Obamacare Has Another Rough Day in Court

Obamacare Has Another Rough Day in Court
By David Catron on 6.10.11 @ 6:08AM

The good news, for the government lawyers who on Wednesday defended ObamaCare against a constitutional challenge brought by 26 states, is that the judges of the Atlanta appeals court asked no questions about broccoli. But their good luck appears to have ended there. The three judges who heard the Obama administration's legal justification for the individual mandate peppered acting U.S. Solicitor General Neal Katyal with obviously unsympathetic questions about the government's claim that Congress has the power to order Americans to buy products from private corporations. Katyal, who was assigned the task of defending this proposition by Elena Kagan before she became a Supreme Court justice, produced the familiar administration arguments about the need to force everyone into the system if it is to work.

But the judges did not appear convinced. Chief Judge Joel Dubina pointed out that there is no precedent for the claim that Congress is permitted to impose such a mandate by virtue of the Constitution's commerce clause: "I can't find any case like this.… If we uphold the individual mandate in this case, are there any limits on Congress's power left?" Judge Stanley Marcus was also unequal to the task of finding a precedent for this arrogation of power by the federal government: "I can't find any case… telling a private person they are compelled to purchase a product in the open market.... Is there anything that suggests Congress can do this?" Judge Frank Hull asked whether Congress could pass a similar law requiring Americans to buy certain types of cars or energy-saving devices to comply with federal energy policy.

Judge Hull's question speaks to the issue that U.S. District Judge Roger Vinson, whose decision to strike down ObamaCare last January led to Wednesday's clash in the appeals court, was getting at when he employed the more colorful broccoli metaphor. Judge Vinson asked Ian Gershengorn, the government lawyer charged with defending ObamaCare in his court, "If they decided everybody needs to eat broccoli because broccoli makes us healthy, they could mandate that everybody has to eat broccoli each week?" Gershengorn responded by pointing out the blindingly obvious and irrelevant fact that health care "is not shoes, it is not cars, it is not broccoli." In response to Hull's question, Katyal echoed Gershengorn's claim that the health care market somehow possesses unique qualities that necessitate the mandate.

Inevitably, the question of severability arose during the hearing. A severability clause, you will recall, is language inserted into a piece of legislation to ensure its general viability even if some poorly-thought-out provision is declared invalid in court. Unfortunately for the DOJ lawyers, the Democrats who foisted "reform" on an unreceptive electorate neglected to include a severability clause in ObamaCare. When Judge Hull inquired about the consequences of striking down the mandate while allowing the rest of the law to stand, lawyers for both sides seemed to agree that ObamaCare would unravel without the mandate. Katyal echoed the government's familiar "linchpin" argument. And, arguing for the states, Paul Clement said, "You can't separate out the mandate. We take the position the whole thing falls."

A significant portion of Wednesday's hearing was devoted to a second, more obscure objection raised by the states. They assert that ObamaCare unconstitutionally "commandeers" state resources by arbitrarily increasing the costs of administering Medicaid. As legal scholar Brad Joondeph explains it, "The notion was that the states had agreed to participate in Medicaid with a certain understanding of the program, and ACA had fundamentally changed those terms…" The government claims that the states are not being coerced because they can simply opt out of the program. This would, however, be virtually impossible from a fiscal and political perspective because it would require them to fund Medicaid with no federal help at all or discontinue the program. In other words, the opt-out choice is illusory.

Interestingly, Judge Vinson was unconvinced by the commandeering argument, and most observers expected the Eleventh Circuit to follow his lead on the Medicaid issue. On Wednesday, however, two of the three judges demonstrated no small amount of interest in the position of the states. As Joondeph points out, "Perhaps most tellingly, Judge Marcus asked whether the Medicaid provisions were severable from the rest of ACA." Likewise, Judge Dubina said the states had "a pretty strong argument." Unlike Vinson, Marcus and Dubina have apparently noticed that ObamaCare was designed to herd about 18 million uninsured patients onto Medicaid without providing enough funds to the states to cover the cost. This is, at the very least, an unfunded mandate.

Politically, the judges of the Eleventh Circuit are a mixed bag. Dubina is a Republican appointee, but Hull was appointed by Bill Clinton, as was Judge Marcus. Despite its Democrat appointees, however, this appeals court has a reputation for conservatism. Thus, it is quite possible that they will strike down at least part of ObamaCare. Regardless of which way they rule, the losing side will immediately ask the Supreme Court to take up the case. Assuming the high court deigns to hear the case, it will end up being argued and decided in the midst of the 2012 election cycle. Further complicating matters is the awkward reality that one of the Supreme Court justices, Elena Kagan, was obviously involved in orchestrating the legal defense of ObamaCare. Thus, there will be legitimate calls for her to recuse herself from any case involving that law.

Presumably, the government lawyers who defended ObamaCare on Wednesday would have preferred Wednesday's proceedings go more like the Fourth Circuit hearing involving Virginia's ObamaCare challenge. The Fourth Circuit panel was comprised of judges appointed by President Obama and Bill Clinton. Not surprisingly, they were transparently sympathetic to the government's position. They will almost certainly uphold ObamaCare, including the individual mandate. The judges of the Eleventh Circuit probably won't be so accommodating. They didn't submit Neal Katyal to the indignity of answering questions about broccoli, but they will probably hand him and his superiors in the Obama administration an embarrassing and inconveniently timed defeat.