sought to regulate economic inactivity by requiring people residing in the United States to buy something, he observed:
[T]he Commerce Clause and Necessary and Proper Clause have never been applied in such a manner before. The power that the individual mandate seeks to harness is simply without prior precedent. The Congressional Research Service (a non-partisan legal “think tank” that works exclusively for Congress and provides analysis on the constitutionality of pending legislation) advised Congress on July 24, 2009, long before the Act was passed into law, that “it is unclear whether the [Commerce Clause] would provide a solid Constitutional foundation for legislation containing a requirement to have health insurance.” The analysis goes on to state that the individual mandate presents “the most challenging question … as it is a novel issue whether Congress may use this clause to require an individual to purchase a good or service.” [In Supreme Court cases involving accommodating Blacks in motels and growing wheat] [a]ll Congress was doing was saying that if you choose to engage in the activity of operating a motel or growing wheat, you are engaged in interstate commerce and subject to federal authority.
But in this case we are dealing with something very different. The individual mandate applies across the board. People have no choice and there is no way to avoid it. People who fall under the individual mandate either comply with it, or they are penalized. It is not based on any activity that they make the choice to undertake. Rather, it is solely based on citizenship and being alive. …
Of course, to say that something is “novel” or “unusual” does not mean that it is “unconstitutional” or “improper.” There may be a first time for anything. But, at this stage of the case, the plaintiffs have most definitely stated a plausible claim with respect to this cause of action. (emphasis in original)
Judge Vinson thus permitted the case to go forward for trial on December 16th and quite possibly motions for summary judgment.
Judge Vinson’s remarks in his Conclusion quote these words from the Supreme Court:
Some truths are so basic, like the air around us, they are easily overlooked. Much of the Constitution is concerned with setting forth the form of our government, and the courts have traditionally invalidated measures deviating from that form. The result may appear “formalistic” in a given case to partisans of the measure at issue, because such measures are typically the product of the era’s perceived necessity. But the Constitution protects us from our own best intentions; it divides power among sovereigns and among branches of government precisely so that we may resist the temptation to concentrate power in one location as an expedient solution to the crisis of the day.
Despite the displeasure noted by the White House, the case will thus proceed, and it rather clearly suggests that the outcome may be very different from that recently where U.S. District Judge George Steeh in Thomas Moore Law Center v. Obama on October 7th rejected claims that the individual mandate exceeds Constitutional authority under the Commerce clause. Judge Vinson’s decision appears to be the better reasoned of the two and it seems likely that in Judge Vinson’s court the government will have a tough roe to hoe in convincing him that the individual mandate meets Constitutional standards.
I also find very encouraging the judicial reaffirmation that when the Congress expressly states its Constitutional authority in enacting legislation, it should be bound by it and not wander off into other possible (but rather improbable) realms to justify the legislation before the courts. ObamaCare was passed, not as justified by the taxing authority but as authorized under the Commerce clause. If it is is not permitted under the Commerce Clause, as it probably is not, it must fall.
(This article has also been posted at Dan Miller’s Blog.)
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