Commonwealth Ex Rel. Cuccinelli v. Sebelius
728 F. Supp. 2d 768
E.D. Va.2010Background
- Virginia sues to strike down ACA §1501 minimum coverage provision as unconstitutional under Commerce Clause, General Welfare Clause, and Tenth Amendment; provision imposes a penalty for non-coverage enforced via IRS; court will resolve only constitutional issues, not policy.
- Commonwealth argues the mandate exceeds Congress’s commerce power and cannot be justified as a tax; also claims it conflicts with Virginia’s Health Care Freedom Act and intrudes on state sovereignty.
- Defendant contends the provision is a valid exercise of Commerce Clause or, alternatively, Necessary and Proper to implement the broader health care reform, and, as a tax, falls within general welfare powers.
- Court previously denied dismissal, finds no genuine factual disputes, and holds the challenge turns on constitutional powers rather than fact-specific inquiries.
- Court ultimately concludes Section 1501 exceeds congressional power and severs it from the Act; injunctive relief not granted; declaratory judgment appropriate.
- The decision emphasizes analysis of Commerce Clause limits post-Lopez and Morrison, and whether aggregation of individual non-participation constitutes economic activity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §1501 exceeds Congress’s Commerce Clause power | Virginia argues there is no economic activity by nonparticipants | Sebelius argues aggregation theory shows substantial interstate impact | Section 1501 exceeds Commerce Clause power |
| Whether §1501 can be sustained under the General Welfare Tax power | Penalty is not a valid tax; risks Tenth Amendment violation | Penalties can be treated as taxes and regulate general welfare | Not sustained under General Welfare Tax power; invalid as a stand-alone tax power basis |
| Whether §1501 is severable from the ACA | Invalidity of §1501 would undermine broader reforms | Severability should preserve rest of statute if possible | Severed; §1501 and related references removed; rest of ACA remains intact |
| Whether the Court should grant injunctive relief pending appeal | Immediate relief is warranted to prevent enforcement | Lack of irreparable harm and likelihood of success on merits; relief not appropriate | Declined to enjoin; declaratory judgment sufficient; no injunction issued |
Key Cases Cited
- Gonzales v. Raich, 545 U.S. 1 (U.S. 2005) (aggregation theory; substantial effect on interstate commerce)
- Wickard v. Filburn, 317 U.S. 111 (U.S. 1942) (aggregate effect; economic activity includes noneconomic conduct when aggregated)
- Lopez v. United States, 514 U.S. 549 (U.S. 1995) (limits on Commerce Clause authority; activity required)
- Morrison v. United States, 529 U.S. 598 (U.S. 2000) (noneconomic, aggregate-regulation limits; outer bounds of commerce power)
- Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381 (U.S. 1940) (distinction between taxes and penalties; limitations on penalties)
- United States v. La Franca, 282 U.S. 568 (U.S. 1931) (tax vs penalty distinction remains meaningful)
- United States v. Comstock, 130 S. Ct. 1949 (S. Ct. 2010) (broad Necessary and Proper analysis; tether to enumerated power)
- Gonzales v. United States, 545 U.S. 2 (U.S. 2005) (aggregation/noneconomic activity in regulatory program)
- City of Chicago v. Morales, 527 U.S. 41 (U.S. 1999) (facial challenges to statutes; standard evolution)
- Free Enterprise Fund v. Public Co. Accounting Oversight Bd., 130 S. Ct. 3138 (S. Ct. 2010) (severability guidance; severance with circumspection)