5 Highlights As ACA Showdown Starts At Supreme Court

By Jeff Overley
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Law360 (May 6, 2020, 10:49 PM EDT) -- Democratic attorneys general and lawmakers seized on the coronavirus pandemic and warned against "judicial overreach" Wednesday in opening briefs urging the U.S. Supreme Court to reject a Republican-led lawsuit aimed at invalidating the Affordable Care Act.

The briefs came from a group of 21 Democratic attorneys generals, led by California Attorney General Xavier Becerra, and the Democrat-controlled U.S. House of Representatives. Together, they're fighting a group of Republican attorneys general, who are led by Texas Attorney General Ken Paxton and supported by the Trump administration.

The Republicans contend that Congress' elimination of the tax penalty in the ACA's individual mandate to maintain health insurance — previously upheld under congressional taxing power — rendered the mandate unconstitutional, and that the mandate's importance means the entire ACA must fall.

The Fifth Circuit agreed with Republicans regarding the mandate's constitutionality but told a Texas federal judge to reconsider a ruling that deemed the whole ACA null and void. The Supreme Court, which has rejected two prior attempts to gut the ACA, in March agreed to resolve the high-stakes showdown.

Here are five highlights to know.

COVID-19 Takes Center Stage

In the two months since the justices accepted the case, the world has been transformed by COVID-19. Democrats said Wednesday the crisis illustrates the importance of the ACA, which directly insures about 20 million Americans, supplies universal consumer protections and could be a public-health life raft as the nation faces a rising tide of unemployment claims and lost health coverage.

"The act has ... been instrumental in our nation's response to the COVID-19 pandemic," the Democratic attorneys general wrote. They cited the law's mandatory benefits, subsidized coverage and investment in so-called community health centers that operate in medically underserved areas.

The first lines in the House's brief focused on COVID-19, saying the devastating outbreak makes it "impossible to deny that broad access to affordable health care is not just a life-or-death matter for millions of Americans, but an indispensable precondition to the social intercourse on which our security, welfare and liberty ultimately depend."

ACA Politics Heat Up Again

More Americans usually viewed the ACA unfavorably than favorably in polls for many years after the law's passage in 2010. The opposite has been true since Republicans launched unsuccessful repeal efforts in 2017; survey results last month from the nonpartisan Kaiser Family Foundation found 50% favorability and 39% unfavorability.

In any event, the law remains divisive and will almost certainly be central to the 2020 election. The political backdrop was on full display Wednesday as Democrats and Republicans traded barbs about the litigation.

"In an act of staggering cruelty and senselessness, the president is still in court suing to tear down the ACA," House Speaker Nancy Pelosi, D-Calif., told reporters Wednesday.

President Donald Trump, speaking Wednesday at an Oval Office event, declared that "Obamacare is a disaster."

Trump also responded to a CNN report that said Attorney General William Barr — who last year signaled distaste for the anti-ACA challenge — urged him to dial back the administration's support for the case.

"We're staying — we're not doing another thing. In other words, we're staying with the group — with Texas and the group," Trump said.

The U.S. Department of Justice initially supported the case to the extent it would scrap protections for Americans with preexisting conditions. It later went all-in to support total invalidation, only to later suggest that relief should perhaps be limited based on specific harms to the state and individual plaintiffs.

A DOJ spokesperson declined to comment Wednesday on the administration's current position.

Democrats Decry 'Judicial Overreach' 

After the Texas federal judge in late 2018 deemed the ACA invalid, Democrats began describing the decision as an abuse of judicial power that accomplished through the courts what GOP politicians failed to achieve in Congress.

They reprised that criticism Wednesday, noting that the Fifth Circuit's 2-1 decision last year included a dissent that accused the majority of perpetuating "textbook judicial overreach" by the district judge.

"The district court's [ruling] makes a mockery of the legislative process through which the people's elected representatives deliberated, refused to repeal the ACA and instead made a focused amendment to the act" that merely axed its tax penalty, the Democratic attorneys general wrote.

At issue is the legal doctrine of severability, which is perhaps most likely to decide the case. Here, the doctrine asks whether Congress would have wanted the ACA to remain on the books without the mandate, should it be deemed unconstitutional. Democrats argued Wednesday that Congress spoke loud and clear when it declined in 2017 to repeal the ACA and then settled for changing the tax penalty to zero.

"Congressional supporters of that change uniformly stressed that it would eliminate any consequence for forgoing insurance and would not cause anyone to lose health care, because the remainder of the ACA would continue to operate exactly as before," the House wrote Wednesday.

The states also noted that enrollment and premiums have remained stable after the disappearance of the mandate's penalty, which was viewed as essential to establishing ACA marketplaces but seems to no longer be necessary.

"The remaining provisions of the ACA have continued to operate as Congress intended," the states said, observing that health care companies widely support that view of how the law is functioning.

Plaintiffs' Right to Sue Is Questioned

Both of Wednesday's briefs contended that the individual and state plaintiffs lack standing to challenge the ACA's validity.

With respect to the individual plaintiffs, the House derided their contention that they're injured by purchasing insurance they don't want because they feel obligated to respect the penalty-free mandate, which says Americans "shall" maintain health insurance unless exempted.

That is "precisely the kind of self-inflicted harm that this court has consistently rejected as a basis for standing," the House asserted.

With respect to the states, the House criticized the idea that the penalty-free mandate imposes indirect costs on them, saying the supposed harm "lacks any support in the factual record" and that recognizing it could open up a Pandora's box of state lawsuits.

"Accepting such claims of injury as a basis for standing would ... exponentially increase the risk that the judicial process will be used to usurp the powers of the political branches," the House wrote.

Mandate's Constitutionality Defended

Democrats on Wednesday also contested the idea that the penalty-free mandate represents a command to buy health insurance and therefore exceeds congressional powers. The attorneys general, for example, suggested that the penalty could eventually be restored and said that the mandate "may be upheld as a suspended exercise of the taxing power."

Separately, the AGs argued that the Supreme Court typically interprets statutes by assuming that Congress legislates with an eye toward constitutional limits. With that in mind, the Supreme Court should assume that Congress' repeal of the tax penalty didn't make the mandate a command, which the Supreme Court in 2012 said would be unconstitutional.

"It would have been astonishing if ... Congress had [repealed the penalty] to do exactly what this court had forbidden just a few years earlier," the attorneys general wrote.

A spokesperson for Paxton declined to comment Wednesday. Opening briefs from the GOP attorneys general and the Trump administration are due by June 25. Oral arguments haven't been scheduled but could happen as early as October, shortly before the presidential election.

The petitioner states are represented by their respective attorneys general, led by the California Attorney General's Office.

The House is represented by Munger Tolles & Olson LLP, the Constitutional Accountability Center and the Office of General Counsel for the U.S. House of Representatives.

The cross-petitioner states are represented by their respective attorneys general, led by the Texas Attorney General's Office.

The federal government is represented by the U.S. Department of Justice.

The cases are California et al. v. Texas et al., case number 19-840, and Texas et al. v. California et al., case number 19-1019, in the Supreme Court of the United States.

--Editing by Breda Lund.

For a reprint of this article, please contact reprints@law360.com.

Attached Documents

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Case Information

Case Title

California, et al., Petitioners v. Texas, et al.

Case Number



Supreme Court

Nature of Suit

2890 Other Statutory Actions

Date Filed

January 03, 2020

Case Title

Texas, et al., Petitioners v. California, et al.

Case Number



Supreme Court

Nature of Suit

2890 Other Statutory Actions

Date Filed

February 14, 2020

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