The arguments are based on the Commerce Clause, the Necessary and Proper Clause, and General Welfare Clause of the Constitution, which I reproduce here:
[The Congress shall have Power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes
The Congress shall have Power – To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
Here’s the gist of the ruling:
The Necessary and Proper Clause coupled with the Commerce Clause lets Congress enforce any law assisting in the enforcement regulation of interstate commerce. However, it does not allow Congress to enforce any law necessary to make a certain regulation have a certain effect.
So, Congress has the authority to do whatever is necessary to enforce the “preexisting conditions” coverage mandates on insurers, but if that makes the market “implode” as Kathleen Sebelius’ representation argued it would in the absence of an individual mandate, that doesn’t give Congress an excuse to implement an individual mandate not otherwise allowed by the Commerce Clause. Enforcing the individual mandate may help the market function better when the other, constitutionally-allowed regulations are simultaneously in place, but that has nothing to do with the actual enforcement of those other, constitutionally-allowed regulations. Hence, the Necessary and Proper Clause cannot be used to argue for the constitutionality of an individual mandate as a necessary component for “carrying into Execution” the Commerce Clause regulations.
Additionally, the ruling states that the Secretary’s suggestion that an individual’s inactivity on health care inevitably leads to economic activity later on “lacks logical limitation” and “could apply to transportation, housing, or nutritional decisions,” putting it outside the realm of Commerce Clause jurisprudence.
Finally, the mandate is not allowed under Congress’ power to lay taxes, because it is structured as a penalty, not a revenue-gathering measure. If this measure were to work perfectly, then it would generate zero revenue, as everyone would avoid it by buying health insurance. The Secretary made exactly this argument with regards to her Commerce Clause defense. Hence, it cannot be construed as a tax, must be considered a regulatory penalty, and is not allowed through the General Welfare Clause.
So there you have it. That is why a Virginia Federal Judge has ruled the individual mandate unconstitutional.
On a side note, I also would like to call attention to this line:
“The unchecked expansion of congressional power to the limits suggested by the Minimum Essential Coverage Provision would invite unbridled exercise of federal police powers.“
While making this exact same assertion over the past year, I’ve been called crazy, a reactionary, a nutjob, a racist teabagger, a violator of Godwin’s Law, etc. And now a Federal judge who has reviewed this case extensively is coming to the same conclusion. I don’t think people realize how the entire idea of constitutional limits on federal power resides on this case.