Why the Court should grant the petitions in the ACA case despite the absence of any injunction

Marty Lederman

The recent Affordable Care Act decision by the U.S. Court of Appeals for the Fifth Circuit didn't, as a formal legal matter, result in any coercive judgment against anyone: No party is subject to any judicial decree, and no one is legally obligated to alter their behavior, as a result.  Ordinarily, that fact would be reason enough for the Supreme Court not to get involved in the case--not yet, anyway.

But this is no ordinary case.  The divided Fifth Circuit panel acted inexplicably--I think it's fair to say indefensibly--in two major respects, and thereby caused a de facto crisis in the national health care markets even in the absence of a formal injunction or declaratory judgment.  What's more, from all that appears the court of appeals did so deliberately, just so that its opinion would have such a convulsive impact.  That is to say, the upshot and apparent objective of the court of appeals' two egregious errors--something that cries out for immediate correction--is precisely that it chose to issue an interlocutory decision that can't be explained by anything other than a plan to sow chaos (not by any other apparent legitimate reason, anyway).  That ought to be reason enough for the Supreme Court to grant certiorari and to correct the court of appeals' errors with dispatch, despite the case's interlocutory posture.  [UPDATE: To be clear, I'm usually wary of attributing ill motives to judges and most other government officials except where the evidence is clear.  And, as some readers on Twitter have suggested, there are of course other possibilities here -- but all those they've identified would be even less legitimate; as I note below, the respondents and DOJ don't offer any justification for at least the panel's severability punt; and, at a minimum, the panel issued its substantively indefensible rulings without regard to the foreseeable impact on the nation's health markets.]

The intervening defendant States, California, et al., as well as the intervenor House of Representatives, have not only asked the Supreme Court to hear the case in this unusual interlocutory, noninjunctive posture, but also to expedite proceedings so that the Court can resolve the case by the end of its current Term in June.  The plaintiffs in the case, including Texas and other states, have opposed the motions for expedition, as has the Department of Justice.  And yesterday, the States and the House filed their reply briefs on the motion to expedite.  You can find all of the filings here (in the California case, No. 19-840) and here (in the House case, No. 19-841).

As the House explains in its reply brief, the real question before the Court now isn't so much whether to expedite consideration of the cert. petitions but instead whether to grant those petitions themselves, because if four or more Justices are inclined to hear the case in this interlocutory posture, the reason for doing so would be to eliminate the interim, in terrorem impact of the panel decision, something the Court can only do effectively if it resolves the case quickly, i.e., this Term.  To be sure, if the Court were to refuse the motion to expedite but then grant cert. later this Term, leading to a final decision in, say, early 2021, that would surely be much better than waiting until the lower courts both issue their decisions.  Nevertheless, even a year-long delay would allow for unnecessary damage to the health care system resulting from the court of appeals' interim decision.  Therefore, as the House writes, the respondents' arguments, nominally in opposition to the motion to expedite, actually "go[] to whether this Court should grant certiorari now—not whether the Court should expedite consideration of the petitions for certiorari and, should it grant certiorari despite respondents’ arguments, decide the case this Term."

As for whether the Court should grant cert.:  I wouldn't ordinarily say this about an interlocutory appeal without any coercive decree, but I think that in this idiosyncratic situation the Court ought to grant the petitions (and thus the motions to expedite) because of the stratagem that two judges on the Fifth Circuit employed here and the foreseeable effects their manipulations will have.

As I noted at the top, the Fifth Circuit panel did two indefensible things.

First, it held that Section 5000A of the ACA, as amended in 2017, is unconstitutional because it now purportedly imposes a legal obligation on individuals to maintain health insurance--something the panel accuses the Republican-majority Congress and Donald Trump of having done in 2017 in defiance of the Supreme Court's own holding in NFIB v. Sebelius that Congress lacks the constitutional authority to impose such a mandate.

As regular Balkinization readers know, I've already explained at length, in a series of posts published before the court of appeals acted, why that reading of the statute--a reading the Department of Justice is now shockingly and irresponsibly defending--is patently implausible for at least four reasons, any one of which ought to have been sufficient to deter any serious lawyer or judge to reject that reading of the law.  Here's the short version.  (Those of you who're already familiar with my views can skip ahead a few paragraphs to the one beginning "Even so, ... ."):

First, the Supreme Court itself, in NFIB, already construed the two operative provisions of § 5000A to afford covered individuals a lawful choice between two courses of conduct, and the 2017 Congress did not amend those provisions, thereby leaving the lawful choice intact.  The court of appeals' contrary reading--that Congress in 2017 amended § 5000A to change a legal choice between two options into an invalid mandate to perform only the first of those options--thus makes no sense and flies in the face of the Supreme Court's authoritative reading of § 5000A (a reading that was necessary to its ultimate judgment).

Second, there’s no evidence in the legislative history—none at all—that any member of the 2017 Congress, let alone majorities of both Houses and the President, intended such a radical change or understood the amendment of subsection 5000A(c) to have such an effect.  To the contrary, every member of Congress to speak on the issue in 2017—from then-Speaker Ryan and Leader McConnell on down—as well as President Trump, confirmed that the point of the amendment was to eliminate any legal or financial pressure to purchase insurance, not to establish a legal obligation to buy it.  The court of appeals' reading, in other words, is one that no member of Congress or the President intended or foresaw, or that any member of Congress or the President would ever have accepted.  Indeed, just yesterday the President tweet-boasted that "I am honored to have terminated the very unfair, costly and unpopular individual mandate for you!"--a statement that directly contradicts and undermines the view his own DOJ is now arguing to the Supreme Court.  I don't write this often, but in this case . . . Trump is manifestly right.

Third, the court of appeals' (and DOJ's) reading would mean that tens or hundreds of thousands of people who didn't purchase health insurance were lawbreakers as of January 2019, even though that manifestly wasn't Congress's intent or design--and it would also mean that countless members of Indian tribes and indigent individuals who couldn't afford coverage have been recklessly and audaciously breaking the law for more than five years by failing to maintain covered insurance, even though Congress exempted them from the second of the two options.  As I wrote earlier, these implications of the panel's reading of the law are, "of course, ridiculous" fo, as Chief Justice Roberts wrote in NFIB, "Congress did not think it was creating [millions of] outlaws.”

Fourth, as I noted above, construing Congress’s modest amendment in 2017 as having converted Section 5000A from offering a lawful choice to imposing an invalid command to purchase insurance is effectively to accuse the 2017 Congress and the President of directly defying the Supreme Court—the precise opposite of what the constitutional avoidance canon demands.

For all these reasons, I genuinely think it's not hyperbolic to say that the court of appeals' (and DOJ's) reading of the amended § 5000A is about as misguided a case of statutory construction as you're likely ever to find.  In dissent, Judge King went so far as to write that it "boggles the mind."  I typically think that such rhetoric is inappropriate in judicial opinions.  This case, however, is the rare exception:  a more courteous description wouldn't capture just how indefensible the panel's reading of § 5000A truly is.

Even so, if that had been the only egregious error the panel made, the case wouldn't be cert.-worthy, because even though that reading of § 5000A led to the panel's additional holding that § 5000A is unconstitutional--a holding no one would dispute if the panel's reading of the provision were correct (which, as noted above, is one big reason why that reading is implausible)--that holding, standing alone, wouldn't change anyone's behavior, because it would have exactly the same impact as the correct reading of the amended § 5000A, which is that the provision doesn't require anyone to do anything.  Whether one reaches that conclusion because of the proper statutory interpretation (as any decent attorney or judge would) or because, on the incorrect reading, it's unconstitutional (the panel majority's ruling), makes no practical difference.  And it wouldn't warrant the Supreme Court's review at all, let alone on an expedited basis.

If that error stood alone.

But it doesn't.

Which brings us to the panel's second indefensible move:  It refused to decide whether the purported unconstitutionality of § 5000A rendered inoperative any or all of the other provisions of the ACA--the "severability" question that's driving the litigation.  Instead, the panel remanded that legal question back to District Court Judge O'Connor, knowing full well that he'll affirm his earlier decision that the entire ACA is nonseverable (or at most, that he might perhaps "sever" out a few of the less important provisions of the law).  The court of appeals thereby ensured that it'll be months before the question returns to the appellate court, and months more after that until the court of appeals actually enters a judgment enjoining anyone from doing anything.

As Judge King and many others across the political and jurisprudential spectrum have explained, the answer to the severability question is easy and straightforward, too:  Of course the 2017 Congress intended that the rest of the ACA would continue to operate even if § 5000A no longer requires or induces anyone to purchase health insurance.  Indeed, everyone in Congress in 2017 understood that § 5000A would no longer have those effects--not because it's unconstitutional, but simply because Congress "zeroed out" the shared responsibility payment (one of the two options available under § 5000A)--and yet Congress chose to leave the rest of the statute intact, thereby making its intent in this respect pellucidly clear.  As Judge King wrote in dissent:

Given the breadth of the ACA and the importance of the problems that Congress set out to address, it is simply unfathomable to me that Congress hinged the future of the entire statute on the viability of a single, deliberately unenforceable provision. ....  If Congress viewed the coverage requirement as so essential to the rest of the ACA that it intended the entire statute to rise and fall with the coverage requirement, it is inconceivable that Congress would have declawed the coverage requirement as it did.

"Unfathomable" and "inconceivable" are not exaggerations.  Thus, unsurprisingly, President Trump also understood, when he signed the bill, that it had not undone the key components of the ACA.  Indeed, in another tweet yesterday, he wrote that "I was the person who saved Pre-Existing Conditions in your Healthcare."  His own Solicitor General is now arguing exactly the opposite to the Supreme Court.  Once again, however, the President's understanding of his own (and Congress's) intent in 2017 is far more defensible--because it's obviously true--than the absurd reading the SG is offering.

Whatever one thinks of the merits of the severability question, however, the petitioners are right that little or no value would be served by allowing that question to be adjudicated in the first instance by the district court and the court of appeals, thereby delaying the Supreme Court's ultimate resolution of the case until 2022 or so.  There was no basis for the court of appeals to skirt the question.  The parties had fully briefed the question, urging opposite, categorical views that are antecedent to the sort of provision-by-provision analysis the panel instructed Judge O'Connor to apply.  If either side is right--if either all or none of the ACA provisions are severable from an inoperative § 5000A--that would be the end of the analysis and there'd be no justification for a painstaking severability review of all of the hundreds or thousands of provisions in the ACA, which would be a pointless exercise.  And there's nothing at all to be gained by waiting on the district judge's own view on this antecedent question, not only because we already know his view, but also because there's nothing he could add to what the parties themselves already argued to the court of appeals.  Severability is thus as ripe for decision as a legal issue can possibly be.  And it's a pure question of law of the sort the Supreme Court routinely decides in the first instance--indeed, the Court did so in NFIB itself with respect to the Medicaid expansion provisions of the ACA.

In contrast to the utter absence of benefits in further severability adjudication in the lower courts, the record demonstrates that the costs of waiting would be severe.  As the House writes in its reply brief:

[T]he Fifth Circuit’s decision creates crippling uncertainty for the health-care and health insurance marketplaces, and those harms fully warrant this Court’s review during the present Term.  See House Mot. To Expedite 5-6; see also State Intervenors Mot. To Expedite 5-7; State Defs. Mot. To Expedite 2-5 (5th Cir. Feb. 1, 2019).  As the record reveals, uncertainty over the ACA’s viability makes it difficult for insurers to predict the future of the marketplace, forcing some to raise premiums to account for that instability or to withdraw from the market.  See, e.g., State Defs. Mot. To Expedite, Bertko Decl. ¶ 4; Blewett Decl. ¶ 7; 7; Corlette Decl. ¶¶ 4-5, 7; Gobeille Decl. ¶ 4.  For smaller states with fewer insurers, losing even a single insurer will “negatively impact the stability and competitiveness” of the states’ health insurance markets.  E.g., id. Gobeille Decl. ¶ 2; Sherman Decl. ¶ 2.  That uncertainty also makes the process of rate-setting and managing the health insurance marketplace more complicated and costly.  E.g., id. Gobeille Decl. ¶¶ 6, 7; Sherman Decl. ¶ 7.  And, given that uncertainty, market participants and state governments must invest tremendous time and resources in developing contingency plans to alleviate the catastrophic effects of a sudden and immensely broad invalidation of the ACA.  E.g., id. Blewett Decl. ¶ 9; Gobeille Decl. ¶ 6; Sherman Decl. ¶ 7.

I'm the furthest thing from an expert on the health insurance and health care markets and so I don't have any independent views on whether and to what extent the alarms in the experts' declarations are accurate.  I do think it's telling, however, that none of the respondents even tries to make a serious case that those experts are wrong--i.e., that the Fifth Circuit’s decision doesn't pose a severe, immediate, and ongoing threat to the orderly operation of health-care markets throughout the country and thus casts doubt on the ability of millions of individuals to continue to be able to afford health care.

To the contrary, DOJ successfully urged the court of appeals to expedite its consideration of the case precisely in order to prevent the harms resulting from the continued “uncertainty in the healthcare sector” that the district court's decision had triggered.  Since then, that uncertainty has only gotten much worse because the panel affirmed the district court's absurd ruling that § 5000A is unconstitutional and signaled that it might eventually declare all or most of the ACA invalid as a result of that ruling.

As the House explains, it's especially remarkable that DOJ has now turned its back on its previous representations regarding the need for expedition because "while this litigation continues, the Executive Branch is being forced to devote massive resources, and spend billions of taxpayer dollars, to administer a comprehensive statutory scheme that it believes is wholly invalid.  It is difficult to fathom why the Executive would want that state of affairs to persist for years as th[e] Court awaits the outcome of unnecessary further proceedings in the lower courts."

To be sure, and as I noted at the outset of this post, the court of appeals has only issued an interlocutory ruling--one that doesn't include any injunctive decree.  But that is, in effect, exactly why the Court should grant certiorari and decide the case this Term.  The court of appeals majority (i) went out of its way "only" to (implausibly) declare § 5000A unconstitutional by reading it to do the opposite of what everyone knows Congress intended to do in 2017 (i.e., impose a patently unconstitutional mandate)--a holding that has no legal impact in and of itself--and then (ii) punted on the severability question, the one thing that could have had legal effect, in what appears to have been (iii) a deliberate effort to create an in terrorem situation while the litigation meanders on.

In effect, then, it looks as though the court of appeals is trying to exploit the fact that it issued no operative judgment in order to throw the health markets, and Congress's carefully crafted, complex solution to the nation's health care crisis, into a state of indefinite tumult.  Perhaps there's a more benign explanation for what the panel majority did here but, if so, I haven't seen it--and it's conspicuous that neither the respondents nor the SG makes much of an effort to identify any valid reason nor to otherwise defend what the court of appeals did.  The Supreme Court should insist, before further damage is done, that that's not an appropriate role for an Article III court to play.

The easiest way to do so would be for the Court simply to reverse the Fifth Circuit's patently mistaken reading of § 5000A--something it could easily do without much effort this Term.  Alternatively, the Court could conclude that it doesn't need even to review the panel's interpretation of the 2017 amendment to § 5000A because whether or not the 2017 Congress imposed a mandate to purchase insurance, it undoubtedly intended that the rest of the ACA would be operative even though § 5000A would have no effect.

Either way, the time to act is now.
Posted 8:34 AM by Marty Lederman [link]