Two Thoughts on Yesterday’s Court Ruling
As has been reported elsewhere, the Fourth Circuit struck down two lawsuits against Obamacare yesterday, on procedural and standing grounds. Most of the rulings’ discussion involved procedural and standing issues, as might be expected, and therefore did not examine the merits of the mandate. But there are two points worth noting from the opinions.
First, one judge in the Liberty University case filed a concurring opinion, arguing that the court should dismiss the case on procedural and standing grounds, but adding that, on the merits, he would uphold the mandate as a constitutional tax. The justification of the mandate as a tax relied in part on this footnote on page 59 of the ruling:
The fact that Congress considered it necessary to exempt the individual mandate exaction from some traditional tax collection procedures like criminal liability and liens evidences that the exaction is a tax. 26 U.S.C. § 5000A(g)(2). Otherwise, there would be no need to except the exaction from some of the standard tax collection procedures, which otherwise apply.
In other words, because Congress made the mandate look LESS like a tax – by calling it a “penalty,” and by prohibiting criminal enforcement and the filing of tax liens – the mandate is therefore a tax. Given this tortured logic, it perhaps isn’t surprising that this concurrence is an anomaly, thus far the only opinion among more than one dozen judges – at both the district and circuit court levels, and among judges appointed by Republican and Democrat Presidents – to conclude the mandate is in fact a tax and not a penalty.
Second, another judge in the Liberty case filed a dissent, arguing that the court should hear the case on the merits and affirm the mandate on commerce clause grounds. The interesting element here is one argument he made to hear the case NOW, rather than waiting until after 2014 – as the majority argued – to determine whether the mandate lawsuits are justified: “Leaving the constitutionality of the Act unsettled would seem likely to create uncertainty in the health insurance and health care industries, which might depress these major sectors of the economy.” That sentiment equally applies to the uncertainty facing all businesses about what their expenses might be as Obamacare’s new regulations raise costs for business. Regardless of where one stands on the merits of the mandate, stopping the uncertainty for business over Obamacare is an appropriate sentiment at this time of economic turmoil – one the Justice Department will bear in mind as it decides, hopefully sooner rather than later, whether and how to appeal last month’s ruling overturning the mandate.