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Obama Health-Care Law Goes Before Second of at Least Three Appeals Court

The second of at least three appeals courts that will consider whether Congress can compel Americans to buy insurance listened to the Obama administration’s top litigator spar with an attorney for a faith-based legal advocacy group opposed to the health-care reform law.

The three-judge panel in Cincinnati’s federal courthouse listened to and questioned acting U.S. Solicitor General Neal Katyal and Robert Muise, a lawyer for the Thomas More Law Center, about the limits of congressional power.

“This is the outer reaches of Congress’s authority to regulate under the commerce clause,” Muise told the court today as he argued for reversal of last year’s lower-court ruling throwing out his group’s challenge to the Patient Protection and Affordable Care Act.

The legislation, signed into law by President Barack Obama, a Democrat, in March 2010, is intended to create the first near- universal U.S. health-care coverage program by barring insurers from rejecting those who are already sick and from imposing life-time limits on costs.

It also requires almost every American resident to have health insurance starting in 2014 or pay a tax penalty, a mandate that opponents of the act including Muise have argued exceeds the regulatory power allotted to Congress under the Constitution.

Photographer: Joshua Roberts/Pool via Bloomberg

President Barack Obama’s health-care law, including its mandate that most Americans obtain insurance, goes before a U.S. appeals court, the second of at least three such panels that will consider the act’s constitutionality. Close

President Barack Obama’s health-care law, including its mandate that most Americans... Read More

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Photographer: Joshua Roberts/Pool via Bloomberg

President Barack Obama’s health-care law, including its mandate that most Americans obtain insurance, goes before a U.S. appeals court, the second of at least three such panels that will consider the act’s constitutionality.

‘Power Grab’

The Cincinnati panel is the second of three U.S. appellate courts that will consider the merits of the dispute over a five- week span. A U.S. appeals court in Richmond on May 10 heard argument on appeals of two conflicting rulings. Another panel in Atlanta is set to hear the government’s appeal of a federal judge’s Jan. 31 decision to find the entire act invalid.

Muise called the legislative action a “power grab” without precedent adding, “This court should not create it.”

“Congress is regulating the insurance market, something everyone thinks is constitutional,” Katyal countered.

Without the requirement that individuals obtain insurance coverage before they need it, the government can’t require carriers to insure anyone regardless of their state of health, the government’s lawyer said.

U.S. Circuit Judge Jeffrey S. Sutton questioned Muise’s distinction between Congress’s ability to regulate economic activity and whether it can regulate what Muise said was the “inactivity” of those who don’t buy insurance.

“It’s really hard to think of risk as inaction,” Sutton said.

Eating Broccoli

If the congressional mandate is constitutional, Muise replied, “there’s virtually, then, no limit to Congress’s power” to regulate anything from health care to eating broccoli.

Katyal disagreed, telling the court, “I can’t show up at the broccoli store without money and buy broccoli.” In the health care market, people can get those services absent the ability to pay, he said.

“In dealing with the commerce clause,” Katyal said, “the ultimate test is ‘is this affecting commerce?’”

The panel concluded the hearing after listening to the lawyers for 1 1/2 hours and will issue an opinion at a later date.

Three lower-court judges have upheld the legislation, Two have declared it all or partly invalid. Decisions by appeals courts, including the three-judge panel in Cincinnati, may set the stage for review by the U.S. Supreme Court.

Can’t ‘Sit There’

“A ruling that a major act is unconstitutional cannot just sit there,” Harvard Law School Professor Charles Fried said yesterday in a phone interview. “If one court says it’s unconstitutional, it’ll go up.”

The case before the Cincinnati court was filed in 2010 by the Thomas More Law Center, based in Ann Arbor, Michigan. The center says on its website that it advocates Christian values.

U.S. District Judge George Caram Steeh in Detroit last year rejected the group’s arguments that compulsory medical coverage amounts to an unlawful tax.

“Decisions to forgo insurance coverage in preference to attempting to pay for health care out of pocket drive up the costs of insurance,” Steeh said in his Oct. 7 ruling. “The costs of caring for the uninsured who prove unable to pay are shifted to health care providers, to the insured population in the form of higher premiums, to governments and to taxpayers.”

Bachmann, Paul

The Thomas More Law Center’s supporters in the appeals case include the Cato Institute, the Washington Legal Foundation, and Republican U.S. representatives Michele Bachmann of Minnesota and Ron Paul of Texas.

The Cato Institute backs individual liberty and free markets, according to its website. The Washington Legal Foundation, according to its website, supports free enterprise, limited government, individual rights and business civil liberties.

Those backing the Obama administration include Governor Christine Gregoire of Washington, U.S. Representative Nancy Pelosi of California and Senate Majority Leader Harry Reid of Nevada, all Democrats.

The other two appeals court judges hearing the case were Boyce F. Martin Jr., nominated to the federal bench in 1979 by President Jimmy Carter, a Democrat, and U.S. District Judge James Graham, a former chief judge for the Southern District of Ohio. Graham was named to that court by President Ronald Reagan, a Republican, in 1986. Sutton was appointed by Republican President George W. Bush in 2003.

Split Rulings

Besides Steeh, federal judges in Lynchburg, Virginia, and Washington also upheld the act as constitutional. Steeh was nominated to the bench in 1997 by Bill Clinton, a Democrat. Judge Norman Moon in Lynchburg and Judge Gladys Kessler in Washington were also nominated by Clinton.

Judge Henry E. Hudson in Richmond, Virginia, said the act was partly unlawful because of the mandatory insurance requirement. U.S. District Judge C. Roger Vinson in Pensacola, Florida, ruled the entire law invalid because it couldn’t operate without the insurance mandate. Hudson was appointed by Bush while Vinson was selected by Reagan.

The five cases are now working their way through appeals courts.

An appeals court in Atlanta will hear arguments June 8 on Vinson’s decision throwing out the entire act. That case was filed by Bill McCollum, a Republican, when he was Florida’s attorney general. Twenty-five other states joined the suit.

Constitutional Question

“The opponents of the mandate made too much of the fact that they got a couple of the courts to say it was unconstitutional,” said Fried, a former solicitor general, the top U.S. government litigator, under Reagan.

“There were more decisions that went the other way,” he said.

Fried said the law passes constitutional muster and that if all the appeals courts agree, the Supreme Court isn’t required to hear the case. He isn’t involved in any of the lawsuits.

Melvyn Durchslag, a professor of constitutional law at Case Western Reserve University in Cleveland, said the high court will recognize a need for a final resolution of whether the law is constitutional.

“There would be a lot of pressure for the Supreme Court to take this case, simply to move the issue of health care 100 percent out of the legal realm and into the political realm and let the political forces fight it out,” said Durchslag.

The Cincinnati case is Thomas More Law Center v. Obama, 10- 2388, U.S. Court of Appeals for the Sixth Circuit (Cincinnati).

To contact the reporter on this story: Andrew Harris in Chicago at aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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