Balkinization: The Lost Court Decision that Could Have Resolved Texas v. California

The Lost Court Decision that Could Have Resolved Texas v. California

Guest Blogger

Timothy Jost

As Texas v. California, the lawsuit seeking to invalidate the entire Affordable Care Act, continues its steady march toward a Supreme Court decision, the issue that has emerged as the most important in the case is that of severability—if the Court finds the individual mandate unconstitutional, as both the district court and Fifth Circuit did, how much of the rest of the ACA must be jettisoned with it?

Of course, there are other issues before the Court: Do the plaintiffs have standing? Is the now unenforceable mandate in fact unconstitutional? But the most significant question before the Court is, if the mandate is unconstitutional can it be severed from the ACA or do certain insurance reforms have to go with it, or does it take the entire ACA down. Both plaintiff’s briefs filed on June 25, as well as the federal government’s brief in an odd way, argue for total invalidation.

Curiously, the question of severability has been carefully examined and persuasively resolved in earlier litigation involving most of the same plaintiffs bringing the current case. Minutes after the ACA was signed into law by President Obama, a coalition of 26 states joined by two individuals and the NFIB filed a lawsuit in federal court in Florida claiming that numerous provisions of the ACA were unconstitutional. The 26 states included all but 4 of those states currently challenging the ACA before the Supreme Court. Judge Vinson rejected many of their claims but held that Congress lacked the constitutional authority to adopt the individual mandate. Florida v. HHS, 780 F.Supp.2d 1286 (N.D.Fla. 2011). He also held that with the mandate gone, the rest of the ACA must be invalidated.

That decision was appealed to the 11^th Circuit. In a 2 to 1 decision (with the dissenter voting to reject all the plaintiffs’ claims and uphold the mandate), the 11^th Circuit agreed that the mandate was unconstitutional. Florida v. U.S., 648 F.3d 1235 (11^th Cir. 2011). The court further held, however, that the mandate was entirely severable from the rest of the ACA.

The discussion of the severability issue is lengthy, detailed, and persuasive. It fills over eight Federal Reporter pages. It first lays out the principles that the Supreme Court has relied on in deciding severability cases: “Courts must ‘‘strive to salvage’’ acts of Congress by severing any constitutionally infirm provisions ‘‘while leaving the remainder intact.” and ‘‘Unless it is evident that the Legislature would not have enacted those provisions which are within its power, independently of that which is not, the invalid part may be dropped if what is left is fully operative as a law.’’

The court next applies these principles to review Judge Vinson’s decision that the entire ACA was inseverable from the mandate and should be entirely invalidated. The court concluded that invalidation of the individual mandate would not prevent most of the ACA from being fully operative as a matter of law. . . . “the lion’s share of the Act has nothing to do with private insurance, much less the mandate that individuals buy insurance.” Much of the district court decision had relied on the absence of a severability clause in the ACA, but the 11^th Circuit decision explained at length why this was irrelevant.

The court then turned specifically to the severability of the individual mandate from the guaranteed issue and preexisting condition ban provisions of the ACA. The Department of Justice had argued that these two reforms were definitely inseverable from the mandate. The court noted that these reforms could “fully operate as law” without the mandate and then asked whether Congress “would not have enacted them without the mandate.”

It offered a long list of arguments that it would have. First, there is no non-severability clause in the ACA. Second, none of the insurance reforms contain a cross-reference to the mandate. Third, the ACA has many other provisions to accomplish the same objectives as the mandate—the exchanges, the tax recredits, the cost-sharing reduction payments, the website, etc. Fourth, the mandate is limited in its operation because of its exemptions.

The court also discussed at some length the “findings” section of the mandate provision, on which both plaintiffs’ briefs and the DOJ filed June 25 rely very heavily for their argument that Congress decided the mandate was essential to the rest of the ACA and in particular to the insurance provision. The court noted the obvious—the findings were not included as a non-severability clause but to justify Congress relying on the Commerce Power to adopt the mandate. Also, the “findings” also say the mandate was essential to other laws outside the ACA, ERISA and the Public Health Services Act. Clearly, these laws were not meant to be invalidated.

The 11^th Circuit held, therefore, that, although the mandate was unconstitutional, the rest of the ACA survived untouched.

The Supreme Court granted certiorari. The Court appointed an amicus, who ably argued that the mandate was completely severable, and received about 30 briefs on the severability issue. It held a day of arguments on the severability issue.

The Supreme Court, however, reversed the 11^th circuit on the constitutionality of the mandate, finding it permissible as a tax, and the severability issue dropped out-- although severability was a major focus of the dissent. The 11^th Circuit decision, therefore, has no preclusive effect on the plaintiff states litigating the issue all over again, although I find it galling that they get a whole new bite at the apple.

Four of the over forty briefs filed in the Texas case before the Supreme Court mention the 11^th Circuit decision, although only one of them, a brief by David Boyle, discusses it at any length. A well-reasoned and persuasive opinion by a distinguished appellate court that resolved the central issue now before the Supreme Court—in a case brought by many of the same parties bringing the current case--has simply, and unfortunately, been lost.

Timothy Jost is Emeritus Professor of Law at Washington and Lee University School of Law. You can reach him by e-mail at Jostt at wlu.edu

Posted 9:30 AM by Guest Blogger [link]