Your DNA and your First Amendment

David Rivkin Jr. and Andrew Grossman 

 The FDA is blocking 23andMe’s genome service. But the real target is free speech.

Did you know that you cannot be trusted with knowledge of your own genetic background? That’s what the Food and Drug Administration decreed late last month when it ordered 23andMe to stop marketing its Personal Genome Service.

23andMe is at the cutting edge of mass-market genomics. For $99 the company tests a saliva sample to identify genetic markers that correspond to various conditions and predispositions, as well as ancestry. Based on these markers, the company produces a report describing genetic health risks and inherited traits, along with citations to the research that backs up its analysis and the current scientific “confidence” for each point.

The FDA does not claim that 23andMe is a scam or could cause direct injury. Instead, its concern is that people using the genome service may begin to self-manage their treatments. Essentially, the agency wants to “protect” patients from knowing about their own health.

Proactive prevention

The service is not marketed as a diagnostic tool but as a way for individuals to take a proactive approach to their health through prevention and management, while providing themselves and their physicians with more information to make better choices.

The agency worries that individuals, with information about their genetics, could make the wrong choices. As an example, the agency suggests a customer informed of a heightened risk for breast or ovarian cancer might undergo unnecessary prophylactic surgery or chemotherapy. But this could not happen without first consulting a doctor and undergoing diagnostic tests.

The FDA also claims that individuals shouldn’t be able to receive health information based on their genes, unless and until the underlying correlations have been subjected to rigorous clinical validation the same as an approved drug or medical device. Last week, a $5 million class action suit was filed against 23andMe by one dissatisfied customer claiming its test results are not supported by scientific evidence.

Anne Wojcicki, co-founder of 23andMe, responded that her company and the regulators are entering uncharted territory. She said the FDA is set up to approve individual tests, not the millions of tests her company does on a person’s DNA.

To be sure, the FDA does have a legitimate interest in ensuring that consumers are not misled by false claims and bad products. But that’s not at issue here.

The interpretation of genetic markers is grounded in recent discoveries and could be tentative. 23andMe, like others in the field, acknowledges this and is constantly revising its interpretation of genetic data. But that fact does not mean these services aren’t useful to consumers, particularly when combined with traditional diagnostics.

Suppressing speech

Yet the FDA maintains that 23andMe has to keep that knowledge away from its customers. Forget about the FDA’s medical device claims, its stance puts the agency in direct conflict with our free speech rights. Shuttering a service such as 23andMe is no different from censoring home medical references or any of myriad websites that link symptoms with medical conditions.

In fact, the Supreme Court has long rejected the premise that government may substitute its judgment as to how best to speak for that of speakers and listeners. While the FDA may prefer that scientific research be limited to professionals and then filtered through a physician or FDA-approved service for the rest of us, the First Amendment prevents it from suppressing speech.

What’s troubling is that the FDA knows this. Two years ago, the Supreme Court struck down on First Amendment grounds a state law that blocked pharmacists from disclosing information about doctors and their prescribing habits to pharmaceutical manufacturers, who would use it for research and marketing. As the court observed, the free flow of information has “great relevance in the fields of medicine and public health, where information can save lives.”

That connection is far more direct here. The knowledge that a person is at heightened risk for a particular disorder could prompt lifestyle changes to reduce the risk or encourage early detection and treatment.

For now, 23andMe has voluntarily taken its service off the market. The FDA, of course, does not want Americans to make bad health choices, but it does seem determined to keep them in the dark about how to make good ones.

Rather than regulate by assuming that consumers are incapable of understanding their personal genetics, the FDA should be thinking about the enormous opportunities to improve health offered by widespread, affordable genetic testing.

SOURCE: http://www.usatoday.com/story/opinion/2013/12/09/23andme-fda-suit-dna-column/3926589/

David Rivkin and Andrew Grossman practice law in the Washington, D.C., office of BakerHostetler. Rivkin served in the Justice Department and the White House Counsel’s Office in the Reagan and George H.W. Bush administrations.

Is Obama trying to pack the DC appeals court?

By David B. Rivkin, Jr. and Andrew M. Grossman 

The D.C. Circuit is the nation’s top regulatory court, responsible for scrutinizing many of the federal government’s most expensive and far-reaching actions. No wonder, then, that President Barack Obama is now trying to push three new judges onto the court and tilt it decisively in his favor. A great deal is at stake here for the U.S. economy, and it is high time for the Senate to have its say.

For a president with an aggressive second-term regulatory agenda, the D.C. Circuit may be a greater impediment than the Supreme Court. By statute, the court hears all challenges to nationwide rules under the Clean Air Act, as well as many major challenges to regulations affecting water, labor relations, securities law, and other fields. It vets agencies’ compliance with constitutional requirements. More than a third of cases in the D.C. Circuit are administrative appeals, compared to 16 percent in other appeals courts. And because the Supreme Court takes so few cases each year, the D.C. Circuit’s word is typically the last when it comes to regulatory challenges.

The court hasn’t exactly been clamoring for more judges. It has the equivalent of 11.25 full-time judges: eight active judges, split 4-4 between Democratic and Republican appointees, plus another six senior judges whose workloads add up to 3.25 full-time judges. While the court has three vacancies, they are not among the 32 “judicial emergencies” identified by the Administrative Office of the U.S. Courts—and the president hasn’t even made nominations to most of those seats.  Moreover, the court’s caseload is among the lowest of the courts of appeals, at 88 cases per judge, and declining. According to one current judge, “If any more judges were added now, there wouldn’t be enough work to go around.”

So why three new judges? And why now?

The best explanation is that the court has played an important role checking the Obama administration’s most legally adventuresome actions. It blocked Obama administration regulations that required some states to reduce air pollution by more than they actually emitted and struck down the president’s attempt to bypass the Senate by “recess” appointing pro-union lawyers to the National Labor Relations Board when the Senate was still in session.

Just recently, it ordered the Nuclear Regulatory Commission to follow the law and reopen consideration of the Yucca Mountain nuclear waste repository, which the Administration had shut down for political reasons. The court felt the need to remind the administration: “The President and federal agencies may not ignore statutory mandates or prohibitions merely because of policy disagreement with Congress.”

To be clear, the court is not set against Obama’s agenda—far from it. Where agencies hew to the letter of the law and present reasoned explanations for their actions, they fare well. Indeed, the D.C. Circuit has turned back challenges to the vast majority of the Obama administration rules, including EPA’s greenhouse gas regulations, which many observers viewed as legally vulnerable for deviating from the language of the Clean Air Act. (The Supreme Court recently agreed to review that precise issue.)

Problems typically arise when regulators overreach by playing fast and loose with the law to carry out their political agendas. As D.C. Circuit Judge David Tatel has explained, “You’d be surprised how often agencies don’t seem to have given their authorizing statutes so much as a quick skim.”

The president is right to fear that his agencies may face tough going in the D.C. Circuit during his second term. Despite a number of high-profile court losses for failure to follow the law, President Obama declared after his reelection that he intends to act even more aggressively. He said that he is “not going to…wait for Congress” to carry out his agenda. “Wherever we have an opportunity and I have the executive authority to go ahead and get some things done, we’re just going to go ahead and do ‘em.” He has followed through on that promise, pushing the EPA to effectively ban new coal-fired power plants and to issue standards for existing plants that are likely to be among the most expensive regulations ever.  EPA is also contemplating new rules targeting natural gas.

Thus, the president’s rush to place three liberal stalwarts on the court. Today, the D.C. Circuit enjoys a reputation for careful legal reasoning and attention to detail. It is sensitive to the tough policy choices faced by public officials, without unduly deferring to their judgments on issues of law. For those very reasons, it poses a real threat to the president’s plans to skirt the normal lawmaking process—that is, working with Congress—in favor of unilateral action.

It’s easier to win in court, of course, when you get to pick the judges.  A second reason for the rush is to prevent the Senate from careful review of his nominees’ records.

This, in particular, should give Senators pause, because it stands in the way of carrying out their constitutional duty to provide “advice and consent” on judicial nominations. Given the stakes, a full airing of the nominees’ records is warranted, followed by careful deliberation by the Senate.

Rivkin Jr. and Grossman practice law in the Washington office of BakerHostetler. Rivkin served in the Justice Department and the White House Counsel’s Office in the Reagan and George H.W. Bush administrations.

 

Sourcehttp://thehill.com/blogs/congress-blog/judicial/188872-is-obama-trying-to-pack-the-dc-appeals-court

A Facebook Deal That Needs Unfriending

Time to end class-action settlements that only reward lawyers, not plaintiffs.

By David B. Rivkin Jr. and Lee A. Casey 

The Supreme Court will soon decide whether to hear a case that could determine the future of particularly abusive class-action settlements. Not abusive in the usual sense, where a class of injured plaintiffs is awarded an exorbitant amount. Instead, these settlements are abusive in that absolutely nothing goes to the injured plaintiffs. At issue is whether federal courts may approve such agreements rewarding lawyers and defendants, leaving plaintiffs out in the cold.

The case is Marek v. Lane, and it arose out of Facebook’s notorious 2007 “Beacon” program. Beacon gathered and published information about Facebook users’ other Internet activities as an advertising and marketing tool, invading the privacy of millions. It may also have violated a number of state and federal laws, including the 1988 Video Privacy Protection Act, which includes a liquidated-damages provision of $2,500 for each offense. A class-action suit was filed in 2008 on behalf of as many as 3.6 million injured social networkers.

Embarrassed (if unrepentant) and under media pressure, Facebook entered settlement negotiations, ultimately agreeing to pay $9.5 million. Of this, about $3.1 million (later reduced to $2.3 million) would go to the class-action lawyers, and the rest would be used to create a Digital Trust Foundation, controlled in part by Facebook. The DTF would sponsor programs and education regarding online threats to personal information and identity—including through funding consumer groups, such as the Electronic Frontier Foundation, that Facebook already supports and are often allied with Facebook on matters of regulation and public policy. Members of the class of injured plaintiffs, meanwhile, would get nothing and, unless they took action to “opt-out” of the settlement, their individual claims would be forever barred.

Such arrangements, through which a class recovery is diverted to purposes other than actually compensating the claimants, are known as “cy pres” awards, a term derived from the French legal expression cy pres comme possible (as near as possible). The idea is that where a court cannot directly achieve some remedial goal, such as meaningful payments to the injured parties, it may adopt other measures that, as nearly as possible, have the same compensatory result.

Cy pres remedies are very much an exception in the law, and are ordinarily subject to significant judicial policing due to the risk that defendants and class-action attorneys will use cy pres to cut a deal that benefits them both but gives plaintiffs little or nothing. For this reason, federal courts carefully assess whether proposed settlements are “fair, reasonable, and adequate” to the injured class members. A cy pres award can be approved only if a court finds that granting the recovery to a third party best advances member interests.

The Facebook settlement, however, provides zero benefit to class members. Breaking with all the other appeals courts to consider cy pres settlements, in February the U.S. Court of Appeals for the Ninth Circuit upheld a ruling that an award of millions to a foundation controlled in part by Facebook was good enough because it was not entirely “unrelated to the class’s interests.”

Yet the Ninth Circuit’s six dissenting judges wrote: “The DTF can teach Facebook users how to create strong passwords, tinker with their privacy settings, and generally be more cautious online, but it can’t teach users how to protect themselves from Facebook’s deliberate misconduct. Unless, of course, the DTF teaches Facebook users not to use Facebook. That seems unlikely.”

Nevertheless, both the trial court and the Ninth Circuit Court of Appeals approved this agreement, without assessing the value of class members’ claims. The agreement did not even forbid Facebook from reinstituting a program identical to Beacon under a different name in the future and injuring class members in the exact same fashion. If that’s “fair, reasonable, and adequate,” then anything goes.

The Ninth Circuit’s decision opens new vistas in class-action litigation, where lawyers (in the form of fat fees) and defendants (in the form of resolving expensive lawsuits on the cheap) could reap rich rewards simply by stiffing those actually injured. Sadly, even courts have been known to get in on the action by helping to choose the institutions or causes to receive cy pres payments—including awards to the alma mater of a plaintiffs’ lawyer, in one case, and to schools where judges either taught or served as a trustee, in others.

Only the Supreme Court can remedy this, by hearing Marek v. Lane and reversing a decision that carries the real and immediate danger of promoting significant abuse nationwide. Class actions should compensate the victims of genuine injuries, not promote some social good as defined by lawyers, defendants and judges.

Messrs. Rivkin and Casey served in the U.S. Justice Department under Presidents Reagan and George H.W. Bush. They are partners in the Washington, D.C., office of Baker & Hostetler LLP, representing claimants opposed to the Facebook settlement and who are now seeking Supreme Court review.

Sourcehttp://online.wsj.com/article/SB10001424052702303796404579101271549128990.html#articleTabs%3Darticle

Why Shira’s Wrong

Frisk judge playing politics.


By David B. Rivkin Jr. and Elizabeth Price Foley

The recent federal court rebuke of New York City’s stop-and-frisk tactics shows that many disputes are best resolved through politics, not lawsuits.

Courts resolve discrete controversies — whether existing law has been violated. They’re not equipped to answer questions about what the law “should” be. Judicial remedies are supposed to make plaintiffs whole, not rewrite policies wholesale.

But try telling that to Judge Shira Scheindlin. She not only enjoined NYPD’s existing tactics, but also ordered the city to video all stops within certain precincts and appointed a monitor to “develop … a set of reforms of the NYPD’s policies, training, supervision, monitoring and discipline regarding stop and frisk.” Such intricate policy prescriptions are the stuff of statutes and regulations, not judicial opinions.

Whether or not any of this is good policy, it has very little to do with the law. Indeed, Supreme Court precedent is utterly at odds with Scheindlin’s Fourth and Fourteenth Amendment analysis.

Scheindlin concluded that NYPD’s policy violated the Fourteenth Amendment’s Equal Protection Clause, relying heavily on statistical evidence of the race of those stopped by the NYPD. But the Equal Protection Clause prohibits only intentional discrimination, not mere statistical differences in the racial impact of government policies.

In Washington v. Davis (1976), for example, the Supreme Court declared, “Our cases have not embraced the proposition that a law or other official act, without regard to whether it reflects a racially discriminatory purpose, is unconstitutional solely because it has a racially disproportionate impact.” Were it otherwise, the fact that standardized tests or even arrests have disproportionate racial impacts would be unconstitutional, transforming the Equal Protection Clause from a guarantee of equal protection to one of equal outcome.

No evidence showed that the NYPD’s practices were intended to discriminate against individuals because of race. Indeed, the notion that one of America’s most progressive cities, with a majority-minority police department, operates with animus towards racial minorities is absurd.

Scheindlin’s Fourth Amendment analysis is equally specious. The Fourth Amendment prohibits “unreasonable” searches and seizures. The key Supreme Court precedent is Terry v. Ohio, which held that police may stop and frisk individuals based on “reasonable suspicion” of criminal activity. Terry was decided by the Warren Court, the most liberal Supreme Court in US history. Even Justice Thurgood Marshall, whose career was dedicated to advancing civil rights, agreed that stop-and-frisk was consistent with the Fourth Amendment.

Some of the NYPD’s stops may lack reasonable suspicion and be problematic. But even the plaintiffs’ own expert found unconstitutional stops to be exceedingly rare, comprising only 6 percent of the 4.4 millions stops studied. Such data highlight the impropriety of adjudicating the constitutionality of stops en masse, as a class action.

If one insists, however, on a wholesale examination of the NYPD’s policy, it is still consistent with the Fourth Amendment. The Supreme Court’s “special needs” doctrine permits broad-brush, highly-intrusive searches, without individualized suspicion of wrongdoing, when grounded in public safety needs.

In Skinner v. Railway Labor Executives’ Association (1989), the court upheld random drug testing of railway employees employed in safety-sensitive positions, even though there was no evidence that the tested employees used drugs. The court found that the privacy intrusion involved — admittedly high — was outweighed by the public safety benefits.

The special-needs doctrine has been used to uphold sobriety checkpoints, border checks and other situations in which searches — lacking in individualized suspicion — are conducted to protect the public.

While the doctrine hasn’t been applied to routine police stops, this is because such stops have been litigated using the Terry framework, which focuses on the reasonableness of individual encounters. But when the constitutionality of a stop-and-frisk is challenged wholesale rather than retail — as in the NYPD case — the special-needs doctrine should apply.

Had Scheindlin considered the special-needs doctrine, she’d have had to conclude that New York’s stop-and-frisk policy is constitutional. A frisk is surely less intrusive than the random drug tests upheld in Skinner. Equally important, the public safety benefits are palpable.

New York City, for example, has seen dramatic decreases in violent crimes — particularly in poor, predominantly minority precincts — since implementing stop-and-frisk.Stop-and-frisk also deters crimes by interrupting overt criminal behavior and reducing the incentive to carry weapons. Scheindlin’s over-reading of the Constitution thus is not merely wrong; it is dangerous.

More is at stake here than the use of flawed constitutional arguments that warp well-established constitutional law. Scheindlin’s decision, while likely to be eventually reversed on appeal, further encourages the use of courts as venues for resolving complex policy, rather than legal, disputes.

The losers are the citizens of places like New York, including millions of minority voters, who have been disfranchised of their ability to enact reasonable stop-and-frisk policies through the democratic process.

David B. Rivkin Jr. is an appellate lawyer with Baker Hostetler LLP. Elizabeth Price Foley is a professor of constitutional law at Florida International University.

Source: http://www.nypost.com/p/news/opinion/opedcolumnists/why_shira_wrong_64aWDvK3AyqT3V7HRMRwoJ/1

The True Lesson of the IRS Scandal

There should be less federal regulation of political speech.

By David B. Rivkin Jr. and Lee A. Casey

President Obama and his political allies have dismissed as “phony scandals” mounting evidence that the Internal Revenue Service and other federal agencies hindered and punished conservative advocacy groups. Meanwhile, efforts are under way to impose even more regulation on core political speech.

The government’s abuses are very real, but the scandal’s lessons are not appreciated: The federal regulation of political speech has already gone further than can be justified by existing law, let alone the Constitution.

The debate about political speech has so far focused on a particular type of nonprofit entity: social-welfare organizations exempt from federal income tax under section 501(c)(4) of the Internal Revenue Code. A group qualifies for this exempt status if it is “operated exclusively for the promotion of social welfare.” This means its efforts cannot inure to the benefit of specific individuals, members or private clubs.

On Wednesday, Rep. Chris Van Hollen (D., Md.) filed a federal lawsuit seeking to force the IRS to tighten the eligibility rules for politically active groups seeking 501(c)(4) status. Yet “social welfare” is a capacious term that includes many policy and political goals—from preserving historic battlefields to repealing laws for or against same-sex marriage.

The IRS has long recognized this by permitting such groups, if consistent with their stated social-welfare purpose, to engage primarily or even wholly in public-issue advocacy or lobbying. In other words, they are permitted to engage in political speech directed at government officials. At the same time, however, the IRS says that political campaign activities cannot account for more than half of a 501(c)(4)’s expenditures. But the statute itself contains no such limitation. In short, the IRS effectively robs social-welfare organizations of one half of their potential political speech.

This distinction between lobbying and election advocacy is entirely arbitrary. Electing candidates who support an organization’s principles and goals may be the most effective (and in some cases the only) means of achieving that organization’s social-welfare purpose. Yet the IRS rules here are consistent with the federal government’s overall approach to regulating elections since at least the 1970s. Bizarre as it may be in the world’s leading democracy, federal election laws treat the most effective form of political speech as the most disfavored. Stricter regulations like those sought by Rep. Van Hollen and others would only worsen the problem.

Until recently, the Supreme Court largely supported this system, interpreting the Constitution’s free-speech guarantees to permit these limitations in order to avoid corruption or its appearance. Even so, the court rejected efforts to control political activities, including expenditures, in support of a candidate but made independently of a candidate’s own campaign organization. The exception was corporations, which could not make independent expenditures.

In Citizens United v. FEC (2010), a majority of the court more sensitive to the First Amendment invalidated restrictions on independent political campaign expenditures by corporations, associations and labor unions. Since Citizens United, the use of 501(c)(4) organizations to engage in political speech has burgeoned—largely because such groups need not disclose their donors as purely political organizations still must. Calls for the IRS to close this supposed “loophole” also have multiplied.

That is a bad idea, not supported by the statutory language, and it is unconstitutional to boot. Although the Supreme Court has held that there is no duty to subsidize political speech through tax exemptions, there is no plausible basis on which the IRS (or Congress) can limit tax-exempt status to groups that eschew independent campaign spending while permitting other forms of political speech, such as lobbying.

Where the potential for corruption—for example, giving money to a candidate in exchange for favors—is absent, as the Citizens United ruling found with regard to independent expenditures, treating one form of political speech differently than others is not rational. It fails even the most deferential judicial review standard, much less the more exacting compelling governmental interest ordinarily applied under the First Amendment. The IRS-created 50% limit is vulnerable to challenge on the same grounds. It should make no difference under the existing statutory language what form the political speech of a 501(c)(4) takes; the organization should be able to spend 100% of its funds on independent campaign spending.

There also are sound policy reasons to cut 501(c)(4)s loose from such regulations. Such groups allow ordinary people to compete with the better-funded media industry, political parties, celebrities and other wealthy players, in the marketplace of ideas. Constraining the activities of 501(c)4s would not, as “progressives” claim, protect the little guy and level the playing field. Instead it would protect entrenched interests and, most of all, incumbents who can raise money simply because they hold public office.

Congress could abolish the 501(c)(4) status entirely. However, neither the IRS nor Congress can produce a result in which some groups, whose social-welfare purposes can be advanced through nonpolitical speech (such as promoting botany or historical research), can use 100% of their resources to do so, while others groups, whose social-welfare purposes can be advanced only through political speech, cannot.

To conclude otherwise would enable the government to engage in content-based restrictions on speech that have always been viewed as the most insidious violation of the First Amendment. The Supreme Court also has long made clear that Congress cannot deploy tax subsidies as a means of suppressing “dangerous ideas.”

The IRS scandal is a moment of reckoning. It offers the country a unique opportunity to free a substantial portion of political speech from government regulation.

This is an opportunity not to be wasted. Republicans should broaden their oversight inquiries into the constitutional and statutory basis on which the IRS has limited 501(c)(4) expenditures in the past—and force the agency to justify any plans it has to continue or expand those limits.

Messrs. Rivkin and Casey served in the Justice Department during the Reagan and George H.W. Bush administrations. They are partners in the Washington, D.C., office of Baker & Hostetler LLP.

Source: http://online.wsj.com/article/SB10001424127887323477604579001263134291446.html

President’s call to end such laws is federal government’s attempt to impose its will.

By David Rivkin Jr. and Andrew Grossman

After George Zimmerman’s acquittal for shooting Trayvon Martin, President Obama and Attorney General Eric Holder urged the state of Florida to abandon its “stand your ground” law. If this were just taking advantage of a high-profile case to advance a political agenda, that would be bad enough. But the president’s and attorney general’s demands are inappropriate for a more fundamental reason: the federal government trying to impose its will on states.

The debate over where to draw the line between federal and state authority has been hard-fought from the early days of the republic. But the one area where state authority has gone unchallenged is in the power to define criminal laws. The states are better placed than the federal government to respond to local conditions and their citizens’ immediate concerns regarding public safety.

The overwhelming number of ordinary crimes is prosecuted by the states. The federal government lacks the resources and the manpower to take over any substantial portion of them. When a person is prosecuted in federal court, it’s for a federal offense, such as fraud in national financial markets or terrorism. While the federal government has been encroaching on state responsibility to address local crime, federal prosecution still remains the exception.

This division of power reflects the reality that there is not any one-size-fits-all criminal law. The states can and do adopt different approaches to defining crimes to meet their unique needs and their citizens’ preferences. When an innovation works, other states are free to adopt it.

That is how the “stand your ground” defense quickly spread to the majority of the states — 31, according to law professor Eugene Volokh’s count. “Stand your ground” has long been the default rule for self-defense within the home, and more recent statutes, such as Florida’s, extend this protection to public places. The difference is that traditional self-defense puts a victim of an attacker outside the home at risk of conviction if a jury second-guesses whether retreat might have been possible and, if so, at what risk to the victim. “Stand your ground” shifts the focus back to where many believe it should be: the attacker and the attack.

That’s hardly a radical change, and it raises no concern — for example, that such laws are motivated by racial discrimination or produce racially disparate result — that might justify federal meddling. Indeed, a 2012 analysis by Florida’s Tampa Bay Timesfound that black defendants who asserted a “stand your ground” defense went free 66% of the time, slightly more than white defendants. Moreover, blacks took advantage of the defense at a rate nearly twice their proportion of the state population. If blacks are more likely to be victims of violent crime, it only makes sense that they would disproportionately benefit from a stronger right to self-defense.

So then why all the controversy? Blame those who would make a federal issue of states’ legitimate differences of opinion. A virtue of federalism, apparently lost on the president and attorney general, is that there doesn’t have to be only one right answer.

David B. Rivkin Jr. and Andrew M. Grossman practice law in the Washington office of BakerHostetler.

Source: http://www.usatoday.com/story/opinion/2013/07/24/david-rivkin-and-andrew-grossman-on-federal-and-state-laws/2578625/

Why the President’s ObamaCare Maneuver May Backfire

By postponing the employer mandate, Obama has given millions of Americans the legal standing to sue.

By  DAVID B. RIVKIN JR. AND LEE A. CASEY

President Obama’s announcement on July 2 that he is suspending the Affordable Care Act’s employer health-insurance mandate may well have exposed his actions to judicial review—even though that is clearly what he sought to avoid.

The health-care reform law’s employer mandate requires businesses with more than 50 employees to provide a congressionally prescribed set of health-insurance benefits or pay a penalty calculated at about $2,000 per employee. The law was to take effect on Jan. 1, 2014, but Mr. Obama has “postponed” its application until 2015. His aim, the administration said, was to give employers more time to comply with the new rules. But it was also seen as a way to avoid paying at least part of ObamaCare’s mounting political price in the 2014 congressional elections.

Whatever the reason, the president does not have the power to stop the implementation of a law. If there is one bedrock constitutional legal principle, it is that the president must “faithfully execute” federal statutes. He cannot suspend laws he dislikes on policy grounds or because he fears their political consequences.

Mr. Obama, however, has made a habit of exercising an unlawful suspending power, refusing to enforce selected federal laws, including various provisions of the immigration laws against young, undocumented aliens; work requirements enacted as part of the 1996 federal welfare reform law; and the testing accountability provisions of the No Child Left Behind education law.

One key problem with suspension power—aside from the fact that it destroys the balance of power between the two political branches—is that, when skillfully exercised, it sidelines the judiciary. The Constitution requires that a party commencing litigation must have what is commonly called “standing,” i.e., the party must have suffered or will suffer a legal injury that a court can redress. A determined president can head off litigation by effectively rewriting federal statutes in ways that do not create individual injuries so no party has standing.

By suspending the Affordable Care Act’s employer insurance mandate, however, the president has potentially given millions of Americans the necessary standing to challenge his conduct. This is because the Affordable Care Act is a highly integrated law, with many of its key provisions dependent on each other. In addition to the employer mandate, the law also contains an “individual mandate,” requiring most Americans to sign up for a required level of health-insurance coverage or pay a penalty.

The individual mandate was one of the core parts of the Affordable Care Act considered by the Supreme Court in the 2012 case of NFIB v. Sebelius, where the court upheld the statute against constitutional attack. Throughout that litigation, the Obama administration portrayed the individual mandate as an “integral part of a comprehensive scheme of economic regulation” that included the employer insurance mandate, which was intended to give millions of Americans a way of meeting their new obligation to have health insurance. In other words, suspending the employer insurance mandate prevents the individual insurance mandate from working the way Congress intended.

Like the employer mandate, the individual mandate by law will take effect in January 2014 (unless the president postpones that as well). Individuals who will then have to buy their own health insurance will arguably have suffered an injury sufficient to give them standing to sue.

Once in court, these litigants can argue that the very integrated nature of the Affordable Care Act would make it unlawful to apply one part against them, while suspending another section. They can also argue that only Congress can determine whether, once a statute is fundamentally changed post-enactment, it should survive or fall.

This inquiry usually arises when courts, having invalidated on constitutional grounds part of a statute, must determine whether or not Congress would have wanted the valid remaining parts of the law to remain in effect. The relevant constitutional doctrine is called “severability.”

As the Supreme Court noted in the leading severability case, Ayotte v. Planned Parenthood of Northern New England (2006), the ultimate fate of the revised statute is decided based on the “legislative intent.” In the case of the Affordable Care Act, if the courts were, for example, to determine that the employer insurance mandate is unconstitutional, the well-established severability analysis would lead them to conclude that the individual mandate (and likely the entire law) must also fall because Congress did not intend those provisions to operate in the absence of the employer insurance mandate. The president’s suspension of that part of the law, therefore, should also produce the same result, rendering the remainder of the statute unenforceable.

This argument should find favor with judges who are weary of the use of suspension power that improperly aggrandizes presidential authority, diminishes congressional power, and denies the judiciary an opportunity to have its say. Courts would have to conclude that the whole statute must fall while the president’s suspension is in effect. While reaching this conclusion, they might also declare the suspension itself unconstitutional. Both results would mark a significant win for the American people.

Source: http://online.wsj.com/article/SB10001424127887323368704578596360026187772.html?mod=wsj_streaming_stream