By Sara Rosenbaum

On September 28, 2011, the United States Justice Department (DOJ) asked the United States Supreme Court to review the decision of the court of appeals for the Eleventh Circuit striking down as unconstitutional what the DOJ terms the law’s “minimum coverage provision.” In seeking Supreme Court intervention, the DOJ sought review on two matters: first, whether Congress exceeded its Commerce Clause powers, as enhanced by the Necessary and Proper Clause; and second, whether the Anti-Injunction Act bars the challenges from proceeding in the first place. (For a review of the petitions for certiorari in the Florida case also filed by the National Federation of Independent Businesses (NFIB) and the states, see the Health Affairs blog by Timothy Stoltzfus Jost.

In requesting the Court’s intervention, DOJ argued that review has become essential: “[T]he court of appeals has held unconstitutional a central provision of the Affordable Care Act, which represents the considered judgment of the elected Branches of Government – after years of study and deliberation – on how to address the crisis in the national health care market.” In striking down the minimum coverage provision, the appellate court has denied “Congress the broad deference it is due in enacting laws to address the Nation’s most pressing economic problems and set tax policy” while creating a fundamental conflict with the June 2011 decision of the court of appeals for the Sixth Circuit, which found the minimum coverage provision to be constitutional in Thomas More Law Center v Obama, 2011 WL 2556039.

DOJ’s Commerce Clause Argument

In its petition, the DOJ pointed out that paradoxically, the Eleventh Circuit majority agreed about the central fact of the case where Congress’ Commerce Clause powers are concerned, namely “that individuals without health insurance participate in the health care market, and that as a class, they annually consume billions of dollars of health care services for which they do not pay.” The DOJ petition also stated that “the majority further acknowledged [and the respondents also conceded] that the Commerce Clause would plainly permit Congress to regulate the way people pay for health care services at the time that they obtain such services.” Thus, the DOJ argued, the Eleventh Circuit decision was based solely on their view that the law is unconstitutional because it “does not regulate behavior at the point of consumption.”

But this position, argued DOJ, ignores the crucial relationship between the minimum coverage provision and the law’s insurance market reforms. The DOJ asserted that the evidence presented by Congress in its findings (PPACA §1501), as well as other evidence presented to the court, shows that without the minimum coverage provision, a guaranteed issue requirement – the heart of the insurance market reforms – would cause the insurance market to collapse, since it would allow people to enroll only when they are sick.

In arguing for quick resolution, the DOJ laid out what it considers to be the major case law precedents that form the Constitutional basis for the Act. Particularly important, in the government’s view, is Gonzales v Raich, 545 U.S. 1(2005), which held that “[i]n reviewing the validity of Commerce Clause legislation, a . . . court need not determine whether the regulated conduct, taken in the aggregate substantially affects interstate commerce but . . . only whether a rational basis exists for so concluding.” In other words, the task of a court is not to second-guess Congress on the structure of an economic law but only to decide whether Congress had a rational basis for deciding to fashion the law it did. According to DOJ, this broad grant of power under the Commerce Clause is enhanced by the Necessary and Proper Clause, also found in Article 1 §8. Because the minimum coverage provision is part of a broader economic regulatory scheme, DOJ argued, it is constitutional. The Congressional findings make clear, in DOJ’s view, that the coverage provision is design to “directly [address] the consequences of economic conduct that distorts the interstate market for health care and health insurance – namely the attempt by millions of Americans to self-insure or rely on the back-stop of free care, and the billions of dollars in cost-shifting that conduct produces each year when the uninsured do not pay for the care they inevitably need and receive.” Because the Act rests on “direct, tangible, and well-documented economic effects on interstate commerce” the minimum coverage provision is Constitutional. Thus, in DOJ’s view, the appeals court overstepped its bounds by substituting its own judgment about how the law should be designed.

In arguing its position, the DOJ relied heavily on Judge Jeffrey Sutton’s concurrence in the Sixth Circuit’s Thomas More decision, which upheld constitutionality of the law. In response to the Eleventh Circuit majority’s assertion that the minimum coverage provision amounts to regulation of inactivity, the DOJ quoted Judge Sutton concurrence: “As Judge Sutton explained. . . ‘no one is inactive when deciding how to pay for health care, as self-insurance and private insurance are two forms of action for addressing the same risk.’” The DOJ also pointed to Judge Sutton’s dismissal of the timing issue focused on by the Eleventh Circuit, since, as he pointed out, requiring the purchase of insurance at the time that health care is needed would be even more coercive than a mandate disconnected from the need for care.

In addition to its Commerce Clause and “Necessary and Proper” arguments, the government also reiterated the status of the minimum coverage provision as a tax and thus, the independent Constitutional basis for the law as an exercise of Congress’ taxing powers.

The Anti-Injunction Act (AIA) Argument

The AIA bars the federal courts from hearing lawsuits “for the purpose of restraining the assessment or collection of any tax.” The question of whether the minimum coverage requirement is a tax that should have triggered the AIA bar has been an issue in several courts. For this reason, the DOJ also asked the Court to consider whether the AIA in fact precludes judicial review in this case until 2015 at the earliest, when the initial tax penalties first would be imposed on non-exempt people. Interestingly the government did not in fact rely on the AIA to argue for dismissal in the Florida case, although the government had raised the AIA at the district court stage and had lost. Indeed, when it was asked for its views on the AIA by the Fourth Circuit court of appeals in Liberty University v. Geithner, the government argued that it had reconsidered its views and that the AIA did not bar the court from hearing the case. But because the Fourth Circuit found that the AIA did act as a bar while the Sixth Circuit in Thomas More did not, the DOJ also sought resolution of this question. Because the DOJ is on record arguing that the AIA does not apply, it recommended that the Court appoint an amicus to brief and argue the opposite view.