Texas v. Rettig, No. 18-10545 (5th Cir. 2020)Annotate this Case
The States filed suit raising constitutional challenges to Section 9010 of the Affordable Care Act (ACA) and statutory and constitutional challenges to the Certification Rule. The Fifth Circuit affirmed the district court's ruling that the States had standing to raise their Certification Rule claims; reversed the district court's ruling that the States' Administrative Procedure Act (APA) claims were not time-barred; and dismissed those claims for lack of jurisdiction.
On the merits, the court affirmed the district court's judgment on the Section 9010 claims, holding that the Provider Fee is a constitutional tax that does not violate the Spending Clause and that Section 9010 satisfies both the requirements under the Tenth Amendment doctrine of intergovernmental tax immunity. In this case, the Provider Fee does not discriminate against states or those with whom they deal because it is imposed on any entity that provides health insurance (with certain exclusions). Furthermore, the legal incidence of the Provider Fee does not fall on the states because Congress expressly excluded states from paying the fee. However, the court reversed the district court's judgment that the Certification Rule violated the nondelegation doctrine, holding that HHS did not unlawfully delegate to a third party its authority to approve state managed-care organization (MCO) contracts. Accordingly, the court rendered judgment in favor of the United States. Because neither the Certification Rule nor Section 9010 are unlawful, the court vacated the district court's grant of equitable disgorgement to the States.