Three-judge panels of two federal courts of appeals today issued directly conflicting rulings on a key IRS regulation implementing the Affordable Care Act. This regulation authorized subsidies for those purchasing insurance from government exchanges, regardless of whether those exchanges were established by the federal government (as in most states) or by an individual state. If this regulation is invalid and subsidies are therefore not available on exchanges established by the federal government, then one leg of the government’s three-legged stool in the Affordable Care Act is removed in more than half the states in the country.
In Halbig v. Burwell, a split panel of the D.C. Circuit held the regulation invalid. Shortly thereafter, the Fourth Circuit issued a directly contrary decision in King v. Burwell, upholding the IRS regulation. Most news coverage thus far has focused on the D.C. Circuit’s decision. There may be a few reasons for this: (1) lots of policy journalists in D.C.; (2) the D.C. decision came first; and (3) the D.C. decision would alter the status quo significantly, while the Fourth Circuit decision would maintain the status quo.
The Fourth Circuit decision is important as well, though less for what it holds than for how its upholding of the regulation might actually benefit the challengers who lost the panel decision. In short, the Fourth Circuit’s decision may speed up the timing of Supreme Court review of this issue. Here’s why: En banc review would probably be favorable for the government in both courts. This means it is likely that the government will seek en banc review in the D.C. Circuit case. The decision to grant en banc review by itself would vacate the panel decision, thus eliminating the existing circuit split, at least for the time being. And if the en banc D.C. Circuit were to rule differently from today’s three-judge panel, then there would not be a circuit split with the Fourth going forward. In the absence of the Fourth Circuit decision, then, it would take a while before the Supreme Court takes a case raising this issue, and the Court might never grant if there is no split. But because the en banc Fourth Circuit is likely favorable for the government, the plaintiffs in that case are likely to bypass en banc review and head straight to the Supreme Court. The Court has discretion whether to grant certiorari, of course, but a circuit split on such an important part of a massive regulatory scheme is the sort of thing that the Supreme Court should hear. Having a final decision in favor of the government therefore is of some help to the challengers because it enables them to go to the Supreme Court more quickly.
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Posted in Law, tagged 5000A, ACA, Affordable Care Act, Article III, Ginsburg, healthcare, healthcare reform, justiciability, mootness, standing on January 7, 2012 |
In the previous post, I asked whether a member of an Indian tribe has standing to bring a constitutional challenge to the minimum coverage provision in § 5000A of the tax code (aka the “individual mandate in Obamacare”). A member of an Indian tribe is in an unusual position under § 5000A. She is obligated to have minimum essential coverage, but she is exempt from the penalty for non-compliance. See 26 U.S.C. § 5000A(e)(3). Assuming that the penalty for non-compliance is the only legal consequence for not having minimum essential coverage, I do not see how she would have standing to bring a constitutional challenge to the requirement that she have minimum essential coverage.
If that is right, then what about Mary Brown? She is one of the private plaintiffs in the constitutional challenge to § 5000A to be decided by the Supreme Court. Ms. Brown’s lawyers have notified the Supreme Court that she has filed a petition for bankruptcy. Although there is not enough public information to make a conclusive determination, Ms. Brown’s financial situation probably qualifies her for a penalty exemption in § 5000A(e). If Ms. Brown does fall within one of the penalty exemptions, are there any arguments to support her standing that differ from those available to the member of an Indian tribe?
One that comes to mind is that financial circumstances are subject to change, whereas tribe membership is stable throughout one’s life. If a person’s qualification for exemption varies from month to month, then that person comes in and out of the legal crosshairs of someone with whom one can have a justiciable controversy. This difference is relevant, because someone permanently exempt has no legal adversity with anyone that would give rise to a justiciable controversy. The sometimes-exempt person, by contrast, sometimes does have such legal adversity.
The justiciability problem posed by a sometimes-exempt person is best thought of as a mootness problem rather than a standing problem. The general rule is that standing is assessed as of the time of filing. If the sometimes-exempt person was not exempt as of the time of filing, and the person otherwise had standing, then a change giving rise to that person’s exemption presents a problem of mootness. That doctrine is more flexible than standing. In Friends of Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U.S. 167 (2000), for example, Justice Ginsburg’s opinion for the Court expressed openness to an “argument from sunk costs.”
That is as far as I’ve taken the analysis for now. As always, I welcome suggestions, corrections, and other comments.
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If the government imposes a legal duty on you, but provides no sanctions for non-compliance (and there are no collateral legal consequences of any sort for non-compliance), do you have standing to challenge the imposition of the duty? That is one question posed by Section 5000A of the tax code, the provision in the Affordable Care Act more popularly known as the individual mandate.
Section 5000A requires “applicable individuals” to have “minimum essential coverage,” and it imposes a penalty on some “applicable individuals” who do not have “minimum essential coverage.” That is, there are some people who are required to have insurance but who are exempt from the penalty for not having it Members of Indian tribes, among others, are beneficiaries of this exemption.
Suppose a member of an Indian tribe wanted to sue the federal government to have the insurance requirement declared unconstitutional. Would he have standing to do so? I have trouble seeing how he would. It is not enough to be subject to allegedly illegal conduct. That conduct must cause injury. If non-compliance with the insurance requirement has no consequences for a member of an Indian tribe, then it does not cause any injury. Perhaps the would-be plaintiff can argue that he will buy insurance to comply with the requirement if it is constitutional because he wants to be in compliance with the law, but he will not buy the insurance if the requirement is unconstitutional. But that cannot be enough, because the “injury” of being forced to buy insurance is entirely self-inflicted; nobody is forcing the would-be plaintiff to do anything.
A better way of thinking about the “case” or “controversy” problem with a challenge by a member of an Indian tribe to the minimum essential coverage provision is in advisory opinion terms. The request for a constitutional ruling is purely advisory because there is no proper defendant who can be brought before the court and bound by a judgment. Nobody has anything to enforce against the would-be plaintiff, who simply seeks advice about whether the insurance requirement is constitutional.
This analysis would require alteration if there were some collateral legal consequences for non-compliance with the insurance requirement. But if the penalty in § 5000A is the only means by which the insurance requirement has any legal bite, there appears to be no Article III “case” that a member of an Indian tribe can bring offensively to challenge the insurance requirement.
I cannot think of the closest analogue to this situation, and cheerfully invite suggestions, corrections, contrary arguments, and so on.
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Just under a month ago, counsel for Mary Brown told the Supreme Court in a letter that her opening brief would explain why she still had standing to challenge the minimum essential coverage provision even though she had recently filed for bankruptcy (and thus would be exempt from the penalty for non-compliance). The opening brief, filed today, asserts that Mary Brown has standing, but provides no argument in support of the claim. With respect to Mary Brown’s standing, the brief states as follows:
After the parties filed their certiorari petitions, Petitioner Brown, whose standing had been conceded by the Government in the Eleventh Circuit (id. 8a), filed a voluntary petition for bankruptcy. See Letter from G. Katsas to D. McNerney (Dec. 7, 2011). Private Petitioners do not believe that Brown’s pending bankruptcy undermines her standing; to the contrary, her worsened financial state exacerbates the degree to which future costs from the mandate are “immediately and directly affect[ing]” her “financial strength and fiscal planning.” Clinton v. City of New York, 524 U.S. 417, 431 (1998).
If this is the promised argument, it is sorely lacking. Do the challengers plan on making an argument elsewhere, or do they have no argument to make? The argument should start with an explanation of what future costs imposed by law directly affect the planning of someone who appears to be exempt at present from any future cost imposed by Section 5000A.
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Posted in Law, tagged ACA, Affordable Care Act, AIA, amicus curiae, Anti-Injunction Act, HCR, healthcare, healthcare reform, NFIB, separability, severability, standing on January 6, 2012 |
According to the Supreme Court’s December 8 briefing schedule in the challenges to the Affordable Care Act, the opening briefs are due today with respect to everything but the Medicaid issue. Here are a two related non-merits issues to look at in today’s filings:
- How does the NFIB’s brief address the standing of the individual plaintiffs? The Wall Street Journal reported back in December on the bankruptcy filing of Mary Brown, who was the only plaintiff that the government conceded had standing to challenge Section 5000A (the minimum essential coverage provision). Ms. Brown’s personal circumstances may render her eligible for an exemption from the penalty for non-compliance with the minimum essential coverage requirement in § 5000A. Earlier this week, the Wall Street Journal reported that the NFIB’s lawyers sought to add as individual plaintiffs two more NFIB members. This is an unusual move, and one that the challengers would not have taken without good reason. (That is not to go so far as to say that the additions should be viewed as an implicit concession about a lack of standing without the to-be-added plaintiffs, only that the lawyers viewed the downside of not seeking to add plaintiffs as higher than the downside of doing so.) In a letter filed with the Supreme Court disclosing Ms. Brown’s bankruptcy, the private plaintiffs said that they would explain in their opening brief why Ms. Brown still had standing. Today is the day they will make good on that promise.
- How does the court-appointed amicus curiae address the Anti-Injunction Act issue? There are several arguments that Mr. Long can make, and it will be interesting to see his assessment of their relative strength by their positioning in the brief.
These two issues may look unrelated on their face, but there is a connection between the AIA issue and Ms. Brown’s standing. One of the arguments that the challengers have previously advanced is that they are challenging the requirement to have insurance but not the penalty for non-compliance. In their view, the mandate is a “free-standing legal requirement” while the penalty is a means of enforcing it. Presumably, this assertion about the internal separability of §5000A with respect to the mandate and the penalty will also be part of the argument for Ms. Brown’s standing. The argument would presumably be that, although Ms. Brown’s financial hardship exempts her from the penalty (under § 5000A(e)), she is still subject to the legal requirement to have minimum essential coverage.
I’m skeptical that these arguments resting on the internal separability of § 5000A succeed. But I will withhold judgment until I see the best presentation of these arguments in the challengers’ briefs.
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The federal Affordable Care Act calls for the creation of health insurance exchanges. States can create their own exchanges. But the federal government will step in with its own exchange if a state does not create one.
A story in today’s Richmond Times-Dispatch reports that Virginia Governor Bob McDonell “wants Virginia to operate its own health insurance exchange, but only if the U.S. Supreme Court upholds the federal mandate that all individuals have health insurance.” According to the story, “McDonnell said he hopes the Supreme Court will strike down the individual mandate, rendering an exchange unnecessary, but he made clear that he wants Virginia to operate the exchange if the law stands.”
The story suggests a direct connection between the constitutionality of the mandate and the need to create health insurance exchanges. But the need to create health insurance exchanges will most likely remain even if the Supreme Court holds that the mandate is unconstitutional. The only way that the health insurance exchanges go away is a holding that the mandate is inseverable from the provisions of law that govern the creation and operation of health insurance exchanges. Unfortunately, severability doctrine–which governs such determinations–is murky and manipulable. The uncertainty about the health insurance exchanges is a direct result of this faulty doctrine. (For my attempt to address the problems with severability doctrine, see Partial Unconstitutionality, 85 N.Y.U. L. Rev. 738 (2010).)
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Posted in Law, News, tagged ACA, conference, healthcare, MCLE, Richmond on November 9, 2011 |
Brad Joondeph has a reminder at ACA Litigation Blog that tomorrow’s conference at the Supreme Court will include discussion of five of the six cert petitions addressing the constitutionality of the minimum essential coverage provision. I add to that a reminder that the University of Richmond Law School is hosting a conference about the ACA litigation on Friday November 11. This conference is about “everything but the merits” of the healthcare litigation. Details available in the conference brochure.
(Note to Virginia lawyers: The program has been approved for 6 MCLE credits; registration is free.)
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SCOTUSBlog is running an excellent symposium on the constitutionality of the Affordable Care Act. A recent post by Abbe Gluck and Gillian Metzger touches on an important point about the remedy. They first argue that the mandate is not unconstitutional. They then argue that if the mandate is unconstitutional, then it may be severable. They write:
In the context of the Commerce Clause inquiry, the mandate is a well-tailored “necessary and proper” means by which Congress can achieve the ACA’s goals. But that does not necessarily mean that, as a remedial matter, if the mandate falls, the Court need or should do more than simply sever it and leave the rest to Congress.
This observation is accurate. The test for constitutionality under the Necessary and Proper Clause does not line up directly with the test for severability. The point has been clouded by the federal government’s litigation decision to concede the inseverability of the mandate from some of the ACA’s insurance-related provisions. This “concession” is designed to serve two functions: (1) to bolster the case for constitutionality, which may turn on whether the individual mandate is an “essential part” of a larger regulatory scheme; and (2) to increase the cost of invalidating the individual mandate.
My only objection is that Gluck and Metzger do not go far enough, endorsing only the conclusion that the mandate “may” be severable. The case can and should be made that the mandate is severable–a case that could be made along lines I suggested (albeit in a descriptive/predictive rather than forensic mode) in a guest post on Balkinization this past February:
For different reasons, the Court’s pragmatists, minimalists, and textualists have good reason to move severability doctrine away from the sort of backward-looking counterfactual speculation that yielded Judge Vinson’s holding of inseverability (i.e., the determination that the individual mandate was inseverable from the remainder of the Act because Congress would not have enacted the Act without the mandate). While a detailed doctrinal analysis to support this assertion would be more appropriate for another venue, a careful review of the Court’s severability reasoning in United States v. Booker and Free Enterprise Fund v. Public Company Accounting Oversight Board suggests directions in which the Court may be moving the doctrine. Justice Breyer’s pragmatic approach to severability in Booker is more forward-looking and consequentialist than the standard approach. Chief Justice Robert’s approach to severability in Free Enterprise Fund emphasizes the need for clear evidence that Congress intended inseverability; given the typical absence of such evidence, the result of this approach is minimalist with respect to the scope of invalidation (though the pragmatic approach is more likely to be minimalist with respect to practical consequences). Finally, textualist Justices eschew, in other contexts, the sort of exercises in imaginative reconstruction that standard formulations of severability doctrine on their face require. Perhaps they might begin to do so in this context as well. For all these reasons, it is extremely unlikely that the Supreme Court would conclude both that the individual mandate is unconstitutional and also that the remainder of the Act is inseverable.
I provide some broader reasons, not specific to the mandate question, for disallowing inseverability doctrine’s expansion of holdings of unconstitutionality in Partial Unconstitutionality, 85 N.Y.U. L. Rev. 738 (2010).
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