//  7/11/18  //  Commentary

By Mitch Johnston, Yale Law School

Over the past few weeks, significant digital ink has been spilled over the ramifications of the new “red state” lawsuit against the individual mandate of the Affordable Care Act. While much of the commentary has comprehensively addressed the issues in the case and the states’ low likelihood of success, some commentators have started to focus on whether the State’s requested remedy is actually backwards. These authors have argued that if the states are correct, and a healthcare mandate with a tax penalty of $0 is unconstitutional, then it is the “repeal” of the mandate, the action that rendered the mandate unconstitutional, that must fall. However, it is not clear that this reasoning stops there. If the mandate repeal is unconstitutional, then, based on the severability arguments advanced by the states, shouldn’t the entire Tax Cuts and Jobs Act (TCJA) be struck down with it?

In a recent piece  on Take Care, James Durling and Garrett West took aim at this first question, arguing that, if the states are correct about the amended mandate, then it is the repeal that is unconstitutional. In line with their earlier law review piece on this topic, they argue that Supreme Court precedent actually suggests that if the Court finds that the amended mandate is constitutionally defective, then it is the amendment that must go. For this proposition, they rely on Frost v. Corporation Commission of Oklahoma, where the Court said that:

“It is conceded that the statute, before the amendment, was entirely valid. . . . Without an express repeal, a different legislature undertook to create an exception, but, since that body sought to express its will by an amendment which, being unconstitutional, is a nullity and, therefore, powerless to work any change in the existing statute, that statute must stand as the only valid expression of the legislative intent.”

The “blue” states defending the law have picked up on this argument as well, arguing that even if the red states are right, the repeal should be severed rather than the ACA.

Professor Bagley has argued that this application of Frost is mistaken because the Frost amendment itself was unconstitutional. He notes that this is not the case here, because no one doubts Congress’s ability to constitutionally change the value of individual taxes. However, even with this clarification, Durling and West may still have a point. The Frost Court noted one reason to sever the amendment from the overall statute was that the “practical effect [of striking down the entire provision] would be to repeal by implication the requirement of the existing statute.” Of course, one can avoid this entire mess by arguing that the amended mandate is constitutional, but if it is not, Frost seems to push in favor of the Durling and West (and the blue states) conclusion that it is the amendment that is defective.

Assuming Durling and West are correct, and it is the repeal of the mandate that should be struck down (meaning the penalty/tax would be restored), the severability analysis then seems to implicate the TCJA itself. As a bipartisan brief filed by a group of law professors last week notes, “[t]he cornerstone of severability doctrine is congressional intent. Under current Supreme Court doctrine, a court must offer its best guess on what Congress would have wanted for the rest of the statute if a single provision is rendered unenforceable.” What would Congress have wanted if the repeal was invalid? The professors, arguing that the mandate is severable, say that by repealing the mandate, the 2017 Congress made it clear that they intended for the rest of the statute to stand without it. As a result, the professors argue that even if a court finds that the new “repealed” mandate is unconstitutional, the intent of Congress shows that the rest of the statute should be upheld. However, there is a different aspect of congressional intent to consider if in fact it is the repeal is constitutionally defective. What would Congress have wanted if the repeal was not included in the TCJA. Here we don’t have to look very hard for evidence of Congress’s intent, because Congress has already told us. They told us when the repeal was a crucial part of making the TCJA satisfy the reconciliation instructions Congress itself passed.

In the debate over the bill, to kick off the reconciliation process, Congress provided a budget of $1.5 trillion dollars to work with. Crucially, there was no rule that made them choose that number. They could have chosen $2 trillion or $1 trillion or even $0 of impact. Congress chose the number they wanted. Debate then commenced about how to craft a bill that satisfied that self-imposed constraint. Critically, the repeal of the mandate, which counterintuitively raises money for the government despite its status as a “tax,” was a key part of meeting that goal. Without the mandate repeal, the bill would not have met the instructions without further changes. And thus, if Durling and West’s proposal is adopted and the repeal is struck down, we are left with a bill that Congress itself told us it was unwilling to pass.

Of course, courts ordinarily are unwilling to use the procedural defects of a bill to strike it down, rightly observing that Congress has the Article I power to determine the “rules of its proceedings” and that therefore remedies for violations of those rules is a political question. This is an important doctrine, and one a court may wish to follow in this case given the justifiable reluctance of courts to interfere with and enforce congressional procedure. However, the above argument is not necessarily a mechanistic appeal to enforce congressional procedure as such. Rather, it is an argument to look to procedure as evidence of intent. As Professor Victoria Nourse has observed, the rules of Congress provide a powerful guide to understanding Congress’s actions. Because Congress makes its own rules, its rules shape how Congress itself has interpreted what it has done. In this case, Congress’s rules tell us that Congress did not wish to pass a tax cut bill that did not include the mandate repeal, because such a bill would have violated the reconciliation procedures Congress set for itself. Therefore, if Durling and West are correct, and a court finds the mandate repeal invalid, then it should strike down the entire TCJA. Contrary to Justice Thomas’ worry in the recent case of Murphy v. NCAA, no “nebulous inquiry” into the hearts and minds of the legislators is needed to apply this form of severability analysis, just the ability to read the rules of the road which they set for themselves.

Ultimately, given the strong presumption of severability coupled with the hesitance to use violations of procedure to invalidate statutes, these arguments are unlikely to sway a court to act. Even if a court were to agree with Durling and West and invalidate the mandate repeal, it is unlikely this action would take the entire TCJA with it. However, it does illustrate how specious the states’ arguments that by amending the individual mandate, Congress has, in effect, repealed the ACA in its entirety. Taken seriously, the states’ arguments perhaps suggest that the courts should strike down a major act of Congress if they find the amended mandate unconstitutional, it’s just not the one they think it is.

 


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