<B><I>BREAKING NEWS:</b></i> <b>Eleventh Circuit Strikes Down Individual Mandate</b>

The Eleventh U.S. Circuit Court of Appeals on Aug. 12 gave a partial victory to challengers of the 2010 federal health care overhaul, finding unconstitutional the part of the law that requires individuals to obtain health insurance but upholding the rest of the statute.

The ruling evens the score in the federal appeals courts' consideration of the health care statute. The Sixth Circuit, the only other circuit to have ruled on the law to date, rejected the challenge to the individual mandate in August.

The decision on the individual mandate, which requires most Americans to maintain a minimum level of health insurance coverage or pay a penalty, is a win for the 26 states (including Georgia), a group of small business owners and two individuals that challenged the law. But the challengers couldn't convince the court to toss the part of the law that expanded eligibility for Medicaid. And, despite the federal government's insistence that the portions of the law that required insurance companies to provide coverage regardless of pre-existing conditions were tied to the minimum coverage provision's fate, the panel majority said those parts of the law could survive, as well.

Eleventh Circuit Chief Judge Joel F. Dubina and Judge Frank M. Hull co-wrote the gargantuan 207-page opinion that declared the individual mandate exceeds Congress' Commerce Clause powers, with Judge Stanley Marcus dissenting from that crucial part of the decision in his own 97-page opus.

Dubina and Hull found the individual mandate 'breathtaking' in scope. 'It regulates those who have not entered the health care market at all,' they wrote. 'It regulates those who have entered the health care market, but have not entered the insurance market (and have no intention of doing so). It is overinclusive in when it regulates: it conflates those who presently consume health care with those who will not consume health care for many years into the future. The government's position amounts to an argument that the mere fact of an individual's existence substantially affects interstate commerce, and therefore Congress may regulate them at every point of their life. This theory affords no limiting principles in which to confine Congress's enumerated power.'

Dubina and Hull rejected the federal government's argument that the minimum coverage requirement was constitutional because it was a necessary part of the government's broader scheme of regulation over the insurance and health care industries. The mandate isn't necessary to securing insurance companies' compliance with the new regulations promulgated by the 2010 act, wrote the majority, but at best serves to counteract the new costs imposed on insurers by the statute. 'That may be a relevant political consideration,' wrote the majority, 'but it does not convert an unconstitutional regulation (of an individual's decision to forego purchasing an expensive product) into a constitutional means to ameliorate adverse cost consequences on private insurance companies engendered by Congress's broader regulatory reform of their health insurance products.'

The majority also rejected the notion that the mandate could be justified under Congress' taxing power, a conclusion joined by Marcus.

Unlike the district judge who heard the case, Senior Judge Roger Vinson of Pensacola, FL, Dubina and Hull wrote that their conclusion the individual mandate was unconstitutional did not mean that the entire 975-page act was invalid. Most of the act has nothing to do with private insurance, let alone the mandate that individuals buy insurance, they wrote, citing provisions such as those establishing reasonable workplace break time for nursing mothers and imposing a tax on indoor tanning salons. The majority said the individual mandate could even be severed from the act's regulations on insurance companies, such that those regulations could survive, saying that while the invalidation of the individual mandate may make the those regulations less desirable, it wasn't clear that Congress wouldn't have enacted those reforms in the absence of the individual mandate.

Marcus' dissent on the question of whether Congress could enact the individual mandate under its Commerce Clause power noted that both the plaintiffs and his colleagues in the majority had conceded that Congress could compel individuals to obtain insurance as a condition to receiving health care service. 'In other words, Congress must wait until each component transaction underlying the costshifting problem occurs, causing huge increases in costs both for those who have health care insurance and for health care providers, before it may constitutionally act,' wrote Marcus. 'I can find nothing in logic or law that so circumscribes Congress' commerce power and yields so anomalous a result.

'Although it is surely true that there is no Supreme Court decision squarely on point dictating the result that the individual mandate is within the commerce power of Congress, the rationale embodied in the Court's Commerce Clause decisions over more than 75 years makes clear that this legislation falls within Congress' interstate commerce power,' Marcus continued. 'These decisions instruct us to ask whether the target of the regulation is economic in nature and whether Congress had a rational basis to conclude that the regulated conduct has a substantial effect on interstate commerce. It cannot be denied that Congress has promulgated a rule by which to comprehensively regulate the timing and means of payment for the virtually inevitable consumption of health care services. Nor can it be denied that the consumption of health care services by the uninsured has a very substantial impact on interstate commerce ' the shifting of substantial costs from those who do not pay to those who do and to the providers who offer care.'

The breakdown of the Eleventh Circuit's panel in the case underscores that the party of a judge's appointing president is not a perfect predictor of the judge's assessment of the health care act. The Sixth Circuit decision upholding the law was written by Judge Jeffrey S. Sutton, an appointee of President George W. Bush with strong conservative credentials. Dubina was appointed by President George H.W. Bush. Both Marcus and Hull were nominated to the Eleventh Circuit by Bill Clinton, but Marcus received both his U.S. attorney and district court posts courtesy of Ronald Reagan.

Former U.S. Solicitor General Paul D. Clement and Michael A. Carvin of Jones Day's Washington office handled the June argument for the challengers to the law. Clement, now with the Washington boutique firm Bancroft, left King & Spalding in April over the firm's decision to drop representation of the U.S. House in its defense of the Defense of Marriage Act.

Georgia Gov. Nathan Deal and Attorney General Sam Olens issued a joint statement praising the decision as a 'huge step toward victory,' saying it 'recognizes the core principles of our federalist system and reminds an over-reaching federal government that the Constitution applies to it, too.'

'Unlike the Eleventh Circuit, we believe that the Obama administration should be taken at its word that the individual mandate is crucial to the whole bill, and that the whole bill should be struck down,' the two Georgia leaders said in their statement. 'But this much is certain: Federal healthcare reform is on life support, and this case will be decided by the Supreme Court of the United States.'

In a statement on the ruling, the Justice Department noted the Sixth Circuit's decision and said it strongly disagreed with the latest ruling. The department, which was represented at oral argument by then-Acting U.S. Solicitor General Neal Kumar Katyal, said it was 'considering the next appropriate steps.'

The Eleventh U.S. Circuit Court of Appeals on Aug. 12 gave a partial victory to challengers of the 2010 federal health care overhaul, finding unconstitutional the part of the law that requires individuals to obtain health insurance but upholding the rest of the statute.

The ruling evens the score in the federal appeals courts' consideration of the health care statute. The Sixth Circuit, the only other circuit to have ruled on the law to date, rejected the challenge to the individual mandate in August.

The decision on the individual mandate, which requires most Americans to maintain a minimum level of health insurance coverage or pay a penalty, is a win for the 26 states (including Georgia), a group of small business owners and two individuals that challenged the law. But the challengers couldn't convince the court to toss the part of the law that expanded eligibility for Medicaid. And, despite the federal government's insistence that the portions of the law that required insurance companies to provide coverage regardless of pre-existing conditions were tied to the minimum coverage provision's fate, the panel majority said those parts of the law could survive, as well.

Eleventh Circuit Chief Judge Joel F. Dubina and Judge Frank M. Hull co-wrote the gargantuan 207-page opinion that declared the individual mandate exceeds Congress' Commerce Clause powers, with Judge Stanley Marcus dissenting from that crucial part of the decision in his own 97-page opus.

Dubina and Hull found the individual mandate 'breathtaking' in scope. 'It regulates those who have not entered the health care market at all,' they wrote. 'It regulates those who have entered the health care market, but have not entered the insurance market (and have no intention of doing so). It is overinclusive in when it regulates: it conflates those who presently consume health care with those who will not consume health care for many years into the future. The government's position amounts to an argument that the mere fact of an individual's existence substantially affects interstate commerce, and therefore Congress may regulate them at every point of their life. This theory affords no limiting principles in which to confine Congress's enumerated power.'

Dubina and Hull rejected the federal government's argument that the minimum coverage requirement was constitutional because it was a necessary part of the government's broader scheme of regulation over the insurance and health care industries. The mandate isn't necessary to securing insurance companies' compliance with the new regulations promulgated by the 2010 act, wrote the majority, but at best serves to counteract the new costs imposed on insurers by the statute. 'That may be a relevant political consideration,' wrote the majority, 'but it does not convert an unconstitutional regulation (of an individual's decision to forego purchasing an expensive product) into a constitutional means to ameliorate adverse cost consequences on private insurance companies engendered by Congress's broader regulatory reform of their health insurance products.'

The majority also rejected the notion that the mandate could be justified under Congress' taxing power, a conclusion joined by Marcus.

Unlike the district judge who heard the case, Senior Judge Roger Vinson of Pensacola, FL, Dubina and Hull wrote that their conclusion the individual mandate was unconstitutional did not mean that the entire 975-page act was invalid. Most of the act has nothing to do with private insurance, let alone the mandate that individuals buy insurance, they wrote, citing provisions such as those establishing reasonable workplace break time for nursing mothers and imposing a tax on indoor tanning salons. The majority said the individual mandate could even be severed from the act's regulations on insurance companies, such that those regulations could survive, saying that while the invalidation of the individual mandate may make the those regulations less desirable, it wasn't clear that Congress wouldn't have enacted those reforms in the absence of the individual mandate.

Marcus' dissent on the question of whether Congress could enact the individual mandate under its Commerce Clause power noted that both the plaintiffs and his colleagues in the majority had conceded that Congress could compel individuals to obtain insurance as a condition to receiving health care service. 'In other words, Congress must wait until each component transaction underlying the costshifting problem occurs, causing huge increases in costs both for those who have health care insurance and for health care providers, before it may constitutionally act,' wrote Marcus. 'I can find nothing in logic or law that so circumscribes Congress' commerce power and yields so anomalous a result.

'Although it is surely true that there is no Supreme Court decision squarely on point dictating the result that the individual mandate is within the commerce power of Congress, the rationale embodied in the Court's Commerce Clause decisions over more than 75 years makes clear that this legislation falls within Congress' interstate commerce power,' Marcus continued. 'These decisions instruct us to ask whether the target of the regulation is economic in nature and whether Congress had a rational basis to conclude that the regulated conduct has a substantial effect on interstate commerce. It cannot be denied that Congress has promulgated a rule by which to comprehensively regulate the timing and means of payment for the virtually inevitable consumption of health care services. Nor can it be denied that the consumption of health care services by the uninsured has a very substantial impact on interstate commerce ' the shifting of substantial costs from those who do not pay to those who do and to the providers who offer care.'

The breakdown of the Eleventh Circuit's panel in the case underscores that the party of a judge's appointing president is not a perfect predictor of the judge's assessment of the health care act. The Sixth Circuit decision upholding the law was written by Judge Jeffrey S. Sutton, an appointee of President George W. Bush with strong conservative credentials. Dubina was appointed by President George H.W. Bush. Both Marcus and Hull were nominated to the Eleventh Circuit by Bill Clinton, but Marcus received both his U.S. attorney and district court posts courtesy of Ronald Reagan.

Former U.S. Solicitor General Paul D. Clement and Michael A. Carvin of Jones Day's Washington office handled the June argument for the challengers to the law. Clement, now with the Washington boutique firm Bancroft, left King & Spalding in April over the firm's decision to drop representation of the U.S. House in its defense of the Defense of Marriage Act.

Georgia Gov. Nathan Deal and Attorney General Sam Olens issued a joint statement praising the decision as a 'huge step toward victory,' saying it 'recognizes the core principles of our federalist system and reminds an over-reaching federal government that the Constitution applies to it, too.'

'Unlike the Eleventh Circuit, we believe that the Obama administration should be taken at its word that the individual mandate is crucial to the whole bill, and that the whole bill should be struck down,' the two Georgia leaders said in their statement. 'But this much is certain: Federal healthcare reform is on life support, and this case will be decided by the Supreme Court of the United States.'

In a statement on the ruling, the Justice Department noted the Sixth Circuit's decision and said it strongly disagreed with the latest ruling. The department, which was represented at oral argument by then-Acting U.S. Solicitor General Neal Kumar Katyal, said it was 'considering the next appropriate steps.'