Questions about Judge who ruled on Health Care Mandates

Should be very interesting going forward to see how the Supreme Court will eventually rule on the Health Care mandates.

Health Care Judge's Interest In Anti-Health Care PR Shop Raises Questions
Ryan J. Reilly | December 13, 2010, 5:02PM
Federal judge Henry E. Hudson's ownership of a stake worth between $15,000 and $50,000 in a GOP political consulting firm that worked against health care reform -- the very law against which he ruled today -- raises some ethics questions for some of the nation's top judicial ethics experts. It isn't that Hudson's decision would have necessarily been influenced by his ownership in the company, given his established track record as a judicial conservative. But his ownership stake does create, at the very least, a perception problem for Hudson that could affect the case.

"Is Judge Hudson's status as a shareholder coincidence or causation? Probably the former, but the optics aren't good," James J. Sample, an associate professor at Hofstra Law School, told TPM. "Federal judges are required by statute to disqualify themselves from hearing a case whenever their impartiality might reasonably be questioned. It's a hyper-protective rule and for good reason. At the very least, his continued financial interest in Campaign Solutions undermines the perceived legitimacy of his decision."

The rules are pretty straightforward: if a judge is invested in a company that is a litigant in a case, he or she can't be involved. But in cases where a company owned by a judge has an interest in the outcome of a case but is not a direct litigant, the lines get much more murky.

"The company is not technically a direct party in the case," Sample told TPM. But he noted the judge is "treading very close to the line."

"You would certainly want to ask whether he has an interest in an organization that's devoted to an outcome that he has control over," Professor Charles Gardner Geyh of the Indiana University Maurer School of Law told TPM. "That would certainly be the inquiry I would want to undertake."

"The more general analysis is whether the judge's impartiality might be questioned. The most I'm willing to commit to is that it certainly raises concerns in my mind that one might fairly explore," Geyh said.

Hudson has held a stake in Campaign Solutions at least since 2003, according to financial disclosure reports. Every year since 2003, Hudson's stake has had a "gross value" of between $15,001 and $50,000 dollars, but his yearly income from his investment has increased. Before 2006, he reported that he earned less that $1,000 dollars. In 2006 and 2007, he earned between $1,001 and $2,500 dollars. Since 2008, his yearly income from his partial ownership of Campaign Solutions has been between $5,001 and $15,000 dollars.

A Campaign Solutions representative did not immediately respond to a request for comment.

Late Update: So guess who ends up to be a client of Campaign Solutions? None other than Cuccinelli himself. He racked up $9,000 in website and credit card processing expenses in 2010, as noted in this story.

Additional reporting by Alex Sciuto.

Ryan J. Reilly | December 13, 2010, 12:11PM


A federal judge in Virginia ruled Monday that the individual mandate contained in the health care law passed by Congress and signed by President Barack Obama this year is unconstitutional.

Judge Henry E. Hudson found in favor of Virginia Attorney General Ken Cuccinelli, who brought this suit separately from the other state attorney generals suing the federal government over the law. Hudson was the first judge to rule against the law. Two other judges ruled in favor of the law, bringing the Obama administration's record thus far to 2-1. At least 13 other suits against the health care law have been dismissed on jurisdiction or standing issues.

Hudson ruled that there where "no compelling exigencies in this case" because the individual mandate doesn't take effect until 2013. Therefore, he said his ruling was declarative and not injunctive, which means it will be reviewed either by the appellate court or by the Supreme Court.

"We are disappointed in today's ruling but continue to believe - as other federal courts in Virginia and Michigan have found - that the Affordable Care Act is constitutional," Justice Department spokeswoman Tracy Schmaler told TPM in a statement. "There is clear and well-established legal precedent that Congress acted within its constitutional authority in passing this law and we are confident that we will ultimately prevail."

"At its core, this dispute is not simply about regulating the business of insurance-or crafting a scheme of universal health insurance coverage-it's about an individual's right to choose to participate," wrote Hudson a George W. Bush-appointee. "The unchecked expansion of congressional power to the limits suggested by the Minimum Essential Coverage Provision would invite unbridled exercise of federal police powers."

"Despite the laudable intentions of Congress in enacting a comprehensive and transformative health care regime, the legislative process must still operate within constitutional bounds," wrote Hudson.

"Because an individual's personal decision to purchase -- or decline to purchase -- health insurance from a private provider is beyond the historical reach of the Commerce Clause, the Necessary and Proper Clause does not provide a safe sanctuary" for health care, Hudson wrote.

Hudson concluded that Congress did not intend to exercise its powers of taxation under the General Welfare Clause, noting the "unequivocal denials by the Executive and Legislative branches that the ACA was a tax."

But, Hudson noted, earlier versions of the bill in the House and the Senate "used the more politically toxic term 'tax' when referring to the assessment for noncompliance with the insurance mandate."

Cuccinelli argued that the Affordable Care Act conflicts with the Virginia Health Care Freedom Act, which was passed by the state in anticipation of the passage of the federal law. Virginia's law said that no individual mandate could be required. Hudson ruled that the law raised constitutional questions on Congress' power to penalize people for refusing to participate in interstate commerce.

As TPM reported, because Democrats left out a "severability clause" when writing the Affordable Care Act, plaintiffs had requested the entire law be scrapped.

Hudson didn't agree, ruling that type of analysis "is difficult to apply in this case given the haste with which the final version of the 2,700 page bill was rushed to the floor for a Christmas Eve vote."

"It would be virtually impossible within the present record to determine whether Congress would have passed this bill, encompassing a wide variety of topics related and unrelated to heath care, without Section 1501," Hudson ruled. Therefore, Hudson said the court would "sever with circumspection" the "problematic portions while leaving the remainder intact."

"The outcome of this case has significant public policy implications," Hudson wrote. "And the final word will undoubtedly reside with a higher court."

Amateur Hour: VA Judge Makes Elementary Error In Health Care Ruling
Brian Beutler | December 14, 2010, 10:25AM

The Virginia federal district court judge who ruled yesterday that the individual mandate in the health care bill is unconstitutional is catching a lot of flack -- and not just for having a financial interest in an anti-health care reform consulting firm.

Legal experts are attacking Judge Henry Hudson's decision on the merits, citing an elementary logical flaw at the heart of his opinion. And that has conservative scholars -- even ones sympathetic to the idea that the mandate is unconstitutional -- prepared to see Hudson's decision thrown out.

"I've had a chance to read Judge Hudson's opinion, and it seems to me it has a fairly obvious and quite significant error," writes Orin Kerr, a professor of law at George Washington University, on the generally conservative law blog The Volokh Conspiracy.

Kerr and others note that Hudson's argument against Congress' power to require people to purchase health insurance rests on a tautology.

The key portion of the ruling reads:


If a person's decision not to purchase health insurance at a particular point in time does not constitute the type of economic activity subject to regulation under the Commerce Clause, then logically an attempt to enforce such provision under the Necessary and Proper Clause is equally offensive to the Constitution.
Kerr notes that this is all wrong. The Necessary and Proper Clause allows Congress to take steps beyond those listed in the Constitution to achieve its Constitutional ends, including the regulation of interstate commerce. Hudson's argument wipes a major key part of the Constitution out of existence. Kerr says Hudson "rendered [it] a nullity."

Kerr's co-blogger, Case Western Law Professor agreed, though he cautioned that Hudson's error doesn't necessarily imply that the mandate is constitutional.

In an interview with TPM this morning, Timothy Jost of Washington and Lee University called the logic on this point "completely redundant."

"In Hudson's opinion he basically conflates the Commerce power and the Necessary and Proper power and says that each provision in a statute has to be looked at independently from every other provision, and each provision has to be independently authorized under the Commerce Clause," Jost said. "And if it isn't, the Necessary and Proper Clause doesn't grant any more authority."

As a result of this error, Hudson never engages the key question in the case: whether the individual mandate is a reasonable way for Congress to implement regulations within its purview.

"Given that existing Supreme Court case law gives the federal government a fairly straightforward argument in support of the mandate under the Necessary and Proper clause, Judge Hudson's error leads him to assume away as a matter of 'logic' what is the major question in the case," Kerr writes. "That is unfortunate, I think."