Strange Bedfellows Join on Severability in the Latest ACA Case

There's room for reasonable disagreement on many aspects of the latest ACA litigation, but the severability question should be clear.

The latest lawsuit against the Affordable Care Act is clever, but ultimately underwhelming, for reasons I explained here (and in this teleforum debate).

As a practical matter, the central issue in the case is severability -- whether the alleged unconstitutionality of an individual mandate with no tax penalty attached requires the invalidation of other portions of the law. For the reasons I explained in my prior post, the answer to this question should be "no." Congress reduced the "tax" on failing to obtain qualifying health insurance to zero and left the remainder of the ACA in place. This gives courts no warrant to strike out other provisions of the law that Congress left in place.

Although the Department of Justice accepted that some portions of the ACA are inseverable from the emasculated mandate, there does not appear to be much disagreement among academics. This morning, five of us filed an amicus brief in Texas v. United States explaining why the severability arguments advanced by both the states and DOJ are without merit. The other signatories to the brief are Nicholas Bagley, Abbe Gluck, Ilya Somin, and Kevin Walsh -- a group not known to agree on much with one another, particularly on the ACA. If this set of strange bedfellows can agree on the severability question, that should tell you something.

Here is a brief summary of our argument:

The cornerstone of severability doctrine is congressional intent. Under current Supreme Court doctrine, a court must offer its best guess on what Congress would have wanted for the rest of the statute if a single provision is rendered unenforceable. But this guessing-game inquiry does not come into play where, as here, Congress itself has essentially eliminated the provision in question and left the rest of a statute standing. In such cases, congressional intent is clear—it is embodied in the text and substance of the statutory amendment itself. Under these circumstances, a court's substitution of its own judgment for that of Congress would be an unlawful usurpation of congressional power and violate basic black-letter principles of severability. Yet that is what the plaintiff States and the United States invite this Court to do.

And here is how we conclude:

Although views on the merits of the ACA as a matter of law and policy vary widely, those positions are irrelevant to severability. When a court finds a portion of a statute unconstitutional and considers what that means for the rest of the law, fundamental questions of separation of powers and the judicial role are implicated. For that reason, courts have always been rightfully cautious when considering severability, homing in on any available evidence of congressional intent and seeking to salvage rather than destroy. If courts invalidate an entire law merely because Congress eliminates or revises one part, as happened here, that may well inhibit necessary reform of federal legislation in the future by turning it into an "all or nothing" proposition.

The positions of the United States and the plaintiff States here get severability exactly backward. They disregard the clearly expressed intent of Congress and seek judicial invalidation of statutory provisions that Congress chose to leave intact. Accepting their invitation to rewrite the ACA under the guise of "severability" would usurp Congress's role and inject incoherence into this critical area of law.

A full copy of the brief may be found here.

As I tried to explain in my prior post, the DOJ's approach to severability (and, as I'll detail in another post, its approach to standing) are more concerning and unusual than its refusal to defend the constitutionality of an unenforced and unenforceablle mandate. In the WSJ, Sai Prakash and Neil Devins make the case that DOJ's refusal to defend a legal provision many in the Administration believe is unconstitutional. They write: "The Justice Department's filing turns not on some independent executive judgment about the ACA but on a straightforward interpretation of the Supreme Court's 2012 precedent." Yet, as they also note, the DOJ's position on severability is "more tenuous."

The DOJ's approach to severability in this case is unmoored from current doctrine. It is also a bit careless. As Nicholas Bagley notes, the DOJ brief targets the relevant provisions of the U.S. Code, rather than the ACA itself (Public Law 111-948). As a consequence, it could actually invalidate more than the individual insurance market reforms Congress adopted in 2010. It's almost as if those who wrote the brief did not fully understand the ACA and how it integrates with other federal laws governing health insurance -- or perhaps the brief was the result of a political imperative not to be seen as defending the ACA, rather than a careful consideration of the relevant legal rules.

Comments

[Al S]

"In such cases, congressional intent is clear?it is embodied in the text and substance of the statutory amendment itself"

It certainly is not clear to me that changing a tax rate (in a tax bill!) is conclusive evidence of Congress's intent with respect to the guaranteed issue and community rating mandates.

Could be evidence that Congress was interested in, you know, reducing taxes at the time they changed the tax rate, not dealing with health insurance regulatory issues.

As one of my old law professors used to say, if you have to tell people something is clear, it's probably not.

[Josh R]

As I said in an earlier thread, Congress's intent on guaranteed issue and community ratings wasn't made clear by setting the tax penalty to $0. It was made clear by leaving those two regulation intact and unchanged.

[TwelveInchPianist]

But it also left the mandate, and the non-severability finding intact.

[Al S]

Except for the tax laws changed by the tax bill, Congress left the entire remainder of the US Code unchanged.

I don't think it's clear that the entire Congress supports the entire remainder of the US Code just because it didn't repeal some provisions in the tax bill.

[Josh R]

No one is claiming that the entire Congress supports guaranteed issue, community ratings or the rest of the US code. But Congress, the institution speaking for the majority of its members, does.

[ReaderY]

That which Congress has severed it necessarily found to be severable, even if a previous Congress, in enacting a previous version of the law, found otherwise. Elections matter. A new Congress has the right to change its priorities, findings, and policies.

[Lee Moore]

But as TiP tirelessly points out, Congress didn't sever the mandate. It kept both it, and the finding of its essentialness to the regulatory scheme, intact. You might better say "that which Congress has found to be essential (ie non severable) and has left in place, is necessarily found to be non severable.

You severers don't seem to realise that you cannot rely on formalism. You lose on formalism. You have to make some kind of appeal to common sense, reasonableness, policy, the children, whatever, Formalism kills your argument.

[ReaderY]

In addressing sever ability, the Court's job is solely to determine Congress' intent, which here could not be plainer. It is not the Court's business to form its own opinion as to whether it thinks a severed provision should have been severed or not. It is Congress's job, not the Court's, to make decisions about which policies are workable and which aren't.

[TwelveInchPianist]

Well, fortunately for the court, Congress made its intent clear in the text of the statute, as amended.

The statute contains findings that the mandate is an essential component of the regulatory scheme. And statutory text, if unambiguous, is not just evidence of Congressional intent, but the very manifestation of Congressional intent. If Congress intended to change its findings when it amended the statute, or to eliminate the mandate, it was free to do so, but it did not.

[TwelveInchPianist]

Currently, the law says that the mandate, with zero penalty, is an essential part of the overall regulatory scheme. I'm not sure why the court would get to second-guess the unambiguous text of a statute. If the text says something, why should it matter whether it got that way by direct passage, or amendment?

[Josh R]

As the amicus brief argues:

By expressly amending the statute in 2017 and setting the penalty at zero while not making other changes, Congress eliminated any need to examine earlier legislative findings or to theorize about what Congress would have wanted.

For you to be correct that the earlier findings are still relevant in determining the intent of the 2017 Congress, we would have to reach the absurd conclusion that the 2017 Congress believes a mandate with a non-zero penalty is not essential to the over regulatory scheme, but a mandate with a zero-dollar penalty is.

[TwelveInchPianist]

No, we just have to believe that the 2017 continues to believe that the mandate is essential, even without the penalty. And we don't have do theorize about what the 2017 Congress would want, the 2017 Congress passed, by amending the ACA, a statute that says that there is a mandate, with zero penalty, and that that mandate is essential.

[Josh R]

If Congress felt that the mandate with a penalty was essential, it wouldn't have zeroed out the penalty.

[TwelveInchPianist]

They think that the mandate is essential. Clearly they don't think that the penalty is essential.

[Josh R]

And that strikes me as absurd because a mandate without a penalty is not de facto a mandate.

[Lee Moore]

Of course it is, it's a mandate carrying the opprobrium that if you don't obey it you are a law breaker. Moreover. believe it or not there are still actually some folk who have persuaded themselves that they ought to obey the law because it's the law, not merely because they fear the legal consequences. Even if they think there's no chance of getting caught. Back in the day, those sort of folk used to be called "good citizens."

[Josh R]

The CBO said, in advance of Congress setting the penalty to $0, an outright repeal and a $0 penalty had virtually the same effect.

[Lee Moore]

I don't think you are answering TiP's point. If TiP is correct that the essentialness of the mandate to the regulatory scheme remains on the face of the amended statute, then why is that not conclusive ? Presumably only on the theory that what Congress actually, formally, does is NOT conclusive evidence of its intention; ie even though it failed to amend the "essentialness" bit of the statute, we must assume that it intended to do so. Because common sense, or whatever.

But if you argue thus, it is absolutely closed to you to argue that Congress' failure explicitly to eliminate the regulatory scheme IS conclusive evidence that Congress intended to keep it. Because you have just argued precisely the opposite in relation to the essentalness of the mandate to the regulatory scheme.

[Josh R]

You are treating findings the same as the operative clauses, but as the amicus brief argues:

A preamble no doubt contributes to a general understanding of a statute, but it is not an operative part of the statute . . . . The operative provisions of statutes are those which prescribe rights and duties and otherwise declare the legislative will

[Lee Moore]

Although I agree that the red states and the DoJ are going to lose on the severability point, I don't think Adler's discussion of "intent" is quite as convincing, or coherent, as he thinks.

"But this guessing-game inquiry does not come into play where, as here, Congress itself has essentially eliminated the provision in question and left the rest of a statute standing. In such cases, congressional intent is clear?"

In fact Congress didn't eliminate the provision in question, it merely "essentially" did so, by reducing the "tax" to zero. The provision is still on the books. But Adler doesn't doubt for a microsecond that Congress' intention was to eliminate the mandate. Consequently in considering intent, he does look behind what Congress actually formally did ? the words in the statute reducing the tax to zero ? to what it "essentially" did ? get rid of the mandate. But why if Congress wanted to eliminate the mandate did it in fact merely reduce the rate to zero? We all know that. Because Senate procedures allowed only that mechanism for "essentially" eliminating the mandate, in the absence of 60 Senate votes. Congress had to choose a particular method of eliminating the mandate based on its procedures.

[Lee Moore]

This is consistent with his later remark : "For that reason, courts have always been rightfully cautious when considering severability, homing in on any available evidence of congressional intent"

Note "any available evidence." If we are entitled to look at Congress' intent using any available evidence ? ie including our knowledge of Congressional procedure ? we can see precisely why Congress sawed away at one leg of a three legged stool, rather than burn the whole damn stool. It only had a saw, it didn't have matches.

Consequently we can't conclude that by sawing away the tax leg, and leaving the other two legs alone, Congress didn't intend to get rid of the whole stool. That may be precisely what Congress intended, but it had to achieve it using the tools it had available to it ? ie reconciliation.

So Adler's "any available evidence" is an uncomfortable mixture of common sense looking past the formalism ? they intended to get rid of the mandate even though that's not actually what they did ; and rigid adherence to formalism ? they couldn't have intended to nuke the whole thing because the formal words only involve a saw and one leg.