Yesterday, D.D.C. ruled that the House of Representatives suit against the Obama Administration could proceed. The House raised two claims–one you are likely familiar with, one you are likely not familiar with. When this suit was first being discussed last summer, it was initially conceived to challenge the Obama administration’s delay of the employer mandate. However, when the complaint was ultimately filed, an additional claim was added, that you are less likely familiar with. It contends that that the Obama Administration is paying subsidies to insurance companies that were never appropriated. Unlike King v. Burwell, which involved premium tax credits, this case involves cost-sharing subsidies. These payments are made to the insurers to help cover the costs of Obamacare enrollees with lower income. (That is a gross oversimplification–read Sarah Kliff and Andrew Prokop’s explanation of the facts at Vox). Judge Collyer found that the House has standing to sue on the latter claim, but not the former.
The (lengthy)analysis is after the jump.
Let’s start with the cost-sharing subsidies. The House alleges that there is a “constitutionally significant difference” between how the premium tax credits (at issue in King v. Burwell) and the cost-sharing subsidies (at issue here) are funded.
Essentially, the House contends that Section 1401 Premium Tax Credits are funded by a permanent appropriation in the Internal Revenue Code, whereas Section 1402 Cost-Sharing Offsets must be funded and re-funded by annual, current appropriations. Id. The House alleges further that “Congress has not, and never has, appropriated any funds (whether through temporary appropriations or permanent appropriations) to make any Section 1402 Offset Program payments to Insurers.”
In April 2013, OMB requested for its budget funding for Section 1402. That same day, HHS also requested funding for cost-sharing under Section 1402, referring to it .as one of “five annually-appropriated accounts.” This request for 2014 was never withdrawn. Indeed, the cost-sharing credits were listed by OMB as subject to sequestration, unlike the premium tax credits, which were exempt from sequestration because they derived from a permanent appropriation.
Judge Collyer calls out the federal government for “erroneously” stating that the request for funding was withdrawn.
At the hearing on the instant motion, the Secretaries erroneously stated that the FY2014 request for Section 1402 funding had been withdrawn. See 5/28/15 Tr. at 23 (Counsel for the Secretaries) (“There was initially a request and that request was later withdrawn because the administration took a second look and realized that there were principles of appropriations law that made the request unnecessary.”). Counsel for the House questioned whether that was correct. Id. at 38. The Secretaries have since notified the court that “[t]he reference of a withdrawal [was] to OMB’s submission of the Fiscal Year 2015 Budget, which did not request a similar line item. Defendants’ counsel did not intend to suggest that there was a formal withdrawal document, and apologizes for being unclear on that point.” Stipulation at 3 n.1.
Neither the House nor the Senate ever passed an appropriation for funding under Section 1402. The gravamen of the House’s complaint is that “despite Congress’s refusal to fund the Section 1402 Cost-Sharing Offsets through a current appropriation, nonetheless drew and spent public monies on that program beginning in January 2014.” Further, by delaying the employer mandate, Secretary Lew (Treasury) “has effectively “legislate[d] changes” to Section 1513, both by delaying the employer mandate beyond December 31, 2013 and by altering the percentage of employees that must be offered coverage.” These acts, Congress claims, have “usurp[ed] its Article I legislative authority.”
Citing Windsor, the court notes that it is important not to “elide the distinction” between the “jurisdictional requirements of Article III and the prudential limits on its exercise.”
In the middle of their arguments concerning why the House has no “actionable injury,” and thus no standing to sue, the Secretaries inject a separation-of-powers argument. Mem. at 16-18. That confuses jurisdiction with justiciability, however, which are separate principles. The first is a legal question, while the second assumes the legal answer yet cautions prudence. See Elk Grove Unified Sch. Dist. v. Newdow, 542 U.S. 1, 11-12 (2004). The Court will not consider separation of powers in the standing analysis. See Powell, 395 U.S. 486, 512 (“[T]he doctrine of separation of powers is more properly considered in determining whether the case is ‘justiciable.’”).
In other words, the court will consider whether it has Article III jurisdiction, separate and apart from whether the case is justiciable–an inherently prudential inquiry.
Under these long-established principles of law, and accepting the facts as alleged in the Complaint, the Court must decide whether it can hear this case (jurisdiction) and whether it should hear this case (justiciability).
The court stresses later in a footnote that it will not consider the separation of powers implications of allowing the House to sue, and how that would affect the balance of powers.
The Secretaries stake a fifth argument, that “[t]he separation of powers forecloses the House’s claim of standing,” Mem. at 16-19, which the Court will not consider in its standing analysis. As described above, separation-of-powers concerns are properly accounted for in a justiciability analysis, not a jurisdictional analysis
The standing analysis begins with the starting point that this case is unprecedented–there is no authority to resolve this case directly.
There is no authority that answers the questions posed by the Secretaries’ motion. A survey of the precedent relied on by the parties is a worthwhile starting point, however, as it provides the guiding principles to be applied.
As is often the case in novel separation of powers disputes (as Justice Jackson, the former executive branch lawyer, noted decades ago), there is not an abundance of resources to help resolve the case.
The court starts with Coleman v. Miller and Raines v. Byrd. The former permitted a suit brought by the Kansas Senate, and the latter rejected a suit by Senator Robert Byrd and other individual Senators (challenging the line item veto prior to Clinton v. City of New York). Coleman is a bizarre case because there was not a clear majority on the Court. The Raines Court read Coleman narrowly, and explained that Byrd and his colleagues had had “alleged no injury to themselves as individuals,” and because “the constitutional injury they allege[d] is wholly abstract and widely dispersed.”
So does Raines provide the rule of decision here? The parties disagree–and the court agrees with the House:
The Secretaries perceive a straight line between Raines and this suit: they argue that the House has alleged only an “abstract dilution of institutional legislative power.” Mem. at 1 (quoting Raines, 521 U.S. at 826). But the plaintiff here is the House of Representatives, duly authorized to sue as an institution, not individual members as in Raines. In fact, Raines “attach[ed] some importance to the fact that appellees have not been authorized to represent their respective Houses of Congress in this action, and indeed both Houses actively oppose their suit.” Id. at 829. That important fact clearly distinguishes this case. As discussed below, the injury here is sufficiently concrete and particularized as to the whole House.
The D.C. Circuit has already allowed suits by Congress, or even its committees, to sue in an official capacity to demand information pursuant to its oversight role. This principle has been reaffirmed post-Raines in recent suits against AG Holder and White House Counsel Harriet Miers.
The court then turn to the Supreme Court’s recent pronouncement in Arizona State Legislature. In that case, the Court found that a statewide citizens initiative “strip[ped] the Legislature of its alleged prerogative to initiate redistricting,” and that the Legislature, therefore, had alleged an adequate injury in fact.
More importantly–as I stressed at the time–it did not affect Raines. And although the Court said it was not resolving the question of institutional standing for the House, it didn’t reject it either.
Arizona carefully distinguished Raines, emphasizing its narrow holding “that six individual Members of Congress lacked standing to challenge the Line Item Veto Act.” Id. at 2664 (emphasis in original). The Arizona Court reiterated that there was “some importance to the fact that [the Raines plaintiffs] not been authorized to represent their respective Houses of Congress.” Id. In contrast, the Arizona Legislature was “an institutional plaintiff asserting an institutional injury.” Id.
To be sure, the Arizona Court went out of its way not to decide the question presented in this case: “The case before us does not touch or concern the question whether Congress has standing to bring a suit against the President. There is no federal analogue to Arizona’s initiative power, and a suit between Congress and the President would raise separation-of-powers concerns absent here.” Id. at 2665 n.12. That obiter dictum raises cautions only as to justiciability, not jurisdiction.
But that’s just dicta.
In short, it is unprecedented:
In sum, no case has decided whether this institutional plaintiff has standing on facts such as these. Without the benefit of fully-applicable precedent, the Court proceeds to address the merits of the Secretaries’ motion.
So let’s move onto what are dubbed the “non-appropriation theory”–that HHS spent money that was never appropriated. This act, the court observes, inflicts a “concrete, particular harm on the House.”
The Secretaries argue that the House lacks standing to sue and stop expenditures for which no annual appropriation was enacted. The House rejoins that it has standing to sue on several grounds, not least of which is that it has been “divested utterly and completely of its most defining constitutional function.” Opp’n at 25. The Court agrees: the constitutional trespass alleged in this case would inflict a concrete, particular harm upon the House for which it has standing to seek redress in this Court.
Critically, the court stresses that the Non-Appropriation theory is not about the implementation, interpretation, or execution of the statute–even though the government uses the phrase “implement” forty times in their 26-page brief.
Properly understood, however, the Non-Appropriation Theory is not about the implementation, interpretation, or execution of any federal statute. It is a complaint that the Executive has drawn funds from the Treasury without a congressional appropriation—not in violation of any statute, but in violation of Article I, § 9, cl. 7 of the Constitution.17 The Non- Appropriation Theory, in other words, is not about how Section 1402 is being applied, but rather how it is funded.
The court adds that the mere fact that the President is also violating an appropriation statute is not sufficient to create standing–what creates standing is the violation of the appropriation Clause. In effect, the court is narrowly constraining the scope of standing for the House–it is not enough to allege the President is violating a statute–they must allege the President is violating a specific provision of the Constitution that inflicts an “institutional injury.”
But again, the Non-Appropriation Theory is not about executing congressionally-enacted laws or staying within their bounds. Nor is it “a generalized grievance about the conduct of government.” Mem. at 25 n.12 (quoting United Presbyterian Church in the U.S.A. v. Reagan, 738 F.2d 1375, 1382 (D.C. Cir. 1984)). It alleges a specific, constitutional violation that is wholly irrespective of the ACA’s implementation.
It is for this reason that standing is unwarranted for the delay of the employer mandate. The court draws a strong distinction between alleging the President was unfaithful to the Constitution, and unfaith to the statute.
The gist of this theory is that Secretary Lew stepped into congressional shoes by effectively amending a congressionally-adopted law through regulation. But as discussed below, the heart of the alleged violation remains statutory, not constitutional: the House alleges not that Secretary Lew has disobeyed the Constitution, but that he disobeyed the ACA as enacted.
Distilled to their essences, the Non-Appropriation Theory alleges that the Executive was unfaithful to the Constitution, while the Employer-Mandate Theory alleges that the Executive was unfaithful to a statute, the ACA. That is a critical distinction, inasmuch as the Court finds that the House has standing to assert the first but not the second.
At first glance, I balked at this statement, but after reflection, it makes sense. What is at issue here is not whether the President has faithfully executed the law (a statute). At issue is whether the President has complied with the Constitution. I don’t know that any court has articulated this theory.
The court notes in a footnote that Secretaries have mounted no argument as to the traceability or redressability of that injury, and thus concede that those elements of standing are satisfied. Therefore, the only other inquiry concerns injury-in-fact.
Once the nature of the Non-Appropriation Theory is appreciated, it becomes clear that the House has suffered a concrete, particularized injury that gives it standing to sue.18 The Congress (of which the House and Senate are equal) is the only body empowered by the Constitution to adopt laws directing monies to be spent from the U.S. Treasury.
If the President could spend, where there is no appropriation, our “constitutional structure would collapse.”
Yet this constitutional structure would collapse, and the role of the House would be meaningless, if the Executive could circumvent the appropriations process and spend funds however it pleases. If such actions are taken, in contravention of the specific proscription in Article I, § 9, cl. 7, the House as an institution has standing to sue. None of the Secretaries’ four arguments, Mem. at 9-23, persuades the Court otherwise.
The court restates this point later in the opinion:
Instead, it illustrates precisely why the nature of the Non- Appropriation Theory is so important to grasp: the House is not suing to police implementation of the ACA, but rather to redress an alleged violation of the Constitution. And because the House occupies a unique role in the appropriations process prescribed by the Constitution, not held by the ordinary citizen, perversion of that process inflicts on the House a particular injury quite distinguishable from any suffered by the public generally.
The court then walks through each argument, one-by-one. First up is the “vindication of the rule of law.”
The Secretaries first argue that “vindication of the rule of law” is too generalized a grievance to be entertained by an Article III court. Mem. at 9-11. Their argument depends on, and cites almost exclusively, Raines v. Byrd. But this is not a case about “abstract dilution of institutional legislative power” as addressed in Raines, 521 U.S. at 826. The institutional injury was “diluted” in that case because only six of the 535 members of Congress sued as plaintiffs.20 The critical distinction here is that the House of Representatives as an institution is the plaintiff. See Arizona, 135 S. Ct. at 2664 (“The ‘institutional injury’ at issue [in Raines], we reasoned, scarcely zeroed in on any individual Member. . . . The Arizona Legislature, in contrast, is an institutional plaintiff asserting an institutional injury.”)
Although, the court does note that the Arizona case involved both houses of its legislature, while this case does not involve the U.S. Senate. The court finds that the injury must be inflicted, but “not exclusively” on the House.
It is of course true that the House is but one chamber of Congress, and the Senate is not a plaintiff in this suit. That distinguishes the case from Arizona, where the entire state legislature sued. 135 S. Ct. at 2658-59. Yet the House remains an institution claiming an institutional injury. The only question is whether that injury “zeroe[s] in on” the House, or is too “widely disbursed” between it and the Senate. Id. at 2665. In Raines, six of 535 congressional members was not enough. Id. In Arizona, the entire legislature was enough. Id. In this case, one of two separate appropriating institutions—half of Congress—is the plaintiff. The Court finds that the injury, although arguably suffered by the House and Senate alike, is sufficiently concentrated on the House to give it independent standing to sue. An injury in fact must be inflicted particularly, but not exclusively, on the plaintiff.
Raines did not foreclose this sort of suit:
But when the institution itself files suit, it can obtain a remedy for the “institutional” injury that the Raines Court found “too widely dispersed” when asserted by only a few members. Id.; cf. Arizona, 135 S. Ct. at 2664. As this Court has held, Raines “does not stand for the proposition that Congress can never assert its institutional interests in court,” but instead “expressly leaves that possibility open.”
The House is different from individual members because it has an institutional interest.
An individual legislator holds political power in trust for the people; she may gain and lose that power at their whim. The legislature’s role is not so fleeting; the House remains the House, and it can sue to vindicate certain institutional interests, such as its distinct role in the appropriations process.
Second, the court considers the government’s claim that Congress has no “legally cognizable interest in the manner in which federal law is implemented.”
The Non-Appropriation Theory does not turn on the implementation, interpretation, or execution of the ACA. The question presented is instead constitutional. … The House does have a continuing and distinct interest in the appropriation process, for that is its role in our constitutional system and the source of virtually all of the House’s political power.
Third, the government defends that the House has what the court refers to as “non-judicial countermeasures.” (This reminds me of Dave Pozen’s article on constitutional countermeasures).
The Secretaries further argue that the House is not injured by the lack of an appropriation because it can remedy or prevent that injury through means outside this lawsuit. Id. at 19-20. Chief among those means, they contend, is “the elimination of funding.” Id. As the House points out, the Secretaries are “apparently oblivious to the irony” of their argument. Opp’n at 35. Eliminating funding for Section 1402 is exactly what the House tried to do. But as the House argues, Congress cannot fulfill its constitutional role if it specifically denies funding and the Executive simply finds money elsewhere without consequence. Indeed, the harm alleged in this case is particularly insidious because, if proved, it would eliminate Congress’s role via-a- vis the Executive. The political tug of war anticipated by the Constitution depends upon Article I, § 9, cl. 7 having some force; otherwise the purse strings would be cut.
In effect, Congress already took the countermeasure of not funding this specific program. They did it, and the President disregarded it. By the President making up an appropriation source–which the court seems inclined to believe–the Executive can cut the proverbial purse strings.
The court adds later that the Administration’s actions disarms these countermeasures:
In addition to their justiciability argument rooted in separation of powers, the Secretaries argue unpersuasively that the Court should exercise its discretion under the Declaratory Judgment Act and dismiss this case because the House “has a variety of legislative means available to counter the Executive Branch.” Mem. at 26. As discussed above, the constitutional violation of which the House complains has the collateral effect of disarming the most potent of those legislative means.
But couldn’t Congress repeal or amend the appropriation authority? That wouldn’t remedy the injury, for it is a violation of the Constitution, and not the statute.
The Court finds equally unpersuasive the argument that Congress “could repeal or amend the terms of the regulatory or appropriations authority that it has vested in the Executive Branch.” Mem. at 19.23 But the authority trespassed upon under the Non-Appropriation Theory is not statutory; it is constitutional. It was not vested in the Executive by Congress; it was vested in Congress by sovereign people through constitutional ratification. Neither Congress nor the Executive has the authority to repeal or amend the terms of Article I, § 9, cl. 7.
The court does not reach the Coleman v. Miller position that “vote nullification” has occurred.
In an obvious effort to preempt the House’s invocation of Coleman v. Miller, the Secretaries argue that ‘vote nullification’ is not a cognizable injury. Mem. at 20-23. The House responds that this case “presents the same type of nullification injury the Supreme Court recognized in Coleman.” Opp’n at 27. The Court need not reach this question, however, because it finds that the House suffers a sufficiently concrete and particularized injury by its displacement from the appropriations process. Whether its votes were ‘nullified’ within the meaning of Coleman need not be addressed at this juncture.
As a result, the House can sue to remedy constitutional violations.
The House of Representatives as an institution would suffer a concrete, particularized injury if the Executive were able to draw funds from the Treasury without a valid appropriation. The House therefore has standing to sue on its Non-Appropriation Theory, to the extent that it seeks to remedy constitutional violations.
Where the dispute is over true implementation, Congress retains its traditional checks and balances—most prominently its purse strings. But when the appropriations process is itself circumvented, Congress finds itself deprived of its constitutional role and injured in a more particular and concrete way.
But the key limitation is “constitutional violations.” Statutory violations only concern the implementation of the law, to which caselaw forecloses institutional standing.
Some of the counts under the Non-Appropriation Theory do not seek redress for constitutional violations. Count III alleges a violation of 31 U.S.C. § 1324, which appropriates funds for Section 1401 Premium Tax Credits but not, allegedly, the Section 1402 Cost-Sharing Offsets. Because that question is statutory and not constitutional, it falls within the sphere of cases to which the Secretaries’ precedent does apply: those that concern the implementation, interpretation, or execution of federal statutory law.
Those statutory claims were dismissed.
So what is the remedy for a violation of the Non-Appropriation Theory? The court hints at it later in the opinion:
If successful on the merits, which are not addressed here, the Non-Appropriation theory might result in an injunction against further Section 1402 Cost-Sharing Offsets until an appropriation is made. That would cure the constitutional injury.
The court next turns to the employer-mandate theory, which you will recall was the most widely-discussed claim when the House authorized the suit during the summer of 2014.
The Employer-Mandate Theory stands on very different footing than the Non- Appropriation Theory. The House alleges that Secretary Lew and Treasury have disregarded the congressionally-adopted employer mandate in two ways. First, Secretary Lew delayed the effective date of the mandate beyond the statutory prescription of January 1, 2014. Compl. ¶ 45. Second, he reduced the percentage of employees or full-time equivalents (FTEs) who must be offered insurance, thereby decreasing the burden on employers. Id. ¶ 46. Both of these regulatory actions are said to “injure the House by, among other things, usurping its Article I legislative authority.”
However, these are statutory claims, even if framed in constitutional terms.
Despite its formulation as a constitutional claim, the Employer-Mandate Theory is fundamentally a statutory argument. The House cites only Article I, § 1 and Article I, § 7, cl. 2 in its Complaint. See Compl. ¶¶ 91-108 (Counts VI-VIII). Those provisions, taken together, establish that Congress has sole legislative authority and that laws cannot be adopted without its approval. The House extrapolates from this that any member of the Executive who exceeds his statutory authority is unconstitutionally legislating.
The court–in what I see as its key limiting principle to prevent the floodgates from opening–explains that the implementation of law, or even extra-statutory action, is not sufficient to justify standing.
The argument proves too much. If it were accepted, every instance of an extra- statutory action by an Executive officer might constitute a cognizable constitutional violation, redressable by Congress through a lawsuit. Such a conclusion would contradict decades of administrative law and precedent, in which courts have guarded against “the specter of ‘general legislative standing’ based upon claims that the Executive Branch is misinterpreting a statute or the Constitution.” House of Representatives, 11 F. Supp. at 89-90; cf. Windsor, 133 S. Ct. at 2689 (“The integrity of the political process would be at risk if difficult constitutional issues were simply referred to the Court as a routine exercise.”).25 In sum, Article I is not a talisman; citing its most general provisions does not transform a statutory violation into a constitutional case or controversy.
Further, private parties are free to sue over the delay of the employer mandate.
The generalized nature of the injury alleged in the Employer-Mandate Theory is also relevant because other litigants can sue under the Administrative Procedure Act to invalidate Treasury regulations. Cf. Blackfeet Nat’l Bank v. Rubin, 890 F. Supp. 48, 54 (D.D.C.), aff’d 67 F.3d 972 (D.C. Cir. 1995). Indeed, litigation over implementing regulations has been ubiquitous since the ACA’s inception. E.g., King v. Burwell, 135 S. Ct. at 2488. A private plaintiff who is aggrieved by Treasury’s actions is free to sue and convince a court that such regulations are contrary to the ACA or otherwise improper.
I don’t know if this is right–one of the insidious aspects of the Obama administration’s delays of penalties is that no one is injured. The plaintiffs in King v. Burwell–who were in a very slim income band–were only able to establish standing because the imposition of the mandate, in light of the subsidies, means they would have to pay more money. For virtually every income band, that would not be the case. I still haven’t seen how anyone would have standing to challenge the delay of the employer mandate. But as a general matter, the court is correct–where private parties can sue, prudence dictates the House shouldn’t.
Unlike redressability for the Non-Appropriation Theory, where the remedy would call on the President to stop spending money that isn’t appropriated, the remedy for the employer mandate becomes much more difficult.
But under the Employer- Mandate Theory, the House merely asks the Court to declare unconstitutional several subsections of the preamble to a Treasury Rule. Id. Quite conspicuously, and in contrast to the Non- Appropriation Theory, the House does not seek injunctive relief with regard to the employer mandate. Compl. at 26-27 (Prayer for Relief). But if the alleged injury resides in the delayed enforcement of the employer mandate, declaratory relief alone would not help. Striking down Treasury’s preamble to would not require Secretary Lew to start assessing payments. He might instead continue delaying the employer mandate without memorializing such delay in a regulation.26 Thus, a ruling for the House may offer nothing but the “psychic satisfaction” of knowing “that the Nation’s laws are faithfully enforced,” which is “not an acceptable Article III remedy because it does not redress a cognizable Article III injury.” Steel Co. v. Citizens for Better Env’t, 523 U.S. 83, 107 (1998).
In effect, the relief would be a mere declaration of unconstitutionality.
The true injury is one of unfaithful execution–but this is not one that the House suffers.
The Employer-Mandate Theory concerns the Executive’s alleged infidelity to the ACA. To the extent the theory is expressed as a constitutional violation—on the ground that the Secretary of the Treasury is not Congress—the theory is too general to state a concrete, particularized harm to the House.
The court concludes that there is only standing for the Non-Appropriation Theory, and explains the essentiality of this doctrine to the separation of powers.
Congress’s power of the purse is the ultimate check on the otherwise unbounded power of the Executive. See U.S. Dep’t of the Navy v. Fed. Labor Relations Auth., 665 F.3d 1339, 1347 (2012) (“[If not for the Appropriations Clause,] the executive would possess an unbounded power over the public purse of the nation; and might apply all its monied resources at his pleasure.”) (quoting 2 Joseph Story, Commentaries on the Constitution of the United States § 1342, at 213-14 (1833)). The genius of our Framers was to limit the Executive’s power “by a valid reservation of congressional control over funds in the Treasury.” OPM v. Richmond, 496 U.S. 414, 425 (1990). Disregard for that reservation works a grievous harm on the House, which is deprived of its rightful and necessary place under our Constitution. The House has standing to redress that injury in federal court.
The government only challenged standing, and did not seek to dismiss for want of subject matter jurisdiction. The court finds this inquiry straightforward.
This case “arises under” the Constitution in both a constitutional and statutory
sense. The allegations here turn on a straightforward constitutional analysis: did the Secretaries violate Article I, § 9, cl. 7? “It has long been held that a suit arises under the Constitution if a petitioner’s claim will be sustained if the Constitution is given one construction and will be defeated if it is given another.” Powell, 395 U.S. at 514 (citing Bell, 327 U.S. at 685; King County, 263 U.S. at 363-364) (alterations and quotation marks omitted). The relevant statute, 28 U.S.C. § 1331, similarly confers jurisdiction when the “case depends directly on construction of the Constitution.” Powell, 395 U.S. at 516. The Court concludes that it has subject matter jurisdiction over this case.
Next, the court turns to whether there is a court of action. First, it considers the good ‘ol Declaratory Judgment Act. There is a cause of action, because there is standing.
The House has standing under the Non-Appropriation Theory (as to Count I and Count V, in part) but not under the Employer-Mandate Theory. The House accordingly may pursue a remedy under the Declaratory Judgment Act coextensive with its standing under the Non-Appropriation Theory.
What about the APA? Has the House suffered a “legal wrong” within the meaning of the APA?
Once again, the analysis collapses back into standing. For the reasons stated above, the Court finds that the House has standing because it has alleged a legal wrong that is traceable and remediable. The Secretaries’ APA defense therefore fails.
But is the House a “person aggrieved?”
That analysis does not control this case, therefore, and the Secretaries offer no precedent for the proposition that the House cannot be a “person aggrieved.” Because there is precedent for the House filing suit to vindicate its rights in other contexts, see AT&T, 551 F.2d at 390-91; Miers, 558 F. Supp. 2d at 69; Holder, 979 F. Supp. 2d at 3; House of Representatives, 11 F. Supp. 2d at 86, the Court will deny the Secretaries’ motion to dismiss Count V for want of a cause of action under the APA.
(This will make the Citizens United crowd livid! Not only is a corporation a person, but the House is a person too!).
Finally, the court finds that as institution, the congress has a cause of action that arises under the Constitution.
But this is not a case about private citizens deputizing themselves in an effort to enforce federal law. Such putative plaintiffs must demonstrate an expressly-conferred cause of action precisely because they suffer no injury in their own right. It is quite another matter when the House—which bears the brunt of the constitutional injury alleged—is the institutional plaintiff. Cf. Ariz. Legislature, 135 S. Ct. at 2664 (contrasting the individual plaintiffs in Raines to “an institutional plaintiff asserting an institutional injury”).
The court adds that there is nothing inconsistent with the Constitution to permit this suit:
Nor is it inconsistent with “the context of the Constitution as a whole,” id., for the Framers to forbid the Executive from spending un-appropriated money and then allow the appropriators to enforce that right in court. After all, “we presume that justiciable constitutional rights are to be enforced through the courts.” Davis v. Passman, 442 U.S. 228, 242 (1979). The House in this case has “no effective means other than the judiciary” to seek redress for its injury and “must be able to invoke the existing jurisdiction of the courts for the protection of [its] justiciable constitutional rights.” Id. The Court recognizes an implied cause of action for the House as an institution under a specific constitutional prohibition whose violation, if proved, would particularly harm Congress.
Next, the court turns to justiciability.
That the Court has jurisdiction over this case does not end the inquiry. It must also consider whether there is any reason it should not hear the case, i.e., whether the case is justiciable. That, in turn, presents two questions: (1) whether the claim presented and the relief sought are of the type which admit of judicial resolution; and (2) whether the structure of the federal government renders the issue presented a “political question,” that is, not justiciable because of the separation of powers among the Legislative, Executive and Judicial Branches established by the Constitution. Powell, 395 U.S. at 516-17
First, finds that this case presents issues of pure constitutional interpretation. This is not a political question, see Marbury.
The first question is easily answered: the claims for which the House has standing involve pure questions of constitutional interpretation, amenable to resolution by this Court. “It would be difficult to say that there are no ‘manageable standards’ for adjudicating the issues raised. Familiar judicial techniques are available to construe the meaning” of the Constitution. Powell, 395 F.2d at 594; see also Powell, 395 U.S. at 548-49 (“[A] determination of petitioner Powell’s right to sit would require no more than an interpretation of the Constitution. Such a determination falls within the traditional role accorded to courts to interpret the law, and does not involve a ‘lack of respect due [a] coordinate [branch] of government,’ nor does it involve ‘an initial policy determination of a kind clearly for nonjudicial discretion.’”) (quoting Baker, 369 U.S. at 217). In short, centuries of precedent demonstrate the Judiciary’s ability to adjudicate the Secretaries’ compliance with the Constitution. See, e.g., Marbury v. Madison, 5 U.S. (1 Cranch) 137 (1803).
Second, the government claims this suit would upset the balance between the branches, and is not suitable for judicial resolution.
The Secretaries pin their hopes on the second question, arguing that to allow this suit to proceed would “upset the finely wrought balance” among the branches and that the case presents issues not “suitable for resolution by an Article III court.” Mem. at 16, 18.29 The argument is not persuasive. Whatever the merits of the parties’ interpretations of the differing appropriation legislation—an issue not to be addressed at this stage of litigation—the Complaint makes clear that this is not a dispute over statutory semantics. To the contrary, the constitutional violation alleged is that, despite an intentional refusal by Congress to appropriate funds for Section 1402, the Secretaries freely ignored Article I, § 9, cl. 7 of the Constitution and sought other sources of public money. The Complaint’s Non-Appropriation Theory presents a question of constitutional interpretation for the Judiciary, which provides “the primary means through which [constitutional] rights may be enforced.”
But what about the fact that traditionally, the political branches did not resort to litigation?
The first part is unconvincing: the refusal by several presidents to sue Congress over the Tenure of Office Act hardly answers the question presented by the pending motion. See 521 U.S. at 826. The refrain by either branch from exercising one of its options does not mean that the option was unavailable; there will never be a history of litigation until the first lawsuit is filed.
The mere fact that the House is a plaintiff does not turn this into a political dispute. That there is a constitutional dispute, does not render it unsuitable for the courts. See Marbury.
The Court concludes that prudential considerations do not counsel avoidance of this dispute. The Court is familiar with the standards for constitutional review of Executive actions, and the mere fact that the House of Representatives is the plaintiff does not turn this suit into a non-justiciable “political” dispute. See Powell, 395 U.S. at 549 (“Our system of government requires that federal courts on occasion interpret the Constitution at variance with the construction given the document by another branch. The alleged conflict that such an adjudication may cause cannot justify the courts’ avoiding their constitutional responsibility.”) (collecting cases). Despite its potential political ramifications, this suit remains a plain dispute over a constitutional command, of which the Judiciary has long been the ultimate interpreter. See Marbury, 5 U.S. (1 Cranch) 137.
Finally, the court notes that its theory (as I described earlier) does not open the floodgates, because it is–in the words of Justice Scalia in Zivotofsky–gerymandered to the facts of this case.
The Court is also assured that this decision will open no floodgates, as it is inherently limited by the extraordinary facts of which it was born. The Secretaries note that this case is a “novel tactic” by the House and “entirely without precedent.” Mem. at 2, 25. The House agrees that this “case is the result of an historic vote by plaintiff House of Representatives.” Opp’n at 1. The rarity of these circumstances itself militates against dismissing the case as non-justiciable. See Windsor, 133 S. Ct. at 2689 (“The integrity of the political process would be at risk if difficult constitutional issues were simply referred to the Court as a routine exercise. But this case is not routine.”).
What’s important to remember is that for purposes of a motion to dismiss on standing, the facts are taken as true.
When reviewing a motion to dismiss for lack of jurisdiction under Rule 12(b)(1), a court must construe the complaint liberally, giving the plaintiff the benefit of all inferences that can be derived from the facts alleged.;;lllo
This is why I’ve noted that Texas’s suit against DAPA, as well as West Virginia’s suit against the Obamacare individual mandate administrative fix, the court must accept the rendition of facts advanced by the Plaintiff. (Judge Hanen was widely faulted for accepting Texas’s understanding of DAPA but this is compelled by precedent).
What does all this mean? Seth Chandler explains that if the courts ultimately rule in favor of the House, it could drastically impact Obamacare in all 50 states:
Success by the House in this lawsuit will not just threaten policies in states that failed to establish their own Exchanges, but health insurance policies purchased on Exchanges in all 50 states.
Nick Bagley (who I’m sure enjoyed his ever-so-brief respite from all things Obamacare) disagrees. Even if the House wins, the insurance companies are still entitled to the payments, but they would need to sue in the court of federal claims:
Even without an appropriation, health plans still have a statutory entitlementto cost-sharing payments. What that means in non-legalese is that Congress has promisedto pay them money—whether or not there’s an appropriation. And health plans can sue the government in the Court of Federal Claims to make good on that promise. (Congress has undeniably appropriated the money to pay court judgments.)
So the question isn’t whether the government will pay the cost-sharing reductions. It’s when. If the government is right, Treasury can pay health plans on a “periodic and timely” basis. If the House is right, health plans have to file thousands upon thousands of duplicative lawsuits to get the money.
That’d be bonkers, of course. Forcing health plans to pursue expensive and time-consuming litigation to recover what they’re owed doesn’t help anyone. The plans will just pass on the costs of the litigation, delay, and uncertainty to their customers. That’s why, if push comes to shove, I suspect that Congress will appropriate the money it’s supposed to pay. After all, there’s a longstanding convention that Congress honors its debts.
Jon Adler explains (and I agree) that an interlocutory appeal is coming next.
As for what comes next, Bagley and I agree that this case would seem to satisfy the standard for immediate interlocutory review by the U.S. Court of Appeals for the D.C. Circuit, and I would think the Administration will seek such review. House v. Burwell presents a novel and largely unprecedented standing claim, arguably based upon novel and somewhat unprecedented assertions of executive authority in domestic policy. As such, it would be good to get this claim “squared away” sooner rather than later.
The timing on this appeal is tricky. If it is appealed to a panel of the D.C. Circuit now, let’s assume an expedited decision is rendered in 6 months. The House (which will certainly not go for en banc with the “nuclear” D.C. Circuit) could file a cert petition by April or May. If granted (no guarantee) the case would be heard in October 2016–right around the election season.
One other thought came to mind. This reminds me obliquely of Zivotofsky, as a potential #SCOTUS Repeater (to borrow Richard Re’s phrasing). Because of the posture of the interlocutory appeal, the only question involved is whether the House has standing. There is no discussion of the merits. So even if this case makes it to the Supreme Court, the only question is whether the House can proceed. The Court would not have to render any decision on the merits. As happened in Zivotofsky, in 2012 the Court found there was standing, but in 2015 on a 5-4 decision, he lost on the merits. It is not inconceivable that allowing the suit to proceed, but stopping it on the merits, could be the option for this case three years down the road.