Rule of Law

Conservative D.C. Judges Question Challenge to Health Care Mandate

Shane Kunselman co-wrote this piece.

On Friday morning, the U.S. Court of Appeals for the D.C. Circuit became the most recent—and perhaps most influential—appellate court to hear a challenge to the minimum coverage provision of the Patient Protection and Affordable Care Act.  The panel was comprised of two generally conservative judges, and one generally liberal judge: Judge Brett Kavanagh, a former top aide to President George W. Bush, who appointed him to the bench; Judge Laurence Silberman, a staunch conservative appointed by Ronald Reagan; and Harry T. Edwards, a well-respected Carter-appointee.

The case, Seven-Sky v. Holder, was brought by a group of individuals who, for mostly religious reasons, claim that they will never participate in the health services market and assert that Congress lacked power to enact the minimum coverage provision as part of its health care reform legislation.  As discussed in CAC’s brief filed in the case and in this Issue Brief, this assertion is wrong:  the Constitution’s text and history—in particular the Commerce Clause, the Taxing Power, and the Necessary and Proper Clause—give the federal government substantial power to enact a national solution to a national problem.  A federal district court agreed, rejecting Seven-Sky’s challenge to Affordable Care Act.  Seven-Sky appealed to the D.C. Circuit.

Arguing for the United States in Seven-Sky, Deputy Assistant Attorney General Beth S. Brinkmann made it clear that the Affordable Care Act regulates the national health-services market, with the focus on insurance as a method of financing participation in that market.   Because Congress has the authority under the Commerce Clause to enact a comprehensive regulatory scheme regarding the national health-services market, the minimum coverage provision—as an essential part of that overall regulatory system—is constitutional.  Of course, if the provision infringed a right or liberty protected by the Constitution, then it would be unconstitutional regardless of its role in a comprehensive regulatory scheme.  But there is no constitutionally protected right to freeload off your neighbors and avoid paying for health care services.  (The court implicitly recognized this by brushing aside certain arguments by Seven-Sky’s lawyer in rebuttal as individual rights arguments not properly raised in the case.)

The conservative-leaning panel of judges in D.C. seemed inclined to agree that the minimum coverage provision passes constitutional muster, even with some hesitation about whether there were sufficient “limiting principles.” For example, a key question put to Seven-Sky’s lawyer was how to distinguish this case from the Supreme Court’s ruling in Wickard v. Filburn, a case that many conservatives love to hate.   In Wickard, Roscoe Filburn, a wheat farmer, claimed that the portion of wheat he grew for his own family’s consumption should be exempt from a market-regulation wheat quota because it never entered the stream of interstate commerce.  The Supreme Court rejected this argument and ruled that even though Filburn intended to keep his wheat for his family and not put it on the market, his behavior affected the price of wheat on aggregate and could therefore be reached by the Commerce Clause.

Seven-Sky’s lawyer argued that the minimum coverage provision forces his client into the health care market, whereas Mr. Filburn did not have to buy wheat on the interstate market, even though he was being encouraged to do so.   Judge Silberman wasn’t buying it.  He repeatedly pointed out that Justice Jackson’s opinion in Wickard made it clear that, by prohibiting the growing of wheat for personal consumption, the government could effectively have forced Mr. Filburn to participate in the open market.   Judge Silberman raised the possibility that, just as the agricultural regulation at issue in Wickard eliminated cultivation of wheat for personal use as an option for obtaining wheat, Congress could constitutionally eliminate the option of self-financing health care.  While there is a very good chance he might not be happy with such a conclusion for ideological reasons, Judge Silberman appeared to suggest that Seven-Sky’s case is indistinguishable from Wickard and that the health care mandate is well within Congress’s authority under the Commerce Clause.

But the Court of Appeals might not even get to the merits of the constitutional question.   Judge Kavanagh expressed “major concern” that the Anti-Injunction Act, which generally requires tax challengers to pay the tax first and sue later, would prevent the courts from considering the constitutionality of the mandate until 2015.

While there is disagreement about whether the penalty associated with the minimum coverage provision is truly a “tax,” the provision is written into the Internal Revenue Code.   Judge Kavanagh noted that he Anti-Injunction Act makes clear that it applies to the taxes located in Section 68 of the Code.  The minimum coverage provision’s penalty is written into Section 48 of the Code—but it expressly cross-references to Section 68 for purposes of assessment and collection.  Judge Kavanagh seized upon this point, suggesting that if the Anti-Injunction Act applies to Section 68, and the minimum coverage provision specifically aligns itself with Section 68, then the Anti-Injunction Act likely applies to the minimum coverage provision’s penalty, too.   This would mean the dismissal of Seven-Sky’s case, just as it led to dismissal of the Liberty University case in the 4th Circuit earlier this month.

Interestingly, neither of the parties want this outcome.  The government would prefer to have clarity on whether a major piece of an important federal law is constitutional or not.  And even if the case were to be  dismissed under the Anti-Injunction Act, that would probably just delay true resolution until 2015 at the earliest, when the tax penalty contemplated by the minimum coverage provision would be collected.  But a court must assure itself of its own jurisdiction to hear each case that comes before it, regardless of what the parties may want.

Whichever way the D.C. Circuit goes, the opinion will certainly get a lot of attention.  While the D.C. suit is not one of the cases leading the race to the Supreme Court, because the D.C. Circuit is considered to be the most prestigious circuit court in the nation, the court’s opinion is likely to hold significant sway with the Justices.   Stay tuned to Text & History for case developments and analysis.

Elizabeth Wydra is CAC’s Chief Counsel.  Shane Kunselman is a junior at Claremont McKenna College and an intern at CAC.