Florida v. U.S. Dep't of Health & Human Serv., 11-11021 & 11-11067

CourtUnited States Courts of Appeals. United States Court of Appeals (11th Circuit)
Writing for the CourtDUBINA
PartiesSTATE OF FLORIDA, by and through Attorney General, STATE OF SOUTH CAROLINA, by and through Attorney General, STATE OF NEBRASKA, by and through Attorney General, STATE OF TEXAS, by and through Attorney General, STATE OF UTAH, by and through Attorney General, et. al., Plaintiffs - Appellees - Cross-Appellants, v. UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SECRETARY OF THE UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, UNITED STATES DEPARTMENT OF THE TREASURY, SECRETARY OF THE UNITED STATES DEPARTMENT OF TREASURY, UNITED STATES DEPARTMENT OF LABOR, SECRETARY OF THE UNITED STATES DEPARTMENT OF LABOR, Defendants - Appellants - Cross-Appellees.
Docket NumberNo. 11-11021 & 11-11067,D.C. Docket No. 3:10-cv-00091-RV-EMT,11-11021 & 11-11067
Decision Date12 August 2011

STATE OF FLORIDA, by and through Attorney General, STATE OF SOUTH
CAROLINA, by and through Attorney General, STATE OF NEBRASKA, by
and through Attorney General, STATE OF TEXAS, by and through Attorney General,
STATE OF UTAH, by and through Attorney General, et.
al.,
Plaintiffs - Appellees - Cross-Appellants,
v.
UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES,
SECRETARY OF THE UNITED STATES DEPARTMENT OF HEALTH
AND HUMAN SERVICES, UNITED STATES DEPARTMENT OF THE TREASURY,
SECRETARY OF THE UNITED STATES DEPARTMENT OF TREASURY,
UNITED STATES DEPARTMENT OF LABOR,
SECRETARY OF THE UNITED STATES DEPARTMENT OF LABOR,
Defendants - Appellants - Cross-Appellees.

Nos. 11-11021 & 11-11067
D.C. Docket No. 3:10-cv-00091-RV-EMT

UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT

August 12, 2011


[PUBLISH]

Appeals from the United States District Court
for the Northern District of Florida

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Before DUBINA, Chief Judge, and HULL and MARCUS, Circuit Judges.

DUBINA, Chief Judge, and HULL, Circuit Judge:1

Soon after Congress passed the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), amended by Health Care and Education Reconciliation Act of 2010 ("HCERA"), Pub. L. No. 111-152, 124 Stat. 1029 (2010) (the "Act"), the plaintiffs brought this action challenging the Act's constitutionality. The plaintiffs are 26 states, private individuals Mary Brown and Kaj Ahlburg, and the National Federation of Independent Business ("NFIB") (collectively the "plaintiffs").2 The defendants are the federal Health and Human Services ("HHS"), Treasury, and Labor Departments and their Secretaries (collectively the "government").

The district court granted summary judgment (1) to the government on the state plaintiffs' claim that the Act's expansion of Medicaid is unconstitutional and (2) to the plaintiffs on their claim that the Act's individual mandate—that

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individuals purchase and continuously maintain health insurance from private companies3 —is unconstitutional. The district court concluded that the individual mandate exceeded congressional authority under Article I of the Constitution because it was not enacted pursuant to Congress's tax power and it exceeded Congress's power under the Commerce Clause and the Necessary and Proper Clause. The district court also concluded that the individual mandate provision was not severable from the rest of the Act and declared the entire Act invalid.

The government appeals the district court's ruling that the individual mandate is unconstitutional and its severability holding. The state plaintiffs cross-appeal the district court's ruling on their Medicaid expansion claim. For the reasons that follow, we affirm in part and reverse in part.4

INTRODUCTION

Legal issues concerning the constitutionality of a legislative act present important but difficult questions for the courts. Here, that importance and

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difficulty are heightened because (1) the Act itself is 975 pages in the format published in the Public Laws;5 (2) the district court, agreeing with the plaintiffs, held all of the Act was unconstitutional; and (3) on appeal, the government argues all of the Act is constitutional.

We, as all federal courts, must begin with a presumption of constitutionality, meaning that "we invalidate a congressional enactment only upon a plain showing that Congress has exceeded its constitutional bounds." United States v. Morrison, 529 U.S. 598, 607, 120 S. Ct. 1740, 1748 (2000).

As an initial matter, to know whether a legislative act is constitutional requires knowing what is in the Act. Accordingly, our task is to figure out what this sweeping and comprehensive Act actually says and does. To do that, we outline the congressional findings that identify the problems the Act addresses, and the Act's legislative response and overall structure, encompassing nine Titles and hundreds of laws on a diverse array of subjects. Next, we set forth in greater depth the contents of the Act's five components most relevant to this appeal: the insurance industry reforms, the new state-run Exchanges, the individual mandate,

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the employer penalties, and the Medicaid expansion.

After that, we analyze the constitutionality of the Medicaid expansion and explain why we conclude that the Act's Medicaid expansion is constitutional.

We then review the Supreme Court's decisions on Congress's commerce power, discuss the individual mandate—which requires Americans to purchase an expensive product from a private insurance company from birth to death—and explicate how Congress exceeded its commerce power in enacting its individual mandate. We next outline why Congress's tax power does not provide an alternative constitutional basis for upholding this unprecedented individual mandate. Lastly, because of the Supreme Court's strong presumption of severability and as a matter of judicial restraint, we conclude that the individual mandate is severable from the remainder of the Act. Our opinion is organized as follows:

I. STANDING
II. THE ACT
A. Congressional Findings
B. Overall Structure of Nine Titles
C. Terms and Definitions
D. Health Insurance Reforms
E. Health Benefit Exchanges
F. Individual Mandate

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G. Employer Penalty
H. Medicaid Expansion
III. CONSTITUTIONALITY OF MEDICAID EXPANSION
A. History of the Medicaid Program
B. Congress's Power under the Spending Clause
IV. SUPREME COURT'S COMMERCE CLAUSE DECISIONS
V. CONSTITUTIONALITY OF INDIVIDUAL MANDATE UNDER THE COMMERCE POWER
A. First Principles
B. Dichotomies and Nomenclature
C. Unprecedented Nature of the Individual Mandate
D. Wickard and Aggregation
E. Broad Scope of Congress's Regulation
F. Government's Proposed Limiting Principles
G. Congressional Findings
H. Areas of Traditional State Concern
I. Essential to a Larger Regulatory Scheme
J. Conclusion
VI. CONSTITUTIONALITY OF INDIVIDUAL MANDATE UNDER THE TAX POWER
A. Repeated Use of the Term "Penalty" in the Individual Mandate
B. Designation of Numerous Other Provisions in the Act as "Taxes"
C. Legislative History of the Individual Mandate
VII. SEVERABILITY
I. STANDING

As a threshold matter, we consider the government's challenge to the

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plaintiffs' standing to bring this lawsuit. "Article III of the Constitution limits the jurisdiction of federal courts to 'cases' and 'controversies.'" Socialist Workers Party v. Leahy, 145 F.3d 1240, 1244 (11th Cir. 1998) (citations omitted). As we have explained:

The case-or-controversy constraint, in turn, imposes a dual limitation on federal courts commonly referred to as "justiciability." Basically, justiciability doctrine seeks to prevent the federal courts from encroaching on the powers of the other branches of government and to ensure that the courts consider only those matters that are presented in an adversarial context. Because the judiciary is unelected and unrepresentative, the Article III case-or-controversy limitation, as embodied in justiciability doctrine, presents an important restriction on the power of the federal courts.

Id. (citations omitted). Indeed, there are "three strands of justiciability doctrine—standing, ripeness, and mootness—that go to the heart of the Article III case or controversy requirement." Harrell v. The Fla. Bar, 608 F.3d 1241, 1247 (11th Cir. 2010) (quotation marks and alterations omitted).

As for the first strand, "[i]t is by now axiomatic that a plaintiff must have standing to invoke the jurisdiction of the federal courts." KH Outdoor, LLC v. City of Trussville, 458 F.3d 1261, 1266 (11th Cir. 2006). "In essence the question of standing is whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues." Primera Iglesia Bautista Hispana of Boca Raton,

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Inc. v. Broward Cnty., 450 F.3d 1295, 1304 (11th Cir. 2006) (quotation marks omitted). To demonstrate standing, a plaintiff must show that "(1) he has suffered, or imminently will suffer, an injury-in-fact; (2) the injury is fairly traceable to [the statute]; and (3) a favorable judgment is likely to redress the injury." Harrell, 608 F.3d at 1253; see also Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S. Ct. 2130, 2136 (1992). "The plaintiff bears the burden of establishing each of these elements." Elend v. Basham, 471 F.3d 1199, 1206 (11th Cir. 2006). And standing must be established for each claim a plaintiff raises. See Harrell, 608 F.3d at 1253-54. "We review standing determinations de novo." Bochese v. Town of Ponce Inlet, 405 F.3d 964, 975 (11th Cir. 2005).

In fact, "[s]tanding is a threshold jurisdictional question which must be addressed prior to and independent of the merits of a party's claims." Id. at 974 (quotation marks and alteration omitted). And "we are obliged to consider questions of standing regardless of whether the parties have raised them." Id. at 975.

Notably, the government does not contest the standing of the individual plaintiffs or of the NFIB to challenge the individual mandate. In fact, the government expressly concedes that one of the individual plaintiffs—Mary

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Brown—has standing to challenge the individual mandate. See Government's Opening Br. at 6 n.1 ("Defendants do not dispute that plaintiff Brown's challenge to the minimum coverage provision is justiciable."). Nor does the government dispute...

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