Proposed Intervenors in House of Representatives v. Burwell file Emergency Motion to Suspend Abeyance

December 28th, 2016

Last week, I blogged about a last-ditch effort by two ACA-enrollees to intervene in the House v. Burwell litigation. Both the House of Representatives and the Obama administration filed motions on December 23, stating that the D.C. Circuit’s order to hold in abeyance precluded resolution of the motion to intervene.

On Tuesday, the proposed intervenors–represented by Mayer Brown–filed an emergency motion to suspend abeyance for limited purpose of adjudicating the motion to intervene. Here is the crux of their position:

To avoid irreparable prejudice to the interests of Intervenor- Movants, this Court should partially suspend the abeyance and set a brief- ing schedule on the motion to intervene that would permit the Court to rule on that motion prior to the Presidential transition. Because the Executive Branch and the House in their respective December 23 filings have already expressed their views on responding to the motion, and relatively little time remains before joint action by the House and the new Admin- istration to dismiss or otherwise settle this appeal could well moot the Motion to Intervene, Intervenor-Movants urge the Court to set the briefing schedule now, without awaiting further submissions from those parties.

If Intervenor-Movants’ motion is not resolved by this Court prior to January 20, there is a significant risk that the new Administration and the House could act jointly to dismiss the appeal*—which would allow the District Court’s injunction to take effect, triggering the significant harm to Intervenor-Movants described in the motion to intervene.

The movants call the House’s request for additional time “disingenuous.”

The House’s suggestion that resolution of the motion await the new Administration is thus quite disingenuous: the prospect of collusion between the House and the new Administration to permit the District Court’s injunction to take effect is precisely why Intervenor-Movants have asked to represent their own interests before this Court. Delaying action on the motion until after the change in Administrations would permit the very harm that the mo- tion seeks to prevent. If Intervenor-Movants are permitted to join this case, then the House and the new Administration will not be able to settle this case in a manner that employs the Judicial Power to undermine the interests of Intervenor-Movants, and the millions of other Americans who rely upon the Affordable Care Act’s healthcare exchanges for subsidized health insurance—by allowing the District Court’s order to take effect without review by this Court.

On one day’s notice, the House of Representatives filed an opposition to the motion to suspend abeyance. (The Justice Department announced that it did “not plan to file a substantive response to the intervention motion at this time unless requested to do so by the Court.”). The House makes five primary arguments.

First, the movants waited far too long to move to intervene, and even longer to file this emergency motion. The elected was settled nearly two months ago. The motion, they argue, should be denied on this basis alone.

Second, echoing a point I made in my previous post, the CSR payments are made to insurers, not the insured.

In other words, the unsubstantiated and utterly speculative outcome that Movants claim to fear – namely, that settlement negotiations between the parties will lead to reinstatement of the injunction with no alternative in place – would not actually harm Movants, because their statutory rights to receive cost-sharing reductions from insurers would remain fully enforceable.

The movants counter that if the payments are halted, their insurers can cancel their policies under an arrangement reached with CMS. The House responds that these concerns are speculative.

In their Intervention Motion, Movants also claim to fear that their 2017 policies could be “terminated” because the Center for Medicare and Medicaid Services (“CMS”) has allegedly agreed to permit insurers to “seek to leave the exchange mid-year should the House of Representatives prevail in this lawsuit.” Intervention Mot. at 13. As shown by the plain language of the agreement they cite (id. at 13 n.6), however, their concern is baseless. The cited agreement merely reflects CMS’s acknowledgement that an insurer “could have cause to terminate” its participation in the CMS Data Services Hub, “subject to applicable state and federal law,” if the “assumption that … CSRs [i.e., Cost-sharing Reductions] will be available to qualifying Enrollees” during 2017 “ceases to be valid.”

Third, the House contends that the movants’ entire argument is based on a “speculative chain of causation” that cannot even be redressed by intervention.

If, as Movants posit, the incoming Administration intended to halt cost-sharing funding to insurers forthwith – a highly improbable claim for which Movants cite no evidence – intervention would do nothing to prevent that, because the new Administration would have ample authority to take that step without regard to the pendency of this case. This appeal provides no vehicle for Movants to attempt to compel the new Administration to make cost- sharing payments to insurers over its objection, because the only claim at issue here is the House’s claim that such payments are precluded, not that they are compelled.

Reiterating a point I made in my previous post, this suit is likely but a prelude to a suit by AHIP.

Indeed, Movants admit that a separate lawsuit would be required if such a claim were to be asserted. See Intervention Mot. at 5 n.4.

Footnote 4 teases out what would happen if the administration interpreted the ACA to preclude the payments of the cost sharing reimbursements:

The President could direct the relevant agencies to interpret Section 1324 not to provide a permanent appropriation for the cost-sharing reimbursement payments. That too would render this case moot, although it might give rise to another lawsuit challenging the new interpretation of Section 1324.

It “might” huh? This intervention is but a mere prelude to a future suit by AHIP, seeking a TRO to prevent the stoppage of the CSR payments.

Fourth, the House asserts that a potential settlement, far from “collusi[ve]” is “highly favored.”

The mere fact that the parties may reach a settlement does not constitute an “emergency” and, therefore, cannot be considered grounds for granting Movants’ motion.

Fifth, even if the Trump Administration reverses the Obama administration’s position, seeking intervention now–before the inauguration–is premature.

Even if Movants are correct that the incoming Administration will shift its legal position, it makes no sense for the parties to respond to the Intervention Motion at this time. Until the new Administration has taken office and determined its position, there is no basis for concluding that it will not adequately represents Movants’ interests, and the current Administration is obviously in no position to address that question. Accordingly, delaying responsive briefing on the Intervention Motion is eminently reasonable and serves to prevent unnecessary and inefficient expenditure of valuable public resources that would result from the premature briefing and judicial consideration of this motion.

This last-ditch litigation is entirely understandable. The insurance companies and Obamacare beneficiaries are panicked that the election will upset the status quo. They will use all tools in their disposal to try to maintain their rents. This emergency motion, however, is not the proper vehicle to accomplish these goals. They should have thought about this suit before the order to hold in abeyance was entered on December 5. The House filed their motion to hold in abeyance on November 21. The proposed intervenors should have sought extraordinary relief at that time, when the government’s response was due. Not an entire month later.

Everyone knew such a motion to hold in abeyance was coming. There was no mystery. At 2:00 AM ET on November 9 (before Clinton even conceded), I wrote:

Third, House of Representatives v. Burwell, which is pending before the D.C. Circuit, may also come off the docket. A Trump Administration will simply decline to make these illegal payments.

One day later at National Review, I wrote how the litigation will likely wind down, and private insurers will have to litigate the cessation of payments.

Fifth, the case of House of Representatives v. Burwell will draw to a premature close. The Obama administration has made payments to insurance companies that Congress never appropriated. Speakers John Boehner and Paul Ryan have pursued litigation to challenge the legality of these payments. Once the Trump administration halts the subsidies, the case will be dismissed. Insurance companies will still be free to bring private causes of action against the government, but the House’s litigation will wind down.

The likely truth is that the intervenors probably didn’t think of this idea quickly enough, so they filed this 11th-hour challenge.

The D.C. Circuit should not reward such truancy. Putting aside all of the merits, this suit fails on the doctrine of laches.