The United States District Court for the Eastern District of Virginia Issued a Declaratory Judgment Today Finding PPACA’s Minimum Essential Coverage Provision Exceeds the Constitutional Boundaries of Congressional Power
Client Alert | 1 min read | 12.13.10
The Attorney General of Virginia brought suit on behalf of the Commonwealth of Virginia challenging the constitutionality of Section 1501 of PPACA, commonly known as the Minimum Essential Coverage Provision or the Individual Mandate. This provision requires that every United States citizen, unless specifically excepted, maintain a minimum level of health insurance coverage for each month beginning in 2014, or the individual will have to pay a penalty.
The Court found that the penalty operated, in fact, as a penalty rather than a tax necessitating that Congress’s authority to enact the penalty would have to be tied to a valid exercise of the Commerce Clause and the associated Necessary and Proper Clause, rather than the General Welfare Clause. However, the Court found that Congress had lacked the power under the Commerce Clause “to compel an individual to involuntarily engage in a private commercial transaction, as contemplated by the Minimum Essential Coverage Provision.” The Court went on to state that 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.”
The Court ordered that Section 1501 be severed from the remainder of PPACA, but declined to issue an injunction. The ruling does not address any of the remaining PPACA provisions. The issue will now go up on appeal.
Insights
Client Alert | 3 min read | 06.12.26
DOJ Guidance Backs Away From Disparate Impact Liability
On June 9, 2026, the U.S. Department of Justice (DOJ) issued a formal opinion concluding that the Equal Opportunity Employment Commission’s (EEOC) existing interpretations of Title VII of the Civil Rights Act of 1964 (Title VII) disparate-impact liability, including the Uniform Guidelines on Employee Selection Procedures (UGESP), are unconstitutional. According to the opinion, EEOC’s prior interpretations contemplate liability based on disproportionately adverse effects alone, without regard to an employer’s likely intent, rather than treating disparate impact as an evidentiary mechanism to “smoke out” intentional discrimination. DOJ found that this approach functions as a “qualified racial-proportionality mandate” that places “a racial thumb on the scales, often requiring employers to evaluate the racial outcomes of their policies, and to make decisions based on (because of) those racial outcomes.” The opinion fulfills one mandate of Executive Order 14281, which rejected disparate-impact liability insofar as it “creates a near insurmountable presumption that unlawful discrimination exists wherever there are any differences in outcomes among different [demographic groups].”
Client Alert | 4 min read | 06.12.26
Auto Dealers: The FTC Is Back in the Driver’s Seat — Warning Letters Signal Renewed Federal Scrutiny
Client Alert | 13 min read | 06.12.26
Client Alert | 4 min read | 06.12.26
