JANUARY 22, 2014
Appeal Filed in Lawsuit Challenging Obama Delay of Obamacare Employer Mandate
Judicial Watch Appeals Decision against Kawa Orthodontics’ Challenge to Obama’s Rewrite of Health Care Law
(Washington, DC) – Judicial Watch announced today that it has filed a notice of appeal with the U.S. Court of Appeals for the Eleventh Circuit to appeal a lower court decision in litigation on behalf of Kawa Orthodontics against the U.S. Department of Treasury, Secretary of Treasury Jack Lew, the Internal Revenue Service and IRS Director Daniel Werfel challenging the Obama administration’s decision to delay the enactment of the so-called “employer mandate” provision of the Affordable Healthcare Act (ACA), also known as Obamacare. (Kawa Orthodontics, LLP vs. Jack Lew, et al. (No. 9:13-cv-80990))
In the Kawa lawsuit, filed on October 1, 2013, in the U.S. District Court for the Southern District of Florida, Judicial Watch argued that the unilateral postponement of the employer mandate from January 1, 2014, to 2015 violated the Administrative Procedures Act (APA), was “arbitrary and capricious,” and had caused Kawa Orthodontics to lose “the value of its substantial efforts” in preparing for the mandate as originally scheduled. But on January 13, 2014, U.S. District Court Judge William P. Dimitrouleas, in a brief opinion, dismissed the lawsuit on “standing” grounds.
The Obamacare employer mandate, which subjects certain large employers to tax penalties if they do not offer “affordable, minimum essential” health insurance coverage to their employees, is considered “a major pillar of the ACA.” By law, the mandate was required to take effect January 1, 2014. On July 2, 2013, however, the Obama administration postponed the mandate without the approval of Congress.
The Obama administration has now unilaterally rewritten the Obamacare law at least 16 times by executive fiat. The changes include such major overhauls as the congressional opt-out, eviscerating the individual mandate, and delaying the employer mandate. The latest rewrite occurred on December 20, 2013, when the administration allowed hundreds of thousands of people who had lost their insurance due to Obamacare to sign up for bare-bones “catastrophic” plans that are expressly prohibited by the Obamacare law.
According to the Judicial Watch legal filings, the unlawful delay of the “employer mandate” has caused Kawa Orthodontics “to lose the substantial time and resources it expended and the significant opportunity costs it incurred in anticipation of” the controversial provision now scheduled to take effect beginning next year. The company estimates that it could have generated approximately $1.2 million in new revenue for its practice had it not spent approximately 100 hours of time determining how best to comply with the “employer mandate.” The Agency for Health Research and Quality of the U.S. Department of Health and Human Services reported that the number of employers in the United States having more than 50 employees is as high as 1.6 million, each of which could be affected as well.
A July 30, 2013, letter from the Director of the Congressional Budget Office to the Chairman of the Committee on the Budget, U.S. House of Representatives states that the delay of the “employer mandate” will result in an estimated loss of $10 billion in penalty payments by employers and approximately 1 million fewer people are expected to be enrolled in employment-based coverage in 2014 than the number previously projected, primarily because of the one-year delay in penalties on employers.
In a December 2013 Motion for Summary Judgment, Judicial Watch attorneys, arguing on behalf of Kawa Orthodontics stated:
This lawsuit raises a single, straightforward legal question: does the Executive Branch have authority to ignore a clear, congressionally-imposed deadline affecting hundreds of thousands of employers and millions of employees across the country on a matter of unquestionable importance? … The answer to the question posed by this lawsuit is quite plainly ‘No.’ Defendants’ delay of the mandate violates the Administrative Procedures Act (‘APA’). It exceeds Defendants’ statutory jurisdiction, authority, and limitations, is contrary to constitutional right, power, or privilege, and is otherwise not in accordance with law.
“Kawa Orthodontics continues its challenge to Obama’s rewrite of Obamacare because the court is so plainly wrong,” said Judicial Watch President Tom Fitton. “If President Obama truly wants to fix Obamacare, he will have to go through Congress. He may ‘have a pen,’ but he ought to use it to sign a repeal of his law that had been passed by Congress.”
“With over 300 million people and 16 illegal changes there’s only been one lawsuit with one plaintiff that has been filed and continues to be adjudicated. The administration doesn’t want to defend its actions on the merits and is trying to prevent us from having our day in court,” stated Dr. Larry Kawa, owner of Kawa Orthodontics, LLP. “The administration presented no credible legal precedent for Obama’s delay of the employer mandate. This single lawsuit could do more to rein in Obama’s lawless actions than anything going in Congress right now. We expect the courts will ultimately rule in our favor and remind this president that he is not above the law.”