State of Texas v. USA
Citation945 F.3d 355
Date Filed2019-12-18
Docket19-10011
Cited15 times
StatusPublished
Full Opinion (html_with_citations)
Case: 19-10011 Document: 00515242592 Page: 1 Date Filed: 12/18/2019
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
December 18, 2019
No. 19-10011
Lyle W. Cayce
Clerk
STATE OF TEXAS; STATE OF ALABAMA; STATE OF ARIZONA; STATE
OF FLORIDA; STATE OF GEORGIA; STATE OF INDIANA; STATE OF
KANSAS; STATE OF LOUISIANA; STATE OF MISSISSIPPI, by and
through Governor Phil Bryant; STATE OF MISSOURI; STATE OF
NEBRASKA; STATE OF NORTH DAKOTA; STATE OF SOUTH
CAROLINA; STATE OF SOUTH DAKOTA; STATE OF TENNESSEE;
STATE OF UTAH; STATE OF WEST VIRGINIA; STATE OF ARKANSAS;
NEILL HURLEY; JOHN NANTZ,
Plaintiffs â Appellees,
v.
UNITED STATES OF AMERICA; UNITED STATES DEPARTMENT OF
HEALTH; HUMAN SERVICES; ALEX AZAR, II, SECRETARY, U.S.
DEPARTMENT OF HEALTH AND HUMAN SERVICES; UNITED STATES
DEPARTMENT OF INTERNAL REVENUE; CHARLES P. RETTIG, in his
Official Capacity as Commissioner of Internal Revenue,
Defendants â Appellants,
STATE OF CALIFORNIA; STATE OF CONNECTICUT; DISTRICT OF
COLUMBIA; STATE OF DELAWARE; STATE OF HAWAII; STATE OF
ILLINOIS; STATE OF KENTUCKY; STATE OF MASSACHUSETTS;
STATE OF NEW JERSEY; STATE OF NEW YORK; STATE OF NORTH
CAROLINA; STATE OF OREGON; STATE OF RHODE ISLAND; STATE OF
VERMONT; STATE OF VIRGINIA; STATE OF WASHINGTON; STATE OF
MINNESOTA,
Intervenor-Defendants â Appellants.
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Appeals from the United States District Court
for the Northern District of Texas
Before KING, ELROD, and ENGELHARDT, Circuit Judges.
JENNIFER WALKER ELROD, Circuit Judge:
The Patient Protection and Affordable Care Act (the Act or ACA) is a
monumental piece of healthcare legislation that regulates a huge swath of the
nationâs economy and affects the healthcare decisions of millions of Americans.
The law has been a focal point of our countryâs political debate since it was
passed nearly a decade ago. Some say that the Act is a much-needed solution
to the problem of increasing healthcare costs and lack of healthcare
availability. Many of the amici in this case, for example, argue that the law
has extensively benefitted everyone from children to senior citizens to local
governments to small businesses. Others say that the Act is a costly exercise
in burdensome governmental regulation that deprives people of economic
liberty. Amici of this perspective argue, for example, that the Act âhas deprived
patients nationwide of a competitive market for affordable high-deductible
health insurance,â leaving âpatients with no alternative to . . . skyrocketing
premiums.â Association of American Physicians & Surgeons Amicus Br. at 15.
None of these policy issues are before the court. And for good reasonâ
the courts are not institutionally equipped to address them. These issues are
far better left to the other two branches of government. The questions before
the court are far narrower: questions of law, not of policy. Those questions are:
First, is there a live case or controversy before us even though the federal
defendants have conceded many aspects of the dispute; and, relatedly, do the
intervenor-defendant states and the U.S. House of Representatives have
standing to appeal? Second, do the plaintiffs have standing? Third, if they do,
2
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is the individual mandate unconstitutional? Fourth, if it is, how much of the
rest of the Act is inseverable from the individual mandate?
We answer those questions as follows: First, there is a live case or
controversy because the intervenor-defendant states have standing to appeal
and, even if they did not, there remains a live case or controversy between the
plaintiffs and the federal defendants. Second, the plaintiffs have Article III
standing to bring this challenge to the ACA; the individual mandate injures
both the individual plaintiffs, by requiring them to buy insurance that they do
not want, and the state plaintiffs, by increasing their costs of complying with
the reporting requirements that accompany the individual mandate. Third,
the individual mandate is unconstitutional because it can no longer be read as
a tax, and there is no other constitutional provision that justifies this exercise
of congressional power. Fourth, on the severability question, we remand to the
district court to provide additional analysis of the provisions of the ACA as they
currently exist.
I.
On March 23, 2010, President Barack Obama signed the ACA into law.
See Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124Stat. 119 (2010). The Act sought to âincrease the number of Americans covered by health insurance and decrease the cost of health careâ through several key reforms. See Natâl Fedân of Indep. Bus. v. Sebelius (NFIB),567 U.S. 519, 538
(2012).
Some of those reforms implemented new consumer protections, aiming
primarily to protect people with preexisting conditions. For example, the law
prohibits insurers from refusing to cover preexisting conditions. 42 U.S.C.
§ 300gg-3. The âguaranteed-issue requirementâ forbids insurers from turning
customers away because of their health. See 42 U.S.C. §§ 300gg, 300gg-1. The
âcommunity-rating requirementâ keeps insurers from charging people more
3
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because of their preexisting health issues. 42 U.S.C. § 300gg-4. 1 The law also
requires insurers to provide coverage for certain types of care, including
womenâs and childrenâs preventative care. 42 U.S.C. § 300gg-13(a)(3)â(4). 2
Other reforms sought to lower the cost of health insurance by using both
policy âcarrotsâ and âsticks.â 3 On the stick side, the individual mandateâ
which plaintiffs challenge in the instant caseârequires individuals to
âmaintain [health insurance] coverage.â 26 U.S.C. § 5000A(a). If individuals
do not maintain this coverage, they must make a payment to the IRS called a
âshared responsibility payment.â 4 Id.; see also King v. Burwell, 135 S. Ct. 2480,
2486 (2015).
1 The ACA features a few other consumer-protection reforms of note. For example,
the Act requires insurance companies to allow young adults to stay on their parentsâ health
insurance plans until they turn 26; prohibits insurers from imposing caps on the value of
benefits provided; and mandates that the insurance plans cover at least ten âessential health
benefits,â including emergency services, prescription drugs, and maternity and newborn care.
See 42 U.S.C. §§ 300gg-14 (young adults), 300gg-11 (restriction on benefit caps), 18022
(essential health benefits). The ACA also requires employers with at least fifty full-time
employees to pay the federal government a penalty if they fail to provide their employees
with ACA-compliant coverage. 26 U.S.C. § 4980H.
2 The womenâs preventative care provision was at issue in a trio of recent Supreme
Court cases. See Zubik v. Burwell, 136 S. Ct. 1557(2016); Wheaton College v. Burwell,573 U.S. 958
(2014); Burwell v. Hobby Lobby Stores, Inc.,573 U.S. 682
(2014); see also California v. U.S. Depât of Health & Human Servs., No. 19-15072,2019 WL 5382250
(9th Cir. Oct. 22, 2019); Pennsylvania v. President United States,930 F.3d 543
(3d Cir. 2019), as amended (July 18, 2019); DeOtte v. Azar,393 F. Supp. 3d 490
, 495 (N.D. Tex. 2019).
3 Some opponents of the ACA assert that the goal was not to lower health insurance
costs, but that the entire law was enacted as part of a fraud on the American people, designed
to ultimately lead to a federal, single-payer healthcare system. In a hearing before the House
Committee on Oversight and Government Reform, for example, Representative Kerry
Bentivolio suggested that Jonathan Gruber, who assisted in crafting the legislation, had
âhelp[ed] the administration deceive the American people on this healthcare act or [told] the
truth in [a] video . . . about how [the Act] was a fraud upon the American people.â Examining
Obamacare Transparency Failures: Hearing Before the H. Comm. on Oversight and
Government Reform, 113th Cong. 83 (2014) (statement of Rep. Kerry Bentivolio).
4 The Act exempts several groups of people from the shared responsibility payment.
Specifically, the Act provides that â[n]o penalty shall be imposedâ on those âwho cannot afford
[insurance] coverage,â on â[t]axpayers with income below [the] filing threshold,â on
4
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The individual mandate was designed to lower insurance premiums by
broadening the insurance pool. See 42 U.S.C. § 18091(2)(J) (âBy significantly increasing . . . the size of purchasing pools, . . . the [individual mandate] will significantly . . . lower health insurance premiums.â). When the young and healthy must buy insurance, the insurance pool faces less risk, which, at least in theory, leads to lower premiums for everyone. See42 U.S.C. § 18091
(2)(I) (positing that the individual mandate will âbroaden the health insurance risk pool to include healthy individuals, which will lower health insurance premiumsâ). The individual mandate thus serves as a counterweight to the ACAâs protections for preexisting conditions, which push riskier, costlier individuals into the insurance pool. Under the protections for consumers with preexisting conditions, if there were no individual mandate, there would arguably be an âadverse selectionâ problem: âmany individuals would,â in theory, âwait to purchase health insurance until they needed care.âId.
5
The Act also sought to lower insurance costs for some consumers through
policy âcarrots,â providing tax credits to offset the cost of insurance to those
with incomes under 400 percent of the federal poverty line. See 26 U.S.C.
§ 36B; 42 U.S.C. §§ 18081, 18082. The Act also created government-run,
taxpayer-funded health insurance marketplacesâknown as âExchangesââ
which allow customers âto compare and purchase insurance plans.â King, 135
â[m]embers of Indian tribes,â on those who had only âshort coverage gaps,â or on anyone who,
in the Secretary of Health and Human Servicesâ determination, has âsuffered a hardship.â
26 U.S.C. § 5000A(e).
5 Opponents of the ACA, however, argue that the Act goes too far in limiting
individualsâ freedom to choose healthcare coverage. For example, at a House committee
hearing, Representative Darrell Issa argued that one of the âfalse claimsâ that the Obama
administration made in passing the Act was that â[i]f you like your doctor, you will be able to
keep your doctor, period. . . . [And i]f you like your [insurance] plan, you can keep your plan.â
Examining Obamacare Transparency Failures: Hearing Before the H. Comm. on Oversight
and Government Reform, 113th Cong. 2 (2014) (statement of Rep. Darrell Issa, Chairman, H.
Comm. on Oversight and Government Reform).
5
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S. Ct. at 2485; see also 42 U.S.C. § 18031. Opponents of the law argue that the
law has led to unintended subsidies to keep plans afloat and insurance
companies in the black. Texas points in its brief, for example, to a
Congressional Budget Office study estimating that federal outlays for health
insurance subsidies and related spending will rise by about 60 percent over the
next ten years, from $58 billion in 2018 to $91 billion by 2028. CBO, The
Budget and Economic Outlook: 2018 to 2028 at 51 (April 2018), available at
https://tinyurl.com/CBOBudgetEconOutlook-2018-2028; State Plaintiffsâ Br. at
13â14.
The ACA also enlarged the class of people eligible for Medicaid to include
childless adults with incomes up to 133 percent of the federal poverty line. 42
U.S.C. §§ 1396a(a)(10)(A)(i)(VII), 1396a(e)(14)(I)(i); NFIB, 567 U.S. at 541â42.
The ACA originally required each state to expand its Medicaid program or risk
losing âall of its federal Medicaid funds.â NFIB, 567 U.S. at 542. In NFIB, however, the Supreme Court held that this exceeded Congressâ powers under the Spending Clause.Id. at 585
(plurality opinion). But the Court allowed those states that wanted to accept Medicaid expansion funds to do so. Seeid.
at 585â86 (plurality opinion);id.
at 645â46 (Ginsburg, J., concurring in part,
concurring in the judgment in part, and dissenting in part). As a result, the
states that have not participated in the expansion now subsidize, through their
general tax dollars, the states that have participated in expansion.
Since the Act was passed, its opponents have attempted to attack it both
through congressional amendment and through litigation. Between 2010 and
2016, Congress considered several bills to repeal, defund, delay, or amend the
ACA. See Intervenor-Defendant Statesâ Br. at 10. Except for a few modest
changes, these efforts were closely fought but ultimately failed. Intervenor-
Defendant Statesâ Br. at 10â11. In 2017, the shift in presidential
administrations reinvigorated opposition to the law, but many of these later
6
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legislative efforts failed as well. In March 2017, House leaders pulled a bill
that would have repealed many of the ACAâs essential provisions. In July
2017, the Senate voted on three separate bills that similarly would have
repealed major provisions of the Act, but each vote failed. 6 Finally, in
September 2017, several Senators introduced another bill that would have
repealed some of the ACAâs most significant provisions, but Senate leaders
ultimately chose not to bring it to the floor for a vote. Intervenor-Defendant
Statesâ Br. at 11.
The ACAâs opponents also took their cause to the courts in a series of
lawsuits, some of which reached the Supreme Court. Particularly relevant
here, the Court, in NFIB, upheld the lawâs individual mandate. 567 U.S. at
574. Through fractured voting and shifting majoritiesâexplained in more
detail in Part V of this opinionâthe Court decided that the ACAâs individual
mandate could be read as a tax on an individualâs decision not to purchase
insurance, which was a constitutional exercise of Congressâ taxing powers
under Article I of the U.S. Constitution. Id.; U.S. Const. art. I, § 8, cl. 1. The
Court favored this tax interpretation to save the provision from
unconstitutionality. Reading the provision as a standalone command to
purchase insurance would have rendered it unconstitutional. This reading
could not have been justified under the Commerce Clause because it would
have done more than âregulate commerce . . . among the several states.â U.S.
Const. art. I, § 8, cl. 3. It would have compelled individuals to enter commerce
in the first place. 7 NFIB, 567 U.S. at 557â58. The Court also held that the
One of these bills failed by a razor-thin vote of fifty-one against, forty-nine in favor.
6
See 163 Cong. Rec. S4415 (daily ed. July 27, 2017).
Chief Justice Roberts cautioned that concluding otherwise would empower the
7
government to compel Americans into all kinds of behavior that the government thinks is
7
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provision could not be justified under the Constitutionâs Necessary and Proper
Clause. Id. at 561 (Roberts, C.J.); id. at 654â55 (Scalia, Kennedy, Thomas, and
Alito, JJ., dissenting).
In December 2017, the ACAâs opponents achieved some legislative
success. As part of the Tax Cuts and Jobs Act, Congress set the âshared
responsibility paymentâ amountâthe amount a person must pay for failing to
comply with the individual mandateâto the âlesserâ of âzero percentâ of an
individualâs household income or â$0,â effective January 2019. Pub. L. No. 115-
97, § 11081, 131 Stat. 2054, 2092 (2017); see also 26 U.S.C. § 5000A(c). The
individual mandate is still âon the booksâ of the U.S. Code and still consists of
the three fundamental components it always featured. Subsection (a)
prescribes that certain individuals âshall . . . ensureâ that they and their
dependents are âcovered under minimum essential coverage.â 26 U.S.C.
§ 5000A(a). Subsection (b) âimpose[s] . . . a penaltyâ called a â[s]hared
responsibility paymentâ on those who fail to ensure they have minimum
essential coverage. 26 U.S.C. § 5000A(b). Subsection (c) sets the amount of
that payment. All Congress did in 2017 was change the amount in subsection
(c) to zero dollars. 26 U.S.C. § 5000A(c).
Two months after the shared responsibility payment was set at zero
dollars, the plaintiffs hereâtwo private citizens 8 and eighteen states 9âfiled
this lawsuit against several federal defendants: the United States of America,
beneficial for them, including, for example, compelling them to purchase broccoli. See NFIB,
567 U.S. at 558 (Roberts, C.J.).
8 Namely, Neill Hurley and John Nantz.
9 Namely, Texas, Alabama, Arizona, Florida, Georgia, Indiana, Kansas, Louisiana,
Mississippi, Missouri, Nebraska, North Dakota, South Carolina, South Dakota, Tennessee,
Utah, West Virginia, and Arkansas. Wisconsin, which was originally a plaintiff state, sought
and was granted dismissal from the appeal.
8
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the Department of Health and Human Services and its Secretary, Alex Azar,
as well as the Internal Revenue Service and its Acting Commissioner, David J.
Kautter. The plaintiffs argued that the individual mandate was no longer
constitutional because: (1) NFIB rested the individual mandateâs
constitutionality exclusively on reading the provision as a tax; and (2) the 2017
amendment undermined any ability to characterize the individual mandate as
a tax because the provision no longer generates revenue, a requirement for a
tax. The plaintiffs argued further that, because the individual mandate was
essential to and inseverable from the rest of the ACA, the entire ACA must be
enjoined. On this theory, the plaintiffs sought declaratory relief that the
individual mandate is unconstitutional and the rest of the ACA is inseverable.
The plaintiffs also sought an injunction prohibiting the federal defendants
from enforcing any provision of the ACA or its regulations.
The federal defendants agreed with the plaintiffs that once the shared
responsibility payment was reduced to zero dollars, the individual mandate
was no longer constitutional. They also agreed that the individual mandate
could not be severed from the ACAâs guaranteed-issue and community-rating
requirements. Unlike the plaintiffs, however, the federal defendants
contended in the district court that those three provisions could be severed
from the rest of the Act. Driven by the federal defendantsâ decision not to fully
defend against the lawsuit, sixteen states 10 and the District of Columbia
intervened to defend the ACA.
The district court agreed with the plaintiffsâ arguments on the merits.
Specifically, the court held that: (1) the individual plaintiffs had standing
10 Namely, California, Connecticut, Delaware, Hawaii, Illinois, Kentucky,
Massachusetts, New Jersey, New York, North Carolina, Oregon, Rhode Island, Vermont,
Virginia, Washington, and Minnesota.
9
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because the individual mandate compelled them to purchase insurance;
(2) setting the shared responsibility payment to zero rendered the individual
mandate unconstitutional; and (3) the unconstitutional provision could not be
severed from any other part of the ACA. The district court granted the
plaintiffsâ claim for declaratory relief. Specifically, the district courtâs order
âdeclares the Individual Mandate, 26 U.S.C. § 5000A(a),
UNCONSTITUTIONAL,â and the order further declares that âthe remaining
provisions of the ACA, Pub L. 111-148, are INSEVERABLE and therefore
INVALID.â The district court, however, denied the plaintiffsâ application for a
preliminary injunction. The district court entered partial final judgment 11 as
to the grant of summary judgment for declaratory relief, but stayed judgment
pending appeal. This appeal followed.
On appeal, the U.S. House of Representatives intervened to join the
intervenor-defendant states in defending the ACA. 12 Also on appeal, the
federal defendants changed their litigation position. After contending in the
district court that only a few provisions of the ACA were inseverable from the
individual mandate, the federal defendants contend in their opening brief for
the first time that all of the ACA is inseverable. See Fed. Defendantsâ Br. at
43â49. Moreover, the federal defendants contend for the first time on appeal
11 The final judgment is only partial because it addresses only Count One of the
plaintiffsâ amended complaint. Count One requests a declaratory judgment that the
individual mandate exceeds Congressâ constitutional powers. The district court has not yet
ruled on the other counts in the amended complaint. In Count Two, the plaintiffs request a
declaratory judgment that the ACA violates the Due Process Clause of the Fifth Amendment.
In Count Three, the plaintiffs request a declaratory judgment that the ACA violates the
Tenth Amendment. In Count Four, the plaintiffs request a declaratory judgment that agency
rules promulgated pursuant to the ACA are unlawful. In Count Five, the plaintiffs request
an injunction prohibiting federal officials from âimplementing, regulating, or otherwise
enforcing any part of the ACA.â
12 In addition to the U.S. House, four other states intervened on appeal to join the
original group that defended the Act in the district court: Colorado, Iowa, Michigan, and
Nevada.
10
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thatâeven though the entire ACA is inseverableâthe court should not enjoin
the enforcement of the entire ACA. The federal defendants now argue that the
district courtâs judgment should be affirmed âexcept insofar as it purports to
extend relief to ACA provisions that are unnecessary to remedy plaintiffsâ
injuries.â 13 Fed. Defendantsâ Br. at 49. They also now argue that the district
courtâs judgment âcannot be understood as extending beyond the plaintiff
states to invalidate the ACA in the intervenor states.â Fed. Defendantsâ Supp.
Br. at 10. Simply put, the federal defendants have shifted their position on
appeal more than once.
II.
We review a district courtâs grant of summary judgment de novo. Time
Warner Cable, Inc. v. Hudson, 667 F.3d 630, 638(5th Cir. 2012). Summary judgment is appropriate when âthe movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.â Fed. R. Civ. P. 56(a); see also Dialysis Newco, Inc. v. Cmty. Health Sys. Grp. Health Plan,938 F.3d 246
, 250 (5th Cir. 2019). A dispute about a material fact is genuine if âthe evidence is such that a reasonable jury could return a verdict for the non-moving party.â Amerisure Ins. v. Navigators Ins.,611 F.3d 299, 304
(5th Cir. 2010) (quoting Gates v. Tex. Depât of Protective & Regulatory Servs.,537 F.3d 404, 417
(5th Cir. 2008)). When ruling on a
motion for summary judgment, the court views all inferences drawn from the
13The federal defendants do not specify which precise provisions, in their view, injure
the plaintiffs and which do not.
11
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factual record âin the light most favorable to the non-moving parties below.â
Trent v. Wade, 776 F.3d 368, 373 n.1 (5th Cir. 2015).
III.
We first must consider whether there is a live â[c]aseâ or â[c]ontroversyâ
before us on appeal, as Article III of the U.S. Constitution requires. U.S. Const.
art. III, § 1. A case or controversy does not exist unless the person asking the
court for a decisionâin this case, asking us to decide whether the district
courtâs judgment was correctâhas standing, which requires a showing of
âinjury, causation, and redressability.â Sierra Club v. Babbitt, 995 F.2d 571,
574(5th Cir. 1993). When âstanding to appeal is at issue, appellants must demonstrate some injury from the judgment below.âId. at 575
(emphasis
omitted).
We conclude, as all parties agree, that there is a case or controversy
before us on appeal. Two groups of parties appealed from the district courtâs
judgment: the federal defendants, and the intervenor-defendant states. 14
There is a case or controversy before us because both of these groups have their
own independent standing to appeal. 15
The federal defendants have standing to appeal. The instant case is on
all fours with the Supreme Courtâs decision in United States v. Windsor, 570
U.S. 744 (2013). In that case, the executive branch of the federal government
declined to defend a federal statute that did not allow the surviving spouse of
14 The U.S. House of Representatives, also a party in this case, intervened in our court
after the intervenor-defendant states and the federal government had filed notices of appeal.
15Even if only one of these parties had standing to appeal, that would be enough to
sustain the courtâs jurisdiction. An intervenor needs standing only âin the absence of the
party on whose side the intervenor intervened.â Sierra Club, 995 F.2d at 574(alteration omitted) (quoting Diamond v. Charles,476 U.S. 54, 68
(1986)); see also Vill. of Arlington Heights v. Metro. Hous. Dev. Corp.,429 U.S. 252
, 264 & n.9 (1977) (exercising jurisdiction
because âat least oneâ plaintiff had standing to sue).
12
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a same-sex couple to receive a spousal tax deduction. Id.at 749â53. The district court ruled that the statute was unconstitutional and ordered the executive branch to issue a tax refund to the surviving spouse.Id.
at 754â55. The executive branch agreed with the district courtâs legal conclusion, but it appealed the judgment and continued to enforce the statute by withholding the tax refund until a final judicial resolution.Id.
at 757â58.
The Supreme Court ruled that âthe United States retain[ed] a stake
sufficient to support Article III jurisdiction.â Id. at 757. That stake was the
tax refund, which the federal government refused to pay. This threat of
payment of money from the Treasury constituted âa real and immediate
economic injuryâ to the federal government, which was sufficient for standing
purposes. Id. at 757â58 (quoting Hein v. Freedom From Religion Found., Inc.,
551 U.S. 587, 599(2007) (plurality opinion)). As the Court explained, âthe refusal of the Executive to provide the relief sought suffices to preserve a justiciable dispute as required by Article III.â Windsor,570 U.S. at 759
; see also Food Mktg. Inst. v. Argus Leader Media,139 S. Ct. 2356, 2362
(2019) (concluding that there was a justiciable controversy because the government ârepresented unequivocallyâ that it would not voluntarily moot the controversy absent a final judicial order, and â[t]hat is enough to satisfy Article IIIâ); INS v. Chadha,462 U.S. 919, 939
(1983) (holding that there was âadequate Art. III
adversenessâ because the executive branch determined that a federal statute
was unconstitutional and refused to defend it but simultaneously continued to
abide by it).
The instant case is similar. Though the plaintiffs and the federal
defendants are in almost complete agreement on the merits of the case, the
government continues to enforce the entire Act. The federal government has
made no indication that it will begin dismantling any part of the ACA in the
absence of a final court order. Just as in Windsor, then, effectuating the
13
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district courtâs order would require the federal government to take actions that
it would not take âbut for the courtâs order.â Windsor, 570 U.S. at 758. And just as in Windsor, the federal defendants stand to suffer financially if the district courtâs judgment is affirmed. 16 As just one example, the district courtâs judgment declares the Actâs Medicare reimbursement schedules unlawful, which, if given effect, would require Medicare to reimburse healthcare providers at higher rates. See, e.g., 42 U.S.C. § 1395ww(b)(3)(B)(xi)â(xii). Therefore, just as in Windsor, an appellate decision here will âhave real meaning.â570 U.S. at 758
(quoting Chadha,462 U.S. at 939
). 17
The intervenor-defendant states also have standing to appeal. While a
partyâs mere âstatus as an intervenor below . . . does not confer standing,â
Diamond v. Charles, 476 U.S. 54, 68(1986), intervenors may appeal if they can demonstrate injury from the district courtâs judgment. Sierra Club,995 F.2d at 574
; see also Va. House of Delegates v. Bethune-Hill,139 S. Ct. 1945, 1951
(2019); Cooper v. Tex. Alcoholic Beverage Commân,820 F.3d 730, 737
(5th Cir.
2016). The intervenor-defendant states have made this showing because the
district courtâs judgment, if ultimately given effect, would: (1) strip these states
of funding that they receive under the ACA; and (2) threaten to hamstring
these states in possible future litigation because of the district court
judgmentâs potentially preclusive effect. 18
16The dissenting Justices in Windsor objected to the Windsor majorityâs approach to
standing. Justice Scalia, for example, said that this approach to standing âwould have been
unrecognizable to those who wrote and ratified our national charter.â Windsor, 570 U.S. at
779 (Scalia, J., dissenting). We are bound by the Windsor majority opinion.
17Just as in Windsor, moreover, principles of prudential standing weigh in favor of
exercising jurisdiction despite the governmentâs alignment with the plaintiffs. Just like the
intervenors in Windsor, the intervenor-defendant states and the U.S. House both put on a
âsharp adversarial presentation of the issues.â Id. at 761.
18 At first glance, it may not be entirely clear how a mere partial summary judgment
on the issuance of a declaratory judgment would aggrieve anyone. But at oral argument, all
14
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First, the intervenor-defendant states receive significant funding from
the ACA, which would be discontinued if we affirmed the district courtâs
judgment declaring the entire Act unconstitutional. â[F]inancial loss as a
result ofâ a district courtâs judgment is an injury sufficient to support standing
to appeal. United States v. Fletcher ex rel. Fletcher, 805 F.3d 596, 602(5th Cir. 2015). In their supplemental briefing, the intervenor-defendant states identify a few examples of the funding sources they would lose under the district courtâs judgment. Evidence in the record shows that eliminating the Actâs Medicaid expansion provisions alone would cost the original sixteen intervening state defendants and the District of Columbia a total of more than $418 billion in the next decade. See 42 U.S.C. §§ 1396a(a)(10)(A)(i)(VIII), (e)(14)(I)(i), 1396d(y)(1). Moreover, the Actâs Community First Choice Option program gives states funding to care for the disabled and elderly at home or in their communities instead of in institutions. See 42 U.S.C. § 1396n(k). Record evidence shows that eliminating this program would cost California $400 million in 2020, and that Oregon and Connecticut have already received $432.1 million under this program. This evidence is more than enough to show that the intervenor-defendant states would suffer financially if the district courtâs judgment is given effect, an injury sufficient to confer standing to appeal. See Depât of Commerce v. New York,139 S. Ct. 2551, 2565
(2019).
The district courtâs judgment, if given effect, also threatens to injure the
intervenor-defendant states with the judgmentâs potentially preclusive effect
in future litigation. We have held that â[a] party may be aggrieved by a district
court decision that adversely affects its legal rights or position vis-Ă -vis other
parties agreed that the district courtâs partial summary judgment would have binding effect.
Indeed, this is partly why the district court issued a stay. The district court acknowledged
that the intervenor-defendant states would be prejudiced by the judgment, which means that
the district court understood it to be binding.
15
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parties in the case or other potential litigants.â Leonard v. Nationwide Mut.
Ins., 499 F.3d 419, 428(5th Cir. 2007) (quoting Custer v. Sweeney,89 F.3d 1156, 1164
(4th Cir. 1996)). If the federal defendants began unwinding the ACA, either in reliance on the district courtâs judgment or on their own, the district courtâs judgment would potentially estop the intervenor-defendant states from challenging that action in court. This case thus stands in contrast to the cases in which there was no chance whatsoever of a preclusive effect. See Klamath Strategic Inv. Fund ex rel. St. Croix Ventures v. United States,568 F.3d 537, 546
(5th Cir. 2009) (holding that there was no threatened injury
from potential estoppel from the appealed-from judgment because that
judgment was interlocutory, not final, and therefore could not estop the
appealing party).
Finally, we examine the standing of the U.S. House of Representatives,
which intervened after the case had been appealed. The Supreme Courtâs
recent decision in Virginia House of Delegates v. Bethune-Hill calls the Houseâs
standing to intervene into doubt. 139 S. Ct. at 1953 (âThis Court has never
held that a judicial decision invalidating a state law as unconstitutional inflicts
a discrete, cognizable injury on each organ of government that participated in
the lawâs passage.â). However, we need not resolve the question of the Houseâs
standing. âArticle III does not require intervenors to independently possess
standingâ when a party already in the lawsuit has standing and seeks the same
âultimate reliefâ as the intervenor. Ruiz v. Estelle, 161 F.3d 814, 830 (5th Cir.
1998). That is the case here: the intervenor-defendant states have standing to
appeal, and the House seeks the same relief as those states. We accordingly
pretermit the issue of whether the House has standing to intervene.
IV.
We now turn to the issue of whether any of the plaintiffs had Article III
standing to bring this case at the time they brought the lawsuit. To be a case
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or controversy under Article III, the plaintiffs must satisfy the same three
requirements listed above. First, a plaintiff must have suffered an âinjury in
factââa violation of a legally protected interest that is âconcrete and
particularized,â as well as âactual or imminent, not âconjecturalâ or
âhypothetical.ââ Lujan v. Defs. of Wildlife, 504 U.S. 555, 560(1992) (quoting Whitmore v. Arkansas,495 U.S. 149, 155
(1990)). Second, that injury must be âfairly . . . trace[able] to the challenged action of the defendant, and not . . . th[e] result [of] the independent action of some third party not before the court.âId.
(alterations in original) (quoting Simon v. E. Ky. Welfare Rights Org.,426 U.S. 26
, 41â42 (1976)). Third, it must be âlikelyâânot merely âspeculativeââthat the injury will be âredressed by a favorable decision.âId.
at 561 (quoting Simon,426 U.S. at 38, 43
).
The instant case has two groups of plaintiffs: the individual plaintiffs
and the state plaintiffs. Only one plaintiff need succeed because âone party
with standing is sufficient to satisfy Article IIIâs case-or-controversy
requirement.â 19 Texas v. United States (DAPA), 809 F.3d 134, 151(5th Cir. 2015) (quoting Rumsfeld v. Forum for Acad. & Institutional Rights, Inc.,547 U.S. 47
, 52 n.2 (2006)). 20 The individual plaintiffs and the state plaintiffs
allege different injuries. We evaluate each in turn and conclude that both the
individual plaintiffs and the state plaintiffs have standing.
A.
The standing issues presented by the individual plaintiffs are not novel.
The Supreme Court faced a similar situation when it decided NFIB in 2012.
19 For an academic critique of this approach, see Aaron-Andrew P. Bruhl, One Good
Plaintiff Is Not Enough, 67 Duke L. J. 481 (2017).
We refer to this 2015 case as âDAPAââafter Deferred Action for Parents of
20
Americans, the policy at issue thereâto prevent confusion with the present case of the same
name.
17
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At oral argument in that case, Justice Kagan asked Gregory Katsas,
representing NFIB, whether he thought âa person who is subject to the
[individual] mandate but not subject to the [shared responsibility payment]
would have standing.â Transcript of Oral Argument at 68, Depât of Health and
Human Servs. v. Florida, 567 U.S. 519(2012) (No. 11-398). Mr. Katsas replied, âYes, I think that person would, because that person is injured by compliance with the mandate.âId.
Mr. Katsas explained, âthe injuryâwhen that person is subject to the mandate, that person is required to purchase health insurance. Thatâs a forced acquisition of an unwanted good. Itâs a classic pocketbook injury.âId.
at 68â69.
In 2012, this questioning made sense because neither the individual
mandate nor the shared responsibility payment would be assessed for another
two years. Patient Protection and Affordable Care Act, Pub. L. No. 111-148,
§ 1501,124 Stat. 119
, 244 (2012) (requiring insurance coverage âfor each month beginning after 2013â and applying the shared responsibility payment for any failure to purchase insurance âduring any calendar year beginning after 2013â). It was thus certainly imminent that the private plaintiffs would be subject to the individual mandate, which applies to everyone, but not certain that they would be subject to the shared responsibility payment, which exempts certain people. 26 U.S.C. § 5000A(e) (prescribing that â[n]o penalty shall be imposedâ on certain groups of people). 21 The distinction was important because a plaintiff âmust demonstrate standing for each claim he seeks to press.â Davis v. Fed. Election Commân,554 U.S. 724, 734
(2008) (quoting DaimlerChrysler Corp. v. Cuno,547 U.S. 332, 352
(2006)). To bring a claim
21 For the full list of exemptions, see supra note 4.
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against the individual mandate, therefore, the plaintiffs needed to show injury
from the individual mandateânot from the shared responsibility payment.
Accordingly, the district court in NFIB ruled that the private plaintiffs
were injured by the ACA âbecause of the financial expense [they would]
definitively incur under the Act in 2014,â and the private plaintiffsâ need âto
take investigatory steps and make financial arrangements now to ensure
compliance then.â Florida ex rel. Bondi v. U.S. Depât of Health & Human
Servs., 780 F. Supp. 2d 1256, 1271(N.D. Fla. 2011), affâd in part and revâd in part,648 F.3d 1235
(11th Cir. 2011), affâd in part and revâd in part,567 U.S. 519
(2012). The record evidence in that case supported this conclusion. Mary Brown, one of the private plaintiffs in that case, for example, had declared that âto comply with the individual insurance mandate, and well in advance of 2014, I must now investigate whether and how to rearrange my personal finance affairs.â Appendix of Exhibits in Support of Plaintiffsâ Motion for Summary Judgment, Florida v. U.S. Depât of Health & Human Servs., No. 3:10-cv-91- RV/EMT (N.D. Fla. Nov. 10, 2010), ECF No. 80-6. At the Eleventh Circuit, all parties agreed that Mary Brown had standing. Florida ex rel. Atty. Gen. v. U.S. Depât of Health & Human Servs.,648 F.3d 1235, 1243
(11th Cir. 2011), affâd in part and revâd in part,567 U.S. 519
(2012) (âDefendants do not dispute
that plaintiff Brownâs challenge to the minimum coverage provision is
justiciable.â). Congress could have reasonably contemplated people like Mary
Brown. As Mr. Katsas explained at oral argument in the Supreme Court,
âCongress reasonably could think that at least some people will follow the law
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precisely because it is the law.â Transcript of Oral Argument at 67, Depât of
Health & Human Servs. v. Florida, 567 U.S. 519 (2012) (No. 11-398).
The district court in the instant case followed a similar approach with
regard to the individual plaintiffsâ standing. 22 It concluded that because the
individual plaintiffs are the object of the individual mandate, which requires
them to purchase health insurance that they do not want, those plaintiffs have
demonstrated two types of âinjury in factâ: (1) the financial injury of buying
that insurance; and (2) the âincreased regulatory burdenâ that the individual
mandate imposes. In concluding that these injuries were caused by the
individual mandate, the court made specific fact findings that both Nantz and
Hurley purchased insurance solely because they are âobligated to comply with
the . . . individual mandate.â The district court made these findings based on
Nantzâs and Hurleyâs declarations, which the intervenor-defendant states
never challenged. Because the undisputed evidence showed that the
individual mandate caused these injuries, the district court reasoned that a
favorable judgment would redress both injuries, allowing the individual
plaintiffs to forgo purchasing health insurance and freeing them âfrom what
they essentially allege to be arbitrary governance.â
We agree with the district court. The Supreme Court has held that when
a lawsuit challenges âthe legality of government action or inaction, the nature
and extent of facts that must be averred (at the summary judgment stage) or
proved (at the trial stage) in order to establish standing depends considerably
upon whetherâ the plaintiffs are themselves the âobject[s] of the action (or
forgone action) at issue.â Lujan, 504 U.S. at 561; see also Texas v. EEOC,933 F.3d 433, 446
(5th Cir. 2019). âWhether someone is in fact an object of a
22 No party initially questioned the plaintiffsâ standing in the district court. An amicus
brief raised the issue, and the intervenor-defendant states addressed it at oral argument.
20
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regulation is a flexible inquiry rooted in common sense.â EEOC, 933 F.3d at
446(quoting Contender Farms, L.L.P. v. U.S. Depât of Agric.,779 F.3d 258, 265
(5th Cir. 2015)). If a plaintiff is indeed the object of a regulation, âthere is
ordinarily little question that the action or inaction has caused [the plaintiff]
injury, and that a judgment preventing or requiring the action will redress it.â
Lujan, 504 U.S. at 561â62.
It is undisputed that Hurley and Nantz are the objects of the individual
mandate and that they have purchased insurance in order to comply with that
mandate. Record evidence supports these conclusions. In his declaration in
the district court, Nantz stated, âI continue to maintain minimum essential
health coverage because I am obligated.â Similarly, Hurley averred in his
declaration that he is âobligated to comply with the ACAâs individual
mandate.â They both explain in their declarations that they âvalue compliance
with [their] legal obligationsâ and bought insurance because they âbelieve that
following the law is the right thing to do.â Accordingly, the district court
expressly found that Hurley and Nantz bought health insurance because they
are obligated to, and we must defer to that factual finding. The evidentiary
basis for this injury is even stronger than it was in NFIB. In the instant case,
the individual mandate has already gone into effect, compelling Nantz and
Hurley to purchase insurance now as opposed to two years in the future.
The intervenor-defendant states fail to point to any evidence
contradicting these declarations, and they did not challenge this evidence in
the district court. In fact, some of the evidence these parties rely on actually
supports the conclusion that Nantz and Hurley purchased insurance to comply
with the individual mandate. The intervenor-defendant states acknowledge a
2017 report from the Congressional Budget Office indicating that âa small
number of peopleâ would continue to buy insurance without a penalty âsolely
becauseâ of a desire to comply with the law. Cong. Budget Office, Repealing
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the Individual Health Insurance Mandate: An Updated Estimate 1 (Nov. 2017).
This report is at least somewhat consistent with a 2008 Congressional Budget
Office report, relied on by the state plaintiffs, that â[m]any individualsâ subject
to the mandate, but not the shared responsibility payment, will obtain
coverage to comply with the mandate âbecause they believe in abiding by the
nationâs laws.â Cong. Budget Office, Key Issues in Analyzing Major Health
Insurance Proposals 53 (Dec. 2008). Whether this group of law-abiding citizens
includes âmany individualsâ or âa small number of people,â Nantz and Hurley
have undisputed evidence showing that they are a part of this group.
In this context, being required to buy something that you otherwise
would not want is clearly within the scope of what counts as a âlegally
cognizable injury.â âEconomic injuryâ of this sort is âa quintessential injury
upon which to base standing.â Tex. Democratic Party v. Benkiser, 459 F.3d 582,
586(5th Cir. 2006); see also Vt. Agency of Nat. Res. v. United States,529 U.S. 765
, 772â77 (1998) (finding Article III injury from financial harm); Clinton v. New York,524 U.S. 417, 432
(1998) (same); Sierra Club v. Morton,405 U.S. 727
, 733â34 (1972) (same); DAPA,809 F.3d at 155
(same). In Benkiser, for example, we held that a political party would suffer an injury in fact because it would need to âexpend additional fundsâ in order to comply with the challenged regulation.459 F.3d at 586
. In the instant case, the undisputed
record evidence shows that the individual plaintiffs have spent âadditional
fundsâ to comply with the statutory provision that they challenge on
constitutional grounds.
This injury, moreover, is âactual,â not merely a speculative fear about
future harm that may or may not happen. Lujan, 504 U.S. at 560. The record
shows that, at the time of the complaint, Hurley and Nantz held health
insurance, spending money every month that they did not want to spend.
Nantz reports that his monthly premium is $266.56, and Hurley says his is
22
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$1,081.70. The injury is also âconcreteâ because it involves the real
expenditure of those funds. See Barlow v. Collins, 397 U.S. 159, 162â63, 164
(1970) (finding a concrete injury when a regulation caused economic harm from
lost profit).
Causation and redressability âflow naturallyâ from this concrete,
particularized injury. Contender Farms, 779 F.3d at 266. The evidence in the
record from Hurleyâs and Nantzâs declarations show that they would not have
purchased health insurance but for the individual mandate, and the
intervenor-defendant states have no evidence to the contrary. A judgment
declaring that the individual mandate exceeds Congressâ powers under the
Constitution would allow Hurley and Nantz to forgo the purchase of health
insurance that they do not want or need. They could purchase health
insurance below the âminimum essential coverageâ threshold, or even decide
not to purchase any health insurance at all.
The intervenor-defendant states make several arguments against this
straightforward injury, and all of them come up short. They first argue that
there is no legally cognizable injury because there is no longer any penalty for
failing to comply. In one sense, this argument misses the point. The threat of
a penalty that Hurley and Nantz would face under the pre-2017 version of the
statute is one potential form of injury, but it is far from the only one. We have
held that the costs of compliance can constitute an injury just as much as the
injuries from failing to comply. See, e.g., Benkiser, 459 F.3d at 586. Thus, in
this instance, it is this injuryâthe time and money spent complying with the
statute, not the penalty for failing to do soâthat constitutes the plaintiffsâ
injury.
But the intervenor-defendant states also argue that even the costs of
compliance cannot count as an injury in fact if there is no consequence for
failing to comply. The individual mandateâs compulsion cannot inflict a
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cognizable injury, they say, because it is not a compulsion at all. Because the
enforcement mechanism has been removed, the U.S. House contends, it is now
merely a suggestion, at most. We recently rejected this argument in Texas v.
EEOC, when the Equal Employment Opportunity Commission tried to argue
that Texas could not challenge its allegedly non-final administrative guidance
because âthe Guidance does not compel Texas to do anything.â 933 F.3d at 448. We concluded that it would âstrain credulity to find that an agency action targeting current âunlawfulâ discrimination among state employersâand declaring presumptively unlawful the very hiring practices employed by state agenciesâdoes not require action immediately enough to constitute an injury- in-fact.â 23Id.
The individual mandate is no different. Just like the agency
guidance, the individual mandate targets as âunlawfulâ the decision to go
without health insurance.
The dissenting opinion grounds its discussion of the issue in the Supreme
Courtâs decision in Poe v. Ullman, 367 U.S. 497 (1961). There, the Supreme
Court rejected a challenge to Connecticutâs criminal prohibition on
contraception. The dissenting opinion states that if there was no standing in
Ullman, then there cannot be standing here. The dissenting opinion seems to
treat Ullman as part of the âpre-enforcement challengeâ line of cases in which
the Supreme Court analyzed claims of injury based on future enforcement to
determine whether the future enforcement was sufficiently imminent.
Ullman, however, is not cited in the seminal Supreme Court cases of that line.
23 The dissenting opinion states that Texas had standing in Texas v. EEOC because of
the âconsequences for disobeying the [challenged] guidanceâincluding the possibility that
the Attorney General would enforce Title VII against it.â This depiction of Texas v. EEOC
ignores that opinionâs emphasis on the fact that Texas was âthe object of the Guidance.â 933
F.3d at 446; see alsoid.
(âIf, in a suit âchallenging the legality of government action,â âthe
plaintiff is himself an object of the action . . . there is ordinarily little question that the action
or inaction has caused him injury . . . .ââ (quoting Lujan, 504 U.S. at 561â62)). As explained
above, the individual plaintiffs in this case are the objects of the individual mandate.
24
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No. 19-10011
See, e.g., Susan B. Anthony List v. Driehaus, 573 U.S. 149, 158â61 (2014); Holder v. Humanitarian Law Project,561 U.S. 1, 15
(2010); Virginia v. Am. Booksellers Assân, Inc.,484 U.S. 383
, 392â93 (1988); Babbitt v. United Farm Workers Natâl Union,442 U.S. 289, 298
(1979); see also Abbott Labs. v. Gardner,387 U.S. 136, 154
(1967). More importantly, as we have explained,
this case is not a pre-enforcement challenge because the plaintiffs have already
incurred a financial injury. 24
The plurality opinion in Ullman said there was insufficient adversity
between the parties because there was overwhelming evidenceâeighty yearsâ
worth of no enforcement of the statuteâof âtacit agreementâ between
prosecutors and the public not to enforce the anti-contraceptive laws that the
plaintiffs challenged. 367 U.S. at 507â08. As a result, the Court held that the
lawsuit before it was ânot such an adversary case as will be reviewed here.â Id.
The fifth, controlling vote in that caseâJustice Brennan, who concurred in the
judgmentâemphasized that this adverseness was lacking because of the caseâs
âskimpy record,â devoid of evidence that the âindividuals [were] truly caught
in an inescapable dilemma.â Id. at 509 (Brennan, J., concurring).
By contrast, as documented above, the record in the instant case contains
undisputed evidence that Nantz and Hurley feel compelled by the individual
mandate to buy insurance and that they bought insurance solely for that
24The dissenting opinion also relies on City of Austin v. Paxton, No. 18-50646, ___ F.3d
___, 2019 WL 6520769(5th Cir. Dec. 4, 2019). That reliance is confusing because City of Austin is an Ex parte Young case, not a standing case. For the Ex parte Young exception to Eleventh Amendment sovereign immunity to apply, the state official sued âmust have âsome connection with enforcement of the challenged act.ââId. at *2
(alteration omitted) (quoting Ex parte Young,209 U.S. 123, 157
(1908)). In City of Austin, the Cityâs claims against the
Texas Attorney General failed because the City failed to show the requisite connection to
enforcement under Ex parte Young. Of course, because this is a lawsuit against the federal
government, neither the Eleventh Amendment nor Ex parte Young applies. Moreover, even
if City of Austin had been a pre-enforcement challenge standing case, it would still be
irrelevant because this case is not a pre-enforcement challenge.
25
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No. 19-10011
reason. Especially in light of the fact that the individual mandate lacks a
similar eighty-year history of nonenforcement, Nantz and Hurley have gone
much further in demonstrating that they are caught in the âinescapable
dilemmaâ that the Ullman plaintiffs were not.
The intervenor-defendant states also argue that there is no causation
between the individual mandate and Hurley and Nantzâs purchase of
insurance because Hurley and Nantz exercised a voluntary âchoiceâ to
purchase insurance. Because Nantz and Hurley would face no consequence if
they went without insurance, the intervenor-defendant states argue that their
purchase of insurance is not fairly traceable to the federal defendants. Instead,
they claim that Nantz and Hurley impermissibly attempt to âmanufacture
standing merely by inflicting harm on themselves.â Glass v. Paxton, 900 F.3d
233, 239(5th Cir. 2018) (quoting Clapper v. Amnesty Intâl USA,568 U.S. 398, 416
(2013)).
This argument fails, however, because it conflates the merits of the case
with the threshold inquiry of standing. The argument assumes that 26 U.S.C.
§ 5000A presents not a legal command to purchase insurance, but an option
between purchasing insurance and doing nothing. Because this option exists,
the argument goes, any injury arising from Hurleyâs and Nantzâs decisions to
buy insurance instead of doing nothing (the other putative option) is entirely
self-inflicted. This, however, is a merits question that can be reached only after
determining the threshold issue of whether plaintiffs have standing.
Texas v. EEOC makes clear that courts cannot fuse the standing inquiry
into the merits in this way. There, in addition to the injury described above
from the Guidanceâs rebuke of Texasâs employment practices as âunlawful,â
Texas claimed it was injured by the EEOCâs curtailing of Texasâs procedural
right to notice and comment before being subject to a regulation. EEOC, 933
F.3d at 447. In rejecting the suggestion that Texas was not truly injured
26
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No. 19-10011
because the EEOC had not in fact violated the Administrative Procedure Actâs
notice-and-comment rules, we held that â[w]e assume, for purposes of the
standing analysis, that Texas is correct on the merits of its claim that the
Guidance was promulgated in violation of the APA.â Id.(citing Sierra Club v. EPA,699 F.3d 530, 533
(D.C. Cir. 2012)); see also Bennett v. Spear,520 U.S. 154
, 177â78 (1997) (treating constitutional standing and finality as distinct
inquiries).
Indeed, allowing a consideration of the merits as part of a jurisdictional
inquiry would conflict with the Supreme Courtâs express decision in Steel Co v.
Citizens for a Better Environment to not abandon âtwo centuries of
jurisprudence affirming the necessity of determining jurisdiction before
proceeding to the merits.â 523 U.S. 83, 98(1998). That case presented both the question of Article III standing and the merits question of whether the relevant statute authorized lawsuits for purely past violations.Id. at 86
. The Court rejected any âattempt to convert the merits issue . . . into a jurisdictional one.âId. at 93
. The Court further rejected the âdoctrine of hypothetical jurisdiction,â under which certain courts of appeals had âproceed[ed] immediately to the merits question, despite jurisdictional objectionsâ in certain circumstances.Id.
at 93â94. As the district court correctly noted, that is
exactly what the appellants ask this court to do. They urge us to âskip ahead
to the merits to determine § 5000A(a) is non-binding and therefore
constitutional and then revert to the standing analysis to use its merits
determination to conclude there was no standing to reach the merits in the
first place.â
Moreover, even if we were to consider the merits as part of our
jurisdictional inquiry, it would not make a difference in this case. Because we
conclude in Part IV of this opinion that the individual mandate is best read as
a command to purchase insurance (and an unconstitutional one at that), rather
27
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than as an option between buying insurance or doing nothing, the individual
plaintiffs would have standing even if we considered the merits. 25
B.
We next consider whether the eighteen state plaintiffs have standing,
and we conclude that they do. 26 The state plaintiffs allege that the ACA causes
them both a fiscal injury as employers and a sovereign injury âbecause it
prevents them from applying their own laws and policies governing their own
healthcare markets.â State Plaintiffsâ Br. at 25. In DAPA, we determined that
the state of Texas was entitled to special solicitude because it was âexercising
a procedural right created by Congress and protecting a âquasi-sovereignâ
interest.â DAPA, 809 F.3d at 162(quoting Massachusetts v. EPA,549 U.S. 497, 520
(2007)); see alsoid.
at 154â55. Because the state plaintiffs in this case
have suffered fiscal injuries as employers, we need not address special
solicitude or the alleged sovereign injuries.
Employers, including the state plaintiffs, are required by the ACA to
issue forms verifying which employees are covered by minimum essential
coverage and therefore do not need to pay the shared responsibility payment.
See 26 U.S.C. § 6055(a) (âEvery person who provides minimum essential coverage to an individual during a calendar year shall, at such time as the Secretary may prescribe, make a return described in subsection (b).â);26 U.S.C. § 6056
(a) (âEvery applicable large employer [that meets certain
25 Even if the individual plaintiffs did not have standing, this case could still proceed
because the state plaintiffs have standing. DAPA, 809 F.3d at 151(holding that only one plaintiff needs standing for the court to exercise jurisdiction). âThis circuit follows the rule that alternative holdings are binding precedent and not obiter dictum.âId.
at 178 n.158 (quoting United States v. Potts,644 F.3d 233
, 237 n.3 (5th Cir. 2011)).
26Likewise, even if the state plaintiffs did not have standing, this case could still
proceed because the individual plaintiffs have standing. DAPA, 809 F.3d at 151 (holding that
only one plaintiff needs standing for the court to exercise jurisdiction).
28
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No. 19-10011
statutory requirements] shall . . . make a return described in subsection (b).â).
These provisions have led to Form 1095-B and 1095-C statements that
employees receive from their employers around tax time, which include a series
of check boxes indicating the months that employees had health coverage that
complies with the ACA. State Plaintiffsâ Br. at 23. These legally required
reporting practices exist on top of state employersâ own in-house
administrative systems for managing and tracking their employeesâ health
insurance coverage.
The record is replete with evidence that the individual mandate itself
has increased the cost of printing and processing these forms and of updating
the state employersâ in-house management systems. For example, Thomas
Steckel, the director of the Division of Employee Benefits within the South
Dakota Bureau of Human Resources, submitted a declaration documenting the
administrative costs that the individual mandate has imposed by way of these
reporting requirements. He said, â[t]he individual mandate caused significant
administrative burdens and expenses to program our IT system to track and
report ACA eligible employees and complete mandatory IRS Form 1095 annual
reports.â Steckel noted specifically that âthe individual mandate caused . . .
$100,000.00 [in] ongoing costsâ for Form 1095-C administration alone. The
dissenting opinion discards this evidence as conclusory. But as even counsel
for the intervenor-defendant states admitted at oral argument, nobody
challenged this evidence as conclusory in the district court or in the appellate
court. 27 Oral Argument at 5:12.
South Dakota is far from the only state that has been harmed from the
financial cost of the reporting requirements that the individual mandate
27The reason why is obvious: the evidence is not conclusory. This is bread-and-butter
summary judgment practice, not, as the dissenting opinion contends, any ânew summary-
judgment rule.â Of course, a properly-included affidavit must be based on personal
29
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aggravates. Judith Muck, the Executive Director of the Missouri Consolidated
Health Care Plan, reported that Missouriâs costs for preparing 1095-B forms,
along with 1094-B forms, are projected to be $47,300 in fiscal year 2019 and
$49,200 in fiscal year 2020. Similarly, Teresa MacCartney, the Chief Financial
Officer of the State of Georgia and the Director of the Georgia Governorâs Office
of Planning and Budget, reported that Georgiaâs overall cost of compliance with
the ACAâs reporting requirements âis an estimated net $3.6 million to date.â
MacCartney also reported that after the ACAâs implementation, Georgiaâs
Department of Community Health âexperienced increased enrollment of
individuals already eligible for Medicaid benefits under pre-ACA eligibility
standards.â This enrollment increase required the Department to enhance its
management systems, which was âvery costly.â Blaise Duran, who is the
Manager for Underwriting, Data Analysis and Reporting for the Employees
Retirement System of Texas, further documented Texasâ costs of the reporting
requirements. He declared that the Texas Employees Group Benefits Program
âhas made administrative process changes in connection with its ACA
knowledge, and conclusory facts and statements on information and belief cannot be utilized.
See Charles Alan Wright and Arthur R. Miller, Federal Practice and Procedure, § 2738 (4th
ed. 2019). The Steckel affidavit easily satisfies this standard: it is a detailed 8-page
declaration. Steckel attested, under penalty of perjury, that he is âresponsible for developing
and implementing the Stateâs health plan for state employeesâ and that he is âparticularly
familiar with changes in costs, plans, and policies related to the enactment of the ACA
because of my role as the Director of the Division [of Employee Benefits].â He estimates the
financial costs the individual mandate has caused in nine different categories, including
ongoing costs of $10,400 for review of denied appeals, ongoing costs of $100,000 for Form
1095-C administration, and a one-time cost of $3,302,942 as a Transitional Reinsurance
Program fee. For other costs, such as the pre-existing conditions prohibition and the
expanded eligibility for adult dependent children to age 26, he conceded that he was âunable
to accurately estimate the ongoing costs of this mandate.â A determination of standing is
supported by the administration of Form 1095-C, the CBOâs prediction that some individuals
will continue to purchase insurance in the absence of a shared responsibility payment, the
fact that two such individuals are before this court, and the Supreme Courtâs observation
that âthird parties will likely react in predictable ways.â Department of Commerce, 139 S. Ct.
at 2566.
30
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compliance, such as those related to the provision of Form 1095-Bs to plan
participants and the Internal Revenue Service.â 28
The intervenor-defendant states and the U.S. House have not challenged
the state plaintiffsâ evidence or presented any evidence to the contrary.
Instead, they argue that the reporting requirements set forth in Sections
6055(a) and 6056(a) âare separate from the mandate and serve independent
purposes.â U.S. House Reply Br. at 19. Therefore, they claim, âany resulting
injury is thus neither traceable to Section 5000A nor redressable by its
invalidation.â U.S. House Reply Br. at 19. But this misreads the undisputed
evidence in the record. The individual mandate commands individuals to get
insurance. Every time an individual gets that insurance through a state
employer, the state employer must send the individual a form certifying that
he or she is covered and otherwise process that information through in-house
management systems. 29 Thus, the reporting requirements in Sections 6055(a)
and 6056(a) flow from the individual mandate set forth in Section 5000A(a).
28 This list is not exhaustive. For instance, Arlene Larson, Manager of Federal Health
Programs and Policy for Wisconsin Employee Trust Funds, declared that the state expended
funds by âhir[ing] a vendor to issue 343 Form 1095-Csâ in 2017. And Mike Michael, Director
of the Kansas State Employee Health Plan, averred that reporting for Form 1094 and 1095
cost the state $43,138 in 2017 and $38,048 in 2018. No record evidence indicates that these
reporting requirements have been eliminated. Moreover, the âstanding inquiry remains
focused on whether the party invoking jurisdiction had the requisite stake in the outcome
when the suit was filed.â Davis v. Fed. Election Commân, 554 U.S. 724, 734 (2008).
29 Relying on this injury, therefore, does not run afoul of Natâl Fed. of the Blind of
Texas v. Abbott, 647 F.3d 202(5th Cir. 2011). That case prevents plaintiffs from claiming injury based on provisions whose enforcement would be enjoined only if they are inseverable from an unconstitutional provision that does not harm the plaintiff.Id.
at 210â11. The state
plaintiffsâ injuries stem from the increased administrative costs created by the individual
mandate itself, not from other provisions. To be sure, those costs are created in part by the
individual mandateâs practical interaction with other ACA provisions, like the reporting
requirements. But this is no different from the injuries in DAPA, where the challenged action
interacted with Texasâs driverâs license regulations. It is also no different from Department
of Commerce, where the challenged census question interacted with constitutional rules tying
political representation to a stateâs population.
31
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These costs to the state plaintiffs are well-established. 30 Moreover, the
continuing nature of these fiscal injuries is consistent with Fifth Circuit and
Supreme Court precedent.
In DAPA, we held that the state of Texas had standing to challenge the
federal governmentâs DAPA program because it stood to âhave a major effect
on the statesâ fisc.â Id. at 152. This was because, if DAPA were permitted to
go into effect, it would have âenable[d] at least 500,000 illegal aliens in Texasâ
to satisfy Texasâs requirements that the Department of Public Safety ââshall
issueâ a license to a qualified applicant,â including noncitizens who present
âdocumentation issued by the appropriate United States agency that
authorizes the applicant to be in the United States.â Id. at 155 (quoting Tex.
Transp. Code §§ 521.142(a), 521.181). Evidence in the record showed that
Texas, which subsidizes its licenses, would âlose a minimum of $130.89 on each
one it issued to a DAPA beneficiary.â Id. Even a âmodest estimateâ of
30 The dissenting opinion, citing no authority, contends that the state plaintiffs need
evidence that at least one specific âemployee enrolled in one of state plaintiffsâ health
insurance programs solely because of the unenforceable coverage requirement.â We have
already explained why the uncontested affidavits suffice. We note, moreover, that the DAPA
court found that Texas had standing because âit would incur significant costs in issuing
driverâs licenses to DAPA beneficiariesââwithout requiring that Texas first show that it had
issued a specific license to a specific illegal alien because of DAPA. Finally, the dissenting
opinionâs rule would create a split with our sister circuits. See Massachusetts v. United States
Depât of Health & Human Servs., 923 F.3d 209, 225(1st Cir. 2019) (â[Massachusetts] need not point to a specific person who will be harmed in order to establish standing in situations like this.â); California v. Azar,911 F.3d 558, 572
(9th Cir. 2018), cert. denied sub nom. Little Sisters of the Poor Jeanne Jugan Residence v. California,139 S. Ct. 2716
(2019) (âAppellants fault the states for failing to identify a specific woman likely to lose coverage. Such identification is not necessary to establish standing.â); Pennsylvania v. President United States,930 F.3d 543, 564
(3d Cir. 2019), as amended (July 18, 2019) (âThe Government faults
the States for failing to identify a specific woman who will be affected by the Final Rules, but
the States need not define injury with such a demanding level of particularity to establish
standing.â).
32
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predictable third-party behavior would rack up costs of âseveral million
dollars.â Id.
The Supreme Court recently applied a similar analysis in Department of
Commerce v. New York, 139 S. Ct. 2551(2019). In that case, a group of state and local governments sued to prevent the federal government from including a question about citizenship status on the 2020 census.Id. at 2563
. The Supreme Court held that these plaintiffs had standing because they met their burden âof showing that third parties will likely react in predictable ways to the citizenship question.âId. at 2566
. The census question would likely lead to ânoncitizen households responding . . . at lower rates than other groups, which in turn would cause them to be undercounted.âId. at 2565
. This undercounting of third parties would injure the state and local governments by âdiminishment of political representation, loss of federal funds, degradation of census data, and diversion of resources.âId.
In both DAPA and Department of Commerce, the state plaintiffs
demonstrated injury by showing that the challenged law would cause third
parties to behave in predictable ways, which would inflict a financial injury on
the states. The instant case is no different. The individual mandate commands
people to ensure that they have minimum health insurance coverage. That
predictably causes more people to buy insurance, which increases the
administrative costs of the states to report, manage, and track the insurance
coverage of their employees and Medicaid recipients. 31
V.
Having concluded that both groups of plaintiffs have standing to bring
this lawsuit, we must next determine whether the individual mandate is a
31 The dissenting opinion contends that our opinion is inconsistent because we rely on
Department of Commerce, in which the Court found that some individuals will predictably
violate the law, in explaining why some individuals will predictably âfollow the law regardless
33
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constitutional exercise of congressional power. We conclude that it is not. We
first discuss the Supreme Courtâs holding in NFIB, and then we explain why,
under that holding, the individual mandate is no longer constitutional.
A.
The NFIB opinion was extremely fractured. In that case, Chief Justice
Roberts wrote an opinion addressing several issues. Parts of that opinion
garnered a majority of votes and served as the opinion of the Court. 32 In
relevant part, Part III-A of the Chief Justiceâs opinion, joined by no other
Justice, observed that â[t]he most straightforward reading of the [individual]
mandate is that it commands individuals to purchase insurance,â and that,
using that reading of the statute, the individual mandate is not a valid exercise
of Congressâ power under the Interstate Commerce Clause. NFIB, 567 U.S. at
562, 546â61 (Roberts, C.J.). The Constitution, he explained, âgave Congress the power to regulate commerce, not to compel it.âId. at 555
(Roberts, C.J.).
For similar reasons, the Chief Justice concluded that this command to
of the incentives.â In a large group, there will predictably be some individuals in each
category. Even the dissenting opinion accepts the Congressional Budget Officeâs projection
that some people will buy insurance solely because of a desire to comply with the law. See
Cong. Budget Office, Repealing the Individual Health Insurance Mandate: An Updated
Estimate 1 (Nov. 2017).
32 As a general overview, Chief Justice Robertsâs opinion functioned in the following
way. In Part III-A, Chief Justice Roberts said that the individual mandate was most
naturally read as a command to buy insurance, which could not be sustained under either
the Interstate Commerce Clause or the Necessary and Proper Clause. Though no Justice
joined this part of the opinion, the four dissenting JusticesâJustices Scalia, Kennedy,
Thomas, and Alitoâagreed with Part III-A in a separate opinion. In Part III-B, the Chief
Justice wrote that even though the most natural reading of the individual mandate was
unconstitutional, the Court still needed to determine whether it was âfairly possibleâ to read
the provision in a way that saved it from being unconstitutional. In Part III-C, the Chief
Justiceâjoined by Justices Ginsburg, Breyer, Kagan, and Sotomayorâconcluded that the
provision could be construed as constitutional by reading the individual mandate, in
conjunction with the shared responsibility payment, as a legitimate exercise of Congressâ
taxing power. This last part of the opinion supported the Courtâs ultimate judgment: that
the individual mandate was constitutional as saved.
34
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purchase insurance could not be sustained under the Constitutionâs Necessary
and Proper Clause. Id.The individual mandate was not âproperâ because it expanded federal power, âvest[ing] Congress with the extraordinary ability to create the necessary predicate to the exercise ofâ its Interstate Commerce Clause powers.Id. at 560
.
Though no other Justices joined this part of the Chief Justiceâs opinion,
the âjoint dissentââjoined by Justices Scalia, Kennedy, Thomas, and Alitoâ
reached the same conclusions on the Interstate Commerce Clause and
Necessary and Proper Clause questions. Id. at 650â60 (joint dissent). A
majority of the court, therefore, concluded that the individual mandate is not
constitutional under either the Interstate Commerce Clause or the Necessary
and Proper Clause.
This limited reading of the Interstate Commerce Clauseâand, by
extension, of the Necessary and Proper Clauseâwas necessary to preserving
âthe country [that] the Framers of our Constitution envisioned.â Id. at 554(Roberts, C.J.). As Chief Justice Roberts observed, if the individual mandate were a proper use of the power to regulate interstate commerce, that power would âjustify a mandatory purchase to solve almost any problem.âId. at 553
(Roberts, C.J.). If Congress can compel the purchase of health insurance today, it can, for example, micromanage Americansâ day-to-day nutrition choices tomorrow.Id.
(Roberts, C.J.); see alsoid. at 558
(Roberts, C.J.) (reasoning that,
under an expansive view of the Commerce Clause, nothing would stop the
federal government from compelling the purchase of broccoli).
An expansive reading of the Interstate Commerce Clause would be
foreign to the Framers, who saw the clause as âan addition which few oppose[d]
and from which no apprehensions [were] entertained.â Id. at 554 (Roberts,
C.J.) (quoting The Federalist No. 45, at 293 (J. Madison) (C. Rossiter ed.,
1961)). Elevating Congressâ power to âregulate commerce . . . among the
35
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several states,â U.S. Const. art. I, § 8, cl. 3, to a power to create commerce
among the several states would make a Leviathan of the federal government,
âeverywhere extending the sphere of its activity and drawing all power into its
impetuous vortex.â NFIB, 567 U.S. at 554(Roberts, C.J.) (quoting The Federalist No. 48, at 309 (J. Madison) (C. Rossiter ed., 1961)). Justice Scalia, writing for the joint dissenters, similarly noted that the more expansive reading of the Interstate Commerce Clause would render that provision a âfont of unlimited power,âid. at 653
(joint dissent), or, in the words of Alexander Hamilton, a âhideous monster whose devouring jaws . . . spare neither sex nor age, nor high nor low, nor sacred nor profane,âid.
(quoting The Federalist No.
33, at 202 (C. Rossiter ed., 1961)).
In Part III-B, again joined by no other Justice, Chief Justice Roberts
concluded that because the individual mandate found no constitutional footing
in the Interstate Commerce or Necessary and Proper Clauses, the Supreme
Court was obligated to consider the federal governmentâs argument that, as an
exercise in constitutional avoidance, the mandate could be read not as a
command but as an option to purchase insurance or pay a tax. This âoptionâ
interpretation of the statute could save the statute from being
unconstitutional, as it would be justified under Congressâ taxing power. Id.at 561â63 (Roberts, C.J.); see alsoid. at 562
(Roberts, C.J.) (âNo court ought, unless the terms of an act rendered it unavoidable, to give a construction to it which should involve a violation, however unintentional, of the constitution.â) (quoting Parsons v. Bedford,28 U.S. (3 Pet.) 433
, 448â49 (1830)); see alsoid. at 563
(Roberts, C.J.) (âThe question is not whether that is the most natural interpretation of the mandate, but only whether it is a âfairly possibleâ one.â) (quoting Crowell v. Benson,285 U.S. 22, 62
(1932)).
In Part III-C, the Chief Justiceâwriting for a majority of the Court,
joined by Justices Ginsburg, Breyer, Sotomayor, and Kaganâundertook that
36
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inquiry of determining whether it was âfairly possibleâ to read the individual
mandate as an option and thereby save its constitutionality. See id. at 563â74
(majority opinion). Chief Justice Roberts reasoned that the individual
mandate could be read in conjunction with the shared responsibility payment
in order to save the individual mandate from unconstitutionality. Read
together with the shared responsibility payment, the entire statutory provision
could be read as a legitimate exercise of Congressâ taxing power for four
reasons.
First and most fundamentally, the shared-responsibility payment
âyield[ed] the essential feature of any tax: It produce[d] at least some revenue
for the Government.â Id. at 564. Second, the shared-responsibility payment
was âpaid into the Treasury by taxpayers when they file their tax returns.â Id.
at 563 (alternations and internal quotation marks omitted). Third, the amount
owed under the ACA was âdetermined by such familiar factors as taxable
income, number of dependents, and joint filing status.â Id. Fourth and finally,
â[t]he requirement to pay [was] found in the Internal Revenue Code and
enforced by the IRS, which . . . collect[ed] it in the same manner as taxes.â Id.
at 563â64 (internal quotation marks omitted).
Because of these four attributes of the shared responsibility payment,
the Court reasoned that â[t]he Federal Government does have the power to
impose a tax on those without health insurance.â Id. at 575. The Court
concluded that â[s]ection 5000A is therefore constitutional, because it can
reasonably be read as a tax.â 33 Id. We agree with the dissenting opinion that
âthis case begins and ought to endâ with NFIB.
33 Seven JusticesâChief Justice Roberts and Justices Scalia, Kennedy, Thomas,
Breyer, Alito, and Kaganâagreed that the Actâs Medicaid-expansion provisions
unconstitutionally coerced states into compliance. NFIB, 567 U.S. at 575â85 (plurality
opinion); id. at 671â89 (joint dissent). But, in light of a severability clause, Part IVâB of the
Chief Justiceâs opinion concluded that the unconstitutional portion of the Medicaid provisions
37
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B.
Now that the shared responsibility payment amount is set at zero, 34 the
provisionâs saving construction is no longer available. The four central
attributes that once saved the statute because it could be read as a tax no
longer exist. Most fundamentally, the provision no longer yields the âessential
feature of any taxâ because it does not produce âat least some revenue for the
Government.â Id. at 564. Because the provision no longer produces revenue,
it necessarily lacks the three other characteristics that once rendered the
provision a tax. The shared-responsibility payment is no longer âpaid into the
Treasury by taxpayer[s] when they file their tax returnsâ because the payment
is no longer paid by anyone. Id. at 563 (alteration in original and internal
quotation marks omitted). The payment amount is no longer âdetermined by
such familiar factors as taxable income, number of dependents, and joint filing
status.â Id. The amount is zero for everyone, without regard to any of these
factors. The IRS no longer collects the payment âin the same manner as taxesâ
because the IRS cannot collect it at all. Id. at 563â64 (internal quotation marks
omitted).
Because these four critical attributes are now missing from the shared
responsibility payment, it is, in the words of the state plaintiffs, âno longer
âfairly possibleâ to save the mandateâs constitutionality under Congressâ taxing
could be severed. Id. at 585â88 (plurality opinion). Meanwhile, Justice Ginsburg, joined by
Justice Sotomayor, disagreed that the Actâs mandatory Medicaid expansion was
unconstitutional. Id. at 633 (Ginsburg, J., concurring in the judgment in part, and dissenting
in part). Those two Justices concurred in the judgment with respect to the Chief Justiceâs
conclusion that the unconstitutional provisions could be severed from the remainder of the
Act. Id. at 645â46 (Ginsburg, J., concurring in the judgment in part, and dissenting in part).
The four dissenting Justices concluded that the Actâs Medicaid-expansion provisions were
unconstitutionally coercive and rejected the relief of allowing states to opt into Medicaid
expansion. Id. at 671â90 (joint dissent).
34 26 U.S.C. §§ 5000A(c)(2)(B)(iii), (c)(3)(A).
38
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power.â State Plaintiffsâ Br. at 32. The proper application of NFIB to the new
version of the statute is to interpret it according to what Chief Justice
Robertsâand four other Justices of the Courtâsaid was the âmost
straightforwardâ reading of that provision: a command to purchase insurance.
Id. at 562 (Roberts, C.J.). As the district court properly observed, âthe only
reading available is the most natural one.â Under that reading, the individual
mandate is unconstitutional because, under NFIB, it finds no constitutional
footing in either the Interstate Commerce Clause or the Necessary and Proper
Clause. Id. at 546â61 (Roberts, C.J.); id. at 650â60 (joint dissent).
The intervenor-defendant states have several arguments against this
conclusion, all of which fail. They first argue that the saving construction of
the individual mandate, interpreting the provision as an option to buy
insurance or pay a tax, is still âfairly possible.â As the individual plaintiffs
point out, the Court interpreted the individual mandate as an option only
because doing so would save it from being unconstitutional. Accordingly, the
intervenor-defendant states must show that the âoptionâ would still be a
constitutional exercise of Congressâ taxing power. To make that showing, the
intervenor-defendant states reject the plaintiffsâ attempt to read a âsome
revenueâ requirement into the Constitutionâs Taxing and Spending Clause,
arguing instead for a potential-to-produce-revenue requirement. The
individual mandate, they say, is still set out in the Internal Revenue Code. It
still provides a âstatutory structure through whichâ Congress could eventually
tax people for failing to buy insurance. It still includes references to taxable
income, number of dependents, and joint filing status. 26 U.S.C. §§
5000A(b)(3), (c)(2), (c)(4). Further, it still does not apply to individuals who pay
no federal income taxes. 26 U.S.C. § 5000A(e)(2).
The intervenor-defendant states have little support for this reading of
the Taxing and Spending Clause. For starters, NFIB could not be clearer that
39
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No. 19-10011
the âproduc[tion]â of âat least some revenue for the Governmentâânot the
potential to produce that revenueâis âthe essential feature of any tax.â 567
U.S. at 564 (majority opinion) (emphasis added). As the district court observed,
when determining whether a statute is a tax, the actual production of revenue
is ânot indicative, not commonâ[but] essential.â
The intervenor-defendant states also find no support in United States v.
Ardoin, 19 F.3d 177, 179â80 (5th Cir. 1994). In that unusual case, Congress had imposed a tax on machine guns, but subsequently outlawed machine guns altogether, which prompted the relevant agency to stop collecting the tax.Id.
at 179â80. The defendant was convicted not only for possessing a machine gun but also for failing to pay the tax, which remained on the books.Id. at 178
. The court upheld the conviction on the basis that the tax law at issue could âbe upheld on the preserved, but unused, power to tax or on the power to regulate interstate commerce.âId. at 180
. But the taxing power was âpreservedâ in
Ardoin because it was non-revenue-producing only in practice whereas the
âtaxâ here is actually $0.00 as written on the books. 35 See Fed. Defendantsâ Br.
at 32. Expanding Ardoin to apply here would, as the federal defendants point
out, puzzlingly allow Congress to âprohibit conduct that exceeds its commerce
power through a two-step process of first taxing it and then eliminating the tax
while retaining the prohibition.â Fed. Defendantsâ Br. at 32.
The intervenor-defendant states argue further that the individual
mandate does not even need constitutional justification because it is merely a
suggestion, not binding legislative action. The individual mandate, they
contend, is no different from the Flag Code, which, though entered into the
35 This distinction also disposes of the intervenor-defendant statesâ concern about
âcast[ing] constitutional doubt on taxes with delayed start dates or that Congress has
temporarily suspended for periods of time.â Intervenor-Defendant Statesâ Br. at 43. In none
of the examples the intervenor-defendant states cite did the statute purport to levy a âtaxâ of
$0.00.
40
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pages of the U.S. Code, âwas not intended to proscribe conduct.â Dimmitt v.
City of Clearwater, 985 F.2d 1565, 1573 (11th Cir. 1993) (analyzing 36 U.S.C.
§§ 174â76). This argument is just a repackaged version of their argument that
the individual mandate can still be read as an option. But, as the state
plaintiffs, the individual plaintiffs, and the federal defendants point out, the
Supreme Court has already held that the âmost straightforwardâ reading of
the individual mandateâwhich emphatically demands that individuals âshallâ
buy insurance, 26 U.S.C. § 5000A(a)âis as a command to purchase health
insurance. The Court then concluded that that command lacked constitutional
justification. The zeroing out of the shared responsibility payment does not
render the provision any less of a command. Quite the opposite: Chief Justice
Roberts concluded that the greater-than-zero shared responsibility payment
actually converted the individual mandate into an option. NFIB, 567 U.S. at
563â64 (majority opinion). Now that the shared responsibility payment has
been zeroed out, the only logical conclusion under NFIB is to read the
individual mandate as a command, quite unlike the Flag Code. It is an
individual mandate, not an individual suggestion.
Moreover, it is not true that when the Court adopts a limiting
construction to avoid constitutional questions, that construction controls as to
all applications of the statute, regardless of whether the original constitutional
implications are present. The case on which the U.S. House relies involved
different applications of an identical statute to different facts. Clark v.
Martinez, 543 U.S. 371, 380 (2005) (rejecting the argument that âthe
constitutional concerns that influencedâ a previous interpretation of a
provision of the Immigration and Nationality Act were ânot present forâ the
aliens at issue in that case). This case is readily distinguishable because the
four characteristics that made the previous interpretation possibleâthe
production of revenue and other tax-like featuresâhave now been legislatively
41
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removed. The limiting construction is no longer available as a matter of
statutory interpretation. The interpretation must accordingly change to
comport with what five Justices of the Supreme Court have said is the âmost
straightforward readingâ of that interpretation. 36
The dissenting opinion justifies its continued reliance on the saving
constructionâeven though it is no longer applicableâby citing Kimble v.
Marvel Entmât, LLC, 135 S. Ct. 2401(2015). This approach fares no better. The dissenting opinion quotes Kimble to say that âin whatever way reasoned,â the Courtâs interpretation âeffectively become[s] part of the statutory scheme, subject . . . to congressional change.âId. at 2409
. The dissenting opinion
correctly acknowledges that the individual mandate was never changed. But
what did change was the provision that actually mattered: the shared
responsibility payment. When it was set above zero, it could be saved as a tax,
even though five justices agreed this was an unnatural reading. It would be
puzzling if Congress could change a statute at will, entirely insulated from
constitutional infirmity, just because the Court had previously used
constitutional avoidance to save a previous version of the statute.
The intervenor-defendant states argue furthermore that the individual
mandate can now be constitutional under the Interstate Commerce Clause
because it does not compel anyone into commerce. This is again a repackaged
version of their argument that the individual mandate is an option even
36Contrary to the dissenting opinionâs suggestion, a saving construction is no longer
available. The canon of constitutional avoidance applies only âwhen statutory language is
susceptible of multiple interpretations.â Jennings v. Rodriguez, 138 S. Ct. 830, 836(2018). In NFIB, § 5000A was amenable to two possible interpretations. It was either âa command to buy insuranceâ or âa tax.â NFIB,567 U.S. at 574
(Roberts, C.J.). After Congress zeroed out the shared responsibility payment, one of those possible interpretations fell away. What was then the âmost straightforward readingâ is now the only available reading: it is a âcommand to buy insuranceâ and âthe Commerce Clause does not authorize such a command.âId.
42
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without a revenue-generating shared responsibility payment, an argument
that, as the state plaintiffs point out, the Supreme Court has already rejected.
This argument, as the district court observed, is also logically inconsistent. If
the individual mandate no longer truly compels anything, then it can hardly
be said to be a âregulat[ion]â of interstate commerce. In the words of the
district court, the intervenor-defendant states âhope to have their cake and eat
it too.â 37
Finally, we would be remiss if we did not engage with the dissenting
opinionâs contention that § 5000A is not an exercise of legislative power. This
would likely come as a shock to the legislature that drafted it, the president
who signed it, and the voters who celebrated or lamented it. It is not surprising
that the dissenting opinion can cite no case in which a federal court deems a
duly enacted statute not an exercise of legislative power, much less a statute
that clearly commands that an individual âshallâ do something. 38 The
dissenting opinion is inconsistent on this point: it argues that the provisionâs
status as an exercise of legislative power fluctuates according to the amount of
the shared responsibility payment while simultaneously contending that âif
the text of the coverage requirement has not changed, its meaning could not
37Any argument that the individual mandate can now be sustained under the
Necessary and Proper Clause fails for the same reasons. The individual mandate now must
be read as a command, and five Justices in NFIB already rejected the argument that such a
command could be sustained under the Necessary and Proper Clause. NFIB, 567 U.S. at 561(Roberts, C.J.);id.
at 654â55 (joint dissent).
38 The dissenting opinionâs theory of the âlaw that does nothingâ results in some
bizarre metaphysical conclusions. The ACA was signed into law in 2010. No one questions
that when it was signed, § 5000A was an exercise of legislative power. Yet today, the
dissenting opinion asserts, § 5000A is not an exercise of legislative power. So did Congress
exercise legislative power in 2010, as seen from 2015? As seen from 2018? Does § 5000A
ontologically re-emerge should a future Congress restore the shared responsibility payment?
Perhaps, like SchrĂśdingerâs cat, § 5000A exists in both states simultaneously. The dissenting
opinion does not say. Our approach requires no such quantum musings.
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have changed either.â Our decision breaks no new ground. We simply observe
that § 5000A was originally cognizable as either a command or a tax. Today,
it is only cognizable as a command. It has always been an exercise of legislative
power.
***
In NFIB, the individual mandateâmost naturally read as a command to
purchase insuranceâwas saved from unconstitutionality because it could be
read together with the shared responsibility payment as an option to purchase
insurance or pay a tax. It could be read this way because the shared
responsibility payment produced revenue. It no longer does so. Therefore, the
most straightforward reading applies: the mandate is a command. Using that
meaning, the individual mandate is unconstitutional.
VI.
Having concluded that the individual mandate is unconstitutional, we
must next determine whether, or how much of, the rest of the ACA is severable
from that constitutional defect. On this question, we remand to the district
court to undertake two tasks: to explain with more precision what provisions
of the post-2017 ACA are indeed inseverable from the individual mandate; and
to consider the federal defendantsâ newly-suggested relief of enjoining the
enforcement only of those provisions that injure the plaintiffs or declaring the
Act unconstitutional only as to the plaintiff states and the two individual
plaintiffs. We address each issue in turn.
A.
The Supreme Court has said that the âstandard for determining the
severability of an unconstitutional provision is well established.â Alaska
Airlines, Inc. v. Brock, 480 U.S. 678, 684 (1987). Unless it is âevident that the
Legislature would not have enacted those provisions which are within its
power, independently of that which is not, the invalid part may be dropped if
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what is left is fully operative as a law.â Id.(quoting Buckley v. Valeo,424 U.S. 1, 108
(1976)).
This inquiry into counterfactual Congressional intent has been
crystallized into a âtwo-part . . . framework.â NFIB, 567 U.S. at 692(joint dissent). First, if a court holds a statutory provision unconstitutional, it then determines whether the now-truncated statute will operate in âa manner consistent with the intent of Congress.â Alaska Airlines,480 U.S. at 685
(emphasis omitted). This first step asks whether the constitutional provisionsâstanding on their own, without the unconstitutional provisionsâ are âfully operative as a law,â not whether they would simply âoperate in some coherent wayâ not designed by Congress. Free Enter. Fund v. Pub. Co. Accounting Oversight Bd.,561 U.S. 477
, 509 (2010) (quoting New York v. United States,505 U.S. 144, 186
(1992)); NFIB,567 U.S. at 692
(joint dissent). Second, even if the remaining provisions can operate as Congress designed them to, the court must determine if Congress would have enacted the remaining provisions without the unconstitutional portion. If Congress would not have done so, then those provisions must be deemed inseverable. Alaska Airlines,480 U.S. at 685
(â[T]he unconstitutional provision must be severed unless the statute created in its absence is legislation that Congress would not have enacted.â); Free Enter. Fund,561 U.S. at 509
(â[N]othing in the statuteâs
text or historical context makes it evident that Congress, faced with the
limitations imposed by the Constitution, would have preferred no Board at all
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to a Board whose members are removable at will.â (internal quotation marks
omitted)).
Severability doctrine places courts between a rock and a hard place. On
the one hand, courts strive to be faithful agents of Congress, 39 which often
means refusing to create a hole in a statute in a way that creates legislation
Congress never would have agreed to or passed. See Murphy, 138 S. Ct. at
1482(â[Courts] cannot rewrite a statute and give it an effect altogether different from that sought by the measure viewed as a whole.â (quoting R.R. Ret. Bd. v. Alton R.R.,295 U.S. 330, 362
(1935))). On the other hand, courts often try to abide by the medical practitionerâs maxim of âfirst, do no harm,â aiming âto limit the solution to the problemâ by ârefrain[ing] from invalidating more of the statute than is necessary.â Ayotte v. Planned Parenthood of N. New England,546 U.S. 320
, 328 (2006); Collins v. Mnuchin,938 F.3d 553
, 592 (5th Cir. 2019) (en banc) (Haynes, J.) (severing unconstitutional removal restriction from remainder of Federal Housing Finance Agencyâs enabling statute). 40 In fact, courts have a âdutyâ to âmaintain the act in so far as it is validâ if it âcontains unobjectionable provisions separable from those found to be unconstitutional.â Alaska Airlines,480 U.S. at 684
(quoting Regan v. Time, Inc.,468 U.S. 641, 652
(1984) (plurality opinion)).
The Supreme Court emphasizes this duty so strongly that commentators
have identified âa presumption [of severability] implicit in the Courtâsâ
severability jurisprudence. Adrian Vermeule, Saving Constructions, 85 Geo.
L.J. 1945, 1950 n.28 (1997); see also Brian Charles Lea, Situational
See Frank H. Easterbrook, Text, History, and Structure in Statutory Interpretation,
39
17 Harv. J. L. & Pub. Polây 61, 63 (1994) (â[Courts] are supposed to be faithful agents, not
independent principals.â).
40 Judge Haynes wrote the opinion of the court as to the question of remedy. See
Collins, 538 F.3d at 591.
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Severability, 103 Va. L. Rev. 735, 744 (2017) (â[C]ourts assume that a legislature intends for any unlawful part of its handiwork to be severable from all lawful parts in the absence of indicia of a contrary intention.â). This presumption is strongest when Congress includes a severability clause in the statutory text; however, â[i]n the absence of a severability clause . . . Congressâs silence is just thatâsilenceâand does not raise a presumption against severability.â Alaska Airlines,480 U.S. at 686
.
Nevertheless, the meticulous analysis required by severability doctrine
defies reliance on presumptions or generalities. The Supreme Courtâs latest
venture into severability territory, Murphy v. NCAA, 138 S. Ct. 1461(2018), provides an example. There, the Court held that the entirety of the Professional and Amateur Sports Protection Act was unconstitutional because one of its provisionsâauthorizing private sports gamblingâviolated the anti- commandeering doctrine.Id. at 1484
. Justice Alitoâs majority opinion separately explored each of the other operative provisions in the act, reasoning that all of the actâs provisions were âobviously meant to work togetherâ and be âdeployed in tandem.âId. at 1483
. Because Congress would not have wanted the otherwise-valid provisions âto stand alone,â the Court declined to sever them.Id.
This conclusion prompted a dissent from Justice Ginsburg, who characterized the majority as âwield[ing] an ax . . . instead of using a scalpel to trim the statuteâ and reiterated that âthe Court ordinarily engages in a salvage rather than a demolition operation.âId.
at 1489â90 (Ginsburg, J., dissenting).
These Murphy opinions draw attention to one difficulty inherent in
severability analysis: selecting the right tool for the job. Justice Thomasâ
concurring opinion goes further, providing two reasons why navigating
between the Scylla of poking small but critical holes in complex, carefully
crafted legislative bargains and the Charybdis of invalidating more duly
enacted legislation than necessary stands âin tension with traditional limits on
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judicial authority.â Murphy, 138 S. Ct. at 1485(Thomas, J., concurring). â[T]he judicial power is, fundamentally, the power to render judgments in individual cases,â and severability doctrine threatens to violate that vital separation-of-powers principle in more than one way.Id.
(Thomas, J.,
concurring).
First, severability doctrine requires âa nebulous inquiry into
hypothetical congressional intent,â as opposed to the usual judicial bread-and-
butter of âdetermin[ing] what a statute means.â Id. at 1486(Thomas, J., concurring) (quoting United States v. Booker,543 U.S. 220
at 321 n.7 (2005) (Thomas, J., dissenting in part)). Because âCongress typically does not pass statutes with the expectation that some part will later be deemed unconstitutional,â id. at 1487, this requirement often leaves courts to exercise their imagination or âintuitions regarding what the legislature would have desired had it considered the severability issue.âLea, supra, at 747
. This, in turn, âenmeshes the judiciary in making policy choicesâ the Constitution reserves for the legislature, David H. Gans, Severability as Judicial Lawmaking,76 Geo. Wash. L. Rev. 639
, 663 (2008), providing unelected
judicial officers with cover to simply implement their own policy preferences.
Second, severability doctrine forces courts to âweigh in on statutory
provisions that no party has standing to challenge, bringing courts
dangerously close to issuing advisory opinions.â Murphy, 138 S. Ct. at 1487(Thomas, J., concurring); see also Jonathan F. Mitchell, The Writ-of-Erasure Fallacy,104 Va. L. Rev. 933
, 936 (2018) (âThe federal courts have no authority
to erase a duly enacted law from the statute books, [but can only] decline to
enforce a statute in a particular case or controversy.â 41). As Justice Thomas
41 If that is true, then courts are speaking loosely when they state that they are
âinvalidatingâ or âstriking downâ a law.
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points out, when Chief Justice Marshall famously declared that â[i]t is
emphatically the province and duty of the judicial department to say what the
law is,â he justified that assertion by explaining that â[t]hose who apply [a]
rule to particular cases, must of necessity expound and interpret that rule.â
Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177(1803). Yet severability doctrine directs courts to go beyond the necessaryâthat is, the application of a particular statutory provision to a particular caseâto consider the viability of other provisions without even âask[ing] whether the plaintiff has standing to challenge those other provisions.â Murphy,138 S. Ct. at 1487
(Thomas, J., concurring). â[S]everability doctrine is thus an unexplained exception to the normal rules of standing, as well as the separation-of-powers principles that those rules protect.âId.
Severability analysis is at its most demanding in the context of sprawling
(and amended) statutory schemes like the one at issue here. The ACAâs
framework of economic regulations and incentives spans over 900 pages of
legislative text and is divided into ten titles. Most of the provisions directly
regulating health insurance, including the one challenged in this case, are
found in Titles I and II. See, e.g., 26 U.S.C. § 5000A(a) (individual mandate);
42 U.S.C. § 300gg-14(a) (requiring insurers offering family plans to cover adult
children until age 26), §§ 18031â18044 (creating health insurance exchanges).
The other titles generally amend Medicare (Title III), fund preventative
healthcare programs (Title IV), seek to expand the supply of healthcare
workers (Title V), enact anti-fraud requirements for Medicare/Medicaid
facilities (Title VI), establish or expand drug regulations (Title VII), create a
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voluntary long-term care insurance program (Title VIII), address taxation
(Title IX), and improve health care for Native Americans (Title X 42).
The plaintiffs group this host of provisions into three categories for ease
of reference. State Plaintiffsâ Br. at 38. The first category includes the three
core ACA provisions the Supreme Court has called âclosely intertwinedâ: the
individual mandate, 26 U.S.C. § 5000A(a), the guaranteed-issue requirement,
42 U.S.C. §§ 300gg, 300gg-1, and the community-rating requirement, 42 U.S.C.
§ 300gg-4. King, 135 S. Ct. at 2487. The second category includes the
remaining â[m]ajor provisions of the Affordable Care Act,â NFIB, 567 U.S. at
697(joint dissent), namely other provisions dealing with âinsurance regulations and taxes,â âreductions in federal reimbursements to hospitals and other Medicare spending reductions,â the insurance âexchanges and their federal subsidies,â and âthe employer responsibility assessment.â See, e.g., 25 U.S.C. § 4980H; 26 U.S.C. § 36B; 42 U.S.C. §§ 1395ww, 18021â22. The third category includes a variety of minor provisions, for example taxes on certain medical devices or provisions requiring the display of nutritional content at restaurants. See, e.g.,21 U.S.C. § 343
(q)(5)(H);26 U.S.C. § 4191
(a).
Moreover, Congress has made a number of substantive amendments to
the ACA, revising the statute in 2010, 2011, 2014, 2017, and 2018. See, e.g.,
Medicare and Medicaid Extenders Act of 2010, Pub. L. No. 111-309, 124Stat. 3285 (2010) (modifying tax credit scale and Medicaid requirements); Department of Defense and Full-Year Continuing Appropriations Act, 2011,Pub. L. No. 112-10, 125
Stat. 38 (2011) (repealing program that required some employers to provide some employees with vouchers for purchasing insurance); Bipartisan Budget Act of 2015,Pub. L. No. 114-74, 129
Stat. 584 (2015)
42 Title X also includes a number of miscellaneous provisions relating to the other
titles.
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(repealing requirement that employers with more than 200 employees enroll
new full-time employees in health insurance and continue coverage for current
employees). Most of these amendments occurred prior to the 2017 legislation
eliminating the shared responsibility payment, but some are more recent. See,
e.g., Bipartisan Budget Act of 2018, Pub. L. No. 115-123, 132 Stat. 64 (2018)
(repealing Independent Payment Advisory Board).
In summary, then, this issue involves a challenging legal doctrine
applied to an extensive, complex, and oft-amended statutory scheme. All
together, these observations highlight the need for a careful, granular
approach to carrying out the inherently difficult task of severability analysis
in the specific context of this case. We are not persuaded that the approach to
the severability question set out in the district court opinion satisfies that
need. The district court opinion does not explain with precision how particular
portions of the ACA as it exists post-2017 rise or fall on the constitutionality of
the individual mandate. Instead, the opinion focuses on the 2010 Congressâ
labeling of the individual mandate as âessentialâ to its goal of âcreating
effective health insurance markets,â 42 U.S.C. § 18091(2)(I), and then proceeds
to designate the entire ACA inseverable. In using this approach, the opinion
does not address the ACAâs provisions with specificity, nor does it discuss how
the individual mandate fits within the post-2017 regulatory scheme of the
ACA.
The district court opinion begins by addressing the 2010 version of the
ACA. Starting with the text of the ACA, the district court opinion points out
that the 2010 Congress incorporated into the text its view that âthe absence of
the [individual mandate] would undercut Federal regulation of the health
insurance market.â 42 U.S.C. § 18091(2)(H). The district court opinion notes
that the 2010 Congress devised the individual mandate, âtogether with the
other provisionsâ of the ACA, to âadd millions of new customers to the health
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insurance market.â 42 U.S.C. § 18091(2)(C). In this way, the 2010 Congress sought to âminimize th[e] adverse selectionâ that might otherwise occur if healthy individuals âwait[ed] to purchase health insurance until they needed care,â42 U.S.C. § 18091
(2)(I)âa strategic choice that would otherwise be
available given the ACAâs guaranteed-issue and community-rating provisions.
According to the district court opinion: because the 2010 Congress found the
individuate mandate âessentialâ to this plan to reshape health insurance
markets, the individual mandate is inseverable from the rest of the ACA â[o]n
the unambiguous enacted text alone.â
The district court opinion also addresses ACA caselaw. Citing the
Supreme Courtâs decisions in NFIB and King, the district court opinion states
that â[a]ll nine Justices . . . agreed the Individual Mandate is inseverable from
at least the pre-existing-condition provisions.â See NFIB, 567 U.S. at 548(Roberts, C.J.), 596â98 (Ginsburg, J., joined by Breyer, Kagan, and Sotomayor, JJ.), 695â96 (joint dissent of Scalia, Kennedy, Thomas, and Alito, JJ.); King,135 S. Ct. at 2487
(stating that the individual mandate is âclosely intertwinedâ with the guaranteed-issue and community-rating provisions). As to the ACAâs other provisions, the district court opinion notes that the only group of Justices who fully considered whether the other major and minor provisions were severable was the joint dissent in NFIBâand those Justices would have held that âinvalidation of the ACAâs major provisions requires the Court to invalidate the ACAâs other provisions.â NFIB,567 U.S. at 704
(joint dissent).
Beyond these points, the district court opinion states that its âconclusion
would only be reinforcedâ if it âparse[d] the ACAâs provisions one by one.â The
district court opinion arrives at this conclusion by reasoning that declaring
only the individual mandate unlawful would disrupt the Actâs careful balance
of âshared responsibility.â The district court opinion lists a few examples of
how it would expect this to happen with regard to the ACAâs major provisions.
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First, the district court opinion reasons that âthe Individual Mandate reduces
the financial risk forced upon insurance companies and their customers by the
ACAâs major regulations and taxes.â If the individual mandate fell and the
regulations and taxes did not, insurance companies would suffer a burden
without enjoying a countervailing benefitââa choice no Congress made and
one contrary to the text.â Second, if a court were to declare just the individual
mandate and the protections for preexisting conditions unlawfulâbut not the
subsidies for health insuranceâthen the Act would be transformed into âa law
that subsidizes the kinds of discriminatory products Congress sought to
abolish at, presumably, the re-inflated prices it sought to suppress.â Third,
Congress never intended âa duty on employers, see 26 U.S.C. § 4980H, to cover
the skyrocketing insurance premium costsâ that would âinevitably result from
removingâ the individual mandate. Fourth, because âthe Medicaid-expansion
provisions were designed to serve and assist fulfillment of the Individual
Mandate,â removing the individual mandate would remove the need for that
expansion.
As to the ACAâs minor provisions, the district court opinion states that it
is âimpossible to know which minor provisions Congress would have passed
absent the Individual Mandate,â and that such an inquiry involves too much
âlegislative guesswork.â Relying on the 2010 Congressâ labeling of the
individual mandate as âessential,â the district court opinion ultimately
determines that there is âno reason to believe that Congress would have
enactedâ the minor provisions independently. The district court opinion
similarly disclaims the ability to divine the intent of the 2017 Congressâwhich
had zeroed out the shared responsibility payment but left the rest of the ACA
untouchedâlabeling such an inquiry âa foolâs errand.â To the extent it
analyzed the intent of the 2017 Congress, the district court opinion determines
that Congressâ failure to repeal the individual mandate shows that it âknew
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that provision is essential to the ACA.â In sum, the district court opinion
concludes that the entire ACA is inseverable from the individual mandate.
The plaintiffs urge affirmance for essentially the same reasons stated in
the district court opinion. 43 As to the guaranteed-issue and community-rating
provisions, they rely primarily on the 2010 Congressâ express findings linking
those provisions to the individual mandate. State Plaintiffsâ Br. at 39â44;
Individual Plaintiffsâ Br. at 47â48. The 2010 Congress found that, without the
individual mandate, âmany individuals would wait to purchase health
insurance until they needed care,â creating an âadverse selectionâ problem. 42
U.S.C. § 18091(2)(I); see alsoid.
(finding that the individual mandate is âessential to creating effective health insurance markets in which improved health insurance products that are guaranteed issue and do not exclude coverage of pre-existing conditions can be soldâ). As to the remaining major and some of the minor provisions, the plaintiffs rely primarily on the joint dissent in NFIB for the proposition that leaving these provisions standing would âundermine Congressâ scheme of shared responsibility,â throwing off the balance interlocking insurance market reforms set out in the ACA.567 U.S. at 698
(joint dissent) (internal quotation marks omitted); State Plaintiffsâ Br.
at 44â49. As for the most minor provisions, they argue that these were âmere
adjunctsâ of the more important provisions and would not have been
independently enacted. State Plaintiffsâ Br. at 50.
On appeal, the federal defendants agree with the plaintiffs that the
entirety of the ACA is inseverable from the individual mandate. Fed.
Defendantsâ Br. at 36â49. This marks a significant change in litigation
position, as the federal defendants had previously submitted to the district
43 The individual plaintiffs adopt the state plaintiffsâ severability arguments by
reference. See Fed. R. App. P. 28(i).
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court that only the guaranteed-issue and community-rating provisions were
inseverable. And that is not the only new argument the federal defendants
make on appeal. For the first time on appeal, the federal defendants argue
that the remedy in this case should be limited to enjoining enforcement of the
ACA only to the extent it harms the plaintiffs. See Fed. Defendantsâ Br. at 26â
29 (arguing that the individual âplaintiffs do not have standing to seek relief
against provisions of the ACA that do not in any way affect themâ); Fed.
Defendantsâ Supp. Br. at 10 (â[T]he judgment itself, as opposed to its
underlying legal reasoning, cannot be understood as extending beyond the
plaintiff states to invalidate the ACA in the intervenor states.â).
The intervenor-defendant states, meanwhile, argue that every provision
of the ACA is severable from the individual mandate. They argue that the
2017 Congressâ decision not to repeal or otherwise undermine any other
provision of the ACA shows that it intended the rest of the ACA to remain
operativeâand that the court should not focus on the intent of the 2010
Congress. Intervenor-Defendant Statesâ Br. at 34â35, 43. They point to the
statements of several legislators in the 2017 Congress that seem to evince an
assumption that other parts of the ACA would not be altered, 44 and to
Congressâ knowledge of reports highlighting the severe consequences a total
44 Although we decline to opine on the merits of the partiesâ arguments at this
juncture, we caution against relying on individual statements by legislators to determine the
meaning of the law. â[L]egislative history is not the law.â Epic Sys. Corp. v. Lewis, 138 S.
Ct. 1612, 1631(2018); see also Asadi v. G.E. Energy (USA), LLC,720 F.3d 620
, 626 n.9 (5th Cir. 2013) (â[T]he authoritative statement is the statutory text, not the legislative history or any other extrinsic material.â) (quoting Exxon Mobil Corp. v. Allapattah Servs., Inc.,545 U.S. 546, 568
(2005)); Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 392â93 (2012) (âEach member voting for the bill has a slightly different reason for doing so. There is no single set of intentions shared by all . . . [y]et a majority has undeniably agreed on the final language that passes into law . . . and that is the sole means by which the assembly has the authority to make law.â). And even among legislative history devotees, âfloor statements by individual legislators rank among the least illuminating forms.â N.L.R.B. v. SW Gen., Inc.,137 S. Ct. 929, 943
(2017).
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invalidation of the ACA would have. Intervenor-Defendant Statesâ Br. at 40.
Finally, they argue that the passage of time since the ACAâs enactment has
shown that the individual mandate is not all that crucial after all, and they
provide examples of ACA provisions they say have nothing to do with insurance
markets or became operative years before the individual mandate took effect.
Intervenor-Defendant Statesâ Br. at 45.
Although we understand and share the district courtâs general
disinclination to engage in what it refers to as âlegislative guessworkââand
what a Supreme Court Justice has described as âa nebulous inquiry into
hypothetical congressional intent,â Murphy, 138 S. Ct. at 1486(Thomas, J., concurring) (quoting Booker,543 U.S. at 321
n.7 (Thomas, J., dissenting in
part))âwe nevertheless conclude that the severability analysis in the district
court opinion is incomplete in two ways.
First, the opinion gives relatively little attention to the intent of the 2017
Congress, which appears in the analysis only as an afterthought despite the
fact that the 2017 Congress had the benefit of hindsight over the 2010
Congress: it was able to observe the ACAâs actual implementation. Although
the district court opinion states that burdening insurance companies with
taxes and regulations without giving them the benefit of compelling the
purchase of their product is âa choice no Congress made,â it only links this
observation to the 2010 Congress. It does not explain its statement that the
2017 Congressâ failure to repeal the individual mandate is evidence of an
understanding that no part of the ACA could survive without it.
Second, the district court opinion does not do the necessary legwork of
parsing through the over 900 pages of the post-2017 ACA, explaining how
particular segments are inextricably linked to the individual mandate. The
opinion lists a few examples of major provisions and cogently explains their
link to the individual mandate, at least as it existed in 2010. For example, the
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opinion discusses the individual mandateâs interplay with the guaranteed-
issue and community-rating provisionsâall of which are found in Title I of the
ACAâanalyzing how Congress intended those provisions to work and how
they might be expected to work without the individual mandate. But in order
to strike the delicate balance that severability analysis requires, the district
court must undertake a similar inquiry for each segment of the post-2017 law
that it ultimately declares unlawfulâand it has not done so. Instead, the
district court opinion focuses on the 2010 Congressâ designation of the
individual mandate as âessential to creating effective health insurance
marketsâ and intention that, for at least one set of legislative goals, the
individual mandate was intended to work âtogether with the other provisionsâ
of the ACA. E.g., 42 U.S.C. § 18091(2)(I). On this basis, and on the views of
the dissenting Justices in NFIB addressing the ACA as it stood in 2012, the
district court opinion renders the entire ACA inoperative. More is needed to
justify the district courtâs remedy.
Take, for example, the ACA provisions in Title IV requiring certain chain
restaurants to disclose to consumers nutritional information like âthe number
of calories contained in the standard menu item.â Patient Protection and
Affordable Care Act, Pub. L. No. 111-148, § 4206,124 Stat. 119
, 573â74 (2012) (codified at21 U.S.C. § 343
). Or consider the provisions in Title X establishing the level of scienter necessary to be convicted of healthcare fraud. Patient Protection and Affordable Care Act § 10606,124 Stat. 119
, 1006â09, (codified at18 U.S.C. § 1347
). Without more detailed analysis from the district court
opinion, it is unclear how provisions like theseâwhich certainly do not directly
regulate the health insurance marketplaceâwere intended to work âtogetherâ
with the individual mandate. Similarly, the district court opinionâs assertion
that âmost of the minor provisionsâ of the ACA âare mere adjuncts ofâ or âaids
to the[] effective executionâ of the project of the individual mandate is not
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supported by the actual analysis in the district court opinion, which does not
dive into those provisions. Finally, some insurance-related reforms became
law years before the effective date of the individual mandate; the district court
opinion does not explain how provisions like these are inextricably linked to
the individual mandate. See, e.g., 42 U.S.C. §§ 300gg-11, 300gg-14(a).
Whatever the solution to the problem of âlegislative guessworkâ the district
court opinion identifies in severability doctrine as it currently stands, it must
include a careful parsing of the statutory scheme at issue to address questions
like these.
We have long ârequire[d] that a district court explain its reasons for
granting a motion for summary judgment in sufficient detail for us to
determine whether the court correctly applied the appropriate legal test.â
Wildbur v. ARCO Chem. Co., 974 F.2d 631, 644(5th Cir. 1992). This is because we have âlittle opportunity for effective reviewâ when the district court opinion leaves some reasoning âvagueâ or âunsaid.â Myers v. Gulf Oil Corp.,731 F.2d 281, 284
(1984). âIn such cases, we have not hesitated to remand . . . .âId.
In this case, the analysis the district court opinion provides is substantial and far exceeds the sort of cursory reasoning that normally prompts us to remand. Yet, the vast, wide-ranging statutory scheme at issue in this case also far exceeds the comparatively small number of provisions at issue in other severability cases, see, e.g., Chadha, 462 U.S. at 931â35 (considering whether8 U.S.C. § 244
(c)(2) could be severed from the rest of § 244)âespecially cases in which entire legislative acts are determined to be inseverable, see, e.g., Murphy, 138 S. Ct. at 1481â84 (considering whether part of28 U.S.C. § 3702
(1) could be
severed from §§ 3701â04).
Moreover, the Supreme Court has remanded in the severability context
upon a determination that additional analysis was necessary. In Ayotte v.
Planned Parenthood of Northern New England, 546 U.S. 320 (2006), the
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Supreme Court took up the issue of what relief was appropriate upon a
determination that a New Hampshire provision requiring parental notification
prior to abortion was unconstitutional in some applications. Id.at 328â32. The Supreme Court determined that, although the district courtâs choice to use âthe most blunt remedyââtotal inseverabilityâwas âunderstandableâ under its own precedent, more analysis was needed to determine âwhether New Hampshireâs legislature intended the statute to be susceptible toâ severability.Id.
at 330â31. As a result, the Supreme Court remanded for âlower courts to determine legislative intent in the first instance.âId.
We do the same here, directing the district court to employ a finer-
toothed comb on remand and conduct a more searching inquiry into which
provisions of the ACA Congress intended to be inseverable from the individual
mandate. We do not hold forth on just how fine-toothed that comb should beâ
the district court may use its best judgment to determine how best to break the
ACA down into constituent groupings, segments, or provisions to be analyzed.
Nor do we make any comment on whether the district court should take into
account the governmentâs new posture on appeal or what the ultimate outcome
of the severability analysis should be. 45 Although âwe cannot affirm the order
as it is presently supported,â we do not suggest what result will be merited
â[a]fter a more thorough inquiry.â Unger v. Amedisys Inc., 401 F.3d 316, 325
(5th Cir. 2005). We only note that the inquiry must be made, and that the
district courtâwhich has many tools at its disposalâis best positioned to
determine in the first instance whether the ACA âremains âfully operative as a
lawââ and whether it is evident from âthe statuteâs text or historical contextâ
45 The district court should also consider this courtâs recent severability analysis in
Collins v. Mnuchin, 938 F.3d 553 (5th Cir. 2019) (en banc). That opinion was issued after
both the district courtâs decision and the oral argument here.
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that Congress would have preferred no ACA at all to an ACA without the
individual mandate. Free Enter. Fund, 561 U.S. at 509(quoting New York,505 U.S. at 186
).
It may still be that none of the ACA is severable from the individual
mandate, even after this inquiry is concluded. It may be that all of the ACA is
severable from the individual mandate. It may also be that some of the ACA
is severable from the individual mandate, and some is not. 46 But it is no small
thing for unelected, life-tenured judges to declare duly enacted legislation
passed by the elected representatives of the American people unconstitutional.
The rule of law demands a careful, precise explanation of whether the
provisions of the ACA are affected by the unconstitutionality of the individual
mandate as it exists today.
B.
Remand is appropriate in this case for a second reason: so that the
district court may consider the federal defendantsâ new arguments as to the
proper scope of relief in this case. The relief the plaintiffs sought in the district
court was a universal nationwide injunction: an order that totally âenjoin[ed]
Defendants from enforcing the Affordable Care Act and its associated
regulations.â Before the district court, the federal defendants urged entry of a
declaratory judgment stating that the guaranteed-issue and community-rating
provisionsâat that time, the only provisions the federal defendants argued
were inseverableâwere âinvalid[ated]â by the zeroing out of the shared
46For an explanation of some, but certainly not all, of the potential conclusions with
regard to severability, see Josh Blackman, Undone: The New Constitutional Challenge to
Obamacare, 23 Tex. Rev. L. & Pol. 1, 28â51 (2018) (stating that the district court could halt
the enforcement of just the individual mandate, halt the enforcement of the entire Act, or
halt the enforcement of the community-rating and guaranteed-issue provisions along with
the individual mandate, for example). The district court could also issue a declaratory
judgment without enjoining any government official.
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responsibility payment. This would be âsufficient relief against the
Government,â the federal defendants argued, because a declaratory judgment
would âoperate[] in a similar manner as an injunctionâ against the federal
government, which would be âpresumed to comply with the lawâ once the court
provides âa definitive interpretation of the statute.â
Ultimately, of course, the district court opinion determined that no ACA
provision was severable and resulted in a judgment declaring the entire ACA
âinvalid.â On appeal, the federal defendants first changed their litigation
position to agree that no ACA provision was severable. Now they have changed
their litigation position to argue that relief in this case should be tailored to
enjoin enforcement of the ACA in only the plaintiff statesâand not just that,
but that the declaratory judgment should only reach ACA provisions that
injure the plaintiffs. They argue that the Supreme Court has made clear that
â[a] plaintiffâs remedy must be tailored to redress the plaintiffâs particular
injury.â Gill v. Whitford, 138 S. Ct. 1916, 1934(2018); see also Printz v. United States,521 U.S. 898, 935
(1997) (reasoning that the Court has âno business
answeringâ questions dealing with enforcement of provisions that âburden . . .
no plaintiffâ); see also Murphy, 138 S. Ct. at 1485â86 (Thomas, J., concurring).
This argument came as a surprise to the plaintiffs, who explained at oral
argument that they saw the governmentâs new position as a possible âbait and
switch.â The federal defendants admitted at oral argument that they had
raised the scope-of-relief issue on appeal âfor the first time,â but argued that it
was necessary to address, as it went to the district courtâs Article III
jurisdiction. The federal defendants therefore suggested that it âwould be
appropriate to remand to consider the scope of the judgment.â
The court agrees that remand is appropriate for the district court to
consider these new arguments in the first instance. The district court did not
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have the benefit of considering them when it crafted the relief now on appeal. 47
On remand, the district courtâwhich is in a far better position than this court
to determine which ACA provisions actually injure the plaintiffsâmay
consider the federal defendantsâ position on the proper relief to be afforded. As
part of this inquiry, the district court may consider whether the federal
defendantsâ arguments were timely raised, and whether limiting the remedy
in this case is supported by Supreme Court precedent. Once again, we place
no thumb on the scale as to the ultimate outcome; the district court is free to
weigh the federal defendantsâ changed arguments as it sees fit.
VII.
For these reasons, the judgment of the district court is AFFIRMED in
part and VACATED in part. We REMAND for proceedings consistent with
this opinion.
47 The consideration of limited relief may affect the intervenors as well. The district
court is better suited to resolving these issues in the first instance.
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KING, Circuit Judge, dissenting:
Any American can choose not to purchase health insurance without legal
consequence. Before January 1, 2018, individuals had to choose between
complying with the Affordable Care Actâs coverage requirement or making a
payment to the IRS. For better or worse, Congress has now set that payment
at $0. Without any enforcement mechanism to speak of, questions about the
legality of the individual âmandateâ are purely academic, and people can
purchase insuranceâor notâas they please. No more need be said; it has long
been settled that the federal courts deal in cases and controversies, not
academic curiosities.
The majority sees things differently and today holds that an
unenforceable law is also unconstitutional. If the majority had stopped there,
I would be confident its extrajurisdictional musings would ultimately prove
harmless. What does it matter if the coverage requirement is unenforceable by
congressional design or constitutional demand? Either way, that law does not
do anything or bind anyone.
But again, the majority disagrees. It feels bound to ask whether
Congress would want the rest of the Affordable Care Act to remain in force now
that the coverage requirement is unenforceable. Answering that question
should be easy, since Congress removed the coverage requirementâs only
enforcement mechanism but left the rest of the Affordable Care Act in place. It
is difficult to imagine a plainer indication that Congress considered the
coverage requirement entirely dispensable and, hence, severable. And yet, the
majority is unwilling to resolve the severability issue. Instead, it merely
identifies serious flaws in the district courtâs analysis and remands for a do-
over, which will unnecessarily prolong this litigation and the concomitant
uncertainty over the future of the healthcare sector.
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I would vacate the district courtâs order because none of the plaintiffs
have standing to challenge the coverage requirement. And although I would
not reach the merits or remedial issues, if I did, I would conclude that the
coverage requirement is constitutional, albeit unenforceable, and entirely
severable from the remainder of the Affordable Care Act.
I.
To my mind, this case begins and ought to end with the Supreme Courtâs
decision in National Federation of Independent Business v. Sebelius, 567 U.S.
519(2012). In that case, the Court held that the coverage requirement would be unconstitutional if it were a legal command, because neither the Commerce Clause nor the Necessary and Proper Clause allows Congress to compel individuals to engage in commerce by purchasing health insurance. See NFIB,567 U.S. at 552, 560
(opinion of Roberts, C.J.);id. at 652-53
(joint dissent). The
Court concluded, however, that the coverage requirement was constitutional,
becauseânotwithstanding the most natural reading of the provisionâs textâ
the coverage requirement was not actually a legal command to purchase
insurance.
Instead, according to the NFIB Court, the coverage requirement âleaves
an individual with a lawful choice to do or not do a certain act,â i.e., purchase
health insurance. Id. at 574(Roberts, C.J., majority opinion). All that is required, under this reading, is âa payment to the IRSâ if one chooses not to purchase health insurance.Id. at 567
. Beyond this shared-responsibility payment, there are no further ânegative legal consequences to not buying health insurance,â and individuals who forgo insurance do not violate the law as long as they make the required payment.Id. at 567
. âThose subject to the
[coverage requirement] may lawfully forgo health insurance and pay higher
taxes, or buy health insurance and pay lower taxes. The only thing they may
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not lawfully do is not buy health insurance and not pay the resulting tax.â Id.at 574 n.11. Forcing individuals to make that choice was constitutional, per NFIB, because Congress could âimpose a tax on not obtaining health insuranceâ by exercising its enumerated power to lay and collect taxes, duties, imposts, and excises.Id. at 570
.
Contrary to the suggestion of the majority, which I address specifically
infra at Part III, Congress did not alter the coverage requirementâs operation
when it amended the ACA in 2017. See Tax Cuts and Jobs Act of 2017, Pub. L.
No. 115-97, § 11081,131 Stat. 2054
, 2092 (âTCJAâ). All the TCJA did, with
respect to healthcare, was change the amount of the shared-responsibility
payment to zero dollars. Thus, despite textual appearances, the post-TCJA
coverage requirement does nothing more than require individuals to pay zero
dollars to the IRS if they do not purchase health insurance, which is to say it
does nothing at all.
This insight, that the coverage requirement now does nothing, should be
the end of this case. Nobody has standing to challenge a law that does nothing.
When Congress does nothing, no matter the form that nothing takes, it does
not exceed its enumerated powers. And since courts do not change anything
when they invalidate a law that does nothing, every other law retains, or at
least should retain, its full force and effect.
II.
But as the majority goes well past NFIB, I respond. To begin, I
emphasize the importance of the rule that a plaintiff must have standing to
invoke a federal courtâs power. This is not an anachronism lingering from some
era in which empty formalities abounded in legal practice. Quite the opposite:
â[T]he requirement that a claimant have âstanding is an essential and
unchanging part of the case-or-controversy requirement of Article III.ââ Davis
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v. FEC, 554 U.S. 724, 733(2008) (quoting Lujan v. Defs. of Wildlife,504 U.S. 555, 560
(1992)); see also Susan B. Anthony List v. Driehaus,573 U.S. 149
, 157 (2014) (âArticle III of the Constitution limits the jurisdiction of federal courts to âCasesâ and âControversies.ââ (quoting U.S. Const. art. III, § 2)). And â[n]o principle is more fundamental to the judiciaryâs proper role in our system of government than the constitutional limitation of federal-court jurisdiction to actual cases or controversies.â Clapper v. Amnesty Intâl USA,568 U.S. 398, 408
(2013) (alteration in original) (quoting DaimlerChrysler Corp. v. Cuno,547 U.S. 332, 341
(2006)); accord Raines v. Byrd,521 U.S. 811, 818
(1997).
The Constitutionâs case-or-controversy requirement reflects the
Framersâ view of the judiciaryâs place among the coequal branches of the
federal government: to fulfill âthe traditional role of AngloâAmerican courts,
which is to redress or prevent actual or imminently threatened injury to
persons caused by private or official violation of law.â Summers v. Earth Island
Inst., 555 U.S. 488, 492(2009). Strict adherence to the case-or-controversy requirementâand to standing in particularâthus âserves to prevent the judicial process from being used to usurp the powers of the political branches.â Clapper,568 U.S. at 408
; see also Town of Chester v. Laroe Estates, Inc.,137 S. Ct. 1645, 1650
(2017) (âThis fundamental limitation preserves the âtripartite structureâ of our Federal Government, prevents the Federal Judiciary from âintrud[ing] upon the powers given to the other branches,â and âconfines the federal courts to a properly judicial role.ââ (alteration in original) (quoting Spokeo, Inc. v. Robins,136 S. Ct. 1540, 1547
(2016))). Thus, âfederal courts may exercise power only âin the last resort, and as a necessity,â and only when adjudication is âconsistent with a system of separated powers and [the dispute is one] traditionally thought to be capable of resolution through the judicial process.ââ Allen v. Wright,468 U.S. 737, 752
(1984) (alteration in original)
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(citation omitted) (first quoting Chi. & Grand Trunk Ry. Co. v. Wellman, 143
U.S. 339, 345(1892); then quoting Flast v. Cohen,392 U.S. 83, 97
(1968)), abrogated on other grounds, Lexmark Intâl, Inc. v. Static Control Components, Inc.,572 U.S. 118
(2014). And needless to say, a federal court must conduct an âespecially rigorousâ standing inquiry âwhen reaching the merits of the dispute would force [it] to decide whether an action taken by one of the other two branches of the Federal Government was unconstitutional.â Amnesty Intâl,568 U.S. at 408
(quoting Raines,521 U.S. at 819-20
). âThe importance of this precondition should not be underestimated as a means of âdefin[ing] the role assigned to the judiciary in a tripartite allocation of power.ââ Valley Forge Christian Coll. v. Ams. United for Separation of Church & State,454 U.S. 464, 474
(1982) (alteration in original) (quoting Flast,392 U.S. at 95
).
The standing doctrine polices this constitutional limit on the judiciaryâs
power âby âidentify[ing] those disputes which are appropriately resolved
through the judicial process.ââ Susan B. Anthony List, 573 U.S. at 157
(alteration in original) (quoting Lujan, 504 U.S. at 560). The party seeking redress in the courts has the burden to establish standing. See Spokeo,136 S. Ct. at 1547
. To do so, the plaintiff must show it has â(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.âId.
âTo establish injury in fact, a plaintiff must show that he or she suffered âan invasion of a legally protected interestâ that is âconcrete and particularizedâ and âactual or imminent, not conjectural or hypothetical.ââId.
at 1548 (quoting Lujan,504 U.S. 560
). This means the injury must be âpersonalâ to the plaintiff
and, although the injury does not need to be âtangible,â âit must actually exist.â
Id. at 1548-49.
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The plaintiffsâ evidentiary burden depends on the stage of the litigation.
At each stage, the plaintiffs must demonstrate standing âwith the manner and
degree of evidenceâ otherwise required to establish the plaintiffsâ merits case.
Lujan, 504 U.S. at 561. Thus, because this case comes to us on the plaintiffsâ own motion for summary judgment, the plaintiffs must conclusively prove all three elements of standing with evidence that âwould âentitle [them] to a directed verdict if the evidence went uncontroverted at trial.ââ Intâl Shortstop, Inc. v. Rallyâs, Inc.,939 F.2d 1257, 1264-65
(5th Cir. 1991) (quoting Golden Rule Ins. Co. v. Lease,755 F. Supp. 948, 951
(D. Colo. 1991)). If a plaintiff meets its burden, the defendant can nevertheless defeat summary judgment âby merely demonstrating the existence of a genuine dispute of material fact.â Id. at 1265. In other words, the plaintiffs here must show that, considering the summary-judgment record, all reasonable factfinders would agree that the plaintiffs demonstrate an injury traceable to the coverage requirement and redressable by a favorable decision. See Alonso v. Westcoast Corp.,920 F.3d 878, 885-86
(5th Cir. 2019).
These general principles alone should make the majorityâs error
apparent. More specific authority illuminates it. I explain first why the
majority errs in concluding the individual plaintiffs have standing, then I
explain why the majority errs in concluding the state plaintiffs have standing.
A.
The majority concludes that the individual plaintiffs have standing to
challenge the coverage requirement in the Patient Protection and Affordable
Care Act (the âACAâ), 26 U.S.C. § 5000A(a), 1 because it forces them to purchase
1The coverage requirement is sometimes colloquially known as the âindividual
mandate.â For reasons that will become clear, this nickname can be misleading.
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health insurance that they would not purchase otherwise. The majority
overlooks what will happen if the individual plaintiffs fail to purchase
insurance: absolutely nothing. The individual plaintiffs will be no worse off by
any conceivable measure if they choose not to purchase health insurance. Thus,
whatever injury the individual plaintiffs have incurred by purchasing health
insurance is entirely self-inflicted.
A long line of cases establishes that self-inflicted injuries cannot
establish standing because a self-inflicted injury, by definition, is not traceable
to the challenged action. See, e.g., Amnesty Intâl, 568 U.S. at 416(â[R]espondents cannot manufacture standing merely by inflicting harm on themselves . . . .â); Pennsylvania v. New Jersey,426 U.S. 660, 664
(1976) (âThe injuries to the plaintiffsâ fiscs were self-inflicted, resulting from decisions by their respective state legislatures. . . . No State can be heard to complain about damage inflicted by its own hand.â); Zimmerman v. City of Austin,881 F.3d 378, 389
(5th Cir.) (â[S]tanding cannot be conferred by a self-inflicted injury.â), cert. denied,139 S. Ct. 639
(2018). When a plaintiff chooses to incur an expense, the plaintiff must show that the challenged law forced the plaintiff to incur that expense to avoid some other concrete injury. See Amnesty Intâl,568 U.S. at 415-16
(concluding costs plaintiffs incurred trying to avoid surveillance were self-inflicted because plaintiffsâ fear of surveillance was speculative); Contender Farms, L.L.P. v. USDA,779 F.3d 258, 266
(5th Cir. 2015) (finding
plaintiff had standing to challenge regulations that required plaintiff to either
âtake additional measuresâ to comply with regulation or âface harsher,
mandatory penaltiesâ and prosecution). In other words, a plaintiff can show
standing if the challenged act placed him between the proverbial rock and hard
place. But without showing such a dilemma, a plaintiff âcannot manufacture
standingâ by expending costs to avoid an otherwise noncognizable injury,
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which is exactly what the individual plaintiffs did here. Amnesty Intâl, 568 U.S.
at 416.
The majority brushes off this authority by insistingâwithout
explanationâthat labeling the plaintiffsâ injuries self-inflicted âassumesâ that
the coverage requirement does not act as a legal command to purchase
insurance, which the majority refuses to question at the standing stage. The
majority misunderstands the argument. Even accepting that the coverage
requirement acts as a legal command, the individual plaintiffs are still free to
disregard that command without legal consequence. Therefore, any injury they
incur by freely choosing to obtain insurance is still self-inflicted.
Nor does it matter that to avoid inflicting injury upon themselves, the
plaintiffs would have to violate an unenforceable statute. Plaintiffs may
challenge a statute that requires them âto take significant and costly
compliance measures or risk criminal prosecution.â Virginia v. Am. Booksellers
Assân, 484 U.S. 383, 392(1988) (emphasis added); see also, e.g., Intâl Tape Mfrs. Assân v. Gerstein,494 F.2d 25, 28
(5th Cir. 1974) (explaining that standing to challenge a statute requires a ârealistic possibility that the challenged statute will be enforced to [the plaintiffâs] detrimentâ). But â[w]hen plaintiffs âdo not claim that they have ever been threatened with prosecution, that a prosecution is likely, or even that a prosecution is remotely possible,â they do not allege a dispute susceptible to resolution by a federal court.â Babbitt v. United Farm Workers Natâl Union,442 U.S. 289, 298-99
(1979) (quoting Younger v. Harris,401 U.S. 37, 42
(1971)); see also Poe v. Ullman,367 U.S. 497, 507
(1961)
(Frankfurter, J., plurality) (âIt is clear that the mere existence of a state penal
statute would constitute insufficient grounds to support a federal courtâs
adjudication of its constitutionality in proceedings brought against the Stateâs
prosecuting officials if real threat of enforcement is wanting.â); cf. Zimmerman,
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881 F.3d at 389-90(â[T]o confer standing, allegations of chilled speech or âself- censorship must arise from a fear of prosecution that is not âimaginary or wholly speculative.âââ (quoting Ctr. for Individual Freedom v. Carmouche,449 F.3d 655
, 660 (5th Cir. 2006))).
Ullman illustrates this principle well. 2 The plaintiffs there sought to
challenge Connecticutâs criminal prohibition on contraception. Ullman, 367
U.S. at 498(Frankfurter, J., plurality). But in the more than 75 years that the statute had been on the books, only one violation had been prosecutedâand even that was a collusive prosecution brought to challenge the law.Id.
at 501- 02. The Court dismissed the challenge for lack of standing, holding that â[t]he fact that Connecticut has not chosen to press the enforcement of this statute deprives these controversies of the immediacy which is an indispensable condition of constitutional adjudication.âId. at 508
. The Court explained that it could not âbe umpire to debates concerning harmless, empty shadows.âId.
3
Ullman makes this an easy case. Connecticutâs contraception law at least
allowed the possibility of enforcement, even if it was speculative and unlikely
2 The majority dismisses Ullman as an adversity case. Nonetheless, as this court and
the Supreme Court have repeatedly recognized, Ullman grounds its analysis in terms of
standing and ripeness. See, e.g., Blum v. Yaretsky, 457 U.S. 991, 1000(1982); Roark & Hardee LP v. City of Austin,522 F.3d 533, 544
(5th Cir. 2008); Thomes v. Equitable Sav. & Loan Assân,837 F.2d 1317, 1318
(5th Cir. 1988). In any event, Ullman is just one example;
other cases demonstrate this concept just as well. See, e.g., Driehaus, 573 U.S. at 158-59
(âOne recurring issue in our cases is determining when the threatened enforcement of a law
creates an Article III injury. . . . [W]e have permitted pre-enforcement review under
circumstances that render the threatened enforcement sufficiently imminent.â).
3 The lead opinion in Ullman garnered only a four-judge plurality. But Justice
Brennan, who concurred in the judgment, wrote that he âagree[d] that this appeal must be
dismissed for failure to present a real and substantial controversyâ and that âuntil the State
makes a definite and concrete threat to enforce these laws . . . this Court may not be compelled
to exercise its most delicate power of constitutional adjudication.â Ullman, 367 U.S. at 509
(Brennan, J., concurring in judgment). Accordingly, five Justices agreed that plaintiffs lacked
standing absent any real threat of enforcement.
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to ever occur. Here, as I cannot say often enough, the coverage requirement
has no enforcement mechanism. It is impossible for the individual plaintiffs to
ever be prosecuted (or face any other consequences) for violating it. In
âfind[ing] it necessary to pass onâ the coverage requirement, the majority
âclose[s] [its] eyes to reality.â Id. 4
The majority does not engage with the lessons of Ullman and its progeny.
The closest it comes is in its citation to Texas v. EEOC, 933 F.3d 433(5th Cir. 2019). That case does not abrogate Ullman, Younger, Babbitt, American Booksellers, or Tape Manufacturersânor could it. In Texas v. EEOC, Texas challenged EEOC administrative guidance stating that employers who screen out job applicants with criminal records could be held liable for disparate- impact discrimination.Id. at 437-38
. The EEOC argued that Texas did not have standing to challenge the guidance because the guidance reflected only the EEOCâs interpretation of Title VII, and the Attorney General, not the EEOC, has the sole power to enforce Title VII against states. See Brief for Appellants Cross-Appellees at 18-19, Texas v. EEOC,933 F.3d 433
(5th Cir. 2019) (No. 18-10638). In rejecting that argument, this court explained that Title VIIâs enforcement scheme is not so simple. Although the EEOC may not itself bring enforcement actions against states, it may investigate states and refer cases to the Attorney General for enforcement actions. EEOC,933 F.3d at 447
. Therefore, âthe possibility of investigation by EEOC and referral to the
Attorney General for enforcement proceedings if it fails to align its laws and
4For the same reason, it does not matter that the district court âexpressly foundâ that
the individual plaintiffs âare obligated toâ purchase health insurance. Even ignoring the
conclusory nature of this supposed finding of fact, it is not the abstract obligation that
matters; it is the concrete consequences, if any, that follow from a violation of that obligation.
And the district court did not find (and there would be no basis for it to find) that the
individual plaintiffs would face any consequences.
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policies with the Guidanceâ put pressure on Texas to conform to the EEOCâs
guidance. Id.
In other words, even absent a direct threat of a formal enforcement
action from the EEOC, Texas faced other consequences for disobeying the
guidanceâincluding the possibility that the Attorney General would enforce
Title VII against it. In fact, we noted that â[o]ne Texas agency ha[d] already
been required to respond to a charge of discrimination filed with EEOC based
on its no-felon hiring policy.â Id. at 447 n.26. The majority here cites no similar
concrete consequences that will (or even plausibly could) follow if the plaintiffs
violate the coverage requirement.
My conclusion that individual plaintiffs lack standing is only bolstered
by a unanimous opinion issued mere weeks ago by a panel that included the
author of todayâs majority opinion. In that case, the court held that Austin,
Texas could not use a suit against the Texas Attorney General to challenge a
state statute, which the Attorney General was authorized to enforce, that
barred the city from enforcing one of its ordinances. City of Austin v. Paxton,
No. 18-50646, ___ F.3d ____, 2019 WL 6520769, at *6 (5th Cir Dec. 4, 2019). Although the Paxton court based its holding on sovereign immunity, it looked to âour standing jurisprudence,â and ânote[d] that itâs unlikely the City had standing,â because it did not show that the Attorney General would likely âinflict âfuture harmââ by enforcing the statute against Austin.Id. at *6-7
. If
standing was absent in Paxton because enforcement was insufficiently
probable, I have no idea why standing should be present in this case, where
enforcement of the challenged portion of the ACA is altogether impossible.
In sum, even if the unenforceable coverage requirement must be read as
a command to purchase health insurance, it does not harm the individual
plaintiffs because they can disregard it without consequence. Binding
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precedent squarely establishes that plaintiffs may not sue in such
circumstancesâand with good reason. The great power of the judiciary should
not be invoked to disrupt the work of the democratic branches when the
plaintiffs can easily avoid injury on their own. 5
B.
The majorityâs conclusion that the state plaintiffs have standing to
challenge the coverage requirement fares no better. I would deny the state
plaintiffs standing because there is no evidence in the record, much less
conclusive evidence, to support the state plaintiffsâ alleged injuries.
1.
The majority first concludes that the state plaintiffs have standing
because it believes that the coverage requirement increases the number of
state employees who enroll in the statesâ employee healthcare programs. And
with more enrollees, the logic goes, the states as employers must file more
forms with the IRS at a higher cost to the states.
The majorityâs biggest mistake is that it ignores the posture of this case:
the defendants appeal from the district courtâs order granting summary
judgment to the plaintiffs. Accordingly, the state plaintiffs face a tremendous
evidentiary burdenâthey must produce evidence so conclusive of the coverage
5 The majorityâs suggestion that NFIB, 567 U.S. at 552(opinion of Roberts, C.J.), supports the individual plaintiffsâ standing does not warrant above-the-line attention. In short, the NFIB Court did not address standing. Seeid. at 530-708
. At the time NFIB was decided, the coverage requirement was set to take effect with the shared-responsibility payment as an enforcement mechanism. And there is no indication that any of the NFIB plaintiffs were exempt from the shared-responsibility payment. Thus, even if the majority seeks to infer from NFIB some jurisdictional ruling in violation of the Supreme Courtâs ârepeated[]â command âthat the existence of unaddressed jurisdictional defects has no precedential effect,â Lewis v. Casey,518 U.S. 343
, 352 n.2 (1996), NFIB offers no inferences
of value for the majority to draw. Further, counselâs answer to a Justiceâs hypothetical
question does not bind this court.
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requirementâs effect on their healthcare-administration costs that the evidence
âwould âentitle [them] to a directed verdict if the evidence went uncontroverted
at trial.ââ Intâl Shortstop, 939 F.2d at 1264-65 (quoting Golden Rule Ins.,755 F. Supp. at 951
). 6 And the state plaintiffs provided no evidence at all, never mind
conclusive evidence, to support the dubious notion that even a single state
employee enrolled in one of state plaintiffsâ health insurance programs solely
because of the unenforceable coverage requirement. 7
The majority relies on affidavits from several of the state plaintiffsâ
healthcare administrators. But these affidavits only establish that the state
plaintiffs incur costs complying with the IRS reporting requirements found in
26 U.S.C. §§ 6055(a) and 6056(a). And as the majority recognizes, these requirements are distinct from the coverage requirement. Accordingly, to trace the state plaintiffsâ reporting burden to the coverage requirement, the majority must additionally show that at least some state employees have enrolled in employer-sponsored health insurance solely because of the unenforceable coverage requirement. The majority comes up empty at this step, pointing only to a conclusory statement from a South Dakota human-resources director claiming that the coverage requirement, not §§ 6055(a) and 6056(a), caused South Dakota to incur its reporting expenses. This will not do. See, e.g., Lujan v. Natâl Wildlife Fedân,497 U.S. 871, 888
(1990) (âThe object of [summary judgment] is
6 The district court was free toâbut did notâmake findings of jurisdictional fact,
which we would review for clear error. See Krim v. pcOrder.com, Inc., 402 F.3d 489, 494 (5th
Cir. 2005). Indeed, the district court did not address the state plaintiffsâ standing at all. Thus,
for the state plaintiffs to establish standing on their own motion for summary judgment, they
must show the summary-judgment evidence is conclusive.
7 The majority misunderstands my position. See Maj. Op. 32 n.31. The state plaintiffs
do not need to identify a âspecificâ person that is likely to enroll, but they still must establish
that at least one state employee will enroll as a result of the post-TCJA coverage requirement.
Otherwise, the state plaintiffsâ injuries are not traceable to the provision they challenge and
would not be redressed by its elimination.
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not to replace conclusory allegations of the complaint or answer with
conclusory allegations of an affidavit.â); Shaboon v. Duncan, 252 F.3d 722, 737(5th Cir. 2001) (â[U]nsupported affidavits setting forth âultimate or conclusory facts and conclusions of lawâ are insufficient to either support or defeat a motion for summary judgment.â (alteration in original) (quoting Orthopedic & Sports Injury Clinic v. Wang Labs., Inc.,922 F.2d 220, 225
(5th Cir. 1991))). 8
Citing Department of Commerce v. New York, 139 S. Ct. 2551(2019), the majority argues the state plaintiffs can establish standing by âshowing that third parties will likely react in predictable waysâ to the coverage requirement.Id. at 2566
. But the majority fails to explain why state employees who do not
want health insurance would nevertheless predictably enroll in health
insurance solely because an unenforceable statute, here the coverage
requirement, directs them to do so. What the majority fails to mention in its
discussion of Department of Commerce is that the âpredictableâ behavior at
issue there was individuals âchoosing to violate their legal duty to respond to
8 The majority suggests we must accept this statement as true because the defendants
did not âchallengeâ this evidence. The majority cites no authority for this proposition, and I
am at a loss to understand where the majority came up with its challenge rule. I know of
nothing in the Federal Rules of Civil Procedure or the caselaw requiring litigants to
âchallengeâ conclusory statements in declarations. On the contrary, courts in this circuit
regularly confront and disregard conclusory statements in the summary-judgment record.
See, e.g., Tex. Capital Bank N.A. v. Dall. Roadster, Ltd. (In re Dall. Roadster, Ltd.), 846 F.3d
112, 124(5th Cir. 2017); Brown v. Mid-Am. Apartments,348 F. Supp. 3d 594, 602-03
(W.D.
Tex. 2018). The district courts and litigants of this circuit will be surprised to learn about the
majorityâs new summary-judgment rule.
The majority also claims that the statement is not conclusory. But nothing in the
affidavit addresses the post-TCJA coverage requirement. The affiant states that his
knowledge is ârelated to the enactment of the ACA,â which occurred in 2010. He focuses on
âfinancial costs associated with ACA regulationsâ and concludes that âSouth Dakota would
be significantly burdened if the ACA remained law.â The affidavit does not explain how the
post-TCJA coverage requirement harms South Dakota. Such generalities, untethered to the
actual law at issue in this appeal, cannot establish standingâespecially not at the summary-
judgment stage.
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the census.â Id. at 2565 (emphasis added). Thus, Department of Commerce
shows that people will predictably violate the law when sufficiently
incentivized to do so. This directly contradicts the assumption undergirding
much of the majorityâs analysisâthat people tend to follow the law regardless
of the incentives. And state employees who do not want to enroll in insurance
have every incentive to violate the coverage requirement. 9
2.
The majority similarly argues that the coverage requirement increases
the number of individuals enrolled in the state plaintiffsâ Medicaid programs.
This argument fails for the same reason: the state plaintiffs produce no
evidenceâlet alone conclusive evidenceâshowing that anyone has enrolled in
their Medicaid programs solely because of the unenforceable coverage
requirement. To this end, the best the majority can scrape up is a statement
from Teresa MacCartney, a Georgia budget official, stating that â[a]fter the
implementation of the ACA, [Georgia] experienced increased enrollment of
individuals already eligible for Medicaid benefits under pre-ACA eligibility
standards.â The majorityâs takeaway is that the coverage requirement caused
this increase. Maybe so. But MacCartneyâs statement refers specifically to the
coverage requirement at the time of the ACAâs enactment, when the coverage
9A Congressional Budget Office report released shortly before Congress repealed the
shared-responsibility payment further supports this notion. It concluded:
If the [shared-responsibility payment] was eliminated but the [coverage
requirement] itself was not repealed . . . . only a small number of people who
enroll in insurance because of the [coverage requirement] under current law
would continue to do so solely because of a willingness to comply with the law.
Cong. Budget Office, Repealing the Individual Health Insurance Mandate: An Updated
Estimate at 1 (2017) (hereinafter âCBO Reportâ). On this record, we have been given no
reason to believe that any of the state plaintiffsâ employees are among this âsmall number of
people.â Id.
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requirement interacted with the shared-responsibility payment. This
statement provides no insight into how the coverage requirement affects
Medicaid rolls after the shared-responsibility paymentâs repeal. In fact,
MacCartney signed her declaration on May 14, 2018, more than seven months
before the shared-responsibility paymentâs repeal went into effect. See Budget
Fiscal Year, 2018, Pub. L. No. 115-97, § 11081(b),131 Stat. 2054
, 2092 (2017).
Accordingly, the majorityâs analysis again rests on the necessary
assumption that people will obey the coverage requirement regardless of the
incentives, in direct contradiction to Department of Commerce. And because
Medicaid is available to eligible recipients at little to no cost, it is especially
unlikely that the unenforceable coverage requirement would play any
significant part in anyoneâs decision to enroll. It belies common sense to
conclude that anyone who would otherwise pass on the significant benefits of
Medicaid would be motivated to enroll solely because of an unenforceable law.
In sum, the majority cites no actual evidence tying any costs the state
plaintiffs have incurred to the unenforceable coverage requirement. The state
plaintiffs accordingly cannot show an injury traceable to the coverage
requirement, so they do not have standing to challenge the coverage
requirement.
III.
I would not reach the merits of this case because, as explained in Part II,
I would vacate the district courtâs order for lack of standing. But as the majority
errs on the merits too, I voice my disagreement.
âNeither the Act nor any other law attaches negative legal consequences
to not buying health insurance, beyond requiring a payment to the IRS.â NFIB,
567 U.S. at 568 (Roberts, C.J., majority opinion). Now that Congress has zeroed
out that payment, the coverage requirement affords individuals the same
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choice individuals have had since the dawn of private health insurance, either
purchase insurance or else pay zero dollars. Thus, to my mind, the majorityâs
focus on whether Congressâs taxing power or the Necessary and Proper Clause
authorizes Congress to pass a $0 tax is a red herring; the real question is
whether Congress exceeds its enumerated powers when it passes a law that
does nothing. 10 And of course it does not. 11 Congress exercises its legislative
power when it âalter[s] the legal rights, duties and relations of persons.â INS
v. Chadha, 462 U.S. 919, 952(1983); cf.id.
(âNot every action taken by either
House is subject to the bicameralism and presentment requirements of Art. I.
Whether actions taken by either House are, in law and fact, an exercise of
legislative power depends not on their form but upon âwhether they contain
matter which is properly to be regarded as legislative in its character and
effect.ââ (citation omitted) (quoting S. Rep. No. 1335, 54th Cong., 2d Sess., 8
(1897))).
Lest the majority mistake my position and end up shadowboxing with
âbizarre metaphysical conclusions,â âquantum musings,â or ersatz
inconsistencies, Maj. Op. at 44 & n.40, I need to make something explicit at
the outset. The TCJA did not change the text or the meaning of the coverage
requirement, but it did change the real-world effects it produces. Before the
TCJA, the two options afforded by the coverage requirementâpurchasing
insurance or making a shared-responsibility paymentâwere both
10 âIn litigation generally, and in constitutional litigation most prominently, courts in
the United States characteristically pause to ask: Is this conflict really necessary?â Arizonans
for Official English v. Arizona, 520 U.S. 43, 75 (1997). The majority would do well if it paused
to ask whether it is necessary for a federal court to rule on whether the Constitution
authorizes a $0 tax or otherwise prohibits Congress from passing a law that does nothing.
The absurdity of these inquiries highlights the severity of the majorityâs error in finding the
plaintiffs have standing to challenge this dead letter.
11 The majority does not argue otherwise.
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burdensome, but Congress could force individuals to choose one of those
options by exercising its Taxing Power. Today, the shared-responsibility
paymentâs meaning has not changedâit still gives individuals the choice to
purchase insurance or make a shared-responsibility paymentâbut the amount
of that payment is zero dollars, which means that the coverage requirement
now does nothing. The majorityâs contrary conclusion rests on the premise that
the coverage requirement compels individuals to purchase health insurance.
With this understanding, the majority says that the coverage requirement does
exactly what the Supreme Court said it cannot do: compel participation in
commerce. See NFIB, 567 U.S. at 552(opinion of Roberts, C.J.);id. at 652-53
(joint dissent). This conclusion follows fine from the premise, but the premise
is wrong. Despite its seemingly mandatory language, the coverage requirement
does not compel anyone to purchase health insurance.
In NFIB, although five Justices agreed that â[t]he most straightforward
reading of the [coverage requirement] is that it commands individuals to
purchase insurance,â id. at 562(opinion of Roberts, C.J.); accordid. at 663
(joint dissent), applying the canon of constitutional avoidance, the Court rejected this interpretation. Instead, the Court interpreted the coverage requirement to offer applicable individuals a âlawful choiceâ between purchasing health insurance and paying the shared-responsibility payment, which the Court interpreted as a valid exercise of Congressâs taxing power.Id. at 574
(Roberts, C.J., majority opinion). This is a permissible construction, the Court concluded, because â[w]hile the [coverage requirement] clearly aims to induce the purchase of health insurance, it need not be read to declare that failing to do so is unlawful.âId. at 567-68
. The Court observed that â[n]either
the [ACA] nor any other law attaches negative legal consequences to not
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buying health insurance, beyond requiring a payment to the IRS.â Id. at 568.
And the Court further explained:
Indeed, it is estimated that four million people each year will
choose to pay the IRS rather than buy insurance. We would expect
Congress to be troubled by that prospect if such conduct were
unlawful. That Congress apparently regards such extensive failure
to comply with the [coverage requirement] as tolerable suggests
that Congress did not think it was creating four million outlaws.
Id. (citation omitted).
The NFIB Courtâs application of constitutional avoidance as an
interpretive tool does not mean that the Court rewrote the statute. Only
Congress can do that. Rather, the Court was âchoosing between competing
plausible interpretations of a statutory text, resting on the reasonable
presumption that Congress did not intend the alternative which raises serious
constitutional doubts.â Clark v. Martinez, 543 U.S. 371, 381(2005). âThe canon is thus a means of giving effect to congressional intent, not of subverting it.âId. at 382
. Accordingly, when the Court ruled in NFIB that â[t]hose subject to the [coverage requirement] may lawfully forgo health insurance,â NFIB,567 U.S. at 574
n.11, that was an authoritative determination regarding what the
text of the coverage requirement meant and what Congress intended.
The majority pushes aside NFIBâs construction, acting as though the fact
that the NFIB Court applied the canon of constitutional avoidance means that
its interpretation no longer governs following the repeal of the shared-
responsibility payment. But when the Court construes statutes, its
âinterpretive decisions, in whatever way reasoned, effectively become part of
the statutory scheme, subject (just like the rest) to congressional change.â
Kimble v. Marvel Entmât, LLC, 135 S. Ct. 2401, 2409 (2015) (emphasis added).
While Congress can change its mind and could have amended the coverage
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requirement to turn the âlawful choiceâ described by NFIB, 567 U.S. at 574, into an unwavering command, the majority does not suggest that Congress ever made such a choice. Sure, Congress amended the shared-responsibility payment in 2017. Yet as the district court went to great lengths to establish and the majority is elsewhere eager to point out, the coverage requirement and the shared-responsibility payment are distinct provisions. See Maj. Op. at 19 (âTo bring a claim against the [coverage requirement], therefore, the plaintiffs needed to show injury from the individual mandateânot from the shared responsibility payment.â); Texas v. United States,340 F. Supp. 3d 579, 596
(N.D. Tex. 2018) (âIt is critical to clarify something at the outset: the shared- responsibility payment, 26 U.S.C. § 5000A(b), is distinct from the [coverage requirement], id. § 5000A(a).â). And Congress did not touch the text of the coverage requirement when it amended the shared-responsibility payment. See Budget Fiscal Year, 2018,Pub. L. No. 115-97, § 11081
. Compare § 5000A(a), with 26 U.S.C. § 5000A(a) (2011). At risk of stating the obvious, if the text of the coverage requirement has not changed, its meaning could not have changed either. By âgiv[ing] these same words a different meaning,â the majority âinvent[s] a statute rather than interpret[s] one.â Clark,543 U.S. at 378
.
The majority is thus left on unsteady ground: amendment by implication,
which âwill not be presumed unless the legislatureâs intent is âclear and
manifest.ââ In re Lively, 717 F.3d 406, 410(5th Cir. 2013) (quoting Natâl Assân of Home Builders v. Defs. of Wildlife,551 U.S. 644, 662
(2007)); see also, e.g., Epic Sys. Corp v. Lewis,138 S. Ct. 1612, 1624
(2018) (â[I]n approaching a
claimed conflict, we come armed with the âstron[g] presum[ption]â that repeals
by implication are âdisfavoredâ and that âCongress will specifically addressâ
preexisting law when it wishes to suspend its normal operations in a later
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statute.â (second and third alterations in original) (quoting United States v.
Fausto, 484 U.S. 439, 452-53(1988))). This rule operates with equal force when a judicial construction previously illuminated the meaning of the purportedly amended statute. See TC Heartland LLC v. Kraft Foods Grp. Brands LLC,137 S. Ct. 1514, 1520
(2017) (âWhen Congress intends to effect a change of [a statuteâs earlier judicial interpretation], it ordinarily provides a relatively clear indication of its intent in the text of the amended provision.â); Midlantic Natâl Bank v. N.J. Depât of Envtl. Prot.,474 U.S. 494, 501
(1986) (âThe normal rule of statutory construction is that if Congress intends for legislation to change the interpretation of a judicially created concept, it makes that intent specific.â); cf. Whitman v. Am. Trucking Assân,531 U.S. 457, 468
(2001)
(âCongress, we have held, does not alter the fundamental details of a
regulatory scheme in vague terms or ancillary provisionsâit does not, one
might say, hide elephants in mouseholes.â). Congressâs silence on the matter is
thus conclusive.
Yet even if one probes further, it boggles the mind to suggest that
Congress intended to turn a nonmandatory provision into a mandatory
provision by doing away with the only means of incentivizing compliance with
that provision. Congress quite plainly intended to relieve individuals of the
burden the coverage requirement put on them; it did not intend to increase that
burden. And if it did, it certainly did not make that intent âclear and manifest.â
Lively, 717 F.3d at 410. Moreover, the considerations that led the NFIB Court to conclude that Congress did not intend the coverage requirement to impose a legal command to purchase health insurance are even more compelling in the absence of the shared-responsibility payment. Whereas before the only ânegative legal consequence[] to not buying health insuranceâ was the payment of a tax, NFIB,567 U.S. at 567-68
, now there are no consequences at all. And
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as the Congressional Budget Office (âCBOâ) has predicted, without the shared-
responsibility payment, most applicable individuals will not maintain health
insurance solely for the purpose of obeying the coverage requirement. See
Cong. Budget Office, Repealing the Individual Health Insurance Mandate: An
Updated Estimate at 1 (2017). âThat Congress apparently regards such
extensive failure to comply with the [coverage requirement] as tolerable
suggests that Congress did not think it was creating [millions of] outlaws.â
NFIB, 567 U.S. at 568.
Ergo, when Congress zeroed-out the shared-responsibility payment
without amending the coverage requirement, it did not do away with the lawful
choice it previously offered applicable individuals; it simply changed the
parameters of that choice. Under the old scheme, applicable individuals could
lawfully choose between maintaining health insurance and paying a tax.
Under the new scheme, applicable individuals can lawfully choose between
maintaining health insurance and doing nothing. In other words, the coverage
requirement is a dead letterâit functions as an expression of national policy
or words of encouragement, at most. Accordingly, although I would not reach
the merits, I would reverse if I did.
IV.
I agree with much of what the majority has to say about the district
courtâs severability ruling. But I fail to understand the logic behind remanding
this case for a do-over. Severability is a question of law that this court can
review de novo. And the answer here is quite simpleâindeed, a severability
analysis will rarely be easier. After all, â[o]ne determines what Congress would
have done by examining what it did,â and Congress declawed the coverage
requirement without repealing any other part of the ACA. Legal Servs. Corp v.
Velazquez, 531 U.S. 533, 560 (2001) (Scalia, J., dissenting); see also Ayotte v.
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Planned Parenthood of N. New Eng., 546 U.S. 320, 330 (2006) (â[T]he
touchstone for [severability analysis] is legislative intent.â). Consequently,
little guesswork is needed to determine that Congress believed the ACA could
stand in its entirety without the unenforceable coverage requirement.
The majority suggests that remand is necessary because the district
court âhas many tools at its disposalâ and is thus âbest positioned to undertakeâ
the severability inquiry. Maj. Op. at 60. It is true that the district court is better
able to assess factual issues than appellate judges, because it can hold
evidentiary hearings, but I cannot see how that could be relevant, since
severability is a question of law that we review de novo. Further, it is not clear
what sort of evidence the district court could receive that would be useful when
deciding severability questions except perhaps legislative history, a source
which the majority derides. See Maj. Op. at 56 n.45 (â[W]e caution against
relying on individual statements by legislators to determine the meaning of
the law.â). When it comes to analyzing the statuteâs text and historical context,
see id., we are just as competent as the district court. There is thus no reason
to prolong the uncertainty this litigation has caused to the future of this
indubitably significant statute. 12
A.
Before I address the more specific problems with the district courtâs
inseverability ruling, some background on the ACA is in order. Congress
12 The majority also suggests that remand is necessary so that the district court can
consider remedial issues, raised by the United States for the first time on appeal, regarding
the appropriate scope of relief. But such issues are largely moot if, as I believe, the coverage
requirement is completely severable from the rest of the ACA. For example, I do not perceive
a meaningful difference between a nationwide injunction prohibiting enforcement of the
already-unenforceable coverage requirement versus an injunction against enforcement that
is limited to the plaintiff states. In any case, this court couldâand, in my view, shouldâ
resolve the severability issue even if remanding remedial issues is appropriate.
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passed the ACA in 2010 to address a growing crisis of Americans living without
health insurance. Prior to the ACA, nearly 50 million Americans (about 15
percent of the population at the time) were uninsured. Florida ex rel. Attây Gen.
v. U.S. Depât of Health & Human Servs., 648 F.3d 1235, 1244(11th Cir. 2011), revâd on other grounds, NFIB,567 U.S. 519
. Although many large employers
provided health insurance, coverage was often cost prohibitive for small
businesses and consumers seeking insurance through the individual market
(i.e., directly instead of through an employer). See U.S. Govât Accountability
Office, GAO-12-166R, Health Care Coverage: Job Lock and the Potential
Impact of the Patient Protection and Affordable Care Act 3-4 (2011). Moreover,
insurance companies couldâand regularly wouldâdeny coverage to high-risk
consumers, especially those with preexisting medical conditions. Id. at 4.
The pre-ACA status quo created numerous economic and social
problems. Most obviously, Americaâs uninsured population could not afford
spiraling healthcare costs, thus exacerbating health problems, leading to an
estimated 45,000 premature deaths annually, Andrew P. Wilper et al., Health
Insurance and Mortality in US Adults, 99 Am. J. Pub. Health 2289, 2292
(2009), and causing â62 percent of all personal bankruptcies,â 42 U.S.C.
§ 18091(2)(G). The uninsured crisis caused some subtler problems too. For one
thing, hospitals would have to absorb the costs of treating uninsured patients
and would inevitably pass those costs along to insurance companies, which
would then pass them along to consumers. See § 18091(2)(F) (âThe cost of
providing uncompensated care to the uninsured was $43,000,000,000 in 2008.
To pay for this cost, health care providers pass on the cost to private insurers,
which pass on the cost to families.â). See generally Amicus Br. of HCA
Healthcare, Inc. at 9-13. And dependency on employer-based healthcare
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decreased labor mobility, discouraged entrepreneurship, and kept potential
caregivers away from the home. See GAO-12-166R, supra, at 5-6.
In enacting the ACA, Congress sought to address these and other
problems with the national healthcare system by drastically reducing the
number of uninsured and underinsured Americans. To achieve this goal, the
ACA undertook a series of reforms, most notably to the individual insurance
market. See generally Patient Protection and Affordable Care Act, Pub. L. No.
111-148, tit. I,124 Stat. 119
(2010). Among the ACAâs most important (and
visible) reforms are two related provisions: guaranteed issue and community
rate. See 42 U.S.C. §§ 300gg, 300gg-1. The guaranteed-issue provision requires
health-insurance providers to accept every individual who applies for coverage,
thus preventing insurers from denying coverage based on a consumerâs
preexisting medical condition. See § 300gg-1(a). The community-rate provision
prevents insurers from charging a higher rate because of a policyholderâs
medical condition. See § 300gg(a).
Left without some counterbalance, the guaranteed-issue and
community-rate provisions threatened to overload insurersâ risk pools with
high-risk policyholders. Beyond allowing more high-risk consumers to
purchase health insurance (as intended), these provisions disincentivized
healthy (i.e., low risk) consumers from purchasing health insurance because it
allowed them to wait until they developed costly health problems to purchase
insurance. 13 This would have caused premiums to skyrocket, exacerbating
many of the problems Congress sought to solve. See generally Amicus Br. of
Blue Cross Blue Shield Assân at 3-4. Thus, the ACA included several provisions
to incentivize low-risk consumers to purchase health insurance. It offered tax
13 This is known as the adverse-selection problem.
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credits to offset much of the cost of health insurance for middle-income
consumers. See 26 U.S.C. § 36B(b). It created healthcare exchanges to facilitate
competition among health plans and to lower transaction costs. See 42 U.S.C.
§§ 18031, 18041. It limited new enrollments to an open-enrollment period set
by the Secretary of Health and Human Services, which mitigates the adverse-
selection problem by preventing consumers from purchasing health insurance
only when they need it. See § 18031(c)(6). And it included the coverage
requirement at issue in this lawsuit. See § 5000A(a).
Although the coverage requirement has been among the ACAâs best-
known provisions, the ACAâs reforms to the private insurance market extend
well beyond it. As just mentioned, Congress created other mechanisms to
achieve the same goal as the coverage requirement: incentivize low-risk
consumers to purchase health insurance. The ACA also included other
provisions expanding access to the private insurance market, including a
requirement that employers with 50 or more employees offer health insurance,
see 26 U.S.C. § 4980H, and a requirement that health-insurance providers
allow young adults to remain on their parentsâ insurance until they turn 26,
see 42 U.S.C. § 300gg-14. And it included provisions designed to make health-
insurance policies more attractive, such as those directly regulating premiums,
see, e.g., id. § 300gg-18(b), limiting benefits caps, see id. § 300gg-11, and
prescribing certain minimum-coverage requirements for health plans, see, e.g.,
id. § 300gg-13. Moreover, the ACA contains countless other provisions that are
unrelated to the private insurance marketâand many that are only
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tangentially related to health insurance at all. 14 The following are only some
of many possible examples:
⢠Section 3006, which directs the Secretary of Health and Human
Services to âdevelop a plan to implement a value-based
purchasing program for payments under the Medicare program
. . . for skilled nursing facilities.â
⢠Section 4205, which requires chain restaurants to
conspicuously display âthe number of calories contained in . . .
standard menu item[s].â
⢠Section 5204, which creates a student-loan repayment
assistance program âto eliminate critical public health
workforce shortages in Federal, State, local and tribal public
health agencies.â
⢠Section 6402, which, among other things, strengthens criminal
laws prohibiting healthcare fraud.
⢠Title III of Part X, which reauthorizes and amends the Indian
Health Care Improvement Act, a decades-old statute creating
and maintaining the infrastructure for tribal healthcare
services.
Given the breadth of the ACA and the importance of the problems that
Congress set out to address, it is simply unfathomable to me that Congress
hinged the future of the entire statute on the viability of a single, deliberately
unenforceable provision. 15
14 The ACA contains ten titles. Only the first title focuses on the private insurance
industry. The other titles address wide-ranging topics from the âprevention of chronic
disease,â ACA tit. IV, to the âhealth care work force,â id. tit. V.
15 I do not mean to suggest that, as a policy matter, Congress chose the best (or even
worthwhile) solutions to these problems. Such matters are beyond my job description, so I
express no opinion on them. But the district court should have thought more critically about
whether Congress likely intended to leave its chosen solution to a serious problem so
vulnerable to judicial invalidation.
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B.
In Planned Parenthood of Northern New England, the Court announced
the three principles that must guide our severability analysis. âFirst, we try
not to nullify more of a legislatureâs work than is necessary, for we know that
â[a] ruling of unconstitutionality frustrates the intent of the elected
representatives of the people.ââ Planned Parenthood of N. New Eng., 546 U.S.
at 329(alteration in original) (quoting Regan v. Time, Inc.,468 U.S. 641, 652
(1984) (plurality opinion)). âSecond, mindful that our constitutional mandate and institutional competence are limited, we restrain ourselves from ârewrit[ing] [a] law to conform it to constitutional requirementsâ even as we strive to salvage it.âId.
(first alteration in original) (quoting Am. Booksellers, 484 U.S. at 397). âThird, the touchstone for any decision about remedy is legislative intent, for a court cannot âuse its remedial powers to circumvent the intent of the legislature.ââ Id. at 330 (quoting Califano v. Westcott,443 U.S. 76, 94
(1979) (Powell, J., concurring in part and dissenting in part)).
In accordance with these principles, the Courtâs cases suggest a two-part
inquiry. First, we must ask âwhether the law remains âfully operativeâ without
the invalid provisions.â Murphy v. NCAA, 138 S. Ct. 1461, 1482(2018); see also United States v. Booker,543 U.S. 220, 258-59
(2005); Alaska Airlines, Inc. v. Brock,480 U.S. 678, 684
(1987). If so, the remaining provisions are âpresumed severableâ from the invalid provision. Chadha,462 U.S. at 934
(quoting Champlin Ref. Co. v. Corp. Commân,286 U.S. 210, 234
(1932)). This presumption is rebutted only if âthe statuteâs text or historical context makes it âevidentâ that Congress, faced with the limitations imposed by the Constitution, would have preferredâ no statute over the statute with only the permissible provisions. Free Enter. Fund v. Pub. Co. Accounting Oversight Bd.,561 U.S. 477
, 509 (2010). And as should be clear by now, âthe ânormal ruleâ is
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âthat partial, rather than facial, invalidation is the required course.ââ Id. at 508
(quoting Brockett v. Spokane Arcades, Inc., 472 U.S. 491, 504 (1985)).
1.
The majority has identified the most glaring flaw in the district courtâs
severability analysis: the district court âgives relatively little attention to the
intent of the 2017 Congress, which appears in the analysis only as an
afterthought.â When one takes this fact into account, there can be little doubt
as to Congressâs intent.
We have unusual insight into Congressâs thinking because Congress was
given a chance to weigh in on the ACAâs future without an effective coverage
requirement and it decided the ACA should remain in place. By zeroing out the
shared-responsibility payment, the 2017 Congress left the coverage
requirement unenforceable. If Congress viewed the coverage requirement as
so essential to the rest of the ACA that it intended the entire statute to rise
and fall with the coverage requirement, it is inconceivable that Congress would
have declawed the coverage requirement as it did. And make no mistake:
Congress declawed the coverage requirement. As the CBO found only a month
before Congress passed the TCJA, â[i]f the [coverage requirement] penalty was
eliminated but the [coverage requirement] itself was not repealed, the results
would be very similar toâ if the coverage requirement itself were repealed. 2017
CBO Report, supra, at 1. Regardless of lofty civic notions about people who
follow the law for the sake of following the law, the objective evidence before
Congress was that âonly a small number of peopleâ would obey the coverage
requirement without the shared-responsibility payment. Id.; cf. Depât of
Commerce, 139 S. Ct. at 2565-66 (concluding people will âpredictabl[y]â âviolate
their legal dutyâ when incentivized to do so). Congress accordingly knew that
repealing the shared-responsibility payment would have the same essential
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effect on the ACAâs statutory scheme as would repealing the coverage
requirement.
Furthermore, as various amici highlight, judicial repeal of the ACA
would have potentially devastating effects on the national healthcare system
and the economy at large. See, e.g., Amicus Br. of Am.âs Health Ins. Plans
(discussing impact on health-insurance industry); Amicus Br. of 35 Counties,
Cities, and Towns (discussing impact on municipalities); Amicus Br. of
Bipartisan Econ. Scholars (discussing impact on economy); Amicus Br. of Am.
Hosp. Assân et al. (discussing impact on hospitals). Regardless of whether the
ACA is good or bad policy, it is undoubtedly significant policy. It is unlikely
that Congress would want a statute on which millions of people rely for their
healthcare and livelihoods to disappear overnight with the wave of a judicial
wand. If Congress wanted to repeal the ACA through the deliberative
legislative process, it could have done so. But with the stakes so high, it is
difficult to imagine that this is a matter Congress intended to turn over to the
judiciary.
2.
A second flaw in the district courtâs analysis is the great weight it places
on the fact that Congress in 2017 did not repeal its statutory findings
emphasizing the coverage requirementâs importance to the guaranteed-issue
and community-rate provisions. See 42 U.S.C. § 18091. The district court overread the significance of § 18091. Congress enacted the findings in § 18091 to demonstrate the coverage requirementâs role in regulating interstate commerce. When it invokes its commerce power, Congress routinely makes such findings to facilitate judicial review. See United States v. Morrison,529 U.S. 598, 612
(2000) (âWhile âCongress normally is not required to make formal
findings as to the substantial burdens that an activity has on interstate
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commerce,â the existence of such findings may âenable us to evaluate the
legislative judgment that the activity in question substantially affect[s]
interstate commerce, even though no such substantial effect [is] visible to the
naked eye.ââ (alterations in original) (citation omitted) (quoting United States
v. Lopez, 514 U.S. 549, 562-63 (1995))). Indeed, § 18091(2), the subsection the
district court focused its attention on, is entitled âEffects on the national
economy and interstate commerce.â
Section 18091 is not an inseverability clause, and nothing in its text
suggests that Congress intended to make the coverage requirement
inseverable from the remainder of the ACA. If Congress intended to draft an
inseverability clause, it knew how to do so. See Office of Legislative Counsel,
U.S. Senate, Senate Legislative Drafting Manual § 131(b) (1997) (explaining
purpose of inseverability clause). Compare id. § 131(c) (providing as example
of proper form for inseverability clause: âEFFECT OF INVALIDITY ON
OTHER PROVISIONS OF ACT.âIf section 501, 502, or 503 of the Federal
Election Campaign Act of 1971 (as added by this section) or any part of those
sections is held to be invalid, all provisions of and amendments made by this
Act shall be invalidâ), with § 18091(2)(H) (âThe requirement is an essential
part of this larger regulation of economic activity, and the absence of the
requirement would undercut Federal regulation of the health insurance
market.â). In fact, both the House and the Senate legislative drafting guides
suggest that Congress should include an inseverability clause if it wants to
make a statute inseverable because â[t]he Supreme Court has made it quite
clear that invalid portions of statutes are to be severed âunless it is evident that
the Legislature would not have enacted those provisions which are within its
powers, independently of that which is not.ââ Office of Legislative Counsel, U.S.
House of Representatives, House Legislative Counselâs Manual on Drafting
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Style § 328 (1995) (quoting Chadha, 462 U.S. at 931); accord Senate Legislative
Drafting Manual, supra, at § 131(a). The absence of a genuine inseverability
clause should be all but conclusive in assessing the legislatureâs intent.
Moreover, the argument that § 18091 is meant to signal Congressâs
intent that the coverage requirement be inseverable proves far too much.
Section 18091 discusses the coverage requirementâs importance to the entire
federal healthcare regulatory scheme, includingâalong with the ACAâthe
Public Health Service Act (âPHSAâ) and the Employee Retirement Income
Security Act (âERISAâ). See § 18091(2)(H) (âUnder the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1001 et seq.), the Public Health Service
Act (42 U.S.C. 201 et seq.), and this Act, the Federal Government has a
significant role in regulating health insurance. The [coverage] requirement is
an essential part of this larger regulation of economic activity, and the absence
of the requirement would undercut Federal regulation of the health insurance
market.â (emphasis added)). It is not suggested that Congress intended a court
to strike down the PHSA and ERISA if it found the coverage requirement
unconstitutional. This would be especially implausible given the intensity of
the debate over the coverage requirementâs constitutionality from the get-go.
See NFIB, 567 U.S. at 540 (âOn the day the President signed the [ACA] into
law, Florida and 12 other States filed a complaint in the Federal District Court
for the Northern District of Florida.â). Yet in signaling that the coverage
requirement is âan essential part of this larger regulation,â Congress did not
distinguish between the ACA and these prior statutes. Thus, § 18091 cannot
reasonably be read to bear on the coverage requirementâs severability.
3.
Another flaw in the district courtâs analysis is its suggestion that the
Supreme Court concluded in NFIB and King v. Burwell, 135 S. Ct. 2480 (2015),
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that the coverage requirement is inseverable from the ACAâs guaranteed-issue
and community-rate provisions. The district court misconstrued these
opinions. And even if the district court read them correctly, these opinions
address the coverage requirement as enforced by the shared-responsibility
payment. They give little valuable insight into the coverage requirementâs role
in the post-TCJA ACA.
In NFIB, only the dissenters addressed the coverage requirementâs
severability. The district court did not suggest it is bound by a Supreme Court
dissent, and of course it is not. The district court instead took language from
the other five Justices out of context to conclude that each of them viewed the
coverage requirement as inseverable. But none of the language the district
court cited addresses severability. See NFIB, 567 U.S. at 547-48(opinion of Roberts, C.J.) (discussing Governmentâs argument that coverage requirement plays a role in regulating interstate commerce);id. at 597
(Ginsburg, J., dissenting in part) (same). Although the Justicesâ reasoning certainly suggests that they saw the coverage requirement as an important part of the statutory scheme as it existed in 2012, this does not mean the Justices found it âevidentâ that Congress would have preferred the entire statute to fall without the coverage requirement. Alaska Airlines,480 U.S. at 684
.
King likewise contains some helpful commentary about the ACAâs
original statutory scheme, but it does not discuss severability or otherwise
control the severability analysis. The Court ruled in King that the ACAâs tax
credits were available to every eligible consumer regardless of whether the
state in which a consumer lived established its own exchange or relied on the
federally operated exchange. 135 S. Ct. at 2496. The coverage requirement
came up because many more individuals would have been exempt from the
shared-responsibility payment if tax credits were not available to them. Id. at
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2493-95; see also § 5000A(e)(1)(A) (âNo penalty shall be imposed . . . with
respect to . . . [a]ny applicable individual for any month if the applicable
individualâs required contribution (determined on an annual basis) for
coverage for the month exceeds 8 percent of such individualâs household income
. . . .â). 16 Noting the importance of the tax credits and coverage requirement (as
enforced by the shared-responsibility payment) to the statutory structure, the
Court concluded as a matter of statutory interpretation that Congress did not
intend a scheme in which neither tax credits nor the coverage requirement
were operating to bring low-risk consumers into the insurance pools. See King,
135 S. Ct. at 2492-94 (âThe combination of no tax credits and an ineffective
coverage requirement could well push a Stateâs individual insurance market
into a death spiral. . . . It is implausible that Congress meant the [ACA] to
operate in this manner.â).
The district court framed King as saying that Congress intrinsically tied
the community-rate and guaranteed-issue provisions to the coverage
requirement, meaning that those provisions must be inseverable from the
coverage requirement. But the district court ignored a crucial aspect of the
King Courtâs analysis: it explicitly discussed the coverage requirement as
enforced by the shared-responsibility payment. See id. at 2493 (referring to the
coverage requirement as âa requirement that individuals maintain health
insurance coverage or make a payment to the IRSâ (emphasis added)). Indeed,
as the Court identified it, the crux of the problem with denying consumers tax
credits in federal-exchange states was that doing so would make a large
16Lest there be any confusion, the exemption at issue in King exempted individuals
otherwise subject to the coverage requirement from the shared-responsibility payment; it did
not exempt them from the coverage requirement itself. Exemptions from the shared-
responsibility payment are listed in § 5000A(e)(1), whereas exemptions from the coverage
requirement itself are listed in § 5000A(d).
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number of individuals unable to afford insurance, thus exempting them from
the shared-responsibility payment. See id. These widespread exemptions
would, in turn, make the coverage requirement âineffective.â Id. King thus
speaks far more to the shared-responsibility paymentâs role in the ACAâs pre-
TCJA statutory scheme than it does the coverage requirementâs role in the
statutory scheme.
Even to the extent the Court in NFIB or King meant to opine on the
coverage requirementâs severability, these cases were both decided before the
TCJA. They thus give no insight into how the coverage requirement fits into
the post-TCJA scheme. Whatever reservations the Court previously harbored
about severing the coverage requirement, Congress plainly did not share those
concerns when it zeroed out the shared-responsibility payment. Congress
either concluded that healthcare markets under the ACA had reached a point
of stability at which they no longer needed an effective coverage requirement, 17
or it chose to accept the negative side effects of effectively repealing the
coverage requirement as a cost of relieving the burden it placed on applicable
individuals. Either way, the legislative considerations have necessarily
shifted.
In sum, there was no reason for the district court to conclude that any
provision in the ACA was inseverable from the coverage requirement. The
majority does not necessarily disagree. I thus do not understand its decision to
remand when, even on the majorityâs analysis of the case, it could instead
17See CBO Report, supra, at 1 (concluding that â[n]ongroup insurance markets would
continue to be stable in almost all areas of the country throughout the coming decadeâ if the
coverage requirement were repealed); Amicus Br. of Blue Cross Blue Shield Assân at 24-27
(explaining that tax credits and other ACA provisions are driving enough consumers into
insurance markets to make the coverage requirement unnecessary).
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reverse and render a judgment declaring only the coverage requirement
unconstitutional.
V.
Limits on judicial power demand special respect in a case like this. For
one thing, careless judicial interference has the potential to be especially
pernicious when it involves a complex statute like the ACA, which carries such
significant implications for the welfare of the economy and the American
populace at large. For another, the legitimacy of the judicial branch as a
countermajoritarian institution in an otherwise democratic system depends on
its ability to operate with restraintâand especially so in a high-profile case
such as the one at bar. The district courtâs opinion is textbook judicial
overreach. The majority perpetuates that overreach and, in remanding,
ensures that no end for this litigation is in sight.
I respectfully dissent.
98