Appeals court rules against health care law.

 (CBS)

(CBS/AP)  

Updated at 3:47 p.m. ET

A federal appeals court panel on Friday struck down the requirement in President Barack Obama's health care overhaul package that virtually all Americans must carry health insurance or face penalties.

The divided three-judge panel of the 11th Circuit Court of Appeals struck down the so-called individual mandate, siding with 26 states that had sued to block the law. But the panel didn't go as far as a lower court that had invalidated the entire overhaul as unconstitutional.

"Whatever else this ruling does, it guarantees that the U.S. Supreme Court will take the case and break the dispute that now exists between at least two lower federal appeals courts," according to CBS Radio News legal analyst Andrew Cohen.

The states and other critics argued the law violates people's rights, while the Justice Department countered that the legislative branch was exercising a "quintessential" power.

The decision, penned by Chief Judge Joel Dubina and Circuit Judge Frank Hull, found that "the individual mandate contained in the Act exceeds Congress's enumerated commerce power."

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