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Earlier today, the Supreme Court heard oral arguments in California v. Texas, a challenge to the legality of the Affordable Care Act filed by a coalition of Republican-controlled state governments, and in large part supported by the Trump administration. I described the history of the case and the issues at stake here.

To briefly summarize, the case arose because, in December 2017, the then-GOP-controlled Congress passed a tax reform law that zeroed out the monetary penalty attached to the Obamacare health insurance mandate, but left the mandate itself on the books.

In  its controversial 2012 ruling in NFIB v. Sebelius, the Court narrowly rejected a previous challenge to the constitutionality of the mandate. But Chief Justice John Roberts’ controlling opinion for the Court only reached this conclusion by reinterpreting the mandate as a tax, thereby saving it from being declared unconstitutional.

After the 2017 tax reform bill eliminated the monetary penalty attached to the mandate, twenty red states filed a lawsuit arguing that what’s left of the mandate was no longer constitutional, because it could not be a tax, if it doesn’t raise any revenue. Much more controversially, they also contended that the rest of Obamacare must fall with the mandate, because the latter is such an important part of the statute that it cannot be “severed” from it. This “severability” issue is the key to the case as a whole.

Much remains uncertain after today’s oral argument. We don’t yet know how exactly the Court will resolve the case. But the one thing that is clear is that a large majority of justices (at least six, by my count) reject the plaintiff states’ position on severability. Thus, whatever happens to the residual individual mandate, Obamacare as a whole is going to survive.

The three liberal justices are near-certain votes against the plaintiffs, and nothing they said today should change that impression. As co-blogger Jonathan Adler points out, Chief Justice John Roberts and Justice Brett Kavanaugh also expressed great skepticism about the plaintiffs’ severability theory. At one point, he said that it is “not our job” to strike down the ACA as a whole, merely because the residual mandate might be unconstitutional. Kavanaugh said that the severability issue in the case is “rather straightforward”  and repeatedly emphasized that it is clear that, if the mandate is now unconstitutional, the Court should just strike down that provision and leave the rest alone.

I would add that Justice Samuel Alito also seems hostile to the positions espoused by the plaintiffs and the Trump administration. In an exchange with administration lawyer Jeffrey Wall, he noted the “sea change” in the role of the mandate since the original enactment of the ACA in 2010. In the original 2010 version of the law, “there was strong reason to believe that the individual  mandate  was like a part in an airplane that was essential to keep the plane flying. If the part was taken out, the plane would crash.” Thus, it was inseverable from the rest of the law (a conclusion Alito and three other conservative justices advocated in their dissenting opinion in NFIB v. Sebelius). “But now,” Alito continued, “the part has been taken out and the plane has not crashed.”

This plane analogy has obvious negative implications for the plaintiffs’ position. If the original mandate is like a “part” that Congress itself decided to “take out,” then Congress has effectively made the decision on whether it is essential to the act as a whole. That’s true if you view severability as a matter of divining congressional intent (as current Supreme Court precedent requires). But Alito indicates here that he would reach the same conclusion from the standpoint of asking whether the residual mandate is objectively essential to the operation of the rest of the ACA (whether or not members of Congress thought it was). The fact that “the plane has not crashed” suggests it didn’t really need this “part” in the first place.

The other three conservative justices—Gorsuch, Thomas, and the newly appointed Amy Coney Barrett—didn’t really tip their hands on severability. Barrett’s previously stated views—including her testimony at her confirmation hearings—suggest her position may be similar to Kavanaugh’s. But the oral argument gave us no additional insight into them. It is also not clear where Gorsuch and Thomas stand. But it’s notable that all three largely avoided the subject of severability in the questions they posed to the lawyers representing California (leading a coalition of blue states) and the Democratic-controlled House of Representatives (the parties that intervened to defend the ACA after the Trump administration refused to do so). If they have serious objections to the California’s and the House’s severability analysis, I would have expected them to raise them in oral argument.

In sum, there is, I think, at least a 6-3 majority against the plaintiffs’ take on severability, and very possibly more than that. This result was entirely predictable based on various conservative justices’ previous statements on severability (as well as the very weak nature of the plaintiffs’ case). I in fact predicted it myself, as did a number of other legal commentators.

It is less clear what will happen on the other two issues in the case: standing and the constitutionality of the residual mandate. If  I in interpret the argument correctly, I think there probably is a majority of justices inclined to conclude that the mandate is now unconstitutional, because it can no longer be considered a tax, now that it doesn’t raise any revenue. For reasons I explained here, I think that would be the right conclusion, and would set a valuable precedent for future cases (though it would have very little if any impact on the ACA).

But I admit I could be wrong on this point. It’s possible that some conservative justices (as well as all three liberals) will be persuaded by the argument that the residual mandate is constitutional because it is now simply a nullity that doesn’t do anything. To my mind, that is incorrect because the text of the law still states a command, even if that command is not backed by any kind of penalty or fine. It states that “applicable individual[s] shall” purchase ACA-compliant health insurance. That is the kind of language courts generally interpret as a command. And there is nothing inherently implausible about the idea of a command not backed by a penalty. For example, like most parents, I sometimes give commands to my children in situations where they—and I—know perfectly well that there will be no meaningful punishment for disobedience. That doesn’t mean my and other parents’ statements in such cases are mere suggestions or meaningless nullities. If I tell my five-year-old that I want her to go to bed right now, it’s a command that I intend for her to obey, even though it’s unlikely she will face punishment if she procrastinates.

At one point, Justice Kavanaugh asked Texas Solicitor General Kyle Hawkins whether there are any other naked mandates in the US code that aren’t backed by an penalties. Hawkins couldn’t name any. I would suggest the Flag Code might be an example. One part of that code,  4 USC Section 8, outlines a variety of instructions for the care and display of the flag, such as that “The flag should never be carried flat or horizontally, but always aloft and free.” This strikes me as a command, but one not backed by any threat of punishment for violators. Admittedly, however, the word “should” is a less definitive mandate than “shall.” The former is more easily dismissed as a mere suggestion than the latter.

Finally, as Jonathan Adler explains, it is entirely possible that the justices will end up dismissing the entire case without reaching the merits, by concluding that the plaintiffs lack standing. Indeed, the justices spent much more time on this issue than any other. I would oppose resolving the case in this way, in large part because I am skeptical of constitutional standing requirements generally. But I admit that there’s an entirely plausible argument that the plaintiffs lack standing under current Supreme Court precedent, and that a holding like this might be attractive to various justices who would like to get rid of this case without dealing with any substantive issues.

However, as Jonathan also notes, it may not be easy for the various justices interested in this issue to cobble together an opinion on standing that they can all agree on.

To me, it was striking that there was little discussion of the “special solicitude” on standing issues that the Supreme Court held applies to state governments in Massachusetts v. EPA (2007), over a vehement dissent by Chief Justice Roberts. Despite this omission, the justices surely realize that denying standing to the states in this case might have important implications for their ability to bring other lawsuits against the federal government. It is hard to tell whether they view such constraints as a feature or a bug. I, of course, lean to the latter view. The states should have wide latitude to challenge potentially unconstitutional federal government policies.

In sum, it is clear that Obamacare will survive yet another legal challenge. And it will do with much less in the way of scars than it got in NFIB v. Sebelius,  where the Court limited the potential reach of the individual mandate by interpreting it as a tax (thus foreclosing some potential increases of the associated fine, which would make it large enough to qualify as a penalty that no longer offers any meaningful choice), and invalidated part of the Medicaid expansion. The only remaining question is how the Court will preserve the ACA: by denying standing, by holding that the residual mandate is not unconstitutional, or by striking down the mandate while simultaneously ruling that it is severable from the rest of the law. We will learn the answer soon enough, perhaps within just a few months.

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Throughout the Supreme Court nomination hearings for Justice Amy Coney Barrett, Democrats repeatedly warned that Barrett would be a threat to the Affordable Care Act, and thus to the health insurance of millions of Americans. The Trump administration was backing a lawsuit attempting to overturn the law, and arguments were scheduled for right after the presidential election. Confirming Barrett, the argument went, would result in a Supreme Court more likely to overturn the health care law. 

“Health care coverage for millions of Americans is at stake with this nomination,” said Sen. Dianne Feinstein (D–Ca.), the ranking member of the Senate Judiciary Committee. That argument was central to the Democrats’ argument against Barrett. “My colleagues and I will focus on that subject.” Others were even more blunt. Senate Republicans were “rushing” to confirm Barrett “in time to ensure they can strip away the protections in the Affordable Care Act,” warned then-Sen. Kamala Harris, now the vice-president elect. “If they succeed,” Harris said, “it will result in millions of people losing access to health care at the worst possible time in the middle of a pandemic.” As of this morning, Sen. Elizabeth Warren (D–Mass.) was still issuing similar warnings. 

Right this minute, Justice Barrett and the Supreme Court are hearing the case that could overturn the ACA. Republicans want to rip away your health care, but health care is a basic human right. Democrats will fight on. https://t.co/GYZra3IDDx

— Elizabeth Warren (@SenWarren) November 10, 2020

There was reason to see such claims as politically motivated fear-mongering during Barrett’s confirmation; as Reason‘s Jacob Sullum wrote at the time, Democratic warnings that Barrett would doom Obamacare were implausible and confused. There is even more reason to see it that way now. 

Barrett was eventually confirmed. She now sits on the Supreme Court, which today heard the administration-backed challenge to the health law. And based on those arguments, it looks very much like the Court will uphold the law in essentially its current form, regardless of how Barrett votes. 

This morning, the High Court heard arguments in California v. Texas. At the heart of the case is a challenge to the law’s individual mandate to purchase health insurance, which serves as a platform for a challenge to the entire statute. That challenge is based not only in the history of Supreme Court challenges to the law, but in modifications to the statute. 

When the law passed in 2010, it contained a mandate to purchase health insurance or face a tax penalty. At the time, Congress including signing statements to the effect that the mandate was essential to the proper functioning of its regulatory scheme, which includes provisions guaranteeing that anyone can purchase health insurance regardless of medical history and limiting how much insurers can charged based on health status. 

That provision was immediately challenged in court. In 2012, a Supreme Court opinion written by Chief Justice John Roberts declared that although it was unconstitutional as a command to obtain health insurance, the provision could remain on the books legally as a tax on those who fail to obtain coverage. Roberts had employed a saving construction, finding an alternative way to uphold the mandate. 

A key feature of a tax, of course, is that it raises revenue. Yet in 2017, the GOP-controlled Congress passed the Tax Cuts and Jobs Act which, among other things, zeroed out the tax penalty for the mandate, even while leaving the command in the statute. That command was toothless, formally inoperative; it imposed no penalty on anyone—and it also raised no revenue. 

This created an opening for a group of red state attorneys general, led by Texas, to challenge the mandate on the grounds that a command that does not raise revenue cannot be understood as a tax, as in Roberts’ saving construction. The result was an unconstitutional command. 

The Texas-led suit also took the argument a step further, making a case that the signing statements that were part of the original law meant that if the mandate fell, then the main insurance regulations should fall too—and so too should the rest of the law. In legal terms, the argument was that the mandate could not be “severed” from the rest of the law; without the mandate on the books, it would all have to go. Eventually, the Trump administration took the unusual step of backing this challenge, leaving a group of blue state attorneys general and the Democratically controlled House of Representatives to defend it. 

There have always been two significant problems with this argument. The first is the issue of standing: It is difficult to plausibly argue that a zeroed-out mandate penalty harms anyone, and standing requires a showing of harm.  

An even bigger problem with this argument has always been the issue of severability. It is true that the 2010 Congress that passed the original law stated a belief that the mandate was essential to its function. But it is also clear that the 2017 Congress zeroed out the mandate penalty, rendering the mandate non-functional while leaving the rest of the law intact. The policy finding of the 2010 Congress should not bind the 2017 Congress.

At oral arguments today, the Supreme Court delved deep into both issues, and seemed inclined to leave the law more or less intact. Several justices asked the petitioners about the question of standing, and the response was that even a toothless command was still a command, and thus might induce at least one person to sign up for Medicaid under the law, thus causing financial injury to the states. This is a stretch, since in this scenario the harm does not arise from the main provision in question, the mandate, but from a separate part of the law. 

The severability argument, however, is even more of a stretch, as both Chief Justice Roberts and Justice Brett Kavanaugh seemed inclined to think. Kavanaugh suggested that he found it difficult to see how the zeroed-out mandate remained constitutional “under the taxing clause for the simple reason that it doesn’t raise revenue.” But he also said he agreed that “this is a straightforward case for severability under our precedents, meaning that we would excise the mandate and leave the rest of the act in place.” Similarly, Roberts indicated his skepticism about the argument that striking the mandate should require striking the rest of the law, saying he found it “hard” to argue “that Congress intended the entire act to fall if the mandate were struck down.” 

Presuming that all three Democratic appointees vote to uphold the bulk of the law, the most likely outcome here is not too difficult to see: Even if the Court were to grant standing to the challengers, it seems as if it is on track to strike the mandate while leaving the rest of the law in place. From a practical perspective, the law would remain unchanged.

Oral arguments do not always reveal the outcome of a case, and the justices can always change their minds while considering a ruling. But this was always the most likely result, since the red state case for striking down the entire law, or even just the insurance provisions, has always been weak, as even many of Obamacare’s fiercest critics have recognized. 

If you didn’t listen to oral arguments, tl; dr: There is no chance the Supreme Court is going to invalidate Obamacare. At the very least, Justice Kavanaugh will provide a 5th vote for severing the one provision the plaintiffs & Trump Admin attack, leaving the rest in place. https://t.co/K9FWXphYbF

— SCOTUSblog (@SCOTUSblog) November 10, 2020

Among those critics is Michael Cannon, the health policy director at the libertarian Cato Institute. He writes today that this particular case against the law is largely meritless. It is built on half-baked legal logic engineered in hopes of producing a tactical victory, rather than on sound legal reasoning. Cannon has tirelessly opposed Obamacare from its inception, and he helped conceive one of the previous legal challenges to it. He wants to see Obamacare taken off the books—but not like this.  

The flaws of this particular case do not make Obamacare good law or good policy, nor do they reflect on the quality of previous Supreme Court challenges to the law, both of which were much stronger on the merits.

Indeed, this case only exists because of the tortured reasoning Roberts employed to save the mandate in the first place. And Roberts seemed more annoyed than anything during this morning’s arguments. Which is fitting, in a way, since as Cannon says, it was designed to troll him for his previous ruling. 

Of course he is. The entire purpose of this case is to troll him. https://t.co/GPmMmuNHVG

— Michael F. Cannon (@mfcannon) November 10, 2020

Whatever the eventual ruling turns out to be, one result is already clear: The chief justice has been thoroughly trolled.

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