Summary
On November 10, the United States Supreme Court (the “Court”) heard oral arguments in the case of California v. Texas. While the outcome of the case if far from certain, the Court made clear during these arguments that all three issues at stake – the standing of the plaintiffs (those seeking repeal of the mandate and the rest of the Affordable Care Act) to sue, the constitutionality of the mandate, and the severability of the mandate from the rest of the law – are open questions about which there is substantial debate among the Justices.
Two key developments stand out. First, while the attorneys for both sides did not intend to devote much time to the question of standing, the Justices believe it is a critical issue that must be resolved. Chief Justice Roberts called it an “important doctrine” and several Justices pressed the parties on whether the Court should even consider the constitutionality and severability issues because plaintiffs may have failed to demonstrate bona fide harm and thus a right to sue. In particular, the Justices also spent considerable time debating the novel “standing by inseverability” theory, explained in more detail below, which is a key plank of the plaintiffs’ standing argument.
The other key development was the apparently strong preference by Justice Kavanaugh and others to find that, if the individual mandate is deemed unconstitutional, which Kavanaugh repeatedly stated he believed it now is, then it should be severed from the rest of the ACA, allowing the remaining provisions to stand. Kavanaugh said he is “inclined to agree” that the mandate is severable and that it is “fairly clear” the Court should do so if it finds the provision to be unconstitutional.
Given the prominence of the standing and severability debates in today’s oral argument, and the posture in particular of Justices Roberts and Kavanaugh, we believe it is more likely than not the Court will allow the rest of the ACA to stand based on its holding on one of these issues, even if it finds the individual mandate to be unconstitutional. A decision will be delivered in 2021, as early as February and as late as June.