Legal Challenge to ObamaCare Passes First Hurdle

Judge Hudson of the United States District Court for the Eastern District of Virginia denied a motion by the federal government to dismiss a suit filed by Virginia challenging the mandatory health insurance provisions of the ObamaCare law. Similar motions to dismiss are pending in other district courts.

By virtue of its procedural posture, denial of the motion to dismiss Virginia's action does not decide the case. However, it does provide tentative guidance as to how at least one federal judge may eventually rule on whether a federal requirement that individuals purchase health insurance is within the powers of the federal government.

In addition to the Commerce Clause, the federal government invoked its taxing powers under the Constitution -- as it recently threatened to do despite President Obama's earlier assertions that no tax was involved -- arguing that its taxing powers are even more expansive than its powers under the Commerce Clause. It also claimed that its powers to promote the general welfare justify the mandatory health insurance requirement.

A number of arcane but important issues -- like standing to sue, as the mandatory insurance requirement is not scheduled to go into effect until 2014, and others -- are discussed in the decision, and were resolved favorably to Virginia. But according to Judge Hudson, the "centerpiece of the case" is whether the Congress has the authority "to regulate economic inactivity." The mandatory health insurance requirements of the law present, for the very first time, a question of whether the Commerce Clause is sufficiently broad to permit the requirement to be imposed. Judge Hudson noted:

The congressional enactment under review -- the Minimum Essential Coverage Provision -- literally forges new ground and extends Commerce Clause powers beyond its current high water mark. Counsel for both sides have thoroughly mined relevant case law and offered well reasoned analyses. The result, however, has been insightful and illuminating but short of definitive. While this Court's decision may set the initial judicial course of this case, it will certainly not be the final word.

Under the judge's analysis of Commerce Clause cases, no clear precedent exists to support the federal government's position. Even though the Commerce Clause has become a bloated catchall for everything the federal government wants to do having any tangential impact on interstate and intrastate commerce, it seems that the federal government may finally have overstepped its bounds.

Under the Supreme Court's 2005 decision in Gonzales v Raich, 545 U.S. 1, involving the cultivation of marijuana for personal use only and not for sale:

[Our] case law firmly establishes Congress' power to regulate purely local activities that are part of an economic "class of activities" that have a substantial effect on interstate commerce. ... When Congress decides that the "total incidence" of a practice poses a threat to a national market, it may regulate the entire class. ... In this vein, we have reiterated that when "a general regulatory statute bears a substantial relation to commerce, the de minimis character of individual instances arising under that statute is of no consequence.

The federal government argued that Raich and its predecessor Wickard v. Filburn, 317 U.S. 111 (1942), involving the cultivation of wheat for a farmer's own use and not for sale in commerce applied, since "without full market participation, the financial foundation supporting the health care system will fail, in effect causing the health care regime to implode." The federal government relied principally on Wickard holding that (as noted by Judge Hudson):

[The] Commerce Clause provided federal power to regulate the personal cultivation and consumption of wheat on a private farm ... [because] the "consumption of such non-commercially produced wheat reduced the amount of commercially produced wheat purchased and consumed nationally, thereby affecting interstate commerce."

Virginia argued to the contrary:

[The cited cases] necessarily involved a voluntary decision to perform an act, such as growing wheat or cultivating marijuana. The Commonwealth argues that this critical element is absent in the regulatory mechanism established in the Minimum Essential Coverage Provision. This provision, the Commonwealth maintains, requires a person to perform an involuntary act and as a result, submit to Commerce Clause regulation. ... [The] decision not to purchase a product such as health insurance, is not an economic activity. It is a virtual state of repose -- or idleness -- the converse of activity. (Emphasis added)