Clement Appeals Obamacare OPM Fix to 7th Circuit

September 19th, 2014

Paul Clement, representing Wisconsin Sen. Ron Johnson, has appealed to the 7th Circuit an adverse decision finding that he lacked standing to challenge the Obamacare OPM Fix.

Here is the core of the standing argument:

First, and perhaps most obviously, the administrative burdens imposed by the Rule clearly establish standing. The OPM Rule requires Members to classify their employees and divide them between those who will continue to receive FEHBP benefits and those who will receive tax-free subsidies designed to mimic FEHBP benefits. That process is both time- consuming and inherently divisive. Not only will some staff members prefer one form of benefit, but the process requires the Member to draw distinctions among employees based on the closeness of their associationwith the member. In their complaint, Plaintiffs detailed these burdens and alleged they were time-consuming and SA25-SA26, SA36.

Rather than credit those allegations, as was appropriate at the motion to dismiss stage, the District Court reached beyond the complaint to invoke a news article which suggested that the burdens were merely ministerial. That effort was not only procedurally improper, but it also ignored that Members were reported to be scrambling to comply with the rdens. The District Court pointed to the lack of standards that would constrain the classification decision. But that only underscores the discretionary nature of the necessary decisions and the need for each Member to formulate standards as well as apply them. Finally, the District Court suggested that Plaintiffs could comply by flipping a coin or ignoring the burdens. In reality, ignoring the administrative burdens would leave all staffers under the FEHBP, which would completely frustrate the ACA, and standing analysis has to assume that burdens will be conscientiously discharged. Even the most onerous administrative burden could be minimized by someone willing to fill out forms with random numbers and letters.

Second, even apart from these substantial administrative burdens, Plaintiffs were injured because they were denied their statutory and constitutional entitlements to As explained above, Congress determined that Members and their staffs should be treated no differently from their constituents when it comes to the ACA. The rejection of any separate or special treatment for Members and their staff was a deliberate policy judgment. It avoided charges that Members and their staff enjoyed Cadillac coverage, while constituents suffered with lemons in the form of inferior coverage under the ACA. The provision also ensured that Members and their staffs were in a position to address flaws in the ACA because they would experience those flaws firsthand. The denial of that statutory entitlement was injury in fact.

Finally, the District Court erred in concluding that Senator Johnson lacked standing based upon reputational and electoral harm. Here there was a specific statutory entitlement to equal ment that disparate treatmentespecially more favorable treatmentwould be detrimental to Members and their staff. But even in the absence of such an express statutory judgment, courts have recognized that legislation that constituents perceive as self-dealing can injure a Member by driving a wedge between the Member and his constituents and harming his personal reputation and electoral prospects. This sort of personal and individualized harm suffices for an individual legislator to challenge unlawful government action. The District Court ignored that relevant authority and invoked concerns where frustrated legislators attempt to win in the court a battle they lost in the halls of Congress. That is not this case. Plaintiffs seek to vindicate a congressional action and invalidate an executive rule that operates directly on Members as employers, rather than as Legislators. As the Supreme Court has emphasized, when plaintiffs challenge a government rule that operates directly and distinctly on them, the prerequisites of Article III standing are readily satisfied.

This challenge, though it would not have nearly the impact of Halbig, would be a significant challenge to the ability of the President to change the law midstream through executive fiat. Perhaps this would be a more palatable vehicle for the Court to take this issue, as the collateral consequences are narrow.