Judge Strikes Down Mandated Health Coverage; Supreme Court Review Expected

Using language that echoes the lingering political debate over health care reform, and presaging a novel legal debate that now is virtually certain to end at the U.S. Supreme Court, a federal judge in Virginia Monday struck down as unconstitutional the controversial "individual mandate" provision of the nation's new law. "At its core," U.S. District Judge Henry Hudson wrote, "this dispute is not simply about regulating the business of insurance -- or crafting a scheme of universal health insurance coverage -- it's about an individual's right to choose to participate."

Hudson, a 2002 appointee of George W. Bush, thus became the first federal judge in the nation to endorse the merits of a legal challenge to the mandate provision -- which requires individuals to purchase health insurance, some for the first time, to help reduce the overall costs of health care. The Virginia lawsuit which generated the ruling is one of dozens around the country (another challenge, out of Florida, will move forward with a hearing later this week). Earlier this year, a federal trial judge in Michigan, and another federal trial judge in Virginia, dismissed similar constitutional challenges to the new law.

In his 42-page order, Judge Hudson declared there was no legal precedent under the Commerce Clause of the Constitution to allow the Congress through federal legislation "to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market." The judge also ruled that the mandate could not be validated under the General Welfare Clause of the Constitution, which permits broad federal power to tax, because it is "in form and substance, a penalty as opposed to a tax."

"A thorough survey of pertinent constitutional case law," Judge Hudson wrote, "has yielded no reported decisions from any federal appellate courts extending the Commerce Clause or General Welfare Clause to encompass regulation of a person's decision not to purchase a product." And he rejected each of the federal government's arguments supporting the new measure as necessary to save billions of dollars in state, local and national health care costs. The feds "posit," the judge wrote:

"that every individual in the United States will require health care at some point in their lifetime, if not today, perhaps next week or even next year. [Their] theory further postulates that because near universal participation is critical to the underwriting process, the collective effort of refusal to purchase health insurance affects the national market. Therefore... requiring advance purchases of insurance based upon a future contingency is an activity that will inevitably affect interstate commerce. Of course, the same reasoning could apply to transportation, housing or nutritional decisions. This broad definition of the economic activity subject to congressional regulation lacks logical limitation."

The Justice Department, which anticipated the adverse result based upon Judge Hudson's previous comments about the validity of the new law in a court hearing early this year, will almost certainly appeal his ruling to the 4th U.S. Circuit Court of Appeals. A DOJ spokesman said Monday in the immediate wake of Judge Hudson's order: "We are disappointed in today's ruling but continue to believe – as other federal courts in Virginia and Michigan have found – that the Affordable Care Act is constitutional. There is clear and well-established legal precedent that Congress acted within its constitutional authority in passing this law and we are confident that we will ultimately prevail."

It is also conceivable, but far less likely, that the federal government will seek an expedited review of the matter by the Supreme Court. And it is far less likely still that the justices would welcome such a request before more lower court judges, and perhaps two or more federal appeals courts, chime in on the constitutional questions raised by the new measure. In any event, neither of their appellate options must look appetizing now to federal lawyers. The 4th Circuit is one of the most conservative federal appeals courts in the nation. And the Supreme Court itself has a clear conservative majority, which includes Justices Clarence Thomas, whose wife, Virginia Thomas, is a member of a Virginia political group that has actively opposed the new health care laws.

Those groups Monday were quick to praise Judge Hudson's ruling. And Sen. Orrin Hatch (R-Utah), a key member of the Senate Judiciary Committee, said, "Today is a great day for liberty. Congress must obey the Constitution rather than make it up as we go along. Liberty requires limits on government, and today those limits have been upheld." The White House, meanwhile, responded the ruling with a statement from presidential advisor Stephanie Cutter. "Opponents of reform claim that the individual responsibility requirement-- the requirement that all Americans carry a minimum level of insurance by 2014-- exceeds Congress' power to regulate interstate commerce because it penalizes economic 'inactivity.' Make no mistake-- individuals who choose to go without health insurance are actively engaged in economic decision making-- the decision to pay for health care out-of-pocket or to seek uncompensated care."