U.S. Citizens Association v. Kathleen Sebeliux

Citations: 705 F.3d 588; 2013 WL 380342; 111 A.F.T.R.2d (RIA) 684; 2013 U.S. App. LEXIS 2245Docket: 11-3327, 11-3798

Court: Court of Appeals for the Sixth Circuit; February 1, 2013; Federal Appellate Court

Original Court Document: View Document

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The case involves U.S. Citizens Association and two of its members—Maurice A. Thompson and James Grapek—challenging the constitutionality of the individual mandate in the Patient Protection and Affordable Care Act (PPACA), which requires individuals to purchase health insurance or pay a penalty. The district court dismissed their challenges, and the Sixth Circuit Court of Appeals upheld this dismissal. 

U.S. Citizens Association, a non-profit organization with approximately 27,000 members, advocates for conservative values and opposes federal interference in health care. The plaintiffs, who do not currently hold health insurance, argue that the mandate infringes upon various constitutional rights. Specifically, they allege that it violates the Commerce Clause and their rights to expressive and intimate association, liberty, and privacy under several amendments. Thompson asserts he has the means to pay for emergency care without insurance, while Grapek contends he cannot afford insurance premiums. The case was decided in the Northern District of Ohio, and the appeal was argued before Circuit Judges Suhrheinrich, Stranch, and Donald.

Defendants filed a motion to dismiss all four counts of the plaintiffs' complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). The district court partially granted the motion, choosing not to dismiss the case based on standing, ripeness, or the Anti-Injunction Act. However, it dismissed Counts Two through Four, determining that the plaintiffs did not meet the plausibility standards established in Ashcroft v. Iqbal and Bell Atlantic Corp. v. Twombly. The court allowed the Commerce Clause challenge to proceed, and while summary judgment motions were pending, it issued a sua sponte partial judgment under Rule 54(b) on the dismissed counts. The plaintiffs subsequently appealed this partial judgment, while the district court stayed its ruling on the Commerce Clause issue. Following a relevant appellate decision that did not find the individual mandate of the PPACA to violate the Commerce Clause, the district court granted summary judgment in favor of the defendants on Count One. The plaintiffs appealed this final judgment, and the court consolidated both appeals.

As for appellate jurisdiction, the court has authority to review final orders and judgments under 28 U.S.C. 1291, noting that typically, a district court’s dismissal of some claims does not constitute a final order. However, under Rule 54(b), a court can certify certain claims for immediate appeal if it explicitly finds no just reason for delay. Proper certification involves two steps: directing entry of a final judgment on fewer than all claims and finding no just reason to delay appeal. If Rule 54(b) is not properly applied, the lack of a final order precludes appellate jurisdiction. The court reviews de novo the determination of multiple claims and their finality for appeal, while it reviews the finding of no just reason for delay for abuse of discretion. Recent discussions on Rule 54(b) in the context of constitutional claims revealed differing standards among circuits, particularly concerning abortion statutes.

The document references several cases to explain the analysis of multiple facial challenges to a statute. It asserts that while all statutory challenges share the common fact of the law's passage, the relevant operative facts must also consider the law's impact on various constitutional rights. The distinction is drawn from the case Lowery, where a single retaliatory act was the basis for two claims, unlike the multiple distinct injuries caused by a single law affecting different rights in the current context.

In the examined case, Planned Parenthood, all claims sought to declare the statute unconstitutional but were based on sufficiently separate operative facts. The first claim challenged the vagueness of a statute criminalizing the distribution of an abortion drug, affecting physicians' notice of criminal behavior. The second claim focused on a woman's right to bodily integrity concerning abortion, independent of the physicians' notice issue. The third and fourth claims were more similar, both alleging undue burdens on abortion decisions, yet they were still recognized as distinct in terms of injuries and constitutional rights.

The court concluded that the differences in operative facts across claims justified treating each as a separate claim under Rule 54(b), affirming appellate jurisdiction due to a lack of delay. Applying this reasoning to the current case, the analysis begins with the individual mandate's passage and requires an examination of how it affects distinct constitutional rights and whether the alleged injuries are sufficiently separate to warrant distinct relief.

Each count of the plaintiffs' Second Amended Complaint asserts a distinct injury to constitutional rights: Count Two claims a violation of freedom of expressive and intimate association, Count Three argues a breach of the right to liberty, and Count Four addresses the right to privacy in medical information. While some factual allegations overlap, each count includes unique facts pertinent to its respective constitutional claim. The court concluded that granting relief for one count would not address the constitutional issues raised in the others, affirming that Counts Two through Four present separate constitutional claims rather than just different legal theories for a single declaration of unconstitutionality. 

The district court's decision to permit immediate appeal on Counts Two through Four was deemed appropriate, as it found no just reason for delay. The court considered several factors, including the relationship between adjudicated and non-adjudicated claims, the risk of mootness in appellate review due to district court developments, and the likelihood of the appellate court facing the same issue multiple times. It determined that the constitutional claims in the counts were independent from the remaining Commerce Clause challenge in Count One, reducing the chance of redundant review. The court did not assess the fourth factor regarding potential set-offs against the final judgment, as it was deemed inapplicable. Ultimately, the district court favored immediate appeal for three counts over waiting for a final judgment on all counts, given the uncertainty of when appellate courts would resolve the primary Commerce Clause challenge.

The court dismissed three out of four claims but recognized the plaintiffs' right to an immediate appeal concerning these dismissals. After evaluating the relevant factors and the broader litigation context, the court determined there was no just reason to delay final judgment, thereby granting substantial deference to its decision. The certification under Rule 54(b) was deemed proper, allowing the appellate jurisdiction over the three claims, alongside the final judgment encompassing all four claims for consolidated review.

The standards for reviewing a district court's order include a de novo review for a Rule 12(b)(6) motion to dismiss, where the allegations are construed favorably toward the plaintiffs, and a de novo review for summary judgment, which is appropriate when no material factual disputes exist and the movant is entitled to judgment as a matter of law.

On the merits, the court addressed the Commerce Clause issue, referencing the Supreme Court's ruling in National Federation of Independent Business v. Sebelius, which affirmed Congress's authority to mandate health insurance purchases under its taxing power. The district court was found to have appropriately granted summary judgment in favor of the defendants concerning this claim.

Additionally, the plaintiffs contended that the Patient Protection and Affordable Care Act (PPACA) infringed upon their First and Fifth Amendment rights by interfering with doctor-patient relationships and imposing unwanted health insurance requirements. They argued for a fundamental privacy right to choose their doctors and not to associate with those whose practices they reject, asserting that they should not be financially burdened by both unwanted insured care and preferred alternative treatments. They also claimed that the PPACA's mandates infringed upon their freedom of expressive association by compelling compliance with government-approved health insurance standards.

Plaintiffs assert a fundamental First Amendment right to avoid compulsory association with private health insurers mandated by the PPACA, claiming this requirement burdens their expressive conduct by limiting their ability to criticize or boycott third-party-funded medical care. The document examines the concept of freedom of intimate association, which protects personal relationships from state intrusion due to their significance in preserving individual freedoms. Landmark cases highlight that protected relationships typically involve family ties, close friendships, or romantic connections characterized by small size, selectivity, and seclusion. In contrast, associations with large business entities are not afforded constitutional protection. To determine if a specific relationship qualifies for protection, one must evaluate its objective characteristics along a spectrum of intimacy. While the plaintiffs argue that their relationships with physicians exhibit traits of intimacy—such as being between two individuals, involving a selective choice of doctor, and ensuring confidentiality—precedent suggests that patient-physician relationships do not generally reflect deep personal attachments or shared community values. The plaintiffs reference Andrews v. Ballard, where a court recognized a constitutional right related to healthcare choices, arguing that such rights should extend to their doctor-patient relationships.

Andrews is not applicable to the current case as it pertains to a Fourteenth Amendment privacy right rather than a First Amendment right to intimate association. The statute in Andrews directly limited physicians’ practices, unlike the individual mandate, which imposes no such restrictions. While some aspects of the doctor-patient relationship may exhibit smallness, selectivity, and seclusion, these factors do not warrant heightened scrutiny for intimate association rights. The Ninth Circuit determined that relationships, such as that between a psychoanalyst and a patient, do not qualify as intimate associations significant enough to merit constitutional protection. Furthermore, federal courts generally agree that patients lack a constitutional right to specific treatments or providers if the government reasonably restricts them. The constitutional rights to privacy and personal liberty do not extend to obtaining treatments like laetrile, nor do relationships with large entities like health insurance companies qualify as intimate associations. Consequently, plaintiffs Thompson and Grapek did not demonstrate that their relationships with physicians are infringed by the individual mandate, which does not limit their ability to choose medical professionals. Instead, it mandates health insurance coverage or a shared responsibility payment. The district court's dismissal of this claim is upheld. 

Regarding the freedom of expressive association, this First Amendment right protects group membership for the purpose of collective speech and shields against laws that diminish the appeal of group membership without directly interfering with its composition. The right to associate for expressive purposes is not absolute and includes the freedom not to associate.

Infringements on the right to expressive association may be permissible if justified by regulations aimed at compelling state interests that do not suppress ideas and cannot be achieved through less restrictive means. A three-step evaluation is used for expressive association claims: (1) determining if a group merits protection, (2) assessing whether government action significantly burdens the group's expression, and (3) balancing the government's interest against the plaintiff's rights. While the USCA is recognized as a protected group, the plaintiffs fail to demonstrate a significant burden on their expression from the individual mandate; they retain the ability to express disapproval of the PPACA and are not compelled to include insurance companies in their membership. Choosing to pay the shared responsibility payment instead of obtaining health insurance is a lawful alternative, and noncompliance with the mandate does not render individuals outlaws but simply subjects them to a tax. Consequently, the district court rightly dismissed the claim regarding expressive association.

Regarding the right to liberty under the Fifth Amendment’s Due Process Clause, the plaintiffs assert several fundamental rights, including the right to make personal medical choices and not to pay for unwanted treatments or insurance. They argue that the individual mandate unduly burdens their fundamental right to refuse unwanted medical care by requiring either the purchase of health insurance or payment of a tax. However, the court concludes that the mandate does not infringe on the plaintiffs' liberty rights, as they remain free to choose their medical care and providers, thus affirming the validity of the individual mandate.

No court has invalidated mandates related to the Due Process Clause or other constitutional liberty guarantees. The Supreme Court has historically moved away from protecting economic rights through substantive due process, as seen in Ferguson v. Skrupa, where the doctrine from Lochner was discarded. A fundamental right must be deeply rooted in the nation’s history and tradition, which the plaintiffs' claims regarding the right to remain uninsured or to refuse unwanted medical care do not satisfy, thus lacking heightened protection under the Due Process Clause. The USCA has failed to demonstrate a fundamental liberty right to refuse unwanted medical care, leading to the dismissal of their liberty claim by the district court.

Regarding privacy rights, plaintiffs argued for a constitutionally protected interest in the confidentiality of their medical information, asserting that the federal government cannot compel disclosure to private insurers. They claimed that the PPACA forces contracts and disclosure of medical information against their will, invoking protections from the First, Third, Fourth, Fifth, and Ninth Amendments. While substantive due process does protect against unwanted disclosure of personal information, not all statutes mandating such disclosures are unconstitutional. The Supreme Court, in Whalen v. Roe, upheld a statute requiring prescription documentation despite patient privacy concerns, emphasizing the state’s rational legislative decision-making and the remote possibility of unwarranted disclosure as insufficient to invalidate the statute.

Public disclosures of private health information are deemed similar to various other privacy invasions tied to healthcare, and concerns over privacy may lead individuals to delay necessary medical care. However, sharing private medical data with healthcare professionals, insurers, and public health entities is critical in modern practice, even if it negatively impacts patient reputation. The court noted that mandated disclosures to state representatives responsible for community health do not constitute impermissible invasions of privacy. The individual mandate does not force plaintiffs to reveal personal medical data to insurers; even if it did, the Supreme Court's ruling in Whalen undermines the plaintiffs' argument against the mandate's constitutionality regarding such disclosures. Plaintiffs can avoid privacy concerns by opting out of insurance and paying the shared responsibility fee. Any potential harm from disclosing health information to insurers is speculative and unsupported by specific allegations. Consequently, the plaintiffs' privacy claims lack merit and were rightly dismissed. The court affirmed the partial judgment under Rule 54(b), allowing consideration of constitutional claims in Counts Two through Four and confirming the dismissal of Count One based on the precedent set by National Federation of Independent Business v. Sebelius. Summary judgment in favor of defendants on Count One and dismissal of the other claims for failure to state a claim were affirmed.