Friday, December 18, 2015
Judge Royce Lamberth (D.D.C.) ruled yesterday that the district court lacked jurisdiction over a Guantanamo detainee's habeas claim seeking his periodic review, as ordered by President Obama.
The ruling in Salahi v. Obama leaves Guantanamo detainees without a way to enforce the Periodic Review Board process set by executive order by President Obama.
Recall that President created an interagency process in 2011 to periodically review whether continued detention of certain Guantanamo detainees was "necessary to protect against significant threat to the security of the United States." Under EO 13567, every detainee was to get a full hearing every three years from a PRB, plus interim review under certain circumstances.
Salahi has been detained at Guantanamo since 2002, without charges, and has yet to have a PRB hearing (or even have one scheduled). He filed a habeas claim in the D.C. District seeking, among other things, a scheduled PRB hearing.
The court rejected his claim. The court said that "probabilistic" claims--that is, claims that only might lead to release--don't fall within habeas, and that in any event the EO didn't create any substantive rights that a Guantanamo detainee might actually enforce in court.
The upshot is that while the President may order periodic review, that doesn't mean that detainees can actually get it.
Wednesday, December 16, 2015
The full Second Circuit last week denied en banc review of its June ruling in Turkmen v. Ashcroft. That ruling allowed a civil rights case against former AG Ashcroft and former FBI Director Mueller, among others, by alien detainees held at the Metropolitan Detention Center in New York to go forward. (The June ruling was not a ruling on the merits, however.) The full Second Circuit denied review by a 6-6 vote. (H/t: Joe Dicola.)
The June ruling and the full court's denial of review are victories for the plaintiffs and, more generally, for access to justice. They deal a major blow to the government in defending detainee-abuse suits that arise in domestic, non-military detention facilities. But while the rulings are significant (to say the least), they may be short-lived. That's because the government is sure to appeal to the Supreme Court, and because the Court will almost surely take it.
Monday, November 9, 2015
A sharply divided panel of the Fifth Circuit ruled today that states had a substantial likelihood of success on the merits in their case against the President's deferred action program for parents of Americans and lawful permanent residents, or DAPA. The ruling affirms a nationwide injunction issued by the lower court and means that the government is barred from enforcing DAPA across the country--unless and until the government files for and wins a stay and appeals.
The ruling is a win for plaintiff-states that don't like DAPA and a loss, though perhaps not unexpected (at the conservative Fifth Circuit), for the government.
The dispute between the majority and the dissent on the merits comes down to whether DAPA is really an exercise of discretionary non-enforcement (majority says no; dissent says yes) and whether DAPA violates federal law (majority says yes; dissent says no). The majority and dissent also dispute the states' ability to bring the suit in the first place, or their standing.
This ruling is surely not the last say on the question; this case is undoubtedly going to the Supreme Court.
The court issued four key holdings. First, the court said that the states had standing, and that the case is justiciable. Next, the court said that DAPA likely violated notice-and-comment rules of the APA. Third, the court said that DAPA likely violated federal law (the Immigration and Naturalization Act) and therefore violated substantive APA requirements. Finally, the court said that the district court was within its discretion to issue a nationwide injunction.
The court did not address the plaintiffs' Take Care Clause challenge.
As to standing, the court said as an initial matter that the states were due "special solicitude" for standing under Massachusetts v. EPA. The court went on to say that the states had standing because DAPA would require them to issue drivers licenses to DAPA beneficiaries, because DAPA would "impos[e] substantial pressure on them to change their laws" for drivers licenses, and because the states "now rely on the federal government to protect their interests" in immigration matters.
On the procedural APA claim, the court ruled that the states "established a substantial likelihood that DAPA would not genuinely leave the agency and its employees free to exercise discretion," despite conflicting evidence on the point, apparently ignored by the lower court. The court also ruled that DAPA is a substantive rule (and not procedural), because "receipt of DAPA benefits implies a 'stamp of approval' from the government and 'encodes a substantive value judgment,' such that the program cannot be considered procedural." As a result, according to the court, DAPA was subject to APA notice-and-comment rulemaking, and, because the government didn't use notice and comment, the states had a substantial likelihood of success on their procedural APA claim.
On the substantive APA claim, the court said that DAPA is "manifestly contrary to the [Immigration and Naturalization Act]," in particular, the INA's "specific and intricate provisions" that "directly addressed the precise question at issue." The court rejected the government's claim that DAPA is consistent with historical practice.
Importantly, the court did not "address whether single, ad hoc grants of deferred action made on a genuinely case-by-case basis are consistent with the INA . . . ." It only concluded "that the INA does not grant the Secretary discretion to grant deferred action and lawful presence on a class-wide basis to 4.3 million otherwise removable aliens."
Finally, the court said that the district court could issue a nationwide injunction, because, in short, immigration is a nationwide issue that calls for uniform regulation.
Judge King wrote a lengthy and sharp dissent, challenging the majority at each turn.
Monday, November 2, 2015
The Supreme Court heard oral arguments today in Spokeo v. Robins, the case testing whether Congress can confer standing on a plaintiff by statute, even when the plaintiff lacks a sufficient and independent harm for Article III standing purposes.
The case is important for what it will say about access to the courts, and, in particular, class actions. The justices at oral arguments seemed sharply divided along conventional ideological lines, with progressives favoring access and conservatives, including Justice Kennedy, going the other way. If so, the case will take its place among the line of cases coming out of the Roberts Court that limit access to the judiciary and favor (corporate and government) defendants.
(Check out the outstanding Vanderbilt roundtable on the case, with six different takes, available here.)
The case arose when Spokeo, the owner of a web-site that provides searchable reports containing personal information about individuals, reported false information about Thomas Robins. For example, Spokeo reported that Robins had a graduate degree (he doesn't), that he was employed in a professional or technical field, with "very strong" "economic health" and wealth in the "Top 10% (he's unemployed), and that he's in his 50s, married, with children (he's not in his 50s, not married, and no children).
Robins filed suit, claiming that Spokeo's representations violated the federal Fair Credit Reporting Act. He sought damages under the Act for a willful violation. Robins claimed that Spokeo's false report made it harder for him to find a job.
Justices Kagan and Scalia marked out the competing positions early in Spokeo's argument, and at times bypassed Spokeo's attorney (Andrew Pincus) entirely and simply argued with each other. At one point, Justice Scalia even intervened to answer a question for Pincus, and then told Pincus that it was the right answer. In short, Justice Kagan argued that Congress identified a concrete harm in the Act and provided a remedy for it; Justice Scalia argued that any harm was merely "procedural," because any harm was only Spokeo's violation of the Act's procedures (with no additional concrete harm). Here's a little of the exchange:
Justice Kagan: But did that procedural requirement--this is--this is exactly what Lujan says, "It's a procedural requirement the disregard of which could impair a concrete interest of the plaintiff."
And we distinguished that from procedural requirements in vacuo.
. . .
Justice Scalia: Excuse me. That--that would lead to the conclusion that anybody can sue . . . not just somebody who--whose information was wrong.
Pincus seemed to make an important concession in response to a question by Justice Kennedy, whether "Congress could have drafted a statute that would allow [Robins] to bring suit?" Pincus said yes, and proceeded to describe it--basically a statute that required a plaintiff to show a concrete harm that would be sufficient for Article III. If Justice Kennedy is in play, Pincus's softer position may assuage any concerns over an extreme position that Congress can never confer standing. The softer position also saves other statutes that have similar Congress-confered-standing provisions. (Justice Kennedy picked up this theme with Robins's attorney (William Consovoy) and noted that Consovoy's position of a Congress-created-harm (alone) seemed circular--but Consovoy didn't seem to give a satisfying answer.) At one point Pincus made another important concession: some plaintiffs might have standing under the FCRA, so long as they show an independent and sufficient harm.
On the other side, Chief Justice Roberts pressed Consovoy early on the limits of his argument--a point we're likely to see in the opinion:
Chief Justice Roberts: What about a law that says you get a--a--$10,000 statutory damages if a company publishes inaccurate information about you? . . . The company publishes your phone number, but it's wrong. That is inaccurate information about you, but you have no injury whatever. Can that person bring an action for that statutory damage?
Consovoy didn't have a response, or, rather, his response only opened new cans of worms. (Justice Breyer intervened and offered an interpretation of the statutory language that gives a cause of action to "any consumer who has obtained--who suffers from false information.") Chief Justice Roberts and Consovoy had a similar exchange later in the argument, too. Consovoy maintained that the FCRA was different than the Chief's hypotheticals, because the FCRA authorizes damages only for someone who was injured. He didn't seem to persuade the Chief on this point, though, despite Justice Breyer's help.
Justice Alito pointed to the record and argued that it didn't support a concrete harm. Indeed, he pointed out that nobody in the record (other than Robins himself) searched for him on Spokeo--a "quintessential speculative harm"--probably another point we'll see in the final opinion.
Chief Justice Roberts asked a different question--and a far more loaded one (politically, and constitutionally)--to the government, amicus for Robins:
Chief Justice Roberts: [L]et's kind of say your--your--Congress thinks that the president is not doing enough to stop illegal immigration, so it passes a law that says, anyone in a border State--so it's particularized--who is unemployed may bring an action against an illegal immigrant who has a job. And they get damages, maybe they get an injunction.
. . .
And I would have thought that the--the president would be concerned about Congress being able to create its own enforcement mechanism. I thought that you would be concerned that that would interfere with the executive prerogative.
The government tried to distinguish the hypo, but, again, counsel probably didn't persuade the conservatives.
November 2, 2015 in Cases and Case Materials, Congressional Authority, Courts and Judging, Executive Authority, Jurisdiction of Federal Courts, News, Opinion Analysis, Separation of Powers, Standing | Permalink | Comments (0)
Friday, October 23, 2015
President Obama this week vetoed H.R. 1735, the National Defense Authorization Act for Fiscal Year 2016, citing a variety of objections, including the NDAA's restriction on the use of funds to close Guantanamo Bay, to transfer detainees out of Guantanamo Bay, and to house them here in the United States.
In prior years, President Obama signed the NDAA, but issued a signing statement saying that the Guantanamo-closure provisions were unconstitutional.
But this year, he used those provisions--Sections 1031 through 1041 in the bill--along with other objectionable features of the bill, as a reason to veto. Here's what he said about restrictions on closing Guantanamo:
I have repeatedly called upon the Congress to work with my Administration to close the detention facility at Guantanamo Bay, Cuba, and explained why it is imperative that we do so. As I have noted, the continued operation of this facility weakens our national security by draining resources, damaging our relations with key allies and partners, and emboldening violent extremists. Yet in addition to failing to remove unwarranted restrictions on the transfer of detainees, this bill seeks to impose more onerous ones. The executive branch must have the flexibility, with regard to those detainees who remain at Guantanamo, 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. Rather than taking steps to bring this chapter of our history to a close, as I have repeatedly called upon the Congress to do, this bill aims to extend it.
At the same time, he said that he supported a provision imposing statutory restrictions on interrogation techniques and limiting techniques to those in the Army Field Manual.
Monday, September 28, 2015
The D.C. Circuit announced that it would rehear en banc a panel's earlier judgment vacating the military commission conviction of Ali Hamza Ahmad Suliman al Bahlul, an alien enemy combatant who one time bragged about his role in the 9/11 attacked.
A panel this past June vacated al Bahlul's conviction for inchoate conspiracy. The panel said that the conviction violated Article III because it was based on "the purely domestic crime" of inchoate conspiracy, which is not an offense under the international law of war.
The panel's summer ruling was a victory for al Bahlul and a blow to the government in conducting military commission trials. But the court's latest ruling gives it a second bite at this apple. The ruling vacates the panel's summer judgment and sets oral argument before the entire court for December 1, 2015.
Wednesday, September 9, 2015
Judge Rosemary Collyer (D.D.C.) ruled today that the U.S. House of Representatives has standing to pursue its claim that the administration spent money on a portion of the Affordable Care Act without a valid congressional appropriation. But at the same time, Judge Collyer ruled that the House lacked standing to sue for an administration decision to delay the time when employers have to provide minimum health insurance to their employees.
The split ruling means that the House's case against the administration for spending unappropriated funds can go forward, while the case for extending the time for the employer mandate cannot.
But Judge Collyer's ruling is certainly not the last word on this case. The government will undoubtedly appeal.
And just to be clear: this is not a ruling on the merits. It only says that a part of the case can go forward.
The case arose when the House authorized the Speaker to file suit in federal court against HHS Secretary Burwell and Treasury Secretary Lew for spending money on an ACA program without an appropriation and for unilaterally extending the statutory time for employers to comply with the employer mandate.
As to the spending claim, the House said that a provision of the ACA, Section 1402, which authorizes federal reimbursements to insurance companies for reducing the cost of insurance to certain eligible beneficiaries (as required by the ACA), never received a valid appropriation. That is, Congress never funded the provision. That's a problem, the House said, because Article I, Section 9, Clause 7 of the Constitution says that "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law . . . ." In short, the administration's funding of Section 1402 violated the Constitution.
As to the employer mandate claim, the House said that the administration pushed back the employer mandate beyond December 31, 2013, the date set in the ACA, without congressional authorization. (The House couched this in constitutional terms, but, as Judge Collyer wrote, it's really essentially a statutory claim.)
The Secretaries filed a motion to dismiss for lack of standing.
Judge Collyer denied the motion as to the appropriations theory, but granted it as to the employer mandate claim. According to Judge Collyer, the House could show an institutional harm from the administration's use of non-appropriated funds (because the Constitution itself specifies a role in appropriations for the Congress, which the House said that the administration ignored here, and because the claim isn't about the administration's execution of law). But at the same time she wrote that the House couldn't show a particular institutional harm for the administration's push-back for the employer mandate (because this claim was all about the administration's execution of the law--a role reserved under the Constitution to the executive). She explained:
Distilled to their essences, the Non-Appropriation Theory alleges that the Executive was unfaithful to the Constitution, while the Employer-Mandate Theory alleges that the Executive was unfaithful to a statute, the ACA. That is a critical distinction, inasmuch as the Court finds that the House has standing to assert the first but not the second.
As to the employer mandate claim, she said,
The [House's] argument proves too much. If it were accepted, every instance of an extra-statutory action by an Executive officer might constitute a cognizable constitutional violation, redressable by Congress through a lawsuit. Such a conclusion would contradict decades of administrative law and precedent, in which courts have guarded against "the specter of 'general legislative standing' based upon claims that the Executive Branch is misinterpreting a statute or the Constitution."
We'll watch this case on appeal.
September 9, 2015 in Cases and Case Materials, Congressional Authority, Courts and Judging, Executive Authority, Jurisdiction of Federal Courts, News, Opinion Analysis, Separation of Powers, Standing | Permalink | Comments (0)
Wednesday, August 5, 2015
The D.C. Circuit ruled in Dodge of Naperville v. NLRB that the NLRB's finding of an unfair labor practice against the petitioner was valid, and that the Board didn't lack quorum to act in the waning days of Member Craig Becker's recess appointment.
The ruling means that the NLRB's finding stands.
The petitioners challenged the NLRB finding on the merits and based on the NLRB's lack of quorum at the time it issued its finding. As to the latter, the petitioners argued that the NLRB had only two members (one shy of quorum) when it issued its opinion on January 3, 2012, because the appointment of Member Becker (who was recess appointed in the second session of the 111th Congress) expired on December 17, 2011. That's the date when the Senate agree to adjourn and convene for pro forma sessions only every Tuesday and Friday until January 23, 2012.
But the court flatly rejected this argument. The court said that Member Becker's appoint was valid until "the end of their next session"--that is, until noon on January 2, 2012. The court, citing Noel Canning, said that "the end of an annual session is triggered by a recess only if the Senate adjourns sine die--that is, without specifying a date to return." But under the Senate's adjournment plan, the body convened every few days after December 17, making the short breaks between meetings intra-session recesses--and not end-points for the prior session.
The court rejected the petitioners' argument that maybe the Board's opinion issued after noon on January 3, because the petitioner only raised this point for the first time on reply.
Thursday, June 25, 2015
The Supreme Court ruled today that the Affordable Care Act means exactly what Congress thought it meant in the first place: everybody should get--and be able to get--health insurance.
The Court ruled in King v. Burwell that the ACA authorizes federal tax subsidies for qualified purchasers of health insurance on federally-subsidized exchanges. The ruling means that qualified purchasers will continue to receive federal tax subsidies for their health insurance, that they won't go without insurance (at least not for a lack of subsidies), and that Obamacare remains intact.
Opponents attacked the subsidies, arguing that the ACA authorized subsidies only for purchasers on state exchanges, not federally-facilitated exchanges, and that the IRS had to stop extending subsidies to purchasers on federally-facilitated exchanges. Their argument turned on a single phrase in the Act, that subsidies extend to "an Exchange established by the State," despite the overwhelming evidence that the Act, as a whole, was designed to provide universal coverage. Our oral argument preview is here.
The Court today rejected the opponents' arguments. Chief Justice Roberts wrote the majority opinion, joined by Justices Kennedy, Ginsburg, Breyer, Sotomayor, and Kagan. He wrote that the phrase "an Exchange established by the State" was ambiguous, given the way the rest of the Act hung together, and that the Court therefore should give the phrase a reading that harmonizes with the rest of the Act, including the Act's clear purpose to provide universal coverage. That reading, he wrote, meant that tax subsidies extend to purchasers on both state-created and federally-facilitated exchanges.
Chief Justice Roberts's opinion is notable for its recognition of the several key components of Obamacare (guaranteed issue, community rating, individual mandate, and tax subsidies) and how they are designed to operate together to ensure universal (or close to universal) coverage. The majority opinion also discussed in some detail how these components evolved and ended up in the ACA and the health-care and health-insurance problems they were designed to solve (including the death spiral).
But Chief Justice Roberts also took the opportunity make a dig on process--how the legislative road to the ACA was hurried and lacked transparency.
Justice Scalia wrote the dissent, joined by Justices Thomas and Alito. The dissent was predictably colorful, but comes down to this:
The Court holds that when the Patient Protection and Affordable Care Act says "Exchange established by the State" it means "Exchange established by the State or the Federal Government." This is of course quite absurd, and the Court's 21 pages of explanation make it no less so.
Monday, June 8, 2015
The Supreme Court ruled today in Zivotofsky v. Kerry that the President has exclusive power of recognition of foreign sovereigns, and that a congressional attempt to force the President to recognize sovereignty over Jerusalem (by Israel) impermissibly intrudes on the President's power.
The ruling is a decisive win for the presidency over Congress in the area of recognition of foreign sovereignty. It also puts an end to this highly politicized case involving U.S. recognition of sovereignty over Jerusalem.
Recall that Congress enacted legislation requiring the State Department to put "Israel" as the country-of-birth on a passport of any U.S. citizen born in Jerusalem, upon the request of the passport applicant. President George W. Bush signed the legislation, but with a signing statement saying that this was unconstitutional. The State Department has long had regs that say that only "Jerusalem" (and not "Israel") go on the passport of a U.S. citizen born in Jerusalem, so as not to tilt the balance toward one side on the sensitive question of who has sovereignty over Jerusalem.
Justice Kennedy wrote the Court's opinion, joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan. Justice Kennedy said that the text and history of the Reception Clause (giving the President power to "receive Ambassadors and other public Ministers") gives the President alone authority to recognize foreign sovereigns. He wrote that the text and purpose of Section 214(d) of the Foreign Relations Authorization Act--which required the State Department to list "Israel" as the country-of-birth for a U.S. citizen born in Jerusalem, upon the passport applicant's request--intruded on that authority.
Justice Breyer filed a concurring opinion; Justice filed an opinion concurring in part and dissenting in part; Chief Justice Roberts filed a dissent (joined by Justice Alito); and Justice Scalia wrote a dissent (joined by Chief Justice Roberts and Justice Alito).
We'll have more analysis and review later.
Friday, May 29, 2015
The Fifth Circuit this week denied the government's motion for a stay of Judge Hanen's nationwide injunction against the government's deferred action program for parents of Americans and lawful permanent residents, or DAPA. The denial is not a final ruling on the merits (the court wrote that "we do not decide whether the Secretary has the authority to implement DAPA" at this "early stage of the case"); it says only that Texas's challenge to the program is sufficiently likely to succeed to withstand the government's motion for a stay. Still, the ruling presages the likely result on the merits and makes the case look even more likely to end up at the Supreme Court.
The court addressed two issues: Texas's standing to challenge DAPA, and the state's claim that DHS violated the Administrative Procedures Act in failing to use notice-and-comment rulemaking before implementing DAPA.
The court held that Texas had standing, because it'll cost the state some $130 under state law to subsidize each driver license for each DAPA beneficiary. The government argued that Texas could avoid the economic injury by changing its license-fee structure, and that in any event the many economic benefits of the DAPA program would offset the costs for the state.
The court rejected the former argument, saying that the "forced choice" itself is an injury:
The flaw in the government's reasoning is that Texas's forced choice between incurring costs and changing its fee structure is itself an injury: A plaintiff suffers an injury even if it can avoid that injury by incurring other costs. And being pressured to change state law constitutes an injury.
The court rejected the latter argument, saying that the economic offsets are of a different type--and that the injury therefore still stands, notwithstanding any economic benefits that the program may bring to the state.
Because the court said that Texas had standing based on its economic harm, it did not rule on Texas's claim that it had standing based on the district court's "abdication theory" (that Texas had standing because the federal government "abdicated" its "responsibility" to enforce the law in an area where it has exclusive authority).
The court said that Texas easily falls within the zone of interests of the INA, because "Congress permits states to deny many benefits to illegal aliens," and "the states seek only to be heard in the formulation of immigration policy before [the government] imposes substantial costs on them." The court also said that the INA doesn't bar judicial review.
The court held that DAPA amounts to "nonenforcement" of the INA, because it is the "affirmative act of conferring 'lawful presence' [quoting Johnson's memo] on a class of unlawfully present aliens." "[T]hat new designation triggers eligibility for federal and state benefits that would not otherwise be available."
On the merits, the court held that DAPA is not a mere policy statement (as the government argued), but rather is a "substantive" rule that requires notice and comment under the APA. According to the court, that's because DAPA doesn't really offer enforcement discretion, and it's more than internal procedural guidance (it's substantive, according to the court).
As to the nationwide injunction, the court only said that anything short of a nationwide ban would result in a "patchwork system" that would detract from the uniformity that Congress sought in the INA.
Judge Higginson dissented. He argued that "Supreme Court and Fifth Circuit caselaw forecloses plaintiffs' arguments challenging in court this internal executive enforcement guideline," and that "DHS is adhering to the law, not derogating from it." He argued that DAPA amounts to discretionary enforcement guidelines that aren't subject to notice-and-comment rulemaking under the APA.
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.