September 27, 2010
Dear Friends,
We are in the middle of the summary judgment phase of the health care case in the district court in Richmond, and I wanted to give you an update of where we stand at the moment and what's coming next.
So Far
I'm sure you all recall that on August 2nd the judge in our case rejected all four of the feds' arguments for why Virginia's case should be dismissed, and that as part of his ruling, the judge noted how extraordinarily far the federal government is reaching (in a constitutional sense) in the federal health care law.
Interestingly, in the Florida case, they had their hearing on the feds' motion to dismiss on September 14th. This was the equivalent hearing to ours on July 1st.
The judge in the Florida case indicated from the bench on September 14th that he expected at least part of the states' case to go forward, i.e., survive the feds' motion to dismiss. He also said that he would issue a ruling on October 14th, so we're looking forward to seeing that, and we're hoping (and cautiously expecting) that our allies in Florida will be proceeding forward parallel to us here in Virginia. It will be interesting to see that ruling only four days before our summary judgment oral argument in Richmond (more on this later).
Where We Are In the Process Now
On September 3rd, both Virginia and the federal government filed their motions for summary judgment. As the name implies, these motions are requests by each side to the court to rule "summarily," i.e., without a trial, in our favor. In my opinion, these filings didn't hold much in the way of surprises.
However, this past week both sides filed their opposition to the other parties' motion for summary judgment. Did you follow that? For example, on September 3rd, Virginia filed its motion for summary judgment and on September 23rd, the feds filed their opposition to Virginia's motion for summary judgment. And also on September 3rd, the feds filed their motion for summary judgment, and we filed our opposition on September 23rd.
One interesting note, we filed in the early afternoon on the 23rd, while the feds filed at 9:49 p.m. The deadline is midnight - yikes were they pushing it close to that line!
Some Eye Opening Items in the Feds' Opposition
Three things stood out most to me in the feds' opposition to our summary judgment. One appears generally in the brief, while the other two both relate specifically to the discussion regarding the appropriate remedy if the court rules in Virginia's favor by declaring the individual mandate unconstitutional.
First, the general observation. Call it the "silver bullet(s)" of their brief. In several different locations, the feds cite cases never before appearing in this case for sweeping and powerful propositions. In other words, they keep using them like 'silver bullets.'
A reading of some of these cases certainly looks like some real strrrrrreeeetttttcccchhhhing on their part, but we'll have to deal with that in our reply. This observation may be nothing more than boring to non-lawyers (and to most lawyers...), but I'll leave that to y'all to decide.
The second and third observations are more interesting, and as I said, both relate to the potential remedy if the court declares the individual mandate to be unconstitutional.
The second observation is that the feds take a similar approach to determining what would be left of the law if the individual mandate is found unconstitutional. I'm not used to them approaching much of anything in this case in a similar manner to us.
Here is one of their case quotes (i.e., where they quote a US Supreme Court case):
"After finding an application or portion of a statute unconstitutional, we must next ask: Would the legislature have preferred what is left of its statute to no statute at all?"
[Timely side note: the case quoted is Ayotte v. Planned Parenthood. This is the same Ayotte who is now running for the U.S. Senate in New Hampshire. She was on the right side of that case!]
This quote is an interesting question that any of you can chew on... but don't chew on it just yet, until you read through my third observation. Then come back to the question and come to your own conclusions.
The third observation is perhaps the most stunning (even though it's actually quite logical...). The federal government has conceded that if the individual mandate is found unconstitutional, then all of what they refer to as the "insurance industry reforms" must fall alongside the individual mandate.
Given that up to this point, they have conceded nothing, I am genuinely shocked at the sweeping nature of this concession. Now, mind you, as I mentioned above, this is a logical position. Why is it a logical position? Well, I'll tell you.
All along, the feds have said that their forced changes to the insurance industry's products REQUIRE that everyone must be in the insurance pool for their newly-redesigned (ruined?) insurance scheme to 'work.' [I just can't bring myself to type that word without quotes in this context.] So, logically, if we beat the individual mandate, everyone will NOT be in the insurance pool; therefore, their other changes to their newly-redesigned insurance scheme will not 'work.'
Thus, they have conceded that if the insurance mandate is unconstitutional, then their other insurance requirements must also be discarded by the court.
Here is the quote from their brief:
"Under these principles, some provisions of the Act plainly cannot survive. As defendants repeatedly have made clear ... insurance industry reforms in Section 1201 such as guaranteed-issue and community-rating will stand or fall with the minimum coverage provision.... As Virginia correctly recognizes, these regulations of the interstate insurance market must be coupled with the minimum coverage provision in order to be effective. Absent a minimum coverage provision [a.k.a.: "individual mandate"], the guaranteed-issue and community-rating reforms in Section 1201 would cause many to drop coverage, leading to a spiral of increased premiums and a shrinking risk pool - the insurance market will 'implode.' Because Congress would not have intended this result, these reforms cannot be severed from the minimum coverage provision."
Food for Thought
Okay, now let's look at the quoted question from my second observation again:
"After finding an application or portion of a statute unconstitutional, we must next ask: Would the legislature have preferred what is left of its statute to no statute at all?"
There are any number of sections in the legislation we could look at and contemplate this question, but one may reasonably ask whether ANYTHING would have passed without the insurance pieces of the bill. Recall that many liberals were screaming that this bill was a 'sellout' and didn't go far enough.
In fact, I was on Fox Business on September 14th - the day of the court hearing on the feds' motion to dismiss in the Florida case - and I was watching Congressman Dennis Kucinich (D-Far Left) on the show just before I went on. He was sweeping in his attacks on what he called our "profit based system." This system is also frequently referred to as "capitalism."
Historically of course, capitalism has provided the greatest opportunity to meet the needs and raise the standard of living of the most individuals of any economic system in the history of the world. But, no matter...
Umm, Congressman, did you not notice what happened in all those other systems around the world in the last 100 years that didn't exist in "profit making systems?" Perhaps we could sign him up for Cuban health care. They have achieved Cong. Kucinich's dream of mandated universal coverage, and gee, look how long Castro has lived! Surely it must be working well enough for the Congressman.
On the really expensive front, what they appear to be particularly targeting for saving is their massive (mandated) increase in Medicaid. In Virginia, using the feds' cost estimates (which I have discussed at other times as having been completely discredited), we are looking at an additional $1billion+ added to our already difficult healthcare budget by FY 2022. We will set aside where that money is supposed to come from for the moment... but would Congress have passed elements of the bill like the Medicaid increase without the individual mandate and the insurance elements?
I'll leave that question for you to contemplate as the case rolls forward.
What's Next?
On Monday, October 4th, each side will file its final brief (the reply brief), AND all of the amicus briefs will be filed that day as well. The amicus briefs will be very interesting and for those of you willing to dig into the details, you should take a look at those briefs. Just seeing who files will be interesting, even if you don't read the briefs!
On October 18th, we will be back in court for the summary judgment hearing. This is where the constitutionality of the individual mandate will be openly debated in court.
At some point thereafter, perhaps around the end of November, the judge will likely issue an order with his ruling.
One other strategy of the feds' that became evident last week is their apparent intention to drag out the proceeding, at least for now. They have clearly indicated to the judge that if he finds the individual mandate unconstitutional, that they will want him to hold yet another hearing to focus on what is the appropriate remedy.
In other words, they will want to pick the bill apart piece by piece, arguing over whether each piece should stay or go with the individual mandate. Fun.
We shall see.
Collateral Impacts
Obviously, one other impact is on the November elections. I will leave to each of you to determine how the healthcare matter is effecting those elections.
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