Not a question that we thought we would be asking more than a year after the large omnibus package was signed into law by President Biden. But here we are, with a federal judge in Texas ruling on Feb. 27 that the House’s passage of the Consolidated Appropriations Act, 2023 (P.L. 117-328) (CAA, 2023) violated the “quorum clause” of Article I, Section 5 of the U.S. Constitution.

The court’s ruling puts in jeopardy a number of substantive health policy provisions if it is allowed to stand. Many of the provisions of the act that could be overturned were designed to sunset at the end of 2024 and some have since been reauthorized. But some, like the FDA’s new cosmetic regulatory regime that was included in the Modernization of Cosmetics Regulation Act of 2022 (MoCRA) are more permanent and are now under threat.

The court’s decision limited its impact to only one aspect of the law and enjoined that provision only as applied to public employees in Texas, but the court’s analysis of the way that the law was passed calls into question the entire appropriations act. The Department of Justice (DOJ) has 60 days from the court’s decision to appeal to the U.S. Court of Appeals for the Fifth Circuit. The agency has filed a notice of compliance with the court indicating that neither the DOJ or Equal Employment Opportunity Commission will enforce the law against the state or its agencies.

Court’s Decision was Unusual

Normally, there is nothing out of the ordinary about a federal judge finding a federal law unconstitutional. But this case has a couple of unique features.

First of all, the law was not invalidated on any of the regular grounds that courts would find for overturning a law: because it violated due process or any of the enumerated rights in the constitution, or even that it somehow exceeded the federal government’s powers. Instead, the court ruled that the law could never have been passed because the House of Representatives did not have a sufficient quorum present in December 2022 when the law was passed.

Secondly, the CAA 2023 was a sprawling $1.7 trillion government funding bill designed to keep the federal government funded through the end of the fiscal year. Such bills, frequently known as “omnibus” spending bills, are often necessary to avoid a government shutdown and thus tend to attract various policy riders that are inserted as a way for Congress to make sure that important policies get passed. While the court’s decision doesn’t immediately enjoin the entire law, it does provide ammunition to anyone who wishes to challenge any of those substantive policies.

Violation of the Quorum Clause

The court’s decision focused on something that was an unusual feature of the House of Representatives during the COVID-19 pandemic. As part of the public health emergency, the House passed a rule in 2020 that permitted members to vote by proxy. The rule also permitted those proxy votes to count toward a quorum, even though they were not physically present in the House Chamber.

During the vote for the CAA 2023 in the House, a majority of the members voting did so via a proxy vote. According to Congressional records, of the 431 votes cast on the CAA 2023, only 205 of those votes were physically present in the House, with 226 members voting via proxy. During the vote, the quorum was challenged by one of the members, but the House rule that counted proxy voters was cited to indicate that there was a quorum for the purpose of passing the law.

According to the court, because the rule itself violated a constitutional restriction that requires a majority of members to be present, the law didn’t pass constitutionally.

Enrolled Bill Doctrine Doesn’t Apply

The court found that the “enrolled bill doctrine” doesn’t apply to this case. The doctrine, established by precedent from the U.S. Supreme Court, directs courts not to engage in an extensive fact finding to determine whether a bill that was signed by the officers of both houses and the President was actually passed. Such a bill is considered “enrolled” and deemed passed.

In this case, the court found that the House proxy vote rule under which the bill was passed violated the quorum clause of the Constitution. So, the court said, instead of questioning the text of the bill or the registered counts (the evidence that is warned about in the enrolled bill cases) at issue here is whether the House was acting within its constitutional authority when it passed the act. Thus, the court ruled, the enrolled bill doctrine cannot save the law.

So What Does This Mean?

For right now, not much in the broader health care context. The court was very careful to limit its relief to only an injunction against enforcement of the Pregnant Workers Fairness Act as it would apply to the state of Texas and its agencies.

Additionally, the federal district court opinion is not controlling authority outside of the Northern District of Texas. So, unless there is an appeal to the Fifth Circuit and then to the Supreme Court that adopts the reasoning of the judge here, it does not apply as authority nationwide.

On that point, it is interesting that the DOJ has filed a notice of compliance with the injunction. The notice indicates that the DOJ and EEOC will not enforce the Pregnant Workers Fairness Act against Texas. While the agencies don’t relinquish their right to appeal, their compliance with the injunction could be seen as a desire not to appeal up and end up with a similar opinion from a more authoritative court, and one that could wipe out the law nationwide.

If that were to happen, there are a lot of items within the CAA 2023 that could have an impact on the health care industry if they went away. Among them are MoCRA, which for the first time subjected cosmetics to a similar regulatory regime as drugs and devices. Additionally, there was a provision included in the CAA 2023 that related to pre-approval information exchange for drugs and devices. And, finally, the law included a number of telehealth flexibilities and Medicare payment increases that were scheduled to last through 2024.

The last of these concerns may have been assuaged by the recent passage of the Consolidated Appropriations Act, 2024, which specifically eliminated the Medicare payment increase provision from the CAA 2023 and replaced it with a slightly larger provision. That sort of “reauthorization” may have saved the Medicare payment provision from being overturned by later court action.

It will interesting to see if this goes anywhere, with the government seeking a ruling that the law was constitutional, or if the government simply waits for Congress to reenact policy provisions in new laws that are not passed in a way that would questionably constitutional.

Reed Smith will continue to follow developments with regard to the CAA 2023 and any of the policy provisions within the law. If you have any questions, please do not hesitate to reach out to the health care lawyers at Reed Smith.