Coons v. Lew (Federal Health Care Lawsuit)

Posted on May 12, 2014 | Type: Case
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On August 12, 2010 the Goldwater Institute filed a lawsuit against President Obama's federal health care law. The lawsuit employs two unique arguments not used in any other case against national health care, in combination with the best arguments used in those cases.

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Last step: File reply brief with 9th Circuit
Next step: Oral argument in the 9th Circuit (June 10, 2014)


Why are we suing?

President Obama’s health care law represents the greatest expansion of federal involvement in medicine since the creation of Medicaid and Medicare. As U.S. District Judge Henry Hudson of Virginia described it, the bill “radically changes the landscape of health insurance coverage in America.” U.S. District Judge Roger Vinson of Florida, in ruling the health care law unconstitutional, stated the case "is not really about our health care system at all. It is principally about our federalist system" and "the Constitutional role of government."

If left unchallenged, the health care law redefines some provisions of U.S. Constitution that have existed for more than 220 years. There will be virtually no limits on the power of Congress and federal agencies to control the lives of individual Americans.

The Goldwater Institute is offering the strongest legal challenge to date in Coons v. Geithner by arguing the federal health care law exceeds the powers of Congress and violates individual rights as well as violates the Separation of Powers doctrine. Specifically, our suit is unique among the other lawsuits pending around the country in that it challenges Congress's creation of the Independent Payment Advisory Board (IPAB) as an unconstitutional delegation of Congressional powers to an unelected, unaccountable executive agency.

The Independent Payment Advisory Board (IPAB) is insulated from congressional, presidential and judicial accountability to a degree never before seen

 •  The Independent Payment Advisory Board is a 15-member, presidentially appointed panel that will be free to set Medicare policy and health care payment rates with no meaningful congressional oversight and without the possibility of judicial review. Even worse, while the board is meant to have 15 members, there’s no requirement that it must. The President could give all of this power to just one person by appointing only one board member, or appoint none, in which case his Secretary of Health and Human Services would exercise the power.

 •  IPAB won’t have to follow the basic steps for adopting and enforcing administrative rules. The board’s annual payment schedules and policy “proposals” can’t be examined by the courts and automatically will become law unless amended by Congress through a difficult and complex procedure.

 •  IPAB cannot be repealed by Congress, except by a complex process and during a very short window in 2017, and that repeal automatically would be delayed until 2020.  This violates the separation of powers principle.

 •  The Goldwater Institute’s lawsuit is the only challenge to the federal health insurance law to challenge the constitutionality of IPAB.

The health care law violates the rights to medical autonomy and privacy guaranteed by the Fourth, Fifth, and Ninth Amendments

  • The end result of the health care law will be that people won’t have the freedom to choose the doctors and health care treatments they want. Between the mandate to buy only government-approved insurance plans and a new presidentially appointed panel that will be free to set Medicare policy and health care payment rates with no meaningful congressional oversight and without the possibility of judicial review, people will have their options gradually restricted. The health care law violates each American’s constitutional right to make their own decisions about their personal health care as protected by the Ninth Amendment.

  • The federal health care law requires insurance companies to accept every customer, regardless of any pre-existing conditions. To enforce that provision, the law requires Americans to turn over their most intimate medical records to their insurance company or another third-party for possible review by the federal government. This invasion of medical privacy contradicts federal protections in health privacy laws and violates the Fourth Amendment’s promise to “be secure in their persons.”

The health care law runs afoul of the Health Care Freedom Act

  • Our right to choose our own doctors already is protected in previous federal court rulings and by state law in Arizona. But other states can improve that protection with the Health Care Freedom Act, which says the government cannot prevent anyone from paying directly for their health care or buying private health care insurance, and the government cannot punish them with a fine for doing so. The act can be adopted as a state law or an amendment to the state constitution.

  • The Goldwater Institute drafted the Health Care Freedom Act originally in 2007 at the request of Phoenix physicians Eric Novack and Jeff Singer.

  • Arizona voters overwhelmingly passed the Health Care Freedom Act as Proposition 106 in the Nov. 2, 2010, general election.

  • Nearly 71 percent of Missouri voters passed that state’s version of Health Care Freedom Act in August 2010, the first direct public vote on government-run health care since the federal law was adopted in March 2010 (Wall Street Journal, Aug. 4, 2010). Governors in Virginia, Georgia and Idaho had previously signed the measure into law and 42 states have acted on it in some way (American Legislative Exchange Council).

Who are the clients?

The Goldwater Institute’s Scharf-Norton Center for Constitutional Litigation is representing private individuals and U.S. congressmen who have suffered or will suffer directly from the loss of freedom driven by the health care law:

  • Nick Coons of Tempe, Ariz., owns his own computer sales and repair business and pays for health care out of his pocket. However, he will face heavy fines from the IRS if he doesn’t buy a government-approved health insurance plan by 2014.

  • Dr. Eric Novack is an orthopedic surgeon in Glendale, Ariz. Many of his patients are on Medicare. The health care law empowers the Independent Payment Advisory Board to cut Medicare reimbursements to physicians like Dr. Novack in order to cut Medicare spending. Cutting reimbursement rates when they are already low will result in forcing doctors to cut the number of Medicare patients they see and reduced care for Medicare recipients. IPAB is not reform – it is Congress’s way of abdicating its duties to a centralized, unelected, unaccountable board.

Note: The original version of this lawsuit also included claims on behalf of 29 Arizona state lawmakers who were challenging the additional financial burdens imposed on state taxpayers by the federal health care law. A “maintenance of effort” requirement in the federal law appeared to prevent Arizona from any spending reductions to the state Medicaid program, despite the state’s multi-billion dollar budget deficits. However, a letter dated Feb. 15, 2011, from Kathleen Sebelius, secretary of U.S. Health and Human Services, to Governor Jan Brewer indicates that Arizona will be allowed to make spending adjustments. Secretary Sebelius’ letter suggests Arizona state lawmakers will have the freedom to balance budgets without direct interference from the health care law. So the lawsuit has been amended to remove the state lawmakers’ claims.

Can we win?

  • Conventional wisdom holds that federal law normally trumps state laws when they conflict, but this is a vast oversimplification. Federal law prevails only if Congress has authority in the Constitution to enact the legislation, the federal law does not violate constitutionally protected rights, and the federal law does not usurp powers reserved for the states. The federal health care law fails on all three levels.

  • The U.S. Supreme Court repeatedly has sided with states over the federal government in recent clashes about the powers of the states and federal pre-emption. This includes the Court’s action last year to uphold Arizona’s 2006 law on funding for the education of English language learners in public schools.

  • The Obama administration is expected to argue this lawsuit should be dismissed because the federal health care law won’t be fully implemented until 2014. But a lawsuit from the state of Virginia recently survived a similar claim before U.S. District Judge Henry Hudson, who ruled the pending changes to health care insurance are so significant that Virginia deserves its day in court (Washington Post, Aug. 3, 2010).

  • When lawsuits challenging the health care law aren’t dismissed, part of the federal government’s strategy will be to wear down those who have filed the lawsuits until they are too tired to continue or they have drained their financial resources. This case can be expected to last three years or longer. The Goldwater Institute is committed to pursuing this lawsuit as long as it takes thanks to the generosity of its supporters.


August 12, 2010: Goldwater Institute files complaint
May 10, 2011: Goldwater Institute files second amended complaint
December 10, 2012: Judge dismisses lawsuit
February 19, 2013: Goldwater Institute appeals dismissal
June 10, 2014: 9th Circuit hears oral argument at 9am in San Francisco


Complaint (8/12/2010)
Motion for Preliminary Injunction (11/16/2010)
Defendants' Response to Motion for Preliminary Injunction (12/13/2010)
Plaintiff's Reply in Support of Motion for Preliminary Injunction (1/11/2011)
Notice Filed by the Defendants (1/24/2011)
Plaintiff's Motion to Strike Defendant's Notice (1/28/2011)
Plaintiff's Unopposed Motion to Withdraw Motion for Preliminary Injunction (3/8/2011)
Amended Complaint (3/11/2011)
Defendants' Motion to Dismiss (4/18/2011)
Second Amended Complaint, to add Dr. Eric Novack as a plaintiff (5/10/2011)
Defendants' Second Motion to Dismiss (5/31/2011)
Motion to Treat Defendants' Motion to Dismiss as a Motion for Summary Judgment in Part (6/20/2011)
Response to Defendants' Motion to Dismiss and in Support of its Motion for Summary Judgment (6/20/2011)
Statement of Material Facts in Support of Motion for Summary Judgment (6/20/2011)
Plaintiff's Motion for Summary Judgment (6/20/2011)
Defendants' Motion to Stay (6/23/2011)
Defendants' Memo in Support of Motion to Stay (6/23/2011)
Defendants' Reply in Support of Motion to Dismiss (7/5/2011)
Plaintiffs' Response to Defendants' Motion to Stay (Part 2) (7/7/2011)
Plaintiffs' Response to Defendants' Motion to Stay (Part 1) (7/7/2011)
Defendants' Reply in Support of Motion to Stay (7/14/2011)
Court Order Denying Defendants' Motion to Stay (7/25/2011)
Memorandum in Further Support of Plaintiffs’ Motion for Summary Judgment and in Opposition to Defendants’ Motion for Summary Judgment (8/29/2011)
Controverting Statement of Facts (8/29/2011)
Court Order Granting Motion to Stay (1/17/2012)
Amicus Brief for Department of Health and Human Services v. Florida (2/13/2012)
Defendants' Second Status Report (7/16/2012)
Court Order Ordering Supplemental Briefing (8/31/12)
Plaintiffs’ Supplemental Brief (9/13/2012)
Defendants' Supplemental Brief (9/27/2012)
Court Order Dismissing Lawsuit (12/10/12)
Appellants' 9th Circuit Opening Brief(5/30/13)
Amicus Brief of Pacific Legal Foundation(6/5/13)
Appellees' 9th Circuit Response Brief(7/31/13)
Appellants' 9th Circuit Reply Brief (8/14/13)

Media Coverage

Reason: IPAB: "The Roach After the Nuclear Blast.”
The Hill: GOP hearings shine spotlight on lawsuit to stop Medicare board
Washington Post: George Will: Government by the ‘experts’
Investor's Business Daily: Will Congress Kill 'Death Panel 2.0'?
National Review: Medicare Reform, Obama-Style
Daily Caller: Arizona lawsuit is latest to challenge to federal health care law
Daily Caller: ‘Real death panels’ set to face heat in Congress, courts
Weekly Standard: When Will the GOP Go On Offense Over Obama's Medicare Plan?

Legal Team

Clint Bolick is the Goldwater Institute’s litigation director. He has extensive success before trial judges and appellate courts. He has won two cases before the U.S. Supreme Court. He was named as a Lawyer of the Year in 2003 by American Lawyer magazine.

Christina Sandefur recently won a major victory for Arizona taxpayers when the court of appeals held that the government cannot spend bond money on unapproved purposes. She worked to advance liberty as a law clerk at the Pacific Legal Foundation in California and a research intern and contributor at the Michigan-based Mackinac Center for Public Policy before joining the Goldwater Institute. Christina earned her law degree from Michigan State University College of Law, where she served as notes editor of the law review and president of the campus Federalist Society.

Nick Dranias convinced the U.S. Supreme Court to strike down the use of matching funds in Arizona’s system of taxpayer-funded campaigns. A research scholar as well as a lawyer, he has written amicus briefs and numerous studies and articles about interpreting state and U.S. constitutions to protect freedom.

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