No word yet on Supreme Court’s decision to hear health reform case, but D.C. court speaks

November 10 came and went, and we still don’t know whether the Supreme Court will review one of the health reform cases that I mentioned on Monday. The decision could be revealed this coming Monday, November 14, in the Court’s order list. For now, we continue to wait . . .

In the meantime, other courts continue to rule on health reform cases. The District of Columbia Circuit Court of Appeals has ruled in Seven-Sky v. Holder (No. 11-5047) that the individual mandate in the Patient Protection and Affordable Care Act (ACA) is constitutional. After determining that the Anti-Injunction Act did not bar the lawsuit, the court found that Congress had the authority under the Commerce Clause to enact the individual mandate, which requires individuals to purchase health insurance by 2014 and imposes a penalty on most who do not comply.

Anti-Injunction Act. The shared responsibility payment provision does not implicate the Anti- Injunction Act, according to the court. The Anti-Injunction Act bars pre-enforcement challenges to the assessment and collection of “taxes,” but the shared responsibility payment is labeled a “penalty” in the ACA. Congress labeled other provisions in the ACA “taxes.” This indicates that Congress’ decision to use the word penalty was deliberate, the court wrote. Further, the court said, congressional findings do not show that the purpose of the shared responsibility payment was to raise revenue. Rather, the aim of the payment is to encourage individuals to purchase health insurance. Also, Congress did not provide the IRS with the traditional criminal enforcement or levying powers to collect the payment. Thus, the penalty is not a tax within the meaning of the Anti-Injunction Act, and the lawsuit is not barred.

Commerce Clause. The D.C. court also found that Congress had the authority under the Commerce Clause to enact the individual mandate. The court indicated that the Supreme Court’s Commerce Clause cases do not require “activity” as a prerequisite to regulation. The court likened the current case to the situation in Wickard v. Filburn, 317 U.S. 111 (1942), where the court found that growing wheat for personal consumption could affect the national price of wheat and was, therefore, within Congress’ power to regulate under the Commerce Clause. “Wickard, therefore, comes very close to authorizing a mandate similar to ours, at least indirectly, and the farmer’s “activity” could be as incidental to the regulation as simply owning a farm,” the court wrote.

In addition, the court acknowledged the impact of the mandate on individual liberty. “Appellants’ view that an individual cannot be subject to Commerce Clause regulation absent voluntary, affirmative acts that enter him or her into, or affect, the interstate market expresses a concern for individual liberty that seems more redolent of Due Process Clause arguments. But it has no foundation in the Commerce Clause,” the court wrote.

Dissent. Judge Kavanaugh dissented as to jurisdiction, but did not decide the case on the merits. In a lengthy dissent, he wrote that the Anti-Injunction Act applies because a successful pre-enforcement suit would prevent the IRS from assessing and collecting the penalty from those who do not have health insurance. The ACA contains a provision indicating that the penalty be collected in the “same manner as an
assessable penalty under subchapter B of chapter 68” of the Tax Code. Judge Kavanaugh points out that “penalties under subchapter B of chapter 68 in turn must ‘be assessed and collected in the same manner as taxes.’” (emphasis in original). Because the ACA penalty is to be assessed and collected in the same manner as taxes, and taxes are shielded from pre-enforcement suits by the Anti-Injunction Act, ACA’s penalty likewise is shielded from such suits. Thus, the court lacks jurisdiction to decide this case at this time, he concluded.

White House reaction. Stephanie Cutter, Assistant to the President and Deputy Senior Advisor, reacted quickly to the court’s ruling, posting on the White House blog that “the Affordable Care Act scored another win in court when the District of Columbia Circuit Court of Appeals ruled that the law is constitutional. In upholding the constitutionality of the law, Judge Laurence H. Silberman reaffirmed that Congress has the constitutional authority ‘to forge national solutions to national problems’ like the need to provide affordable, quality health care to all Americans.”

“The ruling is yet another victory for the millions of Americans who are already benefitting from the law including the parents of children with preexisting conditions, women getting mammograms with no out-of-pocket cost, seniors saving hundreds of dollars on their prescription drugs, and one million young adults now newly insured through their parent’s plan,” Cutter wrote.