Fifth Circuit Rules ACA’s Individual Mandate Unconstitutional

On December 18, 2019, in a two-to-one decision, a three-judge panel of the Fifth Circuit United States Court of Appeals ruled that the Patient Protection and Affordable Care Act’s (ACA) individual mandate is unconstitutional. The three judges on the panel were Carolyn Dineen King, Jennifer Walker Elrod, and Kurt D. Engelhardt.

Judge Elrod wrote the majority opinion. She stressed that the ACA is a “monumental piece of healthcare legislation that regulates a huge swath of the nation’s economy and affects the healthcare decisions of millions of Americans” and ruled, “The individual mandate is unconstitutional because, under National Federation of Independent Business v. Sebelius, it finds no constitutional footing in either the Interstate Commerce Clause or the Necessary and Proper Clause.”

The Fifth Circuit tackled the following questions:

1. Is there a live case or controversy—even though the federal defendants have conceded many aspects of the dispute? And do the intervenor-defendant states and the U.S. House of Representatives have standing to appeal?
2. Do the plaintiffs have standing?
3. If plaintiffs have standing, is the individual mandate unconstitutional?
4. If the individual mandate is unconstitutional, how much of the rest of the Act is inseverable from the individual mandate?

The Fifth Circuit answered the first two questions in the affirmative. Judge Elrod wrote “First, there is a live case or controversy because the intervenor-defendant states have standing to appeal and, even if they did not, there remains a live case or controversy between the plaintiffs and the federal defendants.”

Judge Elrod continued, “Second, the plaintiffs have Article III standing to bring this challenge to the ACA; the individual mandate injures both the individual plaintiffs, by requiring them to buy insurance that they do not want, and the state plaintiffs, by increasing their costs of complying with the reporting requirements that accompany the individual mandate.”

The Fifth Circuit also answered the third question in the affirmative and ruled that the individual mandate is unconstitutional. Judge Elrod wrote, “Third, the individual mandate is unconstitutional because it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power.”

The Fifth Circuit did not answer the fourth question. Instead, the court remanded this issue to the district court. Judge Elrod wrote “Fourth, on the severability question, we remand to the district court to provide additional analysis of the provisions of the ACA as they currently exist.”

Judge King was the sole dissenter in the matter. Judge King wrote “I would vacate the district court’s order because none of the plaintiffs have standing to challenge the coverage requirement. And although I would not reach the merits or remedial issues, if I did, I would conclude that the coverage requirement is constitutional, albeit unenforceable, and entirely severable from the remainder of the Affordable Care Act.”

For OTW’s prior coverage of ACA litigation, see: “Federal Judge Dismisses Maryland ACA Lawsuit, For Now,” “Texas Judge Rules ACA Unconstitutional,” “Maryland Sues to Head Off Texas ACA Challenge,” and “Texas Lawsuit Challenges ACA.”