In a major setback for the Obama administration, a federal judge in Virginia struck down as unconstitutional a key provision of the landmark health care law, saying that forcing all Americans to buy health insurance “exceeds the constitutional boundaries of congressional power.”
“At its core, this dispute is not simply about regulating the business of insurance — of crafting a scheme of universal health insurance coverage — it’s about an individual’s right to choose to participate,” U.S. District Judge Henry E. Hudson in Richmond said in a 42-page opinion.
Judge Hudson concluded that Congress lacked the power under the commerce clause “to compel an individual to involuntarily engage in a private commercial transaction,” warning that the “unchecked expansion of congressional power” as suggested by the law “would invite unbridled exercise of federal police powers.”
There are other pending challenges to the health care law, which has been upheld by two other trial court judges. The Supreme Court is therefore likely to decide the law’s ultimate fate — a process that could take up to two years.
Judge Hudson’s ruling was broadly critical of the health care act, signed into law in March and known as the Affordable Care Act. However, the ruling applies only to the mandate that Americans must buy health insurance and those provisions that hinge on it. The law as a whole was not struck down, and the judge declined to grant an injunction that would have suspended the law immediately.
The Obama administration argued that the requirement to purchase health care insurance amounted to a tax and, as a result, was allowable under Congress‘ taxing powers. The commerce clause gives Congress the authority to regulate the trade of goods or commodities with foreign nations and among the states.
“A thorough survey of pertinent constitutional case law has yielded no reported decisions from any federal appellate courts extending the Commerce Clause … to encompass regulation of a person’s decision not to purchase a product,” the judge wrote.
Judge Hudson, named to be bench in 2002 by President George W. Bush, sided with Virginia Attorney General Kenneth T. Cuccinelli II, whose lawsuit defended a new state law prohibiting the government from forcing residents to buy health insurance. Virginia asserted that an Obama administration requirement that citizens buy health insurance by 2014 — when most of the law’s provisions kick in — or pay a penalty was unconstitutional.
Mr. Cuccinelli argued that while the federal government can regulate economic activity that has an impact on interstate commerce, a decision not to buy health insurance was inactivity and thus beyond the government’s reach.
At a news conference Monday, Mr. Cuccinelli applauded the ruling, saying the case was not about health insurance or health care, “it’s about liberty.”
“The ruling is extremely positive for anyone who believes in the system of federalism created by our Founding Fathers,” he said. “It underscores that our Constitution’s limitations on federal power really do mean something.”
Though the Virginia Republican said he understands that many people can’t afford health insurance and that the system “obviously needs to be fixed,” he added that “as someone who has sworn to uphold the law, I can’t endorse the taking away the rights of some people to fund the health insurance for other people.”
He also predicted that by the end of January, half the states will have signed on as parties to a lawsuit against the federal government to rein in its “overstepping the boundaries of the Constitution.”
“This is truly unique and it speaks to the severity of the breach of the constitutional boundaries that has occurred here, and it also speaks to the reaction from the country,” he said.
An ABC News/Washington Post poll found that support for the health care legislation is at a new low with 52 percent opposed and 43 percent in favor — down from a high of 48 percent in favor in November 2009.
Judge Hudson is the first federal judge to strike down the law, which has been upheld by two other federal judges in Virginia and Michigan, but he and Mr. Cuccinelli agreed that the ruling undoubtedly will be appealed — probably all the way to the U.S. Supreme Court.
“This won’t be the final round, as this will ultimately be decided by the Supreme Court, but today is a critical milestone in the protection of the Constitution,” Mr. Cuccinelli said in a statement.
Reaction to the ruling was immediate.
White House press secretary Robert Gibbs said the administration “argued on the other side of this case and disagrees with the ruling.” But he deemed it important to remember that 20 similar court challenges on the health care law are making their way through federal courts and that this decision was the first to go against the administration.
“We are confident that it is constitutional,” he said.
The spokesman said that although he had not conferred with Mr. Obama about the ruling, the elimination of the “individual responsibility portion” would undermine the entire law because only if everyone must participate in the insurance pool can provisions barring discrimination against patients with pre-existing conditions be made workable.
Justice Department spokeswoman Tracy Schmaler said the department was “disappointed in today’s ruling” but continues to believe that the Affordable Care Act is constitutional.
“There is clear and well-established legal precedent that Congress acted within its constitutional authority in passing this law and we are confident that we will ultimately prevail,” Ms. Schmaler said.
But Republicans on Capitol Hill, who in January will take over the House and see their numbers rise in the Senate, asserted that the decision vindicates their opposition to the law and their successful campaign this November on a pledge to repeal at least part of the law.
Sen. Jim DeMint, South Carolina Republican who was personally rebuked by Mr. Obama after he predicted that health care reform would be the president’s “Waterloo,” said the judge’s ruling made it clear that the president and Democrats “overreached and violated the Constitution in their rush to pass a federal takeover of our health care system.”
“The Constitution neither grants Congress nor the president the power to compel every American to buy government-approved health insurance,” he said. “The unconstitutional individual mandate is the centerpiece of the health care takeover and today’s ruling should signal the beginning of the end for Obamacare.”
Sen. Orrin G. Hatch, Utah Republican, applauded the decision, calling it “a great day for liberty.” He said, “Congress must obey the Constitution rather than make it up as we go along. Liberty requires limits on government, and today those limits have been upheld.”
“If the government can tell you what to buy, then what limits on federal power exist? The $2.6 trillion health law is an astonishing expansion of that power and bursts the limits that the Constitution imposes on the federal government,” said Mr. Hatch, the first senator to publicly argue that the individual insurance mandate was unconstitutional.
Utah is an original plaintiff in another major lawsuit against the Obama health care plan, filed in U.S. District Court in Florida, which now includes 20 states, the National Federation of Independent Business (NFIB) and individual citizens.
Sen. Charles E. Grassley of Iowa, ranking Republican on the Senate Finance Committee, said that while the ruling was likely to be appealed, it was a “clear signal that the constitutionality of the law, which was moved through Congress with a lot of controversy and partisanship, isn’t as certain as its supporters have argued.”
“The nonpartisan Congressional Research Service called requiring people to buy a good or service or be penalized a ‘novel issue,’ and now a federal court has ruled it unconstitutional,” Mr. Grassley said.
But Neera Tanden, chief operating officer at the Center for American Progress, a liberal-leaning organization that was influential in providing talking points and strategy for Mr. Obama during his election campaign and during the health care debate, said the judge’s ruling “ignored precedent, the consensus of his colleagues and the Constitution itself to strike down an essential component of the Affordable Care Act.”
“The Affordable Care Act is nothing short of a lifeline for millions of Americans to receive the health care they need and deserve now and in the future as the law takes effect,” Ms. Tanden said. “Make no mistake, Judge Henry Hudson’s poorly reasoned decision is living on borrowed time. We at the Center for American Progress are confident that it will not hold up to further scrutiny.”
Ms. Tanden also noted that Judge Hudson has a financial stake in a major Republican consulting firm.
The Huffington Post reported in July that the judge’s annual financial disclosures showed that he owned part of Campaign Solutions Inc., a Republican consulting firm that worked for GOP candidates, many of whom opposed the Obama health care law.
Mr. Cuccinelli paid Campaign Solutions $9,000 for services rendered in 2010.
Sen. Patrick J. Leahy, Vermont Democrat and chairman of the Senate Judiciary Committee, noted that Judge Hudson declared one provision of the law as unconstitutional and did not issue an injunction requiring the federal government to suspend implementation of the Affordable Care Act.
“Other decisions handed down by courts across the country have upheld Congress‘ authority to enact this legislation; Judge Hudson’s decision is the first to depart from those rulings,” Mr. Leahy said. “I expect that today’s opinion, as well as other rulings around the country related to the Affordable Care Act, will be appealed, and the circuit courts will hear further arguments in the coming months.”
Rep. Tom Price of Georgia, chairman of the conservative Republican Study Committee, said Democrats “ignored the Constitution in order to pass a law that would put Washington in control of your personal health care, while curtailing access to quality, affordable health care.”
“If this individual mandate and its unprecedented power to force citizens to purchase health coverage against their will were found to be constitutional, Congress would have essentially unlimited power to do anything,” Mr. Price said. “The fight for patient-centered health care will continue. We should focus on the principles of access, affordability, quality, responsiveness, innovation and patients’ choices without putting the federal government in charge.”
• Kara Rowland, Ben Conery and Seth McLaughlin contributed to this report.