UNITED STATES HOUSE OF REPRESENTATIVES, Plaintiff, v. Sylvia Matthews BURWELL in her official capacity as Secretary of the United States Department of Health and Human Services, et al., Defendants.
Civil Action No. 14-1967 (RMC)
United States District Court, District of Columbia.
Signed May 12, 2016
165
By contrast, with respect to the second ground, the Court dismisses Count III with prejudice. Because the 2013 Policy is a general statement of policy exempt from the APA‘s notice-and-rulemaking requirements, the second ground on which the plaintiff challenges the 2013 Policy fails to state a viable claim.
IV. CONCLUSION
For the foregoing reasons, the Court grants in part and denies in part the defendants’ motion for judgment on the pleadings. Consequently, the Court: (1) dismisses, with prejudice, Count II of the Complaint; (2) dismisses, with prejudice, Count I of the Complaint with respect to first component of this Count; (3) dismisses, without prejudice, Count III of the Complaint with respect to the first ground on which the plaintiff challenges the 2013 Policy; and (4) dismisses, with prejudice, Count III of the Complaint with respect to the second ground on which the plaintiff challenges the 2013 Policy.8
SO ORDERED this 11th day of May, 2016.9
OPINION
ROSEMARY M. COLLYER, United States District Judge
This Court previously held that the U.S. House of Representatives “has standing to pursue its allegations that the Secretaries of Health and Human Services and of the Treasury violated Article I, § 9, cl. 7 of the Constitution when they spent public monies that were not appropriated by the Congress.” U.S. House of Reps. v. Burwell, 130 F.Supp.3d 53, 81 (D.D.C. 2015). The merits of that claim are now before the Court.
This case involves two sections of the
“If the statutory language is plain, we must enforce it according to its terms.” King v. Burwell, — U.S. —, 135 S.Ct. 2480, 2489, 192 L.Ed.2d 483 (2015). Although the “meaning—or ambiguity—of certain words or phrases may only become evident when placed in context,” id. the statutory provisions in this case are clear in isolation and in context. The
I. FACTS
The merits are fully briefed and ripe for resolution.1 The following facts are undisputed.
A. Constitutional Background
Congress passes all federal laws in this country.
Authorizing legislation establishes or continues the operation of a federal program or agency, either indefinitely or for a specific period. GAO Glossary at 15.2 Such an authorization may be part of an agency or program‘s organic legislation, or it may be entirely separate. Id. No money can be appropriated until an agency or program is authorized, although authorization may sometimes be inferred from an appropriation itself. Id.
Appropriation legislation “provides legal authority for federal agencies to incur obligations and to make payments out of the Treasury for specified purposes.” Id. at 13. Appropriations legislation has “the limited and specific purpose of providing funds for authorized programs.” Andrus v. Sierra Club, 442 U.S. 347, 361, 99 S.Ct. 2335, 60 L.Ed.2d 943 (1979) (quoting TVA v. Hill, 437 U.S. 153, 190, 98 S.Ct. 2279, 57 L.Ed.2d 117 (1978)). An appropriation must be expressly stated; it cannot be inferred or implied.
Appropriations come in many forms. A “permanent” or “continuing” appropriation, once enacted, makes funds available indefinitely for their specified purpose; no further action by Congress is needed. Nevada, 400 F.3d at 13; GAO Principles at 2-14.3 A “current appropriation,” by contrast, allows an agency to obligate funds only in the year or years for which they are appropriated. GAO Principles at 2-14. Current appropriations often give a particular agency, program, or function its spending cap and thus constrain what that agency, program, or function may do in the relevant year(s). Most current appropriations are adopted on an annual basis and must be re-authorized for
B. Statutory Background
On December 24, 2009, H.R. 3590 (111th Cong. 2009), as amended and retitled “Patient Protection and Affordable Care Act,” passed the Senate by a vote of 60-39. On March 21, 2010, the House agreed to the Senate amendments by a vote of 219-212. On March 23, 2010, H.R. 3590, as agreed to by both the Senate and the House, was signed into law by the President. See
1. Section 1401 (“Refundable Tax Credit Providing Premium Assistance for Coverage under a Qualified Health Plan“)
The thrust of Section 1401 was to add a new section to the Internal Revenue Code:
The appropriation for Section 1401 premium tax credits was made in Title 31 of the U.S.Code, “Money and Finance,” which also sets out basic rules of federal appropriations. At
The parties agree that
Disbursements may be made from the appropriation made by this section only for—
(1) refunds to the limit of liability of an individual tax account; and
(2) refunds due from credit provisions of the Internal Revenue Code of 1986 (
26 U.S.C. 1 et seq. ) enacted before January 1, 1978, or enacted by the Taxpayer Relief Act of 1997, or from section 25A, 35, 36, 36A, 36B, 168(k)(4)(F), 53(e), 54B(h), or 6431 ofsuch Code, or due under section 3081(b)(2) of the Housing Assistance Tax Act of 2008.
2. Section 1402 (“Reduced Cost-Sharing for Individuals Enrolling in Qualified Health Plans“)
Section 1402 of the ACA provides that “[i]n the case of an eligible insured enrolled in a qualified health plan—(1) the Secretary shall notify the issuer of the plan of such eligibility; and (2) the issuer shall reduce the cost-sharing under the plan at the level and in the manner specified in subsection (c).” ACA § 1402(a). Cost sharing includes “deductibles, coinsurance, copayments, or similar charges.” ACA § 1302(c)(3)(A)(i). Section 1402 thus requires insurers offering qualified health plans through ACA Exchanges to reduce deductibles, coinsurance, copayments, and similar charges for eligible insured individuals enrolled in their plans. These reductions are referred to in the ACA as “cost-sharing reductions.” See, e.g., ACA §§ 1331(d)(3)(A)(i), 1402(c)(3)(B), 1412(c)(3).
The insurers are supposed to get their money back. See ACA § 1402(c)(3)(A) (“An issuer of a qualified health plan making reductions under this subsection shall notify the Secretary [of HHS] of such reductions and the Secretary shall make periodic and timely payments to the issuer equal to the value of the reductions.“). Nothing in Section 1402 prescribes a “periodic and timely payment[]” process, however. Nor does Section 1402 condition the insurers’ obligations to reduce cost sharing on the receipt of offsetting payments.6
To qualify for reduced cost sharing, an individual must enroll in a qualified health plan and have a household income that “exceeds 100 percent but does not exceed 400 percent of the poverty line for a family of the size involved.”
Section 1402 is codified not in the Internal Revenue Code, but in Title 42, which includes federal laws concerning “Public
3. Section 1412 (“Advance Determination and Payment of Premium Tax Credits and Cost-Sharing Reductions“)
Section 1412 of the ACA requires the Secretaries to consult and establish a program under which eligibility determinations are made in advance “for the premium tax credit allowable under section 36B of the Internal Revenue Code of 1986 and the cost-sharing reductions under section 1402.” ACA § 1412(a)(1). After the Secretary of HHS tells the Secretary of the Treasury and the pertinent Exchange who is eligible for either benefit, Treasury “makes advance payments of such credit or reductions to the issuers of the qualified health plans [on such Exchange] in order to reduce the premiums payable by individuals eligible for such credit.”
C. Other Relevant Background
During deliberations over the ACA, the Congressional Budget Office (CBO) scored Section 1402‘s cost-sharing reductions as “direct spending.” See, e.g., Sec‘y Mot., Ex. 6, Letter of Douglas W. Elmendorf, Director, CBO to the Hon. Nancy Pelosi, (Mar. 20, 2010) [Dkt. 55–8] (CBO Ltr.) at tbl. 2 (listing “Premium and Cost Sharing Subsidies” as “direct spending“), reprinted in Cong. Budget Office, Selected CBO Publications Related to Health Care, 2009-2010 at 20 (Dec.2010)); CBO Ltr. at tbl. 4 (including “Exchange Subsidies & related spending” in estimating effect of ACA on the federal deficit).
During the same deliberations, several members of Congress described Sections 1401 and 1402 as costing “500 billion dollars,” an estimate that almost certainly combined the costs of Section 1401‘s premium tax credits and Section 1402‘s cost-sharing reimbursements. See 156 Cong. Rec. S2069, S2081 (Mar. 25, 2010) (Sen. Durbin) (“$500 billion of tax cuts and cost-sharing“); 155 Cong. Rec. S12565, S12576 (Dec. 7, 2009) (Sen. Enzi) (“this bill will commit the Federal Treasury to paying for these new subsidies for the uninsured forever“); 156 Cong. Rec. H1891, H1898 (Mar. 21, 2010) (Rep.Paulsen) (“$500 billion ... [in] new entitlement spending“); 156 Cong. Rec. H1891, H1910 (Mar. 21, 2010) (Rep.Diaz-Balart) (“half a trillion dollars ... [for] a massive new entitlement program“).
On April 10, 2013, the Office of Management and Budget (OMB) submitted the President‘s Fiscal Year 2014 Budget of the U.S. Government. Budget [Dkt. 30-1].9 The Appendix to the FY 2014 Budget Request contained “more detailed financial information on individual programs and appropriation accounts than any of the other budget documents.” App. to Budget [Dkt. 30-2] at 3. The Appendix included, among other things, “explanations of the work to be performed and the funds needed.”
For carrying out, except as otherwise provided, sections 1402 [Reduced Cost-Sharing] and 1412 [Advanced Payments] of the Patient Protection and Affordable Care Act (
Public Law 111-148 ), such sums as necessary. For carrying out, except as otherwise provided, such sections in the first quarter of fiscal year 2015 (including upward adjustments to prior year payments), $1,420,000,000.
On the same day, HHS separately submitted to the relevant appropriations com
The FY 2014 request for Reduced Cost Sharing for Individuals Enrolled in Qualified Health Plans is $4.0 billion in the first year of operations for Health Insurance Marketplaces, also known as Exchanges. CMS also requests a $1.4 billion advance appropriation for the first quarter of FY 2015 in this budget to permit CMS to reimburse issuers who provided reduced cost-sharing [under Section 1402] in excess of the monthly advanced payments received in FY 2014 through the cost-sharing reduction reconciliation process.
On May 17, 2013, the Administration submitted a number of amendments to the FY 2014 Budget Request. See Amendments [Dkt. 30-4]. The Secretaries acknowledge that neither these amendments, nor any other post-budget submission, withdrew the request for an annual appropriation for Section 1402 reimbursements. See Joint Stipulation [Dkt. 30] at 3 n.1.
On May 20, 2013, OMB issued its Sequestration Preview Report for FY 2014, which listed “Reduced Cost Sharing” as subject to sequestration in the amount of $286 million, or 7.2% of the requested appropriation. Report [Dkt. 30-18] at 23. Because permanently-appropriated programs (such as Section 1401) are exempt from sequestration, OMB‘s including Section 1402 on a list of sequestration-bound programs appears to acknowledge that no permanent appropriation was available for Section 1402 reimbursements.
On July 13, 2013, the Senate Appropriations Committee adopted S. 1284, a bill appropriating monies to HHS and other agencies for FY 2014. An accompanying report stated that “[t]he Committee recommendation does not include a mandatory appropriation, requested by the administration, for reduced cost sharing assistance ... as provided for in sections 1402 and 1412 of the ACA.” S.Rep. No. 113-71, 113th Cong., at 123 (2013). No subsequent consideration of funding for Section 1402 appears in the record, for FY 2014 or since.
On October 17, 2013, the President signed into law the first of two continuing resolutions to keep the government running pending a consolidated appropriations act. See
Since January 2014, Treasury has been making advance payments of premium tax credits and cost-sharing reimbursements to issuers of qualified health plans to eligible individuals. Sec‘y Mot. at 10 & Ex. 3, CMS Payment Policy and Financial Management Group, Marketplace Payment Processing (Dec. 6, 2013) [Dkt. 55-5] at 6-7 (discussing plans “to make estimated payments to issuers beginning in January 2014 based on data provided by the December deadline“). These payments have been based on the Secretaries’ determination that “the permanent appropriation in
II. LEGAL STANDARD
“Summary judgment is proper when ‘there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.’ Pursuant to the cross-motions for summary judgment, there is no genuine dispute of material fact; at hand are only questions of law, which include statutory construction.” Teltech Sys., Inc. v. Bryant, 702 F.3d 232, 235 (5th Cir.2012) (citing
III. ANALYSIS
The question is whether Congress appropriated the billions of dollars that the Secretaries have spent since January 2014 on Section 1402 reimbursements. The Secretaries rely on
The only result of the ACA, however, is that the Section 1402 reimbursements must be funded annually. Far from absurd, that is a perfectly valid means of appropriation. The results predicted by the Secretaries flow not from the ACA, but from Congress’ subsequent refusal to appropriate money. Such an appropriation cannot be inferred, no matter how programmatically aligned the Secretaries may view Sections 1401 and 1402. See
Paying out Section 1402 reimbursements without an appropriation thus violates the Constitution. Congress authorized reduced cost sharing but did not appropriate monies for it, in the FY 2014 budget or
A. The Secretaries’ Textual Arguments
The Secretaries argue that the text of
1. The relevant appropriation statute
The Secretaries contend that
Disbursements may be made from the appropriation made by this section only for—
(1) refunds to the limit of liability of an individual tax account; and
(2) refunds due from credit provisions of the Internal Revenue Code of 1986 (
26 U.S.C. 1 et seq. ) enacted before January 1, 1978, or enacted by the Taxpayer Relief Act of 1997, or from section 25A, 35, 36, 36A, 36B, 168(k)(4)(F), 53(e), 54B(h), or 6431 of such Code, or due under section 3081(b)(2) of the Housing Assistance Tax Act of 2008.
The Secretaries can only prevail if Section 1402 payments are properly considered “refunds due ... from section ... 36B.”
If “from” depends on context, moreover, then so must “refunds.” In this case, the word “refunds” is shorthand for “refunds due from credit provisions of the Internal Revenue Code.”
The Secretaries insist that payments under both Sections 1401 and 1402 are “refunds due ... from section ... 36B” because they are both “compensatory payments made to subsidize an individual‘s insurance coverage based on that individual‘s satisfaction of the eligibility requirements in Section 36B.” Sec‘y Mot. at 12. The argument relies on ACA Section 1402(f)(2), which provides: “No cost-sharing reduction shall be allowed under this section [1402] ... unless ... a credit is allowed to the insured ... under section 36B of [the Internal Revenue] Code.” In other words, insurers may not reduce cost sharing for anyone who does not qualify for a premium tax credit.
The Secretaries exaggerate the significance of Section 1402(f)(2). Although it is true that “[e]ligibility for a premium tax credit under Section 36B is[ ] a statutory precondition for receipt of the cost-sharing reductions,” Sec‘y Mot. at 13, the sections do have separate eligibility provisions. Compare ACA § 1401(a), codified at
Section 1402(f)(2) does automatically link ineligibility. It dictates that if an insured individual becomes ineligible for tax credits, he will automatically become ineligible for reduced cost sharing. Taxpayers can lose eligibility for the credits for reasons other than income. Under Section 1401, for example, married couples must file a joint return or else they cannot qualify as an “applicable taxpayer,” i.e., they cannot qualify for the premium tax credits.
The Secretaries argue that “36B” should be read broadly because its adjacent terms frequently are. See Sec‘y Mot. at 26 (“The Section 1324 appropriation is not limited to payments made under the provisions listed in that statute.“).11 The Secretaries offer
The Secretaries’ syllogism is unsound. Section 35 tax credits remain “refunds due ... from section ... 35” even if advanced payment is authorized by Section 7527. Those credits are not transformed into “refunds due ... from section ... [7527]” merely because Section 7527 allows them to be paid in advance. The same is true of the tax credits provided under Section 36B, which ACA Section 1412 allows to be paid in advance. The advance-funding mechanism in the ACA, codified at
While both ACA Sections 1401 and 1402 can be paid in advance via Section 1412, only Section 1401 (in the guise of
2. The advance payments program
The Secretaries argue that Sections 1401 and 1402 are “unified” by the advance-payment program authorized by Section 1412. Sec‘y Mot. at 13. However, Section 1412 itself recognizes a separation in payment schemes:
(a) In General.—The Secretary [of HHS], in consultation with the Secretary of the Treasury, shall establish a program under which—
(1) upon request of an Exchange, advance determinations are made under section 1411 with respect to the income eligibility of individuals enrolling in a qualified health plan in the individual market through the Exchange for the premium tax credit allowable under section 36B of the Internal Revenue Code of 1986 and the cost-sharing reductions under section 1.402.
ACA § 1412(a)(1) (emphasis added).14 The ACA could not have been clearer:
There are other important textual distinctions in Section 1412. See, e.g., ACA § 1412(c) (“Payment of Premium Tax Credits and Cost-Sharing Reductions“). Under “Premium Tax Credit,” that section provides:
The Secretary of the Treasury shall make the advance payment under this section of any premium tax credit allowed under section 36B of the Internal Revenue Code of 1986 to the issuer of a qualified health plan on a monthly basis (or such other periodic basis as the Secretary may provide).
ACA § 1412(c)(2)(A) (emphasis added). But under “Cost-Sharing Reductions,” it provides:
The Secretary [of HHS] shall also notify the Secretary of the Treasury and the Exchange under paragraph (1) if an advance payment of the cost-sharing reductions under section 1402 is to be made to the issuer of any qualified health plan with respect to any individual enrolled in the plan. The Secretary of the Treasury shall make such advance payment at such time and in such amount as the Secretary [of HHS] specifies in the notice.
Two distinctions are apparent. First, these passages reiterate the difference between Section 1401 premium tax credits, which are paid “under section 36B of the Internal Revenue Code,” and payments for Section 1402 cost-sharing reductions, which are payable “under section 1402.” Compare ACA § 1412(c)(2)(A) with
Sections 1412(c)(2) and 1412(c)(3), immediately adjacent and yet using noticeably different language, belie the Secretaries’ textual argument that Section 1412 was meant to unify Sections 1401 and 1402. See Nat‘l Fed‘n of Indep. Bus. v. Sebelius, — U.S. —, 132 S.Ct. 2566, 2583, 183 L.Ed.2d 450 (2012) (“Where Congress uses certain language in one part of a statute and different language in another, it is
3. The Hyde Amendment
The Secretaries base one of their textual arguments on the so-called Hyde Amendment. Named for former Illinois Representative Henry Hyde, the amendment bars the use of federal funds to pay for abortions except in specified circumstances. See Harris v. McRae, 448 U.S. 297, 302, 100 S.Ct. 2671, 65 L.Ed.2d 784 (1980). It routinely has been attached to certain appropriations legislation, including for HHS, since 1976. “The Hyde Amendment is not permanent legislation,” but is often “enacted as part of the statute appropriating funds for certain Executive Departments for one fiscal year.” Dalton v. Little Rock Family Planning Servs., 516 U.S. 474, 477, 116 S.Ct. 1063, 134 L.Ed.2d 115 (1996) (per curiam).
The ACA contains a prohibition on abortion funding that is tied to annual appropriations restrictions like the Hyde Amendment. Section 1303(a)(2)(A)(ii) provides that an insurer offering a qualified health plan “shall not use any amount attributable to ... [a]ny cost-sharing reduction under section 1402 of the [ACA]” or the “amount (if any) of the advance payment of the reduction under section 1412” to pay for “abortions for which the expenditure of Federal funds appropriated for the Department of Health and Human Services is not permitted, based on the law as in effect” six months prior to the plan year. ACA § 1303(a)(1)(B)(i). So long as the Hyde Amendment continues to be attached to HHS appropriations laws, cost-sharing reduction payments under Section 1402 cannot be used to fund abortion services. That would create a redundancy, in the Secretaries’ view, because the Hyde Amendment itself would block such use if the Section 1402 reimbursements were appropriated annually.
The House points to the term “if any” as evidence that cost-sharing reductions might never be paid. But the same “if any” language is found in the preceding section on premium tax credits. ACA § 1303(a)(2)(A)(i). The term refers to the advanced payments, the Secretaries say, which “can be explained as merely reflecting that neither the premium tax credit nor cost-sharing reduction subsidies must always be made in advance.” Sec‘y Reply at 13.16 The Secretaries are right; the term “if any” appears in both subsections.
Section 1303(a)(2)(ii) does create a redundancy, but not one that trumps ambiguous text. “Redundancies across statutes are not unusual events in drafting, and so long as there is no ‘positive repugnancy’ between two laws, a court must give effect to both.” Conn. Nat. Bank v. Germain, 503 U.S. 249, 253, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992). (quoting Wood v. United States, 41 U.S. (16 Pet.) 342, 363, 10 L.Ed. 987 (1842) (citation omitted)). In King v. Burwell, the Court specifically rejected the petitioners’ and the dissent‘s redundancy argument. 135 S.Ct. at 2492 (“[O]ur preference for avoiding surplusage constructions is not absolute.“) (quoting Lamie v. U.S. Trustee, 540 U.S. 526, 536, 124 S.Ct. 1023, 157 L.Ed.2d 1024 (2004)). The Court added that “specifically with respect to [the ACA], rigorous application of the canon does not seem a particularly useful guide to a fair construction of the
There is no positive repugnancy created between ACA § 1303 and the Hyde Amendment, nor any created within the ACA. The Germain Court explained that “canons of construction are no more than rules of thumb that help courts determine the meaning of legislation,” and that “a court should always turn first to one, cardinal canon before all others[:] courts must presume that a legislature says in a statute what it means and means in a statute what it says there.” 503 U.S. at 253-54; see also Ali v. Fed. Bureau of Prisons, 552 U.S. 214, 227, 128 S.Ct. 831, 169 L.Ed.2d 680 (2008) (“In the end, we are unpersuaded by petitioner‘s attempt to create ambiguity [by invoking the rule against superfluities] where the statute‘s text and structure suggest none.“). Given the choice between rewriting plain text and accepting a minor redundancy, the choice is clear.
4. “Conspicuously absent” text
The Secretaries also rely on the absence of certain text. As it often does, Congress said in certain parts of the ACA that there “are authorized to be appropriated such sums as are necessary.”18 But that language is not in Section 1402. The Secretaries do not argue—nor could they—that these words are necessary to appropriate monies in the future. Instead, they deduce that the absence of this language means that Congress felt it unneeded, ostensibly because Section 1402 was already funded permanently.
To the extent that this missing language evidences congressional intent, it cannot surmount the plain text. According to that text, Congress authorized Section 1402 but did not appropriate for it. That is perfectly consonant with principles of appropriations law. So long as programs are authorized, Congress may appropriate funds for them, or not, as it chooses. See GAO Principles at 2-41 (“An authorization act is basically a directive to Congress itself, which Congress is free to follow or alter (up or down) in the subsequent appropriation act.“). The absence of the “authorized to be appropriated” language does not give the Court or the Secretaries—
5. Post-ACA legislation
The Secretaries urge the Court to consider post-ACA legislation to inform the meaning of the ACA‘s text. Specifically, they draw significance from the October 2013 Continuing Appropriations Act, which required HHS to certify eligibility for “premium tax credits ... and reductions in cost-sharing” before “making such credits and reductions available.”
The significance of the October 2013 appropriations act is too ephemeral to support the Secretaries’ deduction. With FY 2014 funding still unsettled, Section 1402 reimbursements might yet have been funded for that year. In addition, Congress could always have appropriated monies to fund Section 1402 in the future; nothing about its prior refusal bound it or a future Congress. And with these ACA provisions set to become effective in mere months, the temporary appropriations act allowed Congress to require certification of eligibility prior to monies being distributed under either Section 1401 or 1402. Congress did not give a reason for its requiring certification in the continuing appropriations act, but the Secretaries’ deduction would create an appropriation for Section 1402 out of thin air. Whatever the explanation, the October 2013 Continuing Appropriations Act does not alter the meaning of “refunds due ... from section ... 36B.”
B. The Secretaries’ Contextual Arguments
The thrust of the Secretaries’ argument relies on the ACA‘s “structure and design.” See Sec‘y Mot. at 16-23. “Reliance on context and structure in statutory interpretation is a ‘subtle business, calling for great wariness lest what professes to be mere rendering becomes creation and attempted interpretation of legislation becomes legislation itself.‘” King, 135 S.Ct. at 2495-96 (quoting Palmer v. Massachusetts, 308 U.S. 79, 83, 60 S.Ct. 34, 84 L.Ed. 93 (1939)). The relevant text is, once again, “refunds due ... from section ... 36B.”
1. Structure and design
The Secretaries first posit that the ACA enacted a “closely intertwined” system of subsidies, citing King, 135 S.Ct. at 2487.
This case is fundamentally different from King v. Burwell. There, the phrase “established by the State,”
If we give the phrase “the State that established the Exchange” its most natural meaning, there would be no “qualified individuals” on Federal Exchanges. But the Act clearly contemplates that there will be qualified individuals on every Exchange. As we just mentioned, the Act requires all Exchanges to “make available qualified health plans to qualified individuals“—something an Exchange could not do if there were no such individuals.
§ 18031(d)(2)(A) . And the Act tells the Exchange, in deciding which health plans to offer, to consider “the interests of qualified individuals ... in the State or States in which such Exchange operates“—again, something the Exchange could not do if qualified individuals did not exist.§ 18031(e)(1)(B) . This problem arises repeatedly throughout the Act.
King, 135 S.Ct. at 2490 (emphasis in original). Simply put, the statute could not function if interpreted literally; it had to be saved from itself.
The problem the Secretaries have tried to solve here is very different: it is a failure to appropriate, not a failure in drafting. Congress‘s subsequent inaction, not the text of the ACA, is what prompts the Secretaries to force the elephant into the mousehole. There are no inherent flaws in the ACA that keep Section 1402 payments from being paid, in advance or otherwise. None of the operative provisions becomes unworkable, as they did in King, when the relevant passage (
The result in King was driven by the Court‘s holding “that the Act may not always use the phrase ‘established by the
2. Unintended consequences
The Secretaries predict a “cascading series of nonsensical and undesirable results” if
The Secretaries depict health insurance premiums and cost-sharing reimbursements as a financial seesaw; as one goes down, the other must go up. Sec‘y Mot. at 2. Insurers cannot escape cost-sharing reductions, which are a mandatory feature of participation in the Exchanges. If the insurers are not reimbursed, they will charge higher premiums to cover their expenses. Sec‘y Mot. at 17 & Ex. 4, ASPE Issue Brief: Potential Fiscal Consequences of Not Providing CSR Reimbursements [Dkt. 55-6] (ASPE Br.) at 2. When premiums rise, taxpayers become entitled to greater tax credits under Section 1401. Sec‘y Mot. at 18 (citing
But the seesaw is asymmetrical. More people qualify for premium tax credits than for cost-sharing reductions, and tax credits for all health plans are “indexed” to the cost-sharing-eligible (“silver“) plans. Sec‘y Mot. at 19. For these reasons, if federal spending decreased on the cost-sharing side, it would increase disproportionately on the tax-credit side. Congress would end up spending more through Section 1401 alone than it would through Sections 1401 and 1402 working together.
There are other potential consequences if no funds are appropriated for Section 1402 reimbursements. Unreimbursed insurers might sue the government under the Tucker Act,
The Secretaries also project that annual funding of Section 1402 would cause uncertainty in the market. Because “plans sold on the [ACA‘s] Exchanges are required to set their premiums for the following year well in advance” of the government‘s fiscal year, “insurers would be forced to set their premiums for the upcoming year in the face of uncertainty about the existence and
Finally, the Secretaries argue that Congress has not adopted an “appropriated entitlement” since 1997 and surely would not have done so in the ACA without saying so clearly. Sec‘y Mot. at 21-22. They cite the
An entitlement whose source of funding is in an annual appropriation act. However, because the entitlement is created by operation of law, if Congress does not appropriate the money necessary to fund the payments, eligible recipients may have legal recourse. Veterans’ compensation and Medicaid are examples of such appropriated entitlements.
GAO Glossary at 13.
These arguments all focus on the wrong consequences. For purposes of interpreting the ACA, the relevant question is not whether Congress intended premiums to skyrocket, deficits to explode, or enrollment to plummet—those are not consequences of the statute that Congress wrote in 2010. The relevant question is far narrower: Would it have been “nonsensical” or “absurd” for Congress to authorize a program permanently in 2010 but not appropriate for it permanently at the same time?
The answer is “no.” Congress once conferred, for example, “permanent authority” on Treasury “to permit prepayment ... to territorial treasuries of estimates of moneys to be collected from certain taxes, duties, and fees.” Remission to Guam & Virgin Islands of Estimates of Moneys to be Collected, B-114808, 1979 WL 12213, at *1 (Comp.Gen. Aug. 7, 1979). Yet because no subsequent appropriation was made, no such money could be spent:
In sum, although we think that Section[s] 1(c) and 4(c)(2) of
Pub.L. No. 95-348 do establish permanent authority for future appropriations, we conclude that they do not establish permanent indefinite appropriations. Thus, the Department of the Treasury cannot remit funds to Guam and the Virgin Islands under these sections until Congress makes appropriations for that purpose.
Id. at *4. Interestingly, GAO recognized that “Congress probably did not anticipate that appropriations would be needed in order to implement the prepayment provisions.” Id. at *2. That did not alter GAO‘s analysis of the statute, however, because “the making of an appropriation is not to be inferred but must be expressly stated. This principle is even more important in the case of a permanent appropriation.” Id. at *3 (emphasis added).
The Remission to Guam decision was recently cited by GAO when analyzing Section 1342(b)(1) of the ACA. See Dep‘t of HHS—Risk Corridors Program, B-325630, 2014 WL 4825237, at *2 (Comp. Gen. Sept. 30, 2014). GAO found that “Section 1342, by its terms, did not enact an appropriation to make the payments specified in section 1342(b)(1).” Id. GAO ultimately concluded that HHS could spend monies appropriated by another statute,
These decisions illustrate well-understood principles of appropriations law. In decisions spanning 35 years, GAO has consistently emphasized that appropriations—especially permanent appropriations—must be expressly stated. GAO has also ruled that a mere requirement to pay is not an appropriation. “Although GAO decisions are not binding, [courts] ‘give special weight to [GAO‘s] opinions’ due to its ‘accumulated experience and expertise in the field of government appropriations.‘” Nevada v. Dep‘t of Energy, 400 F.3d 9, 16 (D.C.Cir.2005) (quoting United Auto., Aerospace & Agric. Implement Workers v. Donovan, 746 F.2d 855, 861 (D.C.Cir. 1984)). This Court draws from GAO‘s expertise, as well.
Finally, the Secretaries’ “appropriated entitlement” argument fails. Recall that, in its April 2013 budget justification, HHS called Section 1402 an “appropriated entitlement[ ]” while requesting an appropriation for it. Justification [Dkt. 30-3] at 184. The agency now calls appropriated entitlements a “dormant ... construct,” Sec‘y Mot. at 22, but apparently thought in 2013 that the construct had awoken. Nothing prevented Congress from resurrecting this method of appropriating, least of all a 13-year old Conference Report. In the end, this argument simply does not call into question the plain text of
To recapitulate, the consequence at issue here is that a permanently authorized benefit program was made dependent on non-permanent appropriations. That approach is perfectly consonant with principles of appropriations law; most federal entities operate in the same fashion. The Secretaries’ argument, taken to its logical conclusion, is that every permanent authorization must also constitute a permanent appropriation or else an “absurd result” would obtain. That is assuredly not the law. Higher premiums, more federal debt, and decreased enrollment are not consequences of the ACA‘s text or structure. Those results would flow—if at all—from Congress‘s continuing refusal to appropriate funds for Section 1402 reimbursements. That is Congress‘s prerogative; the Court cannot override it by rewriting
3. The Affordable Care Act‘s legislative history
The Secretaries make two points about the legislative history of the ACA. First, they say that CBO consistently referred to Section 1402 reimbursements as “direct spending.” CBO would not have used this term, according to the Secretaries, if the money were not already appropriated. But when CBO scores “laws providing or creating direct spending,” it is required by law to assume that “funding for entitlement authority [will] be adequate to make all payments required by those laws.”
Second, the Secretaries point to statements by individual Representatives and Senators whose description of the “cost” of the ACA presumed that Section
4. The contemporary understanding
The best evidence of the contemporary understanding of the ACA comes from the parties’ preparation for the effective date of the law. Cf. United States v. Kanchanalak, 192 F.3d 1037, 1045 (D.C.Cir.1999) (“A[] court will ordinarily give substantial deference to a contemporaneous agency interpretation of a statute it administers.“) (quoting Sierra Pac. Power v. EPA, 647 F.2d 60, 65 (9th Cir.1981)). The only such actions that speak directly to the question in this case—whether Section 1402 reimbursements were permanently appropriated for—were taken by OMB in the FY 2014 Budget Request and by HHS when it submitted its Justification, both of which sought an annual appropriation for Section 1402 reimbursements. See Budget [Dkt. 30-1]; App. to Budget [Dkt. 30-2] at 3, 448; Justification [Dkt. 30-3] at 7, 184. These requests “are not in dispute.” Sec‘y Opp‘n at 4.
The Secretaries argue that these requests are irrelevant, however, because “[b]udget requests ... do[] not implement, interpret, or prescribe any law or policy.” Fund for Animals, Inc. v. U.S. Bureau of Land Mgmt., 460 F.3d 13, 20 (D.C.Cir.2006) (internal quotations omitted)). They note that “the particular request at issue here [for FY 2014] did not purport to analyze the ACA or consider the availability of the permanent appropriation in
As an initial matter, it strains credulity to suggest that OMB or HHS submitted a multibillion dollar budget request without analyzing the relevant statutes. The Secretary of HHS is aided by an Assistant Secretary for Financial Resources who manages an Office of Budget.24 The employees in that office “play a lead role in analyzing Congressional budget actions and appropriations legislation.”25 Within
The Administration‘s FY 2014 Budget Request and its Appendix reflected the careful analysis that one would expect from these institutions. Each request accounted meticulously for every penny sought. Statutory authority was cited for every program, along with tables detailing the budgetary resources available and the effect of any appropriation or outlay. See, e.g., App. to Budget [Dkt. 30-2] at 448 (detailing such information for “Reduced Cost Sharing for Individuals Enrolled in Qualified Health Plans” and the “Consumer Operated and Oriented Plan Program Contingency Fund“). CMS‘s accompanying Justification contained pages of painstaking analysis of various appropriations statutes. See Justification [30-3] at 1113, 129-31, 171-72, 183, 185-86. Clearly these agencies were analyzing appropriations statutes and were considering the availability of permanent appropriations. Nevertheless, it is true that the FY 2014 Budget Request and its accompanying documents do not “constrain this Court” or obviate “the traditional tools of statutory analysis.” Sec‘y Opp‘n at 4.
The Secretaries cite two cases for the proposition that “Executive Branch statements have no bearing on questions of statutory interpretation like the one now before this Court.” Sec‘y Opp‘n at 5. In Wong Yang Sung v. McGrath, the Supreme Court refused to agree “that a request for and failure to get in a single session of Congress clarifying legislation on a genuinely debatable point of agency procedure admits weakness in the agency‘s contentions.” 339 U.S. 33, 47, 70 S.Ct. 445, 94 L.Ed. 616 (1950). The Court drew “no inference in favor of either construction of the Act” merely because the agency sought, but Congress did not pass, certain legislation. Id. In Federal Trade Commission v. Dean Foods Company, the Court refused to “infer[,] from the fact that Congress took no action at all on the request of the [FTC] to grant it” preliminary-injunction powers under the Clayton Act, any intent by Congress “to circumscribe [the] traditional judicial remedies” provided in the
The Secretaries have asked this Court to consider statutes that were enacted years after the ACA; floor statements by individual Members of Congress; an HHS “issue brief” on potential fiscal consequences; a New York Times article; the Hyde Amendment; a CMS webinar from 2013; excerpts from the House Budget Committee‘s Compendium of Laws and Rules of the Congressional Budget Process (2015 ed.); CBO scoring terminology; and a House Conference Report from 1997. It is passing strange that they find the offi
The Secretaries ignore their own actions and focus instead on congressional inaction. Sec‘y Mot. at 29 (arguing that the “failure of Congress to provide an annual appropriation to HHS does not alter the scope of the permanent appropriation to Treasury in Section 1324“); id. at 30 (“Congress‘s failure to provide a specific appropriation requested by an agency sheds no light on the question whether other appropriations are available to make the same expenditure.“). Those arguments beg the question. No one disputes that
C. Deference to the Secretaries’ Interpretation
The Secretaries argue that “at a minimum,” they deserve deference to their interpretation of
Even if Chevron deference were warranted, the Secretaries would fail at step one. See W. Minnesota Mun. Power Agency v. Fed. Energy Regulatory Comm‘n, 806 F.3d 588, 591 (D.C.Cir.2015) (“Under step one, the court must determine ‘whether Congress has directly spoken to the precise question at issue.’ If so, then the court and the agency must ‘give effect to the unambiguously expressed intent of Congress.’ “) (quoting Chevron, 467 U.S. at 842, 842–43). As described at length above, Congress spoke directly and unambiguously to the precise question at issue. See
D. Standing
The Secretaries invite the Court to revisit its standing analysis. Sec‘y Mot. at 33-34. “Standing represents a jurisdic
The Secretaries believe that they have proven this case to be only about statutory interpretation and implementation. Sec‘y Mot. at 34 (“As should be apparent from the foregoing discussion, this case indeed involves solely a dispute over the meaning of federal statutes.“). This argument was raised in their motion to dismiss, Defs. Reply [Dkt. 26] at 10 (“In short, the House has described two relatively straight-forward differences of opinion between the Legislative and Executive Branches as to the interpretation of federal law.“), and addressed in the Court‘s prior opinion, 130 F.Supp.3d at 74 n. 24 (“The Secretaries’ primary defense will be that an appropriation has been made, which will require reading the statute. But that is an antecedent determination to a constitutional claim.“) (emphasis in original).
The Court has not changed its mind. While it is true that the Secretaries’ defense in this case requires interpreting federal statutes, the House of Representatives’ claim under the Appropriations Clause does not. See
IV. CONCLUSION
The Court will grant summary judgment to the House of Representatives and enter judgment in its favor. The Court will also enjoin any further reimbursements under Section 1402 until a valid appropriation is in place. However, the Court will stay its injunction pending any appeal by the parties. A memorializing Order accompanies this Opinion.
David V. MANN, Plaintiff, v. WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY (WMATA), Defendant.
Civil No. 13-cv-00120 (APM)
United States District Court, District of Columbia.
Signed May 12, 2016