States’ motion to intervene granted in case challenging the ACA’s constitutionality

The District Court of the Northern District of Texas granted the motion of seventeen states to intervene as defendants in a challenge to the constitutionality of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) brought by nineteen states and three individuals. The plaintiffs, led by the state of Texas, seek a declaratory judgment that the ACA is unconstitutional. The plaintiffs contend that the amended ACA is no longer protected from constitutional attack since the Tax Cuts and Jobs Act of 2017 (P.L. 115-97) eliminated the tax for failure to comply with the individual mandate (see sec. 1501). The proposed intervenor states entered their motion to intervene to protect their distinct fiscal, economic, sovereign, and quasi sovereign interests in the ACA and this case.

Federal Rule of Civil Procedure. The proposed intervenor states contended that they met the standard for intervention as a matter or right under the Federal Rule of Procedure 24(a). In the alternative, they moved for permissive intervention under rule 24(b). The defendants in the case include HHS; the HHS Secretary, Alex Azar; the IRS, and the Acting Secretary of Internal Revenue, David J. Kautter, collectively referred to as the federal defendants.

Under Rule 24(a), the court must permit anyone to intervene who claims an interest related to the property or transaction that is the subject of the action and is so situated that disposing of the action may as a practical matter impair or impede the movant’s ability to protect its interest, unless the existing parties adequately represent that interest. Under Rule 24(b), the court may use its discretion to grant intervention when an application is timely, there is a common question of law or fact, and there is no undue delay or prejudice to the original parties.

The court’s reasoning. The court noted that Fifth Circuit requires (1) the intervention to be timely, (2) the applicant to have an interest related to the property or transaction that is the subject of the action, (3) the applicant to be situated in such a manner that the disposition may impair or impede its ability to protect that interest, and (4) the existing parties to inadequately represent the applicant’s interest. The court determined that the proposed intervenors met the first three requirements of Rule 24(a) but had not satisfied the fourth requirement, which requires the proposed intervenors to show that the federal defendants would not adequately represent their interests or that their interests diverge. Therefore, the proposed intervenor states were not entitled to intervention under Rule 24(a).

The court concluded, however, that the proposed intervenor states met the requirements of Rule 24(b). Their application was timely, they have a defense that shares a question of law with the plaintiffs, and the court found no reason why the intervention would cause undue delay or prejudice to the original parties. Therefore, the court granted the proposed intervenor states motion to intervene.

SOURCE: Texas v. U.S., (N.D. Tex.), Civil Action No. 4:16-cv-01061-O, May 16, 2018.
Visit our News Library to read more news stories.