California, et al. v. Texas, et al. (Docket 19-840)
Facts of the case
In the year 2010, the president Mr. Barrack Obama, signed the Affordable Care Act into law, intending to expand the healthcare coverage and offset the increasing premiums’ cost. Those opposed to the law attacked the legitimacy of the Act through litigation and making congressional amendments. The controversy surrounding the law was the individual mandate that required a person that is not insured to purchase healthcare from the government or risk imposition of penalties. The Supreme court had 2012affirmed that the individual mandate was constitutional as allowed under Article 1 section 8 of the Taxing and Spending Clauses outlined in Nat’l Fed’n of Indep. Bus. v. Sebelius (NFIB). The court in the case held that the ACA was not something that was constitutionally authorized because the ACA compelled individuals to partake in commerce and therefore was not justifiable because, if applicable, it would mean that the state could force individuals to enter into all kinds of behavior provided that the government thinks that the specific action would be beneficial to them. In making its decision, the court relied on the Taxing and Spending Clause to be able to justify that the ACA was constitutional.
The court’s decision was met with opposition, and in the year 2017, President Donald Trump signed the Tax Cuts and Jobs Act into law. The impact of the law was to lower the penalty for non-compliance about the individual mandate by zero. in the year 2018, the state of Texas, together with other 28 states and two individuals, instituted this case at the District Courts against the federal government who where the defendants claiming that the individual mandate was unconstitutional. Therefore the entire ACA should be struck down. The state of California was joined with other states to defend the AVA. They petitioned the Court of Appeal for the Fifth Circuit to review the lower court’s decision and decide whether the severance of the individual mandate from the ACVA meant that the entire legislation was unconstitutional.
Issues for Determination
- Whether the state and state plaintiffs have the legal standing to challenge the individual mandates outlined under section 5000A(a) pf the Patient Protection and Affordable Care Act.
- Whether eliminating the penalty provision for the individual mandate in the Tax and Jobs Cuts Act, 2017 rendered the provision unconstitutional.
- Whether the individual mandate is severable by its unconstitutionality from the ACA.
Holding and reasoning
The fifth circuit in its ruling upheld the principle of the District Judge O’Connor in support of the elimination of the individual mandate was valid, making parts of the ACA unconstitutional. The circuit court’s decision was to the effect that the district court should consider the concept of severability because the individual mandate was not tied to other parts of the Act as the health insurance marketplace. Therefore, the court’s decision remanded the case back to the lower courts to consider the severability concept. Also, the circuit court asked the district court to consider that the Justice Department’s suggestion included in one of its briefs that the ACA should only be invalid in the states that had challenged its applicability.
Whether the individuals have the legal standing to be able to challenge the individual mandate provision
The petitioners argued that the two individuals who were part of the defendants did not have the standing under Article III because they cannot prove that they have suffered any particularized injury. Therefore, the petitioner argued that since there was no actual consequence that resulted from the failure to purchase health insurance, the individuals were therefore not compelled to purchase health insurance. On the contrary, the respondents argued that the individuals have the legal standing as they are objects’ of the individual mandate that required them to purchase health insurance. The position of the Supreme court precedent outlined that objects of any action by the government have the legal standing to challenge such action. Therefore, if the Supreme Court is asked to analyze severability, there is a likelihood that the law would be termed as unconstitutional.
Therefore, the fifth circuit in a 2-1 decision held that the plaintiffs state do have the legal standing to bring the claim and also that’s section 5000A of the ACA was unconstitutional. On the issue of severability, the court held that the issue should be remanded back to the district court and went further to instruct the lower court to explain with precision what specific provisions of the post 2017 ACA would be termed as in severable from the viewpoint of the individual mandate.
In a dissenting opinion Justice King concluded that the plaintiffs in the matter did not have the legal standing but also observed that if she had reached the merits of the arguments made, then she would have concluded that the individual mandate as outlined in the ACA is constitutional and also entirely severable from the remainder of the law.
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