Obamacare Could Come Before SCOTUS Again

The Supreme Court of the United States began its October 2012 term last week. Little noticed, among the various orders it issued at the outset, was a request in Case No. 11-438 (see p. 7 of the order list) that the Department of Justice—that is, the Solicitor General—respond to a petition for rehearing filed over the summer in a case which the Court had denied review on June 29, 2012—the day after it issued its controversial decision in National Federation of Independent Business, et al., v. Sebelius upholding Obamacare as a valid exercise of Congress’ power to tax.

Just what is the significance of that request? A procedural history is essential here, in order to place the matter into context.

The decision handed down on June 28, 2012 in NFIB v. Sebelius upheld two parts of Obamacare: (1) it found that the penalty imposed for failing to purchase health insurance was a valid exercise of Congress’ taxing power; and (2) the expansion of Medicaid for the States was also proper, but the condition Congress imposed on the States for that expansion was not.

Along the way, in order to reach its first result, the Court had to decide that the federal Anti-Injunction Act (“AIA”), which prohibits courts from prematurely preventing taxes from going into effect, did not apply to Obamacare.

It did so, you may recall, through Chief Justice Roberts’ distinction between a “tax” and an “assessment / penalty.” Only the former would be affected by the AIA, and since in passing Obamacare Congress did not use the word “tax” (but only the words “assessment” and “penalty”), the AIA as such did not reach Obamacare. Hence the federal courts were not prohibited from considering the validity of the legislation before it went into effect (in 2014).

One of the many cases to reach the Supreme Court last term was No. 11-438, entitled Liberty University, et al. v. Geithner, et al., a petition to review a decision by the Fourth Circuit Court of Appeals in Richmond, Virginia. The case had been brought by Liberty University and others who contended that Obamacare would require them to purchase insurance coverage which would force them to support abortions, and hence violate their religious beliefs. The federal District Court in Lynchburg, Virginia dismissed the suit on its merits, finding Obamacare constitutional, and also ruling on the way (as Chief Justice Roberts and four other Justices did later) that the AIA did not require dismissal for lack of jurisdiction. The plaintiffs appealed to the Fourth Circuit. On September 8, 2011, that Court vacated the District Court’s opinion and remanded the case with directions to dismiss it under the provisions of the AIA.

Got that? The district court in Lynchburg held that the AIA did not bar the suit, and upheld Obamacare on its merits against plaintiffs’ First Amendment arguments. The Court of Appeals in Richmond held that the AIA did bar the suit, and so vacated (i.e., erased from the books) the lower court’s ruling as to the constitutionality of Obamacare’s provisions.

The plaintiffs then filed a petition for review of the Court of Appeals’ decision with the United States Supreme Court.

On June 28, 2012, as noted earlier, SCOTUS handed down its Obamacare decision (NFIB v. Sebelius), in which it found—contrary to the ruling by the Fourth Circuit Court of Appeals in the Liberty University case—that the AIA did not deprive lower courts of jurisdiction to consider the constitutionality of the Patient Protection and Affordable Care Act.

But the very next day, it entered an order denying Liberty University’s request to review a decision that was directly contrary to what it had held the day before.

Talk about unfairness—the effect of the Supreme Court’s order was to deprive the Liberty University plaintiffs of the right to have their constitutionality arguments ever considered in court again. The order denying review would let stand the Fourth Circuit’s order to the district court to dismiss the case for lack of jurisdiction, without ever reaching the merits of the statute itself.

This was critical, because in deciding the Sebelius case, SCOTUS never considered the constitutionality of the Obamacare mandates under the First Amendment, i.e., the very arguments raised by the Liberty University plaintiffs in their case.

So those arguments would still be open to other plaintiffs to make—just not the Liberty University plaintiffs. All the work which plaintiffs and their opponents put into briefing the case (as well as the briefs submitted by hundreds of amici—“friends of the court”, i.e., interested outsiders whom the court allows to offer their views on the issues in the case) would go for naught.

Hence the request by the plaintiffs, filed with SCOTUS over the summer, to reconsider its denial of review. Instead, they ask the Court to grant their petition, to vacate the Fourth Circuit’s decision on the ground that it was overruled by the decision in NFIB v. Sebelius, and to remand the case to the Court of Appeals to consider plaintiffs’ constitutional arguments against Obamacare on their merits. (Here is a link to a .pdf copy of their petition.)

The Supreme Court could have denied the petition for rehearing outright, as it does with almost 99% of such petitions. But every now and then, where there is a possibility that the Court made a genuine mistake, it will grant one. Before doing so, however, its rules require it to give the opposing parties a chance to be heard.

Hence came the “request” (n.b.: not an order—the Solicitor General is free to, and frequently does, take a pass on such requests) to the “respondents”—Secretaries Geithner and Sebelius, and Attorney General Holder—to file a response to Liberty’s petition within thirty days.

If the Supreme Court grants the relief requested, the Liberty case will go back to the Fourth Circuit. That Court will then call for briefing “on the merits”—i.e., on the religious issues under the First Amendment raised both by the individual and employer mandates in Obamacare to purchase insurance that provides coverage for free contraception and abortion services.

Then, after hearing oral argument, the Fourth Circuit panel will rule, one way or the other: the mandates are either constitutional, or they are not.

And no matter which way the Fourth Circuit rules, the losing party will petition SCOTUS to review that decision.

In that event, the Supreme Court will once again be given an opportunity to rule that Obamacare is unconstitutional—but on grounds which are different from those it considered in the Sebelius case. And it if finds for the Liberty University plaintiffs, Obamacare will go down, regardless of whether it is a valid exercise of the taxing power or not, because Congress is forbidden from exercising that power in such a way so as to infringe upon rights guaranteed under the First Amendment.

There are other lower court cases raising the same issues, but as far as I am aware, none of them has reached an appellate court yet. So the Liberty University plaintiffs could, if the Supreme Court acts next month to grant the relief they have requested, have in inside track to bring their arguments to the Court first.

Of course, if Barack Obama fails to be re-elected to a second term, then it is possible also that the next Congress will repeal Obamacare in toto. That would make all of the pending cases moot. It is only if Obama is re-elected that we know that the statute’s mandates will be implemented, and thus remain subject to challenge until SCOTUS decides on their validity.

So stay tuned—as they say here out West, “the opera ain’t over until the fat lady sings.”