The Volokh Conspiracy

Mostly law professors | Sometimes contrarian | Often libertarian | Always independent


Filed today: New brief in Sissel v. HHS Origination Clause challenge


Earlier today Erik Jaffe, Lawrence Joseph, and I filed an amicus brief on behalf of Texas Senators John Cornyn and Ted Cruz in support of the motion by the Pacific Legal Foundation for rehearing en banc by the DC Circuit Court of Appeals of the ruling by a three judge panel that dismissed its Origination Clause challenge to the Affordable Care Act. Last week, "upon consideration of the petition for rehearing en banc," the full Circuit on its own motion ordered the Federal Government to file a response to PLF's petition within 15 days. As PLF attorney Paul Beard observed here, "An order calling for a response to a rehearing petition is rare and, at the very least, means that some members of the Court are taking the petition seriously."

In our amicus brief, we identify a serious error made by the panel when interpreting the Origination Clause that prevented it from reaching many of the most important Origination Clause issues presented by the ACA. Let me explain.

The Origination Clause, U.S. CONST. art. I, § 7, cl. 1, states that "[a]ll Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.." PLF contended that, once the Supreme Court in NFIB v. Sebelius upheld the "shared responsibility payment" solely as a tax, rather than as a penalty enforcing a mandate to buy insurance pursuant to the Commerce Clause, it raised a new constitutional objection. Because the ACA originated in the Senate, and not the House, it violated the Origination Clause. PLF also denied that the ACA was a proper "amendment" of the House bill that was totally gutted by the Senate and replaced with the text of the ACA.

But the DC Circuit Court of Appeals panel never reached most of these issues because it ruled that the ACA was not a bill "for raising revenue" and therefore the Origination Clause simply did not apply. The panel did so on the ground that the primary "purpose" of the ACA was not "to raise revenue," but was to induce people to buy insurance and provide affordable health care to Americans; so that its revenue raising effect was merely "incidental" to this purpose.

Of course, the Senate obviously considered the ACA to be a bill for raising revenue as evidenced by the fact it used the "shell bill" maneuver of taking a House bill that it thought (inaccurately) to be a bill for raising revenue and then "amending" it by striking out every single word of the bill, including the title, retaining only the House bill number. The panel reached the different conclusion that the Senate was wrong to think the gut-and-replace maneuver was necessary because, in the panel's view, the ACA was not a bill for raising revenue in the first place.

In our 8 page amicus brief, we focus on a most serious error in the panel's analysis that has the functional consequence of eliminating the Origination Clause from the Constitution: its mistaken reading of the text, original meaning and precedent to conclude erroneously that the ACA was not a bill for raising revenue because the principal "purpose" of the shared responsibility payment in particular or the ACA as a whole was to achieve affordable health care rather than add to the coffers of the treasury.

We explain that prior references to the "purpose" of the statute were actually references to constitutional objects or purposes. So if the purpose of a monetary exaction was to enforce a commerce clause regulation—e.g. by a monetary fine or penalty—or would have been within the commerce power of Congress, the fact that the exaction revenue "incidentally" contributes money to the treasury does not make it a bill for raising revenue. BUT, if the monetary exaction is justified only as a "tax" under Congress's power to tax, then it necessarily must be a bill for raising revenue. In sum, "a bill that imposes a tax, under the sole authority of the taxing power, is necessarily a bill for raising revenue. Only when a measure is upheld pursuant to some other constitutional power is it warranted to characterize the money it may raise as 'incidental' to another object or 'purpose.'"

Here is a longer excerpt:

Were the motive or policy goals of a bill the touchstone, no revenue measure would ever be subject to the Origination Clause. Amici's Senate colleagues surely could articulate a broader "purpose" in raising whatever funds they deem required. The income tax could easily (and largely truthfully) be characterized as a bill to provide for national defense and foreign diplomacy, or to facilitate any other federal program. No tax is levied to raise money for its own sake, and all monies raised are "incidental" to other government goals. Under the panel's approach, the Origination Clause would be toothless.

The panel decision is particularly troublesome when combined with its broad view that the taxing power may be exercised regardless of any regulatory purpose that may be beyond Congress' authority, and regardless whether the revenue purpose is secondary. This combination leads to a constitutional whipsaw whereby otherwise unconstitutional regulatory measures are deemed taxes yet are immunized from the Origination Clause, despite whatever revenue-raising function justified them as taxes for constitutional purposes.

Not only is such a Catch-22 contrary to the original meaning of the Origination Clause, neither does it fit the pattern of any prior case rejecting an Origination Clause challenge. In every prior case there existed constitutional authority independent of the tax power to to enact the monetary exaction that was upheld. In each case, those money-generating provisions were simply a means of implementing a separate Congressional power.

In this case, with an exclusive reliance on the taxing power, the shared responsibility penalty was constitutionally justified solely as a revenue-raising tax. Courts may not look behind the constitutional "object" or purpose for this measure to any other motives that Congress may have harbored. Congress may exact money for a variety of constitutional ends, but when it attempts to achieve these ends by using its power to tax the people, such a measure is a bill for raising revenue that must originate in the House.

Of course, en banc review is rarely granted by the DC Circuit, but given that it recently granted the government's motion for en banc review of the statutory interpretation case of Halbig v. Burwell presumably because of the importance of the ACA, the case for correcting a mistaken constitutional interpretation is even more important, especially as the panel's reasoning has the effect of completely gutting the Origination Clause from the Constitution in the same way the Senate gutted the House bill. Regardless of whether the ACA was a proper "amendment" by the Senate, courts are not empowered to amend the Constitution in this way.

[some typos corrected]