Outside the Beltway

Federal Judge Denies Motion To Dismiss Virginia’s ObamaCare Lawsuit

A Federal District Court Judge has allowed a lawsuit against the Obama Administration's health care reform law filed by the Commonwealth of Virginia to proceed.

Doug Mataconis · Monday, August 2, 2010 · 3 comments

Earlier today, U.S. District Court Judge Henry Hudson issued an order denying the Federal Government’s Motion to Dismiss the lawsuit filed by the Commonwealth of Virginia seeking to declare the recently passed health care reform law unconstitutional:

WASHINGTON — Virginia’s lawsuit challenging the Obama administration’s health care reform law cleared its first legal hurdle Monday as a federal judge ruled the law raises a host of complex constitutional issues.

U.S. District Judge Henry Hudson’s decision stemmed from Virginia Attorney General Ken Cuccinelli’s claims that Congress exceeded its authority under the Constitution’s Commerce Clause by requiring citizens to buy health insurance or pay a penalty.

Hudson’s ruling denied the Justice Department’s attempt to have the lawsuit dismissed.

“The mere existence of the lawfully-enacted statute is sufficient to trigger the duty of the Attorney General of Virginia to defend the law and the associated sovereign power to enact it,” Hudson wrote. “Unquestionably, this regulation radically changes the landscape of health insurance coverage in America.”

Cuccinelli announced in March that he would challenge the national law. More than a dozen other state attorneys general have filed a separate lawsuit in Florida challenging the federal law, but Virginia’s lawsuit is the first to go before a judge.

Hudson said Virginia’s case raises several complex constitutional issues — mainly whether Congress has the right to regulate and tax a person’s decision not to participate in interstate commerce.

In the opinion, which is embedded below and much of which deals with technical issues of standing and subject-matter jurisdiction, Hudson indicated that he was, at best, extremely skeptical of the government’s argument that the health care insurance mandate was a valid exercise of Congress’s power under the Interstate Commerce Clause:

Never before has the Commerce Clause and Necessary and Proper Clause been extended this far. At this juncture, the court is not persuaded that the Secretary has demonstrated a failure to state a cause of action with respect to the Commerce Clause element.

With respect to the Federal Government’s argument that the mandate was justified under the Court’s taxing power, Hudson was equally skeptical:

While this case raises a host of complex constitutional issues, all seem to distill to the single question of whether or not Congress has the power to regulate — and tax — a citizen’s decision not to participate in interstate commerce. Neither the U.S. Supreme Court nor any circuit court of appeals has squarely addressed this issue. No reported case from any federal appellate court has extended the Commerce Clause or Tax Clause to include the regulation of a person’s decision not a purchase a product, notwithstanding it’s effect on interstate commerce. Given the presence of some authority arguably supporting the theory underlying each side’s position, this Court cannot conclude at this stage that the Complaint fails to state a cause of action.

Basically, this can be taken to be a victory for the Commonwealth of Virginia and other opponents of ObamaCare. It is, however, only the first step. Next, this particular case will proceed to the merit’s stage. This will take the form of briefs in support of the Government’s Motion for Summary Judgment, which Judge Hudson will hear on October 18th, 2010. While it’s not always easy to read how a Judge might decide on the merits based on a ruling on a Motion to Dismiss, it would appear from this Order that Hudson is, to say the least, highly skeptical of the Federal Government’s arguments in this case.

Score one for the opponents of ObamaCare, and advocates of limited government, today.

Here’s the opinion:

Order Denying Motion To Dismiss in Virginia v. Sebelius et al