6th Circuit finds health care mandate constitutional

The Sixth Circuit affirmed the U.S. District Court judge’s finding that the health care mandate of the Patient Protection and Affordable Care Act is constitutional under the Commerce Clause.

U.S. District Court judge George Steeh had found the mandate falls within the Commerce Clause because:

(1) the provision regulates economic decisions regarding how to pay for health care that have substantial effects on the interstate health care market; and (2) the provision is essential to the Act’s larger regulation of the interstate market for health insurance.  Because the district court found the provision to be authorized by the Commerce Clause, it declined to address whether it was a permissible tax under the General Welfare Clause.

In Thomas More Law Center v Obama, a 6th Circuit panel consisting of Judges Boyce Martin, Jeffrey Sutton and U.S. District Court Judge James Graham (Ohio) agreed.

Writing for the majority opinion, Martin said the law falls within the Commerce Clause because it

There is debate over whether the provision regulates activity in the market of health insurance or in the market of health care.  In the most literal, narrow sense, the provision might be said to regulate conduct in the health insurance market by requiring individuals to maintain a minimum level of coverage.  However, Congress’s intent and the broader statutory scheme may help to illuminate the class of activities that a provision regulates.  The Act considered as a whole makes clear that Congress was concerned that individuals maintain minimum coverage not as an end in itself, but because of the economic implications on the broader health care market.  Virtually everyone participates in the market for health care delivery, and they finance these services by either purchasing an insurance policy or by self-insuring.  Through the practice of self-insuring, individuals make an assessment of their own risk and to what extent they must set aside funds or arrange their affairs to compensate for probable future health care needs.
Thus, set against the Act’s broader statutory scheme, the minimum coverage provision reveals itself as a regulation on the activity of participating in the national market for health care delivery, and specifically the activity of self-insuring for the cost of these services. 

By regulating the practice of self-insuring for the cost of health care delivery, the minimum coverage provision is facially constitutional under the Commerce Clause for two independent reasons.  First, the provision regulates economic activity that Congress had a rational basis to believe has substantial effects on interstate commerce.  In addition, Congress had a rational basis to believe that the provision was essential to its larger economic scheme reforming the interstate markets in health care and health insurance.

Martin also said that, even if the mandate wasn’t economic activity under the Commerce Clause, it would still be constitutional because it’s part of a larger regulatory scheme for interstate health insurance markets.

Martin also shot down the challenge based on the idea that Congress can’t regulate inactivity by fining those that choose not to buy insurance:

Similarly, this Court has also refused to focus on imprecise labels when determining whether a statute falls within Congress’s Commerce Power.  For example, we rejected the argument that the Child Support Recovery Act is unconstitutional because it regulates an individual’s failure to place an item in commerce.  Instead, we held that Congress had a rational basis for concluding that a non-custodial spouse’s failure to send court-ordered child support payments across state lines substantially affects interstate commerce. Here, too, the constitutionality of the minimum coverage provision cannot be resolved with a myopic focus on a malleable
label.  Congress had a rational basis for concluding that the practice of self-insuring for the cost of health care has a substantial effect on interstate commerce, and that the minimum coverage provision is an essential part of a broader economic scheme.  Thus, the provision is constitutional notwithstanding the fact that it could be
labeled as regulating inactivity.

Graham dissented from Martin’s Commerce Clause analysis, arguing the law doesn’t regulate “the commercial activity of obtaining health care,” but “the status of remaining uninsured.” His dissent ends like many do, with the slippery slope argument.

If the exercise of power is allowed and the mandate upheld, it is difficult to see what the limits on Congress’s Commerce Clause authority would be.  What aspect of human activity would escape federal power?  The ultimate issue in this case is this: Does the notion of federalism still have vitality?  To approve the exercise of power would arm Congress with the authority to force individuals to do whatever it sees fit (within boundaries like the First Amendment and Due Process Clause), as long as the regulation concerns an activity or decision that, when aggregated, can be said to have some loose, but-for type of economic connection, which nearly all human activity does. …  Such a power feels very much like the general police power that the Tenth Amendment reserves to the States and the people.  A structural shift of that magnitude can be accomplished legitimately only through constitutional amendment.


6th Cir. Judge James Ryan retiring in Sept.

DETROIT (AP) — Federal appeals court Judge James L. Ryan of Michigan says he’s stepping down in September.

Ryan has been on the 6th U.S. Circuit Court of Appeals in Cincinnati since January 1986. He was nominated by President Ronald Reagan after 10 years on the Michigan Supreme Court and nine years as a Wayne County judge.

In a statement Wednesday, Ryan says he still loves the work but wants to do other things. Off the bench, he has taught at law schools and given lectures in more than 30 states.

The appeals court hears cases from Michigan, Ohio, Kentucky and Tennessee.

6th Cir. blocks release of Hutaree defendants

DETROIT (AP) — A federal appeals court on Thursday issued an emergency stay blocking, at least temporarily, the release of nine jailed Michigan militia members accused of conspiring to overthrow the U.S. government.

The 6th U.S. Circuit Court of Appeals in Cincinnati issued the stay shortly after the U.S. attorney’s office in Detroit filed a motion seeking the order. Defense attorneys had until 5 p.m. to respond.

The nine had been returned to U.S. District Court in Detroit to be processed for release until trial, but the appeals court halted those proceedings.

"They’re bad losers," defense attorney Mark Satawa told reporters after the hearing, referring to the government. "I fully expect that the 6th Circuit will resolve this quickly."

In a ruling late Wednesday, U.S. District Judge Victoria Roberts said she would not further suspend her Monday order that releases the militia members with strict rules, including electronic monitoring and curfews.

"We don’t think the conditions are satisfactory," U.S. Attorney Barbara McQuade told The Associated Press. "We think the defendants pose a danger to the public and to law enforcement in particular. It’s my duty to protect the safety of the public."

Roberts had ordered the militia members released Monday, then suspended her decision while prosecutors decided whether to appeal. They will appeal, but she was not persuaded to freeze the order any longer.

"Defendants are presumed innocent of all charges against them. … This presumption of innocence is part and parcel of why, ‘In our society liberty is the norm, and detention prior to trial or without trial is the carefully limited exception,’" Roberts wrote, quoting a 1987 U.S. Supreme Court decision.

The members of the southern Michigan militia, called Hutaree, are charged with conspiracy to commit sedition, or rebellion, against the government and the attempted use of weapons of mass destruction. They have been in custody without bond since late March.

Prosecutors claim the suspects are too dangerous to be released from jail. But Roberts set many restrictions and appointed third-party custodians, mostly family members, to keep watch.

Many were at the courthouse Thursday waiting for their relatives to be released.

"One hundred miles for nothing," said Tina Stone’s father, 64-year-old Tim Kelley of North Adams, Mich., referring to his drive from Hillsdale County.

Stone, 44, the wife of militia leader David Stone, 44, of Clayton, Mich., has been ordered to stay with her father when she is released.

"It’s frustrating, to be sure. She thought she was going home," her attorney, Michael Rataj, said of the delay.

Since the series of raids and arrests about six weeks ago, Hutaree members have been portrayed by the government as homegrown extremists out to strike at authorities.

Roberts found that the secret recordings of militia members by an undercover agent contained "offensive and hate-filled speech," but nothing that signaled a conspiracy to levy war against the government.

"The defendants laugh, make sounds and appear to talk over one another," Roberts said, referring to a Feb. 20 recording. "There is also a discussion of strippers."

Prosecutors have said allowing the militia members to go free pending trial would endanger the public.

"If the defendants were to flee or to cause even a fraction of the harm they have repeatedly and fervently spoken of and planned for, no ruling by the 6th Circuit could undo that damage," Assistant U.S. Attorney Ronald Waterstreet said in a court filing Wednesday.

6th Cir: ERISA lien can’t be put on future SSD benefits

In Hall v Liberty Life Assurance Co of Boston, the 6th Cir. held that the an ERISA plan couldn’t put an equitable lien on future Social Security benefits to recover overpayment of benefits paid from a long-term disability policy.

Sonya Hall went on disability in 2002. She was required to seek Social Security disability benefits under her disability policy, so that the the social security benefits were to offset a portion of her insurance payments.  Between 2002 and 2006, she was denied benefits several times. Finally, in 2006, she was granted benefits retroactively to 2002 for her disability.

Liberty Life, the disability insurer, sought an equitable lien as restitution for the amount she was overpaid when she received retroactive social security benefits.  The court said that, while Liberty Life was entitled to the equitable lien, by statute, such lien could not be placed on future social security benefits:

We similarly agree with the district court’s conclusion in this regard, and we affirm on the basis of the court’s Opinion dated October 31, 2008, with the exception of the court’s decision to impose an equitable lien directly upon Hall’s future Social Security benefits for reimbursement of the Plan’s overpayments. Such a lien is prohibited by federal statute.

A plan fiduciary is permitted to bring a claim for equitable relief to enforce the terms of the plan. 29 U.S.C. § 1132(a)(3). For restitution of insurer overpayments to be of an equitable nature, the restitution must involve the imposition of a constructive trust or
equitable lien on “particular funds or property in the [insured’s] possession.” [Great-Life]. The plan must identify a particular fund, distinct from an insured’s general assets, and the portion of that fund to which the plan is entitled. [Sereboff]. Courts are not permitted, however, to place a lien directly on the Social Security benefits themselves. 42 U.S.C. § 407(a) … The equitable lien in this case must therefore be limited to a specifically identifiable fund (the overpayments themselves) within Hall’s general assets, with the Plan entitled to a particular share (all overpayments due to her receipt of Social Security benefits, not to exceed the amount of benefits paid).

The lien imposed by the district court deviated from the principles set forth in Gilchrest because the court imposed the lien directly on the Social Security benefits received by Hall. This is impermissible because the Plan has no claim to Hall’s future Social Security benefits prior to the point at which they are in her possession. The Plan conceded this point during oral argument. Accordingly, we find that the district court erred in imposing an equitable lien directly upon Hall’s future Social Security benefits.

6th Cir: Virtually all child porn activity falls under Commerce Clause

In United States v Bowers, the Sixth U.S. Circuit Court of Appeals overturned its 2001 decision in U.S. v Corp, holding that prosecutors do not need to show that child porn activity “substantially affects interstate commerce.”

The defendant maintained a scrapbook of naked photos that he took of his daughters 11-12 year old friends. Some of the photos were of naked adult women with the children’s faces pasted on heads. Bowers himself was naked in some of the photos.

Bowers argued that he could not be prosecuted under federal law because his activities were solely intrastate and he did not distribute the photos commercially. He relied upon the Corp decision, which held that the government must show that defendant’s activity substantially affects interstate commerce.

However, the unanimous panel held that the U.S. Supreme Court’s decision in Gonzalez v Raich. The Raich court held:

“Congress can regulate purely intrastate activity that is not itself ‘commercial,’ in that it is not produced
for sale, if it concludes that failure to regulate that class of activity would undercut the regulation of the interstate market in that commodity.” Id. at 18. When the larger
“general regulatory statute bears a substantial relation to commerce, the de minimis character of individual instances arising under that statute is of no consequence.” Id. at 17 (internal quotation marks omitted).

[Bowers, page 7].

The court held that the Raich decision effectively nullified the Corp decision, essentially gives the federal government jurisdiction over all child porn cases.

Bowers’s argument is misplaced, and we take this opportunity to make clear that, after Raich, this court’s decision in Corp is no longer good law.

Moreover, as outlined above, given Congress’s broad regulatory power in the child pornography arena, as well as its rational belief that wholly intrastate, non-commercial activity affects the larger interstate commercial market, a case-by-case analysis as
conducted in Corp would completely contradict the Supreme Court’s emphasis in Raich that where Congress has the federal power to regulate a class of activities, “the courts have no power to excise, as trivial, individual instances of the class,” Raich, 545 U.S. at 23 (internal quotation marks omitted), and the “de minimis character of individual instances arising under that statute is of no consequence,” id. at 17 (internal quotation marks omitted). We cannot envision, after Raich, a circumstance under which an as-applied Commerce Clause challenge to a charge of child-pornography possession or production would be successful.

[Bowers at 10, emphasis added).

In their opinions

“When a government entity speaks only and continually about posting a religious document, treats the religious document as separate and distinct from the history-related documents, and focuses principally on ensuring that the religious document is posted in a way that does not upset ‘the [American] Civil Liberties [Union],’ an objective observer would rightly conclude that the predominant purpose behind hanging the religious document was to support and spread the religious message.”

6th U.S. Circuit Court of Appeals Judge Karen Nelson Moore, dissenting in ACLU of Kentucky, et al. v. Grayson County, Kentucky.

It’s not the thought that counts.

The misleadingly named Grayson County Fiscal Court has no judicial responsibilities. It is the Tennessee equivalent of a county board of commissioners in Michigan, and as such, manages the county courthouse.

The Fiscal Court

approved a proposal to hang a “Foundations of American Law and Government Display” in the county courthouse. The display consisted of nine historical documents, including a copy of the Ten Commandments, along with an “Explanation Document” purporting to describe the significance of these items as foundations of law and government in the United States. …

The display includes the Mayflower Compact, the Declaration of Independence, the Ten Commandments, the Magna Carta, The Star Spangled Banner, the National Motto, the Preamble to the Kentucky Constitution, the Bill of Rights, and a picture of Lady Justice.

There’s precedent for this sort of thing, Mercer County v. ACLU, 432 F.3d 624 (6th Cir. 2005).

The majority in ACLU v. Grayson County applied Mercer County to reverse a federal district court ruling that the display crossed the line drawn, as the majority put it, by the U.S. Supreme Court’s “convoluted” Establishment Clause jurisprudence.

6th U.S. Circuit Court of Appeals Judge David McKeague, joined by Judge Karl S. Forester, sitting by designation, wrote

The historical and educational purpose of the Foundations Display was made manifestly apparent to any objective observer through the contents and context of the display from the date of its initial installation, immediately after the display was approved and weeks before litigation commenced.

But, according to Judge Moore in her dissent

“The eyes that look to purpose” behind government action, “belong to an ‘objective observer,'” … a person who is “presumed to be aware of the text, legislative history, and implementation of the state action.” Mercer County, 432 F.3d at 630[.]

And, according to Moore’s sifting of the record, the “asserted purpose here – that the Display was posted for educational or historical reasons – is a sham and should be rejected.”

Moore noted that a religious leader asked the Fiscal Court to post the Ten Commandments in the courthouse and suggested that placing them with other historical documents would stave off the ACLU.

Fiscal Court members asked the county’s attorney about posting the Ten Commandments “in a way that would not cause problems for the County … .”

Moore asserted that the evidence

clearly indicates that the predominant purpose was to post the Ten Commandments as a religious text and that the additional, “Historical Documents” were added merely to avoid violating the Constitution.

Most notably, throughout the Fiscal Court’s discussion of whether to erect a display, the Ten Commandments were always treated as separate from and more important than any of the “Historical Documents” mentioned. Reverend Shartzer, a religious leader, specifically asked the Fiscal Court to display the Ten Commandments.

Magistrates Hornback and Farris, both government officials, singled out the Ten Commandments as their primary focus when making their respective motions to place the Display in the courthouse and clearly considered the “Historical Documents” as distinct from the Ten Commandments.

Indeed, the actual orders that the Fiscal Court passed on September 18 and September 28 both focused on hanging the Ten Commandments and explicitly distinguished them from the “Historical Documents,” which were mentioned in passing and only as a way to attempt to avoid constitutional problems. …

Under such circumstances, the desire to post the religious document establishes the predominant purpose, even if the government entity never bluntly states that purpose as its rationale.