UPDATE — Virginia Federal Judge Rules Obamacare Mandate Unconstitutional

Via Ace of Spades HQ, the decision is here.

The court frames the issue as follows: “While this case raises a host of complex constitutional issues, all seem to distill to the single question of whether or not Congress has the power to regulate-and tax-a citizen’s decision not to participate in interstate commerce.” 

It then addresses whether the individual mandate and affiliated tax penalty (1) are beyond the outer limits of the Commerce Clause and associated Necessary and Proper Clause, or (2) are a legitimate exercise of the congressional power of taxation under the General Welfare Clause.  Having held that the mandate is not constitutional, the court determined that the clause is “severable,” leaving intact the remainder of the legislation.

Commerce Clause

As with previous decisions by other courts, the Virginia court focuses on the third traditional “strand” of Commerce Clause analysis, which looks at whether the act is a legitimate exercise of Congress’s power to regulate activities that substantially affect interstate commerce.  According to the government:

Both the Secretary’s argument in defense of the Provision and the apparent underlying rationale of Congress are premised on the facially logical assumption that every individual at some point in life will need some form of health care. “No person can guarantee that he will divorce himself entirely from the market for heath care services.”  “[N]o person can guarantee that he will never incur a sudden, unanticipated need for expensive care; and very few persons, absent insurance, can guarantee that they will not shift the cost of that care to the rest of society.” (Citations omitted.)

The argument is that this cost shift which increases the cost of healthcare services and therefore has a substantial effect on interstate commerce, allowing Congress to require people to buy insurance and prevent them from causing that cost shift.

In response, Virginia argued that, unlike the parties challenging Congressional power to regulate in prior Supreme Court cases who made conscious decisions that placed them in the stream of interstate commerce  — by growing wheat or marijuana — the individual mandate compels an unwilling person to perform an involuntary act — buying insurance they don’t want.  In short, Virginia argued that a decision not to purchase a product is not economic activity.

The court ultimately accepts the state’s argument:

In surveying the legal landscape, several operative elements are commonly encountered in Commerce Clause decisions. First, to survive a constitutional challenge the subject matter must be economic in nature and affect interstate commerce, and second, it must involve activity. Every application of Commerce Clause power found to be constitutionally sound by the Supreme Court involved some form of action, transaction, or deed placed in motion by an individual or legal entity. The constitutional viability of the Minimum Essential Coverage Provision in this case turns on whether or not a person’s decision to refuse to purchase health care insurance is such an activity.

* * *

But these regulatory powers are triggered by some type of self-initiated action. Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market.  In doing so, enactment of the Minimum Essential Coverage Provision exceeds the Commerce Clause powers vested in Congress under Article I.  (Footnote omitted.)

I wrote a while back that the Commerce Clause, as currently “interpreted” by Supreme Court precedent, would likely allow the individual mandate to stand, and I stand by that analysis.   Under those cases, which I vehemently disagree with, I just don’t see enough of an economic activity/inactivity distinction. 

I hope to be proven wrong, however.  Even better would be some overruling of the previous authority that has all but neutered the Commerce Clause as a check on congressional power.

General Welfare Clause

As to congressional taxation power, the court leads by noting that the government has taken inconsistent positions on the issue: 

Despite pre-enactment representations to the contrary by the Executive and Legislative branches, the Secretary now argues that the Minimum Essential Coverage Provision is, in essence, a “tax penalty.” The Secretary notes that the Provision is codified in the Internal Revenue Code and the penalty, if applicable, is reported and paid as a part of an individual’s annual tax return.

As an advocate, that kind of hole is never a good place to begin your argument, and the court ultimately found “the notion that the generation of revenue was a significant legislative objective [to be] a transparent afterthought.”

The legislative purpose underlying this provision was purely regulation of what Congress misperceived to be economic activity. The only revenue generated under the Provision is incidental to a citizen’s failure to obey the law by requiring the minimum level of insurance coverage.  The resulting revenue is “extraneous to any tax need.”

“This Court is therefore unpersuaded that Section 1501(b)(1) is a bona fide revenue raising measure enacted under the taxing power of Congress.”

Severability

The severability discussion is kind of amusing, or it would be if it were not so sad.   Basically, the court holds that because the Obamacare legislation was so larded up with junk that is “patently extraneous to health care,” and since “the 2,700 page bill was rushed to the floor for a Christmas Eve vote,” it would be impossible to figure out whether the legislation would have passed without the individual mandate. 

So the court takes a cautious approach and holds that only the mandate and directly related provisions should be stricken down.

It is truly pathetic that the legislation as a whole would survive in large part because of the pork-laden bribes it contains and the ridiculously rushed process that crammed it down the throats of the public.

Injunction

Finally, the court agrees with everyone else that the matter is headed to a higher court, and since the mandate doesn’t kick in for a while, the court declines to issue an injunction barring implementation of the mandate.

Advertisements
Published in: on December 13, 2010 at 12:09 pm  Comments (1)  

The URI to TrackBack this entry is: https://mangyredbonehound.wordpress.com/2010/12/13/update-virginia-federal-judge-rules-obamacare-mandate-unconstitutional/trackback/

RSS feed for comments on this post.

One CommentLeave a comment

  1. […] UPDATE:  A discussion of the opinion is now here. […]


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: