Affordable Care Act

On the Eve of Oral Argument in Texas v. U.S.

A quick round up and response to Josh Blackman and Randy Barnett

|The Volokh Conspiracy |

Tomorrow at 1pm Central (2pm Eastern), the U.S. Court of Appeals for the Fifth Circuit will hear oral argument in Texas v. U.S., the latest attempt to invalidate the entire Affordable Care Act in federal court. According to a notice on the court's website, no electronics may be used in the courtroom, but audio of the oral argument should be posted within an hour of its conclusion. (SCOTUS, take note!)

When we last checked in on the case, the Fifth Circuit had requested supplemental briefing on whether the court had appellate jurisdiction to hear the case. Among other things, the court asked the parties to address whether the House of Representatives and blue state intervenors had standing to intervene and, if not, whether that would deprive the court of jurisdiction to hear the appeal.

Last week, all of the parties filed briefs responsive to the Fifth Circuit's request. Of note, none of the parties believe the Fifth Circuit lacks jurisdiction to hear the appeal. This is almost certainly correct. Because the United States continues to enforce the ACA (as its own brief noted), there is still a case or controversy, as there was in Windsor v. United States, in which the Obama Administration refused to defend the constitutionality of the Defense of Marriage Act, but continued to enforce the law. Several of the parties questioned whether the House of Representatives had standing to intervene (and with good reason), but this does not matter for the Fifth Circuit to have jurisdiction both because the federal government is still enforcing the ACA and because (as the plaintiff states conceded), the state intervenors almost certainly have standing as well.

As a consequence of these filings, it would be quite a surprise were the Fifth Circuit to dismiss the appeal for a lack of appellate jurisdiction. Instead, the court will likely dive into evaluating Judge O'Connor's opinion and determining whether the plaintiff states and individuals had standing to bring their initial claim and whether the constitutional infirmity of the individual mandate requires invalidating other parts of the ACA. As my prior posts on this case (indexed below) indicate, I am doubtful the plaintiffs had standing and believe there is no basis in the law of severability—either as originally understood or as currently applied by the Supreme Court—for invalidating any ACA provision beyond the mandate itself.

Over the past few days, my co-blogger Randy Barnett has written several posts (all but one with Josh Blackman) expressing a slightly different view of the case. (See here, here, here, and here.) As I've already blogged on many of the issues raised in these posts, I'll here just offer a few brief comments to supplement what I've blogged before.

First, on the individual mandate itself, I am not sure who Randy and Josh are addressing. I don't think there is much debate that, under NFIB, Congress may not use its Commerce Clause and Necessary and Proper Clause powers to impose an insurance coverage mandate. Insofar as Congress wishes to induce individuals to purchase health insurance, it must use the taxing power—which it did up until 2017. As I noted in my first post on the suit, once Congress eliminated the tax penalty for failing to purchase qualifying health insurance, the mandate became "no more than a hortatory statement buried in the U.S. Code" with no legal effect.

In NFIB, Chief Justice Roberts noted that there was no consequence for failing to purchase qualifying health insurance other than the payment of a tax, and now that the tax has been eliminated, there is no consequence at all. Any suggestion that by zeroing out the tax penalty, Congress somehow resuscitated the mandate itself is absurd. Indeed, Congress lacked the power to take such a step under the reconciliation rules under which the 2017 tax reform was enacted, and it's quite clear no Republican member of Congress saw their vote as an attempt to reimpose the mandate.

It is also a bit odd to claim, simultaneously, that under NFIB "the mandate qua mandate is gone" (as Randy correctly argued in his Florida Law Review article) and that plaintiffs still have standing to challenge the mandate in federal court. If, as Randy argued there, NFIB eliminated the mandate while upholding the penalty as a tax, there is no mandate left to challenge, and certainly no judicially cognizable injury.

Finally, I am puzzled by the repeated suggestion that those critical of Judge O'Connor's ruling are motivated by their fondness of the ACA. As I've noted before, the plaintiffs' legal theory and Judge O'Connor's ruling has been roundly criticized across the political spectrum, including by conservative office-holders, prominent conservative and libertarian academics (including our co-blogger Ilya Somin), and those who have made it their life's mission to see the ACA erased in its entirety. What critics of Judge O'Connor's opinion have in common is not any love for the ACA, but a distaste for flawed and unpersuasive legal arguments.

Whereas many prominent legal thinkers on the Right expressed support for the arguments against the individual mandate in NFIB or against the lawfulness of tax credits in federal exchanges in King v. Burwell, there is a dearth of prominent voices in support of the plaintiffs' theory here. I don't think that's an accident. NFIB and King were grounded in foundational aspects of conservative legal jurisprudence (the notion of limited federal power and textualist statutory interpretation, respectively). Texas v. U.S., on the other hand, is a too-clever attempt at legal jujitsu that requires discarding traditional conservative approaches to standing, statutory interpretation and severability. This is why even those who would love to find a killer argument against the ACA have refused to embrace the plaintiffs arguments, and why I think this effort will ultimately fail, whether before the Fifth Circuit or the Supreme Court.

For more on the case, here are links to my prior writings on this case, both here at the VC and (as indicated) in the New York Times.

University of Michigan law professor Nicholas Bagley, with whom I sparred regularly over King v. Burwell, has also compiled a list of his posts on the case at The Incidental Economist.

Links to the various legal filings in this case, and to much supporting material, may be found here.

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  1. I agree with Professor Adler that the plaintiffs and their allies have not done a great job in this case ensuring that they have standing, but I agree with Professors Barnett and Blackman that they *could* do it. The reason they haven’t established standing is obvious: they’re arguing that the mandate is unconstitutional but no one is impeding them from treating the mandate as unconstitutional by disobeying it. But they *could* establish standing in various ways.

    EXAMPLE I: The Department of Justice has a policy of taking disciplinary action against employees for “failure to pay just debts” to other private parties, and failure to pay for mandatory health care would probably qualify. Various state agencies have similar policies requiring employees to obey the law. Although government employees are often “eligible” for health benefits from their employers at no cost, that does not mean they are required to accept them, and if they do not accept them then they are subject to the mandate.

    EXAMPLE II: If person declines to obey the mandate because of a belief that it is unconstitutional, and also believes that the mandate is not severable from the rest of the ACA so the entire ACA must be unconstitutional as well, and that person consequently incurs a penalty for violating some *other* part of the ACA, then that person should have standing to challenge the mandate because its alleged unconstitutionality is a partial but concrete cause of a serious penalty.

    1. Example I does not work because DOJ attested and SCOTUS concurred that there is no consequence from failing to obtain qualifying health insurance other than paying the penalty, and as written the penalty is zero.
      Example II does not work because, as the Court has indicated repeatedly (and as recently as Gil V. Whitford), standing is not dispensed in gross. It needs to be established for each claim, so standing to challenge one provision of a law cannot be used to bootstrap standing to challenge another provision. Further, severability is a question of remedy. The injury must be tied to the allegedly unlawful provision, not some other provision that could be potentially reached in the remedial phase.

      1. Thanks for the reply.

        Regarding EXAMPLE I, it is indisputable that governmental agencies often have policies for firing scofflaw employees. I even quoted above from such a policy within DOJ. If DOJ attested or implied otherwise, then they were clearly mistaken (as I said above, they “have not done a great job”).

        Regarding EXAMPLE II, I disagree that Gil v. Witford addressed a situation like I described, where a plaintiff violates *both* of the provisions in question. Severability is indeed a question of remedy, but that does not mean it cannot also be a question for other purposes (e.g. a client can sue his lawyer for giving incompetent advice that a statutory provision is not severable and can thus be freely violated by the clent).

      2. There is another solution but it would require the congress to pass a law so that it could be enforced. Insurance is a means of protecting oneself against financial loss. If a person does not want to have pay for health care when it is received a then buy insurance but if a person does not want to pay for health care then when there is a medical problem that person will have to pay for the care. If the person does not pay for the health care then make it like other debt a civil matter and a court case. If he looses the case then the person pays. This debt would remain on the person until it was paid or the person dies. I don’t know if it could be only for health care debt of if all debt would have to fall under this law.

    2. Except failure to pay for health care doesn’t create any debts at all. If it is a debt, it could be enforced in court. This isn’t any more of a debt than not having a child to get the dependency deduction creates the debt of one child.

      1. If the law says, “Emu shall pay $250 per month to Blue Cross for Health Insurance” and you don’t, then that creates a debt, no?

  2. […] Court of Appeals in New Orleans at 2 pm. In anticipation of that argument, Jonathan Adler has a good round-up of the arguments made by both sides in the court and the commentary on the proceedings from other legal analysts. The Court will […]

  3. Maybe this has been covered, but if 2017 tax cut legislation eliminated penalty for not buying health insurance and thus rendered ACA no longer an exercise of tax power, why isn’t remedy to repeal the tax cut (or that portion of the tax cut relating to the individual mandate) rather than repealing the original statute? (And, p.s., would that be funny or what?)

    Related (rhetorical) q – how does president sign legislation that alters an otherwise constitutional statute and now refuse to defend it on the ground that, as amended, it is unconstitutional?

    1. P.S. I know “repeal” isn’t right word — “void” probably better.

  4. “Any suggestion that by zeroing out the tax penalty, Congress somehow resuscitated the mandate itself is absurd” — even if Congress did now add an unconstitutional mandate, so what? Adding an unconstitutional part to an earlier law should not lead to the whole earlier law getting struck, only the new unconstitutional part.

  5. […] implementation, I do not believe this suit has much merit. Over at the Volokh Conspiracy, I have a post summarizing the issues and linking to more detailed analyses. My bottom line: This suit should fail and ultimately will fail, if not before the Fifth Circuit, […]

  6. May I suggest a case as quintessentially on point? The case is Doe v. Duling, 782 F. 2nd 1202. The 4th Circuit refuses to accept a constitutional challenge to Virginia’s fornication law. The plaintiffs produced no evidence they faced a realistic threat of prosecution. And absent a threat of prosecution, what legislatures choose to put on their books does not give rise to an Article III case or controversy, and is no business of the Federal courts.

  7. […] firewall against the political attacks on the ACA. Even some of the law’s most strident critics laughed off these latest legal claims as preposterous. But Republicans didn’t bring this case in just any […]

  8. Isn’t reducing a tax to zero the same thing as repealing the tax?
    We know that a mandate qua mandate is unconstitutional.
    We have been told by Roberts that the mandate is actually a tax.
    The Plaintiffs claim to have bought insurance because they believed that they would be breaking the law if they didn’t.
    I think the way to solve this is for the courts to rule that zeroing out a tax is the same thing as repealing the tax.
    Then, the severability problem goes away, since no court will have invalidated the mandate, but rather will have simply ruled that Congress repealed it.
    Nothing to see here, folks! Move along…

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