STATE OF TEXAS; STATE OF ALABAMA; STATE OF ARIZONA; STATE OF FLORIDA; STATE OF GEORGIA; STATE OF INDIANA; STATE OF KANSAS; STATE OF LOUISIANA; STATE OF MISSISSIPPI, by and through Governor Phil Bryant; STATE OF MISSOURI; STATE OF NEBRASKA; STATE OF NORTH DAKOTA; STATE OF SOUTH CAROLINA; STATE OF SOUTH DAKOTA; STATE OF TENNESSEE; STATE OF UTAH; STATE OF WEST VIRGINIA; STATE OF ARKANSAS; NEILL HURLEY; JOHN NANTZ, Plaintiffs - Appellees,
UNITED STATES OF AMERICA; UNITED STATES DEPARTMENT OF HEALTH; HUMAN SERVICES; ALEX AZAR, II, SECRETARY, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES; UNITED STATES DEPARTMENT OF INTERNAL REVENUE; CHARLES P. RETTIG, in his Official Capacity as Commissioner of Internal Revenue, Defendants - Appellants, STATE OF CALIFORNIA; STATE OF CONNECTICUT; DISTRICT OF COLUMBIA; STATE OF DELAWARE; STATE OF HAWAII; STATE OF ILLINOIS; STATE OF KENTUCKY; STATE OF MASSACHUSETTS; STATE OF NEW JERSEY; STATE OF NEW YORK; STATE OF NORTH CAROLINA; STATE OF OREGON; STATE OF RHODE ISLAND; STATE OF VERMONT; STATE OF VIRGINIA; STATE OF WASHINGTON; STATE OF MINNESOTA, Intervenor-Defendants - Appellants.
Appeals from the United States District Court for the
Northern District of Texas
KING, ELROD, and ENGELHARDT, Circuit Judges.
JENNIFER WALKER ELROD, CIRCUIT JUDGE
Patient Protection and Affordable Care Act (the Act or ACA)
is a monumental piece of healthcare legislation that
regulates a huge swath of the nation's economy and
affects the healthcare decisions of millions of Americans.
The law has been a focal point of our country's political
debate since it was passed nearly a decade ago. Some say that
the Act is a much-needed solution to the problem of
increasing healthcare costs and lack of healthcare
availability. Many of the amici in this case, for example,
argue that the law has extensively benefitted everyone from
children to senior citizens to local governments to small
businesses. Others say that the Act is a costly exercise in
burdensome governmental regulation that deprives people of
economic liberty. Amici of this perspective argue, for
example, that the Act "has deprived patients nationwide
of a competitive market for affordable high-deductible health
insurance," leaving "patients with no alternative
to . . . skyrocketing premiums." Association of American
Physicians & Surgeons Amicus Br. at 15.
these policy issues are before the court. And for good
reason- the courts are not institutionally equipped to
address them. These issues are far better left to the other
two branches of government. The questions before the court
are far narrower: questions of law, not of policy. Those
questions are: First, is there a live case or controversy
before us even though the federal defendants have conceded
many aspects of the dispute; and, relatedly, do the
intervenor-defendant states and the U.S. House of
Representatives have standing to appeal? Second, do the
plaintiffs have standing? Third, if they do, is the
individual mandate unconstitutional? Fourth, if it is, how
much of the rest of the Act is inseverable from the
answer those questions as follows: First, there is a live
case or controversy because the intervenor-defendant states
have standing to appeal and, even if they did not, there
remains a live case or controversy between the plaintiffs and
the federal defendants. Second, the plaintiffs have Article
III standing to bring this challenge to the ACA; the
individual mandate injures both the individual plaintiffs, by
requiring them to buy insurance that they do not want, and
the state plaintiffs, by increasing their costs of complying
with the reporting requirements that accompany the individual
mandate. Third, the individual mandate is unconstitutional
because it can no longer be read as a tax, and there is no
other constitutional provision that justifies this exercise
of congressional power. Fourth, on the severability question,
we remand to the district court to provide additional
analysis of the provisions of the ACA as they currently
March 23, 2010, President Barack Obama signed the ACA into
law. See Patient Protection and Affordable Care Act,
Pub. L. No. 111-148, 124 Stat. 119 (2010). The Act sought to
"increase the number of Americans covered by health
insurance and decrease the cost of health care" through
several key reforms. See Nat'l Fed'n of Indep.
Bus. v. Sebelius (NFIB), 567 U.S. 519, 538 (2012).
those reforms implemented new consumer protections, aiming
primarily to protect people with preexisting conditions. For
example, the law prohibits insurers from refusing to cover
preexisting conditions. 42 U.S.C. § 300gg-3. The
"guaranteed-issue requirement" forbids insurers
from turning customers away because of their health.
See 42 U.S.C. §§ 300gg, 300gg-1. The
"community-rating requirement" keeps insurers from
charging people more because of their preexisting health
issues. 42 U.S.C. § 300gg-4. The law also requires
insurers to provide coverage for certain types of care,
including women's and children's preventative care.
42 U.S.C. § 300gg-13(a)(3)-(4).
reforms sought to lower the cost of health insurance by using
both policy "carrots" and
"sticks." On the stick side, the individual mandate-
which plaintiffs challenge in the instant case-requires
individuals to "maintain [health insurance]
coverage." 26 U.S.C. § 5000A(a). If individuals do
not maintain this coverage, they must make a payment to the
IRS called a "shared responsibility
payment." Id.; see also King v.
Burwell, 135 S.Ct. 2480, 2486 (2015).
individual mandate was designed to lower insurance premiums
by broadening the insurance pool. See 42 U.S.C.
§ 18091(2)(J) ("By significantly increasing . . .
the size of purchasing pools, . . . the [individual mandate]
will significantly . . . lower health insurance
premiums."). When the young and healthy must buy
insurance, the insurance pool faces less risk, which, at
least in theory, leads to lower premiums for everyone.
See 42 U.S.C. § 18091(2)(I) (positing that the
individual mandate will "broaden the health insurance
risk pool to include healthy individuals, which will lower
health insurance premiums"). The individual mandate thus
serves as a counterweight to the ACA's protections for
preexisting conditions, which push riskier, costlier
individuals into the insurance pool. Under the protections
for consumers with preexisting conditions, if there were no
individual mandate, there would arguably be an "adverse
selection" problem: "many individuals would,"
in theory, "wait to purchase health insurance until they
needed care." Id.
also sought to lower insurance costs for some consumers
through policy "carrots," providing tax credits to
offset the cost of insurance to those with incomes under 400
percent of the federal poverty line. See 26 U.S.C.
§ 36B; 42 U.S.C. §§ 18081, 18082. The Act also
created government-run, taxpayer-funded health insurance
marketplaces-known as "Exchanges"- which allow
customers "to compare and purchase insurance
plans." King, 135 S.Ct. at 2485; see
also 42 U.S.C. § 18031. Opponents of the law argue
that the law has led to unintended subsidies to keep plans
afloat and insurance companies in the black. Texas points in
its brief, for example, to a Congressional Budget Office
study estimating that federal outlays for health insurance
subsidies and related spending will rise by about 60 percent
over the next ten years, from $58 billion in 2018 to $91
billion by 2028. CBO, The Budget and Economic Outlook:
2018 to 2028 at 51 (April 2018), available at
Plaintiffs' Br. at 13-14.
also enlarged the class of people eligible for Medicaid to
include childless adults with incomes up to 133 percent of
the federal poverty line. 42 U.S.C. §§
1396a(a)(10)(A)(i)(VII), 1396a(e)(14)(I)(i); NFIB,
567 U.S. at 541-42. The ACA originally required each state to
expand its Medicaid program or risk losing "all of its
federal Medicaid funds." NFIB, 567 U.S. at 542.
In NFIB, however, the Supreme Court held that this
exceeded Congress' powers under the Spending Clause.
Id. at 585 (plurality opinion). But the Court
allowed those states that wanted to accept Medicaid expansion
funds to do so. See id. at 585-86 (plurality
opinion); id. at 645-46 (Ginsburg, J., concurring in
part, concurring in the judgment in part, and dissenting in
part). As a result, the states that have not participated in
the expansion now subsidize, through their general tax
dollars, the states that have participated in expansion.
the Act was passed, its opponents have attempted to attack it
both through congressional amendment and through litigation.
Between 2010 and 2016, Congress considered several bills to
repeal, defund, delay, or amend the ACA. See
Intervenor-Defendant States' Br. at 10. Except for a few
modest changes, these efforts were closely fought but
ultimately failed. Intervenor-Defendant States' Br. at
10-11. In 2017, the shift in presidential administrations
reinvigorated opposition to the law, but many of these later
legislative efforts failed as well. In March 2017, House
leaders pulled a bill that would have repealed many of the
ACA's essential provisions. In July 2017, the Senate
voted on three separate bills that similarly would have
repealed major provisions of the Act, but each vote
failed. Finally, in September 2017, several
Senators introduced another bill that would have repealed
some of the ACA's most significant provisions, but Senate
leaders ultimately chose not to bring it to the floor for a
vote. Intervenor-Defendant States' Br. at 11.
ACA's opponents also took their cause to the courts in a
series of lawsuits, some of which reached the Supreme Court.
Particularly relevant here, the Court, in NFIB,
upheld the law's individual mandate. 567 U.S. at 574.
Through fractured voting and shifting majorities-explained in
more detail in Part V of this opinion-the Court decided that
the ACA's individual mandate could be read as a tax on an
individual's decision not to purchase insurance, which
was a constitutional exercise of Congress' taxing powers
under Article I of the U.S. Constitution. Id.; U.S.
Const. art. I, § 8, cl. 1. The Court favored this tax
interpretation to save the provision from
unconstitutionality. Reading the provision as a standalone
command to purchase insurance would have rendered it
unconstitutional. This reading could not have been justified
under the Commerce Clause because it would have done more
than "regulate commerce . . . among the several
states." U.S. Const. art. I, § 8, cl. 3. It would
have compelled individuals to enter commerce in the
first place. NFIB, 567 U.S. at 557-58. The
Court also held that the provision could not be justified
under the Constitution's Necessary and Proper Clause.
Id. at 561 (Roberts, C.J.); id. at 654-55
(Scalia, Kennedy, Thomas, and Alito, JJ., dissenting).
December 2017, the ACA's opponents achieved some
legislative success. As part of the Tax Cuts and Jobs Act,
Congress set the "shared responsibility payment"
amount-the amount a person must pay for failing to comply
with the individual mandate-to the "lesser" of
"zero percent" of an individual's household
income or "$0," effective January 2019. Pub. L. No.
115-97, § 11081, 131 Stat. 2054, 2092 (2017); see
also 26 U.S.C. § 5000A(c). The individual mandate
is still "on the books" of the U.S. Code and still
consists of the three fundamental components it always
featured. Subsection (a) prescribes that certain individuals
"shall . . . ensure" that they and their dependents
are "covered under minimum essential coverage." 26
U.S.C. § 5000A(a). Subsection (b) "impose[s] . . .
a penalty" called a "[s]hared responsibility
payment" on those who fail to ensure they have minimum
essential coverage. 26 U.S.C. § 5000A(b). Subsection (c)
sets the amount of that payment. All Congress did in 2017 was
change the amount in subsection (c) to zero dollars. 26
U.S.C. § 5000A(c).
months after the shared responsibility payment was set at
zero dollars, the plaintiffs here-two private
citizens and eighteen states-filed this
lawsuit against several federal defendants: the United States
of America, the Department of Health and Human Services and
its Secretary, Alex Azar, as well as the Internal Revenue
Service and its Acting Commissioner, David J. Kautter. The
plaintiffs argued that the individual mandate was no longer
constitutional because: (1) NFIB rested the
individual mandate's constitutionality exclusively on
reading the provision as a tax; and (2) the 2017 amendment
undermined any ability to characterize the individual mandate
as a tax because the provision no longer generates revenue, a
requirement for a tax. The plaintiffs argued further that,
because the individual mandate was essential to and
inseverable from the rest of the ACA, the entire ACA must be
enjoined. On this theory, the plaintiffs sought declaratory
relief that the individual mandate is unconstitutional and
the rest of the ACA is inseverable. The plaintiffs also
sought an injunction prohibiting the federal defendants from
enforcing any provision of the ACA or its regulations.
federal defendants agreed with the plaintiffs that once the
shared responsibility payment was reduced to zero dollars,
the individual mandate was no longer constitutional. They
also agreed that the individual mandate could not be severed
from the ACA's guaranteed-issue and community-rating
requirements. Unlike the plaintiffs, however, the federal
defendants contended in the district court that those three
provisions could be severed from the rest of the Act. Driven
by the federal defendants' decision not to fully defend
against the lawsuit, sixteen states and the District of
Columbia intervened to defend the ACA.
district court agreed with the plaintiffs' arguments on
the merits. Specifically, the court held that: (1) the
individual plaintiffs had standing because the individual
mandate compelled them to purchase insurance; (2) setting the
shared responsibility payment to zero rendered the individual
mandate unconstitutional; and (3) the unconstitutional
provision could not be severed from any other part of the
ACA. The district court granted the plaintiffs' claim for
declaratory relief. Specifically, the district court's
order "declares the Individual Mandate, 26 U.S.C. §
5000A(a), UNCONSTITUTIONAL," and the order further
declares that "the remaining provisions of the ACA, Pub
L. 111-148, are INSEVERABLE and therefore INVALID." The
district court, however, denied the plaintiffs'
application for a preliminary injunction. The district court
entered partial final judgment as to the grant of summary
judgment for declaratory relief, but stayed judgment pending
appeal. This appeal followed.
appeal, the U.S. House of Representatives intervened to join
the intervenor-defendant states in defending the
ACA. Also on appeal, the federal defendants
changed their litigation position. After contending in the
district court that only a few provisions of the ACA were
inseverable from the individual mandate, the federal
defendants contend in their opening brief for the first time
that all of the ACA is inseverable. See Fed.
Defendants' Br. at 43-49. Moreover, the federal
defendants contend for the first time on appeal that-even
though the entire ACA is inseverable-the court should not
enjoin the enforcement of the entire ACA. The federal
defendants now argue that the district court's judgment
should be affirmed "except insofar as it purports to
extend relief to ACA provisions that are unnecessary to
remedy plaintiffs' injuries." Fed.
Defendants' Br. at 49. They also now argue that the
district court's judgment "cannot be understood as
extending beyond the plaintiff states to invalidate the ACA
in the intervenor states." Fed. Defendants' Supp.
Br. at 10. Simply put, the federal defendants have shifted
their position on appeal more than once.
review a district court's grant of summary judgment
de novo. Time Warner Cable, Inc. v. Hudson,
667 F.3d 630, 638 (5th Cir. 2012). Summary judgment is
appropriate when "the movant shows that there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law." Fed.R.Civ.P.
56(a); see also Dialysis Newco, Inc. v. Cmty. Health Sys.
Grp. Health Plan, 938 F.3d 246, 250 (5th Cir. 2019). A
dispute about a material fact is genuine if "the
evidence is such that a reasonable jury could return a
verdict for the non-moving party." Amerisure Ins. v.
Navigators Ins., 611 F.3d 299, 304 (5th Cir. 2010)
(quoting Gates v. Tex. Dep't of Protective &
Regulatory Servs., 537 F.3d 404, 417 (5th Cir. 2008)).
When ruling on a motion for summary judgment, the court views
all inferences drawn from the factual record "in the
light most favorable to the non-moving parties below."
Trent v. Wade, 776 F.3d 368, 373 n.1 (5th Cir.
first must consider whether there is a live
"[c]ase" or "[c]ontroversy" before us on
appeal, as Article III of the U.S. Constitution requires.
U.S. Const. art. III, § 1. A case or controversy does
not exist unless the person asking the court for a
decision-in this case, asking us to decide whether the
district court's judgment was correct-has standing, which
requires a showing of "injury, causation, and
redressability." Sierra Club v. Babbitt, 995
F.2d 571, 574 (5th Cir. 1993). When "standing to appeal
is at issue, appellants must demonstrate some injury from the
judgment below." Id. at 575 (emphasis omitted).
conclude, as all parties agree, that there is a case or
controversy before us on appeal. Two groups of parties
appealed from the district court's judgment: the federal
defendants, and the intervenor-defendant
states. There is a case or controversy before us
because both of these groups have their own independent
standing to appeal.
federal defendants have standing to appeal. The instant case
is on all fours with the Supreme Court's decision in
United States v. Windsor, 570 U.S. 744 (2013). In
that case, the executive branch of the federal government
declined to defend a federal statute that did not allow the
surviving spouse of a same-sex couple to receive a spousal
tax deduction. Id. at 749-53. The district court
ruled that the statute was unconstitutional and ordered the
executive branch to issue a tax refund to the surviving
spouse. Id. at 754-55. The executive branch agreed
with the district court's legal conclusion, but it
appealed the judgment and continued to enforce the statute by
withholding the tax refund until a final judicial resolution.
Id. at 757-58.
Supreme Court ruled that "the United States retain[ed] a
stake sufficient to support Article III jurisdiction."
Id. at 757. That stake was the tax refund, which the
federal government refused to pay. This threat of payment of
money from the Treasury constituted "a real and
immediate economic injury" to the federal government,
which was sufficient for standing purposes. Id. at
757-58 (quoting Hein v. Freedom From Religion Found.,
Inc., 551 U.S. 587, 599 (2007) (plurality opinion)). As
the Court explained, "the refusal of the Executive to
provide the relief sought suffices to preserve a justiciable
dispute as required by Article III." Windsor,
570 U.S. at 759; see also Food Mktg. Inst. v. Argus
Leader Media, 139 S.Ct. 2356, 2362 (2019) (concluding
that there was a justiciable controversy because the
government "represented unequivocally" that it
would not voluntarily moot the controversy absent a final
judicial order, and "[t]hat is enough to satisfy Article
III"); INS v. Chadha, 462 U.S. 919, 939 (1983)
(holding that there was "adequate Art. III
adverseness" because the executive branch determined
that a federal statute was unconstitutional and refused to
defend it but simultaneously continued to abide by it).
instant case is similar. Though the plaintiffs and the
federal defendants are in almost complete agreement on the
merits of the case, the government continues to enforce the
entire Act. The federal government has made no indication
that it will begin dismantling any part of the ACA in the
absence of a final court order. Just as in Windsor,
then, effectuating the district court's order would
require the federal government to take actions that it would
not take "but for the court's order."
Windsor, 570 U.S. at 758. And just as in
Windsor, the federal defendants stand to suffer
financially if the district court's judgment is
affirmed. As just one example, the district
court's judgment declares the Act's Medicare
reimbursement schedules unlawful, which, if given effect,
would require Medicare to reimburse healthcare providers at
higher rates. See, e.g., 42 U.S.C. §
1395ww(b)(3)(B)(xi)-(xii). Therefore, just as in
Windsor, an appellate decision here will "have
real meaning." 570 U.S. at 758 (quoting Chadha,
462 U.S. at 939).
intervenor-defendant states also have standing to appeal.
While a party's mere "status as an intervenor below
. . . does not confer standing," Diamond v.
Charles, 476 U.S. 54, 68 (1986), intervenors may appeal
if they can demonstrate injury from the district court's
judgment. Sierra Club, 995 F.2d at 574; see also
Va. House of Delegates v. Bethune-Hill, 139 S.Ct. 1945,
1951 (2019); Cooper v. Tex. Alcoholic Beverage
Comm'n, 820 F.3d 730, 737 (5th Cir. 2016). The
intervenor-defendant states have made this showing because
the district court's judgment, if ultimately given
effect, would: (1) strip these states of funding that they
receive under the ACA; and (2) threaten to hamstring these
states in possible future litigation because of the district
court judgment's potentially preclusive
the intervenor-defendant states receive significant funding
from the ACA, which would be discontinued if we affirmed the
district court's judgment declaring the entire Act
unconstitutional. "[F]inancial loss as a result of"
a district court's judgment is an injury sufficient to
support standing to appeal. United States v. Fletcher ex
rel. Fletcher, 805 F.3d 596, 602 (5th Cir. 2015). In
their supplemental briefing, the intervenor-defendant states
identify a few examples of the funding sources they would
lose under the district court's judgment. Evidence in the
record shows that eliminating the Act's Medicaid
expansion provisions alone would cost the original sixteen
intervening state defendants and the District of Columbia a
total of more than $418 billion in the next decade.
See 42 U.S.C. §§ 1396a(a)(10)(A)(i)(VIII),
(e)(14)(I)(i), 1396d(y)(1). Moreover, the Act's Community
First Choice Option program gives states funding to care for
the disabled and elderly at home or in their communities
instead of in institutions. See 42 U.S.C. §
1396n(k). Record evidence shows that eliminating this program
would cost California $400 million in 2020, and that Oregon
and Connecticut have already received $432.1 million under
this program. This evidence is more than enough to show that
the intervenor-defendant states would suffer financially if
the district court's judgment is given effect, an injury
sufficient to confer standing to appeal. See Dep't of
Commerce v. New York, 139 S.Ct. 2551, 2565 (2019).
district court's judgment, if given effect, also
threatens to injure the intervenor-defendant states with the
judgment's potentially preclusive effect in future
litigation. We have held that "[a] party may be
aggrieved by a district court decision that adversely affects
its legal rights or position vis-à-vis other parties
in the case or other potential litigants." Leonard
v. Nationwide Mut. Ins., 499 F.3d 419, 428 (5th Cir.
2007) (quoting Custer v. Sweeney, 89 F.3d 1156, 1164
(4th Cir. 1996)). If the federal defendants began unwinding
the ACA, either in reliance on the district court's
judgment or on their own, the district court's judgment
would potentially estop the intervenor-defendant states from
challenging that action in court. This case thus stands in
contrast to the cases in which there was no chance whatsoever
of a preclusive effect. See Klamath Strategic Inv. Fund
ex rel. St. Croix Ventures v. United States, 568 F.3d
537, 546 (5th Cir. 2009) (holding that there was no
threatened injury from potential estoppel from the
appealed-from judgment because that judgment was
interlocutory, not final, and therefore could not estop the
we examine the standing of the U.S. House of Representatives,
which intervened after the case had been appealed. The
Supreme Court's recent decision in Virginia House of
Delegates v. Bethune-Hill calls the House's standing
to intervene into doubt. 139 S.Ct. at 1953 ("This Court
has never held that a judicial decision invalidating a state
law as unconstitutional inflicts a discrete, cognizable
injury on each organ of government that participated in the
law's passage."). However, we need not resolve the
question of the House's standing. "Article III does
not require intervenors to independently possess
standing" when a party already in the lawsuit has
standing and seeks the same "ultimate relief" as
the intervenor. Ruiz v. Estelle, 161 F.3d 814, 830
(5th Cir. 1998). That is the case here: the
intervenor-defendant states have standing to appeal, and the
House seeks the same relief as those states. We accordingly
pretermit the issue of whether the House has standing to
turn to the issue of whether any of the plaintiffs had
Article III standing to bring this case at the time they
brought the lawsuit. To be a case or controversy under
Article III, the plaintiffs must satisfy the same three
requirements listed above. First, a plaintiff must have
suffered an "injury in fact"-a violation of a
legally protected interest that is "concrete and
particularized," as well as "actual or imminent,
not 'conjectural' or 'hypothetical.'"
Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992)
(quoting Whitmore v. Arkansas, 495 U.S. 149, 155
(1990)). Second, that injury must be "fairly . . .
trace[able] to the challenged action of the defendant, and
not . . . th[e] result [of] the independent action of some
third party not before the court." Id.
(alterations in original) (quoting Simon v. E. Ky.
Welfare Rights Org., 426 U.S. 26, 41-42 (1976)). Third,
it must be "likely"-not merely
"speculative"-that the injury will be
"redressed by a favorable decision." Id.
at 561 (quoting Simon, 426 U.S. at 38, 43).
instant case has two groups of plaintiffs: the individual
plaintiffs and the state plaintiffs. Only one plaintiff need
succeed because "one party with standing is sufficient
to satisfy Article III's case-or-controversy
requirement." Texas v. United States (DAPA),
809 F.3d 134, 151 (5th Cir. 2015) (quoting Rumsfeld v.
Forum for Acad. & Institutional Rights, Inc., 547
U.S. 47, 52 n.2 (2006)). The individual plaintiffs and the
state plaintiffs allege different injuries. We evaluate each
in turn and conclude that both the individual plaintiffs and
the state plaintiffs have standing.
standing issues presented by the individual plaintiffs are
not novel. The Supreme Court faced a similar situation when
it decided NFIB in 2012. At oral argument in that
case, Justice Kagan asked Gregory Katsas, representing NFIB,
whether he thought "a person who is subject to the
[individual] mandate but not subject to the [shared
responsibility payment] would have standing." Transcript
of Oral Argument at 68, Dep't of Health and Human
Servs. v. Florida, 567 U.S. 519 (2012) (No. 11-398). Mr.
Katsas replied, "Yes, I think that person would, because
that person is injured by compliance with the mandate."
Id. Mr. Katsas explained, "the injury-when that
person is subject to the mandate, that person is required to
purchase health insurance. That's a forced acquisition of
an unwanted good. It's a classic pocketbook injury."
Id. at 68-69.
2012, this questioning made sense because neither the
individual mandate nor the shared responsibility payment
would be assessed for another two years. Patient Protection
and Affordable Care Act, Pub. L. No. 111-148, § 1501,
124 Stat. 119, 244 (2012) (requiring insurance coverage
"for each month beginning after 2013" and applying
the shared responsibility payment for any failure to purchase
insurance "during any calendar year beginning after
2013"). It was thus certainly imminent that the private
plaintiffs would be subject to the individual mandate, which
applies to everyone, but not certain that they would be
subject to the shared responsibility payment, which exempts
certain people. 26 U.S.C. § 5000A(e) (prescribing that
"[n]o penalty shall be imposed" on certain groups
of people). The distinction was important because a
plaintiff "must demonstrate standing for each claim he
seeks to press." Davis v. Fed. Election
Comm'n, 554 U.S. 724, 734 (2008) (quoting
DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352
(2006)). To bring a claim against the individual mandate,
therefore, the plaintiffs needed to show injury from the
individual mandate-not from the shared responsibility
the district court in NFIB ruled that the private
plaintiffs were injured by the ACA "because of the
financial expense [they would] definitively incur under the
Act in 2014," and the private plaintiffs' need
"to take investigatory steps and make financial
arrangements now to ensure compliance then." Florida
ex rel. Bondi v. U.S. Dep't of Health & Human
Servs., 780 F.Supp.2d 1256, 1271 (N.D. Fla. 2011),
aff'd in part and rev'd in part, 648 F.3d
1235 (11th Cir. 2011), aff'd in part and rev'd in
part, 567 U.S. 519 (2012). The record evidence in that
case supported this conclusion. Mary Brown, one of the
private plaintiffs in that case, for example, had declared
that "to comply with the individual insurance mandate,
and well in advance of 2014, I must now investigate whether
and how to rearrange my personal finance affairs."
Appendix of Exhibits in Support of Plaintiffs' Motion for
Summary Judgment, Florida v. U.S. Dep't of Health
& Human Servs., No. 3:10-cv-91-RV/EMT (N.D. Fla.
Nov. 10, 2010), ECF No. 80-6. At the Eleventh Circuit, all
parties agreed that Mary Brown had standing. Florida ex
rel. Atty. Gen. v. U.S. Dep't of Health & Human
Servs., 648 F.3d 1235, 1243 (11th Cir. 2011),
aff'd in part and rev'd in part, 567 U.S.
519 (2012) ("Defendants do not dispute that plaintiff
Brown's challenge to the minimum coverage provision is
justiciable."). Congress could have reasonably
contemplated people like Mary Brown. As Mr. Katsas explained
at oral argument in the Supreme Court, "Congress
reasonably could think that at least some people will follow
the law precisely because it is the law." Transcript of
Oral Argument at 67, Dep't of Health & Human
Servs. v. Florida, 567 U.S. 519 (2012) (No. 11-398).
district court in the instant case followed a similar
approach with regard to the individual plaintiffs'
standing. It concluded that because the individual
plaintiffs are the object of the individual mandate, which
requires them to purchase health insurance that they do not
want, those plaintiffs have demonstrated two types of
"injury in fact": (1) the financial injury of
buying that insurance; and (2) the "increased regulatory
burden" that the individual mandate imposes. In
concluding that these injuries were caused by the individual
mandate, the court made specific fact findings that both
Nantz and Hurley purchased insurance solely because they are
"obligated to comply with the . . . individual
mandate." The district court made these findings based
on Nantz's and Hurley's declarations, which the
intervenor-defendant states never challenged. Because the
undisputed evidence showed that the individual mandate caused
these injuries, the district court reasoned that a favorable
judgment would redress both injuries, allowing the individual
plaintiffs to forgo purchasing health insurance and freeing
them "from what they essentially allege to be arbitrary
agree with the district court. The Supreme Court has held
that when a lawsuit challenges "the legality of
government action or inaction, the nature and extent of facts
that must be averred (at the summary judgment stage) or
proved (at the trial stage) in order to establish standing
depends considerably upon whether" the plaintiffs are
themselves the "object[s] of the action (or forgone
action) at issue." Lujan, 504 U.S. at 561;
see also Texas v. EEOC, 933 F.3d 433, 446 (5th Cir.
2019). "Whether someone is in fact an object of a
regulation is a flexible inquiry rooted in common
sense." EEOC, 933 F.3d at 446 (quoting
Contender Farms, L.L.P. v. U.S. Dep't of Agric.,
779 F.3d 258, 265 (5th Cir. 2015)). If a plaintiff is indeed
the object of a regulation, "there is ordinarily little
question that the action or inaction has caused [the
plaintiff] injury, and that a judgment preventing or
requiring the action will redress it." Lujan,
504 U.S. at 561-62.
undisputed that Hurley and Nantz are the objects of the
individual mandate and that they have purchased insurance in
order to comply with that mandate. Record evidence supports
these conclusions. In his declaration in the district court,
Nantz stated, "I continue to maintain minimum essential
health coverage because I am obligated." Similarly,
Hurley averred in his declaration that he is "obligated
to comply with the ACA's individual mandate." They
both explain in their declarations that they "value
compliance with [their] legal obligations" and bought
insurance because they "believe that following the law
is the right thing to do." Accordingly, the district
court expressly found that Hurley and Nantz bought health
insurance because they are obligated to, and we must defer to
that factual finding. The evidentiary basis for this injury
is even stronger than it was in NFIB. In the instant
case, the individual mandate has already gone into effect,
compelling Nantz and Hurley to purchase insurance
now as opposed to two years in the future.
intervenor-defendant states fail to point to any evidence
contradicting these declarations, and they did not challenge
this evidence in the district court. In fact, some of the
evidence these parties rely on actually supports the
conclusion that Nantz and Hurley purchased insurance to
comply with the individual mandate. The intervenor-defendant
states acknowledge a 2017 report from the Congressional
Budget Office indicating that "a small number of
people" would continue to buy insurance without a
penalty "solely because" of a desire to comply with
the law. Cong. Budget Office, Repealing the
Individual Health Insurance Mandate: An Updated Estimate
1 (Nov. 2017). This report is at least somewhat consistent
with a 2008 Congressional Budget Office report, relied on by
the state plaintiffs, that "[m]any individuals"
subject to the mandate, but not the shared responsibility
payment, will obtain coverage to comply with the mandate
"because they believe in abiding by the nation's
laws." Cong. Budget Office, Key Issues in Analyzing
Major Health Insurance Proposals 53 (Dec. 2008). Whether
this group of law-abiding citizens includes "many
individuals" or "a small number of people,"
Nantz and Hurley have undisputed evidence showing that they
are a part of this group.
context, being required to buy something that you otherwise
would not want is clearly within the scope of what counts as
a "legally cognizable injury." "Economic
injury" of this sort is "a quintessential injury
upon which to base standing." Tex. Democratic Party
v. Benkiser, 459 F.3d 582, 586 (5th Cir. 2006); see
also Vt. Agency of Nat. Res. v. United States, 529 U.S.
765, 772-77 (1998) (finding Article III injury from financial
harm); Clinton v. New York, 524 U.S. 417, 432 (1998)
(same); Sierra Club v. Morton, 405 U.S. 727, 733-34
(1972) (same); DAPA, 809 F.3d at 155 (same). In
Benkiser, for example, we held that a political
party would suffer an injury in fact because it would need to
"expend additional funds" in order to comply with
the challenged regulation. 459 F.3d at 586. In the instant
case, the undisputed record evidence shows that the
individual plaintiffs have spent "additional funds"
to comply with the statutory provision that they challenge on
injury, moreover, is "actual," not merely a
speculative fear about future harm that may or may not
happen. Lujan, 504 U.S. at 560. The record shows
that, at the time of the complaint, Hurley and Nantz held
health insurance, spending money every month that they did
not want to spend. Nantz reports that his monthly premium is
$266.56, and Hurley says his is $1, 081.70. The injury is
also "concrete" because it involves the real
expenditure of those funds. See Barlow v. Collins,
397 U.S. 159, 162-63, 164 (1970) (finding a concrete injury
when a regulation caused economic harm from lost profit).
and redressability "flow naturally" from this
concrete, particularized injury. Contender Farms,
779 F.3d at 266. The evidence in the record from Hurley's
and Nantz's declarations show that they would not have
purchased health insurance but for the individual mandate,
and the intervenor-defendant states have no evidence to the
contrary. A judgment declaring that the individual mandate
exceeds Congress' powers under the Constitution would
allow Hurley and Nantz to forgo the purchase of health
insurance that they do not want or need. They could purchase
health insurance below the "minimum essential
coverage" threshold, or even decide not to purchase any
health insurance at all.
intervenor-defendant states make several arguments against
this straightforward injury, and all of them come up short.
They first argue that there is no legally cognizable injury
because there is no longer any penalty for failing to comply.
In one sense, this argument misses the point. The threat of a
penalty that Hurley and Nantz would face under the pre-2017
version of the statute is one potential form of injury, but
it is far from the only one. We have held that the costs of
compliance can constitute an injury just as much as the
injuries from failing to comply. See, e.g.,
Benkiser, 459 F.3d at 586. Thus, in this instance, it is
this injury-the time and money spent complying with the
statute, not the penalty for failing to do so-that
constitutes the plaintiffs' injury.
intervenor-defendant states also argue that even the costs of
compliance cannot count as an injury in fact if there is no
consequence for failing to comply. The individual
mandate's compulsion cannot inflict a cognizable injury,
they say, because it is not a compulsion at all. Because the
enforcement mechanism has been removed, the U.S. House
contends, it is now merely a suggestion, at most. We recently
rejected this argument in Texas v. EEOC, when the
Equal Employment Opportunity Commission tried to argue that
Texas could not challenge its allegedly non-final
administrative guidance because "the Guidance does not
compel Texas to do anything." 933 F.3d at 448. We
concluded that it would "strain credulity to find that
an agency action targeting current 'unlawful'
discrimination among state employers-and declaring
presumptively unlawful the very hiring practices employed by
state agencies-does not require action immediately enough to
constitute an injury-in-fact." Id. The
individual mandate is no different. Just like the agency
guidance, the individual mandate targets as
"unlawful" the decision to go without health
dissenting opinion grounds its discussion of the issue in the
Supreme Court's decision in Poe v. Ullman, 367
U.S. 497 (1961). There, the Supreme Court rejected a
challenge to Connecticut's criminal prohibition on
contraception. The dissenting opinion states that if there
was no standing in Ullman, then there cannot be
standing here. The dissenting opinion seems to treat
Ullman as part of the "pre-enforcement
challenge" line of cases in which the Supreme Court
analyzed claims of injury based on future enforcement to
determine whether the future enforcement was sufficiently
imminent. Ullman, however, is not cited in the
seminal Supreme Court cases of that line. See, e.g.,
Susan B. Anthony List v. Driehaus, 573 U.S. 149,
158-61 (2014); Holder v. Humanitarian Law Project,
561 U.S. 1, 15 (2010); Virginia v. Am. Booksellers
Ass'n, Inc., 484 U.S. 383, 392-93 (1988);
Babbitt v. United Farm Workers Nat'l Union, 442
U.S. 289, 298 (1979); see also Abbott Labs. v.
Gardner, 387 U.S. 136, 154 (1967). More importantly, as
we have explained, this case is not a pre-enforcement
challenge because the plaintiffs have already incurred a
plurality opinion in Ullman said there was
insufficient adversity between the parties because there was
overwhelming evidence-eighty years' worth of no
enforcement of the statute-of "tacit agreement"
between prosecutors and the public not to enforce the
anti-contraceptive laws that the plaintiffs challenged. 367
U.S. at 507-08. As a result, the Court held that the lawsuit
before it was "not such an adversary case as will be
reviewed here." Id. The fifth, controlling vote
in that case-Justice Brennan, who concurred in the
judgment-emphasized that this adverseness was lacking because
of the case's "skimpy record," devoid of
evidence that the "individuals [were] truly caught in an
inescapable dilemma." Id. at 509 (Brennan, J.,
contrast, as documented above, the record in the instant case
contains undisputed evidence that Nantz and Hurley feel
compelled by the individual mandate to buy insurance and that
they bought insurance solely for that reason. Especially in
light of the fact that the individual mandate lacks a similar
eighty-year history of nonenforcement, Nantz and Hurley have
gone much further in demonstrating that they are caught in
the "inescapable dilemma" that the Ullman
plaintiffs were not.
intervenor-defendant states also argue that there is no
causation between the individual mandate and Hurley and
Nantz's purchase of insurance because Hurley and Nantz
exercised a voluntary "choice" to purchase
insurance. Because Nantz and Hurley would face no consequence
if they went without insurance, the intervenor-defendant
states argue that their purchase of insurance is not fairly
traceable to the federal defendants. Instead, they claim that
Nantz and Hurley impermissibly attempt to "manufacture
standing merely by inflicting harm on themselves."
Glass v. Paxton, 900 F.3d 233, 239 (5th Cir. 2018)
(quoting Clapper v. Amnesty Int'l USA, 568 U.S.
398, 416 (2013)).
argument fails, however, because it conflates the merits of
the case with the threshold inquiry of standing. The argument
assumes that 26 U.S.C. § 5000A presents not a legal
command to purchase insurance, but an option between
purchasing insurance and doing nothing. Because this option
exists, the argument goes, any injury arising from
Hurley's and Nantz's decisions to buy insurance
instead of doing nothing (the other putative option) is
entirely self-inflicted. This, however, is a merits question
that can be reached only after determining the threshold
issue of whether plaintiffs have standing.
v. EEOC makes clear that courts cannot fuse the standing
inquiry into the merits in this way. There, in addition to
the injury described above from the Guidance's rebuke of
Texas's employment practices as "unlawful,"
Texas claimed it was injured by the EEOC's curtailing of
Texas's procedural right to notice and comment before
being subject to a regulation. EEOC, 933 F.3d at
447. In rejecting the suggestion that Texas was not truly
injured because the EEOC had not in fact violated the
Administrative Procedure Act's notice-and-comment rules,
we held that "[w]e assume, for purposes of the standing
analysis, that Texas is correct on the merits of its claim
that the Guidance was promulgated in violation of the
APA." Id. (citing Sierra Club v. EPA,
699 F.3d 530, 533 (D.C. Cir. 2012)); see also Bennett v.
Spear, 520 U.S. 154, 177-78 (1997) (treating
constitutional standing and finality as distinct inquiries).
allowing a consideration of the merits as part of a
jurisdictional inquiry would conflict with the Supreme
Court's express decision in Steel Co v. Citizens for
a Better Environment to not abandon "two centuries
of jurisprudence affirming the necessity of determining
jurisdiction before proceeding to the merits." 523 U.S.
83, 98 (1998). That case presented both the question of
Article III standing and the merits question of whether the
relevant statute authorized lawsuits for purely past
violations. Id. at 86. The Court rejected any
"attempt to convert the merits issue . . . into a
jurisdictional one." Id. at 93. The Court
further rejected the "doctrine of hypothetical
jurisdiction," under which certain courts of appeals had
"proceed[ed] immediately to the merits question, despite
jurisdictional objections" in certain circumstances.
Id. at 93-94. As the district court correctly noted,
that is exactly what the appellants ask this court to do.
They urge us to "skip ahead to the merits to determine
§ 5000A(a) is non-binding and therefore constitutional
and then revert to the standing analysis to use its merits
determination to conclude there was no standing to reach the
merits in the first place."
even if we were to consider the merits as part of our
jurisdictional inquiry, it would not make a difference in
this case. Because we conclude in Part IV of this opinion
that the individual mandate is best read as a command to
purchase insurance (and an unconstitutional one at that),
rather than as an option between buying insurance or doing
nothing, the individual plaintiffs would have standing even
if we considered the merits.
consider whether the eighteen state plaintiffs have standing,
and we conclude that they do. The state plaintiffs allege that the ACA
causes them both a fiscal injury as employers and a sovereign
injury "because it prevents them from applying their own
laws and policies governing their own healthcare
markets." State Plaintiffs' Br. at 25. In
DAPA, we determined that the state of Texas was
entitled to special solicitude because it was
"exercising a procedural right created by Congress and
protecting a 'quasi-sovereign' interest."
DAPA, 809 F.3d at 162 (quoting Massachusetts v.
EPA, 549 U.S. 497, 520 (2007)); see also id. at
154-55. Because the state plaintiffs in this case have
suffered fiscal injuries as employers, we need not address
special solicitude or the alleged sovereign injuries.
including the state plaintiffs, are required by the ACA to
issue forms verifying which employees are covered by minimum
essential coverage and therefore do not need to pay the
shared responsibility payment. See 26 U.S.C. §
6055(a) ("Every person who provides minimum essential
coverage to an individual during a calendar year shall, at
such time as the Secretary may prescribe, make a return
described in subsection (b)."); 26 U.S.C. § 6056(a)
("Every applicable large employer [that meets certain
statutory requirements] shall . . . make a return described
in subsection (b)."). These provisions have led to Form
1095-B and 1095-C statements that employees receive from
their employers around tax time, which include a series of
check boxes indicating the months that employees had health
coverage that complies with the ACA. State Plaintiffs'
Br. at 23. These legally required reporting practices exist
on top of state employers' own in-house administrative
systems for managing and tracking their employees' health
record is replete with evidence that the individual mandate
itself has increased the cost of printing and processing
these forms and of updating the state employers' in-house
management systems. For example, Thomas Steckel, the director
of the Division of Employee Benefits within the South Dakota
Bureau of Human Resources, submitted a declaration
documenting the administrative costs that the individual
mandate has imposed by way of these reporting requirements.
He said, "[t]he individual mandate caused significant
administrative burdens and expenses to program our IT system
to track and report ACA eligible employees and complete
mandatory IRS Form 1095 annual reports." Steckel noted
specifically that "the individual mandate caused . . .
$100, 000.00 [in] ongoing costs" for Form 1095-C
administration alone. The dissenting opinion discards this
evidence as conclusory. But as even counsel for the
intervenor-defendant states admitted at oral argument, nobody
challenged this evidence as conclusory in the district court
or in the appellate court. Oral Argument at 5:12.
Dakota is far from the only state that has been harmed from
the financial cost of the reporting requirements that the
individual mandate aggravates. Judith Muck, the Executive
Director of the Missouri Consolidated Health Care Plan,
reported that Missouri's costs for preparing 1095-B
forms, along with 1094-B forms, are projected to be $47, 300
in fiscal year 2019 and $49, 200 in fiscal year 2020.
Similarly, Teresa MacCartney, the Chief Financial Officer of
the State of Georgia and the Director of the Georgia
Governor's Office of Planning and Budget, reported that
Georgia's overall cost of compliance with the ACA's
reporting requirements "is an estimated net $3.6 million
to date." MacCartney also reported that after the
ACA's implementation, Georgia's Department of
Community Health "experienced increased enrollment of
individuals already eligible for Medicaid benefits under
pre-ACA eligibility standards." This enrollment increase
required the Department to enhance its management systems,
which was "very costly." Blaise Duran, who is the
Manager for Underwriting, Data Analysis and Reporting for the
Employees Retirement System of Texas, further documented
Texas' costs of the reporting requirements. He declared
that the Texas Employees Group Benefits Program "has
made administrative process changes in connection with its
ACA compliance, such as those related to the provision of
Form 1095-Bs to plan participants and the Internal Revenue
intervenor-defendant states and the U.S. House have not
challenged the state plaintiffs' evidence or presented
any evidence to the contrary. Instead, they argue that the
reporting requirements set forth in Sections 6055(a) and
6056(a) "are separate from the mandate and serve
independent purposes." U.S. House Reply Br. at 19.
Therefore, they claim, "any resulting injury is thus
neither traceable to Section 5000A nor redressable by its
invalidation." U.S. House Reply Br. at 19. But this
misreads the undisputed evidence in the record. The
individual mandate commands individuals to get insurance.
Every time an individual gets that insurance through a state
employer, the state employer must send the individual a form
certifying that he or she is covered and otherwise process
that information through in-house management
systems. Thus, the reporting
requirements in Sections 6055(a) and 6056(a) flow from the
individual mandate set forth in Section 5000A(a).
costs to the state plaintiffs are
well-established. Moreover, the
continuing nature of these fiscal injuries is consistent with
Fifth Circuit and Supreme Court precedent.
DAPA, we held that the state of Texas had standing
to challenge the federal government's DAPA program
because it stood to "have a major effect on the
states' fisc." Id. at 152. This was
because, if DAPA were permitted to go into effect, it would
have "enable[d] at least 500, 000 illegal aliens in
Texas" to satisfy Texas's requirements that the
Department of Public Safety "'shall issue' a
license to a qualified applicant," including noncitizens
who present "documentation issued by the appropriate
United States agency that authorizes the applicant to be in
the United States." Id. at 155 (quoting Tex.
Transp. Code §§ 521.142(a), 521.181). Evidence in
the record showed that Texas, which subsidizes its licenses,
would "lose a minimum of $130.89 on each one it issued
to a DAPA beneficiary." Id. Even a "modest
estimate" of predictable third-party behavior would rack
up costs of "several million dollars." Id.
Supreme Court recently applied a similar analysis in
Department of Commerce v. New York, 139 S.Ct. 2551
(2019). In that case, a group of state and local governments
sued to prevent the federal government from including a
question about citizenship status on the 2020 census.
Id. at 2563. The Supreme Court held that these
plaintiffs had standing because they met their burden
"of showing that third parties will likely react in
predictable ways to the citizenship question."
Id. at 2566. The census question would likely lead
to "noncitizen households responding . . . at lower
rates than other groups, which in turn would cause them to be
undercounted." Id. at 2565. This undercounting
of third parties would injure the state and local governments
by "diminishment of political representation, loss of
federal funds, degradation of census data, and diversion of
DAPA and Department of Commerce, the state
plaintiffs demonstrated injury by showing that the challenged
law would cause third parties to behave in predictable ways,
which would inflict a financial injury on the states. The
instant case is no different. The individual mandate commands
people to ensure that they have minimum health insurance
coverage. That predictably causes more people to buy
insurance, which increases the administrative costs of the
states to report, manage, and track the insurance coverage of
their employees and Medicaid recipients. 
concluded that both groups of plaintiffs have standing to
bring this lawsuit, we must next determine whether the
individual mandate is a constitutional exercise of
congressional power. We conclude that it is not. We first
discuss the Supreme Court's holding in NFIB, and
then we explain why, under that holding, the individual
mandate is no longer constitutional.
NFIB opinion was extremely fractured. In that case,
Chief Justice Roberts wrote an opinion addressing several
issues. Parts of that opinion garnered a majority of votes
and served as the opinion of the Court. In relevant part, Part III-A of the
Chief Justice's opinion, joined by no other Justice,
observed that "[t]he most straightforward reading of the
[individual] mandate is that it commands individuals to
purchase insurance," and that, using that reading of the
statute, the individual mandate is not a valid exercise of
Congress' power under the Interstate Commerce Clause.
NFIB, 567 U.S. at 562, 546-61 (Roberts, C.J.). The
Constitution, he explained, "gave Congress the power to
regulate commerce, not to compel it."
Id. at 555 (Roberts, C.J.). For similar reasons, the
Chief Justice concluded that this command to purchase
insurance could not be sustained under the Constitution's
Necessary and Proper Clause. Id. The individual
mandate was not "proper" because it expanded
federal power, "vest[ing] Congress with the
extraordinary ability to create the necessary predicate to
the exercise of" its Interstate Commerce Clause powers.
Id. at 560.
no other Justices joined this part of the Chief Justice's
opinion, the "joint dissent"-joined by Justices
Scalia, Kennedy, Thomas, and Alito- reached the same
conclusions on the Interstate Commerce Clause and Necessary
and Proper Clause questions. Id. at 650-60 (joint
dissent). A majority of the court, therefore, concluded that
the individual mandate is not constitutional under either the
Interstate Commerce Clause or the Necessary and Proper
limited reading of the Interstate Commerce Clause-and, by
extension, of the Necessary and Proper Clause-was necessary
to preserving "the country [that] the Framers of our
Constitution envisioned." Id. at 554 (Roberts,
C.J.). As Chief Justice Roberts observed, if the individual
mandate were a proper use of the power to regulate interstate
commerce, that power would "justify a mandatory purchase
to solve almost any problem." Id. at 553
(Roberts, C.J.). If Congress can compel the purchase of
health insurance today, it can, for example, micromanage
Americans' day-to-day nutrition choices tomorrow.
Id. (Roberts, C.J.); see also id. at 558
(Roberts, C.J.) (reasoning that, under an expansive view of
the Commerce Clause, nothing would stop the federal
government from compelling the purchase of broccoli).
expansive reading of the Interstate Commerce Clause would be
foreign to the Framers, who saw the clause as "an
addition which few oppose[d] and from which no apprehensions
[were] entertained." Id. at 554 (Roberts, C.J.)
(quoting The Federalist No. 45, at 293 (J. Madison) (C.
Rossiter ed., 1961)). Elevating Congress' power to
"regulate commerce . . . among the several states,"
U.S. Const. art. I, § 8, cl. 3, to a power to
create commerce among the several states would make
a Leviathan of the federal government, "everywhere
extending the sphere of its activity and drawing all power
into its impetuous vortex." NFIB, 567 U.S. at
554 (Roberts, C.J.) (quoting The Federalist No. 48, at 309
(J. Madison) (C. Rossiter ed., 1961)). Justice Scalia,
writing for the joint dissenters, similarly noted that the
more expansive reading of the Interstate Commerce Clause
would render that provision a "font of unlimited
power," id. at 653 (joint dissent), or, in the
words of Alexander Hamilton, a "hideous monster whose
devouring jaws . . . spare neither sex nor age, nor high nor
low, nor sacred nor profane," id. (quoting The
Federalist No. 33, at 202 (C. Rossiter ed., 1961)).
III-B, again joined by no other Justice, Chief Justice
Roberts concluded that because the individual mandate found
no constitutional footing in the Interstate Commerce or
Necessary and Proper Clauses, the Supreme Court was obligated
to consider the federal government's argument that, as an
exercise in constitutional avoidance, the mandate could be
read not as a command but as an option to purchase
insurance or pay a tax. This "option"
interpretation of the statute could save the statute from
being unconstitutional, as it would be justified under
Congress' taxing power. Id. at 561-63 (Roberts,
C.J.); see also id. at 562 (Roberts, C.J.) ("No
court ought, unless the terms of an act rendered it
unavoidable, to give a construction to it which should
involve a violation, however unintentional, of the
constitution.") (quoting Parsons v. Bedford, 28
U.S. (3 Pet.) 433, 448-49 (1830)); see also id. at
563 (Roberts, C.J.) ("The question is not whether that
is the most natural interpretation of the mandate, but only
whether it is a 'fairly possible' one.")
(quoting Crowell v. Benson, 285 U.S. 22, 62 (1932)).
III-C, the Chief Justice-writing for a majority of the Court,
joined by Justices Ginsburg, Breyer, Sotomayor, and
Kagan-undertook that inquiry of determining whether it was
"fairly possible" to read the individual mandate as
an option and thereby save its constitutionality. See
id. at 563-74 (majority opinion). Chief Justice Roberts
reasoned that the individual mandate could be read in
conjunction with the shared responsibility payment in order
to save the individual mandate from unconstitutionality. Read
together with the shared responsibility payment, the entire
statutory provision could be read as a legitimate exercise of
Congress' taxing power for four reasons.
and most fundamentally, the shared-responsibility payment
"yield[ed] the essential feature of any tax: It
produce[d] at least some revenue for the Government."
Id. at 564. Second, the shared-responsibility
payment was "paid into the Treasury by taxpayers when
they file their tax returns." Id. at 563
(alternations and internal quotation marks omitted). Third,
the amount owed under the ACA was "determined by such
familiar factors as taxable income, number of dependents, and
joint filing status." Id. Fourth and finally,
"[t]he requirement to pay [was] found in the Internal
Revenue Code and enforced by the IRS, which . . . collect[ed]
it in the same manner as taxes." Id. at 563-64
(internal quotation marks omitted).
of these four attributes of the shared responsibility
payment, the Court reasoned that "[t]he Federal
Government does have the power to impose a tax on those
without health insurance." Id. at 575. The
Court concluded that "[s]ection 5000A is therefore
constitutional, because it can reasonably be read as a
tax." Id. We agree with the
dissenting opinion that "this case begins and ought to
end" with NFIB.
that the shared responsibility payment amount is set at zero,
 the provision's saving
construction is no longer available. The four central
attributes that once saved the statute because it could be
read as a tax no longer exist. Most fundamentally, the
provision no longer yields the "essential feature of any
tax" because it does not produce "at least some
revenue for the Government." Id. at 564.
Because the provision no longer produces revenue, it
necessarily lacks the three other characteristics that once
rendered the provision a tax. The shared-responsibility
payment is no longer "paid into the Treasury by
taxpayer[s] when they file their tax returns" because
the payment is no longer paid by anyone. Id. at 563
(alteration in original and internal quotation marks
omitted). The payment amount is no longer "determined by
such familiar factors as taxable income, number of
dependents, and joint filing status." Id. The
amount is zero for everyone, without regard to any of these
factors. The IRS no longer collects the payment "in the
same manner as taxes" because the IRS cannot collect it
at all. Id. at 563-64 (internal quotation marks
these four critical attributes are now missing from the
shared responsibility payment, it is, in the words of the
state plaintiffs, "no longer 'fairly possible'
to save the mandate's constitutionality under
Congress' taxing power." State Plaintiffs' Br.
at 32. The proper application of NFIB to the new
version of the statute is to interpret it according to what
Chief Justice Roberts-and four other Justices of the
Court-said was the "most straightforward" reading
of that provision: a command to purchase insurance.
Id. at 562 (Roberts, C.J.). As the district court
properly observed, "the only reading available is the
most natural one." Under that reading, the individual
mandate is unconstitutional because, under NFIB, it
finds no constitutional footing in either the Interstate
Commerce Clause or the Necessary and Proper Clause.
Id. at 546-61 (Roberts, C.J.); id. at
650-60 (joint dissent).
intervenor-defendant states have several arguments against
this conclusion, all of which fail. They first argue that the
saving construction of the individual mandate, interpreting
the provision as an option to buy insurance or pay a tax, is
still "fairly possible." As the individual
plaintiffs point out, the Court interpreted the individual
mandate as an option only because doing so would save it from
being unconstitutional. Accordingly, the intervenor-defendant
states must show that the "option" would still be a
constitutional exercise of Congress' taxing power. To
make that showing, the intervenor-defendant states reject the
plaintiffs' attempt to read a "some revenue"
requirement into the Constitution's Taxing and Spending
Clause, arguing instead for a potential-to-produce-revenue
requirement. The individual mandate, they say, is still set
out in the Internal Revenue Code. It still provides a
"statutory structure through which" Congress could
eventually tax people for failing to buy insurance. It still
includes references to taxable income, number of dependents,
and joint filing status. 26 U.S.C. §§ 5000A(b)(3),
(c)(2), (c)(4). Further, it still does not apply to
individuals who pay no federal income taxes. 26 U.S.C. §
intervenor-defendant states have little support for this
reading of the Taxing and Spending Clause. For starters,
NFIB could not be clearer that the
"produc[tion]" of "at least some revenue for
the Government"-not the potential to produce that
revenue-is "the essential feature of any
tax." 567 U.S. at 564 (majority opinion) (emphasis
added). As the district court observed, when determining
whether a statute is a tax, the actual production of revenue
is "not indicative, not common-[but] essential."
intervenor-defendant states also find no support in
United States v. Ardoin, 19 F.3d 177, 179-80 (5th
Cir. 1994). In that unusual case, Congress had imposed a tax
on machine guns, but subsequently outlawed machine guns
altogether, which prompted the relevant agency to stop
collecting the tax. Id. at 179-80. The defendant was
convicted not only for possessing a machine gun but also for
failing to pay the tax, which remained on the books.
Id. at 178. The court upheld the conviction on the
basis that the tax law at issue could "be upheld on the
preserved, but unused, power to tax or on the power to
regulate interstate commerce." Id. at 180. But
the taxing power was "preserved" in Ardoin
because it was non-revenue-producing only in practice whereas
the "tax" here is actually $0.00 as written on the
books. See Fed.
Defendants' Br. at 32. Expanding Ardoin to apply
here would, as the federal defendants point out, puzzlingly
allow Congress to "prohibit conduct that exceeds its
commerce power through a two-step process of first taxing it
and then eliminating the tax while retaining the
prohibition." Fed. Defendants' Br. at 32.
intervenor-defendant states argue further that the individual
mandate does not even need constitutional justification
because it is merely a suggestion, not binding legislative
action. The individual mandate, they contend, is no different
from the Flag Code, which, though entered into the pages of
the U.S. Code, "was not intended to proscribe
conduct." Dimmitt v. City of Clearwater, 985
F.2d 1565, 1573 (11th Cir. 1993) (analyzing 36 U.S.C.
§§ 174-76). This argument is just a repackaged
version of their argument that the individual mandate can
still be read as an option. But, as the state plaintiffs, the
individual plaintiffs, and the federal defendants point out,
the Supreme Court has already held that the "most
straightforward" reading of the individual mandate-which
emphatically demands that individuals "shall" buy
insurance, 26 U.S.C. § 5000A(a)-is as a command to
purchase health insurance. The Court then concluded that that
command lacked constitutional justification. The zeroing out
of the shared responsibility payment does not render the
provision any less of a command. Quite the opposite: Chief
Justice Roberts concluded that the greater-than-zero shared
responsibility payment actually converted the individual