Jeffrey CUTLER, Appellant v. UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, et al., Appellees.
No. 14-5183.
United States Court of Appeals, District of Columbia Circuit.
Argued May 12, 2015. Decided Aug. 14, 2015.
811 F.3d 483
So ordered.
Robert J. Muise argued the cause for appellant. With him on the briefs was David E. Yerushalmi.
Katherine Twomey Allen, Attorney, U.S. Department of Justice, argued the cause for appellees. With her on the brief were Benjamin C. Mizer, Acting Assistant Attorney General, Ronald C. Machen Jr., U.S. Attorney at the time the brief was filed, and Mark B. Stern and Alisa B. Klein, Attorneys.
Before: HENDERSON, ROGERS and MILLETT, Circuit Judges.
Opinion for the Court filed by Circuit Judge MILLETT.
MILLETT, Circuit Judge:
Jeffrey Cutler‘s insurance company cancelled his health insurance plan because it did not comply with the requirements of the Patient Protection and Affordable Care Act (“Affordable Care Act” or “Act“),
I
Statutory and Regulatory Framework
Congress enacted the Affordable Care Act in 2010 in an effort to “increase the number of Americans covered by health insurance and decrease the cost of health care.” National Federation of Independent Business v. Sebelius, 567 U.S. 519, 132 S.Ct. 2566, 2580, 183 L.Ed.2d 450 (2012). Key to the Act‘s “interlocking reforms,” King v. Burwell, 576 U.S. 473, 135 S.Ct. 2480, 2485, 192 L.Ed.2d 483 (2015), is a general requirement that individuals must maintain health insurance coverage or pay a tax penalty to the Internal Revenue Service.
To qualify for the exemption, an individual must prove “membership in, and adherence to the tenets or teachings of, the sect or division thereof” and must waive “all benefits and other payments” under the Social Security and Medicare programs.
Aside from the coverage requirement for individuals, the Affordable Care Act imposes a number of requirements on insurance providers and employers who offer health insurance to their workers, such as the guaranteed availability of coverage and a prohibition on refusing coverage due to an applicant‘s pre-existing medical condition. See
Several of the Affordable Care Act‘s new requirements were scheduled to take effect on January 1, 2014, including provisions governing insurance premiums and discrimination on the basis of preexisting conditions. See
Factual and Procedural History
Cutler, proceeding pro se, filed suit in the United States District Court for the District of Columbia to challenge the Affordable Care Act as unconstitutional, both facially and as applied to him. Complaint ¶ 20, J.A. 16. Specifically, his complaint alleged that the religious exemption in the Act violates the First Amendment‘s guarantee of religious freedom. Id. ¶ 1, J.A. 11.
Cutler later filed a motion for partial summary judgment, in which he raised for the first time a separate claim that the transitional policy, as implemented, violates his “rights under the Equal Protection Clause in the Fourteenth Amendment[.]” Plaintiff‘s Motion for Partial Summary Judgment at 2, J.A. 23. Specifically, he objected that “state insurance commissioners are now empowered to override the law—‘if you like your plan you can keep it, but only in NY, CT, CA, etc.‘” Id.
The district court granted the government‘s motion to dismiss, reasoning that Cutler lacked standing to bring either claim. See Cutler v. Department of Health and Human Services, 52 F.Supp.3d 27, 33 (D.D.C.2014). As for equal protection, the court noted that Cutler “makes no claim as to how he is injured * * * by the alleged fact that the Act will be enforced differently in different states.” Id. at 35 n. 4.6
With respect to the Establishment Clause challenge, the district court found no standing because Cutler “bases his challenge to the religious exemption on the fact that such exemptions harm everyone by their mere existence and not that the exemption personally harms him.” Cutler, 52 F.Supp.3d at 37. The court reasoned that, even if Cutler‘s Establishment Clause challenge succeeded, “[h]e would be subject to the individual mandate and would be required to either obtain health insurance coverage or pay the penalty,” and so “the fact that he is subject to the individual mandate[] is not redressed by declaring the religious exemption invalid.” Id. at 38. The court did not agree with Cutler that, if it found the religious exemption invalid, it would have to strike down the entire law. Id.
Nevertheless, “given the evolution of the taxpayer standing doctrine and in an abundance of caution,” the court addressed Cutler‘s exemption challenge on the merits. Cutler, 52 F.Supp.3d at 38 (internal citations omitted). The court followed the
II
Analysis
Standard of Review
We review the district court‘s dismissal of Cutler‘s complaint on both standing and merits grounds de novo. See Brown v. Whole Foods Market Group, Inc., 789 F.3d 146, 150 (D.C.Cir.2015). In so doing, we accept the factual allegations in the complaint as true, and grant Cutler the benefit of all reasonable inferences that can be drawn in his favor. See id. And because Cutler proceeded below without counsel, we hold his district court filings to “less stringent standards than formal pleadings drafted by lawyers[.]” Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (quoting Estelle v. Gamble, 429 U.S. 97, 106, 97 S.Ct. 285, 50 L.Ed.2d 251 (1976)).
Establishment Clause Challenge
Standing
The first thing we must decide is whether we can decide. If Cutler lacks standing to bring his claims in federal court, then we are powerless to decide the case and must dismiss it. See, e.g., Florida Audubon Society v. Bentsen, 94 F.3d 658, 663 (D.C.Cir.1996) (“[A] showing of standing ‘is an essential and unchanging’ predicate to any exercise of our jurisdiction.“) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)).
The “irreducible constitutional minimum of standing” is that (i) the plaintiff suffered an “injury in fact,” meaning “an invasion of a legally protected interest” that is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical“; (ii) the injury must be “fairly traceable to the challenged action of the defendant“; and (iii) a favorable decision by the court must be likely to redress the injury. Lujan, 504 U.S. at 560-561 (internal citations, quotation marks, and alterations omitted).
The party invoking federal jurisdiction bears the burden of showing each of those elements, “with the manner and degree of evidence required at the successive stages of the litigation.” Lujan, 504 U.S. at 561. Because the district court dismissed this case at the complaint stage, Cutler need only make a plausible allegation of facts establishing each element of standing. See Price v. Socialist People‘s Libyan Arab Jamahiriya, 294 F.3d 82, 93 (D.C.Cir.2002) (“[W]here the defendant contests only the legal sufficiency of plaintiff‘s jurisdictional claims, the standard is similar to that of
Applying those standards, we conclude that Cutler has standing to bring his Establishment Clause challenge to the religious exemption. His objection is straightforward: Because he is neither a member of a religious group that qualifies for the religious exemption nor religiously opposed to obtaining insurance, he must either pay for a statutorily compliant insurance plan or pay a penalty. Cutler argues that allowing individuals to avoid both paying for insurance and paying the penalty if they abjure insurance for religious reasons, but not if they abjure it for secular reasons, violates the Establishment Clause because it favors faith over his nonbelief. In so doing, Cutler has adequately alleged an injury in fact to his constitutional right not to be treated differently—not to be penalized for lacking insurance—just because he is not religiously motivated. See, e.g., McCreary County, Kentucky v. American Civil Liberties Union of Kentucky, 545 U.S. 844, 860, 125 S.Ct. 2722, 162 L.Ed.2d 729 (2005) (“[T]he First Amendment mandates governmental neutrality between * * * religion and nonreligion.“) (internal citation and quotation marks omitted). That injury, in turn, stems directly from the religious exemption in the Affordable Care Act, as that is what causes him to be subject to a penalty when religious objectors to purchasing insurance are not. See Sissel v. United States Dep‘t of Health and Human Services, 760 F.3d 1, 5 (D.C.Cir.2014); see generally Lujan, 504 U.S. at 560 (injury must be “fairly traceable to the challenged action of the defendant“) (internal quotation marks and alterations omitted).
Finally, because we must assume at this stage that the requested relief would be granted, Cutler satisfies the redressability prong of the standing inquiry. In his complaint, Cutler seeks wholesale invalidation of the Affordable Care Act, see Complaint, Prayer ¶ 4, while his appellate briefing suggests that he might be satisfied with a court order “enjoining the enforcement of the penalty provision as applied against Plaintiff,” Cutler Br. 18. Either way, if this court were to give Cutler what he wants, his Establishment Clause injury—the differential treatment because of his lack of religious objection—would disappear. See In re Thornburgh, 869 F.2d at 1511 (“[T]he redressability test asks whether a plaintiff‘s injury would be likely to be redressed if the requested relief were granted.“) (emphasis in original).
The district court read Cutler‘s complaint as asserting injury solely in his objection to the existence of a religious exemption, which the court deemed to be the type of “generalized grievance” that will not support standing. Cutler, 52 F.Supp.3d at 37. That was mistaken. Cutler is explicit that he is injured by being forced to choose between paying for compliant insurance and paying a penalty. That is the type of direct and concrete injury that satisfies Article III, see Sissel, 760 F.3d at 5, regardless of how many other people face the same financial choice. “[A]n injury shared by a large number of people is nonetheless an injury.” Center for Auto Safety v. National Highway Traffic Safety Admin., 793 F.2d 1322, 1324 (D.C.Cir.1986); see also Federal Election Comm‘n v. Akins, 524 U.S. 11, 24, 118 S.Ct. 1777, 141 L.Ed.2d 10 (1998) (“[W]here a harm is concrete, though widely shared, the Court has found injury in fact.“) (internal citation and quotation marks omitted).
The government argues that removing the religious exemption—while leaving the rest of the Affordable Care Act in place—would leave Cutler in precisely the same
The U.S. Supreme Court thought otherwise. Reasoning that the “constitutional attack holds the only promise of escape from” the differential “burden,” the Supreme Court held that the Arkansas Writers’ Project did have Article III standing. Arkansas Writers’ Project, 481 U.S. at 227 (quoting Orr v. Orr, 440 U.S. 268, 273, 99 S.Ct. 1102, 59 L.Ed.2d 306 (1979)). To adopt the state‘s “notion of standing,” the Supreme Court concluded, would “effectively insulate underinclusive statutes from constitutional challenge[.]” Id.
Moreover, in analyzing the redressability prong of standing, it must be remembered that “a court sustaining” an equal protection claim faces “two remedial alternatives: [it] may either declare [the statute] a nullity and order that its benefits not extend to the class that the legislature intended to benefit, or it may extend the coverage of the statute to include those who are aggrieved by the exclusion.” Heckler v. Mathews, 465 U.S. 728, 738-739, 104 S.Ct. 1387, 79 L.Ed.2d 646 (1984) (quoting Welsh v. United States, 398 U.S. 333, 361, 90 S.Ct. 1792, 26 L.Ed.2d 308 (1970) (Harlan, J., concurring in the result)); see also, e.g., Jacobs v. Barr, 959 F.2d 313, 317 (D.C.Cir.1992) (same); Dumaguin v. Secretary of Health and Human Services, 28 F.3d 1218, 1222 (D.C.Cir. 1994) (same). Thus, because one response to the differential-treatment challenge would be for the government to expand the exemption and treat Cutler‘s non-religious objection to obtaining insurance equally, and “we have no way of knowing how the [government] will in fact respond,” Cutler “must be held to have standing here.” Orr v. Orr, 440 U.S. 268, 272, 99 S.Ct. 1102, 59 L.Ed.2d 306 (1979).
Challenges to the Religious Exemption
Settled precedent answers Cutler‘s argument that the Affordable Care Act‘s religious accommodation provision runs afoul of the Establishment Clause. The religious exemption in the Affordable Care Act, like its counterpart in the Social Security Act, accommodates religion by exempting all believers whose faith system provides an established, alternative support network that ensures individuals will not later seek to avail themselves of the federal benefits for which they did not contribute. Cutler is correct that the Affordable Care Act withholds a similar exemption for non-believers. But the Supreme Court has repeatedly held that “the government may accommodate religious practices without violating the Establishment Clause.” Cutter v. Wilkinson, 544 U.S. 709, 713, 125 S.Ct. 2113, 161 L.Ed.2d 1020 (2005) (internal citations, quotation marks, and alterations omitted); see also Locke v. Davey, 540 U.S. 712, 718, 124 S.Ct. 1307, 158 L.Ed.2d 1 (2004);
Even more to the point, the Supreme Court has addressed the religious exemption in the Social Security Act that the Affordable Care Act replicates as an “accommodat[ion], to the extent compatible with a comprehensive national program, [of] the practices of those who believe it a violation of their faith to participate in the social security system.” United States v. Lee, 455 U.S. 252, 260, 102 S.Ct. 1051, 71 L.Ed.2d 127 (1982). In creating that exemption, the Supreme Court continued, Congress “provided for a narrow category which was readily identifiable,” in a manner “sensitive to the needs flowing from the Free Exercise Clause.” Id. at 260-261.
The religious accommodation in the Affordable Care Act, like the Social Security exemption it mirrors, is narrow. The exemption is available only to those (i) whose sincere religious beliefs prevent them from subscribing to any form of health insurance, and (ii) whose faith communities have a demonstrated track record of taking care of their dependent members. Those factors together alleviate any Establishment Clause concerns in two ways.
First, by limiting the exemption to those whose sincerely held faith beliefs flatly forbid participation in the federal program, the accommodation is carefully confined to “alleviat[ing] exceptional government-created burdens on private religious exercise.” Cutter, 544 U.S. at 720. Democratic government, after all, cannot survive if every political or personal objection to a government-imposed obligation must be accommodated. Confining the exemption to members of faith groups for whom an established and pre-existing belief system forbids the benefits as well as the burdens of the governmental program allows those believers to avoid “a hard choice between contravening imperatives of religion and conscience or suffering penalties.” Gillette v. United States, 401 U.S. 437, 445, 91 S.Ct. 828, 28 L.Ed.2d 168 (1971); see also Employment Division, Dep‘t of Human Resources of Oregon v. Smith, 494 U.S. 872, 890, 110 S.Ct. 1595, 108 L.Ed.2d 876 (1990) (“[A] society that believes in the negative protection accorded to religious belief can be expected to be solicitous of that value in its legislation as well.“); Lee v. Weisman, 505 U.S. 577, 628, 112 S.Ct. 2649, 120 L.Ed.2d 467 (1992) (Souter, J., concurring) (“[G]eneral rules can unnecessarily offend the religious conscience when they offend the conscience of secular society not at all.“); Board of Education of Kiryas Joel Village School District v. Grumet, 512 U.S. 687, 715, 114 S.Ct. 2481, 129 L.Ed.2d 546 (1994) (O‘Connor, J., concurring in part and concurring in the judgment) (“What makes accommodation permissible, even praiseworthy, is not that the government is making life easier for some particular religious group as such. Rather, it is that the government is accommodating a deeply held belief.“).
Second, the requirement that the faith system have a proven track record of providing an alternative safety net for members helps to ensure that the religious adherents will not later seek to avail themselves of public services to which they have not contributed. The Affordable Care Act, just like the Social Security exemption, is carefully calibrated to protect the government—and thus taxpayers who do not share the religious sensibilities of those covered by the exemption—from later having to pick up the tab from which the adherent has been exempted. See Cutter, 544 U.S. at 722 (“Our decisions indicate that an accommodation must be measured so that it does not override other significant interests.“).
Cutler argues that the exemption impermissibly discriminates between religions, exempting only those that meet the foregoing criteria. That argument fails because the qualifications for exemption are not drawn on sectarian lines; they simply sort out which faiths have a proven track record of adequately meeting the statutory goals. And the exemption promotes the Establishment Clause‘s concerns by ensuring that those without religious objections do not bear the financial risk and price of care for those who exempt themselves from the tax. As configured by this specific statutory framework, that is an objective, non-sectarian basis for cabining the exemption‘s reach. See Cutter, 544 U.S. at 720 (government “must take adequate account of the burdens a requested accommodation may impose on nonbeneficiaries“); see also Children‘s Healthcare is a Legal Duty, Inc. v. Min De Parle, 212 F.3d 1084, 1091 (8th Cir. 2000).
Equal Protection Claim
It is highly dubious whether that argument even plausibly alleges an Article III injury because Arkansas law, on its face, does not require insurers to offer non-compliant plans. A quick glance at the Arkansas insurance bulletin upon which Cutler relies (but declines to quote) reveals that Arkansas, like Pennsylvania, permits but does not compel the continuation of non-compliant plans during the transition period. See Arkansas Insurance Dep‘t, Bulletin No. 6-2014 (March 6, 2014) (“[T]he Department suggests that insurers credit or adjust rates for those groups which have already renewed under [Affordable Care Act] compliance rates, and permit re-enrollment of the group in the earlier [i.e., non-compliant] plan, if the group desired or desires to renew under the earlier non-grandfathered plan.“) (emphasis added).7 In other words, Cutler has not even colorably alleged a differential-treatment injury because there is no differential treatment.
In any event, Cutler lacks Article III standing to pursue his equal protection challenge because his alleged injury is not fairly traceable to the transitional policy, nor would it be redressed by striking down that policy. The transitional policy applies evenhandedly across the United States, so if Cutler cannot obtain the insurance he
III
Conclusion
Cutler has standing to litigate his Establishment Clause claim, but it fails on the merits. He lacks standing to press his equal protection challenge.
So ordered.
Notes
encouraged people to wait until they got sick to buy insurance. Why buy insurance coverage when you are healthy, if you can buy the same coverage for the same price when you become ill? This consequence—known as ‘adverse selection‘—led to a second: Insurers were forced to increase premiums to account for the fact that, more and more, it was the sick rather than the healthy who were buying insurance.576 U.S. —, 135 S.Ct. 2480, 2485-86.
Any individual may file an application (in such form and manner, and with such official, as may be prescribed by regulations under this chapter) for an exemption from the tax imposed by this chapter if he is a member of a recognized religious sect or division thereof and is an adherent of established tenets or teachings of such sect or division by reason of which he is conscientiously opposed to acceptance of the benefits of any private or public insurance which makes payments in the event of death, disability, old-age, or retirement or makes payments toward the cost of, or provides services for, medical care (including the benefits of any insurance system established by the Social Security Act).
(A) such evidence of such individual‘s membership in, and adherence to the tenets or teachings of, the sect or division thereof as the Secretary may require for purposes of determining such individual‘s compliance with the preceding sentence, and (B) his waiver of all benefits and other payments under titles II and XVIII of the Social Security Act on the basis of his wages and self-employment income as well as all such benefits and other payments to him on the basis of the wages and self-employment income of any other person, and only if the Commissioner of Social Security finds that— (C) such sect or division thereof has the established tenets or teachings referred to in the preceding sentence, (D) it is the practice, and has been for a period of time which he deems to be substantial, for members of such sect or division thereof to make provision for their dependent members which in his judgment is reasonable in view of their general level of living, and (E) such sect or division thereof has been in existence at all times since December 31, 1950.