Tag: power

ObamaCare Ruled Unconstitutional (Again)

In August 2018, The Jurist’s Corner speculated that the question of the constitutionality of the Affordable Care Act 2010 (ACA or ObamaCare) might be heading towards the US Supreme Court again in 2019. On 14 December 2018, a District Court for the Northern District of Texas held, in the case of Texas v the United States No. 4:18-cv-00167-O that the ObamaCare, in its entirety, was unconstitutional. This is yet another time the ACA is ruled unconstitutional, but it is the first time since Congress passed the Tax and Jobs Act 2017 eliminating the tax/penalty for a failure to comply with the ObamaCare’s Individual Mandate (i.e. the requirement to buy a health insurance).

So far the ObamaCare has withstood, albeit not in its entirety, several challenges before the federal courts. In 2012 the US Supreme Court ruled in the case of National Federation of Independent Business v. Sebelius 567 U.S. 519 2012 that, inter alia, although the Individual Mandate was not a valid exercise of the Congress’s power to regulate inter-state commerce, the penalty for its breach could be read as a tax and thereby be a valid exercise of the Congress’s taxation power instead. This is because the so called ‘penalty’ for breaching the Mandate was limited to a financial fee processed by the IRS together with individuals’ income taxes. This saving construction persuaded Chief Justice Roberts who joined the 4 liberal Justices on the Court and voted to uphold the Individual Mandate.

However, the Tax and Jobs Act 2017 passed by Congress in 2017 eliminated this tax/penalty while leaving the Individual Mandate as such intact. In those circumstances, several Red States sued in a Texas federal District Court again claiming that the elimination of the tax had rendered the Individual Mandate unconstitutional as now, in the absence of any tax attached to it, it could only be construed as an exercise of the Congress’s power to regulate inter-state commerce and that would violate National Federation of Independent Business v. Sebelius 567 U.S. 519 2012. The lawsuit went even further claiming that the Individual Mandate was inseverable from the rest of the law, or at least from its certain parts, such as the community rating. As such, the lawsuit argued that in case of finding the Individual Mandate unconstitutional, the Court should strike down the rest of the ObamaCare with it. Shortly afterwards, the Trump Administration announced that it would not to defend the lawsuit, so several Red States led by California intervened in the case submitting briefs in defence of the ACA (The Atlantic).

On 14 December 2018, the Court issued its judgment. Judge O’Connor analysed the effect of the elimination of the tax attached to the Individual Mandate by the Tax and Jobs Act 2017 and found that in the absence of any tax, the Mandate could not possibly fall within the Congress’s taxation power (pp20-27). Next, Judge O’Connor once again considered the possibility of the Individual Mandate being a valid exercise of the power to regulate inter-state commerce but rejected it on the grounds of the Majority Opinion in National Federation of Independent Business v. Sebelius 567 U.S. 519 2012 (pp27-34). Ultimately, “the Court [found that] the Individual Mandate is no longer fairly readable as an exercise of Congress’s Tax Power and continues to be unsustainable under Congress’s Interstate Commerce Power. The Court therefore finds the Individual Mandate, unmoored from a tax, is unconstitutional...” (p34).

At this point, the main question became whether the Individual Mandate was severable from the rest of the ObamaCare so that the rest of the ACA could remain in force. Judge O’Connor examined the approach of the Supreme Court to the question of the severability of the Individual Mandate in both National Federation of Independent Business v. Sebelius 567 U.S. 519 2012 and King v. Burwell 576 U.S. ___ (2015) and summarised:

“The ACA’s text and the Supreme Court’s decisions in NFIB and King thus make clear the Individual Mandate is inseverable from the ACA. As Justice Ginsburg explained, “Congress could have taken over the health-insurance market by establishing a tax-and-spend federal program like Social Security.” Id. at 595 (Ginsburg, J., joined by Breyer, Kagan, and Sotomayor, JJ.). But it did not. “Instead of going this route, Congress enacted the ACA . . . To make its chosen approach work, however, Congress had to use . . . a requirement that most individuals obtain private health insurance coverage.” Id. (citing 26 U.S.C.§ 5000A). That requirement—the Individual Mandate—was essential to the ACA’s architecture. Congress intended it to place the Act’s myriad parts in perfect tension. Without it, Congress and the Supreme Court have stated, that architectural design fails. “Without a mandate, premiums would skyrocket. The guaranteed issue and community rating provisions, in the absence of the individual mandate, would create an unsustainable death spiral of costs, thus crippling the entire law.” BLACKMAN, supra note 3, at 147; accord NFIB, 567 U.S. at 597 (Ginsburg, J., joined by Breyer, Kagan, and Sotomayor, JJ.) (noting the mandate was essential to staving off “skyrocketing insurance premium costs”). Congress simply never intended failure.” (p47)

Next, Judge O’Connor analysed the potential effect of retaining the rest of ObamaCare, in the absence of the Individual Mandate, on other major provisions of the ACA:

Even if the Court preferred to ignore the clear text of § 18091 and parse the ACA’s provisions one by one, the text- and precedent-based conclusion would only be reinforced: Upholding the ACA in the absence of the Individual Mandate would change the “effect” of the ACA “as a whole.” See Alton, 295 U.S. at 362. For example, the Individual Mandate reduces the financial risk forced upon insurance companies and their customers by the ACA’s major regulations and taxes. See 42 U.S.C. §§ 18091(2)(C), (I). If the regulations and taxes were severed from the Individual Mandate, insurance companies would face billions of dollars in ACA-imposed regulatory and tax costs without the benefit of an expanded risk pool and customer base—a choice no Congress made and one contrary to the text. See NFIB, 567 U.S. at 698 (joint dissent); 42 U.S.C. § 18091(2)(C) and (I).” (p48)

“Similarly, the ACA “reduce[d] payments by the Federal Government to hospitals by more than $200 billion over 10 years.” NFIB, 567 U.S. at 699 (joint dissent). Without the Individual Mandate (or forced Medicaid expansion), hospitals would encounter massive losses due to providing uncompensated care. See BLACKMAN, supra note 3, at 2–4 (discussing the freerider and cost-shifting problems in healthcare).” (p48)

“The story is the same with respect to the ACA’s other major provisions, too. The ACA allocates billions of dollars in subsidies to help individuals purchase a government-designed health-insurance product on exchanges established by the States (or the federal government). See, e.g., 26 U.S.C. § 36B; 42 U.S.C. § 18071. But if the Individual Mandate falls, and especially if the pre-existing-condition provisions fall, upholding the subsidies and exchanges would transform the ACA into a law that subsidizes the kinds of discriminatory products Congress sought to abolish at, presumably, the re-inflated prices it sought to suppress.” (pp48-49)

“Nor did Congress ever contemplate, never mind intend, a duty on employers, see 26 U.S.C. § 4980H, to cover the “skyrocketing insurance premium costs” of their employees that would inevitably result from removing “a key component of the ACA.” (Ginsburg, J., joined by Breyer, Kagan, and Sotomayor, JJ.). And the Medicaid-expansion provisions were designed to serve and assist fulfillment of the Individual Mandate and offset reduced hospital reimbursements by aiding “low-income individuals who are simply not able to obtain insurance.” Id. at 685 (joint dissent).” (p49)

“The result is no different with respect to the ACA’s minor provisions. For example, the Intervenor Defendants assert that, “[i]n addition to protecting consumers with preexisting medical conditions, Congress also enacted the guaranteed-issue and community-rating provisions to reduce administrative costs and lower premiums.” Intervenor Defs.’ Resp. 35, ECF No. 91; see also id. at 34 (“Congress independently sought to end discriminatory underwriting practices and to lower administrative costs.”). But Congress stated explicitly that the Individual Mandate “is essential to creating effective health insurance markets that do not require underwriting and eliminate its associated administrative costs.” 42 U.S.C. § 18091(2)(J) (emphasis added). At any rate, to the extent most of the minor provisions “are mere adjuncts of the” now-unconstitutional Individual Mandate and nonmandatory Medicaid expansion, “or mere aids to their effective execution,” if the Individual Mandate “be stricken down as invalid” then “the existence of the [minor provisions] becomes without object.” Williams, 278 U.S. at 243.” (pp49-50).

On that basis Judge O’Connor held:

“…Congress was explicit: The Individual Mandate is essential to the ACA, and that essentiality requires the mandate to work together with the Act’s other provisions. See 42 U.S.C. § 18091. If the “other provisions” were severed and preserved, they would no longer be working together with the mandate and therefore no longer working as Congress intended. On that basis alone, the Court must find the Individual Mandate inseverable from the ACA. To find otherwise would be to introduce an entirely new regulatory scheme never intended by Congress or signed by the President.” (pp47-48).

“In the face of overwhelming textual and Supreme Court clarity, the Court finds “it is ‘unthinkable’ and ‘impossible’ that the Congress would have created the” ACA’s delicately balanced regulatory scheme without the Individual Mandate. Alton, 295 U.S. at 362. The Individual Mandate “so affect[s] the dominant aim of the whole statute as to carry it down with” it. Id. To find otherwise would “rewrite [the ACA] and give it an effect altogether different from that sought by the measure viewed as a whole.” Alton, 295 U.S. at 362. Employing such a strained view of severance would be tantamount to “legislative work beyond the power and function of the court.” Wallace, 259 U.S. at 70.” (pp50-51)

Finally, Judge O’Connor rejected the argument that in 2017, when passing the Tax and Jobs Act 2017, Congress indicated that the Individual Mandate was severable from the rest of the ObamaCare because it did not repeal the rest of the ACA while eliminating the tax attached to the Individual Mandate (pp52-54). In conclusion, the Court held that:

“In some ways, the question before the Court involves the intent of both the 2010 and 2017 Congresses. The former enacted the ACA. The latter sawed off the last leg it stood on. But however one slices it, the following is clear: The 2010 Congress memorialized that it knew the Individual Mandate was the ACA keystone, see 42 U.S.C. § 18091; the Supreme Court stated repeatedly that it knew Congress knew that, see, e.g., NFIB, 567 U.S. at 547 (Roberts, C.J.) (citing 42 U.S.C. § 18091(2)(F)); King, 135 S. Ct. at 2487 (citing 42 U.S.C. § 18091(2)(I)); and knowing the Supreme Court knew what the 2010 Congress had known, the 2017 Congress did not repeal the Individual Mandate and did not repeal § 18091.” (pp54-55)

The ruling is now bound to be appealed to the Court of Appeals for the Fifth Circuit and then probably to the US Supreme Court. The appeal proceedings will likely focus on the question of the severability of the Individual Mandate from the rest of the ObamaCare. With the new judgment and the prospects of future appeals, it seems that the ObamaCare has now become the most litigated issue of our time.

The Grand Chamber Vindicates Russian Opposition Leader Navalny (ECtHR)

On 15 November 2018, the Grand Chamber of the European Court of Human Rights ruled unanimously in the case of Navalny v Russia (App. no.: 29580/12) that the treatment of Russian opposition leader Alexei Navalny by the Russian government had violated his rights under:

  • Article 5 of the Convention (concerning arbitrary arrest on 7 occasions and pre-trial detention on 2 occasions);
  • Article 6 of the Convention (concerning 6 out of 7 administrative proceedings leading to his conviction of administrative offences);
  • Article 11 of the Convention (concerning the inability to peacefully assemble).

Furthermore, the Court also held 14-3 that there had been a breach of Article 18 considered in conjunction with Article 5 and Article 11 of the Convention. At the end, the Court ordered the Russian government to pay €50,000 in respect of non-pecuniary damage, €1,025 in respect of pecuniary damage and €12,653 in respect of costs and expenses, which adds up to €63,678 in total. The ruling comes after the Russian government appealed against the original judgment of the Third Section of the European Court of Human Rights. The Grand Chamber has now upheld the main bulk of the Third Section’s reasoning unanimously dismissing the Government’s objection:

  • of non-exhaustion of domestic remedies under Article 5 of the Convention;
  • of non-exhaustion of domestic remedies under Article 11 of the Convention;
  • as to the failure to comply with the six-months rule under Article 18 of the Convention.

Mr Navalny lodged a complaint against the Russian government in 2014 effectively claiming a political persecution through different methods and over an extensive period of time. In respect of Article 5, Navalny complained about having been arbitrarily arrested on 7 occasions while attending peaceful demonstrations, including twice for an alleged failure to obey a police order (on 9 May 2012 and 24 February 2014) and about having been detained for over 3 hours in violation of the statutory time-limit pending his trial (paras. 68-9). In respect of Article 6, Navalny argued that on all 7 occasions when he was arrested, he was unfairly convicted of an administrative offence in violation of his right to a fair hearing, including the right to the equality of arms, presumption of innocence, impartiality of the tribunal and the adversarial nature of the proceedings (para. 73). In respect of Article 11, Navalny claimed that arresting him 7 times while attending peaceful demonstrations had violated his freedom of peaceful assembly (para. 85).

Finally, in respect of Article 18 (stipulating that “the restrictions permitted under [the] Convention to the said rights and freedoms shall not be applied for any purpose other than those for which they have been prescribed”), arguably the most interesting element of Mr Navalny’s claim, he:

“156. … submitted that since the 2011-2012 protest rallies in which he played a leading role, the authorities had become wary of his participation in any kind of informal gathering. They sought to punish him for his political criticism and took steps to discourage his supporters. He was specifically and personally targeted by the authorities who acted to suppress political dissent. He referred, in particular, to the footage of his arrest in front of the courthouse on 24 February 2014 (the sixth episode). He also alleged that he had been arrested even though the gatherings in question had been peaceful and had raised no public-order issues. The procedure set out by law for drawing up the administrative offence report had been manipulated so as to remove him from the event venue unnecessarily and to detain him without a lawful purpose. Whilst he had promoted the ideas and values of a democratic society … and as the most prominent opposition figure advocating these values, he had been harassed precisely because of his active engagement in political life and the influence that he had on the political views of the Russian people.

On that subject, the Court held that:

“168. … It cannot be overlooked that the arrests took place in the context of the applicant exercising his Convention right to freedom of assembly. The Court finds that a certain pattern may be discerned from the series of seven episodes. Moreover, the pretexts for the arrests were becoming progressively more implausible, whereas the degree of potential or actual disorder caused by the applicant diminished. It is also noteworthy that in the first four episodes the applicant was one of the leaders of the gatherings, and this could explain to a certain extent why he was among the first persons to be arrested. However, this was not the case in the subsequent episodes where the applicant did not play any special role.

169. In the fifth episode (on 27 October 2012) the applicant was one of some thirty activists taking part consecutively in a stationary demonstration. There were several prominent public figures among the participants and no obvious leadership. Moreover, according to the official version, the applicant was arrested not in connection with the demonstration itself but for holding a “march” when he was walking away from the venue followed by a group of people, including journalists. Nothing suggests that the applicant had arranged for these people to accompany him, or that he was somehow in charge of his followers or that he was in a position to control them in the very brief moments before his arrest (see paragraph 32 above).

170. An equally evident example was the sixth episode (on 24 February 2014) with his arrest in front of the courthouse, where he was merely one of the persons waiting to be allowed inside the building to attend the public hearing. The police deliberately divided the crowd to retrieve the applicant and remove him from the venue, although nothing in his conduct or appearance distinguished him from other peaceful individuals quietly waiting behind the police cordon. In this episode it is particularly difficult to dismiss the applicant’s allegation that he was specifically and personally targeted as a known activist, even in the most innocuous situation remotely resembling a public gathering (see paragraph 156 above).

171. In this context, the Court’s observation in Merabishvili to the effect that in a continuous situation the predominant purpose may vary over time (§ 308) assumes particular significance. It may well appear that the predominant purpose of the measures taken against the applicant has indeed changed over the period under examination. What might possibly have seemed a legitimate aim or purpose at the outset appears less plausible over time. Thus, as held in paragraphs 126 and 127 above, whereas the Court has serious doubts that any legitimate aim as claimed by the Government existed on the first four occasions, it has found that no such aim was present on the fifth and sixth occasions, and was again highly questionable on the seventh occasion. Also, as noted above, the violations in the present case occurred despite the authorities’ increasing awareness that the practices in question were incompatible with Convention standards (see paragraph 149 above). In this connection, the Court considers that regard should also be had to the wider context (ibid., § 317), notably to its similar findings in Navalnyy and Yashin (cited above) with regard to a demonstration three months before the first of the seven episodes in the present case. Equally relevant to the general context are its findings with regard to the sequence of events that unfolded in two sets of criminal proceedings which were being conducted against the applicant in parallel. In one case it found that the national courts had “omitted to address” and “had heightened … concerns that the real reason for the applicant’s prosecution and conviction had been a political one” (see Navalnyy and Ofitserov, cited above, §§ 116-19). In the other it held that the applicant’s criminal sentence was “arbitrary and manifestly unreasonable”, that the law was “extensively and unforeseeably construed” and applied in an arbitrary manner which flawed the proceedings “in such a fundamental way that it rendered other criminal procedure guarantees irrelevant” (see Navalnyye v. Russia, no. 101/15, §§ 83-84, 17 October 2017).

172. In addition, there is converging contextual evidence corroborating the view that the authorities were becoming increasingly severe in their response to the conduct of the applicant, in the light of his position as opposition leader, and of other political activists and, more generally, in their approach to public assemblies of a political nature. The Court has previously noted the important legislative changes which took place in the reference period, increasing and expanding liability for a breach of the procedure for conducting public events (see Lashmankin and Others, cited above, §§ 301-06). In particular, the maximum amount of the fine payable for such offences was increased by twenty times; new types of aggravated offences were introduced with correspondingly severe sanctions; and the limitation period for the offences in question was extended. Further restrictions of the legislative framework on freedom of assembly introduced in July 2014, including criminal liability for assembly-related offences, although falling outside the period under consideration, may be noted as a continuous trend…

173. Against this background, the applicant’s claim that his exercise of freedom of assembly has become a particular object for targeted suppression appears coherent within the broader context of the Russian authorities’ attempts at the material time to bring the opposition’s political activity under control. At this point, the Court considers it appropriate to have regard to the nature and degree of reprehensibility of the alleged ulterior purpose, bearing in mind that the Convention was designed to maintain and promote the ideals and values of a democratic society governed by the rule of law (seeMerabishvili, cited above, § 307).

174. At the core of the applicant’s Article 18 complaint is his alleged persecution, not as a private individual, but as an opposition politician committed to playing an important public function through democratic discourse. As such, the restriction in question would have affected not merely the applicant alone, or his fellow opposition activists and supporters, but the very essence of democracy as a means of organising society, in which individual freedom may only be limited in the general interest, that is, in the name of a “higher freedom” referred to in the travaux préparatoires (see paragraph 51 above). The Court considers that the ulterior purpose thus defined would attain significant gravity.

175. In the light of all the above-mentioned elements, and in particular the sequence and pattern of the events in the present case (see paragraphs 167-68 above), viewed as a whole, the Court finds it established beyond reasonable doubt that the restrictions imposed on the applicant in the fifth and the sixth episodes pursued an ulterior purpose within the meaning of Article 18 of the Convention, namely to suppress that political pluralism which forms part of “effective political democracy” governed by “the rule of law”, both being concepts to which the Preamble to the Convention refers (see, mutatis mutandisŽdanoka v. Latvia [GC], no. 58278/00, § 98, ECHR 2006‑IV, and Karácsony and Others v. Hungary [GC], nos. 42461/13 and 44357/13, § 147, ECHR 2016 (extracts)). As the Court has pointed out, notably in the context of Articles 10 and 11, pluralism, tolerance and broadmindedness are hallmarks of a “democratic society”. Although individual interests must on occasion be subordinated to those of a group, democracy does not simply mean that the views of a majority must always prevail: a balance must be achieved which ensures the fair and proper treatment of people from minorities and avoids abuse of a dominant position (see, among other authorities, Young, James and Webster v. the United Kingdom, 13 August 1981, § 63, Series A no. 44; Gorzelik and Others v. Poland [GC], no.44158/98, § 90, ECHR 2004‑I; Leyla Şahin, cited above, § 108; and Karácsony and Others, cited above, § 147).”

Interestingly, the issue of Article 18, unlike other issues in this case, divided the Grand Chamber. Accordingly, the ruling includes a Partly Concurring and Partly Dissenting Opinion of Judges Pejchal, Dedov, Ravarani, Eicke and Paczolay in which the Judges argued that the abuse of the Convention rights perpetrated by the Russian government should have been dealt with on the basis of Article 17 (stipulating that “nothing in this Convention may be interpreted as implying for any State, group or person any right to engage in any activity or perform any act aimed at the destruction of any of the rights and freedoms set forth or at their limitation to a greater extent than is provided for in the Convention“) rather than Article 18 of the Convention (para. 3). The Judges admit in their Joint Opinion that the Court could not have properly considered Article 17 since the complaint had originally been made under Article 18 (paras. 4-5) but they nevertheless decided to elaborate on this subject. Firstly, they claim that Article 17 is clearly applicable to abuses of Convention rights perpetrated by states, not only individuals or groups (paras. 6-19). However, the Judges recognise that such an application of Article 17 is extremely rare. Secondly, the Judges, while admitting that Article 17 and Article 18 have a similar scope of application, distinguish the two on the basis of the difference between an ‘abuse of power’ and a ‘misuse of power’ claiming that

“26. If misuse of power is also undoubtedly an abuse of power, the opposite is not necessarily true. There may be instances of abuse of power when the authorities in taking an individual decision do not, in fact, pursue an ulterior purpose. To use the paradigm of the theory of sets, Article 18 is a subset of Article 17. The concept of abuse of rights is broader than that of misuse of power, meaning that certain acts will be considered “abusive”, not because the purpose is unlawful, but because of the way in which the power was used.”

The Judges conclude:

“33. In light of the above, we are of the view that, if the case had been presented in those terms, an examination of the facts of the present case under Article 17 would have enabled the Court to assess whether the number of individual episodes addressed in the judgment, taken together, are evidence or isolated manifestations of a system that abusively seeks to limit, by legislative, administrative and/or judicial means, the democratic rights of the applicant in a way that substantially runs counter to the purpose and general spirit of the Convention and is aimed at unduly limiting those rights; and to do so without (a) having to adopt a narrow focus on the (administrative) authorities involved in the individual incident under consideration and (b) having to address the difficult issue of whether those authorities, in their response to each individual occasion on which the applicant sought to exercise his fundamental freedom of assembly, pursued an ulterior purpose.”

It seems that the Joint Opinion of Judges Pejchal, Dedov, Ravarani, Eicke and Paczolay by no means was designed to limit the scope of liability on the part of the Russian government, as recognised in the Majority Opinion. To the contrary. Under the approach to Article 17 and Article 18 advocated in the Joint Opinion, the liability of the Russian government for a repeated pattern of abuse of power towards Mr Navalny would probably only deepen. In any event, the Joint Opinion in this case is a rather rare example of the Court, or at least a part of it, trying to clarify confusing rules of application of Articles which are rarely relied on by applicants and therefore not sufficiently explained in the Court’s jurisprudence.