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What Big Law Clients Are Saying About ‘Backward’ Obamacare Ruling Out of Texas

Protesters rally on March 23, 2016, in support of the Affordable Care Act's contraceptive mandate. Credit: Diego M. Radzinschi / NLJ

Nearly two dozen amicus briefs flooded into the ongoing appeal on Monday of a ruling by a federal judge in Texas striking down the entire Affordable Care Act.

The briefs saw two Republican states crossing the aisle to oppose the ruling that found the Obama-era health care law unconstitutional. It also saw unusual alliances, such as four legal academics, Jonathan Adler, Nicholas Bagley, Abbe Gluck, Ilya Somin, teaming up to oppose the decision.

"The four of us do not agree on much, particularly where the Affordable Care Act is concerned, but we all agree that the decision below is unmoored from law or contemporary doctrine,” Adler said in a blog post Monday.

U.S. District Judge Reed O’Connor of the Northern District of Texas ruled in December that a congressional tax law passed in 2017, which zeroed out the penalty imposed by the ACA’s individual mandate, rendered the entire health care law unconstitutional.

The law, however, remains in effect while the ruling is being appealed to the U.S. Court of Appeals for the Fifth Circuit.

A coalition of states, led by California Attorney General Xavier Becerra, have defended the health care law after the Justice Department said it would fully support the trial judge's decision. The U.S. House of Representatives also stepped in to defend the law and hired former U.S. Solicitor General Don Verrilli, who defended the ACA at the U.S. Supreme Court nearly six years ago.

Texas Attorney General Ken Paxton and several other states are leading that challenge.

Here’s a look at some of the amicus briefs filed yesterday:

>> Jonathan Adler, Nicholas Bagley, Abbe Gluck and Ilya Somin, represented by Morrison & Foerster: “When a court finds a portion of a statute unconstitutional and considers what that means for the rest of the law, its task implicates fundamental questions of separation of powers and the judicial role. For that reason, courts have always been rightfully cautious when considering severability, homing in on any available evidence of congressional intent and seeking to salvage rather than destroy. … The district court got severability exactly backward. It disregarded the clearly expressed intent of Congress and invalidated statutory provisions that Congress chose to leave intact. Its judicial repeal of the ACA under the guise of ‘severability’ usurped Congress’s role and injected incoherence into this critical area of law.”

>> Montana and Ohio: “If the effect of the district court’s decision were simply to bungle constitutional doctrine in Texas, then Ohio and Montana would likely sit this one out. The trouble is, the District Court’s decision purports to invalidate the Affordable Care Act for the entire nation—from Big Bend country to Big Sky and Big Ten country. The court’s decision, if affirmed, will deprive millions of non-elderly Ohioans and Montanans of coverage for pre-existing conditions. It will also negatively affect countless others who organized their affairs in reliance on the Act’s many unrelated provisions. To be sure, the fact that a ruling has negative consequences does not mean it is wrong. Let justice be done, though the heavens may fall. But the District Court’s ruling is wrong, and its errors threaten harm to millions of people in the Buckeye and Treasure states. That is why Ohio and Montana are filing this brief.”

>> American Medical Association, represented by Schiff Hardin: “The district court wrongly concluded that these provisions are inextricably intertwined with the removal of the tax on non-compliance with the mandate. First, it is not ‘evident’ that the 2017 Congress intended these provisions to fall when it enacted the (Tax Cuts and Jobs Act). On the contrary, many congressional leaders voiced support for the law’s preexisting condition protections even as they voted for the TCJA. For example, Senator Hatch said ‘nothing in the bill impacts Obamacare policies like coverage for preexisting conditions’ and ‘the bill does nothing to alter Title I of Obamacare, which includes all of the insurance mandates and requirements related to preexisting conditions.’ Most telling of all, when Congress changed the tax/penalty rate to zero, it did not repeal the preexisting-conditions, guaranteed-issue, and community-ratings provisions, and other key consumer protections in Titles I and II of the ACA.”

>> American Hospital Association, represented by Hogan Lovells: “In sum, affirming the judicial repeal of the ACA that the Plaintiffs obtained from the District Court will harm the patients that depend on the ACA, harm the hospitals that serve them, and harm the ongoing progress in health care innovation. This all shows that Congress could not have intended the rest of the ACA to fall with the mandate. Congress’s overall goal in the ACA was to ‘to ensure that health coverage is affordable.’ A result that eliminates the ACA, where health coverage would be out-of-reach, is directly contrary to that goal. As between an ACA without the mandate and no ACA at all, the evidence is clear that Congress would not have preferred the latter. After all, courts do not ‘interpret federal statutes to negate their own stated purposes.’ This Court should follow that commonsense teaching here and reverse the District Court’s order declaring the individual mandate unconstitutional and declaring the rest of the ACA inseverable from the mandate.”

>> First Focus and The Children’s Partnership, represented by Gibson, Dunn & Crutcher: "The ACA indisputably benefits millions of children, young adults, and their families. Infants born with complex medical issues can receive care without fear of annual or lifetime limits; young adults navigating their first jobs or higher education have the protection of their parents’ insurance; other children receive care through Community Health Centers and home visits. Given that Congress did not repeal these provisions or countless others, there is no basis to conclude that it would want the courts to strike them down—particularly given the millions of American children whose lives have been changed (and saved) because of the ACA, and given how deeply the ACA is now woven into the fabric of the nation’s healthcare system and economy. This Court has no basis to eliminate those protections when Congress has not, and to do so would exceed the lawful role of the judiciary."

>> Law professors Walter Dellinger of O’Melveny & Myers and Douglas Laycock, represented by Selendy & Gay: “Because the TCJA reduced the only consequence for failure to purchase insurance coverage to $0, Individual Plaintiffs’ contention that they are harmed by their ‘obligation to comply with the individual mandate,’ despite their desire not to purchase health insurance, lacks any basis. Being provided with a choice to obtain coverage and pay nothing, or not to obtain coverage and pay nothing, does not constitute a ‘concrete and particularized injury.’ Congress has now ensured that Individual Plaintiffs will not suffer any of the forms of concrete harm the Supreme Court has found sufficient to satisfy Article III’s injury-in-fact requirements, e.g., pecuniary loss; lost business opportunities; loss of enjoyment of public resources; discriminatory treatment based on race, sex, or some other prohibited characteristic; or viable threat of a government enforcement action.”

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