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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.

(more…)

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