California v. Texas/Texas v. California
As originally enacted, the Patient Protection and Affordable Care Act (ACA) required individuals to obtain health insurance coverage and imposed a tax on persons who did not. The Supreme Court upheld the constitutionality of the individual coverage “mandate” as an exercise of Congress’s power to tax. In the 2017 tax cut legislation, Congress lowered the tax on not obtaining insurance to zero starting with tax year 2019. A number of states led by Texas, as well as some individual opponents of the ACA then filed a lawsuit claiming that with the tax reduced to zero, the individual mandate was no longer constitutional as an exercise of Congress’s taxing power. Many other states, led by California, as well as the U.S. House of Representatives, intervened to defend the law.
A federal district court in Texas held that the mandate is now unconstitutional and struck down the ACA in its totality. California and the House of Representatives appealed, and the U.S. Court of Appeals for the Fifth Circuit affirmed the ruling that the mandate is unconstitutional, but remanded the case for consideration of whether parts of the law are “severable” from the mandate and thus may continue to function. California sought review by the Supreme Court, arguing that the mandate is not unconstitutional because it now has no effect whatsoever, and that even if it were unconstitutional, the rest of the ACA is entirely severable from the mandate and must be upheld. Texas also sought review, arguing that the ACA must fall in its entirety if the mandate falls. The Supreme Court granted both petitions.
Public Citizen filed an amicus brief supporting California. The brief explains that if the mandate has become unconstitutional, longstanding principles of “severability” require that the Court hold that all the rest of the Act must continue to stand. Severability is a matter of congressional intent, and Congress, by repealing the tax on failing to obtain insurance while leaving the rest of the ACA intact, has itself made clear that an enforceable mandate is not indispensable to the operation of the ACA.
In a decision issued in June 2021, the Court held that the plaintiffs lacked standing because they had not shown an injury fairly traceable to the defendants’ conduct enforcing the specific statutory provision they challenged as unconstitutional. The Court’s decision did not address the severability issue we briefed or the merits of the plaintiffs’ claim.