Press Releases

Home  » News & Media » Press Releases

Pacific Legal Foundation | Press Release


Contact: Paul J. Beard II
Principal Attorney
Pacific Legal Foundation
(916) 419-7111


PLF suit: Tax-raising Affordable Care Act started in wrong house of Congress

Health Care Law is still unconstitutionalWashington, D.C.; September 12, 2012: Pacific Legal Foundation (PLF) announced today that it has just launched a new constitutional cause of action against the federal Affordable Care Act. The ACA imposes a charge on Americans who fail to buy health insurance — a charge that the U.S. Supreme Court recently characterized as a federal tax. PLF’s amended complaint, filed late yesterday, alleges that this purported tax is illegal because it was introduced in the Senate rather than the House, as required by the Constitution’s Origination Clause for new revenue-raising bills (Article I, Section 7).

PLF is a watchdog organization that litigates for limited government, property rights, individual rights, and free enterprise in courts nationwide. In challenging the ACA’s constitutionality, PLF attorneys represent Iowa small business owner Matt Sissel, without charge.

The Origination Clause argument is part of an amended complaint filed late yesterday in PLF’s existing lawsuit against the ACA, Sissel v. U.S. Department of Health & Human Services, pending before Judge Beryl A. Howell, in the U.S. District Court for the District of Columbia.

PLF’s Sissel lawsuit was on hold while the U.S. Supreme Court considered the challenge to the ACA from the National Federation of Independent Business (NFIB) and 26 states, in NFIB v. Sebelius. As initially filed, PLF’s Sissel lawsuit targeted the ACA’s individual mandate to buy health insurance as a violation of the Constitution’s Commerce Clause (Article I, Section 8).

The Supreme Court agreed with this position, in the NFIB ruling.

However, Chief Justice John Roberts, joined by four justices, characterized the ACA’s charge as a federal “tax,” because it requires a payment to the federal government from people who decide not to buy health insurance.

That holding prompted PLF’s new cause of action. “If the charge for not buying insurance is seen as a federal tax, then a new question must be asked,” said PLF Principal Attorney Paul J. Beard II. “When lawmakers passed the ACA, with all of its taxes, did they follow the Constitution’s procedures for revenue increases? The Supreme Court wasn’t asked and didn’t address this question in the NFIB case. The question of whether the Constitution was obeyed needs to be litigated, and PLF is determined to see this important issue all the way through the courts.”

With its charge for not buying insurance,
the ACA is a non-starter — because it started in the Senate

“Did Congress obey the Constitution’s requirements?” asked Beard. “No, the process was backwards. The Constitution says revenue-raising bills must be approved first in the House of Representatives. But even though it imposes taxes, the ACA started in the Senate. That makes it a non-starter, in a constitutional sense.”

The Constitution’s “Origination” Clause provides that “all bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other bills.” But what became the ACA was introduced in the upper chamber by Senate Majority Leader Harry Reid. In a so-called “shelf bill” maneuver, Reid took a House-passed measure to help veterans buy homes, struck out all its language, and inserted the federal health care legisla­tion that became known as the ACA, with its health insurance mandate and charge for people who choose not to comply. In fact, the ACA, as it was created in the Senate, included a dozen new taxes estimated to increase federal revenue by $486 billion by 2019.

PLF Podcast Now Playing
In today's podcast, Paul Beard discusses PLF's updated challenge to Obamacare.

“When we focus on the Origination Clause, we’re not talking about dry formalities and this isn’t an academic issue,” said Beard. “The Founders understood that the power to tax, if misused, involves the power to destroy, as Chief Justice John Marshall put it. Therefore, they viewed the Origination Clause as a vital safeguard for liberty. They insisted that the power to initiate new taxes should be left with the lawmakers who are most directly accountable to voters — members of the House, who are elected every two years by local districts.”

Because the charge for those who don’t buy insurance is so central to the structure of the ACA, PLF’s lawsuit asks that the entire law be struck down.

In addition to its Origination Clause argument, PLF’s amended complaint asks the courts to recognize that the NFIB decision set a clear limit to federal regulatory power under the Commerce Clause (Article I, Section 8). Specifically, PLF seeks to clarify that a binding precedent was created by the five justices who held that Congress lacked Commerce Clause authority to order people to engage in commerce by purchasing health insurance.

Plaintiff Matt Sissel: “I’m in this to defend freedom and the Constitution”

Matt Sissel, PLF clientPLF attorneys represent Matt Sissel, a small business owner who chooses to pay for medical expenses on his own, rather than buy health insurance. He objects on financial, philosophical, and constitutional grounds to being ordered by the federal government to purchase a health care plan he does not need or want, on pain of a financial penalty.

“I’m in this case to defend freedom and the Constitution,” said Sissel. “I strongly believe that I should be free — and all Americans should be free — to decide how to provide for our medical needs, and not be forced to purchase a federally dictated health care plan. I’m very concerned about Congress ignoring the constitutional roadmap for enacting taxes, because those procedures are there for a purpose — to protect our freedom.”

An artist and owner of an art business in Iowa City, Matt was a soldier with the Iowa Army National Guard from 2000 to 2008. He spent two years in Iraq as a combat medic, the second of which he volunteered for, providing medical care to the sick and wounded. On top of those duties, his second year was spent training and advising the Iraqi military. During his second tour, he received the Bronze Star for his service.

“I proudly wore the American uniform, to defend liberty and the Constitution,” said Sissel. “It’s dispiriting to see our lawmakers treat the rules set out in the Constitution with disrespect, as if they’re just suggestions, or as if members of Congress are too important to follow them.

“I am grateful that PLF is representing me without charge and allowing me to take a stand for principles, for my rights, and for the integrity of our Constitution.”

About Pacific Legal Foundation
Donor-supported Pacific Legal Foundation is a watchdog organization that litigates for limited government, property rights, individual rights, and free enterprise, in courts nationwide.