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Liberty University Loses Mandate Appeal; Plots Return to SCOTUS

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By William Peacock, Esq. on July 17, 2013 1:24 PM

Liberty University’s long-awaited return to the Fourth Circuit finally resulted in a decision on the merits last week, but the outcome was not what they were hoping for. The university attacked the Affordable Care Act’s employer mandate on constitutional grounds, and while the district court found the mandate constitutional, the Fourth Circuit refused to hear the case, citing the Anti-Injunction Act.

However, when the Supreme Court considered the individual insurance mandate in National Federation of Independent Business v. Sebelius, they held that the AIA didn’t apply. When Liberty University appealed to the Supreme Court, they remanded the case for reconsideration in light of their holding in NFIB, leading to last week’s lengthy decision.

Commerce Clause

In NFIB, while upholding the individual insurance mandate in light of Congress' power to tax, the Supreme Court refused to uphold the mandate under the Commerce Clause. The court's reasoning was that Congress cannot force active participation in commerce. Such a holding would expand the already broad power too far.

That reasoning isn't as applicable here, per the Fourth Circuit. Employers are already engaged in commerce via procurement of labor. This is simply a regulation relating to employee compensation, akin to wage and hour laws, which have been held to be permissible under the Commerce Clause powers by the Supreme Court. The panel also notes that employers don't have to purchase insurance at all -- they can simply self-insure!

Being the thorough court that they are, the Fourth Circuit panel also addressed the constitutionality of the employer mandate as a tax. We'd rehash it, but it was merely a lengthy recitation of quotes from the Supreme Court's decision in NFIB.

Religion and the Mandate

When it comes to Free Exercise arguments, the court held that because the law was a general law of neutral applicability, it did not violate the clause, even if it does impose an incidental burden on religious practices.

The Religious Freedom Restoration Act analysis was far more interesting. The panel first correctly points out that the RFRA only applies when an individual's exercise of religion is substantially burdened. Such a burden requires "substantial pressure on an adherent to modify his behavior and to violate his beliefs."

Are those individuals burdened here? The court notes that the ACA allows an individual to purchase plans that provide for abortions only in limited cases (rape, incest, endangered life of mother), and even with no abortion services at all. (42 U.S.C. § 18023(b)(1)(A)(i)).

Finally, if none of those reasons are good enough, the panel also notes that if a person's religion is burdened by the ACA, they can always choose to pay the penalty-tax.

Religion and the Contraception Regulations

You didn't really think the Fourth Circuit would address the toughest issue of all, did you?

The court punted here due to procedural reasons. Because the contested regulations, which require all group health plans to cover all FDA-approved contraceptive methods (including the controversial morning-after pills), weren't implemented until long after this suit had been filed, the plaintiffs here didn't make the corresponding arguments until this case had been remanded by the Supreme Court.

The Fourth Circuit held that because a district-level trial court hadn't heard the issues yet, they could not be raised for the first time on appeal.

What's Next?

According to the Washington Times, the university expressed encouragement that the merits were reached, even if the wrong decision was reached, as this clears the way for an appeal to the Supreme Court. We'd also guess that an additional lawsuit, based on the morning-after pill regulation, will be forthcoming as well.

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