The Fourth Circuit Court of Appeals yesterday rejected two challenges to the constitutionality of the mandate requiring individuals to purchase health insurance under the recently enacted Patient Protection and Affordable Care Act, Public Law 111-148. Like the Third Circuit, and unlike the Sixth and Eleventh Circuits, the Fourth Circuit held that the challengers lacked standing. (As we previously reported, the Sixth Circuit was the first Circuit Court in the country to rule on the health care statute’s constitutionality when it upheld the individual mandate under the Commerce Clause back on June 29, 2011. See Thomas More Law Center, et al. v. Obama, et al. (Sixth Circuit, Case No. 10-2388).)
First, in a unanimous opinion written by Judge Gribbon Motz, the Fourth Circuit held that the Commonwealth of Virginia lacked standing to challenge the individual mandate because it is a requirement imposed on individuals, not states. See Opinion, Commonwealth of Virginia v. Sebelius (Fourth Circuit, Case No. 11-1057) (PDF). In a second 2-1 opinion written by Judge Motz, the Fourth Circuit concluded that the individual mandate is a tax, and thus the conservative Liberty University could not challenge the mandate until it goes into effect in 2014: “Because this suit constitutes a pre-enforcement action seeking to restrain the assessment of a tax, the Anti-Injunction Act strips us of jurisdiction.” See Opinion, Liberty University, Inc. v. Geithner (Fourth Circuit, Case No. 10-2347) (PDF).
What’s interesting is that the government conceded before the Fourth Circuit that the individual mandate was not a tax for purposes of the Anti-Injunction Act. And even President Obama has insisted that the individual mandate is not a tax in defending the requirement:
The Fourth Circuit nevertheless raised the Anti-Injunction Act bar on its own, observing that the government “fails to explain [its] change in position.” In doing so, the Fourth Circuit specifically disagreed with the Sixth Circuit’s Thomas More ruling that the Anti-Injunction Act was inapplicable because the exaction for failure to comply with the individual mandate was labeled a “penalty,” not a “tax.” The Fourth Circuit noted that the U.S. Supreme Court has specifically determined that an exaction’s label is immaterial to the applicability of the Anti-Injunction Act, and thus “it is not surprising that no federal appellate court, except the Sixth Circuit in Thomas More, has ever held that the label affixed to an exaction controls, or is even relevant to, the applicability of the [Anti-Injunction Act].”
The Fourth Circuit case is also interesting because it suggests the possibility that the individual mandate could ultimately be upheld as a constitutional exercise of Congress’s tax power even if it exceeds the commerce power. In his concurring opinion in Case No. 10-2347, Circuit Judge James Wynn stated that “Congress had the authority to enact the individual and employer mandates under its plenary taxing power.” Thus, for all the talk about whether the individual mandate exceeds the commerce power, the U.S. Supreme Court will have another rationale to uphold the health care statute if it ultimately agrees to hear the challenge (which Court observers agree is a near certainty).
We’ll, of course, continue to stay on top of all the developments and the nuances of the battle over the health care statute.