ALSBTALK:

On economics listserv the topic of Obamacare came up.  Imagine, if you will, a spirited debate of constitutional law by economists.  Truth, it seems, comes in many forms.

In that exchange one contributor with a noticeable preference on how the SCOTUS case ought be resolved offered up a recent case while describing that case as ruling unconstitutional an insurance mandate.  If your are interested in the Obamacare debate then you are are sure to encounter this case again and again because someone out there is telling folks it rules unconstitutional an insurance mandate.  However, that proponent of this case's importance appears to not have read the case.  Perhaps that proponent merely googled the words insurance, mandate, unconstitutional.  Who knows.  As noted in detail below, this case, as no surprise whatsoever, says the opposite and really is about something else altogether.  Sigh.

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Thank for the link to the PR case.  Garcia-Rubiera v. Fortuno, No. 10-2507, United States First Circuit, 12/05/2011, A constitutional challenge to Puerto Rico's compulsory auto insurance scheme.  http://caselaw.findlaw.com/us-1st-circuit/1587257.html?DCMP=NWL-pro_injury

Yes, this is an auto insurance case.  No, it is not a case banning mandatory insurance.  It is an auto insurance case that clearly and unambiguously holds that a "State" may mandate purchase of auto insurance coverage.  That is a minor part of this case because that is long settled law.  (Mandating auto insurance purchases is only tangentially related to Obamacare's mandate:  three constitutionally material differences are [i] Police Power versus Commerce Clause; [ii] privilege versus right; and [iii] adverse selection in a context of minimally regulated sellers versus adverse selection in a context of sellers mandated to sell.)  

The major part of this case is its escheat ruling.  It is an escheat case defining the boundary between mere regulation and taking.  It is an escheat case qua taking with a twist of theft by deception practiced by a fiduciary acting under color of "State" law using the deceptive device of grossly insufficient procedural due process in a context where intensive judicial oversight is required under the substantive due process doctrine.  It is a due process case ruling on the sufficiency of notice and the sufficiency of hearing.

From the case's subsection "ii.  What Notice is Required?" note the following sentence.  "In one analogous situation, the Second Circuit has held in a series of cases that New York City's procedure for returning property seized from arrestees failed to meet the minimum due process requirements for notice."  This case would be more apropos precedence in a pension fund diversion case by a "State".

The government's power [a] to mandate the citizen's contribution of the money for the defined purpose of auto insurance; and [b] to collect the mandated contributed money for the defined purpose of auto insurance was challenged by the plaintiffs.  The court expressly rejected that challenge.  In the section "B.  Plaintiffs' Other Federal Claims Fail" you will find this sentence "It is not unconstitutional for the Commonwealth to charge plaintiffs the duplicate fees upfront in order to guarantee coverage, and thereafter take custody of the payments, provided that the Commonwealth also implements a meaningful notice and refund process that complies with due process.".  

What was successfully challenged was the government's power to divert the collected money to purposes other than the defined purpose WHEN USING the means of diversion that did not provide the minimally required notice and the minimally required hearing. 

Recall, WITH DUE PROCESS OF LAW the government is expressly granted the power in the USA Constitution to take you life, to take your liberty, and to take your property.  What is due?  That is this case.

This case actually is relatively "easy" since the legislature made RECENT choices and those recent legislatively choices were DELIBERATE technological CHOICES calibrated to minimize the effectiveness of both the notice and the hearing provided SO AS TO FRUSTRATE the People's due process right(s) WITH  NO EFFORT by the legislature TO SATISFY that/those right(s).  

A far "harder" case would be a "State" making deliberate choices while seeking to provide the required minimum due process with a deliberate effort to satisfy that/those rights, but unfortunately the "State's" good faith efforts --in effect-- provide less than the required minimum (e.g., your run of the mill State restriction of abortion case).  Given judicial deference to legislative authority, how far below the minimum must the "State" fall when the "State" is exercising its right to only provide the minimum --and-- the "State" is striving in good faith to respect the People's right(s)?  Who is the runner to whom ties go?  That is the essence of substantive due process.
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Michael

Professor Michael J. O'Hara, J.D., Ph.D.
Finance, Banking, & Law Department
College of Business Administration
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University of Nebraska at Omaha
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