Saturday, August 30, 2014

Origination Clause Challenge to Individual Mandate In Trouble ... For Now?

Among the stunning features of the Patient Protection and Affordable Care Act, “Obamacare,” is its requirement that every American purchase health care insurance. That requirement, the individual mandate, marked the first time in US history that Congress ordered the American people to purchase a product that, previously, they had been free to buy or to reject.  The outcry was immediate, and led to a turnover in Congress to Republican leadership in the House of Representatives.

Challenges to the individual mandate were immediate.  Multiple legal theories supported the challenges.  

Thus far, the Supreme Court has taken two turns at examining the Act, or parts thereof.  Last year, a bare majority held that the individual mandate under the Act, which could not be justified as an exercise of the Commerce Clause power, was, instead a tax.  Then, just weeks ago, as the 2013 Supreme Court ended, the Court held that the mandate for corporations to include prescription coverage for their employees for abortion-inducing birth control violated rights under the federal Religious Freedom Restoration Act.

Still other challenges to the Act are moving forward in other courts.

Among constitutionalists, much hope has been invested in legal challenges based on two separate strains of legal theory.  One approach seeks to bring about an implosion of the Affordable Care Act by stripping out federal tax credits to fund premiums for low income applicants; those credits are authorized in States that set up exchanges, but not in the 36 States that did not do so.  An IRS rule-making extended the credit in those States despite the lack of authorization for such an extension.  I have previously posted on two recent, conflicting decisions addressing this approach.  

An entirely separate approach, born of a search within the Constitution for the underpinnings of the power to impose a federal tax, has challenged the enactment of Obamacare because it originated in the Senate, rather than the House of Representatives. That, if true, may mean that when the Democratic Party-controlled Congress enacted Obamacare, it violated the Origination Clause the US Constitution.  The Origination Clause states:  “All bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.”  US Const. Art. I, sec. 7. 

Litigation raising the Origination Clause argument against Obamacare has been pending in the Nation’s Capitol for some time now.  Matt Sissel, the plaintiff, claimed that, because the penalty for failing to purchase health insurance is a tax, the Origination Clause required that the House of Representatives originate the legislation.

Obamacare, however, was an invention of the Senate.  In fact, the Democrat-controlled Senate took a pending House bill – one regarding tax credits for home ownership by members of the military -- stripped out every jot and every tittle of it including its title, and inserted the Affordable Care Act in place of its original text and title.  This, on Capitol Hill, is called an amendment in the nature of a substitute.

Neither a Nation nor its people, nor their hopes, aspirations, dreams, labors or relationships should be governed by the whim of gamesmanship.  Yet, with courts at the crux of decisions about the legality of laws like Obamacare, crucial decisions often resemble a group of judges arguing over number placement in Sudoku or attempting a “group solve” on the daily crossword.  Not to put too fine a point on it, attorneys whose careers depend on appearing before the Supreme Court and federal appellate courts understand how these word games are played and craft their arguments to the tune of such judicial gamesmanship.

Now, however, a decision from the US Court of Appeals in WashingtonDC, spells trouble for those who have held the hope that a faithful application of the Origination Clause to the mandate would lead to a decision striking down that provision, and perhaps, the entire the Patient Protection and Affordable Care Act.  Because the meaning and application of the Constitution is the right of every citizen to discern and the duty of every federal official to respect, a decision that gives meaning to, or applies what it claims is the settled meaning of, a provision of the Constitution, the Court's decision should be thought important by every man.

Matt Sissel, an artist, small-business owner and National Guardsman, simply thought that such a signal shift in policy and law, if it were to be forced upon the people, ought to be accomplished within the bounds of the law and the Constitution. Sissel's view is, I suppose, perceived as unreasonable by those who pushed the Affordable Care Act through Congress.  Such denizens of social manipulation and control take affront when we, who prefer to do so, manage the affairs of our lives free of government mandates. For them, it was entirely reasonable to enact legislation, while candidly admitting that they had to pass the bill to know what was in it. That reasoning hardly inspires confidence that legislators are, in fact, comporting themselves within constitutional boundaries.
Judith Rogers, a Bill Clinton appointee to the DC federal appeals court, joined by two recent Obama appointees, evaluated Sissel's theory that Obamacare violated the Origination Clause.  Faultless, the court responded, was Sissel's assertion that the legislation had, in fact, originated in the Senate, rather than the House.  Faultless, the court responded, was Sissel's assertion that the individual mandate imposed a tax. Of course, Judge Rogers deserves no particular credit on that score given the Supreme Court's previous Obamacare decision by Chief Justice Roberts holding that the mandate was, in fact, a tax.

The appeals court concluded, however, that even though the BILL ORIGINATED IN THE SENATE and even though the BILL IMPOSED A TAX, it was not, as the Origination Clause language states, a "bill[] for raising Revenue."  The court concluded that, while it was true that the tax would, in fact, raise revenue for the federal government coffer, the purpose of the entire Act, and the purpose of the mandate's tax, was, rather than raising revenue, to address the policy and law on health care insurance in the United States. Thus, while revenues will flow in to the government under the Act, because that was not the motivation of the entire act, the court reasoned, the Origination Clause challenge to it failed. 

Clever and conclusive, the decision abides what it must, the Supreme Court's conclusion that the penalty for failing to purchase insurance is a tax, admits what it cannot deny, that the bill originated in the Senate rather than the House and that it imposes a tax rather than a penalty, and then claims a ground of construction of the Constitution allowing it to dispose of Sissel's claim.  

For now, it would seem the Origination Clause challenge to the individual mandate under Obamacare is in trouble.

This post is the first of three on the topic of the Origination Clause, the Sissel litigation, and Obamacare. Parts two and three will follow shortly.