SCOTUS Bends The Law In Yet Another Obamacare Case

For more than a decade, it seems that different rules apply to Obamacare cases. In NFIB v. Sebelius (2012), a penalty was rewritten into a tax, and a mandatory Medicaid expansion was rewritten into a voluntary program. In King v. Burwell (2014), “established by the State” was rewritten as “established by the federal government.” In California v. Texas (2021), the Court found that the plaintiffs waived a standing argument that was clearly invoked. And so on. When health care is at issue, all the usual rules go out the window.

The latest ACA case continues the trend. Kennedy v. Braidwood Management, Inc. is an Appointments Clause case. Yet, the Court resolves this dispute based on a theory not developed below. Justice Thomas’s dissent explains what happened:

This case concerns the U. S. Preventive Services Task Force, a body that issues legally binding recommendations regarding preventive healthcare treatments. At the beginning of this suit, a subordinate official within the Department of Health and Human Services (HHS) had for years appointed the Task Force’s members. Everyone now agrees that this practice was unlawful. Everyone further agrees that no one statute provides for a department head to appoint the Task Force’s members. But, rather than accept that the default mode of appointment applies, the Government invented a new theory on appeal, arguing that the combination of two ambiguously worded statutes enacted decades apart establishes that the Secretary of HHS can appoint the Task Force’s members. The Court today rushes to embrace this theory. I cannot. To begin with, I would not rule on the Government’s new theory before any lower court has done so.

Thomas writes that two questions are presented, but the Fifth Circuit only considered the latter question:

I would remand for the Fifth Circuit to consider the important threshold question that it skipped: whether the Secretary has the statutory power to appoint the Task Force. The Secretary may appoint the Task Force’s members only if (1) Congress has vested in the Secretary the power to appoint them, and (2) the members are inferior officers under the Appointments Clause. The answer to the first question significantly affects the analysis of the second question. But, no court has passed on the first question, and this Court has had only a limited opportunity to consider it.

And the novel theory the Court relied on was based on the Reorganization Plan of 1966 (not a statute). This Plan could not vest the Executive with new powers that did not exist in 1966. Yet, that is exactly what the government argued here.

Thomas explains:

Here, the purpose of a “reorganization” plan is to “give a definite and orderly structure to” a department’s existingfunctions, not to create new functions that a departmentcannot otherwise lawfully perform. Oxford English Dictionary 923–924 (2d ed. 1989) (defining “organize”). A plan may not, “under the guise of consolidating and rearranging, . . . creat[e] authority in the Executive Branch which had not existed before.” Dept. of Justice, Office of Legal Counsel,Memorandum of William H. Rehnquist, Assistant Atty.Gen. (Sept. 11, 1969), in Reorganization Plan No. 1 of 1969 (ICC): Hearing before the Subcommittee on Executive Reorganization of the Senate Committee on Government Operations, 91st Cong., 1st Sess., 29 (1969) (Rehnquist Memorandum). Yet, that is precisely what the Government’sreading accomplishes, since, without the ReorganizationPlan, the Executive has no power to appoint the Task Force outside the gauntlet of Senate confirmation.

Seth Barrett Tillman and I wrote about the Rehnquist opinion here.

Justice Thomas also gets a good dig in about how Justice Kavanaugh focus on executive branch practice:

The intervening passage of the ACA also makes the majority’s appeals to “consistent Executive Branch practice” fall flat. Ante, at 31 (citing Loper Bright Enterprises v. Raimondo, 603 U. S. 369, 394 (2024)).The Government concedes that its practice from 2010 until its appeal inthis suit was for the AHRQ Director to appoint Task Force members invalidly, based on the mistaken view that the members were not officers. See Brief for Federal Defendants in Braidwood Mgmt., Inc., No. 23– 10326 (CA5), ECF Doc. 159, pp. 31, n. 2, 41. The practice thus sheds no light on whether the Director’s convening power constitutes an express vesting of appointment authority that overcomes the constitutional default. And, surely this Court did not overrule Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984), only to defer to concededly unlawful executive action.

There is a big problem with Justice Kavanaugh’s fixation on tradition. At bottom, it is a deference doctrine, where unlawful conduct can become lawful if it continues.

In the normal course, the Supreme Court would have remanded the case to the lower court. But it seemed pretty clear that the Supreme Court did not want to give the Fifth Circuit another crack at this case, so the majority went ahead and decided this novel issue from scratch.

Here is your regular reminder that President Trump could have, but didn’t, elevate his Fifth Circuit appointees to the Supreme Court.

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