D.C. Circuit Court Orders Government to Respond in Sissel Case


    By Hadley Heath Manning

    In a new and surprising development, the U.S. Court of Appeals for the D.C. Circuit has ordered that the Federal Government respond to their challengers' petition for an en banc hearing. This case, Sissel v. Department of Health and Human Services, centers on the Origination Clause and alleges that the Affordable Care Act was passed in an unconstitutional way. In short, according to Article 1, Section 7 of the U.S. Constitution, any legislation that raises taxes must originate in the House of Representatives. The ACA, or ObamaCare, includes 20 new taxes or tax increases, but originated in the U.S. Senate. 

    Although Matt Sissel did not initially succeed at the D.C. Circuit, he has filed now for an en banc hearing, in which more judges on the appellate bench would rehear the case. The Court has now ordered the Federal Government to respond, indicating that judges are taking this request for a rehearing seriously. 

    The case is gaining attention and support: Congressional leaders and several states have filed amicus briefs supporting Matt Sissel. The Pacific Legal Foundation is handling litigation for the case, and you can find out more at their Website.

    Like other cases challenging ObamaCare, this is about limiting the government's power to the design put forth in the Constitution. The Founders understood that it was essential to limit the power to tax, to keep government from abusing the people.  The people are best represented in the House, the larger of the two bodies in our bicameral legislature, and therefore the Founders put forth the requirement that tax-raising bills originate in the House.  There is a reason why our government was designed this way, and today our judges should heed the ACA's challengers in Sissel, and uphold this important limitation. 


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    Pruitt Wins Summary Judgment in District Court


    Oklahoma Attorney General Scott Pruitt, like the IRS-challengers in Halbig, filed a suit alleging that the subsidies available in the Affordable Care Act are only available through state-established (as opposed to federally-established) exchanges. Today, he won his case in a summary judgment from the U.S. District Court for the Eastern District of Oklahoma.  From the Court's decision:

    This is a case of statutory interpretation. “The text is what it is, no matter which side benefits.” Bormes v. United States, 759 F.3d 793, 798 (7th Cir.2014). Such a case (even if affirmed on the inevitable appeal) does not “gut” or “destroy” anything. On the contrary, the court is upholding the Act as written. Congress is free to amend the ACA to provide for tax credits in both state and federal exchanges, if that is the legislative will. As the Act presently stands, “vague notions of a statute’s ‘basic purpose’ are nonetheless inadequate to overcome the words of its text regarding the specific issue under consideration.” Mertens v. Hewitt Assocs., 508 U.S. 248, 261 (1993) (emphasis in original). It is a “core administrative-law principle that an agency may not rewrite clear statutory terms to suit its own sense of how the statute should operate.” Util. Air Regulatory Group v. EPA, 134 S.Ct. 2427,2446(2014).

    “But in the last analysis, these always-fascinating policy discussions are beside the point. The role of this Court is to apply the statute as it is written – even if we think some other approach might ‘accor[d] with good policy.’” Burrage v. United States, 134 S.Ct. 881, 892 (2014)(quoting Commissioner v. Lundy, 516 U.S. 235, 252 (1996)(other citation omitted)). See also Michigan v. Bay Mills Indian Community, 134 S.Ct. 2024, 2034 (2014)(“This Court has no roving license, in even ordinary cases of statutory interpretation, to disregard clear language simply on the view that . . . Congress ‘must have intended’ something broader.”); Util. Air Regulatory Group v. EPA, 134 S.Ct. 2427, 2446 (2014)(“The power of executing the laws necessarily includes both authority and responsibility to resolve some questions left open by Congress that arise during the law’s administration. But it does not include a power to revise clear statutory terms that turn out not to work in practice.”).

    The animating principles of this court’s decision have been articulated by the Tenth Circuit: “[C]ourts, out of respect for their limited role in tripartite government, should not try to rewrite legislative compromises to create a more coherent, more rational statute. A statute is not ‘absurd’ if it could reflect the sort of compromise that attends legislative endeavor.” Robbins v. Chronister, 435 F.3d 1238, 1243 (10th Cir.2006). “An agency’s rule- making power is not ‘the power to make law,’ it is only the ‘power to adopt regulations to carry into effect the will of Congress as expressed by the statute.’” Sundance Associates, 139 F3d at 808 (citation omitted) “In reviewing statutes, courts do not assume the language is imprecise ... Rather, we assume that in drafting legislation, Congress says what it means.” Id at 809.

    The court holds that the IRS Rule is arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law, pursuant to 5 U.S.C. §706(2)(A), in excess of statutory jurisdiction, authority, or limitations, or short of statutory right, pursuant to 5 U.S.C. §706(2)(C), or otherwise is an invalid implementation of the ACA, and is hereby vacated.

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    Court of Appeals Grants En Banc Hearing for Halbig


    By Hadley Heath Manning

    The U.S. Court of Appeals in D.C. just issued an order this morning that granted the government's petition for an en banc hearing. 

    This means that, rather than going (directly) to the Supreme Court, the case will stay in appellate court for another ruling (with more judges hearing the case this time).  This order vacates the appellate court's recent 2-1 ruling in favor of Jacqueline Halbig et al.  

    If the en banc hearing results in the same ruling, then the Halbig case and the King case will still stand as split-circuit decisions on the same issue.  Challengers in the King case have already filed for cert at the Supreme Court.

    If the en banc hearing resolves the split circuit (and the ruling is in favor of the government), this does not preclude the Supreme Court from ruling on the cases.  The en banc hearing will take place December 17 at 9:30 am.

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    The Future for Halbig


    By Hadley Heath Manning

    An appellate court victory this summer significantly raised the profile of Halbig v. Burwell, one of several cases challenging the authority of the IRS to disburse subsidies through the federal exchange. This case has the potential to impact ObamaCare significantly. 

    So where is this case going?  After the law's challengers won in the U.S. Court of Appeals in Washington, D.C., the government (in this instance, the losers) reacted just as expected: they filed for an en banc hearing, or a re-deciding of the case by more judges at the same (appellate) level. They hope to reverse the decision and align the ruling with a similar one at the Fourth Circuit Court of Appeals (King v. Burwell). 

    In the Wall Street Journal, attorney Adam White explains why an en banc hearing is not necessary or appropriate in this case:

    But if the D.C. Circuit rehears the case en banc, it would be a sharp break from history. The D.C. Circuit rehears virtually none of its cases. Each year the court's three-judge panels make roughly 500 rulings, but the court averages roughly one en banc rehearing. This year has produced a bumper crop: two. The previous year: zero.

    The low numbers are thanks to the court's high standard, found in the Federal Rules of Appellate Procedure: En banc rehearing "is not favored and ordinarily will not be ordered" unless the case satisfies one of two standards. First, an en banc rehearing may be needed to "secure or maintain uniformity of the court's decisions." A three-judge panel is not allowed to overrule old precedents, even when precedents are in conflict; only the full court can do so, en banc.

    Second, en banc rehearing is appropriate for what the federal appellate rules call cases of "exceptional importance." For the D.C. Circuit, this standard has been met almost exclusively by cases raising serious constitutional issues. Over the past decade seven of the nine cases reheard en banc raised difficult questions of constitutional law, such as the rights of Guantanamo detainees or of terminally ill patients.

    Cases that will substantially affect the court's own workings also can be deemed of "exceptional importance." In 2011, the court sat en banc to decide whether taxpayers could file lawsuits challenging IRS procedures for obtaining tax refunds.

    Halbig checks none of these boxes. It is a straightforward statutory interpretation case. The administration's supporters seem to believe that Halbig has "exceptional importance" because the Affordable Care Act is exceptionally important to them and the panel's decision was, in their eyes, wrong. But that is a dangerous interpretation of the standard, for reasons best stated by Judge Harry Edwards —the very D.C. Circuit judge who dissented from the panel decision in Halbig.

    The entire piece is online here

    Instead of an en banc hearing, the law's challengers would like to see the Supreme Court take up the issue. If the Court did so, it would hear the case(s) in spring of 2015 and decide in summer 2015. But a lot can happen before then: Open enrollment for ObamaCare plans for 2015 coverage starts on November 15, 2014, just after the 2014 midterm elections. 

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    Challengers in King Case File Cert Petition


    By Hadley Heath Manning

    Today, petitioners in the case King v. Burwell filed for certiorari with the Supreme Court.  

    Not ten days ago, David King, Douglas Hurst, Brenda Levy and Rose Luck found out that the Fourth Circuit Court of Appeals sided against them 2-1, and ruled that the Obama Administration did not overstep its authority when it made federal subsidies available through the federal ObamaCare exchange. 

    This case is among a handful that all allege the same thing: The Affordable Care Act or ObamaCare was written to provide federal subsidies to exchanges established by states.  But 36 states chose not to establish exchanges of their own, and thereby default to a federally-operated exchange. The challengers in the King case (and other similar cases) argue that the letter of the law does not provide for subsidies to be disbursed in non-establishing states. They believe the executive branch - through an IRS regulatory rule - overstepped its bounds by changing this part of the law's structure after the fact. 

    Just as the appellants in King found out they'd lost at the appellate level, challengers in an another lawsuit, Halbig v. Burwell, found out that they had won. Halbig's 2-1 ruling went exactly the opposite way at the Court of Appeals for the D.C. Circuit. Court watchers expect the government to ask for an en banc hearing in Halbig, but petitioners in the King case have asked for the Highest Court to take up their case this term.

    From their petition:

    This is a challenge to the most consequential regulation promulgated under the Patient Protection and Affordable Care Act (“ACA”). Two Courts of Appeals have squarely divided over its facial validity. The resulting uncertainty over this major plank of ACA implementation means that millions of people have no idea if they may rely on the IRS’s promise to subsidize their health coverage, or if that money will be clawed back. Employers in 36 states have no idea if they will be penalized under the ACA’s employer mandate, or are effectively exempt from it. Insurers have no idea if their customers will pay for health coverage in which they enrolled, or if large numbers will default. And the Treasury has no idea if billions of dollars being spent each month were authorized by Congress, or if these expenditures are illegal. Only this Court can definitively resolve the matter; it is imperative that the Court do so as soon as possible.

    As I wrote for Doublethink Magazine this week, these cases are already creating bad press for the Obama Administration, and undermine the concept of government-run health care. 

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