Is Obama’s “like it/keep it” fix legal? — ctd.

The following is a guest post by Nicholas Bagley, University of Michigan Assistant Professor of Law.

I speculated last week about the legal basis for the administrative fix that the president announced to deal with the “like it/keep it” fiasco. Since then, the administration has offered a new hint about its thinking. According to press accounts, it means to defend the fix—which delays application of the ACA to insurance plans currently sold on the individual market for one year—as an exercise of its enforcement discretion.

I’m not sure this rationale works. The administration’s claim rests on an expansive reading of Heckler v. Chaney, an important Supreme Court decision from 1985. In Heckler, the Court held that agencies have wide discretion to decide whether, when, and how to enforce the law. No agency, the Court explained, has enough resources to police every technical legal violation. Instead, agencies must set priorities based on a host of factors—the harm caused by the violation, the likelihood of prevailing, the need to conserve scarce resources, and the like. Courts shouldn’t second-guess how an agency weighs all those factors. Enforcement, in the legal jargon, is “committed to agency discretion by law.”

But just how far does the Heckler principle go? Although federal agencies have wide discretion to decline to prosecute, they can’t dispense with the law altogether. That would contravene the President’s constitutional duty to “take Care that the Laws be faithfully executed.” The difficulty is that there’s no crisp dividing line between non-enforcement of the law (which is OK) and ignoring the law (which is not). In principle, you could spin the like it/keep it fix either way. It’s both a decision not to enforce the law against a discrete set of plans and a decision to dispense with the law as to those plans.

The administration’s legal defense rests on the claim that the fix falls on the non-enforcement side of the ledger. Maybe. But I see four reasons to worry. First, it’s not the federal government’s job to enforce the ACA’s insurance rules. That’s up to the states. It’s hard to justify the administrative fix as an exercise of enforcement discretion when someone else is doing the enforcing. (The feds can step in if a state fails to “substantially enforce” the ACA. But the states were prepared to enforce the law, which is why insurers canceled their non-conforming plans in the first place.*)

Second, Heckler is mostly concerned with giving agencies the space to make “discretionary judgment[s] concerning the allocation of enforcement resources.” The administration’s decision to stop deporting DREAMers, for example, can be defended as that kind of judgment. With millions of people in violation of the immigration laws, it’s sensible to devote limited resources to deporting the worst offenders. Here, in contrast, the fix doesn’t really have anything to do with resource allocation. Wedging it into the Heckler rule may therefore be hard.

Third, Heckler’s general assumption that agencies have enforcement discretion can be rebutted where a statute constrains that discretion. Here, the ACA probably does. On Thursday, the president acknowledged that he was trying to “fix” the ACA’s grandfather clause, which, in his view, was drafted too narrowly. But doesn’t that clause stand as persuasive evidence that the plans that it covers are the only ones that Congress wanted to grandfather? Whatever the scope of its enforcement discretion, the administration probably can’t exercise that discretion to deliberately rewrite the statute.

Fourth, the D.C. Circuit has suggested that Heckler should be confined to “single-shot” decisions not to enforce against small, discrete sets of violators. In words that seem pertinent here, the court has said that “an agency’s pronouncement of a broad policy against enforcement poses special risks that it has consciously and expressly adopted a general policy that is so extreme as to amount to an abdication of its statutory responsibilities.” Distinguishing between single-shot decisions and broad policies isn’t as easy as you might think—even the agency choice at issue in Heckler wasn’t, strictly speaking, a single-shot decision. But the breadth of the fix is another strike against it.

In short, I’m uncomfortable with the “enforcement discretion” justification. Because I haven’t yet seen a complete legal defense, I remain open to persuasion. As it stands, however, the administrative fix looks awfully vulnerable to legal attack.

* Actually, it’s a little more complicated than that. Six states, including Texas, have said they won’t enforce the ACA’s new insurance rules. The federal government will have to enforce the law in those states. On the whole, however, the states remain primarily responsible for enforcing the ACA.

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