Should a Court Reinstate the Individual Mandate Penalty?, by Jamie Durling and Garrett West
In a recent post, Nicholas Bagley reported on the latest challenge to the Affordable Care Act. On February 26th, twenty states filed a lawsuit alleging that the individual mandate is unconstitutional. Right away, you might be wondering about two questions: Didn’t Congress repeal the individual mandate in the Tax Cuts and Jobs Act back in December? And didn’t the Supreme Court uphold the individual mandate in NFIB v. Sebelius back in 2012?
First, the Tax Cuts Act didn’t technically repeal the individual mandate. Rather, it zeroed out the accompanying penalty beginning in 2019. (Lots of popular press reporting at the time didn’t make this distinction clear because, for practical purposes, repealing the penalty was like repealing the mandate.) Second, NFIB did uphold the individual mandate by construing the penalty as a tax. But since Congress recently repealed the penalty, the mandate might no longer count as a tax for constitutional purposes. The states’ argument is pretty simple: First, in NFIB, the Court upheld the individual mandate under the Taxing Clause but denied that it could also be sustained under the Commerce Clause. Second, in the Tax Cuts Act, Congress repealed the individual mandate’s penalty. Therefore, the mandate is no longer a tax, and so it’s unconstitutional.
Perhaps more radically, though, the states also argue that the individual mandate is inseverable from the rest of the ACA and, thus, that the court should strike down the entire law. This argument has already been criticized by commentators from the across the ideological spectrum, including Bagley, Abbe Gluck, and Ilya Somin. Yet each of these commentators also seem to concede an important point: that the correct remedy would be to strike down the individual mandate.
In our forthcoming essay in The University of Chicago Law Review Online, we take a different position. We argue that the correct remedy (assuming that the plaintiffs have standing and win on the merits) is to strike down the repeal of the penalty. In other words, the court should reinstate the tax. This proposal might seem counterintuitive. But it is in fact deeply ground in existing severability doctrine and theory. The Supreme Court has long corrected constitutional violations created by statutory amendments by severing the amendment and leaving the preexisting law in place. And notably, the Court has even done so in cases where the constitutional violation is caused by the repeal of a tax.
The issues raised in this litigation raise broader questions about the application of severability doctrine to unconstitutional amendments. We argue that, in cases of unconstitutional amendments, courts should favor restoration to the status quo. This rule better balances the competing claims of prior and current Congresses, and it better reflects Marbury’s maxim that a “legislative act contrary to the Constitution is not law.” And this rule makes particular sense on the facts of the latest suit. We know that the Republicans in Congress who held a majority in both the House and Senate wanted to repeal the individual mandate and perhaps the entire ACA, but they just didn’t have the votes to do so. Instead, they had to settle on zeroing out the penalty. As Katie Keith, a frequent commentator on the ACA, recently observed, “The idea that the states could accomplish what Congress repeatedly failed to do through a lawsuit over a small amendment seems far-fetched, to say the least.” Perhaps more importantly, it also runs counter to the purpose of severability doctrine. Simply put, courts shouldn’t create laws that Congress never would have enacted.
Jamie Durling and Garrett West are J.D. Candidates at Yale Law School.