Lawsuit Seeks to Stop Obama's Mandate Delay: 'President Has No Right to Change Law'

Wednesday, 09 Oct 2013 12:05 PM

By Jennifer G. Hickey

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Despite a Supreme Court decision last year dismissing objections to Obamacare, legal challenges to the law continue to mount — the latest attempt a case charging that the president acted illegally when he delayed a provision requiring many employers to provide healthcare for their workers.

The lawsuit by a Florida dentist seeking to overturn the delay of the "employer mandate" joins other legal actions that also seek to undo all or part of the Affordable Care Act.

One case pending in federal court claims Obamacare violates the Constitution's Origination Clause, which states that all revenue measures are required to originate in the House.

Related: Dick Morris: Oklahoma Suit May End Obamacare

Legal actions have been filed over Obamacare's mandate that health plans cover contraception, even for employers who have conscientious objections such as some religious hospitals.

And several cases — including one filed by the Oklahoma attorney general — involve the issue of whether subsidies are permitted in federally run healthcare exchanges.

In the challenge to the delay over the "employer mandate," the plaintiff in the federal lawsuit says President Barack Obama "crossed the red line" by taking unilateral executive action to change the law.

"I feel that he crossed the red line when he chose to waive the employer mandate. He generally rules by executive fiat, and he feels that he's a Congress of one," Larry Kawa, a Florida dentist, told "The Steve Malzberg Show" on Newsmax TV.

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Kawa said the president doesn't have the authority "to pick and choose which parts of the law he's going to enforce for the sake of political convenience."

The lawsuit — filed by Judicial Watch on Kawa's behalf in the Southern District of Florida against the U.S. Treasury and the Internal Revenue Service — argues that the delay of the employer mandate "exceeded statutory authority, is arbitrary, capricious, and contrary to law, and is otherwise unlawful."

ObamaCare: You Can Win With The Facts

At issue is whether the administration — by deciding on July 2 to postpone for one year the mandate for businesses with more than 50 employees — violated the Administrative Procedure Act, a 1946 statute which governs how federal agencies can establish regulations and sets up a process for federal courts to review agency decisions.

Kawa believes the administration did violate the APA. Furthermore, Kawa tells Newsmax, under Article II of the Constitution, the president has the "duty to enforce those laws and not only is he not enforcing them, but he's changing them."

According to the lawsuit, Kawa "expended substantial time and resources, including money spent on legal fees and other costs, in preparation for the 'employer mandate' taking effect on Jan. 1, 2014" and that he "would not have expended resources and incurred these anticipatory costs in 2013" if he knew the mandate would take effect in 2015.

The suit seeks an injunction to prevent Obama from waiving the employer mandate and a "declaratory action, which is basically a judge, to memorialize the fact that this was an attempted illegal maneuver," Kawa said.

Thomas Miller, a senior fellow at the American Enterprise Institute, believes the Kawa case faces an uphill battle in the attempt to overturn the "employer mandate" delay, but that the case might nevertheless prove to be problematic for the administration.

"The federal courts usually provide a good bit of deference to executive branch regulators when it's a matter of relatively short delays for technical or practical factors. Whether a full one-year delay for enforcement of the employer mandate is arbitrary, capricious, or unlawful will be a matter of judgment by the court," Miller told Newsmax.

While Kawa may not achieve the outcome he desires, Miller says the case may make White House and Justice Department officials nervous if it results in the Obama administration being forced "into having to disclose more politically uncomfortable details about its July decision to delay the mandate."

Unlike Kawa's challenge, which seeks to force the law to be implemented as written, other legal attempts are trying to stop parts of the law from going forward or have the entire act declared unconstitutional.

The Supreme Court's decision in NFIB v. Sebelius upholding Obamacare focused on whether the law's "individual mandate" violated the Constitution's Commerce Clause by requiring that individuals purchase healthcare insurance. The majority opinion held that the penalties for not buying health insurance fell instead under Congress' taxing authority.

That decision led to an amended legal challenge by the Pacific Legal Foundation, which argues in Sissel v. Department of Health and Human Services that the measure violated the Constitution's Origination Clause, since the redefined "tax" originated in the Senate and not in the House as required.

Ilya Shapiro, senior fellow in constitutional studies and editor-in-chief of the Cato Supreme Court Review, said there are numerous avenues to challenge Obamacare given the sheer size and scope of the legislation.

"Every time you have a major piece of legislation passed, it often becomes a full employment act for lawyers and this is no different," notes Shapiro, who believes the Supreme Court may take up the issue of the contraceptive mandate in the current term.

As part of Obamacare, the Department of Health and Human Services issued guidelines requiring employers to include and pay for coverage of contraception, with a failure to comply resulting in fines. The provision included a narrow exemption for certain religious employers, but many Catholic institutions and employers maintain the mandate would violate the tenets of their faith.

As many as 70 lawsuits with more than 200 plaintiffs have been filed by religious organizations and other private employers to block the contraceptive mandate from going into effect. The Catholic Archdiocese of New York also has filed suit.

The Hobby Lobby chain was granted a preliminary injunction in federal district court because it had shown a likely violation of the Religious Freedom Restoration Act of 1993, and the Pennsylvania manufacturer Conestoga Wood, which employs about 950 people, was granted temporary relief by the U.S. Court of Appeals for the Third Circuit. Both cases could reach the Supreme Court.

Law professor Timothy A. Jost at Washington & Lee University says it is unlikely that the Supreme Court will revisit the constitutionality of the entire healthcare statute, but might uphold challenges to parts of the healthcare act.

"I don't see any litigation that will challenge the law, but there are some that could possibly lead to additional companies getting exemptions or having specific provisions eliminated," Jost told Newsmax.

Jost says almost half of the lawsuits making their way through the courts are related to the contraceptive mandate, and would not slow down the overall implementation of Obamacare.

"While the cases involving the contraceptive mandates are significant, they are more of a religious freedom case and relate to one provision promulgated by the law," Jost said.

Robert I. Field, Drexel University law professor, agrees the contraceptive mandate cases have the greater chance of successfully reaching the Supreme Court.

ObamaCare: You Can Win With The Facts

"The court is more likely to hear [the religious contraception mandate], but I think they might rule in favor of religiously affiliated institutions, or those that have a religious component, and not be as favorable to businesses that happen to be owned by individuals," Field said.

Two ongoing suits that could result in the greatest weakening of the Obamacare law involve the issue of whether subsidies are permitted in federally run healthcare exchanges.

In Halbig v. Sebelius, which was filed in May, a group of employers and individuals from six states filed suit in the District of Columbia challenging the IRS' claim that it has authority to issue subsidies to health-insurance companies.

The plaintiffs are also challenging the IRS' authority to impose penalties on individual taxpayers and employers who live in the 33 states that have refused to establish a health insurance exchange under Obamacare. They claim the penalty is in violation of the language of the ACA and counter to congressional intent.

The Department of Justice has moved to dismiss the case for lack of standing and made the same argument in a similar case: Pruitt v. Sebelius. However, a court ruled in August that the case, brought by Oklahoma Attorney General Scott Pruitt, could proceed.

Like the Halbig case, Oklahoma is arguing that Obamacare contains no provision giving the federally run exchanges the right to offer consumers health-insurance tax credits.

Field says if the Supreme Court decides to take the subsidy exchange cases and rules in favor of the states, that "would truly decimate the law because given states would not be required to subsidize care for low-income families."


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