Case 3:10-cv-00091-RV -EMT Document 156 Filed 02/17/11 Page 1 of 19

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF FLORIDA
PENSACOLA DIVISION

STATE OF FLORIDA, by and )

through PAM BONDI, et al., )
)
Plaintiffs, )
)
v. ) Case No. 3:10-cv-91-RV/EMT
)
UNITED STATES DEPARTMENT )
OF HEALTH AND HUMAN )
SERVICES, et al., )
)
Defendants. )
____________________________________)

DEFENDANTS’ MOTION TO CLARIFY

Defendants, through undersigned counsel, respectfully move the Court to clarify that its

January 31, 2011, declaratory judgment does not relieve the parties of their rights and obligations

under the Affordable Care Act while the declaratory judgment is the subject of appellate review.

In accordance with Local Rule 7.1(B), defendants’ counsel conferred with plaintiffs’

counsel to request their position on this motion. Plaintiffs indicated that they oppose.

In support of this motion, the Court is respectfully referred to the accompanying

memorandum.

Dated: February 17, 2011 Respectfully submitted,

TONY WEST
Assistant Attorney General

IAN HEATH GERSHENGORN

Deputy Assistant Attorney General

THOMAS F. KIRWIN
United States Attorney
Case 3:10-cv-00091-RV -EMT Document 156 Filed 02/17/11 Page 2 of 19

SHEILA LIEBER
Deputy Director

/s/ Eric Beckenhauer

BRIAN G. KENNEDY
Senior Trial Counsel, D.C. Bar No. 228726
ERIC B. BECKENHAUER, Cal. Bar No. 237526
Trial Attorney
U.S. Department of Justice
Civil Division, Federal Programs Branch
20 Massachusetts Ave. NW
Washington, DC 20530
Telephone: (202) 514-3338
Facsimile: (202) 616-8470
E-mail: [email protected]

Attorneys for Defendants

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF FLORIDA
PENSACOLA DIVISION

STATE OF FLORIDA, by and )

through PAM BONDI, et al., )
)
Plaintiffs, )
)
v. ) Case No. 3:10-cv-91-RV/EMT
)
UNITED STATES DEPARTMENT )
OF HEALTH AND HUMAN )
SERVICES, et al., )
)
Defendants. )
____________________________________)

MEMORANDUM IN SUPPORT OF DEFENDANTS’ MOTION TO CLARIFY

This Court has held that Congress lacked authority to enact the minimum coverage

provision of the Patient Protection and Affordable Care Act (“Affordable Care Act,” “ACA,” or

the “Act”).1 The Court has also held that the provision is not severable from the remainder of the

statute, and that therefore “the entire Act must be declared void.” Order Granting Summ. J.

(“Op.”) 76 [Doc. No. 150]. The Court’s declaratory judgment potentially implicates hundreds of

provisions of the Act and, if it were interpreted to apply to programs currently in effect, duties

currently in force, taxes currently being collected, and tax credits that may be owed at this time

or in the near future, would create substantial uncertainty. Because of the sweeping nature of the

declaratory judgment, such an interpretation would pose a risk of substantial disruption and

hardship for those who rely on the provisions that have already been implemented.

1
Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by Health Care and Education
Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010).
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Defendants will appeal both the Court’s judgment and the rulings that underlie it. This

motion respectfully asks the Court to clarify the scope of its order, in particular that its

declaratory judgment does not relieve the parties to this case of any obligations or deny them any

rights under the Affordable Care Act while the judgment is the subject of appellate review, or, if

the Court anticipated otherwise, to address specifically what the Court intends the parties’

obligations and rights to be under the judgment while appellate review is pending.

1. The minimum coverage provision does not take effect until 2014 and thus creates

no immediately enforceable obligations or rights with respect to any of the parties. As the Court

observed, however, the Act “has approximately 450 separate pieces,” Op. 73, many of which are

currently in effect. The Court did not find that these other provisions of the ACA violate the

Constitution; indeed, the Court expressly rejected plaintiffs’ arguments that several other

provisions of the Act are unconstitutional. The Court’s opinion also recognized that “many . . .

provisions in the Act can stand independently without the individual mandate.” Op. 74. For

example, the Court stated that “there is little doubt that the provision in the Act requiring

employers to provide a ‘reasonable break time’ and separate room for nursing mothers to go and

express breast milk [Act § 4207] can function without the individual mandate.” Op. 65.

Nevertheless, the Court’s judgment declares the entire Act unconstitutional because, in its view,

there “are simply too many moving parts in the Act and too many provisions dependent (directly

and indirectly) on the individual mandate and other health insurance provisions . . . for me to try

and dissect out the proper from the improper, and the able-to-stand-alone from the unable-to-

stand-alone.” Op. 73-74.

In holding that the entire Act must “stand or fall as a single unit” and thereby declaring

all provisions of the ACA invalid, the Court expressly acknowledged that it was deviating from

2
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the “‘normal rule’ that reviewing courts should ordinarily refrain from invalidating more than the

unconstitutional part of a statute.” Op. 74. The Court observed that “[s]everability is a doctrine

of judicial restraint,” and that “just this past year,” the Supreme Court reaffirmed that courts

should “‘try to limit the solution to the problem,’ severing any ‘problematic portions while

leaving the remainder intact,’” and that the “‘normal rule’ is that partial invalidation is proper.”

Op. 64 (quoting Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 130 S. Ct. 3138, 3161

(2010)). At the same time, the Court correctly noted that its decision to nonetheless invalidate

the entire Act would have “indeterminable implications.” Op. 76.

In addition, this Court recognized that two other district courts have upheld the minimum

coverage provision, which is the only provision that this Court held to be beyond the reach of

Congress’s power. The minimum coverage provision does not take effect until 2014, and the

Court’s decision casts no doubt on the constitutionality of any of the individual statutory

provisions that are in effect now or will become effective before 2014. (Indeed, those provisions

that are already in effect can clearly stand alone because they have become operative years

before the minimum coverage provision takes effect.) The only other court to hold the minimum

coverage provision invalid rejected the contention that it should declare the Act invalid in its

entirety and did not enter an injunction. Virginia ex rel. Cuccinelli v. Sebelius, 728 F. Supp. 2d

768 (E.D. Va. 2010).2 That court explained that “[i]t would be virtually impossible within the

present record to determine whether Congress would have passed this bill, encompassing a wide

2
Appellate review of the decisions that were issued prior to this Court's judgment is
already proceeding on an expedited basis. The Fourth Circuit has calendared oral argument in
Virginia ex rel. Cuccinelli v. Sebelius, Nos. 11-1057, 11-1058 (4th Cir.), and Liberty University
v. Geithner, No. 10-2347 (4th Cir.), for its May 2011 sitting, and the Sixth Circuit has granted
the parties’ request to hear Thomas More Law Center v. Obama, No. 10-2388 (6th Cir.), during
its May 30–June 10, 2011, session.

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variety of topics related and unrelated to heath care, without Section 1501,” and “[e]ven then, the

Court’s conclusions would be speculative at best.” Id. at 789.

Given (a) the wide-ranging and indeterminate consequences that would occur if the

declaratory judgment were assumed to have immediate injunction-like effect; (b) the Court’s

acknowledgment that it was deviating from the “‘normal rule’” of severability; (c) the

concededly unique nature of the Court’s judgment, see, e.g., Op. 74 (“This is not a situation that

is likely to be repeated.”); and (d) the fact that the Court declined to impose an injunction, see

Op. 75, defendants do not interpret the Court’s order as requiring them to immediately cease

operating programs, implementing Medicare reforms, collecting taxes, extending grants,

providing tax credits, and enforcing duties created by the ACA with regard to the plaintiff states,

National Federation of Independent Business (“NFIB”) members, and individual plaintiffs

pending appeal, and defendants are proceeding on that basis.

2. Despite expressly declining to impose an injunction, the Court noted that “there is

a long-standing presumption ‘that officials of the Executive Branch will adhere to the law as

declared by the court. As a result, the declaratory judgment is the functional equivalent of an

injunction.’” Op. 75 (quoting Comm. on Judiciary of U.S. House of Representatives v. Miers,

542 F.3d 909, 911 (D.C. Cir. 2008)). This general point is not drawn into issue by this motion to

clarify. Indeed, defendants’ opposition to plaintiffs’ summary judgment motion noted the same

presumption. Defs.’ Opp’n to Pls.’ Mot. for Summ. J. 43 [Doc. No. 137].

However, defendants’ opposition brief went on to note that this injunction-like effect of a

declaratory judgment against defendants here would apply “after appellate review is exhausted.”

Id. (emphasis added). In other declaratory judgment cases, pending appellate review, “the

Government has been free to continue to apply [a] statute” following entry of a declaratory

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judgment. Kennedy v. Mendoza-Martinez, 372 U.S. 144, 155 (1963); accord, e.g., Carreno v.

Johnson, 899 F. Supp. 624, 628 (S.D. Fla. 1995) (“[a]bsent an injunctive sanction, a district

court’s declaration that a statute is unconstitutional does not bar the government from continuing

to apply the statute pending review by the Court of Appeals and the . . . Supreme Court”).

Mendoza-Martinez contrasted that rule for declaratory relief with the different immediate

consequences of an injunction, under which “a single federal judge” could “paralyze totally the

operation of an entire regulatory scheme, either state or federal, by issuance of a broad injunctive

order” prior to appellate review. 372 U.S. at 154.

That point has particular force here given the sweeping nature of the Court’s declaratory

judgment, which, although finding only one provision of the Act unconstitutional — the

minimum coverage provision, which does not go into effect until 2014 and which the

government thus would not enforce pending appeal in any event — proceeds to declare the rest

of the Act inseverable and therefore invalid on that distinct ground. Miers, by contrast,

presented a narrow and focused issue concerning compliance with a specific subpoena that

purported to create a legal duty that was challenged (as was the declaratory judgment) on

constitutional grounds. 542 F.3d at 910. And in the other case cited by the Court, Sanchez-

Espinoza v. Reagan, 770 F.2d 202, 208 & n.8 (D.C. Cir. 1985) (Scalia, J.), the D.C. Circuit

relied on a parallel between declaratory and injunctive relief in concluding that intrusive

declaratory relief should not have been entered in the first place. Consistent with the concededly

unique nature of the Court’s judgment, defendants are not aware of any past examples of a court

relying on a general presumption that the government would adhere to the legal rulings in a

declaratory judgment to conclude that the government would immediately halt implementation

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of so many statutory provisions with respect to so many plaintiffs, and indirectly affecting so

many people, while appellate review is pending.

As such, the critical point this motion addresses is one of timing, which the Court’s

opinion and judgment do not clearly address. In particular, we do not understand the Court’s

declaratory judgment of its own force to relieve the parties to this case of any obligations or deny

them any rights under the Act while appellate review is pending. Many of the plaintiff states

have publicly affirmed a similar view.3 But, if defendants are wrong about what the Court

anticipated, all parties must know that in determining specifically how to proceed while appellate

review is pending.

Defendants therefore respectfully request that the Court confirm that its declaratory

judgment does not in itself automatically and in a self-executing manner relieve the parties of

their obligations or rights under the Affordable Care Act while appellate review is pending.

3
Amy Goldstein & N.C. Aizenman, State Officials Divided on Meaning of Judge’s
Health-Care Ruling, Wash. Post, Feb. 1, 2011 (“Meanwhile, the governors of Georgia, Iowa and
Mississippi said through spokesmen that they did not think the court decision gave them license
to stop work on the law, in part because the ruling is destined to be appealed to higher courts,”
and quoting Georgia Governor Nathan Deal as stating that “[w]e’ll be required to move forward
until such time relief is granted or an appellate decision is finalized”), available at http://www.
washingtonpost.com/wp-dyn/content/article/2011/02/01/AR2011020105041.html; Andrew M.
Harris & Margaret Cronin Fisk, Health-Care Law Goes to Appeals Courts, States Weigh
Enforcement, Bloomberg News, Feb. 2, 2011 (quoting Ohio Attorney General Mike DeWine as
stating “[w]e don’t think we can advise that this law is void”), available at http://www.
bloomberg.com/news/2011-02-01/health-care-law-goes-to-appeals-courts-as-states-differ-on-
statute-s-scope.html; David Wahlberg, Walker Accepts $38m to Create Health Care Exchange,
Wisc. State Journal, Feb. 16, 2011 (Wisconsin “Gov. Scott Walker is accepting nearly $38
million from the federal health care reform law to create a health care exchange, even though he
has said he opposes the law”), available at http://host.madison.com/wsj/news/local/ health_med_
fit/article_8640ead4-3a08-11e0-aacc-001cc4c03286.html. But see Kevin Sack et al., States
Diverge on How to Deal With Health Care Ruling, N.Y. Times, Feb. 2, 2011, at A16 (quoting
state attorney general J. B. Van Hollen as stating, “[e]ffectively, Wisconsin was relieved of any
obligations or duties that were created under terms of the federal health care law”), available at
http://www.nytimes.com/2011/02/02/health/policy/02states.html (all Internet addresses last
visited February 17, 2011).

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3. The importance of clarification is underscored by the variety of statutory

provisions that would be subject to significant disruption if, contrary to defendants’

understanding, the declaratory judgment was anticipated to operate as an immediate injunction

with respect to programs currently in effect.

a. The Affordable Care Act provides tax credits to eligible small businesses that

offer insurance to their employees, offsetting up to 35 percent of employer premium costs

beginning in tax year 2010. See ACA § 1421(a). Clarification would confirm defendants’ view

that the Court did not anticipate that its declaratory judgment would relieve the parties to this

case of any obligations or deny them any rights under the Act, and that the federal government

may continue to make these tax credits available to eligible small businesses among the hundreds

of thousands of NFIB members4 that offer insurance to their employees.5

b. More than 20 sections of the ACA effected changes to Medicare payment rates

for 2011, including extensions of a number of payment adjustments (such as add-on payments

and exceptions to payment caps) that pre-date the ACA. These changes have already been

incorporated through notice and comment rulemaking into Medicare payment regulations and

implemented through edits to nearly every major Medicare claims processing system, including

4
NFIB claims to have more than 350,000 members as of August 2010. See Kathy
Barber, Legislative Director, NFIB/Texas, Testimony Before the Committee on Ways & Means,
Texas House of Representatives (Aug. 17, 2010), available at http://www.nfib.com/nfib-in-my-
state/nfib-in-my-state-content?cmsid=52329.
5
With respect to the many tax provisions of the ACA that this Court’s order would seem
to reach as a result of its severability ruling, serious questions concerning jurisdiction are raised
because of the Anti-Injunction Act, 26 U.S.C. § 7421(a), and the injunction exception to the
Declaratory Judgment Act, 28 U.S.C. § 2201(a). This Court’s holding that the minimum
coverage provision is not a tax and so may be challenged notwithstanding those jurisdictional
provisions, Order & Mem. Op. 7-30 (Oct. 14, 2010) [Doc. No. 79], does not imply that
provisions of the ACA that the Court did recognize as taxes, see, e.g., id. at 19-20; Op. 73, may
also be enjoined or even declared invalid.

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those for inpatient services, outpatient services, and physician services.6 To attempt at this

juncture to devise an alternative, pre-ACA rate structure for plaintiff state-owned or operated

Medicare providers (and NFIB member Medicare providers) would impose staggering

administrative burdens on HHS and its fiscal intermediaries, and could cause major delays and

errors in the payment of the roughly 100 million Medicare claims processed each month.

Clarification would confirm defendants’ view that the Court did not anticipate an interpretation

that could yield these highly disruptive consequences, especially since there are procedures

under the Medicare program for reconciliation of payments at the end of a cost year for certain

providers and through different mechanisms for others.7

c. To prevent fraud and waste in the Medicaid program, the ACA required all states,

by the end of 2010, to enter into contracts with auditors (“Recovery Audit Contractors”) to

identify incorrectly paid claims and to recoup overpayments. See ACA § 6411. Moreover, the

Act requires states to suspend Medicaid payments to providers or suppliers when an

6
75 Fed. Reg. 73170 (Nov. 29, 2010) (changes to physician fee schedule and other
revisions to Medicare Part B for calendar year 2011); 75 Fed. Reg. 71800 (Nov. 24, 2010)
(changes to outpatient prospective payment system effective January 1, 2011); 75 Fed. Reg.
50042 (Aug. 16, 2010) (revising Medicare hospital inpatient prospective payment system for
federal fiscal year 2011).
7
These Medicare payment provisions were not challenged by plaintiffs or discussed by
the parties, and the inclusion of those provisions in the Court’s declaration that the entire Act is
invalid also raises substantial jurisdictional issues. Ordinarily, a provider — including a plaintiff
state-owned or operated provider or NFIB member provider — challenging a Medicare statute,
regulation, or payment decision must proceed through the special procedures designed by
Congress for the precise purpose of channeling such challenges. E.g., Shalala v. Ill. Council on
Long Term Care, 529 U.S. 1 (2000); Weinberger v. Salfi, 422 U.S. 749 (1975) (applying similar
bar to require such channeling of challenge to constitutionality of statutory provision); see
generally Pub. Serv. Comm’n of Utah v. Wycoff Co., 344 U.S. 237, 246 (1952) (“[T]he
declaratory judgment procedure will not be used to preempt and prejudge issues that are
committed for initial decision to an administrative body or special tribunal any more than it will
be used as a substitute for statutory methods of review.”).

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investigation into a credible allegation of fraud is pending, unless good cause exists not to. See

ACA § 6402(h)(2). Clarification of the anticipated effect of the declaratory judgment would

confirm that these anti-fraud measures remain fully effective in the plaintiff states, protecting the

integrity of federal Medicaid expenditures.

d. Twenty-five plaintiff states (all but Alaska) have applied for and been awarded

federal grants to begin to take measures to ensure that their exchanges will be operational by

2014. See ACA § 1311(a). Clarification that the Court did not anticipate that the declaratory

judgment would have an immediate effect on the duty of the Secretary and these plaintiff states

to carry out their grant agreements, will confirm that these plaintiff states can continue to use the

more than $24 million already made available to them, and that they can continue to apply for

additional exchange grants that are currently available.

e. Twelve plaintiff states have contracted with HHS to run federally funded

high-risk insurance pools (Pre-existing Condition Insurance Plan, or PCIP, programs) established

pursuant to the Affordable Care Act. See ACA § 1101. These pools provide coverage to eligible

Americans who have been uninsured for more than 6 months because of a pre-existing condition.

Clarification of the declaratory judgment’s anticipated effect will confirm that these plaintiff

states may continue to administer these pools under the Act to provide coverage for their most

high-risk citizens, thus avoiding potential coverage disruptions for current enrollees.

f. In their role as employers, most plaintiff states sponsor their own group health

plans. Thus, they are subject to ACA provisions already in effect that, for example, generally

require insurers to offer parents the option to keep children on their plans until age 26, bar

insurers from placing lifetime limits on the dollar value of coverage, and prohibit insurers from

rescinding coverage unexpectedly after an illness or accident because of a mistake on an

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application. See ACA § 1001. Clarification of the anticipated effect of the declaratory judgment

will confirm that millions of participants in these plans — employees of these plaintiff states and

their families, who are not parties to this suit — are not deprived of coverage or denied benefits

while the Court’s ruling is under review.

g. All plaintiff states, either as employers or through at least one state entity,

currently participate in the ACA’s Early Retiree Reinsurance Program (“ERRP”). See ACA

§ 1102. Early retirees are often ineligible for coverage from their former employers, but are too

young to qualify for Medicare and too old, or too ill, to obtain coverage in the individual market.

To encourage employers to continue coverage to early retirees and their families, the Act

provides for $5 billion in ERRP subsidies through 2013. These subsidies reimburse 80 percent

of the costs of certain medical claims of early retirees and their family members. Clarification of

the anticipated effect of the declaratory judgment will confirm that funding under this program

may continue to be provided to the plaintiff states, as well as to NFIB members that elect to

participate, avoiding potential coverage disruptions.

h. All 50 states have applied for and received funding under the ACA’s Maternal,

Infant, and Early Childhood Home Visiting Program, which appropriates $1.5 billion in funding

over five years for states to deliver health care and other social services — such as prenatal care

and domestic violence prevention — to families in at-risk communities who lack other resources.

See ACA § 2951. In fiscal year 2010, for example, Florida was allocated $3.4 million, Michigan

$2.1 million, and Pennsylvania $2.2 million. Clarification that the anticipated effect of the

declaratory judgment was not to require that such funding be halted will confirm that the

plaintiff states have continued access to grants under this program to help families at great risk of

health and developmental problems, child maltreatment, and domestic violence.

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i. Twenty-two plaintiff states have been awarded a total of $22 million in grants to

create or improve state oversight of health insurance premium increases. See ACA § 1003.8

Clarification of the anticipated effect of the declaratory judgment will confirm that these plaintiff

states may continue to use these grants (and to apply for $204 million in grants that have yet to

be awarded) to protect the public from unreasonable premium increases.

j. Thirteen plaintiff states have been awarded over $11.1 million in grants pursuant

to the Act’s Consumer Assistance Program, which authorizes and appropriates funding for states

to help consumers navigate the health care market by, for example, facilitating enrollment in

health plans and assisting with complaints and appeals against insurers. See ACA § 1002.9

Clarification of the anticipated effect of the declaratory judgment will confirm that these plaintiff

states may continue to use these funds to benefit their citizens.10

4. The fact that the Court did not consider with specificity the entities entitled to

invoke the Court’s judgment, cf. Fed. R. Civ. P. 65(d), further suggests that it did not anticipate

that its declaratory order would have immediate injunction-like effect. Non-parties are of course

not entitled to the benefits of a judgment against the government, see United States v. Mendoza,

464 U.S. 154 (1984), but neither are nominal parties who lack standing, see Allen v. Wright, 468

8
By letter dated February 1, 2011, Florida’s State Insurance Commissioner advised HHS
that Florida was rescinding its earlier acceptance of a $1 million rate review grant award and that
it would not draw down any of this amount.
9
On February 10, 2011, Wisconsin advised HHS that it would be returning a $238,000
Consumer Assistance Program grant that it had been awarded by HHS.
10
The recitation above identifies only some provisions of the Act that are currently in
effect and are being implemented. Issues concerning some other provisions of the Act that are
not yet in effect or that have not given rise to any concrete disputes are not ripe for consideration
here, and, in any event, may have their own special statutory procedures for administrative and
judicial review in which the application of the ACA should be considered in the first instance.
See, e.g., 42 U.S.C. § 1316 (special review procedures for proposed amendments to state plans).

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U.S. 737, 752 (1984) (Article III standing limitations are designed “to ascertain whether the

particular plaintiff is entitled to an adjudication of the particular claims asserted”) (emphasis

added). Here, the Court did not address whether 24 of the 26 plaintiff states have standing to

challenge the minimum coverage provision. The Court addressed the standing of only two

plaintiff states with regard to the minimum coverage provision, finding that Utah and Idaho had

standing because they had enacted statutes before the ACA became law that arguably conflict

with the minimum coverage provision. Op. 18. The Court’s opinion thus did not address

whether the other plaintiff states — many of which do not have comparable statutes — had

Article III standing and on what basis. The Court observed that to resolve the merits of the legal

issue it was sufficient to find that some plaintiffs had standing. That the Court found that it had

jurisdiction to resolve the merits of the legal issue as to at least one party does not, however,

address its authority to grant relief to any, much less all, other parties. The Court’s not having

addressed with specificity the issue of who is subject to the declaratory judgment further

suggests that it was not anticipated that it would provide immediate injunction-like relief

pending appeal.

The existence of an associational plaintiff adds an additional layer of uncertainty if the

declaratory judgment is interpreted to apply to provisions already in effect. Aside from Mary

Brown and a handful of other declarants — who claimed standing and rested their constitutional

challenge on the basis of the asserted impact on them of the minimum coverage provision, which

does not go into effect until 2014 — defendants do not know who were NFIB members at the

time the First Amended Complaint was filed such that they may be affected by the judgment (for

example, NFIB members may be unable to receive tax credits available to small businesses, see

supra ¶ 3(a)). That the Court did not address this issue or any matters concerning the tax credit

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(or other provisions that would affect some or all parties) suggests that it did not anticipate that

its declaratory judgment would have immediate injunction-like effect.

5. In issuing a broad declaratory judgment, the Court was aware that its ruling would

have “indeterminable implications.” Op. 76. The Court gave no indication, however, that it

intended or anticipated the specific potential disruptions of ongoing programs and operations

(discussed above) and the questions that would arise about which parties are bound by the

Court’s order while the appellate courts resolve constitutional challenges to the Affordable Care

Act. And despite its clear recognition of the complexity of the ACA and the difficulty in

determining how the reasoning of its declaratory judgment would affect existing programs, this

Court expressly declined to grant “injunctive relief enjoining implementation of the Act.” Op.

75-76.

If the Court had entered an injunction, its order would have been required to be “specific

in terms” and to “describe in reasonable detail, and not by reference to the complaint or other

document, the act or acts sought to be restrained.” Fed. R. Civ. P. 65(d). That requirement is

“‘designed to prevent precisely the sort of confusion’” that can arise from a vague district court

order. Gunn v. Univ. Comm. to End the War in Vietnam, 399 U.S. 383, 389 (1970) (quoting Int’l

Longshoremen’s Ass’n v. Philadelphia Marine Trade Ass’n, 389 U.S. 64, 74 (1967)). Given the

“extraordinary” nature of an injunctive order, Congress required “‘that a federal court frame its

orders so that those who must obey them will know what the court intends to require and what it

means to forbid.’” Id. (quoting Int’l Longshoremen’s Ass’n, 389 U.S. at 76). The Supreme

Court has observed that this requirement is especially “vital” in cases concerning the validity of

duly enacted statutes. Id.

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Moreover, before the Court could have entered an injunction barring the federal

government from implementing any of the provisions of the Act, it would have been required to

apply the familiar four-factor test, which consists of not only the likelihood of success on the

merits, but also the respective equities of the parties and where the public interest lies, including

an injunction’s effect on parties not before the Court. Similarly, even if the Court had

anticipated that its declaratory judgment would serve as the functional equivalent of an

injunction during the pendency of an appeal (which, in defendants’ view, it did not), it would

have had to satisfy the “equivalen[t] . . . criteria for issuance,” including the requirements for

issuance of equitable relief. Sanchez-Espinoza, 770 F.2d at 208 n.8; cf. Samuels v. Mackell, 401

U.S. 66, 72 (1971) (where federal declaratory judgment would result in “interference with and

disruption of state proceedings,” “the propriety of declaratory and injunctive relief should be

judged by essentially the same standards”). These omissions are additional reasons why

defendants do not understand the Court’s order to have immediate injunction-like effect.

6. Clarification that the Court anticipated that its declaratory judgment would not

affect the parties’ rights and obligations until after the conclusion of appellate review will also

shape the contours of further litigation of this case, both here and in the appellate courts. As

outlined above, a contrary understanding would threaten serious harm to many Americans

currently benefitting from provisions of the Affordable Care Act that are already in effect and

would significantly interfere with defendants’ statutory duty to implement the Act as Congress

directed. Defendants do not understand the Court to have anticipated that its judgment would

operate in that self-executing manner to halt the operation of the Act as to all plaintiffs,

especially since numerous provisions of the ACA clearly benefit the plaintiffs, or affect third

parties not before the Court. Defendants therefore move the Court to clarify that its judgment

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indeed does not, pending appellate review, relieve the parties to this case of any rights or

obligations under the ACA.

If the Court disagrees with defendants’ understanding and instead issues an order stating

that it did, in fact, anticipate its judgment to have immediate injunction-like effect, defendants

will consider how to respond pending appellate review, including whether to seek a stay pending

appeal. Otherwise, defendants will proceed based on their understanding of the judgment as

reflected above.

CONCLUSION

For the foregoing reasons, defendants respectfully request that the Court clarify that its

January 31, 2011, declaratory judgment does not relieve the parties of their rights and obligations

under the Affordable Care Act while the declaratory judgment is the subject of appellate review.

Dated: February 17, 2011 Respectfully submitted,

TONY WEST
Assistant Attorney General

IAN HEATH GERSHENGORN

Deputy Assistant Attorney General

THOMAS F. KIRWIN
United States Attorney

SHEILA LIEBER
Deputy Director

/s/ Eric Beckenhauer

BRIAN G. KENNEDY
Senior Trial Counsel, D.C. Bar No. 228726
ERIC B. BECKENHAUER, Cal. Bar No. 237526
Trial Attorney
U.S. Department of Justice
Civil Division, Federal Programs Branch
20 Massachusetts Ave. NW

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Case 3:10-cv-00091-RV -EMT Document 156 Filed 02/17/11 Page 18 of 19

Washington, DC 20530
Telephone: (202) 514-3338
Facsimile: (202) 616-8470
E-mail: [email protected]

Attorneys for Defendants

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 Case 3:10-cv-00091-RV -EMT Document 156 Filed 02/17/11 Page 19 of 19

CERTIFICATE OF SERVICE

I hereby certify that on February 17, 2011, the foregoing document was filed with the
Clerk of Court via the CM/ECF system, causing it to be served on Plaintiffs’ counsel of record.

/s/ Eric Beckenhauer

ERIC B. BECKENHAUER