Breaking News

Nike Says It Has Suspended Contract With Adrian Peterson
Tweet TWEET

U.S. Judge Says Challenge to Obama Health-Care Law Will `Probably' Proceed

A legal challenge to the health- care overhaul signed by President Barack Obama probably will be allowed to proceed, said a federal judge in Florida.

U.S. District Judge Roger Vinson in Pensacola said today he will make a decision by Oct. 14 on whether the states have jurisdiction to sue. Sympathizing with the claims of the states, Vinson told lawyers he would probably dismiss part of the lawsuit, while allowing other claims to proceed.

“The states are left almost powerless to affect Congress,” Vinson said. “It’s enforced upon them whether they like it or not.”

The states allege the government’s requirement that people buy health insurance exceeds congressional powers under the Constitution, while the U.S. counters that provision is allowed under its commerce powers because of the billions of dollars a year in unpaid medical bills absorbed by the market each year.

The Justice Department claims the lawsuit is premature and fails to identify any injury the states have suffered.

Any injuries to state budgets fall short of the imminent harm required to bring a claim, the U.S. argued before Vinson.

“The state is free to disagree with the policy judgment of Congress,” said Ian Gershengorn, an attorney for the U.S. “It is not free to overturn 75 or 100 years of constitutional law.”

With at least part of the case surviving today’s hearing, Vinson scheduled further arguments for Dec. 16.

‘Unprecedented Intrusion’

Florida Assistant Attorney General Blaine Winship told Vinson the “the law is an unprecedented intrusion on the sovereignty of states and the liberty of their citizens.”

A federal judge in Richmond, Virginia, last month allowed a similar lawsuit brought by that state to proceed, rejecting the federal government’s motion to dismiss the claim. He scheduled an Oct. 18 hearing for further arguments.

Joining Florida in the suit were Alabama, Alaska, Arizona, Colorado, Georgia, Idaho, Indiana, Louisiana, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Pennsylvania, South Carolina, South Dakota, Texas, Utah and Washington. The National Federation of Independent Business, a small-business lobbying group, also joined Florida’s lawsuit.

The Florida and Virginia lawsuits were filed within minutes of Obama signing the health-care legislation.

The states claim the legislation places an unconstitutional burden on their budgets by expanding Medicaid, the federal-state program that provides health care for the poor.

Commerce and Taxation

Vinson questioned whether people who don’t buy health care can be considered to be actively participating in commerce and can be taxed for it. The U.S. has previously claimed that the possibility of being injured and an inability to pay one’s medical bills are enough to draw a link between commerce and taxation.

“You’re trying to turn the word upside down and say activity is the equivalent of inactivity,” Vinson said.

Gershengorn said choosing to avoid buying health insurance is an active decision, and others end up paying for those who go to the emergency room without coverage.

‘This is economic activity,” he said. “It is the purchase of health-care services without paying for them.”

The hearing required an overflow room for people to watch through closed-circuit television and attracted a crowd of a couple dozen onlookers outside on the courtroom steps with only one protester who held a white sign with black letters reading: “Obamacare makes us sick.”

Two Years

Many of the changes enacted by the bill, included requirements for most people to have health insurance and for employers to provide coverage, will take at least two years to go into effect.

Part of the courtroom debates hinge on whether the health- care law falls within the government’s power to tax. Opponents of the law claim the law’s purpose is to ensure people buy health care and not to raise revenue, so it shouldn’t be classified as a tax.

The health-care overhaul will extend Medicaid coverage to 16 million more Americans, according to the nonpartisan Congressional Budget Office. The legislation will cost the states billions of dollars to administer, the attorneys general claim.

The attorneys general opposing the health law claim it infringes on states’ sovereignty and violates the Constitution’s 10th Amendment, which says powers not granted to the national government are reserved by the states.

The case is State of Florida v. U.S. Department of Health and Human Services, 10-cv-00091, U.S. District Court, Northern District of Florida (Pensacola).

To contact the reporter on this story: William McQuillen in Washington at bmcquillen@bloomberg.net; Duwayne Escobedo in Pensacola, Florida, at duwayne.escobedo@gmail.com.

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.