Sunday, May 17, 2015
Judge Reggie B. Walton (D.D.C.) ruled in American Freedom Law Center v. Obama that the plaintiffs lacked standing to challenge the federal government's "transitional policy" and "hardship exemption," which permit individuals temporarily to maintain health insurance coverage through plans that are not compliant with the general requirements of the Affordable Care Act.
The ruling deals a blow to opponents of the government's exemption--but a fully predictable one.
The plaintiffs' theory of standing turned on market forces driving up an AFLC staff member's premiums. It goes like this: When the federal government temporarily exempted certain individuals from enrolling in non-compliant plans (in reaction to the political blow-back after many folks received notices that their insurance would be cancelled and changed to comply with the ACA), this depleted the pool of individuals enrolling in ACA-compliant plans; and that drove up the costs of those plans. Plaintiff Muise was enrolled in such a plan, and, indeed, saw his premiums rise.
In short, Muise argued that his premiums rose in his compliant plan because the government's exemption meant that fewer people enrolled in compliant plans.
Judge Walton disagreed. He noted that insurance premiums can fluctuate for any number of reasons, not just the government's exemption, and that the plaintiff's theory suffered from other defects in the causal chain. Quoting from the government's motion to dismiss:
[the] [p]laintiffs have not established any of the links in the causal chain . . . that would be necessary to their apparent theory of standing to challenge this particular exemption. [The] [p]laintiffs have not alleged, for example, that there are individuals in Michigan with cancelled policies; that any such individuals consider the other policies available to them to be unaffordable; that any such individuals have availed themselves of [the defendants'] "hardship" exemption for consumers with cancelled policies; that, but for this exemption, any such individual would have purchased "minimum essential coverage" . . .; that in purchasing such coverage, that individual would have entered the same risk pool as these [p]laintiffs; and that such individual's addition to the risk pool would have lowered [the] [p]laintiffs' premiums.
The ruling is consistent with similar rulings in other district courts.
May 17, 2015 in Cases and Case Materials, Courts and Judging, Executive Authority, Jurisdiction of Federal Courts, News, Opinion Analysis, Separation of Powers, Standing | Permalink | Comments (0) | TrackBack (0)
Friday, May 8, 2015
Judge Hanen issued a "Supplemental Order" in the state case, led by Texas, against the federal government challenging the President's Deferred Action program, DAPA, doubling down on his earlier conclusion that the government "abdicat[ed] its duty to enforce this country's immigration laws."
The order cites testimony by ICE Director Sarah Saldana before the House Judiciary Committee on April 14, 2015, "reiterat[ing]," according to Judge Hanan, "that any officer or agent who did not follow the dictates of the 2014 DHS Directive would face the entire gamut of possible employee sanctions, including termination." This, according to Judge Hanan, is conclusive evidence that the program represents "the Government's abdication of its duty to enforce the INA," and not lawful discretionary enforcement.
Judge Hanan likened DAPA to the government's non-enforcement of the Civil Rights Act, and active funding of segregating schools, in Adams v. Richardson, the 1973 D.C. Circuit case. Judge Hanan wrote,
Just like HEW giving federal funds to those violating the civil rights laws in Adams, the DHS in this case is giving a variety of rewards to individuals violating the country's immigration laws. This general policy of affirmatively awarding benefits is not merely an exercise of prosecutorial discretion. The Government has announced, and has now confirmed under oath, that it is pursuing a policy of mandatory non-compliance (with the INA), and that any agent who seeks to enforce the duly-enacted immigration laws will face sanctions--which could include the loss of his or her job. If the solicitation of voluntary compliance (questioned by taxpayers who are rarely accorded standing) equates to abdication, certainly mandatory non-compliance by the Government (questioned by twenty-six states) does as well.
Thursday, May 7, 2015
District Judge Rejects Challenges to Requirement that Government Contractors Post Employee Rights Notice
In an opinion today in National Association of Manufacturers (NAM) v. Perez, Judge Amit Mehta of the District of Columbia District Court rejected various challenges to the Department of Labor's so-called "Posting Rule," a regulation requiring, as a condition of nearly all federal contracts, that contractors post workplace notices informing their employees of their rights under the National Labor Relations Act. The "Posting Rule" is derived from President Obama's Executive Order 13496, promulgated in January 2009 pursuant to the Procurement Act.
The central constitutional challenge is that the "Posting Rule" is compelled speech and violates the First Amendment as an unconstitutional condition. The court's first task was to determine the relevance of a NAM v. NLRB, 717 F.3d 947 (D.C. Cir. 2013), overruled in part by Am. Meat Inst. v. U.S. Dep’t of Agric., 760 F.3d 18 (D.C. Cir. 2014). The judge concluded that while the posting at issue in NAM was "nearly identical," that case was not a First Amendment one - - - although it drew on some First Amendment principles - - - but an interpretation of §8(c) of the NLRA which prohibits the expression of views, argument, or opinions as constituting an unfair labor practice.
Instead, the challenge here was analogous to the Supreme Court's decision in Rumsfeld v. FAIR involving the Solomon Amendment directed at law schools.
There is little material distinction between FAIR and this case. The facts differ, but the First Amendment analysis and outcome are the same. Like the Solomon Amendment, the Posting Rule is a “far cry” from the government-mandated speech deemed unconstitutional in Barnette and Wooley. Requiring an employer to post government speech about labor rights is “simply not the same as forcing a student to pledge allegiance, or forcing a Jehovah’s Witness to display the motto ‘Live Free or Die,’ and it trivializes the freedom protected in Barnette and Wooley to suggest that it is.”
Moreover, the Posting Rule does not require a contractor to speak at all. Rather, the contractor is required to host government speech as a condition of receipt of a federal contract. That, of course, presents a contractor with a choice—agree to post the Notice or forgo federal contracting. But that choice is no different than the one presented by the Solomon Amendment— either accommodate a military recruiter or forgo federal funds.
Additionally, the Posting Rule does not interfere with the contractor’s ability to convey a different message. A contractor can still express its own views or engage in lawful activities to discourage unionization. Indeed, nothing in the rule prevents a contractor from creating its own posting and placing it next to the Department of Labor-drafted Notice, so as to make clear that the Notice does not reflect the contractor’s own views and its display is government mandated. *** A contractor’s speech is thus not “affected by the speech it [is] forced to accommodate.”
Nor are employees likely to believe that the Notice is their employer’s speech.
[citations omitted]. The court rejected NAM's attempt to distinguish FAIR because the speech here is a “slanted list of rights that unfairly promotes unionization while pointedly omitting a host of other critical employee rights,” noting even if the court could determine the meaning of "slanted," it is well settled that the government may make content-based choices about its own speech.
The court rejected NAM's arguments regarding preemption, as well as its statutory and administrative law arguments. It therefore entered summary judgment in favor of the government.Given the vigor with which NAM has litigated similar issues, it will most likely appeal. However, recently appointed Judge Mehta has authored a closely reasoned opinion that should withstand review.
Friday, March 13, 2015
Earlier this week, Judge Hanen deferred a ruling on DOJ's motion to stay his nationwide injunction against DAPA until after March 19. He'll hold a hearing then on DOJ's Advisory (filed March 3) that the government granted about 100,000 deferred action applications (filed under the original 2012 DACA guidelines) for 3 years between November 24, 2014, and the court's order--and whether DOJ previously misled the court in representing that it wouldn't grant new deferrals under the new and expanded DACA guidelines during this period. It seems now even less likely (if that's possible) that Judge Hanen will grant DOJ's motion for a stay.
Then yesterday DOJ filed an Emergency Motion for Stay Pending Appeal, asking the Fifth Circuit to stay Judge Hanen's injunction nationwide, or, if not, at least limit it to Texas or the plaintiff states. DOJ argued that Judge Hanen's ruling is wrong, because it allows a single state to "override the United States' exercise of its enforcement discretion in the immigration laws." DOJ also addressed standing, and the underlying APA claim. DOJ wrote:
The court invented a novel theory of Article III standing that purports to confer standing on States without any actual injury. In the alternative, the court purported to find a cognizable injury to Texas based on indirect economic costs that are not the subject of these policies, that federal law does not obligate Texas to bear, and in disregard of the expected economic benefits of these same policies--a standing theory that would radically expand the ability of States to intrude into this uniquely federal domain.
On the merits, the district court erred in holding that DHS violated the notice and comment requirement of the APA.
DOJ also asked for expedited briefing (7 days for the plaintiffs to respond) and decision (14 days).
Fourteen states and the District of Columbia filed an amicus in support of the United States.
Then today the Fifth Circuit directed the plaintiffs that they have until March 23 to respond to DOJ's motion for a stay and for expedited appeal. (March 23 is obviously beyond the 7-day response time requested by DOJ. But the court's order specifically leaves on the table DOJ's "motion to expedite the appeal.")
The Fifth Circuit's order today doesn't say anything about the merits. But it may give a clue as to how the conservative court will view the case.
The upshot is that no stay is immediately on the horizon. The next move appears to be Judge Hanen's, at the hearing on March 19.
The ACLU filed suit this week on behalf of several media and human rights organizations challenging the NSA's "upstream surveillance" program. The plaintiffs argue that the program violates the First and Fourth Amendments, and that NSA has implemented upstream surveillance in violation of the FISA Amendments Act of 2008. (H/t reader Darren Elliot.)
Through upstream surveillance, a program disclosed by Edward Snowden after the Court handed down Clapper v. Amnesty International (more on that below), the NSA intercepts, collects, and searches all of Americans' international communications (e-mails, web-browsing, search engine queries, and the like). The NSA intercepts communications through devices directly on the internet backbone (with the help of providers like Verizon and AT&T), and it searches that material using keywords associated with NSA targets--that is, anyone outside the United States believed likely to communicate "foreign intelligence information."
The Supreme Court dismissed the last major suit of this type. The Court said that the plaintiffs in Clapper v. Amnesty International lacked standing to challenge NSA surveillance under the FISA Amendments Act (50 USC Sec. 1881a), because they didn't allege that they'd actually be targets of surveillance (only that they'd likely be targets).
This suit addresses the standing problem by alleging that upstream surveillance has already targeted them--because upstream surveillance is up and running and collects, in a drag-net kind of way, the kinds of communications that they engage in. And by including Wikimedia (with all its international internet connections), the ACLU ensures that at least one plaintiff has certainly been a target of this program.
Monday, March 9, 2015
The Supreme Court ruled today in Perez v. Mortgage Bankers Association that the Department of Labor need not engage in notice-and-comment rule-making when it changes a Department interpretation of an existing rule. At the same time, the Court overturned the D.C. Circuit rule that forced agencies to do this whenever an agency wished to issue a new interpretation that deviated significantly from an old one.
The ruling thus re-shifts power back to executive agencies in determining the meaning of their own regulations. That's because Congress didn't require agencies to use notice-and-comment rule-making for interpretations, but the D.C. Circuit did, when a new interpretation deviated significantly from an old one--that is, when an agency changed its interpretation. By overturning that decision, and putting interpretive decisions back in the exclusive hands of the agencies (with loose, deferential judicial oversight), the Court re-set the balance that Congress struck. The ruling is thus a victory for agencies and their power to interpret their own regulations without notice-and-comment rule-making and with deferential judicial review. (More on that last part below.)
The case grows out of DOL's re-interpretation of its FLSA rule on minimum wage and overtime for mortgage-loan offices. The agency's rule exempts certain classes of employees, including individuals who are "employed in a bona fide executive, administrative, or professional capacity . . . or in the capacity of outside salesman . . . ." In 1999 and 2001, DOL issued interpretive letters opining that mortgage-loan officers did not qualify for this exemption. In 2006, however, DOL reversed course and opined that mortgage-loan officers did meet the exemption. But in 2010, DOL went back to its old position, withdrew the 2006 interpretation, and opined that mortgage-loan officers didn't meet the exemption.
The Administrative Procedure Act requires agencies to provide public notice and an opportunity to comment when they propose new rules and regulations under an authorizing statute. But the APA does not require this notice-and-comment rule-making when an agency simply issues an interpretation. Seeing the potential for abuse, the D.C. Circuit devised a court-created rule that said that agencies still had to use notice-and-comment rule-making, even for a mere interpretation. The D.C. Circuit rule is called the Paralyzed Veterans rule, after the case that established it.
So the question in Mortgage Bankers Association was whether DOL had to use notice-and-comment rule-making in issuing its 2010 interpretation.
The Supreme Court said no. The Court, in an opinion by Justice Sotomayor, ruled that the APA by its plain terms exempts interpretative decisions from the notice-and-comment requirement, and that the D.C. Circuit's Paralyzed Veterans rule violated those plain terms. Justice Sotomayor wrote that Congress, in enacting the APA, considered the costs and benefits of applying notice-and-comment rule-making requirements to agency interpretations, and that Congress decided that notice-and-comment procedures weren't necessary.
All nine justices agreed on the result, but Justices Scalia, Thomas, and Alito each wrote separately to take issue in different ways and to different degrees with judicial deference to agency interpretations. In other words, they're not sure that the courts should defer to agency interpretations (even if courts do validly defer to agency rules), or they reject deference altogether. Judicial deference to agency interpretations comes from Bowles v. Seminole Rock & Sand Co. and Auer v. Robbins. In Auer (relying on Seminole Rock) the Court held that agencies may authoritatively resolve ambiguities in their own regulations.
The rule that courts defer to an agency's interpretation of its authorizing statute is well settled in Chevron v. Natural Resources Defense Council. This is called Chevron deference. But Auer extended that deference to an agency's interpretation of its own rules. This Auer deference is what caught the eyes of Justices Scalia, Thomas, and Alito.
They all indicated that they'd reconsider Auer deference if given the chance. Justices Scalia and Thomas both outlined their (separate) separation-of-powers objections to Auer deference. In short, Justice Scalia expressed concern that an agency could both write its own rule and then interpret that rule without meaningful oversight; Justice Thomas explained why Auer deference took power away from the judiciary and gave it to the executive agencies.
Both Chief Justice Roberts and Justice Kennedy signed on in full to Justice Sotomayor's opinion (as did Justices Ginsburg, Breyer, and Kagan). None of these joined Justice Scalia, Justice Thomas, or Justice Alito and the concerns with Auer deference that they expressed.
Any nuclear agreement negotiated by President Obama could be short-lived, according to an open letter signed by forty-seven Senate Republicans today, and Iran should take note.
The letter, first reported by Josh Rogin at Bloomberg, tries to school Iran in the U.S. Constitution and separation of powers--and to undermine President Obama's efforts to come to nuclear deal with Iran.
The letter warns that any agreement "not approved by Congress is a mere executive agreement" that "[t]he next president could revoke . . . with the stroke of a pen and future Congresses could modify the terms of the agreement at any time."
The letter also reminds Iran that President Obama leaves office in January 2017, "while most of [the letter signers] will remain in office well beyond then--perhaps decades."
Wednesday, March 4, 2015
The Supreme Court heard oral arguments today in King v. Burwell, the case testing whether IRS tax subsidies to health-insurance purchasers on a federally-facilitated exchange violate the ACA. We posted our oral argument preview here.
There were no huge surprises, and questions from the bench mostly aligned with conventional beliefs about the Justices' politics (with Chief Justice Roberts, in his near silence, declining to tilt his hand at all).
But questions from Justice Kennedy--one to watch here (along with Chief Justice Roberts)--suggested that federalism principles and constitutional avoidance may drive the case. (That assumes that Justice Kennedy controls the center in the case.) This could be an elegant way for a conservative Justice to uphold the subsidies, because it's rooted in the challengers' argument itself (and not the government's case). In other words, a conservative Justice could accept the challengers' premise, but still uphold the subsidies.
Justice Kennedy at several points raised federalism concerns about the challengers' case: If the challengers are right that Congress designed the ACA so that all states would establish their own exchange (on threat of the death spiral that would result if they defaulted to a federally-facilitated exchange, without tax subsidies), then isn't that coercion in violation of federalism principles? And if that's so, shouldn't the Court reject the challengers' reading for constitutional avoidance reasons? Here he puts the question to Michael Carvin, arguing for the ACA challengers:
Let me say that from the standpoint of the dynamics of Federalism, it does seem to me that there is something very powerful to the point that if your argument is accepted, the States are being told either create your own Exchange, or we'll send your insurance market into a death spiral. We'll have people pay mandated taxes which will not get any credit on -- on the subsidies. The cost of insurance will be sky-high, but this is not coercion. It seems to me that under your argument, perhaps you will prevail in the plain words of the statute, there's a serious constitutional problem if we adopt your argument.
Later, he made a similar point with General Verrilli: "Because it does seem to me that if Petitioners' argument is correct, this is just not a rational choice for the States to make and that they're being coerced. And that you then have to invoke the standard of constitutional avoidance."
But in terms of constitutional avoidance, Justice Kennedy qualified his earlier statement to Carvin: "It may well be that you're correct as to these words, and there's nothing we can do. I understand that." Justice Kennedy also later seemed concerned with the government's Chevron argument, pointing out that a statute that costs billions of dollars in tax subsidies has to be absolutely clear.
Carvin argued that the ACA didn't create coercion for the states to establish their own exchanges. But he may have painted himself into a corner with the argument, because his argument also assumes that Congress thought all 50 states would establish an exchange, and, as Justices Ginsburg, Sotomayor, and Kagan pointed out, the portion of the ACA establishing a federally-facilitated exchange would be superfluous if all 50 states set up their own exchanges. They also pointed out that he had a different position in the last ACA challenge. Chief Justice Roberts rescued him, though, reminding everyone that he lost.
Most of the rest of the argument involved predictable statutory construction arguments, with no clear winner or loser. Maybe the only surprise was Justice Scalia's cramped reading of the four words, seemingly at odds with his approach (stated at oral argument earlier just this Term) to consider the context and entire statutory scheme when interpreting any individual provision.
Justice Ginsburg noted that standing is an issue, and that the Court can address it itself. Some of the other Justices fished a little around the question with General Verrilli. But in the end, General Verrilli didn't press the point and instead assumed that "because Mr. Carvin has not said anything about the absence of a tax penalty," that at least two plaintiffs still have standing.
Tuesday, March 3, 2015
The Court will hear oral arguments tomorrow in King v. Burwell, the case testing whether the Affordable Care Act authorizes the IRS to provide subsidies to purchasers of health insurance on a federally-facilitated exchange. Here's my oral argument preview ("Significance" section is down below), from the ABA Preview of U.S. Supreme Court Cases, with permission:
The Affordable Care Act (ACA), or “Obamacare,” is designed to increase the number of Americans covered by health insurance and to decrease its costs. In order to achieve these goals, the ACA requires most Americans to obtain “minimum essential” coverage or to pay a tax penalty to the IRS. (The ACA, of course, contains many other provisions to achieve its goals, most notably the expansion of the Medicaid program. But the minimum-coverage provision, sometimes called the “individual mandate,” is the one most relevant to this case.)
To facilitate the purchase of health insurance, the ACA establishes health care “exchanges,” where individuals can purchase competitively-priced coverage. The Act provides that “[e]ach State shall . . . establish an American Health Benefit Exchange.” 26 U.S.C. § 1311. But it also provides that if a state does not “elect” to create an exchange, the federal government “shall establish and operate such exchange within the State.” 26 U.S.C. § 1321(c)(1). When the plaintiffs filed this case, 16 states plus the District of Columbia elected to set up their own exchanges; the remaining 34 states relied on the federally-facilitated exchange. (The U.S. Department of Health and Human Services (HHS) establishes the federally-facilitated exchange. It’s at www.healthcare.gov.)
To keep health insurance affordable, the Act provides a federal tax credit to low- and moderate-income Americans to offset the cost of insurance policies. The Act provides the credit to individuals who enroll in a health plan “through an Exchange established by the State under Section 1311.” 26 U.S.C. § 36B.
Pursuant to this provision, the IRS promulgated regulations making the tax credit available to qualifying individuals who purchase health insurance on both state-run and federally-facilitated exchanges. The IRS rule says that credits shall be available to anyone “enrolled in one or more qualified health plans through an Exchange.” The rule adopts by cross-reference a definition of “Exchange” by the U.S. Department of Health and Human Services (HHS) that includes any exchange “regardless of whether the Exchange is established and operated by a State or by HHS.”
The plaintiffs, Virginia residents who do not want to purchase health insurance, challenged the IRS rule, in particular, the provision of tax credits to purchasers on a federally-facilitated exchange. Virginia declined to establish its own health insurance exchange, so the state uses the federally-facilitated exchange. Without a federal tax credit, the plaintiffs would be exempt from the ACA’s minimum coverage requirement under the ACA’s unaffordability exemption. (This provision exempts individuals from the minimum coverage requirement if the cost of health insurance exceeds eight percent of their projected household income.) But with the federal tax credit, and the resulting reduced cost of health insurance, the plaintiffs do not qualify for the unaffordability exemption, and they must either purchase health insurance or pay the tax penalty. (As this goes to press, media reports have raised serious questions whether some of the plaintiffs are actually affected this way, and therefore whether they have standing to bring this suit. So far, neither the parties nor the Supreme Court have formally addressed these questions.)
The district court rejected the plaitniffs’ claims and upheld the tax credit. The United States Court of Appeals for the Fourth Circuit affirmed. (On the same day that the Fourth Circuit issued its ruling, the United States Court of Appeals for the D.C. Circuit held the opposite—that the ACA did not authorize the IRS to provide tax credits to purchasers on a federally-facilitated exchange. The full D.C. Circuit later vacated that ruling and agreed to hear the case en banc. The court then held the case in abeyance pending the outcome of this case.) This appeal followed.
In ruling on an agency’s interpretation of a statute, the Court uses the two-step process set out in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). In step one, the Court determines whether statutory language is ambiguous—that is, if it is reasonably susceptible of different interpretations. In making this judgment, courts use all the traditional tools of statutory construction, including the text and context of the provision in question. If the language is clear, “that is the end of the matter, for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.”
If the language is ambiguous, however, the court moves to step two. At step two, courts ask whether an “agency’s [action] is based on a permissible construction of the statute”—a highly deferential standard. Courts uphold an agency interpretation so long as it is not “arbitrary, capricious, or manifestly contrary to the statute.” This standard is called “Chevron deference.”
The parties focus principally on the first step. They both argue that the Act’s text, structure, and history give an unambiguous meaning either against tax credits (the plaintiffs) or for them (the government). The parties also argue briefly why the Court should not grant Chevron deference to the IRS (the plaintiffs) or why it should (the government).
The plaintiffs argue that the plain text of the ACA restricts tax subsidies to health insurance purchases through state-run (and not federally-facilitated) exchanges. The plaintiffs point to three provisions: Section 1311, which says that states “shall” establish exchanges; Section 18041(c), which provides that HHS “shall . . . establish and operate such Exchange within the State,” upon a state’s “failure to establish [an] Exchange”; and Section 36B(c)(2)(A) & (B), which authorizes tax subsidies for coverage that is “enrolled in through an Exchange established by the State under section 1311.” The plaintiffs say that these three provisions clearly distinguish between state-run and federally-facilitated exchanges, and just as clearly authorize tax credits only for purchasers through state-run, not federally-facilitated, exchanges.
The plaintiffs assert next that the government’s arguments are meritless and do not override the plain language of the text. The plaintiffs say that just because the ACA authorizes HHS to establish exchanges does not mean that those exchanges are “established by the State” (under Section 36B). They claim that the ACA’s instruction to HHS (under Section 18041(c)) to establish “such Exchange” if a state declines to create an exchange does not mean a state-run exchange (and thus turn a federally-facilitated exchange into a state-run exchange); instead, “such Exchange” only means “an exchange,” whichever entity operates it. The plaintiffs contend that the ACA does not authorize HHS to establish an exchange on behalf of a state (thus making a federally-facilitated exchange a state exchange); instead, it only authorizes HHS to establish a federally-facilitated exchange when a state refuses to establish a state exchange. They say that the ACA’s definition of “Exchange” as one established under Section 1331 does not help the government, but instead just creates confusion and thus clarifies that only exchanges “established by the State” trigger subsidies. And finally the plaintiffs contend that the government’s claim that exchanges are “established by the State” as a matter of law is simply belied by the plain text of the Act.
The plaintiffs argue that other provisions in the ACA support its interpretation. As an initial matter, the plaintiffs claim that Section 36B is the only provision in the ACA that defines the scope of the tax subsidy, and so Section 36B is the only provision that the Court need consult. But the plaintiffs say that other provisions, too, support their interpretation. In particular, the plaintiffs argue that other portions of the ACA expressly deem certain non-state entities (but not the federal government) to be “states,” that other portions treat state-run and federally-facilitated exchanges distinctly, and that other provisions show that Section 36B is the provision that sets the terms of the tax subsidy in all relevant respects. Taken together, the plaintiffs say that the ACA authorizes the tax subsidy only to purchasers on a state-run exchange.
The plaintiffs argue that their interpretation leads to only logical results. They say that conditioning tax subsidies on a state’s creation of an exchange is not inconsistent with Congress’s desire to extend subsidies nationwide. Indeed, they say, that might be the most effective way to achieve Congress’s goal. That’s because tax subsidies, so limited, provide a powerful incentive for states to create their own exchanges, and thus to extend subsidies nationwide. (The plaintiffs point to the ACA’s Medicaid expansion provision as an illustration of how the same ACA uses incentives to states to achieve policy objectives. The plaintiffs claim that the ACA uses tax subsidies for purchasers on a state-exchange to create a similar kind of incentive.) The plaintiffs argue that the ACA’s legislative history supports this interpretation, and they say that its interpretation harmonizes with other provisions in the ACA.
Finally, the plaintiffs argue that Chevron deference cannot save the IRS rule. They say that the text is unambiguous (as above). They also say that an act requiring tax credits must be unambiguous. And they claim that the IRS has no authority to interpret Section 36B, in any event, because Section 36B is codified in Title 42 of the U.S. Code and not the Internal Revenue Code. (For similar reasons, they claim that HHS has no authority to interpret tax laws.)
In response, the government argues first that the Act’s text shows that tax credits are available through both state-run and federally-facilitated exchanges. The government says that “an Exchange established by the State” in Section 36B is a term of art in the Act that includes both state-run and federally-facilitated exchanges. It says moreover that the phrase “such Exchange” in Section 18031(b)(1) means that a federally-facilitated exchange stands in for a state-run exchange, and that therefore tax credits are available under Section 36B to purchasers on both. The government contends that this reading is the only reading that would allow the federally-facilitated exchange to run just like a state-run exchange—and that even the plaintiffs acknowledge that the exchanges should function the same. Finally, the government says that other provisions of the Act—including the Act’s definition of “Exchange” as “an American Health Benefit Exchange established under section 18031”—support its interpretation.
The government argues that the Act’s structure and design confirm its interpretation. It says that nationwide tax credits are essential to the Act’s insurance-market reforms—and that the Act could not achieve its dual goals of increasing coverage and reducing costs without it. Indeed, given the Act’s other provisions, the government says that the plaintiffs’ position “would have disastrous consequences for the insurance markets in the affected States.” Moreover, the government contends that the availability of tax credits in every state is essential to the ACA’s model of cooperative federalism. The government says that the plaintiffs’ reading transforms the ACA’s promise of state flexibility regarding exchanges into a threat that states would suffer severe consequences (lack of affordable health insurance for low- and moderate-income residents), without clear warning from Congress.
The government argues that the history of the Act supports its interpretation, too. The government says that it was well understood when the ACA passed that some states would not establish exchanges for themselves. The government also says that the tax credits are not a condition on a federal spending program available to the states (and thus do not operate as an incentive for states to establish their own exchanges); instead, they are independent federal tax credits, available to federal taxpayers, by virtue of their purchase of health insurance on an exchange. And the government says that the legislative record confirms that Congress intended tax credits to apply in every state.
The government argues that the petitioners’ position would lead to contradictions and other absurd results, given the way other provisions in the Act work. Most notably, the government says, if the plaintiffs’ interpretation were correct, no individual would be eligible to purchase insurance on a federally-facilitated exchange, and no individual-market plans could be sold there. That’s because only a “qualified individual” can purchase individual-market policies on an exchange, and the Act defines “qualified individual” as one who “resides in the State that established the Exchange.” 42 U.S.C. § 18032(f)(1)(A)(ii). Under this definition, there are no qualified individuals in a state with a federally-facilitated exchange.
Finally, the government argues that even if the Act contained an ambiguity, the Court should grant Chevron deference to the IRS interpretation.
This case is easily one of the most important cases of the Term, and even of the last several Terms. That’s because a ruling for the plaintiffs would mean that more than eight million people (and perhaps many more) could lose their health insurance, because they would lose their tax credit to purchase insurance at an affordable rate on a federally-facilitated exchange. It would mean that health insurance rates could skyrocket in states with a federally-facilitated exchange as much as 47 percent, according to a recent Rand Corporation study. And it would undermine a critical component of the Affordable Care Act, and probably (as a practical matter) lead to its ruin.
On the other hand, a ruling for the government would only keep the ACA operating as it is, forcing an unspecified (but probably very small) number of individuals to continue to purchase unwanted health insurance with the help of a federal tax credit. To be affected by a ruling for the government, an individual in a state with a federally-facilitated exchange, who did not want health insurance, would have to have just the right income so that the federal tax credit would push them out of an unaffordability exemption to the minimum coverage requirement. Opponents of the ACA who engineered this suit reportedly had difficulty finding individuals who fell into this category to act as plaintiffs. This may be an indication of just how few people are likely to be affected by a ruling for the government. It may also be further evidence that the real purpose of the case is not to protect these plaintiffs, but rather to dismantle the ACA.
Recognizing the importance of the case, amici too numerous to list here have weighed in on both sides. (The medical and insurance industries, at least so far as they participated in this case, favor the government. The U.S. Chamber of Commerce is conspicuously absent from the case.) Print periodicals, blogs, and web-sites are filled with analyses, commentaries, and opinions on the case. Not surprisingly, opinions in these media tend to divide along party lines, revealing just how political this case is.
The Court has commonly accepted tools of statutory construction to help it sort this case out. And the parties have not seriously contested those tools. (Even strict textualists like Justices Scalia and Thomas have said that in a statutory case like this courts look to the language and the broader statutory context. The only real debate is over the significance of legislative history. But the justices probably don’t need legislative history to rule (one way or the other) in the case, anyway.) But just because there is agreement on the tools, that doesn’t mean that the case will be simple, or that the justices will all agree on the result. Indeed, as we have seen, the parties have interpreted the Act very differently, even using the same, or similar, tools of statutory construction. Justices on the Court are likely to divide sharply on the outcome, too, even if they apply the same tools.
Whatever the Court says, the Court’s ruling in the case certainly won’t end debates over the ACA. If the plaintiffs prevail, supporters of the ACA will move quickly to amend the Act to authorize tax credits for purchasers on federally-facilitated exchanges, or to urge all states to create their own exchanges, or both. But there is little evidence that these tactics will work: the Republican-controlled Congress is unlikely to amend the Act, at least without using the case as a bargaining chip to exact significant concessions, which themselves would likely destroy the ACA; and states that declined to create their own exchanges would have little increased incentive to create an exchange (because they would recognize that the ruling would effectively unravel the Act). If the government prevails, opponents of the ACA will continue to rail against it, and vote against it in Congress. But unless and until they garner sufficient votes to override a certain veto by this president, or unless and until an opponent of the ACA moves into the White House, with a win here, the ACA will (continue to) be the law.
One final point: As this goes to press, there are serious questions, raised by Mother Jones and The Wall Street Journal, whether the plaintiffs suffered the kinds of harms that they alleged, and therefore whether they even have standing to bring this case. While neither the parties nor the Court have formally addressed the plaintiffs’ standing during this appeal, the government or the Court could raise it at any time. If so, and if the Court ultimately rules that the plaintiffs lacked standing, the Court would not address the merits of the case, thus leaving the tax credits comfortably in place, at least until opponents of the ACA can bring another case. That could happen quickly, if the D.C. Circuit resurrects its case. Or it could happen never, if opponents have the same standing problems in the D.C. Circuit case and if they have the same difficulties finding new plaintiffs that they had in this case.
Monday, March 2, 2015
Senators Orrin Hatch, Lamar Alexander, and John Barrasso wrote in WaPo that Republicans now have a plan for health care, should the Supreme Court strike the IRS subsidies for health-insurance purchasers on a federally facilitated exchange in King v. Burwell. The plan apparently involves "financial assistance to help Americans keep the coverage they picked for a transitional period." It also involves giving states "the freedom and flexibility to create better, more competitive health insurance markets offering more options and different choices." But the senators are short on detail.
There's another problem. While Hatch, Alexander, and Barrasso claim that "Republicans have a plan to protect Americans harmed by" the loss of IRS subsidies (should Obamacare opponents win in King), the most they can say is that "there is a good deal of consensus on how to proceed" among congressional Republicans.
Monday, February 23, 2015
A New Jersey trial judge today ruled that Governor Chris Christie's cut to the state's public pension system violated the state and federal contracts clauses. Along the way, the judge also ruled that the state's contractual obligation to fund its public pension system did not violate the state constitutional Debt Limitations Clause and Appropriations Clause, and did not impermissibly infringe on the governor's line-item veto power. Oh, and she also ruled that the trial court had jurisdiction over the case, and that it didn't present a political question.
In a case that "implicate[s] the fragile balance at the heart of the legislative process . . . where political, constitutional, and judicial forces appear to collide," this ruling has a little something for everyone.
As a result of earlier litigation, the state has a statutory obligation to fund its public pension system. And the statute is written to create a contract right on the part of public employees--so that any decision not to fully fund the system immediately implicates the state and federal contract clauses. So when Governor Christie wielded his line-item veto pen to cut the state contribution out of the legislature's appropriation bill (because of unexpectedly low revenues), the plaintiffs were waiting in the wings with their contracts clause claims. And the judge agreed with them. That part of the ruling is unremarkable.
But the Governor's creative defenses--and the court's rejection of them--demand some attention. The governor argued that the statutory obligation to fund the public pension system violated the state constitutional Debt Limitations Clause (which limits state borrowing burdens) and the Appropriations Clause. Moreover, Governor Christie said that the statutory obligation intruded upon his executive power to veto legislation. The court reviewed the text, history, and cases on the relevant state constitutional provisions and concluded that they did not override the state's statutory obligation to fund its public pension system.
The ruling means that the state has to find $1.57 billion to fund the system. Governor Christie will likely appeal.
Thursday, February 19, 2015
Philadelphia DA Seth Williams filed suit in the Supreme Court of Pennsylvania to stop Governor Tom Wolf from implementing his death penalty moratorium and reprieve for a certain condemned prisoner. DA Williams argues that Wolf exceeded his state constitutional authority in issuing these, because the governor has no power to issue a moratorium, and because the reprieve is really only a moratorium, beyond the scope of gubernatorial power.
On January 13, 2015, former Governor Tom Corbett issues a warrant scheduling Terrance Williams's execution for March 4. (Defendant Williams was convicted of first-degree murder, robbery, and conspiracy and sentenced to death.) Then on January 20, 2015, new Governor Tom Wolf, who said during his campaign that he'd issue a moratorium on the death penalty, did so. The moratorium runs "until the [bipartisan Pennsylvania Task Force and Advisory Commission] has produced its recommendation and all concerns [with the death penalty] are addressed satisfactorily."
Pursuant to the moratorium, Wolf also issued a reprieve for Defendant Williams, again, "until I have received and reviewed the forthcoming report of the Pennsylvania Task Force and Advisory Committee on Capital Punishment, and any recommendations contained therein are satisfactorily addressed."
DA Williams then filed this emergency case in the state high court, arguing that Wolf's actions exceeded his authority and violated the Pennsylvania constitutional Take Care Clause.
Here's the state constitutional reprieve power, in Article IV, Sec. 9(a):
In all criminal cases except impeachment the Governor shall have the power to remit fines and forfeitures, to grant reprieves, commutation of sentences and pardons; but no pardon shall be granted, nor sentence commuted, except on the recommendation in writing of a majority of the Board of Pardons, and, in the case of a sentence of death or life imprisonment, on the unanimous recommendation in writing of the Board of Pardons, after full hearing in open session, upon due public notice.
Under this provision, Wolf's reprieve isn't subject to approval by the Board of Pardons. But DA Williams argues that it's not really a reprieve, because it's not temporary. (It ceases when the Commission issues its report and all concerns are addressed--maybe never.) Instead, DA Williams says it's a permanent moratorium, that the governor has no authority to issue a permanent moratorium, and that the actions violate the state constitutional Take Care Clause.
If DA Williams is successful, the suit could stop Wolf's moratorium, and even his reprieve, resetting Defendant Williams's execution for March 4. If he's not successful, however, this could mark the beginning of the end of the death penalty in Pennsylvania.
Tuesday, February 17, 2015
DHS Secretary Jeh Johnson announced that the government would comply with the temporary injunction issued late yesterday by Judge Andrew S. Hanen (S.D. Tex.) halting implementation of the Deferred Action for Parents of Americans and Lawful Permanent Residents, or DAPA, program. But the government will appeal.
Here's Judge Hanen's opinion.
Judge Hanen's ruling is based on the APA, and did not address the Take Care Clause argument. The first 60 pages is dedicated to standing. We previously posted on the case here.
Wednesday, February 11, 2015
The White House today sent its long-awaited authorization for use of military force against ISIS (or ISIL) to Congress. Here's the accompanying letter from the President.
The draft AUMF authorizes the President to use "necessary and appropriate" military force against "ISIL or associated persons or forces." (The draft defines "associated persons or forces" as "individuals and organizations fighting for, on behalf of, or alongside ISIL or any closely-related successor entity in hostilities against the United States or its coalition partners.") The draft has a three-year duration, and specifically excludes the use of U.S. troops in "enduring offensive ground operations," but it contains no geographic restriction on the use of force.
The draft would also revoke the 2002 AUMF against Iraq. However, it does not revoke (or otherwise address) the sweeping 2001 AUMF, although President Obama calls for refinement, and ultimately revocation, in his accompanying letter.
The draft acknowledges that "the United States has taken military action against ISIL" already, and cites "its inherent right of individual and collective self-defense" as authority for that prior action. Last fall, the President cited his Article II powers and the 2001 AUMF as authority for military action against ISIS and the Khorasan Group.
Monday, December 22, 2014
President Obama on Friday signed the FY 2015 National Defense Authorization Act, and, as in prior years, issued a constitutional signing statement on provisions restricting the use of funds to move any detainee out of Guantanamo Bay.
President Obama's signing statement this year is a little different than in prior years: it includes an array of policy objections to Congress's forced maintenance of the detention facility. The constitutional objection is a little more dressed up than in prior years, but the core constitutional objection remains the same:
The executive branch must have the flexibility, with regard to those detainees who remain, to determine when and where to prosecute them, based on the facts and circumstances of each case and our national security interests, and when and where to transfer them consistent with our national security and our humane treatment policy. Under certain circumstances, the provisions concerning detainee transfers in both bills [the NDAA and the Consolidation and Further Continuing Appropriations Act, 2015] would violate constitutional separation of powers principles. In the event that the restrictions on the transfer of detainees operate in a manner that violates constitutional separation of powers principles, my Administration will implement them in a manner that avoids the constitutional conflict.
That means that the administration claims the right to ignore the restrictions when they violate separate of powers.
It's not clear that the changed language of the signing statement this year signals any greater likelihood that the administration will actually ignore the restrictions and move a detainee off the base in violation of the provisions. But President Obama's other actions (on immigration, on Cuba) might suggest that the administration is more willing to do this.
The Supreme Court hasn't ruled on the legal status of a signing statement like this. And even though a signing statement is involved in the Zivotofsky passport case this Term, the Court's not likely to say anything about it.
Tuesday, December 16, 2014
A federal district judge in Pennsylvania has taken it upon himself to rule President Obama's recently announced immigration action unconstitutional--in a case that apparently has nothing to do with the action. We've posted on President Obama's action, and challenges to it, here, here, and here.
The surprising and brazenly activist, stretch-of-a-ruling underscores just how political President Obama's action has become, driving a district judge to reach out in a wholly unrelated case to rule the action unconstitutional.
The ruling comes in a case involving an undocumented immigrant who pleaded guilty to re-entry into the United States by a removed alien in violation of 8 U.S.C. Sec. 1326. Judge Arthur J. Schwab (W.D. Pa.) then ordered the parties to brief whether President Obama's action has any impact on the defendant, and whether the action is constitutional. Despite the government's reply that the action wouldn't affect this defendant (because "the Executive Action is inapplicable to criminal prosecutions under 8 U.S.C. Sec. 1326(a), and . . . [it] solely relates to civil immigration enforcement status"), and the defendant's agreement with that position, Judge Schwab said that the action could protect the defendant from removal and went ahead to rule on its constitutionality.
Even if the action applied to the defendant, however, Judge Schwab didn't bother to explain why ti was relevant to this proceeding, or why he had to rule on its constitutionality, except to say this:
Specifically, this Court was concerned that the Executive Action might have an impact on this matter, including any subsequent removal or deportation, and thereby requiring the Court to ascertain whether the nature of the Executive Action is executive or legislative.
Judge Schwab went on to say why he thought the action was unconstitutional, relying not on the ordinary judicial tools for such an important task (like, say, the text of the law, serious consideration of Supreme Court precedent, prior executive practice, etc.), but instead on President Obama's public statements about the action. Judge Schwab wrote that the President can't act just because Congress won't (answering President Obama's public statements suggesting that he'd act unilaterally if Congress wouldn't) and that the President's action is policy-making, not prosecutorial discretion, because it treats a large class of people alike.
Oddly, after concluding that the action is unconstitutional, Judge Schwab goes on to consider whether it applies to this defendant. (His conclusion: maybe, maybe not. Judge Schwab says the action leaves the defendant in a "no-man's land.") Ordinarily, this question would come prior to the constitutional question--for constitutional avoidance reasons, but also because it is logically prior to the constitutional question. Still, Judge Schwab answered it second.
In a final surprising move, Judge Schwab says that President Obama's action violates the rights of the defendant, because it doesn't obviously grant deferred status to him, even as it grants deferred status to others.
Judge Schwab concluded by giving the defendant a chance to withdraw his guilty plea, go to sentencing and take one year supervised release in the United States, or go to sentencing and be turned over to ICE.
So the logic of the opinion appears to be this: The President's action is unconstitutional; but if it is constitutional, it doesn't obviously apply (or not apply) to the defendant; and therefore the defendant should have a chance to withdraw his guilty plea in order to (possibly) take advantage of the (unconstitutional) action. All this after both parties agreed that the President's action didn't really have anything to do with this case in the first place.
With all its twists and turns, it's really hard to make heads or tails of this opinion. But one thing is clear: This is not the stuff of a serious separation-of-powers ruling. If the case against President Obama's action is going anywhere, opponents are going to have to do better--much better--than this.
Friday, December 12, 2014
With the publication of the more than 500 page "Executive Summary" of the Senate Select Committee on Intelligence Committee Study of the Central Intelligence Agency's Detention and Interrogation Program (searchable document here), the subject of torture is dominating many public discussions.
A few items worth a look (or second look):
In French, Justice Scalia's interview with Le Journal du matin de la RTS (videos and report) published today. One need only be marginally fluent in French to understand the headline: "La torture pas anticonstitutionnelle", dit le doyen de la Cour suprême US. (h/t Prof Darren Rosenblum).
The French report will not surprise anyone familiar with Justice Scalia's discussion of torture from the 2008 "60 Minutes" interview discussed and excerpted here.
And while Justice Scalia contended that defining torture is going to be a "nice trick," LawProf David Luban's 2014 book Torture, Power, and Law offers very explicit definitions, even as it argues that these definitions can erode as torture becomes "normalized," seemingly giving credence to Scalia's point.
December 12, 2014 in Courts and Judging, Current Affairs, Due Process (Substantive), Executive Authority, Foreign Affairs, International, Interpretation, News, Scholarship, Sexuality, Theory | Permalink | Comments (0) | TrackBack (0)
Friday, December 5, 2014
As expected, Texas Governor-Elect Greg Abbott led 17 other states and state officials in suing the federal government over President Obama's immigration policy.
The complaint argues that the President, through DACA and administration immigration policies, caused a humanitarian crisis by encouraging illegal immigration and then turning a blind eye to undocumented immigrants within the country. It contends that the President, having created this crisis, now makes it even worse by authorizing an even larger class of certain undocumented immigrants to stay. The plaintiffs claim that even President Obama previously said, repeatedly (with quotes), that taking the kind of action that he took would have exceeded his authority. This all appears to be just context, or even political blustering; the plaintiffs don't say why or how any of it bears on their legal claims.
The complaint discusses the OLC memo that provides legal justification for President Obama's policy, but doesn't seriously try to undermine it. The complaint says only that the OLC justifies President Obama's policy based in part "on much smaller and more targeted deferred action programs that previous Congresses approved," such as "deferred action for victims of violence and trafficking, family members of U.S. citizens killed in combat, and family members of individuals killed in the September 11 attacks."
That's true, as far as it goes. But it also woefully under-describes the OLC analysis. The complaint doesn't take issue with the other components of the OLC memo, like the statutory analysis, e.g. The plaintiffs appended the OLC memo to their complaint.
The plaintiffs argue that the President's policy violates the Take Care Clause and the APA. As to the Take Care Clause, the complaint says, "the President admitted that he 'took an action to change the law.' The Defendants could hardly contend otherwise because a deferred action program with an acceptance rate that rounds to 100% is a de facto entitlement--one that even the President and OLC previously admitted would require a change to the law." As to the APA, the complaint alleges that the President's policy made law without proper authority, and without following notice-and-comment rulemaking procedures.
Tuesday, November 25, 2014
Texas Governor-Elect Greg Abbott put the finest point yet on Republicans' legal case against President Obama over his announcement last week to defer immigration enforcement action against certain unauthorized aliens. Abbott said in a statement yesterday that President Obama's move violated the Take Care Clause, Congress's immigration authority under Article II, Section 8, and the Administrative Procedure Act.
These claims are head-and-shoulders above the kind of general blustering we've heard from others in the debate. But they're still far from specific. Indeed, they're answered by the OLC's own legal analysis: the OLC relies on congressionally-designed flexibility in the text of the INA, among other legal authorities, to conclude that President Obama's action is consistent with, and supported by, the INA. In other words, Congress wrote the INA (using its authority under Article II, Section 8) to give the President just this kind of flexibility in enforcement. If that's true--and we haven't heard many (if any) specifics challenging this interpretation from opponents of President Obama's actions--then it seems odd to argue that President Obama isn't properly executing the law, or that he isn't respecting a uniquely congressional authority, or that he's violating the APA. Indeed, it seems that's exactly what he's doing.
Moreover, Abbott's statement is silent on prior executive practice, an important tool in sorting out this kind of separation-of-powers problem.
Abbott swears that "[t]his is a legal issue, not a political issue." But before we can take that claim seriously, it'd help if Abbott, Oklahoma AG Scott Pruitt, Kansas AG Kris Kobach, and others threatening suit sharpen their case with a little statutory interpretation and history of executive practice (to say nothing of Supreme Court precedent). We'll keep you posted.
Friday, November 21, 2014
House Republicans filed their expected lawsuit against the Obama administration, arguing that the administration spend money on the Affordable Care Act's insurer offset program without an appropriation and extended the ACA's deadline for the employer mandate without congressional authorization. The complaint is here; Jonathan Turley's post on his blog onthe case is here; we previously posted on the issue here. It's also all over the news.
The case is only the latest move by opponents of the ACA to chip away and ultimately kill the Act by a thousand cuts. It's also only the latest move by opponents of President Obama in their effort to cast him as lawless.
House Republicans' first claim involves the administration's expenditures of funds that haven't been appropriated by Congress. The ACA contains two expenditure programs. The first, the Section 1401 Refundable Tax Credit Program, provides refundable tax credits for individual purchasers of health insurance on an ACA health insurance marketplace exchange. The second, the Section 1402 Offset Program, provides direct payments to ACA insurers to offset costs that they incur in providing cost-sharing reductions to beneficiaries that are required under the Act.
House Republicans claim that Congress funded the Section 1401 program, but did not fund the Section 1402 program. Yet they say that the Obama administration is using Section 1401 appropriated funds to make payments under Section 1402. In other words, House Republicans claim that the administration is spending money that wasn't appropriated by Congress, and shifting money from one line to another, in violation of Congress's exclusive power of the purse.
House Republicans also claim that the administration unilaterally extended the deadline for the ACA's employer mandate. The ACA says that large employers will be subject to tax penalties (or shared-responsibility payments), and that those penalties "shall apply to months beginning after December 31, 2013." But House Republicans claim that the administration unilaterally altered that date, without congressional action or congressional delegation, by extending the date by which penalties will be assessed by a year.