MARY AGNES CAREY: Welcome. I’m Mary Agnes Carey.

By a vote of 5 to 4, the Supreme Court has ruled that family-owned, closely held corporations do not have to comply with the health law’s contraception coverage requirements if they violate the owner’s religious views. Legal analyst Stuart Taylor Jr. joins us now to discuss the decision. Thanks for being with us.

STUART TAYLOR: Nice to be with you.

MARY AGNES CAREY: Why did the court rule this way?

STUART TAYLOR: Well, the court held that under an act of Congress passed in 1993, the Religious Freedom Restoration Act, the right is conferred on all religious groups, including, the court said in this case for the first time, for-profit corporations as well as churches and, say, nonprofit religious groups — they all get broad protection of their religious freedoms. And in a very detailed analysis of the various steps you go through under this law, first, can you invoke protection at all if you’re a for-profit corporation. The court said yes. Then, does it substantially burden your religious exercise. The court said yes, because these companies have objections to providing contraception coverage, and then they go on and say is this the government’s least restrictive means they could use to serve the need of the women who want the contraceptives, in this case. And the court said no; they have other ways they could to it. The government could pay for it or they could use an accommodation they are already using for nonprofit religious employers.

MARY AGNES CAREY: These companies, Hobby Lobby, which is a very well-known craft store, and Conestoga Wood Specialties, which is a cabinet maker, what were their arguments against the contraception mandate?

STUART TAYLOR: Unlike the Catholic groups that are also challenging the mandate, these groups have a religious objection only to what they call abortifacients—the morning after pill, certain kinds of IUDs that they think operate to induce abortion.

Now, it doesn’t induce abortion as the government describes abortifacient, but it does in the beliefs of these companies. And the government says they are entitled to their beliefs. So [companies] say: For us to help someone get that kind of contraception, violates our religious beliefs. We cannot do it without violating our religious beliefs. The government is trying to force us to do it against our religious beliefs, and that puts us in a terrible position, because the fines are enormous for not complying with this provision of the Affordable Care Act.

Anti-abortion advocates cheer in front of the Supreme Court after the decision in Burwell v. Hobby Lobby Stores (Photo by Chip Somodevilla/Getty Images).

For Hobby Lobby, which is a pretty [good-sized] company, it would be fines of $1.3 million a day, or $475 million a year, if it refuses to provide all federally approved contraceptive coverage, including these so-called abortifacients, and they say that’s an intolerable burden: We shouldn’t be put to that choice and the Religious Freedom Restoration Act exempts us from that choice.

MARY AGNES CAREY: What does this ruling mean for female employees of Hobby Lobby and similar companies that have objections to some forms of contraception coverage?

STUART TAYLOR Jr.: In this case, it’s not going to have much effect. In fact, the majority opinion says the effect of this on the women employed by Hobby Lobby and other companies involved in these cases would be precisely zero. And the reason is that the court says if the administration extends the same so-called accommodation to these religious employers who are for-profit companies then it’s already extended to nonprofit Catholic hospitals, nonprofit religious schools, nonprofit religious colleges, and nonprofits – if it extends the same so-called “accommodation” to these for-profit companies, that it has already created for the nonprofit companies, then the women will get the coverage anyway through the same insurance companies that cover everything else.

MARY AGNES CAREY: So these accommodations, the justices suggested, for example, number one, the government can pay for it. Or, they could put into play some accommodations that are already there for religiously affiliated employers, which is having the insurers cover it.

STUART TAYLOR Jr.: Yes, and that’s a tricky little thing that would apply in this case and not many others. And what makes it work is that the cost of providing the contraceptive coverage is really about zero, whether it’s the employers paying for it or whether it’s the insurance company that’s paying for it because they save money on the other end, because they don’t have the child birth expenses, which are larger than contraceptive coverage. So nobody’s really paying out much money. It’s a matter of who’s got the symbolic function of providing the coverage.

This accommodation that’s already been given to nonprofit employers basically says: OK, all you have to do is certify that you have a religious objection to providing this coverage and then the government will require that your insurance company provide the coverage at no cost to you. And that’s what’s being done already in some cases — and what the court now says they can do in the cases of company, for-profit companies like Hobby Lobby.

MARY AGNES CAREY:  There are many other non-profit employers like Catholic hospitals that have said even these accommodations, these other arrangements, are going to violate their religious beliefs. So what does this mean for them?

STUART TAYLOR:  That’s right, and the reason they say it violates their religious beliefs is that they are required, at least by the regulation to certify to the insurance companies that they have this religious objection, then that triggers the insurance companies obligation to provide it. So these companies are saying, yeah, but if we have to certify and then it gets provided that means we are doing what we object to doing, which is providing a link in the chain of causation that leads to women using contraceptives.

BURWELL V. HOBBY LOBBY STORES

• SUPREME COURT LIMITS CONTRACEPTIVE MANDATE FOR CERTAIN EMPLOYERS
• WHAT THE HOBBY LOBBY DECISION MEANS FOR EMPLOYERS
• FAQ: HIGH COURT’S HOBBY LOBBY RULING CUTS INTO CONTRACEPTIVE MANDATE
• COURT RULING GEARED TO ‘CLOSELY HELD’ FIRMS, BUT WHAT IS THAT?
• HOBBY LOBBY DECISION MAY NOT BE THE LAST WORD ON BIRTH CONTROL COVERAGE

So it’s a little peculiar because the court has said that Hobby Lobby and its co-plaintiffs who do not object to the certification can be covered by this, but at least technically the possibility remains that the court would eventually decide that you cannot require, say, Catholic organizations that object to providing the coverage to object to certifying that they won’t provide the coverage to do so.

MARY AGNES CAREY:  Does this ruling mean that privately held for for-profit corporations can ignore other requirements of the health law if they find those requirements objectionable on religious grounds?

STUART TAYLOR:  Justice Ginsburg’s long and eloquent dissent implied that, but the majority and more specifically Justice Kennedy who provided a concurring opinion say that no that wouldn’t really do that, it’s not nearly as broad as Justice Ginsburg says it is. The quote is Justice Kennedy says: The Court’s opinion does not have the breadth and sweep ascribed to it by the respectful and powerful dissent of Justice Ginsburg’s. So you have a disagreement between the dissent and at least some of the majority of whether this is going to be a far reaching decision or whether it’s going to be one that covers this case and not too many other cases.

MARY AGNES CAREY:  What did Justice Ginsburg mean in her dissent when she called the ruling a decision of startling breadth?

STUART TAYLOR:  She meant that, she went on to say, that it says: The court holds that commercial enterprises, including corporations, can opt out of any law, except tax laws, they judge incompatible with their sincerely held religious beliefs.

It would be a decision of startling breadth if the court had said that. But as the majority and Justice Kennedy’s concurrence both say: No, no, no, Justice Ginsburg. It isn’t nearly as broad as you’re saying it is.

And, by the way, this kind of dialogue is fairly common when dissenters, in order to emphasize what terrible things could happen as the result of a decision they don’t like, they tend to read it as broadly as possible to make it sound worse, and then the majority tends to say: Oh, no, it’s not that broad. And you never really find out how broad it is until the next case comes along.

MARY AGNES CAREY:  What does today’s decision mean for other litigants who are challenging the contraception mandate because they say it violates their religious freedom?

STUART TAYLOR:  I think most of them are going to win their cases if they can make it clear that their religious objections are sincere. I think most of them can, or they don’t file lawsuits.

It should be clear: A public company, certainly a big public company, would not be able to pull off a sincere religious objection of this kind, because the bigger a company gets, the less likely it is that all of the people who have an ownership or management interest in it are of the same religion and share the same objections. So this is, by its nature, this sort of logic is confined to family-owned companies, or maybe companies owned by a small group of like-minded religious people who say their religion is very important to the way they operate their businesses.

Hobby Lobby is quite a big company, for example, but still we’re not talking about General Motors or Ford or McDonald’s or any companies like that.

MARY AGNES CAREY:  That you so much legal analyst Stuart Taylor.

STUART TAYLOR:  Thank you.

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An Obama Administration regulation requiring that many employers — including religious employers — provide insurance without copays or deductibles that covers a wide range of contraceptives, including sterilization, as part of women’s preventive health care.

Religious groups decry it as an extreme attack on their freedom. Already, more than 40 lawsuits have been filed by Catholic and evangelical plaintiffs including hospitals, universities and private businesses. The Catholic plaintiffs object to all contraceptives, the evangelicals to methods that induce what they call abortion.

Continue reading the column here.

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The oral arguments regarding the law’s contraception coverage mandate, slated for March 25, will be a rematch between two lawyers who squared off in the first health law challenge — Obama administration Solicitor General Donald B. Verrilli Jr. and former Bush administration Solicitor General Paul Clement.

Continue reading the column here.

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The pending challenges to the law, and related regulations, range from the Goldwater Institute’s claim that it gives the Independent Payment Advisory Board unconstitutionally broad powers over Medicare services and payments, to the more than 35 lawsuits by religious employers attacking a Department of Health and Human Services rule that requires them to provide their employees with insurance that covers women’s contraceptives without a copayment. on whether Congress intended that tax credits and subsidies to help consumers buy health insurance be available only through state-created exchanges. Many states are signaling that they may not create their own exchanges, leaving the federal government to do so, as the law requ

By far the broadest and potentially most damaging of the legal challenges turnsires.

If subsidies and tax credits aren’t available in states with federally run exchanges, conservative legal scholars say, then two other lynchpins of the law would also be undermined: the requirements that employers of a certain size offer insurance and that most individuals buy insurance.

Supporters of the law scoff at the arguments, asserting that Congress clearly intended that the subsidies and credits would be available in all exchanges.

But, confident of their case, some health law opponents, including Jonathan Adler of Case Western Reserve Law School, Michael Cannon of the libertarian Cato Institute andNational Affairs editor Yuval Levin, are urging Republican-led governments to refuse to set up the online insurance purchasing exchanges, which would, as the argument goes, make their residents ineligible for the tax credits and subsidies. They say that this step also would gut the so-called employer mandate, which the law says will take effect in states where residents are eligible for such assistance.

The mandate requires employers with more than 50 full-time workers to offer health insurance policies for employees and their families that include a minimum set of benefits, or pay a tax of $2,000 per employee for failing to do so. The tax wouldn’t apply to the first 30 workers.

Health law critics theorize that by refusing to set up exchanges, states could also carve a hole in the provision that requires individuals to either obtain insurance or pay a tax as a consequence of choosing not to, which the Supreme Court upheld in June. And if states could disable both the employer mandate and part of the individual mandate, they could wreak havoc with the law’s overall operation.

Indeed, if lots of states also refuse to participate in the Medicaid expansion, as the Supreme Court ruled they can do without penalty, “the ACA may end up being fully applicable only in a portion of the United States,” says David Rivkin, a Washington lawyer who spearheaded the constitutional challenges that fell one vote short of striking down the entire measure last summer. Rivkin and some other ACA critics hope that by exploiting what they see as the law’s still-unresolved flaws, they can hasten its inevitable failure to work as advertised, and thus clear the way for Republicans to dismantle it.

The Obama administration and other ACA supporters dismiss these legal theories as far-fetched and view conservatives’ broader hopes of crippling the entire law as wishful thinking. They say states have no power to limit the subsidies, the employer mandate, or the individual mandate; and, that if they did, the effect would be to block their own citizens from receiving large federal tax breaks and obtaining affordable health insurance.

Tracking The Argument
Last year, the Internal Revenue Service issued an interpretive rule saying that federal exchanges also would have the power to distribute the tax credits and subsidies.

But Oklahoma Attorney General E. Scott Pruitt, a Republican whose state has refused to set up an insurance exchange, has urged a federal district court to invalidate the IRS rule and thereby nullify the employer mandate in Oklahoma.

With only 17 states having so far committed to creating their own health insurance exchanges — in part because of concern that the administration has not provided clear guidance on how they should work — more lawsuits could be on the way, brought by states, employers or both.

As even some health law supporters concede, the claim that Congress denied to the federal exchanges the power to distribute tax credits and subsidies seems correct as a literal reading of the most relevant provisions. Those are sections 1311, 1321, and 1401, which provide that people are eligible for tax credits and subsidies only if “enrolled . . . through an Exchange established by the state” (emphasis added).

Why would the measure’s drafters have wanted to cripple any fallback exchanges created by the federal government? Pruitt, Cannon, Adler, and others claim the legislative history shows that the drafters wanted to give states strong incentives to create their own exchanges, and expected them to do so.

State governments hostile to the law might also hope that refusing to create exchanges could free some of their residents from the individual mandate, which imposes tax penalties on people who don’t obtain insurance.

These arguments are detailed in a paper to be published in Health Matrix by Adler and Cannon. There are, of course, also forceful counterarguments.

The Counterpoints
The administration and other advocates say that the 2,700-page law’s language on the powers of federal exchanges clearly did not reflect the intent of Congress. That, they say, was to give federal exchanges all powers enjoyed by state exchanges, in keeping with the overarching purpose of making health insurance affordable for the vast majority of Americans.

The law’s legislative history and a related statute establish “that Congress understood that premium tax credits would be available through both federal and state exchanges,” wrote Timothy Jost, of the Washington and Lee University School of Law, in the Health Affairs Blog.

Jost said that while “the ACA is not a model of clear drafting,” the Adler-Cannon theory “has little chance in succeeding in the courts, and even less chance of being addressed by the courts anytime in the near future because of jurisdictional problems.” He referred to a federal law, the Anti-Injunction Act, that bars courts from enjoining federal taxes — perhaps including the tax to be imposed on employers who defy the mandate — before they come due. In addition, argued Jost, only employers — not states such as Oklahoma — would have legal standing to challenge the IRS’s interpretation, and probably not before 2015.

It’s unclear at this point whether many businesses that would like to avoid the employer mandate, or many states besides Oklahoma, will be motivated to take on the Obama administration in the courts again.

It’s also unclear how receptive courts will be to efforts by Republican-run states to dismantle part of a law that the Supreme Court has so recently upheld after a titanic battle.

And, in the perhaps unlikely event that the dispute over the powers of federal exchanges reaches the Supreme Court, would Chief Justice John Roberts — having made his uneasy peace with Obamacare in June — have the stomach to resume hostilities based on a legal analysis that even lawyers find hard to follow?

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STUART TAYLOR: It was the most amazing Supreme Court theater I’ve ever seen for 50-some minutes. Roberts the chief justice went on for 20 minutes. When you’re three minutes in, you think “Oh my gosh, they’re going to strike down the mandate.” When you’re eight minutes in, you think “Oh no! They’re going uphold it.” And they do uphold it. They uphold it under the taxing power.

JACKIE JUDD: And he, of course, is the deciding vote.

STUART TAYLOR: He is the deciding vote on everything, pretty much. Then, when he starts in on the Medicaid expansion, he starts in, “Oh, they’re striking it down. By 7-2.” And indeed they were. But the footnote is, all this means is the law cannot force the states to join this new expansion by threatening them with the loss of all their existing Medicaid funds if they don’t.

JACKIE JUDD: Let’s start first with the mandate. As I said, it was a 5-4 vote with Roberts breaking the tie. How did they reach that conclusion?

STUART TAYLOR: Well, there were two sources of federal power that the government claims sustained the mandate. The first is the power to regulate interstate commerce, and 90 percent of the public discussion has been about that issue: Can in the name of regulating interstate commerce, can you force people to buy an unwanted commercial product?

By 5-4, Roberts and the conservatives said, “No, you can’t. The Commerce power does not allow this.” And the liberals were very angry about that. But then the question was: What about the power to levy and collect taxes? Does that sustain the individual mandate? And the government had made that argument; it had gotten much less attention. It was on that basis that the Chief Justice and the four more liberal justices upheld the mandate. They said that it was a valid exercise of Congress’s power to tax.

JACKIE JUDD: And calling it a tax, which is something Congress did not do, is it a distinction with a difference or does this mean that the law as it stands will be implemented as the architects had envisioned?

STUART TAYLOR: It will be implemented exactly as the architects had envisioned, except maybe Medicaid to some extent. In other words, it’s upheld all the way. The question is: What’s the source of constitutional authority? Why does it make a difference? It can make a difference in future cases. The gist is, the court says Congress can tax anybody, anytime, anyway to support the general welfare. And they don’t have to call it a tax. If it acts like a tax, it quacks like a tax, it doesn’t have to be called a tax. But they can only do so much under their power to regulate interstate commerce, which the court seems to think of as a more dangerous power, in terms of “expansionability.” The taxing power has the virtue that the voters watch rather carefully when they’re being taxed.

JACKIE JUDD: Let’s move now to the Medicaid issue. In the Affordable Care Act, the ACA, it forced, essentially, the states to expand Medicaid beginning in 2014, to millions of the uninsured. And if states chose not to, the financial penalty could have been the total withdrawal of all federal funding, which is sizeable.

STUART TAYLOR: Correct. The court said that the threat to withdraw all Medicaid funding was coercive — unduly coercive. The federal government can be a little bit coercive towards the states under case law but they can’t be unduly [coercive]. It’s a matter of degree or kind.

The court says, here, “This is way too coercive, states have no choice. They couldn’t possibly say ‘Sure, take away all of our Medicaid funding, we’re not going along with this.’ Therefore, that violates the sovereignty of the states.” And there were seven votes for that proposition. Interestingly, two of the more liberal justices, [Stephen] Breyer and [Elena] Kagan, joined in that. But then, the question is: OK, so it’s unconstitutional to threaten the states with losing all their [Medicaid] funds. What’s the remedy for that? We just let the states opt out, without losing all their funds. If the states want to go along with the expansion, everything is fine. Most people think the states will want to go along.

JACKIE JUDD: Because in the early years, the federal government is paying 100 percent of the cost.

STUART TAYLOR: Right, and even in 10 years, it goes down only to 90 percent. Now, theoretically, 20 years from now, the federal government could say: ‘Joke’s on you, states, now you’re going to have to pay 80 percent,’ which I think is the sort of thing conservatives were worried about in their dissent. But that’s a long way down the line.

JACKIE JUDD: Thank you so much, it was fascinating. Thank you so much for watching. Please join us again, at 4:00 Eastern Time, this [Thursday, June 28th] afternoon to hear more about the decision. Stuart will be with us, as well as KHN reporters and Tom Goldstein and Lyle Denniston of SCOTUSblog. We hope to see you then.

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For starters, it’s big enough for the justices to schedule six hours of arguments — more time than given to any case since 1966. After all, the Affordable Care Act is arguably the most consequential domestic legislation since the creation of Medicare in 1965.

It’s also big enough to attract more briefs than any other case in history. At least 170, including more than 120 “friend-of-the-court” or amicus briefs, have been filed, many of which are joined by 10, 20 or more groups of every imaginable description.

And, finally, it’s big enough to cause the justices to postpone until October half of the 12 cases that they would ordinarily hear in April in order to clear time to get started on the health care opinions that they are expected to issue by the late June, or possibly, early July.

What’s it all about?

The immediate issues, in the order the court will hear them, begin with the question of whether the so-called “individual mandate” — which requires that almost all Americans without coverage buy individual health insurance policies or pay fines — is ripe for adjudication now. Or must the case be deferred until 2015 because of the 1867 Anti-Injunction Act, which bars federal courts from ruling on the constitutionality of tax laws before payments are due?

After that come the arguments about what many consider the central issue: whether the mandate, which is unprecedented, should be voided because it represents an unconstitutional exercise of Congress’ powers to regulate commerce and to levy taxes.

Next is what becomes of the law’s hundreds of other provisions, covering 2,700 pages, if the mandate is unconstitutional? Are some or all of them “severable,” meaning that Congress would have wanted them to stand even if the mandate falls? For example, what about the provisions establishing tax credits to help small businesses and individuals buy health insurance and taxing large employers that do not provide full-time employees government-approved coverage?

Apart from those issues, does the law’s expansion of Medicaid violate the sovereignty of the states by effectively requiring them to spend more of their own money or forfeit all of the federal Medicaid money they now receive?

What’s the likely outcome?

Nobody knows. It’s clear that the court’s four more liberal members, like almost all other liberal legal experts, will find the law constitutional in all respects. It’s also clear that conservative Justice Clarence Thomas will vote to strike down much or all of the law. It’s less clear what swing-voting Justice Anthony Kennedy and conservative Chief Justice John Roberts as well as Justices Antonin Scalia and Samuel Alito will do.

Kennedy, Roberts, Alito, and (especially) Scalia — whom the government’s brief quotes five times — have all joined past decisions construing federal regulatory power very broadly. Two respected conservative federal appeals court judges, Laurence Silberman and Geoffrey Sutton, who is one of Scalia’s favorite law clerks, have upheld the law.

What are the major arguments for and against the individual mandate?
Defenders say that the broad constitutional power of Congress to regulate interstate commerce, and the even broader power to “lay and collect taxes,” both provide ample authority for requiring that people buy insurance as part of a comprehensive scheme to end “discriminatory insurance practices that have excluded millions of people from coverage based on medical history,” in the words of a brief by Solicitor General Donald Verrilli.

The same brief also asserts that uninsured people consume $43 billion a year worth of emergency-room and other health care for which they do not pay, costs that are shifted to insurers and that raise insured families’ average premiums by more than $1,000 a year. Critics of the law dispute these numbers.

The 26 states challenging the law (along with a business group and four individuals) say, in the words of a brief by Paul Clement, who was solicitor general under President George W. Bush: “The individual mandate rests on a claim of federal power that is both unprecedented and unbounded: the power to compel individuals to engage in commerce in order more effectively to regulate commerce. This asserted power does not exist. … It is a revolution in the relationship between the central government and the governed.”

Clement also stresses that President Barack Obama and his allies in Congress insisted during the debate before the measure became law that the financial penalty for failing to comply with the individual mandate is not a tax. They should not be allowed, he argues, to “enact legislation that would not have passed had it been labeled a tax and then turn around and defend it as a valid exercise of the tax power.”

The Anti-Injunction Act?

This reconstruction-era statute bars courts from considering the constitutionality of tax laws until payments are due. It will apply here if the court deems the individual mandate’s penalty provision a “tax.”

Because the mandate is not scheduled to take effect until 2014 and the first penalties would not be due until 2015, the federal courts would not yet have jurisdiction to consider the constitutionality of the penalties or the mandate. In other words, consideration of the case would be postponed until 2015, and, therefore, such a decision would convert the biggest case in decades into the biggest anticlimax in Supreme Court history.

Both sides say that the Anti-Injunction Act does not apply. But the court appointed a lawyer as “friend of the court” to argue that it does, as one federal appeals court held. This appointment signaled the court’s care to observe arguable limits on its jurisdiction even when the parties agree that it has jurisdiction.

What are the major arguments on severability?

The government says that if the court strikes down the mandate, it should defer until future cases any ruling on the severability of most other provisions. But, if it does rule on severability, the government maintains that only two other provisions should go down with the mandate. Those are the “guaranteed-issue” and “community-rating” provisions, which bar insurers from denying coverage or charging higher premiums because of medical history. Without the individual mandate, the government says, those provisions would send premiums soaring by creating incentives for healthy people to defer buying insurance until they need health care.

The 26 states argue that the mandate was deemed by Congress to be “necessary to make the other provisions work as intended,” and that the court should strike down the whole law.

The court appointed another friend-of-the-court lawyer to write a brief arguing that a decision striking down the mandate should leave the rest of the law — including guaranteed issue and community rating — intact.

What are the major arguments on Medicaid?

The government asserts that “it is well settled that Congress’s spending power includes the power to fix the terms on which it will disburse funds to the states,” that Congress has repeatedly expanded the state-federal Medicaid program, and that this new expansion will not “impose significantly onerous burdens on the states.”

The 26 states counter that the Medicaid expansion unconstitutionally coerces them because it “threatens States with the loss of every penny of federal funding under the single largest grant-in-aid program in existence — literally billions of dollars each year — if they do not capitulate to Congress’ steep new demands.”

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The case, which will probably be argued in March on a date still to be announced, is especially momentous because it not only will determine the fate of President Barack Obama’s biggest legislative achievement but also will cast important light on the Supreme Court’s future course under Chief Justice John Roberts on issues of federal government power.

The central issue — but not the only important one — is whether Congress exceeded its constitutional powers to regulate interstate commerce and to levy taxes when it adopted the so-called “individual mandate” at the heart of the health care law.

That provision would require millions of people starting in 2014 to buy commercial health insurance policies or pay financial penalties for failing to do so.

The court also agreed to decide a challenge to the Affordable Care Act’s provision essentially requiring states greatly to expand their Medicaid spending.

The court made clear that if it decides to strike down the individual mandate or Medicaid provision, it will also decide which of the 975-page law’s hundreds of other provisions should go down too, by divining whether Congress would have wanted some or all of them to be effective even without the voided provision or provisions.

Finally, the court agreed to decide whether — as one federal appeals court ruled — the litigation surrounding the individual mandate must be deferred until 2015 because of the 1867 “Anti-Injunction Act,” which bars courts from striking down tax laws before they take effect.

The court allocated an extraordinary five and one-half hours — the most time in many decades for related challenges to a single new law — for argument on all these issues combined.

How The Case Got Here

The court’s announcement Monday centered on a challenge to the law by 26 state governments. The 11th Circuit Court of Appeals in Atlanta voted in August to strike down the individual mandate but to leave standing the rest of the health law, including the Medicaid expansion. All three of the petitions granted today involve that case.

In other action, though, the D.C. Circuit and the 6th Circuit, centered in Cincinnati, have upheld the individual mandate, with opinions supporting the Obama position by two of the nation’s leading conservative judges, the D.C. Circuit’s Laurence Silberman and the 6th Circuit’s Jeffrey Sutton.

Another appeals court, the 4th Circuit, said courts have no power to decide the individual mandate issue until 2015, when the first monetary penalties will be due for failing to comply with the individual mandate to buy health insurance. This decision held that the penalty provision is a “tax” within the meaning of the Anti-Injunction Act, as described above.

If the justices agree that the Anti-Injunction Act applies, this year’s case will be perhaps the greatest anticlimax in Supreme Court history. And, the justices’ assignment of a full hour of oral argument to this question suggests that some take this issue very seriously.

Meanwhile, the purpose of the individual mandate is to force millions of Americans to obtain health insurance — whether they want to or not — in order to offset the costs that health insurers would bear under the health care law’s requirement that they sell insurance to everyone without charging those with especially costly health problems more than healthy people.

The lower court judges who have struck down the mandate have cited as their reasoning the lack of any precedent for Congress to require people to buy a commercial product they don’t want and the government’s failure to show how — if the individual mandate is upheld — a limit enforceable by the courts could be applied to this exercise of congressional power.

As background, the two Supreme Court decisions since 1937 that have struck down acts of Congress as exceeding the commerce power, one in 1995 and one in 2000, stressed that Congress’ commerce power must be restrained by some principle that could be enforced by the judicial branch of government.

Defenders of the individual mandate stress other Supreme Court precedents suggesting that even economic decisions that have a tiny direct effect on interstate commerce — such as a person’s decision not to buy health insurance — cumulatively have major effects on interstate commerce and thus can be regulated by Congress.

With the court’s announcement today, none of the justices recused themselves from hearing the case. Some conservative opponents of the health care law have suggested that Justice Elena Kagan should recuse herself because of her prior work as President Obama’s Solicitor General. And some liberals have suggested that Justice Clarence Thomas should recuse himself because of his wife Virginia Thomas’s political activities opposing the health care law. But the decision on recusal is left to each individual justice and it would have been announced with today’s order.

Meanwhile, as is customary, the Court announced the grants of review with no comment or indication of the vote. Any four justices can agree to review a case. And, given the importance of the issues, with federal appeals courts divided, today’s announcement was widely expected.

Most but not all Supreme Court experts predict — some very confidently, some cautiously — that the Court will uphold the law. The Supreme Court’s four liberals are certain to uphold the law. They would need only one more vote to prevail. While Justice Clarence Thomas seems a sure vote to strike the law down, Chief Justice John Roberts and Justices Anthony Kennedy, Antonin Scalia and Samuel Alito are harder to call.

A decision in June — or before — would help make the future of health care law a central issue in the 2012 presidential campaign.

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Can Congress and the president use an unprecedented and potentially limitless expansion of the power to regulate interstate commerce to avoid the political hazards of calling a tax a tax? Or might some justices effectively impose a constitutional truth-in-labeling requirement?

In order to explore these questions, it’s important to first review the current tally of wins and losses. So far, one federal appeals court in June upheld the mandate by 2-1. A second struck it down in August by 2-1. And a third on Sept. 8 threw out two other challenges on jurisdictional grounds. Federal district courts have also issued conflicting rulings.

With more cases in the pipeline, it’s certain that the Supreme Court will step in to decide the mandate’s fate. The final decision will probably come down next June, if the Obama administration files its petition for review promptly this autumn, but certainly by 2013.

Most legal experts have long predicted that the Supreme Court will uphold it. Although the confidence level has dipped as lower-court judges have gone both ways, Walter Dellinger, former acting solicitor general under President Clinton, predicts a 7-2 vote to uphold. Tom Goldstein, another leading Supreme Court advocate, who represents AARP as a friend of the court supporting the law, predicts 7-2 or 6-3, adding that “the opponents of the law have done a tremendous job at articulating their theory, and they’ve gotten more traction than I imagined they would,” but he doesn’t “see a realistic chance of them winning.”

But David Rivkin, one of the lead lawyers challenging the health care law, confidently predicts a 5-4 vote to strike down the individual mandate.

Based on the current lay of the land, I’d put the chances at about 25 percent to 33 percent that the mandate is overturned. The court seems even less likely to sweep away the rest of the 975-page law, according to legal experts following the case closely.

For starters, the court’s four Democratic appointees seem almost certain to vote to uphold the law. And Justice Clarence Thomas seems almost certain to vote to strike it down. Still, it’s harder to call the other four Republican appointees, Chief Justice John Roberts and Justices Antonin Scalia, Anthony Kennedy and Samuel Alito. Each side in the health care litigation has cited one or more opinions written or signed by each of these four justices. But even on the questionable assumption that each is a good bet to vote with Thomas, the odds seem against all four doing so. (For example: 2/3 x 2/3 x 2/3 x 2/3 = 16/81.)

Examining The Arguments Against The Mandate

This is not to deny that the health law’s challengers have very respectable arguments against the mandate, which would in 2014 require millions of healthy people either to buy health insurance policies or to pay financial penalties.

First, the mandate is without precedent. Congress has never before passed a law requiring Americans to buy a commercial product that they don’t want in the name of regulating interstate commerce. And the novelty of a far-reaching new requirement may (or may not) count against its constitutionality, the court has said in prior cases.

“Whether such a requirement would be constitutional under the Commerce Clause is perhaps the most challenging question posed by such a proposal, as it is a novel issue whether Congress may use this clause to require an individual to purchase a good or service,” the Congressional Research Service reported in 2009, while the health care bill was pending.

Second, although the justices have construed very broadly Congress’s power to regulate commercial activity, they have never held that Congress may regulate even inactivity, by requiring people who want to be left alone to engage in commerce. As such, the mandate encroaches on individual liberty and autonomy in a way that is sure to trouble those justices — especially Kennedy, who is often the pivotal vote — who see judicially imposed limitations on the commerce power as vital protections of liberty.

Third, although only two Supreme Court decisions (in 1995 and 2000) since 1937 have struck down acts of Congress as exceeding the commerce power, they stand for the proposition that that power must be restrained by some meaningful, judicially enforceable limiting principle. Opponents of the individual mandate have made a strong case that a decision upholding it would effectively give Congress unlimited power to require people to buy vegetables, cars and anything else that Congress might choose to promote.

“If Congress may compel individuals to purchase health insurance from a private company,” Chief Judge Joel Dubina, of the 11th Circuit Court of Appeals, wrote in an August 12 decision striking down the individual mandate but upholding the rest of the law, “it may similarly compel the purchase of other products from private industry, regardless of the ‘unique conditions’ the government cites as warrant for Congress’s regulation here.”

Fourth, there is that truth-in-labeling concern. While never expounded as a formal doctrine, this point stems from the distinction between Congress’ broad power to regulate interstate commerce and its even broader power to “lay and collect taxes” — a theme running through the current litigation.

The court has long ruled that the taxing power is virtually unlimited, on the assumption that the political process is an adequate safeguard against excessive or abusive taxes — at least, if the taxes are undisguised. And this is an important point to remember as the legal action continues to unfold.

Tax Or Penalty?

One of the ways the president and his allies wanted to offset the costs health insurers would bear under the health law’s guaranteed-issue requirement is to require millions of Americans to spend billions of dollars on health insurance, even though many of them might otherwise choose not to buy it.

The most constitutionally unassailable way to do this would have been to raise the taxes of these Americans while offering tax credits to those who bought expensive, government-approved health insurance.

But as U.S. District Judge Roger Vinson, of Pensacola, Fla., asserted in one of the early rulings against the law, “Not only are taxes always unpopular, but to do so at that time would have arguably violated pledges by politicians … to not raise taxes, which could have made it that much more difficult to secure the necessary votes for passage.”

So Congress devised the individual mandate to extract the money from taxpayers while strenuously asserting that the penalty for noncompliance was not a tax. Since the health law’s passage, though, the Obama administration has argued that this penalty is a tax, and thus should be upheld as an exercise of the taxing power, as well as of the power to regulate commerce.

But even most of the judges who have upheld the mandate as a regulation of interstate commerce — as well as those who have struck the mandate down — have rejected the administration’s position that it is also a valid exercise of the taxing power.

Different Supreme Court precedents appear to point in different directions on whether the commerce power is broad enough to justify the individual mandate. Here’s why I am laying odds that they will uphold it:

–The court’s most recent precedents suggest (ambiguously, to be sure) that the only judicially enforceable limit on the commerce power is that Congress cannot use it to regulate non-economic, personal, local activities.

–The health care and health insurance markets massively affect interstate commerce. In the words of an opinion upholding the mandate by Bush-appointed Judge Jeffrey Sutton, “No one is inactive when deciding how to pay for health care, as self-insurance and private insurance are two forms of action for addressing the same risk. Each requires affirmative choices; one is no less active than the other; and both affect commerce.”

And for all the objections to regulating “inactivity,” the individual mandate is no more intrusive on personal liberty and autonomy than, say, the Social Security and Medicare taxes, which serve similar purposes.

This analogy to the Social Security and Medicare laws, which included clearly labeled taxes, only highlights the truth-in-labeling objection to the individual mandate, which is arguably a tax in disguise. But truth does not come easy to politicians. And in this case, the justices may turn to an important principle: When the constitutional arguments for and against striking down a major act of Congress seem almost equally strong, say advocates of judicial restraint, the court should defer to the people’s elected representatives — no matter how unpopular they are with the people.

“Time assuredly will bring to light the policy strengths and weaknesses of using the individual mandate as part of this national legislation,” as Judge Sutton concluded, “allowing the people’s political representatives, rather than their judges, to have the primary say over its utility.”

The post Analysis: Handicapping Health Care Lawsuits, And The Truth-In-Labeling Factor appeared first on Stuart Taylor, Jr..

Listen to audio of the interview. 

JACKIE JUDD: Good day, this is Jackie Judd for Kaiser Health News. A legal blow today to the new health care reform law. Federal Judge Roger Vinson, in Florida, declared the entire law void because its core – the mandate that almost all Americans obtain health insurance – violates the Commerce Clause [of the U.S. Constitution]. The suit was brought by some 26 states. Legal analyst Stuart Taylor, a contributing editor for Newsweek and the National Journal, is with us. Thank you, Stuart, for joining us. Walk us through the judge’s reasoning.

STUART TAYLOR: Nice to be with you. The gist of it was that Congress has no power to require individuals to purchase health insurance. Because the only basis for the power that the federal government has claimed is the power of Congress to regulate interstate commerce. And the judge held that that power – although it’s very broad, and the Supreme Court may decide it’s broad enough to justify this law – Judge Roger Vinson said it’s not broad enough to require someone to purchase a commercial product. That’s the gist of it.

JACKIE JUDD: And then he went a step beyond that, saying that the individual mandate is so inextricably linked to the rest of the bill that one couldn’t be separated from the other and therefore the entire bill would be void?

STUART TAYLOR: Yes, 450-odd provisions, all of them , in his decision would be blown away and Congress would have to start over from scratch. It’s worth noting, by the way, that in that regard, he contradicts the other federal judge who has struck down the health care law, the individual mandate. That was Judge Henry Hudson of Richmond. He held that most of the act could stand and then just carve out the individual mandate.

Judge Vinson, on the other hand, while agreeing that the individual mandate had to be struck down, said that it was so central to the entire operation of the law that it wasn’t at all clear which of the other provisions Congress would have adopted if it had known that it couldn’t do the individual mandate. So he just made a clean sweep of it.

JACKIE JUDD: And we should say that Judge Vinson today said that the law can remain in place. So in terms of a practical impact, little to none?

STUART TAYLOR: Well, probably, because the government will no doubt immediate seek a stay. Although he didn’t issue an order saying “you have to stop doing everything,” that would be the logical implication of his decision. But to the extent that the government might feel some obligation to comply with the law as he’s declared it, it will immediately go up to a higher court and say “please put everything on hold” and the higher court would do so.

JACKIE JUDD: And Stuart, you mentioned a moment ago, of course there was another decision – one based in  Richmond, another one we had earlier based in Michigan, and there doesn’t seem to be yet a single emerging consensus, does there? 

STUART TAYLOR: The consensus is the Democratic appointed judges uphold the law and the Republican appointed judges strike it down – so far.  We have two Clinton appointees upholding it: the one you mentioned plus Judge Norman Moon of Lynchburg, Va., and then we have two Republican appointees, Judge Vinson today, and Judge Henry Hudson of Richmond a few weeks ago saying it’s unconstitutional.  Now  I don’t claim that pattern is going to uphold all the way up to the Supreme Court and that the law’s going to get struck down 5-4 because there are more Republicans, I actually would probably bet – not a lot – but bet on it being upheld  in court.  But so far, it’s clear that there’s a ideological cleavage that’s the best way of reconciling all of these decisions.

JACKIE JUDD: And yet, the judge today, who is a Republican appointee, to my reading, he seemed to be going to great lengths – both at the beginning of the decision and at the end –  to say that this is a legal decision, it is not a political decision.  

STUART TAYLOR: He does, he makes a big point of that, and no doubt sincerely.  I think the reason he does, is that more and more, and because of the logic I just offered about Republican and Democratic judges, more and more the decisions of the judiciary are treated as political decisions by a lot of people in the body politic.  And I don’t claim that this is a political decision, I do think the ideologies of the judges make a big difference.  He just wants to say, “I’m not being political. I’m applying the principles of our Commerce Clause, jurisprudence.” And he goes to great length, he goes back to the beginning, the Framers and James Madison, etc., all the way up to the most recent Supreme Court cases and makes a plausible argument that what I’m doing here is what those cases point to.  He doesn’t claim those cases require it, because there isn’t any case that’s directly on point. 

JACKIE JUDD: A final question, Stuart – it’s one that I asked you the last time we spoke after another court ruling like this one.  What timetable do you see for this law to reach the Supreme Court?

STUART TAYLOR: I would think probably by next year at some time, with probably a decision in June 2012.  But quite possibly, various factors could bump it over until 2013.  The most obvious factor would be if the court waits to have conflicting decisions come up or if no federal appeals court strikes it down – the Supreme Court doesn’t pay much attention to what federal district judges do.  If a federal appeals court confirms what Judge Vinson did today, for example, that’s when you start thinking the Supreme Court is going to want to take this, because it’s obviously so huge.  That could happen fast, and we could see a Supreme Court decision in June 2012, or probably, if it’s slower, by June 2013. 

JACKIE JUDD: And if it’s the former, it puts it right in the middle of the presidential campaign.

STUART TAYLOR: It sure does, and it would be obviously a thunderclap in the campaign and both sides would make hay out of it, as they’ve already made hay out of some of these earlier decisions.  But I don’t think anybody on the Supreme Court would time their approach to the matter so as to affect the campaign.  But that’s sort of the logic if you look at the usual timetable’s that these things operate under – the deadlines, the filing, how many days you have to write a brief – and you just sort of add it all up, you could easily get it before the court a year from now and that would mean it would be decided by June 2012. 

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