Supreme Court of the United States

No. ______ IN THE Supreme Court of the United States NATIONAL FEDERATION OF INDEPENDENT BUSINESS, KAJ AHLBURG, AND MARY BROWN, Petitioners, v. KATHLEEN SEBELIUS, ET AL., Respondents. On Petition For A Writ Of Certiorari To The United States Court Of Appeals For The Eleventh Circuit APPENDIX TO PETITION FOR A WRIT OF CERTIORARI KAREN R. HARNED MICHAEL A. CARVIN EXECUTIVE DIRECTOR Counsel of Record NFIB SMALL BUSINESS GREGORY G. KATSAS LEGAL CENTER C. KEVIN MARSHALL 1201 F St. NW HASHIM M. MOOPPAN Suite 200 JONES DAY Washington, DC 20004 51 Louisiana Ave. NW Washington, DC 20001 (202) 879-3939 [email protected] Counsel for Petitioners (Additional Counsel Listed on Inside Cover) RANDY E. BARNETT CARMACK WATERHOUSE PROFESSOR OF LEGAL THEORY GEORGETOWN UNIV. LAW CENTER 600 New Jersey Ave. NW Washington, DC 20001 TABLE OF CONTENTS Page APPENDIX A: Opinion of the United States Court of Appeals for the Eleventh Circuit ....... 1a APPENDIX B: Opinion of the United States District Court for the Northern District of Florida (Jan. 31, 2011) .................................. 286a APPENDIX C: Opinion of the United States District Court for the Northern District of Florida (Oct. 14, 2010) .................................. 384a APPENDIX D: Order of the United States District Court for the Northern District of Florida (Mar. 3, 2011) ................................... 468a APPENDIX E: Constitutional and Statutory Provisions Involved ....................................... 494a 1a APPENDIX A [PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT Nos. 11-11021 & 11-11067 D.C. Docket No. 3:10-cv-00091-RV-EMT STATE OF FLORIDA, by and through Attorney General, STATE OF SOUTH CAROLINA, by and through Attorney General, STATE OF NEBRASKA, by and through Attorney General, STATE OF TEXAS, by and through Attorney General, STATE OF UTAH, by and through Attorney General, et al., Plaintiffs - Appellees - Cross-Appellants, versus UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, SECRETARY OF THE UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, UNITED STATES DEPARTMENT OF THE TREASURY, SECRETARY OF THE UNITED STATES DEPARTMENT OF TREASURY, UNITED STATES DEPARTMENT OF LABOR, SECRETARY OF THE UNITED STATES DEPARTMENT OF LABOR, Defendants - Appellants - Cross-Appellees. 2a Appeals from the United States District Court for the Northern District of Florida (August 12, 2011) Before DUBINA, Chief Judge, and HULL and MARCUS, Circuit Judges. DUBINA, Chief Judge, and HULL, Circuit Judge:1 Soon after Congress passed the Patient Protection and Affordable Care Act, Pub. L. No. 111- 148, 124 Stat. 119 (2010), amended by Health Care and Education Reconciliation Act of 2010 (“HCERA”), Pub. L. No. 111-152, 124 Stat. 1029 (2010) (the “Act”), the plaintiffs brought this action challenging the Act’s constitutionality. The plaintiffs are 26 states, private individuals Mary Brown and Kaj Ahlburg, and the National Federation of Independent Business (“NFIB”) (collectively the “plaintiffs”).2 The defendants are the federal Health and Human Services (“HHS”), Treasury, and Labor Departments and their Secretaries (collectively the “government”). 1 This opinion was written jointly by Judges Dubina and Hull. Cf. Waters v. Thomas, 46 F.3d 1506, 1509 (11th Cir. 1995) (authored by Anderson and Carnes, J.J.) (citing Peek v. Kemp, 784 F.2d 1479 (11th Cir.) (en banc) (authored by Vance and Anderson, J.J.), cert. denied, 479 U.S. 939, 107 S. Ct. 421 (1986)). 2 The 26 state plaintiffs are Alabama, Alaska, Arizona, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Washington, Wisconsin, and Wyoming. 3a The district court granted summary judgment (1) to the government on the state plaintiffs’ claim that the Act’s expansion of Medicaid is unconstitutional and (2) to the plaintiffs on their claim that the Act’s individual mandate—that individuals purchase and continuously maintain health insurance from private companies3—is unconstitutional. The district court concluded that the individual mandate exceeded congressional authority under Article I of the Constitution because it was not enacted pursuant to Congress’s tax power and it exceeded Congress’s power under the Commerce Clause and the Necessary and Proper Clause. The district court also concluded that the individual mandate provision was not severable from the rest of the Act and declared the entire Act invalid. The government appeals the district court’s ruling that the individual mandate is unconstitutional and its severability holding. The state plaintiffs cross-appeal the district court’s ruling on their Medicaid expansion claim. For the reasons that follow, we affirm in part and reverse in part.4 3 As explained later, unless the person is covered by a government-funded health program, such as Medicare, Medicaid, and others, the mandate is to purchase insurance from a private insurer. 4 We review the district court’s grant of summary judgment de novo. Sammy’s of Mobile, Ltd. v. City of Mobile, 140 F.3d 993, 995 (11th Cir. 1998). We review de novo a constitutional challenge to a statute. United States v. Cunningham, 607 F.3d 1264, 1266 (11th Cir.), cert. denied, 131 S. Ct. 482 (2010). 4a INTRODUCTION Legal issues concerning the constitutionality of a legislative act present important but difficult questions for the courts. Here, that importance and difficulty are heightened because (1) the Act itself is 975 pages in the format published in the Public Laws;5 (2) the district court, agreeing with the plaintiffs, held all of the Act was unconstitutional; and (3) on appeal, the government argues all of the Act is constitutional. We, as all federal courts, must begin with a presumption of constitutionality, meaning that “we invalidate a congressional enactment only upon a plain showing that Congress has exceeded its constitutional bounds.” United States v. Morrison, 529 U.S. 598, 607, 120 S. Ct. 1740, 1748 (2000). As an initial matter, to know whether a legislative act is constitutional requires knowing what is in the Act. Accordingly, our task is to figure out what this sweeping and comprehensive Act actually says and does. To do that, we outline the congressional findings that identify the problems the Act addresses, and the Act’s legislative response and overall structure, encompassing nine Titles and hundreds of laws on a diverse array of subjects. Next, we set forth in greater depth the contents of the Act’s five components most relevant to this appeal: the insurance industry reforms, the new state-run 5 Pub. L. No. 111-148, 124 Stat. 119 (2010), Pub. L. No. 111-152, 124 Stat. 1029 (2010). Some of the sections of the Act have not yet been codified in the U.S. Code, and for those sections we cite to the future U.S. Code provision, along with the effective date if applicable. 5a Exchanges, the individual mandate, the employer penalties, and the Medicaid expansion. After that, we analyze the constitutionality of the Medicaid expansion and explain why we conclude that the Act’s Medicaid expansion is constitutional. We then review the Supreme Court’s decisions on Congress’s commerce power, discuss the individual mandate—which requires Americans to purchase an expensive product from a private insurance company from birth to death—and explicate how Congress exceeded its commerce power in enacting its individual mandate. We next outline why Congress’s tax power does not provide an alternative constitutional basis for upholding this unprecedented individual mandate. Lastly, because of the Supreme Court’s strong presumption of severability and as a matter of judicial restraint, we conclude that the individual mandate is severable from the remainder of the Act. Our opinion is organized as follows: I. STANDING II. THE ACT A. Congressional Findings B. Overall Structure of Nine Titles C. Terms and Definitions D. Health Insurance Reforms E. Health Benefit Exchanges F. Individual Mandate G. Employer Penalty H. Medicaid Expansion III. CONSTITUTIONALITY OF MEDICAID EXPANSION 6a A. History of the Medicaid Program B. Congress’s Power under the Spending Clause IV. SUPREME COURT’S COMMERCE CLAUSE DECISIONS V. CONSTITUTIONALITY OF INDIVIDUAL MANDATE UNDER THE COMMERCE POWER A. First Principles B. Dichotomies and Nomenclature C. Unprecedented Nature of the Individual Mandate D. Wickard and Aggregation E. Broad Scope of Congress’s Regulation F. Government’s Proposed Limiting Principles G. Congressional Findings H. Areas of Traditional State Concern I. Essential to a Larger Regulatory Scheme J. Conclusion VI. CONSTITUTIONALITY OF INDIVIDUAL MANDATE UNDER THE TAX POWER A. Repeated Use of the Term “Penalty” in the Individual Mandate B. Designation of Numerous Other Provisions in the Act as “Taxes” C. Legislative History of the Individual Mandate VII. SEVERABILITY 7a I. STANDING As a threshold matter, we consider the government’s challenge to the plaintiffs’ standing to bring this lawsuit. “Article III of the Constitution limits the jurisdiction of federal courts to ‘cases’ and ‘controversies.’” Socialist Workers Party v. Leahy, 145 F.3d 1240, 1244 (11th Cir. 1998) (citations omitted). As we have explained: The case-or-controversy constraint, in turn, imposes a dual limitation on federal courts commonly referred to as “justiciability.” Basically, justiciability doctrine seeks to prevent the federal courts from encroaching on the powers of the other branches of government and to ensure

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