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The Supreme Court Is Unlikely to Crash the ACA

Supreme Court hears oral arguments California v Texas

On November 10, the Supreme Court heard oral arguments in California v. Texas. Readers of this blog will be familiar with the history of this case, the arguments being made, and the potential results of the Court’s decision.

A quick recap: In 2018, a group of Republican state attorneys general led by Texas, and two individuals, sued to invalidate the Affordable Care Act (ACA). They claimed that in 2012 the Supreme Court held in NFIB v. Sebelius that Congress lacked the authority to enact the law’s individual mandate as a legal requirement but could impose a tax on people who failed to comply. In 2017, Congress reduced the tax to zero. The plaintiffs argued that the mandate is now no longer a tax and thus unconstitutional. Moreover, they claim that without the mandate the entire remaining ACA is invalid.

The U.S. Department of Justice, in an unusual move, refused to defend the law. Instead, the ACA is being defended by a group of 21 Democratic attorneys general led by California and the U.S. House of Representatives. They reject the plaintiffs’ arguments and additionally contend that the plaintiffs have no standing to bring the case because they have not been injured by the toothless mandate. A federal district court judge ruled for the plaintiffs in 2018; the Fifth Circuit partially affirmed in 2019. This decision was appealed to the Supreme Court.

California and the House argued first, followed by Texas and the Department of Justice. Each of the justices asked questions of each of the lawyers.

The Question of Standing

Virtually all the questions the justices asked California focused on standing. Under the Constitution, federal courts can hear cases only if the plaintiffs suffer an actual injury caused by the challenged law or action that can be redressed by the federal courts.

California and the House argued that the plaintiffs do not have standing because the mandate as amended is meaningless. The individual plaintiffs face no risk of a government action to enforce it and the mandate does not apply to Texas. Texas, however, argued that the mandate may increase costs by causing more people to enroll in Medicaid and that provisions related to the mandate may impose administrative requirements on states. California and the House argued that there is insufficient factual evidence to support these claims.

A key issue is the doctrine of “standing by inseverability.” The plaintiffs and the Department of Justice argued that even if the mandate itself did not injure them, other provisions of the ACA did and those provisions were inseverable — that is, unable to be separated — from the mandate. Several justices challenged this theory, noting that this argument would allow anyone affected by any section of a multiprovision statute to challenge the statute if some other provision were unconstitutional. The Constitution does not allow the federal courts to offer “advisory opinions” — opinions in the abstract as to the validity of a law that does not concretely affect plaintiffs — but that is effectively what the plaintiffs are requesting. Although it is not clear where a majority of justices will land on this issue, a finding of “no standing” could be an easy way for the Court to dispose of the case.

Is the Individual Mandate Unconstitutional?

The second major component of the argument focused on whether the mandate is unconstitutional. The debate centered on the Supreme Court’s decision in its earlier 2012 decision, which had found the mandate unconstitutional as “a command” but constitutional as a tax. California and the House argued that Congress had understood this. Reducing the tax to zero effectively repealed the mandate and made it merely precatory — that is, something requested but not legally required.

The plaintiffs and the Department of Justice argued that removing the tax turned the mandate again into an unconstitutional command prohibited under the NFIB decision. The justices asked several questions about other “precatory” provisions in federal law that urge someone to do something but impose no consequences for failure to do so, such as World War I legislation that asked people to buy war bonds. Many of the questions raised hypotheticals or asked for analogies. It is unclear how many justices will find the mandate unconstitutional and how many will uphold it.

Is the Mandate Severable from the Rest of the ACA?

The Court spent little time addressing what most observers believe to be the central question in the case: If the mandate is unconstitutional, how much of the ACA must be invalidated along with it? It was here that the Court tipped its hand most clearly. Both Chief Justice Roberts and Justice Kavanaugh suggested that they believed the remainder of the ACA was severable from the mandate. They also rejected the plaintiff’s argument that the “findings” section of the ACA, which states that the mandate is essential to other ACA provisions, should be treated as an “inseverability” clause. There was essentially no discussion of the plaintiffs’ alternative argument that at least some of the ACA’s insurance reforms should be struck if the mandate is found unconstitutional. It appears that at least five justices are inclined to uphold the rest of the ACA if the mandate is struck.

The plaintiffs urged the Court to focus on the text of the ACA and to ignore any other evidence of the intent of the 2017 Congress or of how the law is working today in the absence of the mandate. Although many of the justices identify as “textualists,” there was little evidence that they were inclined to totally ignore Congress’s intentions in 2017 or of the continued vitality of the ACA. Justice Alito observed that, at the time of NFIB, “there was strong reason to believe that the individual mandate was like a part in an airplane that was essential to keep the plane flying so that if that part was taken out, the plane would crash. But now the part has been taken out and the plane has not crashed.” It appeared from the oral arguments that the Court is not inclined to be the one to crash the ACA.

Publication Details

Publication Date: November 13, 2020
Citation:

Timothy S. Jost, "The Supreme Court Is Unlikely to Crash the ACA," To the Point (blog), Commonwealth Fund, Nov. 13, 2020. https://doi.org/10.26099/p4kg-cw72

Experts

Emeritus Professor, Washington and Lee University School of Law