Oral argument in Texas v. Azar (‘Obamacare’ appeal) does not go as legal experts predicted

This is why “The Enemy of The People,” the “Grim Reaper” Senate Majority Leader Mitch McConnell, is focused on packing the federal courts with unvetted and unqualified conservative activist ideologues who have the Federalist Society’s stamp of approval, reactionaries who want to roll back the 20th Century and return to the Lochner era (1890 to 1937) in which the United States Supreme Court, using a broad interpretation of due process that protected the “economic rights” of the capitalist class, tended to strike down economic regulations of working conditions, wages or hours in favor of laissez-faire economic policy.

I wrote about this years ago. George Will’s radical ‘litmus test’ for a return to the Lochner era. These are Republican judges who will defend the white male patriarchy and the primacy of corporations and the Plutocracy over average working Americans. It is so 19th Century, and reflects the antiquated conservative ideology of William F. Buckley’s National Review: “A conservative is someone who stands athwart history, yelling Stop, at a time when no one is inclined to do so, or to have much patience with those who so urge it.”

Vox.com explains what is at stake in the latest GOP attempt to strike down the Affordable Care Act aka “Obamacare,” something a unified Republican government could not do by legislation after more than 70 attempts to repeal “Obamacare,” so they turned to their shills embedded in the federal courts. The latest legal challenge to the Affordable Care Act, explained:

The Affordable Care Act is being challenged in the courts yet again — and a Fifth Circuit decision could help determine whether that fight winds up going any further.

ON Tuesday, the Fifth Circuit Court of Appeals [heard] oral arguments in the case of Texas v. Azar, a suit brought by 20 GOP state attorneys general — and endorsed by President Donald Trump’s administration — that marks the latest legal challenge to the ACA. The hearing comes in the wake of a 2018 decision by District Court Judge Reed O’Connor, who determined that the ACA is unconstitutional now that Congress has rolled back the penalty requiring everyone who did not carry health insurance to pay a fine.

Legal experts on both sides of the aisle have argued that O’Connor’s reasoning was faulty and likely to be overturned by the Fifth Circuit.

If the panel of three justices decides to reject O’Connor’s decision later this year, it could discourage the Supreme Court from taking up the lawsuit, leaving in place the bulk of President Barack Obama’s signature domestic policy achievement.

Conversely, the Fifth Circuit could also reaffirm his position and send yet another constitutional challenge to the ACA in front of the nine justices, who’d likely have no choice but to hear the case. (As Sarah Kliff has written for Vox, “There is a history of lawsuits that most legal experts thought were unpersuasive nonetheless putting ACA in mortal danger: first the lawsuit against the individual mandate and then the challenge to insurance subsidies.”)

The challenge against the ACA, briefly explained

The crux of this case comes down to a tenet of the 2017 Republican tax cuts, which effectively eliminated [zeroed-out] a penalty that people would have to pay if they did not enroll in health insurance.

Known as the individual mandate, this part of the Affordable Care Act was intended to push people to purchase insurance in order to more evenly distribute health care costs and make covering Americans with chronic illnesses more economically feasible for insurance companies. While the tax law did not undo the individual mandate itself, it made the penalty $0. In doing so, it provided some opponents of the ACA fodder to levy a legal challenge, as Kliff wrote:

The Supreme Court specifically upheld the individual mandate as a tax. If … the mandate doesn’t have a penalty, the attorneys general argue, then it’s no longer a tax — and thus unconstitutional.

On its own, a court decision that declares the individual mandate unconstitutional wouldn’t be a big deal for Obamacare. The financial penalty is, after all, already gone.

But the state attorneys general take their case a step further. They argue that, if the individual mandate is declared unconstitutional, than the rest of the law needs to fall along with it. Or, as the lawsuit itself puts it: “Once the heart of the ACA—the individual mandate—is declared unconstitutional, the remainder of the ACA must also fall.”

As the state attorneys general from Texas, Georgia, and Wisconsin have argued, the individual mandate and the rest of the ACA are inextricably tied together. If the individual mandate is invalidated, they suggest, the ACA should be invalidated as well.

The plaintiffs’ argument is one that O’Connor agreed with in his December decision, which went even further than the argument initially put forth by the Trump administration’s Department of Justice. Since the DOJ has declined to defend the law, a group of state attorneys general from left-leaning states, and House Democrats, have stepped in to advocate for the ACA.

“The Court finds the Individual Mandate ‘is essential to’ and inserverable from ‘the other provisions’ of the ACA,” O’Connor wrote as part of his December ruling.

Legal experts say the argument against the ACA is a weak one

Legal experts have suggested that the argument that’s being used by states to dismantle the ACA isn’t particularly robust.

“This is insanity in print, and it will not stand up on appeal,” University of Michigan law professor Nicholas Bagley tweeted after O’Connor ruled against the ACA in December.

The main issue that many experts have taken with the district court ruling has to do with a legal term known as “severability,” Vox’s Dylan Scott writes:

If one provision in a law is invalidated by a court, can the rest of it stand without it? Texas is arguing that the individual mandate is so central to Obamacare that if it is unconstitutional, then the rest of the law is too.

In other words, O’Connor determined that the entirety of the ACA could be classified as unconstitutional simply because the individual mandate portion of it could be construed this way.

“Courts, however, usually decide that question by looking at Congress’s intent when crafting the law, and that’s where many experts say the states’ arguments fall apart,” Scott writes. They point to Congress’s handling of the individual mandate penalty as clear evidence that rebuts the conservative argument.

“Even if they conclude that the penalty-less mandate is unconstitutional, the case should be reversed on severability,” Georgetown University health insurance reforms expert Katie Keith told Vox.

Because Congress opted to reduce the penalty associated with the individual mandate but kept the rest of the ACA intact, this suggests that congressional intent was to preserve the other pieces of the ACA. For the Court to interpret otherwise is a major stretch, experts say.

Additionally, there’s a question of whether the state attorneys general even have the standing or the legal qualifications needed to bring forth this suit, Keith says. Parties typically have “standing” to sue if they can prove that they’ve been harmed by a particular policy. The Fifth Circuit could determine that the plaintiffs do not and dismiss the case as a result.

“Judge O’Connor’s decision didn’t address the standing of the plaintiff states and relied only on the standing of the two individual plaintiffs,” she says. “His conclusions on standing have been highly criticized, and there’s prior Fifth Circuit precedent on this issue that O’Connor largely dismisses.”

Despite an overwhelming sense that the legal justification for this challenge is relatively lackluster, however, there have been other ACA challenges that were perceived as “frivolous,” which wound up reaching the Supreme Court and ultimately endangering the law. And it’s still a possibility that this could happen again.

“Given that Texas is the plaintiff and [Bill] Barr is the Attorney General, who knows what will happen,” Boston College health law professor Mary Ann Chirba told Vox. “Reason, logic, legal precedent, and principle seem to matter little these days.”

Which brings us to Tuesday’s oral argument. Below is an audio recording of the hearing from HealthLeadersMedia, as released by the court:

The two conservative activist Republican judges on the panel did what they were put on the bench to do, demonstrate support for reactionary Republican ideology. Despite legal experts on both sides of the aisle having argued that District Court Judge Reed O’Connor’s reasoning was faulty and likely to be overturned by the Fifth Circuit, just the opposite appeared likely from oral argument (caution: never read too much into the judge’s questioning, they frequently play devil’s advocate).

Politico reports, Appeals court skeptical Obamacare can survive:

A panel of federal appeals judges aggressively questioned whether Obamacare can survive during Tuesday afternoon oral arguments in a case that could upend the 2010 health care law.

Two Republican appointees on the three-judge panel frequently interrupted attorneys to question whether the Affordable Care Act’s individual mandate is unconstitutional and if not whether the entire law could stand without it. The ACA’s future appeared murky after two hours of oral arguments at the 5th U.S. Circuit Court of Appeals, but it’s not clear if the judges were ready to uphold a federal judge’s earlier decision invalidating the law.

* * *

Appellate Judge Jennifer Elrod, a George W. Bush appointee, on Tuesday posited that lawmakers — who failed to agree on an Obamacare replacement plan two years ago — deliberately eliminated the mandate penalty because they knew the rest of the law would have to fall. She said perhaps lawmakers thought, “Aha, this is the silver bullet that’s going to undo Obamacare.”

Attorneys for the 20 Democratic-led states that are defending the law, as well as the Democratic-controlled House, countered that Congress clearly intended for the rest of the law to survive when it eliminated the mandate penalty.

“All the court has to do is look at the text,” said Samuel Siegel, the attorney representing the Democratic-led states.

The three-judge appellate panel is expected to rule in the coming months. They could back the lower court ruling invalidating all of Obamacare or overturn it entirely. The judges may also determine that the elimination of the individual mandate penalty only renders certain parts of the ACA unconstitutional, such as its protections for individuals with preexisting medical conditions. That was the Trump administration’s original stance on the lawsuit before recently embracing the lower court ruling against the entire ACA.

Judge Kurt Engelhardt, a Trump appointee, pointed out that Congress could settle the dispute over the health law’s future by immediately stripping out the individual mandate entirely, eliminating the basis for the lawsuit. He also questioned why the Republican-controlled Senate hasn’t weighed in on the lawsuit.

“They’re sort of the 800-pound gorilla who’s not in the room,” Engelhardt said.

But in Washington, Senate Republicans were not eager to talk about the case, and several are betting privately that the ACA will survive. Some expressed concern a court decision throwing out the entire law could create chaos in the health care system if it took effect immediately.

Senate Majority Leader Mitch McConnell on Tuesday said Congress would act “quickly, on a bipartisan basis” to restore preexisting condition protections if the courts struck them, but there’s no guarantee that they would. Republicans have supported less robust protections than those provided by the ACA, and Democrats aren’t likely to accept anything less.

Democrats, who saw their promises to defend coverage and pre-existing conditions as winning campaign messages in 2018, are eager to again press that case in 2020.

“The stakes cannot be higher,” said Senate Minority Leader Chuck Schumer. “Millions of Americans will suffer if Republicans succeed. Shame on them.”

Still, what happens next in the courts isn’t clear. During the Tuesday hearing, theRepublican-appointed judges raised numerous questions about whether any party had any legal standing to challenge the ACA’s constitutionality in the first place or to appeal the federal judge’s earlier ruling against the ACA.

The standing issue emerged as a recent wild card in the legal proceedings — the appeals panel two weeks ago first raised questions about whether anyone could challenge the decision after the Trump administration in March shifted its legal strategy to fully side with the Republican-led states.

The judges could toss the entire lawsuit if they determined the red states who brought the case haven’t suffered any harm from the removal of the individual mandate penalty. Attorneys for those states argued that even without a tax penalty, the mandate causes harm by forcing them to spend money on government health care coverage for more people.

“The ACA causes classic pocketbook injury to the states,” said Kyle Hawkins, the attorney representing the Republican-led states.

Meanwhile, the judges seemed confused by the Trump administration’s legal position. The Department of Justice supports the lower court ruling against the entire ACA, but at the same time it has argued that some provisions of the law — which the DOJ hasn’t specified — should remain.

DOJ attorney August Flentje argued that it’s too soon to determine exactly which provisions can remain even if it’s struck down.

“A lot of this stuff will need to be sorted out,” Flentje said. “It’s complicated.”

The lone Democratic appointee on the three-judge panel was silent throughout the hearing. The judges gave no indication on when they might rule on the case.

The ACA has remained in effect since a federal judge found it unconstitutional last December, and the Trump administration has said it will enforce the law while the legal battle continues.

Mother Jones’ Kevin Drum adds, “Republicans squawk endlessly about ‘judicial activism’ and the depredations of the liberal 9th Circuit. But what we heard today goes light years beyond anything the 9th Circuit has ever considered. If the 5th Circuit actually follows through on any of this stuff it would be little different from simply appointing themselves a separate legislature with the power to overturn any laws they didn’t like. And I’ll bet that not a single ‘constitutional conservative’ will so much as mutter under their breath about this.”

Regardless of how this three-judge panel rules, the losing party has two options: move for an en banc hearing by the full Fifth Circuit of Appeals, and then to the U.S. Supreme Court, which would push this case past the 2020 election because of the time involved in pursuing two appeals, or the losing party can go directly to the U.S. Supreme Court to seek review. This would put the U.S. Supreme Court in the position of either upholding whatever this three-judge panel rules by denying cert for an appeal, or granting cert and deciding this case, most likely in the last week of June 2020, dropping a bombshell — potentially blowing up the health insurance system — just before the national conventions of the political parties in July.