McCollum v. U.S. Dep’t of Health & Human Servs. (Summary)

CONSTITUTIONALITY OF HEALTH REFORM LAW

McCollum v. U.S. Dep’t of Health & Human Servs., No. 3:10-cv-91 RV/EMT (N.D. Fla. Oct. 14, 2010)

The United States District Court for the Northern District of Florida granted in part and denied in part the Department of Health and Human Services (“HHS”) motion to dismiss six claims brought by various state officials and citizens challenging the constitutionality of the Health Care and Education Reconciliation Act of 2010 (the “Act”).

The two counts that the court allowed to go forward are: Count 1, the plaintiffs’ claim that the provision of the Act requiring all citizens, beginning in 2014, to obtain federally approved health insurance or pay a monetary penalty exceeds Congress’ authority under the Commerce Clause; and Count 4, that the Act unconstitutionally coerces and commandeers the states with respect to Medicaid by altering and expanding the program.

The court rejected HHS’ argument that the court did not have jurisdiction to review the individual mandate and penalty provision because the penalty was in fact a tax, and thus subject to the Anti-Injunction Act which prohibits suits “for the purpose of restraining the assessment or collection of any tax.” The court also rejected HHS’ argument that the individual plaintiffs – individuals who do not currently have health insurance and who will be required to purchase it under the individual mandate provision or pay a penalty – do not have standing to bring their claims because they have not suffered an injury in fact. The court found that the individual plaintiffs established “‘a realistic danger of sustaining a direct injury as a result of the statute’s operation or enforcement’ that is reasonably ‘pegged to a sufficiently fixed period of time,’ and which is not ‘merely hypothetical or conjectural.’” The court also ruled that the issue was ripe for review because “[t]he complained of injury … is ‘certainly impending’ as there is no reason whatsoever to doubt that the federal government will enforce an individual mandate and employer mandate against the plaintiffs.” It rejected HHS’ contention that the claims were not ripe for review because no injury can occur before 2014 when the act goes into effect.

Having rejected the defendants’ arguments regarding jurisdiction and standing, the court reviewed the plaintiffs’ claim that Congress exceeded its authority under the Commerce Clause in enacting the individual mandate and penalty. Noting that “the government has never required people to buy any good or service as a condition of lawful residence in the United States,” the court found that the plaintiffs “most definitely stated a plausible claim with respect to this cause of action.”

Turning to the claims of the state plaintiffs, the court said that their coercion theory – they are being coerced by Congress to accept changes in the Medicaid program even though they cannot afford them – “stands on extremely ‘wobbly legs,’” but it allowed the claim to go forward, noting that the Eleventh Circuit, unlike other circuits, has not directly addressed and foreclosed this argument. The court also noted that “the point at which pressure turns into compulsion, and ceases to be inducement, would be a question of degree, at times, perhaps, of fact.”