Here is an email from Virginia Attorney General Ken Cuccinelli. He discusses the Florida Ruling and Expediting VA’s case to the Supreme Court.

February 10, 2011

Dear Friends,

I wanted to give you a breakdown of the spectacular ruling in Florida in the healthcare case on January 31st.  The result was the second court to rule the individual mandate unconstitutional – the first being our case in Virginia.  This has helped to build more momentum for those of us standing against the federal healthcare law.

There are three parts to the Florida ruling, two legal issues plus the remedy.  But first, I want to note that this ruling is the most comprehensive ruling yet in this case.  The Judge walked through the history of the commerce clause, the history of Supreme Court  rulings related to the commerce clause, and then applied that background to the case at hand.  If you’re willing to read about 75 pages, this opinion will fully educate you on all of the relevant areas of knowledge at issue in this case.

In the Florida case, there are 26 states as plaintiffs, plus the NFIB and two of their members as individuals.

The three parts of the Florida ruling are: 1) a coercion claim the plaintiffs brought regarding the Medicare/Medicaid provisions of the bill; 2) the individual mandate; and 3) addressing the remedy in light of holding the individual mandate unconstitutional.

Coercion

In a case called South Dakota v. Dole, the Supreme Court stated that it was possible that the Court could block a law if it was so coercive of states that it was the equivalent of ordering the state(s) to undertake something the federal government wouldn’t normally have the power to order such a state to do.  However, while the Supreme Court said that a coercion argument was theoretically possible, it has never yet found a case where such coercion existed.

That brings us to the Florida healthcare case.  In that case, the plaintiffs alleged that the massive increases to Medicare and Medicaid under the federal healthcare law amounted to coercion.  The rationale for this was that after 45 years of those two programs being in effect, that such a massive increase in the programs amounted to coercion.

The problem for the states with this argument was that Medicare and Medicaid are both voluntary programs, i.e., the states can pull out of the programs.  The consequence of such a pullout would be a complete loss of the federal funds associated with the programs.  The states argued that after 45 years of integration of Medicare and Medicaid (and the federal monies) with the states’ provision of medical care to their citizens, that the massive and sudden increases in the requirements of the states under those programs amounted to coercion.

The court in Florida flatly rejected this claim by the states, relying on the fact that the programs are still voluntary.  The Judge noted that even though there’s a lot of money to lose and that the programs have been in place for a long time, they are still in fact voluntary.

So, we still don’t have a finding of coercion of states under the theory articulated in South Dakota v. Dole, but fortunately the states in Florida also argued that the individual mandate is unconstitutional.

Individual Mandate

The Florida ruling on the individual mandate closely tracked the Virginia ruling in December.  Both sides made the same arguments as in the Virginia case, and the Judge exhaustively analyzed those arguments and concluded that the individual mandate is unconstitutional.

The Judge exhaustively walked through the history of the Commerce Clause and the key cases that together define the outer limits of Commerce Clause jurisprudence.

Judge Vinson noted that all cases related to the commerce clause up until this case have addressed activities, while this case revolves around regulating inactivity, i.e., not buying health insurance.  He said: “…in every one of the cases … there has always been clear and inarguable activity.”

In my mind, this gets to the most serious threat to liberty posed by the federal healthcare law: the supposed authority of the federal government to order you to buy the chosen product of the then-ruling majority.

As I have noted many times, not even King George III and his Parliament went so far as to order American colonists to buy British goods, yet our President and the last Congress believed that our federal government has that power.  Stunning.

And in what will be the Tea Party’s favorite quote, along the lines of King George… the Judge also said the following:

“It is difficult to imagine that a nation which began, at least in part, as the result of opposition to a British mandate giving the East India Company a monopoly and imposing a nominal tax on all tea sold in America would have set out to create a government with the power to force people to buy tea in a the first place.  If Congress can penalize a passive individual for failing to engage in commerce, the enumeration of powers in the Constitution would have been in vain for it would be difficult to perceive any limitation on federal power.”

The reason that all the Supreme Court’s previous cases have been limited to regulating activity is because no Congress has ever before even attempted to regulate inactivity.  This led the Judge to say: “…there is a simple and rather obvious reason why the Supreme Court has never distinguished between activity and inactivity before: it has not been called upon to consider the issue because, until now, Congress had never attempted to exercise its Commerce Clause power in such a way before.”

Ouch.

The federal government, in its grasping efforts to try to argue that this case can be treated uniquely, i.e., it isn’t bound by traditional legal constraints, has continuously argued that the healthcare market is unique.  Because, you see, we will all need healthcare at some point.

Um, dinner anyone?

The judge rejected the ‘uniqueness’ argument, citing to food, transportation and shelter.  For myself, if I have to pick between food and healthcare for the rest of my life, I’ll take food, thank you very much.

Finally, being (I would like to think) a logical person, I appreciate logical discussion, and Judge Vinson obliged people like me.  Saying, “The important distinction is that ‘economic decisions’ are a much broader and far-reaching category than are ‘activities that substantially affect interstate commerce.’  While the latter necessarily encompasses the first, the reverse is not true.  Economic’ cannot be equated to ‘commerce.’  ‘And ‘decisions’ cannot be equated to ‘activities.’ Every person throughout the course of his or her life makes hundreds or even thousands of life decisions that involve the same general sort of thought process that the defendants maintain is ‘economic activity.’  There will be no stopping point if that should be deemed the equivalent of activity for Commerce Clause purposes.”

Judge Vinson also found that the Necessary & Proper Clause cannot save the individual mandate.

Having found the individual mandate to be unconstitutional, Judge Vinson then turned to the proper remedy.  And it is in the remedy where Judge Vinson went beyond the Virginia ruling in December.

Remedy-Severance

In the most sweeping ruling to date, Judge Vinson ruled that because of the central importance of the individual mandate in the federal healthcare bill, the unconstitutionality of the individual mandate doomed the entire law.  Thus, he declared the entire law to be invalid and of no effect.  He further stated that he expected federal officials to honor his ruling, i.e., to cease implementing the law.  Of course, it didn’t take those federal officials very long to start making public statements indicating that they have no intention of honoring Judge Vinson’s ruling.  However, his ruling has led a number of states to cease implementation of the law.  This will all be an interesting side show as we work our way toward a final ruling from the Supreme Court.

An important and unusual aspect of the remedy question is the lack of what is called a “severance clause” in the healthcare bill.  A severance clause is found in many contracts and pieces of legislation.  It is called a ‘severance clause’ because it says that if any part of a contract or law is found unenforceable (e.g., unconstitutional) then that part of the contract or law – and all elements dependent on that part – are severed out of the contract or law, with all the remaining parts continuing in full force and effect.

Now, let me correct the most common misconception folks have on this subject, and pardon me in advance for speaking in a double negative.  Just because a contract or law does not have a severance clause, does not mean that the whole contract or law is automatically stricken due to the absence of such a clause when some part of the contract or law is found unenforceable.  This is important in this case.

The absence of a severance clause opens the door to the whole law being invalidated, but it does not automatically mean that that will always (or even often) be the outcome following a finding of unconstitutionality of some part of a law.

In fact, even in the absence of a severance clause, severance is still the judicially preferred course.  In this case, the feds conceded in their briefs that if the individual mandate was found unconstitutional, then all of the insurance elements of the law would have to fall with the mandate.  The reason for this was that the insurance market itself couldn’t sustain the requirements like community issue, no lifetime caps, etc. without the individual mandate.  This is part of why the feds referred to the individual mandate as the “linchpin” of the legislation; because without it, the rest of the insurance scheme does not work.

So, ordinarily, a court would try to sever out an offending provision along with all of the other portions of the law that couldn’t properly function absent the offending provision.  This is what the feds are aiming for in the healthcare case if they lose on the individual mandate.  It is what the judge in our case in Virginia intended to apply as a remedy (he made a drafting error, so it would need to be fixed at the appellate level anyway).

The alternative to severing is what is called the “legislative bargain” theory.  In those instances when the offending provision is so central to the legislation that it would not have passed without such provision, then the proper course is to strike the entire law.  Under circumstances where Congress would not have passed the statute without the offending provision, it is deemed an act of judicial restraint not to rewrite as a law that separate portion of a statute that remains after severing the critical offending provision.

It is Virginia’s position that if there was ever a situation when it can be known that a law would not pass absent a particular provision, it is the federal healthcare bill absent the individual mandate.  This is true for several reasons.

First, as you may recall, the individual mandate was a fallback position from the so-called ‘public option.’  Second, the bill was never before any committee in an amendable form in either the Senate or the House combined with the fact that it did not have a single vote to spare in the Senate and only three to spare out of over 400 in the House.

I cannot name another bill that went through both houses of Congress in its final form without going through committees in either body, much less having such a thin margin for passage.

Recall that the Senate substituted what became the final bill on the Senate floor without further amendments and passed it late at night on Christmas Eve of 2009 (can you say ‘Santa, coal for 60 Senators please?’).  It passed with 60 votes, thereby surviving a potential filibuster no votes to spare.

The following month, Scott Brown was elected to the U.S. Senate from Massachusetts!  Needless, to say, on Christmas Eve, no one was thinking that in a month there would be a Republican from Massachusetts.  And his arrival in the Senate foreclosed the Dems’ ability to amend the bill in the House because if the bill was amended it would have to go back to the Senate where the GOP could now kill it with a filibuster.

Thus, the bill was never before any House committee that could do anything except talk about it, i.e., they couldn’t amend it.  And then of course, late on March 21, 2010, the House passed the unamended bill with three votes to spare, with the President signing it two days later on March 23rd.

As I said, if ever there was a bill that should come tumbling down with its main provision, this is it.

Hurry Up!

Due to the incredible costs the healthcare is imposing already, combined with its very uncertain future, Virginia has requested the U.S. Supreme Court to do something that it only does once or twice a decade – we have asked the Supreme Court to expedite this case and skip the appellate courts.

Unlike many other cases, in this case there is not much to be developed at the appellate level.  It will be essentially the same arguments that were heard in the district court all over again.  So, if that’s the case, and we all know the Supreme Court is going to ultimately decide the case, why not ask them to take it on an accelerated basis?

There being no good reason to wait that we could come up, with proceeded to make the request.  The cases now pending would seem to be considerably more important than many that the Supreme Court has expedited in the last few decades, but it is 100% discretionary to the Supreme Court, so we’ll have to see what they do!

That’s the update for now, I hope you’ve found this helpful.

Sincerely,

Ken Cuccinelli, II

Attorney General of Virginia