The 14-member court uses a computer program to randomly select its panels, and Obama could hardly have wished for a better outcome. He appointed two of the judges, Andre Davis and James Wynn Jr. The other was Judge Diana Gribbon Motz, an appointee of former President Bill Clinton.
Thirty-one lawsuits have been filed challenging the law, and nine of those have been appealed, but the two Virginia cases are the first to reach the argument stage in a federal appeals court. The judges are expected to rule within a few weeks.
In what amounted to a dress rehearsal for the U.S. Supreme Court, which both sides agree will have the final word, attorneys for Liberty University and the commonwealth of Virginia argued that Congress exceeded its authority under the Constitution in requiring individuals to buy health insurance. U.S. Acting Solicitor General Neal Kumar Katyal argued in both cases that the mandate is a valid exercise of congressional authority under the Commerce Clause.
Liberty is appealing U.S. District Judge Norman Moon’s ruling upholding the law, while the Justice Department is appealing U.S. District Judge Henry E. Hudson's decision striking down the insurance mandate. Hudson left the rest of the voluminous healthcare law intact.
The appeals panel focused on the individual mandate in the Liberty appeal, which it heard first, and devoted most of its attention in the second case to the question of whether Virginia had standing to sue based on a state statute that was passed to circumvent the federal law.
Liberty attorney Mathew Staver told the panel that the federal law exceeds the bounds of the Commerce Clause by regulating "economic inactivity"—a person's decision not to buy a product. He said the law "forces inactive bystanders into the stream of commerce."
But Katyal said people are already involved in commerce as consumers of health services, and that's what the law regulates. The only question is who pays for the services, he said, and the law aims to reduce the $45 billion a year in healthcare costs run up by the uninsured. Those costs add about $1,000 a year to the average family premium of those who do buy insurance, Katyal said.
Staver said if the government can force people to buy insurance, it also can force them to buy other products—healthy foods or a gym club membership, for example, if the government determines that obesity is a major problem. He said "there would be no limit" to what the government could require citizens to buy.
However, Wynn suggested that Staver’s claim overlooks a key point in the government's argument—that virtually everyone, at some time, will consume healthcare services.
“You can't make the argument that, in the aggregate, people are going to be obese or unfit,” he said.
In the second hearing, Virginia Solicitor General Duncan Getchell Jr. said the Virginia General Assembly had a right to pass a law declaring that the state's citizens could not be compelled by the government to buy insurance. He said the authors of the Constitution intended for the federal courts to be arbiters of such conflicts over state sovereignty.
“If federal court is not the forum, there’s no forum,” he said.
Katyal said if Virginia’s tactic is allowed to stand, states will be able to pass laws exempting their citizens from the war in Afghanistan, paying Social Security taxes or any other federal policy they don't like.
The cases could reach the Supreme Court in time for a decision by early summer 2012.