This is Bloomberg Law with June Grossel from Bloomberg Radio. Obamacare is back at the Supreme Court for the fourth time. The latest case challenges the task force that recommends some of the medical services health insurers must cover free of charge under the Affordable Care Act, for example, cancer screenings, statins to prevent heart disease, and medication to prevent HIV.
The ultra conservative Fifth Circuit Court of Appeals found that the structure of that task force is unconstitutional under the appointment's clause. The Biden administration appealed to the Supreme Court, saying that decision jeopardizes the availability of critical preventive care for millions of Americans. Joining me is healthcare attorney Harry Nelson of Leech Tishman Nelson Hardiman Harry, this isn't a threat to the entire law.
Tell us what's at stake here in this case, which is called Basera versus Braidwood Management, is a case that's bringing together challenges the constitutionality of several provisions of the Affordable Care Act. It's a little bit of a grab bag. The only scheme that seems to tie all these services is that they are all forms of preventive healthcare. So
there are three main issues. One is that the Affordable Care Action requires insurance companies to cover fifty preventive services, including HIV prevention medications, which have become somewhat controversial in certain quarters, vaccinations, cancer screenings, and it does not require patient cost sharing, meaning patients to pay copays and to have to pay any deductibles or any portion of responsibility.
That's one provision is this preventive services mandate. And then there's also an argument being made that the various services, particularly the US Preventive Service Task Force, are unconstitutional. That's more of a procedural issue of how the members of that task force are appointed and the fact that they're not appointed by the President or confirmed by the Senate. And finally, there are a series of religious objections being made,
particularly on HIV prevention drugs. There's a therapy called PREP which is being funded, and some of the plaintiffs are arguing that it infringes on their religious beliefs to have to be forced to provide this sort of prophylactic treatment that covers the cost of PREP.
As you mentioned, the plaintiffs here are Christian businesses suing over Obamacare. Now the Fifth Circuit, it seems like what they upheld is that the structure of the US Preventive Services Task Force is unconstitutional under the appointment's clause. So this is the argument that we've heard before and that has succeeded sometimes about whether or not their principal officers or in fear, what are your officers.
First of all, the case was brought by even though it's in the name of a business that was forced to cover people. The case is being funded and initiated by a prominent conservative activist in Texas, doctor Stephen Hotts. And the argument is about this task force and essentially a signing of power to a panel of sixteen volunteer members who are nationally recognized experts in things like preventive medicine,
family medicine, pediatrics, epidemiology. They're chosen by a federal agency within the Medicare program called the Agency for Healthcare Research and Quality AHRQ, So it's kind of a technocratic panel.
It's not a political appointment. And part of the argument here is that the decisions they're making are political decisions that really should be appointments by the president and confirmations by the Senate, and the argument it seems to be that the task force is really operating without sufficient oversights as a result of sort of the way it was set up in violation of the appointments clause of the Constitution.
First of all, this went to Judge Ried O'Connor in Texas, who is the judge notorious for striking down Obamacare in its entirety, and that was overruled, and even the Fifth Circuit narrowed his decision. He had had an injunction nationwide.
It was clear that the Fifth Circuit was trying to narrow the decision. Judge O'Connor's decision was a very aggressive conservative activist opinion, I think the way most people view it, and while they do take quite seriously the appointment clause issue, I think some of the other arguments about religious freedom are issues that were already tried, you know, for example, in the hobby Lobby case for the Supreme Court more than a few years ago, in the early days Affordable
Care Act. And my sense is that the Fifth Circuit wanted to focus attention on the appointments clause argument because that's definitely a very grounded textual argument and a fight that's going on in this country between you know, liberals and conservatives over the authority to make appointments to organizations like this and the extent to which they have to follow the process set out in the Constitution or whether
you know, more creative mechanisms can be set out. I don't think when this particular panel has created anyone in vision to be controversy over the particular therapies, whatever with the prep or you know, anything else. But it is clear that these issues are now political, and so I do think that that issue is going to be an interesting one. Sucreme Court it's going to have to tangle with them.
So the Solicitor General said that if this decision is a firm that it could affect things like cancer screenings, I mean things that have nothing to do with you know, the religious objections of the plaintiffs.
I do believe that the issue around cancer screenings had a political issue. The cancer screenings were particularly for cervical cancer and also were related to screens for mammograms, and I think there were a lot of concerns about sort of women's health and this particular advisory panel, you know, making recommendations that were liberal and a perception that you know that they were supporting sexual activity, for example, when
abstinence should be encouraged outside of marriage. There were definitely some other conservative issues beyond the obvious one of prep which has become such an important therapy for HIV prevention. But I do think that's the underlying issue with inclusion of cancer as one of the areas that they were objecting to.
So the Biden administration is appealing, but the Trump administration is coming in and it's been consistently hostile to Obamacare. It might not defend the.
Law, right, Yeah, it's interesting. The Biden administration was clearly opposing and really arguing that this task force operates as an advisory body rather than as an agency that has final authority, so that it was not triggering an appointment clause issue. But I do suspect that the Trump administration is likely to not defend the law to favor a sort of broad reading of federal power under the appointments clause.
And so my sense is that within conservative political activist community, there's a belief that the current court will support that reading. So I do think that both the administration and the Court are receptive to that central argument here.
If that happens, this applies so far, this injunction only to the blandiffs here, but that could lead to a lawsuit asking for nationwide relief if the court upholds this.
Yeah, absolutely, what's really interesting. And again, if you go back to I don't have the year in front of you, but I think it was twenty fourteen or twenty fifteen, we had the Hobby Lobby decision, which was about conservative religious employers desire not to be forced, you know, to cover certain costs like birth control. What we're seeing here is a broader set of issues being subjected to religious
liberty claims. And so I do think that you could see more employers and a broader range of programs potentially following the lead of the plane iff in this case. And so yeah, I do think there is a significant potential impact on access to care and potentially a huge public health backlash. For example, if cancer screenings go down, you know, because I'm sure our employers aren't required to
you know, wave cost sharing requirements. I think this could be particularly burdensome for small employers, and it's going to be. It really is kind of awakening religious liberty arguments.
Again, the Supreme Court is upheld Obamacare three times. It's a program that people like and need, and there are constant attacks on it. There have been something like two thousand different lawsuits.
I think we're looking at a very different Supreme Court right now. If you remember back to the original challenges, you know, we saw a court where John Roberts was the center of the court, and his decision to separate from his conservative colleagues at that time, where it was
a five to four conservative advantage, swung things. Now with the six to three conservative advantage, john Roberts joining and sort of taking the same position or similar position to the views of the affordable character he took back when we were dealing with this ten plus years ago. Now you're looking at Brett Kavanaugh and at Amy Comy Barrett, and so a very different makeup on the court and potentially a willingness to go and take more aggressive positions.
So I do think it's going to be interesting to watch this case because it will be telling that even fairly recent Supreme Court precedent may be you know, up for reevaluation. And yeah, I think that's part of the backdrop in context of this case. A lot of people are going to be watching closely.
The PSTF requires insurers to cover more than fifty preventive services. Are those all in jeopardy If the court affirms this decision.
The case is challenging the entire validity of the us PPF, of the Prevention Task Force, and it certainly jeopardizes everything that they were doing, and who knows that could lead to a backlash. And I also think, even though this case is only about that task force, that kind of feature of use of clinical specialist advisory, you know, support for the government for government plans was a central part of the affordable character in a number of other respects.
And I think this is in some ways an attack on the participation of the healthcare community, the scientific community, on that process without the President and primateur without the Senate confirmation. So I do think that this is essentially a much bigger issue, even though the flashpoint that brought it are these particular issues that drew you know, religious objections from conservative Christians.
Harry, Before I let you go, I want to ask a couple of questions about healthcare in the upcoming Trump administration. The abortion pill MiFi pristone is being used in a majority of abortions these days. Could Trump direct the FDA to revoke the approval of MIFA pristone.
That's a big question that I've been on my mind since the election and even before. You know, there certainly is a contingency within the conservative activist community who would like him to step in and to direct FDA leadership to re examine the current policies around the pristone, its approval, and all of the guidelines that surround it that were changed to make it much more accessible. I do think
that that is a very real possibility. The interesting question here is that President Trump himself has said that he wants this chapter of abortion issues closed. It clearly has been a political loser until this cycle for the Republicans, and so it's interesting because this is an issue where the conservative Christian legal community clearly wants to take this on and to use the FDA itself to pull back on access to MISS pristone and by extension, telemedical abortion,
and the President himself may not be so enthusiastic. So it's going to be interesting to watch where that goes. But I think it's certainly a big concern on the mind of the reproductive health access community.
There's also a concern about vaccines because of the possibility or probability that Robert F. Kennedy Junior is going to be the HHS secretary. What do you think is the likelihood that he would change federal vaccine recommendations.
I do think it's going to be a period under his leadership, assuming he's confirmed, of really heightened scrutiny for both current and future vaccines, and it's going to mean that the process will move lower. And I don't think we're going to see vaccines going away, but I think that mandates and government advisory issuances around vaccines are likely to change. And I think there's just a change in the culture of vaccinations that is certainly negative from the
view of most of the public health community. And my only prayer is that we don't see some massive outbreak of a disease that has largely gone away, something like measles, because of this. But there's definitely going to be a change in the culture, you know, around vaccine and a lot more sort of scrutiny and skepticism after a Kennedy FDA.
We'll have to wait and see how he does in those confirmation hearings coming up. Thanks so much, Harry. That's Harry Nelson, a partner at leech Tishman Nelson Hardiman. US Soccer and Major League Soccer will face off against the now defunct North American Soccer League in an anti trust trial in Brooklyn Federal Court. The NASL claims that US Soccer and MLS colluded to eliminate it from the upper tiers of US men's professional soccer, and NASL is seeking
treble damages of more than five hundred million dollars. Joining me is anti trust expert Peter Carstensen, a professor at the University of Wisconsin Law School. The NASL is blaming US Soccer and MLS for driving it out of business. What's the main question in the case.
As best I can tell, the key question is going to be whether the decisions that the Soccer Federation made were relatively disinterested judgments on the merits of whether or not a particular league should be allowed to participate at a particular level, or alternatively, whether these decisions were made with a goal of excluding a otherwise reasonable competitive alternative
from access to the market. And what you're looking at is a regulator and the question is how did that regulator make decisions, what went into that decision, and what kind of review might there have been of the decision. So if the decision was the product of some kind of an understanding agreement with the existing upper level leagues that there shouldn't be any more comparable leagues allowed in, then that's going to look like an anti trust violation.
Is going to look like using that power over access to exclude competition. That's an agreement and restraint of trade. That's illegal. On the other hand, you need some kind of a decision maker about who gets to play at what level. That's the first thing that is really kind of common ground here, as best I can tell. Somebody has to make these decisions, they need to have criteria
standards for making that decision. If the decision is one on the merits, No, your league does not merit participation at either Division one or Division two level, but only at a Division three level, then that's not a restraint of trade in that it's a legitimate I'd call it
regulatory about the credentials of that particular league. This is a very confusing area of anti trust law because anti trust law doesn't recognize these the facto market regulators as being a special case that needs to be looked at in a distinct kind of way. Some of us have tried to say, hey, understand what you're really dealing with. Here's how it can be made more sensible in terms
of coherent standards. Everybody knows what the rules are likely to be, but so far no core has really articulated that kind of vision. It's the big issue in the NCAA litigation really as well.
US Soccer said it rejected the NSL in twenty sixteen because it didn't meet the minimum standards that it was objectively applying, such as minimum stadium seating capacity of fifteen thousand, number of teams, time zone coverage in other benchmarks. But the federal judge who greenlighted the lawsuit to go ahead said that US Soccer in twenty seventeen waived twenty one standards for second Division and Favored League USL, but denied
two waiver requests for NASL. So would that sort of discrimination and treatment demonstrate something.
Yeah, exactly. That seems to me to be central to why the judge allowed this case to go forward. This is a tricky thing because in theory, once there it's a factual dispute, it's supposed to be decided by the jury. In anti trust cases, judges are more proactive. They've got to decide that a reasonable jury would find this claim sufficiently plausible, that it could reach a verdict of liability
that the judge would feel comfortable upholding. The judge is actually doing some weighing of the evidence, even though the constitutional law since no judge you can't do that. In fact, they do it. And so what he's saying here, as best I can tell you, is this doesn't look quite right. This is the kind of thing, at least until there's much more explanation by the Federation of why these cases
were treated similarly. And even though it was two waivers, those were two really important waivers, whereas the twenty one waivers were relatively minor bookkeeping matters or whatever. But that's going to be for the jury to decide. But what the judge was saying, this looks sufficiently suspicious, but I'm
gonna let it go to a jury. Now, these have gone to juries with mixed results in some of the other sporting cases, and in some other cases judges have said no, I'm going to decide that it's sufficiently unlikely that you can prove your claim. You know, I'm not convinced that a jury should be convinced by this evidence. We've had litigation on tennis, on swimming, soccer, and it's
all very similar. That is, there's a gatekeeper, and the question is whether the gatekeeper has behaved in a reasonably legitimate fashion. And that distinction between the twenty one waivers on one side and two waiver requests rejected on the other, that's the kind of thing that judge looks at and says, ah, hey, that could be a problem.
Nas'll have to show there was an agreement between US Soccer and Major League Soccer.
Ah. Yes, at least my impression is that this is a Section one conspiracy case, not a Section two monopolization case. It may be a conspiracy to monopolized, but it appears that the center piece of the plaintiffs case is that there was an agreement, an understanding of some sort between the established leagues and the regulator, the goal of which was to exclude this potential third rival league. So that requires evidence of some kind of an understanding. Now, anti
trust does not require a written contract. It requires that there be some kind of an understanding between the parties. Again, this is where it gets complicated in terms of what
does the evidence show. Sort of on one extreme, the evidence could show that there were no communications from these two legs to the federation, but that the leaders of the Federation felt that in terms of the best interests of soccer, they really needed to limit the number of leagues playing in Divisions one and two, so that they acted perhaps eighty competitively, but they did so without any kind of agreement or any overt understanding with the two leagues.
And then you start going over to communications from these two leagues, Hey, we really think this is going to create a problem. You need to keep them from coming in regardless of their merit. Now that sounds a lot like lobbying to me, But what are their relationships. There's a joint marketing and so one of the things I would look for is, first of all, there's an economic interest on the part of the federation potentially to limit competition that could reduce the value of the promotion the
revenues that come in. The more you could show an economic interest in doing what they did and lobbying, the more it begins to look like, yeah, there came to be an understanding that they would do whatever was necessary to exclude. But that's why you have a trial. These things are challenging sometimes to establish what the facts are, what the communications were, what emails were sent to whom, what was their economic interest? And that's going to be
I think central here. If you move it over from section one, which it requires the conspiracy, to section two, that is monopolization. You could make a different argument, which is if you could show that the federation's economic interests were to exclude competition at divisions one and two. That's not what it is supposed to be doing. It's supposed
to be making decisions about who's qualified to play. But because it's got an economic relationship with one or two leagues, it comes to have an economic interest that causes it to use its monopoly power. And the monopoly power here is in some way unavoidable because somebody has to make these decisions and they're going to control access to professional soccer.
But if they're doing it to protect their economic interests rather than in the best interests of the overall program of soccer, that would also create an anti trust problem.
And this trial is expected to take two weeks coming up. Could there be a settlement?
This is bloomber.
I've been talking to anti trust expert Peter Carstonsen other University of Wisconsin Law School about US Soccer and Major League Soccer facing off against the now defunct North American Soccer League in an anti trust trial in Brooklyn Federal Court. Peterborough, US Soccer stripped in ASL even of its original Division two status. I understand why they didn't want it to be Division one, but why did they strip it of even Division two?
Indeed, is that a really interesting question, because you move them down to three, as best I can tell, you essentially make them a really low level farm league. And that's not going to attract audience. It's not going to attract good players. So it's it's a way of killing the enterprise, which effectively they did. Because this is a damage case, not an injunction case.
At this point, speaking of damages, they're asking for treble damages, which you get under anti trust law. Do you know how they're estimating their damages?
I'd say creatively. There's a whole special business of economists who work for plaintiffs figuring out how to estimate the loss. I guess they were for a while the vision two,
so they've got some kind of a track record. So you take that, you look at what the other leagues had by way of audience and more specifically revenue, and then you create an economic model that predicts what revenues there would have been if they have been allowed either to remain as two or been allowed to move up to one, based on both their own track record and the performance of these other leagues in the United States.
They may well have taken performance information from the various leagues in Europe and then compared those to the comparable American experience, and then again use this to draw an inference. If these foreign leagues when they moved from two to one, got a thirty percent increase in revenue, and we see the kind of distinction in the United States between the division two and the division of one, we can now
begin to make an estimate. I don't do this, so I am permitted I think to be a little cynical. My object as an economist is to come up with the biggest plausible number I can. I worked for years with an economist co teaching a class on anti trust law and economics and he did a lot of expert work. He once told me that he tried to be pretty
careful about how he did it. So, moving away from my cynicism about economists to an economist I had worked with and respected greatly, and he'd always try to find, he said, at least two and maybe three ways to estimate an economic loss for purposes of damages. He would choose the lowest of the three results. He testified all
three using this model. I get three X using this model, I get two X. Using this model, I get X. So the thing I'm surest about is that the loss is at least X. Yeah, you think about it, that's not a bad strategy. Each measure involves an enormous number of assumptions, relationships that you assume. It's very tenuous in that way. I know the judge expressed skepticism about the
damage estimates, and that was partly. I think that he'd really like these guys to settle this not for five hundred million, but man all one hundredred and fifty two hundred million somewhere in there. He doesn't really want to have a two week trial in any trust case.
But this has been going on for about eight years. Wouldn't they have settled already if they were going to No.
No, First of all, the defense lawyer's interest. They're getting paid one thousand dollars an hour. They've got no incentive to tell their client that settle And until the judge ruled as he did only fairly recently, as I understand it on the summer judgment motion. Up to that, there are three steps here. First step is you file the complaint. The defendant makes the motion to dismiss that the complaint does not state the claim. Judge rejects that. Then you
go to discovery, your expert reports, et cetera. If the issue is clear. And I've seen this in a case involving conspiracy among meat packers to fix wages of workers, the judge said, hey, this is a plausible cause of action. Oop, hey, platives, can we settle this right now? So No, they knew that they were in deep, deep trouble and they wanted to settle it. Once the judge said, we're going to go forward other cases. You know, the judge's going to say, no,
this state's a claim. There's some issues here. Can you do the discovery? And when that's all done, when you've got the expert reports, everything on the table. Then comes the motion for summary judgment. The defendant says, this case is not plausible. A jury could not plausibly find in favor of the plaintiff for the following ten thousand reasons. Defendants prevail in an awful lot of those cases, especially
in complex cases like this one. The judge says, well, yeah, you know, it's a possibility, but it's not sufficiently plausible given the evidence for me to allow it to go to a jury. So it makes sense, especially in a case like this, which has got a lot of complexity, as we've already talked about, for the parties to hang in and get to the summary judgment decision. Now that they've lost that, do they want to go to trial.
Or not, well, I believe they're starting with jury selection.
Then they're probably also having some last minute, fairly serious discussions, and it is quite possible that a number of offers
have been made. The plaintiffs want substantially more dollars than the defendants are prepared to put up, and both sides of them looking at this in terms of probabilities, how probable is it that the jury would find the violation, and how probable is it that, having found a violation, the jury will award something approximating the five hundred million, And given the judge of skepticism about the dollar value, this could wind up like the famous American Football League
versus National Football League anti trust case, where there was so much other evidence is that the American Football League was in serious trouble. One of the key team owners was a guy named Donald Trump, who screwed things up terribly. But that's the only team owner whose name I would
now recall. So the end of the day, the jury found that there was a lawful monopolization and or conspiracy to monopolized by the NFL, but almost all the damage was caused by bad business decisions by the American Football League. They nevertheless awarded the magnificent sum of one dollar trebled.
That doesn't go very far, does it, No, But then the other thing that's in that statute is not only treble damages, but a reasonable attorney's fee.
And so the lawyer said, well, we won. We didn't get very much, but we want what six in my mind is twenty million, but it could have been fifty million. It could have been only ten million. But they wanted something in the millions. They're reasonable attorneys fee, and they had their hours, all their records, and the judge said, that's what the statue says. You're entitled to your money. And well, they appealed to the Third Circuit saying, hey, wait a minute, you can't do this to us. It
was only a dollar troubled damages. Then the Third Circuit said, no, the statue sais, if you filate d any trust laws, you've got to pay a reasonable attorneys fee as well. So my guess, and I don't know how active the judges. Some judges can be very demanding, if you will. That is saying to the parties, you really should settle this. I was involved in a case many many years ago where the judge basically said you're going to go into that room and you're not to come out until you've
got this settled. Now, judges can't do I'm supposed to do that, but the judge, the judge did, and the parties they settled it. That comment about damages looked to me to be a clear flag. The judge is saying, I think there's a really good anti trust case here. I think the damages are exaggerated. Why don't you guys
settle and egos get involved, It would not surprise me. However, as they start selecting jurors, somebody says, you know, we really may want to settle list for X one hundred millions rather than letting a jury make a decision.
The joys of trying a case. Thanks so much for being on the show, Peter. That's Peter Carstensen, a professor at the University of Wisconsin Law School. And that's it for this edition of The Bloomberg Law Show. Remember you can always get the latest legal news on our Bloomberg Law Podcast. You can find them on Apple Podcasts, Spotify, and at www dot Bloomberg dot com, slash podcast slash Law, and remember to tune into The Bloomberg Law Show every
weeknight at ten pm Wall Street Time. I'm June Grosso and you're listening to Bloomberg