Is the ACA in Trouble?

That’s the subtitle of a recent Volokh Conspiracy blogpost in which Jonathan Adler discusses an Obamacare challenge that’s currently being litigated in Texas. Adler’s no fan of the Affordable Care Act. Nevertheless, as far as this particular challenge is concerned, in Adler’s view the answer is decidely, “No”:

On Wednesday, … a district court in Texas heard oral arguments in Texas v. Azar, the latest effort to invalidate the Affordable Care Act (ACA). Here’s coverage of the argument from Politico, the LA Times, and NYT.

Filed by 20 state attorneys general, the suit claims that Congress’s decision to zero out the tax penalty owed by those who fail to obtain qualifying helath insurance requires courts to invalidate the entire ACA. According to the states’ argument, this is because when Congress zeroed out the tax penalty, it eliminated the factual predicate upon which Chief Justice Roberts’ opinion in NFIB v. Sebelius was based. If there is nothing to be paid, the mandate does not operate as a tax, the states argue, so the mandate is no longer subject to a “saving construction” under which the mandate can be upheld as an exercise of the federal taxing power. Further, they maintain, because the mandate was a central part of the ACA, invalidating the mandate requires invalidation of the entire law. It’s a clever argument, but it’s also wrong, for reasons I explained in this post (and in this podcast debate). (See also Ilya’s post here.) …

Inexplicably, the Justice Department did not raise standing and (according to the press reports above) it does not appear Judge O’Connor was particularly interested in them. This is a shame, as it could prolong a lawsuit that really has no legs on which to stand. After all, if the mandate is unenfroced and unenforceable — because it imposes no penalty or consequence on anyone — how do the states (or anyone else) have standing to complain about it?

Some activist groups have tried to suggest the Kavanaugh nomination creates a risk that the states could prevail. Such concerns are groundless. First, whether or not Kavanaugh is confirmed, there are at least five votes to reject the states’ claims. In order to rule in favor of the plaintiff states … the Chief Justice would have to reject his longstanding views of standing (as expressed most recently in Gill v. Whitford), the individual mandate itself (which he said imposes no obligation on anyone beyond any tax payment imposed), and severability (which is decidedly minimalist across the board, including in NFIB). This is not going to happen.

Even if the Chief Justice’s vote were in play, there’s no reason to think a Justice Kavanaugh would find the states’ arguments any more appealing. First and foremost, Judge Kavanaugh has an established track record of applying the same narrow approach to severability as the Chief. He also tends to pay attention to standing and other justiciability concerns. …

I am on record saying this lawsuit will ultimately fail, and may never reach the Supreme Court. Indeed, the only scenario under which the states’ claims get to SCOTUS is if they somehow prevail (in whole or in part) before the U.S. Court of Appeals for the Fifth Circuit — and then the states would be lucky to get two votes. The suit is clever, but is ultiamtely too clever by half.

Given all of the problems in the states’ case, there’s little reason to believe their claims can prevail, and little reason to believe the confirmation of Kavanaugh would have any effect on the outcome of the case. The immediate quesiton is whether the states can obtain a temporary victory in district court. On that we’ll have to see.