Oct. 18 (Bloomberg) -- A federal judge in Virginia said he’ll rule by yearend whether President Barack Obama’s health-care overhaul is constitutional, adding that his decision will be a “brief stop” in the case on its way to the Supreme Court.
U.S. District Judge Henry E. Hudson in Richmond, Virginia, heard arguments today over whether the law’s requirement for individuals to buy health insurance is overreaching by Congress. Justice Department lawyers have argued that failure to have health insurance is an active decision with broad economic effects that can be regulated by the government.
Already, a U.S. judge in Michigan has found the law falls within the framework of the Constitution, while a federal judge in Florida last week, in allowing a case in Pensacola to proceed, said it’s not even a “close call” that Congress may have overstepped its bounds.
“This court is just one brief stop on the way to the Supreme Court,” Hudson said at the close of 2 1/2 hours of arguments today.
Hudson acknowledged that any decision will be quickly appealed to the 4th U.S. Circuit Court of Appeals in Richmond. With courts in Michigan and Florida appealing, the conflicting decisions could improve the chances the high court would review the case.
“I don’t know how it will all come out,” said Carl Tobias, a professor at the University of Richmond School of Law. “There’s likely to be some differences -- the Supreme Court will have to decide if there are differences that need to be reviewed.”
Right to Sue
Hudson in August had given approval for Virginia’s suit to move ahead, rejecting the federal government’s arguments that the state had no right to sue. Virginia said the requirement to buy insurance exceeds Congress’s powers regulate interstate commerce.
In that decision, he said there is authority supporting each side’s arguments and noted the U.S. Supreme Court hasn’t squarely addressed the issue.
Virginia and Florida each filed lawsuits within minutes of Obama signing the bill on March 23. The following day, Governor Bob McDonnell signed legislation making it illegal to force the state’s residents to buy health insurance. Florida’s suit represents 19 other states.
The law is “unprecedented, unlimited and unsupportable in any serious regime of delegated, enumerated powers,” Duncan Getchell, an attorney for Virginia, told Hudson.
Virginia claims in its lawsuit that the federal mandate to buy health insurance goes beyond Congress’s authority. The U.S. said the provision is allowed under its power to regulate commerce because of the $43 billion in unpaid medical bills absorbed by the market each year.
Hudson pressed U.S. Attorney Ian Gershengorn over whether the federal government should be allowed to force people to enter a market or whether choosing not to buy health insurance is actively participating in commerce and can be governed by the Constitution.
“It’s absolutely not passivity,” Gershengorn said. “They are in the market, they are using those health-care services.”
The parties disagreed whether the law is based on a tax or another penalty, with the U.S. lawyers arguing it was a tax, which allows federal oversight. Gershengorn said it was a tax, and not a punishment, while Hudson questioned why lawmakers publicly denied there was a tax involved.
‘Without Prior Precedent’
“They denied it was a tax,” Hudson said. “Was the president trying to deceive the people?”
U.S. District Judge Roger Vinson in Pensacola last week allowed that case to proceed, finding the government’s expansion of powers is “simply without prior precedent.” He also allowed Florida to proceed on its claim that Medicaid would be expanded dramatically and the states cannot realistically opt out. He threw out Florida’s claim that the law interferes with the state’s sovereignty as an employer and the mandate for individuals to get coverage violates the right to due process of law.
Further arguments on the merits of the lawsuit have been scheduled by Vinson for Dec. 16.
Vinson’s decision countered a U.S. judge in Michigan who on Oct. 7 upheld the constitutionality of the health-care overhaul, rejecting an argument by a self-described Christian law center in what was the first court victory for the new law. The ruling denied the Thomas More Law Center’s request for an injunction and said the group failed to prove the statute is unconstitutional under the Commerce Clause.
Lawyers for the U.S. said Congress has a right to regulate people who hurt the economy when they become sick or injured and seek health care without insurance. Because the federal government covers some costs of the uninsured, it has authority to require them to get health coverage even if they don’t want it, the lawyers said.
Virginia said the law’s purpose is to ensure that people buy health-care coverage and not to raise revenue. That means it shouldn’t be classified as a tax, and that puts it outside the realm of Congress’s recognized power to tax and spend, the state’s lawyers argue.
The U.S. said the law is within Congress’s authority to tax and to regulate interstate commerce. The possibility of people being unable to pay medical bills is sufficient to draw a link to their insurance coverage and those powers, the federal government said.
Even knowing the case will ultimately be decided by higher courts, Hudson is likely to take his time with a decision. With the first decision on the merits in a precedent setting case, Hudson knows his ruling will be closely watched.
“It may give a judge pause, a judge may be cautious,” said Tobias. “He has to be diligent. That’s what makes it lonely when you’re a district judge.”
The case is Commonwealth of Virginia v. Sebelius, 10-cv-00188, U.S. District Court, Eastern District of Virginia (Richmond).
To contact the reporter on this story: William McQuillen in Richmond, Virginia, at firstname.lastname@example.org.
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