Lawmakers Reach Deal to End Government Shutdown, Raise Debt Ceiling

by Andrea M. Bergman, Karen S. Sealander, Erica Stocker and Eric Zimmerman

While the focus over the past 16 days has been on the shuttered government and the prospect of the United States defaulting on its debt obligations, there are subtexts that are relevant to the health care industry.  This On the Subject details five key health care takeaways.

Read the full article here.

Pennsylvania Federal Judge Finds the Individual Mandate Unconstitutional and Strikes Down Closely Related Provisions

by J. Peter Rich and Webb Millsaps

On September 13, 2011, a federal district court judge in Pennsylvania ruled that the individual mandate under the Affordable Care Act (ACA) is unconstitutional and that certain provisions closely linked to the individual mandate must also be struck down.

Judge Christopher C. Connor’s decision differed from all of the prior judicial rulings on the question of severability, finding that certain provisions of the ACA which are closely tied to the individual mandate should fail as well, including provisions on guaranteed issuance of health insurance coverage irrespective of pre-existing conditions.  However, Judge Connor ruled that the bulk of the ACA should remain intact, notwithstanding the unconstitutionality of the individual mandate. In this regard, Judge Connor’s decision took a middle path between the previous two district court decisions that had found the individual mandate unconstitutional.  Judge Hudson in Virginia had struck down the individual mandate, but had ruled that all other provisions of the ACA could stand intact.  Judge Vinson in Florida had struck down the individual mandate and had ruled that the entirety of the ACA must fail.

Six federal district courts have now ruled on the constitutionality of the individual mandate: three finding it constitutional and three finding it unconstitutional (two of those decisions, one on each side of the scorecard, were vacated last week by the Fourth Circuit Court of Appeals).  Aside from those six courts, other federal district courts have also ruled in cases involving challenges to the ACA, but those rulings have been on legal grounds not related to the constitutional questions, such as whether the challengers have standing.

Three federal circuit courts of appeals have now considered lower court decisions on the individual mandate.  The Eleventh Circuit Court of Appeals in Atlanta, reviewing Judge Vinson’s opinion, found the individual mandate to be unconstitutional, but overturned Judge Vinson on the severability issue, ruling that the remainder of the ACA should not be struck down.  The Sixth Circuit Court of Appeals in Cincinnati upheld a lower court decision that found the individual mandate to be constitutional.  Last week, on September 8, 2011, the Fourth Circuit Court of Appeals in Richmond vacated two federal district court decisions, finding that the judges did not have standing to reach their decisions (for legal reasons related to standing of the challengers and ripeness of the injuries).  Separately, briefs have been filed in another case which is before the Circuit Court of Appeals for the District of Columbia.

There are approximately 30 cases involving challenges to the ACA that are in various stages of litigation.  Due to the circuit split between the Eleventh Circuit and Sixth Circuit, the U.S. Supreme Court will ultimately resolve the issues of the individual mandate and its severability from other provisions of the ACA.

Supreme Court Receives New Request to Consider Constitutionality of Health Reform Law

by Webb Millsaps and J. Peter Rich

The Supreme Court of the United States received a new request today that it consider the question of whether the “individual mandate” under the Affordable Care Act (the ACA) is constitutional or not. The petition of certiorari was filed by the Thomas More Law Center, one of several plaintiffs challenging the ACA on constitutional grounds in various litigation now working through the federal courts. The filing today requesting Supreme Court review took less than a month after the Sixth Circuit Court of Appeals handed down a 2-1 decision that rejected the Thomas More Law Center’s challenge to the ACA and declared that the individual mandate was constitutional. After losing the Sixth Circuit decision before the three-judge panel, the Thomas More Law Center could have made a request that the Sixth Circuit rehear the case en banc, meaning that all of the Sixth Circuit judges (as many as 26 judges, depending on factors such as current vacancies) would rehear the case and issue a decision. En banc hearings are somewhat rare and are usually reserved for especially complex cases or ones of considerable public importance.

The July 27, 2011 filing is not the first time one of the litigants challenging the ACA has requested that the Supreme Court take up the matter. In April of this year, the Supreme Court refused a request from the State of Virginia that its challenge to the individual mandate and the ACA be heard by the high court on an accelerated basis. Virginia’s request was different in an important respect from the July 27 petition by the Thomas More Law Center because Virginia sought to leap frog the intermediate step of going before a U.S. Circuit Court of Appeals, preferring instead to ask for the extraordinary step of immediately proceeding to the Supreme Court. Accordingly, Virginia’s request represented a departure from the normal course of review and at the time no one was surprised that the Supreme Court preferred that the Virginia matter first be heard by the Fourth Circuit Court of Appeals.   It is also worth noting that Virginia’s request was different from the July 27 request by the Thomas More Legal Center in the sense that Virginia won in its original petition (at least in large part) because the original federal district court had sided with Virginia in its position that the individual mandate was unconstitutional, whereas the Thomas More Law Center has now lost before a federal district court and the Sixth Circuit. 

Throughout the legal battle, the Obama Administration has taken the position that the legal process should play out methodically and go through the appropriate stages of appeal. This may be a political preference and a legal strategy that the Administration views as beneficial to it. Regardless, the Supreme Court itself has a strong, historical preference that, absent extraordinary urgency, it only consider matters after a complete review has taken place in applicable lower courts. 

It is highly unlikely that the Supreme Court will consider taking up the challenges to the ACA until both the Fourth Circuit Court of Appeals and the Eleventh Circuit Court of Appeals have rendered decisions on the ACA cases currently before them. As we have stated previously, if either of those circuit courts strike down the individual mandate or, possibly even the ACA entirely, that would establish a circuit split given that the Sixth Circuit ruled in support of the individual mandate. And if there is a circuit split after decisions are rendered in the other pending cases, it is likely that the Supreme Court will take up the matter more quickly.  In that event, if the high court takes the case this fall, it will likely decide the constitutionality of health care reform just months before the 2012 election.

Split Decision: U.S. Appellate Court Finds Health Reform Law is Constitutional

by J. Peter Rich and Webb Millsaps

The Obama Administration enthusiastically embraced a legal victory yesterday when, in a 2-1 split decision, a federal appeals court panel upheld a lower federal court decision finding that the federal Health Reform Law is constitutional.  Some observers quickly seized on the fact that one of the two votes upholding the Health Reform Law was a conservative Republican judge, Jeffrey Sutton, who once clerked for Supreme Court Justice Antonin Scalia.  The third judge, a Reagan appointee, dissented on the substantive issue, arguing that the Health Reform Law is unconstitutional.

The core question remains an extremely close one.  The three judges on the panel were not unanimous and the opinion itself gives some further indications that the matter could go either way when it is finally decided by the Supreme Court.   For example, Judge Sutton, who concurred in part and wrote the majority opinion in part, indicated that his opinion is just one step in the process – at one point he essentially refers to the appeals court as a “middle management judge” and then later goes on to observe that he is “[m]indful that we at the court of appeals are not just fallible but utterly non-final in this case…” 

Whether today's decision has any ultimate impact will turn on its persuasive power and, in particular, whether the logic of the opinion is deemed compelling by the Supreme Court of the United States.  Even before this case approaches the high court, several additional steps will occur. First, the challengers could request the Sixth Circuit Court of Appeals to re-hear the case en banc, although information posted on the lead challenger’s website indicates that this option will not be pursued and that the challengers prefer that the case proceed directly to the Supreme Court.  In any event, the Sixth Circuit decision is just the first of the three appellate court reviews; two other federal appeals courts are currently considering similar challenges to the Health Reform Law.  In contrast to the Sixth Circuit’s decision in which the lower court had already found the Health Reform Law to be constitutional, the other two circuits, the Fourth and the Eleventh, would have to reverse lower courts that have previously rejected the Health Reform Law as being unconstitutional.   If either of those circuit courts decides the opposite way of today’s decision, the odds will increase that the Supreme Court will take up the matter more quickly.   If the high court takes the case this fall, it could decide the constitutionality of health care reform just months before the 2012 election.