Bloomberg News

Health-Care Law Must Stand, U.S. Says in Third Appeal Argument

June 08, 2011

June 8 (Bloomberg) -- Lawyers for the Obama administration are scheduled to ask a third federal appeals court to uphold a 2010 health-care law in what may be the final legal battle over the statute before it reaches the U.S. Supreme Court.

In oral arguments today, the government will ask a three- judge panel of the U.S. Court of Appeals in Atlanta to reverse a lower-court ruling that struck down President Barack Obama’s health-care legislation. Similar panels in Richmond, Virginia, and Cincinnati have heard challenges to the law over the past five weeks as individual lawsuits work their way through the federal courts.

At issue is a provision of the Patient Protection and Affordable Care Act that requires most Americans to have health insurance starting in 2014. Opponents argue Congress has exceeded its power to regulate commerce in mandating consumers enter the health-care marketplace. In the Atlanta case, the appeals court will be the first to review a ruling that threw out the entire act due to the coverage mandate.

“This case is really kind of the national litigation,” University of Cincinnati law professor A. Christopher Bryant said in a telephone interview. It’s “the obvious one to go all the way” to the U.S. Supreme Court.

Twenty-five states joined the lawsuit filed last year by then-Florida Attorney General Bill McCollum, a Republican. The suit, along with a separate case by Virginia Attorney General Kenneth Cuccinelli, also a Republican, was filed March 23, 2010, the same day Obama, a Democrat, signed the measure into law.

Party Lines

Decisions by the lower courts have broken entirely along party lines, with federal judges appointed by Republican presidents ruling against the law, and those appointed by Democratic presidents upholding it.

Of the two appeals panels that have heard challenges to the law so far, the Cincinnati-based court had two Republican appointees and one Democratic appointee, while the Richmond- based panel included three judges appointed by a Democrat.

Of the three judges on the Atlanta panel, one was appointed by Democratic president and two by a Republican.

The health-care act bars insurers from denying coverage to people who are sick and from imposing lifetime limits on costs. It also requires almost all Americans over age 18 to obtain coverage.

The U.S. has said that the mandatory-coverage provision is the linchpin of the statute because it will add many younger and healthier people to the pool of the insured population, making the program viable for insurers.

Act Invalidated

U.S. District Judge C. Roger Vinson in Pensacola, Florida, on Jan. 31 found that provision was unconstitutional. Then, concluding that the mandate was integral to the remainder of the legislation, he invalidated the entire act.

“Regardless of how laudable its attempts may have been to accomplish these goals in passing the act, Congress must operate within the bounds established by the Constitution,” wrote Vinson, 71, who was appointed to the federal bench by Republican President Ronald Reagan in 1983.

In the immediate aftermath of Vinson’s ruling, officials from some of the states involved in the litigation, including Wisconsin and Alaska, said the act was inoperative in their states, though they are outside Vinson’s jurisdiction.

Vinson, responding to a U.S. request to clarify his decision, on March 3 issued a delay of its enforcement, saying “the sooner this issue is finally decided by the Supreme Court, the better off the entire nation will be.”

‘Bit of Conflict’

If the act is deemed invalid in some parts of the U.S. and not others, “that’s quite a bit of conflict,” said Northbrook, Illinois-based health-care industry attorney Miles Zaremski, a former chairman of the American Bar Association Special Committee on Professional Medical Liability and past president of the American College of Legal Medicine. “The Supreme Court will probably want to jump in and take that case.”

The Supreme Court, while favoring appeals on issues where the intermediate federal courts clash, may still decide to hear a case even if they are in agreement.

“The mandate is the heart of the legislation,” said Zaremski, who isn’t involved in the litigation. “If you excise the heart, the body doesn’t live.”

He added: “The Supreme Court would want to take the case and make a decision, a final decision so that we can go forward.”

Vulnerable to Reversal

Bryant, the Cincinnati law school professor, said the sweep of Vinson’s decision makes it vulnerable to reversal.

“This is such a huge act and there are so many pieces to it,” he said. “To bring it all down is a dramatic judicial intervention into politics.”

The U.S. Court of Appeals in Richmond on May 10 heard the Obama Administration’s challenge to a lower court ruling that sided with Virginia Attorney General Cuccinelli. The U.S. district court judge struck down the individual mandate as unconstitutional while leaving the rest of the act standing.

The appeals panel simultaneously heard an appeal by Lynchburg, Virginia-based Liberty University, which sought to reverse another judge’s dismissal of its challenge to the law.

“All the cases that are deciding the individual mandate are basically deciding the same question,” said Georgetown University law professor Randy Barnett, an attorney for the National Federation of Independent Business, a Nashville, Tennessee-based advocacy group that is a co-plaintiff with the 26 states in the Atlanta case. “If any court strikes the mandate down, that will be as significant as any other one.”

Opposing the Law

Barnett has filed papers -- so-called friend-of-the-court briefs -- opposing the law in the Richmond and Cincinnati cases.

A three-judge panel in Cincinnati last week heard arguments on a bid by the Ann Arbor, Michigan-based Thomas More Law Center to reverse a lower court decision upholding the health-care act.

Neither the Cincinnati nor the Richmond appellate courts have issued rulings in their respective cases.

Hearing the Atlanta case will be Chief U.S. Circuit Judge Joel F. Dubina, nominated to the federal bench by Reagan in 1986. Sitting with him will be U.S. Circuit Judge Frank M. Hull, a 1994 nominee of President Bill Clinton, and U.S. Circuit Judge Stanley Marcus, who was selected by Reagan in 1985.

Ron Pollack, executive director of the Washington health- care advocacy group Families USA, called Vinson’s ruling “an outlier,” adding, “I don’t think any court will go anywhere close to the scope of relief he offered.”

Defended Aspects

Pollack’s organization also has filed friend-of-the-court briefs in each case in which it defended aspects of the Obama legislation.

Like Barnett, Pollack said the issue of whether Congress exceeded its legislative powers under the commerce clause is pivotal for the Atlanta panel and for the other appeals courts.

“The mandate is so integrally related to the funding of the entire mechanism,” said Zaremski, the health-care industry lawyer, because it makes it more possible for health insurers to be able to afford to insure any applicant, as they must do under the act.

“If the mandate is unconstitutional, the rest of the act can’t survive,” he said. “Without the mandate, the insurance industry would say, ‘we can’t afford to do this.’”

The case is State of Florida v. U.S. Department of Health and Human Services, 11-11021, U.S. Circuit Court of Appeals for the Eleventh Circuit (Atlanta).

--Editors: Glenn Holdcraft, David E. Rovella

To contact the reporter on this story: Andrew Harris at the U.S. Court of Appeals for the Eleventh Circuit in Atlanta at aharris16@bloomberg.net.

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


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