Breaking new constitutional ground with a ruling that will be tested in higher courts, a federal trial judge in Washington, D.C., has cleared the way for a lawsuit by the House of Representatives claiming that the Obama administration is spending billions of dollars on the new health care program without Congress’s permission to do so. The administration plans to appeal Wednesday’s ruling, and this fundamental controversy over inter-branch relations seems destined ultimately for the Supreme Court. Never before has a lawsuit like this one gone forward in court.

U.S. District Judge Rosemary M. Collyer, in a forty-three-page opinion, rejected the government’s argument that the House had no right to go to court at all, to pursue what officials have argued is nothing more than a political ploy by Republican lawmakers in their ongoing challenges to President Obama, and especially to the Affordable Care Act. On the contrary, the judge decided, at stake in the lawsuit is the specific grant to Congress by Article I of the Constitution of the power to control when federal funds are spent, and the House is threatened with fundamental harm to that constitutional role.

The ruling, however, is not a final decision that the House will ultimately win on its constitutional claim. The judge has now told both sides to come up with a schedule for how the case moves on from this point, toward such a final decision. In the meantime, however, officials at the White House and the Justice Department vowed to appeal — probably first in the U.S. Court of Appeals for the District of Columbia Circuit. The government would have the option, now or later, to go to the Supreme Court.

While the Affordable Care Act has been challenged repeatedly, in court, in Congress and in politics, by its critics, and while two of the most serious court challenges failed in the Supreme Court, the House’s lawsuit opens a new arena of constitutional combat that potentially could deeply undercut one of the main financial parts of the ACA. The government spent about $3 billion on that provision in the last fiscal year and projects spending of about $175 billion for it over the next decade.

In a second part of her ruling on Wednesday, Judge Collyer did side with the government. She ruled that the House was not justified in suing with its separate claim that the Obama administration acted illegally when it postponed for a year the ACA’s mandate that larger employers must provide affordable health care coverage for their workers or face a financial penalty. That claim, the judge found, was not actually tied to constitutional powers, but instead only to a dispute over how the ACA should be implemented, which does not justify the courts’ intervention.

Even so, the judge’s ruling on the funding provision was a major, if temporary, defeat for the administration.

As part of the ACA’s policy of helping millions of lower-income Americans to obtain health insurance at affordable rates, the law has a variety of subsidy provisions. The Supreme Court in June upheld the system that provides lower-income consumers with a form of tax credit to help them afford policies that are sold on insurance marketplaces (or “exchanges”); that financial provision is not at issue in the House’s lawsuit. But the lawsuit explicitly targets a mechanism to encourage health insurance companies to reduce the costs of coverage for lower-income individuals.

The House claimed in court that, although Congress has in fact voted the funds to pay for the subsidy system keyed to the insurance exchanges, it has never approved any funds to cover the expense of the cost-sharing approach — technically, the “cost-sharing offsets.” The ACA required insurance companies taking part in the new program to specifically reduce the co-pays charged to consumers when they visit doctors’ offices or other health facilities. The federal government then steps in to reimburse the insurers for absorbing those costs.

In going to court, the House contended that the Obama administration has asked for, but never obtained, actual legislation appropriating those reimbursement funds, but instead has simply taken the money out of accounts at the Treasury and sent checks to the insurers. This, it argued, was a direct violation of the Constitution’s command that no federal funds may be spent unless approved, in advance, by Congress.

The administration has argued in response that the ACA itself provided all the authority that the government needed to finance the cost-sharing provision, so there was no need to ask Congress explicitly to put up the money. Officials also have disputed the House claim that they did, in fact, ask for appropriations.

At this point, Judge Collyer has not decided who is right on that basic dispute. Rather, her ruling focused solely on whether the House had a right to sue to defend its control of the federal purse strings. The government had urged the judge to dismiss the entire lawsuit, claiming that the House cannot meet one of the basic requirements for a right to sue in federal court — that is, that it would suffer a legal injury from what the government has done. The House suffers no harm, the government argued, when the government chooses how to implement a law that Congress has enacted.

The judge, however, said the entire House of Representatives faces the potential loss of its specific authority to appropriate funds for government programs, if the government, in fact, has spent money without Congress’s prior approval. “Neither the president nor his officers,” the judge wrote, “can authorize appropriations; the assent of the House of Representatives is required before any public monies are spent. Congress’s power of the purse is the ultimate check on the otherwise unbounded power of the Executive.”

She added: “Disregard of that reservation [of power to the House] works a grievous harm on the House, which is deprived of its rightful and necessary place under our Constitution. The House has standing to redress that injury in federal court.”

In the past, when members of Congress tried to sue the federal government over some dispute, the courts have generally turned aside such lawsuits, finding that individual members do not speak for their entire chamber and cannot use the courts to complain about defeats they had suffered in legislative-executive dealings. This time, however, Judge Collyer noted, it was the whole House that had sued.

Among other points the judge made in clearing the way for the House case to move ahead was the Supreme Court’s decision last Term, finding that the Arizona state legislature, as a whole, had a right to sue in federal court to challenge a voter-approved measure that took away entirely the legislature’s power to draw up new election districts following each new federal census. The judge also relied on prior precedents of the D.C. Circuit that said there were, in some circumstances, opportunities for a house of Congress to sue. But she acknowledged that there were no precedents, from any court, that provided sure guides to how she should rule on this particular lawsuit.

Although the Wednesday ruling did not settle the ultimate legality of the government funding of the “cost-share offsets,” the fact that the judge had given the House permission to pursue its case is subject to appeal right away by the government, and officials made clear they would do so.

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Recommended Citation: Lyle Denniston, House challenge to health care funding can go ahead, SCOTUSblog (Sep. 10, 2015, 5:22 PM), https://www.scotusblog.com/2015/09/house-challenge-to-health-care-funding-can-go-ahead/