Health Law Legal

The feds have filed a legal brief with a federal judge in Florida that some believe might end up leading to a decision that blocks the feds from implementing the entire Obama health law.

Judge Roger Vinson in January found the individual mandate, which forces people to buy health insurance, was unconstitutional - but he stopped short of ordering the feds to suspend its implementation.

For reasons that confound legal experts, the Justice Department has asked the judge to clarify his ruling, which some feel could lead to an adverse ruling for the federal government and even embolden states to put work on the health law on hold.

Here is the brief filed by the feds on Monday:


UNITED STATES DEPARTMENT ) OF HEALTH AND HUMAN ) SERVICES, et al.,) ) Defendants. ) ____________________________________)

The Court’s January 31 order specifically declined to enter an injunction. Several plaintiff states, like defendants, have understood that the ruling did not operate as an immediate injunction. Other plaintiff states, however, have publicly announced a different view.  Because it is important that the parties know specifically what steps the Court anticipated they would take in response to its judgment, defendants moved the Court for clarification.  In that motion, defendants noted a variety of reasons for their conclusion that the Court’s determination not to enter an injunction was purposeful, and asked the Court to confirm that its declaratory judgment does not automatically relieve the parties of their rights or obligations under the Patient Protection and Affordable Care Act (“Affordable Care Act,” “ACA,” or the “Act”) while appellate review is pending.

Plaintiffs’ opposition to defendants’ motion to clarify rests on the premise that the Court clearly intended its order to operate as an immediately effective injunction, and defendants, therefore, must actually be seeking a stay.  That assertion is belied by plaintiffs’ own actions as well as by the statements of many plaintiff states agreeing with defendants’ interpretation. Given that the parties’ briefing and the Court’s decisions addressed only a handful of the Act’s provisions and never discussed hundreds of others, the conclusion of defendants and several plaintiff states that the Court did not anticipate that defendants would immediately halt implementation of the entire Act with respect to plaintiffs is a reasonable and responsible interpretation of the Court’s judgment.  The reasonableness of that understanding is further confirmed by the fact that the Court did not address the standing of 24 of the 26 plaintiff states, and did not otherwise make clear who is entitled to rely on the judgment.  And that understanding is consistent with defendants’ representation in their summary judgment papers that they would adhere to a declaratory judgment after appellate review.  Based on that understanding, defendants have not believed that they need to seek a stay at this juncture. They intended this motion to be what it is labeled — a request that the Court, in light of the conflicting views on the issue, confirm that defendants’ understanding of its judgment is correct.

At least eight plaintiff states have publicly stated that they do not view the declaratory judgment as barring them from continuing to implement the Act.1 Moreover, although an

injunction against implementation across the entire range of ACA provisions as applied to plaintiffs would necessarily bar expenditures and tax credits under the Act, see, e.g., Office of Pers. Mgmt. v. Richmond, 496 U.S. 414 (1990) (federal funds may not be drawn from the Treasury unless authorized and appropriated by an Act of Congress), since the Court entered its judgment on January 31, at least 24 of the 26 plaintiff states have applied for additional grants authorized or appropriated by the ACA, continued to draw down grant funds previously awarded under the ACA, or otherwise availed themselves of resources made available by the ACA. Indeed, South Carolina has continued to drawn down exchange planning grant funds, even though it has declared the Act “void and unenforceable.”2  Similarly, Utah has described the declaratory judgment as an “injunction against further implementation” of the Act, but has continued to draw down Pre-existing Condition Insurance Plan (“PCIP”) funds and to request Early Retiree Reinsurance Program (“ERRP”) reimbursements.3

With respect to plaintiff NFIB, plaintiffs state only that members of the organization “are perfectly capable of asserting their rights” under the Court’s judgment if the ACA is enforced against them.  Pls.’ Opp’n 12. But plaintiffs fail to acknowledge that under an injunction barring; Kathie Durbin, State Health Battle Brewing, The Columbian, Feb. 13, 2011 (quoting Washington attorney general Rob McKenna as stating that, pending appeal, “whether or not to suspend implementation of the health care law in our state is a question for our legislators and the Governor”), available at­brewing (all Internet addresses last visited Feb. 28, 2011).

implementation, NFIB’s members would lose the right to claim tax credits authorized by the Act. In sum, the clarity asserted in plaintiffs’ briefs has proved elusive to them in practice.

As noted, defendants understand the declaratory judgment as not, of its own force and in a self-executing manner, relieving the parties of their rights and obligations pending appeal.  But defendants do not regard the issue as free from doubt, and several plaintiffs — at least in their out-of-court statements — appear to agree.  Therefore, defendants have asked the Court to clarify specifically what the Court anticipated that the defendants would do while the case is on appeal.

The reasons why clarification is appropriate are, for the most part, the same reasons why defendants do not believe that the Court anticipated that its declaration would have the effect of bringing all implementation of the Act with respect to the plaintiffs to an immediate halt.  The Act, as the Court observed, has about 450 provisions.  About 440 of those provisions were never even discussed in the parties’ papers or in the Court’s opinions.4 In particular, neither the parties nor the Court addressed the practical implications of treating the Court’s declaratory judgment as an injunction immediately effective as to all 450 provisions, many of which are already operative, years before the minimum coverage provision takes effect.  Nor did the Court’s judgment provide guidance as to the specific steps that the parties would be required to take or to refrain from taking if it was anticipated that they would immediately treat the declaration as an injunction. See Fed. R. Civ. P. 65(d). The lack of such specific direction is one reason why

defendants concluded that the best reading of the Court’s judgment was as not anticipating that defendants would suspend implementation of all 450 or so provisions as to plaintiffs pending appeal. Defs.’ Mem. 7-13.

In addition, halting implementation of the many provisions currently in effect as to plaintiffs would be extraordinarily disruptive. Defendants concluded that the Court did not, without any discussion, anticipate such widespread disruption. For instance, there is no indication that the Court considered or anticipated that defendants would rescind Medicare provider and physician payment rates that have already been implemented through a series of complex rulemakings and that govern payment of roughly one hundred million claims each month.  Nor is there any indication that the Court considered or anticipated that hundreds of millions of unspent dollars in federal grants to plaintiff states would be frozen or recouped pending appellate review. Yet, these would be the inevitable results of an injunction as to plaintiffs.

Plaintiffs completely fail to grapple with these practical problems and make no effort to answer the kinds of very specific questions that defendants’ motion showed plaintiffs’ view of the Court’s judgment would raise.  Nor do plaintiffs provide any explanation whatsoever as to why they believe the Court intended such disruption. Rather, they dismiss these inarguable and potentially overwhelming consequences with the glib response that the Court’s order requires defendants to figure out and then “reinstate the preexisting status quo.”  Pls.’ Opp’n 9. A few examples demonstrate the difficulties that would arise if plaintiffs were correct that the Court’s declaratory judgment should be treated as an immediate injunction, even though it lacks the specific guidance contemplated under Rule 65, and why plaintiffs’ vague invocation of the status quo ante answers none of the practical questions that such a reading would raise.

returns in order to deploy the systems changes during filing season.  This would result in delay and other risks for all taxpayers. Taxpayers claiming the credit would face significant delays in processing.

Plaintiffs ignore these and the many other specific questions that their view of the immediate effect of the Court’s judgment would raise for the 450 or so very different provisions of the ACA. Directing defendants to the status quo ante is neither an adequate answer nor the kind of detail an injunction would have been required to provide.

According to plaintiffs, defendants are required to do whatever the judgment requires with respect to NFIB members without even knowing who those members are.  Pls.’ Opp’n 12. On plaintiffs’ theory, defendants will find out they have violated the Court’s order only after NFIB members decide which provisions of the Act they wish to invoke, and identify themselves by coming forth to do so.  Id. That would be like no injunction known to American jurisprudence, which instead requires that the parties enjoined be told in advance what actions they must take or avoid, see Gunn v. Univ. Comm. to End the War in Vietnam, 399 U.S. 383, 389 (1970), not that they be informed after the fact that they have violated terms of the injunction known only to undisclosed plaintiffs.6  Defendants should not be required to guess at who might be covered by an order intended to operate as an immediate injunction, only to be apprised in a later proceeding that they guessed incorrectly.

Moreover, contrary to plaintiffs’ view, there is nothing “puzzling” about the rule that a court may grant relief only to a party with standing.  Pls.’ Opp’n 12 n.4. “Each plaintiff must have standing to seek each form of relief in each claim.”  Bronsen v. Swensen, 500 F.3d 1099, 1106 (10th Cir. 2007). It is true that only “one named plaintiff must have standing for each of the claims” in order to vest the court with “jurisdiction.” Jackson v. Okaloosa County, 21 F.3d 1531, 1536-37 (11th Cir. 1994) (emphasis added).7 But where the scope of relief is at issue, as here, a court must “examine each named plaintiff individually to determine whether that plaintiff has standing to make each claim.”  Id. at 1536-37.8 In fact, it appears that it is plaintiffs who are

requesting reconsideration, asking the Court to reach an issue it has twice declined to reach: whether plaintiff states other than Idaho and Utah have standing.  Pls.’ Opp’n 12 n.4.9

It is only under plaintiffs’ view of the Court’s judgment that the Court would be required to decide these standing issues. That the Court did not decide whether the other plaintiff states have standing is thus one of the solid indications that the Court did not anticipate that its ruling would of its own force relieve the parties of any obligations or deny them any rights under the Affordable Care Act while the judgment is the subject of appellate review.  Indeed, plaintiffs’ contrary reading of the judgment would embroil the known parties, the more numerous anonymous parties, and the Court in the kinds of detailed pragmatic problems that the declaratory judgment does not address.  Those problems would unnecessarily complicate and delay any final resolution of the case.

Contrary to plaintiffs’ characterization, no one doubts that a declaratory judgment is a statement of “‘the rights and other legal relations’” of the parties and has “‘the force and effect of a final judgment.’”  Id. at 3-4 (quoting 28 U.S.C. § 2201(a)). That simply repeats the text of

(“[I]f the two remaining Plaintiffs had success on the appeal, we would seemingly be compelled to reach the constitutional standing question in order to be able to decide whether the three other Plaintiffs would be entitled to share in that success. But the appeal of the two remaining Plaintiffs is ultimately unsuccessful.”).

the Declaratory Judgment Act.  The key question, as defendants have said, is one of timing. Plaintiffs argue that, despite defendants’ representation in their summary judgment papers that they would adhere to a declaratory judgment “after appellate review is exhausted,” Defs.’ Opp’n to Pls.’ Mot. for Summ. J. 43 (emphasis added), the Court surely anticipated otherwise.  Pls.’ Opp’n 3-4. Nothing in the Court’s silence signals a rejection of defendant’s representation.

Defendants’ position then, and their understanding now, is fully consistent with Kennedy

Plaintiffs profess surprise at defendants’ “inexplicabl[e] delay” in seeking this clarification but, at the same time, they continue to take advantage of numerous provisions of the Act that they did not challenge and that the Court did not address.  As plaintiffs’ own conduct illustrates, it should come as no surprise that the potential impact of the Court’s judgment has required careful analysis, given the breadth of the statute and the lack of the specific guidance or weighing of the applicable equitable factors that would be required for injunctive relief.  That careful review led defendants to conclude that the Court did not anticipate that its declaratory judgment would lead to an inevitable halt in the implementation of all provisions of the Act with respect to all plaintiffs and, therefore, that a stay is not necessary at this time.

If a stay motion becomes necessary, defendants can and will make the appropriate showing of likelihood of success and of irreparable harm and will demonstrate why plaintiffs’ assertions of irreparable harm during the pendency of an appeal lack merit.  The only ACA provision that the Court found unconstitutional in and of itself — the minimum coverage provision — does not go into effect until 2014, so defendants will not implement and enforce that provision pending appeal. In the meantime, the likelihood of irreparable harm, if any, is “minimal.”  Virginia ex rel. Cucinnelli v. Sebelius, 728 F. Supp. 2d 768, 790 (E.D. Va. Dec. 13, 2010).10

At this juncture, however, these arguments are premature, as neither side has moved for a stay. Rather, defendants ask the Court to clarify that its declaratory judgment was not anticipated to have the immediate effect of relieving the parties to this case of any obligations or denying them any rights under the Affordable Care Act while the judgment is the subject of appellate review. As shown above, defendants do not understand the Court to have anticipated

that, pending appellate review, they would halt and dismantle the many programs established, regulated, or otherwise affected by the ACA with respect to plaintiffs.  Clarification is appropriate so that defendants know how to proceed in this litigation and in implementing the Act, and to dispel the confusion of the public and many plaintiff states regarding their rights and obligations going forward.

For the foregoing reasons, defendants respectfully request that the Court clarify that its January 31, 2011, declaratory judgment was not expected to have the immediate and self-executing effect of relieving the parties of their rights and obligations under the Affordable Care Act while the declaratory judgment is the subject of appellate review.

Dated: February 28, 2011 Respectfully submitted,

TONY WEST Assistant Attorney General

IAN HEATH GERSHENGORN Deputy Assistant Attorney General

THOMAS F. KIRWIN United States Attorney

SHEILA LIEBER Deputy Director

 /s/ Eric Beckenhauer BRIAN G. KENNEDY Senior Trial Counsel, D.C. Bar No. 228726 ERIC B. BECKENHAUER, Cal. Bar No. 237526 Trial Attorney

U.S. Department of Justice Civil Division, Federal Programs Branch 20 Massachusetts Ave. NW Washington, DC 20530 Telephone: (202) 514-3338 Facsimile: (202) 616-8470 E-mail:

             I hereby certify that on February 28, 2011, the foregoing document was filed with the Clerk of Court via the CM/ECF system, causing it to be served on Plaintiffs’ counsel of record.

 /s/ Eric Beckenhauer ERIC B. BECKENHAUER 

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