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Congressional Standing to Protect the Power of the Purse

Do you remember how last summer I suggested the House’s odds of prevailing (in particular, with respect to standing) in a potential Obamacare lawsuit were in the vicinity of the proverbial snowball’s chance in hell? You don’t? Good, because that turns out to be not exactly correct.

To be fair (to myself), I was discussing a somewhat different lawsuit than the one the House ended up bringing. As originally explained by Speaker Boehner, the purpose of the suit was “to compel the president to follow his oath of office and faithfully execute the laws of our country.” Specifically, it was understood that the proposed lawsuit would “focus on the Obama administration’s implementation of the Affordable Care Act, particularly the failure to implement the employer mandate in accordance with the January 1, 2014 effective date set forth in the law.”

The House ultimately ended up bringing suit against the Secretaries of HHS and Treasury for disregarding the employer mandate deadline specified in the ACA and for reducing the statutory percentage of employees who are required to be offered insurance under that mandate. These are essentially the claims we anticipated before the suit was filed (although the House wisely decided to bring them against cabinet officials rather than the president).

In addition to these employer mandate claims, however, the House alleged that the defendants had illegally spent billions of dollars in “cost-sharing” payments to insurance companies under the ACA. Such payments were made pursuant to section 1402 of the ACA in order to compensate insurance companies for reducing the out-of-pocket cost of insurance for lower income beneficiaries.

According to the House’s complaint, payments under section 1402 must be funded through the normal annual appropriations process. Although the administration initially recognized this by submitting an FY 2014 appropriations request for these payments, it changed its position after Congress refused to appropriate the funds. Beginning in January 2014, the administration drew and spent money from permanent appropriations to make the section 1402 payments. The House maintains that this was illegal and unconstitutional because there was no permanent appropriation that covered these payments.

The District Court Decision

In an opinion issued September 9, Judge Collyer addressed the House’s standing to bring the lawsuit. With respect to the employer mandate claims, she found the House lacked standing. Notwithstanding the House’s attempt to characterize these claims as constitutionally based (because the executive’s actions allegedly usurped the Constitution’s exclusive grant of legislative authority to Congress), the court concluded that these claims were predicated on “fundamentally a statutory argument.” Slip op. at 32. Accepting the House’s position would mean “every instance of an extra-statutory action by an Executive officer might constitute a cognizable constitutional violation, redressable by Congress through a lawsuit.” Id. at 33.

Accordingly, the court dismissed the employer mandate claims for lack of standing, just as I (and pretty much everybody else) predicted. So far, so good.

With respect to the section 1402 spending claim, however, the court reached a different conclusion. It characterized this “non-appropriation” claim as one “to preserve [the House’s] power of the purse and to maintain constitutional equilibrium between the Executive and the Legislature.” Slip op. at 2. The court found this claim to be distinguishable from the employer mandate claims for standing purposes.

At the outset, Collyer stressed that “[a]uthorization and appropriation by Congress are nonnegotiable prerequisites to government spending.” Slip op. at 3 (citing Art. I, § 9, cl. 7, which provides “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law. . . .). She also noted that “appropriations are an integral part of our constitutional checks and balances, insofar as they tie the Executive Branch to the Legislature Branch via purse string.” Slip op. at 5. These characteristics of the appropriations power, in the court’s view, make the House’s injury with respect to the non-appropriation claim more concrete and particularized than with respect to a garden variety dispute over how the executive has implemented a statute.

The court also found a “critical distinction” between the “essences” of the non-appropriation and employer mandate claims; the former “alleges that the Executive was unfaithful to the Constitution” while the latter “alleges that the Executive was unfaithful to a statute, the ACA.” Slip op. at 23. True, the court acknowledged, resolution of the constitutional non-appropriation claim would involve some statutory analysis but this is only because the executive branch is asserting a statute (the ACA) as its defense. Id. at 30 n.24. The House’s claim is simply that “the Executive has drawn funds from the Treasury without a congressional authorization—not in violation of any statute, but in violation of Article I, § 9, cl. 7 of the Constitution.” Id. at 24.

Judge Collyer addresses a number of other points in her opinion (for a full summary see Professor Blackman’s post), but I want to flag just two more. First, the judge places a good deal of weight on the role that the power of the purse plays in the system of checks and balances. As she puts it, the “constitutional structure would collapse, and the role of the House would be meaningless, if the Executive could circumvent the appropriations process and spend fund however it pleases.” Slip op. at 25. Put another way, when there is a garden variety legislative-executive dispute over statutory implementation (such as with regard to the employer mandate), there is no need for a judicial remedy in part because Congress has the power of the purse to enforce its will. “But when the appropriations process itself is circumvented, Congress finds itself deprived of its constitutional role and injured in a more particular and concrete way.” Id. at 32; see also id. at 29 (“[T]he harm alleged in this case is particularly insidious because, if proved, it would eliminate Congress’s role vis-à-vis the Executive.”).

The second point is not explicitly in the opinion, but I think can be inferred from it. While Collyer is careful not to address the merits, her opinion leaves the impression that the administration’s justification for drawing on permanent appropriations to make section 1402 payments is shaky at best. If she thought this was just a case of reasonable disagreement over the meaning of a statute, I suspect she would not use words like “insidious” to describe the administration’s (alleged) action. Moreover, no explanation is suggested for why the administration changed its position on the appropriations issue other than its realization that it could not obtain the funds through the normal appropriations process.

If the administration’s underlying legal position is objectively and/or subjectively unreasonable, it is easier to understand the imperative of allowing the House a means of redress.

 

Analysis

We should begin by clarifying the existing state of the law with respect to institutional congressional standing (i.e., the standing of either house or a committee/legislator authorized to sue by either house, as opposed to individual legislators acting on their own). There have been relatively few cases in which such standing has been an actual or potential issue and, as Al Gore might say, they have produced no “controlling legal authority” on when such standing will be recognized. (One exception is the recognition within the D.C. Circuit, see slip op. at 20, that congressional plaintiffs may sue to enforce subpoenas or obtain information.) Indeed, as this recent article by Nat Stern (no relation) explains, the Supreme Court has deliberately left open the general question of institutional congressional standing, and, as recently as June, the Court went out of its way to say nothing about the issue. See Arizona State Legislature v. Arizona Independent Redistricting Comm’n, 576 U.S. __ n. 12 (2015). And no previous case has considered, much less decided, congressional standing in the context of spending of unappropriated funds.

(If you are wondering what the Constitution actually says about congressional standing, as opposed to what courts say it says, unfortunately neither constitutional text nor history tell us very much. Professor Michael Ramsey explains at The Originalism Blog).

Given this landscape, the court was clearly correct to observe that “no case has decided whether this institutional plaintiff has standing on facts such as these.” Slip op. at 22. On the other hand, it was somewhat imprecise when it later referred to “decades of precedent for the proposition that Congress lacks standing to affect the implementation of federal law.” Id. at 31. The latter statement refers to cases involving the direct participation of legislative officers in executing federal law or, more relevantly, the standing of individual legislators to sue for failure to execute the law. It is fair to predict that the hostility of the courts toward individual legislator standing will translate into severe curtailment, if not complete elimination, of institutional legislative standing, but it is not quite accurate to say that existing precedent dictates this outcome.

The best reason for concluding that courts will not recognize institutional standing in garden variety failure to enforce cases is simply that the courts do not want to be in the business of adjudicating disputes between the political branches on a routine basis. While institutional suits have been rare, this could change rapidly if the courts were to open the door to all such suits. So Judge Collyer was clearly “correct,” where by “correct” we mean she will almost certainly be affirmed by the D.C. Circuit and Supreme Court, in dismissing the employer mandate claims for lack of standing.

It is less clear whether Collyer was “correct” in this sense when she refused to dismiss the House’s non-appropriation claim. Professor Adler offers the following:

Should House v. Burwell reach the Supreme Court, I would be surprised if the standing claim prevailed (even though I think the House’s claims are quite strong on the merits). Justice Antonin Scalia is the least likely justice to find congressional standing in a case such as this, and it’s hard to see how Congress could prevail without his vote. Chief Justice John Roberts is also quite the standing hawk, and I suspect he’d vote the same way. So if I had to make a prediction, the House would ultimately lose this suit on standing grounds, 7-2.

That sounds about right to me, but, as Adler makes clear, this is guesswork based on aggregating the preferences of individual justices, not on applying existing legal principles or precedent.

Moreover, it is likely that the Court will recognize some cases in which congressional institutional standing is appropriate, as it arguably has already done with respect to defense of the constitutionality of federal statutes. At this juncture we have no idea how the Court will identify those exceptional or extraordinary cases. One cannot fairly criticize Judge Collyer for misapplying a standing doctrine that has not been announced yet. So the real question should be whether she has articulated a plausible basis for concluding that the House’s non-appropriation claim presents the type of extraordinary situation that should be exempted from the (presumed) general rule of no congressional institutional standing.

I think the answer to this question is yes. First, as the court notes, the non-appropriation claim alleges a violation of the explicit constitutional prohibition against drawing unappropriated funds from the Treasury. Both the violation and the injury are concrete and particularized, far more so than disagreements over statutory implementation. Moreover, the latter types of disputes are commonplace and inevitable, while by contrast it would seem relatively straightforward to avoid drawing funds where there is no appropriation. Doubtful cases can be avoided by following a clear statement rule, which, according to Judge Collyer, is what the law provides.  See slip op. at 4 (citing 21 U.S.C. § 1301 (d)).

There has been some criticism of Collyer’s attempt to distinguish the non-appropriation and employer mandate claims on the ground that the former is essentially constitutional and the latter essentially statutory. Professor Bagley, who argues that the House lacks standing on either type of claim, calls the distinction “incoherent” because both involve constitutional and statutory aspects. Professor Foley, who argues the House has standing for both types, similarly contends that the distinction is an “artificial and unsustainable bifurcation.”

These criticisms seem to me to be off the mark. FWIW, I think the court is right that the non-appropriation claim is essentially constitutional (the statute is asserted only as a defense), while the employer mandate claim is essentially statutory. I am not sure, however, that this difference alone is critical for standing purposes. In the census case, for example, the House asserted that the use of sampling in the census violated both the Census Clause’s requirement of an “actual enumeration” and a specific prohibition in the Census Act. The injury from both was the same, and the three-judge panel did not distinguish between them in upholding the House’s standing. See U.S. House of Representatives v. U.S. Dep’t of Commerce, 11 F. Supp.2d 76, 85 (D.D.C. 1998) (“If statistical sampling in the apportionment census violates the Census Act or the Constitution, Congress will not receive information that it is entitled to be statute.”).

The more important distinction would seem to relate to the nature of the injury and the zone of interests protected by the constitutional or statutory provision. The Constitution’s ban on withdrawing funds without an appropriation seems clearly designed to protect Congress’s power of the purse and the violation causes a concrete and particularized institutional injury. (The argument here is analogous to, and in some respects stronger than, the House’s argument in the census case). By contrast, the employer mandate is designed to protect employees, not Congress, and the alleged injury to Congress’s legislative power is too general and abstract to support standing.

The even stronger argument for the House’s standing on the non-appropriation claim relates to the importance of the power of the purse in maintaining whatever equilibrium still exists between the political branches. As Judge Collyer forcefully argues, if the executive can get away with circumventing the appropriations process, the power of the purse becomes meaningless and an essential part of the constitutional structure of checks and balances would collapse.

As noted earlier, the typical response whenever Congress seeks to appear in court to protect its prerogatives vis-à-vis the executive is that Congress should use its “political remedies” instead. The power of the purse is usually the primary political remedy suggested (see the remarks of Justices Scalia, O’Connor and Ginsburg during the census oral argument). The fact that this case involves the power of the purse itself (and apparently involves the executive disregarding the power of the purse in blatant fashion) distinguishes it from the ordinary congressional lawsuit.

If the executive can disregard the power of the purse without consequence, Congress’s only remaining “political remedy” is impeachment. And what happens if the executive disregards that?

 

Conclusion

For the reasons stated above, there is considerable merit to Judge Collyer’s decision to uphold the House’s standing on the non-appropriation claim while rejecting it on the employer mandate.  Whether this decision will survive appeal, only time will tell.

It is important to note, however, that the court’s decision was predicated on the extraordinary nature of the non-appropriation claim. It is not an invitation to bring every congressional-executive dispute before the courts. For example, I would be very skeptical of the argument that Judge Collyer’s decision could be used to establish standing for a congressional challenge to the Iran deal, as some have suggested. (See Professor Blackman on this issue). The key to protecting Collyer’s ruling on appeal is to persuade the courts that it establishes a narrow exception that will not swallow the rule. Consider the opening sentences in the House’s Supreme Court brief in the census case: “Houses of Congress rarely come to court. But this is an extraordinary case.”

Finally, whatever the final outcome with regard to congressional standing, we should not lose sight of the bigger picture. The House’s non-appropriation claim actually is extraordinary. The House says that the administration is paying billions of dollars to insurance companies that Congress never agreed could be drawn from the Treasury. These funds are not merely being drawn for one year; the administration is drawing them from permanent appropriations, which in effect makes them an obligation for taxpayers yet unborn (call it “birthright debt”). If the House’s claim is true, this ought to be a congressional concern of the highest order, not just a problem that is delegated to its lawyers.

If Congress loses the power of the purse, it really has very little power left.

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