California v. Texas

The ACA (Obamacare) was passed in 2010 under Democratic leadership in both houses of Congress and signed by President Barack Obama. Among much of its provisions, it provided programs for states to provide free or low-cost health insurance to low-income residents through programs like Medicare and Medicaid. ACA encouraged all Americans to have health insurance and as part of this, created an income tax penalty for those that did not have health insurance, otherwise known as the "individual mandate". Passage of the ACA was controversial, and remained an issue that was divided along political lines, with Democrats seeing the law as promoting the public good and Republicans seeing it as a tax burden.{{cite web | url = https://www.cnn.com/2012/06/28/politics/supreme-court-health-timeline/index.html | title= Timeline of the health care law | first = Emily | last = Smith | date = June 28, 2012 | access-date = March 7, 2020 | work = CNN}} The law had been challenged in courts multiple times, with the Supreme Court having seen two cases previously. In 2012, the Court ruled 5–4 in National Federation of Independent Business v. Sebelius that the individual mandate was constitutional as a granted power of Congress under the Taxing and Spending Clause.{{cite web | url = https://www.nytimes.com/2012/06/29/us/supreme-court-lets-health-law-largely-stand.html |title = Supreme Court Upholds Health Care Law, 5-4, in Victory for Obama | first = Adam | last = Liptak | date = June 29, 2012 | access-date = March 7, 2020 | work = The New York Times }}

In 2016, the Republican Party held control of both the House and Senate and gained control of the Executive branch with the election of President Donald Trump. Trump had campaigned on the promise of replacing the ACA once in office,{{cite web | url = https://www.politico.com/story/2016/03/donald-trump-obamacare-health-care-220159 | title = Trump releases plan for replacing Obamacare | first = Paul | last = Demko | date = March 2, 2016 | access-date = March 7, 2020 | work = Politico }} and repealing the law was one of the early targets of the Republicans, but early efforts failed by mid 2017 due to in-party disputes, specifically the deciding vote which was to come from Senator John McCain who denied the Republican Party due to the fact that a promised replacement plan was not forthcoming.{{cite news | url = https://www.washingtonpost.com/powerpost/trump-suggests-republicans-will-let-aca-market-collapse-then-rewrite-health-law/2017/07/18/5e79a3ec-6bac-11e7-b9e2-2056e768a7e5_story.html | title = Senate Republicans' effort to 'repeal and replace' Obamacare all but collapses | first1 = Juliet | last1 = Eilperin | first2 = Sean | last2 = Sullivan | first3 = Ed | last3 = O'Keefe | date = July 18, 2017 | access-date = March 2, 2020 | newspaper = The Washington Post}}

By December 2017, President Trump signed into law a large tax relief bill, the Tax Cuts and Jobs Act of 2017. Among many other tax cuts, the Act eliminated the individual mandate requirement from the ACA by reducing penalty amount related to the required amount of health coverage to {{USD|0}} starting in 2019. The elimination of the penalty was estimated by the Congressional Budget Office to save more than {{USD|300 billion}} in federal spending, although it would cause premium rates to go up for some individual taxpayers.{{cite news | url = https://www.washingtonpost.com/news/wonk/wp/2017/12/15/the-final-gop-tax-bill-is-complete-heres-what-is-in-it/ | title = The final GOP tax bill is complete. Here's what is in it. | first = Heather | last = Long | date = December 15, 2017 | access-date = March 2, 2020 | newspaper =The Washington Post}} Political commentators recognized that the removal of the individual mandate penalty was a partial victory for the Republicans who were trying to repeal the ACA.{{cite web | url = https://www.nytimes.com/2017/12/19/us/politics/tax-bill-vote-congress.html | title = Republican Tax Bill Passes Senate in 51-48 Vote | first1 = Thomas | last1 = Kaplan | first2 = Alan | last2 = Rappeport | date = December 19, 2017 | access-date = March 2, 2020 | work=The New York Times}}

In February 2018, Texas led 19 other states in a federal lawsuit in the United States District Court for the Northern District of Texas challenging the constitutionality of the ACA following the removal of the individual mandate from the Internal Revenue Code. The plaintiffs in the suit, Texas v. Azar, argued that since the penalty related to the individual mandate was seen as core provision of the ACA as determined by the Supreme Court in Sebelius, its removal should make the entire law an unconstitutional exercise of Congressional taxing power.{{cite web | url = https://www.upi.com/Top_News/US/2018/02/27/20-states-challenge-constitutionality-of-Obamacare/5841519735950/ | title = 20 states challenge constitutionality of Obamacare | first = Susan | last = McFarland | date = February 27, 2018 | access-date = March 2, 2020 | publisher= UPI}} The United States Department of Justice told the district court in June 2018 that it mostly agreed with the general basis of the lawsuit, in that without the individual mandate, certain provisions of the ACA were invalidated such as the protections it had provided for those with pre-existing conditions, and would not defend those factors in court. However, the Justice Department still believed certain provisions of the ACA were valid.{{cite web | url = https://www.theatlantic.com/politics/archive/2018/06/aca-preexisting-conditions-doj/562442/ | title = The Federal Government Abandons the Most Popular Part of the ACA | first = Vann R. | last = Newkirk II | date = June 8, 2018 | access-date = March 2, 2020 | work=The Atlantic}}

On December 14, 2018, District Judge Reed O'Connor released his opinion on the case, affirming that without the individual mandate, the whole of the ACA was unconstitutional, going farther than the Justice Department had even indicated. O'Connor wrote that the "Individual Mandate can no longer be fairly read as an exercise of Congress's Tax Power and is still impermissible under the Interstate Commerce Clause—meaning the Individual Mandate is unconstitutional."Texas v. United States, {{cite court |litigants=|vol=340 |reporter=F. Supp. 3d |opinion=579 |pinpoint=593 |court=N.D. Tex. |date=2018 |url=https://www.leagle.com/decision/infdco20181218b00 |accessdate=2021-01-16 |quote=}} He then further reasoned that the individual mandate is an essential part of the entire law, and thus was not severable, making the entire law unconstitutional.{{Cite web | url = https://thehill.com/policy/healthcare/421511-federal-judge-in-texas-strikes-down-obamacare | title = Federal judge in Texas strikes down ObamaCare | last = Sullivan | first = Peter | date = December 14, 2018 | website=The Hill | language = en|access-date=December 15, 2018}}{{cite web | url = https://www.wsj.com/articles/federal-judge-rules-affordable-care-act-is-unconstitutional-11544838743 | title = Federal Judge Rules Affordable Care Act Is Unconstitutional Without Insurance-Coverage Penalty | last = Armour | first = Stephanie | date = December 14, 2018 | website=The Wall Street Journal|access-date=March 2, 2020}} O'Connor's decision rendered the ACA unconstitutional but did not immediately overturn the law, granting a stay pending the resolution of the case on appeal.Texas v. United States, {{cite court |litigants= |vol=352 |reporter=F. Supp. 3d |opinion=665 |court=N.D. Tex. |date=2018 |url=https://www.leagle.com/decision/352192462fsupp3d66539 |access-date=2021-01-16}} Among reaction to this decision was California and several other states, vowing to lead a challenge to the ruling.{{cite web | url = https://www.cnn.com/2018/12/14/politics/texas-aca-lawsuit/index.html | title = Federal judge in Texas strikes down Affordable Care Act | first1 = Ariane | last1 = de Vogue | first2 = Tami | last2 = Luhby | date = December 14, 2018 | access-date = March 2, 2020 | work=CNN}}

By early January 2019, 17 states led by California filed an appeal of O'Connor's decision to the Fifth Circuit, as the Justice Department had indicated it would not challenge the ruling. At this point, it was recognized that the case was likely bound for the Supreme Court, and would land in the midst of the 2020 elections, making it a critical issue for either party.{{cite web | url = https://www.vox.com/health-care/2019/1/3/18166912/supreme-court-obamacare-texas-decision | title = 17 attorneys general are appealing the court decision overturning Obamacare | first = Sarah | last = Kliff | date = January 3, 2019 | access-date = March 2, 2020 | work=Vox}} Four additional states joined California's challenge by February 2019, bringing the number to 21. The Democrat-controlled House of Representatives following the 2018 election also joined in the defense.{{cite journal | url = https://www.healthaffairs.org/do/10.1377/forefront.20190215.143918/full/ | title = House, Four New States Allowed To Intervene In Texas | first = Katie | last = Keith | date = February 15, 2019 | journal = Health Affairs| doi = 10.1377/forefront.20190215.143918 | url-access = subscription }} The Department of Justice filed a brief in support of the defendants (Texas et al.) in March 2019, now in full agreement with O'Connor's decision that the ACA as a whole was unconstitutional without the individual mandate, and would support Texas in defending the challenge.{{cite web | url = https://www.usatoday.com/story/news/health/2019/03/26/affordable-care-act-obamacare-20-million-could-lose-insurance/3277117002/ | title = Challenge to Obamacare could leave 20 million people without health insurance | first = Ken | last = Alltucker | date = March 26, 2019 | access-date = March 2, 2020 | work=USA Today}} Briefs were also filed by the Association of American Physicians and Surgeons, American Center for Law and Justice, Foundation for Moral Law, and Citizens United.{{Cite journal|title=ACA Round-Up: New Uninsured Data, Resources On 1332, Briefs In Texas {{!}} Health Affairs Blog|url=https://www.healthaffairs.org/do/10.1377/forefront.20190514.704702/full/|website=www.healthaffairs.org|year=2019|language=en|doi=10.1377/forefront.20190514.704702|url-access=subscription}}

Prior to the July 2019 oral hearings, the judges in the Fifth Circuit raised the question of whether California and the other states had standing to bring the challenge to the original suit.{{cite news | url = https://www.washingtonpost.com/health/appellate-court-raises-new-threat-to-aca/2019/06/26/65184d3a-9859-11e9-8d0a-5edd7e2025b1_story.html | title = Appellate court raises potential new threat to ACA | first = Yasmeen | last = Abutaleb | date = June 26, 2019 | access-date = March 2, 2020 | newspaper =The Washington Post}} The oral hearings before Judges Carolyn Dineen King, Jennifer Walker Elrod, and Kurt Engelhardt focused on the constitutional challenge, the intent of Congress when they wrote and passed the Tax Cuts and Jobs Act, and on the matter of standing. Observers believed the case would be decided upholding O'Connor's ruling due to how the questioning fell, with Judges Elrod and Engelhardt, both appointed under Republican presidents, asking the bulk of the questions, while Senior Judge King, appointed under Democrat Jimmy Carter, was relatively silent.{{cite web | url = https://www.nytimes.com/2019/07/09/health/obamacare-appeals-court.html | title = Appeals Court Seems Skeptical About Constitutionality of Obamacare Mandate | first = Abby | last = Goodnough | date = July 9, 2019 | access-date = March 2, 2020 | work=The New York Times}}

The Fifth Circuit issued its ruling on December 18, 2019.Texas v. United States, {{cite court |litigants= |vol=945 |reporter=F.3d |opinion=355 |court=5th Cir. |date=2019 |url=https://www.leagle.com/decision/infco20191220160 |access-date=2021-01-16}} The 2–1 decision, joined by Judges Elrod and Engelhardt, upheld in principle District Judge O'Connor's decision that with the elimination of the individual mandate, parts of the ACA were potentially unconstitutional. However, the decision remanded the case back to the district court, arguing that O'Connor's conclusion that the whole of the ACA was unconstitutional may be flawed. The Fifth Circuit decision asked the District Court to consider the concept of severability, since the individual mandate aspect was not apparently tied to other parts of the ACA like the health insurance marketplace. The Fifth Circuit also asked the District Court to consider a suggestion that the Justice Department had included in one of its briefs where the ACA may be invalid only in those states that had challenged it. As questions remained to the degree to which the ACA was unconstitutional, the ACA remained in enforcement following the decision.{{cite web | url = https://www.nytimes.com/2019/12/18/health/obamacare-mandate.html | title = Obamacare Insurance Mandate Is Struck Down by Federal Appeals Court | first = Abby | last = Goodnough | date = December 18, 2019 | access-date = March 2, 2020 | work =The New York Times}}

{{further|Constitutional challenges to the Patient Protection and Affordable Care Act}}

File:California v. Texas.svg

The California-led group filed a petition for writ of certiorari to the Supreme Court by January 3, 2020, in response to the Fifth Circuit's decision. The filing asked for the case to be heard on an expedited schedule, "because of the practical importance of the questions presented for review and the pressing need for their swift resolution by this Court".{{cite web | url = https://www.nytimes.com/2020/01/03/upshot/democrats-obamacare-supreme-court.html | title = Democrats Ask Supreme Court for Quick Decision on Obamacare | first = Margot | last = Sanger-Katz | date = January 3, 2020 | access-date = March 2, 2020 | work =The New York Times}} Texas and the other states also filed a petition in February 2020 for the Supreme Court, asking them to deny the expedited review of the case as it was not ripe and allow it to proceed through the normal judicial process, but that should it accept the case, to review and affirm the ruling that the ACA is now unconstitutional.{{cite web | url = https://thehill.com/policy/healthcare/481230-texas-gop-states-tell-supreme-court-to-wait-on-reviewing-obamacare-case | title = GOP states tell Supreme Court to wait on reviewing ObamaCare case | first = Nathaniel | last = Weixel | date = February 3, 2020 | access-date = March 2, 2020 | work = The Hill}}

On June 25, the Trump administration's Solicitor General of the United States, Noel J. Francisco, filed a brief arguing that the individual mandate is unconstitutional and that, because of this, the rest of the law must be struck down, too.{{cite news|url=https://www.washingtonpost.com/nation/2020/06/26/trump-obamacare-supreme-court-brief/|title=Trump administration asks Supreme Court to strike down Obamacare|date=June 25, 2020|newspaper=The Washington Post|last1=Flynn|first1=Meagan|last2=Elfrink|first2=Tim}}

The Supreme Court refused to hear the case on an expedited schedule for the 2019–2020 term,{{cite web | url = https://www.nytimes.com/2020/01/21/us/supreme-court-obamacare.html | title = Supreme Court Will Not Rule Quickly on Obamacare Appeal | first = Adam | last = Liptak | date = January 21, 2020 | access-date = March 2, 2020 | work =The New York Times}} but did agree, on March 2, 2020, to hear the case during the 2020–2021 term, reviewing not only the severability factors but the standing issue raised by the Fifth Circuit. The Court consolidated both California's and Texas's petitions (Dockets 19-840 and 19–1019, respectively) under California v. Texas.{{cite web | url = https://www.nytimes.com/2020/03/02/us/supreme-court-obamacare-appeal.html | title = Supreme Court to Hear Obamacare Appeal | first = Adam | last = Liptak | date = March 2, 2020 | access-date = March 2, 2020 | work =The New York Times}}

Oral arguments were heard on November 10, 2020.{{cite web |last=Howe |first=Amy |title=Justices will hear argument in ACA case one week after Election Day |url=https://www.scotusblog.com/2020/08/justices-will-hear-argument-in-aca-case-one-week-after-election-day/ |website=SCOTUSblog |access-date=20 August 2020 |language=en |date=19 August 2020}} Observers to the arguments believed that Chief Justice John Roberts and Justice Brett Kavanaugh, along with the three more liberal Justices, appeared to accept the severability arguments of the individual mandate that would leave the rest of the ACA in place.{{cite web | url = https://www.cnbc.com/2020/11/10/supreme-court-appears-willing-to-leave-obamacare-in-place-.html | title= Supreme Court appears willing to leave Obamacare in place | first = Tucker | last= Higgens | date=November 10, 2020 | access-date = November 10, 2020 | work = CNBC}}{{Cite web|url=https://www.cnn.com/2020/11/10/politics/john-roberts-affordable-care-act-again/index.html|title=John Roberts has heard just about enough of Obamacare for one lifetime|date=November 10, 2020|website=CNN|first1=Joan|last1=Biskupic|access-date=November 10, 2020}}

After Democrats won control of Congress through the 2020 elections (and associated runoffs in 2021), speculation arose that the Democratic-controlled Congress would follow President Joe Biden's desire to reinstate the individual mandate. This would effectively nullify any ruling against Obamacare, as the case is predicated upon a $0 individual mandate penalty.{{cite web | url = https://www.cnbc.com/2019/07/05/joe-biden-vows-to-bring-back-obamacare-individual-mandate-penalty.html | title= Joe Biden vows to bring back Individual Mandate | first = Jessica | last= Bursztynsky | date= July 5, 2019 | access-date = February 1, 2021 | work =CNBC}} The Department of Justice under Biden did submit a new amicus brief in February 2021 following the oral hearings asserting that they now believe the ACA is constitutional and the mandate is severable from the rest of the ACA.{{cite web | url = https://www.cnbc.com/2021/02/10/obamacare-supreme-court-case-biden-doj-reverses-trump-era-position.html | title = Justice Department tells Supreme Court it thinks Obamacare is constitutional, reversing Trump-era position | first =Tucker | last=Higgens | date = February 10, 2021 | access-date = February 10, 2021 | work =CNBC}}

The Court issued its decision on June 17, 2021. In a 7–2 ruling, the Court reversed the Fifth Circuit's ruling and remanded the case for further review. In the majority opinion written by Justice Stephen Breyer and joined by Chief Justice John Roberts and Justices Clarence Thomas, Sonia Sotomayor, Elena Kagan, Brett Kavanaugh, and Amy Coney Barrett, the Supreme Court concluded that Texas and other plaintiff states did not have standing to bring the initial challenge of the individual mandate, as those states could not show a past or future injury related to the mandate provision. The Court's decision did not address the constitutionality question of the individual mandate.{{Cite web|url=https://apnews.com/article/supreme-court-dismisses-obamacare-challenge-67cc2e9604a70b1b329c5f3b4177a688|title=Supreme Court dismisses challenge to Obama health law|first = Mark | last= Sherman|date=June 17, 2021| access-date = June 17, 2021 | publisher=Associated Press}}{{cite web | url = https://www.msnbc.com/rachel-maddow-show/affordable-care-act-survives-supreme-court-challenge-again-n1271151 | title = Affordable Care Act survives Supreme Court challenge (again) | first = Steve | last= Benen |author-link=Steve Benen | date = June 17, 2021 | access-date = June 17, 2021 | work = MSNBC }} Breyer wrote in the majority opinion that Texas and the other plaintiff states had failed to show standing as "Unsurprisingly, the states have not demonstrated that an unenforceable mandate will cause their residents to enroll in valuable benefits programs that they would otherwise forgo".{{cite web | url = https://www.reuters.com/business/healthcare-pharmaceuticals/us-supreme-court-rejects-republican-challenge-obamacare-law-2021-06-17/ | title = U.S. Supreme Court rejects Trump-backed challenge to Obamacare | first = Lawrence | last = Hurley | date = June 17, 2021 | access-date = June 17, 2021 | publisher=Reuters}}

Justice Thomas also wrote a concurring opinion. While Thomas agreed with the dissenting opinion that the Court had erred in how it handled the ACA in the past, he wrote that the decision in California was correct as Texas and the other states did not show any injury pending from the individual mandate.{{cite web | url = https://www.scotusblog.com/2021/06/court-again-leaves-affordable-care-act-in-place/ | title = Court again leaves Affordable Care Act in place | first = Amy | last = Howe | date = June 17, 2021 | access-date = June 18, 2021 | work = SCOTUSblog}}

Justice Samuel Alito wrote the dissenting opinion, joined by Justice Neil Gorsuch. Alito stated that the individual mandate was "clearly unconstitutional" and criticized the majority opinion for "judicial inventiveness".

Legal experts believed that the decision based on lack of standing would make it difficult for any other party to challenge the ACA further. Law professor Steve Vladeck said that by avoiding the constitutional question of the individual mandate and instead deciding on standing, the Supreme Court "made it much harder for anyone to get that issue into the courts going forward. In essence, they sucked the oxygen out of the ACA's continuing constitutional fire."

President Joe Biden in a statement called the ruling "a major victory for all Americans," affirming that "healthcare is a right and not a privilege" and that "it is time move forward and keep building on this landmark law."{{cite web | url = https://www.cnn.com/politics/live-news/affordable-care-act-ruling-supreme-court/h_ac13d67cc983631394d67ebd848e1a52 | title = Biden applauds Supreme Court ACA decision, says it is a victory for Americans | first = DJ | last = Judd | date = June 17, 2021 | accessdate = June 18, 2021 | work = CNN }} HHS Secretary Xavier Becerra stated that "[the] decision means that all Americans continue to have a right to access affordable care, free of discrimination."{{Cite news|last=Liptak|first=Adam|date=2021-06-17|title=Affordable Care Act Survives Latest Supreme Court Challenge|language=en-US|work=The New York Times|url=https://www.nytimes.com/2021/06/17/us/obamacare-supreme-court.html|access-date=2021-06-19|issn=0362-4331}} Barack Obama stated that "The principle of universal coverage has been established," and that the law "is here to stay."{{cite web | url = https://www.cnn.com/2021/06/17/politics/supreme-court-affordable-care-act-obamacare/index.html | title = Supreme Court dismisses challenge to Affordable Care Act, leaving it in place | first1= Ariane | last1= de Vogue | first2= Chandelis | last2 = Duster | date = June 18, 2021 | accessdate = June 19, 2021 | work = CNN }} House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer also heralded the ruling, with Schumer stating "For more than a decade, the assault on our health care law was relentless from Republicans in Congress, from the executive branch itself and from Republican attorneys general in the courts."{{cite web | url = https://www.cbc.ca/news/world/us-supreme-court-opinion-obamacare-1.6069073 | title = U.S. Supreme Court rejects latest challenge to Obamacare | publisher= Reuters | via = CBC.ca | date = June 17, 2021 | accessdate = June 19, 2021 }}

Texas attorney general Ken Paxton, whose office brought one of the original lawsuits leading to the Supreme Court appeal, said that he will continue to seek legal means to challenge the ACA. "If the government is allowed to mislead its citizens, pass a massive government takeover of healthcare, and yet still survive after Supreme Court review, this spells doom for the principles of Federalism and limited government." Republicans such as Sen. John Barrasso criticized the decision and the ACA, suggesting that Republicans would focus on policymaking. In a joint statement, Reps. Kevin McCarthy, Steve Scalise and Elise Stefanik criticized the ACA and called on Congress to improve healthcare.

{{reflist}}

• {{caselaw source

| case = California v. Texas, {{ussc|593|___|2021|el=no}}

| googlescholar = https://scholar.google.com/scholar_case?case=9923282555823772133

| justia = https://supreme.justia.com/cases/federal/us/593/19-840/

| oyez = https://www.oyez.org/cases/2020/19-840

| other_source1 = Supreme Court (slip opinion)

| other_url1 = https://www.supremecourt.gov/opinions/20pdf/19-840_6jfm.pdf

}}

{{USArticleIII}}

{{USArticleI}}

{{US Constitutional Tax Law}}

Category:United States Constitution Article One case law

Category:United States Supreme Court cases of the Roberts Court

Category:Affordable Care Act lawsuits

Category:2021 in United States case law

Category:United States Commerce Clause case law

Category:Taxing and Spending Clause case law

Category:United States Supreme Court cases