Two Federal Courts found the health care mandate constitutional – in Michigan and in Virginia.  Two others, in preliminary rulings, indicate they will likely rule the mandate unconstitutional – in Virginia and in Florida.  For what it is worth, the former are both Democrat appointees and the latter Republican appointees.

The Michigan case is before the Sixth Circuit Court of Appeals, with briefs due soon.  The remaining Virginia and Florida cases are in Summary Judgment stage.   I believe the matter will be before the Eleventh and Fourth Circuits by next summer.  While other cases are pending, these are the primary ones to watch.

My analysis has evolved.  While I joined an amicus brief in Virginia, I plan my own for the Circuits.  My focus is primarily tax law and the Necessary and Proper clause.

Contrary to proponents’ arguments, the government must win on both the Commerce Clause and the Taxing Power.  Opponents must win on merely one.  Unlike others, I emphasize important distinctions between the Mandate and the Penalty: we must analyze the Mandate under the Commerce Clause, but the Penalty under both the Necessary and Proper Clause, as well as under the Taxing Power.

Clearly, the Mandate is unconstitutional under the CC.  Contrary to what the Michigan Court held, it attempts to regulate inactivity.  The Court, unfortunately, viewed not having health insurance as an economic decision subject to constitutional regulation.  I disagree.  Others have made that case, so I will not focus on it.  On a positive note, the Michigan Court – as have all others – ruled favorably for opponents on standing and ripeness.  The Court also ruled favorably on the Anti-injunction Act, a critical issue the Florida Court muffed.  The Florida judge correctly did not apply the Act; however, he failed to note the most important limitation: it precludes suits to enjoin taxes by any “person.”  States – the primary litigants in the Virginia and Florida cases – are not persons for purposes of the Act.

Even if the Circuits were to find the Mandate constitutional (I predict one or two will), they must then analyze the Penalty separately – something most commentators have failed to do.  To be constitutional, the Penalty must satisfy the Necessary and Proper clause of Article I, Section 8.  According to Hamilton in Federalist 33, this adds no powers; instead, it limits Congress to existing powers. Madison agreed, in part, in Federalist 44. Even the Supreme Court in McCulloch and Comstock used language effectively limiting N&P – at least in cases of over-lapping powers. Such is the case here. Congress can enforce a commerce regulation using implied police powers, seizure, Spending, prohibitory force, mandatory force, through engaging in actual commerce, or through levying and collecting monetary charges.

Most opponents view the Penalty under N&P via the CC. While I agree, I believe Courts must also reconcile it with the Taxing Power. Consistent jurisprudence, plus the writings of Hamilton and Madison support my view. In addition, the Taxing Power, as I explained in “Of Constitutional Decapitation and Healthcare” was the most important reason for the Constitution. As I further explained in “Oy Yes, the Healthcare Penalty is Unconstitutional,” the Penalty cannot survive the Taxing Power limitations.

Congress may impose duties and imposts, which the Penalty is not. It may impose excises, which the Penalty is labeled in part; however, it may not impose an excise on inactivity. This is critical: even if the Circuits find the CC power reaches “economic decisions,” as did the Michigan Court, no authority has ever found the Excise Tax Power to reach such things. Never. Thus, even if the Mandate passes the CC (which I doubt), the Penalty will fail the Excise Power.

Congress may also impose taxes on “Gross income from whatever source derived.” As I explained here and here, the Penalty fails to reach “gross income” “from” “source” and “derived.” The argument is complicated, but I remain very confident. Only two academics have challenged my arguments. I dealt with both here.

Congress may also impose a tax on individuals (a Capitation) or on land (other Direct Taxes). This is how one would properly classify the Penalty; however, such taxes must be Apportioned, which the Penalty is not.

Lastly, occasional an academic suggests a hidden taxing power heretofore undiscovered. I deal with this in my articles. I would be very surprised if the Circuits or the SC choose this analysis.

I predict the case will reach the SC in early 2012, if not late 2011. I’m not yet publicly stating my predictions on that outcome: mostly it depends on how the opponents argue the case.