On December 18, 2019, the 5^th Circuit Court of Appeals entered its decision in State of Texas, et al. v. United States of America, Case No. 19-10011, which was on appeal from the District Court for the Northern District of Texas. As framed by the 5^th Circuit, the narrow questions before the Court were whether: (1) there was “a live case or controversy” “even though the federal defendants have conceded many aspects of the dispute”; (2) the states and the U.S. House of Representatives had standing to appeal; (3) the plaintiffs have standing; (4) the individual mandate is unconstitutional; and (5) if unconstitutional, the Act is inseverable from the individual mandate?

The 5^th Circuit answered the first four questions “yes,” while remanding the final question back to the District Court for “additional analysis.”

An interesting wrinkle to this case was the federal defendants’ shifting position from seeking to uphold the ACA to ultimately agreeing with the plaintiffs that the individual mandate is unconstitutional and inseverable from the rest of the ACA. The federal defendants originally asserted in the District Court that only a few provisions of the ACA were inseverable from the individual mandate. Then, for the first time on appeal, the federal defendants contended that all of the ACA is inseverable, but that the 5^th Circuit should not enjoin enforcement of the entire ACA. Then, during the pendency of the appeal, the federal defendants shifted their argument again to state that the District Court’s judgment should be affirmed only as to the provisions necessary to remedy plaintiff’s injuries (without stating which provisions those are or how that would work).

Despite the plaintiffs’ and defendants’ apparent alignment on the issues (that the individual mandate is unconstitutional and inseverable from the rest of the ACA), the 5^th Circuit held that a case or controversy existed because (1) the federal government has “made no indication that it will begin dismantling any part of the ACA in the absence of a final court order” and (2) “stand[s] to suffer financially if the district court’s judgment is affirmed.” The position taken by the federal defendants ultimately did not matter to the 5^th Circuit.

While the ACA’s final fate remains uncertain, the District Court’s position is predictable. While the 5^th Circuit remanded the severability issue, the District Court has already outlined its thinking and likely decision upon remand. In its prior decision holding that the individual mandate is unconstitutional, the District Court found that the individual mandate could not be severed from any other part of the ACA. Unless it has a change of heart, the District Court will hold that the ACA in its entirety is unconstitutional because the individual mandate is not severable from the rest of the ACA.

These are the big questions facing the fate of the ACA:

• Will the District Court stay its judgment pending further appeal?
• Will the 5^th Circuit affirm the District Court’s next decision?
• Will the ACA go before the Supreme Court again?

Despite entering the third year of litigation in this case, we are unlikely to have all of these questions answered in 2020.