185 F. Supp. 3d 165
D.D.C.2016Background
- The House sued Secretaries of HHS and Treasury alleging the Executive spent public monies for ACA Section 1402 cost‑sharing reimbursements without a congressional appropriation, violating Art. I, §9, cl.7. The court previously found House standing; merits were decided here.
- ACA §1401 added refundable premium tax credits (codified at 26 U.S.C. §36B) and amended 31 U.S.C. §1324(b) to list §36B among provisions permanently appropriated for refunds.
- ACA §1402 requires insurers to reduce cost‑sharing (deductibles, copays, etc.) and directs periodic payments to issuers to equal the value of those reductions; §1402 is codified in Title 42 (42 U.S.C. §18071) and contains no express appropriation.
- ACA §1412 authorizes advance determinations and advances of both premium tax credits and cost‑sharing reductions, but it distinguishes the PAYMENT AUTHORITIES and roles of Treasury and HHS for the two benefits.
- The Executive made advance payments for both credits and cost‑sharing reductions beginning January 2014, claiming the permanent appropriation in 31 U.S.C. §1324(b) for §36B also funds §1402 reimbursements; Congress did not enact an annual appropriation for §1402 in FY2014 or thereafter.
Issues
| Issue | Plaintiff's Argument (House) | Defendant's Argument (Secretaries) | Held |
|---|---|---|---|
| Whether §1402 reimbursements are covered by the permanent appropriation in 31 U.S.C. §1324(b) (as amended to include §36B) | §1324(b) expressly appropriates refunds only for listed Internal Revenue Code provisions (including §36B); §1402 reimbursements are statutory payments under Title 42, not IRC refunds, so no permanent appropriation exists for them | Sections 1401 and 1402 form an integrated subsidy scheme; the §1324 reference to §36B should be read to cover the ACA’s unified advance‑payment mechanism, thereby funding §1402 reimbursements | Held for House: §1324(b) unambiguously appropriates only IRC credits like §36B, not §1402 reimbursements; §1402 requires annual appropriation if funds are to be paid. |
| Whether the ACA’s text, structure, or purpose render §1324(b) ambiguous so courts should look beyond plain meaning (invoking King v. Burwell) | The statutory language is plain; §36B means the Internal Revenue Code credit and does not include §1402; context does not create the kind of unworkability found in King | The ACA’s integrated design and advance‑payment scheme make treating credits and cost‑sharing separately impracticable and would produce absurd fiscal and market consequences if §1402 were unpaid | Held for House: Unlike King, no textual ambiguity or statutory unworkability exists here; Congress could permissibly authorize without appropriating and the absence of appropriation is not absurd. |
| Whether agency contemporaneous practice, budget requests, or legislative history establish that Congress intended §1402 to be permanently appropriated | Congressional inaction does not create an appropriation; contemporaneous OMB/HHS budget requests seeking annual funds show the agencies understood §1402 needed annual appropriations | Agency practice and budgetary treatment, CBO scoring, floor statements, and programmatic integration support treating §1402 as funded | Held for House: Administrative budget requests and CBO scoring are probative of agency understanding but do not alter the plain statutory text; they do not establish a permanent appropriation. |
| Whether the House has standing to bring the Appropriations Clause claim | The House has institutional injury from Executive spending without appropriation and previously was held to have standing | Defendants argued the dispute is purely statutory (no constitutional injury) and standing should be revisited | Held for House: Standing reaffirmed; the claim is constitutional and not converted into a mere statutory dispute by defendants’ statutory defenses. |
Key Cases Cited
- King v. Burwell, 135 S. Ct. 2480 (interpreting ACA context when text alone produced an impracticable result)
- United States v. MacCollom, 426 U.S. 317 (expenditure of public funds requires congressional authorization/appropriation)
- Andrus v. Sierra Club, 442 U.S. 347 (appropriations legislation provides limited, specific funding for authorized programs)
- Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837 (agency deference framework)
- FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (hesitation to find implicit delegations in extraordinary cases)
- Nevada v. Dep’t of Energy, 400 F.3d 9 (D.C. Cir.) (GAO opinions given special weight in appropriations matters)
- Salazar v. Ramah Navajo Chapter, 132 S. Ct. 2181 (agency spending is constrained by the text of the appropriation)