* Obama lawyers try to reinstate individual mandate
* Court considers whether Virginia had right to sue
* Court's ruling may influence other healthcare cases
(Rewrites throughout with more details from oral arguments)
By Jeremy Pelofsky and Lisa Lambert
RICHMOND, Va., May 10 A U.S. appeals court on
Tuesday sharply questioned whether the state of Virginia could
challenge President Barack Obama's signature healthcare law,
which requires Americans to buy insurance in a bid to slow
The Obama administration is trying to save the individual
mandate after a Virginia federal judge agreed with the state it
was unconstitutional and struck down that part of the law.
The Obama administration has vigorously defended the
measure, set to go into effect in 2014. The president's
Republican opponents are expected to make the issue a theme
during his re-election bid by arguing it is a costly and
unnecessary government expansion.
Virginia passed a law barring the federal government from
making its citizens buy insurance and sued to strike down the
federal law. That prompted tough questions by a three-judge
panel of the Fourth Circuit Court of Appeals on Tuesday about
whether states could pass a law to buck a federal mandate.
"A state could challenge any federal statute in court as
long as the state passed a law?" asked Judge Diana Motz. All
three judges hearing the case were appointed by Democrats,
including two by Obama.
Basic provisions, timeline for health law [ID:nN06300560]
Lawsuits challenging healthcare reform [ID:nN09242345]
Another judge, Andre Davis, who was appointed by Obama,
questioned whether it would open the floodgates to states
challenging all sorts of laws, including the Social Security
retirement program and sending troops off to war.
Lawyers for Virginia countered that it was well within the
state's rights, arguing that the healthcare law threatened its
sovereignty and that the state legislation was an attempt to
protect its citizens.
"The flip side is that a state can't sue ever," Duncan
Getchell, solicitor general for Virginia, told Motz, who was
appointed by former President Bill Clinton. "I don't know why
it's a low trick to pass a law."
The case is the first to reach oral arguments at the
appeals court level, and experts have said a ruling -- expected
in months -- could influence other pending challenges to the
law, including a June 8 hearing by another appeals court.
The law passed by a narrow Democratic majority last year
was a major victory for Obama, one that the Republican Party is
working to undo in the courts, statehouses and Congress.
The Obama administration's top appellate lawyer, acting
U.S. Solicitor General Neal Katyal, told the appeals court that
permitting Virginia's lawsuit would inject the states into the
federal courts over "abstract political disputes."
So far, two federal judges have struck down the so-called
individual mandate, while several others have upheld it,
including one challenge by Liberty University in Virginia which
was founded by conservative evangelical Jerry Falwell.
The school appealed and the court also heard arguments in
that case. They centered on whether Congress exceeded its
authority by imposing a purchase mandate or whether lawmakers
were simply regulating how they paid for healthcare.
"This is quintessentially economic," said Katyal, noting
that at some point all Americans receive healthcare services
and that the law was merely regulating when they paid. The
penalty for not buying insurance is imposed on tax returns.
A lawyer for Liberty University argued that the mandate
"goes far beyond the outer limits" of the U.S. Constitution
because it tries to regulate economic inactivity -- a conscious
decision by Americans not to buy insurance.
"They want to be left alone," lawyer Mathew Staver told the
Judge Davis countered that people who do not have health
insurance can be hit by accidents and illnesses.
"Is it your submission that Congress has no power to
address, in the aggregate, what we know happens every day in
this country?" he asked.
More than 50 million people in the United States do not
have health insurance, and nearly 2 million of the uninsured
are hospitalized each year, according to a report released on
Tuesday by the U.S. Department of Health and Human Services.
The three judges kept close counsel on which way they were
leaning in that case but questioned both sides vigorously.
The 11th Circuit Court of Appeals on June 8 will weigh the
administration's appeal to a decision that struck down the
entire healthcare law as sought by 26 states. The Supreme Court
could hear one of the legal challenges as early as this year.
(Editing by Vicki Allen and Mohammad Zargham)