If you are the Attorney General of Florida, two out of six may not be bad.
Six is the number of counts in Florida’s federal suit to declare the 2010 federal health care law unconstitutional. Yesterday, the federal judge hearing the dispute entered an order dismissing four of the claims but allowing two to proceed. Nineteen other states have joined the case as plaintiffs.
You can read the court’s 65-page order here.
I will offer an overview of what happened.
A primary and controversial feature of the healthcare law is its mandate that, beginning in 2014, nearly all citizens must purchase healthcare coverage or face a penalty. Florida’s challenge to the law is largely centered on the constitutionality of that mandate and, more particularly, the accompanying penalty used to enforce the mandate.
First, the court tackled the question of whether the penalty can be defended on grounds it is a tax adopted pursuant to Congress’s taxing authority. If it is a tax, then federal law precludes any challenge to it until the tax is paid, and thus the core challenge here would be premature by several years. The court determined that the penalty is not a tax, however, because Congress did not intend it to be one — a view the court reached based on the law’s language and the treatment it received during the legislative process.
Based on that ruling, the court permitted count I of the plaintiffs’ complaint to go forward and dismissed count III as moot. Count I asserts that Congress lacks power under the Commerce Clause to adopt the penalty, and count III is a similar challenge under Congress’s power to tax.
Count II challenges the penalty as violating substantive due process. The court dismissed that claim, holding that the law is subject only to rational basis scrutiny and that the law satisfies that standard.
Count IV challenges the law’s expansion of the Medicaid program as an improper expenditure under the Spending Clause, arguing that states are being coerced to participate in a program that is becoming destructively expensive. The court permitted this claim to proceed.
Finally, counts V and VI involve challenges to two additional provisions in the law. One requires states to provide state-operated health benefit exchanges or lose certain regulatory authority. The other requires states to provide health insurance for state employees. The court rejected both challenges, holding that Congress had the authority to adopt each provision and dismissing both claims.
In the end, the court permitted only two claims to proceed: the penalty challenge under count I, which the federal government must now defend only under its commerce powers; and the Medicaid expansion challenge under count IV, which will come down to whether the Medicaid system now amounts to unconstitutional economic coercion.
The court’s order is also notable for its discussion concerning what the court viewed as a material difference between the manner in which Congress debated the law and the manner in which the government now attempts to defend it. The court described the federal government’s positions as including an Alice In Wonderland-like quality:
In Virginia v. Sebelius, one of the twenty or so other lawsuits challenging the Act, the federal government’s lead counsel (who is lead defense counsel in this litigation, as well) urged during oral argument in that case that the penalty is proper and sustainable under the taxing power. Although that power is broad and does not easily lend itself to judicial review, counsel stated, “there is a check. It’s called Congress. And taxes are scrutinized. And the reason we don’t have all sorts of crazy taxes is because taxes are among the most scrutinized things we have. And the elected representatives in Congress are held accountable for taxes that they impose.”
This foregoing statement highlights one of the more troubling aspects of the defendants’ “newfound” tax argument. As noted at the outset of this order, and as anyone who paid attention to the healthcare reform debate already knew, the Act was very controversial at the time of passage. Irrespective of the merits of the arguments for or against it, the legislation required lawmakers in favor of the bill to cast politically difficult and tough votes. As it turned out, the voting was extremely close. Because by far the most publicized and controversial part of the Act was the individual mandate and penalty, it would no doubt have been even more difficult to pass the penalty as a tax. Not only are taxes always unpopular, but to do so at that time would have arguably violated pledges by politicians (including the President) to not raise taxes, which could have made it that much more difficult to secure the necessary votes for passage. One could reasonably infer that Congress proceeded as it did specifically because it did not want the penalty to be “scrutinized” as a $4 billion annual tax increase, and it did not want at that time to be “held accountable for taxes that they imposed.” In other words, to the extent that the defendants are correct and the penalty was intended to be a tax, it seems likely that the members of Congress merely called it a penalty and did not describe it as revenue-generating to try and insulate themselves from the potential electoral ramifications of their votes.
Regardless of whether the members of Congress had this specific motivation and intent (which, once again, is not my place to say), it is obvious that Congress did not pass the penalty, in the version of the legislation that is now “the Act,” as a tax under its taxing authority, but rather as a penalty pursuant to its Commerce Clause power. Those two exactions, as previously noted, are not interchangeable. And, now that it has passed into law on that basis, government attorneys have come into this court and argued that it was a tax after all. This rather significant shift in position, if permitted, could have the consequence of allowing Congress to avoid the very same accountability that was identified by the government’s counsel in the Virginia case as a check on Congress’s broad taxing power in the first place. In other words, the members of Congress would have reaped a political advantage by calling and treating it as a penalty while the Act was being debated, and then reap a legal advantage by calling it a tax in court once it passed into law. This should not be allowed, and I am not aware of any reported case where it ever has been.
Congress should not be permitted to secure and cast politically difficult votes on controversial legislation by deliberately calling something one thing, after which the defenders of that legislation take an “Alice-in-Wonderland” tack and argue in court that Congress really meant something else entirely, thereby circumventing the safeguard that exists to keep their broad power in check. If Congress intended for the penalty to be a tax, it should go back and make that intent clear (for example, by calling it a tax, relying on Congress’s Constitutional taxing power, allowing it to be collected and enforced as a tax, or identifying revenue to be raised) so it can be “scrutinized” as a tax and Congress can accordingly be held accountable. They cannot, however, use a different linguistic with a perhaps secret understanding between themselves that the word, in fact, means something else entirely.
In the preceding quote, citations are omitted but the emphasis shown is the court’s.