Individual Mandate Void, ACA Constitutionality Still In Question

December 19, 2019 - The Fifth Circuit Court found the individual mandate to be unconstitutional but sidestepped making a decision on the rest of the Affordable Care Act (ACA).

“The law has been a focal point of our country’s political debate since it was passed nearly a decade ago,” Circuit Judge Jennifer Walker Elrod wrote in the decision statement. “None of these policy issues are before the court. And for good reason—the courts are not institutionally equipped to address them. These issues are far better left to the other two branches of government.”

Instead, the appellate court decided to remand the decision back to the district court.

When an appeals court comes to a decision that differs from the district court’s decision, it is common practice to “remand” the decision back to the district court. The appellate court’s remand instructs the district court to reconsider their ruling in light of the appellate court’s decision.

The majority opinion was critical of the district court’s conduct in declaring the entire ACA unconstitutional.

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“This issue involves a challenging legal doctrine applied to an extensive, complex, and oft-amended statutory scheme,” the Fifth Circuit court summarized. “All together, these observations highlight the need for a careful, granular approach to carrying out the inherently difficult task of severability analysis in the specific context of this case. We are not persuaded that the approach to the severability question set out in the district court opinion satisfies that need.”

If the court is the place where this debate is to be resolved, then the Fifth Circuit Court expressed some dissatisfaction with the original decision.

Specifically, the Fifth Circuit Court did not approve of the district court’s review of Congress’s intent in 2017 when Congress passed the Tax Cuts and Jobs Act, zeroing-out the individual mandate. The Fifth Circuit court also found lacking the district court’s demonstration that every single piece of the ACA does not stand constitutional.

The Fifth Circuit Court instructed the district court to go through the ACA with a “fine-toothed comb” but did not “hold forth on just how fine-toothed that comb should be— the district court may use its best judgment to determine how best to break the ACA down into constituent groupings, segments, or provisions to be analyzed.”

The Fifth Circuit Court also found that a remand was necessary in light of the federal government’s changed opinion.

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The federal government shifted its position multiple times during the debate. In the district court, it said the individual mandate was unconstitutional but the ACA as a whole was constitutional and the individual mandate was separable from the rest of the law. 

Then, in the appeals court, the federal defendant initially argued that the individual mandate was inseverable from the ACA. 

Then finally, the federal defendant argued in favor of the district court’s judgement, but not the district judge’s decision regarding remedy and with the understanding that the ruling does not apply outside of the plaintiff states.

However, the decision to send the decision back to the lower court was not unanimous.

In her dissenting opinion, Judge Carolyn Dineen King also expressed that it was not the court’s place to deal with this question, but not because the question was legislative. She argued that now that the individual mandate has been set to $0, its existence is purely academic making this ruling unnecessary.

READ MORE: Federal Tax Bill, Individual Mandate Repeal Passes House and Senate

“It has long been settled that the federal courts deal in cases and controversies, not academic curiosities,” she argued.

She said that she and her colleagues were under no obligation to discern whether the ACA is constitutional: the fact that Congress essentially annulled the individual mandate but left the rest of the law intact speaks to the legislative branch’s belief that the unconstitutional individual mandate was severable.

If left to Judge King, she would vacate the district court’s decision because the plaintiffs have no standing to challenge the constitutionality of the ACA’s coverage.

“The district court’s opinion is textbook judicial overreach,” she concludes. “The majority perpetuates that overreach and, in remanding, ensures that no end for this litigation is in sight.” 

Ultimately, as the judges laid out in the beginning of the decision, there were four questions at the center of this debate:

• Is the case live, even though the defendants—the state intervenor-defendants who uphold the ACA—conceded many aspects of the dispute and do the intervenor-defendant states and the House of Representatives have standing?
• Do the plaintiffs—the state intervenors who oppose the ACA and the two individuals who say they have been injured by this law—have standing?
• Is the individual mandate constitutional?
• If so, is it severable from the rest of the Act or does the rest of the Act become unconstitutional with it?

The Fifth Circuit court answered three of the four. It ruled that the defendants and plaintiffs all had standing, the case was indeed live as there was still a controversy between the defendant and plaintiff despite the federal defendant having shifted its position, and the individual mandate was ruled unconstitutional.

What remains to be seen is how the fourth question will be answered—both how the ACA stands in terms of overall constitutionality and how that decision will be made, in lower courts, in the Supreme Court, or by the legislative branch that enacted the law.

California Attorney General Xavier Becerra, leader of the states in defense of the ACA, seemed to offer an answer to where the decision will be finalized in an emailed statement.

“Today we are announcing here at the California Department of Justice that we are prepared to file a cert petition with the US Supreme Court to challenge this ruling and to uphold the Affordable Care Act in all respects,” Becerra said.

In contrast, the White House applauded the decision in a statement released shortly after the court’s ruling was made public.

“Obamacare has failed the American people by increasing costs and reducing choices,” the White House said, reiterating some of the defendants’ main arguments.

The statement also underscored that no changes will take place for those currently covered under the Affordable Care Act.