Judicial Watch Asks U.S. Supreme Court to Hear Kawa Orthodontics’ Challenge to Obama’s Illegal Employer Mandate Delay
Alleges Harm from Obama’s Violation of Obamacare Law with Employer Mandate Delay
(Washington, DC) – Judicial Watch announced today that on May 14, 2015, it filed a petition for a writ of certiorari in the U.S. Supreme Court on behalf of Kawa Orthodontics, a Florida business that alleges that the Obama administration’s 2013 unilateral delay of the Patient Protection and Affordable Care Act’s (ACA’s) employer mandate, without approval from Congress, caused Kawa to lose “the value of the time and money it spent in 2013 preparing for the mandate to take effect in 2014,” and thereby suffer significant economic harm (Kawa Orthodontics, LLP v. Secretary, U.S. Department of the Treasury, et al. (No. 14-10296). Kawa Orthodontics is owned by Dr. Larry Kawa.
In December 2014, the U.S. Court of Appeals for the Eleventh Circuit ruled that it would not address the central question of Kawa Ortho’s legal challenge – whether the executive branch could “ignore the clear, congressionally-imposed deadline” of the ACA, also known as Obamacare – because it concluded that Kawa Ortho did not demonstrate injury sufficient to establish legal standing.
The question, therefore, is “Whether an entity that loses the value of the substantial time and resources it prematurely expended and the time value of the money it spent on anticipatory compliance costs is sufficiently injured to confer Article III standing.”
Under Obamacare, businesses that employ 50 or more individuals full-time are classified as “large employers,” and are required to provide “affordable, minimum essential” health insurance coverage to their employees and their employees’ dependents. In addition, “large employers” have annual reporting obligations under the ACA.
Judicial Watch notes in its petition that prior to July 2, 2013:
Kawa Ortho expended substantial time and resources, including money spent on legal fees and other costs, in anticipation of the employer mandate provisions…Kawa Ortho would not have expended its time and money preparing for the mandate in 2013 if the mandate had not been scheduled to take effect on January 1, 2014. It would have spent its time and money on other priorities instead. Or it may not have spent the money at all and accrued interest on it.
Judicial Watch argues that Kawa Orthodontics has standing to sue because the company incurred an injury traceable to the defendants:
Delay diminishes the time value of money…Kawa Ortho plainly alleged that because of the delay, it lost some, if not all, of the value of the substantial time and resources it expended at least two years early. It lost the time value of the money it spent on anticipatory compliance costs…Contrary to the panel’s ruling, Kawa Ortho has standing. It was injured by Defendants’ delay of the enforcement of the ‘employer mandate’ provisions of the ACA. Had Defendants not delayed enforcement, Kawa Ortho’s spending would not have been premature.
Also, the Eleventh Circuit’s ruling conflicts with previous Supreme Court precedent:
In National Federation of Independent Businesses v. Sebelius, the Court resolved whether the individual mandate was constitutional. Although it did not address standing, by reaching a decision, it implicitly affirmed the court of appeals’ analysis. In that case, the court of appeals held that private parties challenging the constitutionality of the ACA’s “individual mandate” had standing to pursue their claims based on their need to incur anticipatory compliance costs.
Additionally, the Eleventh Circuit’s ruling conflicts with the jurisprudence of other circuit courts:
Like this Court, other courts of appeals have concluded that incurring anticipatory compliance costs is a sufficient injury to confer Article III standing. In Liberty University v. Sebelius, the U.S. Court of Appeals for the Fourth Circuit held that the plaintiff-employer in that case, Liberty University, had standing to challenge the “employer mandate” because of the anticipatory compliance costs it had to incur in order to comply with the mandate…In Association of Private Sector Colleges & Universities. v. Duncan, the U.S. Court of Appeals for the District of Columbia Circuit concluded that the plaintiffs were sufficiently injured to confer standing because they faced increased compliance costs…Similarly, the Second and Sixth Circuits have held that plaintiffs incurring compliance costs have standing.
Judicial Watch argues for Kawa Orthodontics: “When it enacted the ACA, Congress made a deliberate policy choice to have the ‘employer mandate’ obligations commence on January 1, 2014. Defendants seek to replace Congress’ policy choice with their own policy choice…It is a deliberate and unequivocal policy change with very real consequences for hundreds of thousands of businesses and millions of employees across the country.”
“I’m humbled by the opportunity to stand up for the Constitution. Our founders created a system of checks and balances designed so that no one branch of government would become too powerful,” said Dr. Larry Kawa. “When the executive branch decided to rewrite the laws as they saw fit without the consent of Congress, they overstepped their authority, causing injury and harm to myself as a business owner. With the great help of Judicial Watch, I look forward to the opportunity to have our day in court and have justice served.”
“Those who think Obama’s lawlessness and his refusal to follow his own Obamacare law has no consequences are oblivious to costs of this lawlessness for American businesses, such as our client Kawa Orthodontics,” said Judicial Watch President Tom Fitton. “This case is yet another instance in which a responsible and rational business has been injured by a politically motivated, unilateral power grab by the executive branch. In attempting to comply with the law, our client instead suffered significant economic harm, so that President Obama and influential special interests could avoid accountability for the law that was passed despite the clear objections of the American people. The idea that the courts would ignore precedent and, for non-legal reasons, shut down challenges to this lawlessness is fundamentally unjust. It is no surprise that the Obama administration doesn’t want Kawa Orthodontics to have its day in court, but the Supreme Court should uphold the rule of law.”