Analysis: Attorney General Pruitt presses newly invigorated arguments against ‘ObamaCare’
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Published: 15-Jul-2013


OKLAHOMA CITY – Arguments against the Affordable Care Act (ACA), as advanced in legal briefs by the state of Oklahoma, are acquiring some critical mass, even as a case in the eastern district of Oklahoma remains without resolution. 

Last fall, Oklahoma Attorney General Scott Pruitt filed to shut down the ACA in a case deemed “Pruitt v. Sebelius.” In briefs, the state has argued against an Internal Revenue Service rule punishing “large employers” – including local governments – with penalties if health care exchanges are not created within a state. 

Pruitt’s lead lawyer in the litigation, Patrick Wyrick, argues the strictures violate the act itself. The suit also contends that the underlying IRS rule was created in a way that violated the federal Administrative Procedures Act. 

Oklahoma quickly moved last week to bolster arguments against ACA based on a ruling in the Fourth U.S. Circuit Court of Appeals. In that Virginia case, Liberty University had sued over the employer mandate, and whether the Anti-Injunction Act applied to the facts of the case.

The appellate court judges ruled on July 10 that Liberty had standing and, further, that the AIA did not apply. Therefore the independent Baptist school’s case could proceed.  

In Liberty University v. Lew, the appellate circuit judges wrote, “Liberty need not show that it will be subject to an assessable payment to establish standing if it otherwise alleges facts that establish standing. … Even if the coverage Liberty currently provides ultimately proves sufficient, it may well incur additional costs because of the administrative burden of assuring compliance with the employer mandate, or due to an increase in the cost of care.”

Responding to that ruling, on Friday (July 12), Pruitt’s office filed a new brief (6:11-cv-00030-RAW, Document 67, Filed in ED/OK on 07/12/13), asserting, “In rejecting the federal government’s standing arguments, the appeals court relied on the fact that, notwithstanding any potential penalties, the mandate imposed substantial compliance costs on Liberty University.” 

Also last week (on Wednesday, July 10), Pruitt and Wyrick argued in another state brief (6:11-cv-00030-RAW Document 66,Filed in ED/OK on 07/10/13) that the one-year delay in implementation of the employer mandate, announced by the Obama Administration just before the July 4 break, bolstered Oklahoma’s case against the legislation, considered President Barack Obama’s signal achievement. 

Pruitt said in a statement sent to CapitolBeatOK, “Oklahoma’s position has been clear from the beginning that the ‘large-employer mandate’ not only violates the law when implemented in states without a state health care exchange, but cripples businesses with burdensome and onerous requirements and penalties.

“Until now, the Obama Administration has argued in court that the mandate is uncomplicated and easy, but its sudden reversal and delay of the mandate, clearly demonstrates acknowledgement that the 'large-employer mandate' is in fact a complex, job killing and harmful mandate on businesses. Our fight continues on behalf of Oklahoma citizens to confront the Administration when it seeks to overreach its authority and circumvent the law." 

Whether Pruitt’s analysis is persuasive as law remains to be seen. However, the Sooner State’s legal positioning comes in a case that is procedurally in its early stages. Thus the litigation is a “live round” that could be drawn into a cluster of cases for a new round of consideration before the U.S. Supreme Court, presumably after first passing through the Tenth U.S. Circuit in Denver, where appeals of federal cases in Oklahoma are assigned.  

Last month, editors at National Review Online scrutinized the layered arguments Pruitt’s office has advanced, saying those arguments are designed to “hold the federal government to the letter of that misbegotten law.”The analysis threads together reasoning that could provide essentially new issues for ultimate judicial review.

Pruitt’s briefs in the case include the assertion that the Internal Revenue Service is attempting to “spend tax dollars and level taxes without authorization from Congress.” The assemblage of carrots and sticks in the ACA, NRO’s analysis concluded, include “subsidies available for the purchase of health insurance through state-created exchanges, and the penalties for individuals who do not buy insurance and employers who do not provide it.”

On the carrot side, tax credits are supposed to only be available in states that have created their own health insurance exchanges; and the federal government “has no authority under the law to use them to offer subsidies and inflict the accompanying taxes.” 

Some 33 states (including Oklahoma) have declined to create state exchanges, meaning (in the NRO analysis), “If a state’s residents are not eligible for exchange subsidies, then its employers are not subject to the associated punitive tax.” The tax, of course, is the stick.

The NRO analysis concluded, “Stopping the IRS from imposing punitive taxes where it has no legal power to do so should in fact be a popular and bipartisan issue, regardless of one’s opinions about the ACA itself.” 

You may contact Patrick B. McGuigan at Patrick@capitolbeatok.com and follow us on Twitter: @capitolbeatok.

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