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Democratic States Ask for High Court Review of Obamacare Ruling (2)

Jan. 3, 2020, 7:00 PMUpdated: Jan. 3, 2020, 8:45 PM

The U.S. Supreme Court is once again being asked to decide the fate of Obamacare.

A coalition of 20 states and the District of Columbia led by California Attorney General Xavier Becerra (D) asked the court Jan. 3 to review the Dec. 18 decision from the U.S. Court of Appeals for the Fifth Circuit that put the fate of the nation’s health-care law in limbo.

The state’s said the lower court’s decision “cast doubt on hundreds of other statutory provisions that together regulate a substantial portion of the nation’s economy.”

In a separate request, the states asked the justices to consider the petition on an expedited schedule and set expedited dates for briefings and the oral argument if the court decides to grant review so the case can be decided this term.

“States, health insurers, and millions of Americans rely on those provisions when making important—indeed, life-changing—decisions,” they said.

The appeals court ruled that the Affordable Care Act’s individual mandate to buy insurance is unconstitutional because Congress in 2017 dropped the penalty to zero for failing to have coverage. The court said in a 2-1 decision that the mandate “can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power.”

But the Fifth Circuit sidestepped the question of whether that makes the rest of the law unconstitutional, and it kicked the case back to a federal judge in Texas who already struck down the entire law once.

Judge Reed O’Connor of the U.S. District Court for the Northern District of Texas ruled in 2018 that the individual mandate is unconstitutional and so is the rest of the law because the mandate is “essential to” the whole act. That challenge was brought by a coalition of mostly Republican states, led by Texas.

But the appeals court said O’Connor did 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.”

‘Enormous Practical Significance’

The coalition of mostly Democratic-led states said the appeals court’s decision to send the case back to O’Connor with instructions to go through the law with a “finer-toothed comb” and determine whether any provisions of the law can be salvaged “would only prolong and exacerbate the uncertainty already caused by this litigation.”

The mandate “is merely a precatory provision that (at most) encourages Americans to buy health insurance but does not compel anyone to do anything,” the coalition said, adding that Congress intentionally left the rest of the law intact when it removed the coverage’s only enforcement mechanism.

“It is difficult to imagine a plainer indication that Congress considered the coverage requirement entirely dispensable and, hence, severable,” the states argued.

“There is no need for any ‘searching inquiry’ into hundreds of distinct provisions, and no reason for this court to defer review given the enormous practical significance of this case.”

The questions presented in this case are “purely legal, of enormous practical importance, and fully ripe for review by this court,” the states said, before warning the court about the risk of not intervening to settle the matter.

“Under the circumstances here, directing the district court to conduct a burdensome, time-consuming, and wholly unnecessary re-evaluation of severability would serve no useful purpose, while exacerbating uncertainty about the ACA’s future and ‘ensuring that no end for this litigation is in sight,’” they said, quoting the the dissenting opinion from Judge Carolyn Dineen King on the appeals court.

Will Justices Take the Case?

It only takes four of the nine justices to grant review of a lower court decision. But it’s unclear if the Supreme Court will agree to take the case. The justices are already teed up to decide a number of disputes centered on hot-button social issues this term, including abortion, immigration, and LGBT rights.

It takes five justices to agree to expedite review of a case, “so even if the liberal justices want to get Texas v. United States heard this term, they’ll have to pick up a conservative,” Nicholas Bagley, a professor at the University of Michigan Law School, said on Twitter Jan. 3.

Some health law scholars think there’s a good chance the court will grant review but say the court’s blockbuster docket may keep the justices from fast-tracking the case in time to hear it before the term ends in June.

“You could see a world in which maybe the liberal justices say, ‘We are not going to send this back down to the district court and let it languish for years to come back up to us. Even if we can’t get it on the docket for this term, we’re going to consider it beginning in October 2020 and have a decision in 2021,’” said Katie Keith, a health law professor at Georgetown University.

Cases granted after mid-January are typically carried over until the next term, which begins the following October, unless the case is expedited by the court, according to the Supreme Court’s website.

“For the court to hear the case this year, California and the House will have to garner a fifth vote,” Joshua Blackman, an associate professor at the South Texas College of Law in Houston, said in an email.

“I do not think Chief Justice [John] Roberts, or Justice [Brett] Kavanaugh, will be in a hurry to decide the case before the election,” he said. “Moreover, there is no injunction in place, and no exigent reason to rush.”

The case is California v. Texas, U.S., petition for review 1/3/20

(Updated with additional reaction in 17th, 21st, and 22nd paragraphs.)

To contact the reporter on this story: Lydia Wheeler in Washington at lwheeler@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Peggy Aulino at maulino@bloomberglaw.com

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