Eleventh Circuit Strikes Down PPACA Individual Mandate, Creates Circuit Split

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In a 2-1 decision, the U.S. Court of Appeals for the Eleventh Circuit Aug. 12 struck down a key provision of the federal health reform law, but stopped short of declaring the entire statute unconstitutional (Florida v. HHS, 11th Cir., No. 11-11021, 8/12/11).

The court held in a 304-page ruling that Congress exceeded its powers under the U.S. Constitution's commerce clause when it enacted the individual mandate, a provision scheduled to take effect in 2014 that would require most Americans to buy health insurance or pay a penalty.

In an opinion by Chief Judge Joel F. Dubina, joined by Judge Frank M. Hull, the court said Congress could do many things under the commerce clause, but one thing it could not do was “mandate that individuals enter into contracts with private insurance companies for the purchase of an expensive product from the time they are born until the time they die.”

“The federal government's assertion of power, under the Commerce Clause, to issue an economic mandate for Americans to purchase insurance from a private company for the entire duration of their lives is unprecedented, lacks cognizable limits, and imperils our federalist structure,” the court wrote.

Mandate Severable From Remainder of PPACA

The Eleventh Circuit, however, declared the mandate severable from the remainder of the Patient Protection and Affordable Care Act. In invalidating the entire act, the court said, the U.S. District Court for the Northern District of Florida placed too much weight on the fact that the act lacks a severability clause. The proper test, it said, was whether Congress would have enacted the statute in the absence of the individual mandate provision.

The court concluded that PPACA—even sections requiring insurers to issue policies to people with pre-existing conditions—would have passed without the individual mandate.

Judge Stanley Marcus dissented in part, saying “the majority has ignored many years of Commerce Clause doctrine developed by the Supreme Court,” including “the undeniable fact that Congress' commerce power has grown exponentially over the past two centuries, and is now generally accepted as having afforded Congress the authority to create rules regulating large areas of our national economy.”

The decision sets up a circuit split, as the U.S. Court of Appeals for the Sixth Circuit earlier this summer held the individual mandate constitutional. In another split decision, the Sixth Circuit said in Thomas More Law Center v. Obamathat the individual mandate “falls within Congress's power to regulate activities that substantially affect interstate commerce.” The circuit split ups the odds that the U.S. Supreme Court will grant review in at least one of the cases (62 BTM 212, 7/5/11).

Full text of the court's opinion is available at http://op.bna.com/hl.nsf/r?Open=mapi-8knqab .