Appeals Court Freezes the Texas v. USA Affordable Care Act Suit

The 5th U.S. Circuit Court of Appeals today hit pause on an effort by California Attorney General Xavier Becerra and other state attorneys general to appeal a ruling that could overturn the Patient Protection and Affordable Care (PPACA).

The 5th Circuit granted a stay in proceedings in the case, Texas v. USA, , in response to the effects of the recent lapse in federal appropriations that has led to a partial shutdown of much of the federal government.

PPACA is the main part of the two-law Affordable Care Act statutory package.

The Parties

Texas Attorney General Ken Paxton headed the team that filed the Texas v. USA suit, on behalf of Texas and other states led by Republicans. The plaintiffs have asked the 5th Circuit to issue a stay.

The defendants in the case — the USA, the U.S. Department of Health and Human Services (HHS), the Internal Revenue Service, and the heads of HHS and the IRS — supported the plaintiffs’ request for the stay.

Becerra’s coalition has been seeking court permission to intervene in the case. Becerra’s coalition asked the 5th Circuit to keep consideration of its motion to intervene moving forward.

The order granting the stay was signed by Circuit Judge Leslie Southwick.

The Shutdown

The order comes as the nation edges toward its longest government shutdown in history.

Federal courts expect to run out of the contingency funds they need to operate Jan. 18. Some district judges have already paused civil cases that involve federal agencies.

The Administrative Office of the United States Courts was expected to issue shutdown guidance Thursday. At press time, the memo had not yet arrived. District courts were still awaiting guidance.

The Justice Department has asked for stays in many civil cases across the country, both in trial courts and in appellate courts. The department has argued that the federal Antideficiency Act generally precludes federal officials from working during a lapse in appropriations.

There is an exception under the act for cases involving human life and the protection of property.

Texas v. USA

Becerra’s coalition is appealing a Dec. 14 ruling issued by U.S. District Judge Reed O’Connor of the Northern District of Texas.

The Affordable Care Act “individual shared responsibility” provision, or individual mandate provision, requires many people to have a minimum level of heath coverage or pay a penalty.

The federal Anti-Injunction Act shields federal taxes from lawsuits.

O’Connor found that, because the Tax Cuts and Jobs Act of 2017 set the ACA individual mandate penalty at zero, the provision is now a requirement for people to buy health coverage, not a tax.

Because the provision is now a purchase requirement, not a tax, it can be declared unconstitutional, O’Connor ruled.

O’Connor also ruled that the mandate provision cannot be severed from the rest of the Patient Protection and Affordable Care Act of 2010 (PPACA), one of the two statutes in the ACA statutory package.

The individual mandate is unconstitutional, and that makes all of PPACA unconstitutional, O’Connor ruled.

O’Connor stayed his ruling on Dec. 30, pending the outcome of appeals.

Resources

The case number of the original district court case is 4:18-CV-167.