Blog

Though I have had seminars, published articles, and have had many other opportunities to discuss the new 2011 H.S.A. limits with clients, I have missed the opportunity to provide updated information within this blog on the 2011 limits.  The annual 2011 H.S.A. limits are $3050 for single and $6150 for a family’s household. Catch-up contribution is $1000 for those 55 and older. Read more on IRS rules as it relates to the catch-up contributions and a  spouse’s option to have a separate H.S.A., page 14.

Virginia’s Attorney General Ken Cuccinelli has become a divisive figure in health care reform. Regardless of which side of the debate you represent Cuccinelli’s “Grassroots Update”, distributed  via email, does a good job of providing an update on this important issue.

Sent May 23, 2011 by Attorney General Ken Cuccinelli’s office:

My Fellow Virginians and Friends,

Two weeks ago, we had our oral argument in Virginia’s case
against the federal health care legislation – specifically against the
individual mandate.  It was an interesting day, and I wanted to offer you
a few reflections on the hearing.

Virginia is in the 4th Circuit of federal appellate
courts.  The states of Virginia, Maryland, West Virginia, and North and
South Carolina are the states in the 4th Circuit.  Last Tuesday, we argued
before a 3 judge panel of the 4th Circuit.  There are 14 judges on the entire
bench in the 4th Circuit.  Our 3 judge panel was randomly selected from
the judges on the 4th Circuit.  As you may have read, our panel was
composed of: Judge Motz, appointed in 1994 by President Clinton; Judge Davis,
appointed in 2009 by President Obama; and Judge Wynn, appointed in 2010 by
President Obama.

Also arguing in front of the same panel was Liberty
University.  We are in the interesting position in Virginia of having two
different cases, with different parties, not one.  There are two federal
districts in Virginia – the Eastern District and the Western District, and
there was a separate case in each district.

In the district court, Virginia’s case was in the Eastern
District, where we won.  Liberty’s case was brought in the Western District,
where they lost.  So, in the 4th Circuit, the U.S. had appealed our case
and Liberty appealed its case.

In the 4th Circuit, one 3 judge panel cannot overrule
another 3 judge panel.  Thus, to maintain consistency in rulings, both
cases were put in front of the same 3 judge panel.

The 4th Circuit is known for asking a lot of questions and
probing the responses thoroughly.  Our hearing was no exception.  The
two hearings were scheduled for about an hour and a half total, but they went
well over two hours – approaching two and a half hours total.

The pressure that builds up on the lawyers in such an
extended set of exchanges does serve a useful purpose.  The lawyer for the
federal government, the Acting Solicitor General of the U.S., was pushed into a
couple of very candid statements that I found fascinating – especially at the
very end of the hearing.

But first, it is helpful to have a brief reminder of the
basics of the case – though I know most of you have been following this case
closely.

There are four elements to this case: 1) standing, 2) the
individual mandate under the commerce clause, 3) the penalty under the taxing
power, and 4) any remedy, particularly in light of the absence of a severance
clause in the bill.  The fourth item was not addressed in the hearing, so
I will just address the first three.

The Hearing

The U.S. pushed hard to knock Virginia out on standing,
i.e., the idea that Virginia doesn’t even have the right to bring its
case.  The federal government seem down right offended with the
concept that Virginia could have a law and when the federal government later
enacts a conflicting law, that the clash between the two would be a sufficient
basis for Virginia to bring a lawsuit.

One of the judges asked us “is all a state has to do to
have standing to sue the federal government is pass a law?”  Our
answer? “Yes.”

It’s worth remembering that the states’ representatives
wrote the constitution that established our federal government, and it was
adopted by the people’s representatives in constitutional conventions across
America.  As one of my children might say, “we were here first.”

It may appear to some to be inconvenient for states to have
the authority of a co-sovereign with the federal government, but it seems a small
price to pay for the federal government in exchange for its very
existence.  It is also critical to federalism that states be able to
challenge federal overreaches of power that would trample state laws.  It
might be nice if we didn’t have so many “opportunities” to address
such overreaches of federal power, but they’ve been keeping us pretty busy in
that regard!

During the hearing, there was a discussion of a ‘parade of
horribles.’  One of the examples was, ‘well, if Virginia can sue over
this, then they could pass a law saying its citizens couldn’t be sent to
Afghanistan to fight the war.’  Well, Virginia could theoretically pass
such a law and even bring a lawsuit, which the federal government would quickly
win because it has the power “to raise and support Armies” under Art.
I, §8 of the constitution.

As we said in the courtroom, ‘yes, Virginia would have
standing – standing to lose the case.’  Again, there may be an element of
inconvenience to the federal government, but that hardly seems a significant
concern in order to provide a co-sovereign the dignity of a mere attempt to
protect its own code of laws.

The concept of state sovereign standing has been recognized by the
U.S. Supreme Court to allow a state to defend its code of laws.  Every
other federal circuit court of appeals to directly address the issue has found
that a state has standing to defend its code of laws from federal
challenge.  I am hopeful that the 4th Circuit will come to the same
conclusion in our case.

The Merits, i.e., the Meat of the Case

The issue that the Court spent the most time on was, not
surprisingly, the individual mandate.  As I mentioned earlier, I found two
of the federal government’s statements during the case to be particularly
interesting.

The first statement was to describe what is supposedly being
regulated via the individual mandate.  The feds said fairly early in the
oral argument that the individual mandate is part of an attempt to
“regulate the decision to self-insure.”  This is their way of
trying to cast an individual citizen’s decision in commercial terms (remember,
we’re mainly debating the reach of the commerce clause).

It’s a very clever way of saying ‘we are regulating your decision
to do nothing.’

The commerce clause cases during the last 100 years have addressed
regulating some sort of activity; and they have used the word
“activity.”  The feds are trying to overcome the fact that there
is no activity being regulated, so they have to come up with creative excuses
for activity and say that that’s what the legislation regulates.  Thus, in
the hearing on May 10^th, they argued that the “decision to
self-insure” was the activity being regulated.

A problem with this line of argument is that it logically leads to
a “decision” being equivalent to an “activity.”  I.e.,
thinking something is the same as doing something.  The district court
judge in the case in D.C. ruled that the individual mandate is constitutional,
and she actually acknowledged and approved of the fact that the individual
mandate is regulating “mental activity.”  George Orwell would be
proud, but let’s face it, that judge accurately describes what the federal
government is trying to do!

If you take a decision alone, without more, there’s no activity
there – just thought – then the government is equating inactivity to
activity.  That is their argument.

The second statement came nearly at the end of over two hours of
discussion, questions and answers.  One of the judges indicated that she was
not comfortable with the federal government’s attempt to address our
activity/inactivity distinction, and in response, the lawyer for the federal
government said that even if the court found that there was no activity of any
kind, that the law was constitutional anyway.  This was an astonishing
statement.

In other words, instead of trying to convince the court that there
was some kind of activity going on that the federal government was regulating
with the individual mandate, they finally broke down and said that – in their
view – they didn’t even need any activity anyway, they could just order you to
go buy their government-approved product (in this case, health insurance).

This would convert Congress’ authority to regulate interstate
commerce into an unbounded power – just as I have been arguing all along.

Up until this point, the federal government has danced around this
issue.  But when pressed, they finally conceded the sweeping nature of
their claim of power.

If the feds’ position is upheld, it would essentially swallow up
much of the rest of the constitution.  If you don’t even need to do
anything to be subject to federal regulation under the commerce power, then the
feds can reach vast areas of our society now thought immune from federal
authority.

Oh, and by the way, federalism would be dead and liberty would be
badly damaged…

That’s why I always say that this case is about liberty, not
health care.

What’s Next?

It will likely take a couple of months for the 4th Circuit to
issue its order in our case.  If we win,  I suspect that the federal
government will NOT appeal to the Supreme Court, rather, they would attempt to
drag the case out by seeking what is called “en banc” review.
That means a rehearing by the full 4th Circuit – all 13 active judges.
Only then would whichever side loses at that hearing be able to appeal to the
Supreme Court.

If we lose, we will likely appeal to the Supreme Court directly,
in the hopes of resolving this case as quickly as possible.

As we wait for the outcome in our case, there are three others
headed to appellate courts around the country.

On June 1st, the 6th Circuit will hear an appeal in Cincinnati of
a case brought by the St. Thomas More Society and others.

On June 8th, the 11th Circuit will hear the appeal of 26 of our
sister states in Atlanta.  Their case is an appeal brought by the U.S.
Government, as was the situation in our case.

Then, in September, the case in Washington, D.C. that I referenced
earlier (“mental activity”) will also be argued.

As I get news of the other cases, I will pass it along to
you.  And of course, when we get our order, I’ll let you know!

A Separate Note

At the same time that tornadoes were ripping through much of the
Southeast, Virginia was hit too.  Five Virginians were killed and much
damage occurred in Southwest Virginia.
If you are willing, I would appreciate it if you would donate to a
relief effort to help our Virginia families.  You can do so by clicking
on: http://www.vaemergency.com/

Thanks for helping!

Sincerely,

Ken Cuccinelli, II

Attorney General of Virginia

 

A WSJ blog post features a recent playful post put out by The Center for Disease Control’s Assistant Surgeon General Ali Khan to help encourage people to be prepared for emergencies such as natural disasters. Read on…….