JW Files Appellate Brief in Kawa Orthodontics Case Against “Unlawful” Obamacare Delay

Judicial Watch Files Appellate Brief in Kawa Orthodontics Case against “Unlawful” Obama Administration Delay of Obamacare “Employer Mandate”

Lawsuit is Only Legal Challenge to Obama’s Delay of Obamacare Employer Mandate 

(Washington, DC) – Judicial Watch filed its appellate brief on Thursday, February 27 with the U.S. Court of Appeals for the Eleventh Circuit in its litigation on behalf of Kawa Orthodontics, LLP. against the U.S. Department of Treasury and the Internal Revenue Service challenging the Obama administration’s unlawful and unilateral decision to delay the enactment of the “employer mandate” provision of the Affordable Care Act (ACA), also known as Obamacare (Kawa Orthodontics, LLP vs. Jack Lew, et al (No. 9:13-cv-80990)).  

The lawsuit was originally filed on October 1, 2013, in the U.S. District Court for the Southern District of Florida. On January 13, 2014, District Court judge William P. Dimitrouleas ruled in favor of the IRS. 

As a “large employer,” Kawa Orthodontics is subject to the “employer mandate.” Being a responsible employer, Kawa Orthodontics spent substantial time and money preparing to comply with the mandate. After Kawa Orthodontics incurred both anticipatory compliance costs and significant opportunity costs, the Obama Administration unlawfully and unilaterally delayed the “employer mandate” from taking effect on January 1, 2014, to 2015, and subsequently 2016. In its brief, Judicial Watch argues that the delay of the “employer mandate” diminished the value of the costs incurred by Kawa Orthodontics. Judicial Watch also argues that the injury is “redressable” by the court.  Specifically, if the Court were to declare the delay to be unconstitutional and reinstate the effective date established by Congress, Kawa Orthodontics would regain some, if not all, of the value of the time and money it lost as a result of the unlawful and unilateral delay.

As the only legal challenge to the Obama administration’s delay of the Obamacare “employee mandate,” the case could have historic ramifications if the courts rule in favor of Kawa Orthodontics.  

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 officially postponed the mandate without the approval of Congress. On February 10, 2014, the Obama administration again unilaterally delayed the “employer mandate,” this time until 2016.  

Kawa Orthodontics 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 whom could be affected as well. 

According to 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, 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, put the case in context, stating: 

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. 

“This is a pivotal case in terms of reining in the Obama administration’s flagrant disdain for the separation of powers and the rule of law,” said Judicial Watch President Tom Fitton. “President Obama can’t use his ‘pen’ to rewrite the law as if were a one-man Congress.  This lawsuit is the most serious legal challenge to President Obama’s and his administration’s abuses of power.” 

“The Obama administration is desperate to keep us out of court and I am confident that the Eleventh Circuit will rule that the lawsuit may continue,” stated Dr. Larry Kawa of Kawa Orthodontics.  “We will stop you, Mr. President – because we are Americans.  For those of you who want your country back, it’s on the way – and for the IRS and this corrupt administration so are we, because Congress makes the laws.”

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