Politics & Policy

An Obamacare Roadblock

Does the Florida court ruling shut down implementation?

It’s a safe assumption that eventually the Supreme Court will take on the issue of Obamacare’s constitutionality, and of course the Obama administration will comply with its decision. In the meantime, however, the administration needs to figure out what to do about a Florida court ruling that struck down the law last week. The answer is far from obvious: When I contacted various legal scholars who’ve been vocal about Obamacare, the overwhelming majority expressed uncertainty and declined to comment on the record.

To a casual reader, the ruling seems to shut down Obamacare entirely. Judge Roger Vinson declares the law unconstitutional and notes that when faced with such a court ruling, the executive branch is expected to comply. So far, there has been no “stay” to the ruling, which would allow implementation of Obamacare to proceed until higher courts have had a chance to weigh in.

#ad#But in sharp contrast to this reading, the Obama administration has implied that the ruling has no effect whatsoever. “Implementation will continue,” promised Stephanie Cutter, assistant to the president and a deputy senior adviser, in a White House blog post. She provided quotes from experts to support the administration’s position — all but one of which merely disagreed with the ruling, rather than asserting that it didn’t have the force of law.

The consensus among the legal scholars I spoke with is somewhere in between: The ruling prevents implementation, but only regarding the parties of the suit — 26 states, plus two individuals, and the National Federation of Independent Businesses. “There is absolutely no doubt that we have obtained a binding judgment from a federal district court,” says David B. Rivkin Jr., a Baker Hostetler attorney and lead outside counsel to the plaintiffs. “Unless and until the federal government is able to obtain a stay . . . this absolutely precludes the government from implementing any provisions of the act — and this is important — with regard to the parties of the case.”

Kevin C. Walsh, an assistant professor at the University of Richmond Law School, says the main issue is the doctrine of “preclusion.” This doctrine holds that once two parties — in this case, the federal government and the plaintiffs — have litigated a matter in court, the matter is settled between them, and they cannot relitigate it from the beginning (though the loser can appeal the decision to a higher court). But when the federal government is the defendant, preclusion doesn’t apply to entities that were not involved in the suit. This means the federal government can implement the law with regard to everyone but the plaintiffs.

So, what are plaintiffs protected from, and who counts as a plaintiff? As far as the two individuals and the NFIB are concerned, these questions are not pressing: Most Obamacare provisions, including the mandate, won’t take effect until 2014, by which time the Supreme Court almost certainly will have weighed in.

“The only parties having to make a lot of decisions right now would be the states, which are trying to start planning financially for all of these added costs, and creating their exchanges,” says Carrie Severino, chief counsel and policy director for the Judicial Crisis Network. And when it comes to the states, the law gets dicey.

Two distinctions are important: that between states and the individuals who reside in them, and that between the individual mandate, which is the only part of the law Judge Vinson actually found unconstitutional, and the rest of the law, which Vinson struck down because it is not “severable” from the individual mandate.

Walsh and Rivkin say the ruling applies only to the state governments, not the residents — which would mean that the federal government can implement the law against individuals and insurance companies throughout the country. For example, Obamacare already forces insurance companies to cover children on their parents’ policies up to the age of 26.

#page#Wisconsin attorney general J. B. Van Hollen made a bold statement last week, calling the health-care law “dead” in his state. One local paper took this to mean that Wisconsin residents and businesses, not just the state government, would be exempt from the law — but that’s not actually the position of the attorney general’s office. “That’s not something we’ve specifically looked at,” says Steve Means, the executive assistant to the attorney general and the lead attorney on the Obamacare case. “But I do think they’d have a pretty good argument that the federal government is bound by that ruling.”

Also, if the ruling doesn’t apply to the states’ residents, it might not apply to anyone. Obviously, a finding against the individual mandate is irrelevant when applied to the states; even if a higher court didn’t take the case before 2014, it could apply only to the two specific individuals who were parties. Walsh raises the question: If the part of the law that’s actually unconstitutional doesn’t apply to the main parties of the suit, should the court’s decision to strike down the rest of Obamacare carry the force of law?

#ad#This is a complicated issue, and an important one for the 26 states that joined the lawsuit. But “it will be cleared up relatively soon,” Severino says. “Eventually, this is going all the way up to the Supreme Court.”

— Robert VerBruggen is a National Review associate editor.

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