Two hearings in Virginia

The District Courts for the Eastern and Western Districts of Virginia each heard arguments in ACA litigation cases last week. In the more watched case, Judge Hudson heard arguments in Richmond (Eastern District) on the parties' respective motions for summary judgment. You can find news coverage here and here, among other places. Judge Hudson apparently spent much of the argument probing the degree to which the minimum coverage provision is severable from the rest of the ACA--which is, no doubt, an ominous sign for the United States. For the court would only reach the severability question if it first concluded that the minimum coverage provision was unconstitutional. Interestingly, the United States (in part, no doubt, to bolster its principal submissions on appeal) conceded that, if the minimum coverage requirement were unconstitutional, the prohibition on preexisting condition exclusions (imposed on insurers) would be unconstitutional as well. Judge Hudson indicated that he would issue his ruling by the end of the year.

In a less watched case, Judge Moon heard arguments Friday in Lynchburg, Virginia (Western District), in Liberety University v. Geithner on the United States's motion to dismiss. The plaintiffs in that case, in addition to challenging the minimum coverage provision as exceeding Congress's enumerated powers, allege that the ACA violates the First Amendment's Free Exercise Clause (by requiring them to subsidize abortion) and the Equal Protection Clause of the Fourteenth Amendment (by distributing the Act's exemptions unequally).

(Unfortunately, the transcripts of these hearings are not available on PACER.)

The first bit of ACA litigation to reach the Supreme Court

As Lyle Denniston of SCOTUSblog reported on Wednesday, the first piece of ACA litigation has officially reached the Supreme Court. The plaintiffs in Baldwin v. Sebelius (a former California legislator and the Pacific Justice Institute) have filed a petition for a writ of certiorari at the Court, which the justices are scheduled to consider at their November 5 conference.

The Baldwin plaintiffs are challenging the minimum coverage provision, asserting that it exceeds Congress's enumerated powers. The United States District Court for the Southern District of California dismissed the complaint on the ground that the plaintiffs lacked standing, due principally to the fact that the mandate will not take effect until January 2014. Of course, the district courts in Virginia and Florida resolved the standing (or ripeness) question differently, thus there is clearly a split among the lower courts on this precise question. But the Supreme Court typically does not grant cert until there is a split among the Courts of Appeals (or state supreme courts).

The plaintiffs have filed an appeal in the Ninth Circuit, which has not yet set a briefing schedule. But they are hoping to expedite the process, and thus have filed a petition for cert directly in the Supreme Court (which you can find here). The United States has waived its right to respond.

On November 5, the Supreme Court essentially has two choices: (1) it can deny the petition, or (2) if it is interested at all, it can call for a response from the Solicitor General. I think the safe money is on the Court denying certiorari, as it is extraordinarily rare for the Court to grant cert before any court of appeal has even addressed the legal question at issue. But if the Court calls for the government to respond, it would be a strong signal that the justices are quite interested in jumping into the fray, and sooner rather than later.

UPDATE: It is most likely (though I have yet to confirm this) that it would only require the vote of one justice to call for the government to file a brief in opposition to the cert petition. Thus, if the Court does, in fact, ask for the views of the Solicitor General after its November 5 conference, it might not be as strong of a signal as I suggested. It would mean that at least one justice is very interested in jumping into the fray, but perhaps no more than that. (The votes on such matters are not made public.)

"Not even a close call"

If you are looking for a sense as to where this litigation is headed--at least with respect to the minimum coverage requirement--there is one sentence, on page 61 of Judge Vinson's opinion, that pretty much captures it. After laying out the competing arguments as to whether ACA 1501(b) is within Congress's commerce power, he states as follows: "At this stage in the litigation, this is not even a close call."

Judge Vinson goes on to explain that the individual mandate is "simply without prior precedent" (p.61), and that, unlike statutes upheld by the Supreme Court in prior Commerce Clause decisions cited by the federal government (such as Heart of Atlanta Motel and Wickard), this regulation "is not based on an activity that [people] make the choice to undertake" (p.63). In other words, Judge Vinson sees this as a regulation of inactivity, and thus one that is qualitatively different from prior uses of the commerce power (as augmented by the Necessary and Proper Clause). Moreover, he finds it highly salient that those regulated by 1501 (that is, all legal residents) have not taken some sort of voluntary action (such as entering the motel business, or growing wheat, for example) before being subjected to the provision's requirement. Seeing the minimum coverage requirement in these terms, I think, is probably going about 75 percent of the way towards finding it unconstitutional.

Mind you, Judge Vinson concludes by stating that he is holding only that the states have "stated a plausible claim." (p. 64). But the reasoning behind his conclusion--not to mention the modifier "most definitely" that precedes it--gives one the sense that, following the coming motions for summary judgment, the odds are in favor of the court declaring the minimum coverage provision unconstitutional.

The opinion in Florida

You can find Judge Vinson's opinion here. I have just skimmed the 65 pages, but this appears to be the bottom line (on the merits):

1. The minimum coverage requirement is not a bona fide tax, but instead a regulation with an accompanying sanction. As such, if it is within Congress's enumerated powers, it must be justified as a regulation of interstate commerce.

2. The states' claim that the minimum coverage provision exceeds Congress's commerce power is plausible, and thus survives the United States's motion to dismiss. Whether the claim should ultimately prevail will be determined on the coming motions for summary judgment.

3. The states' claim that the ACA's Medicaid amendments are coercive, and thus effectively commandeer the states to implement a federal program, is also plausible, and thus survives the motion to dismiss. It, too, will be resolved on the coming motions for summary judgment.

4. Because the minimum coverage provision is not a tax, the states' contention that it amounts to an unconstitutional, unapportioned "direct" tax is moot, and thus dismissed.

5. All of the states' remaining claims--that the minimum coverage provision violates the Due Process Clause of the Fifth Amendment, that the employer mandates amount to an impermissible burden on the states, and that the provisions implementing the so-called "exchanges" impermissably infringe on the states' independent sovereignty--are all dismissed for the failure to state a claim. They are all implausible on the merits.

I am sure there is plenty more in the 65 pages. But this is the basic gist. I will try to offer some more analysis once I have a chance to wade through the opinion.

Judge Vinson's decision tomorrow

United States Senior District Judge Roger Vinson (N.D. Florida) is scheduled to issue his decision tomorrow regarding the United States's motion to dismiss in Florida v. HHS. In light of what Judge Vinson stated during the September 14 hearing on the matter, most expect the court to deny the federal government's motion and allow the states' lawsuit to proceed, at least to the summary judgment stage.

Another potentially useful site

I should alert readers that I just came across this, the "Health Care Lawsuits" web site, which is being run by an entity entitled HealthCareLawsuits.org. It looks as if there is some useful information here, particularly about the myriad non-state-initiated lawsuits around the country.

For what it is worth, the purveyors of this site do not appear to be coming to the subject from a completely unbiased perspective. Here is a snippet about themselves posted on the site: "Healthcarelawsuits.org is a project of the Independent Women's Forum, which is a nonprofit group dedicated to promoting the principles of economic liberty, free markets, and personal responsibility." Take that for what you will.

Of course, who among us is completely unbiased? No doubt, I have surely let my views creep into the coverage here as well, despite my efforts to be as neutral and non-ideological as possible.

Regardless, the site is another resource for keeping up with the ongoing events.

Thomas More Law Center v. Obama: A quick summary

In his opinion today, District Court Judge George Steeh (E.D. Mich.) upheld the ACA's minimum coverage requirement on the merits and dismissed the plaintiffs' complaint in its entirety. The proceeding was a trial on the merits, under which the parties had agreed that there were no disputed material facts.

What did the court hold? First, Judge Steeh found that all of the plaintiffs had standing. The four individual plaintiffs had standing because, although ACA 1501(b) will not go into effect until 2014, they plausibly alleged that they must immediately begin saving money for the cost of purchasing insurance in the future. "Plaintiffs' decisions to forego certain spending today, so they will have the funds to pay for health insurance when the Individual Mandate takes effect in 2014, are injuries fairly traceable to the Act for the purposes of conferring standing." (Slip op. at 7.) The Thomas More Law Center had standing as an organization because some of its members had standing for this same reason.

Next, Judge Steeh turned to the merits. And he concluded that the minimum coverage requirement was within Congress's commerce power on both of the grounds asserted by the federal government. First, he rejected the plaintiffs' characterization of the regulated conduct as "inactivity." Specifically, he reasoned that, "[f]ar from 'inactivity,' by choosing to forgo insurance plaintiffs are making an economic decision to try to pay for health care services later, out of pocket, rather than now through the purchase of health insurance, collectively shifting billions of dollars, $43 billion in 2008, onto other market participants." (Slip op. at 16-17.) Consequently, the authority to regulate these decisions is well within the power recognized even in Lopez and Morrison. Because the regulated activity is economic in nature, it can be aggregated, and as such has a substantial effect on interstate commerce.

Second, Judge Steeh also embraced the government's alternative rationale that the minimum coverage provision constitutes an essential aspect of a broader regulatory scheme, which regulatory scheme clearly regulates an interstate commercial market. "The provision at issue addresses cost-shifting in [the health care services] markets and operates as an essential part of a comprehensive regulatory scheme." (Slip op. at 18.) Importantly, Judge Steeh commented that, under Raich, Congress is empowered to regulate "wholly intrastate, wholly non-economic matters that form 'an essential part of a larger regulation of economic activity.'" (Slip op. at 18) (quoting Raich, 545 U.S. at 24-25). Thus, Judge Steeh reads Raich as not limiting Congress to reaching only those activities, reached as a means of supporting a larger regulatory scheme, that are economic in nature. The nature of activities so regulated -- economic or non-economic, commercial or non-commercial -- is immaterial.

Finally, having upheld the minimum coverage requirement as a valid exercise of the commerce power, Judge Steeh did not address whether it might alternatively be upheld as a valid tax under the General Welfare Clause. He dismissed the argument that the penalty for failing to acquire minimum coverage constituted an impermissible, unapportioned "direct" tax on the ground that penalties imposed by Congress for the failure to comport with a valid regulation need not conform to the Constitution's limitations on taxes. That is, because ACA 1501(b) amounts to a valid regulation (and sanction), it need not conform to any constitutional limitation on taxes. Those limitations would only be relevant if the provision could only be justified as a tax.

As this was a trial on the merits, decided as a matter of law, there is nothing left to be resolved at the trial court. The next stop is the United States Court of Appeals for the Sixth Circuit.

District Court in Michigan upholds minimum coverage requirement

This is in the case of Thomas More Law Center v. Obama. You can access the opinion here.

I just located the opinion, but I will have some reaction up here as soon as I have a chance to read it.

UPDATE: The court concluded that the plaintiffs had standing, and then went on to hold that the minimum coverage requirement of ACA 1501(b) was a valid exercise of Congress's authority to regulate interstate commerce. There is much to discuss, but here is a crucial passage: "[P]laintiffs in this case are participants in the health care services market. They are not outside the market. While plaintiffs describe the Commerce Clause power as reaching economic activity, the government’s characterization of the Commerce Clause reaching economic decisions is more accurate."

Raich and the requirement that the regulated activity be "economic"

So now that all (but one) of the briefs have been filed in advance the District Court's decision on the cross-motions for summary judgment in Virginia v. Sebelius, we can reflect a bit on the content of those arguments.

And one of the arguments that I found striking--specifically as presented in the CATO brief, repeating what Randy Barnett has argued in his Hayek lecture--is that, under Gonzales v. Raich, the disputed activity that Congress can reach through its regulatory scheme must be "economic" in nature. That is, it is not enough that that broader regulatory scheme (in Raich, the Controlled Substances Act) target economic or commercial activity. Rather, argues Barnett, even the conduct that Congress reaches incidentally in service of that broader regulatory scheme--the conduct that Congress believes it must also regulate in order to prevent that scheme from being undercut--must be economic as well, otherwise it falls outside the commerce power. In essence, Barnett is arguing that, had the Court concluded in Raich that the personal, non-commercial cultivation and possession of marijuana for medicinal purposes were not "economic" activities, then the result would have been different.

There is some language in Raich that, when viewed in isolation, lends some support to this interpretation. But I do not believe that this is the best reading of the opinion, read in its entirety. Rather, the logic of Raich indicates that whether Angel Raich's particular activity was properly described as "economic" was ultimately irrelevant to the Court's holding (or at least its principal basis).

Why? First, section III of the Court's opinion in Raich, which seems to stand on its own as a justification for the holding, nowhere mentions the "economic" nature of Raich's conduct or of the cultivation of marijuana. And it is section III that lays out the basic rationale of the opinion--that when Congress enacts a broad regulatory scheme that clearly targets economic or commercial activity, it can regulate intrastate, non-commercial instances of that activity as well. To the extent the Court discusses the economic nature of any activity, it is the activity targeted by the CSA as a whole.

Second, section IV likewise does not seem to pin any of its reasoning on whether Angel Raich was engaged in economic activity. The Court might have so concluded, but there is nothing in the analysis, to me anyway, that seems to depend on this conclusion.

Finally, and perhaps most importantly, were Barnett's interpretation correct, it would be very hard to square Lopez with Raich. The Court in Lopez definitively stated that the possession of a gun in a school zone is not economic or commercial in nature. Presumably, the same is true for the simple possession of marijuana. That means that, if (as Barnett argues) Congress cannot reach any non-economic conduct through a broad regulatory scheme such as the CSA, it also cannot regulate the simple possession of drugs. Yet the Court itself in Raich stated that the CSA's prohibition on possession was within the commerce power (perhaps as augmented by the Necessary and Proper Clause). Specifically, the Court stated that "[p]rohibiting the intrastate possession or manufacture of an article of commerce is a rational (and commonly utilized) means of regulating commerce in that product." Thus, Raich itself plainly endorses Congress's capacity to regulate a non-economic activity when doing so is a necessary and proper means of implementing a broader regulatory scheme, which scheme regulates an interstate commercial market.

Of course, there remains the question of whether Congress can regulate "inactivity"  using this same logic (and whether the conduct regulated by the minimum coverage requirement is aptly described as "inactivity"). Regulating non-action might fall beyond the logic of Raich. (Alternatively, forcing an individual to engage in a commercial transaction with a third party might be considered "improper" for purposes of the Necessary and Proper Clause.)

But those are different issues. The point here--and I think the point on which Barnett misreads Raich--is that whether the conduct ultimately reached by Congress (as a necessary means to implementing a broader regulation of interstate commerce) is economic in nature is immaterial under the logic of Raich.

Kerr and Somin debating the doctrine

Two members of the Volokh Conspiracy -- Orin Kerr (George Washington University Law School) and Ilya Somin (George Mason University School of Law) -- are today discussing the doctrinal contours of Congress's enumerated powers as it applies to the minimum coverage requirement. Somin, you may recall, is the author of the amicus brief on behalf of the Washington Legal Foundation (and a sizable group of law professors). You can find Somin's posts here and here. Kerr's thoughts are here. Their discussion hones in on what is likely the most important questions concerning the constitutionality of ACA 1501(b): Will the Supreme Court permit Congress to regulate conduct that is arguably non-economic, and arguably not even activity, as a necessary (or "appropriate") means to implementing its broader scheme to regulate the (plainly commercial) health insurance market?

Two more amicus briefs

Two more amicus briefs have been filed in Virginia v. Sebelius: one from the Mountain States Legal Foundation, which you can access here, and one from a non-profit group called Virginia Organizing, which you can access here.

No more tonight

The folks in Richmond responsible for docketing the filings on PACER appear to have gone home for the evening. So if any other briefs have been filed, they will not be available tonight. Again, there is at least one more amicus brief outstanding (presenting the views of three former U.S. attorneys general), which will be filed on Friday.

Also, as I previously listed the law professors on the Washington Legal Foundation brief, I should also mention those on the Constitutional Law Professors brief. They are:

* Jack Balkin, Yale Law School

* Gillian Metzger, Columbia Law School

* Trevor Morrison, Columbia Law School

United States reply brief

The United States has filed its reply brief, which you can find here.

No other amicus briefs have yet been docketed on PACER, but they could well appear later this evening or tomorrow morning. (It appears that at least one brief -- to be filed by former U.S. Attorneys General William Barr, Edwin Meese, III, and Dick Thornburg -- will be filed on Friday, with the permission of the District Court.)

More briefs

The Commonwealth of Virginia has filed its reply brief. In addition, the District Court has docketed amicus briefs from a group of constitutional law professors (including Jack Balkin), the American Civil Rights Union, Americans for Free Choice in Medicine, and the Physician Hospitals of America. We will have all those filings up on the wiki site (and over in the column to the right) in short order.

We still await the United States's reply brief and, most likely, more amicus filings.

UPDATE: Now available:

* Virginia reply brief here.

* The Balkin et al. brief here.

* The American Civil Rights Union brief here.

* The Americans for Free Choice in Medicine brief here.

* The Physician Hospitals of America brief here.

UPDATE 2: The proposed amicus brief of the Landmark Legal Foundation is now up on the wiki and available (as with all the other filings) in the column to the right on this page.

Washington Legal Foundation amicus

The Washington Legal Foundation and a group of constitutional law professors this afternoon filed an amicus brief in support of Virginia's motion for summary judgment. The law professors on the brief are:


* Jonathan Adler, Case Western Reserve University School of Law
* George Dent, Case Western University School of Law
* Michael Distelhorst, Capital University Law School
* James W. Ely, Jr., Vanderbilt University Law School
* Elizabeth Price Foley, Florida International University College of Law
* David Kopel, University of Denver Sturm College of Law
* Kurt Lash, University of Illinois College of Law
* David N. Mayer, Capital University Law School
* Andrew Morriss, University of Illinois at Urbana-Champaign College of Law
* Leonard J. Nelson III, Samford University’s Cumberland School of Law
* Stephen B. Presser, Northwestern University School of Law
* Ronald J. Rychlak, University of Mississippi School of Law
* Steven J. Willis, University of Florida Levin College of Law
* Todd J. Zywicki, George Mason University School of Law

Ilya Somin (George Mason University School of Law) co-authored the brief. You can find it here.

Briefs coming in

Amicus briefs are being filed as we speak in Virginia. Courtesy of reader Mark Regan, I have just received briefs filed by (1) the CATO Institute, Randy Barnett, et al., and (2) a non-profit group based in Washington, D.C., called the Young Invincibles. Those briefs will be posted here shortly. I just checked PACER, and no other briefs have yet to been logged on the electronic docket sheet.

UPDATE: Those amicus briefs, respectively, are available here (CATO) and here (Young Invincibles).

Standing through non-severability?

We are about two weeks from Judge Vinson's ruling on the United States's motion to dismiss in Florida v. HHS. And a threshold question he likely will have to resolve is whether the states have standing to challenge ACA 1501, the minimum coverage requirement. (The states have joined two individual plaintiffs, who may have standing to challenge 1501 even if the states do not. But the court will likely have to rule on the states' independent standing to press this claim.)

One of the arguments that the states press in their memorandum in opposition to the motion to dismiss is as follows: (1) we have an injury from the ACA's Medicaid provisions, which force us to significantly expand coverage at great cost; (2) the minimum coverage requirement is not severable from the rest of the Act; (3) thus, if the minimum coverage requirement is unconstitutional, then the entire Act is unconstitutional; and (4) so even if we are only injured by the ACA's Medicaid provsions, we have standing to challenge 1501 because a decision declaring it unconstitutional would bring down the whole Act.

I readily concede that many of the issues in the ACA litigation are uncertain and susceptible to arguments on both sides. But this issue is not one of them. This simply cannot be right.

A big (first) Monday

The day after tomorrow is the first Monday in October, which means it is the first official day of the Supreme Court's 2010 October Term. At 10:00 a.m. EDT, Justice Elena Kagan will take the bench for the first time. And the Court will comprise three women justices (and no Protestants) for the first time in its history. (Kagan will sit for the first case, which concerns the computation of costs in maintaining a vehicle for purposes of Chapter 13 bankruptcies. But she will leave the bench at 11:00, as she is recused in the second case, which concerns whether certain sentences for carrying a firearm during a drug offense should run consecutively or concurrently.) It should be an interesting Term, though it thus far lacks any true blockbusters, such as Citizens United or McDonald from last year.

More pertinent here, Monday is also the day that the United States and Virginia will be filing their reply briefs, and any participating amici will be filing their briefs in support of either party on their pending motions for summary judgment. We will do our best to get those documents available here as soon as possible. (And if you happen to have a copy of any of those briefs in a PDF format, I would be obliged if you sent a copy to me at bjoondeph@scu.edu.)

A quick thought on Barnett's "Commandeering the People"

As I indicated in my earlier post, Randy Barnett's upcoming Hayek lecture at NYU (the text of which you can find here) is a terrific presentation of the constitutional arguments against the individual mandate. I have now read through it twice, and I think it does an exceptional job of presenting the best case possible, under existing law, as to why ACA 1501(b) might be found unconstitutional.

One of the most interesting aspects of Barnett's arguments is captured in its title, Commandeering the People. To oversimplify a bit, Barnett argues that the anti-commandeering principle articulated by the Supreme Court in New York and Printz can be carried over to apply to "economic mandates" imposed on private individuals. After all, the Tenth Amendment recognizes the People as a sovereign just as much as it recognizes the states. Thus, just as the mandates directed at the states in New York and Printz were an "improper" means of implementing the commerce power (for purposes of the Necessary and Proper Clause), so, too, is the minimum coverage requirement imposed by 1501.

This is an interesting and quite creative argument, and (to my knowledge) a highly original contribution by Barnett. It also, as he notes, taps into the what many Americans find objectionable about 1501 -- that it simply commands certain Americans to engage in commercial transactions with private third parties. Still, I think there are some significant problems with the analogy that ultimately render it inapposite.

Memoranda in opposition to summary judgment

The memoranda filed by Virginia and the United States opposing each others' motions for summary judgments have now been posted by Eric Lightman on our wiki site. You can also find links to those memos just to the right of this post on this page, in the column of filings in Virginia v. Sebelius. Enjoy!