The Fifth Circuit ACA Case: The Good, the Bad, and the Ugly
The plaintiffs' quarrel is with the statute book, not the defendants.
Josh and Ilya have already analyzed the Fifth Circuit's ACA opinion; I'll add three more points.
1. The good. The decision is a real step forward on severability. It's rightly skeptical of the claim that the 2017 Congress, when it dropped the mandate penalty to $0, feared the entire 900-page statute would crumble unless people felt compelled to buy insurance anyway. In particular, the court noted that the 2017 Congress "was able to observe the ACA's actual implementation," so it wasn't bound by an earlier Congress's assumptions of how important the mandate would be. The district court should never have found the entire statute inseverable, and sending the case back down for a redo is a good result.
(There's much more to be said about the government's incoherent position on severability. The DoJ maintains that the statute is wholly inseverable—that no part of the Patient Protection and Affordable Care Act of 2010, Pub L. No. 111–148, 124 Stat. 119, is actually valid law—and also that U.S. attorneys may still bring criminal prosecutions for false-statement offenses created solely by that Act. The enforce-what-you-claim-isn't-law approach was wrong when the Obama administration did it in Windsor, and it's wrong when the Trump administration does it here. The government says the judgment in this case should only address the plaintiffs' injury, and not unrelated things like false-statement offenses; but the issue is the legal position of the United States, not the scope of this particular judgment. If the statute really is inseverable, then the criminal defendants all can make the same arguments the government does here, and on the government's view they ought to win.)
2. The bad. The decision is a step backward on individual standing. There's a lot wrong with modern standing doctrine, but the court's individual-standing analysis takes us further down the wrong road. The opinion, as Josh describes, argues that the plaintiffs really are disadvantaged by the mandate: they're legally obliged to buy insurance when they don't want to. I don't disagree; people ought to take their legal obligations seriously, even if there aren't any penalties attached. (NB: if anyone were ever injured as a proximate result of the plaintiffs' failure to carry health insurance, this breach of legal duty might be held negligence per se.)
But the Fifth Circuit was asking the wrong question. It asked whether the plaintiffs need protection from the statute, when it ought to be asking whether they need protection from the defendants. After all, the defendants in this case are the United States and various agencies and government officials. Putting sovereign immunity issues aside, what exactly are the plaintiffs afraid that the IRS or the HHS Secretary will do to them? Sue them for $0? Charge them an extra $0 in taxes? I can't remember who'd first used this line, but it strikes me that the plaintiffs' quarrel is with the statute book, not with the defendants.
Elsewhere the court cites Jonathan Mitchell's great paper on the "Writ of Erasure" fallacy. Mitchell explains that courts don't really 'strike down' statutes, stripping them out of the U.S. Code. They simply decline to apply invalid provisions in particular cases and controversies already before them. So if there's nothing these defendants are going to do to the plaintiffs, there's no reason to award a judgment against them—and no reason to file a declaratory-judgment action if there's no conceivable enforcement action either. (Cf. the Bray/McConnell/Walsh amicus brief.)
The same problem infects the court's state-standing analysis. The state plaintiffs say their employees' compliance with the mandate increases their costly reporting obligations. That may be true, but what do these defendants have to do with it? What the states seem to want from the court is a really reassuring advisory opinion, one that would convince their employees that it's safe to ignore the mandate. But that doesn't make the opinion any less advisory. My civ pro students would really have liked a court's reassurance about Hanna and Shady Grove in time for their exam, but that's not grounds for a lawsuit.
3. The ugly. The decision should have done more, in this highly controversial case, to stay above the political fray. Consider footnote 3 and accompanying text:
Other reforms sought to lower the cost of health insurance by using both policy "carrots" and "sticks."[FN3]
[FN3]: Some opponents of the ACA assert that the goal was not to lower health insurance costs, but that the entire law was enacted as part of a fraud on the American people, designed to ultimately lead to a federal, single-payer healthcare system. In a hearing before the House Committee on Oversight and Government Reform, for example, Representative Kerry Bentivolio suggested that Jonathan Gruber, who assisted in crafting the legislation, had "help[ed] the administration deceive the American people on this healthcare act or [told] the truth in [a] video . . . about how [the Act] was a fraud upon the American people." Examining Obamacare Transparency Failures: Hearing Before the H. Comm. on Oversight and Government Reform, 113th Cong. 83 (2014) (statement of Rep. Kerry Bentivolio).
I don't really know what this fraud allegation is doing there, other than to advance a policy argument—and that's putting it mildly—against the ACA. The allegation is given no legal significance in the opinion, and it plays no role in the court's subsequent reasoning. (Footnote 5 adds a similar "Opponents … argue" paragraph, this time on the "If you like your doctor, you will be able to keep your doctor" claim.)
I happen to believe the ACA has a lot of problems. But in a case with major policy consequences, courts should be especially careful to stick to the law and not to venture into the policy dispute. The legal question is whether Congress was allowed to enact the ACA, not whether it was wise to do so. In that context, the Fifth Circuit's footnote strikes me as unfortunate, even injudicious.