Case No. 19-840, 19-1019 | 5th Cir.
November 10, 2020
Preview by Jacob Reiskin, Online Editor
California v. Texas is the next saga in the years-long Republican-led effort to overturn the Affordable Care Act (“ACA”). Shortly after the Republican-controlled Congress failed to repeal the ACA at the start of the Trump administration, the Congress successfully repealed the individual health insurance mandate through the Tax Cuts and Jobs Act of 2017, Pub. L. No. 115-97, 131 Stat. 2054. This litigation concerns the way the mandate was repealed. The ACA initially required citizens to either pay a tax or get health insurance. The 2017 Amendment reduced the tax to zero. However, the law still technically requires that individuals possess health insurance, although there is no enforcement or penalty for not acquiring insurance. Since Chief Justice Roberts, writing for the majority in NFIB v. Sebelius, held the individual mandate (§ 5000A of the ACA) was constitutional because it was a tax, Texas argues the ACA now amounts to an unconstitutional command rather than a tax. 567 U.S. 519, 575 (2012); Brief for Respondent/Cross-Petitioner States at 2, Nos. 19-840, 19-1019 (U.S. filed June 25, 2020).
California, joined by the Democratic-controlled House of Representatives, petitioned the Court to overturn the district court and a divided Fifth Circuit after both found the individual mandate unconstitutional. From a policy perspective, the House argues that the respondents seek to use the judiciary to undo the democratic process and repeal the ACA against Congress’s will—which repeatedly failed to whip enough votes to repeal the Act. Opening Brief for the United States House of Representatives as Respondent Supporting Petitioners at 2, Nos. 19-840, 19-1019 (U.S. May 6, 2020).
Turning to the core arguments, California and the House of Representatives (supported by a flood of amici) make three main arguments: (1) neither Texas nor the individual cross-respondents have standing to file the challenge, (2) § 5000A, the amended individual mandate, is constitutional, and (3) even if § 5000A is unconstitutional, it is easily severable from the rest of the ACA.
Starting with standing, California argues that Texas does not have standing because its argument that some CHIP- and Medicaid-eligible people buy insurance because the law so requires is highly speculative. As the House argues, Texas does not identify a single person who actually did this. Additionally, those people are eligible for insurance regardless of § 5000A. See id. at 28. Likewise, petitioners argue that the individual plaintiffs were not forced to do anything and thus have no standing. Texas counters the standing arguments by writing that it is burdened by the administrative costs of the ACA generally. California and the House mainly emphasize that Texas and the individuals do not have a real injury and that finding that they do would mark a vast expansion of existing standing doctrine. Response and Reply Brief for the Petitioners–Cross-Respondents at 8, Nos. 19-840, 19-1019 (U.S. filed July 29, 2020).
As for the constitutionality of the mandate, Texas argues that § 5000A is unconstitutional under both the Necessary and Proper Clause and the Commerce Clause, and the ACA cannot be saved by the notion that § 5000A is a tax, as it was in NFIB, because there is no longer a tax. Brief for Respondent/Cross-Petitioner States at 30–36. California and the House argue that Texas misreads NFIB and relies too heavily on the dissent. California also explains that despite the fact that § 5000A provides that applicable individuals “shall . . . ensure that the individual . . . is covered under the minimal essential coverage,” it does not constitute a command because Congress routinely “extorts[s]” without creating a “mandatory duty.” Opening Brief for the Petitioners at 30–32, Nos. 19-840, 19-1019 (U.S. filed May 6, 2020). The House—in addition to driving home arguments about protecting democratic will and judicial restraint—adds that Congress merely repealed a tax in 2017, which does not exceed Congresses’ authority. Brief for The United States House of Representatives at 35–37.
Finally, California and the House argue that even if the penalty-free individual mandate was found unconstitutional, it could be easily severed from the rest of the ACA. They point out that Texas and the district court wrongly focus on the intent of the 2010 Congress, which believed that the mandate was necessary for providing affordable health care coverage. See Brief for the Petitioners at 40. Instead, severability analysis should focus on the 2017 Congress, which must have believed § 5000A was severable. Otherwise, it would not have simply amended one provision of a several-hundred-provision-long act that it repeatedly failed to repeal. The House adds that even if there is a mandate, the 2017 amendment demonstrates that “Congress intended it to be toothless.” Brief for The United States House of Representatives at 43.
Although the Court will hear legal arguments, the decision before it is the scraps of a political debacle that has played out since the passage of the ACA in 2010.