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No. 11-398
In the Supreme Court of the United States
___________________________________________
UNITED STATES DEPARTMENT OF HEALTH & HUMAN SERVICES, ET AL., Petitioners,
vs.
STATE OF FLORIDA, ET AL., Respondents.
___________________________________________
On Writ of Certiorari to the United States Court of Appeals for the Eleventh Circuit
___________________________________________
MOTION OF ASSOCIATION OF AMERICAN PHYSICIANS & SURGEONS, INC. AND ALLIANCE FOR NATURAL HEALTH
USA FOR LEAVE TO INTERVENE AS RESPONDENTS ___________________________________________
LAWRENCE J. JOSEPH 1250 Connecticut Av NW Suite 200 Washington, DC 20036 Telephone: (202) 669-5135 Facsimile: (202) 318-2254 Email: [email protected]
i
TABLE OF CONTENTS
Table of Contents ............................................................................................................ i Appendix ........................................................................................................................ ii Table of Authorities ...................................................................................................... iii Motion for Leave to Intervene ....................................................................................... 1 Statement of the Case ................................................................................................... 2 Argument ....................................................................................................................... 6 I. The Anti-Injunction Act Does Not Bar Suit by Parties Such as
AAPS and ANH-USA that Suffer Third-Party Injuries and Lack an Alternate Remedy .......................................................................................... 6
II. This Court Should Allow AAPS and ANH-USA to Intervene to Ensure Jurisdiction to Reach the Merits ........................................................... 8 A. Intervention Is Proper under Mullaney and this Court’s
Inherent Authority to Resolve the Cases before this Court ................... 8 B. Intervention Is Proper by Analogy to FED. R. CIV. P. 24 ...................... 11
1. The Motion to Intervene Is Timely ............................................. 12 2. The Movants Have a Sufficient Interest .................................... 14 3. This Action May Impair the Movants’ Interests ........................ 14 4. No Party Adequately Represents the Movants’
Interests ....................................................................................... 15 5. Permissive Intervention Is Justified .......................................... 16
III. AAPS and ANH-USA Satisfy Article III’s Criteria for Jurisdiction ........................................................................................................ 17 A. AAPS and ANH-USA Have Standing to Pursue their
Claims ..................................................................................................... 18 1. Injuries in Fact ............................................................................ 19
a. Statutory Freedom of Choice ............................................ 19 b. Competitive Injuries and Unequal Footing ..................... 20 c. Economic Injury and Regulatory Burden ........................ 21 d. Equal Protection Injury .................................................... 23
2. Zone of Interests .......................................................................... 24 B. AAPS and ANH-USA Have Ripe Claims .............................................. 25
Requested Relief .......................................................................................................... 28 Conclusion .................................................................................................................... 29
ii
APPENDIX
Complaint in Intervention ........................................................................................... 1a
Declaration of Kenneth D. Christman, M.D. ............................................................ 17a
Declaration of Gretchen DuBeau .............................................................................. 20a
Declaration of Laura T. Hammons, M.D. ................................................................. 23a
Declaration of Lawrence J. Joseph ........................................................................... 26a
Declaration of Jane M. Orient, M.D. ......................................................................... 32a
Declaration of George Keith Smith, M.D. ................................................................. 38a
iii
TABLE OF AUTHORITIES
CASES
Abbott Laboratories v. Gardner, 387 U.S. 136 (1967) ................................................ 26
Adams v. Watson, 10 F.3d 915 (1st Cir. 1993) ............................................................ 20
Adarand Constructors, Inc., v. Pena, 515 U.S. 200 (1995) ......................................... 21
Ass’n of Am. Physicians & Surgeons v. Clinton, 997 F.2d 898 (D.C. Cir. 1993) ................................................................................ 3
Ass’n of Am. Physicians & Surgeons v. Mathews, 423 U.S. 975 (1975) ....................... 3
Ass’n of Am. Physicians & Surgeons, Inc. v. Sebelius, No. 1:10-cv-0499-ABJ (D.D.C. filed Mar. 26, 2010) ................................................................................... 4
Ass’n of Am. Physicians & Surgeons, Inc. v. Sebelius, No. 1:10-cv-0499-RJL (D.D.C. Dec. 22, 2010) ............................................................................................ 4
Ass’n of Am. Physicians & Surgeons, Inc. v. Sebelius, No. 1:10-cv-0499-ABJ (D.D.C. Nov. 8, 2011) ....................................................................................... 4, 13
Ass’n of Data Processing Serv. Org., Inc. v. Camp, 397 U.S. 150 (1970) ............. 18, 24
Blanchette v. Conn. Gen. Ins. Corp., 419 U.S. 102 (1974) .......................................... 26
Board of Governors of the Federal Reserve System v. MCorp Financial, 502 U.S. 32 (1991) ............................................................................................... 7-8
Bristol-Myers Squibb Co. v. Shalala, 91 F.3d 1493 (D.C. Cir. 1996) ......................... 20
Canadian Lumber Trade Alliance v. U.S., 517 F.3d 1319 (Fed. Cir. 2008) .............. 20
Cheney v. United States Dist. Court, 542 U.S. 367 (2004) ........................................... 3
Chiles v. Thornburgh, 865 F.2d 1197 (11th Cir. 1989) .............................................. 25
Clinton v. New York, 524 U.S. 417 (1998) .................................................................. 21
Columbia Broadcasting System, Inc. v. U.S., 316 U.S. 407 (1942) ............................ 22
DaimlerChrysler Corp. v. Cuno, 547 U.S. 332 (2006) ................................................. 19
Diamond v. Charles, 476 U.S. 54 (1986) ............................................................... 18, 21
District of Columbia v. Heller, 554 U.S. 570 (2008) ..................................................... 3
Duke Power Co. v. Carolina Envtl. Study Group, Inc., 438 U.S. 59 (1978) ............... 19
Earth Island Inst., 129 S.Ct. 1142 (2009) ................................................................... 19
Eastern-Central Motor Carriers Ass’n v. U.S., 321 U.S. 194 (1944) .......................... 11
El Paso Natural Gas Co. v. FERC, 50 F.3d 23 (D.C. Cir. 1995) ........................... 20-21
FAIC Securities, Inc. v. U.S., 768 F.2d 352 (D.C. Cir. 1985) ..................................... 22
iv
Fairmont Creamery Co. v. Minnesota, 275 U.S. 70 (1927) ......................................... 10
FEC v. Akins, 524 U.S. 11 (1998) ................................................................................ 19
Florida ex rel. Atty. Gen. v. U.S. Dept. of Health and Human Services, 648 F.3d 1235, 1285-1320 (11th Cir. 2011) ........................................................... 2
Florida Power & Light Co. v. E.P.A., 145 F.3d 1414 (D.C. Cir. 1998) ....................... 27
Florida v. HHS, No. 11-400 (U.S.) ...................................................................... 1, 3, 29
Fund for Animals, Inc. v. Norton, 322 F.3d 728 (D.C. Cir. 2003) .............................. 16
Gratz v. Bollinger, 539 U.S. 244 (2003) ...................................................................... 23
Haitian Refugee Ctr. v. Gracey, 809 F.2d 794 (D.C. Cir. 1987) .................................. 25
Hallandale Prof’l Fire Fighters Local 2238 v. City of Hallandale, 922 F.2d 756 (11th Cir. 1991) .............................................................................. 28
Hebard v. Dillon, 699 So.2d 497 (La. App. 1997) ....................................................... 24
Heckler v. Mathews, 465 U.S. 728 (1984) .................................................................... 23
HHS v Florida, No. 11-398 (U.S.) ..................................................................... 2, 28, 29
HHS v Florida, No. 11-398 (U.S. Nov. 18, 2011) .......................................................... 6
Honeywell Int’l, Inc. v. EPA, 374 F.3d 1363 (D.C. Cir. 2004), withdrawn on part on other grounds, 393 F.3d 1315 (D.C. Cir. 2005) ................................................... 25
Hunt v. Washington State Apple Adver. Comm’n, 432 U.S. 333 (1977) .................... 18
Hutto v. Finney, 437 U.S. 678 (1978) .......................................................................... 10
Indep. Bankers Ass’n of Am. v. Heimann, 613 F.2d 1164 (D.C. Cir. 1979) ............... 21
Int’l Union v. Brock, 477 U.S. 274 (1986) ................................................................... 22
Ionian Shipping Co. v. British Law Ins. Co., 426 F.2d 186 (2d Cir. 1970) ................ 17
Jitney Bus Ass’n v. City of Wilkes-Barre, 256 Pa. 462, 100 A. 954 (Pa. 1917) ........... 24
Landis v. North American Co., 299 U.S. 248 (1936) .................................................. 14
Law Offices of Seymour M. Chase, P.C. v. F.C.C., 843 F.2d 517 (D.C. Cir. 1988) .............................................................................. 23
Leedom v. Kyne, 358 U.S. 184 (1958) ......................................................................... 7-8
Liberty University, Inc. v. Geithner, __ F.3d __, 2011 WL 3962915 (4th Cir. 2011) ....................................................................... 15
Liquid Carbonic Indus. Corp. v. FERC, 29 F.3d 697 (D.C. Cir. 1994) ...................... 20
Los Angeles v. Lyons, 461 U.S. 95 (1983) .................................................................... 19
Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) ............................................. 18, 28
Massachusetts v. EPA, 549 U.S. 497 (2007) ................................................................ 10
v
Mullaney v. Anderson, 342 U.S. 415 (1952) ............................................... 1, 6, 8-10, 14
N. Indiana Pub. Serv. Co. v. FERC, 954 F.2d 736 (D.C. Cir. 1992) .......................... 27
N.L.R.B. v. Acme Industrial Co., 384 U.S. 925 (1966) ............................................... 11
N.L.R.B. v. Acme Industrial Co., 385 U.S. 432 (1967) ............................................... 11
Nat’l Ass’n for Advancement of Colored People v. New York, 413 U.S. 345 (1973) ........................................................................................ 12, 17
Nat’l Credit Union Admin. v. First Nat’l Bank & Trust, Co., 522 U.S. 479 (1998) .............................................................................................. 24
Nat’l Fed’n of Independent Business v. Sebelius, No. 11-393 (U.S.) ................... 1-3, 29
Nat’l. Farm Lines v. ICC, 564 F.2d 381 (10th Cir. 1977) ........................................... 16
Nebraska Pub. Power Dist. v. MidAmerican Energy Co., 234 F.3d 1032 (8th Cir. 2000) .............................................................................. 25
People v. Kastings, 307 Ill. 92, 138 N.E. 269 (Ill. 1923) ............................................. 24
Peoples Gas, Light & Coke Co. v. U.S. Postal Service, 658 F.2d 1182 (7th Cir. 1981) .............................................................................. 20
Planned Parenthood of Cent. Mo. v. Danforth, 428 U.S. 52 (1976) ...................... 21-22
Potomac Elec. Power Co. v. ICC, 702 F.2d 1026 (D.C. Cir. 1983) ................................ 5
Public Service Elec. & Gas, 485 F.3d at 1168; Sabre, Inc. v. DOT, 429 F.3d 1113 (D.C. Cir. 2005) ............................................................................ 27
Rea v. U.S., 350 U.S. 214 (1956) ................................................................................. 10
Scheduled Airlines Traffic Offices, Inc. v. D.O.D., 87 F.3d 1356 (D.C. Cir. 1996) .............................................................................. 25
Seven-Sky v. Holder, __ F.3d __, 2011 WL 5378319 (D.C. Cir. 2011) ........................ 15
Sibbach v. Wilson & Co., 312 U.S. 1 (1941) ................................................................ 10
South Carolina v. Regan, 465 U.S. 367 (1984) ......................................................... 1, 7
Springer v. Henry, 435 F.3d 268 (3d Cir. 2006) ............................................................ 3
Stenberg v. Carhart, 530 U.S. 914 (2000) ..................................................................... 3
Stolt-Nielsen S.A. v. Animal Feeds Int’l Corp., 130 S. Ct. 1758 (2010) ..................... 26
Trbovich v. United Mine Workers of America, 404 U.S. 528 (1972) ........................... 15
U.S. Postal Serv. v. Brennan, 579 F.2d 188 (2d Cir. 1978) ........................................ 17
U.S. v. Metro. St. Louis Sewer Dist., 569 F.3d 829 (8th Cir. 2009)............................ 17
U.S. v. Pitney Bowes, Inc., 25 F.3d 66 (2d Cir. 1994) ................................................. 12
U.S. v. Terminal Railroad Ass’n, 236 U.S. 194 (1915) ............................................... 11
vi
United Transp. Union v. I.C.C., 891 F.2d 908 (D.C. Cir. 1989) ................................. 22
Vill. of Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252 (1977) .............. 22
Warth v. Seldin, 422 U.S. 490 (1975) .................................................................... 18, 20
Whitman v. Am. Trucking Ass’ns, 531 U.S. 457 (2001) .............................................. 26
STATUES
U.S. CONST. art. I ........................................................................................................... 2
U.S. CONST. art. III ............................................................................................ 6, 17, 18
U.S. CONST. art. III, §2 ................................................................................................ 25
U.S. CONST. art. VI, cl. 2 .............................................................................................. 20
26 U.S.C. §5000A ....................................................................................................... 2, 6
26 U.S.C. §7421(a) .............................................................. 1, 2, 6-7, 9-11, 13, 15-16, 18
28 U.S.C. §2106 ....................................................................................................... 10-11
28 U.S.C. §2201(a) ......................................................................................................... 6
42 U.S.C. §300gg(a) ....................................................................................................... 6
42 U.S.C. §300gg-5(a)(2) ................................................................................................ 6
Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010) ................................................ passim
Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010)........................................................ 2
OKLA. CONST. art. II, §37(B)(1) .................................................................................... 20
OHIO REV. CODE ANN. §4509.45 ................................................................................... 24
LA. REV. STAT. ANN. §32:104 ........................................................................................ 24
CAL. VEH. CODE §16053 ............................................................................................... 24
REGULATIONS AND RULES
SUP. CT. R. 21 ................................................................................................................. 1
SUP. CT. R. 33.1(g) ........................................................................................................ 13
SUP. CT. R. 37.3(a) ........................................................................................................ 13
FED. R. CIV. P. 21 ........................................................................................................ 8-9
FED. R. CIV. P. 24 .................................................................................................... 11-12
FED. R. CIV. P. 24(a) ...............................................................................................12, 17
FED. R. CIV. P. 24(a)(2) ................................................................................................. 14
FED. R. CIV. P. 24(b) ..................................................................................................... 17
vii
FED. R. CIV. P. 24(b)(1) ................................................................................................. 12
OTHER AUTHORITIES
Henry P. Monaghan, Third Party Standing, 84 COLUM. L. REV. 277 (1984) ............. 22
1
No. 11-398
In the Supreme Court of the United States
___________________________________________
UNITED STATES DEPARTMENT OF HEALTH & HUMAN SERVICES, ET AL., Petitioners,
vs.
STATE OF FLORIDA, ET AL., Respondents.
___________________________________________
MOTION FOR LEAVE TO INTERVENE
Pursuant to SUP. CT. R. 21, the Association of American Physicians &
Surgeons, Inc. (“AAPS”) and Alliance for Natural Health USA (“ANH-USA”)
respectfully move to intervene in the above-captioned action to avoid the possibility
that the Anti-Injunction Act, 26 U.S.C. §7421(a), might deny jurisdiction to resolve
the important and urgent merits issues presented here and in Nos. 11-393 and 11-
400. Assuming arguendo that the challenged federal law is a tax, the movants’
physician members lack a tax-law remedy for the unlawful taxation that the federal
law imposes on their patients, causing economic injury to the physician members.
Because they lack an alternate, post-enforcement remedy, the Anti-Injunction Act
does not bar pre-enforcement review. South Carolina v. Regan, 465 U.S. 367, 373
(1984). Although post-certiorari intervention is rare, this Court has allowed it to
cure jurisdictional issues and thus avoid the “needless waste” of starting over in
district court. Mullaney v. Anderson, 342 U.S. 415, 416-17 (1952). If intervention is
granted, movants would defer to the States’ counsel at oral argument.
2
STATEMENT OF THE CASE
1. This action and the related litigation challenge aspects of the Patient
Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010)
(“PPACA”), as amended by the Health Care and Education Reconciliation Act of
2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010). Specifically, this action and the
related litigation before this Court challenge PPACA §1501, which requires
individuals to obtain PPACA-compliant health insurance or pay a penalty. 26
U.S.C. §5000A (the “Individual Mandate”).
2. In Florida ex rel. Atty. Gen. v. U.S. Dept. of Health and Human
Services, 648 F.3d 1235, 1285-1320 (11th Cir. 2011), the respondents prevailed in
finding the Individual Mandate unconstitutional as outside the Article I powers of
Congress, without the Eleventh Circuit’s reaching the Anti-Injunction Act.
3. The petitioners in No. 11-398 are U.S. Department of Health & Human
Services and its Secretary, Kathleen Sebelius, the U.S. Department of Treasury and
its Secretary, Timothy F. Geithner, and the U.S. Department of Labor and its
Secretary, Hilda L. Solis.
4. The respondents in No. 11-398 include 26 States – Florida, South
Carolina, Nebraska, Texas, Utah, Louisiana, Alabama, Michigan, Colorado,
Pennsylvania, Washington, Idaho, South Dakota, Indiana, North Dakota,
Mississippi, Arizona, Nevada, Georgia, Alaska, Ohio, Kansas, Wyoming, Wisconsin,
Maine, and Iowa – as well as the National Federation of Independent Business, Kaj
Ahlburg, and Mary Brown.
5. The respondents in this action are cross-petitioners in Nos. 11-393 and
3
11-400, and the petitioners in this action are cross-respondents in 11-393 and 11-
400.
6. Significantly, the parties before this Court do not include physicians,
notwithstanding that PPACA’s taking full effect in 2014 would dramatically change
medical practice, as PPACA already has begun to affect the market for health
insurance. Allowing AAPS and ANH-USA to intervene would plug that gap and
ensure at least that the group most affected is here to resolve any perceived
jurisdictional defects.
7. AAPS is a not-for-profit membership organization incorporated under
the laws of Indiana and headquartered in Tucson, Arizona. AAPS members include
thousands of physicians nationwide in all practices and specialties, many in small
practices. AAPS was founded in 1943 to preserve the practice of private medicine,
ethical medicine, and the patient-physician relationship.
8. This Court has expressly cited AAPS, both as a litigant and for amicus
briefs. For example, in Cheney v. United States Dist. Court, 542 U.S. 367, 374
(2004), this Court mentioned the precedent established by AAPS in Ass’n of Am.
Physicians & Surgeons v. Clinton, 997 F.2d 898 (D.C. Cir. 1993), which related to
prior federal efforts to revamp the health care system. AAPS has also directly
litigated an aspect of the Medicare and Medicaid system, which reached this Court
in Ass’n of Am. Physicians & Surgeons v. Mathews, 423 U.S. 975 (1975).
9. This Court has expressly made use of AAPS amicus briefs in high-
profile cases. See, e.g., Stenberg v. Carhart, 530 U.S. 914, 933 (2000); id. at 959, 963
4
(Kennedy, J., dissenting); District of Columbia v. Heller, 554 U.S. 570, 704 (2008)
(Breyer, J., dissenting). The Third Circuit expressly cited an AAPS amicus brief in
the first paragraph of Springer v. Henry, 435 F.3d 268, 271 (3d Cir. 2006).
10. ANH-USA is a not-for-profit membership organization headquartered
in the District of Columbia and founded to promote sustainable health and freedom
of choice in healthcare and to shift the medical paradigm from an exclusive focus on
surgery, drugs, and other conventional techniques to an “integrative” approach
incorporating food, dietary supplements, and lifestyle changes.
11. AAPS and ANH-USA are plaintiffs in Ass’n of Am. Physicians &
Surgeons, Inc. v. Sebelius, No. 1:10-cv-0499-ABJ (D.D.C. filed Mar. 26, 2010), a
challenge to the same PPACA provisions challenged here.
12. The defendants in the AAPS and ANH-USA litigation overlap
substantially with the defendants in this action, including all of the federal
petitioners except those associated with the Department of Labor, and adding the
Social Security Administration, its Administrator, and the United States.
13. Due to a variety of opposed but successful procedural motions by the
federal defendants, the AAPS and ANH-USA litigation has not progressed at all in
eighteen months since the AAPS and ANH-USA litigation was filed in March 2010.
Ass’n of Am. Physicians & Surgeons, Inc. v. Sebelius, No. 1:10-cv-0499-RJL (D.D.C.
Dec. 22, 2010) (staying plaintiffs’ ability to cross move for dispositive relief); Ass’n of
Am. Physicians & Surgeons, Inc. v. Sebelius, No. 1:10-cv-0499-ABJ (D.D.C. Nov. 8,
2011) (staying the hearing of defendants’ motion to dismiss to allow clarification by
5
the Florida litigation in this Court and related litigation in the U.S. Court of
Appeals for the District of Columbia Circuit).
14. As a general rule, AAPS and ANH-USA physician members utilize
“cash practices” (i.e., practices that serve individuals who self-insure) to a greater
extent than members of larger medical associations such as the American Medical
Association. Both AAPS and ANH-USA advocate for “true insurance” in the form of
high-deductible, catastrophic-loss health insurance plans, with maintenance paid
out of pocket (i.e., without insurance).
15. In most – if not all – respects, AAPS and ANH-USA physician
members lack an alternate remedy, much less an adequate alternate remedy, to
seeking pre-enforcement review. See Section I, infra. Even where they ostensibly
have an alternate remedy, that remedy is not adequate. Christman Decl. ¶¶10-11
(App. 19a); Smith Decl. ¶¶16-17 (App. 41a).
16. AAPS and ANH-USA members suffer irreparable harm in several
respects. First, to the extent that they lose the business of third parties, see Smith
Decl. ¶8 (App. 39a-40a); Orient Decl. ¶¶24-25 (App. 36a), the AAPS and ANH-USA
members cannot recover those losses in future litigation. Second, regulatory
uncertainty negatively affects members’ ability to plan the future of their medical
practices, which itself constitutes irreparable injury. Potomac Elec. Power Co. v.
ICC, 702 F.2d 1026, 1034-35 (D.C. Cir. 1983).
17. Under common understandings of economics, PPACA’s amendments to
Public Health Service Act §2704(a) and §2711(a)(2) will drive up the cost of health
6
insurance by prohibiting the exclusion of insureds with pre-existing conditions,
prohibiting insurers from setting lifetime limits, and restricting insurers’ use of
annual limits on coverage. 42 U.S.C. §§300gg(a), 300gg-5(a)(2).
ARGUMENT
Section I, infra, establishes that the Anti-Injunction Act poses no barrier to
suit by AAPS and ANH-USA physician members injured by the government’s
unlawful coercion and regulation of the physicians’ third-party patients. Section II,
infra, establishes the right of AAPS and ANH-USA to intervene, both under the
joinder rationale of Mullaney v. Anderson, 342 U.S. 415, 416-17 (1952) (Section II.A)
and under the principles of FED. R. CIV. P. 24 (Section II.B). Section III, infra,
establishes that this Court has jurisdiction under Article III (Sections III.A-III.B) to
reach the merits of AAPS’ and ANH-USA’s challenge to PPACA.
I. THE ANTI-INJUNCTION ACT DOES NOT BAR SUIT BY PARTIES SUCH AS AAPS AND ANH-USA THAT SUFFER THIRD-PARTY INJURIES AND LACK AN ALTERNATE, POST-ENFORCEMENT REMEDY
Although no party presses the Anti-Injunction Act as a barrier to this
litigation, the Court has acceded to the federal petitioners’ suggestion to appoint an
amicus to make the Anti-Injunction Act argument that the federal petitioners
decline to make. Order (Nov. 18, 2011). As such, it remains theoretically possible
that this Court might dismiss this litigation under the Anti-Injunction Act, which
prevents certain pre-enforcement claims for injunctive relief relating to “the
assessment or collection of any tax.” 26 U.S.C. §7421(a); cf. 28 U.S.C. §2201(a).
Assuming arguendo that the Individual Mandate is indeed such a tax, the Anti-
7
Injunction Act nonetheless would not bar this litigation if this Court allows AAPS
and ANH-USA to intervene.
Consistent with due process and longstanding equitable principles, the Anti-
Injunction Act simply does not apply where the plaintiff has no “alternative legal
way to challenge the validity of a tax.” South Carolina v. Regan, 465 U.S. 367, 373
(1984). Here, AAPS and ANH-USA seek to enjoin unlawful “taxes” levied against
member physicians’ patients, which negatively affect member physicians. Compl.
¶¶31-32 (App. 9a); Smith Decl. ¶8 (App. 39a-40a). Unlike patients themselves,
member physicians clearly lack an alternate legal remedy to enjoin this unlawful
“taxation.”
In addition to the Regan exception to the Anti-Injunction Act, this Court has
identified instances where due process provides judicial review, notwithstanding
statutes that deny review. See, e.g., Leedom v. Kyne, 358 U.S. 184, 188-90 (1958)
(allowing nonstatutory equitable review, notwithstanding that the statute in
question impliedly prohibited judicial review). Even without Regan, AAPS and
ANH-USA could rely on the Kyne exception to seek review because they lack any
remedy whatsoever to PPACA’s unlawfully taxing their members’ patients and
unlawfully aiding those members’ competitors.
In Board of Governors of the Federal Reserve System v. MCorp Financial, 502
U.S. 32, 43 (1991), the Court upheld the “familiar proposition” underlying Kyne
review: namely, that “only upon a showing of ‘clear and convincing evidence’ of a
contrary legislative intent should the courts restrict access to judicial review.” 502
8
U.S. at 44 (quoting Abbott Laboratories v. Gardner, 387 U.S. 136, 141 (1967)).
Because the MCorp statute expressly prohibited judicial review of the regulations at
issue and expressly authorized a challenge to them only in an enforcement action,
this Court withheld the Kyne action from those plaintiffs. 502 U.S. at 43-44.
Significantly, MCorp found the statutory review adequate, 502 U.S. at 43 (“[t]he
cases before us today are entirely different from Kyne because [the MCorp statute]
expressly provides MCorp with a meaningful and adequate opportunity for judicial
review”), which removes MCorp from any relevance here against third-party
plaintiffs like AAPS and ANH-USA.
II. THIS COURT SHOULD ALLOW AAPS AND ANH-USA TO INTERVENE TO ENSURE JURISDICTION TO REACH THE MERITS
This Section establishes the right of AAPS and ANH-USA to intervene in this
action, assuming arguendo that this Court would have independent jurisdiction
over their claims in an independent action.
A. Intervention Is Proper under Mullaney and this Court’s Inherent Authority to Resolve the Cases before this Court
In Mullaney, this Court allowed the addition of parties to cure a jurisdictional
issue (standing) raised by a party for the first time in the proceedings before this
Court. 342 U.S. at 416-17. Relying by analogy on FED. R. CIV. P. 21, the Court took
the admittedly rare step of allowing post-certiorari intervention for two primary
reasons: (1) earlier joinder would not have changed the course of the litigation (i.e.,
late joinder did not prejudice the other party), and (2) requiring the new parties to
start over in district court would constitute a “needless waste” of resources:
9
To grant the motion merely puts the principal, the real party in interest, in the position of his avowed agent. The addition of these two parties plaintiff can in no wise embarrass the defendant. Nor would their earlier joinder have in any way affected the course of the litigation. To dismiss the present petition and require the new plaintiffs to start over in the District Court would entail needless waste and runs counter to effective judicial administration – the more so since, with the silent concurrence of the defendant, the original plaintiffs were deemed proper parties below. Rule 21 will rarely come into play at this stage of a litigation. We grant the motion in view of the special circumstances before us.
Id. (emphasis added). AAPS and ANH-USA respectfully submit that this case
presents a suitable “special circumstance” for allowing appellate intervention.
By way of background, Rule 21 provides that “[m]isjoinder of parties is not a
ground for dismissing an action” and that “[o]n motion or on its own, the court may
at any time, on just terms, add or drop a party.” FED. R. CIV. P. 21. In Mullaney, the
officers of a commercial fishermen’s union brought the initial action, and – in
response to the suggestion that they lacked standing to bring fishermen’s equal-
protection action – moved to add two union-member fishermen as parties. Mullaney,
342 U.S. at 415-16. Here, Rule 21 gives a court authority “on its own” to add parties
like AAPS and ANH-USA, even without a motion by the existing parties. In all
other respects, this situation here aligns with Mullaney. The federal petitioners did
not press the Anti-Injunction Act in the Court of Appeals, and dismissal now would
10
force the “needless waste” of new parties’ starting over in district court.1
Significantly, although AAPS and ANH-USA do not share the identical
officer-member relationship that the Mullaney plaintiffs and interveners shared,
AAPS and ANH-USA members do share a similar relationship with the plaintiff
States. Specifically, AAPS is an Indiana corporation and an Arizona resident, and
AAPS and ANH-USA members reside in all of the States that have pressed this
action. See, e.g., Compl. ¶52 (App. 13a-14a); Smith Decl. ¶8 (App. 39a-40a); Orient
Decl. ¶14 (App. 34a). Although this Court’s precedents do not allow the States to
assert parens patriae standing against the federal sovereign on behalf of state
citizens, Massachusetts v. EPA, 549 U.S. 497, 520 n.17 (2007) (Supreme Court’s
precedent “prohibits” “allowing a State to protect her citizens from the operation of
federal statutes”) (internal quotations omitted), it nonetheless resembles Mullaney
to have AAPS and ANH-USA intervene in order to ensure that their States’ (and
their members’ States) suit against the federal sovereign will reach the merits.
In any event, this Court’s power to allow intervention does not derive from
the rules for district courts, Fairmont Creamery Co. v. Minnesota, 275 U.S. 70, 74
(1927); Hutto v. Finney, 437 U.S. 678, 696 (1978); Rea v. U.S., 350 U.S. 214, 217
(1956); Sibbach v. Wilson & Co., 312 U.S. 1, 10 (1941), much less from any doctrine
tied to allowing intervention by real parties in interest as in Mullaney. See 28
1 As indicated in Section I, supra, the Anti-Injunction Act poses no barrier to plaintiffs who suffer third-party injury from PPACA.
11
U.S.C. §2106. Indeed, this Court has often allowed post-certiorari intervention when
the situation warranted it. See, e.g., U.S. v. Terminal Railroad Ass’n, 236 U.S. 194,
199 (1915) (granting leave to intervene to party affected by the decree at issue);
Eastern-Central Motor Carriers Ass’n v. U.S., 321 U.S. 194, 198-99 n.5 (1944)
(intervention allowed to party that participated before the agency, but did not
receive notice of the lower-court proceedings); N.L.R.B. v. Acme Industrial Co., 384
U.S. 925 (1966) (allowing the affected labor union to intervene in an unfair-labor-
practice matter between the National Labor Relations Board and an employer2).
Under the circumstances, and particularly given the sheer size of the
economic activity that PPACA affects and the unprecedented nature of the
extension of federal power that PPACA represents, AAPS and ANH-USA
respectfully submit that this case easily qualifies as a rare instance that justifies
intervention in this Court. More than any prior litigation in which this Court has
allowed post-certiorari intervention, the need for clarity on PPACA’s lawfulness
justifies the Court’s allowing intervention to cure a potential jurisdictional barrier.
Given the foundational constitutional conflict of a majority of the States suing the
federal sovereign on an issue of federalism, this Court’s refusing intervention and
then dismissing under the Anti-Injunction Act would elevate form over substance.
B. Intervention Is Proper by Analogy to FED. R. CIV. P. 24
FED. R. CIV. P. 24 sets out the criteria for intervention into district-court
2 The merits decision discusses the union, but does not discuss intervention. N.L.R.B. v. Acme Industrial Co., 385 U.S. 432 (1967).
12
proceedings, both as of right and permissively. Although Rule 24 does not apply by
its terms to appellate proceedings, appellate courts frequently look to its criteria to
guide intervention into appellate litigation. This Section justifies intervention by
AAPS and ANH-USA, both as of right and permissively.3
1. The Motion to Intervene Is Timely
For both intervention as of right and permissive intervention, the motion
must be timely, FED. R. CIV. P. 24(a), (b)(1), where “the point to which the suit has
progressed is one factor” but “not solely dispositive.” Nat’l Ass’n for Advancement of
Colored People v. New York, 413 U.S. 345, 365-66 (1973) (“NAACP”). Courts
evaluate timeliness under a totality-of-the-circumstances test, “determined by the
court in the exercise of its sound discretion.” Id. One key factor to this inquiry is
“prejudice to existing parties resulting from any delay” caused by intervention, as
well as a catch-all allowance for “any unusual circumstances militating for or
against a finding of timeliness.” U.S. v. Pitney Bowes, Inc., 25 F.3d 66, 70 (2d Cir.
1994). As explained in this Section, this motion is timely for both intervention as of
right and permissive intervention.
Intervention would not delay these proceedings at all. The only time-related
difference between granting or denying intervention will be seven days between the
filing of an interveners’ brief if intervention is granted and the filing of an amicus
3 Rule 24(c) requires that motions to intervene be accompanied by a pleading that sets out the claim or defense for which intervention is sought. The Appendix includes a Complaint in Intervention (“Compl.”). App. __a-__a.
13
brief if intervention is denied. SUP. CT. R. 37.3(a).4 Moreover, the respondents and
the petitioners both argue that the Anti-Injunction Act should not bar this action,
Pet. at 33 (“[t]he United States continues to believe that the Anti-Injunction Act
does not bar these challenges to the minimum coverage provision”); Br. of State
Respondents at 13 (“all parties agree that the [Anti-Injunction Act] is not an
obstacle”), it would not prejudice anyone to add AAPS and ANH-USA as interveners
to ensure against dismissal under the Anti-Injunction Act.
This motion is timely for another important reason. PPACA represents an
unprecedented federal intrusion into private medical care that already is having
significant impacts. Putting off a decision on PPACA’s constitutionality for several
years will damage the national interest and, therefore, qualifies as an “unusual
circumstance” counseling for intervention to ensure a merits decision. For their
part, AAPS and ANH-USA have recently had their litigation stayed because of this
litigation and other related cases. Ass’n of Am. Physicians & Surgeons, Inc. v.
Sebelius, No. 1:10-cv-0499-ABJ (D.D.C. Nov. 8, 2011). In addition, this Court has
only just granted the petitions for a writ of certiorari and, more importantly, the
subsequent order to appoint an amicus to argue the Anti-Injunction Act issue. The
confluence of these events within the last month raises the potential for a dismissal
of this case on jurisdictional grounds, to the detriment of AAPS and ANH-USA
4 Because AAPS and ANH-USA do not seek to participate in oral argument, the only other material difference between intervention and amicus status is the allowed word count for the brief. See SUP. CT. R. 33.1(g).
14
members.
2. The Movants Have a Sufficient Interest
To meet the second criterion for intervention as of right, AAPS and ANH-
USA must “claim[] an interest relating to the property or transaction that is the
subject of the action.” FED. R. CIV. P. 24(a)(2). Here, AAPS and ANH-USA members
claim injury from the same PPACA provisions challenged in this litigation.
Moreover, unlike other litigants who have challenged PPACA, AAPS and ANH-USA
have had their litigation stayed by virtue of this litigation: “Only in rare
circumstances will a litigant in one cause be compelled to stand aside while a
litigant in another settles the rule of law that will define the rights of both.” Landis
v. North American Co., 299 U.S. 248, 255 (1936) (emphasis added). Finally, AAPS
and ANH-USA would accept participation as amici if it were clear that this Court
would reach the merits here. But the prospect of an indeterminate jurisdictional
dismissal after another half year would leave AAPS and ANH-USA running out of
time to attain the needed certainty for their members’ medical practices.
3. This Action May Impair the Movants’ Interests
To meet the third criterion for intervention as of right, AAPS and ANH-USA
must establish that they are “so situated that disposing of the action may as a
practical matter impair or impede the [movants’] ability to protect [their] interest.”
FED. R. CIV. P. 24(a)(2). While easily met here, the third criterion demonstrates that
the Mullaney framework better suits this motion to intervene. This Court’s ruling in
this litigation will obviously resolve (and thus potentially impair) the identical
facial claims that AAPS and ANH-USA make in their own litigation. By contrast,
15
the concern that prompts this motion to intervene is that this litigation will not
resolve those claims if this Court dismisses under the Anti-Injunction Act. In that
event, AAPS and ANH-USA will be forced to start from scratch in district court,
presumably circa June 2012, to pursue the identical merits issues presented here,
arguing that the Anti-Injunction Act does not bar their claims.
4. No Party Adequately Represents the Movants’ Interests
To meet FED. R. CIV. P. 24(a)’s fourth criterion for intervention as of right,
AAPS and ANH-USA must establish that the existing parties may inadequately
represent the interests of AAPS and ANH-USA members. Trbovich v. United Mine
Workers of America, 404 U.S. 528, 538, n.10 (1972). Because this Court reads the
required showing as “minimal,” id., the fourth criterion is easily met here. Like the
parties, AAPS and ANH-USA argue that the Anti-Injunction Act does not deny
jurisdiction here. But several appellate courts or jurists have disagreed. Liberty
University, Inc. v. Geithner, __ F.3d __, 2011 WL 3962915, 4-5 (4th Cir. 2011) (Anti-
Injunction Act bars pre-enforcement review); Seven-Sky v. Holder, __ F.3d __, 2011
WL 5378319, 16-42 (D.C. Cir. 2011) (Kavanaugh, J., dissenting). Indeed, this Court
found the Anti-Injunction Act issue plausible enough to appoint an amicus to argue
the position that the Anti-Injunction Act does apply.
Under the circumstances, until this Court rules on the Anti-Injunction issue,
the current respondents may lack jurisdiction to pursue this litigation. If the
current parties lack jurisdiction to resolve these issues, those parties do not
16
adequately represent AAPS or ANH-USA.5 Particularly because the litigation by
AAPS and ANH-USA in district court has recently been stayed to await this Court’s
clarification of the merits issues presented here, the many months still required to
resolve this litigation weigh heavily against the ability of AAPS and ANH-USA to
resolve their independent litigation, before PPACA inflicts irreparable harm. AAPS
and ANH-USA physician members have a dwindling amount of time within which
to avert the irreparable harm that PPACA will cause to their medical practices. Of
that dwindling time, this Court’s review of this action likely will consume another
six or seven months. As such, it is critical to AAPS and ANH-USA that this Court
resolve as much of the merits as possible. To the extent that the Anti-Injunction Act
poses any risk that those six or seven months will prove to have been wasted, the
current respondents do not adequately represent AAPS and ANH-USA.
5. Permissive Intervention Is Justified
To intervene permissively pursuant to FED. R. CIV. P. 24(b), a movant must
(1) avoid “unduly delay[ing] or prejudic[ing] the adjudication of the original parties’
rights;” and (2) have a “claim or defense that shares with the main action a common
question of law or fact.” Even if AAPS and ANH-USA do not meet the test for
intervention as of right, they readily meet the test for permissive intervention.
5 In addition to the current parties’ potential jurisdictional defect, AAPS and ANH-USA note that many circuits readily presume that governments do not adequately represent private interests. See, e.g., Fund for Animals, Inc. v. Norton, 322 F.3d 728, 736-37 (D.C. Cir. 2003); Nat’l. Farm Lines v. ICC, 564 F.2d 381, 384 (10th Cir. 1977).
17
Ionian Shipping Co. v. British Law Ins. Co., 426 F.2d 186, 191-92 (2d Cir. 1970)
(denial of intervention as of right does not preordain denial of permissive
intervention). For the reasons already set forth in Section II.B.1, supra, this motion
is timely. See, e.g., NAACP, 413 U.S. at 365 (timeliness under Rule 24(a) and Rule
24(b) coincide). Moreover, intervention would not delay this litigation at all:
intervention’s only temporal effect would be the seven-day difference between filing
as interveners-respondents, rather than as amici curiae seven days later. Under
Rule 24(b), therefore, the only real question is whether the claims by AAPS and
ANH-USA have sufficiently common questions of law or fact with the Florida
plaintiffs’ claims before this Court.
AAPS and ANH-USA seek to intervene on precisely the questions of law and
fact presented by the Florida plaintiffs’ complaints, solely to ensure that this Court
has jurisdiction to reach the merits of the issues that the Florida plaintiffs raise.
Accordingly, even in the absence of intervention as of right, AAPS and ANH-USA
respectfully submit that this Court should allow them to intervene permissively.
III. AAPS AND ANH-USA SATISFY ARTICLE III’S CRITERIA FOR JURISDICTION
Although the Circuits are split on whether an intervener must independently
establish jurisdiction under Article III,6 and this Court reserved that question,
6 Compare, e.g., U.S. v. Metro. St. Louis Sewer Dist., 569 F.3d 829, 833 (8th Cir. 2009) (standing required to intervene) with U.S. Postal Serv. v. Brennan, 579 F.2d 188, 190 (2d Cir. 1978) (intervener need not establish standing independent from the party with which the intervener aligns itself).
18
Diamond v. Charles, 476 U.S. 54, 68-69 (1986), the issue is not presented here. The
entire point of AAPS’ and ANH-USA’s moving to intervene is to establish
jurisdiction here that otherwise might be lacking under the Anti-Injunction Act. As
such, it appears necessary for AAPS and ANH-USA to establish independent
jurisdiction for their claims under Article III.
A. AAPS and ANH-USA Have Standing to Pursue their Claims
To establish standing, a plaintiff must show that: (1) the challenged action
constitutes an “injury in fact,” (2) the injury is “arguably within the zone of interests
to be protected or regulated” by the relevant statutory or constitutional provision,
and (3) nothing otherwise precludes judicial review. Ass’n of Data Processing Serv.
Org., Inc. v. Camp, 397 U.S. 150, 153 (1970). An “injury in fact” is (1) an actual or
imminent invasion of a constitutionally cognizable interest, (2) which is causally
connected to the challenged conduct, and (3) which likely will be redressed by a
favorable decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-62 (1992).
Statutes and constitutional provisions can confer rights, the denial of which
constitutes injury redressable by a court. Warth v. Seldin, 422 U.S. 490, 514 (1975).
For injuries directly caused by government action, a plaintiff can show an injury in
fact with “little question” of causation or redressability, but when the government
causes third parties to inflict injury, the plaintiff must show more to establish
causation and redressability. Defenders of Wildlife, 504 U.S. at 561-62.
Membership organizations may establish standing either in their own right
or on behalf of their members. Hunt v. Washington State Apple Adver. Comm’n, 432
U.S. 333, 343 (1977). To secure merits relief, a membership organization must
19
establish that at least one identified member – or the entire membership or
industry – suffers injury. Summers v. Earth Island Inst., 129 S.Ct. 1142, 1150-52
(2009). The Complaint in Intervention incorporates by reference the declarations
that AAPS and ANH-USA filed to support their standing in their litigation against
PPACA. If directed by the Court, AAPS and ANH-USA will submit declarations
captioned to this litigation by the same declarants.
1. Injuries in Fact
Injury includes both injury and threatened injury, which must be actual or
imminent. Los Angeles v. Lyons, 461 U.S. 95, 101-02 (1983). Although an abstract or
generalized interest (e.g., ensuring proper government operation and general
compliance with the law) cannot establish standing, the mere fact that many people
share an injury cannot defeat standing. FEC v. Akins, 524 U.S. 11, 23 (1998).
Moreover, “once a litigant has standing to request invalidation of a particular
agency action, it may do so by identifying all grounds on which the agency may have
failed to comply with its statutory mandate.” DaimlerChrysler Corp. v. Cuno, 547
U.S. 332, 353 & n.5 (2006). Thus, a plaintiff can challenge a defendant’s action for
any unlawfulness, once the plaintiff establishes standing to challenge that action.
Duke Power Co. v. Carolina Envtl. Study Group, Inc., 438 U.S. 59, 78-81 (1978)
(standing doctrine has no nexus requirement outside taxpayer standing).
a. Statutory Freedom of Choice
In response to PPACA, many states – including Virginia, Idaho, Arizona,
Georgia, Missouri, Oklahoma, and Louisiana – have adopted state “Freedom of
Choice in Health Care Acts” to prohibit compelling their residents to purchase
20
health insurance. See, e.g., Compl. ¶52 (App. 13a-14a); OKLA. CONST. art. II,
§37(B)(1) (“law or rule shall not compel, directly or indirectly, any person, employer
or health care provider to participate in any health care system”); Smith Decl. ¶8
(Oklahoman physician suffering from PPACA’s coercion of Oklahomans in his
personal capacity and through patients) (App. 39a-40a); Orient Decl. ¶14 (Arizona
physician) (App. 34a). Although PPACA and the Supremacy Clause, U.S. CONST.
art. VI, cl. 2, could affect these state statutes if PPACA were lawful, an
unconstitutional federal statute cannot affect state statutes in any way.
Accordingly, to the extent that PPACA is unlawful, these state statutes create
rights, the denial of which establishes standing. Warth, 422 U.S. at 514. PPACA
violates these state-law rights of AAPS and ANH-USA members and – for physician
members – the members’ patients.
b. Competitive Injuries and Unequal Footing
Under the “competitor standing doctrine,” the “injury claimed … is not lost
sales, per se;… [r]ather the injury claimed is exposure to competition.” Bristol-Myers
Squibb Co. v. Shalala, 91 F.3d 1493, 1499 (D.C. Cir. 1996); Liquid Carbonic Indus.
Corp. v. FERC, 29 F.3d 697, 701 (D.C. Cir. 1994) (“Increased competition represents
a cognizable Article III injury”) (citing cases); Canadian Lumber Trade Alliance v.
U.S., 517 F.3d 1319, 1333-34 (Fed. Cir. 2008); Peoples Gas, Light & Coke Co. v. U.S.
Postal Service, 658 F.2d 1182, 1194 (7th Cir. 1981); Adams v. Watson, 10 F.3d 915,
920-25 (1st Cir. 1993). Moreover, “there is no need to wait for injury from specific
transactions to claim standing” when the challenged action “will almost surely
cause [plaintiffs] to lose business. El Paso Natural Gas Co. v. FERC, 50 F.3d 23, 27
21
(D.C. Cir. 1995); Diamond v. Charles, 476 U.S. 54, 66 (1986) (physicians have
standing to challenge state actions that financially affect their practices). Either by
excluding AAPS and ANH-USA physician members from the relevant PPACA and
Medicare markets or by advantaging and subsidizing their competitors, the
challenged government actions constitute an “invasion of a legally protected
interest…. in a manner that is ‘particularized’” to AAPS and ANH-USA members,
which is an injury per se, whether or not the member would secure the benefit with
the injury removed.7 Adarand Constructors, Inc., v. Pena, 515 U.S. 200, 211 (1995).
PPACA inflicts competitive and unequal-footing injuries on AAPS and ANH-USA
members. See Compl. ¶15 (App. 5a-6a); Orient Decl. ¶¶24-25 (App. 36a); Smith
Decl. ¶¶7-8, 10 (App. 39a-40a).
c. Economic Injury and Regulatory Burden
PPACA negatively affects AAPS and ANH-USA members, both with direct
economic costs and administrative burdens, Smith Decl. ¶¶6-15 (App. 39a-41a);
DuBeau Decl. ¶7-8 (App. 21a-22a); Christman Decl. ¶¶5-9 (App. 18a); Compl. ¶¶14-
20 (App. 5a-7a), which plaintiffs have standing to challenge. Diamond, 476 U.S. at
66; Indep. Bankers Ass’n of Am. v. Heimann, 613 F.2d 1164, 1167 (D.C. Cir. 1979)
(standing to challenge agency action that forces regulated entity to choose between
more costly method); Planned Parenthood of Cent. Mo. v. Danforth, 428 U.S. 52, 62
7 Because AAPS and ANH-USA assert equal-protection injuries, see Section III.A.1.d, infra, the question whether this type of “unequal footing” analysis applies to all cases or only to equal-protection cases is not presented here. Compare Clinton v. New York, 524 U.S. 417, 456-57 (1998) with id. at 456-57 (Scalia, J., dissenting).
22
(1976) (standing for “[person] against whom [the act] directly operate[s]… assert a
sufficiently direct threat of personal detriment”). Similarly, unlawful administrative
burdens “[c]learly… me[e]t the constitutional requirements, and… [plaintiffs]
therefore ha[ve] standing to assert [their] own rights,” the “[f]oremost” of which is
the “right to be free of arbitrary or irrational [agency] actions.” Vill. of Arlington
Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 263 (1977). Even if AAPS and
ANH-USA members must seek review in future proceedings on the specific levels of
benefits, they have standing to challenge the federal guidelines that govern how the
government implements federal benefit programs. Int’l Union v. Brock, 477 U.S.
274, 284 (1986). In all of the foregoing analysis, “courts routinely credit” “basic
economic logic” in assessing standing. United Transp. Union v. I.C.C., 891 F.2d 908,
912 n.7 (D.C. Cir. 1989).
In addition to the foregoing, physician and patient members of AAPS and
ANH-USA also suffer from PPACA’s unlawfully restricting the terms on which they
may interact with third parties. Significantly, such injuries are first-party, not
third-party, injuries because they directly impair the freedom to interact with
others. Henry P. Monaghan, Third Party Standing, 84 COLUM. L. REV. 277, 299
(1984) (“a litigant asserts his own rights (not those of a third person) when he seeks
to void restrictions that directly impair his freedom to interact with a third person
who himself could not be legally prevented from engaging in the interaction”); FAIC
Securities, Inc. v. U.S., 768 F.2d 352, 360 n.5 (D.C. Cir. 1985) (citing Monaghan)
(Scalia, J.); Columbia Broadcasting System, Inc. v. U.S., 316 U.S. 407, 422-23 (1942)
23
(broadcasters had standing to challenge regulations that altered the terms on which
third-party station owners could interact with broadcasters); Law Offices of
Seymour M. Chase, P.C. v. F.C.C., 843 F.2d 517, 524 (D.C. Cir. 1988) (discussing
cases) (R.B. Ginsburg, J.).
d. Equal Protection Injury
Although PPACA purportedly seek to protect the federal fisc from uninsured
patients’ imposing costs on the health system, that argument does not apply to
AAPS and ANH-USA members who have not and will not contribute to any burden
on the federal fisc. See Christman Decl. ¶5 (App. 18a); Smith Decl. ¶11 (App. 40a).
For individuals who prefer to maintain high-deductible, catastrophic-loss insurance
and can make their deductible payments, Smith Decl. ¶11 (App. 40a), PPACA
punishes these “self-paying” citizens for failing to buy the type of government-
approved insurance. At least with respect to these self-paying individuals, the
decision to impose these additional burdens discriminates against those with high-
deductible plans who do not impose any burdens on the federal fisc. These
members, therefore, may invoke the right to equal treatment via an exemption from
PPACA’s penalties for maintaining their preferred method of health insurance and
payment. Gratz v. Bollinger, 539 U.S. 244, 262 (2003) (“‘injury in fact’… is the
denial of equal treatment [from] imposition of the barrier”) (emphasis added).
“[W]hen the “right invoked is that of equal treatment,” “the appropriate remedy is a
mandate of equal treatment, [which] can be accomplished by withdrawal of benefits
from the favored class as well as by extension of benefits to the excluded class.”
Heckler v. Mathews, 465 U.S. 728, 740 (1984) (emphasis in original). AAPS and
24
ANH-USA members therefore have equal-protection rights to enforce against
PPACA’s insurance mandates.8
2. Zone of Interests
Standing’s “zone-of-interest” test is a prudential doctrine that asks whether
the interests to be protected arguably fall within those protected by the relevant
statute. Nat’l Credit Union Admin. v. First Nat’l Bank & Trust, Co., 522 U.S. 479,
492 (1998). This generous and undemanding test focuses not on Congress’ intended
beneficiary, but on those who in practice can be expected to police the interests that
the statute protects. Ass’n of Data Processing Serv. Org’ns v. Camp, 397 U.S. 150,
153 (1970) (test asks whether plaintiff is “arguably within the zone of interests to be
protected or regulated by the statute or constitutional guarantee in question”). To
show that they are arguably “protected” by a statute, plaintiffs may demonstrate
8 Precisely to avoid equal-protection arguments and injuries, states that condition the privilege of a driver’s license on maintaining minimum insurance for third-party liability typically allow alternatives, such as self-insurance, bonds, and certificates of deposit for those minimum amounts. See, e.g., CAL. VEH. CODE §16053; OHIO REV. CODE ANN. §4509.45; LA. REV. STAT. ANN. §32:104. Failure to provide these alternatives on equal terms with the insurance option constitutes an equal-protection violation. See, e.g., Hebard v. Dillon, 699 So.2d 497, 503 (La. App. 1997) (“[a]nother reason against having separate penalty rules for insurers and self-insurers dealing with claimants is the potential violation of the constitutional concepts of equal protection and fundamental fairness” because “[a]ll persons in the same class, including insurers and self-insurers, should have similar legal obligations under similar circumstances”); Jitney Bus Ass’n v. City of Wilkes-Barre, 256 Pa. 462, 469, 100 A. 954, 956 (Pa. 1917) (“municipality is entitled to require good and sufficient security, but beyond that it should not go”); People v. Kastings, 307 Ill. 92, 108-09, 138 N.E. 269, 275 (Ill. 1923) (reversing conviction and invaliding statute for impermissibly discriminating between taxis giving bonds and taxis with insurance).
25
that they are either the statute’s intended beneficiaries or “suitable challengers” to
enforce the statute. Honeywell Int’l, Inc. v. EPA, 374 F.3d 1363, 1370 (D.C. Cir.
2004) (citing cases) (emphasis added, alteration in original), withdrawn on part on
other grounds, 393 F.3d 1315 (D.C. Cir. 2005); Scheduled Airlines Traffic Offices,
Inc. v. D.O.D., 87 F.3d 1356, 1360-61 (D.C. Cir. 1996).
But even if AAPS and ANH-USA were neither intended beneficiaries nor
suitable challengers of PPACA, they still could challenge ultra vires action, to which
the conventional zone-of-interest test essentially does not apply. Haitian Refugee
Ctr. v. Gracey, 809 F.2d 794, 811-12 & nn.13-14 (D.C. Cir. 1987).
It may be that a particular constitutional or statutory provision was intended to protect persons like the litigant by limiting the authority conferred. If so, the litigant’s interest may be said to fall within the zone protected by the limitation. Alternatively, it may be that the zone of interests requirement is satisfied because the litigant’s challenge is best understood as a claim that ultra vires governmental action that injures him violates the due process clause.
Haitian Refugee Ctr., 809 F.2d at 812 n.14; accord Chiles v. Thornburgh, 865 F.2d
1197, 1210-11 (11th Cir. 1989). By acting outside its constitutional authority, the
federal sovereign triggers the broadest zone of the Constitution itself, not the
narrow zone of a particular congressional enactment.
B. AAPS and ANH-USA Have Ripe Claims
Like standing, ripeness has a constitutional and a prudential component,
with the constitutional component essentially mirroring the constitutional standing
component of a case or controversy. U.S. CONST. art. III, §2; Nebraska Pub. Power
Dist. v. MidAmerican Energy Co., 234 F.3d 1032, 1037 (8th Cir. 2000). If Plaintiffs
26
currently have constitutional standing, their claims are constitutionally ripe, and
vice versa.
Although the imposition of PPACA’s mandates is still years off, PPACA
already is having profound effects on the medical and health-insurance industries.
In any event, “[w]here the inevitability of the operation of a statute against certain
individuals is patent, it is irrelevant to the existence of a justiciable controversy
that there will be a time delay before the disputed provisions will come into effect.”
Stolt-Nielsen S.A. v. Animal Feeds Int’l Corp., 130 S. Ct. 1758, 1767 n.2 (2010)
(quoting Regional Rail Reorganization Act Cases, 419 U.S. 102, 143 (1974)); accord
Blanchette v. Conn. Gen. Ins. Corp., 419 U.S. 102, 143 (1974). Here, AAPS and
ANH-USA members and their patients will hit this wall, circa 2014 or 2015,
Christman Decl. ¶6 (App. 18a); Smith Decl. ¶12 (App. 40a-41a), which is soon
enough.
Working under a presumption of reviewability, prudential ripeness requires
pragmatic balancing of two independent, but related, factors: fitness for review (i.e.,
the courts’ and agencies’ interests in postponing review) versus the hardship of
postponing review (i.e., the plaintiffs’ or interveners’ countervailing interest in
securing immediate review). Abbott Laboratories v. Gardner, 387 U.S. 136, 140
(1967). As shown below, claims against PPACA are prudentially ripe.
Purely legal issues are presumptively fit for review, particularly where they
“would not benefit from further factual development of the issues presented.”
Whitman v. Am. Trucking Ass’ns, 531 U.S. 457, 479 (2001) (interior quotations
27
omitted). Here, the issues in question are purely legal and depend only on the
federal government’s constitutional powers. Thus, no facts remain to develop, and
neither the federal petitioners nor the courts have an interest in delaying review.
The hardship prong comes into play when a claim is not fit for review, such
that the plaintiff “must demonstrate that postponing review will cause [it]
‘hardship’ in order to overcome a claim of lack of ripeness and obtain review of the
challenged rule at this time.” Florida Power & Light Co. v. E.P.A., 145 F.3d 1414,
1420-21 (D.C. Cir. 1998). Indeed, when no institutional issues counsel to for
postponing review, the hardship prong is “unnecessary.” Public Service Elec. & Gas,
485 F.3d at 1168; Sabre, Inc. v. DOT, 429 F.3d 1113, 1120 (D.C. Cir. 2005) (“absent
institutional interests favoring the postponement of review, a petitioner need not
show that delay would impose individual hardship to show ripeness”). Thus,
“[s]ettled principles of ripeness require that [a court] postpone review of
administrative decisions where (1) delay would permit better review of the issues
while (2) causing no significant hardship to the parties.” Northern Indiana Public
Service Co. v. FERC, 954 F.2d 736, 738 (D.C. Cir. 1992) (“NIPSCO”). Here, neither
NIPSCO factor applies: delay would not benefit review, but it would cause
hardship. The claims by AAPS and ANH-USA are therefore doubly ripe.
Significantly, the claims by AAPS and ANH-USA member physicians would
be ripe, even if claims by patients generally were unripe. It would be inequitable –
even Kafkaesque – to deny review to plaintiffs (e.g., physicians) injured now by
third parties (e.g., patients) acting under government coercion that was unripe for
28
direct review by the third-party patients. Under those circumstances, the third-party
patients would lack a justiciable claim to stop the coercion but nonetheless would
injure the physicians, who lack a claim to recover against the third parties and
could not recover damages against the government. Accordingly, while indirect-
injury plaintiffs have a heightened showing for causation and redressability,
Defenders of Wildlife, 504 U.S. at 561-62, they have a relaxed showing for
prudential ripeness:
Our decision that the Union’s claims are now nonjusticiable does not mean that employees must wait until after they are to be disciplined under the policy to challenge it in federal court. As Solomon and Eaves demonstrate, indirect injury, in the absence of enforcement, may be sufficient to establish a justiciable controversy, as long as that indirect injury is specific. For example, if an employee has a concrete and plausible desire to say something in particular and refrains from doing so because the statement arguably violates the policy, he may have the ingredients for a ripe, justiciable dispute.
Hallandale Prof’l Fire Fighters Local 2238 v. City of Hallandale, 922 F.2d 756, 764
(11th Cir. 1991) (citing Solomon v. City of Gainesville, 763 F.2d 1212 (11th Cir.
1985) and Int’l Society for Krishna Consciousness v. Eaves, 601 F.2d 809 (5th Cir.
1979)). As noted in Hallandale, this Court should not turn away those injured
indirectly injury from government action, even if the patients that injure them (like
the union in Hallandale) lack a ripe claim against the government.
REQUESTED RELIEF
Movants AAPS and ANH-USA request that the Court grant them leave to
intervene in No. 11-398 as respondents. To the extent that their intervention into
the related cases- Nos. 11-393 and 11-400- is necessary for jurisdictional purposes
in those related proceedings, movants also request intervention there. Unless this
Court orders otherwise, movants will rely on the State respondents' counsel at oral
argument, in the event that the Court grants leave to intervene.
CONCLUSION
For the foregoing reasons, the Court should grant the motion of AAPS and
ANH-USA to intervene in No. 11-398- and in Nos. 11-393 and 11-400 if necessary
for the Court's jurisdiction in those matters- to ensure that the Court has
jurisdiction to resolve the important and urgent merits issues presented.
Dated: December 6, 2011
Counsel for Amici Curiae Association of American Physicians & Surgeons and Alliance for Natural Health USA
29
ia
APPENDIX
Complaint in Intervention ........................................................................................... 1a
Declaration of Kenneth D. Christman, M.D. ............................................................ 17a
Declaration of Gretchen DuBeau .............................................................................. 20a
Declaration of Laura T. Hammons, M.D. ................................................................. 23a
Declaration of Lawrence J. Joseph ........................................................................... 26a
Declaration of Jane M. Orient, M.D. ......................................................................... 32a
Declaration of George Keith Smith, M.D. ................................................................. 38a
1
SUPREME COURT OF THE UNITED STATES
U.S. DEP’T OF HEALTH & HUMAN SERVICES, et al., Petitioners,
v.
STATE OF FLORIDA, et al., Respondents
and
ASSOCIATION OF AMERICAN PHYSICIANS & SURGEONS, INC.,
and,
ALLIANCE FOR NATURAL HEALTH USA, Respondents-Interveners.
)))))))))))))))))
No. 11-398 Related Cases Nos. 11-393, 11-400
COMPLAINT IN INTERVENTION
The Association of American Physicians and Surgeons, Inc. (“AAPS”) and Alliance for
Natural Health USA (“ANH-USA” and, collectively with AAPS, the “Plaintiffs-Interveners”)
seek declaratory and injunctive relief based on the following allegations:
NATURE OF THE ACTION
1. AAPS and ANH-USA bring this action under the Administrative Procedure Act
(“APA”), various restrictions on federal action in Article I of the U.S. Constitution, and the Fifth,
Ninth, and Tenth Amendments to enjoin Defendants Sebelius, Solis, and Geithner (collectively,
the “Officer Defendants”) and Defendant agencies (collectively with the Officer Defendants, the
“Defendants”) from intruding into AAPS and ANH-USA members’ medical and economic
decisions that the Constitution reserves to the several states or to the people.
2. As set forth more fully in Paragraph 60, AAPS and ANH-USA seek the following
injunctive and declaratory relief:
2
(a) Enjoin and declare unlawful the Patient Protection & Affordable Care Act
(“PPACA”) mandate that individuals purchase health insurance or pay penalties
(collectively, “PPACA insurance mandates”) as outside the authority of Congress to
enact and the federal government to enforce;
(b) Enjoin and declare unlawful the promulgation and enforcement of federal
standards for health insurance as outside the authority of Congress to enact and the
federal government to enforce;
(c) Enjoin and declare unlawful the enforcement of PPACA in its entirety
because it lacks a severability clause and cannot be funded without the insurance
mandates on individuals;
The requested relief is necessary to preserve individual liberty from ultra vires federal dictates
and to preserve individual liberty and choice under the Constitution.
PARTIES
3. Plaintiff AAPS is a not-for-profit membership organization incorporated under
the laws of Indiana and headquartered in Tucson, Arizona. AAPS’ members include thousands
of physicians nationwide in all practices and specialties, many in small practices. AAPS was
founded in 1943 to preserve the practice of private medicine, ethical medicine, and the patient-
physician relationship. As set forth more fully in Paragraphs 11-23, AAPS members include
without limitation medical professionals – who also are consumers of medical care – as well as
medical employers and owners and managers of medical businesses subject to the PPACA
insurance mandates. AAPS members practice and reside in most (if not all) states in the Union,
including without limitation the District of Columbia, Virginia, Idaho, Arizona, Georgia,
Missouri, and Louisiana.
3
4. Plaintiff ANH-USA is a not-for-profit membership organization headquartered in
the District of Columbia. ANH-USA was founded to promote sustainable health and freedom of
choice in healthcare and to shift the medical paradigm from an exclusive focus on surgery, drugs,
and other conventional techniques to an “integrative” approach incorporating food, dietary
supplements, and lifestyle changes. Traditional “preventative” medicine is too often defined as
taking more and more drugs at an earlier and earlier age, even in childhood. By contrast, ANH-
USA’s concept of sustainable health is real preventative medicine and dramatically reduces
healthcare costs through diet, dietary supplements, exercise, and the avoidance of toxins. As set
forth more fully in Paragraphs 11-23, ANH-USA members include without limitation medical
professionals – who also are consumers of medical care – as well as medical employers and
owners and managers of medical businesses, consumers of medical care who are not medical
professionals, and manufacturers and marketers of dietary supplements subject to PPACA’s
insurance mandates. ANH-USA members practice or reside in most (if not all) states in the
Union, including without limitation the District of Columbia, Virginia, Idaho, Arizona, Georgia,
Missouri, and Louisiana.
5. Defendant Sebelius is the Secretary of Health and Human Services and the head
of defendant HHS, an executive department of the United States government.
6. Defendant Solis is the Secretary of defendant Department of Labor (“DOL”), an
executive department of the United States government.
7. Defendant Geithner is the Secretary of the Treasury and the head of defendant
Department of the Treasury, an executive department of the United States government.
4
JURISDICTION
8. This action arises out of Defendants’ ongoing violations of various clauses in
Article I of the U.S. Constitution, and the Fifth, Ninth, and Tenth Amendments. As such, this
action raises federal questions over which this Court has jurisdiction pursuant to 28 U.S.C.
§1331.
9. With certain exceptions applicable here, the Anti-Injunction Act, 26 U.S.C.
§7421(a), denies federal district courts jurisdiction over pre-collection suits to enjoin the
assessment or collection of federal taxes. The Declaratory Judgment Act includes similar
restrictions on declaratory relief under that Act, 28 U.S.C. §2201(a).
10. An actual and justiciable controversy exists between Plaintiffs-Interveners and
Defendants.
PLAINTIFFS-INTERVENERS’ STANDING
11. AAPS members include without limitation: practicing physicians and other
medical professionals; consumers of medical services who prefer to maintain high-deductible
catastrophic medical insurance and can afford to procure their non-catastrophic medical care out
of pocket; and physicians and others who own or manage medical businesses subject to
PPACA’s insurance mandates. All individual AAPS members are consumers of medical services
in addition to any capacity that they have as medical professionals.
12. ANH-USA members include without limitation: practicing physicians and other
medical professionals; consumers of medical services who prefer to maintain high-deductible
catastrophic medical insurance and can afford to procure their non-catastrophic medical care
through the “integrative” approach advocated by ANH-USA and practiced by its members; and
physicians and others who own or manage medical businesses subject to PPACA’s insurance
5
mandates, as well as dietary-supplement companies subject to PPACA’s insurance mandates. All
individual ANH-USA members are consumers of medical services in addition to any capacity
that they have as medical professionals.
13. To the extent that they relate to third parties (as distinct from AAPS, ANH-USA,
and their members), the allegations of injury (Paragraphs 14-23) are made on the basis of
information and belief, formed after reasonable inquiry, which likely could be proved
conclusively after a reasonable opportunity for discovery.
Ongoing Injuries from Health Insurance Legislation
14. AAPS and ANH-USA members include without limitation the owners of
businesses with more than 50 fulltime employees, who are subject to a new PPACA requirement
to purchase health insurance for employees or else pay a penalty, and the imposition of this
requirement reduces the present value of such businesses. AAPS and ANH-USA members
include without limitation owners of such businesses that currently use high-deductible
catastrophic medical insurance coupled with health-savings accounts for employees. This
approach does not comply with PPACA’s health-insurance controls. The addition of these major
new costs in 2014 and subsequent years has reduced the value of these businesses today.
Removing those new costs would restore the lost value.
15. AAPS and ANH-USA members include without limitation physicians and other
medical care providers who engage in economically viable “cash practices” that operate outside
of insurance reimbursement and outside of Medicare. In many instances, these patients
maintained high-deductible catastrophic medical insurance and pay for AAPS and ANH-USA
members’ services either from cash or from medical savings accounts. Because PPACA will
increase insurance premiums considerably, thereby reducing these patients’ available resources
6
for paying directly for these services, PPACA will weaken these patients’ ability to procure these
services from AAPS and ANH-USA members and instead advantage AAPS and ANH-USA
members’ competitors whose services are covered by PPACA-eligible insurance regimes and
Medicare.
16. PPACA’s insurance mandates will render the “cash practice” business model of
AAPS and ANH-USA members economically non-viable, such that these members will need to
go out of business or invest in a different form of practice.
17. AAPS and ANH-USA members that own or are entities with 50 or more fulltime
employees employ numerous employees who are single or married to spouses who do not work
(and thus cannot rely on a spouse’s employer-provided health insurance) and who earn less than
400 percent of the federal poverty level.
18. The current health insurance premiums for AAPS and ANH-USA members will
rise or have risen, based on PPACA’s requirements, including without limitation (a) prohibiting
insurers from excluding pre-existing conditions (children immediately, and everyone in 2014),
(b) prohibiting insurers from setting lifetime limits, (c) requiring insurers to cover preventive
health services and to allow children to remain on their parents’ plans through age 26, and
(d) restricting insurers’ use of annual limits on coverage.
19. The declarations filed by AAPS and ANH-USA in their related litigation, Ass’n of
Am. Physicians & Surgeons, Inc. v. Sebelius, No. 1:10-cv-0499-ABJ (D.D.C.), are incorporated
herein by reference: Decl. of Kenneth D. Christman, M.D.; Decl. of Gretchen DuBeau; Decl. of
Laura T. Hammons, M.D.; Decl. of Lawrence J. Joseph; Decl. of Jane M. Orient, M.D.; Decl. of
George Keith Smith, M.D.
7
20. In Massachusetts, insurance premiums have risen under the state program on
which Congress based PPACA. PPACA’s new insurance mandates forces up the insurance costs
for most Americans, including most AAPS and ANH-USA members.
Physicians’ Third-Party Standing to Assert Patients’ Rights
21. In addition to the concrete, first-party injuries alleged in Paragraphs 14-20, AAPS
and ANH-USA members who are physicians or vendors also have standing to protect the patient-
physician and vendor-customer relationship both under principles of third-party standing and
from their capacity as “vendors” under this Circuit’s vendor-standing decisions.
Zone of Interests
22. AAPS and ANH-USA and their members meet the prudential zone-of-interests
test because the rights that AAPS and ANH-USA assert are within the relevant statutes’ intended
purposes (e.g., individual and provider autonomy not to enroll or to opt out of Medicare; freedom
from federal dictates outside the Constitution’s authorization; state Freedom of Choice in Health
Care Acts; and the APA’s assurance of an opportunity to comment before agencies legislate via
interpretation).
Associational Standing
23. AAPS and ANH-USA meet the requirements for associational standing because
(a) each organization has members with standing, (b) the missions of AAPS and ANH-USA
include autonomy for their members’ medical practices and their members’ own medical care,
including the economic and liberty interests in both medical practice and medical care, and
(c) nothing requires that AAPS or ANH-USA members participate as party plaintiffs.
8
RIPENESS
24. AAPS and ANH-USA members have ripe claims against the Defendants because
their claims are sufficiently immediate for purposes of constitutional standing as set forth in
Paragraphs 14-23, their claims are purely legal and thus fit for judicial review now without the
need for future facts or implementation details, and they will suffer immediate and irreparable
hardship if the Court defers review as set forth in Paragraphs 29-32.
25. The Defendants have no interest in deferring review and will suffer no hardship
from immediate review. To the contrary, before the Defendants invest significant effort in
implementing PPACA, they have a pressing interest in determining PPACA’s validity.
SOVEREIGN IMMUNITY
26. The United States has waived its sovereign immunity for actions against itself, its
instrumentalities, and its officers for non-monetary injunctive and declaratory relief and for the
entry of judgments and decrees against the United States in such actions. The United States has
waived sovereign immunity for this action and for the relief sought in Paragraph 60.
27. With the Officer Defendants specifically named in their official capacities,
sovereign immunity does not shield the Officer Defendants’ ultra vires actions.
28. As a matter of historical fact, at the time that the states ratified the U.S.
Constitution, the equitable, judge-made doctrine that allows use of the sovereign’s courts in the
name of the sovereign to order the sovereign’s officers to account for their conduct (i.e., the rule
of law) was as least as firmly established and as much a part of the legal system as the judge-
made doctrine of federal sovereign immunity. No act of Congress limits this Court’s equity
jurisdiction for an action against Defendants’ ultra vires acts.
9
IRREPARABLE HARM AND INADEQUATE ALTERNATE REMEDIES
29. Plaintiffs-Interveners’ action is not barred by the APA’s “adequate-remedy bar,”
5 U.S.C. §704, or analogous equitable doctrines because no other provision of law provides an
adequate alternate legal remedy for the injuries to AAPS’s and ANH-USA’s members.
30. Under equity jurisdiction, alternate legal actions that arise after the filing of an
equity action do not displace the previously filed equity action, even if the subsequent alternate
remedy is an adequate remedy.
31. If the penalties associated with PPACA’s insurance mandates are civil penalties
and not taxes, the law does not provide an alternate remedy to recoup the penalty.
32. With respect to payments under PPACA’s individual insurance mandate, AAPS
and ANH-USA members who are physicians lack a remedy to recoup their patients’ and
prospective patients’ “tax” (if the individual mandate’s penalty is a tax). Because these AAPS
and ANH-USA members lack an alternate remedy, the Anti-Injunction Act does not preclude
their challenging PPACA’s individual mandate.
33. Because this Court has jurisdiction as a threshold matter, the Declaratory
Judgment Act, 28 U.S.C. §§2201-2202, provides this Court the power to “declare the rights and
other legal relations of any interested party…, whether or not further relief is or could be
sought.” 28 U.S.C. §2201; accord FED. R. CIV. P. 57 advisory committee note (“the fact that
another remedy would be equally effective affords no ground for declining declaratory relief”).
34. A plaintiff’s irreparable injury and lack of an adequate legal remedy justify
injunctive relief. In addition to the declaratory relief requested in Paragraph 60, Plaintiffs-
Interveners are entitled to injunctive relief because imminent and ongoing exposure to unlawful
federal mandates under PPACA, denial of federal benefits under the POMS, and the imposition
10
of non-compensable PECOS- and NPI-related compliance costs and loss of business constitute
irreparable injury. As set forth in Paragraphs 29-32, Plaintiffs-Interveners lack an adequate
alternate legal remedy.
CONSTITUTIONAL, STATUTORY & REGULATORY BACKGROUND
35. The Constitution that created the United States from the several states embodies a
form of federalism based on the dual sovereignties of the federal government on the one hand
and the state governments on the other.
36. Article I, section 8, provides Congress the authority “to lay and collect taxes,
duties, imposts and excises, to pay the debts and provide for the … general welfare,” provided
that “all duties, imposts and excises shall be uniform throughout the United States.” Article I,
section 8, also authorizes Congress to “regulate commerce … among the several states” and “[t]o
make all laws which shall be necessary and proper for carrying into execution the foregoing
powers.”
37. Article I, section 2, and the Sixteenth Amendment require that direct taxes “shall
be apportioned among the several states … according to their respective numbers,” except that
Congress may “lay and collect taxes on incomes, from whatever source derived, without
apportionment among the several states, and without regard to any census or enumeration.”
Except as provided by the Sixteenth Amendment with respect to “taxes on income,” Article I,
section 9, provides that “[n]o capitation, or other direct, tax shall be laid, unless in proportion to
the census or enumeration herein before directed to be taken.”
38. The Fifth Amendment prohibits the taking of private property for public use
without just compensation and includes an equal-protection component against federal
discrimination that parallels the Equal Protection Clause of the Fourteenth Amendment.
11
39. The Ninth Amendment provides that the “enumeration in the Constitution, of
certain rights, shall not be construed to deny or disparage others retained by the people,” and the
Tenth Amendment reserves to the states or to the people all powers not expressly provided to the
federal government.
Patient Protection and Affordable Care Act
40. On March 23, 2010, PPACA became law after a party-line vote in the Senate and
nearly a party-line vote in the House, with 34 Democrats opposing the bill and no Republicans
supporting it. PPACA greatly expanded federal control over the medical industry, which
represents approximately one sixth of the national economy. The United States has never
adopted such major legislation on such a narrow, party-line vote.
41. The majority leadership in both houses of Congress, in coordination with the
Executive Branch, exerted unusual control over the drafting of the Senate bill and the
reconciliation bill that the House adopted to avoid the ability of members of the Senate to
filibuster the final bill. Neither bill was vetted in congressional committees. Instead, the
leadership made targeted changes and concessions to ensure support by groups of legislators or
individual legislators to enable passage. The United States has never adopted such major
legislation via the reconciliation process.
42. PPACA mandates that individuals maintain federally approved insurance or pay a
penalty, 26 U.S.C. §5000A, and that “large employers” (i.e., those employing 50 or more
fulltime employees) provide federally approved insurance or pay a penalty, 26 U.S.C. §4980H.
43. PPACA prohibits insurers from excluding insureds with pre-existing conditions
(children immediately, and everyone in 2014), §2704(a), prohibits insurers from setting lifetime
limits, §2711(a)(2), requires insurers to cover preventive health services and to allow children to
12
remain on their parents’ plans through age 26, §2714(a), and restricts insurers’ use of annual
limits on coverage, §2711(a)(2).
44. By design, PPACA’s federal criteria for acceptable health insurance subsidize
PPACA policy on acceptable insurance terms (e.g., exclusion of pre-existing conditions, annual
and lifetime limits on coverage, and extended coverage) by spreading costs to private parties,
without relying on the Spending Clause or the Taxing Power.
45. Because the Democratic congressional majorities and president had campaigned
in 2008 against raising taxes on those earning less than $250,000 and against a Republican
proposal to tax health insurance benefits, the Democratic leadership was adamant that the
penalties associated with PPACA’s insurance mandates are not taxes. PPACA justifies the
insurance mandates solely with respect to the Commerce Clause, PPACA identifies various taxes
in areas other than the insurance mandates (e.g., excise taxes on tanning salons), and PPACA
§§9001-9017 collects PPACA’s revenue provisions without listing the penalties associated with
the insurance mandates.
46. By forcing up premiums generally for those who are young, solvent, and/or
healthy to subsidize lower premiums for those who are elderly, poor, and/or sick, the federal
requirement to obtain federally acceptable insurance and the corresponding imposition of criteria
for acceptable insurance represents a regulatory taking, without just compensation, in violation
of the Fifth Amendment. Alternatively, PPACA’s insurance mandates violate the Due Process
Clause as compelled contracts, undue burdens on privacy and liberty, and denials of equal
protection, and violate the Tenth Amendment by commandeering the people, in violation of their
reserved rights.
13
47. If a tax, the penalties associated with PPACA’s insurance mandates are either an
un-apportioned capitation or direct tax or a non-uniform excise tax, all of which violate Article I,
sections 2 and 9, of the Constitution.
48. The Supreme Court has never upheld the ability of Congress to regulate lawful
inactivity – here the failure to purchase PPACA-approved health insurance – under either the
Commerce Clause or the Taxing Power.
49. A penalty for not securing PPACA-approved health insurance is not an impost,
duty, or excise on anything. Instead, a penalty for not securing PPACA-approved health
insurance is a capitation or direct tax on a subset of individuals, as opposed to a capitation or
direct tax on all individuals.
50. PPACA §6402(a) amended Medicare to require, among other things, that all
health care providers eligible for an NPI must include an NPI on claims for payment submitted
under Medicare. 42 U.S.C. §1128J(e). Neither PPACA nor any other provision of law requires
that providers who merely refer for Medicare items or services obtain or use an NPI.
51. Because PPACA’s insurance mandates are central to PPACA’s economic
viability and because PPACA contains no severability clause, Congress intended the entire
PPACA to be unenforceable if the employer insurance mandate is held invalid.
State Laws on Health Insurance
52. Various states – including without limitation Virginia, Idaho, Arizona, Georgia,
Missouri, and Louisiana – have versions of the Freedom of Choice in Health Care Act or similar
laws that protect AAPS and ANH-USA members and their patients from PPACA requirements,
including without limitation PPACA insurance mandates. In addition, most states – including
without limitation Virginia, Idaho, Arizona, Georgia, Missouri, and Louisiana – have laws that
14
regulate the terms and flexibility of what insurers can offer as health insurance. The foregoing
state laws confer rights on AAPS and ANH-USA members and their patients.
53. Although duly enacted and constitutionally valid federal laws preempt state laws
that expressly or impliedly conflict with federal law, federal laws that exceed the federal
government’s constitutional powers – such as PPACA generally and its insurance mandates
particularly – do not preempt the foregoing state laws or their protections of AAPS and ANH-
USA members and their patients
COUNT I UNLAWFUL EMPLOYER INSURANCE MANDATE
54. Plaintiff incorporates Paragraphs 1-53 and 57-60 as if fully set forth herein.
55. Nothing in Article I or elsewhere in the U.S. Constitution authorizes the federal
government to require private employers, with no direct connection to, or contract with, the
federal government to purchase federally approved health insurance for employees or pay a
penalty, and nothing in Article I or elsewhere in the U.S. Constitution authorizes the federal
government to set the acceptable terms of health insurance.
56. For the foregoing reasons, PPACA’s uncompensated mandate for employers with
50 or more fulltime employees to purchase federally approved health insurance is in excess of
authority granted by law, not in accordance with the law, and ultra vires.
COUNT II UNLAWFUL INDIVIDUAL MANDATE
57. Plaintiff incorporates Paragraphs 1-56 and 60 as if fully set forth herein.
58. Nothing in Article I or elsewhere in the U.S. Constitution authorizes the federal
government to require individual citizens, with no direct connection to or contract with the
federal government, to purchase federally approved health insurance or pay a penalty, and
15
nothing in Article I or elsewhere in the U.S. Constitution authorizes the federal government to
set the acceptable terms of health insurance for such individuals.
59. For the foregoing reasons, PPACA’s uncompensated mandate for individuals to
purchase federally approved health insurance is in excess of authority granted by law, not in
accordance with the law, and ultra vires.
PRAYER FOR RELIEF
60. Wherefore, Plaintiffs-Interveners AAPS and ANH-USA respectfully ask this
Court to grant the following relief:
A. Pursuant to 5 U.S.C. §706, 28 U.S.C. §§1331, 2201-2202, FED. R. CIV. PROC. 57, and this
Court’s equitable powers, a Declaratory Judgment that:
(i) The federal government lacks authority under the Commerce Clause to compel
individuals to purchase PPACA-compliant health insurance or pay an offsetting
penalty;
(ii) Congress enacted PPACA’s requirements for individuals to purchase health
insurance or pay an offsetting penalty exclusively under the Commerce Clause,
and not under the Taxing Power;
(iii) The federal government lacks authority under the Commerce Clause and the
Necessary and Proper Clause to compel individuals to purchase health insurance
or pay an offsetting penalty;
(iv) Requiring the private purchase by individuals of insurance with greater coverage
than the purchaser desires and for which the premiums of the healthy, solvent, and
young subsidize the sick, poor, and elderly constitutes a regulatory taking;
(v) If the PPACA insurance mandates’ penalties are taxes, requiring the payment of a
16
penalty for failure to comply with PPACA’s insurance mandates constitutes either
an un-apportioned capitation or direct tax or non-uniform duty, impost or excise;
B. Pursuant to 5 U.S.C. §706, 28 U.S.C. §§1331, 2202, and this Court’s equitable powers,
an Order providing that
(i) Defendant Sebelius and HHS are enjoined from promulgating federal criteria for
acceptable health insurance policies for private individuals;
(ii) Defendants and any and all federal officers acting independently or in concert
with them are enjoined from promulgating or enforcing any mandate that
individuals purchase or carry health insurance;
C. Pursuant to 28 U.S.C. §2412 and any other applicable provisions of law or equity, award
AAPS and ANH-USA their costs and reasonable attorneys’ fees.
D. Such other relief as may be just and proper.
Dated: December 6, 2011 Respectfully submitted,
Lawrence J. Joseph, D.C. Bar No. 464777
1250 Connecticut Ave, NW, Suite 200 Washington, DC 20036 Telephone: (202) 669-5135 Telecopier: (202) 318-2254 Email: [email protected]
Counsel for Plaintiffs-Interveners Association of American Physicians and Surgeons, Inc. and Alliance for Natural Health USA
/s/ Lawrence J. Joseph
1
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
ASSOCIATION OF AMERICAN PHYSICIANS & SURGEONS, INC. et al.,
Plaintiffs,
v.
KATHLEEN G. SEBELIUS, Secretary of Health & Human Services, in her official capacity, et al.,
Defendants.
)))))))))
Civil Action No. 1:10-0499-RJL
DECLARATION OF KENNETH D. CHRISTMAN, M.D.
I, Kenneth D. Christman, M.D., hereby declare and state as follows:
1. I am over 18 years of age, and I am not a party to this action. I am a member of
the Association of American Physicians and Surgeons, Inc. (“AAPS”) and one of its Past
Presidents. I have been an AAPS member for many years, and currently serve on its Board of
Directors. I intend to remain an AAPS member.
2. As a longstanding member of AAPS and its Board of Directors, I regard litigation
like the above-captioned action as an important facet of the benefits that AAPS provides:
namely, to protect patient and physician autonomy from third-party coercion of the patient-
physician relationship, on behalf of AAPS members in a representative capacity, so that AAPS
members need not face the third-party coercion directly, including the costs and administrative
burdens of litigation.
3. I am married with two children – aged fourteen and sixteen – and we reside in
Dayton, Ohio. My wife is not employed, and she does not plan to become employed.
4. I am a practicing plastic and reconstructive surgeon, with my practice located in
Dayton, Ohio. Through my practice and investments, I provide my family’s income. We have
2
been, and expect to remain, able to pay our health-related expenses as they arise through income
and, if necessary, savings and investments.
5. I do not have health insurance, and I have not had health insurance for decades.
Neither my wife nor my children have health insurance. We do not plan to obtain health
insurance. I save and pay for medical expenses as they arise.
6. I do not qualify for Medicare, Medicaid, or Social Security, and I do not receive
health or medical benefits from those programs. Based on my age and income, I do not expect to
qualify for any of the foregoing three programs in or before 2014, under the Patient Protection
and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010) (“PPACA”) or otherwise.
Accordingly, I will be subject to PPACA's individual insurance mandate in 2014.
7. I object to the PPACA's unconstitutional overreaching and to being forced to
obtain and maintain qualifying health care insurance for myself and my dependents, or to pay a
penalty for failing to have such insurance. I do not wish to have such insurance and do not
believe that the cost of health insurance is a wise or acceptable use of my financial resources.
8. My family and I wish to have autonomy over our medical care and to have our
physicians have their autonomy to recommend treatments for us, without the third-party
oversight and controls that such insurance entails.
9. I will be harmed financially if I am compelled to purchase health care insurance
coverage, which I neither want nor need, to comply with PPACA, or to pay the prescribed
penalties for non-compliance. In either case, I will be forced to divert financial resources from
my own priorities, which I consider to be the best and most advantageous use of my resources.
10. Litigating this issue n1yselfj before or after having paid the penalty for tailing to
procure PPACA-mandated insurance~ would be prohibitively expensive:: LJ~cause the likely costs
of the litigation wuuld exceed the penalty tha.t PPACA would impose for rton-compliance.
11. l have been. ::~clvised by AAPS counsel that the presiding judge in the above-
captioned action indicated. during a status conference that cases in the U.S. District Court for the
District of Columbia take approximately three years to complete. Based on that timelin.e, and the
reported likelihood that this litigation- or the issues that it presents- will reach the U.S.
Supreme Court, this litigation is necessary now, to ensure that I avoid diverting funds to PP ACA
penalties for the calendar year of 2014.
12. I have personal knowledge of the foregoing and am competent to testify thereto ar
triaL
I declare under pt=n~ty of perjury that the foregoing is hue and correct. E'l'~cuted on this 61h day
of Ja.t1uary, 2011, a.t Dayton, Ohio.
~~. c;,L:L Kenneth D. Christman, M.D. ~
3
1
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
ASSOCIATION OF AMERICAN PHYSICIANS & SURGEONS, INC. et al.,
Plaintiffs,
v.
KATHLEEN G. SEBELIUS, Secretary of Health & Human Services, in her official capacity, et al.,
Defendants.
)))))))))
Civil Action No. 1:10-0499-RJL
DECLARATION OF GRETCHEN DUBEAU
I, Gretchen DuBeau, hereby declare and state as follows:
1. I am over 18 years of age and not a party to this action. I reside in Washington,
DC, and am the Executive Director of Alliance for Natural Health USA, 1350 Connecticut
Avenue, NW, Washington, DC 20036 (“ANH-USA”).
2. ANH-USA is a United States division of an international, not-for-profit, non-
governmental organization with headquarters in Washington, D.C. ANH-USA is the successor
to the American Association for Health Freedom, which, in turn, is the successor to the
American Preventive Medical Association (“APMA”). ANH-USA’s predecessor’s predecessor
(APMA) was founded in 1992.
3. ANH’s membership consists of practitioners, medical doctors, scientists,
consumers, patients, and commercial entities who variously manufacture, sell, distribute,
recommend, and use dietary supplements.
4. ANH’s mission objectives include the promotion of natural health and access to
dietary supplements and to defend its members’ related constitutional, statutory, and common-
law rights in court. ANH-USA is dedicated to promoting sustainable health and freedom of
choice in healthcare through good science and good law. ANH-USA protects the right of natural
2
health practitioners to practice and the right of consumers to choose the healthcare options they
prefer. ANH-USA works to shift the medical paradigm from an exclusive focus on surgery,
drugs and other conventional techniques to an “integrative” approach incorporating functional
foods, dietary supplements and healthy lifestyle changes.
5. Based on correspondence between ANH-USA members and ANH-USA (as well
as my discussions with practitioner members) about the Patient Protection and Affordable Care
Act, Pub. L. No. 111-148, 124 Stat. 119 (2010) (“PPACA”), the membership generally opposes
PPACA’s mandates that employers and individuals provide or obtain PPACA-mandated health
insurance or pay a corresponding penalty.
6. Although the reasons that individual members oppose PPACA’s individual
mandates vary, the most prevalent reason for their opposition is that PPACA-mandated health
insurance would not cover the integrative approach to health that ANH-USA members and
ANH-USA advocate. These ANH-USA members tend to prefer using true insurance (i.e.,
coverage for catastrophic loss) in the form of relatively inexpensive, high-deductible catastrophic
coverage, while paying day-to-day medical and health expenses out of dedicated health
accounts – such as health savings accounts, health reimbursement accounts, flexible spending
accounts – or simply personal savings and regular income.
7. PPACA §9003’s exclusion of drugs not prescribed by a physician from
reimbursement through health savings accounts and flexible spending accounts (which I
understand to have taken effect January 1, 2011) injures ANH-USA members financially by
denying the ability to purchase over-the-counter drugs and dietary supplements via such
accounts.
8. For ANH-USA physician members, denying their patients the ability to address
health costs and insurance via the means specified in Paragraph 6 puts these physician members
at a competitive disadvantage vis-a-vis traditional physicians, whose practices fall under the type
of insurance that PPACA compels the public to have. Specifically, PPACA coerces these
member physicians' patients to purchase a product- PPACA-mandated health insurance- that
lowers the relative cost to patients of member physicians' competition vis-a-vis the cost of these
member physicians' services.
9. In my capacity with ANH-USA, I have received confidential information on the
nature of ANH-USA corporate members, including (without limitation) detailed information on
four U.S.-based dietary-supplement companies that employ 100, 110, 250, and 550 employees. I
understand that these ANH-USA corporate members will be subject to PPACA's employer
mandates for health insurance.
10. I have personal knowledge of the foregoing and am competent to testify thereto at
trial.
I declare under penalty of perjury that the foregoing is true and correct. Executed on this _th day
of January, 2011, at Washington, DC.
~a~ Gretchen DuBeau Executive Director, Alliance for Natural Health USA
3
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
ASSOCIATION OF AMERICAN PHYSICIANS & SURGEONS, INC. et al.,
Plaintiffs,
v. KATHLEEN G. SEBELIUS, Secretary of Health & Human Services, in her official capacity, et al.,
Defendants.
) ) ) ) ) ) ) ) )
Civil Action No. I :10-0499-RJL
DECLARATION OF LAURA T. HAMMONS, M.D.
I, Laura T. Hammons, M.D., hereby declare and state as follows:
1. 1 am over 18 years of age, and I am not a party to this action. 1 am a resident of
New Mexico and a member of the Association of American Physicians and Surgeons, Inc.
C'AAPS"). I plan to remain an AAPS member and to remain in New Mexico.
2. I graduated from East Tennessee University Medical School in 1986, and I have a
private medical practice in Gallup, New Mexico.
3. There is a shortage of physicians in my area. Because not all physicians see
Medicare and Medicaid patients, the shortage is exacerbated for Medicare and Medicaid patients.
4. In addition to my private; for-profit practice, I have served pro bono (without
charge) as the Medical Director of the Little Sisters of the Poor Home for the Aged. For over
twenty years, I have referred these patients out for needed services- such as bloodwork, x-rays,
oxygen, physical therapy orders, and the similar services - for which their Medicare eligibility
~ualified them.
5. I have not enrolled in the Provider Enrollment, Chain and Ownership System
("PECOS"), and I would prefer not to enroll in PECOS, which I regard as an administrative
burden, an unwarranted risk of unauthorized disclosure of infonnation about me and my practice,
1
and an economic risk that the Medicare system will erroneously debit my business banking
account. As a result of the Medicare system's new policy to require PECOS enrollment for
referrers, I no longer can successfully refer services for Medicare-e1igible patients at the Little
Sisters of the Poor Home for the Aged.
6. I am busy in my private practice, and the PECOS changes will not affect my
income, but those changes cause severe inconvenience to my patients. For example, on or about
January 4, 2011, an elderly man with bilateral lung cancer and respiratory distress was admitted
to the Little Sisters of the Poor Home for the Aged. He cannot afford medical care and, for all
practical purposes, has almost no money. His only medical coverage is Medicare, and he is too
weak to go out to see a Medicare physician. According to the local medical supplier in Gallup,
Medicare will not honor my order for oxygen. As a result; 1 was unable to refer this patient for
oxygen under Medicare. Our only hope for him, at this point, is to wait until hospice enrolls him
to see whether that different way of ordering the oxygen will allow this patient some relief.
7. The situation with this lung-cancer patient with respiratory distress is not unique.
Based on my experience, similar episodes will continue to arise. These rejections of service and
the toll that they take on my patients are physically and emotionally painful for my patients.
They would prefer a return to the prior status quo, under which I could refer them for these
services under Medicare. For humanitarian and professional reasons, I too would prefer a return
to that prior status quo so that I could alleviate their pain.
8. I have personal knowledge of the foregoing declarations and am competent to
testifY thereto at trial.
2
I declare under penalty ofpetjury that the foregoing is true and correct. Executed on this 2 th day
of January, 2011, at Gallup, New Mexico.
3
1
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
ASSOCIATION OF AMERICAN PHYSICIANS & SURGEONS, INC. et al.,
Plaintiffs,
v.
KATHLEEN G. SEBELIUS, Secretary of Health & Human Services, in her official capacity, et al.,
Defendants.
)))))))))
Civil Action No. 1:10-0499-RJL
DECLARATION OF LAWRENCE J. JOSEPH
I, Lawrence J. Joseph, hereby declare and state as follows:
1. I am over 18 years of age and not a party to this action. I reside in McLean,
Virginia, and represent the plaintiffs in the above-captioned action.
2. On or about March 20, 2010, the former Director of the Congressional Budget
Office, Douglas Holtz-Eakin, placed an “op-ed” in the New York Times, which made the
following statements among others:
ON Thursday, the Congressional Budget Office reported that, if enacted, the latest health care reform legislation would, over the next 10 years, cost about $950 billion, but because it would raise some revenues and lower some costs, it would also lower federal deficits by $138 billion. In other words, a bill that would set up two new entitlement spending programs — health insurance subsidies and long-term health care benefits — would actually improve the nation’s bottom line.
Could this really be true? How can the budget office give a green light to a bill that commits the federal government to spending nearly $1 trillion more over the next 10 years?
The answer, unfortunately, is that the budget office is required to take written legislation at face value and not second-guess the plausibility of what it is handed. So fantasy in, fantasy out.
In reality, if you strip out all the gimmicks and budgetary games and rework the calculus, a wholly different picture emerges: The health care reform legislation would raise, not lower, federal deficits, by $562 billion.
2
3. Mr. Holtz-Eakin’s op-ed piece entitled “The Real Arithmetic of Health Care
Reform” is available online at http://www.nytimes.com/2010/03/21/opinion/21holtz-eakin.html
(last visited Jan. 10, 2011). On January 10, 2011, I downloaded a print copy of that op-ed piece
and attached it to this declaration.
4. On information and belief, formed after reasonable inquiry, which likely could be
proved through discovery, at the time that the House passed the Senate bill on the Patient
Protection and Affordable Care Act (“PPACA”), there was no reasonable prospect that an
amended bill would clear the Senate because the newly-elected Senator from Massachusetts,
Scott Brown, gave the minority party enough votes to filibuster an amended bill.
5. Over a period of several months leading up to PPACA’s enactment, the President,
leading members of his Party in Congress, and those working with them repeatedly assured the
American public during the public debates that surrounded PPACA’s enactment that health
reform legislative would not take away private employer-provided health insurance (i.e., if you
liked your plan, PPACA would allow you to keep it).
6. On information and belief, formed after reasonable inquiry, which likely could be
proved through discovery, the federal Department of Health & Human Services (“HHS”) timely
received the comments of the Association of American Physicians & Surgeons, Inc. (“AAPS”)
on the Interim Final Rule with Comment Period that HHS promulgated at 75 Fed. Reg. 24,437
(2010).
7. On information and belief, formed after reasonable inquiry, which likely could be
proved through discovery, insurance companies readily could identify the significant, non-zero
portion of an insurance premium for young, healthy insureds that goes beyond the need to cover
3
the likely expenses of those young, healthy insureds and, instead subsidizes the additional risks
that PPACA (as enacted) requires insurers to cover.
8. On information and belief, formed after reasonable inquiry, which likely could be
proved through discovery, a statistically significant number of large employers nationwide are
considering plans to scale back their health insurance programs in light of PPACA’s enactment.
9. Except where the foregoing declarations are made on the basis of information and
belief, formed after reasonable inquiry, which likely could be proved through discovery, I have
personal knowledge of the foregoing and am competent to testify thereto at trial.
I declare under penalty of perjury that the foregoing is true and correct. Executed on this 10th day
of January, 2011, at McLean, Virginia.
Lawrence J. Joseph
/s/ Lawrence J. Joseph
March 21, 2010
OP-ED CONTRIBUTOR
The Real Arithmetic of Health Care Reform By DOUGLAS HOLTZ-EAKIN
Arlington, Va.
ON Thursday, the Congressional Budget Office reported that, if enacted, the latest health care reform legislation would, over the next 10 years, cost about $950 billion, but because it would raise some revenues and lower some costs, it would also lower federal deficits by $138 billion. In other words, a bill that would set up two new entitlement spending programs — health insurance subsidies and long-term health care benefits — would actually improve the nation’s bottom line.
Could this really be true? How can the budget office give a green light to a bill that commits the federal government to spending nearly $1 trillion more over the next 10 years?
The answer, unfortunately, is that the budget office is required to take written legislation at face value and not second-guess the plausibility of what it is handed. So fantasy in, fantasy out.
In reality, if you strip out all the gimmicks and budgetary games and rework the calculus, a wholly different picture emerges: The health care reform legislation would raise, not lower, federal deficits, by $562 billion.
Gimmick No. 1 is the way the bill front-loads revenues and backloads spending. That is, the taxes and fees it calls for are set to begin immediately, but its new subsidies would be deferred so that the first 10 years of revenue would be used to pay for only 6 years of spending.
Even worse, some costs are left out entirely. To operate the new programs over the first 10 years, future Congresses would need to vote for $114 billion in additional annual spending. But this so-called discretionary spending is excluded from the Congressional Budget Office’s tabulation.
Consider, too, the fate of the $70 billion in premiums expected to be raised in the first 10 years for the legislation’s new long-term health care insurance program. This money is counted as deficit reduction, but the benefits it is intended to finance are assumed not to materialize in the first 10 years, so they appear nowhere in the cost of the legislation.
Page 1 of 3Op-Ed Contributor - The Real Arithmetic of Health Care Reform - NYTimes.com
1/10/2011http://www.nytimes.com/2010/03/21/opinion/21holtz-eakin.html?_r=1&pagewanted=print
Another vivid example of how the legislation manipulates revenues is the provision to have corporations deposit $8 billion in higher estimated tax payments in 2014, thereby meeting fiscal targets for the first five years. But since the corporations’ actual taxes would be unchanged, the money would need to be refunded the next year. The net effect is simply to shift dollars from 2015 to 2014.
In addition to this accounting sleight of hand, the legislation would blithely rob Peter to pay Paul. For example, it would use $53 billion in anticipated higher Social Security taxes to offset health care spending. Social Security revenues are expected to rise as employers shift from paying for health insurance to paying higher wages. But if workers have higher wages, they will also qualify for increased Social Security benefits when they retire. So the extra money raised from payroll taxes is already spoken for. (Indeed, it is unlikely to be enough to keep Social Security solvent.) It cannot be used for lowering the deficit.
A government takeover of all federally financed student loans — which obviously has nothing to do with health care — is rolled into the bill because it is expected to generate $19 billion in deficit reduction.
Finally, in perhaps the most amazing bit of unrealistic accounting, the legislation proposes to trim $463 billion from Medicare spending and use it to finance insurance subsidies. But Medicare is already bleeding red ink, and the health care bill has no reforms that would enable the program to operate more cheaply in the future. Instead, Congress is likely to continue to regularly override scheduled cuts in payments to Medicare doctors and other providers.
Removing the unrealistic annual Medicare savings ($463 billion) and the stolen annual revenues from Social Security and long-term care insurance ($123 billion), and adding in the annual spending that so far is not accounted for ($114 billion) quickly generates additional deficits of $562 billion in the first 10 years. And the nation would be on the hook for two more entitlement programs rapidly expanding as far as the eye can see.
The bottom line is that Congress would spend a lot more; steal funds from education, Social Security and long-term care to cover the gap; and promise that future Congresses will make up for it by taxing more and spending less.
The stakes could not be higher. As documented in another recent budget office analysis, the federal deficit is already expected to exceed at least $700 billion every year over the next decade, doubling the national debt to more than $20 trillion. By 2020, the federal deficit — the amount the government must borrow to meet its expenses — is projected to be $1.2 trillion, $900 billion of which represents interest on previous debt.
The health care legislation would only increase this crushing debt. It is a clear indication that Congress does not realize the urgency of putting America’s fiscal house in order.
Page 2 of 3Op-Ed Contributor - The Real Arithmetic of Health Care Reform - NYTimes.com
1/10/2011http://www.nytimes.com/2010/03/21/opinion/21holtz-eakin.html?_r=1&pagewanted=print
Douglas Holtz-Eakin, who was the director of the Congressional Budget Office from 2003 to 2005, is the president of the American Action Forum, a policy institute.
Copyright 2010 The New York Times Company
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Page 3 of 3Op-Ed Contributor - The Real Arithmetic of Health Care Reform - NYTimes.com
1/10/2011http://www.nytimes.com/2010/03/21/opinion/21holtz-eakin.html?_r=1&pagewanted=print
1
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
ASSOCIATION OF AMERICAN PHYSICIANS & SURGEONS, INC. et al.,
Plaintiffs,
v.
KATHLEEN G. SEBELIUS, Secretary of Health & Human Services, in her official capacity, et al.,
Defendants.
)))))))))
Civil Action No. 1:10-0499-RJL
DECLARATION OF JANE M. ORIENT, M.D.
I, Jane M. Orient, M.D., hereby declare and state as follows:
1. I am over 18 years of age, not a party to this action, and a resident of Arizona. I
am the Executive Director of the Association of American Physicians and Surgeons, Inc.
(“AAPS”), a position I have held for over 15 years. During my tenure as Executive Director, I
also have concurrently been an AAPS member. I plan to remain an AAPS member.
2. AAPS, a non-profit organization founded in 1943, is dedicated to fostering private
medicine, ethical medicine, and the patient-physician relationship and protecting them from
third-party encroachment. Through thousands of member physicians, surgeons, and other
medical professionals, AAPS represents virtually all medical specialties nationwide.
3. Individual AAPS members include (without limitation) physicians practicing and
residing in Arizona, Georgia, Idaho, Louisiana, Missouri, Oklahoma, Utah, and Virginia, as well
as most (if not all) states in the United States.
4. Litigation like the above-captioned action serves as an important facet of the
benefits that AAPS provides its members: namely, to protect patient and physician autonomy
from third-party coercion of the patient-physician relationship on behalf of members, in a
2
representative capacity, so that AAPS members need not directly face the third-party coercion or
bear the costs and administrative burdens of litigation.
5. AAPS receives no government funding and has negligible unrelated business
income. Instead, AAPS is funded almost entirely by member dues, reflecting its representation of
its members and their patients, in contrast with many other medical organizations.
Education and Experience
6. I received my M.D. degree from Columbia University College of Physicians and
Surgeons, New York, New York, in 1974. Prior to that I graduated Phi Beta Kappa with a B.A.
in chemistry with honors and a B.S. in mathematics, summa cum laude, University of Arizona,
Tucson, 1967.
7. I did my internal medicine residency at Parkland Memorial Hospital, Dallas
Veterans Administration Hospital (Texas Southwestern) and University of Arizona Affiliated
Hospitals, Tucson.
8. I have been Board certified, American Board of Internal Medicine, since 1977.
9. I was full-time faculty at the University of Arizona College of Medicine, in the
Ambulatory Care Section at the Tucson Veterans Administration Medical Center, between the
time I completed residency and opened my private practice. I have been a clinical lecturer in
medicine, University of Arizona College of Medicine, since 1981.
10. I am the executive director of the Association of American Physicians and
Surgeons, and a member of the Arizona Medical Association, Pima County Medical Society,
American Association of Orthopaedic Medicine, and American College of Legal Medicine.
11. I have both published articles in medical peer-reviewed journals and performed
peer review on articles that were published in such journals.
3
12. I am currently managing editor of the Journal of American Physicians and
Surgeons, an open access journal and a member of the Directory of Open Access Journals.
13. I am the author of a comprehensive medical textbook entitled Sapira’s Art and
Science of Bedside Diagnosis edition 2, by Jane M. Orient, M.D., Lippincott, Williams &
Wilkins, Philadelphia, 2000; edition 3, 2005; edition 4, 2010.
14. I am a physician licensed in good standing in Arizona, where I practice medicine.
AAPS Views on the Impact of Medical Insurance and “PPACA” on Medical Practice
15. In my capacity with AAPS, I have corresponded and discussed the Patient
Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010) (“PPACA”),
with numerous AAPS members.
16. AAPS supports the right of physicians to use their professional judgment in
assessing and discussing with their patients the appropriate course of treatment, free from third-
party and governmental intrusion.
17. Because the history of medicine is full of examples of medical orthodoxy that
ultimately proved misguided, harmful, or worse, AAPS and AAPS members believe that
individual physicians must have the autonomy to exercise their professional judgment. Historical
examples include not only bleeding and leeches from the distant past, but also more recently
used procedures such as the Halstead radical mastectomy, which was prevalent into the 1970s.
Less dramatic, but equally tied to each physician’s ethical and professional judgment, are
questions of when to provide antibiotics or vaccines versus when to allow the patient’s body to
fight the illness.
18. The membership generally opposes PPACA’s mandates that employers and
individuals provide or obtain PPACA-mandated health insurance or pay a corresponding penalty.
4
19. Although the reasons that individual members oppose PPACA’s individual
mandates vary, the most prevalent reason for their opposition is that PPACA-mandated health
insurance undermines the individual autonomy and responsibility and the free-market principles
that AAPS members and AAPS advocate.
20. AAPS members tend to prefer using true insurance (i.e., coverage for catastrophic
loss) in the form of relatively inexpensive, high-deductible catastrophic coverage or even no
insurance, while paying day-to-day medical and health expenses out of dedicated health
accounts – such as health savings accounts and flexible spending accounts – or simply personal
savings and regular income.
21. Allowing insurance or its government counterparts to inject themselves into day-
to-day medical maintenance – as distinct from catastrophic injury or illness – distorts the free
market, reduces individual responsibility and autonomy over issues related to health, and limits
access to care via queuing, providers’ withdrawal from the market, price controls, and third-party
payers’ views of necessity and efficacy of treatment.
22. Physicians working within government or other third-party managed care systems
invariably need to advocate for treatments within those systems rather than provide the care that
they believe their patients require and want. Even accepting that government has the authority to
attach such conditions to medical care for which it pays directly, AAPS and its members
advocate that nothing allows government to set the terms for healthcare decisions for which the
government does not pay directly.
Impacts on My Medical Practice
23. I have not enrolled in the Provider Enrollment, Chain and Ownership System
(“PECOS”) or obtained a National Provider Identifier (“NPI”), and I object to enrolling in
PECOS and obtaining an NPI. I do not transmit health information in electronic form in the
5
manner contemplated by the Health Insurance Portability and Accountability Act of 1996 or
engage in “e-prescribing” within the terms of applicable federal regulations. Both enrolling in
PECOS and obtaining an NPI present an administrative burden to me. PECOS presents an
unwarranted risk of disclosure for my personal and professional information as well as the risk
that the Medicare system will erroneously debit my banking account pursuant to the Electronic
Funds Transfer Authorization Agreement (Form CMS-588) that I understand that I would need
to execute as part of enrolling in PECOS.
24. If I could refer Medicare-eligible patients for Medicare services to which they are
entitled under Medicare (e.g., x-rays, bloodwork, etc.) without enrolling in PECOS or obtaining
an NPI, that would put me on an equal footing with my professional competitors, with respect to
competition for such patients.
25. If this Court entered a declaratory order or injunction that the federal government
lacks authority to prosecute, seek recoupment from, or otherwise harass non-enrolled physicians
for treating and directly charging willing Medicare-eligible patients, without any Medicare-
related conditions’ applying, I would and could provide Medicare-eligible services for willing
Medicare-eligible patients for which the patients would prefer my treatment for various reasons
(e.g., ease of scheduling or access, status as a prior patient, preference for my services over
Medicare physicians’ services). Removing the barrier of federal oversight and coercion in these
medical relationships would put me on an equal footing with my professional competitors, with
respect to competition for such patients.
26. I have personal knowledge of the foregoing and am competent to testify thereto at
trial.
I declare under penalty of perjury that the foregoing is true and correct Executed on this .!.!th day
of January, 2.011, at Tucson, Arizona.
6
1
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
ASSOCIATION OF AMERICAN PHYSICIANS & SURGEONS, INC. et al.,
Plaintiffs,
v.
KATHLEEN G. SEBELIUS, Secretary of Health & Human Services, in her official capacity, et al.,
Defendants.
)))))))))
Civil Action No. 1:10-0499-RJL
DECLARATION OF GEORGE KEITH SMITH, M.D.
I, George Keith Smith, M.D., hereby declare and state as follows:
1. I am over 18 years of age and not a party to this action. I reside in Oklahoma,
work in Oklahoma City, Oklahoma, and plan to continue both to reside and work there.
2. I am the Medical Director of the Surgery Center of Oklahoma (“Surgery Center”),
which is a partnership of Metro Surgery Center, LLP (“Metro Surgery”), and SHC Oklahoma
City, Inc. (“SHCOC”). I am the President of SHCOC’s Board of Directors and Metro Surgery’s
Managing Partner. In these positions, I am authorized to speak for Surgery Center, Metro
Surgery, and SHCOC. In addition to my capacities with these entities, I am an anesthesiologist
with a private practice at Surgery Center.
3. I am a member of the Association of American Physicians and Surgeons, Inc.
(“AAPS”), and I intend to remain an AAPS member. In addition, the Surgery Center is an AAPS
member, and – in my capacity with the Surgery Center – I intend for the Surgery Center to
remain an AAPS member.
4. To enable it to charge its deeply-discounted prices to cash-based patients, the
Surgery Center has a payment policy that requires payment in full when services are rendered,
2
with alternate payment arrangements available for human resource departments or divisions of
self-insured companies. The Surgery Center does not see Medicare-eligible patients.
5. Because it offers quality care at low prices, without the rationing that goes with
insurance and government health programs, the Surgery Center often sees patients from Canada,
notwithstanding that Canada has a comprehensive national health-care program.
6. If the Surgery Center could treat Medicare-eligible patients wholly outside of
Medicare on the Surgery Center’s payment terms, without any of the burdens or requirements
imposed by the Medicare statute, 42 U.S.C. §§1395-1395kkk-1, and any implementing
regulations or policies, the Surgery Center would be willing to treat such patients, just like it
treats their Canadian counterparts. This arrangement would benefit the patients, the Surgery
Center, and the physicians who practice there, including me.
7. The opportunity to treat such Medicare-eligible patients on the Surgery Center’s
terms would put the Surgery Center on an equal footing with its hospital competitors, with
respect to competition for such patients. Similarly, that opportunity would put physicians and
surgeons – including me – affiliated with the Surgery Center on an equal footing with their
competitors at other medical facilities, with respect to competition for such patients.
8. By coercing Americans generally and Oklahomans specifically to procure
expensive, comprehensive health insurance – notwithstanding that many prefer either to remain
uninsured or to insure only against catastrophic injury or illness – the Patient Protection and
Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010) (“PPACA”) will put my cash-
based practice on an unequal footing with my competitors at other medical facilities, with respect
to competition for such patients. First, these patients will have comprehensive coverage that they
did not heretofore have, making my low prices seem high compared to having the patients’
3
surgery covered by comprehensive insurance. Second, by virtue of paying the significantly
higher premiums that PPACA will require, these patients will simply have fewer funds to devote
to “cash” practices like mine, even if they would prefer to have their surgery at our facility for
other reasons (e.g., the quality of care, the speed of scheduling, convenience, or prior
professional relationships).
9. I have not enrolled in the Provider Enrollment, Chain and Ownership System
(“PECOS”), and I object to enrolling in PECOS, which I regard as an administrative burden, an
unwarranted risk of unauthorized disclosure of information about me and my practice, and an
economic risk that the Medicare system will erroneously debit my business banking account.
10. Currently, I do not see Medicare-eligible patients, but I would consider doing so if
I could see them on the Surgery Center’s payment terms, without any of the burdens or
requirements imposed by the federal Medicare system as cited in Paragraph 6. The ability to
refer Medicare-eligible patients for services would put me on an equal footing with my
competitors at other medical facilities, with respect to competition for such patients.
11. I have been, and expect to remain, able to pay any health-related expenses as they
arise through use of a health savings account, income and, if necessary, savings, and
investments. In addition, I use and plan to continue to use a high-deductible insurance ($10,000)
insurance policy, which covers me and my three children aged fourteen, nineteen, and twenty
two for approximately $200 per month. Neither I nor my children are covered by any other
health insurance.
12. I do not qualify for Medicare, Medicaid, or Social Security, and I do not receive
any benefits from those programs. Based on my age and income, I do not expect to qualify for
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any of the foregoing three programs in or before 2014, under PPACA or otherwise. Accordingly,
I will be subject to PPACA's individual insurance mandate in 2014.
13. I object to the PPACA's unconstitutional overreaching and to being forced to
obtain and maintain qualifying health care insurance for myself and my dependents, or to pay a
penalty for failing to have such insurance. I do not wish to have such insurance and do not
believe that the cost of health insurance is a wise or acceptable use of my financial resources.
14. I wish to have autonomy over my medical care and want physicians to have their
autonomy to recommend treatments for me, without the third-party oversight that such insurance
entails.
15. I will be harmed financially if I am compelled to purchase health care insurance
coverage, which I neither want nor need, to comply with PPACA, or to pay the prescribed
penalties for non-compliance. In either case, I will be forced to divert financial resources from
my own priorities, which I consider to be the best and most advantageous use of my resources.
16. Litigating this issue myself, before or after having paid the penalty for failing to
procure PPACA-mandated insurance, would be prohibitively expensive because the likely costs
of the litigation would exceed the penalty that PPACA would impose for non-compliance.
17. I have been advised by AAPS counsel that the presiding judge in the above-
captioned action indicated during a status conference that cases in the U.S. District Court for the
District of Columbia take approximately three years to complete. Based on that timeline, and the
reported likelihood that this litigation – or the issues that it presents – will reach the U.S.
Supreme Court, this litigation is necessary now, to ensure that I avoid diverting funds to PPACA
penalties circa April 2015 or to increased health insurance premiums circa January 2014.
18. I have personal knowledge of the foregoing and am competent to testify thereto at
trial.
I declare under penalty of perjury that the foregoing is true 1Uld correct. Executed on this _ th day
of January, 2011, at Oklahoma City, Oklahoma.
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