D.C. Circuit Rejects ‘Origination Clause’ Attack On ACA Individual Mandate

WASHINGTON, D.C. — (Mealey’s) A plaintiff challenging the individual mandate of the Patient Protection and Affordable Care Act (ACA) cannot do so by arguing that the requirement is a revenue measure that should have originated in the U.S. House of Representatives, a unanimous federal appeals court ruled July 29 (Matt Sissel v. United States Department of Health and Human Services, et al., No. 13-5202, D.C. Cir. [enhanced opinion available to lexis.com subscribers]). 

(This story is an excerpt from Mealey's Affordable Care Act Report.  For information on how to subscribe to this new monthly report, please contact your LexisNexis account representative or call 800-223-1940.) 

The District of Columbia Circuit U.S. Court of Appeals panel said “the presence of another constitutional power does not suggest that a provision is not a ‘Bill[] for raising Revenue,’ and the absence of another constitutional power does not, in itself, suggest that it is.” 

“Because the existence of another power is not necessary (or sufficient) to exempt a bill from the Origination Clause, the mere fact that Section 5000A [of the ACA] may have been enacted solely pursuant to Congress’s taxing power does not compel the conclusion that the entire Affordable Care Act is a ‘Bill[] for raising Revenue’ subject to the Origination Clause [of the U.S. Constitution],” the panel continued.  “Where, as here, the Supreme Court has concluded that a provision’s revenue-raising function is incidental to its primary purpose . . . the Origination Clause does not apply.” 

“The analysis is not altered by the fact that the shared responsibility payment may in fact generate substantial revenues,” the panel continued.  “In light of the Supreme Court’s historical commitment to a narrow construction of the Origination Clause, this court can only hold that the challenged measure — whose primary purpose ‘plainly’ was not to raise revenue . . . — falls outside the scope of the Clause.” 

Complaint Amended 

Matt Sissel sued the federal government in the U.S. District Court for the District of Columbia, challenging the ACA.  Sissel says that he does not have, need or want to purchase health insurance and that he is able to pay for his medical expenses out of pocket.  He seeks a declaration that the mandate to purchase health insurance or pay a penalty and the act in its entirety is unconstitutional, invalid and unenforceable.

 Sissel's case was stayed pending a decision by the U.S. Supreme Court in National Federation of Independent Business, et al. v. Kathleen Sebelius (NFIB) (No. 11-393), States of Florida, et al. v. Department of Health and Human Services, et al. (No. 11-400) and (United States Department of Health and Human Services, et al. v. State of Florida, et al. (No. 11-398).  The Supreme Court reached a decision in National Federation, holding that the Anti-Injunction Act does not bar challenges to the ACA, that the individual mandate contained in the act is constitutional and that the federal government can expand Medicaid but cannot withhold any existing funding from the states for noncompliance with the expansion [enhanced opinion. lexis.com subscribers may access Supreme Court briefs for this case].

In finding the individual mandate constitutional, the Supreme Court held that Congress was within its power under the taxing clause of the Constitution in implementing the mandate. 

Sissel amended his complaint, saying the Supreme Court's decision left several questions unresolved.  Among the new issues were whether the tax was lawful under the origination clause of the Constitution, which requires all revenue-raising bills to originate in the House of Representatives, Sissel said. 

On June 28, the District Court granted the government’s motion to dismiss the case, holding that the suit was foreclosed by the Supreme Court decision governing the individual mandate and that the act was properly introduced in the House of Representatives. 

Sissel appealed. 

National Federation Misunderstood 

The panel said Sissel’s argument that the commerce clause of the U.S. Constitution does not authorize Congress to impose the individual mandate is a “flawed understanding” of the Supreme Court’s decision in National Federation.  The panel said the high court made clear that the ACA does not compel individuals to buy health insurance but instead gives them a choice to buy insurance and pay a tax if they do not carry insurance. 

The panel said Sissel’s reliance on subsequent U.S. Circuit Court opinions about the ACA is “misplaced” because none of those rulings denies that the Supreme Court upheld the individual mandate as a valid exercise of the taxing power of Congress. 

As to the argument about where the ACA originated, the panel said, “Because we conclude that the shared responsibility payment in Section 5000A is not a ‘Bill[] for raising Revenue’ within the Supreme Court’s accepted meaning of that phrase, and thus was not subject to the Origination Clause, this court has no occasion to determine whether it originated in the House or the Senate.” 

“And after the Supreme Court’s decision in NFIB, it is beyond dispute that the paramount aim of the Affordable Care Act is ‘to increase the number of Americans covered by health insurance and decrease the cost of health care,’ NFIB, 132 S. Ct. at 2580, not to raise revenue by means of the shared responsibility payment.” 

“Because not all of Congress’s exercises of the taxing power are primarily aimed at raising revenue, and a measure is a ‘Bill[] for raising Revenue’ only if its primary purpose is to raise general revenues, some exercises of the taxing power are not subject to the Origination Clause,” Circuit Judge Judith W. Rogers wrote for the panel. 

Panel, Counsel 

The other panel members were Circuit Judges Cornelia T.L. Pillard and Robert L. Wilkins. 

Timothy M. Sandefur, Paul J. Beard II, Luke A. Wake and Daniel A. Himebaugh of the Pacific Legal Foundation in Sacramento, Calif., represent Sissel.  Alisa B. Klein, Assistant Attorney General Tony West, U.S. Attorney Ronald C. Machen Jr., Deputy Director Sheila M. Lieber and Scott Risner of the U.S. Department of Justice in Washington represent the federal government. 

Amicus curiae Center for Constitutional Jurisprudence is represented by John C. Eastman of Chapman University in Claremont, Calif., and Anthony T. Caso of the Law Office of Anthony T. Case in Sacramento.  Amicus Association of American Physicians and Surgeons is represented by Lawrence J. Joseph of the Law Office of Lawrence J. Joseph in Washington. 

Fourteen amici, including two member of Congress, are represented by Joseph E. Schmitz of Joseph E. Schmitz PLLC in Bethesda, M.D., and Paul D. Kamenar of the Law Office of Paul D. Kamenar in Washington.

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