Appellate Court Hears Defense of Health Law

The 14 members of the United States Court of Appeals for the Fourth Circuit, the first appellate court to review the law, are evenly divided as appointees of Democratic and Republican presidents. That puts the odds of drawing three Democratic appointees in the computerized lottery at roughly 10 to 1. Lawyers do not learn the makeup of the panel until the day of the hearing.

The party of the appointing president is not necessarily predictive of a federal judge’s leanings. But in five decisions in lower courts, three Democratic-appointed judges have upheld the Affordable Care Act while two Republican-appointed judges have ruled that its central provision — the requirement that most Americans obtain health insurance — is unconstitutional.

At Tuesday’s hearing in Richmond, the three Fourth Circuit judges — Diana Gribbon Motz, who was appointed by President Bill Clinton, and the two Obama appointees, Andre M. Davis and James A. Wynn Jr. — challenged both sides with pointed questioning. The hearing lasted more than two hours.

As in the lower courts, the judges focused on the novel question of how to define the choice not to buy health insurance: as commercial activity that the Supreme Court has ruled can be regulated, or as inactivity that is beyond Congress’s reach.

They also devoted considerable time to discussing whether Virginia’s attorney general had legal standing to challenge the insurance mandate, because it would impose a requirement on individuals but not on states.

Virginia stakes its right to sue on its enactment of a state law aimed at exempting residents from the insurance requirement, thereby creating a conflict with federal law.

“If you adopted this theory of standing,” argued Neal K. Katyal, the acting United States solicitor general, “you would allow, for example, a state that was opposed to the war in Afghanistan to say our citizens should be exempt and file a lawsuit on that basis.”

The Fourth Circuit panel heard the appeals of two challenges to the health care act that yielded opposite results late last year.

In one challenge, by Attorney General Kenneth T. Cuccinelli II of Virginia, Judge Henry E. Hudson of Federal District Court in Richmond ruled that by requiring most Americans to buy insurance — a commercial product — the mandate exceeded Congress’s authority to regulate interstate commerce. In the other, filed by Liberty University, Judge Norman K. Moon of Federal District Court in Lynchburg, Va., found that the mandate fell comfortably within “well-settled principles” set by the Supreme Court.

The Virginia health care cases are the first of four scheduled for appellate hearings during the next five weeks. The Court of Appeals for the Sixth Circuit, in Cincinnati, will hear arguments on June 1 in the appeal of a ruling upholding the law. A week later, the Court of Appeals for the 11th Circuit, in Atlanta, will hear the Obama administration’s appeal of a Florida judge’s ruling that invalidated the entire act. That judge suspended his ruling until appellate courts could hear the case.

It is widely anticipated that the Supreme Court will ultimately settle the matter, although it is not clear which of several cases it might take. That may depend on how and when the appeals courts rule.

If, for instance, the three-judge panel rules against Virginia, the commonwealth expects to appeal directly to the Supreme Court without requesting a hearing before the full Fourth Circuit bench, Mr. Cuccinelli, a Republican, said on Tuesday. But if the Fourth Circuit rules that Virginia does not have standing to challenge the law, the Supreme Court could wait for a case that gives it a more focused look at the central issues.

In Tuesday’s hearing, Mr. Katyal slightly shifted the emphasis in the government’s defense of the health law. He tried to steer the judges away from a semantic focus on whether a failure to buy health insurance constituted activity or inactivity, a question that has divided the lower courts.

Past Supreme Court decisions have backed Congress’s authority under the Constitution’s Commerce Clause to regulate “activities” that have a substantial effect on interstate commerce. But the court has never considered whether the term can be defined so broadly as to include decisions not to do something.

Mr. Katyal argued instead that the activity being regulated by the health care law is merely the means of payment by Americans who will inevitably enter the health care market and who will shift costs to others if they are not insured.

“Congress is not asking people to buy something they would not otherwise buy,” Mr. Katyal said.

Mathew D. Staver, the dean of Liberty University’s law school, disputed that assertion. The health care act, Mr. Staver said, “forces inactive bystanders into the stream of commerce.”