Susan Seven-Sky v. Eric H. Holder, 661 F.3d 1 (2011).
The Appellants in the case are four United States citizens and taxpayers who are seeking a declaratory and injunctive relief to prevent the enforcement of the minimum essential coverage provision of the Affordable Care Act. The minimum essential coverage provision of said Act requires all U.S. citizens to purchase and maintain certain minimal levels of health insurance coverage beginning in calendar year 2014 or face sanctions. On the trial level, the U.S. District Court dismissed the Appellant's request by granting the government's Motion to Dismiss. The substance of the District Court's ruling was that the U.S. Congress had authority under the Commerce Clause and the Necessary and Proper Clause. The Court ruled that Congress had the power and authority to regulate any activity that substantially affects the health insurance and health care market place and that such industry is a proper subject for regulatory legislation. On appeal to the D.C. Circuit, a divided Court affirmed the District Court's ruling on the merits. A dissent was filed by Judge Kavanaugh on the issue of subject matter jurisdiction only.
Whether the D.C. Circuit federal court possesses subject matter jurisdiction regarding a case involving the Affordable Care Act in light of the Anti-Injunction Act and, if so, whether the individual mandate provisions of the Affordable Care Act is a constitutional exercise of the authority granted the U.S. Congress under the Commerce Clause of the U.S. Constitution.
The District Court ruled that Congress had the power and authority to regulate any activity that substantially affects the health insurance and health care market place and that such industry is a proper subject for regulatory legislation and that, therefore, the mandates of the Affordable Care Act are a proper exercise of the power of the U.S. Congress. On appeal the D.C. Circuit Court affirmed the District Court's ruling on the merits.
The individuals who brought the action before the District Court argued that citizens who do not have health insurance and do not want health insurance should not be forced to do so and that the U.S. Congress exceeded its power and authority by imposing on such individuals the requirement to do so and that by imposing such requirement Congress was acting in violation of the U.S. Constitution. They further argued that all citizens should be afforded the option of deciding for themselves whether or not they want to purchase health coverage and they dismiss the argument that allowing such individuals to go without health insurance placed an unnecessary burden on the government and the taxpayers
The decision by the Circuit Court first addressed the issue of its jurisdiction to hear the Appellant's argument under the provisions of the Anti-Injunction Act. Stated simply, the Anti-Injunction Act states that, with limited exceptions, federal courts lack the authority to entertain suits or claims are brought "for the purpose of restraining the assessment or collection of any tax." The Fourth Circuit Court of Appeals had previously ruled in the case of Liberty University, Inc. v. Geithner, that the Anti-Injunction Act prohibited the federal courts from ruling on the mandate provisions of the Affordable Care Act. The D.C. Circuit, in rendering its decision, disregarding the reasoning of the Fourth Circuit and determined that the Anti-Injunction Act posed no bar to its jurisdictional authority. In rendering its decision the Court reasoned that Congress specifically used the term "penalty" in application to the possible sanctions available for those failing to procure health insurance and purposely failed to use the term tax instead. The Court, in adding further support to its decision, performed a thorough review of the legislative history of the both the Affordable Care Act and the Anti-Injunction Act, the precise language used in the Anti-Injunction Act, and the applicable portions of the Internal Revenue Code. The Court ruled that the Appellant's arguments had little application to the actual regulatory provisions of the Affordable Care Act itself, but rather, the Appellant's arguments were based on the authority of the Internal Revenue to assess and collect any penalties under the Act.
Having decided that they had authority to review the provisions of the Affordable Care Act, the Court directed its attention to the Act itself. The Court quickly and affirmatively determined that under the Commerce Clause of the U.S. Constitution the individual mandate provision of the Affordable Care Act was a valid exercise of the Congress' power. In offering support for its ruling the Court ruled that the U.S. Supreme Court has never ruled or implied in any of its various decisions that Congress' authority under the Commerce Clause was limited to individuals presently engaged in an activity substantially affecting interstate commerce. The Court relied upon the Supreme Court's ruling in Wickard v. Filburn (Wickard v. Filburn, 1942) as support for its ruling. In Wickard, the U.S. Supreme Court ruled that even if an activity is local and not regarded as commerce it may still be regulated by Congress if the action exerts a substantial economic effect on interstate commerce. The D.C. Circuit Court acknowledge the mandate found in the Affordable Care Act was a novel provision but that neither the novelty of the provision nor its limited impact on interstate commerce should affect the power of Congress to enact such legislation. Relying on Wickard, the D.C. Circuit ruled that Congress possessed such authority as long as there is "a rational basis for believing that a congressional enactment, as a whole, substantially relates to interstate commerce."
6. Application to health care administration
The significance of the Sky case is the fact that the D.C. Circuit Court categorically found that the U.S. Constitution's Commerce Clause is applicable to the situation in which the impact of millions of uninsured and underinsured affects interstate commerce and that such situation overrides the concerns of any given individual who may choose to be uninsured. The primary argument of the Appellants and that of most opponents of the Affordable Care Act was that Congress did not have the authority to require individuals with no connection to interstate commerce to purchase a product. The D.C. Circuit in rendering its decision recognizes that, in isolation, an individual may assert his right not to purchase health insurance but that such individual, in time, will require health services. No one can truly live without eventually requiring some form of medical care and that Congress, in issuing its health insurance mandate, recognized that those who do not have health insurance and, instead choose to be self-insured, will inevitably receive health services for which they cannot pay. The practical effect of this occurrence is that these uncovered costs are shifted to those who are insured and that this, in turn, results in increased health insurance costs for everyone.
The Court's ruling in Key is a further expansion of the rationale first recognized in the Wickard v. Filburn case (Bogen, 1972). The Court expressed an appreciation for the fact that individuals should have the right to act in isolation but that in the case of health care and health insurance there really is no such thing as acting in isolation. Everyone will eventually require health care and it should not be the responsibility of the general public to absorb these costs at the expensive of protecting the exercise of individual liberty. In the case of health care, the cost of personal liberty is too expensive and, in the opinion of the D.C. Circuit Court, Congress has the right to act so that the uninsured do not create market failures.
The Sky case, at least for the moment, signals a major victory for the Obama administration and a major step forward in the implementation of the Affordable Care Act. The D.C. Court, in rendering its decision,…