Is Obama’s “like it/keep it” fix legal? Part 3

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

Last week, the House Judiciary Committee held a hearing to investigate whether President Obama has violated his constitutional duty to enforce the laws. The hearings focused in part on the legality of the administrative fix to the “like it/keep it” problem. Per the fix, state insurance commissioners were told they could wait for a year to enforce a raft of new insurance rules contained in the Affordable Care Act.

As I’ve explained before, the administrative fix is probably unlawful. At the hearing, however, Simon Lazarus of the Constitutional Accountability Center offered a staunch defense. His claim—which has also cropped up elsewhere—is rooted in the Administrative Procedure Act, which allows courts to “compel agency action” that is “unreasonably delayed.” Over at the New Republic, Jeffrey Rosen explains:

[A]s Lazarus argued, the [unreasonable-delay provision] …  isn’t an inflexible command: Courts have long made clear that the statutory deadline is one factor to consider in evaluating whether a delay is unreasonable. Moreover, Lazarus argued, the mere fact that the Administrative Procedure Act allows courts to force dithering agencies to implement regulations only in rare cases suggests that Congress has long intended to give agencies broad discretion about when to implement the regulations in the first place.

I think this is wrong. It’s worth explaining why.

“Unreasonable delay” cases typically arise when a statute commands an agency to act and the agency hasn’t yet done so. This kind of thing happens all the time. When it does, the APA lets a litigant come to court and say, “Hey, agency, the statute says you have to act and you haven’t yet. Get on it.” Lazarus is right that the courts tend to defer to agencies that dawdle.

But the “unreasonable delay” cases have nothing to say about the administrative fix. No one is complaining that HHS has failed to act. The complaint is that HHS acted when it shouldn’t have. The administrative fix is itself an agency action that could be challenged as contrary to law.

Conceptually, it’s tempting to put an agency policy that promises to withhold enforcement into the “agency inaction” box. That’s not, however, how the courts think about the problem. If they did, then all of the cases challenging enforcement policies would be treated as cases about “unreasonable delay.” But they’re not. Instead, they’re treated as straight-up challenges to the policies themselves.

In short, I still think the administrative fix is legally vulnerable. To my knowledge, no insurer has sought to challenge it in court (although some insurers probably have standing to do so). If litigation does erupt over the fix, I sure hope the administration can come up with a better argument than I’ve seen so far.

Hidden information below


Email Address*