The Fourth Circuit was the first federal Court of Appeals to hear oral arguments in cases challenging the minimum essential coverage provision (a/k/a the individual mandate) in the Affordable Care Act. On May 10, a three-judge panel heard arguments in two cases: Liberty University v. Geithner and Virginia v. Sebelius. The first is an appeal from a decision of Judge Moon in the Western District of Virginia dismissing the challenge to the individual mandate for failure to state a claim. The second is an appeal from a decision of Judge Hudson in the Eastern District of Virginia granting summary judgment to Virginia on the ground that the individual mandate is unconstitutional (but severable from the remainder of the Act). Here are a few things to look for when the Fourth Circuit rules:
– The Bottom Line: Will the court reach the merits of the individual mandate’s constitutionality in both cases? Much of the oral argument in Virginia v. Sebelius focused on alleged jurisdictional defects. The individual mandate imposes an obligation on individuals but not on states. Virginia traces its right to challenge the mandate to state legislation declaring (with some minor exceptions) that no Virginia resident shall be required to obtain or maintain insurance. Legislatures in several other states have passed similar laws. The federal government’s appeal in Virginia v. Sebelius squarely presents the question whether such legislation authorizes states to sue the federal government for a federal court ruling addressing the conflicting commands of state and federal law.
– If the Court Gets to Yes, How: Although everything is speculative until the court rules, the panel at oral argument appeared more likely than not to uphold the individual mandate against the constitutional challenge that its enactment exceeded Congress’s limited and enumerated powers. If the panel decision does uphold the mandate’s constitutionality, the grounds on which it does so could matter. The federal government has invoked not only Congress’s authority under the Commerce Clause and Necessary and Proper Clause, but also Congress’s power to tax. Thus far, no federal court has upheld the mandate as an exercise of the taxing power. Some courts have rejected the federal government’s reliance on the taxing power, while others have found it unnecessary to reach the issue after concluding that Congress’s power to regulate commerce was sufficient. Although most of the merits discussion at the oral arguments focused on the Commerce Clause and the Necessary and Proper Clause, the judges on the panel also expressed interest in analyzing the parties’ arguments about the extent of Congress’s taxing power. A desire to reach the merits of the taxing power arguments may explain an order for supplemental briefing by the parties to address a statute that bars certain challenges to the assessment of taxes.
– Percolation Effects: One of the reasons that the Supreme Court does not get immediately involved in issues that arise in multiple lawsuits spread across the country is that the percolation of cases in the lower courts can help to clarify, and perhaps resolve, some issues. This process can aid the Supreme Court’s ultimate resolution by sharpening the arguments and developing the implications of various lines of reasoning. It will be interesting to see whether the Sixth Circuit’s opinions in the mandate litigation (Thomas More Law Center v. Obama) have informed any of the Fourth Circuit’s opinions, and, in turn whether the Fourth Circuit’s opinions inform the Eleventh Circuit’s and, ultimately the Supreme Court’s. (Of course, there is always the chance that the Eleventh Circuit’s opinions will come down before the Fourth Circuit’s in which case it will be interesting to see whether the Eleventh Circuit’s opinions influence the Fourth Circuit’s.)