Feb 19 2012

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Understanding the Health Care Litigation, Part One


From time to time we feature guest bloggers . The following post is from my friend the “Wizard” of Laws”..From his profile..Okay, “The Wizard of Laws” is a self-designation, but if I don’t call myself that, who will? A proud graduate of Eastern Michigan University and the University of Virginia School of Law, I have been practicing law for 28 years, though I still feel like a young lawyer. My clients are individuals, small and large corporations, and public sector institutions, such as universities and government entities.


After all the politics appearing in these hallowed pages lately, it’s time to get back to fundamentals, as befits the Wizard of Laws. (Though I dare say that my January 7 and November 9 posts below have been amply vindicated).

The big event of the U.S. Supreme Court’s 2011-2012 term — and perhaps the most important since Brown v Board of Education — will be the decision on the various cases involving the Patient Protection and Affordable Care Act. commonly known as Obamacare.

The issues to be argued are known generally by the public, but few understand them in any detail. For example, during a recent forum, the Lieutenant Governor here in the Enchanted Mitten, arguing for a state-established health care exchange, said that even if the Court finds the individual mandate unconstitutional, it will have no effect on health care exchanges, since HCEs are not before the Court. This position is not exactly accurate. If the Court determines that the individual mandate is unconstitutional. it will then expressly decide whether the entire law must be struck down, including those provisions pertaining to health care exchanges.

The issue of whether to invalidate an entire law when one provision is declared unconstitutional is what is known as the issue of severability. In other words, can the offending provision be severed from the rest of the law so that the law remains in effect, minus the severed provision?

There is a fair amount of misconception about severability. Many people believe that an unconstitutional provision cannot be severed unless there is a severability clause in the law itself. Since Obamacare contains no severability clause, the argument goes that declaring the individual mandate unconstitutional will strike down the entire law automatically.

This is not true.

The Supreme Court established the applicable severability standard in the 1987 case of Alaska Airlines v Brock, in which it held that an unconstitutional provision may be severed “unless it is evident that the Legislature would not have enacted those provisions which are within its power, independently of that which is not.” So, severability is presumed, unless it is clear that, without the unconstitutional provision, Congress would not have enacted the law.

The Brock standard is not exactly a model that lends itself to metaphysical certainty. The Court found that the “more relevant inquiry in evaluating severability is whether the statute will function in a manner consistent with the intent of Congress.” Again, there is a certain subjectivity to this standard, which relies on faithful application by the courts.

Yes, I said “faithful,” not “consistent.” In the four cases in which the individual mandate was found unconstitutional, the courts dealt with severability in four separate ways. The courts in question decided:

1. Only the mandate and those directly-dependent provisions which make specific reference to the mandate were to be severed;

2. The mandate is non-severable and the entire law is invalidated;

3. Only the mandate itself is severed; and

4. The mandate is non-severable from the guaranteed-issue and preexisting conditions provisions, but the rest of the law remains intact.

One Supreme Court petitioner wrote:

As these four divergent opinions make clear, there is serious confusion as to how to apply this Court’s severability jurisprudence to the [Act]. That confusion stems in large part from the unusual facts at hand, including the extraordinary length and complexity of the Act, and ‘the haste with which the final version of the 2,700 page bill was rushed to the floor for a Christmas Eve vote.’

As you can tell, this is a complicated issue, but it is now before the Court and, if the individual mandate is declared unconstitutional, the Supreme Court will then determine whether Congress would have enacted Obamacare without the individual mandate. If the Court declares the mandate non-severable, the entire law will be invalidated, including those provisions related to health care exchanges.

Next time: a closer look at the individual mandate and interstate commerce.

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1 comment

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