Constitutional Litigation

The end of April traditionally marks the end of the busy season in South Florida, with spring break and holidays over, snow birds returning north, traffic easing, and lower summer rates kicking in. So I guess it’s fitting that our appellate courts last week issued a slew of decisions bringing closure to quite a few unsettled legal issues as well.

Most prominent among them was the decision released by the Supreme Court of Florida last Friday that finally put to rest a battle that had commanded the better part of the Supreme Court’s attention over the past few months — namely, the fight over whether the Florida Senate’s post-census plan for allocating state senate districts complied with Amendment 5, a/k/a the Fair Districts Amendment to the Florida Constitution, enacted by voter initiative in 2010. The upshot was that the Supreme Court concluded the review mandated by Article III, section 16 of the Florida Constitution, by declaring that the plan (as modified in response to the Court’s March 9, 2012 decision) was Constitutionally valid. By doing so, the Court avoided taking the unprecedented step of taking the redistricting process out of the legislature’s hands and writing its own plan.

Last week’s decision unquestionably brought closure to the redistricting process, and the initial challenges to the 2012 legislative redistricting (with the Court even prohibiting motions for rehearing). But it may not bring closure in the larger sense of foreclosing other challenges to the redistricting plans based on the Fair Districts Amendment through separate lawsuits.

The overarching issue in the case from the outset was whether the Court would entertain a full scale challenge to the plans in the course of its mandatory review, which can last for no more than 30 days, and in which no evidentiary record can be built in a trial court for it to work from, or would instead limit its review to “facial” challenges only, as it had in the past. And correspondingly, would the Court’s review of the challenges at this stage, by way of res judicata and/or stare decisis, preclude challenges to the districts that might be pursued in separate litigation, or as was true of the Court’s initial review of redistricting plans before the Fair District Amendments, would the declaratory judgment leave open the possibility of separate challenges?

On the one hand, in its March decision, the Court made clear that the Fair Districts Amendment required, and it was willing to undertake, a more probing review than it had deemed appropriate when reviewing previous redistricting plans. In fact, the March decision was the first time ever that the Court invalidated a redistricting plan, at least in part.

On the other hand, in its April decision, the Court seems to have gone out of its way to point out that its review was only “facial” and that its conclusion was that “the opponents have failed to satisfy their burden of demonstrating any constitutional violation in this facial review.” In declining to consider challenges to certain aspects of the revised plan that could have been made against the original plan, but were not, the Court engaged in a lengthy explanation that the reason it was declining to do so was that it would be unfair at that stage of the game. And in what seems like an unnecessary tangent, the Court expreslly stated not only that the new arguments themselves were not barred by res judicata, but that the Court’s review of redistricting plans under its Article III, section 16 duties, is not the type of proceeding that can have res judicata effect. In other words, if opponents of the redistricting plans are looking to challenge them in a separate lawsuit, the the Supreme Court’s decision is unlikely to get in their way.   

So while the decision undoubtedly brings closure to the Court’s Constitutional review of the redistricting plans, and the redistricting process itself, it’s probably premature to see it as bringing closure to the larger battle over redistricting.     

It turns out that the case challenging the ACA’s individual mandate isn’t the first time the Supreme Court has been confronted with questions about the interplay of the health insurance and health care markets. The previous case, called Blue Shield of Virginia v. McCready, 457 U.S. 465 (1983), is a decision dealing with the Sherman Act, not Constitutional issues. But the Court examined an issue that closely parallels one of the key issues in the individual mandate case. And it seems to have been totally missed in the debate.

A major issue in today’s oral arguments before the Supreme Court on the individual mandate, as in the court of appeals’ decisions, is whether the market the individual mandate seeks to regulate is the market for health insurance (in which some people who don’t participate will be required to participate by the mandate) or the market for health care, in which almost everyone will participate at one point or another.

An exchange between several justices and Paul Clement, arguing for the 26 states challenging the law, focused on whether the two markets are in fact separable. Isn’t health insurance just a way to pay for health care, as the government argues? No, according to Mr. Clement:

CHIEF JUSTICE ROBERTS: Well, Mr. Clement,the key to the government’s argument to the contrary is that everybody is in this market. It’s all right to regulate Wickard — again, in Wickard against Filburn, because that’s a particular market in which the farmer had been participating. Everybody is in this market, so that makes it very different than the market for cars or the other hypotheticals that you came up with, and all they’re regulating is how you pay for it.

MR. CLEMENT: Well, with respect, Mr. Chief Justice, I suppose the first thing you have to say is what market are we talking about? Because the government — this statute undeniably operates in the health insurance market. And the government can’t say that everybody is in that market. The whole problem is that everybody is not in that market, and they want to make everybody get into that market.

JUSTICE KAGAN: Well, doesn’t that seem a little bit, Mr. Clement, cutting the bologna thin? mean, health insurance exists only for the purpose of financing health care. The two are inextricably interlinked. We don’t get insurance so that we can stare at our insurance certificate. We get it so that we can go and access health care.

MR. CLEMENT: Well, Justice Kagan, I’m not sure that’s right. I think what health insurance does and what all insurance does is it allows you to diversify risk. And so it’s not just a matter of I’m paying now instead I’m paying later. That’s credit. Insurance is different than credit. Insurance guarantees you an upfront, locked-in payment, and you won’t have to pay any more than that even if you incur much great expenses. And in every other market that I know of for insurance, we let people basically make the decision whether they are relatively risk averse, whether they are relatively non-risk averse, and they can make the judgment based on –

In other words, according to Clement, the health insurance market is distinct from the health care market because buying insurance is not the same thing as paying for health care in advance. You buy insurance to avoid risk, not to pay for things you’ll buy later.

The counter-argument is that while that’s true for most kinds of insurance, health insurance is fundamentally different. Why? Because when you buy homeowner’s insurance, you are trying to avoid the risk of a financial loss if it turns out that a hurricane comes along and damages my house. But there’s also the (better than 50%) chance that a hurricane won’t come along.

When I buy health insurance, on the other hand, I’m not (only) protecting against the risk that I might need to go to the doctor at some point — I know I’m going to go to the doctor. So it can be argued that I buy health insurance, at least in part, as a sort of pre-payment for my doctor’s care (and to take advantage of the lower prices my doctor charges to the insurer).

And that’s pretty much what the Supreme Court said in McCready. McCready was a participant in her employer’s group health plan, provided by Blue Shield of Virginia, who sued Blue Shield based on an alleged conspiracy with psychiatrists to prevent reimbursement for treatment by psychologists. The issue was whether the injury she suffered by being denied reimbursement for treatment was too remote for her to have standing to challenge the conspiracy under the Sherman Act.

McCready was not actually a participant in the health insurance market because her employer purchased a group policy, but she was a participant in the health care market because she went to see a psychologist and paid for it (then sought reimbursement). Blue Shield argued that McCready lacked standing because the market targeted by the alleged conspiracy was the health insurance market, not the health care market:

Petitioners next argue that…the Section 4 remedy…is not available to McCready because she was not an economic actor in the market that had been restrained. In petitioners’ view, the proximate range of the violation is limited to the sector of the economy in which a violation of the type alleged would have its most direct anticompetitive effects. Here, petitioners contend that that market, for purposes of the alleged conspiracy, is the market in group health care plans. Thus, in petitioners’ view, standing to redress [457 U.S. 465, 480] the violation alleged in this case is limited to participants in that market – that is, to entities, such as McCready’s employer, who were purchasers of group health plans, but not to McCready as a beneficiary of the Blue Shield plan.

The Supreme Court rejected that argument, explaining that “as a consumer of psychotherapy services entitled to financial benefits under the Blue Shield plan, we think it clear that McCready was ‘within that area of the economy . . . endangered by [that] breakdown of competitive conditions’ [457 U.S. 465, 481] resulting from Blue Shield’s selective refusal to reimburse.” In other words, although the conduct was directed toward the health insurance market, it had direct effects on participants in the health care market.


In a footnote, the Court also agreed with the court of appeals that the health insurance plan was really akin to a means for pre-paying for medical treatment, not an insurance policy in the usual sense:

Blue Shield Plans are not insurance companies, though they are, to a degree, insurers. Rather, they are generally characterized as prepaid health care plans, quantity purchasers of health care services.

The ultimate Sherman Act-specific holding of McCready has little to do with the individual mandate case, but the point is that the Supreme Court has already addressed the interplay of the health insurance market with the health care market, and has expressed a view that strongly suggests that they are not two independent markets.

Is McCready a silver bullet? Probably not. But it sure seems important to me that there is Supreme Court precedent on an issue that is so central to the debate. Certainly important enough to at least enter the discussion. Why isn’t anyone talking about it? 

I may be the only person in the world who is more interested in the 9th Circuit’s decision in Perry v. Brown, (the much publicized suit over the constitutionality of California’s Proposition 8) for its lessons in advocacy than for its political issues. I see this case as one of the true tests of the limits of legal skill. From the get-go, the question has been whether two of the brightest legal minds out there — David Boies, whose famous cases include representing former VP Al Gore in Bush v. Gore and Ted Olson, who represented former President Bush in that case, and served as Solicitor General after it — could come up with a way to convince the courts (most importantly, a majority of the Supreme Court of the United States) to find a Constitutionally protected right to same-sex marriage.

But after digesting the 9th Circuit’s decision, it is also clear that there’s now something else at work: the fact that judges don’t like handing down decisions that are likely to be reversed. And that apparently includes 9th Circuit Judge Stephen Reinhardt, despite his having told the LA Times in July that he wasn’t bothered that the Supreme Court had reversed so many 9th Circuit decisions (including several he authored) of late.

So once Boies, Olson, and their allies convinced the district court and 9th Circuit to go along with their arguments (which was far from assured at the outset) the authors of the two opinions, who are pretty brainy themselves, added their own slants with the intent of avoiding reversal. It’s interesting to see the way in which the district court’s decision (authored by Judge Walker) and the 9th Circuit’s opinion (by Judge Reinhardt) reach the same result through very different means, with each approach apparently intended to minimize the chances that the Supreme Court will reverse.

Judge Walker’s decision made a sweeping proclamation that, in effect, there is a constitutional right to same-sex marriage. Perhaps recognizing that this holding would have a hard time surviving appellate scrutiny given the current state of the law, he grounded his decision on a broad base of factual findings about the purpose and effect of Proposition 8, presumably hoping for the deference appellate courts grant to a district court’s factual findings.

But the 9th Circuit was convinced by the proponents of Prop 8 (whose counsel is no slouch either) that most of Judge Walker’s factual findings were “legislative facts,” i.e. generalized facts, rather than the type of case-specific facts to which appellate courts might defer, and didn’t defer to Judge Walker’s fact-finding.

And the current Supreme Court seems unlikely to find a constitutional right to same-sex marriage. That’s probably why Judge Reinhardt reframed the issues such that it affirmed Judge Walker’s finding that Proposition 8 is unenforceable, but avoided making a broadly applicable pronouncement of a constitutional right to same-sex marriage.

The 9th Circuit’s decision reinforces the importance of how you frame the question to be answered, particularly when it comes to issues of constitutional interpretation. [I touched on this topic in discussing the arguments for and against the individual mandate in the PPACA, where the challengers frame the “commerce” it regulates as the health insurance market and argue that the individual mandate improperly requires citizens to participate in a market they otherwise would not rather than regulating the activities of persons already participating in commerce; while the Justice Department argues that the “commerce” at issue is healthcare financing, and that all (or almost all) citizens participate in the healthcare market, so the individual mandate regulates existing commerce rather than requiring citizens to participate in a market where they otherwise would not. This issue is discussed more in-depth at Volokh Conspiracy by Case Western Law Professor Jonathan Adler.]

Judge Reinhardt reframed the question in Perry from whether it is unconstitutional to prohibit same-sex marriage to the much narrower issue of whether it is unconstitutional for a state in which same-sex couples (1) have the right to marry; and (2) have all of the same rights as other couples with regard to adoption and other family-related matters, to revoke the right of same-sex couples only to marry. The apparent strategy in that approach was that it not only avoided a broad pronouncement of a newly recognized constitutional right, but also essentially limited the reach of the holding to California only.

A time-honored way to avoid Supreme Court review is to decide the case on pure state law grounds. But that being impossible in Perry, the 9th Circuit did the next best thing by deciding it on federal grounds that apply only to one state. The other apparent advantage is that by reframing the issue as being about revoking existing rights that same-sex couples had shared with the general population, it has parallels to the Supreme Court’s relatively recent decision in Romer v. Evans.

Will the Supreme Court take up the case despite the more narrow focus of the holding on California? I’d be shocked if it didn’t. A bigger question will be whether the Supreme Court will address it through the narrower frame of the 9th Circuit’s opinion. And if it does, the question will become whether the Court will think the facts are similar enough to Romer to apply stare decisis. It’s noteworthy that Judge Smith, in his dissent from the 9th Circuit’s decision, accepted the framework adopted by the majority, but concluded that Romer was distinguishable and that Proposition 8 passed constitutional muster.

Judge Reinhardt’s opinion, however, may not be the 9th Circuit’s last word on Perry. According to Lyle Denniston at SCOTUSBLOG, the proponents of Proposition 8 plan to ask the 9th Circuit to rehear the case en banc before petitioning for certiorari. They may be hoping the 9th Circuit will itself reframe the issues in the case before it even reaches the Supreme Court.

So much for easing back to work after the long weekend.  At least for judges in the First District and Fourth District Court of Appeal. 

As the Miami Herald reports, the 1st DCA is hearing consolidated oral argument this afternoon in Florida Gaming Centers, Inc. v. Florida Department of Business and Professional Regulation, and Calder Race Course, Inc. v. Florida Department of Business and Professional Regulation, two cases dealing with the effect of the 2004 amendment to the Florida Constitution that authorized certain existing parimutuel facilities in Broward and Miami-Dade counties (subject to voter approval in a county-wide referendum) to install slot machines.  Argument is set to begin at 2:00 PM in Courtroom One, before a panel consisting of Judges Davis, Van Nortwick, and Clark.  You can watch the argument live here.  If you miss it live, audio and video recordings of the argument should be available in the 1st DCA’s archives by no later than tomorrow morning.

[UPDATE: Here are some more details after watching the oral argument.  Former Florida Supreme Court justice Raoul Cantero argued on behalf of Hialeah Park and the other appellees, with Joel Perwin and Bruce Rogow arguing on behalf of the appellants, which are competitor parimutuels.  At issue is the validity of a 2010 law authorizing slot machines at Hialeah Park, and of the license to operate slot machines that the State granted to Hialeah Park last December, in light of the 2004 Constitutional Amendment. 

The 2004 amendment authorized slot machines only for parimutuels that were in operation from 2002-2004.  Hialeah Park didn’t qualify, so in 2010 the legislature separately authorized it to operate slot machines.  But the appellants, which stand lose business to Hialeah Park, argued that the 2004 amendment prohibited the legislature from enacting the 2010 statute. 

Counsel for the appellants conceded that prior to the 2004 amendment, the legislature had the power to authorize slot machines at Hialeah Park or anywhere else, and that it could still do so for facilities in any county except Broward and Miami-Dade, where Hialeah Park is located.  They argued, however, that by approving an amendment authorizing slot machines for Broward and Miami-Dade county parimutuels that met specified criteria, the voters impliedly prohibited the legislature from ever authorizing slot machines anywhere in Broward and Miami-Dade that did not meet those criteria. 

Appellees’ counsel countered that the amendment was merely an action by the voters to authorize slot machines in certain places.  It didn’t purport to prohibit anything, and couldn’t prohibit anything.  If that had been part of the amendment’s purpose, it would have violated the prohibition on multi-subject ballot initiatives, and the ballot materials that described the proposed amendment to voters in 2004, which said nothing about prohibiting anything, would have been misleading.

Handicapping appeals is always dangerous, but I’d put my money on the appellees in this one.  The appellants’ concession about the legislature’s power to authorize slots was probably necessary based on precedent, but it made the appellants’ argument tenuous. 

If the 2004 amendment had been the type of amendment that grants the legislature the power to do something it couldn’t previously do (i.e., to authorize slots in the first instance) then the appellants would have a strong argument for saying that the authorization was limited by its terms to entities that met the amendment’s specifications.  But I don’t see the court buying the argument that even though the legislature generally can authorize slots, an amendment authorizing slots in certain places actually took away the legislature’s power to authorize them in other places.  It takes a pretty big logical leap from the voters saying we’re only authorizing slots in certain places to the conclusion that they were really saying we’re prohibiting the legislature from ever authorizing slots anywhere else in these counties.]                 

A different panel, consisting of Judges Thomas, Wetherell, and Swan, heard oral argument this morning in Graham v. Haridopolos, which involves another Constitutional amendment adopted by ballot initiative, the 2002 amendment creating the Florida Board of Governors to be the central governing body for Florida’s state colleges and universities.  That case has something of a political history, as Democrat Graham, the former Governor and U.S. Senator, spear-headed the drive for passage of the ballot initiative after Republican then-Governor Jeb Bush signed legislation doing away with the former central governing body, the Florida Board of Regents.  Graham is the lead plaintiff/appellant and Mike Haridopolos, Republican and Florida Senate President, is the first named defendant/appellee in the case, although Graham’s co-plaintiff/appellant is former Republican Congressman Lou Frey.  The appellants assert that the Florida Legislature lacks the power to set tuition rates for state universities and colleges, because that power is vested in the Board of Governors.  Video and audio recordings of oral argument should be available in the 1st DCA’s archives shortly. 

And the 4th DCA heard oral argument yesterday in Bronner v. AMP Services, Limited, a case that is part of a multi-national litigation saga over the respective rights of heirs and charitable entities to the proceeds of the estate of Walter Bronner, a Columbian citizen and Jewish philanthropist who amassed a large estate after fleeing the Holocaust, and the estate of his widow, Anna.  According to Adolfo Pesquera’s coverage in the Daily Business Review (reg. req.’d), the Florida litigation came about, despite the Bronners having lived in Monaco prior to their deaths, based on the Bronners’ ownership of a residence in Fort Lauderdale.  Judges Hazouri and Taylor (and a third judge) sat on the panel.     

If you read through all 207 pages of 11th Circuit Judge Hull and Judge Dubina’s co-authored majority opinion in Florida v. U.S. Department of Health and Human Services, you’ll notice that although the state Attorneys General succeeded in having the Health Care Act’s individual mandate declared unconstitutional, it wasn’t their arguments that ruled the day. You may also notice the unusual number of citations to amicus briefs. And you may notice that the 2-1 decision resulted, more than anything, from the persuasive power of arguments submitted by these “friends of the court.”

The parties in the Florida case and others challenging PPACA (a/k/a the Patient Protection and Affordable Care Act) have focused their arguments on the issue of whether the individual mandate compels citizens to enter into economic activity, and if so, whether the federal government’s power to “regulate commerce” under the Constitution includes the power to compel a citizen to engage in economic activity rather than merely to regulate the economic activity of citizens who are already engaged in it. Until now, so have the courts’ decisions in those cases.

Not the 11th Circuit majority. It was “not persuaded that the formalistic dichotomy of activity and inactivity provides a workable or persuasive enough answer in this case.” Instead, the court’s analysis focused on whether, assuming the individual mandate is properly characterized as regulating activities, the activities it regulates “substantially affect interstate commerce.”

Congressional findings in PPACA attempt to show that the individual mandate would have those substantial effects, by preventing the “cost-shifting” that results when uninsured persons are treated by medical providers but unable to pay, causing the providers to shift those unpaid costs to persons who do pay for treatment, i.e., health insurers and health insurance purchasers.  But the 11th Circuit majority deemed those findings inadequate to satisfy the “substantial effects” test.

And key to that rejection was the majority’s embrace of a the position advanced by a group of economists who participated as amici curiae.  Their brief included a breakdown of cost-shifting and argued that different types of uninsured persons are responsible for separable portions of cost-shifting, and that the group that the individual mandate would require to buy health insurance isn’t responsible for most of the cost-shifting. Brief of Amici Economists.pdf.  Echoing that reasoning, Judges Hull and Dubina ultimately found that “in reality, the primary persons regulated by the individual mandate are not cost-shifters but healthy individuals who forego purchasing insurance.”

On that basis, the 11th Circuit majority concluded that the link between the activity regulated by the individual mandate, on the one hand, and cost-shifting, on the other, was too attenuated to satisfy the “substantial effects” test: “At best, we can say that the uninsured may, at some point in the unforeseeable future, create that cost-shifting consequence.”  As such, the majority held that the Commerce Clause did not empower the federal government to enact the individual mandate.

Just how significant a role amici played in influencing the majority is perhaps even better illustrated by the pages of text Judge Marcus’s dissent devotes to responding to their arguments. Judge Marcus uses that space to express his strong disagreement with amici’s argument (which the majority appears to have accepted) that not all uninsured individuals will inevitably become healthcare consumers at some point in time. He goes on to discuss at length why the majority is wrong for adopting amici’s parsing of groups of uninsured, as well amici’s argument that it even matters.

But as much as the Florida PPACA case demonstrates the influence that “friends of the court” can have, the outcome also shows that there are limits. I doubt that the amici on either side of the case are particularly happy with the result; leaving PPACA intact sans the individual mandate was no one’s goal, and it would result in sky high health insurance premiums for everyone who buys it, including economists. And no one likes sky high premiums, especially economists.  Even when their amici curiae briefs are responsible for that result.

Orlando City officials received good tidings on April 12, 2011, as 11th Circuit, sitting en banc, ruled in the City’s favor in First Vagabonds Church of God v. City of Orlando, No. 08-16788. The Court unanimously upheld an Orlando ordinance enacted to keep activists for the homeless from serving meals twice a week in Orlando’s most prominent park, Lake Eola Park.  The decision is available here (PDF).  

The Facts:

Essentially, a church catering to the homeless and a political group had set up shop twice a week in the park, serving meals that attracted dozens of homeless persons.  Nearby residents were *less than thrilled* about having these guests visit them so frequently.  

So Orlando enacted a city ordinance that requires anyone who wants to hold a “large group feeding” to obtain a permit, and limited applicants to holding a feeding twice per year in any one park.  Orlando has 42 parks within the vicinity of City Hall (in the Downtown Parks District) and another 66 elsewhere, so in theory the group could hold 84 of its 104 yearly “feedings” in the Downtown Parks, and the other 20 still within the City limits.  

Previous Decisions

The District Court enjoined enforcement of the ordinance as violative of First Amendment rights.  On appeal, Judge Edmonson, writing for a panel majority of himself and Judge Baldock of the 10th Circuit, sitting by designation, reversed.  The majority held that the conduct regulated by the Orlando ordinance, namely holding “large group feedings,” was not expressive in nature, so it was not protected by the 1st Amendment.

Dissents in the 11th Circuit are pretty rare as compared to other federal Circuits, but Judge Barkett vigorously dissented, disputing the majority’s characterization of the conduct being regulated.  In her view, the large group feedings the ordinance targeted had an unmistakable protest element to them, and the conduct was therefore entitled to 1st Amendment protection.

The En Banc Holding   

Here’s where it gets interesting.  Although Judge Barkett dissented from the panel decision, the en banc decision was unanimous (which is also pretty rare).  And the en banc Court reached the same result as the panel, finding that the ordinance is enforceable and Constitutional.

The difference was in the reasoning.  The en banc Court assumed without deciding that the conduct at issue was expressive in nature.  But it found that the ordinance itself passed Constitutional muster. 

The ordinance, the Court explained, does not ban any type of speech outright.  It is only a reasonable “time, place or manner” restriction” in that it restricts the amount of time any group can use any one park for a “feeding”. 

The ordinance is also viewpoint neutral, according to the Court.  Moreover, the Court noted, the homeless activist groups can obey the ordinance and still hold their feedings.  They will just need to rotate among the City’s parks.

Judge Barkett was apparently okay with that conclusion.  As was the rest of the unanimous Court.