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Federal Court Grants Oral Argument in Obamacare Employer Mandate Lawsuit

The 11th Circuit Court of Appeals Has Granted Oral Argument in Kawa Orthodontics' Lawsuit, Filed by Judicial Watch, Challenging the Delay of "Employer Mandate"

WASHINGTON, DC -- (Marketwired) -- 07/17/14 -- Judicial Watch announced today that on Wednesday, July 16, 2014, the U.S. Court of Appeals for the Eleventh Circuit granted oral argument in an appeal of a lawsuit by Kawa Orthodontics, LLP, that challenges the Obama administration's delay of the "employer mandate" provisions of the Affordable Care Act, also known as "Obamacare." Until the delay, the mandate had been scheduled to go into effect on January 1, 2014.

Kawa Orthodontics, which is represented by Judicial Watch, Inc., sued the U.S. Department of Treasury, the Internal Revenue Service, Treasury Secretary Jack Lew, and the Commissioner of the IRS over the delay. The lawsuit was filed on October 1, 2013, in the U.S. District Court for the Southern District of Florida in West Palm Beach (Kawa Orthodontics, LLP vs. Jack Lew, et al (No. 9:13-cv-80990)). It was dismissed without a hearing on standing grounds on January 13, 2014.

On February 27, 2014, the case moved to the Eleventh Circuit in Atlanta (Kawa Orthodontics, LLP v. Secretary, U.S. Department of the Treasury et al. (No. 14-10296)). It currently is awaiting a ruling by a three-judge appellate panel.

With U.S. House of Representatives Speaker John Boehner calling for a House Resolution authorizing a civil suit against the Obama administration, new focus has been given to Kawa Orthodontics' lawsuit, which is the first and most serious legal challenge to the Obama administration's constitutional overreach in delaying the mandate. In July 2013, the administration announced that the mandate would be delayed until 2015 even though the law expressly requires it to take effect on January 1, 2014. The Obama administration subsequently delayed the mandate a second time. It is now scheduled to take effect in 2016.

Many prominent Americans, including members of Congress and other opinion leaders, have voiced support for this historic legal challenge:

"Obamacare is a disastrous law that's increasing patient costs, limiting patient choices, killing jobs and outright violating the Constitution. Obamacare needs to be repealed and replaced, and I believe legal challenges to it will continue to show its flaws." - Senator Marco Rubio (R-FL)

"It's time the President works with Congress, not around it, to achieve realistic policy goals that help grow opportunity for hardworking Americans. They work hard and play by the rules -- we need an Administration that does the same. Dr. Kawa's suit pushing back against this administration and its overreaching agencies should be considered in the larger discussion about the constitutionality of this administration's actions." - Rep. Mike Fitzpatrick (PA-8)

"President Obama has consistently shown a disregard for the limits of his authority under the Constitution, especially with respect to his own signature law, Obamacare. Thankfully, orthodontist and small business owner, Dr. Larry Kawa has taken the necessary action on behalf of his patients and employees to hold the Obama administration accountable to the requirements of the Constitution and the law." - Michael Steele, Former Republican National Committee Chairman

"While it would be best if the government overreach known as Obamacare were banned altogether, it is for better or worse, the law of the land. For President Obama and his administration to override a Congressionally passed law with a blog post is not only ridiculous, it's illegal. The uncertainty about the law and whether or not it will be implemented has critically damaged many local businesses such as Dr. Larry Kawa and Kawa Orthodontics. Dr. Kawa has shown great courage in taking on the establishment and fighting for the rule of law. The framers believed in limited government, which is why there are limits to the president's power. I hope that he finally gets the message." - Richard Rahn, Senior Fellow at the Cato Institute

As a "large employer," Kawa Orthodontics is subject to the "employer mandate." Kawa Orthodontics spent substantial time and money in 2013 in anticipation of the mandate taking effect in 2014. It also incurred significant "opportunity costs" preparing for mandate instead of pursuing other business opportunities. Kawa Orthodontics estimates that it could have generated approximately $1.2 million in new revenue for its practice had it not spent approximately 100 hours of time determining how best to comply with the "employer mandate." The Obama administration announced its delay of the mandate after Kawa Orthodontics incurred these "anticipatory compliance costs."

According to Kawa Orthodontics' attorneys at Judicial Watch, if the court were to declare the delay to be unconstitutional and reinstate the effective date established by Congress, Kawa Orthodontics would regain some, if not all, of the value of the time and money it lost as a result of the delay. The Agency for Health Research and Quality of the U.S. Department of Health and Human Services reported that the number of employers in the United States having more than 50 employees is as high as 1.6 million, each of whom could be affected, as well.

Judicial Watch attorneys arguing on behalf of Kawa Orthodontics, put the case into context:

"This lawsuit raises a single, straightforward legal question: does the Executive Branch have authority to ignore a clear, congressionally-imposed deadline affecting hundreds of thousands of employers and millions of employees across the country on a matter of unquestionable importance? ... The answer to the question posed by this lawsuit is quite plainly 'No.' Defendants' delay of the mandate violates the Administrative Procedures Act (APA). It exceeds Defendants' statutory jurisdiction, authority, and limitations, is contrary to constitutional right, power, or privilege, and is otherwise not in accordance with law."

"We are pleased that the court granted oral argument in the case. Judicial Watch has been entrusted with representing a courageous and well-respected Florida orthodontist, Dr. Larry Kawa and his practice, Kawa Orthodontics, in standing up to this unconstitutional presidential overreach. Today we moved one step closer to our goal of holding this lawless administration to account," said Judicial Watch President Tom Fitton. "President Obama has repeatedly taunted the American people to sue him if they believe his actions are illegal. Well guess what Mr. President, we did. And we will now have our day in court. Once again, Congress, with plans for a lawsuit of its own over the delay of the employer mandate, is late to the table in challenging Obama administration lawlessness."

Dr. Kawa added, "The amount of goodwill and support that we've seen from people like Senator Marco Rubio, Congressman Mike Fitzpatrick, Michael Steele, and Richard Rahn has been incredible. The administration now knows that the country is watching and the courts will be listening. No longer will Americans remain silent while President Obama tramples over the constitutional limits on executive branch authority. We are confident the court will allow us to move forward with our lawsuit so that, ultimately, the rule of law will prevail."

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