December 13, 2010: Judge Henry Hudson in Va. Rules Federal Health Care Law Unconstitutional

By Bonnie K. Goodman

Ms. Goodman is the Editor / Features Editor at HNN. She has a Masters in Library and Information Studies from McGill University, and has done graduate work in history at Concordia University.

OBAMA PRESIDENCY & THE 111TH & 112TH CONGRESS:

U.S. District Court Judge Henry E. Hudson struck down on Monday a key facet of the federal health-care reform law. 

U.S. District Court Judge Henry E. Hudson struck down on Monday a key facet of the federal health-care reform law. (Jay Paul For The Washington Post)

STATS & POLLS

  • Read Judge Hudson’s 42-page health care law rulingDocumentCloud

THE HEADLINES….

  • Judge in Va. strikes down federal health care law: A federal judge declared the foundation of President Barack Obama’s health care law unconstitutional Monday, ruling that the government cannot require Americans to purchase insurance. The case is expected to end up at the Supreme Court.
    U.S. District Judge Henry E. Hudson rejected the government’s argument that it has the power to enact the requirement under the Commerce Clause of the Constitution.
    He wrote that no court had extended the clause to allow regulation of a person’s decision not to buy a product, and that the government’s reasoning could also apply to decisions about transportation, housing or nutrition.
    “At its core, this dispute is not simply about regulating the business of insurance — or crafting a scheme of universal health insurance coverage — it’s about an individual’s right to choose to participate,” Hudson wrote.
    In his order, he said he will allow the law to remain in effect while appeals are heard, meaning there is unlikely to be any immediate impact on other provisions that have already taken effect. The insurance coverage mandate is not scheduled to begin until 2014…. – AP, 12-13-10
  • Judge Voids Key Part of Health Care Law: A federal district judge in Virginia ruled on Monday that the keystone provision in the Obama health care law is unconstitutional, becoming the first court in the country to invalidate any part of the sprawling act and ensuring that appellate courts will receive contradictory opinions from below.
    Judge Henry E. Hudson, who was appointed to the bench by President George W. Bush, declined the plaintiff’s request to freeze implementation of the law pending appeal, meaning that there should be no immediate effect on the ongoing rollout of the law. But the ruling is likely to create confusion among the public and further destabilize political support for legislation that is under fierce attack from Republicans in Congress and in many statehouses.
    In a 42-page opinion issued in Richmond, Va., Judge Hudson wrote that the law’s central requirement that most Americans obtain health insurance exceeds the regulatory authority granted to Congress under the Commerce Clause of the Constitution. The insurance mandate is central to the law’s mission of covering more than 30 million uninsured because insurers argue that only by requiring healthy people to have policies can they afford to treat those with expensive chronic conditions.
    The judge wrote that his survey of case law “yielded no reported decisions from any federal appellate courts extending the Commerce Clause or General Welfare Clause to encompass regulation of a person’s decision not to purchase a product, not withstanding its effect on interstate commerce or role in a global regulatory scheme.”
    Judge Hudson is the third district court judge to reach a determination on the merits in one of the two dozen lawsuits filed against the health care law. The others — in Detroit and Lynchburg, Va. — have upheld the law. Lawyers on both sides said the appellate process could last another two years before the Supreme Court settles the dispute…. – NYT, 12-13-10
  • Virginia health-care ruling strikes down key provision of Obama’s plan: A federal judge in Virginia ruled Monday that a key provision of the nation’s sweeping health-care overhaul is unconstitutional, the most significant legal setback so far for President Obama’s signature domestic initiative.
    U.S. District Court Judge Henry E. Hudson found that Congress could not order individuals to buy health insurance.
    In a 42-page opinion, Hudson said the provision of the law that requires most individuals to get insurance or pay a fine by 2014 is an unprecedented expansion of federal power that cannot be supported by Congress’s power to regulate interstate trade.
    “Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market,” he wrote. “In doing so, enactment of the [individual mandate] exceeds the Commerce Clause powers vested in Congress under Article I [of the Constitution.] WaPo, 12-13-10
  • Virginia Judge Rules Major Health Reform Provision Unconstitutional: Federal judge Henry Hudson ruled Monday afternoon that a major provision of the health care reform law is unconstitutional, setting up a legal battle that will likely end at the Supreme Court…. Hudson is the first federal judge to declare the individual mandate unconstitutional — two other judges have sided with the Obama administration.
    “I am gratified we prevailed. This won’t be the final round, as this will ultimately be decided by the Supreme Court, but today is a critical milestone in the protection of the Constitution,” Cuccinelli said in a statement.
    Cuccinelli argued that the Commerce Clause of the Constitution, which gives the federal government the authority to regulate interstate economic activity, could not be used to justify requiring individuals to buy health insurance.
    “The federal government asked the court to consider as economic activity the decision not to buy health insurance,” he said in a press conference. “This court and this judge rejected that leap of logic.”… – PBS Newshour, 12-13-10
  • Top Republicans praise Va. health care ruling: Top Republicans Mitch McConnell, John Boehner and Eric Cantor all oppose President Obama’s health care law. Top Republicans say a Virginia court’s ruling striking down a key part of President Obama’s health care law helps their push to repeal the measure…. – USA Today, 12-13-10
  • WH: Health care case does not create uncertainty: The White House says it disagrees with a Virginia judge’s ruling declaring a key provision of President Barack Obama’s health care law unconstitutional. But officials say it does not create uncertainty about the implementation of the law’s provisions.
    “Our belief is that when all the legal wrangling is done, this is something that will be upheld,” White House spokesman Robert Gibbs said.
    White House health reform director Nancy-Ann DeParle said that while the Virginia judge ruled against the law, the administration is encouraged by two other federal judges that have upheld the law…. – ABC, WRIC, 12-13-10
  • Big legal setback for Obama’s health care overhaul: President Barack Obama’s historic health care overhaul hit its first major legal roadblock Monday, thrown into doubt by a federal judge’s declaration that the heart of the sweeping legislation is unconstitutional. The decision handed Republican foes ammunition for their repeal effort next year as the law heads for almost certain eventual judgment by the U.S. Supreme Court….. – AP, 12-13-10
  • Judge’s decision on health law conflicts with other cases: A U.S. district judge’s ruling Monday that overthrows a key portion of President Obama’s health care law conflicts with other lower-court rulings and centers on a thorny area of the law at the Supreme Court.
    At issue in the latest ruling on the health care initiative is a provision that requires most Americans to buy health insurance. The legal question is whether a person’s decision not to buy coverage is economic activity that affects interstate commerce and can be regulated by Congress.
    U.S. District Court Judge Henry Hudson ruled Monday that the decision to forgo insurance does not affect interstate commerce. Hudson said the law would penalize a person for not acting, rather than for voluntarily taking part in some economic activity.
    Last month, U.S. District Court Judge Norman Moon, also in Virginia, ruled the opposite, saying a decision to opt out is an “economic” one that ends up affecting the whole system, for example, “by collectively shifting billions of dollars on to other market participants and driving up the prices of insurance policies.”
    At the Supreme Court, where the ultimate fate of the health care overhaul probably rests, the justices’ recent rulings on the power of Congress have been marked by narrow votes and shifting majorities. Yet in one of the most significant disputes, a 2005 case testing federal anti-drug law, the high court broadly interpreted congressional power…. – USA Today, 12-13-10

QUOTES

  • Judge Henry Hudson, Washington Post: “Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market,” he wrote. “In doing so, enactment of the [individual mandate] exceeds the Commerce Clause powers vested in Congress under Article I [of the Constitution.]”
  • Cantor, McDonnell call for expedited Supreme Court review of health-care law: U.S. Rep. Eric Cantor (R-Va.) and Virginia Gov. Bob McDonnell (R) are calling on the Obama administration to join Virginia Attorney General Ken Cuccinelli (R) in fast-tracking Supreme Court consideration of the constitutionality of the federal health-care law.
    Those statements are some of a staggering volume of reaction within Virginia to today’s ruling by U.S. District Court Judge Henry E. Hudson that a central provision of the law requiring that individuals obtain health insurance by 2014 is unconstitutional. The federal government can appeal to the Fourth Circuit Court of Appeals. But Cuccinelli has asked them to consider joining him in requesting immediate Supreme Court review.
    At an afternoon news conference, Cuccinelli said bypassing the appeals court would relieve the country — and its massive health-care market — of the uncertainty of a continued lengthy legal battle. Already, Americans face a confused landscaped including 25 challenges to the law. Some have been dismissed on standing; two other judges have found the same provision of the law to be constitutional.
    Cuccinelli said he would consider asking the Supreme Court to take the case even without Justice Department cooperation, but he has made no decisions on the issue…. – WaPo, 12-13-10
  • John Boehner: A federal judge today ruled that the individual mandate in President Obama’s jobs-killing health care law is unconstitutional. When the new Congress convenes, Republicans will make good on our pledge to America & fight to repeal ObamaCare. We need to start over w/common-sense reforms that will protect jobs & help lower health care costs without unconstitutional mandates, new taxes, & penalties on small businesses.
  • Virginia Gov. Bob McDonnell (R): In a statement, McDonnell said he has asked other governors and governors-elect to sign on to a letter to the Justice Department asking for their cooperation. McDonnell called the legal decision a “victory for the constitution” but said executives like him need a final resolution of the issue as they move ahead with implementing the complicated law. “There must be certainty and finality in order for our businesses and citizens to both know and adhere to the law.”
  • U.S. Rep. Eric Cantor (R-Va.): Cantor pledged that the new Republican-led House of Representatives would pass a repeal of the act next year, but in the meantime also called for expedited review. “In this challenging environment, we must not burden our states, employers and families with the costs and uncertainty created by this unconstitutional law, and we must take all steps to resolve this issue immediately,” he said.
  • Rep. Eric Cantor, the incoming House majority leader:
    “We must not burden our states, employers and families with the costs and uncertainty created by this unconsitutional law,” said Cantor, R-Va., who vowed that Republicans in the House will push for the law’s repeal when the party takes control in January.
  • Eric Cantor: Today’s ruling is a clear affirmation that President Obama’s health care law is unconstitutional and that the efforts of Governor McDonnell and Attorney General Cuccinelli have raised legitimate concerns. Furthermore, once the new House Republican Majority is sworn into office in January, we will pass a clean repeal of ObamaCare.
  • Virginia Attorney General Ken Cuccinelli: “I am gratified we prevailed. This won’t be the final round, as this will ultimately be decided by the Supreme Court, but today is a critical milestone in the protection of the Constitution,” Cuccinelli said in a statement.
    “The federal government asked the court to consider as economic activity the decision not to buy health insurance,” he said in a press conference. “This court and this judge rejected that leap of logic.”
    “Unfortunately, striking the ‘individual responsibility’ provision could also jeopardize the most popular insurance reform in the statute: preventing insurance companies from denying health coverage to people with pre-existing health conditions. While politically motivated opponents of the Affordable Care Act, like Attorney General Cuccinelli, may applaud this decision, for people with health conditions it could be quite tragic,” he said.
  • Justice Department spokeswoman Tracy Schmaler in a statement: “We are disappointed in today’s ruling but continue to believe — as other federal courts in Virginia and Michigan have found — that the Affordable Care Act is constitutional.” “We are confident that we will ultimately prevail.”
  • White House spokesman Robert Gibbs said in a press conference that the administration would appeal the ruling and that “Our belief is that the health care act will go forward and that it is constitutional.”
  • Sen. Jim DeMint, R-S.C.: “Today’s ruling should signal the beginning of the end for Obamacare.”:
  • Sen. Orrin Hatch, R-Utah, hailed the ruling as “a great day for liberty.” He summed up the issue of the government mandate like this: “If the government can tell you what to buy, then what limits on federal power exist?”
  • Rep. Fred Upton, R-Mich., the incoming chairman of the House Energy and Commerce Committee: “This decision strikes a blow for freedom.”
  • On the Democratic side, Rep. Henry Waxman says it’s clear the question of whether the individual mandate is constitutional will be decided by the Supreme Court.
    “When it gets there (to the high court), I am confident that cooler heads will prevail and that the health reform law will be upheld in full,” said Waxman, D-Calif., the current chairman of the commerce committee. He noted that some justices early on ruled that Social Security was illegal.
  • MA Senator Scott Brown lauds unconstitutional ruling on Obama Care: “This shows you the federal mandate of one size fits all is not appropriate,” Brown told the Herald. “It should be left up to the states.” “This also shows the Massachusetts health care law is nothing like the federal mandate,” Brown said. “The federal mandate does not pass constitutional muster. The state’s rights are very important and this ruling proves it.” – Boston Herald, 12-13-10
  • Stephanie Cutter is Assistant to the President for Special Projects: Today’s Health Care Court Ruling: Today’s narrow ruling in Virginia on the constitutionality of a provision of the Affordable Care Act is just one of many recent rulings on similar cases that have come down in recent months. Since the law passed, opponents of reform have filed more than 20 different legal challenges. Judges have already granted the Administration’s motion to dismiss 12 of these cases. And in two cases, federal judges looked at the merits of the opponents’ arguments, determined that the Affordable Care Act is constitutional and upheld the law.
    We disagree with the ruling issued today in Virginia and the Department of Justice is considering its appeal options.
    We are pleased that Judge Hudson agrees that implementation of the law will continue uninterrupted. In the nine months since the health reform law was passed, we’ve made tremendous progress to strengthen our health care system, including lowering costs and implementing a new patient’s bill of rights to end some of the worst insurance company abuses. That work continues. And we’re confident that when it’s all said and done, the courts will find the Affordable Care Act constitutional.
    History and the facts are on our side. Similar legal challenges to major new laws — including the Social Security Act, the Civil Rights Act, and the Voting Rights Act — were all filed and all failed. Contrary to what opponents argue the new law falls well within Congress’s power to regulate economic activity under the Commerce Clause, the Necessary and Proper Clause, and the General Welfare Clause.
    Opponents of reform claim that the individual responsibility requirement – the requirement that all Americans carry a minimum level insurance by 2014 –exceeds Congress’ power to regulate interstate commerce because it penalizes economic “inactivity.” Make no mistake — individuals who choose to go without health insurance are actively engaged in economic decision making – the decision to pay for health care out-of-pocket or to seek uncompensated care. Every year millions of those who have chosen to go without health insurance actively seek medical care, which is evident in the billions of dollars spent on uncompensated care every year.
    The Affordable Care Act came into being precisely because of the interconnectedness of our health care costs. People who make an economic decision to forego health insurance do not opt out of the health care market, but instead shift their costs to others when they become ill or are involved in an accident and cannot pay. Those costs – $43 billion in 2008 alone – are borne by doctors, hospitals, insured individuals, taxpayers and small businesses throughout the nation. This cost-shift added on average $1,000 to family premiums in 2009 and roughly $410 to an individual premium.
    This concept is clearly seen in other areas of commerce. For example, in most states, drivers are required to carry a minimum level of auto insurance. Accidents happen and when they do, they need to be paid for quickly and responsibly. Requiring drivers to carry auto insurance accomplishes this goal. Similarly, the Affordable Care Act, through the individual responsibility requirement, will require everyone to carry some form of health insurance since everyone at some point in time participates in the health care system, and incur costs that must be paid for.
    It’s no surprise then, that President Reagan’s Solicitor General Charles Fried recently wrote, “the health care law’s enemies have no ally in the Constitution.” Two federal judges that recently ruled on the challenge to the constitutionality of the reform law in Michigan and Virginia agreed. These lawsuits were dismissed, with the federal judge in Virginia concluding “how and when to pay for health care are activities…in the aggregate…substantially affect[s] the interstate health care market.”
    Two federal judges have agreed with this argument. In an earlier ruling in the Western District of Virginia, a federal judge wrote:
    “I hold that there is a rational basis for Congress to conclude that individuals’ decisions about how and when to pay for health care are activities that in the aggregate substantially affect the interstate health care market…Nearly everyone will require health care services at some point in their lifetimes, and it is not always possible to predict when one will be afflicted by illness or injury and require care…Far from ‘inactivity,’ by choosing to forgo insurance, Plaintiffs are making an economic decision to try to pay for health care services later, out of pocket, rather than now, through the purchase of insurance. As Congress found, the total incidence of these economic decisions has a substantial impact on the national market for health care by collectively shifting billions of dollars on to other market participants and driving up the prices of insurance policies.”
    The Affordable Care Act also bans insurance companies from discriminating against people with preexisting conditions. However, unless every American is required to have insurance, it would be cost prohibitive to cover people with preexisting conditions. Here’s why: If insurance companies can no longer deny coverage to anyone who applies for insurance – especially those who have health problems and are potentially more expensive to cover – then there is nothing stopping someone from waiting until they’re sick or injured to apply for coverage since insurance companies can’t say no. That would lead to double digit premiums increases – up to 20% – for everyone with insurance, and would significantly increase the cost health care spending nationwide. We don’t let people wait until after they’ve been in a car accident to apply for auto insurance and get reimbursed, and we don’t want to do that with healthcare. If we’re going to outlaw discrimination based on pre-existing conditions, the only way to keep people from gaming the system and raising costs on everyone else is to ensure that everyone takes responsibility for their own health insurance.
    There have been many rulings on court cases regarding health reform and we know there will be many more. In the end, the Affordable Care Act will prevail and the American people will enjoy the benefits of reform. WH, 12-13-10

HISTORIANS & ANALYSTS’ COMMENTS

  • Larry J. Sabato Professor of Politics, University of Virginia “Hiccup or heart attack for health care reform? Plus, will White House charm offensive work?”: Let’s see. The Democratic judges who have ruled so far have upheld the health care reform law and the Republican judge has struck down the law’s heart. Very predictable to this point because — despite the claims of many in the judicial branch — the partisan identification and personal ideology of judges matter enormously in cases with strong political overtones. If you knew the backgrounds of the Democratic judges and Republican Judge Henry Hudson, you could have made a bundle betting in Vegas.
    Eventually the controversy will reach the Supreme Court, otherwise known as “Anthony Kennedy,” for its resolution.
  • Mary Frances Berry Professor of American Social Thought and History, U. Penn.: Since the legality of the Health reform law will be at issue until decided by the Supreme Court, it is worth noting that Justice Thomas has repeatedly expressed an interest in curbing the power of Congress under the Commerce Clause. He would revisit decisions dating back to the New Deal. Other justices have shown varying degrees of interest.
    It is, therefore, entirely possible that the health reform individual mandate could be overturned in a 5-4 decision. It is also entirely possible that other recent congressional enactments, under the Commerce Clause, might be affected. Since the individual mandate is the “linchpin” of the health reform law, there is reason for worry.
  • Tevi Troy Visiting Senior Fellow, the Hudson Institute; Former Deputy HHS secretary: President Obama is right to be concerned about oversight investigations, but a charm offensive directed toward the new GOP chairmen may not help him much. With the Democrats controlling both houses of Congress for Obama’s first two years, the White House has not had to worry much about congressional oversight into agency activities. This will change in January, and White House phone calls or tea parties with the GOP chairmen are unlikely to deter them from their investigative efforts.
  • Julian E. Zelizer Professor of History and Public Affairs, Princeton : Many say there wasn’t that much to investigate with President Clinton, but the GOP found a way. As the politics heat up, investigations are likely to come.
  • Kyle Wingfield: Strike one against ObamaCare: Today’s ruling by a federal judge in Virginia, declaring the health-insurance mandate in ObamaCare unconstitutional, is not the last word by any means. But to paraphrase Vice President Biden’s line about the law, it’s a big bleepin’ deal. This isn’t the big states’ lawsuit against the federal government over the law; Georgia and 20 other states are pursuing a lawsuit working its way through federal courts in Florida. It is, however, the lawsuit that addresses the constitutional question that so many conservatives raised during the health-reform debate: Can the federal government compel citizens to buy a particular product (in this case, health insurance)?…. – Atlanta Journal Constitution, 12-13-10
  • Derek Thompson: What if the Supreme Court Strikes Down the Insurance Mandate?: The key provision in the health care reform law that requires all citizens to buy insurance is unconstitutional, according to a Virginia district judge. Judge Henry E. Hudson ruled that the insurance mandate violated the Commerce Clause because it tries to regulate the opposite of commerce — the refusal to purchase health care insurance. Before I start to make a big deal about this story, let’s remember why it’s silly to make a big deal about this story. First, two judges have already ruled that the insurance mandate is constitutional. Second, it could be another two years before the Supreme Court picks up the case against the insurance mandate. Third, the bulk of the health care overhaul doesn’t come online until 2014 anyway, which means we’re debating the legality of provisions that won’t become reality for another two election cycles.
    But in the slim chance that the Supreme Court does strike down the insurance mandate, what would be the options of an Obama administration, or Democratic Party? To get a handle on that question, I spoke with Paul Van de Water at the Center on Budget and Policy Priorities. Here were the four ideas we discussed…. – The Atlantic, 12-13-10
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