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Affordable Care Act

Live Blogging California v. Texas (Updated)

High points and low points of today's oral argument in the latest Affordable Care Act case. (Updated with some summary conclusions.)


Today the Supreme Court hears oral argument in California v. Texas. In this post I am live blogging the oral argument, identifying questions and responses that are interesting or potentially important. My last case preview and prior posts on this litigation are available in this post from last night.

Note that the justices question the advocates seriatim, so it is more difficult to know how justices are leaning, as they will all probe both sides. That said, upon the conclusion of the argument, it appears there are at least five votes to uphold the ACA. Both the Chief Justice and Justice Kavanaugh expressed profound skepticism of the inseverability arguments. This is not surprising.

Another significant takeaway from the argument is that several of the justices are quite interested in the standing question. Most of the questions posed to the intervenor states at the outset concerned standing, and the justices returned to the issue repeatedly. Some were quite skeptical of the standing claims, and were puzzled by the Department of Justice's acquiescence to standing through alleged inseverability. If the Court decides this case on standing, however, it will likely require votes from both liberal and conservative justices, with an eye toward how such a ruling will affect the doctrine in future cases.

What follows  (below the jump) is my summary of the argument as it was occurring.

First up is California Solicitor General Michael Mongan, on behalf of the intervenor states seeking to defend the ACA, stressing that the individual mandate does not operate as a mandate, but rather offers a choice, as the Court had concluded in NFIB v. Sebelius.

Chief Justice opens questioning with standing: Does someone who fails to purchase insurance violate the law? No, says Mongan. What if they later apply for a job and are asked whether they have ever violated the law? No one has made such a claim of injury here, notes that relevant precedent requires a prospect of enforcement. Standing is on the Chief's mind (as it appears to be on the minds of others).

Justice Thomas follows up on standing questions, wondering whether opprobrium from failing to follow the law might be sufficient to establish standing. As Mongan notes, no such claim was alleged here. No such harm has been asserted. Justice Thomas also raises question of how standing, statutory interpretation, and severability should interact.

Justice Breyer asks about the Department of Justice's theory of standing. Mongan notes this is a "novel" theory of standing that would enable all sorts of litigants to use the alleged infirmity of the mandate to challenge any other part of the law they don't like, e.g., restaurants could use this theory to challenge the calorie count disclosure requirements.

Justice Alito turns to state theory of standing, asking whether they could seek a declaratory judgment. As Mongan notes, the provision  Texas cites as its alleged injury is a separate provision of the statute, not the mandate, so does not establish standing to challenge the mandate. Justice Alito pushes back a little, but Mongan holds to his position, nothing that Texas has not alleged any argument about why the provisions that allegedly harm Texas are themselves unconstitutional.

Justice Sotomayor helps Mongan underline the point, and then asks for best argument that the mandate, Section 5000A, is not a command. Mongan obliges, and they have a back and forth on whether 5000A actually mandates than anybody does anything. Mongan further notes Texas offered no evidence that amendment to Section 5000A imposes any additional costs on Texas, as is required of parties claiming standing at summary judgment.

Justice Kagan keeps the discussion on standing—the Court really seems to care about this. She asks whether Texas can assert standing on the basis that more people may enroll in other programs as a result of the mandate, even if it is not enforced. While Justice Kagan is a near-certain vote against the plaintiffs, it is not clear she wants the Court to decide the case on standing grounds. If there are two or three votes to dispatch this case on standing grounds, this will present an interesting conundrum for the more liberal justices, who like more permissive standing rules, but clearly want this case to fail.

Justice Gorsuch asks whether the United States could bring a civil enforcement action to enforce the mandate. Mongan rejects this claim because NFIB said there was no legal consequence from failing to comply with a mandate other than paying the tax penalty. But what if? Justice Gorsuch asks. Mongan responds noting that the Court's standing cases claim that there still needs to be a reasonable prospect of enforcement for there to be jurisdiction, but also notes that the state intervenors are happy to press their claims on the merits. Justice Gorsuch asks additional questions about Texas' claims, including the implications of the CBO report indicating that some people may acquire insurance because of the mandate despite the lack of a penalty.

Justice Kavanaugh returns to individual standing, asks whether someone could challenge a law declaring that every homeowner should fly an American flag in front of their house, if the law lacked any enforcement provision. Mongan says there might be plausible claims, perhaps raising First Amendment claims, but no such arguments were made here. Justice Kavanaugh asks whether there are any other provisions of federal law imposing a mandate without penalty. Mongan says no. Turning to the merits, Kavanaugh asks whether 5000A can still be read as a tax if it does not raise revenue.

Justice Barrett asks whether it is relevant that the mandate was not repealed. Mongan responds that Congress understood 5000A offered a choice (as the Court had said in NFIB) and  merely altered the consequences of the choice. On the standing front, Barrett asks whether the analysis would be different if the government maintained a record of whether or not individuals were complying with the mandate. Mongan notes that's not at issue here, and then pivots to note that even if plaintiffs have standing, declaring that the mandate is not enforceable against them would fully redress their injuries.

Former Solicitor General Donald Verrilli (who defended the ACA in NFIB v. Sebelius) is up next, representing the House of Representatives. The Chief Justice opens up asking why the mandate is not as important now as Congress claimed in 2010. Verrilli notes that Congress in 2010 made assumptions based upon what it believed at the time, but that Congress in 2017 made a different judgment, based upon CBO's updated assessment that the market would remain stable with or without an enforceable mandate. Asks whether Verrilli agrees the paperwork burden on states is enough for standing.

Justice Thomas asks whether zeroing out the penalty, without more, was enough to make the mandate a less central provision of the ACA than it had been in 2012. As Verrilli notes, this question goes to the heart of the severability issue. Verrilli notes that plaintiffs' claims about what Congress wanted are implausible, stressing that Congress in 2017 acted based upon the understanding that zeroing out the penalty would have the same effect as repealing the mandate. Further, Verrilli notes, those who supported zeroing out the mandate proclaimed they were eliminating the mandate, which is inconsistent with any claim that Congress believed continued moral suasion was necessary to keep the law operable.

Keeping on the severability theme, Justice Breyer stumbles through the start of a question, seeming to have some technical or other problems, and is cut off by the Chief Justice. (Awkward.)

Justice Alito asks about whether standing may be asserted through purported inseverability. Verrilli notes that there is no precedent for this, and points out that if the Court were to embrace this sort of theory of standing, it should not be married with a presumption of inseverability at the standing phase, as this would be an open invitation for advisory opinions. Justice Alito turns to asking why the focus should be on the 2017 Congress, as different members of Congress may have had different assumptions or intentions. Verrilli responds that Court should focus on objective factors when assessing severability (as in the Barr v. AAPC case). Also notes it would be odd for Court to assume that members of Congress knowingly and deliberately intended to enact an unconstitutional amendment to the ACA.

Chief offers to go back to Breyer. Breyer declines.

Justice Sotomayor lobs softballs about implications of zeroing out the mandate. Then asks Verrilli to address whether states would actually have lower paperwork costs if mandate were struck down. Verrilli notes there is no evidence of such costs, which was their burden at the summary judgment stage.

Justice Kagan notes there were many changes in the ACA since 2012, but that "relics" of the view that the mandate is essential remain, such as the findings that the mandate was essential. Verrilli notes (as I pointed out here) that the findings are not an inseverability clause, and should not be read as such. Further, a finding about what the law said and did in 2010 cannot be read as a finding about how the law operates after various amendments, and the 2017 Congress could not agree that a mandate backed by a penalty was essential because the 2017 Congress zeroed out the penalty. There was no need to go back and amend the finding, as it was not an operable provision of law.

Justice Gorsuch asks Verrilli to set aside standing and severability and focus on the merits. Specifically he asks whether the saving construction of the mandate can remain operable now that the penalty no longer produces any revenue. Verrilli walks through how the mandate does not have any effect, so there is no more need for an enumerated power than if Congress were to enact a hortatory provision. Verrilli concedes that he is not relying upon the existence of commerce clause authority to impose a mandate. (This is an important concession and one that I doubt the House of Represenatives' usual attorney would have made.)

Justice Kavanaugh follows up on Gorsuch's questions. Verrilli explains that, under the Necessary & Proper Clause, Congress needs to have the ability to raise, lower or zero out tax provisions as times require. Justice Kavanaugh turns to severability and notes he tends to agree with Verrilli that the severability analysis in this case is "rather straightforward." (This is not surprising given Justice Kavanaugh's own prior opinions and statements on severability.) Kavanaugh asks about how severability should apply to original law.

Justice Barrett asks whether Congress is bound by a Court's avoidance construction of a statute. Is Congress locked in by this? No, Verrilli says, but Congress is presumed to be following and accepting the Court's interpretation of a statute unless it explicitly says otherwise. (Put another way, if Congress wants to overturn the Court's statutory interpretation, it has to be clear about that.) Justice Barrett pushes back, asking whether zeroing out the tax requires an assumption that Congress was leaving a mandate in place that could only be justified by the Commerce power. Verrilli notes that no one made such arguments at the time, and emphasizes that if any member of Congress sought to impose a command in 2017, someone would have said so. No one did.

Texas Solicitor General Kyle Hawkins is next, and he  lays out the plaintiffs' claims. (I had thought the SG was first. Oops.) Hawkins claims that those defending the ACA are asking the Court to ignore provisions of the U.S. Code based upon extra-textual considerations.

The Chief Justice expresses substantial skepticism about the inseverability argument. Congress did not vote down the entire statute, perhaps wanting the Court to do that, but "that's not our job." This is a pretty clear indication he is unpersuaded by the plaintiffs inseverability claims, which is not surprising. Chief also notes that the findings don't read like an inseverability clause and do not resemble any such clause anywhere else in the U.S. Code.

Justice Thomas returns to standing, noting there is no enforcement mechanism for the mandate and asking how there can be an injury without enforcement. Hawkins claims the clearest basis for standing is the fact that the existence of the mandate means that a non-zero number of people will enroll in Medicaid and other programs than would have otherwise, and this imposes costs on states. Hawkins is correct that this is the strongest theory in support of standing. Justice Thomas also asks when the Court should evaluate the severability claims.

Justice Breyer is on the call now. He asks about the merits. Can you sue just because a statute has some sort of admonition in it? Are precatory enactments by Congress open to challenge? Hawkins says it depends. Breyer asks whether such admonitions, lacking enforcement mechanisms, can be challenged, and whether this would create lots of new opportunities for litigation. Hawkins insists that 5000A is different. "It is the law" that people are required to obtain qualifying health insurance.

Justice Alito returns to standing, asking what would happen if Texas did not fulfill its obligations to new enrollees in Medicaid and other state-financed programs, and asks about how theories of standing interact with the Anti-Injunction Act, which precludes pre-enforcement challenges to tax provisions.

Justice Sotomayor follows up on standing, asking about whether those who enrolled post-2017 would not have enrolled prior to 2017 due to other provisions of the ACA and other exogenous factors. Hawkins responds arguing that Texas's standing argument is no less speculative than the standing theory accepted by the Court in the Census case. Sotomayor says his answer does not make sense. Turning to the merits, Justice Sotomayor notes that NFIB barred the imposition of a mandate under the Commerce Clause, and asks how the Court declaring that a second time would somehow entitle the states to greater relief, and striking down additional portions of the statute. (Note that unlike some academics, no justice on the Court seems to believe that NFIB failed to hold that a mandate exceeds the scope of the Commerce Clause.)

Justice Kagan asks how it could be Congress made the ACA more unconstitutional by making the relevant provisions less coercive. If, at the end of the day, NFIB upheld 5000A, how could it become unconstitutional when Congress makes it less coercive. Hawkins responds this is because the saving construction is no longer operative. Justice Kagan asks whether those who were exempt from the mandate penalty at the time of NFIB had a valid claim against the mandate. Hawkins thinks so. Justice Kagan says his response has things "precisely backwards."

Justice Gorsuch sticks with the merits, asking Hawkins to respond to Verrilli's argument that, under the Necessary & Proper Clause, Congress must retain the ability to raise and lower taxes. Hawkins says the provision cannot be a tax because it does not raise revenue, and that to accept Verrilli's argument is to turn the taxing power into a de facto police power. Turning to remedies, Justice Gorsuch asks what injunctive relief plaintiffs are asking for and can be provided by the Court, and whether a declaratory judgment by itself is enough for jurisdiction.

Justice Kavanaugh asks Hawkins whether there are any other naked mandates in the U.S. Code, and Hawkins says he is unaware of any. Turning to severability, Kavanaugh says that, under the Court's severability precedents, it would seem "fairly clear" that the Court is required to strike down the mandate and nothing else. Hawkins responds relying upon the congressional findings. Kavanaugh interrupts noting that inseverability clauses are typically very clear; "Congress knows how to write an inseverability clause," he says, adding that he is "having trouble" reading the findings as an inseverability clause.

Justice Barrett circles back to standing for the individual plaintiffs, asking how the alleged injury of voluntarily purchasing insurance is traceable to the federal defendants. Given the lack of enforcement action by any federal issue, isn't it Congress that caused this harm? And how can you sue Congress? On state standing, Barrett also renews questions about the paperwork requirements, and how these alleged burdens are traceable to the mandate.

Last up is Acting Solicitor General Jeffrey Wall. The opening question from the Chief returns to standing, and the DOJ's unusual standing argument, which would allow a party injured by one legal provision to challenge other provisions. Wall argues that there is no floodgates risk here because it is rare to have such a clear indication of inseverability as there is here. The Chief Justice pushes back, showing skepticism of the argument. Wall replies stressing the individuals' injuries caused by the insurance market reforms (but not by the mandate).

Justice Thomas renews his question about when to consider severability, at the merits or at some other stage. Wall embraces the premise of Justice Thomas's question, that severability should be a question of statutory interpretation to be assessed at the merits stage, rather than at standing or remedies. Stresses that most provisions of most statutes are severable, and this is the rare case where there is inseverability.

Justice Breyer asks whether there is precatory language in the U.S. Code. Wall accepts that there is, prompting Breyer to ask why the mandate is not simply an entreaty, as opposed to the imposition of a legal obligation. Wall says that 5000A uses the word "shall," and that makes the difference. Breyer asks whether any of the various precatory provisions enacted include the word "shall," and Wall confesses he does not know, but that the SG's office is not aware of any such statutes. So, Breyer responds, it all comes down to "shall" versus "should."

Justice Alito follows up asking whether Congress has ever used the taxing power to say that someone must do something, and then sets the tax at zero. Wall says he is not. Justice Alito pivots noting the "sea change" in the prevailing view of the mandate. In 2010 it was essential, but is not viewed that way now. How is the mandate still essential to the operation of the Act? Wall responds relying upon the findings as a de facto inseverability clause, noting this language has not been changed by Congress. Says that zeroing out the penalty is "less coercive in a sense," but is also "more coercive" in that it subjected people to a naked mandate.

Justice Sotomayor asks whether the federal government has the authority to enact taxes with delayed effective dates or temporary phaseouts. Wall says Congress does. So does this mean Congress could have enacted a statute in 2010 providing for a phase in of tax in 2014 and a phase out in 2019, would that be constitutional? Yes, Wall says, but had something like that been done, it might have precluded the conclusion that the mandate penalty could operate as a tax. Sotomayor's question hints at how the plaintiffs' and DOJ's theory would constrain Congress's exercise of its taxing powers, and potentially allow one Congress to bind its successors.

Justice Kagan asks for DOJ's view of the plaintiffs' standing theories, and Wall is hesitant, stressing that the only standing theory DOJ has endorsed is its standing-by-inseverability theory. Justice Kagan notes this is very odd because DOJ is usually a hawk on standing, and here the DOJ is not passing judgment on the asserted bases of standing offered by the plaintiffs, and is instead asking the Court to embrace a new approach to standing that has broad, unsettling potential and "cuts against" the Court's doctrine. Wall claims his approach is grounded in Alaska Airlines. Kagan is unconvinced. This is based on a misunderstanding of Alaska Airlines (as Kevin Walsh pointed out in his Stanford Law Review piece on NFIB and related litigation).

Justice Gorsuch gives Wall more time to explain why DOJ does not believe its approach will "open the floodgates" to various constitutional challenges to federal statutes. Wall reiterates the point that the ACA is relatively unique because of the findings that operate as an inseverability clause.

Justice Kavanaugh returns to the question of precatory language in the U.S. Code. Even if this language is different, why couldn't the Court just construe this language as being the equivalent of such precatory language throughout the U.S. Code. Wall responds with a deflection, arguing that this gets in the way with NFIB's saving construction. This misses the point. Kavanaugh is suggesting a different sort of savings construction. Kavanaugh then turns to the strong presumption of severability, reiterating that Congress knows how to write an inseverability clause" and this language is different, and seeks Wall's response. Wall acknowledges that the language is different, but that there is no "magic words" requirement, and that the findings here operate as an inseverability clause.

Justice Barrett asks whether it is indisputable that NFIB held that a mandate is beyond the scope of Congress's Commerce Clause power, and Wall says that NFIB is clear on this point (contra the claims  of some academics). Accepting that premise, and that "shall" means "shall," would it not then be odd to assume that Congress amended the ACA in 2017 to make 5000A uncosntitutional? Is that not assuming that Congress sought to act unconstitutionally? Wall says this is a valid point, but is no excuse to depart from the clear text of the statute.

[Note, I've revised the post at the top to include some summary comments.]