Judicial Watch • Appeal Filed in Lawsuit Challenging Obama Delay of Obamacare Employer Mandate

Appeal Filed in Lawsuit Challenging Obama Delay of Obamacare Employer Mandate

Appeal Filed in Lawsuit Challenging Obama Delay of Obamacare Employer Mandate

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.”



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  • SmallBizOwner

    This delay is Bullshit. In Indiana, small businesses are now mandated by Indiana Codes to provide health insurance to any employee that works 30 hours or more. The definition of a small employer is 2 employees minimum! This was passed to meet the requirements of Obamacare, but also likely because of heavy lobbying by Anthem (one of Indiana’s largest employers and lobbyists). We are screwed. Our insurance costs have gone up by 78% and our deductibel went from $250 to $3,000. It sucks! This is not only expensive to have, but also to utilize! We only have 10 employees, but we don’t have the opportunity to postpone regardless of this Obama wand waiving. Most insurance companies know that they snuffed out the competition, HMO’s and smaller providers, so they don’t care what Obama delays because they are not going to offer any other option BUT the Obamacare plans.

    This legislation is the worst bill ever passed in the history of the World. We get stiffed as an employer, we get screwed as an employee, and we get double-screwed by the Government who has to give them BAIL-OUTS when they don’t make enough money! The Insurance Companies are the only ones getting a great thing here! Well, besides the politicians who has a wife or family member sitting on the boards of these Insurance Companies, with a nice salary and stock options, as a kick-back to reward those politicians for screwing Americans! Evan Bayh and his wife became Millionaire all because of this kind of racket, that the FBI should be investigating!

  • tradlawyer

    JW undoubtedly anticipated the standing challenge. But there is perhaps a stronger argument to be made on appeal. Insurance, by nature, is an actuarial enterprise. By illegally “rewriting” the statute (i.e., deferring the employer mandate), there are now large numbers who would have been part of the actuarial pool, but are not. Combine this “loss” of insureds with Obamacare’s prohibition on denying coverage for pre-existing conditions, and costs, and consequently premiums, will have to go up and faster than they would otherwise. Your plaintiff undoubtedly is harmed by this (although query: is he harmed now?).

    Obviously, your best case would be an employee who would otherwise have insurance but for the illegal “rewriting.” Immediate harm is obvious. But that suit probably needs to be asserted against the employer and then let the employer try to argue the validity of the “waiver.”

    Good luck.

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