Breaking: Divided DC Circuit Queues Up New Major Obamacare Case for Possible #SCOTUS Review

In 61 pages of dueling opinions, the D.C. Circuit has rejected a request to take en banc yet another challenge to the Obamacare law, one grounded in the “Origination Clause” of the Constitution (providing that all bills which raise revenue must originate in the House of Representatives).  The extensive dissent from rehearing en banc, written by SCOTUS shortlister Judge Brett Kavanaugh, and joined by Judges Henderson, Brown, and Griffith, raises and originalist and textualist argument that is sure to attract the attention of at least some of the Court’s conservatives making it a serious candidate for Supreme Court review in the next term. The main reason the Court might not want to take the case is that the dissenters would reach the same result as the majority (yet still take the case to resolve the main issue). [Update: Challengers have announced they will take the case to the Supreme Court.]

The issue presented in the case is arcane, though perhaps not as arcane as the “established by the state” fight in King v. Burwell, the last Obamacare challenge.  Like King, the question comes out of the rushed and partisan way in which the ACA got out of Congress.

For the judges who concurred in the majority decision not to hear the case on banc, relying on Supreme Court precedent, the main question under the origination clause is whether the purpose of the bill is to raise revenue. These judges find that the purpose was to provide health care, not to raise revenue. For the dissenters, the test that the majority relied upon is wrong, and that the bill was one to raise revenue. The reason the dissenters agree is that they find that the bill originated in the House.

Judge Kavanaugh’s dissent, which explains why en banc review was called for even though the result would not change, explains why the case also might be attractive to some Supreme Court Justices for review:

In my view, the Affordable Care Act complied with the Origination Clause, but not for the reason articulated by the three-judge panel opinion. The panel opinion concluded that the Affordable Care Act was not a revenue-raising bill for purposes of the Origination Clause and therefore did not have to originate in the House. In my respectful view, that conclusion is untenable. The Affordable Care Act established new subsidies for the purchase of health insurance and expanded the Medicaid program for low-income Americans. Those new subsidies and expanded entitlements cost an enormous amount of money. So as not to increase the annual budget deficit and the overall national debt, the Act imposed numerous taxes to raise revenue. Lots of revenue. $473 billion in revenue over 10 years. It is difficult to say with a straight face that a bill raising $473 billion in revenue is not a “Bill for raising Revenue.”

The Affordable Care Act therefore was a revenue-raising bill subject to the Origination Clause. That said, the Act did in fact originate in the House, as required by the Clause. Although the original House bill was amended and its language replaced in the Senate, such Senate amendments are permissible under the Clause’s text and precedent.

So in concluding that the Affordable Care Act complied with the Origination Clause, the panel opinion reached the right bottom line, but relied on what I see as a faulty rationale. Does such a case still warrant en banc review? Oftentimes no, but here yes. The panel opinion sets a constitutional precedent that is too important to let linger and metastasize. Although no doubt viewed by some today as a trivial or anachronistic annoyance, the Origination Clause was an integral part of the Framers’ blueprint for protecting the people from excessive federal taxation. It is true that the Framers’ decision to grant the Senate a broad amendment power gave the Origination Clause less bite than it otherwise might have had. But the Clause nonetheless has been important historically and remains vital in the modern legislative process. By newly exempting a substantial swath of tax legislation from the Origination Clause, the panel opinion degrades the House’s origination authority in a way contrary to the Constitution’s text and history, and contrary to congressional practice. As a result, the panel opinion upsets the longstanding balance of power between the House and the Senate regarding the initiation of tax legislation. Therefore, I would grant rehearing en banc. In my respectful view, the en banc Court should vacate the panel opinion and rule for the Government on the ground that the Affordable Care Act originated in the House and thereby complied with the Origination Clause.

I could see this interesting Justice Scalia (whose alternative view of the origination clause gets play by Judge Kavanaugh), Justice Thomas, and potentially Justice Alito. Do they get a fourth vote for cert. from CJ Roberts or Justice Kennedy, and would they care whether they’d be likely to get both of them on the merits in a final ruling?  This is unclear, as is it unclear how strategically these Justices will vote on the cert. decision.

But it is a fascinating question.

[This post has been significantly revised and edited.]


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