Biden Administration Reverses DOJ Position in Texas ACA Case

There was little question that the Biden Administration would be more eager to defend the Affordable Care Act in court than was the Trump Administration. As had been widely reported, the federal government’s legal position in California v. Texas was dictated by the White House, not Justice Department lawyers. Now, however, the federal government reversed course.

Earlier today, Deputy Solicitor General Edwin Kneedler sent a letter informing the Supreme Court that the Department of Justice has reconsidered its position on the constitutionality of the mandate-sans-penalty and the severability of the mandate from the remainder of the Act.

The letter reads in relevant part:

On November 10, 2020, this Court heard oral argument in these consolidated cases concerning whether, as a result of the elimination in 2017 of the monetary payment under 26 U.S.C. 5000A, which was enacted as part of the Patient Protection and Affordable Care Act (ACA), Pub. L. No. 111-148, 124 Stat. 119, that provision is no longer a valid exercise of Congress’s legislative authority; and whether, if that provision is now invalid, the remainder of the ACA’s provisions are inseverable from it.

1. The federal respondents had previously filed a brief contending that Section 5000A(a) is unconstitutional and is inseverable from the remainder of the ACA, although the scope of relief entered should be limited to the provisions shown  to injure the plaintiffs. The government advanced the same positions at oral argument.

Following the change in Administration, the Department of Justice has reconsidered the government’s position in these cases. The purpose of this letter is to notify the Court that the United States no longer adheres to the conclusions in the previously filed brief of the federal respondents.

2. After reconsideration of the issue, it is now the position of the United States that the amended Section 5000A is constitutional. In National Federation of Independent Business v. Sebelius (NFIB), this Court held that the payment provision in Section 5000A could be sustained as a valid exercise of Congress’s constitutional power because it offered a choice between maintaining health insurance and making a tax payment. 567 U.S. 519, 570, 574 & n.11 (2012). In so ruling, the Court noted that no negative legal consequences attached to not buying health insurance beyond requiring a payment to the IRS, and that the government’s position in the case confirmed that if someone chooses to pay rather than obtain health insurance, that person has fully complied with the law. Id. at 568. Congress in 2017 amended Section 5000A(c) by reducing to zero (effective in 2019) the shared responsibility payment assessed under Section 5000A(b) as a lawful alternative to purchasing insurance under Section 5000A(a), see Tax Cuts and Jobs Act, Pub. L. No. 115-97, Tit. I, § 11081, 131 Stat. 2092, but it did not amend Section 5000A(a) or (b). In the view of the United States, Congress’s decision to reduce the payment amount to zero therefore did not convert Section 5000A from a provision affording a constitutional choice into an unconstitutional mandate to maintain insurance. Rather than imposing a new burden on covered individuals, the 2017 amendment preserved the choice between lawful options and simply eliminated any financial or negative legal consequence from choosing not to enroll in health coverage.

It is also now the position of the United States that, if this Court nevertheless concludes that Section 5000A(a) is unconstitutional, that provision is severable from the remainder of the ACA. The severability inquiry typically requires asking “whether Congress would have wanted the rest of [a statute] to stand, had it known that” one or more particular provisions of the statute would be held invalid. NFIB, 567 U.S. at 587 (opinion of Roberts, C.J.). And the “normal rule is that partial, rather than facial, invalidation is the required course.” Free Enter. Fund v. Public Co. Accounting Oversight Bd., 561 U.S. 477, 508 (2010) (citation and internal quotation marks omitted). In the view of the United States, that presumption of severability cannot be overcome here, particularly as the 2017 Congress that reduced to zero the amount of the shared responsibility payment option under Section 5000A simultaneously left in place the remainder of the ACA.

3. Because oral argument was held and these cases were submitted three months ago, and because other parties have fully briefed both sides of the questions presented, the United States is not requesting supplemental briefing.

Of note, the brief does not alter the Justice Department’s position on whether the plaintiffs have standing to bring their claims.

This letter may be too late to influence the Supreme Court’s resolution of the case. As VC readers know, I do not think the claims in California v. Texas have much merit, and do not believe the Court was likely to have given the Justice Department’s prior position much heed. Accordingly, I doubt this last-minute change will affect the case’s outcome, or even the vote of a single justice. That said, it does put the Biden Administration on record in this case.

For those interested in more on California v. Texas, here is a list of my prior VC posts on the case, and a few NYT op-eds. (Updated to keep the list more current.)

• The Clever Red State Lawsuit Against the Individual Mandate, and the Justice Department’s Disappointing Response—6/11/18
• Strange Bedfellows Join on Severability in the Latest ACA Case—6/14/18
• How Do the States Have Standing to Challenge an Unenforced and Unenforceable Mandate?—6/15/18
• An Obamacare Case So Wrong It Has Provoked a Bipartisan Outcry (w/ Abbe Gluck), New York Times, 6/19/18
• Meanwhile, in a Texas Courtroom, Is the ACA in Trouble?—9/6/18
• BREAKING: District Court Judge in Texas Holds ACA Is Unlawful—12/14/18
• What the Lawless Obamacare Ruling Means (w/ Abbe Gluck), New York Times, 12/15/18
• Understanding Why Judge O’Connor Was Wrong to Conclude Plaintiffs Had Standing to Challenge the Penalty-Less Individual Mandate—12/21/18
• Court Stays Ruling Invalidating the Affordable Care Act Pending Appeal—12/31/18
• Justice Department Revises Its Position in Texas ACA Case—3/25/19
• Does Anyone Support DOJ’s Position in the Texas ACA Case?—3/29/19
• Another Round of Strange Bedfellows on Severability in Texas v. U.S.—4/1/19
• Fifth Circuit Adds New Wrinkle to Texas ACA Case—6/26/19
• The ACA Cases Continue—7/1/19
• On the Eve of Oral Argument in Texas v. U.S.—7/8/19
• Where Is the Fifth Circuit’s Opinion in the Texas ACA Case? [Updated]—12/16/19
• BREAKING: Fifth Circuit Declares Individual Mandate Unconstitutional, Punts on Whether Rest of ACA Must Fall (Updated)—12/18/19
• Can Courts Consider Severability Before Other Questions?—1/22/20
• Red State Challenge to Affordable Care Act Goes to SCOTUS (But the Arguments Remain Incredibly Weak) (Updated)—3/2/20
• Will the Trump Administration Finally Abandon Its Bizarre Position in the Texas ACA Case? (Update: No)–5/5/20
• The Penalty-less Individual Mandate Is Severable from the Rest of the ACA No Matter How You Look at It.–5/14/20
• SCOTUS Expands Texas ACA Case Oral Argument—8/24/20
• How Judge Barrett Ruled in the Texas ACA Case—10/2/20
• The ACA’s Legislative Findings Do Not Constitute an “Inseverability Clause”—10/3/20
• Would Justice Barrett Be Required to Recuse in the Texas ACA Case?—10/3/20
• Standing to Challenge the Individual Mandate—11/9/20
• On the Eve of Oral Argument in California v. Texas–11/9/20
• Live Blogging California v. Texas (Updated)–11/10/20
• The Risks to the ACA of a Standing Decision in California v. Texas Are Overstated (Updated)–2/25/21