Appellate court raises new threat to Obamacare

Fifth Circuit Court of Appeals

The 5th U.S. Circuit Court of Appeals asked both sides in a case about the legality of Obamacare to present additional legal arguments. | Jonathan Bachman/AP Photo

A federal appeals court this afternoon questioned whether Democratic states and the House of Representatives have the right to appeal a court ruling that declared all of Obamacare unconstitutional.

In a surprise move that legal experts said added an unexpected threat to Obamacare, the 5th U.S. Circuit Court of Appeals asked who — if anyone — has standing to appeal the December lower court ruling after the Trump administration recently sided with red states who brought the lawsuit.

Story Continued Below

The request from one of the most conservative circuit courts in the country suggests that the judges who will hear the could toss out the appeal on procedural grounds. In that scenario, the lower court ruling would stand, leaving in doubt the future of the expansive 2010 health care law.

The implications of such a decision for the future of the Affordable Care Act are difficult to parse without more information, legal experts said. But most suggested that it wouldn’t bode well for supporters of Obamacare.

“The odds that the Fifth Circuit does something nasty to the health-reform law have gone up,” Nicholas Bagley, a professor at the University of Michigan Law School who has followed the case closely, wrote on Twitter.

The lawsuit was brought by more than a dozen GOP-led states who claim Obamacare was invalidated by Congress’s decision to eliminate the individual mandate penalty in its 2017 tax cut. A group of Democratic-led states and the Democratic-led House are defending Obamacare in court.

The 5th Circuit, which is scheduled to hear oral arguments on the lawsuit in two weeks, questioned whether the Democrats had standing to defend the law after the Trump administration made a significant shift in legal strategy. The Trump administration initially only supported part of the lawsuit brought by more than a dozen GOP-led states, requesting that the courts strike just the law’s insurance protections, including those for people with preexisting conditions. But in an expansion of the legal fight in March, the Justice Department backed the lower court ruling against the entire ACA.

Parties in the case were asked to file additional briefs addressing whether the administration’s legal shift “mooted the controversy and no other defendant has standing to appeal.” The parties have seven days to file the briefs, and the court said they should be prepared to address the standing questions during oral arguments, scheduled for July 9 in New Orleans.

The court has not yet said which three judges will hear the case. Eleven of the 16 active judges on the 5th Circuit are Republican appointees, including five named to the bench by President Donald Trump.

Katie Keith, a professor at Georgetown Law who has written extensively about ACA legal issues, said the optimistic interpretation for ACA supporters is that the appellate court is simply paying deference to a recent Supreme Court ruling addressing standing that’s cited in the new order.

“They want to cross their T’s and dot all their I’s so that it’s not grounds to somehow overturn whatever decision they’re going to make” Keith suggested.