Fifth Circuit Hears Oral Arguments in Texas Lawsuit Contesting Obamacare’s Constitutionality


Today, the Fifth Circuit Court of Appeals heard the first round of oral arguments in Texas v. United States, a case challenging the constitutionality of Obamacare. Texas is the lead plaintiff in this latest legal challenge to President Obama’s marquis legislative legacy.

The suit was filed in February of last year by a coalition of (at the time) 20 states. The coalition is led by Texas Attorney General Ken Paxton. Paxton stated about the challenge, “a divided Supreme Court’s approval [of Obamacare] rested solely on the flimsy support of Congress’ authority to tax.”

That authority to tax being a reference to the individual mandate penalty.

However, the Tax Cuts and Jobs Act of 2017 included a provision that zeroed out the individual mandate penalty for not buying health insurance.

To that end, Paxton and the other plaintiffs argue the conclusion reached by the Supreme Court in NFIB v. Sebelius — that the individual mandate to buy health insurance could be considered a tax, and therefore within Congress’ authority to impose — is now rendered moot after the mandate’s effective repeal.

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The plaintiffs also argue that the rest of Obamacare is inseparable from the mandate, and therefore the entire law should be struck down.

In December, Judge Reed O’Connor upheld the plaintiff’s challenge, thus sending it to higher courts for affirmation or rejection.

In O’Connor’s order, he stated the court found “the Individual Mandate is unconstitutional because it no longer triggers a tax and is inseverable from the remainder of the ACA [Obamacare].” But he did grant the request for a stay on the implementation of the judgment until an appeal is heard.

The case contains a bevy of parties among the opposition. As O’Connor noted, the United States (the main defendant) agrees that the mandate is “unconstitutional and inseverable from the ACA’s pre-existing-condition provisions.” 

The state defendants believe the rest of Obamacare can stand on its own without the mandate.

A throng of 17 mostly Democrat-run states, spearheaded by California, claims that the plaintiff’s argument entirely fails to pass muster and Obamacare should remain intact as is.

Two state Attorneys General, Timothy Fox of Montana and Dave Yost of Ohio, issued an amicus brief in April “in support of neither party” in the case. The pair takes the position that 1) the individual mandate is unconstitutional 2) striking down the entire law on that fact has no precedential grounding and 3) the current “severability doctrine” allows courts to effectively rewrite the law, and thus should be reformed.

On May 1, Paxton filed a brief — leading the same coalition minus Maine and Wisconsin — urging the Fifth Circuit Court to uphold O’Connor’s previous decision.

After the conclusion of the first day of arguments, thoughts on the first day were given by Rob Henneke, general counsel with the conservative Texas Public Policy Foundation (TPPF), who is part of the legal team representing the individuals on the plaintiff’s side.

Henneke argued in front of the Fifth Circuit that the lower court was correct in its decision, “Because the mandate is unconstitutional, and the mandate is inextricably intertwined with the entirety of a regulatory scheme, that requires all of the Affordable Care Act to be struck down.”

“The other side’s argument that this was okay just to not follow the law seemed to not sit well with the judges,” Henneke added. 

Henneke concluded, “I expect after today’s arguments that the Fifth Circuit will uphold the trial court’s ruling and I think it’s quite likely that the Fifth Circuit could strike the House of Representatives and the California state coalition from the case for not having standing to be before the court.”

Each party testified for roughly a half an hour. The California-led defendant’s case is threefold. 

The first is that Congress’ intention within the Tax Cuts and Jobs Act of 2017 was to eliminate the penalty, not repeal all of Obamacare. 

The second is that the severability doctrine is “based on congressional intent,” and thus Congress’ intent to only eliminate the mandate meets the requirement for one section of the law to be repealed [the mandate] while not invalidating the entirety of the law.

The third is that the Supreme Court ruled the law constitutional and that the “choice” for consumers provided by the law — which at the time was between enrolling in Obamacare or paying the penalty (or “tax” as SCOTUS called it)  — is still intact now without the penalty.

California Attorney General Xavier Becerra, who is leading the coalition of state defendants, said of the first hearing, “Today we saw an Administration pressed to explain why affordable care, and American lives, should be put at risk.”

Becerra continued, “If they have their way, millions of Americans could be forced to delay, skip or forego potentially life-saving healthcare. Our state coalition made it clear: on top of risking lives, gutting the law would sow chaos in our entire healthcare system.” 

“We will fight the Trump administration tooth and nail,” Becerra concluded.

The full audio of the arguments will be available to listen to here.

The Supreme Court adjourned for the summer at the end of June and will not come back into session until October. 

But should this case be decided in such a way that an appeal to the nation’s highest court is possible, then Obamacare’s constitutionality could once again sit before the Supreme Court going into a presidential election year — and Texas at the center of the outcome.

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