Appeals court upholds health-care law

November 8, 2011

A federal appeals court upheld the constitutionality of the 2010 health-care law Tuesday, granting the Obama administration another appellate victory as the law nears an expected final review by the Supreme Court.

In a 2 to 1 decision, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit found that Congress acted within its authority to regulate interstate commerce when it required virtually all Americans to obtain insurance or pay a penalty. The dissenting judge argued that the case should be dismissed because the challenge was premature.

The insurance mandate “certainly is an encroachment on individual liberty, but it is no more so than a command that restaurants or hotels are obliged to serve all customers regardless of race, that gravely ill individuals cannot use a substance their doctors described as the only effective palliative for excruciating pain, or that a farmer cannot grow enough wheat to support his own family, ” Senior Judge Laurence Silberman wrote in the majority opinion.

Silberman’s participation in the majority is noteworthy because he is highly respected in conservative judicial circles. An appointee of Republican President Ronald Reagan and veteran of two Republican administrations, he has written several recent decisions whose arguments were upheld by the Supreme Court.

Legal observers said the swiftness with which the D.C. Circuit panel issued its ruling — barely a month and a half after hearing oral arguments in the case — suggests that Silberman and the other judges were eager to influence the higher court, which will consider requests to review four other appellate opinions on the health-care law in a private conference this week. With split decisions at the circuit level, the court is almost certain to take up the issue.

In one of the four cases, appellate judges upheld the law’s constitutionality. In another, brought by 26 states, the appeals court invalidated the individual mandate. Two more challenges, including one from the Commonwealth of Virginia, were dismissed on the grounds that the plaintiffs lacked the legal right to sue. The case before the D.C. Circuit was brought by four individuals represented by the American Center for Law and Justice, a conservative litigation organization. It argued that Congress’s authority over interstate commerce is limited to regulating individuals who are engaged in commercial “activity”; Congress cannot compel individuals to enter into commerce by making them buy health insurance.

The administration countered that because nearly everyone will need health care and hospitals are barred from turning away emergency cases, people who go without insurance are already engaging in commerce: They are making an economic decision about how the health care they will eventually need will be funded — out of their own pockets or by passing the cost on to providers or taxpayers.

In the majority opinion, joined by Judge Harry T. Edwards, a Democratic appointee, Silberman affirmed a lower court ruling that sided with the administration. He wrote that although the insurance mandate represents an unprecedented use of Congress’s commerce authority, the plaintiffs’ argument that it is prohibited is just as novel. Neither the Constitution nor Supreme Court precedent explicitly limits Congress to regulating individuals presently engaging in economic “activity,” he said.

Furthermore, Silberman said, the Supreme Court decision that relates most closely to the circumstances of this case favors the administration’s view. Like judges who have ruled against the insurance mandate, Silberman expressed concern that upholding it implied there were practically no limits on the types of products Congress could compel Americans to purchase.“That a direct requirement for most Americans to purchase any product or service seems an intrusive exercise of legislative power surely explains why Congress has not used this authority before,” he wrote, “but that seems to us a political judgment rather than a recognition of constitutional limitations.”

Judge Brett Kavanaugh, named to the bench by Republican president George W. Bush, echoed the majority’s concerns in his dissent but offered another solution: Dismiss the case on the grounds that federal law bars the plaintiffs from contesting the tax penalty associated with the mandate until it is actually collected in 2015.

By then, Congress could tweak the law to guarantee its constitutionality. Or the courts could find that the mandate falls under Congress’s power to levy taxes.

“If we need not decide the Commerce Clause issue now, we should not decide the Commerce Clause issue now,” Kavanaugh wrote. “History and precedent tells us to cross that bridge only if and when we need to. . . . I would . . . leave these momentous constitutional issues for another day — a day that may never come.”

Staff writer Robert Barnes contributed to this report.

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