Health-Care Ruling May Delay High Court's Final Answer

A federal appeals court decision cast doubt on the prospect that the U.S. Supreme Court will rule on the constitutionality of President Barack Obama’s health-care overhaul before the 2012 elections.

The three-judge panel said yesterday it didn’t yet have the power to consider a challenge to the law’s requirement that Americans, by 2014, either acquire health insurance or pay a penalty. The court ruled that judicial review must wait for the assessment of a fine -- something that wouldn’t occur until the following year.

The health-care law, which has divided courts around the country, was already in line for possible Supreme Court review early next year, with a ruling likely in June. Yesterday’s ruling adds a new legal wrinkle, raising a procedural issue that might delay the ultimate outcome.

“It’s still the case that we will get some decision from the United States Supreme Court the last week of this coming June,” said Walter Dellinger, the former U.S. solicitor general who filed a brief backing the law on behalf of congressional Democrats. “But it is possible that ruling could be that no one has the right to challenge this law until they’ve declined to pay the penalty or sought a refund.”

Three federal appeals courts have now considered the law, each reaching a different conclusion. A Cincinnati-based appeals court upheld the law in June, calling it a valid use of Congress’s power to regulate interstate commerce. An appeal in that case is now before the Supreme Court.

26 States

An Atlanta-based court then disagreed, upholding arguments by 26 states that Congress had exceeded its power under the commerce clause. The Justice Department is scheduled to say by the end of the month whether it will seek Supreme Court review of that ruling or instead ask a larger panel of appellate judges to reconsider.

The latest ruling, from the 4th U.S. Circuit Court of Appeals in Richmond, Virginia, takes a third approach. The panel focused on a law, known as the Anti-Injunction Act, barring lawsuits that seek to block the collection of federal taxes. The measure says that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person.”

Writing for herself and one other panel member, Judge Diana Gribbon Motz, said the law meant the court couldn’t hear a suit filed by Liberty University, a Christian school in Lynchburg, Virginia, founded by the late Rev. Jerry Falwell.

“This expansive language leaves no room for a court to carve out exceptions based on the policy ramifications of a particular pre-enforcement challenge,” she wrote.

‘Another Victory’

Motz rejected arguments from Liberty and the Justice Department, which had contended that the Anti-Injunction Act shouldn’t stop the suit from going forward. The White House nonetheless claimed victory after the ruling.

“This decision is another victory for the Affordable Care Act and the tens of millions of Americans already benefiting from this landmark law,” Stephanie Cutter, assistant to the president and deputy senior adviser, said in a White House blog post.

Cutter pointed to statements by two judges that they would have upheld the law had the court ruled on the merits. The appeals court threw out a separate lawsuit, filed by Virginia Attorney General Ken Cuccinelli, on different grounds.

The ruling put the 4th Circuit at odds with the Cincinnati- based 6th Circuit, which said the Anti-Injunction Act didn’t apply. Before yesterday’s ruling, all nine federal judges to consider the issue had concluded they could address the merits of the health-care law, according to Judge Andre Davis, who dissented from Motz’s ruling.

‘Astounding’ Decision

Mathew Staver, dean of the Liberty University School of Law called the outcome “astounding,” and said the school will seek Supreme Court review. “I think this is a case that would clearly be reversed,” he said in an interview.

The high court will have to resolve the Anti-Injunction Act matter even if the Justice Department doesn’t press the issue. Under longstanding Supreme Court precedents, federal courts have an independent obligation to determine whether they have jurisdiction.

Although Motz said yesterday that the law might not restrict state suits against the health care law, those challenges face their own separate procedural questions.

The issue is an obstacle for foes of the law, said Tom Goldstein, an appellate lawyer in Bethesda, Maryland, whose Scotusblog website tracks the high court.

‘Front and Center’

“Even if it only costs the plaintiffs a vote, it’s not a vote that they really have to lose,” said Goldstein, who filed a brief supporting the law on behalf of AARP, an advocacy group for senior citizens. “When the government gave up on this argument, it seemed to fade, but now it will be back front and center.”

Ilya Shapiro, a senior fellow at the libertarian Cato Institute in Washington and an opponent of the health-care measure, said the Anti-Injunction Act might give the high court a way to leave the law intact, at least for the time being, without endorsing an expansion of federal power.

“I think it’s more likely to do that than to rule for the individual mandate on the merits,” he said.

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net.

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net.

Bloomberg reserves the right to edit or 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.