A federal court recently scuttled Judicial Watch’s lawsuit on behalf of Kawa Orthodontics’ challenge of the Obama administration’s delay of the so-called “employer mandate” provision of the Affordable Care Act (ACA), also known as Obamacare, but we’re not going away that easily.
This is too important. We immediately filed a notice of appeal, and we will take this as far as we need to go until justice is served.
The U.S. Department of Treasury, Secretary of Treasury Jack Lew, the Internal Revenue Service, and IRS Director Daniel Werfel are named as defendants in the lawsuit, originally filed on October 1, 2013, in the U.S. District Court for the Southern District of Florida.
Here’s the crux of our argument: President Obama’s unilateral postponement of the employer mandate from January 1, 2014 to 2015 violated the Administrative Procedures Act (APA), was “arbitrary and capricious,” and caused Kawa Orthodontics to lose “the value of its substantial efforts” in preparing for the mandate as originally scheduled.
And what did the court say in response to these arguments with its dismissal? Absolutely nothing. On January 13, 2014, U.S. District Court Judge William P. Dimitrouleas, in a brief opinion, dismissed the lawsuit on “standing” grounds.
Before we get to the background of this lawsuit and the constitutional issues at play, let me address this issue of “standing.” For Kawa Orthodontics to meet the “standing” threshold to bring this lawsuit, it must meet three basic requirements under Article III of the Constitution: (1) “injury in fact,” (2) “a causal connection between the injury in fact and the challenged action of the defendant,” and (3) the injury will be redressed by “a favorable court decision.”
Does Kawa Orthodontics meet these requirements? Judge for yourself.
According to the Judicial Watch legal filings, the unlawful delay of the “employer mandate” has caused Kawa Orthodontics “to lose the substantial time and resources it expended and the significant opportunity costs it incurred in anticipation of” the controversial provision now scheduled to take effect beginning next year.
The company estimates that it could have generated approximately $1.2 million in new revenue for its practice had it not spent approximately 100 hours determining how best to comply with the “employer mandate.”
So that takes care of “injury in fact” and “a causal connection.” With respect to redressing the injury, our lawsuit seeks the original reinstatement of the original date for the mandate. If granted, Kawa Orthodontics’ considerable expenditures to prepare for the mandate will not have been wasted. The offense will have been remedied.
So we are confident that Kawa Orthodontics has standing. Now, we shall review how this wound up in court.
The Obamacare employer mandate, which subjects certain large employers to tax penalties if they do not offer “affordable, minimum essential” health insurance coverage to their employees, is considered “a major pillar of the ACA.” By law, the mandate was required to take effect January 1, 2014. On July 2, 2013, however, the Obama administration postponed the mandate without the approval of Congress.
And this was not the first time.
The Obama administration has now unilaterally rewritten the Obamacare law at least 16 times by executive fiat. The changes include such major overhauls as the congressional opt-out, eviscerating the individual mandate, and delaying the employer mandate. The latest rewrite occurred on December 20, 2013, when the administration allowed hundreds of thousands of people who had lost their insurance due to Obamacare to sign up for bare bones “catastrophic” plans that are expressly prohibited by the Obamacare law.
It’s very clear why President Obama has resorted to these extra-constitutional means to avoid the unpleasant consequences of Obamacare. He’s a politician, and he knows that his unpopular healthcare overhaul will lead to disastrous political results he’d rather delay as long as possible. The problem is the Obama administration is operating outside the law, and businesses are suffering.
The Agency for Healthcare Research and Quality of the U.S. Department of Health and Human Services reported that the number of employers in the United States having more than 50 employees is as high as 1.6 million, all of whom could be affected, as well.
Clearly, the numbers can begin to add up. And on this point, a July 30, 2013, letter from the Director of the Congressional Budget Office to the Chairman of the Committee on the Budget states that the delay of the “employer mandate” will result in an estimated loss of $10 billion (that’s “billion” with a “b”!) in penalty payments by employers. Additionally, approximately 1 million fewer people are expected to be enrolled in employment-based coverage in 2014 than the number previously projected, primarily because of the one-year delay in penalties on employers.
In a December 2013 Motion for Summary Judgment, Judicial Watch attorneys, arguing on behalf of Kawa Orthodontics, stated:
This lawsuit raises a single, straightforward legal question: does the Executive Branch have authority to ignore a clear, congressionally-imposed deadline affecting hundreds of thousands of employers and millions of employees across the country on a matter of unquestionable importance? … The answer to the question posed by this lawsuit is quite plainly “No.” Defendants’ delay of the mandate violates the Administrative Procedures Act (“APA”). It exceeds Defendants’ statutory jurisdiction, authority, and limitations, is contrary to constitutional right, power, or privilege, and is otherwise not in accordance with law.
The court did not get to these issues. Kawa Orthodontics continues its challenge to Obama’s rewrite of Obamacare because the court is so plainly wrong. If President Obama truly wants to fix Obamacare, he will have to go through Congress. He may “have a pen,” but he ought to use it to sign a repeal of his law passed by Congress.
Dr. Kawa, meanwhile, puts the lawsuit in perspective:
With over 300 million people and 16 illegal changes there’s only been one lawsuit with one plaintiff that has been filed and continues to be adjudicated. The administration doesn’t want to defend its actions on the merits and is trying to prevent us from having our day in court. The administration presented no credible legal precedent for Obama’s delay of the employer mandate. This single lawsuit could do more to rein in Obama’s lawless actions than anything going in Congress right now. We expect the courts will ultimately rule in our favor and remind this president that he is not above the law.
Judicial Watch President Tom Fitton is author of the NY Times best-seller “The Corruption Chronicles” and executive producer of the documentary “District of Corruption.”
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