The Anti-Injunction Act Complications

[Ed. Note: We are pleased to welcome the work of Bradley W. Joondeph to HRW. He is a Professor of Law at Santa Clara Law School who publishes the aca litigation blog, an invaluable resource in following the various lawsuits pending against the Patient Protection and Affordable Care Act (PPACA or ACA). He specializes in Tax and Constitutional Law and is a well regarded author on the topics of federalism, judicial behavior, and American constitutional development. He has had extensive experience with the Supreme Court, having served as judicial clerk to the Honorable Sandra Day O’Connor. He also served as clerk for the Honorable Deanell Reece Tacha of the United States Court of Appeals for the Tenth Circuit.]

The big news from [last Friday's] two decisions was not that Virginia lacks standing; that was a problem lurking in that case from the beginning, a nettlesome issue going all the way back to Judge Hudson’s first opinion (in August 2010) rejecting the United States’s motion to dismiss on 12(b)(1) grounds. Virginia would have stood on much stronger ground had it also alleged an injury in fact from the effect of the minimum essential coverage provision’s necessarily pushing more Virginia residents onto the state’s Medicaid rolls, and thus imposing a significant financial cost on the state. But the Commonwealth failed to do this, instead resting on the claim that it had standing based on the alleged “conflict” between its Virginia Health Care Freedom Act and the individual mandate. This was a weak argument from the beginning, and the Fourth Circuit’s holding was entirely unsurprising.

What is surprising–perhaps not on the merits, but in relation to the attention the issue has received to date, from the courts and the parties–is the court’s holding in Liberty University v. Geithner that federal courts lack any subject matter jurisdiction over a suit seeking to enjoin enforcement of the individual mandate because such jurisdiction is precluded by the Anti-Injunction Act. In this respect, there are some important points worth noting:

* This is a potential problem in every lawsuit currently challenging the individual mandate. That is, if the Fourth Circuit’s analysis is correct, then the Supreme Court would lack jurisdiction to hear any private plaintiff’s claim that the minimum coverage provision exceeds Congress’s enumerated powers until after a taxpayer was assessed a penalty under ACA 1501, paid the penalty, and sued the federal government for a refund. The case thus would not reach the Supreme Court until somewhere in the neighborhood of 2015 or 2016.

* It is conceivable, though, that the AIA does bar suits brought by state governments. Of course, state governments have problems establishing standing under Article III, as discussed above. But if the states could overcome the Article III hurdle, it might be that they (unlike private plaintiffs) could avoid the AIA bar. (I remember Judge Hudson analyzing this issue in his August 2010 ruling denying the United States’s motion to dismiss. Obviously, I need to look at it more carefully now.)

* One solution is that which Kevin Walsh has just proposed, which you can read here. In essence, Congress could pass a law repealing the AIA (since it is a statutory bar to jurisdiction) as applied to the ACA lawsuits. As Kevin documents, such a “retroactive” restoration of jurisdiction appears to be viable, even if there actually was not jurisdiction when the case was initially filed in the district court. (I agree with Kevin that Democrats and the President likely have an incentive to appear publicly to support this. But I am not sure there is quite the bipartisan consensus in fact to which Kevin refers. I can think of several reasons that most Democrats would much rather this case be decided by the Supreme Court in 2013 rather than June 2012.)

* What does the Justice Department do now? It has already essentially flip-flopped on this question–initially arguing that the AIA precluded subject matter jurisdiction, but then changing its tune, most notably in the letter brief it filed with the Fourth Circuit after oral argument. Does it now wish to flip back, given that the argument now seems to have gained greater credibility? Or is there too high a political cost for the administration in appearing to run from a fight on the merits? Or is there just too much to gain politically from delaying Supreme Court review (something the Court might well welcome) and pushing the decision past the 2012 election, such that it is worth taking whatever the hit will be from appearing so irresolute? I’m sure the DOJ lawyers working on this case were happy to have prevailed yesterday. But they simultaneously had a new strategic headache thrown into their laps.

There is much more to say, but I need to look into the various legal questions with more care. For now, it suffices to say that the Fourth Circuit’s decision may well have complicated matters considerably, at least if Judge Motz’s analysis proves difficult for the Supreme Court to refute.

UPDATE: One other point worth emphasizing: Probably the most important analytic move in Judge Motz’s opinion was to hold that the meaning of “tax” for purposes of the Anti-Injunction Act and the meaning of “tax” for purposes of the General Welfare Clause (relevant to whether the individual mandate is a valid exercise of Congress’s taxing power) are distinct. More specifically, the category of “taxes” (or exactions) to which the AIA applies is potentially much broader than that under the General Welfare Clause. Most (and perhaps all–I would need to go back and check carefully) of the other judges to have analyzed the AIA issue thus far have treated the issues as one and the same. (Recall Judge Vinson’s opinion in October 2010, where he held that the individual mandate imposed a “penalty” rather than a “tax,” and thus concluded from this both that the AIA was inapplicable and that the individual mandate could not be justified by the taxing power.) My suspicion is that Judge Motz’s analysis on this point will be much harder to refute than the government’s claim that the mandate is a valid exercise of the taxing power.

This post first appeared on the aca litigation blog.

Reform Rodeo

Photo by David Monniaux

1. Stem Cell News: A ban imposed by a federal district court on the use of federal funding for embryonic stem cells has been stayed by a court of appeals judge.

2. Important PPACA Case: Kaiser Health News notes that a closely followed hearing is scheduled in Florida for a case filed by 20 state attorneys general that challenges PPACA’s individual mandate.

3. Primary Care no Panacea: Maggie Mahar discusses new research which finds that a greater population of primary care physicians is not a sufficient condition to improving the quality of care.

4. Bending the Cost Curve: The New York Times discusses a new study by The Center for Medicare and Medicaid Services that outlines the future costs of health care under PPACA. The study itself can be found here.

5. On Defensive Medicine: Joe Paduda describes recent research that reveals only a minimal cost for defensive medicine.

An ERISA Defense Conference with Nine “Renowned Federal Judges”

A mosaic, "Law." Fredrick Dielman (1847-1935)

On Health Reform Watch we’ve written quite a bit about transparency, accountability and gifts as it regards Pharma and Physicians. I saw this today on Illness and Insurance Hell, a rather wide ranging and interesting blog devoted to procuring assistance to a spouse with multiple sclerosis. The author takes a macro view, however, and this wound up in her web: A conference held, it seems, yearly now, in October:

“ERISA LITIGATION: Expert defense strategies for leading outside counsel and in-house counsel on litigating today’s key issues involving benefit plans and fiduciaries”

For those of you who don’t know, ERISA stands for the Employee Retirement Income Security Act of 1974. (Pub.L. 93-406, 88 Stat. 829, enacted September 2, 1974. Erisa is a

federal statute that establishes minimum standards for pension plans in private industry and provides for extensive rules on the federal income tax effects of transactions associated with employee benefit plans. ERISA was enacted to protect the interests of employee benefit plan participants and their beneficiaries by requiring the disclosure to them of financial and other information concerning the plan; by establishing standards of conduct for plan fiduciaries; and by providing for appropriate remedies and access to the federal courts.

There can be major implications for worker benefits, including  health care benefits, in cases brought against employers under ERISA. It is a complex area of law, to say the least. And it is entirely understandable that those charged with the oversight of such plans, should want to meet to discuss how best to discharge their complex duties; how best to comport themselves in a manner in accord and compliance with law; how best, as is their duty if they are attorneys, to zealously represent their clients.

The conference provides a veritable smorgasbord of effective strategies and interesting panels presented by what seems  to be a truly stellar faculty of practitioners:

Senior in-house counsel, top outside defense litigators and renowned

jurists will provide you with winning strategies and practical information on:

• Preventing improper parties from being named as defendants and identifying available remedies

under §502(a)

• Using the claims review process to set up, control and strengthen the defense
• Effective strategies to strengthen the administrative record and memorialize the decision-making

process

• Addressing evidence outside the administrative record, standards of review, conflicts of interest

& discovery once a suit is filed

• The newest theories of liability in 401(k) fee cases and what to do when your plan discovers it has

paid unknown fees

• Defending against stock drop suits and other defined contribution plan claims
• Tibble v. Edison: the trial, theories of the defense, selection of experts, and other practical insights
• ERISA fiduciary litigation: The newest plaintiffs’ liability theories, substantive defenses and trends

in defense pleadings and motions

• How to structure your fiduciary’s role to minimize risk
• Underwriting of fiduciary liability insurance and strategic ideas for litigating and settling cases

when a fiduciary (and their insurance plan) is involved

• Judicial communication: Explaining plan documents and ERISA nuances to the court
• New areas of liability as a result of healthcare reform
• ERISA preemption - the procedural and substantive aspects of the defense
• Defending against age-based and other “recessionary economy” ERISA claims: Cash balance plans,

early retirement, reductions in force, multi-employer plan funding and beyond

If you’re a law geek (I am), a legal practitioner in this area of the law, a representative of an insurer, or a member of a corporation bound by these laws, this conference looks absolutely fascinating (click here, for an overview, download pdf for the full view). And I have no doubt that attendance will be rewarded with a great deal of newly acquired knowledge and an important grasp of methodology. But the faculty also includes nine “renowned federal judges,” who “will help you convey ERISA complexities to a court.”

Having had the benefit of a legal education, I have some idea of the complexity of the matter at hand ( a quick look here will give you some idea as well)  and can fully understand how judges would want to educate practitioners defending claims so as to better execute and expedite the process.  A case, court system or retirement plan riddled with ignorance is in no one’s best interest. And a knowledge of the law enables compliance with the law.

But I would suggest, humbly, that it just doesn’t look good.  It is, after all, a conference designed to “defend against” ERISA claims. I would be at least somewhat surprised if these federal judges were speaking at a conference for impoverished workers who were deprived of their retirement benefits. If am wrong, I am gladly so. And one could make the case that the many federal judges who teach as adjuncts at law schools across the United States are doing just that–taking time out of an arduous schedule to teach law, compliance and process to what will be both defense and prosecution– because we all benefit from an effective legal system. But this conference seems a bit more–or less– than that; at least in the eyes of smart non-lawyers like the author of Illness and Insurance Hell. To her it just looks like “the fix is in.” Like Big Money is courting the Law and those inviolable robes, the buttresses of justice, have shown a slip. I have a great deal more faith in the Law than that. I capitalize the word without apology. And I have no doubt that this is just a matter of appearances–and that appearances can be misleading. But despite my efforts here, I really don’t think she, who has struggled in the legal system against an insurer to get medical help for her very sick husband, and people like her, will believe me. Or the judges. And that’s a problem.

Professor Gaia Bernstein on ‘Intensive Parenting’ and the Law

According to Health Law Prof Blog, Seton Hall Law’s own Professor Gaia Bernstein and co-author Zvi Triger  led in SSRN Health Law Paper downloads last month for their paper, “Over Parenting,” forthcoming in U.C. Davis Law Review. In addition to taking the number one spot at SSRN, Professor Bernstein appeared in the New York Times, Forbes Magazine and Canada’s leading newspaper, The Globe and Mail, concerning her recent scholarship on “Intensive Parenting” and the Law. These articles follow on the heels of another recent article in the ABA Journal. (See all below).

Regarding the general perception that “Intensive Parenting” or “Helicopter Parenting” is a norm appropriate for unmitigated aspiration, The Times writes:

Bernstein and Triger are not so sure. They cite studies that suggest what we have discussed on Motherlode before, that what they call intensive parenting (which others dub helicopter parenting or smothering mothering) can cause more harm than good. It is creating an anxious, dependent generation, they write, and it can “seriously undermine one of the most important roles of parents, namely, nurturing a sense of independence and separation from the parent.”

They fear that the trend is already being codified into law. In custody cases, lawyers advise parents, particularly the one who might have had less day-to-day participation in the children’s lives, to enter what Bernstein calls “the race for involvement.”

“It becomes a strategy, to know all the teachers, coach little league, text your children 20, 30 times a day,” she said in an interview.

Professor Bernstein and her co-author have also cautioned that “the law repeatedly incorporates child-rearing practices into mandatory legal standards and that we should expect to see pressure on legislatures and courts to turn sophisticated child rearing practices used by Intensive Parenting adherents into legal standards. ‘Some child rearing practices are desirable social norms but not desirable legal standards,’ Professor Bernstein explained. “For example, some states now place women who consume alcohol during pregnancy under civil confinement. Would we want to see pregnant women who do not to take folic acid vitamins–which reduce the probability of birth defects– similarly placed under civil confinement?”

“The authors warn against use of the law to enforce Intensive Parenting. Although research has shown that Intensive Parenting has important advantages, a rising body of research has shown that Intensive Parenting can seriously undermine one of the most important roles of parents, namely, nurturing a sense of independence and separation from the parent.  Disconcertingly, this research also shows that deficiencies correlated with Intensive Parenting place this generation at a higher risk for anxiety disorders and making poor choices regarding alcohol and drug abuse and sexual relationships.”

“Intensive Parenting is largely a socio-economic construct. It is class, race, ethnicity and culturally dependent and tends to place its weight squarely upon the shoulders of women-who are still overwhelmingly responsible for the raising of children. A hasty and uncritical incorporation of such standards in a multicultural society would increase existing biases and force Intensive Parenting on those who may be financially unable or ideologically unwilling to adopt it.”

Read the New York Times article, Defining a Successful Parent.

Read the Forbes article, Custody Goes To The Craziest Parent.

Read the Globe and Mail article, Give Helicopter Parents a Break

Read the ABA Journal article, Courts Reward Helicopter Parents, Two Law Profs Say

Read more about Professor Bernstein’s “Over Parenting,” forthcoming in the U.C. Davis Law Review, here.

Disparate Impact and the Tanning Tax

I have previously blogged in favor of a vanity tax, so I was happy to see the health reform legislation included a 10% tax on tanning salons. But not everyone is so pleased to see it:

When an article about the fallout from the tax — which took effect last week — appeared on the Washington Post’s Web site Wednesday, dozens of commenters questioned the tax’s legality. The case can seem deceptively simple: Since patrons of tanning salons are almost exclusively white, the tax will be almost entirely paid by white people and, therefore, violates their constitutional right to equal protection under the law.

Randall Kennedy dismisses that claim out of hand. But I hope the angry tanners join me in endorsing a plan to address the grave injustice here: legal scrutiny of face-whitening creams. Tax tanning, tax lightening, and we may well move closer to a society that can transcend the fickle “beauty bias.”

What’s So Great About Law School?

Neelu Pal, MD/Seton Hall Law Student

SURGEON/ONE L

Where Law & Medicine Meet

What’s so great about law school?

It has been two months since I started attending law school. After two months the initial surreal-ness of law school is starting to wear off and a reality about the hard work that is required to excel is setting in. Yet with every passing day I realize how fortunate I am to have this opportunity to get a legal education. Understanding the law and being able to apply it is a unique ability that is often underrated by many people, including law students and lawyers themselves.

Recently I had the opportunity to attend a reception at Capitol Hill, in Washington DC. It was an event that commemorated the historic meeting between Dr. Martin Luther King and Coretta Scott King with Mahatma Gandhi. This was a meeting that forever created solidarity between people separated by oceans and continents, yet intertwined in parallel struggles for freedom and equality. The event itself was remarkable in that it was attended by so many dignitaries: senators, ambassadors and congressmen who spoke of inspiring events in their own lives and of the history that they had witnessed. It was a truly expansive experience to see people from South Africa, India, America, France, Germany, Mongolia, Vietnam and numerous other countries, all assembled to pay homage to something that had happened so long ago, yet was so formative in the histories of the two countries: India and the United States.

At this event, I had the opportunity to meet many of these dignitaries and senators. I met an eminently qualified individual, who after we exchanged brief introductions, told me about her very impressive work at the Health Policy department of the Veterans Affairs in Washington DC. She had considered going to law school in the past. She wanted to know why, after medical school, residency and fellowship training I thought it important to spend time to get a legal education. I could not explain to her the many events that led up to this decision, but I want to tell her what is so great about law school and why she should seriously consider getting a legal education.

In my mind the study of law serves two purposes. First, it develops a formal understanding of the rules that govern our society. And second, the knowledge of the law can be used in conjunction with any other field to bring it into greater focus and examine it closely while separating its components, almost like a prism and a magnifying glass combined. Read more