6th Circuit Hears Arguments in Health Care Lawsuit

CINCINNATI - (Mealey's) A panel of the Sixth Circuit U.S. Court of Appeals yesterday heard oral arguments in a public interest law firm's appeal of the dismissal of its case challenging the Patient Protection and Affordable Care Act (PPACA) (Thomas More Law Center, et al. v. Barack Hussein Obama, et al., No. 10-2388, 6th Cir.).

U.S. Judge George Caram Steeh of the Eastern District of Michigan on Oct. 7 dismissed a challenge to the PPACA brought by the Thomas More Law Center, Jann DeMars, John Ceci, Steven Hyder and Salina Hyder against President Obama and other federal defendants.  The plaintiffs sought a declaration that Congress lacks authority under the commerce clause of the U.S. Constitution to pass the law and a declaration that the individual health insurance provision is unconstitutional. 

The Sixth Circuit asked the parties to first address the Anti-Injunction Act, saying that it had read the briefs filed in the Fourth Circuit U.S. Court of Appeals in which the court asked for supplemental briefing following oral arguments in the cases of Commonwealth of Virginia v. Kathleen Sebelius (Nos. 11-1057 & 11-1058) and Liberty University, et al. v. Timothy Geithner, et al. (No. 10-2347) to address whether it even had authority to decide the constitutionality of the PPACA based on the Anti-Injunction Act.

The plaintiffs said the penalty for failing to comply with the individual mandate is not a tax subject to the Anti-Injunction Act because it was not passed pursuant to the taxing and spending clause of the Constitution but was passed expressly pursuant to the commerce clause. 

In response to questioning from the court, the plaintiffs agreed that the government could raise taxes for everybody and give people credit for having health insurance or raise taxes to pay for health care but said that is not what the government has done. 

The government has forced people to purchase insurance, which is a commodity, the plaintiffs said. 

If the government wanted to raise taxes, it could have, but it chose not to, and it is important that the means the government chooses meet constitutional limitations; the limits of Congress' reach is regulating interstate economic activity, the plaintiffs said. 

The Sixth Circuit panel questioned Thomas More attorneys about the distinction between inactivity and activity, with Judge Jeffrey S. Sutton saying that it's hard to think of risk as inaction.  The point of the mandate is for people to buy health care when they need it, Judge Sutton said. 

Arguing for the government, Acting Solicitor General Neal Katyal said the government regulates the insurance market, and no one contends that isn't constitutional because people are being priced out of the market because of pre-existing conditions and other things.  Congress said it would make sure that insurance companies couldn't discriminate because of pre-existing conditions, but it knew if it did that without coupling insurance reforms to the minimum insurance provision, the reforms wouldn't work. 

Congress reacted to the market, which was pricing individuals out of the market and excluding individuals altogether, Katyal said.  In states that tried to make insurance reforms without the minimum coverage provision, insurers left the market because insurance got too high, he added. 

In the only state where it has worked - Massachusetts - it worked because the minimum coverage provision was coupled to the insurance reforms, Katyal said. 

Judge Sutton questioned Katyal whether Congress could compel companies not on the supply side to offer insurance out in the market, saying it would broaden the risk pool and be connected to commerce.  Katyal said such a hypothetical doesn't consider what Congress was dealing with - $43 billion in cost shifting. 

The court also listened to arguments on the government's motion to dismiss the appeal as moot.  The government filed a motion to dismiss on May 27, saying that a supplemental declaration by DeMars lacks standing because she currently has employer-provided health insurance and has had such insurance since October 2010.  Because DeMars has insurance, she cannot show that the minimum coverage provision will cause her any economic injury; therefore, she lacks standing, the government said. 

Judges Sutton and Boyce E. Martin and U.S. Judge James L. Graham of the Southern District of Ohio, sitting by designation, comprised the panel. 

[Editor's Note:  Full coverage will be in the June 15 issue.  For all of your legal news needs, please visit www.lexisnexis.com/mealeys.]

For more information, e-mail editor Cheryl Keely at cheryl.keely@lexisnexis.com.

Lexis.com subscribers may search all Mealey Publications

Non-subscribers may search for Mealey Publications stories and documents at www.mealeysonline.com or visit www.Mealeys.com.

For more information about LexisNexis products and solutions, connect with us through our corporate site.