Appeals Court Rules Portion of Obama Health Care Bill Unconstitutional

August 12, 2011 -- A federal appeals court in Atlanta on Friday struck down a key provision of the Obama administration's health care reform law, ruling that Congress exceeded its authority in mandating that most Americans buy health insurance by 2014 or face a penalty.

A divided, three-judge panel of the 11th Circuit Court of Appeals ruled that the individual mandate was "breathtaking in its expansive scope" and therefore unconstitutional. The "individual mandate," they wrote, "exceeds Congress's enumerated commerce power."

The opinion was written jointly by Chief Judge Joel F. Dubina, a George H.W. Bush appointee, and Judge Frank M. Hull, appointed to the bench by Bill Clinton. The ruling marks the first time a judge appointed by a Democratic president struck down the key provision of the law.

"This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives," Judges Hull and Dubina wrote. They said, "We have not found any generally applicable, judicially enforceable limiting principle that would permit us to uphold the mandate without obliterating the boundaries inherent in the system of enumerated congressional powers."

While striking down the mandate, the Court ruled that it was severable from the rest of the law.

"The Act's other provisions remain legally operative after the mandate's excision," the majority wrote.

Because a separate Appeals Court upheld the provision in June, today's ruling increases the likelihood that the Supreme Court might eventually step in and hear the issue to resolve the circuit split. Currently the 4th Circuit Court of Appeals in Virginia is considering a similar challenge.

Friday's challenge was brought by 26 states, the National Federation of Independent Businesses and two individual plaintiffs.

At oral arguments Acting Solicitor General Neal Katyal had argued for the administration that health care is a unique market and a "universal fact of our existence" and that Congress was well within its authority to pass a sweeping health care law. But Paul Clement, arguing for the States, said the case turns on "whether or not the federal government can compel an individual to engage in commerce."

Today the Court agreed with Clement and targeted the limits of Congress, saying the case was about whether the government can issue a mandate "that Americans purchase and maintain health insurance from a private company for the entirety of their lives."

Hull and Dubina wrote, "Ultimately, the government's struggle to articulate cognizable, judicially administrable limiting principles only reiterates the conclusion we reach today: there are none."

Judge Stanley Marcus, a Clinton appointee, partially dissented, writing, "The individual mandate, viewed in light of the larger economic regulatory scheme of the Act as a whole and the truly unique and interrelated nature of both markets, is a legitimate exercise of Congress' power ... and is not prone to the slippery slope of hypothetical horrors leading to an unlimited federal Commerce Clause power."

The case also marked the first time an appeals court addressed another provision of the law that expands the reach of Medicaid.

Clement argued that the government had gone too far in asking the states to add significant administrative expenses and force them to eventually cover more citizens through Medicaid.

But the Court ruled that the Medicaid expansion is constitutional.

The Department of Justice issued a statement following the opinion, saying it "strongly" disagreed with the decision and that it is "considering the next appropriate steps."

Supporters of the law joined in the criticism.

"The 11th Circuit majority ignored the text and history of the Constitution, centuries of Supreme Court precedent, and the basic reality of our health care system," said Elizabeth Wydra, chief counsel of the Constitutional Accountability Center.

But Georgetown law professor Randy Barnett ,who represented the States in the case, issued a statement hoping the Supreme Court would take up the issue.

"Now that judges appointed by both Democratic and Republican presidents have found the individual insurance mandate to be unconstitutional, the nation's interest requires the Supreme Court to hear this case next term. Only then would the uncertainty inflicted upon the national economy by this unprecedented and unconstitutional law be lifted. "