Justice

The Case Against Obamacare May Fail One Of The Most Basic Tests Of A Lawsuit

CREDIT: AP Photo/Matt Slocum

He's in no hurry

King v. Burwell, a Supreme Court case seeking to defund much of the Affordable Care Act and strip health insurance from as many as 13 million people, is a project of the Competitive Enterprise Institute (CEI), a conservative organization whose former chairman compared Obamacare to the Holocaust. CEI, does not hide this fact. To the contrary, its website announces that CEI is “coordinating and funding” the King litigation.

The Constitution, however, does not permit CEI to bring a lawsuit challenging Obamacare simply because they do not like the law. Rather, in order to invoke the jurisdiction of federal courts, CEI had to track down at least one plaintiff somewhere in the country who is actually injured in some way by the provisions of the Affordable Care Act CEI wishes to attack. Recent reporting by the Wall Street Journal and Mother Jones, however, indicate that CEI may have failed at this basic task when it assembled the four plaintiffs in King.

Article III of the Constitution requires plaintiffs challenging a federal law to show that they will actually be harmed in some way if the law remains in effect, a requirement known as “standing.” King challenges tax credits that help millions of individuals who purchased health insurance through health exchanges operated by the federal government afford their coverage. To establish standing, however, the lawyers behind this case offer a somewhat convoluted theory.

Although the Affordable Care Act requires most Americans to either carry health insurance or pay somewhat higher taxes, individuals are exempt from this requirement if the cost of the lowest-price coverage available to them exceeds 8 percent of their household income. The King plaintiffs claim that the cost of such a health plan is below 8 percent of their income if they are eligible for tax credits, but it is above 8 percent of their income if the tax credits are struck down. Thus, they claim, by rendering health care unaffordable for millions of Americans, they can also save themselves from complying with the law.

It’s not at all clear that the plaintiffs’ (and their attorneys’) math is correct, however, at least if one assumes that the claims that they made regarding their own finances are correct. According to a declaration filed by a senior official in the Department of Health and Human Services, two of the four plaintiffs are exempt from the consequences of not buying health insurance regardless of whether they receive a tax credit, because the cost of the cheapest plan will exceed 8 percent of their income even if they do receive a tax credit. Additionally, while plaintiff Brenda Levy projected that she would earn as much as $43,000 in 2014, reporting by the Wall Street Journal suggests that her income may actually be “less than $10,000.” If her income is this low, she would also be exempt from the law’s consequences for people who do not buy health insurance.

That leaves one more plaintiff, Douglas Hurst.

The Wall Street Journal also reports, however, that Mr. Hurst is a veteran and may be entitled to enroll in a veterans health plan. Federal regulations provide that several veterans health programs qualify as insurance coverage under the Affordable Care Act. So if Hurst qualifies for one of these programs, he does not have standing the challenge the tax credits even if he hasn’t actually enrolled in the veterans benefits he is entitled to. A plaintiffs’ decision not to claim benefits they are entitled to is their own choice, but that does not give a plaintiff a right to “complain about damage inflicted by its own hand.”

In an email to ThinkProgress, CEI’s general counsel Sam Kazman writes that, to CEI’s knowledge at the outset of the King litigation, “neither Mr. King nor Mr. Hurst was ever enrolled in any veterans health care program,” and he claims that their failure to enroll in veterans benefits means that “under the ACA and its regulations, neither was ‘eligible’ for such coverage.” To justify this counter-intuitive definition of the word “eligible,” Kazman points to a regulation establishing a “Special rule for coverage for veterans and other individuals.”

“CEI is wrong,” however, according to law professor and health policy expert Tim Jost. Jost explains that “there are two sets of regulations that discuss veterans benefits,” and the regulations Kazman cites to do not answer the question of who has complied with their obligation to obtain health insurance under the Affordable Care Act. Rather, the regulations Kazman cites gives veterans a choice — they can either enroll in a veterans program or obtain insurance through another means such as through the health insurance exchanges. But, once again, a plaintiff cannot root his standing to bring a lawsuit in his own choices.

So what all does this mean for the future of the King case? If all four plaintiffs lack standing, the Court must dismiss the case because the Constitution does not permit federal courts to decide cases where no plaintiff has standing. Based on what we know now, however, it would be premature for the Court to definitively hold that no party has standing. It is possible, for example, that Ms. Levy’s income is higher than news reports suggest, or that Mr. Hurst does not qualify for veterans benefits. These facts could only be determined with certainty if the case is sent back to a lower court to allow additional fact-finding.

One possibility is that the Supreme Court could dismiss the case as “improvidently granted,” a process that would allow the justices to wait for another case that presents a similar issue without also presenting the same doubts regarding whether the Court has jurisdiction to decide the matter in the first place. As a practical matter, however, it probably is not in the Justice Department’s interests to urge the justices to reach such a decision. If there are five votes who are inclined to reject this attack on Obamacare, then the best outcome for the Department — and for the millions of Americans who rely the law’s tax credits to afford insurance — is to have the justices reach the merits and uphold the law. If, on the other hand, there are five votes eager to gut the law, then they are unlikely to stay their hand due to doubts about the plaintiffs’ standing.

As the New York Times‘s Linda Greenhouse recently explained, the plaintiffs’ legal arguments in King aren’t just weak on the merits, they conflict with the previously stated views of all five of the Supreme Court’s conservatives. By taking CEI’s case, according to Greenhouse, the justices allowed themselves “to be recruited into the front lines of a partisan war.” And once a justice decides to take sides in such a war, it’s not likely that they are going to be deterred because CEI was less-than-diligent in recruiting plaintiffs.

Nevertheless, CEI’s trouble recruiting plaintiffs for this lawsuit who can claim, with certainty, that they were actually injured in some way by Obamacare says a great deal about the stakes in this litigation. During oral arguments before a federal appeals court that upheld the tax credits, Judge Andre Davis described what he thought the plaintiffs in this lawsuit were after — “You are asking us to kick millions of Americans off health insurance, just to save four people a few dollars.” As it turns out, the four King plaintiffs may have even less at stake than Judge Davis thought.