<b><i>BREAKING NEWS:</b></i> Supreme Court Upholds Health Care Law

In a stunning victory for the Obama administration, the U.S. Supreme Court on June 29 upheld the centerpiece of the nation's new health care law ' the so-called individual mandate to buy insurance ' as a constitutional exercise of Congress' taxing authority.

Chief Justice John Roberts Jr., who wrote the Court's opinion, secured the majority on the tax issue by joining with his more liberal colleagues ' justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan. (Find the full opinion at www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf.)

The Court also ruled that the Affordable Care Act's major expansion of the federal-state Medicaid program unconstitutionally coerced the states. The coercion was in the federal government's threat to withhold all of its existing Medicaid funds to states that failed to participate. But instead of striking down the program expansion, the court held only that the federal government could not withhold those funds. States now can decide whether to participate in the expansion.

Four justices ' Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito Jr. ' would have struck down the entire law.

Roberts opened the morning and final session of the term before a packed courtroom. Outside of the building, a line of visitors stretched from the front plaza across the street to the Library of Congress. A large group of supporters and opponents rallied on the sidewalk.

As the solicitor general of the United States and the other lawyers in that office sat at the lawyers' table directly below the bench, Roberts began his summary of the health care decision by tackling what had been the government's primary argument in defense of the law: Congress' authority under the commerce clause.

'As expansive as our cases construing the scope of the commerce power have been, they all have one thing in common: They uniformly describe the power as reaching 'activity,' ' he wrote in his opinion. 'The individual mandate, however, does not regulate existing commercial activity. It instead compels individuals to become active in commerce by purchasing a product on the ground that their failure to do so affects interstate commerce.'

Roberts and his four conservative colleagues rejected the government's commerce clause argument, saying it would open a new and potentially vast domain to congressional authority. Roberts also said the mandate could not be upheld under the necessary-and-proper clause, explaining that even if the mandate were necessary to achieve the insurance reforms in the act, this expansion of federal power was not a proper means for making the reforms effective.

Roberts then turned to the taxing power argument, noting that if a law has two possible meanings, one of which violates the Constitution, courts should adopt the one that does not. He said the penalty for not purchasing minimum insurance functioned as a tax: It is collected by the Internal Revenue Service; there is no punitive sanction, such as criminal punishment; and it will raise revenue.

'The Affordable Care Act's requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax,' Roberts wrote. 'Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.'

The majority's reliance on the taxing power was somewhat surprising, because the government as well as numerous legal scholars and commentators across the political spectrum had focused most of their arguments on whether the individual mandate was a valid exercise of Congress' commerce clause power. The government, however, did argue forcefully in the Supreme Court that the taxing power was another valid basis for the law.

On the Medicaid issue, Roberts wrote that the financial inducement that Congress chose to get states to participate is 'a gun to the head.' He said the threatened loss of more than 10% of a state's overall budget is 'economic dragooning that leaves the states with no real option but to acquiesce in the Medicaid expansion.'

When Roberts finished his summary, Kennedy read a summary of the joint dissent. The act, he said, exceeds federal power both in mandating the purchase of insurance and in denying nonconsenting states all Medicaid funding. Because those parts are central to the act, he said, it followed that all of the must fall. Kennedy said the Court had abandoned judicial modesty and engaged in 'judicial overreaching.'

Ginsburg wrote separately and also summarized her opinion, saying she would have upheld the mandate on commerce clause grounds and the Medicaid expansion exactly as Congress enacted it. She called Roberts' commerce clause analysis 'a stunning setback' that should not have staying power. And the Medicaid expansion, she said, is funded almost entirely by the federal government, 'hardly something that states can complain about.'

'In the end, the Affordable Care Act survives largely unscathed, but the court's commerce clause and spending clause jurisprudence has been set awry,' said Ginsburg, adding that she expects the setbacks to be 'temporary blips, not permanent obstruction.'

Reaction

Reaction to the decision flew from across the political and ideological spectrum.

'Today's decision validates our claim that a congressional power to compel that all Americans engage in commerce was a constitutional bridge too far,' said Professor Randy Barnett of Georgetown University Law Center, one of the legal architects of the activity/inactivity argument accepted by Roberts. 'By rewriting the law to make it a 'tax,' the court has now thrown ObamaCare into the political process where the People will decide whether this so-called 'tax' will stand. And the People will also decide whether future Supreme Court nominees will pledge to enforce the Constitution's restrictions on the power of Congress.'

His frequent health care sparring partner, Walter Dellinger of O'Melveny & Myers, said the decision was a 'modest incursion' on congressional power. 'What is breathtaking is how sweeping the restrictions would be if the four justices in the dissent had prevailed. The court is just one vote away from severe limits on the authority of Congress.'

The justices' ruling ended ' at least for now ' a remarkable and riveting period of public focus and debate on not only the health care law, but also on the role of the Supreme Court, the power of Congress vis-'-vis the states, the scope of the Constitution, and the decision's potential political fallout on the presidential election.

The lead-up to the arguments drew an outpouring of more than 100 amicus briefs from a broad range of ideological, historical, medical, business and civil rights organizations. An intense battle between conservative and liberal advocacy groups also ignited over the participation in the case by Thomas and Kagan. Groups on the left sought Thomas' recusal because his wife had lobbied against passage of the health care law for an organization that she had headed. Conservative groups called for Kagan to step aside because, they charged, she had worked on the government's case when she served as solicitor general.

In the end, nothing came of the recusal movement as both justices took their seats on argument day.

The justices in March devoted three days and more than six hours to arguments. Immediately after the March arguments, many court watchers and others predicted that skeptical questions and comments by the court's conservative justices about the government's arguments spelled bad news for the Obama administration. For the next three months until the morning of June 29, tea-leaf reading was rampant.

President Obama signed the bill on March 23, 2010, two days after the House passed it by a vote of 219-212. Not a single Republican voted for the bill.

Within minutes of the signing, the first legal challenge was filed in federal district court in Pensacola, FL, by then-Florida Attorney General Bill McCollum, who was joined by 12 other, mostly Republican state attorneys general, and the National Federation of Independent Business. An additional 13 state attorneys general would eventually join the lawsuit.

Four other key lawsuits also were filed in three other federal circuits by conservative government officials or organizations: Virginia's Republican attorney general and Liberty University in the Fourth; the Thomas More Law Center in the Sixth and the American Center for Law and Justice in the District of Columbia.

During the next two years, the lawsuits had a mixed reception in the federal appellate courts. A U.S. Court of Appeals for the Fourth Circuit panel decided that the Anti-Injunction Act, which bars pre-enforcement tax challenges, prevented the Liberty University lawsuit from going forward. Panels in the Sixth and D.C. circuits upheld the law's central feature'the individual mandate. Only the Eleventh Circuit panel in the Florida lawsuit ruled the mandate was unconstitutional.

The Eleventh Circuit decision subsequently became the primary vehicle for review by the Supreme Court of the law's constitutionality.

In a stunning victory for the Obama administration, the U.S. Supreme Court on June 29 upheld the centerpiece of the nation's new health care law ' the so-called individual mandate to buy insurance ' as a constitutional exercise of Congress' taxing authority.

Chief Justice John Roberts Jr., who wrote the Court's opinion, secured the majority on the tax issue by joining with his more liberal colleagues ' justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan. (Find the full opinion at www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf.)

The Court also ruled that the Affordable Care Act's major expansion of the federal-state Medicaid program unconstitutionally coerced the states. The coercion was in the federal government's threat to withhold all of its existing Medicaid funds to states that failed to participate. But instead of striking down the program expansion, the court held only that the federal government could not withhold those funds. States now can decide whether to participate in the expansion.

Four justices ' Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito Jr. ' would have struck down the entire law.

Roberts opened the morning and final session of the term before a packed courtroom. Outside of the building, a line of visitors stretched from the front plaza across the street to the Library of Congress. A large group of supporters and opponents rallied on the sidewalk.

As the solicitor general of the United States and the other lawyers in that office sat at the lawyers' table directly below the bench, Roberts began his summary of the health care decision by tackling what had been the government's primary argument in defense of the law: Congress' authority under the commerce clause.

'As expansive as our cases construing the scope of the commerce power have been, they all have one thing in common: They uniformly describe the power as reaching 'activity,' ' he wrote in his opinion. 'The individual mandate, however, does not regulate existing commercial activity. It instead compels individuals to become active in commerce by purchasing a product on the ground that their failure to do so affects interstate commerce.'

Roberts and his four conservative colleagues rejected the government's commerce clause argument, saying it would open a new and potentially vast domain to congressional authority. Roberts also said the mandate could not be upheld under the necessary-and-proper clause, explaining that even if the mandate were necessary to achieve the insurance reforms in the act, this expansion of federal power was not a proper means for making the reforms effective.

Roberts then turned to the taxing power argument, noting that if a law has two possible meanings, one of which violates the Constitution, courts should adopt the one that does not. He said the penalty for not purchasing minimum insurance functioned as a tax: It is collected by the Internal Revenue Service; there is no punitive sanction, such as criminal punishment; and it will raise revenue.

'The Affordable Care Act's requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax,' Roberts wrote. 'Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.'

The majority's reliance on the taxing power was somewhat surprising, because the government as well as numerous legal scholars and commentators across the political spectrum had focused most of their arguments on whether the individual mandate was a valid exercise of Congress' commerce clause power. The government, however, did argue forcefully in the Supreme Court that the taxing power was another valid basis for the law.

On the Medicaid issue, Roberts wrote that the financial inducement that Congress chose to get states to participate is 'a gun to the head.' He said the threatened loss of more than 10% of a state's overall budget is 'economic dragooning that leaves the states with no real option but to acquiesce in the Medicaid expansion.'

When Roberts finished his summary, Kennedy read a summary of the joint dissent. The act, he said, exceeds federal power both in mandating the purchase of insurance and in denying nonconsenting states all Medicaid funding. Because those parts are central to the act, he said, it followed that all of the must fall. Kennedy said the Court had abandoned judicial modesty and engaged in 'judicial overreaching.'

Ginsburg wrote separately and also summarized her opinion, saying she would have upheld the mandate on commerce clause grounds and the Medicaid expansion exactly as Congress enacted it. She called Roberts' commerce clause analysis 'a stunning setback' that should not have staying power. And the Medicaid expansion, she said, is funded almost entirely by the federal government, 'hardly something that states can complain about.'

'In the end, the Affordable Care Act survives largely unscathed, but the court's commerce clause and spending clause jurisprudence has been set awry,' said Ginsburg, adding that she expects the setbacks to be 'temporary blips, not permanent obstruction.'

Reaction

Reaction to the decision flew from across the political and ideological spectrum.

'Today's decision validates our claim that a congressional power to compel that all Americans engage in commerce was a constitutional bridge too far,' said Professor Randy Barnett of Georgetown University Law Center, one of the legal architects of the activity/inactivity argument accepted by Roberts. 'By rewriting the law to make it a 'tax,' the court has now thrown ObamaCare into the political process where the People will decide whether this so-called 'tax' will stand. And the People will also decide whether future Supreme Court nominees will pledge to enforce the Constitution's restrictions on the power of Congress.'

His frequent health care sparring partner, Walter Dellinger of O'Melveny & Myers, said the decision was a 'modest incursion' on congressional power. 'What is breathtaking is how sweeping the restrictions would be if the four justices in the dissent had prevailed. The court is just one vote away from severe limits on the authority of Congress.'

The justices' ruling ended ' at least for now ' a remarkable and riveting period of public focus and debate on not only the health care law, but also on the role of the Supreme Court, the power of Congress vis-'-vis the states, the scope of the Constitution, and the decision's potential political fallout on the presidential election.

The lead-up to the arguments drew an outpouring of more than 100 amicus briefs from a broad range of ideological, historical, medical, business and civil rights organizations. An intense battle between conservative and liberal advocacy groups also ignited over the participation in the case by Thomas and Kagan. Groups on the left sought Thomas' recusal because his wife had lobbied against passage of the health care law for an organization that she had headed. Conservative groups called for Kagan to step aside because, they charged, she had worked on the government's case when she served as solicitor general.

In the end, nothing came of the recusal movement as both justices took their seats on argument day.

The justices in March devoted three days and more than six hours to arguments. Immediately after the March arguments, many court watchers and others predicted that skeptical questions and comments by the court's conservative justices about the government's arguments spelled bad news for the Obama administration. For the next three months until the morning of June 29, tea-leaf reading was rampant.

President Obama signed the bill on March 23, 2010, two days after the House passed it by a vote of 219-212. Not a single Republican voted for the bill.

Within minutes of the signing, the first legal challenge was filed in federal district court in Pensacola, FL, by then-Florida Attorney General Bill McCollum, who was joined by 12 other, mostly Republican state attorneys general, and the National Federation of Independent Business. An additional 13 state attorneys general would eventually join the lawsuit.

Four other key lawsuits also were filed in three other federal circuits by conservative government officials or organizations: Virginia's Republican attorney general and Liberty University in the Fourth; the Thomas More Law Center in the Sixth and the American Center for Law and Justice in the District of Columbia.

During the next two years, the lawsuits had a mixed reception in the federal appellate courts. A U.S. Court of Appeals for the Fourth Circuit panel decided that the Anti-Injunction Act, which bars pre-enforcement tax challenges, prevented the Liberty University lawsuit from going forward. Panels in the Sixth and D.C. circuits upheld the law's central feature'the individual mandate. Only the Eleventh Circuit panel in the Florida lawsuit ruled the mandate was unconstitutional.

The Eleventh Circuit decision subsequently became the primary vehicle for review by the Supreme Court of the law's constitutionality.