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Hotze v. Burwell (U.S. Sup. Ct.)

Hotze v. Burwell involved a challenge to the individual and employer mandate provisions of the Patient Protection and Affordable Care Act (“ACA”).  The plaintiffs in Hotze, Texas physician Steven Hotze and his company, filed suit in the U.S. District Court for the Southern District of Texas, arguing that these provisions violated the Constitution’s Origination Clause, which provides that “[a]ll Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other bills.”  According to the plaintiffs, the ACA is a revenue-raising bill that did not originate in the House of Representatives. 

The district court rejected the plaintiffs’ arguments, holding that the ACA is not a revenue-raising bill under the Origination Clause and, in the alternative, even if it is a revenue-raising bill, it is nonetheless constitutional because the ACA originated in the House of Representatives and the Senate’s amendments to the Act were proper under the Origination Clause.  The plaintiffs appealed to the United States Court of Appeals for the Fifth Circuit. 

On July 17, 2014, CAC filed an amici curiae brief in the Fifth Circuit on behalf of Senator Ron Wyden of Oregon, Chairman of the Senate Finance Committee, and Representative Sandy Levin of Michigan, Ranking Member of the House Ways and Means Committee, demonstrating that the challenged provisions of the ACA satisfy the requirements of the Origination Clause.  As we discussed in our brief, when the Framers drafted the new national charter, they debated at length the precise balance of power that should exist between the House of Representatives and the Senate. The Origination Clause was critical to the balance that was struck, giving the important prerogative to propose bills that would affect the national treasury to the House of Representatives, but ensuring that the Senate would retain broad power to amend such legislation.  Since the Constitution was adopted, both houses of Congress have respected this balance.  The Senate has properly exercised its constitutional authority to amend revenue-raising bills, but when it has contravened the House’s prerogative by attempting to originate such bills itself, the House has zealously defended its constitutionally-granted authority.  Most often it has done this by using a “blue slip” resolution to inform the Senate that the House believes the Senate’s bill or the Senate’s amendment to a House non-revenue bill infringes upon the House’s constitutional prerogative to originate bills for raising revenue and that, accordingly, the House refuses to consider the Senate bill.

As our brief explained, the ACA satisfies the requirements of the Origination Clause because it originated in the House as H.R. 3590, the Services Members Home Ownership Tax Act of 2009 (“SMHOTA”), and was subsequently amended by the Senate to become the ACA.  The SMHOTA was a revenue-raising bill within the meaning of the Origination Clause, and both precedent and settled practice demonstrate that the Senate’s amendment of the SMHOTA was consistent with the requirements of the Origination Clause.  Further, not a single member of the House filed a blue slip resolution at the time the ACA was being considered.  As amici Senator Wyden and Representative Levin knew from their extensive experience and leadership roles in Congress, the failure of any member of Congress to raise such an objection further confirmed that the challenged provisions of the ACA satisfied the requirements of the Origination Clause.

On November 14, 2014, the Fifth Circuit granted CAC’s motion for argument time, allocating us 10 minutes to argue on behalf of Senator Wyden and Representative Levin.  The court heard oral argument on December 2, 2014, and on April 24, 2015, ruled that because the plaintiffs had failed to adequately establish an injury that would give them standing, the district court lacked jurisdiction to entertain their Complaint in the first place.  Given this ruling, the Fifth Circuit did not consider the merits of the Origination Clause arguments.  On June 8, 2015, the plaintiffs sought en banc review by the full Fifth Circuit, which was denied on August 17.

On November 12, 2015, the plaintiffs filed a petition for a writ of certiorari with the Supreme Court. After receiving an extension, the government filed a brief in opposition to cert. on January 13, 2016. The Supreme Court denied the petition for a writ of certiorari on February 29, 2016.