States and House of Representatives make strong arguments in defense of the Affordable Care Act in the Fifth Circuit

The United States Court of Appeals for the Fifth Circuit yesterday held oral argument in the latest challenge to the Affordable Care Act, hearing an appeal from a Texas district court’s ruling that the individual mandate is unconstitutional after the penalty for non-compliance was removed in the 2017 Tax Cuts and Jobs Act and that the rest of the law could not be severed from the unconstitutional mandate. The State Attorneys General and the attorney for the U.S. House of Representatives defending the law made strong arguments, but the ultimate outcome remains uncertain.

The Fifth Circuit panel consisted of two Republican-appointed judges, Jennifer Elrod and Kurt Engelhardt, and one Democrat-appointed judge, Carolyn King. King did not ask any questions, leaving Elrod and Engelhardt to probe the parties.

Two things seem clear from yesterday’s arguments. First, at least one of the challengers has standing to attack the law. Elrod emphasized the undisputed evidence of harm to the State plaintiffs, and Engelhardt expressed disbelief that no one would have standing to challenge the mandate. Second, despite a request for supplemental briefing, the panel did not appear concerned that it did not have jurisdiction. All sides agreed that there was a live case because the government continues to enforce the law, and that position received no pushback.

The Court’s views on the merits of the case were murkier. The attorney for the California-led coalition of states argued that, even if the mandate was unconstitutional, the remedy was to remove the mandate and leave the rest of the ACA in place, as Congress essentially did in 2017. The attorney for the House of Representatives also argued strongly that the challengers had the burden to show that Congress would have wanted the entire law to be struck down with the mandate, a hypothesis inconsistent with all of the evidence. But the panel focused on the congressional findings that the mandate was essential to the law’s reforms, suggesting the mandate was inseverable. Attorneys for California and the House responded that those findings were about the initial, 2010 bill, but it is not clear the Court was convinced.

The challengers, too, faced tough questions. They were repeatedly asked why an unconstitutional mandate could not be severed from the ACA’s “minor” provisions, such as calorie listings at certain restaurants. And they were asked why the Court should not remand the case to the district court to sort out which provisions could, and could not, be severed from the mandate.

The attorney for the United States government—which took the bizarre position that an unconstitutional mandate was inseverable from the rest of the act but that the Court should enjoin only the act’s provisions that personally harm the challengers—had the hardest time of all. It was bombarded with questions as to how its remedy would work in practice, and the government attorney had no satisfactory answers.

Elrod at the end called the appeal a “very complex case,” and so predictions are even harder than usual. There is no deadline for the court’s decision.

In a friend-of-the-court brief filed in April, the AHA, joined by the Federation of American Hospitals, The Catholic Health Association of the United States, America's Essential Hospitals, and the Association of American Medical Colleges urged the Fifth Circuit Court of Appeals to reject the decision to strike down the ACA. In a separate friend-of-the-court brief filed in the case, 24 state hospital associations also urged the Fifth Circuit to reverse the district court's decision.

Sean Marotta is a partner at Hogan Lovells Supreme Court and Appellate practice group, and led AHA’s amicus brief in support of the Affordable Care Act in the Fifth Circuit in this case.