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InsiderOnline Blog: December 2010

Obamacare Decision Affirms Limits on Commerce Clause Powers

Congress’s power to regulate interstate commerce does not include the power to require people to purchase a particular product as a condition of residing in the United States. That’s what the U.S. District Court for the Eastern District of Virginia said today in its ruling on Virginia’s lawsuit against Obamacare. Specifically, the court held that the law’s mandate on individuals to purchase health insurance is unconstitutional. The court also said that Congress’s general power to tax does not allow it evade the limits of the Commerce Clause by calling a penalty against non-purchase a tax. From Judge Henry E. Hudson’s decision:

The power of Congress to regulate a class of activities that in the aggregate has a substantial and direct effect on interstate commerce is well settled. This even extends to noneconomic activity closely connected to the intended market. But these regulatory powers are triggered by some type of self-initiated action. Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market. In doing so, enactment of the Minimum Essential Coverage Provision exceeds the Commerce Clause powers vested in Congress under Article I.

A thorough survey of pertinent constitutional case law has yielded no reported decisions from any federal appellate courts extending the Commerce Clause or General Welfare Clause to encompass regulation of a person’s decision not to purchase a product, notwithstanding its effect on interstate commerce or role in a global regulatory scheme. The unchecked expansion of congressional power to the limits suggested by the Minimum Essential Coverage Provision would invite unbridled exercise of federal police powers. At its core, this dispute is not simply about regulating the business of insurance—or crafting a scheme of universal health insurance coverage—it’s about an individual’s right to choose to participate. [Internal citations omitted.]

Posted on 12/13/10 05:49 PM by Alex Adrianson

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