D.C.Cir.: ACA’s individual mandate constitutional

The D.C. Circuit Court of Appeals upheld the constitutionality of the Affordable Care Act’s individual mandate under the Commerce Clause, rejecting the applicability of the Anti-Injunction Act. One judge dissented, arguing that the suit should be dismissed, based on the Anti-Injunction Act, and not expressing an opinion about the Commerce Clause issue. Susan Seven-Sky v. Holder, No. 11-5047 (D.C.Cir. Nov. 8, 2011). Judge Silberman, nominated by President Reagan, wrote the opinion. Judge Edwards, nominated by President Carter, concurred. Judge Kavanaugh, nominated by President George W. Bush, dissented . Several organizations, including the National Senior Citizens Law Center, filed amicus briefs.

This case was one of several challenges to the individual mandate of the recently enacted Affordable Care Act (“ACA”). The Sixth Circuit has upheld the mandate constitutionality under the Commerce Clause (see our posting here).  The Fourth Circuit dismissed the suit holding that was barred by the Anti-Injunction Act (see our posting here).  The Eleventh Circuit held that the mandate is not constitutional under the Commerce Clause and severed the mandate from the rest of the statute (see our posting here).

The plaintiffs in the DC litigation were four U.S. citizens and taxpayers. They claimed the individual mandate exceeded the authority of Congress to enact and that it violates the Religious Freedom Restoration Act by interfering with the religious practices of two of the plaintiffs. The district court dismissed the claims, and the plaintiffs appealed.

The D.C. Circuit first addressed whether it had jurisdiction to hear the appeal. One amicus brief argued that the Anti-Injunction Act, which bars courts from hearing challenges to taxes before a taxpayer has paid the tax, prevented the D.C. Circuit from hearing the case. The amici argued that the “shared responsibility payment” the Act assessed was a tax covered by the Anti-Injunction Act. The court disagreed. It noted that Congress referred to the shared responsibility payment as a “penalty” rather than a “tax” and that Congress has demonstrated an ability to clearly indicate when it wishes payments to be considered “taxes” for the purposes of the Anti-Injunction Act. Also, the plaintiffs were challenging the health care mandate rather than the collection of revenues. Therefore the Anti-Injunction Act did not, on its own, prevent the court from taking jurisdiction over the claim. Furthermore, since the primary beneficiary of the Anti-Injunction Act was the federal government, the government’s interpretation that the Anti-Injunction Act should not bar the plaintiffs suits here was entitled to deference.

The court then turned to the plaintiffs’ Commerce Clause arguments against the individual mandate. The court noted that since the plaintiffs were making a facial challenge to the statute, they “theoretically” were obligated to prove that the statute was invalid in all possible applications. However, citing U.S. v. Lopez, 514 U.S. 549 (1995), the court explained that the Supreme Court has struck down statutes as facially invalid if the statute would merely be unconstitutional in most circumstances.

According to the plaintiffs, Congress only possesses the power to regulate existing commerce, and it cannot require individuals to undertake new interstate commerce or to refrain from leaving interstate commerce. The court mentioned at the beginning of its discussion of the issue that while the mandate “is indeed somewhat novel, […] so too, for all its elegance, is appellants’ argument.” Prior to the passage of the ACA, no court had ever adopted the distinction between active participation in commerce and inactive non-participation.

The court examined the text of the Commerce Clause and Supreme Court precedent. Citing an eighteenth century dictionary, the court explained that “regulate” in the Commerce Clause did not only apply to pre-existing activity; nor did the word “commerce.” Supreme Court precedent interpreting the Commerce Clause also never made the distinction that the plaintiffs were promoting. The Circuit Court analogized this case to Wickard v. Filburn, 317 U.S. 111 (1942). In that case, though a farmer never put his wheat into the stream of interstate commerce, Congress’ commerce power still could regulate his wheat because of the impact personal supplies of wheat could have on the interstate market for wheat. Since Wickard, Congress’ commerce power has allowed Congress to ban individual decisions not to participate in interstate commerce when the aggregate effect of such a decision would interfere with Congress’ efforts to regulate an interstate commercial system. The court also found that limiting the commerce power based on whether an “activity” was involved would be a difficult line to draw. The court conceded that it was troubled by the government’s inability (and its own) to find a limiting principle to prevent Congress from having the authority to require individuals to purchase any product. Yet, the court’s concern was not fatal to Congress’s Act. In fact, the court suggested that the intrusive nature of legislation requiring the purchase of a particular good had so far prevented Congress from exercising this power, and that deciding when to exercise this power should be resolved by the political branches of government.

The court also rejected the plaintiffs’ other Commerce Clause arguments. Commerce Clause jurisprudence limits Congress’ power to regulate uniquely state affairs, but the plaintiffs did not show that health care and the health care industry were uniquely state concerns. Also, the Commerce Clause has never been held to prevent Congress from requiring a person to engage in an activity. Such an argument “expresses a concern for individual liberty that seems more redolent of Due Process Clause Arguments.” Under the Commerce Clause, “the only thing that matters is whether the national problem Congress has identified is one that substantially affects interstate commerce.”

In his brief concurrence, Judge Edwards emphasized that the Necessary and Proper Clause limits Congress’s power to legislate under the Congress’ Commerce.  His one paragraph opinion consists primarily of three quotes from Justice Scalia’s concurrence in Gonzales v. Raich, 545 U.S. 1 (2005), focusing on Congress’s power to utilize means necessary to make interstate regulation effective.

Judge Kavanaugh filed a lengthy dissent, but did not discuss the plaintiffs’ Commerce Clause arguments. Judge Kavanaugh disagreed with the majority about its interpretation of the Anti-Injunction Act. Kavanaugh cited provisions of the tax code providing, for example, that tax penalties would be assessed like taxes. The fact that the IRS, rather than another agency, was responsible for collecting the penalties, also weighed in favor of finding them to be taxes covered by the Anti-Injunction Act. In Kavanaugh’s opinion, the Anti-Injunction Act should have barred the plaintiffs from bringing suit until the plaintiffs had actually paid the “shared responsibility” penalty.

Nate Vogel, University of Pennsylvania Law School, class of 2011


This entry was posted in Case Analyses. Bookmark the permalink.

Comments are closed.