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  • WisBar News
    April 17, 2015

    Seventh Circuit: Senator Lacks Standing to Challenge Affordable Care Act Rule

    Joe Forward
    Legal Writer

    April 17, 2015 – The U.S. Court of Appeals for the Seventh Circuit has ruled that U.S. Sen. Ron Johnson (R-Wisconsin) does not have standing to challenge a rule implementing a provision of the Patient Protection and Affordable Care Act.

    Johnson and his legislative counsel, Brooke Ericson, filed a lawsuit in the U.S. District Court for the Eastern District of Wisconsin to contest a rule that amends regulations regarding health insurance coverage for members of Congress and their staff.

    Prior to the Affordable Care Act (ACA), Congress and staff members could receive health insurance through the Federal Employee Health Benefits Program (FEHBP), which is offered to all federal employees. Under that plan, the government pays up to 75 percent of health insurance plan premiums and those contributions are tax free.

    Under the ACA, enacted in 2010, Congress members and their staff could no longer receive health insurance under the FEHBP. They were limited to health insurance plans created under the ACA or offered through ACA-established insurance “exchanges.”

    In this way, Johnson said, members of Congress would receive the same insurance options as constituents and would not receive tax-free contributions from government.

    In 2013, the federal Office of Personnel Management (OPM) issued a final rule to implement this ACA provision. Johnson sued, arguing the rule is contrary to the ACA because it allows Congress members and staff to participate in plans reserved for small businesses.

    That is, members of Congress would have access to health insurance plans through the Small Business Health Options Program (SHOP) and the ACA expressly limits participation in SHOPs insurance plans to businesses with less than 100 employees.

    In addition, the OPM rule said the government would provide pre-tax contributions towards health insurance premiums for Congress members with SHOP plans, calculated in the same manner as pre-tax contributions for other federal employees.

    Johnson argued that OPM did not have authority to grant the government’s pre-tax contributions towards SHOP plan premiums for Congress members and staff.

    Johnson also argued that the OPM rule violates “statutory and constitutional entitlement to equal treatment” with Johnson’s constituents by treating him differently than constituents who buy health insurance on ACA individual exchanges.

    OPM and its director, Katherine Archuleta, moved to dismiss the lawsuit on the ground that Sen. Johnson lacked standing. U.S. District Court Judge William Griesbach of the Eastern District of Wisconsin granted OPM’s motion. Johnson appealed.

    But in Johnson v. U.S. Office of Personnel Management, No. 14-2723 (April 14, 2015), a three-judge panel for the Seventh Circuit Court of Appeals affirmed. The panel agreed that Johnson and his staff didn’t identify a cognizable injury traceable to OPM’s rule.

    First, the panel rejected Johnson’s argument that the OPM rule creates an administrative burden to determine who is considered “congressional staff.”

    “[E]ven if the Rule does place an administrative burden on plaintiffs, that does not give them standing to challenge the aspects of the Rule that they allege are illegal, which are unrelated to the imposition of an administrative burden,” wrote Judge Joel Flaum.

    “Put differently, plaintiffs’ administrative injury would continue to exist even if the Rule were cured of all its alleged infirmities,” Judge Flaum explained.

    Second, the panel rejected Johnson’s claim that he had standing based on the injury of unequal treatment with constituents. It noted that the ACA does not grant a statutory right to equal treatment. “Nothing on the face of the [ACA provision] states or implies that Members have a right to equal treatment with their constituents,” the panel noted.

    The ACA sought to restrict the healthcare options available to members of Congress and their staff, the panel noted, and other Americans are not constrained in that way.

    Finally, the panel rejected Johnson’s argument that the OPM rule violates his constitutional right to equal protection. Johnson argued that he is treated differently, under the OPM rule, because he is allowed to receive tax-free contributions and access SHOP plans when many of his individual constituents don’t have those options.

    “[P]laintiffs argue that what looks to some like a benefit (such as a healthcare contribution) can, to a plaintiff, also act as an injury,” Judge Flaum wrote.

    “We agree with the plaintiffs on this point – standing does not rest on a court’s belief as to whether unequal treatment, as a whole, benefits or harms a plaintiff.”

    But the panel noted that a plaintiff must still show an injury, and the “mere allegation of unequal treatment, absent some kind of actual injury, is insufficient to create standing.”

    Johnson claimed that his reputation and electoral prospects will suffer from a rule that subjects him to a government benefit that he views as illegal under the ACA.

    “We have repeatedly held that public officials forced to take what they believe to be illegal actions cannot premise standing on the assertion that they do not want to be complicit in unlawful behavior,” Judge Flaum wrote.

    The panel noted that the ACA provision and the OPM rule do not require members of Congress to accept pre-tax contributions or buy insurance through SHOP plans. 

    “Here, Senator Johnson can avoid his asserted injury by refusing the benefits that he alleges to be illegal. Such an avoidable injury cannot support standing,” Flaum wrote.

    The panel distinguished a case involving U.S. House Speaker John Boehner in which the D.C. Circuit Court of Appeals ruled that Boehner had standing to challenge a cost of living adjustment that increased his pay, noting the adjustment was “automatic.”

    “[A]lthough Representative Boehner could decide what to do upon receipt of his allegedly illegal benefit, he could not refuse the benefit itself,” the panel noted.

    Johnson argued that he could sustain reputational and electoral harm simply because those health insurance benefits are available to him, even if he rejects them. The panel noted that future election opponents, if elected, would be offered the same benefits.

    “Respectfully, we do not see how Senator Johnson’s reputation could be sullied or his electability diminished by being offered, against his will, a benefit that then decided to refuse,” wrote Judge Flaum, concluding Johnson did not allege a concrete injury.

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