By Hadley Heath
In July, the House of Representatives voted to file a lawsuit against the Obama administration, alleging that the executive branch overstepped its authority while implementing ObamaCare. Today, that lawsuit was filed in the federal court in the District of Columbia. Specifically, the House of Representatives points out in their complaint that the Obama administration acted unilaterally to delay the employer mandates in ObamaCare and dispersed payments to insurance companies that were not authorized by Congress.
The defendants are HHS Sec. Sylvia Burwell, the Department of Health and Human Services, Treasury Sec. Jack Lew, and the Department of the Treasury.
To read the complaint, click here.
Today the Supreme Court announced it will hear the issue of Obamacare’s subsidies in the federal exchange, which challengers have alleged are illegal. Reuters reports:
In a one-sentence order, the court said it would decide a case brought by conservative challengers to the law. The plaintiffs appealed a July ruling by the 4th U.S. Circuit Court of Appeals that upheld the subsidies. The nine justices will issue a ruling by the end of June.
This suggests that the Justices are granting the cert petition filed in King v. Burwell. But the King case isn’t the only one to deal with this issue. Notably, Halbig v. Burwell is a very similar case that won in the D.C. Circuit Court of Appeals. Often, in the case of a split circuit, the Court will combine cases to hear the same issue and resolve the conflicting lower court rulings.
This issue poses an existential threat to ObamaCare. While it has been framed in the press as a politically-motivated attempt to gut ObamaCare of its subsidies (one of its essential features), this case is really about executing the law as it was written. Challengers point out that the law never authorized subsidies to be dispersed through a federal exchange, but only through an exchange established by a state.
If the Supreme Court were to side with challengers and rule that the IRS overstepped and illegally changed the implementation of the law without Congressional approval, the result would be that no subsidies would flow through the federal exchange. But this would not be the fault of these lawsuits – it would simply be the execution of ObamaCare as written.
Importantly, the subsidies trigger other not-so-popular mechanisms in the law, like mandates and penalties, which could also be affected if the law’s challengers prevail.
By Hadley Heath Manning
In a new and surprising development, the U.S. Court of Appeals for the D.C. Circuit has ordered that the Federal Government respond to their challengers' petition for an en banc hearing. This case, Sissel v. Department of Health and Human Services, centers on the Origination Clause and alleges that the Affordable Care Act was passed in an unconstitutional way. In short, according to Article 1, Section 7 of the U.S. Constitution, any legislation that raises taxes must originate in the House of Representatives. The ACA, or ObamaCare, includes 20 new taxes or tax increases, but originated in the U.S. Senate.
Although Matt Sissel did not initially succeed at the D.C. Circuit, he has filed now for an en banc hearing, in which more judges on the appellate bench would rehear the case. The Court has now ordered the Federal Government to respond, indicating that judges are taking this request for a rehearing seriously.
The case is gaining attention and support: Congressional leaders and several states have filed amicus briefs supporting Matt Sissel. The Pacific Legal Foundation is handling litigation for the case, and you can find out more at their Website.
Like other cases challenging ObamaCare, this is about limiting the government's power to the design put forth in the Constitution. The Founders understood that it was essential to limit the power to tax, to keep government from abusing the people. The people are best represented in the House, the larger of the two bodies in our bicameral legislature, and therefore the Founders put forth the requirement that tax-raising bills originate in the House. There is a reason why our government was designed this way, and today our judges should heed the ACA's challengers in Sissel, and uphold this important limitation.
Oklahoma Attorney General Scott Pruitt, like the IRS-challengers in Halbig, filed a suit alleging that the subsidies available in the Affordable Care Act are only available through state-established (as opposed to federally-established) exchanges. Today, he won his case in a summary judgment from the U.S. District Court for the Eastern District of Oklahoma. From the Court's decision:
This is a case of statutory interpretation. “The text is what it is, no matter which side benefits.” Bormes v. United States, 759 F.3d 793, 798 (7th Cir.2014). Such a case (even if affirmed on the inevitable appeal) does not “gut” or “destroy” anything. On the contrary, the court is upholding the Act as written. Congress is free to amend the ACA to provide for tax credits in both state and federal exchanges, if that is the legislative will. As the Act presently stands, “vague notions of a statute’s ‘basic purpose’ are nonetheless inadequate to overcome the words of its text regarding the specific issue under consideration.” Mertens v. Hewitt Assocs., 508 U.S. 248, 261 (1993) (emphasis in original). It is a “core administrative-law principle that an agency may not rewrite clear statutory terms to suit its own sense of how the statute should operate.” Util. Air Regulatory Group v. EPA, 134 S.Ct. 2427,2446(2014).
“But in the last analysis, these always-fascinating policy discussions are beside the point. The role of this Court is to apply the statute as it is written – even if we think some other approach might ‘accor[d] with good policy.’” Burrage v. United States, 134 S.Ct. 881, 892 (2014)(quoting Commissioner v. Lundy, 516 U.S. 235, 252 (1996)(other citation omitted)). See also Michigan v. Bay Mills Indian Community, 134 S.Ct. 2024, 2034 (2014)(“This Court has no roving license, in even ordinary cases of statutory interpretation, to disregard clear language simply on the view that . . . Congress ‘must have intended’ something broader.”); Util. Air Regulatory Group v. EPA, 134 S.Ct. 2427, 2446 (2014)(“The power of executing the laws necessarily includes both authority and responsibility to resolve some questions left open by Congress that arise during the law’s administration. But it does not include a power to revise clear statutory terms that turn out not to work in practice.”).
The animating principles of this court’s decision have been articulated by the Tenth Circuit: “[C]ourts, out of respect for their limited role in tripartite government, should not try to rewrite legislative compromises to create a more coherent, more rational statute. A statute is not ‘absurd’ if it could reflect the sort of compromise that attends legislative endeavor.” Robbins v. Chronister, 435 F.3d 1238, 1243 (10th Cir.2006). “An agency’s rule- making power is not ‘the power to make law,’ it is only the ‘power to adopt regulations to carry into effect the will of Congress as expressed by the statute.’” Sundance Associates, 139 F3d at 808 (citation omitted) “In reviewing statutes, courts do not assume the language is imprecise ... Rather, we assume that in drafting legislation, Congress says what it means.” Id at 809.
The court holds that the IRS Rule is arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law, pursuant to 5 U.S.C. §706(2)(A), in excess of statutory jurisdiction, authority, or limitations, or short of statutory right, pursuant to 5 U.S.C. §706(2)(C), or otherwise is an invalid implementation of the ACA, and is hereby vacated.
By Hadley Heath Manning
The U.S. Court of Appeals in D.C. just issued an order this morning that granted the government's petition for an en banc hearing.
This means that, rather than going (directly) to the Supreme Court, the case will stay in appellate court for another ruling (with more judges hearing the case this time). This order vacates the appellate court's recent 2-1 ruling in favor of Jacqueline Halbig et al.
If the en banc hearing results in the same ruling, then the Halbig case and the King case will still stand as split-circuit decisions on the same issue. Challengers in the King case have already filed for cert at the Supreme Court.
If the en banc hearing resolves the split circuit (and the ruling is in favor of the government), this does not preclude the Supreme Court from ruling on the cases. The en banc hearing will take place December 17 at 9:30 am.