Suit on Health Care Bill Appears Likely to Advance

http://www.nytimes.com/2010/09/15/health/policy/15health.html

Suit on Health Care Bill Appears Likely to Advance
KEVIN SACK
September 14, 2010

PENSACOLA, Fla. — A federal judge indicated on Tuesday that he would give a green light to a lawsuit filed by elected officials from 20 states who are challenging the constitutionality of the new health care law and its requirement that most individuals obtain medical insurance.

Although he did not issue a formal ruling, Judge Roger Vinson of Federal District Court said at the close of a two-hour hearing that he leaned toward denying the federal government’s motion to dismiss the lawsuit, on at least one count. That would end the jockeying over whether states have legal standing to challenge the law, and move the case to a full debate over its fundamental constitutional question: Is the federal government’s power so broad that Congress can require citizens to purchase a commercial product like health insurance?

Judge Vinson did not detail which claims he might sustain and which he might dismiss as improper. But he said he would issue an opinion no later than Oct. 14, and scheduled arguments on the merits of the case for Dec. 16.

The Pensacola case would be the second of more than 15 lawsuits filed against the health law to advance to this stage. Last month, a federal judge in Richmond, Va., rejected a Justice Department request to dismiss a similar lawsuit filed by Virginia’s attorney general. That case is scheduled for oral argument on Oct. 18.

Experts on both sides expect the challenges to eventually present the Supreme Court with a landmark opportunity. “Our whole system of federalism rests on the decisions of this case,” said Florida’s attorney general, Bill McCollum, a Republican who is the lead plaintiff in the lawsuit here.

Although the Florida case is proceeding slightly behind its Virginia counterpart, it has been closely watched as a possible first among equals in the appellate process because of the political weight carried by the plaintiffs. They include 16 attorneys general, all but one a Republican, and four Republican governors.

Two individuals and the National Federation of Independent Business, which represents small companies, were added to the lawsuit to fend off the federal government’s contention that states do not have standing to sue because they have not been injured by the new health law.

Given that all but one of the state plaintiffs are Republicans, the lawsuit is seen as one prong of a partisan strategy to eviscerate the law in the courts, at the ballot box and on Capitol Hill.

By filing the lawsuit in Pensacola, Mr. McCollum ensured that the case would be heard by a Republican appointee to the District Court, and then by the United States Court of Appeals for the 11th Circuit, in Atlanta, a generally conservative bench that handles cases from Florida. Judge Vinson, a senior judge who was nominated by President Ronald Reagan, is a former naval aviator and a member of the Federal Intelligence Surveillance Court, as well as the president of the American Camellia Society.

His comments from the bench on Tuesday suggested initial skepticism of the federal government’s claim that an individual’s decision to not purchase insurance constitutes commercial “activity” that can be regulated by Congress.

“You’re trying to turn the word upside down and say activity is really equivalent to inactivity,” Judge Vinson at one point challenged Ian H. Gershengorn, a deputy assistant United States attorney general.

Each of the legal challenges to the health care law is somewhat different, and judges around the country have ruled differently on whether plaintiffs have legal standing to sue. Judges recently tossed out lawsuits filed by individuals and interest groups in California and Maryland, but those filed by state officials have survived.

Mr. McCollum, who recently lost Florida’s Republican primary for governor, watched the hearing in the courtroom along with Attorneys General Troy King of Alabama and Mark L. Shurtleff of Utah.

The Florida lawsuit attacks the sweeping health care law on a number of fronts. Most prominently, it charges that the insurance requirement, which does not take effect until 2014, exceeds the traditional reach of the Commerce Clause in Article I of the Constitution. The Supreme Court in its most recent opinion on the matter said the clause allows Congress to “regulate activities that substantially affect interstate commerce.”

David B. Rivkin Jr., a Washington lawyer hired to represent the plaintiffs, argued that if the government could regulate individual decisions to not purchase health insurance there could be no meaningful limits on federal power. “Congress can regulate commerce,” he said. “But Congress cannot create it.”

Mr. Gershengorn countered that decisions to not buy insurance, taken in the aggregate, have a direct effect on commerce because uninsured people still consume health care, and often cannot pay. That uncompensated care, he said, is subsidized by others and drives up costs for hospitals, governments and privately insured individuals.

“The appearance of inactivity here is just an illusion,” Mr. Gershengorn said. What Congress is regulating, he said, is how and when people will pay for the medical services they will inevitably consume. “This is not telling people you have to buy a product,” he said. “It’s saying this is how you have to pay for your health care.”

The states also argue that the new law, by vastly expanding the shared state and federal Medicaid program, amounts to a coercive commandeering of state resources. The federal government initially will pay for the entire eligibility expansion, but states will start paying a share in 2016 that eventually rises to 10 percent.

The Justice Department responds that the Medicaid program, which provides health insurance to those with low incomes, is voluntary, and that states may withdraw if they wish. But Blaine H. Winship, an assistant Florida attorney general, said that presented states with a Hobson’s choice that ignored the safety-net role played by Medicaid for more than four decades.

“I think it’s disingenuous,” he told Judge Vinson. “The idea that we could walk away from Medicaid is just essentially nonsensical.”

The judge seemed to empathize. “This really puts all 50 states on the short end of the stick,” he said. “States are in a Catch-22 situation.”

A version of this article appeared in print on September 15, 2010, on page A20 of the New York edition.