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Fourth Circuit Issues Opinions on Health Care Reform but Side Steps Substantive Issues

On September 8, 2011, the Fourth Circuit issued opinions in two separate cases challenging as unconstitutional the provision of the Patient Protection and Affordable Care Act (“ACA”), requiring all individuals to purchase a minimum amount of health insurance by 2014. 

However, unlike the previous two circuits to hear the case, the Sixth and Eleventh Circuits, the Fourth Circuit did not issue an opinion as to the constitutionality of the individual mandate, but rather dismissed both of the cases on procedural grounds.  As with numerous other cases being heard throughout the country, the main focus of the litigation is the individual mandate provision.  Plaintiffs in each of these cases generally contend that the individual mandate is unconstitutional because Congress has exceeded its powers under the Commerce Clause by requiring individuals to purchase health insurance.

On June 29, 2011, the Sixth Circuit was the first federal appeals court, in a 2-to-1 decision, to issue an opinion as to the constitutionality of the individual mandate, finding the mandate to be constitutional in its 64-page analysis.  On August 12, 2011, the Eleventh Circuit issued its more than 300-page opinion, also a 2-to-1 majority, that the individual mandate is unconstitutional.  The split of authority between the circuits is almost certain to mean that the Supreme Court will decide the constitutionality of the ACA, and in fact, the plaintiffs in the Sixth Circuit case have petitioned the Supreme Court for review. 

The Fourth Circuit’s opinion was anticipated to be a tie-breaker of sorts, but ultimately the court did not provide a substantive opinion on the issue.  In one of the two cases filed, Liberty University and two individuals challenged both the individual mandate and a similar employer mandate, requiring employers to provide certain minimum coverage, as unconstitutional.  Their claims were brought under a theory that the mandate was a tax.  The district court had upheld the constitutionality of both provisions.  The Fourth Circuit, however, in a 2-to-1 decision, viewed the suit as a pre-enforcement action seeking to restrain the assessment of a tax.  In a procedurally-complex, 140-plus-page opinion, the court reasoned that the Anti-Injunction Act strips the court of jurisdiction over the matter.  Thus, the court vacated the lower court judgment and remanded the case with instructions that it be dismissed for lack of jurisdiction.

In the second, unanimous, and relatively brief 33-page opinion issued by the Fourth Circuit on September 8, 2011, the plaintiff was the Commonwealth of Virginia, again challenging the constitutionality of the individual mandate.  The district court found the challenged provision to be unconstitutional, but the Fourth Circuit determined that the Commonwealth lacked standing to sue because a state typically does not have standing to sue the federal government on behalf of its citizens; the court then vacated the judgment of the district court, and remanded the case with instructions to dismiss the case for lack of subject-matter jurisdiction. 

While the Fourth Circuit’s decisions in these two cases did not provide guidance on the constitutionality of the individual mandate, the court’s decisions nonetheless provide further evidence of the discord among the circuits with regard to the individual mandate, and the ACA as a whole.  Furthermore, other cases continue to be heard in courts around the country, including a case in the federal D.C. Circuit scheduled for oral argument later this month.  And, as recently as September 13, 2011, a federal district court judge in Pennsylvania found the individual mandate unconstitutional, paving the way for a possible appeal to the Third Circuit. 

Commentators anticipate that the Supreme Court is likely to hear oral arguments about the constitutionality of the individual mandate in 2012, most likely before the general election. 

If you have questions regarding the ACA, please contact any member of Greenebaum’s Health and Insurance Team.



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