Twenty States Get Greenlight to Proceed With Overturning Obamacare

By Ashby Jones

A federal judge in Pensacola, Fla., has ruled that 20 U.S. states can proceed with their lawsuit seeking to overturn President Barack Obama’s landmark healthcare reform law.

Click here for the 65-page opinion; here for all earlier LB coverage of the suit, which was filed the same day Obama signed the bill into law.

U.S. District Judge Roger Vinson had already indicated at a hearing last month that he would reject parts of a motion by the Justice Department to dismiss the lawsuit, led by Florida and 19 other states.

And today he did just that. Vinson actually dismissed several of the plaintiffs’ claims, but made two rather large rulings in their favor.

First, Vinson shot down the Justice Department’s argument that the individual mandate — the provision in the law that requires every American to own health insurance by 2014 — can be viewed as a tax. The government had made the argument for two reasons: 1) to argue that the individual mandate is constitutional under the Taxing and Spending Clause of the Constitution and 2) to argue that the Tax Anti-Injunction Act thereby applies.

Wrote Vinson:

To summarize the foregoing, it “clearly appears” from the statute itself . . . that Congress did not intend to impose a tax when it imposed the penalty. To hold otherwise would require me to look beyond the plain words of the statute. I would have to ignore that Congress: (i) specifically changed the term in previous incarnations of the statute from “tax” to “penalty;” (ii) used the term “tax” in describing the several other exactions provided for in the Act; (iii) specifically relied on and identified its Commerce Clause power and not its taxing power; (iv) eliminated traditional IRS enforcement methods for the failure to pay the “tax;” and (v) failed to identify in the legislation any revenue that would be raised from it, notwithstanding that at least seventeen other revenue-generating provisions were specifically so identified.

Second, and perhaps more importantly, Vinson declined to dismiss the plaintiffs’ claim that Congress, in passing the individual mandate, overstepped the authority granted to it by the Commerce Clause, which allows Congress the power to regulate interstate commerce.

Wrote Vinson:

At this stage in the litigation, this is not even a close call. . . This case law is instructive, but ultimately inconclusive because the Commerce Clause and Necessary and Proper Clause have never been applied in such a manner before. The power that the individual mandate seeks to harness is simply without prior precedent.

. . .

Vinson noted the difference between regulating an economic activity and attempting to regulate an economic non-activity. Most Commerce Clause cases deal with the former, not the latter.

[I]n this case we are dealing with something very different. The individual mandate applies across the board. People have no choice and there is no way to avoid it. Those who fall under the individual mandate either comply with it, or they are penalized. It is not based on an activity that they make the choice to undertake. Rather, it is based solely on citizenship and on being alive.

. . .

Of course, to say that something is “novel” and “unprecedented” does notnecessarily mean that it is “unconstitutional” and “improper.” There may be a first time for anything. But, at this stage of the case, the plaintiffs have most definitely stated a plausible claim with respect to this cause of action.

Vinson said the case would continue as scheduled. He had previously set a hearing for Dec. 16.