Health Care

Another Round of Strange Bedfellows on Severability in Texas v. U.S.

Another amicus brief on severability and the Affordable Care Act.

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Earlier today, I joined three other academics -- Nicholas Bagley, Abbe Gluck, and the VC's own Ilya Somin -- in submitting an amicus brief to the U.S. Court of Appeals for the Fifth Circuit in Texas v. U.S. explaining how Judge Reed O'Connor bungled the severability analysis when concluded that the alleged unconstitutionality of an uneforced individual mandate requires invalidation of the entire Affordable Care Act (ACA). To the contrary, under existing severability doctrine, Judge O'Connor should have left the rest of the law completely intact.

Our brief largely recapitulates the arguments we made in a prior amicus brief below (then joined by Kevin Walsh, who is now on a separate brief focusing on a major jurisdictional problem the plaintiffs' case). Here is the introduction:

Amici's goal in filing this brief is limited. This brief takes no position on whether plaintiffs have a justiciable claim or on whether they are correct that the minimum coverage provision (commonly called the individual mandate) is unconstitutional in light of Congress's reduction to zero of the penalties associated with it. Instead, the brief assumes the answer to both questions is yes in order to reach the question of severability. That question is not debatable under established doctrine—the mandate is severable from the rest of the ACA.

Yet according to the district court, the plaintiffs, and (now) the United States, the entire ACA must fall if the individual mandate is unconstitutional. In their view, a mandate with no enforcement mechanism—eliminated by Congress itself—is somehow essential to the law as a whole. The United States takes that stunning position even though it said just the opposite before the district court, emphasizing that Congress provided "proof of its intent that the bulk of the ACA would remain in place" without the individual mandate. Federal Defendants' Memorandum in Response to Plaintiffs' Application for Preliminary Injunction 18, Dkt. No. 92 (N.D. Tex. June 7, 2018) ("U.S. D. Ct. Br."). Before the district court, the United States had contended that the statute's guaranteed-issue and community-rating provisions alone are inseverable from the individual mandate. In Amici's view, both of the United States' inseverability positions are based on a fundamental misunderstanding of severability.

The cornerstone of severability doctrine is congressional intent. Under current Supreme Court doctrine, when part of a statute becomes unenforceable, a court must ask whether Congress would have preferred what remains of the statute to no statute at all. Typically, it is a court that renders a provision unenforceable. In hypothesizing what Congress would have intended in that scenario, courts will sometimes assess the statute's functionality without the provision as a proxy for discerning legislative intent.

But this case is unusual in all of these respects. It presents no need for those difficult inquiries because Congress itself—not a court—eliminated enforcement of the provision in question and left the rest of the statute standing. So congressional intent is clear; it is embodied in the text and substance of the statutory amendment itself. In these circumstances, a guessing-game inquiry is not only unnecessary—it is unlawful. A court's insistence on nonetheless substituting its own judgment for that of Congress usurps congressional power and violates black-letter principles of severability. Yet that is what the district court did here. Its severability decision should be reversed.

The four of us do not agree on much, particularly where the Affordable Care Act is concerned, but we all agree that the decision below is unmoored from law or contemporary doctrine.

We are not the only amici critical of Judge O'Connor's decision. The Attorneys General of Ohio and Montana -- Dave Yost and Timothy Fox -- submitted a particularly powerful brief explaining how neither existing severability doctrine nor the original understanding of the Article III judicial power can justify Judge O'Connor's analysis. This brief does a particularly good job of explaining why self-described judicial conservatives should object to the decision below.

From the introduction:

The Supreme Court first considered the Affordable Care Act in National Federation of Independent Business v. Sebelius ("NFIB"), 567 U.S. 519 (2012). It did so again in King v. Burwell, 135 S. Ct. 2480 (2015). Both decisions had their critics. Among them, Justice Scalia, who faulted the majorities in NFIB and King for "chang[ing] the usual rules" to protect the Affordable Care Act. King, 135 S. Ct. at 2506 (Scalia, J., dissenting). Each case, he wrote, stood for "the discouraging truth that the Supreme Court of the United States favors some laws over others, and is prepared to do whatever it takes to uphold and assist its favorites." Id. at 2507.

Some agree with these criticisms. Others do not. But no one can disagree that courts should adhere to neutral principles, even in cases involving the Affordable Care Act. Whether those principles support the Act or undermine it is, or at least should be, of no concern. That is what it means to have a government of laws, and not of men.

The District Court below committed the very sin that Justice Scalia decried in King: throwing out all the usual rules in a -case about the Affordable Care Act. See 135 S. Ct. at 2506. The Act's individual mandate—the provision that orders most Americans to buy health insurance—is unconstitutional. The Supreme Court upheld the mandate as a tax in NFIB, reasoning that nothing else in Article I would empower Congress to pass such a law. See 567 U.S. at 561–74. But Congress amended the Act in 2017, eliminating the penalty for refusing to buy health insurance. As a result, the mandate cannot raise any revenue, and therefore cannot be upheld as an exercise of Congress's taxing power.

This raises the question of what to do with the remainder of the Act. Does the mandate's unconstitutionality require striking down the entire law, or is the mandate "severable"? The District Court invalidated the whole thing. That part of its decision cannot be squared with the Constitution's original meaning or binding Supreme Court precedent. As an original matter, the federal courts have no power to "strike down" entire laws; "when early American courts determined that a statute was unconstitutional, they would simply decline to enforce it in the case before them." Murphy v. NCAA, 138 S. Ct. 1461, 1486 (2018) (Thomas, J., concurring). The power to go any further is an invention of the courts, not the Framers.

As a matter of binding doctrine, courts can strike down entire laws based on the unconstitutionality of a single provision. But they may do so only if the remainder of the law is "incapable of functioning independently," or if it is otherwise "evident" that Congress would have preferred no law at all to a law without the unconstitutional provision. Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477, 509 (2010) (citations omitted). This severability analysis usually entails asking about the hypothetical intent of a hypothetical Congress. Not here. Congress's 2017 amendment effectively repealed the individual mandate by reducing the penalty for non-compliance to $0. That effective repeal objectively establishes that the law is capable of functioning without the mandate (it already does), and that Congress would have preferred such a law to no law at all. The mandate is therefore severable, and its unconstitutionality has no bearing on the rest of the Act.

The District Court erred in coming out the other way. It failed to ask whether the now-inoperative mandate is essential to the Affordable Care Act as currently codified. (How could it be?) Instead, it asked whether the original version of the individual mandate—the one that Congress made enforceable with a penalty—was central to the original version of the Affordable Care Act. The Court thus invalidated the current version of the Affordable Care Act by assessing the importance of an earlier version of the mandate to an earlier version of the Act. To describe the approach is to refute it. . . .

This is the rare case that involves constitutional overreach by two separate branches. Congress acted unconstitutionally by enacting the individual mandate and the court below exceeded its power by striking down the Affordable Care Act in full. Assuming anyone has standing to bring this suit—a topic this brief leaves to others—this Court should hold the individual mandate unconstitutional but leave the rest of the Affordable Care Act in place.

As the Yost-Fox brief notes, there are serious standing questions in this case (in addition to the jurisdictional question raised by the Bray-McConnell-Walsh brief). While our brief did not go into the standing issues, I have addressed them previously on this blog here and here, and Nicholas Bagley addressed them for The Atlantic.

The bottom line is that the district court lacked jurisdiction to hear the plaintiff states' claims against the ACA, and once it asserted jurisdiction, the court bollixed the severabiity analysis. It's no wonder even the ACA's most ardent critics refuse to defend Judge O'Connor's decision. Here's hoping the U.S. Court of Appeals for the Fifth Circuit cleans up this mess.