Virginia Federal Court Judge Upholds Constitutionality of Health Care Law

hand with gavel2.JPGProponents of the Affordable Care Act were handed a victory on Tuesday when a federal court judge in Virginia dismissed (pdf) yet another lawsuit challenging the constitutionality of the health care law’s individual mandate, among other provisions. The case was brought by Liberty University and a number of individuals affiliated with the Christian school against various members of the Obama Administration. The plaintiffs set forth nine counts challenging the legality the Affordable Care Act, many of which have been argued in other suits filed across the country. One of the main arguments made in these cases is that the Act’s requirement that individuals and large businesses obtain health insurance for themselves or provide insurance to their employees or face a monetary penalty exceeds the government’s powers under the Commerce Clause.

In rejecting this argument, Judge Norman K. Moon reasoned that: “[t]he conduct regulated by the individual coverage provision is . . . within the scope of Congress’ powers under the Commerce Clause because it is rational to believe the failure to regulate the uninsured would undercut the Act’s larger regulatory scheme for the interstate health care market.” Moon further explained that:

As Congress stated in its findings, the individual coverage provision is “essential” to this larger regulatory scheme because without it, individuals would postpone health insurance until they need substantial care, at which point the Act would obligate insurers to cover them at the same cost as everyone else. This would increase the cost of health insurance and decrease the number of insured individuals—precisely the harms that Congress sought to address with the Act’s regulatory measures.

For these reasons, the individual coverage requirement is a valid exercise of federal power under the Commerce Clause, even as applied to the facts of this case.

With respect to employers, Moon found that the requirement that large employers offer minimum essential coverage or pay a penalty was like minimum wage or other federally-mandated employment-related requirements. “The opportunity provided to an employee to enroll in an employer-sponsored health care plan is a valuable benefit offered in exchange for the employee’s labor, much like a wage or salary.” Moreover, the judge explained that:

A rational basis exists for Congress to conclude that the terms of health coverage offered by employers to their employees have substantial effects cumulatively on interstate commerce. Maintaining adequate health care coverage is among the foremost concerns of employees when considering whether to take advantage of better job opportunities. “Job lock” occurs when a worker declines to accept a better job because taking the new job requires giving up the worker’s current health plan, and he fears he will be unable to obtain a comparable one. . . . . In this way, the interstate economy is impeded by the failure of certain large employers to offer adequate health care coverage. Accordingly, the employer coverage provision is a lawful exercise of Congress’ Commerce Clause power.

The court also rejected the argument that the Affordable Care Act violates the plaintiffs’ First Amendment religious freedom rights. The plaintiffs argued that as a Christian organization and observant Christians, they were opposed to any penalty payments being use to fund abortions. In dismissing this contention, Judge Moon pointed out that the Act explicitly states that no insurance plan is required to cover abortion services, at least one insurance plan offered in the future health exchanges must not provide coverage of abortion services, with limited exceptions, and that states may pass laws prohibiting coverage.

The judge, did, however, disagree with the government’s position that the plaintiffs lacked standing to bring the suit in the first instance. Although the judge did dismiss the individuals from the suit on standing grounds, he stated that the University, which makes decisions regarding its employee’s health coverage, does have standing to bring the suit. “The present or near-future cost of complying with a statute that has not yet gone into effect can be an injury in fact sufficient to confer standing.”

Judge Moon’s decisions on the Commerce Clause and standing issues echo those of a Michigan court judge who similarly dismissed an Affordable Care Act challenge in October. Other lawsuits opposing the health care act, however, have been allowed to proceed. In August, a federal court in Virginia denied the Administration’s motion to dismiss a similar lawsuit challenging the Affordable Care Act’s Constitutionality, thus allowing the case to proceed. Twenty other states are also challenging the Affordable Care Act’s constitutionality in a joined suit filed in a Florida court. On October 14, 2010, the district court judge in that case dismissed four of the six claims in the Attorney General’s suit. It is anticipated that these issues will eventually make their way before the U.S. Supreme Court.

This entry was written by Ilyse Schuman.

Photo credit: dra_schwartz

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.