Health-Care Law Goes to Appeals Courts, Opposing States Weigh Enforcement

The fight over President Barack Obama’s health-care law, after federal judges split on whether it’s constitutional, is headed to three U.S. appeals courts as states examine whether the statute is enforceable.

The Patient Protection and Affordable Care Act requires citizens over age 18 to obtain health coverage as part of the Obama administration’s goal of near-universal health care. A federal judge in Pensacola, Florida, ruled on Jan. 31 that the mandate exceeded Congress’ power to regulate commerce and invalidated the entire law.

Three other judges in Virginia and Michigan have weighed in on the law -- two affirming its legality and one striking it down in part.

While the Florida lawsuit was filed on behalf of 26 states, all four cases will be on an equal footing at the appellate level as the dispute moves toward the U.S. Supreme Court. Those cases -- from Detroit and Richmond and Lynchburg in Virginia, along with the Florida suit -- will now rise to three-judge panels of the U.S. courts of appeal in Cincinnati, Richmond and Atlanta.

In the interim, states are mulling whether the law remains enforceable and are considering a request for expedited Supreme Court review, Utah Attorney General Mark Shurtleff said yesterday in a phone interview.

Supreme Court

The ruling by U.S. District Judge Roger Vinson in Pensacola left attorneys general questioning how they should handle the law in their states, said Shurtleff, a Republican whose state joined the Florida lawsuit. “The question is: Is the law stayed in the 26 states? That needs to be resolved.”

“We don’t think we can advise that this law is void,” Ohio Attorney General Mike DeWine, a Republican who opposes the act, said yesterday in a phone interview. “It will get resolved fairly quickly with a court decision. I would hope the U.S. Supreme Court would find a way to expedite this.”

While the appeals are pending, the federal government may seek to enforce the health-care law outside of judicial districts where part or all of it has been invalidated. The states involved in the Florida lawsuit discussed their options during a phone conference yesterday, Shurtleff said.

“There is clear and well-established legal precedent that Congress acted within its constitutional authority in passing this law and we are confident that we will ultimately prevail on appeal,” Justice Department spokeswoman Tracy Schmaler said in an e-mailed statement following the Jan. 31 ruling.

Law’s Requirements

The 955-page law bars insurers from denying coverage to people who are sick and from imposing lifetime limits on costs. It includes projects to test ideas such as incentives for better results and bundled payments to medical teams for patient care.

In addition to appealing Vinson’s ruling, the Justice Department is seeking to overturn the Dec. 13 decision by U.S. District Judge Henry Hudson in Richmond, in which he invalidated the purchase requirement.

Vinson, appointed in 1983 by President Ronald Reagan, a Republican, said the mandate for coverage was tied so inextricably to the entire law as to invalidate it in its entirety. Hudson, appointed to the bench in 2002 by President George W. Bush, a Republican, held that the provision was severable from the remainder of the legislation.

Both interpretations clash with a Nov. 30 ruling by U.S. District Judge Norman Moon in Lynchburg, who rejected a challenge to the statute brought by Liberty University. Moon was appointed in 1997 by President Bill Clinton, a Democrat.

Appeal Arguments

The U.S. Court of Appeals for the Fourth Circuit in Richmond is scheduled in May to hear arguments on the rulings by Hudson and Moon. The Obama administration said it will appeal Vinson’s ruling to the U.S. Court of Appeals for the 11th Circuit in Atlanta.

On Oct. 7, U.S. District Judge George Caram Steeh in Detroit rejected a challenge to the health-care law in a case filed by the Ann Arbor, Michigan-based Thomas More Law Center. Steeh was appointed to the bench in 1998 by Clinton.

The center, which opposes the law, is asking the U.S. Court of Appeals for the Sixth Circuit in Cincinnati to overturn Steeh’s ruling.

“I think there’s momentum with the states,” Oklahoma Attorney General Scott Pruitt said in a phone interview. He filed his own challenge to the legislation on Jan. 21 in federal court in Muskogee, Oklahoma. He seeks to have the entire act declared void. “Now we’ve got two separate rulings where the individual mandate has been stricken,” he said.

Law Invalidated

Vinson took the additional step of invalidating the entire measure, Pruitt said.

That decision ought to mean the act is nationally null and void, said Pruitt, a Republican. “Normally that would cause the federal government to cease its enforcement of the law” unless application of the ruling is stayed, he said.

“The attitude out of Washington is that this is not going to happen,” Pruitt said. He said the Obama administration has been “pretty dismissive” of Vinson’s ruling.

The U.S. hasn’t filed a response to Pruitt’s lawsuit.

In a statement yesterday, Wisconsin Attorney General J.B. Van Hollen, a Republican opposed to the law and a participant in the Florida lawsuit, said he doesn’t believe the federal statute needs to be enforced following Vinson’s ruling.

“For Wisconsin, the federal health-care law is dead -- unless and until it is revived by an appellate court,” Van Hollen said. “Wisconsin was relieved of any obligations or duties that were created under terms of the federal health-care law.”

Wisconsin, part of the U.S. Seventh Circuit, isn’t within the federal court districts where the law has been litigated.

Virginia’s Stance

Kenneth Cuccinelli, the Virginia attorney general who won the December ruling finding the mandate unconstitutional, also said the law is no longer in effect.

“Even the things that have gone into effect are no longer in effect,” he said yesterday in a phone interview. “The Constitution means the same thing everywhere.”

Virginia won’t cease enforcement of provisions of the health-care law as a result of Vinson’s decision, he said.

“Why waste time?” he said. The federal government will ask for a stay of Vinson’s order, which the appeals court “likely” will grant, he said.

Florida Attorney General Pam Bondi didn’t immediately respond to an interview request.

Tim Jost, a law professor at the Washington & Lee University in Lexington, Virginia, disputed the conclusions reached by Cuccinelli and Van Hollen.

States ‘Presumptuous’

“The statute has been upheld by two other courts in full and in another court, other than the individual mandate,” Jost said in a phone interview. “It would be presumptuous to say the law is no longer valid and the states are off the hook.”

“I don’t think it’s absolutely clear how far this judgment goes,” Jost said of Vinson’s decision. “I would expect that that’s an issue the Justice Department is trying to get clarified.”

Schmaler, the Justice Department spokeswoman, said the U.S. is still analyzing the ruling and considering what steps, if any, to take pending appeal.

Utah’s Shurtleff said he expects the federal government will file its notice of appeal with the U.S. court in Atlanta and then ask it to block enforcement of Vinson’s decision.

“We’re not going to oppose a stay,” Shurtleff said. “That puts us at ease. That will at least pause it.”

The 26 states’ attorneys general then would file a request for expedited hearing before the Supreme Court, he said.

“We want to get this done,” Shurtleff said.

The cases are State of Florida v. U.S. Department of Health and Human Services, 10-00091, U.S. District Court, Northern District of Florida (Pensacola); Commonwealth of Virginia v. Sebelius, 11-01057, and Liberty University v. Geithner, 10- 02347, U.S. Court of Appeals for the Fourth Circuit (Richmond); Thomas More Law Center v. Obama, 10-02388, U.S. Court of Appeals for the Sixth Circuit (Cincinnati).

To contact the reporters on this story: Andrew M. Harris in Chicago federal court at aharris16@bloomberg.net; Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

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