Guest Article

March Madness at the Court—Sweet Sixteen Players? No, Nifty Nine

By Alvin D. Lurie
March 21, 2012

As the days of March have dwindled down to a precious few for "court" watchers in venues around the country, their excitement has soared as the players have shrunk from the Sweet Sixteen to Eight, then Four, and finally Two.

But at another venue in a place by the Potomac, nine players are holding court in a mighty three-day contest next week. Spectators will have lined the streets for hours before the games begin each day, just to catch a glimpse of the gladiators. The Nine will sit on a bench high above the gladiators' field of battle as they wage their war of words to win the minds of the Nine. But the battle began long before the three days to follow next week. For three years it has gripped the attention, not just of sports fans, but of Americans of every stripe—indeed, of America-watchers around the world. The uncivil war has left the fundamental institutions of our democracy in tatters, its players barely talking to each other, and without a satisfactory truce, let alone a resolution. Now it will be up to the "Nifty Nine," who, one hopes, will find a way to achieve some accommodation between the warring parties.

The Justices of the United States Supreme Court will hear oral arguments (for an unprecedented three days!) this coming Monday, Tuesday and Wednesday on the constitutionality of the health reform legislation. One professor, Thomas Mayo of SMU Dedman School of Law, has called this "not just the Case of the Term, but the Case of the Decade." Except for his observation being somewhat understated, I think the professor got it just about right.

The struggle over that legislation raged between the White House and the Congress almost from the first day of the Obama Administration through the ensuing 15 months, until the Administration outmaneuvered the Republicans by engineering the enactment of the legislation in two separate bills, each of which separately was filibuster-proof—thus neutralizing the Republicans' ultimate weapon to block enactment of the law. The struggle left open wounds that continue to fester to this day, preventing the two principal foundations of our government from functioning properly—to the point of inability to enact important pieces of legislation—which led to the downgrading of our credit rating by one of the rating agencies, to say nothing of the loss of respect for the workings of our vaunted democracy, not just by peoples around the world, but even by Americans themselves.

It is, I believe, fair to say that the upcoming Supreme Court decision is likely to rank with the great opinions of the Court, from the Nation's beginnings (think Marbury v. Madison), the Civil War (Dred Scott), the New Deal (the Schechter case that outlawed the NRA), Brown v. Board of Education, down to Bush v. Gore, and even Citizens United (whose shadow continues to lengthen over the political landscape to this very hour). Indeed, I do not think it is an overstatement to posit that the Court's decision, which it has indicated can be expected before July 4, doubtless will shape the issues in the November election and very possibly the outcome in elections countrywide up to and including the Oval Office.

Important as these political outcomes are to the immediate future of our country, much more might be hanging in the balance. The principal issue before the Court will be whether the so-called insurance mandate is constitutional—i.e., the law's compulsions on individuals and businesses to purchase for themselves or to provide to their employees, as the case may be, health care coverage insurance satisfying statutorily prescribed minimum coverage standards—what the statute calls "essential health benefits." There are other requirements imposed on insurance carriers and so-called state insurance exchanges, respectively, to include in health care policies offered and policies sold at the exchanges coverage of "essential" and other specified types of care; but it seems likely that the Court will not deal directly with the constitutionality of those other mandated features of the law (at least, I have seen no indication in published reports that the issues presented by them have been certified for review).

However, directly related to the underlying mandate issue is the question whether, if the mandate itself is ruled unconstitutional, it is so integral to the health care reform law in its entirety that the law must be struck down root and branch, not just the mandate-related provisions. Lawyers refer to this issue by the term "severability." Fairly strong arguments can be made that the law is all of a single piece because the mandate provides the financial underfooting for the massive overhaul of health care. The mandate provides insurance companies with the assured funding to enable them to underwrite all the coverage they are required to offer. Even so strong a supporter of the law as economics professor Paul Krugman has written that "simply requiring that insurers cover people with pre-existing conditions ... doesn't work either: premiums are sky-high because only the sick buy insurance."

The Court has sent an unmistakable signal that it is keenly interested in that issue. It has done something in setting the stage for the oral arguments and for its ensuing deliberations that, if not unprecedented, is extremely rare. Notwithstanding the lengthy time allotted to oral arguments by counsel for the parties—three days, rather than the usual two hours!—and, presumably, the welter of amici briefs that have been filed, it has named two lawyers in private practice to make oral arguments and submit briefs on two issues, one of which is severability. (The other is the applicability of a federal anti-injunction statute that arguably prohibits a challenge to a revenue-raising law before it has become operative. That statute might apply to the provisions of the health care law that are not yet in effect.)

Important as the unconstitutionality of the health care law may be, whether in part or in toto, an even much larger issue potentially is at stake, which the Court as a whole, or one or more of the several opinions which its Justices may file (concurring, concurring in part, dissenting or whatever), might confront—namely, how big is too big a role of the Federal government? The issue divides the political parties and the electorate at large at this time, and it obviously directly affects one's view of the health care reform legislation. But, in a larger sense, it affects the entire fabric of our society. To a surprising degree the issue has drawn many young Americans into Ron Paul's camp during the current primary season. It doubtless accounts for a sizeable segment of Tea Party supporters, and undoubtedly even resonates with many in the moderate wing of the Republican Party. As will be noted below, an aspect of the governmental intrusion issue has rattled even some highly placed Democrats. So it will not be surprising if that theme courses through the opinion or opinions of the Court.

It is not difficult for Republican critics to make the case, as was stated in a New York Times story several months ago, that "President Obama's health care overhaul ... was imposing a rigid, bureaucratic- controlled health system on Americans ... forcing a one-size-fits-all standard for health insurance and usurping state authority to regulate the industry." This criticism "helps explain why public opinion of the law remains deeply divided," the Times reporter noted.

An event that broke late in January added fuel to this "big government" argument, when the general public became aware that the Obama Administration had issued a regulation under the health care reform law that would require all employers, excepting only religious churches -- but not excepting church-affiliated hospitals, charities and other such religiously supported institutions—to provide contraceptive and other birth control services without charge, co-pays or other cost-sharing under their health insurance plans. The regulation evoked a strong reaction even among Democrats, including Vice President Joseph Biden. While the Administration, with the active participation of the President, was considering the issue, Biden and others warned of its consequences, given the deep feelings among Catholics and others that the rule being considered struck at the sacred doctrine of the Separation of Church and State. Biden's advice was not heeded. But, after a large public outcry, the Administration backed down with an amelioration of the new rule that quieted many of the critics. It is worth underscoring that this overreaching did not involve a statutory mandate. It was an agency regulation promulgated under the ostensible administrative authority derived from the statute. It is, at the least, a cautionary tale of the extent to which this Administration is prepared to run with this law, even to the point of taking on the Separation of Church and State issue.

Can one really contend that this case does not possess all the elements for becoming one of the great decisions, not just of the decade, but of many decades?

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Copyright 2012, A.D. Lurie

Alvin D. Lurie is a practicing pension attorney. He was appointed as the first person to administer the ERISA program in the IRS National Office in Washington. He is general editor of Bender's Federal Income Taxation of Retirement Plans (LexisNexis), a 2-volume treatise, and he is also editor of the annual compendium of articles published under the title New York University Review of Employee Benefits and Executive Compensation (LexisNexis). Mr. Lurie is the first recipient of the Lifetime Employee Benefits Achievement Award sponsored by the Employee Benefits Committee of the American Bar Association Tax Section. He can be contacted at Alvin D. Lurie, P.C. in Larchmont, New York, at (914) 834-6725 or via email: allurie@optimum.net. He is also of counsel to The Wagner Law Group in Boston.

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