In particular, the D.C. Circuit explicitly rejected the legal reasoning published Sept. 8 by the U.S. Court of Appeals for the 4th Circuit finding that the mandate was a tax and therefore could not be challenged in court since pre-tax challenges are illegal and the “tax” cannot be levied until 2014. The D.C. Circuit ruled that Congress clearly intended the tax-penalty in the mandate as a penalty, which can be challenged prior to implementation.
More fundamentally, the D.C. court also cited what it said could be a precedent decision for the mandate.
Critics of the reform law say Congress has never possessed the power to regulate interstate economic “inactivity” such as the decision not to purchase health insurance, and supporters with President Barack Obama's administration have not cited a clear precedent.
The D.C. judges found striking similarities in the 1942 Supreme Court case Wickard v. Filburn, which upheld punishments against a farmer who grew wheat for personal use in defiance of federal limits. That case, the judges wrote, was similar to the insurance mandate law challenge because it involved the government regulating a farmer's decision not to purchase wheat from a market—a personal decision that could affect interstate commerce.
“In Wickard, it mattered not that Filburn's annual wheat output was trivial in relation to national production,” the D.C. Circuit judge wrote. “All that mattered were the overall dynamics of the wheat market—in other words, generalizations about likely, future economic behavior.”