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An obscure court order should terrify anyone who depends on Obamacare

The injunction wars just escalated considerably.

CREDIT: Supachok Pichetkul / EyeEm
CREDIT: Supachok Pichetkul / EyeEm

Last month, Texas federal Judge Amos Mazzant handed down an order in Nevada v. the United States Department of Labor. Everything about this order is bizarre.

The order concerns a pair of lawsuits asking whether an Obama administration rule expanding the class of workers that are entitled to receive overtime pay. It also concerns Judge Mazzant’s apparent belief that he should be allowed to impose his view of this question on federal district judges throughout the country.

But Judge Mazzant’s order also has far deeper implications. It escalates an ongoing war about whether a single federal judge may issue a nationwide injunction halting a federal policy. And, if allowed to stand, Mazzant’s order is likely to intimidate lawyers throughout the country against seeking to enforce laws that were halted by a single district judge. Many innocent parties, including the fast food workers injured by Mazzant’s order, will be unable to find lawyers willing to represent them, if the judge’s order is not reversed.

And, on top of all of this, Mazzant’s order could have profound implications for the Affordable Care Act. It could enable a single rogue judge to issue harsh sanctions against any lawyer who dares to claim that Obamacare is still good law. And it could do so at the very moment when a deeply partisan judge is considering a lawsuit seeking to repeal Obamacare in its entirety.

A tale of two cases

The path that led to Mazzant’s strange March 19 order began over a year ago. In 2016, several Republican state officials sued to challenge the Obama era rule expanding the universe of workers who will receive overtime pay. Mazzant sided with these officials in Nevada, issuing a nationwide injunction blocking the overtime rule.

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Notably, Mazzant’s order contained an ambiguous description of the scope of the injunction — “[T]he Department’s Final Rule described at 81 Fed. Reg. 32,391 is hereby enjoined. Specifically, Defendants are enjoined from implementing and  enforcing the following regulations . . . pending further order of this Court.” While the first sentence of this description suggests that the rule as a whole is enjoined, the second sentence suggests that the injunction may only apply to the defendants in this lawsuit.

As a constitutional matter, moreover, it is far from clear that Mazzant’s injunction could bind non-parties to the Nevada lawsuit even if he wanted it to. Article III of the Constitution limits the judiciary’s authority to “cases” and “controversies,” meaning that judges are not allowed to freelance, hunting for what they perceive to be legal violations and striking them down. Rather, a court is able to act only when a party (ordinarily, a plaintiff or a prosecutor) invokes the court’s power, and typically only when it invokes that power against a particular defendant.

The Department of Labor was before Mazzant’s court — and subject to its authority — in the Nevada case. Individual workers who might benefit from the overtime rule were not.

Which brings us to the second lawsuit at issue in Mazzant’s recent order. A lawsuit called Alvarez v. Chipotle Mexican Grill argues that the ubiquitous chain of fast casual Mexican restaurants illegally failed to pay overtime to its “managerial apprentices.” Specifically, Alvarez claims that Chipotle underpaid these employees in violation of the Obama administration’s overtime rule, and that Judge Mazzant’s order does not apply to this case because none of Chipotle’s managerial apprentices were a party to the Nevada lawsuit.

It’s a strong legal claim, based both on Article III of the Constitution and on a federal appeals court decision that limits Mazzant’s authority. And yet, rather than allow this claim to be resolved through the ordinary legal process, Mazzant went nuclear on the lawyers behind the Alvarez case.

Contempt

Mazzant’s March order held these lawyers in contempt. It ordered them to withdraw the case against Chipotle “within seven days” (though Mazzant later stayed this order), and it further asserted that “Chipotle is entitled to compensation for fees and expenses tied to this contempt proceeding.”

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A team of lawyers, who filed a lawsuit in good faith — a lawsuit that, by the way, is supported by strong legal arguments — were hit with expensive sanctions by a judge who likely does not even have jurisdiction over them in the first place. If this contempt order is allowed to stand, it will have a chilling effect on lawyers throughout the country, potentially leaving many people with valid legal claims unable to find representation.

Though the ordinary rule is that non-parties to a lawsuit are not bound by a court’s decision in that case, there are exceptions. Mazzant relies on an appeals court decision holding that “federal courts will bind a nonparty whose interests were represented adequately by a party in the original suit,” claiming that the federal government adequately represented the interests of private workers seeking overtime pay.

But this doctrine, permitting non-parties to be bound by a decision involving the government, is limited. In its 1974 decision in Rodriguez v. East Texas Motor Freight, the United States Court of Appeals for the Fifth Circuit rejected a similar attempt to prevent private parties from bringing a lawsuit — in that case, a suit alleging employment discrimination — even though the government brought a similar action against the same defendants.

Among other things, the Fifth Circuit explained that the government’s suit and the private parties’ suit protect “different interests” — though “the Government may be willing to compromise in order to gain prompt, and perhaps nationwide, relief, private plaintiffs, more concerned with full compensation for class members, may be willing to hold out for full restitution.”

Rodriguez‘s warning that the government’s interests do not always align with those of private parties takes on a new meaning when one considers who is running the government right now. Though Judge Mazzant handed down his original ruling against the overtime rules during the waning days of the Obama administration, the responsibility for defending those rules in the Nevada litigation — both in future proceedings before Mazzant and on appeal — now rests with the Trump administration.

The implication of Mazzant’s contempt order is that individual workers are powerless to assert their own legal interests under the overtime rules, and must rely entirely on an administration hostile to those very rules. And any lawyer who challenges this regime risks being held in contempt of court.

The injunction wars

All of this drama could have been avoided if Mazzant — a lone federal trial judge — had not claimed the power to issue a nationwide injunction barring the entire federal government from enforcing its rule.

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During the Obama administration, conservative litigants pioneered the tactic of shopping for a single, highly ideological district judge who would issue such an injunction, and then using such injunctions to halt major Obama era programs. The Texas attorney general’s office, for example, successfully manipulated the court system to bring challenges to two of Obama’s immigration programs before Judge Andrew Hanen, an immigration hardliner who promptly ordered the programs halted.

(It is unclear whether the plaintiffs in the Nevada litigation forum-shopped for Judge Mazzant or if they simply got lucky. Mazzant is an Obama appointee, but home state senators often play an outsized role in selecting district judges — and Texas has two Republican senators.)

After Trump became president, liberal litigants borrowed from the conservative playbook. As Attorney General Jefferson Beauregard Sessions III complained in a recent speech to the conservative Federalist Society, “scholars have not found a single example of any judge issuing this type of extreme remedy in the first 175 years of the Republic. But President Trump has been hit with 22 in just over one year in office—on issues like DACA, the travel order, sanctuary cities, and the service of transgender people in the military.”

It is far from clear, however, that nationwide injunctions will remain an especially potent tool against the Trump administration. In one round of litigation over the Trump administration’s proposed Muslim travel ban, which reached the Supreme Court last June, the justices signaled that there were losing patience with overbroad injunctions, and that judges should tailor their orders more carefully. Judge Mazzant, however, has not rolled back the nationwide injunction he ordered in the Nevada case.

Meanwhile, conservative state officials continue to forum shop for ideological judges who are likely to hand down more such injunctions against policies conservatives dislike.

The latest such example is Texas v. United States, a lawsuit claiming that the entire Affordable Care Act must be struck down. If you care to learn more about the risible, “too clever by half” legal arguments fueling that suit, you can read about them here. But the one key fact that could drive this case is that it is being heard by Judge Reed O’Connor, a former Republican aide to the Senate Judiciary Committee who is known for issuing broad orders blocking pro-LGBTQ federal policies.

O’Connor, in other words, is exactly the kind of partisan judge who could issue a nationwide injunction blocking Obamacare in its entirety.

Ordinarily, that wouldn’t necessarily be the end of the world. Though the federal government may stop enforcing Obamacare, private litigants would go to other, less partisan judges seeking orders reinstating their rights under Obamacare. That could mitigate the disruption caused by O’Connor’s order until a higher court can stay or reverse it.

But such side litigation will not be possible under the regime contemplated by Judge Mazzant’s contempt order. Under the logic of that order, Judge O’Connor could hand down a partisan injunction halting Obamacare, and then he could hold in contempt any attorney who attempts to enforce Obamacare in another court. That is likely to deter many lawyers from bringing such suits in the first place — and it could potentially lead to Obamacare basically ceasing to exist for months until a higher court intervenes against O’Connor’s injunction.

In the end, the Supreme Court is almost certainly going to need to intervene to reestablish some limits on how much a single judge may do to frustrate a national policy. Though both sides have benefited, at times, from nationwide injunctions, there is something profoundly anti-democratic about allowing a single district judge to order a countrywide halt to a law or regulation — and this is doubly true when that judge is handpicked by forum-shopping plaintiffs who expect the judge to impose his ideology on the law.