Standing to Challenge The Rewriting of Obamacare: Senator Ron Johnson edition

July 22nd, 2014

It wasn’t bad enough that BOTH the D.C. and Fourth Circuit decided to drop a total of 120+ pages of opinions in the tax credit case while I drifted at sea from Bayonne to Bermuda. In addition, our courts gave us a third Obamacare decision. (The Bermuda triangle? I’m sure Sissel will drop later this week).

The District Court for the District of Wisconsin dismissed Senator Ron Johnson’s complaint, filed by the Badger State’s native son Paul Clement, for lack of jurisdiction. Though the opinion is (thankfully) is only 20 pages, but there is a lot of significant discussion about standing.

First, a brief background. When Obamacare was being debated in the Senate, Senators made it abundantly clear that members of Congress, and their staff, should be subject to the same Obamacare exchanges as their constituents. They would not be able to receive the cushy plans of other federal employees. Unlike Halbig, there was fairly clear legislative history on this, as the Senate considered proposal to allow staff to participate in the exchanges, and it was rejected. Anyway, as it is wont to do, when people started complaining that the Congressional staffers would be put on the Obamacare exchanges—without any tax credits—OPM did its thing. They wrote a regulation saying that members of Congress could designate employees who would not have to go onto the exchanges.

Needless to say, OPM totally lacked the authority to do so. Zero. Zilch. Not even the pretense of statutory authority. Unlike Halbig, where at least there is a colorable argument that the IRS was acting within the scope of the statute, this is a case where the Executive clearly rewrote the statute. Remarkably, in a lengthy discussion, the District Court effectively acknowledged this fact.

Indeed, the allegations of the complaint here, which must be accepted as true at this stage of the proceedings, Navarro v. Neal, 716 F.3d 425, 429 (7th Cir. 2013), are that the executive branch has rewritten a key provision of the ACA so as to render it essentially meaningless in order to save members of Congress and their staffs from the consequences of a controversial law that will affect millions of citizens. If proven, this would be a violation of Article I of the Constitution, which reposes the lawmaking power in the legislative branch.

Believe it or not, this may be the clearest judicial statement of the Obama administration’s modus operandi—rewrite statutes to save people from the unpopular ramifications of laws it enforces. And the court did not find this “tweak” was within the President’s Article II discretions. If the allegations are “true,” it would be a “violation of Article I” and an assumption of the “lawmaking power.” This is big.

The decision continues, with references to Madison about the dangers of the executive assuming the legislative powers.

The violation alleged is not a mere technicality. It strikes at one of the most important safeguards against tyranny that the framers erected—the separation of powers. As James Madison explained in response to the objection that the proposed Constitution disproportionally distributed the powers of government:
No political truth is certainly of greater intrinsic value, or is stamped with the authority of more enlightened patrons of liberty, than that on which the objection is founded. The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self- appointed, or elective, may justly be pronounced the very definition of tyranny. THE FEDERALIST NO. 47.

Tweaks to reduce the harms caused by Obamacare are not a “mere technicality.” It is an affront to the separation of powers itself. This should provide some confidence to those planning the Boehner lawsuit on the merits. Rewriting the law, outside the scope of executive discretion, is a per se violation of Article II.

But that cannot be the holding of this case, as Sen. Johnson lacks standing.

Nevertheless, absent a concrete injury to the party bringing the lawsuit, there is no “case” or “controversy” over which the courts have jurisdiction. For the judiciary to intervene under these circumstances would violate the same principle Plaintiffs seek to vindicate in their own lawsuit with far less opportunity for correction by either the other branches or the people. For all of these reasons, the dispute must be left to the “Nation’s elected leaders, who can be thrown out of office if the people disagree with them.” Nat’l Fed. of Indep. Bus. v. Sebelius, 132 S. Ct. 2566, 2579 (2012). “It is not our job to protect the people from the consequences of their political choices.” Id.

The rest of the decision addresses numerous arguments concerning Article III standing. Here I’ll highlight a few of the most salient discussions.

First, Johnson and his staffer argue that he suffers an injury because he is participating in an “unlawful” scheme. Even though the court acknowledged that, if the allegations are true (and they are) the scheme is unconstitutional, he is not willing to assert that the violation to the Constitution, in and of itself, is an injury for purposes of Article II.

Plaintiffs also argue that they experience injury even if there is no actual administrative burden because the very act of classifying employees forces them to participate in a scheme they view as unlawful. This argument is unpersuasive for at least two reasons. First, it puts the cart before the horse. The question of the legality of the regulation has not been determined yet; although Plaintiffs believe the regulation is unlawful, such a belief cannot be enough to create standing because that would open the door to any uninjured party who had a generalized grievance with a government regulation. Under such an approach, there would be no principled limit on standing because a plaintiff need only allege a belief that the challenged regulation is illegal. Valley Forge Christian Coll. v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 485 (1982) (“Although respondents claim that the Constitution has been violated, they claim nothing else. They fail to identify any personal injury suffered by them as a consequence of the alleged constitutional error, other than the psychological consequence presumably produced by observation of conduct with which one disagrees.”) In short, one’s personal belief that a regulation is unlawful is not itself an “injury” sufficient to confer standing.

This argument strikes me as problematically circular. If you read Coleman v. Miller in light of Raines v. Byrd, a violation of the separation of powers that results in a “nullification” of the legislative vote can be, by itself, an injury for purposes of Article III. (More on that later, as I’m working on something on point). With the right case, this theory would offer a grounds for standing based on an injury to the separation of powers. Though, this is not that case.

The Court also addresses an argument raised by amici—if the court doesn’t fix this case, no one will, and the President can continue to act unlawfully.

Finally, it is necessary to address an argument advanced primarily by the amici curiae. In short, they argue that if these Plaintiffs do not have standing, then there will be no recourse to stop the Obama Administration from ignoring the laws Congress passes and from exceeding its authority in other ways. They portray the OPM rule as just one more example of an administration that has on multiple occasions usurped the powers entrusted to Congress by rewriting or amending laws the Congress has passed or simply refusing to enforce them. If the courts—a co-equal branch of government—do not step in, amici argue, then there will be no check on executive authority.
First, there is nothing in the Constitution stipulating that all wrongs must have remedies, much less that the remedy must lie in federal court….
Second, as the above quotation also makes clear, it is not true that the courts are the only remedy for the Administration’s alleged unlawfulness. The Congress itself is surely not helpless to rein in the executive: it has spending authority, investigative powers, and it even wields the blunt instrument of impeachment; it has the power to pass, delay, or kill initiatives the executive branch might propose; and it may delay or thwart consideration of executive branch nominees .… In sum, the fact that the allegations advanced in this action might be difficult or even impossible to pursue in federal court for any other plaintiffs does not mean that these Plaintiffs have suffered the kind of injury that could give rise to standing.

This discussion raises the important issue of proportionality, that was addressed at some length by Elizabeth Price Foley during her testimony last week before the House. What is a proportional response by Congress for a violation of Article II. Let’s consider each item identified by the court. With respect to the “spending authority,” Congress made a deliberate decision in 2009 not to spend money for staffers to receive federal health benefits. The President’s rewriting, and suspension of the law, disregarded that authority. So much for that. The “investigative powers” would reveal that OPM issued this regulation, without even the pretense of authority, and is damn proud of it. Not much help there, with such an open, flagrant violation of the law. Impeachment is certainly a “blunt” instrument, that is totally out of whack to this significant, but fairly minor scale violation of the Constitution.

Repeated efforts to “pass, delay, or kill” executive branch initiatives have only emboldened President Obama to take further unilateral executive action. This is the Catch 22 of congressional intransigence and executive power. The more Congress thwarts the President, the more he exercises “self help” and takes matters into his own hand. In sum, the issue of proportionality, with respect to the various remedies Congress has at its disposal, renders the suspension and rewriting of the law a unique type of constitutional injury.