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  • Coming Up: King Plaintiffs’ Day in Court

    February 13, 2015 5:20 PM

    Oral arguments before the U.S. Supreme Court in King v. Burwell will be held on March 4, 2015. The Competitive Enterprise Institute is coordinating this case, which challenges an IRS regulation that illegally distributes subsidies in states that refused to establish state-based health insurance exchanges. The IRS regulation is illegal because it is contrary to the plain language of the law passed by Congress.

    The four plaintiffs involved are individuals who are harmed by this regulation because it makes them subject to Obamacare’s individual mandate, which requires people to enroll in comprehensive healthcare coverage or pay a tax penalty. Both lower courts unanimously agreed that the individual plaintiffs have standing and the Justice Department expressly abandoned any challenge to their standing before the Supreme Court.  

  • Gruber Testifies Before Congress on Obamacare Transparency Issues

    December 9, 2014 11:12 AM

    Today, the Centers for Medicare and Medicaid Services Administrator Marilyn Tavenner and MIT economist Jonathan Gruber are testifying before the House Oversight and Government Reform Committee on repeated transparency failures and enrollment issues surrounding the Affordable Care Act. CEI General Counsel Sam Kazman explains what this hearing could mean for ongoing Obamacare litigation efforts.

    Sam Kazman, CEI general counsel:

    “Regardless of what happens at the hearing, Jonathan Gruber has already had a major impact on the ongoing Obamacare litigation, as in CEI’s King v. Burwell and Halbig v. Burwell cases. This is due to both the content of his 2012 video, where Gruber refers to the subsidy issue saying if states don’t set up exchanges then citizens won’t get tax credits, and to how the government dropped nearly all mention of Gruber and his three-legged stool analogy from the court briefs following the video’s rise in popularity.

    “And according to a recent CEI report by Scot Vorse, we see that Gruber isn’t the only thing the administration flip-flopped on. Based on a trail of government documents, we find that actions taken by the HHS, Treasury, and IRS to implement the law, especially when it comes to developing a tax-credit calculator, show the administration was only focused on providing subsidies on the state exchanges, not the federal exchange.”

    >> View CEI report by Scot Vorse: “Beyond Gruber: How HHS Flip-Flopped on Federal Exchange Subsidies

  • Michael Mann Case Is about First Amendment, Not Global Warming

    November 25, 2014 3:07 PM

    This morning the D.C. Court of Appeals heard oral arguments in Michael E. Mann v. Competitive Enterprise Institute, National Review, et al. CEI General Counsel Sam Kazman gave the following comments about the case:

    Regardless of where one stands on global warming, this case is about the First Amendment. Michael Mann’s defamation lawsuit is an unfounded attempt to chill speech on a major issue of public concern. Professor Mann is a high-profile figure in the global warming debate, and he himself is responsible for much of the overheated rhetoric in that debate. His complaint about CEI’s criticism of his statistical methods belongs in the arena of public discussion and scientific inquiry, not in the courts.

    This is precisely the type of First Amendment lawsuit that the District of Columbia’s Anti-SLAPP law was designed to stop at the outset, and it is for this reason that CEI and National Review’s position is supported by a wide range of amici, including the Reporters’ Committee for Freedom of the Press, the Electronic Frontier Foundation, the Cato Institute, and dozens of other organizations. We are hopeful that the Court of Appeals will agree.

    Legal briefs in the case can be found at cei.org/michaelmann.

  • Liberals and Conservatives Challenge Overreach of Dodd-Frank's FSOC on MetLife

    November 18, 2014 2:18 PM

    As CEI brings suit before the D.C. Circuit Court of Appeals tomorrow challenging the constitutionality of unaccountable bureaucracies created by the Dodd-Frank “financial reform” law of 2010, it looks like we may have some high-profile company in litigation against Dodd-Frank’s Financial Stability Oversight Council (FSOC).

    The FSOC is a secretive, unaccountable task force of financial bureaucrats of various agencies created to designate banks and other financial firms “systemically important,” or too-big-to-fail. In September, the FSOC preliminarily decreed insurer MetLife a “systemically important financial institution,” or SIFI.

    As CEI argues in our legal challenge to the Dodd-Frank Act (including the FSOC’s role of identifying risk), the SIFI designation confers on a firm a strong competitive advantage, as investors and creditors know the government won’t let it fail. That’s why big banks and MetLife competitor American International Group (AIG), which have already received billions in taxpayer bailouts, have eagerly embraced their SIFI status.

    But MetLife, to its credit, has publicly stated that it is not too big to fail and does not want the special privileges that come with SIFI status, nor the regulatory costs. MetLife chairman and CEO Steven A. Kandarian declared last year, “I do not believe that MetLife is a systemically important financial institution.”

    Now, The Wall Street Journal reports that “MetLife Inc. doesn’t want to be tagged as “systemically important” and is preparing to possibly take the U.S. government to court to avoid it, people familiar with the matter said.” The insurance firm has hired Eugene Scalia, attorney with Gibson, Dunn & Crutcher, who has put forth successful suits against other provisions of Dodd-Frank.

  • Gruber’s “Speakola” Virus and Pelosi’s Selective Memory

    November 14, 2014 3:32 PM

    Obamacare supporters say that when deciding King v. Burwell and the related Halbig v. Burwell, challenges to the law that the Competitive Enterprise Institute helped fund and coordinate, there is really no need for courts to narrowly confine themselves to the language of specific provisions. Instead, they should look at the broad purposes of the law, as explained by its key architects. But one problem with this approach is these architects of the law—both in Congress and outside—seem to have selective memories about the structure of the Patient Protection and Affordable Care Act of 2010, aka Obamacare

    Until very recently, one of the key sources that Obamacare supporters have relied on to establish that purpose are statements and writings by the key architects of the law. For example, MIT Professor Jonathan Gruber’s writings on Obamacare were extensively cited by the government, and by supporting amici, in the early briefs in these cases. In fact, Gruber’s “three-legged stool” metaphor for Obamacare was expressly incorporated into a central portion of the dissent in Halbig, which argued that the Obamacare rule should be upheld.

    Gruber was an outside expert who has advised Congress, the Department of Health and Human Services, and many states on the law and its implementation (and has been paid handsomely by taxpayers for much of this advice). In July of this year, Gruber told Chris Matthews of MSNBC that interpreting the law as barring federal subsidies in states that didn’t set up their was “crazy.”

    Yet a couple days later, my Competitive Enterprise Institute colleague Ryan Radia—with props to Volokh Conspiracy commenter Rich Weinstein—unearthed a clip of Gruber relaying an audience in 2012 what was basically the same “crazy” interpretation. “If you're a state and you don’t set up an exchange, that means your citizens don't get their tax credits,” Gruber said.

    Gruber responded that this was a “speak-o,” a speaking version of a typo. But since then, many more speak-os of Gruber have surfaced, suggesting that he has a condition that could be called the “Speakola virus.”  

  • Obamacare: Cert Granted on Friday, and Gruber III on Saturday

    November 11, 2014 12:00 AM

    It was very good news, delivered in a very surprising way. Shortly after noon last Friday, the Supreme Court announced that it would review our Fourth Circuit Obamacare challenge, King v. Burwell

    Ever since we filed the case with the Supreme Court this past July, we’d been hopeful that the Court would take the case. The likelihood of the Court accepting any case is extremely low, but there were several major factors in our favor. 

    First, the question involved is extremely important to millions of Americans, be they taxpayers, health insurance policyholders, or workers. (In most cases, they’ll be all three.) The issue is whether Obamacare health insurance subsidies are available nationwide, as the White House claims, or whether they are limited to the minority of states that have set up their own insurance exchanges, as indicated by the language of the statute. Riding on this issue are billions of dollars in taxpayer funds, insurance choices made by millions of individuals and hundreds of thousands of employers, and the huge penalties that such subsidies can trigger for companies in nonparticipating states.

    Second, only the Supreme Court could resolve the issue both quickly and definitively. True, the companion case that we had wonHalbig v. Burwell, is now up before the D.C. Circuit for en banc review; the government argued that the Supreme Court should wait for the en banc circuit ruling because it might eliminate the need for any Supreme Court action whatsoever. But even if that court were to overturn the Halbig panel’s ruling, there would still be ongoing challenges in other circuits. Oklahoma’s victory on the issue is now on expedited appeal in the Tenth Circuit, and Indiana just argued its challenge in district court in the Seventh Circuit. In short, while the lack of a split between the D.C. and Fourth Circuits might remove one technical reason for Supreme Court review, it might well do so only temporarily, and Supreme Court inaction at this point would only prolong the uncertainty and multiply the impact of an adverse ruling.

  • The Long National Nightmare of Dodd-Frank Is Almost Over

    November 10, 2014 3:14 PM

    One of the prime reasons for the continuing economic uncertainty that bedevils so many ordinary Americans is the presence in law of the Dodd-Frank Act of 2010, which was meant to solve the problems of the financial crisis. In fact, by giving unelected bureaucrats Czar-like power over the financial system, it has caused the stagnation of that system, reducing the free flow of money through the economy and stopping businesses and citizens getting access to the credit that they desperately need.

    On November 19, however, a three-judge panel of the D.C. Circuit will hear arguments in a case brought by CEI and others challenging the constitutionality of this new bureaucracy. If the judges rule in our favor, Main Street and Wall Street should both breathe a sigh of relief.

    The grounds for our case are simple. CEI and our co-plaintiffs believe that the Consumer Financial Protection Board (CFPB) and the Financial Stability Oversight Council (FSOC) violate the Constitution in a number of ways. Most importantly, the CFPB has no checks or balances to its power, making it unaccountable to Congress, the Administration, the courts, or the people in general:

    • Congress exercises no “power of the purse” over the CFPB, because the agency’s budget – administered essentially by one person – comes from the Federal Reserve, amounting to approximately $400 million that Congress cannot touch or regulate.
    • The President cannot carry out his constitutional obligation to “take care that the laws be faithfully executed,” because the President cannot remove the CFPB Director except under limited circumstances. It is probable that neither the current President nor his successor will be able to remove Director Cordray until his term ends in 2018. Dodd-Frank goes beyond the "for cause" standard for removal from most independent agencies, and says the president may only remove the director "for inefficiency, neglect of duty, or malfeasance in office."
    • Judicial review of the CFPB’s actions is limited, because Dodd-Frank requires the courts to give extra deference to the CFPB’s legal interpretations.

    Our basic claim is that Dodd-Frank gives an agency of unelected government bureaucrats unrestrained power. We argue this unaccountable power over the daily lives of the American people results in a lack of public accountability, creating a power grab over every U.S. citizen.

  • ObamaCare Failing to Make Insurance Affordable for Many Americans

    November 3, 2014 8:06 AM

    The two most important Courts in the land are about to dive into the language and purpose of the Affordable Care Act (ACA), the “Obamacare” law. At issue is whether, under the specific wording of the ACA, the federal government may legally offer subsidies to residents of states that opted out of setting up their own health insurance exchanges. One of the Obama Administration’s central arguments is that the ACA has a single stated purpose—to deliver more affordable health insurance coverage to more Americans who previously couldn’t afford that coverage without support from either their employer or from government—and whether it is achieving that ought to be considered by the courts. As someone who actually works with a wide spectrum of individuals and employers to find affordable insurance, I hereby take up the Administration’s challenge. Here are four ways in which the ACA, as it currently stands, makes health insurance coverage less affordable.

  • Update: Where in the World is Jonathan Gruber?

    October 14, 2014 6:20 PM

    Today the plaintiffs in King v. Burwell filed the last brief regarding the cert petition now before the Supreme Court. It effectively rebuts each of the government’s arguments against Supreme Court review. 

    For starters, there’s some interesting history about the government’s switch in its tactics on timing. When Obamacare was first being litigated several years ago and the government lost in the Eleventh Circuit, it quickly sought Supreme Court review even though there were no imminent deadlines facing it regarding Obamacare taking effect.  Now, on the other hand, we have, in the words of the reply brief, “billions of taxpayer dollars … pouring out of the Treasury without congressional authorization and millions of Americans … ordering their lives around an impugned regulation.” And instead of  supporting a quick Supreme Court review of King, the government instead asks the Supreme Court to hold off until the D.C. Circuit completes its en banc reconsideration of Halbig—a reconsideration that the government itself requested.

    And while the reply brief’s starting point is what the government did, its conclusion succinctly describes what the government did not do. It did not mention Jonathan Gruber at all. Gruber, “the ACA architect whose work it cited in every brief below … is nowhere mentioned now.”

    That fittingly leads us back to the title of our earlier post: Where in the World is Jonathan Gruber? (Or, for you more plain-spoken Waldo fans, Find Gruber!) 

  • Where in the World is Jonathan Gruber?

    October 9, 2014 8:18 AM

    The Obamacare insurance exchange rule is being challenged in four cases, and each one of them has been active over the last two weeks. The IRS rule puts the Obamacare insurance subsidies, and their attendant penalties, into effect nationwide. CEI is involved in two of these casesKing v. Burwell, which we lost in the Fourth Circuit, and Halbig v. Burwell, which we won in a 2-1 D.C. Circuit panel ruling. We argue that this is contrary to the underlying statute, which provides for such subsidies only in states that have chosen to set up their own exchanges—a choice that 34 states have declined.

    The King plaintiffs have petitioned the Supreme Court to review the Fourth Circuit’s ruling, which upheld the IRS rule. Last Friday the federal government filed its opposition to that request. Its arguments were relatively predictable, with one exception that we’ll get to later. 

    In the D.C. Circuit, Halbig is now on en banc review, with argument before the full 13-judge court scheduled for December 17. Our opening en banc brief, together with six supporting amici, was also filed last Friday.

    Last Tuesday, September 30, there was a third court ruling—Oklahoma won its own challenge to the IRS rule in the Eastern District of Oklahoma. That court did an excellent critique of the dissent in Halbig, and it was also noteworthy for issuing the first “post-Gruber” ruling—that is, the first court decision to consider the recently-unearthed 2012 video that showed MIT Professor Jonathan Gruber, one of Obamacare’s chief architects, directly contradicting his current attack on our position. The video shows him flatly stating that nonparticipating states would not receive subsidies, in stunning contrast to the more recent claims, by Gruber and others, that our legal position is “crazy.” (CEI, by the way, is proud to have helped launch that video into Internet stardom just two days after the Halbig and King decisions.)

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