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BREAKING NEWS: A federal appeals court rules 2-1 that subsidies that helped people buy insurance at healthcare.gov are illegal.

WASHINGTON (Reuters) - A U.S. appeals court on Tuesday threw out a federal regulation that implements key subsidies that are vital to President Barack Obama's healthcare overhaul. The U.S. Court of Appeals for the District of Columbia Circuit accepted one of the main legal challenges to the policy by conservatives opposed to an expansion of the federal government. A three-judge panel returned the case to a lower court with instructions to rule in favor of appellants who had sued to overturn t...

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U.S. man nabbed for smuggling grenade parts

By Rachel Uranga

MEXICO CITY (Reuters) - Mexican police arrested a U.S. man accused of trafficking grenade and gun parts to one of the country's deadliest drug cartels in a sign the gangs could now be making their own weapons, authorities said on Tuesday.

Federal police captured Jean Baptiste Kingery last week at a house in the Pacific tourist town of Mazatlan in Sinaloa state, where they seized a small cache of guns and found a Hummer sports utility vehicle parked outside.

Law enforcement officials accuse Kingery of delivering parts used to make grenades and firearms, some bought at stores and online in the United States, to the Sinaloa cartel, headed by Mexico's most wanted man Joaquin "Shorty" Guzman.

Kingery's capture raises the possibility powerful cartels are manufacturing weapons inside Mexico and not just smuggling arms from the United States, the attorney general's office said.

Drug gangs frequently use grenades and automatic weapons in an escalating battle between rival gangs and against law enforcement that has claimed more than 42,000 lives since late 2006 when President Felipe Calderon launched a war on traffickers.

As part of the sweep that netted Kingery, Mexican police also found gunpowder, grenade pins and other components to assemble firearms in several different houses in Sinaloa state, home to the dominant drug cartel with the same name.

The arrest is part of an ongoing operation with U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) agents which led to the arrest of another American gun runner last month.

The Obama administration recently announced a major shake-up at the U.S. agency after it botched an operation to track smuggled guns into Mexico, known as "Fast and Furious," that allowed weapons to flow freely over the border.

(Editing by Tim Gaynor and Jerry Norton)

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