Texas et al v. United States of America et al

Filing 211

[STAYED per order of Dec 30 2018] ORDER granting Plaintiffs partial summary judgment (Ordered by Judge Reed C. O'Connor on 12/14/2018) (Judge Reed C. O'Connor) Modified on 12/31/2018 (wrb).

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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION

TEXAS, et al.,
Plaintiffs,
v.
UNITED STATES OF AMERICA, et al.,
Defendants,

CALIFORNIA, et al.
Intervenors-Defendants.

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Civil Action No. 4:18-cv-00167-O

MEMORANDUM OPINION AND ORDER
The United States healthcare system touches millions of lives in a daily and deeply personal
way. Health-insurance policy is therefore a politically charged affair—inflaming emotions and
testing civility. But Article III courts, the Supreme Court has confirmed, are not tasked with, nor
are they suited to, policymaking.1 Instead, courts resolve discrete cases and controversies. And
sometimes, a court must determine whether the Constitution grants Congress the power it asserts
and what results if it does not. If a party shows that a policymaker exceeded the authority granted
it by the Constitution, the fruit of that unauthorized action cannot stand.
Here, the Plaintiffs allege that, following passage of the Tax Cuts and Jobs Act of 2017
(TCJA), the Individual Mandate in the Patient Protection and Affordable Care Act (ACA) is
unconstitutional. They say it is no longer fairly readable as an exercise of Congress’s Tax Power

See Nat’l Fed’n of Indep. Businesses v. Sebelius (NFIB), 567 U.S. 519, 530–38 (2012) (noting the wisdom
of legislative policy is entrusted to the Nation’s elected leaders).
1

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and continues to be unsustainable under the Interstate Commerce Clause. They further urge that,
if they are correct, the balance of the ACA is untenable as inseverable from the Invalid Mandate.
Resolution of these claims rests at the intersection of the ACA, the Supreme Court’s
decision in NFIB, and the TCJA. In NFIB, the Supreme Court held the Individual Mandate was
unconstitutional under the Interstate Commerce Clause but could fairly be read as an exercise of
Congress’s Tax Power because it triggered a tax. The TCJA eliminated that tax. The Supreme
Court’s reasoning in NFIB—buttressed by other binding precedent and plain text—thus compels
the conclusion that the Individual Mandate may no longer be upheld under the Tax Power. And
because the Individual Mandate continues to mandate the purchase of health insurance, it remains
unsustainable under the Interstate Commerce Clause—as the Supreme Court already held.
Finally, Congress stated many times unequivocally—through enacted text signed by the
President—that the Individual Mandate is “essential” to the ACA. And this essentiality, the ACA’s
text makes clear, means the mandate must work “together with the other provisions” for the Act
to function as intended. All nine Justices to review the ACA acknowledged this text and Congress’s
manifest intent to establish the Individual Mandate as the ACA’s “essential” provision. The current
and previous Administrations have recognized that, too. Because rewriting the ACA without its
“essential” feature is beyond the power of an Article III court, the Court thus adheres to Congress’s
textually expressed intent and binding Supreme Court precedent to find the Individual Mandate is
inseverable from the ACA’s remaining provisions.
Construing the Plaintiffs’ Application for Preliminary Injunction, (ECF No. 39), as a
motion for partial summary judgment, the Court therefore DENIES Plaintiffs’ request for an
injunction but GRANTS summary judgment on Count I of the Amended Complaint. See FED. R.
CIV. P. 56(f); July 16, 2018 Order, ECF No. 176.

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I.

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BACKGROUND
More than any factual developments, the background to this case involves the nuances of

the ACA, NFIB, and the TCJA, which the Court traces below.
A.

The ACA

The ACA became law on March 23, 2010. See Patient Protection and Affordable Care Act,
Pub. L. 111-148, 124 Stat. 119-1045 (2010). Congress intended the ACA to achieve “nearuniversal” health-insurance coverage and to “lower health insurance premiums” through the
“creation of effective health insurance markets” and new statutory requirements for individuals
and insurance companies. See, e.g., 42 U.S.C. §§ 18091(2)(D), (2)(F), and (2)(I). It pursued these
goals through a carefully balanced restructuring of the Nation’s health-insurance ecosystem.
For starters, the ACA established a “[r]equirement to maintain minimum essential
coverage”—commonly known as the “Individual Mandate.” 26 U.S.C. § 5000A(a). To compel
compliance with the Individual Mandate, Congress imposed a tax penalty on individuals who were
subject to the requirement but chose to disobey it. Id. § 5000A(b). The ACA labeled this penalty
the “[s]hared responsibility payment.” It was originally to be assessed at either $695.00 or a 2.5
percent share of a family’s household income—whichever was greater. Id. § 5000A(c).
From the start, Congress exempted some individuals from Individual Mandate. For
example: those qualifying for a “[r]eligious exemption[],” id. § 5000A(d)(2)(A); “member[s] of a
health care sharing ministry,” id. § 5000(d)(2)(B); individuals who are “not . . . citizen[s] or
national[s] of the United States . . . or alien[s] lawfully present in the United States,” id.
§ 5000A(d)(3); and “[i]ncarcerated individuals,” id. § 5000A(d)(4). At the same time, Congress
exempted five categories of individuals from the shared-responsibility payment but not the
Individual Mandate. See id. § 5000A(e). This means several classes of individuals are obligated

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by § 5000A(a) to obtain minimum-essential coverage but are not subject to the tax penalty for
failure to do so.2
Congress also wanted to ensure affordable health insurance for those with pre-existing
conditions. See 42 U.S.C. § 18091(2)(I) (“By significantly increasing health insurance coverage,
the [Individual Mandate], together with the other provisions of this Act, will minimize . . . adverse
selection and broaden the health insurance risk pool to include healthy individuals, which will
lower health insurance premiums . . . [and] creat[e] effective health insurance markets in which
improved health insurance products that are guaranteed issue and do not exclude coverage of preexisting conditions can be sold.”). Congress therefore required insurers to cover high-risk
individuals via the “guaranteed-issue” and “community-rating” provisions. The guaranteed-issue
provision requires insurers to “accept every employer and individual in the State that applies for
. . . coverage.” Id. § 300gg-1. The community-rating provision prohibits insurers from charging
higher rates to individuals based on age, sex, health status, or other factors. Id. § 300gg-4.
The ACA includes many other integral regulations and taxes as well. These include, among
other things, an excise tax on high-cost insurance plans, 26 U.S.C. § 4980I; the elimination of
coverage limits, 42 U.S.C. § 300gg-11; and a provision allowing dependent children to remain on
their parents’ insurance until age 26, id. § 300gg-14(a). The ACA also implemented an employer
mandate and an employer-responsibility assessment. These provisions require employers with at
least fifty full-time employees to pay the federal government a penalty if they fail to provide their
employees with ACA-compliant health-plan options. See 26 U.S.C. § 4980H.

These classes included “[i]ndividuals who cannot afford coverage,” id. § 5000A(e)(1); taxpayers with
income “less than 100 percent of the poverty line for the size of the family involved,” id. § 5000A(e)(2);
members of an Indian tribe, id. § 5000A(e)(3); individuals experiencing “short coverage gaps” in health
insurance, id. § 5000A(e)(4); and individuals who have received a “hardship” exemption from the Secretary
of Health and Human Services, id. § 5000A(e)(5).
2

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But just as Congress funneled nearly all Americans into health-insurance coverage on the
one hand—through the Individual Mandate and employer mandate, e.g.—it also significantly
reduced reimbursements to hospitals by more than $200 billion over ten years on the other. 42
U.S.C. §§ 1395ww(b)(3)(B)(xi)–(xii), 1395ww(q), 1395ww(r), and 1396r-4(f)(7).
Notably, several ACA provisions are tied to another signature reform—the creation and
subsidization of health-insurance exchanges. See id. §§ 18031–44. Through these and other
provisions, the ACA allocated billions of federal dollars to subsidize the purchase of health
insurance through government-run exchanges. Plus, the ACA expanded the scope of Medicaid,
adding millions of people to the eligibility roster. See id. § 1396a(a)(10)(A)(i)(VIII).
The ACA also lays out hundreds of minor provisions, spanning the Act’s 900-plus pages
of legislative text, that complement the above-mentioned major provisions and others.
B.

NFIB

After the ACA took effect, states, individuals, and businesses challenged its
constitutionality in federal courts across the country.3 One of those cases reached the Supreme
Court in 2012. See NFIB, 567 U.S. at 519. In NFIB, twenty-six states, along with several
individuals and an organization of independent businesses, challenged the ACA’s Individual
Mandate and Medicaid expansion as exceeding Congress’s enumerated powers. In short, the
Supreme Court held the Individual Mandate was beyond Congress’s Interstate Commerce Power
but salvageable under its Tax Power. The decision was highly splintered and warrants explanation.

3

In the interest of brevity, a full history of the lower-court decisions leading up to NFIB is not included
here. But legal scholars have documented that history to help explain this complex statutory scheme and
the Supreme Court’s decision in 2012. See, e.g., JOSH BLACKMAN, UNPRECEDENTED: THE
CONSTITUTIONAL CHALLENGE TO OBAMACARE 79–158 (2013) [hereinafter “BLACKMAN”].

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Chief Justice Roberts

Chief Justice Roberts authored a lengthy opinion considering several issues. See id. at 530–
89. Only certain parts of that opinion garnered a majority of votes or otherwise reached a
conclusion agreed to by a majority of the Supreme Court. Here are the pertinent parts.
In Part III-A, Chief Justice Roberts concluded the Individual Mandate is not a valid
exercise of Congress’s power under the Interstate Commerce Clause. Id. at 546–61 (Roberts, C.J.).
The Government argued the Individual Mandate could be sustained under the Interstate Commerce
Clause because individual decisions to not buy health insurance collectively “ha[ve] a substantial
and deleterious effect on interstate commerce.” Id. at 548–49 (citing Brief for United States). It
also asserted insurance reforms without a mandate would create cost-shifting problems whereby
insurers would increase premiums to cover the costs of high-risk individuals. Id. at 547–48.
The Chief Justice disagreed and held the Interstate Commerce Clause authorizes regulating
“activity,” not inactivity. Id. at 553. He warned the Government’s theory would “extend[] the
sphere of [Congress’s] activity and draw[] all power into its impetuous vortex.” Id. at 554 (quoting
THE FEDERALIST NO. 48, at 309 (James Madison)). “The Framers gave Congress the power to
regulate commerce,” he reasoned, “not to compel it.” Id. at 555 (emphasis in original).
Though no other Justice joined this part of the Chief Justice’s opinion, the “joint dissent”—
consisting of Justices Scalia, Kennedy, Thomas, and Alito—reached the same conclusion on the
Interstate Commerce Clause question. Id. at 657 (joint dissent). Accordingly, a majority of the
Supreme Court found the Individual Mandate is unconstitutional under the Interstate Commerce
Clause,4 and even the four Justices not reaching that conclusion recognized it as the holding of the

4

The same five Justices also found that the Individual Mandate could not be upheld as an essential
component of the ACA’s insurance reforms under the Necessary and Proper Clause. Id. at 560 (Roberts,
C.J.); id. at 654–55 (joint dissent).

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Court. See id. at 572 (majority) (“The Court today holds that our Constitution protects us from
federal regulation under the Commerce Clause so long as we abstain from the regulated activity.”).
In Part III-B, the Chief Justice concluded that, because the Individual Mandate is
impermissible under the Interstate Commerce Clause, the Supreme Court was obligated to
entertain the Government’s argument that the mandate could be upheld under the Tax Power. Id.
at 561–63 (Roberts, C.J.). He noted that “[t]he most straightforward reading of the mandate is that
it commands individuals to purchase insurance.” Id. at 562. “But, for the reasons explained above,
the Commerce Clause does not give Congress that power.” Id.
In Part III-C, the Chief Justice wrote a majority opinion, joined by Justices Ginsburg,
Breyer, Sotomayor, and Kagan, holding that 26 U.S.C. § 5000A—including the Individual
Mandate and the shared-responsibility payment—was a constitutional exercise of Congress’s Tax
Power. Id. at 563–74 (majority). The Supreme Court’s analysis in this section focused more on the
shared-responsibility payment than on the Individual Mandate. See, e.g., id. at 563 (“The exaction
the Affordable Care Act imposes on those without health insurance looks like a tax in many
respects. The ‘[s]hared responsibility payment,’ as the statute entitles it, is paid into the Treasury
. . . .”); id. at 566 (“The same analysis here suggests that the shared responsibility payment may
for constitutional purposes be considered a tax.”); id. at 568 (reasoning “the shared responsibility
payment merely imposes a tax citizens may lawfully choose to pay in lieu of buying health
insurance”); id. at 569 (“Our precedent demonstrates that Congress had the power to impose the
exaction in § 5000A under the taxing power.” (emphasis added)).
The Supreme Court’s conclusion that § 5000A constituted a constitutional exercise of
Congress’s Tax Power turned on several factors. First, the shared-responsibility payment “is paid
into the Treasury by taxpayers when they file their tax returns.” Id. at 563 (cleaned up). Second,

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the amount owed under the ACA “is determined by such familiar factors as taxable income,
number of dependents, and joint filing status.” Id. (citing 26 U.S.C. §§ 5000A(b)(3), (c)(2), (c)(4)).
And “[t]he requirement to pay is found in the Internal Revenue Code and enforced by the IRS,
which . . . must assess and collect it ‘in the same manner as taxes.’” Id. at 563–64. Third and
finally, the shared-responsibility payment “yields the essential feature of any tax: It produces at
least some revenue for the Government.” Id. at 564 (citing United States v. Kahriger, 345 U.S. 22,
28 n.4 (1953)) (emphasis added). On these bases, the Supreme Court held, “The Federal
Government does have the power to impose a tax on those without health insurance. Section 5000A
is therefore constitutional, because it can reasonably be read as a tax.” Id. at 575.
Finally, in Part IV, Chief Justice Roberts was joined by Justices Breyer and Kagan in
concluding that the ACA’s Medicaid-expansion provisions unconstitutionally coerced States into
compliance—but given the existence of a severability clause, the unconstitutional portion of the
Medicaid provisions could be severed. Id. at 575–88 (Roberts, C.J., joined by Breyer and Kagan,
JJ.). While Justice Ginsburg, joined by Justice Sotomayor, disagreed that the ACA’s mandatory
Medicaid expansion was unconstitutionally coercive, see id. at 624–45 (Ginsburg, J., joined by
Sotomayor, J.), she agreed with the Chief Justice’s conclusion—only because the Chief Justice
found the expansion unconstitutional—that the offending provisions could be severed from the
remainder of the Act, see id. at 645 (“But in view of THE CHIEF JUSTICE’s disposition, I agree
with him that the Medicaid Act’s severability clause determines the appropriate remedy.”).
2.

Joint Dissent

Justices Scalia, Kennedy, Thomas, and Alito agreed with the Chief Justice that the
Individual Mandate exceeds Congress’s powers under the Interstate Commerce and Necessary and

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Proper Clauses, but they concluded § 5000A could not be characterized as a tax.5 Id. at 652–57
(joint dissent). The joint dissent noted that Congress rejected an earlier version of the ACA that
“imposed a tax instead of a requirement-with-penalty” and reasoned that characterizing § 5000A,
including the Individual Mandate, as a tax was therefore contrary to congressional intent. Id. at
669 (citations omitted).
Because the joint dissenters concluded the Individual Mandate and the Medicaid expansion
were unconstitutional, they—and only they—addressed whether “all other provisions of the Act
must fall as well.” Id. at 691. The dissenters noted that the ACA “was passed to enable affordable,
‘near universal’ health insurance coverage.” Id. at 694 (citing 42 U.S.C. § 18091(2)(D)). And to
effectuate this goal, the ACA “consists of mandates and other requirements; comprehensive
regulation and penalties; some undoubted taxes; and increases in some governmental expenditures,
decreases in others.” Id. The dissenters then asked whether this “closely interrelated” scheme could
“function in a coherent way and as Congress would have intended, even when the major provisions
establishing the Individual Mandate and Medicaid Expansion are themselves invalid.” Id. at 691,
694. They opined it could not.
In passing the ACA, the dissenters noted, Congress understood the fiscal concerns
surrounding healthcare reform and engineered a system whereby “it did not intend to impose the
inevitable costs on any one industry or group of individuals.” Id. at 694. The dissenters reasoned
the ACA “attempts to achieve near-universal health insurance coverage by spreading its costs to
individuals, insurers, governments, hospitals, and employers—while, at the same time, offsetting
significant portions of those costs with new benefits to each group.” Id. at 695. In a nutshell:
the Federal Government bears the burden of paying billions for the new
entitlements mandated by the Medicaid Expansion and federal subsidies for
The joint dissent also agreed the ACA’s Medicaid expansion exceeded “Congress’ power to attach
conditions to federal grants to the States.” NFIB, 567 U.S. at 671.
5

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insurance purchases on the exchanges; but it benefits from reductions in the
reimbursements it pays to hospitals. Hospitals lose those reimbursements; but they
benefit from the decrease in uncompensated care, for under the insurance
regulations it is easier for individuals with pre-existing conditions to purchase
coverage that increases payments to hospitals. Insurance companies bear new costs
imposed by a collection of insurance regulations and taxes, including “guaranteed
issue” and “community rating” requirements to give coverage regardless of the
insured’s pre-existing conditions; but the insurers benefit from the new, healthy
purchasers who are forced by the Individual Mandate to buy the insurers’ product
and from the new low-income Medicaid recipients who will enroll in insurance
companies’ Medicaid-funded managed care programs. In summary, the Individual
Mandate and Medicaid Expansion offset insurance regulations and taxes, which
offset reduced reimbursements to hospitals, which offset increases in federal
spending.
Id. at 695–96. “In summary, the Individual Mandate and Medicaid Expansion offset insurance
regulations and taxes, which offset reduced reimbursements to hospitals, which offset increases in
federal spending.” Id. at 696. And Congress intended the Individual Mandate and Medicaid
Expansion to work together with the rest of the ACA. Id. (citing 42 U.S.C. §§ 18091(2)(C), (2)(E),
(2)(F), (2)(G), (2)(I), (2)(J)).
Next, the joint dissenters detailed the ACA’s major provisions. They concluded, given the
above, that these provisions—insurance regulations and taxes; hospital-reimbursement reductions
and other reductions in Medicare expenditures; health-insurance exchanges and their federal
subsidies; and the employer-responsibility assessment—are all inseverable from the Individual
Mandate. See id. at 697–703. They concluded the same with respect to the ACA’s minor
provisions. See, e.g., id. at 704 (“if the major provision were unconstitutional, Congress would not
have passed the minor one”). In sum, the joint dissenters would have declared the ACA “invalid
in its entirety.” Id. at 707.
C.

The TCJA

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 was signed into law. See Pub.
L. No. 115-97, 131 Stat. 2054 (2017). Congress passed the TCJA through budget reconciliation,
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“an expedited procedure [for] considering legislation that would bring existing spending, revenue,
and debt limit laws into compliance with the current fiscal priorities established in the annual
budget resolution.” Megan S. Lynch & James V. Saturno, The Budget Reconciliation Process:
Stages of Consideration, at 1, CONGRESSIONAL RESEARCH SERVICE (Jan. 4, 2017). Budget
reconciliation limits congressional action to fiscal matters.
In the TCJA, Congress reduced the ACA’s shared-responsibility payment to zero, effective
January 1, 2019. See TCJA § 11081. Congress took no other action pertaining to the ACA. Nor
could it. The reconciliation process limited Congress to doing exactly what it did: reducing taxes.
See Fed. Defs.’ Resp. 16 n.4, ECF No. 92 (“Although Congress was able to revoke the tax penalty,
it could not have revoked the guaranteed-issue or community-rating provisions through
reconciliation.”); Sept. 5, 2018 Hr’g Tr. at 36:7–12 (Intervenor Defendants) [hereinafter “Hr’g
Tr.”] (“Congress did not repeal any part of the ACA, including the shared responsibility payment.
In fact, it could not do so through the budget reconciliation procedures it used.”).
II.

PROCEDURAL BACKGROUND
Plaintiffs are the States of Alabama, Arizona, Arkansas, Florida, Georgia, Indiana, Kansas,

Louisiana, Mississippi, Missouri, Nebraska, North Dakota, South Carolina, South Dakota,
Tennessee, Texas, Utah, West Virginia, Wisconsin, Governor Paul LePage of Maine (the “State
Plaintiffs”), and individuals Neill Hurley and John Nantz (the “Individual Plaintiffs” and,
collectively with the State Plaintiffs, “Plaintiffs”).
Defendants are the United States of America, the United States Department of Health and
Human Services (“HHS”), Alex Azar, in his official capacity as Secretary of HHS, the United
States Internal Revenue Service (the “IRS”), and David J. Kautter, in his official capacity as Acting
Commissioner of Internal Revenue (collectively, the “Federal Defendants”).

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Finally, the States of California, Connecticut, Delaware, Hawaii, Illinois, Kentucky,
Massachusetts, Minnesota, New Jersey, New York, North Carolina, Oregon, Rhode Island,
Vermont, Virginia, and Washington, and the District of Columbia intervened as defendants
(collectively, the “Intervenor Defendants”).
The Plaintiffs sued the Federal Defendants seeking, among other things, a declaration that
the Individual Mandate, as amended by the TCJA, is unconstitutional and that the remainder of
the ACA is inseverable. Am. Compl. 2, ECF No. 27. Their theory is that, because the TCJA
eliminated the shared-responsibility tax payment, the tax-based saving construction developed in
NFIB no longer applies. Id. at 2–3. Plaintiffs further argue that, as the four joint dissenters reasoned
in NFIB, the Individual Mandate is inseverable from the rest of the ACA. Pls.’ Br. Prelim. Inj. 35,
ECF No. 40 (citing NFIB, 567 U.S. at 691–703 (joint dissent)) [hereinafter “Pls.’ Br.”].
The Federal Defendants agree the Individual Mandate is unconstitutional and inseverable
from the ACA’s pre-existing-condition provisions. But they argue all other ACA provisions are
severable from the mandate. The Intervenor Defendants argue all the Plaintiffs’ claims fail.
The Plaintiffs filed an Application for Preliminary Injunction, (ECF No. 39), on April 26,
2018; the Federal Defendants and the Intervenor Defendants responded, (ECF Nos. 91 and 92), on
June 7, 2018; and Plaintiffs replied, (ECF No. 175), on July 5, 2018. Because the Federal
Defendants argued a judgment, as opposed to an injunction, was more appropriate, the Court
provided notice of its intent to resolve the issues in this case on summary judgment. See July 16,
2018 Order, ECF No. 176 (citing FED. R. CIV. P. 56(f)(3)). The parties responded. See ECF Nos.
177–79.
The Plaintiffs argued they desire a preliminary injunction but are unopposed to
“simultaneously considering Plaintiffs’ application as a motion for partial summary judgment on

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the constitutionality of the ACA’s mandate.” See Pls.’ Resp. July 16, 2018 Order, ECF No. 181
(emphasis in original). The Intervenor Defendants opposed converting the preliminary-injunction
briefing to a summary-judgment ruling because they wished to more fully brief issues such as
Article III standing, the Interstate Commerce Clause, and the scope of injunctive relief. Intervenor
Defs.’ Resp. July 16, 2018 Order 2, ECF No. 182. At the hearing, the Federal Defendants requested
the Court “to defer any ruling until after the close of the open enrollment period which is in mid
December, [as] that would ensure that there is no disruption to the open enrollment period.” Hr’g
Tr. at 30:15–18.
The Court finds the Intervenor Defendants adequately briefed and argued at the September
5, 2018 hearing the standing and Interstate Commerce Clause issues. The Court therefore construes
the application as a motion for partial summary judgment.
III.

LEGAL STANDARDS
A.

Article III Standing

“Every party that comes before a federal court must establish that it has standing to pursue
its claims.” Cibolo Waste, Inc. v. City of San Antonio, 718 F.3d 469, 473 (5th Cir. 2013). Standing
doctrine is rooted in the Constitution’s grant of judicial power to adjudicate cases or controversies.
“The doctrine developed in our case law to ensure that federal courts do not exceed their authority
as it has been traditionally understood.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016).
“The doctrine of standing asks ‘whether the litigant is entitled to have the court decide the
merits of the dispute or of particular issues.’” Cibolo Waste, 718 F.3d at 473 (quoting Elk Grove
Unified Sch. Dist. v. Newdow, 542 U.S. 1, 11 (2004)). Standing has both constitutional and
prudential components. See id. (quoting Elk Grove, 542 U.S. at 11) (stating standing “contain[s]
two strands: Article III standing . . . and prudential standing”). The “irreducible constitutional

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minimum” of Article III standing consists of three elements. Spokeo, 135 S. Ct. at 1547; Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560 (1992). The plaintiff must have (1) suffered an injury in
fact (2) that is fairly traceable to the challenged conduct of the defendant and (3) that is likely to
be redressed by a favorable decision. Lujan, 504 U.S. at 560–61. It is not necessary for all plaintiffs
to demonstrate Article III standing. Rather, “one party with standing is sufficient to satisfy Article
III’s case-or-controversy requirement.” Texas v. United States, 809 F.3d 134, 151 (5th Cir. 2015)
(quoting Rumsfeld v. Forum for Academic & Institutional Rights, Inc., 547 U.S. 47, 52 n.2 (2006)).
“Prudential standing requirements exist in addition to ‘the immutable requirements of
Article III,’ . . . as an integral part of ‘judicial self-government.’” ACORN v. Fowler, 178 F.3d 350,
362 (5th Cir. 1999) (quoting Lujan, 504 U.S. at 560). “The goal of this self-governance is to
determine whether the plaintiff ‘is a proper party to invoke judicial resolution of the dispute and
the exercise of the court’s remedial power.’” Id. (quoting Bender v. Williamsport Area Sch. Dist.,
475 U.S. 534, 546 n.8 (1986)). The Supreme Court has observed that prudential standing
encompasses “at least three broad principles,” including “the general prohibition on a litigant’s
raising another person’s legal rights . . . .” Lexmark Int’l, Inc. v. Static Control Components, Inc.,
134 S. Ct. 1377, 1386 (2014); Cibolo Waste, 718 F.3d at 474 (quoting Elk Grove, 542 U.S. at 12).
As the parties invoking jurisdiction, the Plaintiffs must show the requirements of standing
are satisfied. See Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001).
B.

Summary Judgment

Summary judgment is proper when the pleadings and evidence show “that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
FED. R. CIV. P. 56(a). “[T]he substantive law will identify which facts are material.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine issue of material fact exists “if the

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evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. The
movant makes a showing that there is no genuine issue of material fact by informing the court of
the basis of its motion and by identifying the portions of the record that reveal there are no genuine
material-fact issues. See FED. R. CIV. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
When reviewing the evidence on a motion for summary judgment, the court must resolve
all reasonable doubts and inferences in the light most favorable to the non-movant. See Walker v.
Sears, Roebuck & Co., 853 F.2d 355, 358 (5th Cir. 1988). The court cannot make a credibility
determination in light of conflicting evidence or competing inferences. Anderson, 477 U.S. at 255.
And if there appears to be some support for the disputed allegations, such that “reasonable minds
could differ as to the import of the evidence,” the court must deny the motion for summary
judgment. Id. at 250.
IV.

ANALYSIS
The Court’s analysis involves three separate inquiries and conclusions. First, the Court

finds the Parties satisfy the applicable standing requirements. Second, the Court finds the
Individual Mandate can no longer be fairly read as an exercise of Congress’s Tax Power and is
still impermissible under the Interstate Commerce Clause—meaning the Individual Mandate is
unconstitutional. Third, the Court finds the Individual Mandate is essential to and inseverable from
the remainder of the ACA.
A.

Article III Standing

No party initially challenged the Plaintiffs’ standing. But amici raised the issue6 and the
Intervenor Defendants addressed it at oral argument. See, e.g., Hr’g Tr. at 52–58; 64–68. And

6

The American Medical Association filed an amicus brief that argued the Individual Plaintiffs lack standing
because they “seek to leverage their own voluntary decisions to purchase minimum essential coverage into
cognizable injuries-in-fact” and therefore impermissibly base standing on a self-inflicted injury. See Br. of

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because Article III standing is a requirement of subject-matter jurisdiction, it cannot be waived.
See FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 231 (1990) (“The federal courts are under an
independent obligation to examine their own jurisdiction.”).
The Individual Plaintiffs, who are citizens and residents of the State of Texas, challenge
the Individual Mandate as an unconstitutional requirement to purchase ACA-compliant health
insurance. They argue they are injured by the “obligation to comply with the individual mandate
. . . despite the provision’s unconstitutionality.” Am. Compl. ¶ 43, ECF No. 27. Injury-in-fact must
be both particularized and concrete, not conjectural or hypothetical. Spokeo, 136 S. Ct. at 1548
(quoting Lujan, 504 U.S. at 560). For an injury to be particularized, it “must affect the plaintiff in
a personal and individual way.” Id. Under Lujan, a concrete and particularized injury generally
exists if the “plaintiff is himself an object of the action (or forgone action) at issue. If he is, there
is ordinarily little question that the action or inaction has caused him injury, and that a judgment
preventing or requiring the action will redress it.” Lujan, 504 U.S. at 561–62. The question of
“whether someone is in fact an object of a regulation is a flexible inquiry rooted in common sense”
and “underlies all three elements of standing.” Contender Farms, LLP v. USDA, 779 F.3d 258,
264, 266 (5th Cir. 2015).
In Contender Farms, a company and its principal, McGartland, challenged a regulation
under the Horse Protection Act that required certain entities to suspend horse trainers who engaged
in “soring.” Id. at 262. The Fifth Circuit analyzed whether the plaintiffs had standing to challenge
the regulation and the scope of the agency’s rulemaking authority. Applying a “commonsense
approach to the facts in [the] case,” the court held first that the plaintiffs were the object of the
challenged regulation because the regulation “target[ed] participants in Tennessee walking horse
the Am. Med. Ass’n et al. 7, ECF No. 113. The Association also challenged the State Plaintiffs’ standing,
arguing their alleged injury is too attenuated and speculative to support standing. See id. at 11–12.

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events like Contender Farms and McGartland.” Id. at 265. Second, the court determined the
regulation amounted to an increased regulatory burden because it subjected the plaintiffs to
“harsher, mandatory penalties” for violation of the soring rules—it also required competitors to
“take additional measures to avoid even the appearance of soring.” Id. at 266. Because “[a]n
increased regulatory burden typically satisfies the injury in fact requirement,” and because the
Fifth Circuit found that causation and redressability naturally flowed from the type of injury
alleged, the plaintiffs satisfied Article III standing. Id.
Here, the Individual Plaintiffs are the object of the Individual Mandate. It requires them to
purchase and maintain certain health-insurance coverage. See 26 U.S.C. § 5000A(a); see also Pls.’
App. Supp. Prelim. Inj., Ex. A (Nantz Decl.) ¶ 15, ECF No. 41 (“I am obligated to comply with
the [ACA’s] individual mandate”); Pls.’ App. Supp. Prelim. Inj., Ex. B (Hurley Decl.) ¶ 15, ECF
No. 41 (“I continue to maintain minimum essential health coverage because I am obligated . . . .”).
Cf. Lujan, 504 U.S. at 561–62; Time Warner Cable, Inc. v. Hudson, 667 F.3d 630, 636 (5th Cir.
2012).
The American Medical Association argues the Individual Plaintiffs have created their own
financial injury because they can choose not to comply with the Individual Mandate and, beginning
in January 2019, no penalty will be assessed against them. See Br. Am. Med. Ass’n 8–9, ECF No.
113; Hr’g Tr. at 37:9–16. But this argument begs a leading question in this case by assuming the
Individual Plaintiffs need not comply with the Individual Mandate. Moreover, a showing of
economic injury is not required.
In warning lower courts not to conflate the “actual-injury inquiry with the underlying
merits” of a claim, the Fifth Circuit recognizes that standing can be established where a plaintiff
alleges that a federal statute or regulation “deters the exercise of his constitutional rights.” Duarte,

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759 F.3d at 520. Here, the Individual Plaintiffs allege just that. They claim “Section 5000A’s
individual mandate exceeded Congress’s enumerated powers by forcing Individual Plaintiffs to
maintain ACA-compliant health insurance coverage.” Am. Compl. ¶ 49, ECF No. 27. Intervenor
Defendants, meanwhile, contend the Individual Mandate remains a constitutional exercise of
Congress’s tax or regulatory authority. As a result, the “conflicting contentions of the parties . . .
present a real, substantial controversy between parties having adverse legal interests, a dispute
definite and concrete, not hypothetical or abstract.” Babbitt v. United Farm Workers Nat’l Union,
442 U.S. 289, 298 (1979) (quoting Railway Mail Assn. v. Corsi, 326 U.S. 88, 93 (1945)). The
Individual Plaintiffs have therefore sufficiently alleged an injury in fact that sits at the center of a
live controversy.
“Causation and redressability then flow naturally from” the injury created by the Individual
Mandate. Contender Farms, 779 F.3d at 266. Without it, the Individual Plaintiffs would not be
required to maintain health-insurance coverage and would not be subject to an increased regulatory
burden. A favorable decision for the Plaintiffs—a declaration that the Individual Mandate is
unconstitutional—would redress the alleged injury. The Individual Plaintiffs, for example, would
be free to forego purchasing health insurance altogether or to otherwise purchase health insurance
below the “minimum essential coverage” better suited to their health and financial realities. At a
minimum, they would be freed from what they essentially allege to be arbitrary governance.
The Court finds the Individual Plaintiffs have standing to challenge the constitutionality of
the Individual Mandate.7 And because the Individual Plaintiffs have standing, the case-orcontroversy requirement is met. See Watt v. Energy Action Educ. Found., 454 U.S. 151, 160 (1981)

7

The Court does not analyze whether the Individual Plaintiffs have prudential standing to bring their claims
because “prudential standing (unlike Article III standing) is not jurisdictional, meaning that prudential
standing has been forfeited” and is not properly before the court, if, like here, no party contests it. Grocery
Mfrs. Ass’n v. EPA, 693 F.3d 169, 181 (D.C. Cir. 2012) (Kavanaugh, J., dissenting).

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(“Because we find California has standing, we do not consider the standing of the other
plaintiffs.”); Rumsfeld, 547 U.S. at 53 n.2.
B.

The Individual Mandate

With standing satisfied, the Court “must . . . determine whether the Constitution grants
Congress powers it now asserts, but which many States and individuals believe it does not
possess.” NFIB, 567 U.S. at 534 (Roberts, C.J.). The Court recalls the principles undergirding
NFIB. Namely, “deference in matters of policy cannot . . . become abdication in matters of law.”
Id. at 538. This means “respect for Congress’s policy judgments . . . can never extend so far as to
disavow restraints on federal power that the Constitution carefully constructed.” Id. “The peculiar
circumstances of the moment may render a measure more or less wise, but cannot render it more
or less constitutional.” Id. (quoting Chief Justice John Marshall, A Friend of the Constitution No.
V, Alexandria Gazette, July 5, 1819, reprinted in JOHN MARSHALL’S DEFENSE OF MCCULLOCH V.
MARYLAND 190–91 (G. Gunther ed. 1969)). “And there can be no question that it is the
responsibility of this Court to enforce the limits on federal power by striking down acts of Congress
that transgress those limits.” Id. (citing Marbury v. Madison, 5 U.S. 137, 175–76 (1803)).
The question of constitutionality is straightforward: Is the Individual Mandate a
constitutional exercise of Congress’s enumerated powers when the shared-responsibility payment
is zero? Because the Supreme Court upheld the Individual Mandate under Congress’s Tax Power,
the Court will begin there before proceeding to an Interstate Commerce Clause analysis. The Court
finds that both plain text and Supreme Court precedent dictate that the Individual Mandate is
unconstitutional under either provision.

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Congress’s Tax Power

In NFIB, the Supreme Court held 26 U.S.C. § 5000A to be a constitutional exercise of
Congress’s Tax Power. Id. at 570 (majority) (“Our precedent demonstrates that Congress had the
power to impose the exaction in § 5000A under the taxing power, and that § 5000A need not be
read to do more than impose a tax. That is sufficient to sustain it.”). That power authorizes
Congress to “lay and collect Taxes, Duties, Imposts, and Excises, to pay the Debts and provide for
the common Defence and general Welfare of the United States.” U.S. CONST. art. I, § 8, cl. 1.
Previously, the shared-responsibility provision, 26 U.S.C. § 5000A(b), imposed an “exaction” for
failure to obey the Individual Mandate, id. § 5000A(a). The question here is whether an eliminated
shared-responsibility exaction continues to justify construing the Individual Mandate as an
exercise of Congress’s Tax Power to implement § 5000A.
The Plaintiffs and Federal Defendants say “no.” Pls.’ Br. 26, ECF No. 40; Fed. Defs.’ Resp.
11, ECF No. 92. The Intervenor Defendants, on the other hand, argue § 5000A can still fairly be
read as a tax because it continues to satisfy the tax factors discussed in NFIB, including that
previous shared-responsibility payments will make their way into the treasury for years to come.
Intervenor Defs.’ Resp. 16–22, ECF No. 91.
a.

Sections 5000A(a) and (b) Are Distinct

It is critical to clarify something at the outset: the shared-responsibility payment, 26 U.S.C.
§ 5000A(b), is distinct from the Individual Mandate, id. § 5000A(a). For one thing, the latter is in
subsection (a) while the former is in subsection (b).8 And the Plaintiffs challenge only the
Individual Mandate, not the shared-responsibility penalty, as unconstitutional. See, e.g., Am.
Compl. ¶ 49, ECF No. 27 (“Section 5000A’s individual mandate exceeds Congress’s enumerated

8

Subsection (c) sets the amount of the shared-responsibility payment erected in subsection (b), see id.
§ 5000A(c), and it is the subsection set at zero per cent by the TCJA, see TCJA § 11081(a).

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powers . . . .” (emphasis added)); id. (“the individual mandate cannot be upheld under any other
provision of the Constitution”); id. at ¶¶ 55–56 (“[A]fter Congress amended Section 5000A, it is
no longer possible to interpret this statute as a tax enacted pursuant to a valid exercise of
Congress’s constitutional power to tax. Rather, the only reading available is the most natural one;
Section 5000A contains a stand-alone legal mandate . . . Accordingly, Section 5000A’s individual
mandate is unconstitutional.” (emphasis added)). The Court cannot ignore that the Individual
Mandate, § 5000A(a), is separate and distinct from the shared-responsibility penalty, § 5000A(b).9
Other ACA text and functionality demand §§ 5000A(a) and (b) not be lumped together,
too. Most obviously, Congress exempted some individuals from the shared-responsibility penalty
but not the Individual Mandate. See 26 U.S.C. § 5000A(e). For example, § 5000A(e)(1) provides
that “[i]ndividuals who cannot afford coverage” are exempt from the penalty, but not the mandate.
Id. § 5000A(e)(1). “Members of Indian tribes” are also subject to the mandate but not the penalty.
See id. § 5000A(e)(3). Congress could not possibly have intended the mandate and penalty to be
treated as one when it treated them as two.10
Congress’s codified ACA findings support the distinction as well. As the Plaintiffs argue,
those “findings identify the individual mandate itself—‘[t]he requirement’ to purchase health
insurance”—while “making no mention of the separate tax penalty that attaches to some
individuals’ failure to comply with the mandate.” Pls.’ Br. 8–9, ECF No. 40 (citation omitted)
(emphasis in Plaintiffs’ Brief). The Court agrees the findings highlight that Congress believed that,

9

See ANTONIN SCALIA & BRYAN A. GARNER, READING LAW: THE INTERPRETATION OF LEGAL TEXTS
174–79 (2012) (Surplusage Canon) [hereinafter “READING LAW”].
10
Federal agencies recognize this as well. See, e.g., CENTERS FOR MEDICARE & MEDICAID SERVICES, ONE
PAGER – INDIAN EXEMPTION, https://marketplace.cms.gov/technical-assistance-resources/exemptionindian-health-care-provider.pdf (last visited December 2018) (“Under the Affordable Care Act, everyone
who can afford to is now required by law to have health coverage . . . However, those who can’t afford
coverage or meet other conditions may qualify for [a shared-responsibility-payment] exemption.”).

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“if there were no requirement”—i.e., no Individual Mandate—“many individuals would wait to
purchase health insurance until they needed care.” 42 U.S.C. § 18091(2)(I) (emphasis added). That
is the belief it acted on and on which it formed its intent.11
The 2010 Congress therefore intended the mandate and penalty to be distinct. The 2017
Congress solidified that intent. Section 11081 of the TCJA is entitled “Elimination of shared
responsibility payment for individuals failing to maintain minimum essential coverage.” TCJA
§ 11081. This section amends 26 U.S.C. § 5000A(c)—the provision setting the amount of the
shared-responsibility penalty, id. § 5000A(b)—to “[e]liminat[e]” the existing payment and replace
it with “Zero percent” and “$0.” TCJA § 11081(a). It does not eliminate the Individual Mandate.
So, just as the 2010 Congress subjected some individuals to the Individual Mandate but no sharedresponsibility payment, the 2017 Congress subjected all applicable individuals to the Individual
Mandate but no shared-responsibility payment. Congress never intended the two things to be one.
As described below, the Supreme Court’s Tax Power analysis in NFIB proceeded along
these lines—recognizing the Individual Mandate as separate and distinct from the sharedresponsibility penalty. This distinction is critical to the Court’s remaining legal analysis.
b.

Section 5000A(a) Can No Longer Be Sustained as an Exercise of
Congress’s Tax Power

NFIB does not contravene Congress’s intent to separate the Individual Mandate and sharedresponsibility penalty. To the extent the Supreme Court held § 5000A could be fairly read as a tax,

11

See also CONGRESSIONAL BUDGET OFFICE, KEY ISSUES IN ANALYZING MAJOR HEALTH INSURANCE
PROPOSALS 53 (Dec. 2008), available at https://www.cbo.gov/sites/default/files/110th-congress-20072008/reports/12-18-keyissues.pdf (December 2008) (“[S]ome compliance is generally observed, even when
there is little or no enforcement of mandates. Compliance, then, is probably affected by an individual’s
personal values and by social norms. Many individuals and employers would comply with a mandate, even
in the absence of penalties, because they believe in abiding by the nation’s laws.”).

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it reasoned only that the Individual Mandate could be viewed as part and parcel of a provision
supported by the Tax Power—not that the Individual Mandate itself was a tax.
The Supreme Court stated its “precedent demonstrate[d] that Congress had the power to
impose the exaction in § 5000A under the taxing power”—and § 5000A(b) is the exaction—“and
that § 5000A need not be read to do more than impose a tax. That is sufficient to sustain it.” NFIB,
567 U.S. at 570 (emphasis added). In other words, it was only because of the totally distinct sharedresponsibility payment, or exaction, that the Supreme Court could construe § 5000A as a tax
provision. As the Government argued at the time, and as Chief Justice Roberts recognized, that
meant “the mandate [could] be regarded as establishing a condition—not owning health
insurance—that triggers a tax.” Id. at 563 (Roberts, C.J.) (emphasis added).
Put plainly, because Congress had the power to enact the shared-responsibility exaction,
§ 5000A(b), under the Tax Power, it was fairly possible to read the Individual Mandate,
§ 5000A(a), as a functional part of that tax also enacted under Congress’s Tax Power. Therefore,
§ 5000A as a whole could be viewed as an exercise of Congress’s Tax Power.
The majority’s analysis compels this conclusion.12 In its very first breath under Part III-C,
the majority reasoned:
The exaction the Affordable Care Act imposes on those without health insurance
looks like a tax in many respects. The “[s]hared responsibility payment,” as the
statute entitles it, is paid into the Treasury by “taxpayer[s]” when they file their tax
returns. 26 U.S.C. § 5000A(b). It does not apply to individuals who do not pay
federal income taxes because their household income is less than the filing
threshold in the Internal Revenue Code. § 5000A(e)(2). For taxpayers who do owe
the payment, its amount is determined by such familiar factors as taxable income,
number of dependents, and joint filing status. §§ 5000A(b)(3), (c)(2), (c)(4). The
requirement to pay is found in the Internal Revenue Code and enforced by the IRS,
which—as we previously explained—must assess and collect it “in the same
manner as taxes.”
Accord Intervenor Defs.’ Resp. 17, ECF No. 91 (“In NFIB, the Supreme Court explained that the shared
responsibility payment ‘looks like’ a tax in several respects.” (emphasis added)).
12

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NFIB, 567 U.S. at 563–64 (majority) (final citation to ACA omitted). The Supreme Court’s
baseline analysis thus turned on the following: the exaction looks like a tax; it is paid into the
treasury; it does not apply to individuals who pay no federal income taxes; familiar tax factors are
applied to folks who owe the payment; and the requirement to pay is in the revenue code. Id. Only
one of those factors applies to the Individual Mandate, § 5000A(a): it is in the Internal Revenue
Code. But the Individual Mandate is not in § 5000A(b), is not called the shared-responsibility
payment, is not an exaction, is not paid into the Treasury or otherwise a payment, does not exclude
those who pay no federal taxes for income reasons, and is not determined by familiar tax factors.
Section 5000A(b) is all those things.
Crucially, after assessing § 5000A(b) against the factors above, the Supreme Court
concluded § 5000A “yields the essential feature of any tax: It produces at least some revenue for
the Government.” Id. at 564 (citing United States v. Kahriger, 345 U.S. 22, 28 n. 4 (1953)).
The Supreme Court thus identified three basic criteria to conclude § 5000A could be
viewed as an exercise of the Tax Power: (1) a payment is paid into the Treasury, (2) the payment
amount is determined with reference to income and other familiar factors, and (3) the payment
produces revenue for the Government. Id. at 563–64. In their brief, the Intervenor Defendants urge
the “shared responsibility payment continues to maintain these tax-like characteristics.” Intervenor
Defs.’ Resp. 18, ECF No. 91. But at the hearing, they seemed to concede § 5000A will no longer
meet the first and second criteria starting January 1, 2019. See Hr’g Tr. at 70:10–16; 70:23–25.
They instead focus on the third factor, contending the “production of revenue at all times is not a
constitutional requirement for a lawful tax.” Intervenor Defs.’ Resp. 18, ECF No. 91.
But the Intervenor Defendants downplay the Supreme Court’s most crucial conclusion:
§ 5000A “yield[ed] the essential feature of any tax: It produce[d] at least some revenue for the

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Government.” NFIB, 567 U.S. at 564 (emphasis added); accord Rosenberger v. Rector and
Visitors of Univ. of Virginia, 515 U.S. 819, 841 (1995) (“A tax, in the general understanding of
the term, and as used in the Constitution, signifies an exaction for the support of the Government.”
(citation omitted)). Not indicative, not common—essential.13 Thus, the bottom line is the
Individual Mandate was buoyed by Congress’s Tax Power only because it “trigger[ed]” a provision
that “produce[d] at least some revenue for the Government.” And it was high tide when the
Supreme Court decided NFIB because the shared-responsibility payment was still a payment. But
with the TCJA, the tide has gone out. Section 5000A no longer contains an exaction.
The Intervenor Defendants argue that “[e]ven if Plaintiffs were correct that a
constitutionally-valid tax must produce revenue at all times”—a condition the Supreme Court
called essential—“it will be years before the shared responsibility payment ceases to do so.”
Intervenor Defs.’ Resp. 21, ECF No. 91. They contend that, due to the frequency of late payments
and deferrals, the government will continue to receive revenue from 2018 shared-responsibility
payments “until 2020 or beyond.” Id.
Intervenor Defendants cite no authority for the proposition that the relevant timeframe to
analyze tax revenue is the tax year in which it is remunerated. Plaintiffs reply that “the revenue
Intervenor-Defendants identify is attributable to tax year 2018.” Pls.’ Reply 8 n.9, ECF No. 175.
It is a well-accepted practice that tax revenue is attributable to the tax year in which it is
assessed, not the one in which it is paid. See, e.g., NFIB, 567 U.S. at 563 (“the payment is expected
to raise about $4 billion per year by 2017”) (emphasis added); CONGRESSIONAL BUDGET OFFICE,
ANALYSIS OF MAJOR HEALTH CARE LEGISLATION ENACTED IN MARCH 2010, at 14 (Mar. 30, 2011)

See Essential, WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 777 (1986) (defining as “of or
relating to an essence”; “having or realizing in itself the essence of its kind”; and “necessary,
indispensable”); see also BLACK’S LAW DICTIONARY (10th ed. 2014) (“1. Of, relating to, or involving the
essence or intrinsic nature of something. 2. Of the utmost importance; basic and necessary.”).
13

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(analyzing by fiscal year estimated budgetary effects of ACA tax credits and revenue from excise
taxes). When individuals file tax returns in April 2019, for example, the taxes they pay and the
returns they receive will affect the government’s 2018 tax-year revenue. The same holds true even
if individuals receive deferrals or make late payments in the months and years thereafter. And at
any rate, because the TCJA eliminated the shared-responsibility payment “beginning after
December 31, 2018,” that provision no longer produces revenue for the Government—present
tense—and any future monies that come in will be because the provision once produced revenue
for the Government—past tense. So, it is true the shared-responsibility payment once had the
essential feature of any tax. But it no longer does.
Finally, the Intervenor Defendants point to three examples of Congress delaying or
suspending taxes within the ACA: the Cadillac Tax, the Medical Device Tax, and the Health
Insurance Providers Fee. Intervenor Defs.’ Resp. 18– 20. Drawing on these examples, the
Intervenor Defenders argue “[t]he shared responsibility payment has not been rendered
unconstitutional merely because it will be $0 in 2019.” Id. at 18.
As an initial matter, suspending or delaying a tax is not equivalent to eliminating it. And
the TCJA does not suspend collection of the shared-responsibility payment, it eliminates it. See
TCJA § 11081 (“Elimination of shared responsibility payment for individuals failing to maintain
minimum essential coverage.”). Put differently, until a change in law, there is no sharedresponsibility payment. True, Congress may reinstate the payment in the future. But that would be
a change in law. The Court cannot rule on a hypothetical counterfactual. It may only “say what the
law is,” not what it someday could be. Marbury, 5 U.S. at 177.
But at a more fundamental level, the Intervenor Defendants’ argument demonstrates they
misapprehend the Plaintiffs’ basic position. The Intervenor Defendants assert: “The shared

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responsibility payment has not been rendered unconstitutional merely because it will be $0 in
2019.” Intervenor Defs.’ Resp. 18, ECF No. 91 (emphasis added). The Plaintiffs do not argue that;
they argue the Individual Mandate is unconstitutional. And as the Court has explained, the text of
the ACA and TCJA, as well as the Supreme Court’s reasoning in NFIB, all hinge on an
understanding that the Individual Mandate and the shared-responsibility payment are two very
different creatures. The saving construction in NFIB was available only because § 5000A(a)
triggered a tax.14 And § 5000A(b) was a tax because it produced some revenue for the Government.
Sozinsky v. United States, 300 U.S. 506, 513–14 (1937); United States v. Ross, 458 F.2d 1144,
1145 (5th Cir. 1972) (“The test of validity is whether on its face the tax operates as a revenue
generating measure and the attendant regulations are in aid of a revenue purpose.”).
Under the law as it now stands, the Individual Mandate no longer “triggers a tax” beginning
in 2019. So long as the shared-responsibility payment is zero, the saving construction articulated
in NFIB is inapplicable and the Individual Mandate cannot be upheld under Congress’s Tax Power.
See NFIB, 567 U.S. at 574 (“Congress’s authority under the Taxing power is limited to requiring
an individual to pay money into the Federal Treasury, no more.” (emphasis added)).
2.

Congress’s Interstate Commerce Power

Because the Individual Mandate can no longer be read as an exercise of Congress’s Tax
Power, the Court takes up the Intervenor Defendants’ argument that the mandate is now sustainable
under the Interstate Commerce Clause.

14

This distinction also explains why the Cadillac Tax, the Medical Device Tax, and the Health Insurance
Providers Fee are all inapposite. Even if, for example, Congress had eliminated the payment under Medical
Device Tax—which it did not—the analogy would not hold for the fact pattern before the Court. Instead,
to make the Medical Device Tax analogous, it would need to contain a provision requiring all applicable
individuals to purchase medical devices. And it would also need to contain a separate provision taxing any
applicable individual who did not purchase medical devices. Then, if Congress delayed or suspended the
tax under that scheme, the Medical Device Tax would be at least usefully analogous. But the Medical
Device Tax does not tax inactivity and is therefore unhelpful here.

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The Constitution grants Congress the power to “regulate Commerce . . . among the several
States.” U.S. CONST. art. 1, § 8, cl. 3. Before NFIB, the Supreme Court had never considered
whether Congress’s power to regulate interstate commerce allowed it to compel citizens into
commerce—i.e., to regulate inactivity. 567 U.S. at 647 (joint dissent) (identifying issue of first
impression). As outlined above, the Supreme Court concluded it does not. It therefore held the
Individual Mandate could not be sustained under the Interstate Commerce Clause. See id. at 572
(majority).
The Plaintiffs argue this issue is decided because the Supreme Court already concluded in
NFIB that the Individual Mandate cannot be upheld under the Interstate Commerce Clause. Pls.’
Br. 22, ECF No. 40.15 The Intervenor Defendants respond that the Individual Mandate “may now
be sustained under the Commerce Clause” because “with a tax of zero dollars, there is no
compulsion.” Intervenor Defs.’ Resp. 18 n.17, ECF No. 91. They argue the constitutional problem
identified in NFIB—Congress “compelling the purchase of insurance”—is no longer a problem
because a tax of zero dollars imposes no legal consequence on individuals who do not comply with
the Individual Mandate. Id. (emphasis in original); see also Hr’g Tr. at 37:9–25, 66:14–68:7.
The Individual Mandate provides: “An applicable individual shall . . . ensure that the
individual . . . is covered under minimum essential coverage . . . .” 26 U.S.C. § 5000A(a). The
Intervenor Defendants argue the provision “gives the individuals the same choice they’ve always
had—to either purchase insurance or pay the tax.” Hr’g Tr. at 67:17–19. But the Intervenor

15

The Federal Defendants did not separately brief the Interstate Commerce Clause issue but agree with the
Plaintiffs. See Fed. Defs.’ Resp. 11, ECF No. 92 (“[O]nce the associated financial penalty is gone, the ‘tax’
saving construction will no longer be fairly possible and thus the individual mandate will be
unconstitutional. As a majority of the Supreme Court held in NFIB, ‘[t]he Federal Government does not
have the power to order people to buy health insurance. Section 5000A would therefore be unconstitutional
if read as a command.’” (citations omitted)).

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Defendants’ position is logically self-defeating and contrary to the evidence in this case, the
language of the ACA, and Fifth Circuit and Supreme Court precedent.
a.

The Intervenor Defendants’ Position Is Logically Inconsistent

At the threshold, the Intervenor Defendants hope to have their cake and eat it too by arguing
the Individual Mandate does absolutely nothing but regulates interstate commerce. That is, they
first say the Individual Mandate “does not compel anyone to purchase insurance.” Hr’g Tr. at
37:12. Yet they ask the Court to find the provision “regulate[s] Commerce . . . among the several
States.” U.S. CONST. art. 1, § 8, cl. 3. The Intervenor Defendants’ theory, then, is that Congress
regulates interstate commerce when it regulates nothing at all. But to “regulate” is “to govern or
direct according to rule” and to “bring under the control of law or constituted authority.”
WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 1913 (1986). Accepting Intervenor
Defendants’ theory that the Individual Mandate does nothing thus requires finding that it is not an
exercise of Congress’s Interstate Commerce Power. Cf. Gibbons v. Ogden, 22 U.S. 1, 189–90
(1824) (“Commerce . . . is regulated by prescribing rules . . . .” (emphasis added)).
b.

The Intervenor Defendants’ Position Contradicts the Evidence

Despite the Intervenor Defendants’ logical gymnastics, the undisputed evidence in this case
suggests the Individual Mandate fixes an obligation. The Individual Plaintiffs assert they feel
compelled to comply with the law. Pls.’ App. Supp. Prelim. Inj., Ex. A (Nantz Decl.) ¶ 15, ECF
No. 41 (“I value compliance with my legal obligations . . . [t]he repeal of the associated health
insurance tax penalty did not relieve me of the requirement to purchase health insurance”); Pls.’
App. Supp. Prelim. Inj., Ex. B (Hurley Decl.) ¶ 15, ECF No. 41 (“I continue to maintain minimum
essential health coverage because I am obligated to comply with the [ACA’s] individual
mandate”). This should come as no surprise. “It is the attribute of law, of course, that it binds; it

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states a rule that will be regarded as compulsory for all who come within its jurisdiction.” HADLEY
ARKES, FIRST THINGS: AN INQUIRY INTO

THE

FIRST PRINCIPLES

OF

MORALS

AND JUSTICE

11

(1986). Law therefore has an enormous influence on social norms and individual conduct in
society. See CONGRESSIONAL BUDGET OFFICE, KEY ISSUES

IN

ANALYZING MAJOR HEALTH

INSURANCE PROPOSALS at 53 (Dec. 2008) (noting compliance “is generally observed, even when
there is little or no enforcement”). That is the point.
Undoubtedly, now that the shared-responsibility payment has been eliminated, more
individuals will choose not to comply with the Individual Mandate. See CONGRESSIONAL BUDGET
OFFICE, REPEALING THE INDIVIDUAL HEALTH INSURANCE MANDATE: AN UPDATED ESTIMATE at 1
(Nov. 8, 2017). And that is likely to undermine Congress’s intent in passing the ACA: Nearuniversal healthcare and reduced healthcare costs. See id. But the fact that many individuals will
no longer feel bound by the Individual Mandate does not change either that some individuals will
feel so bound—such as the Individual Plaintiffs here—or that the Individual Mandate is still law.
c.

The Intervenor Defendants’ Position Is Contrary to Text and
Binding Precedent

And therein lies the rub. The Individual Mandate is law. 26 U.S.C. § 5000A(a). To be
precise, the “[r]equirement to maintain minimum essential coverage” is still law. Id. § 5000A(a)
(emphasis added). As the Intervenor Defendants concede, Congress “deliberately left the rest of
the ACA untouched”—including the Individual Mandate. Hr’g Tr. at 40:12–13.
That the Individual Mandate persists, the Court must conclude, is no mistake. “[I]t is no
more the court’s function to revise by subtraction than by addition.” READING LAW, supra note 9,
at 174. The surplusage canon holds that, while “[s]ometimes lawyers will seek to have a crucially
important word ignored,” courts must “avoid a reading that renders some words altogether
redundant” or “pointless.” Id. at 174, 176. And this is just as true when parties “argue that an entire
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provision should be ignored.” Id. at 175; see also Yates v. United States, 135 S. Ct. 1074, 1085
(2015) (“We resist a reading . . . that would render superfluous an entire provision . . . .”).
To accept the Intervenor Defendants’ argument that the Individual Mandate does nothing
would be doubly sinful under the canon against surplusage—it would require ignoring both the
mandatory words of the provision and the function of the provision itself. As to the words of the
provision, it is entitled, “Requirement to maintain minimum essential coverage,” and provides that
“[a]n applicable individual shall . . . ensure” that she or he is covered under an appropriate plan.
26 U.S.C. § 5000A(a). These words must be interpreted according to their plain meaning. See
United States v. Yeatts, 639 F.2d 1186, 1189 (5th Cir. 1981) (“A basic canon of statutory
construction is that words should be interpreted as taking their ordinary and plain meaning.” (citing
Perrin v. United States, 444 U.S. 37, 42 (1980))); READING LAW, supra note 9, at 69.
The words “requirement” and “shall” are both mandatory. Webster’s defines “requirement”
as “something required,” “something wanted or needed,” and “something called for or demanded.”
WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 1929 (1986). And it provides the following
as the non-archaic meaning of “shall”: “used to express a command or exhortation.” Id. at 2085.
But a plethora of binding caselaw already establishes that there is nothing permissive about a
Congressionally enacted requirement that properly16 employs the verbiage “shall.” See, e.g., Fed.
Express Corp. v. Holowecki, 552 U.S. 389, 399 (2008) (reasoning “‘shall’ imposes obligations on
agencies to act”); Lopez v. Davis, 531 U.S. 230, 241 (2001) (noting “shall” indicates an intent to
“impose discretionless obligations”); Crane v. Napolitano, No. 3:12-cv-03247-O, 2013 WL

There are some instances where drafters improperly use the word “shall” as part of a negative command.
For example, “Neither party shall claim reimbursement for its expenses from the other party.” READING
LAW, supra note 9, at 113. In such an instance, “shall” means something more akin to the traditionally
permissive “may.” But § 5000A(a) is not a negative command. And “[w]hen drafters use shall . . .
correctly”—as in § 5000A(a)—“the traditional rule holds”—i.e., “that shall is mandatory.” Id. at 112.
16

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1744422, at *8 (N.D. Tex. Apr. 23, 2013), aff’d sub nom. Crane v. Johnson, 783 F.3d 244 (5th
Cir. 2015) (“Congress’s use of the word ‘shall’ . . . imposes a mandatory obligation”).
This is precisely why Chief Justice Roberts, in explaining his road to the NFIB majority,
noted that the Individual Mandate “reads more naturally as a command to buy insurance.” NFIB,
567 U.S. at 574 (Roberts, C.J.). Indeed, the Chief Justice reasoned that he “would uphold it as a
command if the Constitution allowed it.” Id. But because courts “have a duty to construe a statute
to save it, if fairly possible,” id., and because “§ 5000A [could] be interpreted as a tax” at the time,
id., the Chief Justice construed the Individual Mandate “as establishing a condition . . . that triggers
a tax,” id. at 563. In other words, to the extent the majority construed the Individual Mandate as
something other than a standalone mandate, it did so only because it was possible to construe the
provision as triggering a tax. That “fundamental construct,” as the Intervenor Defendants call it,
see Hr’g Tr. at 66:15, was just that—a construct. And in light of this Court’s finding on the Tax
Power today, the construct no longer holds.
But even under the NFIB construct, the Individual Mandate created an obligation.17 As the
majority noted, “the individual mandate clearly aims to induce the purchase of health insurance.”18
NFIB, 567 U.S. at 567 (majority). It continued, “Neither the Act nor any other law attaches
negative legal consequences to not buying health insurance, beyond requiring a payment to the
IRS.” Id. at 568. And the Government agreed at the time, “if someone chooses to pay rather than
obtain health insurance, they have fully complied with the law.” Id.

17

Cf. READING LAW, supra note 9, at 63 (Presumption Against Ineffectiveness).
That conduct-inducing characteristic is what led five Justices to conclude the Individual Mandate was
unsustainable under the Interstate Commerce Clause. See NFIB, 567 U.S. at 552 (Roberts, C.J.) (“The
individual mandate, however, does not regulate existing commercial activity. It instead compels individuals
to become active in commerce . . . .”); id. at 649 (joint dissent) (“To be sure, purchasing insurance is
‘Commerce’; but one does not regulate commerce that does not exist by compelling its existence.”).
18

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The logic of the NFIB construct is that an individual can comply with the law after
disobeying the Individual Mandate only by paying the shared-responsibility payment. “The only
thing they may not lawfully do is not buy health insurance and not pay the resulting tax.” Id. at
574 n.11. But this means the Individual Mandate is no more optional than the tax.
If an individual can satisfy the law only by satisfying either Condition 1 (the Individual
Mandate) or Condition 2 (the tax), then both conditions are equally optional and mandatory. To
state it differently, under the NFIB construct, failing Condition 1 no more triggers Condition 2 than
failing Condition 2 triggers Condition 1. So, an individual who disobeys the Individual Mandate
can satisfy the law only by paying a tax, but an individual who disregards the tax can satisfy the
law only by obeying the Individual Mandate. And only in a world where the Individual Mandate
were truly non-binding could an individual disobey the Individual Mandate and forego the tax. But
under the NFIB majority’s construct, that is not the case. That is because logic demands that the
Individual Mandate was never—pardon the oxymoron—a non-binding law.
The remainder of the ACA proves that, too. As noted above, § 5000A(e), did and still does
exempt some individuals from the eliminated shared-responsibility payment but not the Individual
Mandate—“a distinction that would make no sense if the mandate were not a mandate.” Id. at 665
(joint dissent). What is more, Congress exempted, and continues to exempt, certain individuals
from the Individual Mandate itself. See 26 U.S.C. § 5000A(d)(1). Why would Congress exempt
individuals from a mandate that is not mandatory? To ask is to answer.
At least five Justices agreed the Individual Mandate reads more naturally as a command to
buy health insurance than as a tax,19 and those five Justices agreed the mandate could not pass

19

Justices Ginsburg, Breyer, Kagan, and Sotomayor seemingly took no position on this construction but
instead reasoned that the Individual Mandate was constitutional even it were construed as a command. See,
e.g., NFIB, 567 U.S. at 610 (Ginsburg, J., joined by Breyer, Kagan, and Sotomayor, JJ.) (“Requiring

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muster under the Interstate Commerce Clause. Given that the Individual Mandate no longer
“triggers a tax,” the Court finds the Individual Mandate now serves as a standalone command that
continues to be unconstitutional under the Interstate Commerce Clause.
* * *
The Court today finds the Individual Mandate is no longer fairly readable as an exercise of
Congress’s Tax Power and continues to be unsustainable under Congress’s Interstate Commerce
Power. The Court therefore finds the Individual Mandate, unmoored from a tax, is unconstitutional
and GRANTS Plaintiffs’ claim for declaratory relief as to Count I of the Amended Complaint.
C.

Severability

Since the Individual Mandate is unconstitutional, the next question is whether that
provision is severable from the rest of the ACA. The Plaintiffs and the Federal Defendants agree,
based on the text of 42 U.S.C. § 18091 and all the opinions in NFIB, that the guaranteed-issue and
community-rating provisions of the ACA are inseverable from the Individual Mandate. See Pls.’
Br. 30–35, ECF No. 40; Fed. Defs.’ Resp. 13–16, ECF No. 92; Pls.’ Reply 9, ECF No. 175. The
Plaintiffs, however, argue the Individual Mandate is inseverable from the entire ACA, pointing
again to § 18091 and NFIB. Pls.’ Br. 27–40, ECF No. 40. The Intervenor Defendants first argue
the Individual Mandate is severable from all provisions in the ACA. Intervenor Defs.’ Resp. 28–
33, ECF No. 91. But they also specifically urge that the guaranteed-issue and community-rating
provisions are severable from the Individual Mandate. Id. at 33–43.
Notably, the parties dispute which Congress’s intent controls—the 2010 Congress that
passed the ACA or the 2017 Congress that passed the TCJA. See Pls.’ Reply 14, ECF No. 175
(arguing the intent of the 2010 Congress controls); Intervenor Defs.’ Resp. 28–30, ECF No. 91

individuals to obtain insurance unquestionably regulates the interstate health-insurance and health-care
markets, both of them in existence well before the enactment of the ACA.”).

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(contending the intent of the 2017 Congress controls); Hr’g Tr. at 43–44. This is a bit of a red
herring because, applying the relevant standards, the Court finds both Congresses manifested the
same intent: The Individual Mandate is inseverable from the entire ACA.
Because the story begins with the 2010 Congress, the Court begins there as well, analyzing
both plain text and Supreme Court precedent. But first, a word about severability doctrine.
1.

Severability Doctrine

The doctrine of severability is rooted in the separation of powers. See Ayotte v. Planned
Parenthood of N. New Eng., 546 U.S. 320, 329–30 (2006); Regan v. Time, Inc., 468 U.S. 641,
652–53 (1984) (plurality opinion). The Supreme Court has therefore frequently severed
unconstitutional provisions from constitutional ones.20 This practice reflects a judicial duty to “try
to limit the solution to the problem.” Ayotte, 546 U.S. at 328. In other words, “a court should
refrain from invalidating more of the statute than is necessary.” Regan, 468 U.S. at 652.
Severability, however, is possible only where “an act of Congress contains unobjectionable
provisions separable from those found to be unconstitutional.” Id. (quoting El Paso & Ne. R. Co.
v. Gutierrez, 215 U.S. 87, 96 (1909)) (emphasis added). Were a court to overplay deference to
sever an inseverable statute, it would embrace the very evil the doctrine is designed to deter. See,
e.g., R.R. Ret. Bd. v. Alton R.R. Co., 295 U.S. 330, 362 (1935) (“[W]e cannot rewrite a statute and
give it an effect altogether different from that sought by the measure viewed as a whole.”). Put
bluntly, severing an inseverable statute “is legislative work beyond the power and function of the

20

See, e.g., Chadha, 462 U.S. at 931–35 (severing the legislative-veto provision from the remainder of the
Immigration and Nationality Act); Alaska Airlines, 480 U.S. at 684–97 (holding the legislative-veto
provision severable from the remainder of the Airline Deregulation Act of 1978); New York v. United States,
505 U.S. at 186–87 (holding the take provision severable from the remainder of the Low-Level Radioactive
Waste Policy Amendments Act of 1985); Buckley v. Valeo, 424 U.S. 1, 108–09 (1976) (holding campaign
expenditure limits severable from other provisions in the Federal Election Campaign Act of 1971).

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court.” Hill v. Wallace, 259 U.S. 44, 70 (1922). For that reason, the Supreme Court has also readily
held whole statutes unconstitutional due to an inseverable part.21
In light of these background principles, the test for severability is often stated as follows:
“Unless it is evident that the Legislature would not have enacted those provisions which are within
its power, independently of that which is not, the invalid part may be dropped if what is left is fully
operative as a law.”22 Alaska Airlines, 480 U.S. at 684. Even under this statement of the rule, “[t]he
inquiry into whether a statute is severable is essentially an inquiry into legislative intent.” Mille
Lacs, 526 U.S. at 191.23 It “requires judges to determine what Congress would have intended had
it known that part of its statute was unconstitutional.” Murphy, 138 S. Ct. at 1486–87 (Thomas, J.,
concurring). And consistent with the separation of powers, “enacted text is the best indicator of
intent.” Nixon v. United States, 506 U.S. 224, 232 (1993); cf. United States v. Maturino, 887 F.3d
716, 723 (5th Cir. 2018) (“Text is the alpha and the omega of the interpretive process.”).
So, a court’s severability analysis begins with a bread-and-butter exercise: parsing a
provision’s text and gleaning the ordinary meaning. See Murphy, 138 S. Ct. at 1486 (Thomas, J.,
concurring) (“Because courts cannot take a blue pencil to statutes, the severability doctrine must
be an exercise in statutory interpretation.”). If the text reflects Congress’s intent that an

See, e.g., Wallace, 259 U.S. at 70 (“Section 4 with its penalty to secure compliance with the regulations
of Boards of Trade is so interwoven with those regulations that they cannot be separated. None of them can
stand.”); Alton, 295 U.S. at 362 (“[W]e are confirmed by the petitioners’ argument that, as to some of the
features we hold unenforceable, it is ‘unthinkable’ and ‘impossible’ that the Congress would have created
the compulsory pension system without them. They so affect the dominant aim of the whole statute as to
carry it down with them.”). See also Minnesota v. Mille Lacs Band of Chippewa Indians, 526 U.S. 172, 191
(1999) (applying “the severability standard for statutes” to an Executive Order and holding “it is clear that
President Taylor intended the 1850 order to stand or fall as a whole”).
22
This statement of the rule represents something of a departure from the Supreme Court’s reasoning in
other decisions that there is a “presumption . . . of an intent that, unless the act operates as an entirety, it
shall be wholly ineffective.” Alton, 295 U.S. at 362 (citing Wallace, 259 U.S. at 70). But even as stated in
Alton, the crux of the inquiry is Congressional “intent.”
23
See Murphy v. Nat’l Collegiate Athletic Ass’n,, 138 S. Ct. 1461, 1485–87 (2018) (Thomas, J. concurring)
(discussing the problems with applying the modern severability doctrine as a remedy rather than an exercise
in statutory interpretation).
21

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unconstitutional provision not be severed—i.e., if “it is evident” Congress “would not have enacted
those provisions which are within its power, independently of that which is not,” Alaska Airlines,
480 U.S. at 684—the analysis ends. The provision is inseverable.
If the text does not reflect a clear legislative intent, however, the court must ask whether
the constitutional provisions, severed from the unconstitutional one, would remain “fully operative
as a law.” Free Enterprise, 561 U.S. at 509 (citing New York, 505 U.S. at 186; Alaska Airlines,
480 U.S. at 684). This is because “Congress could not have intended a constitutionally flawed
provision to be severed from the remainder of the statute if the balance of the legislation is
incapable of functioning independently.” Alaska Airlines, 480 U.S. at 684. Here too the touchstone
is intent.
Applying these standards, the Court finds the 2010 Congress expressed through plain text
an unambiguous intent that the Individual Mandate not be severed from the ACA. Supreme Court
precedent supports that finding. And in passing the TCJA through the reconciliation process, the
2017 Congress further entrenched the intent manifested by the 2010 Congress.
2.

The Intent of the 2010 Congress

The Intervenor Defendants contend that, “even if it were proper to consider the legislative
intent of the 2010 Congress that passed the minimum coverage provision in its original . . . form—
and to graft that intent onto a statutory amendment passed by a different Congress—that would
still be of no assistance to Plaintiffs.” Intervenor Defs.’ Resp. 30, ECF No. 91. They first briefly
point to the fact that several ACA provisions went into effect before the Individual Mandate. Id.
at 31–32. They then argue that, “[i]n light of the ACA’s numerous stand-alone provisions
addressing a vast array of diverse topics, it is not remotely ‘evident’ that Congress would want the
extraordinary disruption that would be caused by” a finding of inseverability. Id. at 32–33. Finally,

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the Intervenor Defendants devote ten pages to explaining why the Individual Mandate is
specifically severable from the guaranteed-issue and community-rating provisions, arguing
Congress intended to end discriminatory underwriting practices and that Congress’s findings are
irrelevant as they focused on an adverse-selection problem that no longer exists. Id. at 33–43.
a.

The ACA’s Plain Text

“[T]he touchstone for any decision about remedy is legislative intent, for a court cannot
use its remedial powers to circumvent the intent of the legislature.” Ayotte, 546 U.S. at 330 (citation
and quotation marks omitted). And if it is “the well-established rule that the plain language of the
enacted text is the best indicator of intent,” Nixon, 506 U.S. at 232, then the intent of the 2010
Congress could not be clearer. Congress codified its intent plainly in 42 U.S.C. § 18091,
“Requirement to maintain minimum essential coverage; findings.” Those findings are not mere
legislative history—they are enacted text that underwent the Constitution’s requirements of
bicameralism and presentment; agreed to by both houses of Congress and signed into law by
President Obama. See INS v. Chadha, 462 U.S. 919, 951 (1983) (noting “the Framers were acutely
conscious that the bicameral requirement and the Presentment Clauses would serve essential
constitutional functions” and “[i]t emerges clearly that the prescription for legislative action . . .
represents the Framers’ decision that the legislative power of the Federal government be exercised
in accord with a single, finely wrought and exhaustively considered, procedure”).
The findings state Congress intended to “significantly increas[e] healthcare coverage,”
“lower health insurance premiums,” ensure that “improved health insurance products that are
guaranteed issue,” and ensure that such health insurance products “do not exclude coverage of preexisting conditions.” 42 U.S.C. § 18091(2)(I). And Congress intended to achieve those goals in a

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very specific way. Congress knew that “[i]n the absence of the requirement,24 some individuals
would make an economic and financial decision to forego health insurance coverage and attempt
to self-insure, which increases financial risks to households and medical providers.” Id.
§ 18091(2)(A). So, Congress designed “[t]he requirement, together with the other provisions of
this Act” to “add millions of new customers to the health insurance market.” Id. § 18091(2)(C)
(emphasis added).
“The requirement,” Congress intended, would “achieve[] near-universal coverage”—a
major goal of the ACA—“by building upon and strengthening the private employer-based health
insurance system.” Id. § 18091(2)(D). Congress believed this would work because “[i]n
Massachusetts, a similar requirement ha[d] strengthened private employer-based coverage.” Id.
Moreover, Congress stated “the requirement, together with the other provisions of this Act, will
significantly reduce [the] economic cost” caused by uninsured individuals. Id. § 18091(2)(E).
Congress also intended the Individual Mandate to achieve another stated goal: “By significantly
reducing the number of the uninsured, the requirement, together with the other provisions of this
Act, will lower health insurance premiums.” Id. § 18091(2)(F). And “the requirement, together
with the other provisions of this Act,” Congress stated, “will improve financial security for
families.” Id. § 18091(2)(G).
If there were any lingering doubt Congress intended the Individual Mandate to be
inseverable, Congress removed it: “The requirement is an essential part of this larger regulation of
economic activity, and the absence of the requirement would undercut Federal regulation of the
health insurance market.” Id. § 18091(2)(H) (emphasis added). That is because, “if there were no
requirement, many individuals would wait to purchase health insurance until they needed care.”

24

In § 18091, the Individual Mandate is “referred to as the ‘requirement.’” Id. § 18091(1).

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Id. §18091(2)(I). And that would undermine the entire project. So, Congress intended “the
requirement, together with the other provisions of this Act,” to “minimize this adverse selection
and broaden the health insurance risk pool . . . which will lower health insurance premiums.” Id.
In other words, “[t]he requirement is essential to creating effective health insurance markets in
which improved health insurance products that are guaranteed issue and do not exclude coverage
of pre-existing conditions can be sold.” Id. (emphasis added).
Congress closed by adding that it intended “the requirement, together with the other
provisions,” to “significantly reduce administrative costs and lower health insurance premiums.”
Id. § 18091(2)(J). “The requirement is essential,” Congress reiterated, “to creating effective health
insurance markets that do not require underwriting and eliminate its associated administrative
costs.” Id. (emphasis added).
All told, Congress stated three separate times that the Individual Mandate is essential to
the ACA.25 That is once, twice, three times and plainly. It also stated the absence of the Individual
Mandate would “undercut” its “regulation of the health insurance market.” Thirteen different
times, Congress explained how the Individual Mandate stood as the keystone of the ACA. And six
times, Congress explained it was not just the Individual Mandate, but the Individual Mandate
“together with the other provisions” that allowed the ACA to function as Congress intended.
As the Supreme Court has repeatedly explained, “The best evidence of congressional intent
. . . is the statutory text that Congress enacted.”26 Marx v. Gen. Revenue Corp., 568 U.S. 371, 392

See supra note 13 (defining “essential” as, among other imperatives, “the essence of its kind,”
“indispensable,” and “[o]f the utmost importance; basic and necessary”) (citations omitted).
26
It is also instructive to consider what text Congress did not enact. In NFIB, the Supreme Court held that
the unconstitutional portions of the ACA’s Medicaid-expansion provisions could be severed from the
constitutional portions because Congress included a severability clause. See NFIB, 567 U.S. at 585–86
(Roberts, C.J., joined by Breyer and Kagan, JJ.); id. at 645 (Ginsburg, J., joined by Sotomayor, J.). In
severing the unconstitutional portions of the Medicaid-expansion provisions, the Supreme Court was
“follow[ing] Congress’s explicit textual instruction.” Id. at 586 (Roberts, C.J., joined by Breyer and Kagan,
25

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n.4 (2013) (citing West Virginia Univ. Hospitals, Inc. v. Casey, 499 U.S. 83, 98 (1991)).27 On the
issue of severability, the text of the ACA is unequivocal. Virtually every subsection of 42 U.S.C.
§ 18091 is teeming with Congress’s intent that the Individual Mandate be inseverable—because it
is essential—from the entire ACA—because it must work together with the other provisions.
On the unambiguous enacted text alone, the Court finds the Individual Mandate is
inseverable from the Act to which it is essential.28
b.

The Supreme Court’s ACA Decisions

While the ACA’s plain text alone justifies finding complete inseverability, this text-based
conclusion is further compelled by two separate Supreme Court decisions. All nine Justices to
address the issue, for example, agreed the Individual Mandate is inseverable from at least the pre-

JJ.); accord id. at 645 (Ginsburg, J., joined by Sotomayor, J.) (“I agree . . . that the Medicaid Act’s
severability clause determines the appropriate remedy.” (emphasis added)). The Supreme Court’s
Medicaid-severability analysis in NFIB thus supports this Court’s finding of Individual Mandate
inseverability in two ways. First, it confirms the Court must foremost look to Congress’s “explicit textual
instruction”—here, that the mandate is “essential” to the ACA. See 42 U.S.C. § 18091(2). Second, it
confirms Congress knew exactly how to signal its intent that an offending ACA provision be severed from
non-offending provisions—i.e., through enacted text. Cf. Gozlon-Peretz v. United States, 498 U.S. 395, 404
(1991) (“[W]here Congress includes particular language in one section of a statute but omits it in another
section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the
disparate inclusion or exclusion.” (quoting Russello v. United States, 464 U.S. 16, 23 (1983))). Yet
Congress sent up no such signals anywhere in the ACA with respect to the Individual Mandate. While not
dispositive, the lack of a severability clause covering the Individual Mandate is therefore not only consistent
with Congress’s repeated statements that the Individual Mandate is “essential” to the ACA but also
probative of Congress’s intent on its own terms.
27
See also EEOC v. Hernando Bank, Inc., 724 F.2d 1188, 1190 (5th Cir. 1984) (noting severability requires
“the court [to] inquire into whether Congress would have enacted the remainder of the statute in the absence
of the invalid provision” and reasoning “Congressional intent and purpose are best determined by an
analysis of the language of the statute in question”).
28
See Barnhart v. Sigmon Coal Co., 534 U.S. 438, 450 (2002) (reasoning statutory construction “ceases if
the statutory language is unambiguous and the statutory scheme is coherent and consistent” (cleaned up));
Connecticut Nat’l Bank v. Germain, 503 U.S. 249, 253–54 (1992) (“[I]n interpreting a statute a court should
always turn first to one, cardinal canon before all others. We have stated time and again that courts must
presume that a legislature says in a statute what it means and means in a statute what it says there . . . When
the words of a statute are unambiguous, then, this first canon is also the last: ‘judicial inquiry is complete.’”
(citing United States v. Ron Pair Enters., Inc., 489 U.S. 235, 241–42 (1989); Rubin v. United States, 449
U.S. 424, 430 (1981); United States v. Goldenberg, 168 U.S. 95, 102–03 (1897); and Oneale v. Thornton,
6 Cranch 53, 68 (1810))).

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existing-condition provisions.29 In NFIB, Chief Justice Roberts explained “Congress addressed the
problem of those who cannot obtain insurance coverage because of preexisting conditions or other
health issues . . . through the [ACA’s] ‘guaranteed-issue’ and ‘community-rating’ provisions.”
NFIB, 567 U.S. at 547–48 (Roberts, C.J.). But these “reforms sharply exacerbate [the] problem”
of healthy individuals foregoing health insurance. Id. at 548. “The reforms also threaten to impose
massive new costs on insurers,” the Chief Justice continued. Id. “The individual mandate was
Congress’s solution to these problems. By requiring that individuals purchase health insurance,
the mandate prevents cost shifting . . . [and] allows insurers to subsidize the costs of covering the
unhealthy individuals the reforms require them to accept.” Id. The Individual Mandate, the Chief
Justice thus explained, was the fulcrum on which the macro-level trade-offs pivoted.
Justice Ginsburg, joined by Justices Breyer, Kagan, and Sotomayor, agreed. She wrote:
“To make its chosen approach work . . . Congress had to use some new tools, including a
requirement that most individuals obtain private health insurance coverage.” Id. at 596 (Ginsburg,
J., joined by Breyer, Kagan, and Sotomayor, JJ.) (citing 26 U.S.C.§ 5000A) (emphasis added). She
elaborated: “To ensure that individuals with medical histories have access to affordable insurance,
Congress devised a three-part solution.” Id. at 597. Part one: guaranteed issue. Id. Part two:

29

The Federal Defendants here are consistent in taking the same position the previous administration took
during the NFIB litigation. See Br. for Resp. (Severability) at 45, NFIB, 567 U.S. 519 (No. 11-393)
(“Congress’s findings establish that the guaranteed-issue and community-rating provisions are inseverable
from the minimum coverage provision.”); id. at 11; see also Memorandum from Att’y Gen. Jefferson B.
Sessions III for Speaker Paul Ryan (June 7, 2018) (on file with the Dep’t of Justice) (noting that, “[i]n
NFIB, the Department previously argued that if Section 5000A(a) is unconstitutional, it is severable from
the ACA’s other provisions, except” the guaranteed-issue and community-rating provisions). Also notable
is that many of the Intervenor Defendants appeared as amici in NFIB and expressly declined to challenge
the Government’s concession that the community-rating and guaranteed-issue provisions were inseverable
from the Individual Mandate. See Br. for California et al. as Amici Curiae Supporting Respondents at 3 n.2,
NFIB, 567 U.S. 519 (No. 11-393) (“Respondents have conceded that the guaranteed issue and community
rating provisions that go into effect in 2014 should be invalidated if the Court concludes the minimum
coverage provision is unconstitutional. Amici States do not seek to challenge this concession.”). But that
was then, and this is now.

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community rating. Id. “But these two provisions, Congress comprehended, could not work
effectively unless individuals were given a powerful incentive to obtain insurance.” Id. (emphasis
added). Congress drew this lesson from the “disastrous” results of seven different states that
experienced “skyrocketing insurance premium costs, reductions in individuals with coverage, and
reductions in insurance products and providers” after “enact[ing] guaranteed-issue and
community-rating laws without requiring universal acquisition of insurance coverage.” Id. at 597–
98 (citations and quotation marks omitted).
Based on these lessons, “Congress comprehended that guaranteed-issue and communityrating laws alone will not work.” Id. at 598 (emphasis added). So, taking a cue from Massachusetts,
“Congress passed the minimum coverage provision as a key component of the ACA.” Id. at 599
(emphasis added). As did the Chief Justice, then, Justices Ginsburg, Breyer, Kagan, and Sotomayor
all understood what Congress understood: Without the Individual Mandate, the guaranteed-issue
and community-rating provisions “could not work.”
Make that nine Justices. As the joint dissent explained, “Insurance companies bear new
costs imposed by a collection of insurance regulations and taxes, including ‘guaranteed issue’ and
‘community rating’ requirements to give coverage regardless of the insured’s pre-existing
conditions.” Id. at 695 (joint dissent). But, keeping with the careful balance described by the other
Justices, “the insurers benefit from the new, healthy purchasers who are forced by the Individual
Mandate to buy the insurers’ product and from the new low-income Medicaid recipients who will
enroll in insurance companies’ Medicaid-funded managed care programs.” Id. at 695–96. Because
the Supreme Court held the ACA’s Medicaid Expansion could not be compulsory, see id. at 575–
85 (Roberts, C.J.), the Court’s finding today that the Individual Mandate is unconstitutional means

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both components the joint dissenters found to be inseverable from the pre-existing-conditions
provisions have now fallen.
In King v. Burwell, the Supreme Court reaffirmed many of the Justices’ severability
conclusions from NFIB. See 135 S. Ct. 2480, 2485–87 (2015). There, a six-Justice majority
recounted the history of several states attempting to expand health-insurance coverage without
implementing a mandate—an experiment that repeatedly “led to an economic ‘death spiral.’” Id.
at 2486. It then explained what all nine Justices in NFIB expressed: the guaranteed-issue provision,
the community-rating provision, and the Individual Mandate “are closely intertwined.” Id. at 2487.
And citing directly to Congress’s findings for support,30 the Supreme Court stated unequivocally:
“Congress found that the guaranteed issue and community rating requirements would not work
without the coverage requirement.” Id. (citing 42 U.S.C. § 18091(2)(I)) (emphasis added).
So, after King, the Government31 and all nine Justices had agreed that at least the
guaranteed-issue and community-rating provisions “could not work” without the Individual
Mandate.32 And all of them cited Congress’s findings in reaching that conclusion.
But the reasoning in the above opinions also confirms the Individual Mandate is
inseverable from the entirety of the ACA. See, e.g., King, 135 S. Ct. at 2486 (noting the successful
Massachusetts model used by Congress relied not only on a mandate but instead on “[t]he

As noted above, the Intervenor Defendants argue Congress’s ACA findings are no longer relevant to
severability because they addressed only how the ACA would be created, not how it would work. See
Intervenor Defs,’ Resp. 39–43, ECF No. 91. But the Supreme Court relied on those findings in 2015—after
the ACA was up and running—when deciding King. See 135 S. Ct. at 2487.
31
See Randy Barnett, Commandeering the People: Why the Individual Health Insurance Mandate Is
Unconstitutional, 5 N.Y.U. J.L. & LIBERTY 581, 614–21 (2010) (detailing the Government’s position
leading up to the NFIB litigation that the Individual Mandate was constitutional under the Interstate
Commerce Clause because it was “essential” to “a broader regulatory scheme”).
32
The Intervenor Defendants nearly agree. See Intervenor Defs,’ Resp. 37, ECF No. 91 (“To be sure,
Congress intended that the requirement to purchase health insurance, along with the community-rating and
guaranteed-issue provisions, would work together harmoniously to increase the number of insured
Americans and lower premiums.”).
30

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combination of these three reforms—insurance market regulations, a coverage mandate, and tax
credits” (emphasis added)). Notably, the joint dissent in NFIB was the only block of Justices to
fully consider severability because it was the only block of Justices to find the Individual Mandate
unconstitutional—which is now the controlling framework. And they explained why the Individual
Mandate was inseverable from the ACA as a whole. That explanation is consistent with the
reasoning offered in the Chief Justice’s opinion and in Justice Ginsburg’s opinion.
The joint dissent first detailed how “[t]he whole design of the [ACA] is to balance the costs
and benefits affecting each set of regulated parties.” Id. at 694; accord id. at 548 (Roberts, C.J.)
(noting “the mandate prevents cost shifting”); id. at 593 (Ginsburg, J., joined by Breyer, Kagan,
and Sotomayor, JJ.) (noting Congress wanted to address “[t]hose with health insurance
subsidiz[ing] the medical care of those without it”). To that end, “individuals are required to obtain
health insurance”; insurers must “sell them insurance regardless of . . . pre-existing conditions and
. . . comply with a host of other regulations . . . [and] pay new taxes”; “States are expected to
expand Medicaid eligibility and to create regulated marketplaces”; “[s]ome persons who cannot
afford insurance are provided it through the Medicaid Expansion, and others are aided in their
purchase of insurance through federal subsidies”; “[t]he Federal Government’s increased spending
is offset by new taxes and cuts in other federal expenditures”; and certain employers “must either
provide employees with adequate health benefits or pay a financial exaction.” Id. at 694–95 (joint
dissent) (citations omitted). “In short,” the joint dissent explained, “the Act attempts to achieve
near-universal health insurance coverage by spreading its costs to individuals, insurers,
governments, hospitals, and employers—while, at the same time, offsetting significant portions of
those costs with new benefits to each group.” Id. at 695; accord id. at 596 (Ginsburg, J., joined by
Breyer, Kagan, and Sotomayor, JJ.) (“A central aim of the ACA is to reduce the number of

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uninsured U.S. residents . . . The minimum coverage provision advances this objective.” (citing 42
U.S.C. §§ 18091(2)(C) and (I))). Congress, in other words, “did not intend to impose the inevitable
costs on any one industry or group of individuals.” Id. at 694 (joint dissent); accord id. at 548
(Roberts, C.J.) (noting “the mandate forces into the insurance risk pool more healthy individuals,
whose premiums on average will be higher than their health care expenses” which “allows insurers
to subsidize the costs of covering the unhealthy individuals the reforms require them to accept”).
As the joint dissent concluded, “the Act’s major provisions are interdependent.” Id. at 696
(joint dissent). Indeed, the ACA “refers to these interdependencies as ‘shared responsibility.’” Id.
(citations omitted). And the joint dissent cited Congress’s findings to buttress its conclusion on the
Individual Mandate’s complete inseverability, noting that “[i]n at least six places, the Act describes
the Individual Mandate as working ‘together with the other provisions of this Act.’” Id. (citing 42
U.S.C. §§ 18091(2)(C), (E), (F), (G), (I), and (J)). The joint dissent further noted that the ACA
“calls the Individual Mandate ‘an essential part’ of federal regulation of health insurance and warns
that ‘the absence of the requirement would undercut Federal regulation of the health insurance
market.’” Id. (citing 42 U.S.C. § 18091(2)(H)).
“In sum, Congress passed the minimum coverage provision as a key component of the
ACA.” Id. at 599 (Ginsburg, J., joined by Breyer, Kagan, and Sotomayor, JJ.) (emphasis added);
accord id. at 539 (majority) (“This case concerns constitutional challenges to two key provisions,
commonly referred to as the individual mandate and the Medicaid expansion.” (emphasis added)).
Not a key component of the guaranteed-issue and community-rating provisions, but of the ACA.
The Supreme Court’s only reasoning on the topic thus supports what the text says: The Individual
Mandate is essential to the ACA.

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The Individual Mandate is Inseverable from the Entire ACA

The ACA’s text and the Supreme Court’s decisions in NFIB and King thus make clear the
Individual Mandate is inseverable from the ACA. As Justice Ginsburg explained, “Congress could
have taken over the health-insurance market by establishing a tax-and-spend federal program like
Social Security.” Id. at 595 (Ginsburg, J., joined by Breyer, Kagan, and Sotomayor, JJ.). But it did
not. “Instead of going this route, Congress enacted the ACA . . . To make its chosen approach
work, however, Congress had to use . . . a requirement that most individuals obtain private health
insurance coverage.” Id. (citing 26 U.S.C.§ 5000A). That requirement—the Individual Mandate—
was essential to the ACA’s architecture. Congress intended it to place the Act’s myriad parts in
perfect tension. Without it, Congress and the Supreme Court have stated, that architectural design
fails. “Without a mandate, premiums would skyrocket. The guaranteed issue and community rating
provisions, in the absence of the individual mandate, would create an unsustainable death spiral of
costs, thus crippling the entire law.” BLACKMAN, supra note 3, at 147; accord NFIB, 567 U.S. at
597 (Ginsburg, J., joined by Breyer, Kagan, and Sotomayor, JJ.) (noting the mandate was essential
to staving off “skyrocketing insurance premium costs”). Congress simply never intended failure.
Yet the parties focus on particular provisions. It is like watching a slow game of Jenga,
each party poking at a different provision to see if the ACA falls. Meanwhile, Congress was
explicit: The Individual Mandate is essential to the ACA, and that essentiality requires the mandate
to work together with the Act’s other provisions. See 42 U.S.C. § 18091. If the “other provisions”
were severed and preserved, they would no longer be working together with the mandate and
therefore no longer working as Congress intended. On that basis alone, the Court must find the
Individual Mandate inseverable from the ACA. To find otherwise would be to introduce an entirely
new regulatory scheme never intended by Congress or signed by the President. And the Court

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“cannot rewrite a statute and give it an effect altogether different from that sought by the measure
viewed as a whole.” Murphy, 138 S. Ct. at 1482 (quoting Alton, 295 U.S. at 362).
Even if the Court preferred to ignore the clear text of § 18091 and parse the ACA’s
provisions one by one, the text- and precedent-based conclusion would only be reinforced:
Upholding the ACA in the absence of the Individual Mandate would change the “effect” of the
ACA “as a whole.” See Alton, 295 U.S. at 362. For example, the Individual Mandate reduces the
financial risk forced upon insurance companies and their customers by the ACA’s major
regulations and taxes. See 42 U.S.C. §§ 18091(2)(C), (I). If the regulations and taxes were severed
from the Individual Mandate, insurance companies would face billions of dollars in ACA-imposed
regulatory and tax costs without the benefit of an expanded risk pool and customer base—a choice
no Congress made and one contrary to the text. See NFIB, 567 U.S. at 698 (joint dissent); 42 U.S.C.
§ 18091(2)(C) and (I). Similarly, the ACA “reduce[d] payments by the Federal Government to
hospitals by more than $200 billion over 10 years.” NFIB, 567 U.S. at 699 (joint dissent). Without
the Individual Mandate (or forced Medicaid expansion), hospitals would encounter massive losses
due to providing uncompensated care. See BLACKMAN, supra note 3, at 2–4 (discussing the freerider and cost-shifting problems in healthcare). This would, as Plaintiffs argue, “distort the ACA’s
design of ‘shared responsibility.’” Pls.’ Br. 36, ECF No. 40 (citing NFIB, 567 U.S. at 699 (joint
dissent)).
The story is the same with respect to the ACA’s other major provisions, too. The ACA
allocates billions of dollars in subsidies to help individuals purchase a government-designed
health-insurance product on exchanges established by the States (or the federal government). See,
e.g., 26 U.S.C. § 36B; 42 U.S.C. § 18071. But if the Individual Mandate falls, and especially if the
pre-existing-condition provisions fall, upholding the subsidies and exchanges would transform the

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ACA into a law that subsidizes the kinds of discriminatory products Congress sought to abolish
at, presumably, the re-inflated prices it sought to suppress. Cf. Williams v. Standard Oil Co. of
Louisiana, 278 U.S. 235, 244 (1929), overruled in part on other grounds by Olsen v. Nebraska ex
rel. W. Reference & Bond Ass’n, 313 U.S. 236 (1941) (“The taxes imposed by section 10 are solely
for the purpose of defraying the expenses of the division of motors and motor fuels, and since the
functions of that division practically come to an end with the failure of the price-fixing features of
the law, it is unreasonable to suppose that the Legislature would be willing to authorize the
collection of a fund for a use which no longer exists.”).
Nor did Congress ever contemplate, never mind intend, a duty on employers, see 26 U.S.C.
§ 4980H, to cover the “skyrocketing insurance premium costs” of their employees that would
inevitably result from removing “a key component of the ACA.” (Ginsburg, J., joined by Breyer,
Kagan, and Sotomayor, JJ.). And the Medicaid-expansion provisions were designed to serve and
assist fulfillment of the Individual Mandate and offset reduced hospital reimbursements by aiding
“low-income individuals who are simply not able to obtain insurance.” Id. at 685 (joint dissent).
The result is no different with respect to the ACA’s minor provisions. For example, the
Intervenor Defendants assert that, “[i]n addition to protecting consumers with preexisting medical
conditions, Congress also enacted the guaranteed-issue and community-rating provisions to reduce
administrative costs and lower premiums.” Intervenor Defs.’ Resp. 35, ECF No. 91; see also id. at
34 (“Congress independently sought to end discriminatory underwriting practices and to lower
administrative costs.”). But Congress stated explicitly that the Individual Mandate “is essential to
creating effective health insurance markets that do not require underwriting and eliminate its
associated administrative costs.” 42 U.S.C. § 18091(2)(J) (emphasis added). At any rate, to the
extent most of the minor provisions “are mere adjuncts of the” now-unconstitutional Individual

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Mandate and nonmandatory Medicaid expansion, “or mere aids to their effective execution,” if the
Individual Mandate “be stricken down as invalid” then “the existence of the [minor provisions]
becomes without object.” Williams, 278 U.S. at 243.
Perhaps it is impossible to know which minor provisions Congress would have passed
absent the Individual Mandate. But the level of legislative guesswork entailed in reconstructing
the ACA’s innumerable trade-offs without the one feature Congress called “essential” is plainly
beyond the judicial power. See Alton, 295 U.S. at 362; Wallace, 259 U.S. at 70. And there is every
reason to believe Congress would not have enacted the ACA absent the Individual Mandate—
given the Act’s text as interpreted by the Supreme Court—but “no reason to believe that Congress
would have enacted [the minor provisions] independently.” NFIB, 567 U.S. at 705 (joint dissent).
In sum, the Individual Mandate “is so interwoven with [the ACA’s] regulations that they
cannot be separated. None of them can stand.” Wallace, 259 U.S. at 70.
* **
Neither the ACA’s text nor Supreme Court precedent leave any doubt. The 2010 Congress
never intended the ACA “to impose massive new costs on insurers” while allowing widespread
“cost shifting.” Id. at 548 (Roberts, C.J.). It never intended the ACA to go on without the signature
provision that everyone knew would “make its chosen approach work”—the signature provision
Congress “had to use.” Id. at 596 (Ginsburg, J., joined by Breyer, Kagan, and Sotomayor, JJ.). It
never agreed to a law that would lead to “disastrous” results like “skyrocketing insurance premium
costs, reductions in individuals with coverage, and reductions in insurance products and
providers.” Id. at 597–98 (citations and quotation marks omitted). And Congress never intended
to excise “a key component of the ACA.” Id. at 599.

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Historical context confirms Congress would not have enacted the ACA absent the
constitutional infirmities.33 See Free Enterprise, 561 U.S. at 509 (considering “the statute’s text”
and “historical context”). Every state’s attempt to do so failed miserably. See King, 135 S. Ct. at
2485–86. To leave the ACA in place without the Individual Mandate—or, even more drastically,
to leave it in place without either the Individual Mandate or the provisions covering pre-existing
conditions as the Federal Defendants suggest—would thus be wildly inconsistent “with Congress’
basic objectives in enacting the statute.” Booker, 543 U.S. at 259 (citing Regan, 468 U.S. at 653).
This tells the Court all it needs to know. Based on unambiguous text, Supreme Court
guidance, and historical context, the Court finds “it is evident that the Legislature would not have
enacted” the ACA “independently of” the Individual Mandate. Alaska Airlines, 480 U.S. at 684.
That is to say, Congress “would not have enacted those provisions which are within its power,
independently of [those] which [are] not.” Murphy, 138 S. Ct. at 1482 (quoting Alaska Airlines,
480 U.S. at 684). “Though this inquiry can sometimes be elusive, the answer here seems clear.”
Free Enterprise, 561 U.S. at 509 (cleaned up). Congress intended the Individual Mandate to serve
as the keystone, the linchpin of the ACA. That is a conclusion the Court can reach without
marching through every nook and cranny of the ACA’s 900-plus pages because Congress plainly
told the public when it wrote the ACA that “[t]he minimum coverage provision is . . . an ‘essential
par[t] of a larger regulation of economic activity’” and “without the provision, ‘the regulatory
scheme [w]ould be undercut.’” NFIB, 567 U.S. at 619 (Ginsburg, J., joined by Breyer, Kagan, and
Sotomayor, JJ.) (quoting but not citing Congress’s findings in 42 U.S.C. § 18091).
In the face of overwhelming textual and Supreme Court clarity, the Court finds “it is
‘unthinkable’ and ‘impossible’ that the Congress would have created the” ACA’s delicately
See, id. (“In coupling the minimum coverage provision with guaranteed-issue and community-rating
prescriptions, Congress followed Massachusetts’ lead.”).
33

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balanced regulatory scheme without the Individual Mandate. Alton, 295 U.S. at 362. The
Individual Mandate “so affect[s] the dominant aim of the whole statute as to carry it down with”
it. Id. To find otherwise would “rewrite [the ACA] and give it an effect altogether different from
that sought by the measure viewed as a whole.” Alton, 295 U.S. at 362. Employing such a strained
view of severance would be tantamount to “legislative work beyond the power and function of the
court.” Wallace, 259 U.S. at 70.
3.

The Intent of the 2017 Congress

Looking for any severability-related intent in the 2017 Congress is a fool’s errand because
the 2017 “Congress did not repeal any part of the ACA, including the shared responsibility
payment. In fact, it could not do so through the budget reconciliation procedures that it used.” Hr’g
Tr. at 36:7–10 (Intervenor Defendants); accord id. at 98:1–3 (Federal Defendants) (“The only thing
that we know for sure about Congress’ intent in 2017 . . . is that Congress wanted to pass a tax
cut.”). So, asking what the 2017 Congress intended with respect to the ACA qua the ACA is
unhelpful. There is no answer.
But suppose it is true the intent of the TCJA-enacting Congress of 2017 controls
severability rather than the intent of the ACA-enacting Congress of 2010. The Intervenor
Defendants argue the Court should infer that, by eliminating the shared-responsibility payment
while leaving the rest of the ACA intact, the 2017 Congress intended to preserve the balance of
the ACA. Intervenor Defs.’ Resp. 28–30, ECF No. 91; Hr’g Tr. at 42:10–11 (“The 2017 Congress
that amended § 5000A(c) deliberately left the rest of the ACA intact . . . .”).
But consider what Congress did not do in 2017—or ever. First and foremost, it did not
repeal the Individual Mandate. As the Court described in great detail, see supra Part IV.B.1.a, the
shared-responsibility payment is not the Individual Mandate. That matters. The Individual

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Mandate, not the shared-responsibility payment, is “essential” to the ACA. See 42 U.S.C. § 18091.
And the 2017 Congress did not repeal it. Accord Hr’g Tr. at 42:10–11 (Intervenor Defendants)
(“The 2017 Congress that amended § 5000A(c) deliberately left the rest of the ACA intact . . . .”).
So, at best, searching the 2017 Congress’s legislation for severability-related intent would create
an inference that the 2017 Congress, like the 2010 Congress, intended to preserve the Individual
Mandate because the 2017 Congress, like the 2010 Congress, knew that provision is essential to
the ACA. Intervenor Defendants’ argument that the 2017 Congress manifested an intent of
severability is therefore unavailing. Indeed, one would have to take the incorrect view that the
shared-responsibility payment is the Individual Mandate to accept the argument that the 2017
Congress, by eliminating the payment, intended to sever the Individual Mandate.
Secondly, the 2017 Congress did not repeal 42 U.S.C. § 18091, which every Supreme Court
Justice to review the ACA cited and which definitively establishes Congress’s intent that the
Individual Mandate be “an essential part of” its “regulation of the health insurance market.” 42
U.S.C. § 18091(2)(H); see generally supra Part IV.C.1.a. Finally, given the 2017 Congress
repealed neither the Individual Mandate nor § 18091, the 2017 Congress did nothing to repudiate
or otherwise supersede the Supreme Court’s NFIB and King opinions detailing the Individual
Mandate’s essentiality to the ACA.
The Intervenor Defendants thus ask the Court to infer a severability-related intent from a
Congress that did not and could not amend the ACA and that therefore did not and could not repeal
the Individual Mandate or the enacted text stating the mandate is “essential” to the whole scheme
when working “together with the other provisions.” They then ask the Court “to graft that intent”
onto the Congress that did pass the ACA, that did employ the Individual Mandate as the keystone,
and that did memorialize its intent through enacted text stating the Individual Mandate is essential.

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The Court finds the 2017 Congress had no intent with respect to the Individual Mandate’s
severability. But even if it did, the Court would find that “here we know exactly what Congress
intended based on what Congress actually did.” Hr’g Tr. at 42:8–10 (Intervenor Defendants). If
the 2017 Congress had any relevant intent, it was to preserve § 18091 and to preserve the Individual
Mandate, which the 2017 Congress must have agreed was essential to the ACA.
4.

Severability Conclusion34

In some ways, the question before the Court involves the intent of both the 2010 and 2017
Congresses. The former enacted the ACA. The latter sawed off the last leg it stood on. But however
one slices it, the following is clear: The 2010 Congress memorialized that it knew the Individual

34

The Intervenor Defendants also argue the Court should forego a traditional severability analysis and
instead remedy the harm to Plaintiffs by striking TCJA § 11081. Intervenor Defs.’ Resp. 22–24, ECF No.
91. For this, the Intervenor Defendants rely on Frost v. Corporation Commission of Oklahoma, a case in
which the Supreme Court held that “when a valid statute is amended and the amendment is unconstitutional,
the amendment ‘is a nullity and, therefore, powerless to work any change in the existing statute . . . .’” 278
U.S. 515, 525–27 (1928) (citation omitted) (emphasis added). Frost is inapposite. There, the Appellant
challenged the amendment, not the original statute, on equal-protection grounds and won. Id. at 517, 523–
24. The Supreme Court held the amendment to be “a nullity,” not because it rendered the original statute
unconstitutional but because it was unconstitutional itself. Id. at 526 (reasoning that because “the
amendment is void for unconstitutionality, it cannot be given” “its practical effect [which] would be to
repeal by implication the requirement of the existing statute in respect of public necessity” (emphasis
added)). The original statute therefore was permitted to “stand as the only valid expression of legislative
intent.” Id. at 527. But here, the Plaintiffs challenge the original statute, not the TCJA. Nor would it make
sense for them to challenge the TCJA—Congress has plenary power to lay and repeal taxes, as the
Intervenor Defendants argue. See, e.g., Intervener Defs.’ Resp. 19, ECF No. 91 (“In light of the broad taxing
power afforded by the Constitution, it is not unusual for Congress to enact taxes with delayed effective
dates . . . .”); accord Pls.’ Reply 13–14, ECF No. 175 (citing Brushaber v. Union Pac. R.R. Co., 240 U.S.
1, 12 (1916)); Hr’g Tr. at 72:23–24. Plus, the TCJA repeals nothing “by implication.” And at any rate, Frost
is not a license for courts to reach out and hold unchallenged constitutional acts unconstitutional as a
remedial safety valve. See Josh Blackman, Undone: the New Constitutional Challenge to Obamacare, 23
TEX. REV. L. & POL. (forthcoming 2018) (manuscript at 35–36) (“Frost’s bite is not available in Texas v.
United States for a simple reason. Because of how Texas structured its challenge, the district court is
presented with a narrower menu of options with respect to severability. No one—not the Plaintiffs, not the
Intervenors—has challenged the constitutionality of the TCJA. Federal courts lack a roving license to flip
through the U.S. Code with a red pencil to void one statute in order to save another. Invalidating the 2017
tax cut is simply not an option in the Texas litigation because it has not been challenged.” (citations
omitted)). To the extent Frost is relevant here, it stands only for the proposition that a court should hold
unconstitutional acts invalid and constitutional ones valid. The unconstitutional act in this case is the
Individual Mandate, not the TCJA.

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Mandate was the ACA keystone, see 42 U.S.C. § 18091; the Supreme Court stated repeatedly that
it knew Congress knew that, see, e.g., NFIB, 567 U.S. at 547 (Roberts, C.J.) (citing 42 U.S.C.
§ 18091(2)(F)); King, 135 S. Ct. at 2487 (citing 42 U.S.C. § 18091(2)(I)); and knowing the
Supreme Court knew what the 2010 Congress had known, the 2017 Congress did not repeal the
Individual Mandate and did not repeal § 18091.
“The principle of separation of powers was not simply an abstract generalization in the
minds of the Framers: it was woven into the documents that they drafted in Philadelphia in the
summer of 1787.” Chadha, 462 U.S. at 946 (quoting Buckley, 424 U.S. at 124). For that reason,
the Court respects Congress’s plain language. And here, “[t]he language is plain. There is no room
for construction, unless it be as to the effect of the Constitution.” In re Trade-Mark Cases, 100
U.S. 82, 99 (1879). “To limit this statute in the manner now asked for,” therefore “would be to
make a new law, not to enforce an old one. This is no part of [the Court’s] duty.” Id.
The Court finds the Individual Mandate “is essential to” and inseverable from “the other
provisions of” the ACA.
V.

CONCLUSION
For the reasons stated above, the Court grants Plaintiffs partial summary judgment and

declares the Individual Mandate, 26 U.S.C. § 5000A(a), UNCONSTITUTIONAL. Further, the
Court declares the remaining provisions of the ACA, Pub. L. 111-148, are INSEVERABLE and
therefore INVALID. The Court GRANTS Plaintiffs’ claim for declaratory relief in Count I of the
Amended Complaint.
SO ORDERED on this 14th day of December, 2018.
_____________________________________
Reed O’Connor
UNITED STATES DISTRICT JUDGE

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