02.24.10

Nullification, Round Three

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The Tennessee Senate passed on February 17 its version of a nullification bill. The “Tennessee Health Freedom Act” (Senate Bill 3498) declares:

(c)(1) The power to require or regulate a person’s choice in the mode of securing health care services, or to impose a penalty related thereto, is not found in the Constitution of the United States of America, and is therefore a power reserved to the people pursuant to the Ninth Amendment, and to the several states pursuant to the Tenth Amendment. This state hereby exercises its sovereign power to declare the public policy of this state regarding the right of all persons residing in this state in choosing the mode of securing health care services.
(2) It is declared that the public policy of this state, consistent with our constitutionally recognized and inalienable rights of liberty, is that every person within this state is and shall be free to choose or decline to choose any mode of securing health care services without penalty or threat of penalty.
(d)(1) No public official, employee, or agent of this state or any of its political subdivisions shall act to impose, collect, enforce, or effectuate any penalty in this state that violates the public policy set forth in this section
(2) The attorney general shall take such action as is provided in Section 2 of this act, in the defense or prosecution of rights protected under this section.

2. Except as otherwise provided in this chapter, it is the duty of the attorney general and reporter to seek injunctive or any appropriate relief as is expeditiously as possible to preserve the rights and property of the residents of this state, and to defend as necessary this state, its officials, employees and agents in the event that any law or regulation violating the public policy set forth in the Tennessee Health Freedom Act . . . . is enacted by any government, subdivision, or agency thereof.

The bill is obviously intended to challenge the individual mandate found in both the House and Senate health reform bills, and in that respect resembles bills that have been introduced in the legislatures of about 30 states. It goes beyond those bills, however, in specifically stating that the individual mandate is unconstitutional and directing the Tennessee Attorney General to challenge the law.

Standing to challenge federal law in federal court is determined by Article III of the U.S. Constitution, and a state cannot create standing for itself by its own laws. A state itself does not have standing in itself to challenge the constitutionality of a federal law, even if it claims that the federal law invades its constitutional prerogatives. In Commonwealth of Massachusetts v. Mellon, 262 U.S. 447 (1923), the Commonwealth of Massachusetts brought an action challenging the Maternity Act, one of the earliest health care reform efforts of Congress, claiming that the act was “a usurpation of power not granted to Congress by the Constitution—an attempted exercise of the power of local self-government reserved to the states by the Tenth Amendment.” Massachusetts also attempted to bring the action as a parens patriae action on behalf of its citizens.

The Supreme Court unanimously rejected the Massachusetts challenge in an opinion written by Justice Sutherland. The Court held that “No rights of the state falling within the scope of the judicial power have been brought within the actual or threatened operation of the statute and this court is …. without authority to pass abstract opinions upon the constitutionality of acts of Congress…” The Court also rejected the attempt by the state to bring a parens patriae action, noting that the state’s citizens were also United States citizens, and that “it is not part of [a state’s] duty or power to enforce [the rights of its citizens] in respect to their relations with the federal government.” As far as I can tell, Massachusetts v. Mellon has never been overruled and is still good law. Therefore, insofar as the Tennessee law purports to give the state’s attorney general authority to challenge the federal law, the federal courts would have no standing to entertain the claim.

An action could, I suppose, be brought in state court to enjoin the operation of the federal law, but the state judge would be bound by the Supremacy Clause to enforce the federal law. The case would also certainly be removed into federal court by the United States, where it would be dismissed.

If the individual mandate is adopted into law, it will be subject to challenge by an individual affected by it. An individual who simply refuses either to buy insurance or to pay the tax could contest the tax as he or she could any other tax. I see no federal law reason why a state attorney general could not offer his or her services to an individual challenging the tax, although a state constitution might limit the ability of a legislature to direct the state’s attorney general as to how to exercise the attorney general’s discretion. Of course, the health reform law will not go into effect until 2014, so a challenge would not be ripe prior to that time.

The Tennessee law raises a couple of other issues. First, since it directs state officials to have no part in enforcing the individual mandate, it might mean that Tennessee will not be able to operate its own exchange, but will rather have an exchange operated by the federal government. Under the Senate bill, the exchange is responsible for certifying individuals who cannot afford health insurance and are thus exempt from the mandate. If Tennessee decides that this would require a state official to play a role in “effectuating” the mandate, it would necessarily have to cede operation of the Tennessee exchange to the federal government.

Second, it is curious that the states are going to so much trouble to try to block the operation of the individual mandate. If the President’s proposal mooted earlier this week is accepted, the mandate will not affect any individual or family with income under the filing limit and will also be subject to a hardship exception excusing people from buying insurance if it would cost them more than 8% of their income. In effect, the mandate only applies to people who can actually afford health insurance but refuse to purchase it.

These people are simply being irresponsible. A few of them may actually have sufficient savings that they can cover any medical catastrophe they may encounter, but most probably do not have the resources to cover the cost of caring for a major traumatic injury or illness, which can amount to hundreds of thousands of dollars. If they face such a medical catastrophe, they will have to turn to a public program, receive uncompensated care from a health care provider, or go bankrupt. Each of these alternative means that someone else—a provider, the taxpayers, or other people who are responsible and do purchase insurance—will be covering the bill. Why state legislators are putting so much effort into protecting these deadbeats is hard to fathom, particularly since the biggest supporters of these laws are those who generally make the most noise about the importance of individual responsibility.

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The views reflected in this blog are those of the individual authors and do not necessarily represent those of the O’Neill Institute for National and Global Health Law or Georgetown University. This blog is solely informational in nature, and not intended as a substitute for competent legal advice from a licensed and retained attorney in your state or country.

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