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Fourth Circuit Decisions Dodge Central Obamacare Issues



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As Ed Whelan has noted, today the Fourth Circuit handed down a decision against both Virginia and Liberty University in their cases challenging the constitutionality of Obamacare. While this is a defeat for the particular plaintiffs and a boon for the government insofar as it eliminates two more fronts on which the law is being attacked, it’s hardly a victory for Obamacare itself. Both decisions rest on grounds that will not affect the other appellate decisions now en route to the Supreme Court.

Virginia’s case was rejected because the commonwealth lacked standing to bring suit, as it did not suffer an “injury” as a result of the law. Such injury is part of the constitutional requirement that courts hear “cases and controversies” involving real litigants with real injuries rather than addressing hypothetical or theoretical questions of law. 

Virginia’s claimed injury was premised on the existence of a Virginia law (signed into law the day after Obamacare itself) providing that “no resident of this Commonwealth . . . shall be required to obtain or maintain a policy of individual insurance coverage.” The conflict between that law and the federal mandate was the harm that allegedly gave Virginia standing to challenge the federal law.

While this is an interesting argument, it was never a slam-dunk, as this particular type of standing has never been addressed by the Supreme Court. The Fourth Circuit distinguished Virginia’s law with its goal of immunizing citizens from federal power from other laws in which a state is purporting to enforce a legal code or administer a program, and found that the Virginia’s type of “immunizing” law doesn’t give a state standing. (Incidentally, the states in the Eleventh Circuit case have additional standing arguments not addressed here, and standing in that case has not been an issue because the individual plaintiffs and the National Federation for Independent Business have clear standing to sue.)

The Liberty University case was decided on the basis of the Anti-Injunction Act, which prohibits challenging a tax before the tax has been assessed, allowing a legal challenge only through proper procedures and after the tax has been paid. While no other court has found the individual mandate to constitute a tax, it looks to me like the plaintiffs themselves in this case characterized the law as a tax, which explains the atypical result in this case. 

There is no question that the Supreme Court is going to decide this case sooner or later. The timing is up to President Obama. He can decide whether to seek immediate Supreme Court review of the Eleventh Circuit case, in which Obamacare’s individual mandate was declared unconstitutional, or push the decision off until after the 2012 election. 

Businesses and individual states are already having to deal with the huge costs imposed by Obamacare, and in this economy the last thing they need is even more uncertainty about the status of a massive law.  The only explanation for a delay by the Obama administration would be that the president’s campaign team doesn’t want to deal with the political consequences of either a victory (creating a new Kelo moment) or a loss (invalidating his signature achievement) just a few months before the 2012 election. 

However the case is decided, it will be recorded in textbooks and taught to students for generations to come. Its significance is just one of the reasons I was proud to author briefs on behalf of Speaker Boehner and Senate Republicans. I hope President Obama will treat this case and the judicial process with the respect they deserve.  



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