The Origin of House of Representatives v. Burwell

September 23rd, 2016

Cross-Posted at Volokh Conspiracy.

In House of Representatives v. Burwell, the House challenged the legality of subsidies the Obama administration paid to insurers. Judge Rosemary Collyer ruled that the House as an institution had standing, and that the payments were made without an appropriation. Currently, the case is on appeal to the D.C. Circuit. While the litigation has had an unexpected success in the courts, its origin was rocky. As I discuss in Chapter 23 of Unraveled, one of the most difficult aspects the case was finding an attorney to take it–or more precisely, an attorney whose law firm would allow him keep the case.

In 2014, David Rivkin of the Baker Hostetler law firm and Florida International University Law Professor Elizabeth Price Foley wrote a series of articles, sketching a theory of why the House of Representatives would have standing to challenge the President’s implementation of the Affordable Care Act. At the time, their writings focused on the White House’s delay of the employer mandate. Behind the scenes, Rivkin, Foley, and their colleagues at Baker were advising the House of Representatives on how to take legal action.

With their counsel, on June 25, 2014, Speaker John Boehner circulated a memorandum to the House GOP caucus. The Ohioan wrote that “for the integrity of our laws and the sake of our country’s future, the House must act now” to stop the president’s illegal executive actions. In July, Boehner would bring legislation to the floor to authorize the House General Counsel “to file suit in the coming weeks in an effort to compel the president to follow his oath of office and faithfully execute the laws of our country.” On July 30, the House voted along straight party lines – 225 to 201 – to authorize the litigation. (One Republican voted nay.) House Resolution 676 was framed very broadly: the lawsuit could “seek any appropriate relief regarding the failure” of all executive-branch officials – including the president himself – “to act in a manner consistent with that official’s duties under the Constitution and laws of the United States with respect to implementation” of the ACA.

After the House authorized the suit, David Rivkin and Baker Hostetler signed a contract to litigate the case, which was capped at $350,000. The reaction from Democrats was swift. The White House called the suit “unfortunate.” Minority Leader Nancy Pelosi criticized the case as a waste of “time and taxpayer dollars.” Representative Louise M. Slaughter (D-NY) called the suit a “sorry spectacle of legislative malpractice” and “political theater.” Even many conservatives critiqued the decision. Talk Radio Host Mark Levin, who served in the Reagan administration, called the litigation a “foolish move.”

Soon, the law firm was ridiculed on late night television. Jimmy Fallon aired a fake infomercial for Baker Hostetler on the Tonight Show. The parody featured an ambulance-chasing lawyer pitching his firm. “At Baker Hostetler, we specialize in one thing,” the actor said, “suing the president. For instance, have you ever been forced to pass Obamacare, even though you didn’t like it? We can help you waste thousands of dollars in taxpayer money to fight for what you sort of believe in.”

The New York Times reported that Rivkin was “under pressure after facing criticism” from his colleagues “that he had taken on an overly partisan lawsuit.” Partners at his firm, the Times wrote, “feared the case against Mr. Obama could drive off potential clients and hurt Baker Hostetler’s credibility.” I learned from an attorney involved in the matter that when the contract was initially signed, a conflict check was performed, and the firm “backed the case.” However, within a week after the contract was announced, partners at the firm started to receive urgent calls from general counsels of clients in the health care industry. Baker Hostetler represents many hospital management firms and insurance companies, particularly at its office in Columbus, Ohio. All of the calls from the general counsels had the “identical” message: they were under pressure, and could not continue to associate with Baker Hostetler if it litigated the House’s lawsuit.

The attorney I spoke with said it was “suspicious” that they all gave the “same” message very shortly after the contract was announced. There was a concern – confirmed by at least one general counsel – that the Obama administration was quietly pushing health care companies to drop Baker Hostetler. After these calls came in, Rivkin’s colleagues told him, “you can’t do this.” The contract with the House prohibited partners at Rivkin’s firm from any “lobbying or advocacy” concerning the ACA. Many of Rivkin’s colleagues lobbied for health care reform. Although the House was willing to amend the contract to strike this provision, all of the parties agreed that this would be a valid basis to cancel the representation.

This withdrawal was particularly bittersweet for Rivkin. In 2010, he was the first attorney to represent Florida in its constitutional challenge to Obamacare. However, after Pam Bondi was elected as Attorney General of Florida, she opted to replace Rivkin with SCOTUS-superstar Paul Clement. Bondi wanted to hire someone who would argue at the Supreme Court, though she admitted it was an agonizing decision to switch horses in the middle of the race. In 2013, Rivkin told me that he understood the decision and took it graciously. It was a “typical Washington thing,” he said. In 2014, after he had to withdraw from the House’s case, Rivkin was angry at this political hardball that was completely beyond his control.

This is also not the first time the House Republicans have been in this sort of predicament. In 2011, the Obama administration announced that it would no longer defend the constitutionality of the Defense of Marriage Act. The House of Representatives hired Paul Clement, then of the King & Spalding law firm, to take the case and litigate it all the way to the Supreme Court. Under pressure, Clement’s firm asked him to drop the case. Rather than quitting, Clement announced that he would resign from King & Spalding “out of the firmly held belief that a representation should not be abandoned because the client’s legal position is extremely unpopular in certain quarters.”

Tony Mauro reported in The National Law Journal that “pressure from within King & Spalding – as well as from some of its clients – were said to be factors in Clement’s exit.” Dahlia Lithwick wrote in Slate that “Human Rights Campaign, the gay rights advocacy group that had been agitating against Clement’s defense of the law, is happy to claim responsibility for pressuring the firm to abandon its representation.” A spokesman for HRC said that the LGBT organization “contact[ed] King & Spalding clients to let them know that the group viewed the firm’s defense of DOMA as unacceptable.” He added: “We are an advocacy firm that is dedicated to improving the lives of gays and lesbians. It is incumbent on us to launch a full-throated educational campaign so firms know that these kinds of engagements will reflect on the way your clients and law school recruits think of your firm.”

In a tradition dating back to John Adams’s defense of the Red Coats who opened fire during the Boston Massacre, attorneys are ethically obligated to continue representing a client, even if the cause is unpopular, or if they may lose other business. Clement wrote in his resignation latter that “when it comes to lawyers, the surest way to be on the wrong side of history is to abandon a client in the face of hostile criticism.” Firms should consider those factors before accepting a client, not after the representation begins.

For example, after he retired as attorney general, Eric Holder joined the firm of Covington and Burling. It was reported in The National Law Journal that the former Obama administration official – no friend of the financial industry – “may have lost a client because the firm hired him back.” Holder recalled, “One big bank went to Covington and said, ‘If you hire this guy, that is going to put at risk the relationship between this firm and this bank.’” The former attorney general relayed a conversation with the firm’s chairman, who said, “I guess we’re not going to have a relationship anymore, because he’s coming back to Covington.” Note that this decision happened even before Holder had joined the firm, whereas Clement was asked to withdraw after the firm accepted the case.

Following his resignation, Clement was able to immediately join the Bancroft law firm and continue his representation of the House. Over the next five years, Clement would establish Bancroft PLLC as a preeminent Supreme Court litigation boutique. Recently, Clement and his colleages went back to big law by joining Kirkland Ellis.

David Rivkin told me that during the summer of 2014, he and his colleagues “spent weeks scrambling to see whether [they] could find a way to continue representing the House.” He explained that “this was a very difficult process for all of us as we had to balance our ethical obligations to the House and other Firm clients as well as numerous other considerations,” particularly in light of their work over the past year to “develop the legal architecture” of the case. “A number of options were considered,” Rivkin said. “Unfortunately, all of them would have required a considerable period of time to implement and the House wanted to file the lawsuit as soon as possible. In the end, withdrawing was the only viable option.”

The House, without a lawyer for its case, frantically approached many of the top firms in Washington, D.C. They asked veteran litigator Chuck Cooper, who served in the Reagan administration, to take the case. The founding partner of the Cooper and Kirk law firm declined. The House also asked Michael Carvin and Greg Katsas of Jones Day. Katsas had argued alongside Carvin before the Supreme Court in NFIB v. Sebelius. Jones Day also declined the House’s case. An attorney at the firm told me they did not think it was a winning argument to challenge the delay of the employer mandate. Specifically, the employer mandate would go into effect in 2016, thus potentially mooting the case before it worked its way up to the Supreme Court. President Obama made a similar point in ridiculing the suit. In his July speech in Kansas City, Obama said, “It’s estimated that by the time the thing was done, I would have already left office. So it’s not a productive thing to do.”

After a harried search, the House selected D.C. lawyer William Burck of Quinn Emanuel Urquhart & Sullivan LLP. I learned that Quinn Emanuel was deemed a better option because it was a litigation firm that did not lobby on behalf of the health care industry. However, three weeks later, without any explanation, Burck withdrew from the case under similar pressure from his firm. An attorney involved in the selection process told me it was “embarrassing.” Another attorney said House Republicans were “pissed” and “irritated how everything played out.”

After two attorneys dropped out in one month, the House could not afford another miscue. An attorney advised Speaker Boehner that they needed an academic to litigate the case who “would not have any conflicts.” (Academics can do more than write about the influence of Immanuel Kant on evidentiary approaches in 18th-century Bulgaria). They soon chose Jonathan Turley, a law professor at George Washington University. Turley, though a liberal who supported national health care, had been a staunch critic of President Obama’s executive actions. Months earlier, he warned that “what the president is doing is effectively amending or negating the federal law to fit his preferred approach. Democrats will rue the day if they remain silent in the face of this shift of power to the executive branch.” On November 18, Turley was officially hired. House Democrats still objected to the case. Rep. Robert Brady (D-PA) carped that Turley should not allow unpaid law students who have “not passed the bar” to be “exploited” by working on this case.

On November 21 – nearly four months after the House authorized the suit – Turley filed House of Representatives v. Burwell. In addition to the employer mandate claim, Turley’s complaint also asserted that the Obama administration was paying subsidies to insurances companies that were not appropriate. This additional claim proved decisive, as the court dismissed the mandate-delay claim. In May 2016, Judge Collyer ruled that the payments were illegal. The case is already on appeal to the D.C. Circuit, and will probably be argued in early 2017.

Josh Blackman is a constitutional law professor at the Houston College of Law, and the author of Unraveled: Obamacare, Religious Liberty, and Executive Power (Cambridge University Press, 2016).