4th Circuit Rejects Two PPACA Challenges on Technical Grounds

On September 8, two court challenges to the health care reform law (the Patient Protection and Affordable Care Act, or “PPACA”) were struck down by a three-judge panel of the 4th Circuit Court of Appeals in Richmond, Virginia. The court rulings rejected the cases on technical grounds and did not address whether PPACA’s individual mandate to purchase health insurance violated the commerce clause of the U.S. Constitution.

The opinions do contain some interesting subsidiary rulings and commentary, however. In one of the underlying cases the 4th Circuit held that noncompliance fines imposed under the PPACA were taxes, not penalties. This interpretation is consistent with that of the Obama administration, and supports the conclusion that the individual mandate (and penalties for failing to comply with it) fall within Congress’s authority under the Taxing and Spending clause of the Constitution. (The “tax versus penalty” issue is afoot in a number of the court challenges to the PPACA and likely will proceed to the Supreme Court for resolution.)

Additionally, two members of the three-judge panel stated in that they would have upheld the constitutionality of the PPACA, had the technical flaws in the cases not prevented them from reaching decision on that issue. Per the New York Times, all members of the three-judge panel were appointed by Democratic presidents, two by the current administration.