Fourth Circuit Tosses Challenges To Affordable Care Act, Declines To Rule On Merits
Both Virginia lawsuits challenging the Affordable Care Act have been dismissed by a Federal Appeals Court.
There had been some speculation after oral argument that the panel of 4th Circuit Judges hearing the appeals in Virginia v. Sebelius and Liberty University v. Geithner may have been exploring the idea of issuing rulings that stopped short of ruling on the Commerce Clause claims raised in the case. Today, that suspicion was confirmed when the Court dismissed both cases for lack of subject-matter jurisdiction on the grounds that neither the Commonwealth of Virginia nor the individual Plaintiffs in Liberty University had standing to challenge the law at this time:
In a surprise move, a three-judge panel of a federal appeals court based in Virginia has tossed out one of the most prominent challenges to the health reform law.
This is the first appeals court to toss out a case for lack of standing after a lower court had ruled on the merits. It leaves the Affordable Care Act with an even scorecard in the courts, with one appeals court ruling in favor of health reform’s constitutionality and one against it.
Most observers had expected the Virginia panel — all Democratic appointees, two of President Obama’s — to rule in favor of the health reform law, supporting the mandated purchase of insurance.
Instead, they threw a bit of a curveball.
The U.S. Fourth Circuit Court of Appeals ruled that two plaintiffs bringing challenges — Lynchberg-based Liberty University and Virginia attorney general Ken Cuccinelli — did not have standing to bring a case against the health reform law.
There isn’t a whole lot in either of these opinions that addresses the merits of the lawsuits themselves, however they do provide some interesting arguments and a possible route by which the Supreme Court could, if it wanted to, avoid ruling on the merits of the Affordable Care Act in the upcoming term.
The Virginia lawsuit differed from the 26 state lawsuit in Florida in that there were no individual Plaintiffs involved in the case. The Commonwealth’s sole challenge to the law was based upon a statute that Virginia passed at the same time that Congress passed the ACA which made it illegal to require residents of Virginia to be required to purchase health insurance. The Fourth Circuit ruled in a fairly short opinion (33 pages, 16 of which were taken up with the case header listing multiple defendants and amicus brief filers), that the mere existence of this statute was not sufficient to grant a state standing to challenge the Constitutionality of Federal Law:
Given that the VHCFA does nothing more than announce an unenforceable policy goal of protecting Virginia’s residents from federal insurance requirements, Virginia’s “real interest” is not in the VHCFA itself, but rather in achieving this underlying goal. Snapp, 458 U.S. at 600; see id. at 602 (noting that “[i]nterests of private parties are obviously not in themselves sovereign interests, and they do not become such simply by virtue of the State’s aiding in their achievement”). But a state may not litigate in federal court to protect its residents “from the operation of [a] federal statute[],” Georgia v. Pa. R. Co., 324 U.S. 439, 447 (1945), nor can it escape this bar merely by codifying its objection to the federal statute in question. See New Jersey v. Sargent The presence of the VHCFA neither lessens the threat to federalism posed by this sort of lawsuit nor provides Virginia any countervailing interest in asserting the rights of its citizens. , 269 U.S. 328, 334 (1926) (dismissing an action whose “real purpose” was “to obtain a judicial declaration that . . . Congress exceeded its own authority”). Cf. Kleppe, 533 F.2d at 677. After all, the action of a state legislature cannot render an improper state parens patriae lawsuit less invasive of federal sovereignty. See Mellon, 262 U.S. at 485-86 (emphasizing that “it is no part of [a state’s] duty or power to enforce [its citizens’] rights in respect of their relations with the federal government”). Nor does a state acquire some special stake in the relationship between its citizens and the federal government merely by memorializing its litigation position in a statute. See Illinois Dep’t of Transp. v. Hinson, 122 F.3d 370, 373 (7th Cir. 1997). To the contrary, the VHCFA, because it is not even hypothetically enforceable against the federal government, raises only “abstract questions of political power, of sovereignty, of government.” Mellon, 262 U.S. at 485. The Constitution does not permit a federal court to answer such questions. See id..
The Virginia law always seemed questionable to me at best. Unless you buy into the discredited nullification arguments of the 1830s and the the pre-Civil War era, the idea that a state law can overrule Federal Law is simply absurd. In fact, there’s a specific provision of the Constitution that covers it. On the face of it, I think the Court has a fairly good point when it argues that passing a law that is merely declaratory, contains no enforcement mechanism, and may well be unconstitutional itself is not sufficient to give a state standing to challenge a Federal Law in Court. Virginia’s Attorney General Ken Cuccinelli displayed no small degree of personal political ambition when he chose to file a self-standing lawsuit against the Affordable Care Act rather than join in the multi-state lawsuit that was about to be filed in Florida. Today, the Fourth Circuit slapped him back for that decision.
The more interesting and potentially important case is Liberty University v. Geithner. In that case, the university founded by Jerry Falwell and other individual Plaintiffs had filed their own lawsuit against the PPACA. At the District Court level, that case was decided in favor of the government on the merits. However, today the Fourth Circuit ruled that the individual Plaintiffs didn’t have standing to bring the lawsuit in the first place because of a Federal law called the Anti-Injunction Act, which prohibits Federal Courts from entertaining lawsuits challenging a tax assessment before the tax is paid:
As part of the Internal Revenue Code, the AIA provides that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person.” I.R.C. § 7421(a). The Declaratory Judgment Act authorizes a federal court to issue a declaratory judgment “except with respect to Federal taxes.” 28 U.S.C. § 2201(a). In Bob Jones Univ. v. Simon, 416 U.S. 725, 732 n.7 (1974), the Court held that “the federal tax exception to the Declaratory Judgment Act is at least as broad as the Anti-Injunction Act.” Accordingly, our holding as to the Anti-Injunction Act applies equally to plaintiffs’ request for declaratory relief. The parties concede, as they must, that, when applicable, the AIA divests federal courts of subject-matter jurisdiction. The Supreme Court has explicitly so held. See Enochs v. Williams Packin g & Navigation Co., 370 U.S. 1, 5 (1962)
By its terms the AIA bars suits seeking to restrain the assessment or collection of a tax. Thus, the AIA forbids only pre-enforcement actions brought before the Secretary of the Treasury or his delegee, the Internal Revenue Service (IRS), has assessed or collected an exaction. A taxpayer can always pay an assessment, seek a refund directly from the IRS, and then bring a refund action in federal court. See United States v. Clintwood Elkhorn Mining Co., 553 U.S. 1, 4-5 (2008).
In a long analysis, the Court determines that the AIA does in fact bar the Plaintiff’s action in this case despite the fact that both sides basically argue that it shouldn’t. The most persuasive fact for the Court in this regard seems to be the fact that the penalties that would be imposed if one fails to comply with the individual or employer mandate provisions of the PPACA are contained within the Internal Revenue Code. This is also the reason that the government has argued in other cases, unsuccessfully, that the mandate itself should be upheld under the General Welafare/Taxation clause of Article II, Section 8. While that argument has not been accepted, the Fourth Circuit held that the penalty was sufficiently similar to a tax for the AIA to apply, that Congress took no action to exempt those penalties from the provisions of the AIA, and that none of the exceptions to the AIA apply to these penalties. For that reason, the Court essentially holds, the Constitutionality of the mandate cannot be heard until a penalty for non-compliance has actually been paid. The implications of a holding like this should be obvious. This same argument could be used to strike down both the 11th Circuit and 6th Circuit cases without ruling on the merits.
This decision likely doesn’t do much to change the timing of the litigation at this point. The 6th Circuit case, Thomas More Law Center v. Obama is already before the Supreme Court on a Writ of Certiorari, and the 11th Circuit Case, Florida v. HHS, isn’t far behind. The cases decided today could be appealed to the full 4th Circuit, but the more likely result is another trip to the Supreme Court. In the end, though, the only impact that the Virginia cases are likely to have on the outcome of the challenges to the PPACA will be to provide the Justices with a way to deal with the cases before them without having to rule on the merits in an election year, should they choose to do so.
Here’s the opinion in Virginia v. Sebelius:
Virginia v. Sebelius Fourth Circuit Opinion
Here’s the opinion in Liberty University v. Geithner:
Bottom line. The 4th circuit punted. They know perfectly well that the constitutionality will go before SCOTUS given we have two mutually contradictory circuit court rulings already. They didn’t want to get their hands dirty IMHO and found a reason to punt the case, and did.
-Polaris
I think the implication of the second case is worse than whatever happens to Obamacare. The decision expands the ability of the federal government to use the tax code to restrict Constitutionally-protected rights without the opportunity for prior protection from the Courts.
I don’t personally think much of the commerce clause challenge, but what if the tax code was used to regulate speech, guns, religion or bypass criminal prodecural protections?
On a different but related topic, what once was a great court now has become a barking liberal moonbat haven. Sad, that is. Somewhere out there Michael Luttig should be suffering for leaving this court in the lurch.
In any event, I don’t blame this particular panel for punting. At this stage of the game there’s basically nothing for the 4th Circuit nor any other appeals courts. It’s time for the SCOTUS to fish or to cut bait.
@Polaris:
It sure as hell didn’t punt in the Virginia case. See, Prawfsblog, Jurisdictional defect in the PPACA litigation?, and Kevin Walsh’s paper, The Ghost that Slayed the Mandate.
Cuccinelli let his ambition and ideology lead him into a stupid error.
@ PDShaw
And what if pigs could fly?
Almost any court challenge against Obama has been tossed because of a “standing” issue.
The court cases on his eligibility to be president were tossed on “standing”.
If a US Citizen does not have standing to sue an illegitimate president, who in the hell does?
If Virginia does not have standing to sue the Federal government for an illegal act, who the hell does?
@Hey Norm: States have already used the tax code to unconstitutionally go after drug users, either violating their right against self-incrimination or subjecting them to double jeopardy. So, yes, we know the government will use its taxing power improperly.
@Sam:
You could study law and develop an understanding of these issues for yourself.
Sapere aude!
@PD Shaw:
I think that’s a bit off the mark. You don’t really have a constitutional right to not be compelled to buy things. Otherwise we’d have already gone through this with state car insurance requirements. So really, the point about using the tax code to violate rights isn’t salient. Well, not unless the court decides to invent a right to not buy health insurance.
@Console:
Not true! The key word in what you said above is state car insurance requirements. States get this right from the 10th amendment. However the Federal Congress only has those ennumerated powers given to it by the constitution, and making someone engage in commerce is not one of them.
-Polaris
@Polaris:
Except for that pesky “necessary and proper” clause, but good job making a bald assertion out of something that’s been debated since 1789.
@Polaris:
We’ll see. Query: Can the congress place someone in interstate commerce even if they never ever engage in commerce across state lines? Scalia seems to think so. See his concurrence in Gonzalez vs. Raich.
The so called “necessary and proper” clause (also called the comerce clause) is hotely debated but it is part of the enumerated powers of congress. It’s up to SCOTUS to once and for all determine how far that claus goes into defining what can and can’t be regulated by congress under the commerce claus.
My intuition is that the ability to regulate interstate commerce does not include the ability to require commerce. Otherwise there is no limit to the power of congress at all.
-Polaris
@Polaris:
The tenth amendment doesn’t supersede the fourteenth. States can’t violate due process anymore than Congress can. Therefore if there is some magical right to not buy things, it would affect states just as much as the federal government.To clear up any confusion, I was addressing PD Shaw’s statements about constitutional rights and coercion through the tax code, I wasn’t talking about the commerce clause.
Sidenote, states don’t derive powers from the tenth amendment. State powers exist whether or not there is a tenth amendment as state powers are not granted by the constitution. I’m arguing semantics, but I have a lot pet peeves when it comes to the tenth amendment. And don’t get me started on the phrase “state’s rights.” Government entities don’t have a right to do shit. There is no power the government possesses that isn’t subject to recall by the people. Rights are inalienable, powers aren’t.
@Polaris:
Look, dude, that is just flatass wrong, wrong, wrong. The N&P Clause is not properly one of the enumerated powers (so-called). It is the mechanism placed in the constitution to enable congress to pass legislation implementing the provisions of the Article 1, Section 8 enumerated powers (so-called). If you look Article 1, Section 8, you ‘ll see that some mechanism is required to pass laws — the N&P Clause is that mechanism:
@Polaris:
But to jump into the world of the commerce clause.
To me, you’ve articulated a world where Congress can force you to buy government insurance from a government run insruance plan (medicare), where Congress can let you buy a hair brush, but then tell you you can’t use it on your beard (or less hypothetically, where congress can let you buy freon, but forbid you from huffing it), but magically if congress can force you to buy something from a private company… then their power is unlimited?
Obama could literally constitutionally socialize healthcare, but forcing people to buy things is one step too far for the government?
Either we as a nation and judicial system have to have a serious revision of commerce clause constitutional law, or we have to stop pretending like Obamacare is some major step on the road to tyranny. Conservatives can’t have it both ways and pretend everything was fine with government power until ol Obama came along.
Which means that it’s part of congressional power, i.e the power to enact it’s other ennumerated powers. So I am NOT wrong.
Console: No one is invoking a right “not to buy things”. In fact no one is saying such a “right” exists. Rather what we are saying is that congress does NOT have the ennumerated power to force a person to engage in commerce against his will, i.e. the necessary and proper clause (or commerce clause) doesn’t extend that far.
After all if it did, there would be no limit to congressional power at all making ennumeration pointless.
It’s already aknowledged that states have the right to make people buy things. That doesn’t mean the federal govt does.
-Polaris
Console,
The govt does not have the right to force you to use medicare. If Obamacare is allowed to stand, then there is no a priori reason why congress can’t pass a law requiring all americans to buy a GM car as part of a federal stimulous bill, or have to buy (and have installled) a listening device.
It is indeed the Camel’s nose under the tent, and it’s my intuition that at least five members of Scotus are itching for the chance to rap POTUS and Congress on the knuckles hard on this issue and FORCE (for the first time in over 100 years) a real and sharp limit on the commerce clause.
-Polaris
Edit PS: Actually nationalizing healthcare would be constitutional. I’d oppose it as generally a poor idea, but that clearly lies within the powers of congress. Making someone buy a particular product (i.e. engage in commerce) does not.
You don’t have to use medicare, but you still have to pay into it all the same.
We nationalized railroads in WW1… but god forbid anyone be forced to buy a train ticket, why that would be tyranny!
@Polaris:
No, you were wrong.
@Polaris:
The government does require everyone to join part A of Medicare. But then I’m not really sure what you mean by ‘The govt does not have to right’ — do you mean that Medicare is unconstitutional?
@Console:
Yes it would. Controlling access and movements of people is one of the first things (after seizure of private arms) that a tyranny attempts to do, so in fact yes, making people buy train tickets (rather than using other forms of transport) is in fact one tool of a would be tyrant.
-Polaris
@samwide: False. I looked that up on the goverment’s own site. Most people are eligible for Medicare Part A and are considered to have paid into it by paying federal taxes, but even that’s not universal. You are not actually forced to have it.
In any event, you are NOT forced to buy a good or service from someone outside the goverment (say private company) to meet a government mandate….until Obamacare.
If the government can make you buy a good from Company A vs Company B, then the government’s power is essentially unlimited.
-Polaris
“You are not actually forced to have it.”
Funny when I withdrew from part B, I was told I could not withdraw from part A. Be that as it may,
I kinda hate to do this, but you’re wrong there, too. See Militia Act of 1792. Government mandates for citizens (as defined at the time) to purchase from private companies is not an alien concept in our history. (And I readily acknowledge this is not the Commerce Clause. I only offer it to show that individual mandates are not outside the pale in our constitutional history.)
Oh, so you’re a birther? Interesting…
@Rick Almeida:
Screw you idiot! Not all of us are slimy bottom feeding lawyers thank God!
@An Interested Party:
Screw you too you ASSumer! Only asses assume so much.
I will ask the ASSumeers, is this site only for you bottom feeding ambulance chasers or is it open to normal people too?
@Forbidden Jimmy:
You’re well on the way to fulfilling the promise of your name, pal.
@Polaris:
BTW, this reminds me of an interesting part of Judge Marcus’s dissent in Florida vs. HHS (in the 11th Circuit):
Basically, then, the government cannot compel you to purchase health insurance while you are in the parking lot of the hospital, but it can so compel you when you’re at the admitting desk.
Interesting.
Sam,
That is not what I am saying. I am saying that congress under it’s commerce power does (although I think it’s bad policy) have the right to nationalize any one industry (say medicine in this case). In which case the consumer is no longer forced to buy one private option over another private option. This is NOT the same thing as saying that a patient can be forced to buy medical insurance at the hospital admittance desk. It is saying that the govt can eliminate the heath care industry (as a private industry) entirely if it so chooses. Different thing.
Alsothe militia act you mentions requires those on the active militia to have such a weapon. It does not include the right for the federal govt to actually activate the unrecognized militia (that right is reserved to the states). The ability to activate the unrecognized militia came much later (Civil War) and it was never understood that those enlisted (officers are different) from the unrecognized militia had to pay or report to duty with anything other than the cloths on their back, and most didn’t.
-Polaris
Regardless my strong intuition is that SCOTUS will find that congress does not have the power to compell commerce making the individual mandate unconstitutional. In fact I can think of at least four justices chomping on the bit to write that ruling.
-Polaris
@Polaris:
And there are 4 waiting to oppose it. Emperor Kennedy wins again!
@Polaris:
Well, only in the interests of historical accuracy, here’s the explicit wording: