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Posts Tagged ‘Section 5000A’

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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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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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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