Sept. 20, 2011, Cheryl Hanna: A Brief Post on Severability

Professor Cheryl HannaJust a few quick thoughts in light of Don’s analysis.  Pat, Don and I have speculated that one option for Judge Murtha is to somehow send this case back to the Public Service Board to make a final determination under Act 248. If he did find that Act 248 can be severed from her sister acts, then there could an appeal to the Second Circuit on that issue. Even if that were the initial outcome of Judge Murtha’s ruling,  there’s no guarantee that the PSB would actually hear VY’s case.  The case could then be appealed on the question of the severability doctrine and its application to this case.

So here is a quick primer on severability: When a court finds that part of a statute is unconstitutional, if the part of the law that remains is self-sustaining and capable of separate enforcement without regard to that portion of the statute that has been cast aside, then such a statute is said to be severable. In other words, if you can save some of the statute, a court can do so. Usually, when a legislature intends its law to be severable, it adds a severability clause that says something to the effect of “if any part of this statute is determined to be unconstitutional, it is the intention of this Legislature that the rest of the law remain intact.”

While a severability clause can help save the rest of a statute, the lack of one doesn’t necessarily mean a court can’t keep the rest of the statute alive. It helps, but the lack of a severability clause is not fatal. For example, in  Free Enterprise Fund v. Public Company Accounting Oversight Board, the U.S. Supreme Court recently severed part of the Sarbanes-Oakley Act despite there being no severability clause.

Case in point: If anyone is following the Patient Protection and Affordable Care Act (Obamacare), you have no doubt learned that the health care law doesn’t have a severability clause despite its vast scope. Why? Well, it appears that it was a big mistake.  A story that ran in the New York Times found: “An earlier version of the legislation, which passed the House last November, included severability language. But that clause did not make it into the Senate version, which ultimately became law. A Democratic aide who helped write the bill characterized the omission as an oversight” (CH:I wonder if that aide still has a job!)

So, what some courts have held is that because the individual mandate is unconstitutional, the entire statute is unconstitutional because there is no severability clause and because the mandate is central to the overall scheme. But other courts have disagreed, finding that while the individual mandate can’t stand, the rest of the law can despite there being no severability clause. A lot of commentators argue that allowing severability absent clear language of legislative intent is itself unconstitutional by allowing courts to essentially take on a legislative function. Severability, they argue, absent explicit language, violates the separation of powers. You can be the judge on that!

So, what does all this mean for the VY litigation?  Judge Murtha could find that Act 248 survives, while ruling the rest of the sister acts unconstitutional even though there is no language of severability. Then, the Second Circuit turns to the question of the severability doctrine. . . just like in the health care litigation. That was something none of us contemplated at the beginning of this whole lawsuit. It is interesting to think that federal health care and future of VY could turn on that question!

Again, just like preemption, severability is, at its heart, a constitutional question. While Entergy may lose that battle with Judge Murtha, it still could win the war in the Second Circuit (and who knows how much the health care litigation will play into that decision).  But here is why I think that Entergy still has a slight advantage over the state on that question. Not only does the statutory scheme contain no serverability clause, but I also still think that Entergy’s lawyers have shown greater legal sophistication on the constitutional law questions. Sullivan and her team just have greater experience shaping the legal questions for Circuit and Supreme Court review. In the long run, that advantage alone could make all the difference.



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