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Posts Tagged ‘individual mandate’

One feature of speculation about how the Supreme Court might rule on the challenge to the ACA subsidies is reference to the Court’s narrow upholding of the individual mandate against constitutional challenge in NFIB v. Sebelius. I’ve heard some conservatives wondering, to put it bluntly, whether the Chief Justice will fold again. This kind of framing, I think, misunderstands the nature of the Chief Justice’s decision in NFIB v. Sebelius and ignores two key differences between that case and the ACA subsidies cases.

I accept the press reports that the Chief Justice changed his vote in the individual mandate cases. But I do not think it in his judicial character to have buckled somehow. The stakes of the case may have led to some re-examination, but I think the Chief Justice became persuaded of the legal merits of the arguments that he ultimately set forth in his opinion. I suppose we’ll never know. So, on to the next issue …

Tom Goldstein argues that “a major lesson to be learned from the Court’s previous decision holding that the ACA is constitutional is that a majority of the Justices do not want to determine the fate of a hugely important social issue that has been debated in this country for decades.” At some level, it blinkers reality to say that consequences don’t matter to judges. But they are less consequential for many. And there are at least two very important differences between the individual mandate challenge and the ACA subsidies challenge that should factor into assessment of the Chief Justice’s likely position. First, a ruling for the individual mandate challengers required the development of constitutional doctrine in a way that a ruling for the ACA subsidies challengers would not. The political branches have long been on fair notice that text of enacted law controls, whereas they may have been lulled into complacency by the Court’s own latitudinarian constructions of the scope of congressional authority under Article I over time. Second, there is no statutory inseverability issue in the ACA subsidies challenge. The decision in NFIB v. Sebelius was made under the shadow of potential statutory inseverability, such that a newly formulated limitation on congressional power could be used to take down the entire ACA in one judicial ruling. While the practical effects of invalidating the IRS regulation in the ACA subsidies could be severe, the legal ruling would itself be much narrower by comparison.

These two differences may partially explain why the Chief Justice might size up the ACA subsidies challenge differently from the individual mandate challenge from a judicial and institutional point of view.

Another piece of the explanation may be his recognition that the Court’s authority stems from its identification with the law, and that identification is easier for people to make when there is relatively clear statutory language in contrast with murky constitutional doctrine that has been treated in accordion-like fashion over time.

Nor can one discount the possibility that, over time, Chief Justice Roberts has come to view President Obama’s commitment the rule of law in a manner similar to how Chief Justice Marshall understood President Jefferson’s commitment to the same.

For all these reasons, I hesitate to draw too close a connection between how Chief Justice Roberts approached the individual mandate challenge and how he might approach the ACA subsidies challenge.

From an interpretive point of view, more relevant data points would be his opinions and votes on similar questions of statutory interpretation. I have been surprised, for example, not to have seen any mention of Bond v. United States in any of the opinions upholding the regulation or in any commentary thus far on the interpretive issues raised. Bond was a case in which Chief Justice Roberts found statutory ambiguity to arise from the improbably broad reach of a statutory definition, the consequences of the interpretation, and the apparent lack of any need to take the broad definition in its full breadth given the background of the law. As Justice Scalia put it in his dissent: “Whatever has improbably broad, deeply serious, and apparently unnecessary consequences . . . is ambiguous!” In essence, that is at the core of what some critics of Halbig are arguing. And one can see the outlines of a similar argument from the improbably narrow formula for calculating credits, the consequences of adopting this interpretation, and so on. My own view is that this argument should be a loser given the relevant statutory language. But it’s the kind of argument that those who disagree with Halbig need to be making if they are interested in the Chief Justice’s vote.

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Both sides can claim victory of a sort, though their wins come at a price.

The Obama Administration and congressional Democrats won on the mandate’s enforceability. But they now own it politically as a tax.

The States won a real choice on Medicaid expansion. But they may not wish to have to make that choice.

The challengers won real limits on federal regulatory power under the Commerce Clause. But they lost on the ultimate judgment of constitutionality.

The real winner of this decision is Chief Justice Roberts. Today’s decision makes clear that this is the Roberts Court, not the Kennedy Court, as many have called it.

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Justice Kennedy’s vote on the constitutionality of the individual mandate is bound to be a disappointment regardless of how he votes.

Two decades ago, it was widely expected that he would vote to overturn Roe v. Wade and return state abortion legislation to rational basis review. And he did vote that way . . . only to later switch and vote another way. If Justice Kennedy follows his Casey pattern, that means he will have voted at conference to hold the individual mandate unconstitutional, only to switch his vote some time during writing. That would be a disappointment to many.

But Justice Kennedy’s Casey vote did not work out quite as he anticipated, as his dissent in Stenberg v. Carhart and his opinion for the Court in in Gonzales v. Carhart bear out. Moreover, Justice Kennedy may still be nursing resentment over his Flipper reputation from October 1991 Term (which brought both Casey and Lee v. Weisman). Perhaps he learned from Casey that he should not flip his vote in cases of that magnitude. And if that was his takeaway from Casey for the individual mandate ruling, then he not only voted at conference to hold the individual mandate unconstitutional, but also did not switch to the other side during writing.

Yet Justice Kennedy’s contemplation of a 5-4 split down the lines of partisan appointments may have brought to mind Bush v. Gore . . . leading to no change at all. For Justice Kennedy simply cannot understand why anyone would question the Court’s leanings and rulings from that case alone. In his view, the Bush v. Gore majority was–obviously–only deciding based on its best understanding of the law. And even if Justice Kennedy had worries about public perception, the unpopularity of the individual mandate (which is much less popular now than Al Gore was then) provides some insulation for the Court.

For all these reasons, it will be most interesting to see if Justice Kennedy thinks that stare decisis means the same thing for Raich as it did for Roe.

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Following the Supreme Court oral arguments in the health care litigation, there has been much more after-argument augmention of merits analyses than severability analyses. That is unfortunate because an incorrect approach to severability poses a more significant problem of long-term distortion of the federal judicial role in constitutional adjudication. This PPACA severability series is an attempt to continue the conversation about severability.

The primary obstacle to clear thinking about severability is a pernicious metaphor that describes invalidation as excision, which is in turn understood as a legislative function. The operation of this metaphor can be seen, for example, in a recent article by Tom Campbell, Dean and Donald P. Kennedy Chair in Law, and Professor of Economics, Chapman University: Severability of Statutes, 62 Hastings L.J. 1495 (2011).

The major premise of Dean Campbell’s article is that “[c]ourts legislate when they engage in ‘severability analysis,’ allowing part of a law to continue in force after having struck down other parts as unconstitutional.” [1495] More precisely,  “making something into law that was not precisely the text that had been approved by Congress and signed by the President is exactly what a court does when it exercises severability authority.” [1498-99]

From this characterization of severance as creating new legislation, the rest of Dean Campbell’s argument follows. Because a presidential “line-item veto” that would accomplish such legislative handiwork without bicameralism and presentment is impermissible, so too is judicial severance that operates just like a line-item veto. Dean Campbell accordingly calls for “the complete abolition of the severability doctrine.” [1497] According to Dean Campbell’s proposed approach, the unconstitutionality of one provision of a bill enacted into law would result in the invalidation of the entire bill of which that unconstitutional provision was a part.

As I have previously argued, the legislative characterization of the severability function is endemic in modern scholarly discourse and unreflectively implicit in existing doctrine. If one accepts Dean Campbell’s premise that severance creates new legislation, then his proposal makes sense as a way of enforcing the bicameralism and presentment requirements for creating new legislation. Dean Campbell’s proposal therefore presents a challenge to all those who accept an excision-based framework for judicial review.

In my view, however, the major premise is incorrect. A judicial refusal to enforce is not equivalent to amending the law or to exercising a judicial line-item veto. “When a court holds part of a statute unconstitutional, it issues a judgment saying so (and, in some cases, an injunction against its future enforcement). By virtue of precedent and preclusion, this judgment and the reasoning in support of it prevent the unconstitutional part of the statute from having legal effect going forward. Nothing about the actual text of the statute changes as a direct consequence of judicial action.” 85 N.Y.U. L. Rev. at 747.

The real challenge for those who advocate inseverability is to justify the transformation of (A) judicial refusal to give effect as law to one provision in resolving a case, into (B) a command that nobody (in the judiciary or otherwise) should give effect as law to any other provisions of the bill that contained the unconstitutional provision. I do not see how that justification of turning (A) into (B) can be done consistently with traditional separation of powers principles.

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Severability doctrine is not only a “discretionary destructive device” that “calls on judges to act, consciously, like legislators,” but it also results in the creation of law without accountability.

Suppose that the Supreme Court holds the so-called individual mandate unconstitutional and fully severable. When insurance companies are stuck with guaranteed-issue and community ratings for sicker people, but without the revenue that comes from insuring healthier people, who is responsible for that? Congress, because it used an unconstitutional mechanism and did not include an inseverability provision? The Court, because it refused to hold the mandate inseverable from these other provisions? There is no good way to answer these questions, because the judiciary’s action is formally based on perceived congressional intent. Both Congress and the Court are responsible, and neither are.

The problem is not simply the existence of a law that Congress never enacted and the President never signed. A holding of unconstitutionality and inseverability that obliterated the PPACA entirely would raise a similar problem of accountability. When small businesses that benefit from tax credits in the PPACA or individuals that benefit from the ban on lifetime caps are deprived of the benefits that they currently enjoy under the PPACA, who do they blame? A case can be made against both Congress and the Court, and each institution also has a plausible defense.

The Supreme Court has often noted the connection between liberty and accountability. An important aspect of liberty is self-government, and self-government requires accountability. That is an important theme of the Court’s federalism jurisprudence. And it also underlies the Court’s recognition that the separation of powers also promotes individual liberty. Consider, for example, Justice Kennedy’s opinion for the Court last term in United States v. Bond, which stated:

Separation-of-powers principles are intended, in part, to protect each branch of government from incursion by the others. Yet the dynamic between and among the branches is not the only object of the Constitution’s concern. The structural principles secured by the separation of powers protect the individual as well.

Within the excision-based framework of modern severability doctrine, there is simply no way for the judiciary to avoid illegitimate law creation or law destruction. And the federal judiciary’s presence in the legislative realm violates the separation of powers. “We Americans have a method for making the laws that are over us. We elect representatives to two Houses of Congress, each of which must enact the new law and present it for the approval of a President, whom we also elect.” Sosa v. Alvarez-Machain (Scalia, J., concurring in part and concurring in the judgment). Once these laws are made, the federal judiciary has a proper role of deciding on their enforceability in cases or controversies. That judicial role is powerful, but limited. The limits come from the federal judicial power itself. For too long, modern severability doctrine  has located within the judicial power an avowedly legislative function. In future posts, I will lay out an alternative approach–the original approach to partial unconstitutionality–more deeply rooted in traditional understandings of the federal judicial role.

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When it comes to severability determinations–especially in the absence of a severability clause–the output of any hypothetical legislative intent test asking what Congress would have preferred is purely fictive. The doctrinal formula that generates it is a verbal shell with its meat scraped out and its insides filled with the fluid of judicial discretion. This failure of existing doctrine to provide an intelligible legal guidance is one reason to stop using it.

An even more fundamental reason for the Supreme Court to keep its hands off this destructive doctrinal tool is rooted in the separation of powers. Simply put, the doctrine calls on judges to act, consciously, like legislators.

The non-judicial nature of an inseverability holding came through clearly at oral argument in the healthcare litigation, although the Justices did not appreciate it at the time. Consider the following portion of the oral arguments, in which Edwin Kneedler of the DOJ presses the claim that the Supreme Court lacks authority to consider the continued enforceability of statutory provisions that the plaintiffs lack standing to challenge:

MR. KNEEDLER: Thank you, Mr. Chief Justice, and may it please the Court: There should be no occasion for the Court in this case to consider issues of severability, because as we argue, the — the minimum coverage provision is fully consistent with Article I of the Constitution. But if the Court were to conclude otherwise, it should reject Petitioners’ sweeping proposition that the entire Act must fall if this one provision is held unconstitutional. As an initial matter, we believe the Court should not even consider that question. The vast majority of the provisions of this Act do not even apply to the Petitioners, but instead apply to millions of citizens and businesses who are not before the Court -­

CHIEF JUSTICE ROBERTS: How does your proposal actually work? Your idea is that, well, they can take care of it themselves later. I mean, do you contemplate them bringing litigation and saying — I guess the insurers would be the most obvious ones -­ without — without the mandate, the whole thing falls apart, and we’re going to bear a greater cost, and so the rest of the law should be struck down. And that’s a whole other line of litigation?

MR. KNEEDLER: Well, I — I think the continuing validity of any particular provision would arise in litigation that would otherwise arise under that provision by parties who are actually -­

CHIEF JUSTICE ROBERTS: But what cause of action is it? I’ve never heard of a severability cause of action.

MR. KNEEDLER: Well, in the first place, I don’t — the point isn’t that there has to be an affirmative cause of action to decide this. You could — for example, to use the Medicare reimbursement  issue is one of the things that this Act does is change Medicare reimbursement rates. Well, the place where someone adjudicates the validity of Medicare reimbursement rates is through the special statutory review procedure for that. And the same thing is true of the Anti-Injunction Act -­

JUSTICE SCALIA: Mr. Kneedler, there are some provisions which nobody would have standing to challenge. If the provision is simply an expenditure of Federal money, it doesn’t hurt anybody except the taxpayer, but the taxpayer doesn’t have standing. That — that just continues. Even though it is — it should — it is so closely allied to what’s been struck down that it ought to go as well. But nonetheless, that has to continue because there’s nobody in the world that can challenge it. Can that possibly be the law?

MR. KNEEDLER: I think that proves our point, Justice Scalia. This Court has repeatedly said that just because there’s — no one may have standing to challenge — and particularly like tax credits or taxes which are challenged only after going through the Anti-Injunction Act, just because no one has standing doesn’t mean that someone must. * * *

JUSTICE SCALIA: But those are provisions that have been legitimately enacted. The whole issue here is whether these related provisions have been legitimately enacted, or whether they are so closely allied to one that has been held to be unconstitutional that they also have not been legitimately enacted. You can’t compare that to — to cases dealing with a statute that nobody denies is constitutional.

MR. KNEEDLER: This case is directly parallel to the Printz case, in our view. In that case, the Court struck down several provisions of the Brady Act, but went on to say it had no business addressing the severability of other provisions that did not apply to the people before [the Court].

The questions posed by Chief Justice Roberts and Justice Scalia here can be distilled to two:

(1) If the Court doesn’t address severability in this case, won’t that leave a mess that the federal judiciary might not be able to be sort out in further litigation?

(2) Should the federal judiciary permit provisions in the statute that nobody can challenge in court to stay in effect as law even though they are “closely allied to one that has been held to be unconstitutional”?

The correct answers to these two questions are Yes and Yes.

Yes, it would create a mess for the Supreme Court to hold the so-called individual mandate unconstitutional without addressing the continued enforceability of other PPACA provisions. But that mess is not the federal judiciary’s problem except to the extent that the enforceability of those other PPACA provisions can be challenged in a case or controversy by someone that they injure in a judicially cognizable way. True, there is no “severability cause of action.” But a regulated entity can, in some circumstances, seek a declaratory judgment and injunction on the ground that a federal statute purportedly applicable to it does not have the force of law. If it were a valid legal argument to say that a statutory provision, itself perfectly constitutional, should not be enforceable because Congress would not have enacted it in the absence of another statutory provision that is unconstitutional, then someone can raise that argument in an appropriate pre-enforcement claim for declaratory and injunctive relief. Under current severability doctrine, that could be a valid legal argument. It ought not to be, because the fact Congress would not have enacted the provision should not be allowed to undo the fact that Congress did pass the provision. But whether this is a valid legal argument and whether it ought to be are two different questions.

Yes, the federal judiciary should leave alone statutory provisions that cause no legally cognizable injury to the parties properly before a federal court in a case or controversy. The doctrines that define the case or controversy requirement set the boundaries of the judicial domain. Anything outside those boundaries is none of the federal courts’ business.

As Justice Scalia recognized in Hamdi v. Rumsfeld, the Supreme Court sometimes adopts a “Mr. Fix-it Mentality” in which the Court “seems to view it as its mission to “Make Everything Come Out Right, rather than merely to decree the consequences, as far as individual rights are concerned, of the other two branches’s actions and omissions.”  The oral arguments over the severability of the so-called individual mandate reveal a Court tempted to play this role.

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The prospect of the Supreme Court deploying severability doctrine in any high-stakes litigation should fill legalists with dread. And the present challenge to the so-called individual mandate in the Patient Protection and Affordable Care Act is high-stakes litigation.

Severability doctrine is a discretionary destructive device. And when judges wield it to lay waste to legislative handiwork, everyone loses. The only winners are the cynics about law whose cynicism is vindicated by the judiciary’s adventuresome expansion of invalidity beyond unconstitutionality.

My first article-length law review piece, Partial Unconstitutionality, was about severability. I wrote it before the PPACA was enacted and without that legislation in mind. In fact, severability doctrine seemed at the time to be in the backwaters of scholarly and judicial interest. That was typical. Nobody pays attention to severability until it matters, and then the doctrine usually evades scrutiny by remaining in the shadows of the substantive constitutional rulings that occasion its application. Sure, there have been bouts of handwringing about severability–as when the Court was busy striking down New Deal legislation in the 1930s, or when INS v. Chadha‘s constitutional holding threatened over 200 statutes that also contained legislative vetoes in the early 1980s. But life would go on and severability would slink back into the shadows.

The recent oral arguments about the severability of the so-called individual mandate have shone a spotlight on severability. And what we have seen isn’t pretty.

The good news is that the Justices recognize an ugly doctrinal state of affairs. The bad news is that there appears little prospect when working within the assumptions of current doctrine to make it better. Barring some serious rethinking of the doctrine, its use in the health care litigation (if it ends up being used) can only make a bad doctrinal situation worse.

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Virginia Attorney General Ken Cuccinelli comments on a Justice Kennedy comment at oral argument over the constitutionality of 26 USC 5000A:

Justice Kennedy noted that the mandate was unique in light of its affirmative requirement of a citizen to purchase something, and that would appear to alter the relationship between the government and individuals in a “fundamental way.”  This is a powerful and deeply philosophical statement that I take great comfort in.

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Commentators are already suggesting that there could be a backlash against the Supreme Court if it rules by a 5-4 vote that the so-called individual mandate is unconstitutional. In part for reasons that Sandy Levinson has already identified (with support from an intriguing paper by political scientist James Gibson), however, the opposite may be true. The mandate is incredibly unpopular and a majority of Americans believe not only that it is unconstitutional but also that the Supreme Court will hold it unconstitutional. And many Americans want the Supreme Court to act like a super-legislature.  (“Super” in the senses of both “above” and “better.” “Legislature” in the sense of both making and unmaking the law.) This desire for the Court to act as a super-legislature stems less from ideological or partisan understandings of the relationship between the Court and the elected branches than from a sense that the Court should speak for the people when it speaks in the name of the Constitution.

A recent Kaiser Family Foundation poll of  a nationally representative random sample of over 1,200 people asked what factor should play the most important role in the justices’ decision in the healthcare case. The top answer was “the views of average Americans,” which came in at 34%. That beat out “the justices’ analysis and interpretation of the law,” which came in at 29%.

The remaining four choices were “whether the justices themselves hold  liberal or conservative views,” “national politics,” “whether a justice was appointed by a Republican or Democratic president,” and “the justices’ past personal experiences.” None of these choices received more than 5% agreement. The minimal role that people think ought to be played by these last four factors may seem like good news. But the aggregate percentage for these four factors taken together is 16%. When added to the 34% who think that the views of average Americans should play the most important role, a full 50% of respondents to this question think that something other than the justices’ analysis and interpretation of the law should be paramount in the Court’s consideration.

Answers to the question about what should play the most important role indicate what people think should give way when push comes to shove, but it need not exclude a significant role played by the law. When asked what should play a major role, the most popular choice was “the justices’ analysis and interpretation of the law,” receiving 53% agreement, followed by “the views of average Americans,” with 50% agreement.

Interestingly, only 27% of respondents thought that the views of average Americans would play a major role in the justices’ deliberations.  In other words, a much greater percentage of respondents thought that the views of average Americans should play a major role (50%) than thought that those views would play a major role (27%). While some legal elites criticize the Court’s conservative Justices for appearing to traffic in talk-radio hypotheticals, that sort of permeability between popular constitutionalism and Supreme Court decisionmaking seems to be what many Americans want.

Critics of a potential 5-4 holding that the so-called individual mandate is unconstitutional also overlook the possibility of a backlash against the Supreme Court for upholding the law. Respondents to the Kaiser poll were asked how they would feel if the mandate were ruled unconstitutional. Just 12% said that they would be angry, compared with 17% who said that they would be enthusiastic. Another 30% said that they would be disappointed but not angry, but 32% said that they would be satisfied but not enthusiastic. By contrast, respondents were asked how they would feel if the mandate were ruled constitutional. A whopping 25% said that they would be angry, while only 13% said that they would be enthusiastic. Another 30% said that they would be disappointed but not angry, while 26% said that they would be satisfied but not enthusiastic. When a nationally representative poll says that more than double the percentage of people will be angry if a law is upheld than if it is struck down, and 55% of respondents say that they will be either angry or disappointed with a ruling upholding the law, it is hard to see what kind of significant backlash would be generated by a decision holding the law to be unconstitutional.

This is not a case where the Court needs to think twice to rule “hey, give ‘em what they want.”

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The Supreme Court has had a hard time improving on Chief Justice Marshall’s McCulloch v. Maryland formulation of the doctrinal test for Congress’s power under the Necessary and Proper Clause. At one point in time, the Court even adopted that formulation as its test for the reach of Congress’s power under Section 5 of the Fourteenth Amendment. In City of Boerne v. Flores, however, the Court tried to do better in its Section 5 jurisprudence. That was a mistake. Boerne‘s congruence and proportionality test is a “flabby test” that is “a standing invitation to judicial arbitrariness and policy-driven decisionmaking,” as Justice Scalia reiterated in a solo concurrence just last week.

Based on this week’s oral arguments on the constitutionality of the “individual mandate,” at least some of the Justices appear willing to formulate a new doctrinal test for what counts as a “Proper” law under the Necessary and Proper Clause. As they were in Boerne, the Justices are on a search for a limiting principle on Congress’s power. In their attempt to not Garcia-ize the Commerce Clause and the Necessary and Proper Clause, let us hope that they do not Boerne-ize those powers instead.

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During today’s oral arguments about the severability of Section 5000A, neither the Justices nor counsel could come up with a case in which the Court had left standing the rest of a partially unconstitutional statute after “excising” its “heart.”

Justice Scalia pressed Edwin Kneedler, counsel for the federal government, for an example. Kneedler suggested United States v. Booker, but Justice Scalia rejected it as inapt. Mr. Kneedler then stated that “there is no example,” which led Justice Scalia to say: “This is really a case of first impression. I don’t know another case where we have been confronted with this — with this decision. Can you take out the heart of the Act and leave everything else in its place?”

One example that comes to mind, however, is the federal income tax, which the Supreme Court held partially unconstitutional and inseverable in Pollock v. Farmers’ Loan & Trust Co., 158 U.S. 601 (1895). This was the case later described by Justice Jackson, in The Struggle for Judicial Supremacy, as “a brilliant and smashing victory” for “the opponents of majority rule.” The Court held in Pollock that a tax on income from property was an unconstitutional direct tax. There was no similar constitutional problem with a tax on income from wages and salaries. But the Court held that the income tax was inseverable and therefore entirely unenforceable, not only as to income from property but also as to income from wages and salaries. This was a massive blow to the government. And it is commonly thought that, in Justice Jackson’s words, “the whole Act fell.” But that is incorrect. The income tax was part of a larger Act called the Wilson-Gorman Tariff Act of 1894. In Pollock, the Supreme Court rendered unenforceable sections 27 to 37 of this Act, but not the remainder. It is a judgment call whether the income tax provisions were the “heart” of this Act (just as the relative importance of Section 5000A to the PPACA can be debated as well). But the inclusion of the income tax was important to the overall legislative bargain because it was supposed to raise revenue that would be lost by the lowering of tariff rates. Given the importance of the income tax politically and the high-profile nature of the Supreme Court’s invalidation of it–ultimately leading to the Sixteenth Amendment–perhaps Pollock is the precedent the Court is looking for.

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If you’re interested in the severability of Section 5000A from the rest of the PPACA and would like a refreshingly clear-headed take on severability doctrine generally, check out Sense and Severability, the remarks of Tobias Dorsey at the University of Richmond Law Review’s 2011 Allen Chair Symposium, “Everything but the Merits: Analyzing the Procedural Aspects of the Health Care Litigation.” Dorsey’s prediction from last November  seems even more prescient today than when made:

[I]f we get to severability, I see a two-way split much like the two-way split in Booker, with the Chief Justice and Justice Kennedy joining the three more conservative Justices in holding the mandate unconstitutional, and the Chief Justice and Justice Kennedy joining the four more liberal Justices in taking the Solicitor General‘s point of view.

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Perhaps the Solicitor General will have more luck with a different aspect of Printz tomorrow?

One of the more pointed lines of questioning directed toward the Solicitor General regarding the constitutionality of Section 5000A came from Justice Scalia with respect to “Proper” in “Necessary and Proper”:

JUSTICE SCALIA: Wait. That’s — it’s both  “Necessary and Proper.” What you just said addresses  what’s necessary. Yes, has to be reasonably adapted. Necessary does not mean essential, just reasonably adapted. But in addition to being necessary, it has to  be proper. And we’ve held in two cases that something that was reasonably adapted was not proper, because it violated the sovereignty of the States, which was implicit in the constitutional structure. The argument here is that this also is — may be necessary, but it’s not proper, because it violates an equally evident principle in the Constitution, which is that the Federal Government is not supposed to be a government that has all powers; that it’s supposed to be a government of limited powers. And that’s what all this questioning has been about. What — what is left? If the government can do this, what — what else can it not do?

GENERAL VERRILLI: This does not violate the norm of proper as this Court articulated it in Printz or in New York because it does not interfere with the States as sovereigns. This is a regulation that — this
is a regulation -­

JUSTICE SCALIA: No, that wasn’t my point. That is not the only constitutional principle that
exists.

GENERAL VERRILLI: But it -­

JUSTICE SCALIA: An equally evident constitutional principle is the principle that the Federal Government is a government of enumerated powers and that the vast majority of powers remain in the
States and do not belong to the Federal Government. Do  you acknowledge that that’s a principle?

GENERAL VERRILLI: Of course we do, Your Honor.

JUSTICE SCALIA: Okay. That’s what we are talking about here.

Justice Scalia’s expansive invocation of quasi-Printz suggests a distinction that he perceives between HHS v. Florida and Gonzales v. Raich.

There is another aspect of Printz that the Solicitor General will rely on tomorrow with respect to severability. That is the Court’s’ refusal to adjudicate the severability of provisions that only burdened parties not before the court. After holding unconstitutional a provision requiring CLEOs (or Chief Law Enforcement Officers) to perform background checks on firearms purchasers, there remained a severability question whether firearms dealers remained obligated to forward to the CLEO the requisite background information and to wait five days before consummating the sale. These steps seemed a pointless formality after the invalidation of the CLEOs’ obligation to do background checks. But the Court’s opinion refused to address the issue:

These are important questions, but we have no business answering them in these cases. These provisions burden only firearms dealers and purchasers, and no plaintiff in either of those categories is before us here. We decline to speculate regarding the rights and obligations of parties not before the Court.

Relying on this aspect of Printz, the federal government has argued that the Supreme Court has no authority to decide the severability of provisions, even the guaranteed issue and community rating requirements, that do not burden the parties to the case.

Printz aside, I think the federal government is right about this as a matter of first principles. Unfortunately, severability has long been an area where first principles have been ignored. Perhaps tomorrow’s arguments will provide a chance for the Court to come face to face with the many problems of its severability doctrine, including the frankly legislative determinations it authorizes the judiciary to undertake.

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I’ve finally been able to review the transcript of today’s oral arguments in the healthcare litigation. The federal government’s position on the Anti-Injunction Act appeared to make it through today’s oral arguments with fewer dings than the positions of the amicus curiae and the challengers. The government’s position appears attractive to the Justices because adopting it would enable them to reach the merits without throwing too big of a wrench into the general machinery of tax enforcement. The broader theories advanced by the challengers would pose such a threat, while adopting the amicus curiae’s position would not allow the Supreme Court to reach the merits at this time. The federal government’s position is legally convoluted, but its narrow scope apparently covers many legal blemishes.

The amount of time spent on the jurisdictionality of the provision surprised me. An effect of the apparent division on the Court with respect to that issue may be to render more attractive the federal government’s position that the Act is inapplicable. As the Solicitor General’s response to questioning by Justice Ginsburg revealed, the Court need not decide whether the Anti-Injunction Act is jurisdictional if the Court concludes that it is simply inapplicable to this challenge to Section 5000A.

In part for reasons explored in this post from last October, I was surprised that Chief Justice Roberts characterized Helvering v. Davis as the “biggest hurdle” facing the amicus curiae’s claim that the AIA is jurisdictional. As Justice Breyer and Justice Scalia pointed out in their questioning, Davis was a suit in which the remedy sought was ordering the corporation not to pay the tax. It was not a suit restraining the assessment or collection of a tax even though the United States intervened as a defendant.

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Some say that the challengers to the individual mandate can win even if they lose on the merits. That is, they can win the broader battle for public opinion even if they lose in the Supreme Court. I think that’s right. This kind of win is a common goal of public impact litigation. But the strategy thus far pursued by the mandate challengers differs from the strategy one often sees in such litigation. A typical strategy focuses on real people and the effect of the challenged rule on them. Not so the individual mandate challenges.

In a recent post at The Volokh Conspiracy (“Public Opinion, the Individual Mandate, and  the Supreme Court”), Ilya Somin compares the potential backlash that could be generated by a Supreme Court decision upholding the constitutionality of the mandate with the backlash generated by the Kelo case. The Supreme Court held in Kelo that government can use its power of eminent domain to take the property of an individual for use in a private party’s redevelopment efforts. The idea was that this would serve a “public use” by generating more tax revenue. One of the strategies of the challengers in Kelo was to highlight the plight of a particular individual, Susette Kelo, showing how the government was going to affect her life by taking her house away.

Contrast this strategy with that pursued by the individual mandate challengers. They have focused on the deprivation of liberty inherent in being ordered by the federal government to enter into, and stay in, an economic relationship with another private party. But this focus has not involved real people. Perhaps understandably, the mandate challengers have thus far chosen not to focus on the plight of particular individuals. Some may have read news stories about Kaj Ahlburg, one of the original plaintiffs, and others may have read stories about Mary Brown, another one of the original plaintiffs. But nobody knows much about Dana Grimes and David Klemencic, who were added to the case at the Supreme Court level. The reality is that, after two years of litigation, we don’t know much about any of the individual mandate challengers.

It could be that the more we find out about their personal circumstances, the less plausible their challenge to the mandate becomes. What has been learned thus far has benefitted the federal government. Most notably, a story in the Wall Street Journal highlighted the personal circumstances of Mary Brown, who filed for bankruptcy and included unpaid medical bills in her list of outstanding debts. Seizing on this fact, the federal government pointed out in a brief filed with the Supreme Court that the likelihood of an individual having significant unpaid medical bills is much lower if that person has private insurance to cover their significant medical expenditures. This story shows how  learning about a particular individual challenger’s circumstances could allow one to construct a story about how it is plausible for a given individual to run up medical bills that would exceed his or her ability to pay. Such a story would give credence to the government’s argument that mandatory insurance is a reasonable means of preventing or combatting the cost shifting that takes place when unpaid medical care is delivered.

By reflecting on this litigation strategy of minimizing the individual circumstances of particular people and highlighting the deprivation of liberty at a very abstract level, one can begin to see the wisdom of the approach to adjudication adopted by Judge Sutton in the Sixth Circuit. Judge Sutton argued that the appropriate way to analyze the constitutionality of the requirement to obtain and maintain a particular level of insurance coverage would be to look at the application of that requirement to particular people, rather than to assess it in the abstract, or as a “facial” matter. Judge Sutton further argued that it would be inappropriate to invalidate the mandate across the board, especially in a pre-enforcement setting, when its application to various classes of people would undoubtedly fall within Congress’s powers as construed by the Supreme Court.

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I had the privilege this morning to participate as a panelist in the Politico Pro Health Care Breakfast Briefing. My fellow panelists were Walter Dellinger, Tom Goldstein, Neal Katyal, and Nina Totenberg. I enjoyed the morning and think we covered a lot of ground.

Nobody (including me) predicted victory for the challengers. Walter Dellinger predicted (and Neal Katyal agreed) that the Court would uphold the mandate’s constitutionality, that it would not be 5-4, and that Chief Justice Roberts would probably write for the Court. Tom Goldstein also predicted victory for the federal government, but thought that we might see a per curiam opinion. Nina Totenberg predicted that Justice Scalia would vote to hold the minimum coverage provision unconstitutional, but declined to speculate about the outcome overall. I declined to speculate about particular Justices, but expressed the view that the Court would vote to uphold the mandate’s constitutionality if it reached the merits of that issue. As many others have observed, the provision’s challengers go in with what looks to be a 4-1 deficit. The likelihood that they will run the table on the remaining four Justices seems low, especially in light of how the litigation played out in the lower courts. That said, “the experts” were wrong about Lopez and Morrison. Time will tell.

The main issue on which I may have viewed things differently from the other panelists was on the Anti-Injunction Act. While I believe it is more likely than not that the Court will reach the merits of the individual mandate, I think that the textual arguments for the Anti-Injunction Act’s applicability are strong and that the possibility of a majority voting to find the AIA applicable is greater than 20%. My recollection is that at least some of the others (particularly Nina Totenberg and Neal Katyal) thought that the Court would be much more likely to favor prompt review out of a belief that the country needs an answer from the Supreme Court now.

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Lyle Denniston at SCOTUSBlog has a post discussing the Solicitor General’s Supreme Court filing that requests additional argument time for the Anti-Injunction Act arguments and sets forth the various parties’ positions regarding the distribution of argument time on the other issues.

While the Solicitor General and the challengers to § 5000A agree that the AIA should not be interpreted to bar the present pre-enforcement challenges, they disagree on why. The DOJ has offered a narrow argument, focused on specific features of § 5000A. While the challengers agree with this narrow argument, they also offer broader arguments that the DOJ sees as a threat to its long-term institutional interest in the proper application of the Anti-Injunction Act:

The Government and both sets of respondents take the position that, contrary to the submission by the amicus, this suit challenging the constitutionality of the minimum coverage provision is not barred by the AIA. All the parties therefore seek the same bottom-line result on this issue – i.e., a holding that the AIA does not bar the Court from considering the merits of that challenge. But the Government, alone among the parties, has a critical long-term institutional interest in the sound application of the AIA, because the Government has been and will continue to be the defendant in numerous cases in this Court and the lower courts in which the AIA is at issue. It therefore is important that there be an opportunity for counsel for the Government to present, and for the Court to consider, a full explanation of the Government’s position, which will be afforded by our proposed allocation. By contrast, respondents’ primary interest in the AIA issue is that this particular case should be permitted to proceed – a position with which, as noted above, the Government agrees.

The nature of the arguments presented by the parties further supports the allocation of argument time proposed above. The Government argues that the text of 26 U.S.C. 5000A (Supp. IV) as added by the Affordable Care Act, when read together with other relevant provisions of the Internal Revenue Code, does not trigger the AIA’s bar. Respondents have not taken issue with that submission, and they will receive full relief on the AIA issue if the Court agrees with it, because the Court in that event would be able to consider the challenge to the constitutionality of the minimum coverage provision. But respondents also advance additional, and broader, arguments in support of the proposition that the AIA does not bar their suits. States Cert.-Stage Br. 14- 18; NFIB Cert.-Stage Br. 14-16. The Government does not agree with those additional arguments by respondents, which in the Government’s view are contrary to the text, purposes, and judicial construction of the AIA. See Gov’t Cert.-Stage Reply Br. 2-11. Counsel for the Government therefore must have sufficient time at oral argument not only to advance the Government’s position that the AIA does not bar respondents’ challenge to the minimum coverage provision and to oppose the amicus’s contrary position, but also to oppose respondents’ additional arguments against application of the AIA. Respondents, by contrast, will have no need to devote any of their argument time to opposing the Government’s argument for why the AIA does not bar their challenge.

SG Motion for Additional Time for Oral Argument and for Allocation of Argument Time Nos. 11-393, 11-398, 11-400 (emphasis added).

My own view–formed without the benefit of the anti-AIA briefs to be filed soon–is that the federal government and the challengers are both wrong and that the AIA does bar a pre-enforcement challenge to § 5000A of the tax code (a/k/a the individual mandate). The federal government properly opposes the challengers’ broader rationales for disregarding the AIA. But the federal government’s change of position on the AIA is difficult to square with the text of § 5000A and the congressional design that it reflects. And it is easy to see how both political and pragmatic considerations, rather than straight-on legal analysis, drove the federal government to switch from initially arguing that the AIA does bar pre-enforcement challenges to the present position that it does not.

It may also be worth noting that the push for both sets of challengers to have argument time on the AIA is yet another unfortunate consequence of the Eleventh Circuit’s decision not to address the States’ lack of a justiciable challenge to the individual mandate. (For argument in support of this claim, see my Eleventh Circuit amicus brief in Florida v. HHS or section II.D of The Ghost that Slayed the Mandate.)

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The papers from the “Everything But the Merits” symposium on the healthcare litigation held at the University of Richmond School of Law last November (11/11/11) will be published in the March 2012 issue of the University of Richmond Law Review. Draft versions of several are now available on SSRN. The paper with the most immediate relevance to the ongoing litigation is Edward Hartnett’s, which addresses the topic of facial and as-applied challenges.

Here are links to the currently available SSRN versions of the papers:

A. Christopher Bryant (Cincinnati), Constitutional Forbearance

Tobias A. Dorsey (Federal Practice), Sense and Severability

Edward A. Hartnett (Seton Hall), Facial and As-Applied Challenges to the Individual Mandate of the Patient Protection and Affordable Care Act

Elizabeth Weeks Leonard (Georgia), The Rhetoric Hits the Road: State Resistance to Affordable Care Act Implementation

Kevin C. Walsh (Richmond), The Anti-Injunction Act, Congressional Inactivity, and Pre-Enforcement Challenges to Section 5000A of the Tax Code

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I recently posted to SSRN a draft version of the paper that arose out of my participation in the “Everything But the Merits” symposium on the healthcare litigation held at the University of Richmond School of Law last November (11/11/11). The papers from the symposium will be published in the March 2012 issue of the University of Richmond Law Review.

The title of my paper is The Anti-Injunction Act, Congressional Inactivity, and Pre-Enforcement Challenges to Section 5000A of the Tax Code.

Abstract below.

(more…)

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The Supreme Court granted a motion last week to add two individuals to the case it will hear addressing the constitutionality of the minimum essential coverage provision in the Affordable Care Act. (See Lyle Denniston’s post on the order at SCOTUSBlog.) This makes it less likely that the Court will need to reach the question whether the States can bring a justiciable challenge to that provision, which imposes obligations on individuals but not on States. That is all for the good, as the States do not have standing.

In the course of reading on an unrelated subject, I came across the following quotation that I thought worth passing along:

If Congress passes a law which exceeds the powers granted to it, the States–now that the doctrine of nullification is dead–do not raise the question of constitutionality, and contend with the national government, but the law goes quietly into the statute-book, and any person who feels aggrieved by it brings it before the courts, as he would the by-law of a railroad company the validity of which he wanted to test.

1 A. Lawrence Lowell, Essays on Government 104 (1890).

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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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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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Ruth Marcus of the Washington Post argues in an op-ed that a Supreme Court ruling on the constitutionality of the individual mandate should come sooner rather than later. The argument targets some of the prudential reasoning at the end of Judge Kavanaugh’s dissent in Seven-Sky v. Holder while passing over Kavanaugh’s “technical interpretation of the statute.” Marcus argues that “the arguments of Kavanaugh and other advocates of constitutional can-kicking are unconvincing.” Fine. But whatever one’s prudential views about timing, they cannot overcome what a straightforward textual interpretation of the AIA requires. For that reason, advocates of AIA avoidance should aim their arguments at Congress in seeking an exception from the AIA (as I have previously argued).

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David Rivkin & Lee Casey have an op-ed in the Wall Street Journal that contains some misleading argument about the federal tax Anti-Injunction Act (alternate link here). Here are the key paragraphs:

Finally, the Supreme Court has also agreed to consider one of the highly technical arguments raised in the case, whether the federal Anti-Injunction Act (AIA) prohibits a challenge to the individual mandate before the requirement actually takes effect in 2014. This issue has always been a red herring, arising because the government tried to argue that the individual mandate can be justified under Congress’s power to tax, even if it is insupportable under the power to regulate interstate commerce.

Virtually every lower court to consider ObamaCare—both those that have struck down the law as unconstitutional and those that have upheld it—has agreed that the AIA does not apply here. There is every reason to believe that the Supreme Court will do the same. The AIA was designed to protect federal tax-collection activities, generally requiring that a tax be paid before its legality can be challenged in court. The mandate, of course, is not a tax—but an affirmative regulatory requirement. It is enforced by a penalty. The only connection with the federal tax apparatus is that the penalty will be collected by the Internal Revenue Service from tax refunds otherwise due to violators, and its application here would only postpone challenges to the individual mandate to 2014.

A few problems with these two paragraphs:

(1) The federal tax AIA bar does not arise “because the government tried to argue that the individual mandate can be justified under Congress’s power to tax.” In fact, such an assertion is doubly wrong. First, the issue arises because the statutory text of the ACA requires that the tax penalty be assessed and collected in the same manner as other tax penalties that cannot be challenged pre-enforcement because of the federal tax Anti-Injunction Act. Second, Rivkin & Casey’s opposing counsel disclaim a connection between the constitutional justification of the tax penalty as a tax and the operation of the AIA as a bar. Although one would not know it (and would probably think the opposite) from reading the Rivkin & Casey op-ed, the Supreme Court has held that a challenge to a penalty may be barred by the AIA even if the penalty is not “justified under Congress’s power to tax.”

(2) The split on the AIA in the circuit courts of appeals is 2-1, the same as the split on the unconstitutionality of the individual mandate. If these splits were predictive, then Rivkin & Casey should predict that their challenge will lose on the merits.

(3) The connection between the tax penalty for non-compliance with the insurance requirement and the “federal tax apparatus” is not limited to the means of enforcement. The calculation of the penalty (and therefore the assessment of the amount due on one’s tax return) depends on other elements of an applicable individual’s tax return.

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The D.C. Circuit’s opinion upholding the minimum essential coverage provision is available here. Brad Joondeph has a quick summary at ACA Litigation Blog. More to come here on the Anti-Injunction Act, which split the panel. Judge Kavanaugh’s dissent is, in my estimation, persuasive and powerfully reasoned. The nature of the 2-1 circuit split on the applicability of the Anti-Injunction Act suggests that, at the very least, the issue is a difficult and close one.

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