Federal Court Dismisses First DRA Lawsuit

The federal district court for the Southern District of New York has dismissed the plaintiffs' claim in One Simple Loan v. U.S. Secy. of Educ.,(S.D.N.Y., 06 Civ. 2979, June 9, 2006), one of four pending suits challenging the constitutionality of the Deficit Reduction Act of 2005 (DRA).

The lawsuit, filed by an independent professional student loan firm and two individual Federal Family Education Loan (FFEL) institutions, sought to enjoin a provision of the DRA that prohibits a two-step loan reconsolidation process. As in the other suits against the DRA, the plaintiffs argued the provisions should not be enforced because the Senate and House of Representatives passed different versions of the bill.

In dismissing the DRA challenge, the court found that the plaintiffs lacked standing because even if the DRA was found to be unconstitutional, it is likely that Congress would simply pass a new bill resolving the problem and leaving the student loan provision intact. And the court held that even if the plaintiffs were found to have standing, their claim is subject to dismissal under the Enrolled Bill Rule established in Marshall Field & Co. v. Clark, 143 U.S. 649, (U.S. 1892), which posits that if a bill is authenticated by the appropriate officials, the courts must treat the document as properly adopted.

Meanwhile, the Department of Justice (DOJ) has filed a motion to dismiss one of the other three suits challenging the DRA's constitutionality, this one filed in April by Rep. John Conyers (D-MI) and ten other House Democrats.

In a motion filed with U.S. District Judge Nancy Edmunds, DOJ attorney Brian Kennedy says the plaintiffs lack standing because they do not lease medical equipment covered by the provision in question and are not in "any way personally affected or injured" by other provisions in the law. The difference in the House and Senate versions pertains to a part of the bill changing durable medical equipment provisions.

The DOJ also argues that the difference between the House and Senate versions of the bill would not have affected the votes of the House Democrats, who "were opposed to the bill in either event." Conyers called the arguments "legally tenuous," adding, "In terms of standing, there is no more fundamental right in Congress than the right to vote, yet the administration would not only take this right away, but prevent duly elected members (of Congress) from asserting that right after it is taken away."