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August 13, 2013

US judge denies motion to dismiss Oklahoma lawsuit

OKLAHOMA CITY — A federal judge Monday denied most of the federal government’s motion to dismiss Oklahoma’s legal challenge to implementation of the new federal health care law.

In a 27-page decision, U.S. District Judge Ronald White of Muskogee rejected assertions by government lawyers that the state of Oklahoma lacked legal standing to challenge implementation of the Affordable Care Act. The decision means that Attorney General Scott Pruitt, who filed a lawsuit challenging the law in 2011, can continue to present his case in court.

Oklahoma challenged implementation of the Affordable Care Act after the Internal Revenue Service finalized a rule allowing the federal government to punish “large employers,” including state governments, with millions of dollars in penalties in states without state health care exchanges, like Oklahoma. Pruitt maintains the health care law does not permit that.

“The court finds plaintiff has made sufficient plausible allegations supporting standing for the state of Oklahoma in its capacity as a large employer,” White ruled.

Pruitt said he was encouraged by the court’s ruling in the case.

“We’re optimistic the court will recognize what states have known for months that the IRS disregarded the law by making the large employer mandate effective in Oklahoma or in any of the 33 other states without a state health care exchange,” Pruitt said.

White granted the government’s motion to dismiss other parts of the lawsuit, including one that attacks the individual mandate portion of the health care law that requires all citizens to purchase private health insurance or pay a penalty.

The U.S. Supreme Court ruled last year that Congress lacks the power under the Constitution’s commerce clause to put the mandate in place, but it said the government does have the power to impose a tax on people without health insurance.

An after-hours telephone call to Joel McElvain, senior trial counsel for the U.S. Department of Justice’s civil division in Washington, D.C., was not immediately returned.

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