Oral Arguments Heard in Appeals of Lawsuits Against Reform Law

On Tuesday, a panel of three judges at the Fourth U.S. Circuit Court of Appeals in Richmond, Va., heard oral arguments in the appeals of two Virginia-based lawsuits that challenge the constitutionality of the federal health reform law and its individual mandate, the Washington Post reports (Helderman, Washington Post, 5/10).

The court heard arguments in two cases in which federal district court judges delivered divergent rulings. The cases were filed by Virginia state officials and officials at Liberty University, a private Christian college in the state.

Background on Lawsuits

In the state lawsuit -- filed in March 2010, shortly after the health reform law was enacted -- Virginia Attorney General Ken Cuccinelli (R) argued that the mandate is unconstitutional and also conflicts with a state law that protects state residents from such federal insurance mandates. In his December 2010 ruling, U.S. District Court Judge Henry Hudson agreed with the state's argument, ruling that the mandate is unconstitutional because it exceeds Congress' power to regulate interstate commerce. However, Hudson did not invalidate the law or block its implementation.

In their formal notices of appeal, the Obama administration argued that Hudson was wrong in his ruling of the mandate, while Virginia officials argued that Hudson should have struck down the entire overhaul.

In the Liberty lawsuit, university officials and five state residents argued that Congress exceeded its constitutional authority by requiring the university and other similar entities and businesses that employ more than 50 people to provide health insurance coverage. The university argued that it potentially could face as much as $1.1 million in fines if the requirement is upheld. The plaintiffs also claimed that the law violates their religious rights because some of the money collected through new insurance regulations would be used to cover abortions, which the university opposes. U.S. District Court Judge Norman Moon in a November 2010 ruling dismissed the university's lawsuit and upheld the constitutionality of the law (California Healthline, 5/9).

Appeals Arguments

At Tuesday's hearing, the three Democrat-appointed judges -- who were randomly selected from the court's 14-member roster -- focused on two questions that were raised by the lawsuits:

• Whether a state has the standing to sue the government on issues it opposes; and
• Whether the government has the power under the commerce clause in the Constitution to regulate interstate commerce and "inactivity" (Sack, New York Times, 5/10).

Although the panel was "tough" on Acting Solicitor General Neal Katyal, who argued for the Obama administration, the judges "peppered" lawyers for the state of Virginia and the university with "intense rounds of questioning" (Haberkorn, Politico, 5/10).

During examination of the Virginia lawsuit, Judge Andre Davis -- who was appointed by President Obama -- asked state Solicitor General E. Duncan Getchell, "How on earth can there be standing if all it takes is Virginia to pass a statute and for the attorney general to come to court?" In addition, Judge James Wynn, also an Obama appointee, asked Getchell whether the state enacted the law for the purpose of gaining a standing to file its lawsuit (Adamy, Wall Street Journal, 5/11).

Getchell noted that states like Oregon and Wyoming have successfully defended laws that conflicted with federal laws, adding that the Virginia law also would protect residents against any private employer in the state that required its workers to obtain health insurance as a condition of employment (Norman, CQ HealthBeat, 5/10). He insisted that the Virginia General Assembly had the right to pass the law to protect the state's sovereignty, adding that federal courts were designated under the Constitution to be the arbiters of such conflicts over state sovereignty.

However, Katyal argued that if Virginia's argument is allowed to stand, states then could pass any number of laws exempting their residents from any other federal policy they oppose (O'Dell, AP/Miami Herald, 5/10).

During the session on the Liberty case, the judges asked "probing questions" of Mathew Staver, who argued on behalf of the university, about the lawsuit's assertion that an individual that has opted not to purchase health insurance also has chosen not to engage in an economic activity, the Post reports (Washington Post, 5/10).

Judge Diana Gribbon Motz, who was appointed by President Clinton and was designated as the presiding judge in Tuesday's hearings, also pressed Staver about the difference between activity and inactivity (CQ HealthBeat, 5/10). Staver responded, "I think it's inherent when you're talking about regulating commerce, ... commerce cannot be idleness" (Washington Post, 5/10).

However, Katyal argued that health care is a necessity for all individuals at some point in their lives, and that others would have to bear the medical costs if individuals are allowed to remain uninsured. "Congress is not asking people to buy something they would not otherwise buy," Katyal added. Staver, the dean of Liberty University's law school, rejected Katyal's assertion, adding that the health reform law "forces inactive bystanders into a stream of commerce" (New York Times, 5/10).

Possible Outcome and Timeline of Appeals

Legal observers at the hearing said that the panel appeared to be leaning in the Obama administration's favor, but some noted that the line of questioning likely would have been the same with any other panel of judges, The Hill reports (Baker, The Hill, 5/10). However, Kevin Walsh, an assistant professor of law at the University of Richmond, said, "All three judges appeared more skeptical of the challengers' argument and more accepting of the federal government's."

Following the hearing, Cuccinelli said he believed the judges "were aggressive in both directions for both sides, so I don't draw any great concern about that." Staver also said, "I don't think it should matter at the end of the day whether they are appointed by Republicans or Democrats, conservative or liberal," adding, "There is no case in our history that forces a person to buy a product, and that's the question [the judges are] going to have to wrestle with" (AP/Miami Herald, 5/10).

According to the Post, the Fourth Circuit appeals court usually delivers its rulings in about 45 days, but the judges on Tuesday did not offer any indication about when they plan to announce their decision (Washington Post, 5/10). Cuccinelli said that if the panel does not rule in favor of his lawsuit, he plans to skip his option to have the full 14-member appellate court hear his case and file a petition in the U.S. Supreme Court (Politico, 5/10). Late last month, the Supreme Court rejected Cuccinelli's appeal for an expedited review of the lawsuit (California Healthline, 4/26).