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Affordable Care Act

On the Eve of Argument in California v. Texas

Some things to listen for when the Supreme Court hears oral argument in the latest Affordable Care Act case.

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Tuesday morning the Supreme Court will hear oral argument in California v. Texas, the seventh* Affordable Care Act case to reach the Supreme Court. This case, like the first one (NFIB v. Sebelius) focuses on the individual mandate, but also seeks to invalidate as much of the law as possible. Specifically, the plaintiffs claim that Congress' decision to zero out the tax penalty for failing to obtain qualifying health insurance has rendered the individual mandate unconstitutional, and that the entire ACA must be invalidated because the rest of the law is inseverable from the mandate. As regular VC readers know, I think much less of this case than prior challenges to the ACA or its implementation (my prior posts are linked below). In this post, I want to highlight some things to pay attention for in the oral argument.

The California v. Texas argument, like all Supreme Court arguments these days, will be telephonic. The advocates and justices will not be in the courtroom at One First Street. Instead, they will be on the phone. One consequence of this is that the justices will question the advocates seriatim, with each justice having an opportunity to question each attorney. This allows for more thorough questioning, but comes at the expense of the give-and-take that occurs at traditional arguments. It also means that it can be harder to gauge the views of individual justices based upon where they focus their questions.

The order in which the attorneys will argue also means that the most important exchanges may happen at the end of the argument. First up will be the ACA's defenders, the intervenor states (California, et al.) and the House of Representatives, followed by the Solicitor General and the plaintiffs. This means that we might not know whether the justices are concerned about issues like standing until an hour or more in.

Speaking of standing, whether any of the justices see an Article III standing problem is definitely worth paying attention to. As I noted in this post, it is not clear how anyone has standing to challenge an unenforced and unenforceable statutory provision. Contrary to standard practice, the Department of Justice ignored the standing problems, and the lower courts offered cursory and unconvincing arguments in support of standing.

Concluding that the plaintiffs lack standing would be a relatively easy way for the justices to dispatch of this case. It also might provide the Chief Justice with an opportunity to recalibrate, and narrow, the law of standing, perhaps even curtailing the doctrine of "special solicitude" for state standing claims. On the Seventh Circuit, Justice Barrett showed some interest in standing too, so we may get a glimpse whether she shares her mentor, the late Justice Scalia's concern about the need to police the bounds of Article III.

Another issue to pay attention to is how the justices characterize the mandate itself. If the Court concludes the plaintiffs have standing, the next question is whether the ACA still imposes any obligation to purchase qualifying health insurance on anyone, now that Congress has zeroed out the penalty for noncompliance. In NFIB v. Sebelius, the Chief Justice infamously concluded that the minimum coverage requirement was written as a mandate but operated as a tax. Now that there is no financial penalty, it no longer operates as a tax. So does this mean its a mandate? Or is it nullity? Or is it a tax for which the required payment is zero? Insofar as the justices ask about the mandate itself, pay attention to how they characterize the relevant ACA provision, and the implications of NFIB for the law today. Along these lines, do not be surprised if some of the justices challenge the intervenor states for (in effect) arguing that a mandate to purchase health insurance is constitutional notwithstanding NFIB -- and don't read too much into any such questioning, as resolution of this question need not have much bearing on the ultimate outcome of the case.

If the Court concludes plaintiffs have standing and the mandate, such as it remains, is unconstitutional, the justices will have to decide whether the rest of the ACA is severable from the mandate. Along with Abbe Gluck, Nicholas Bagley and Ilya Somin, I submitted a "strange bedfellows" amicus brief arguing that the mandate is severable from the rest of the Act under existing standing doctrine and plausible alternatives. We argue that this is the case whether one looks at what Congress would have intended or whether the ACA can operate without a mandate, as well as under a more minimalist or originalist approach to severability.

I would be quite surprised if a majority of the Court thinks the severability question is particularly difficult in this case, but it will be interesting to see whether any of the justices evince any sympathy for the plaintiffs' severability arguments nonetheless. It will also be interesting to see whether any of the justices signal their dissatisfaction with current severability doctrine. Justices Thomas and Gorsuch have expressed an interest in returning to first principles in this area, so pay attention to whether they express such views at argument. If so, do not be surprised if someone notes that in Marbury v. Madison, the Court held the offending portion of the Judiciary Act was not judicially enforceable, and did not even consider whether any other part of the Act needed to fall.

Another issue to look out for is the question of statutory jurisdiction flagged in this amicus brief by co-blogger Sam Bray, occasional VC guest poster Michael McConnell, and Kevin Walsh. While their argument has not been embraced by any of the parties, It does provide an alternative jurisdictional off-ramp should the justices wish to take it.

The case will formally be submitted at the close of argument. The justices will cast their initial votes, and opinions will be assigned, at Friday's conference. An opinion can be expected no later than June of 2021, but do not be at all surprised if we see something sooner. It's quite common for cases argued in November to be released in February or March, particularly if (as I suspect will be the case here) the Court is not closely divided.

I will post during or shortly after the argument's conclusion. In the meantime, for those interested in my prior commentary on this case, here is a list of my prior VC posts on the case, and a few NYT op-eds with Abbe Gluck.

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* For those keeping track, the prior cases are NFIB v. SebeliusKing v. Burwell, the three contraception mandate cases (Hobby Lobby, Zubik, & Little Sisters) and the risk corridor case (Maine Community Health Options v. United States). Thus, California v. Texas is the seventh ACA case to reach the High Court, and it will not be the last.

NEXT: Standing to Challenge the Individual Mandate

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  1. I am still confused how severability can be in question.
    The inclusion of a severability clause was widely reported as the bill was discussed (as much as it was discussed out of closed doors. Since a severability clause was deliberately left out, it should stand or fall as a whole. That was the stated political position at passage, that it was ALL needed (esp the 'fee that identifies as a tax').

    1. "fee that identifies as a tax" -- Roberts was ahead of his time. A bit better phrasing and he'd have been famous 🙂

    2. Basically they were playing a game of chicken with the Court, daring them to strike down the entire thing, since they couldn't strike down just part of it.

      And Roberts chickened.

  2. I have a simple semi-OT question. If a tax reduced to zero is no longer a tax, what about someone whose income, for IRS purposes, results in zero tax? Can they refuse to file? I know nothing about the tax code. It might be perfectly legal to not file is you don't make enough. Then there are credits for low-income filers, so most people would want to file anyway. And it's probably unlikely that the IRS would take someone to court for not filing a zero tax return.

    Probably just a silly question.

    1. Not a silly question. Yes, you need to file if you want to avoid an audit. If you don't mind IRS harassment enforcement actions compelling you to produce evidence of no income, feel free to not file.

      1. Filling is not mandatory if you have no income. The IRS is only going to hit you with an audit if they have some evidence of hidden income (such as you are visibly spending lots of money). They do not go around threatening homeless people with legal action for not filling income tax returns.

  3. Will the clingers attack universal health care as unconstitutional, relying on such authority as Real Americans v. Communism, Sovereign Patriot Citizens v. Socialism, and Republicans v. Anything That Could Help Black People?

  4. One argument that the whole law needs to fall is that it cannot function without the individual mandate. However it seems to have been functioning for some time without any penalty for not obeying the mandate.

    I'm not a lawyer but that seems to indicate the law can function without a mandate at all.

    The question then becomes what is the basis of Congress's authority to pass the law in the first place?

    1. I think "functioning" is all relative and a matter of opinion :-O

      1. Well, if a State thinks that its health insurance markets have been rendered non-functioning as a result of ACA reforms like community rating and guaranteed issue operating without an individual mandate, that State can enact an individual mandate (win-win, in these Covid times, that also gets revenue for the State budget). So Texas and other States that haven't enacted an individual mandate apparently view the health insurance market as functioning.

  5. Why does it matter what the congress that passed the PPACA thought about severability? The congress that reduced the "tax" to zero did not repeal the act. Expressio unius, no? Seems that the congress that reduced the "tax" to zero was fine with PPACA continuing without the penalty supporting the mandate.

    On the other hand, if the court decides to reconsider the act as originally written and rejects the CJ's odd "tax" holding then they just might trash the whole thing.

  6. Justices Thomas and Gorsuch have expressed an interest in returning to first principles in this area, so pay attention to whether they express such views at argument. If so, do not be surprised if someone notes that in Marbury v. Madison, the Court held the offending portion of the Judiciary Act was not judicially enforceable, and did not even consider whether any other part of the Act needed to fall.

    The idea the the Court might rule that a mandate that already has no enforcement mechanism is not “judicially enforceable” just underlines the basic silliness of this case.

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