Judge Brett Kavanaugh addresses the assembled audience in the East Room of the White House moments after President Donald Trump nominated him to be Associate Justice at the U.S. Supreme Court after Justice Anthony Kennedy announced his retirement from the Court. July 9, 2018. Justice Brett Kavanaugh (Photo: Diego M. Radzinschi/ALM)

With the fate of health insurance for more than 20 million Americans at stake, two justices — Chief Justice John Roberts Jr. and Justice Brett Kavanaugh — seemed inclined Tuesday to form a majority to preserve the Affordable Care Act in nearly its entirety.

The two justices, along with their three liberal colleagues, indicated that if the health care law’s individual mandate to purchase health insurance was no longer constitutional following Congress’ action in 2017, a doctrine known as severability would allow the court to excise the mandate but keep the rest of the law in place.

Resources

  • A copy of the Texas v. California oral arguments transcript is available here.
  • An article about how the Supreme Court justices talked about severability in another recent ruling is available here.

The ACA individual mandate provision requires some people to have what the government classifies as a minimum level of health coverage or else pay a penalty.

In 2017, Congress eliminated the tax penalty for failure to have health insurance. A coalition of 18 Republican state attorneys general, led by Texas, and two individuals brought a legal challenge claiming that eliminating the tax penalty undermined the Supreme Court’s 2012 decision upholding the mandate’s constitutionality under Congress’ taxing power. A federal district court in Texas and the 5th U.S. Circuit Court of Appeals agreed.

“It’s hard for you to argue that Congress intended the entire act to fall when the same Congress that lowered the penalty to zero did not even try to repeal the rest of the act,” Roberts told Texas Solicitor General Kyle Hawkins. “I think they wanted the court to do that, but it’s not our job.”

Under the severability question, Roberts added, “We ask whether Congress would want the rest of the law to survive. Here Congress left the rest of the law intact. That seems to be compelling evidence.”

Kavanaugh said that, if the individual mandate can’t be justified, “It does seem fairly clear the proper remedy would be to sever it. Inseverability clauses usually are very clear. Congress knows how to write them and that is the not the language they chose here [in the act].”

The issue of severability was seen by many court scholars and others as the “ball game” in the case. But two other issues also consumed the more than two hours of arguments: whether the Republican states and individuals had standing to challenge the health act, and whether the mandate without the tax penalty was constitutional.

The justices appeared closely divided on whether the challengers had offered sufficient evidence that, for standing purposes, they had suffered a concrete injury from Congress’ 2017 action.

Roberts and Justice Elena Kagan strongly questioned the standing theory offered by acting U.S. Solicitor General Jeffrey Wall on behalf of the Trump administration, which had declined to defend the law. Wall and the Republican states contend they have standing based on provisions surrounding the mandate but not directly tied to it. Kagan said the government’s theory threatened to “explode standing doctrine” and allow individuals to hunt through legislation that often is more than a thousand pages for one provision to claim injury. “This theory is new to me and I think would be new to many people.”

Justice Amy Coney Barrett also focused on standing, which, if a majority found did not exist for the challengers, would end the case at the outset. Her vote could be determinative on the issue, given comments by other conservative justices. Senate Democratic members of the Judiciary Committee had made the legal threat to the Affordable Care Act a central focus of their objection to Barrett’s nomination.

The justices also examined whether the mandate was constitutional without the penalty and, in some ways, the arguments sounded much like they did when the court first faced the mandate in 2012. This time, however, hypotheticals included one about a mandate to wear masks, a reference to the ongoing pandemic, and even a reference to a mandate to eat broccoli, which had first surfaced during earlier arguments over the health law at the high court.

But the question this time was: Is an unenforceable mandate an unconstitutional command to insure, as the Republican states argued, or a constitutional choice — buy insurance or don’t — as California and its Democratic-led coalition of states and the U.S. House argue.

“Eight years ago, in defending the mandate, you emphasized it was key to the whole act,” Roberts told Munger, Tolles & Olson partner Donald Verrilli Jr., representing the U.S. House. “Now your representation is that everything is fine without it. Why the bait and switch? We spent all that time talking about broccoli for nothing.”

Verrilli, who successfully defended the act in 2012 as solicitor general in the Obama administration, answered, “In 2010, Congress adopted a carrot and stick approach — and lots of carrots but also a stick. The 2010 Congress thought that stick was important. But it turned out the carrots worked without a stick. Congress is allowed to learn from experiences in the world and that’s what happened here.”

Listening to and tweeting thoughts about the arguments, Morrison & Foerster partner Joseph Palmore, who filed an amicus brief supporting California, said, ”I’m less sure on where the court will come down on standing and the merits. But those are questions of largely academic interest here. Severability is the big fight, and my sense is that the #ACA will win it and survive this case.”

— Read Kill the Medicare Drug Plan Donut Hole Plug With the Rest of the ACA: Texas to Supreme Courton ThinkAdvisor.

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