Another Legal Setback for Obamacare Opponents?

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JONATHAN COHN MAY 17, 2011

Another Legal Setback for Obamacare Opponents?

The legal challenge to the Affordable Care Act took a very interesting turn last week. And it's probably not the sort of turn that opponents of the law wanted to see.

At the moment, the case against the law in the hands of the appellate courts. Three sets of cases are pending, each one before a different Circuit Court. Last week judges from the Fourth Circuit, which sits in Virginia, heard the first of these cases. Early next month, judges from the Sixth Circuit, in Cincinnati, are supposed to hear the next one.

The Fourth Circuit judges, all of them Democratic appointees, seemed openly skeptical of arguments that the Affordable Care Act is unconstitutional. But the Sixth Circuit panel will include two judges appointed by Republicans and just one appointed by a Democrat. Most experts figure they will be more sympathetic to the lawsuit challenging the law's constitutionality or, at least, to the parties bringing it.

And maybe they will be. But, on Thursday, the judges sent a letter to lawyers from both parties. In it, they asked the lawyers to write briefs on three procedural questions. Two of them are about "standing" and "ripeness." (Or at least what I understand those concepts to be.) 

The first question asks whether the plaintiffs can show they have suffered an injury or face an "imminent injury," even though the law doesn't take effect until 2014. The other asks for details on the penalties for violating the individual mandate and the extent to which they would actually cause "injury and hardship." As legal expert Timothy Jost and journalist 
Timothy Noah have pointed out, the law specifically prohibits the federal government from using criminal penalties to enforce the insurance requirement. 

These questions are critical because, if the plaintiffs can't demonstrate that the Affordable Care Act has caused or will "imminently" cause them hardship, then they arguably have no right to challenge the law. And the Sixth Circuit judges don't seem to be the only ones pondering these issues. The Fourth Circuit judges, in Richmond, made a big deal about this in last week's oral arguments.

Just to clarify things, I asked Walter Dellinger, former acting Solicitor General during the Clinton Administration, what this development means. Here's what he told me in an email:

The order to brief the procedural issues is a hugely significant development, long overdue. It's about time, for heaven's sake, that attention is finally paid to the fact that there are no real lawsuits over the "mandate" at this time. None of the pending "individual mandate" cases is a real law suit because the government is not at this time mandating that anybody do anything.

The responsibility of federal courts is to resolve actual disputes at the behest of parties with a real stake in the outcome. The penalty provisions of the act only require certain individuals to pay a surcharge (not to exceed 2.5%) on their income tax in any year after 2014 that they fail to maintain adequate health insurance coverage. The only enforcement mechanism is that IRS can deduct that surcharge from any refund due a taxpayer who has chosen not to maintain adequate coverage. Such a taxpayer can then contest the withholding of the full refund. Nobody else (and certainly not the state Attorneys General) has standing to bring such a challenge, and nobody at all has standing to do so before 2014.

It is bedrock conservative doctrine (which I believe is entirely correct) that the courts have the authority to opine about the Constitution only when doing so is actually necessary to resolve a real lawsuit. Once 2014 gets here, real plaintiffs can bring real lawsuits. And those real lawsuits will provide useful context for the judicial consideration of the issues. For example, some who object to the "mandate" will be people who actually have health insurance but that insurance fails to meet minimum standards (which Congress can indisputably regulate). Others will have been "active" in other ways -- adding and dropping coverage over time, for instance. And no one will be subject to the "mandate's" penalty who has not actively entered the stream of commerce and earned substantial taxable income. The "real" plaintiffs who can bring "real" lawsuits after 2014 will thus not be people who have simply been "inactive.' Concrete facts that will be available after 2014 will provide a reality that will assist courts in making better informed decisions.  

I'm no legal expert, obviously, and Dellinger has been skeptical of these lawsuits from the very beginning. But he's had plenty of company. Early on, when talk of the lawsuits first became serious, many legal experts were arguing the lawsuits would fail because the plaintiffs lacked standing. Since that time, the willingness of some judges to entertain the challenges and of two judges to rule in favor of them has shifted conversation to debates over the true meaning of "activity," "necessary and proper," and so forth. But the standing issue never went away away. The Sixth Circuit could refuse to hear the case because of it--and it might not be the last panel of jurists to rule that way.

For more, see Ian Milhiser at Wonk Room. And for an argument making the plantiffs' case for standing, see Ilya Somin at the Volokh Conspiracy.

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posted in: jonathan cohn, politics, cincinnati, timothy jost, timothy noah, walter dellinger, virginia

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