DANGER, WILL ROBINSON: The stakes in the #TexasFoldEm lawsuit were just raised further

Jibbers Crabst on a stick. Any time University of Michigan Law Professor Nicholas Bagley begins his Twitter threads with a screenshot of legalese, it's bad news.

First, here's his full thread:

The panel in the Fifth Circuit that's about to hear Texas v. United States has just asked for further briefing on standing -- and in particular on whether the intervenor states and the House of Representatives can properly appeal the case.

— Nicholas Bagley (@nicholas_bagley) June 26, 2019

This is an ominous sign. If neither the blue states nor the House has standing, it would mean that no one has standing to appeal the decision. That would effectively leave the lower court decision unappealable.

— Nicholas Bagley (@nicholas_bagley) June 26, 2019

What happens then is a bit uncertain to me -- but I don't think it's good. I doubt this is a case in which you'd get a Munsingwear vacatur: normally, if the parties don't appeal, the lower court decision stands. And that's what we'd effectively have. See Bancorp.

— Nicholas Bagley (@nicholas_bagley) June 26, 2019

If so, O'Connor's declaration that the ACA is invalid -- lock, stock, and barrel -- would remain on the books and would bind the Trump administration. That's not necessarily a death-knell for the ACA, because the declaration might or might not extend nationwide.

— Nicholas Bagley (@nicholas_bagley) June 26, 2019

And O'Connor hasn't entered injunctive relief anyhow, so I don't think the Trump administration would immediately throw its hands up and decline to enforce the ACA.

— Nicholas Bagley (@nicholas_bagley) June 26, 2019

More to the point, the House and the blue states would immediately seek a stay pending appeal while they pursued their standing arguments in front of the Supreme Court. But arguing about whether they have standing is not the footing on which they want to go to the Court.

— Nicholas Bagley (@nicholas_bagley) June 26, 2019

More generally, this order suggests that the Fifth Circuit panel may be hostile to the ACA and inclined to support the red states. The odds that the Fifth Circuit does something nasty to the health-reform law have gone up.

— Nicholas Bagley (@nicholas_bagley) June 26, 2019

I'm still thinking this through, and lord knows the panel may ultimately decide that someone does have standing to take the appeal. The Supreme Court too will have the final say. But my word, this seems bad to me. /fin

— Nicholas Bagley (@nicholas_bagley) June 26, 2019

Second, don't panic. Note that even Bagley makes sure to include several caveats that this may not be as bad as it looks. In addition, see these tweets from Case Western Reserve University Law Professor Jonathan Adler. Adler is hardly a friend of the ACA--he was one of the main architects behind a previous attempt to overturn the law based on the infamous #KingvsBurwell case (which, I should note, had its Supreme Court decision announced exactly four years ago), and even he says that the Texas vs. Azar lawsuit has zero legal justification:

I think there's good reason to be skeptical of House standing to pursue appeal, but it's hard for me to see how Intervenor states lack standing if Plaintiff states had it - and it would be quite odd to toss appeal on that basis.

— Jonathan H. Adler (@jadler1969) June 26, 2019

I'm hopeful this jsut means panel is taking standing seriously - perhaps seriously enough to overturn O'Connor's ruling on that basis alone.
Curious whether @nicholas_bagley agrees.

— Jonathan H. Adler (@jadler1969) June 26, 2019

Might this just be an indication that they taken standing seriously and an awareness that Bethune-Hill has obvious implications for House standing? If so, perhaps this is precursor to holding plaintiff states lacked standing in first place. 1/2

— Jonathan H. Adler (@jadler1969) June 26, 2019

OTOH, perhaps some on the panel think plaintiff states lack standing, prompting someone to ask "if red states lack standing, how do blue states have it?" It's a fair question, but it seems to me intervenor states have far stronger standing claim that plaintiffs. 2/2

— Jonathan H. Adler (@jadler1969) June 26, 2019

Third, as a reminder, here's the Texas vs. Azar (aka Texas vs. US, aka #TexasFoldEm) "case" in a nutshell:

  1. The ACA's Individual Mandate penalty is only Constitutional because the penalty is considered a tax by the Supreme Court.
  2. The GOP changed the penalty fee to $0 or 0% of income.
  3. Therefore, that somehow makes not only the mandate unconstitutional, it also means the rest of the law is as well, because...reasons.
  4. Therefore, the entire law needs to be repealed en masse.

No, it makes zero sense whatsoever. Yet here we are.

Fourth, here's just part of what's at stake if the plaintiffs ultimately win and the entire ACA is torn down "lock, stock & barrel" as Bagley put it:

  • 16 million people would lose Medicaid
  • 9 million people would lose subsidized private ACA exchange coverage
  • 850,000 would lose BHP coverage in Minnesota & New York
  • Medicare Part D donut hole? Reopened.
  • Children being allowed to stay on their parents plans until age 26? Gone.
  • Discrimination against those with preexisting conditions? Back.
  • Annual & lifetime limits on coverage? Back.
  • Caps on out of pocket expenses? Gone.
  • ...and much, much more.

The actual oral arguments on the case in front of the 5th Circuit Court of Appeals is scheduled for Tuesday, July 9th.

The assumption until now has been that 1) the 5th Circuit is likely to rule against the plaintiffs on the (lack of merits) of their case, and 2) even if they ruled for the plaintiffs, the case would then be appealed again up to the U.S. Supreme Court, where it would likely not be heard until sometime next year.

With this development, Bagley is saying that there's a possibility that there may not be any appeal possible, because the U.S. Department of Justice (which is supposed to defend the law) is refusing to do so (and in fact is actually siding with the plaintiffs), and the coalition which is bringing the appeal (a bunch of Democratic state Attorneys General as well as the U.S. House of Representatives) wouldn't be allowed to do so since they "don't have standing".

I'm not a lawyer, but this sounds insane to me--I suppose you might be able to argue that the House doesn't have standing, but certainly the states do...and both Adler and Bagley seem to agree with me:

How the hell COULDN'T the states in particular have standing?? Tens of millions of their residents, tens of billions of dollars, public health, state economies, ALL of them would be directly impacted. (I know, IANAL nor a Constitutional expert so I'm just shouting at the wind)

— Charles Gaba (@charles_gaba) June 26, 2019

I dunno. But I'm not the one asking the questions!

— Nicholas Bagley (@nicholas_bagley) June 26, 2019