Twist in Obamacare Supreme Court case: Weak plaintiffs

Liz Goodwin
Senior National Affairs Reporter
In this Tuesday, March 27, 2012 file photo, Amy Brighton from Medina, Ohio, who opposes health care reform, holds a sign in front of the Supreme Court in Washington, DC. (Charles Dharapak/AP Photo)

New revelations about the four plaintiffs fighting President Barack Obama’s health care law may dramatically shift the course of the case Wednesday, when the Supreme Court will hear both sides present their arguments for the first time.

In recent weeks, media reports have raised questions about whether the four men and women from Virginia who were recruited by a libertarian think tank to challenge the law have the right to do so. The plaintiffs’ shaky footing could prove a mark against them on Wednesday — if any of the justices decide to pursue it.

Petitioners must show they are suffering direct harm from a law in order to sue, which is referred to as standing. In this case, all four plaintiffs said the federal subsidies available to them from Obamacare pushed them over the law’s income threshold and forced them to buy health insurance or pay a penalty. They want those subsidies struck down, based on their literal interpretation of the Affordable Care Act, which suggests tax credits should have gone only to people who live in states that set up their own health care exchanges.

But two of the plaintiffs, David King and Douglas Hurst, are Vietnam veterans, which means it’s likely they qualify for insurance through the Department of Veterans Affairs and would thus not be required to buy insurance on the exchange, The Wall Street Journal recently reported. A third, Rose Luck, listed a motel as her permanent address in court papers and no longer lives there, raising questions about whether she’s in the same economic and geographic circumstances that she was when she decided to sue. And it’s possible that the fourth plaintiff, Brenda Levy, may actually qualify for the income exemption under the health care law, which would mean she does not have to purchase insurance and is not harmed by subsidies.

Luckily for the challengers, only one of the plaintiffs has to show that the federal tax credits in Virginia harmed him or her in order for the case to go forward. And so far the government has been entirely silent on the issue, suggesting the Justice Department would rather the justices side with them on the merits of the case than dismiss it on a standing issue.

Assuming at least one of the four has standing and the case can go forward, it’s still possible that the doubts and questions swirling around them will hurt their cause, according to some legal experts.

Justices are supposed to look purely at the facts at hand, weighing the legal questions dispassionately. But lawyers and interest groups have long hedged their bets by handpicking the very best, most sympathetic plaintiffs around — especially in big test cases.

“I think it absolutely does affect justices what the individual plaintiffs’ grievance looks like,” said Amanda Frost, a law professor at American University. “Very sympathetic plaintiffs tend to do better.”

Interest groups backing same-sex marriage, for example, have carefully selected the best possible couples to headline their cases. In April, the justices will hear a challenge brought by two Michigan nurses who are asking for the right to marry each other so they can adopt each other’s disabled children. In another sympathetic example, the landmark case in 2008 that struck down Washington, D.C.’s gun ban was brought by a police officer, Dick Heller, who wasn’t allowed to have a handgun in his home next to a housing project for protection.

From left, Chief Justice John G. Roberts and Supreme Court justices Anthony M. Kennedy, Ruth Bader Ginsburg, Stephen G. Breyer and Sonia Sotomayor stand before President Barack Obama's State Of The Union address on Tuesday, Jan. 20, 2015, on Capitol Hill in Washington. (Mandel Ngan, Pool/AP Photo)

That the four clients in the health care case were presumably the best the opposition could find might raise questions among the justices about whether tax credits to buy insurance are actually harming people.

But on the other hand, imperfect plaintiffs routinely win over the Supreme Court. The Westboro Baptist Church won its First Amendment right to protest soldiers’ funerals with offensive and hateful signs in 2011. In criminal justice cases, successful plaintiffs can be hardened criminals who nonetheless were denied due process by the system. And Norma McCorvey, the “Jane Roe” plaintiff in the case that legalized abortion in all 50 states, was a drug user who later said she had invented a story about a rape having led to her pregnancy, and then joined the antiabortion movement.

Some legal experts say plaintiffs’ stories and backgrounds matter even less in a case like this one, a dry legal dispute that boils down to how literally four words in the 906-page Affordable Care Act should be interpreted. Even though a decision against the government could dismantle one of the most politically charged pieces of legislation in modern history, the legal questions at hand are technical and lusterless.

“Who the plaintiffs are just doesn’t matter,” said Erwin Chemerinsky, dean of the University of California-Irvine law school. “It depends on the case — in some cases it matters enormously, but in this case the plaintiffs are just names to bring the challenge.”

The petitioners are also helped by the government’s total silence on the issue. Standing is not mentioned in a single brief in front of the court.

But the justices read the newspapers and are most likely aware of the standing controversy even though it’s conspicuously absent from the briefs.

“I would be surprised if somebody doesn’t raise it,” said David Levine, professor at UC Hastings College of Law.

“Roberts has always been very strict on standing,” said Chemerinsky, referring to Chief Justice John Roberts. “The conservatives tend to be stricter on standing than the liberals.”

If the justices decide the plaintiffs lacked standing, they would most likely dismiss the case as improvidently granted, which means King v. Burwell would be over for now, and opponents of the health care law would need to come up with a new challenge.

Such a finding would be a way for justices to dodge or at least delay wading into a politicized issue. Two years ago, the justices decided not to rule on California’s same-sex marriage ban on a standing issue, which allowed each state to continue to decide whether or not it wanted to allow same-sex marriage.

“When they want standing to be an impediment, they will use it, but when they don’t want it to get in their way, they find ways around it,” Levine said.

If the justices do find that the petitioners have the right to bring the case, then they will decide whether four words in the Affordable Care Act should be interpreted literally, resulting in millions of Americans losing their insurance.  

In the original bill, lawmakers wrote that poor and middle-class Americans could access tax credits to buy insurance through marketplaces “established by the state.” Most states didn’t form their own insurance marketplaces, so millions of Americans bought insurance on the federal exchange with the help of the tax credits. If the plaintiffs prevail, tax credits will no longer be available to people who live in at least 32 states without exchanges, and millions will no longer be able to afford their insurance.

The plaintiffs, who all live in Virginia, argue that if the IRS didn’t provide subsidies to people in their state, they wouldn’t have to buy health insurance under the law’s affordability exemption. With the subsidies, insurance fell to just below 8 percent of their incomes, requiring them to either buy insurance or pay a tax. That’s the injury that gives them standing to bring the case.

It’s unclear how many people who do not want to buy insurance fall into the specific and narrow income range where federal subsidies push them out of the affordability exemption they would otherwise qualify for. The number is most likely fairly small, which might help explain why the plaintiffs do not appear to be perfect test cases.

Sam Kazman, general counsel of the Competitive Enterprise Institute think tank, which is backing the challenge, said in a statement that standing is a “nonissue” for his clients. “At the Supreme Court stage, the government expressly conceded the standing issue,” Kazman said, referring to the Justice Department’s silence on the topic. Lower courts granted the plaintiffs standing.

Still, government lawyers no doubt are hoping the justices might take note of the shaky standing when they are considering the merits of the case.

“It’s remarkable to me that you couldn’t find people with more compelling stories than these four,” Levine said.