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Breaking News – the Fourth Circuit Rejects Challenges to Health Reform

On August 8, after the 11th Circuit held the Affordable Care Act (ACA) unconstitutional, I posted that the Court of Appeals score on the health law law was tied, 1 to 1.  We now have decisions from another court, the Fourth Circuit, but those decisions punish (presumably unintentionally) my framing of this as a sporting competition.  The opponents of health reform lost, but I can’t say the Administration exactly “won.”

The Fourth Circuit, in two decisions, held that the courts did not have jurisdiction to hear these challenges to  it (or, in one case, to hear these challenges “yet”), giving the Administration a victory in this phase of the litigation but not (at least as a holding) an endorsement of its constitutional theory.

One case was brought by the Commonwealth of Virginia, aimed at, and only at, the individual mandate of the ACA.  A federal district court in the Eastern District of Virginia had held the statute unconstitutional.  A unanimous panel of the Fourth Circuit, in an opinion written by Judge Motz, held that neither it nor the district court had standing to consider that claim, as Virginia, not being an individual, didn’t face an individual mandate.  The Commonwealth was, the court held, really suing the United States as parens patriae for (effectively, in the place of, or as the parent of) its citizens. But, quoting a 1923 Supreme Court case, the Fourth Circuit says  “With respect to the federal government’s relationship to individual citizens, ‘it is the United States,and not the state, which represents [citizens] as parens patriae.’”  Without standing, there is no “case or controversy” and hence the courts have no jurisdiction.

Standing is a notoriously murky doctrine.  I’m not sure that anyone, apart from a five person majority of the Supreme Court in a particular case, can truly be considered an expert on how the Supreme Court will decide standing arguments, but the Fourth Circuit’s analysis in this case looks convincing to me.  Note, though, that this is only likely to be important in this particular case – it is because the only plaintiff was the Commonwealth, and the only claim was against the individual mandate, that no plaintiff had standing to bring any claim.  Sometimes “focus” is a bad idea.

The second case was brought by Liberty University, arguing that the penalty provisions that enforce the individual and the employer mandates of the ACA violate the constitution.  This case had been heard by a judge in the Western District of Virginia, which upheld the constitutionality of the ACA.  The court once again concluded that it had no jurisdiction, not as a result of standing per se, but through the Tax Anti-Injunction Act.  This statute, passed originally in 1867, says “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person.”  The idea is simple – make the upset taxpayer actually pay the tax and then sue to get it back.  Two judges of the court (Judge Motz, writing the majority, and Judge Wynn, who agreed but also wrote a separate concurrence) held that this statute deprived it of jurisdiction in this case, even though both the plaintiff and the Secretary of the Treasury (the defendant), disagreed.  Although it seems odd to disagree with the Treasury Department over whether a particular suit falls within a statute aimed at protecting the Treasury Department from suits, the court does.  (The court also holds that a parallel provision in the Declaratory Judgment Act keeps it from hearing the plaintiff’s arguments for declaratory, not injunctive, relief.)  The dissenter, Judge Davis, would find jurisdiction, following the argument made by the Treasury.

My lack of expertise in standing is as nothing compared with my complete ignorance of the Tax Anti-Injunction Act.  Suffice it to say that both opinions put forward plausible arguments and it looks to me as though the Supreme Court could agree with either of them.  The Sixth Circuit, in upholding the constitutionality of the ACA, was the only federal appellate court, says the Fourth Circuit majority, to disagree with it on this point, but plenty of district courts had. (The 11th Circuit, in striking down the ACA, doesn’t discuss the tax anti-injunction act, possibly because there were defendants other than Treasury Department.)

So, the Fourth Circuit reversed one district court that had held the ACA unconstitutional and reversed a different district court that had held the ACA constitutional, in both cases finding, for different reasons, that those courts did not jurisdiction to hear the case.  Not only were its opinions even-handed in their results, but the Fourth Circuit did not, in these decisions, make any holding of its own about the constitutionality of the ACA – nor could it, in light of its holdings on its lack of jurisdiction.  BUT two of the three judges, writing individually in the Liberty University case, “opined” that they would hold the Act constitutional against the claims made in that case (which also seems to encompass the sole claim made in Virginia’s suit).  Judge Davis would find it an appropriate regulation of interstate commerce; Judge Wynn would find it an appropriate use of the taxing power.  Judge Motz did not express an opinion.   (It may, or may not, be worth noting that Judge Motz was appointed by President Clinton; judges Davis and Wynn by President Obama.)

What does this all mean?  No change, I think – this issue will still be decided by the Supreme Court.  Either it will overturn the jurisdictional arguments of the Fourth Circuit and rule in one or both of these cases, or, more likely, it will decide the issues in another case that doesn’t have the same jurisdictional problems, possibly the 11th circuit case, Florida v. Sebelius.

But, moving back to the sports analogy, what’s the current score in the circuits?

Perhaps the best score card for appellate  would now read

The Administration, 1 win, 1 loss

The Opposition, 1 win, 2 losses.

In baseball, that means the Administration has a half game lead.  In the court system, not so much.

On the other hand, if we look at the views expressed by the nine circuit judges who have heard the appeals, the score is

For the Administration. 5 (2 in the 6th, 1 in the 11th, 2 in the 4th circuit)

For the Opposition, 3 (1 in the 6th, 2 in the 11th, none in the 4th)

For neither, 1 (Judge Motz, in the 4th).

I’m not sure whether this means you can’t keep score without a program, but there surely isn’t any easy way to keep score.  And the only really important game is yet to be played.

Hank Greely

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