Federal Court Rejects Two Challenges To Health Law

Published: September 08, 2011

by Scott Hensley

In a win for the administration, a federal appeals court in Virginia tossed two lawsuits challenging the constitutionality of the sweeping law overhauling the health care system.

A three-judge panel of the 4th U.S. Circuit Court of Appeals dismissed cases brought by Virginia Attorney General Kenneth Cuccinelli and Liberty University in Lynchburg, Va.

So, it's a victory, yes, but the judges didn't get down to the nub of the matter: Is the law's requirement that people get health coverage or pay a penalty constitutional? Ultimately, the Supreme Court is going to have sort that out.

Nevertheless, the 4th Circuit, based in Richmond, is the second of three federal appeals courts to turn back challenges to the law. The 6th Circuit in Cincinnati ruled in favor of the law in June. A panel of the 11th Circuit in Atlanta heard the appeal of a lower court ruling against the constitutionality of the mandate and largely agreed with it, dealing a blow to the administration.

Virginia Attorney General Cuccinelli had argued that the insurance mandate violated a state law prohibiting such a requirement on Virginians. The 4th Circuit panel didn't buy it, writing, in part, "the mere existence of a state law like [Virginia's] does not license a state to mount a judicial challenge to any federal statute with which the state law assertedly conflicts." (Read the full decision here.) The three judges unanimously ruled against Virginia.

In the case brought by Liberty University, the two of three judges on the panel agree that the penalty for those who don't have health insurance constitutes a tax. That means lawsuits filed in advance of its collection are barred by a separate federal law. They're the first judges at any level to accept that argument, which the Obama administration has been making from the start.

"We have three different courts of appeals issuing three different ruling on three different bases," says Randy Barnett, a law professor at Georgetown and attorney for the National Federation of Independent Business, which opposes the law. "One of which held the statute was unconstitutional, one of which held that it was constitutional, and one of which held that the federal court lacks jurisdiction to figure out whether it's constitutional or not. If that doesn't cry out for Supreme Court resolution, I don't know what does," he tells NPR's Julie Rovner. [Copyright 2013 NPR]

TRANSCRIPT:

MELISSA BLOCK, host: The Obama administration won two legal victories today in the ongoing battle over the federal health care law. The 4th Circuit Court of Appeals first ruled that Virginia Attorney General Ken Cuccinelli could not sue the federal government to block the 2010 law. It also threw out a second case challenging the law's requirement that all people have health insurance by 2014. NPR's Julie Rovner has this report.

JULIE ROVNER: Cuccinelli helped spearhead a Virginia state law exempting its citizens from the new federal requirement that they either have health insurance in 2014 or pay a penalty. Then, he turned around and used that law to sue the federal government, calling the federal insurance mandate unconstitutional. A lower court judge agreed with Cuccinelli last December, but today, the appeals court disagreed strongly.

IAN MILLHISER: They smacked him, and they smacked him hard.

ROVNER: Ian Millhiser is a constitutional lawyer with the Center for American Progress and a supporter of the health law. He says the court ruled that Virginia lacked legal standing to sue because state law can't trump federal law.

MILLHISER: And they were very direct and at times very brutal in their language saying that, no, Mr. Cuccinelli, you cannot get into court this way.

ROVNER: Cuccinelli issued a statement vowing to appeal the ruling. Meanwhile, the three-judge panel also dismissed a second case, this one brought by Liberty University, the Lynchburg, Virginia institution originally founded by Jerry Falwell. But this time, the judges split. They ruled that the penalty for not having health insurance is a tax, and, says Millhiser, if that penalty is in fact a tax, there's a federal law that bars the filing of lawsuits at least for now.

MILLHISER: You are not allowed to sue the government to prevent it from collecting a tax from you, but you are allowed to sue after you pay the tax in order to get the money back.

ROVNER: That, said two of the three judges, means they couldn't even rule on the merits of the lawsuit. A third judge disagreed. He said he would have upheld the law's constitutionality if he could have. All three judges on the panel were appointed by Democratic presidents.

But while the dismissal of the Virginia state case wasn't a complete surprise, their finding that the penalty was the tax was. That's because the Obama administration made that claim in all of the dozens of cases it argued and not very successfully. That amused people like Randy Barnett. He's a law professor at Georgetown University.

RANDY BARNETT: I mean, I have to tell you that law professors love the tax argument. So I was getting a good deal of mileage and having a good deal of fun tweaking them with the fact that they may love it but no federal judge has ever agreed with them. Well, I can't say that anymore.

ROVNER: Barnett is one of the attorneys arguing that the law is unconstitutional. He thinks it's clearer than ever that the case needs to be heard by the Supreme Court, and heard soon.

BARNETT: We have three different courts of appeals issuing three different rulings on three different bases, one of which held that the statute was unconstitutional, one of which held that it was constitutional and one of which held that the federal courts lacks jurisdiction to figure out whether it's constitutional or not. If that doesn't cry out for Supreme Court resolution, I don't know what does.

ROVNER: And while these two cases from Virginia have both been dismissed, making it unlikely that they'll be the ones used to determine the constitutionality of the health law, Ian Millhiser says they could still play an important role at the high court.

MILLHISER: The conservative justices on the Supreme Court tend to be very sympathetic to argument that the court's power is narrow, that there should be limited jurisdiction in all cases. And for that reason, I think that this opinion saying that there's no jurisdiction here could wind up influencing one or more of the conservatives on the bench.

ROVNER: And he says if only one conservative justice thinks the court lacks jurisdiction to decide the constitutionality of the law, that could end up preserving it. Meanwhile, one more case challenging the health law is set to be heard by an appeals court in Washington, D.C., this fall. Julie Rovner, NPR News, Washington. Transcript provided by NPR, Copyright NPR.