U.S. House of Representatives v. Burwell

• Citation: 185 F.Supp.3d 165
• Decision Date: 12 May 2016
• Docket Number: Civil Action No. 14-1967 (RMC)
• Parties: United States House of Representatives, Plaintiff, v. Sylvia Matthews Burwell in her official capacity as Secretary of the United States Department of Health and Human Services, et al., Defendants.
• Court: U.S. District Court — District of Columbia

185 F.Supp.3d 165

United States House of Representatives, Plaintiff,

v.Sylvia Matthews Burwell in her official capacity as Secretary of the United States Department of Health and Human Services, et al., Defendants.

Civil Action No. 14-1967 (RMC)

United States District Court, District of Columbia.

Signed May 12, 2016

Eleni Maria Roumel, Isaac Benjamin Rosenberg, Kerry William Kircher, Kimberly Ann Hamm, Todd Barry Tatelman, William Bullock Pittard, IV, U.S. House of Representatives, Jonathan Robert Turley, George Washington University Law School, Washington, DC, for Plaintiff.

Joel L. McElvain, Matthew J.B. Lawrence, U.S. Department of Justice, Washington, DC, for Defendants.

OPINION

ROSEMARY M. COLLYER, United States District Judge

This Court previously held that the U.S. House of Representatives "has standing to pursue its allegations that the Secretaries of Health and Human Services and of the Treasury violated Article I, § 9, cl. 7 of the Constitution when they spent public monies that were not appropriated by the Congress." U.S. House of Reps. v. Burwell, 130 F.Supp.3d 53, 81 (D.D.C.2015). The merits of that claim are now before the Court.

This case involves two sections of the Affordable Care Act: 1401 and 1402. Section 1401 provides tax credits to make insurance premiums more affordable, while Section 1402 reduces deductibles, co-pays, and other means of "cost sharing" by insurers. Section 1401 was funded by adding it to a preexisting list of permanently-appropriated tax credits and refunds. Section 1402 was not added to that list. The question is whether Section 1402 can nonetheless be funded through the same, permanent appropriation. It cannot.

"If the statutory language is plain, we must enforce it according to its terms." King v. Burwell, ––– U.S. ––––, 135 S.Ct. 2480, 2489, 192 L.Ed.2d 483 (2015). Although the "meaning—or ambiguity—of certain words or phrases may only become evident when placed in context," id. the statutory provisions in this case are clear in isolation and in context. The Affordable Care Act unambiguously appropriates money for Section 1401 premium tax credits but not for Section 1402 reimbursements to insurers. Such an appropriation cannot be inferred. None of Secretaries' extra-textual arguments—whether based on economics, "unintended" results, or legislative history—is persuasive. The Court will enter judgment in favor of the House of Representatives and enjoin the use of unappropriated monies to fund reimbursements due to insurers under Section 1402. The Court will stay its injunction, however, pending appeal by either or both parties.

I. FACTS

The merits are fully briefed and ripe for resolution.¹ The following facts are undisputed.

A. Constitutional Background

Congress passes all federal laws in this country. U.S. Const. art. I, § 1 ("All legislative Powers herein granted shall be vested in a Congress of the United States[.]"). Those "Powers" includes sole authority to adopt laws that authorize the expenditure of public monies and laws that appropriate those monies. Authorization and appropriation by Congress are nonnegotiable prerequisites to government spending: "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law...." Id. art. I, § 9, cl. 7; see also United States v. MacCollom, 426 U.S. 317, 321, 96 S.Ct. 2086, 48 L.Ed.2d 666 (1976) ("The established rule is that the expenditure of public funds is proper only when authorized by Congress, not that public funds may be expended unless prohibited by Congress."). The distinction between authorizing legislation and appropriating legislation is relevant here and bears some discussion.

Authorizing legislation establishes or continues the operation of a federal program or agency, either indefinitely or for a specific period. GAO Glossary at 15.² Such an authorization may be part of an agency or program's organic legislation, or it may be entirely separate. Id. No money can be appropriated until an agency or program is authorized, although authorization may sometimes be inferred from an appropriation itself. Id.

Appropriation legislation "provides legal authority for federal agencies to incur obligations and to make payments out of the Treasury for specified purposes." Id. at 13. Appropriations legislation has "the limited and specific purpose of providing funds for authorized programs." Andrus v. Sierra Club, 442 U.S. 347, 361, 99 S.Ct. 2335, 60 L.Ed.2d 943 (1979) (quoting TVA v. Hill, 437 U.S. 153, 190, 98 S.Ct. 2279, 57 L.Ed.2d 117 (1978) ). An appropriation must be expressly stated; it cannot be inferred or implied. 31 U.S.C. § 1301(d) ("A law may be construed to make an appropriation out of the Treasury ... only if the law specifically states that an appropriation is made."). It is well established that "a direction to pay without a designation of the source of funds is not an appropriation." U.S. Government Accounting Office, GAO–04–261SP, Principles of Federal Appropriations Law (Vol.I) 2–17 (3d ed. 2004) (GAO Principles ). The inverse is also true: the designation of a source, without a specific direction to pay, is not an appropriation. Id. Both are required. See Nevada, 400 F.3d at 13–14. An appropriation act, "like any other statute, [must be] passed by both Houses of Congress and either signed by the President or enacted over a presidential veto." GAO Principles at 2–45 (citing Friends of the Earth v. Armstrong, 485 F.2d 1, 9 (10th Cir.1973) ; Envirocare of Utah, Inc. v. United States, 44 Fed.Cl. 474, 482 (1999) ).

Appropriations come in many forms. A "permanent" or "continuing" appropriation, once enacted, makes funds available indefinitely for their specified purpose; no further action by Congress is needed. Nevada, 400 F.3d at 13 ; GAO Principles at 2–14.³ A "current appropriation," by contrast, allows an agency to obligate funds only in the year or years for which they are appropriated. GAO Principles at 2–14. Current appropriations often give a particular agency, program, or function its spending cap and thus constrain what that agency, program, or function may do in the relevant year(s). Most current appropriations are adopted on an annual basis and must be re-authorized for each fiscal year. Such appropriations are an integral part of our constitutional checks and balances, insofar as they tie the Executive Branch to the Legislative Branch via purse strings.

B. Statutory Background

On December 24, 2009, H.R. 3590 (111th Cong. 2009), as amended and retitled "Patient Protection and Affordable Care Act," passed the Senate by a vote of 60–39. On March 21, 2010, the House agreed to the Senate amendments by a vote of 219–212. On March 23, 2010, H.R. 3590, as agreed to by both the Senate and the House, was signed into law by the President. See Pub.L. No. 111–148, 124 Stat. 119 (2010) (ACA).⁴ The ACA enacted a host of reforms and programs; two are relevant here.

1. Section 1401 ("Refundable Tax Credit Providing Premium Assistance for Coverage under a Qualified Health Plan")

The thrust of Section 1401 was to add a new section to the Internal Revenue Code: 26 U.S.C. § 36B. See ACA § 1401(a). Section 36B provides in principal part that "there shall be allowed as a credit against the [income] tax imposed by this subtitle for any taxable year an amount equal to the premium assistance credit amount of the taxpayer for the taxable year." 26 U.S.C. § 36B(a). Those taxpayers "whose household income for the taxable year equals or exceeds 100 percent but does not exceed 400 percent of an amount equal to the poverty line for a family of the size involved" are entitled to tax credits to cover their health insurance premiums. 26 U.S.C. § 36B(c). Section 1401 is codified in the Internal Revenue Code, not in Title 42.⁵

The appropriation for Section 1401 premium tax credits was made in Title 31 of the U.S.Code, "Money and Finance," which also sets out basic rules of federal appropriations. At 31 U.S.C. § 1301(d), the statute specifies that "[a] law may be construed to make an appropriation out of the Treasury ... only if the law specifically states that an appropriation is made." At 31 U.S.C. § 1324, the law provides for "Refund of internal revenue collections." Specifically, it appropriates to the Secretary of the Treasury "[n]ecessary amounts ... for refunding internal revenue collections as provided by law." Id.

The parties agree that 31 U.S.C. § 1324 constitutes a permanent appropriation for Section 1401 premium tax credits. Specifically, the ACA amended § 1324(b) so that it reads:

Disbursements may be made from the appropriation made by this section only for—

(1) refunds to the limit of liability of an individual tax account; and

(2) refunds due from credit provisions of the Internal Revenue Code of 1986 (26 U.S.C. 1 et seq. ) enacted before January 1, 1978, or enacted by the Taxpayer Relief Act of 1997, or from section 25A, 35, 36, 36A, 36B , 168(k)(4)(F), 53(e), 54B(h), or 6431 of such Code, or due under section 3081(b)(2) of the Housing Assistance Tax Act of 2008.

31 U.S.C. 1324(b) (emphasis on term added by ACA § 1401(d)). Put simply, ACA tax credits to subsidize health insurance for eligible taxpayers are permanently funded via the reference to "36B" in 31 U.S.C. § 1324(b)(2).

2. Section 1402 ("Reduced Cost–Sharing for Individuals Enrolling in Qualified Health Plans")

Section 1402 of the ACA provides that "[i]n the case of an eligible insured enrolled in a qualified health plan—(1) the Secretary shall notify the issuer of the plan of such eligibility; and (2) the issuer shall reduce the cost-sharing under the plan at the level and in the manner specified in subsection (c)." ACA § 1402(a). Cost sharing includes "deductibles, coinsurance, copayments, or similar charges." ACA § 1302(c)(3)(A)(i). Section 1402 thus requires insurers offering qualified health plans through ACA Exchanges to reduce deductibles, coinsurance, copayments, and similar charges for eligible insured individuals enrolled in their...