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Yet Another Court Voids Obamacare’s Insurance Mandates

RGNStPauls On August 12, the United States Court of Appeals for the Eleventh Circuit held that the insurance mandate in the “Obamacare” health control law is unconstitutional. The Court ruled that the mandate exceeded Congress’s Commerce Power, and was not a “tax” under Congress’s Taxation Power.

The ruling came in State of Florida v. U.S. Dept. Of Health and Human Services, the most significant of several cases challenging the constitutionality of Obamacare. This is the case brought by a coalition of 26 state attorneys general.

Some of the Court’s discussion suggests that an amicus curiae (“friend of the court”) brief filed by us at the Independence Institute may have influenced how the judges reached their decision.

However, the decision was not a total loss for the Obama administration—specifically, it upheld the law’s mandates on the states pertaining to Medicaid. Later posts will explain why that part of the decision is flat-out wrong, both under the actual meaning of the Constitution and under existing U.S. Supreme Court precedent.

But first, here are some basic facts about the ruling:

* The Court showed more understanding than previous tribunals of the nature of the Commerce Power—specifically that the Commerce Power is based on both the Commerce Clause (Art. I, Section 8, Clause 3) and the Necessary and Proper Clause (Art. I, Section 8, Clause 18). The Supreme Court has rested its expansive reading of the Commerce Power (including the controversial “substantial effects test”) mostly on the Necessary and Proper Clause—not on the Commerce Clause itself. Since earlier opinions had not grasped this point, the 11th Circuit’s relative enlightenment may have been due to the explanation in our amicus brief. Understanding this technical point is important for properly understanding the Constitution.

* This decision is the first in which a judge (Hull) appointed by a Democratic President agreed that the mandate was unconstitutional. The decision was 2-1, with another Democratic nominee (Marcus) voting to uphold the mandate. (The other person in the majority was Chief Judge Dubina, a Republican appointee.)

* Unfortunately, in its analysis the judges refused to rely only on the straightforward and workable “activity vs. non-activity” test adopted by the trial court and other courts voiding Obamacare. Instead, the judges dismissed that test as too “formalistic” and got themselves tangled in a confused analysis of other factors. All this was in accordance with the philosophy of “legal realism” that has dominated the nation’s law schools for many years—promulgated, I might note, largely by law professors who themselves have little experience in the realism of law practice. (One difficulty with reading the Constitution this way is that the document speaks primarily in traditional legal—i.e., so-called “formalistic,” terms.)

* The trial court had invalidated the entire health control law, not just the unconstitutional mandate portion. The Obama administration had pointed out that the mandate was central to the viability of the law. Because that was so, the trial judge had held that Congress needed to go back to the drawing board entirely. But the appeals court decided that the rest of the law could be preserved without the mandate.

* Like all other courts considering the issue, the tribunal rejected the Obama administration’s argument that the penalty for not buying health insurance was a tax rather than a regulation of commerce. This was clearly the correct decision, both in view of the Constitution’s actual meaning and of the wording and legislative history of the health control law.

* Finally, like some other courts, the 11th Circuit upheld the Medicaid mandates on states. This part of the decision was clearly erroneous under the Constitution’s real meaning and probably erroneous under Supreme Court precedent. Future posts will explain why.

Rob Natelson