July 5, 2013

PLF and client Matt Sissel file appeal of adverse ruling in Obamacare case

By PLF and client Matt Sissel file appeal of adverse ruling in Obamacare case

Today, we filed an appeal of the D.C. District Court’s decision last Friday to dismiss our challenge to the Affordable Care Act.

Readers may recall that our client, Matt Sissel, challenges the Act’s provision imposing an individual mandate and tax-penalty based on last year’s Supreme Court ruling in the healthcare case. There, the High Court held that the individual mandate–the requirement that most Americans purchase health insurance–was unconstitutional under the Commerce Clause of the Constitution. But the Court then re-characterized the penalty for not complying with the mandate as a “tax” on those who go without insurance and upheld it under Congress’s Taxing Power. By separately analyzing the individual mandate and penalty, the Court was able to uphold the Act’s central provision.

In light of the Supreme Court’s novel decision, we amended Matt’s complaint and argued that (1) the individual mandate formally should be declared unconstitutional under the Commerce Clause (as a majority of Justices had opined), and (2) the “tax” penalty should be declared unconstitutional under the Origination Clause of the Constitution—an argument that the Supreme Court had not considered. That Clause requires that “[a]ll Bills for raising Revenue shall originate in the House of Representatives” but that “the Senate may propose or concur with Amendments as on other Bills.” We argue that the tax-penalty violates the Origination Clause, because–as a significant revenue-raiser–the tax originated in the Senate, not the House. The Government moved to dismiss our case, and the district court granted that motion on Friday.

First, the district court perplexingly disagreed with our contention that the Supreme Court had severed the penalty from the individual mandate–upholding the former, but not the latter. In the district court’s view, the entire provision was upheld under the Taxing Power, and therefore, any other challenge to the provision–including a Commerce Clause challenge–was foreclosed.

Second, the district court dismissed our Origination Clause argument. The court said that the tax penalty–while it raised significant revenues that went into the Government’s general funds–was nevertheless not contained in a bill for raising revenue. Instead, such revenues were merely “incidental” to the Act’s main purpose (i.e., to force people to buy health insurance). The district court went on to say that, even if it were a revenue raiser, the tax actually did originate in the House because it resulted from a constitutional amendment to a bill for raising revenue that had originated in the House. The court was referring to a bill (HR 3590) that had absolutely nothing to do with the Affordable Care Act (it involved tax credits for veterans and an off-setting tax hike for certain corporations, among other things), and that in any event was revenue-neutral (i.e., not a revenue raiser).

While this is a disappointing development in our ongoing efforts to overturn the Act, we–and Matt Sissel–are determined to keep fighting. Today, we filed an appeal of the district court’s decision. The case now will proceed in the D.C. Circuit Court of Appeals, where the parties will brief and argue the case over the coming months. Stay tuned for further details on this important case.

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