By Mike Dorf
Last week the U.S. Court of Appeals for the 4th Circuit became the first federal appeals court to hear argument on the constitutionality of the individual mandate provision of the Patient Protection and Affordable Care Act (PPACA). In addition to the merits, the case raises an interesting question of standing that I'll discuss here.
In its brief on the merits in the case brought by the State of Virginia, the federal government concedes that private parties to whom the mandate applies--like the plaintiffs in the parallel Liberty University litigation--do have standing to contest the mandate. However, the feds say, the State of Virginia is not subject to the mandate.
Virginia argues that it nonetheless has standing because the mandate pre-empts a Virginia law stating that no one can be mandated by law to purchase health insurance. The feds respond by noting that the Virginia law was passed for the express purpose of nullifying the federal statute. If Virginia would have lacked standing to sue the federal government challenging the mandate absent its statute--and the federal government says that under traditional principles of parens patriae, it would have lacked such standing--then the mere enactment of a statute purporting to nullify the federal law cannot create standing.
Interested readers may want to look at Virginia's brief and the federal government's reply brief, as well as listen to the oral argument. Or, if you prefer, I'll save you the trouble by first disposing of a non-issue that seems to have distracted the judges and lawyers, and then raising what I take to be the fundamental question.
The non-issue is whether the Virginia law was adopted for the subjective purpose of conferring standing. After much pointless back-and-forth, the parties appeared to agree that the Virginia law contains provisions that do not simply nullify the federal PPACA but instead regulate private actors and localities in Virginia. Virginia hasn't yet attempted to enforce those provisions but the suggestion by one of the judges during the oral argument that they are incapable of being enforced strikes me as simply wrong. It's also irrelevant, however. The federal government says that the federal PPACA does not pre-empt the portions of the Virginia law that regulate private parties and localities. The only provision of the Virginia law that is pre-empted by the PPACA (if it's valid) is the provision that purports to nullify the PPACA. And that particular bit of bootstrapping, the federal government says, is impermissible--not because of the subjective purpose for which the provision was adopted but because of what it objectively does, which is to nullify without regulating.
The issue was well joined when, under questioning by Judge Motz, Virginia SG Getchell said that a State could always create standing for itself to challenge a federal law by passing a state law nullifying that federal law. Under follow-up questioning and in his brief, Getchell had three responses to the objection that this position is too sweeping. First, he argued that the difficulty of enacting state legislation will act as a constraint on States doing this. Second, he noted that in most of the more outlandish hypothetical examples, allowing a State to have standing would be largely harmless because the State would lose on the merits. And third, he said that the alternative was never to permit States standing to challenge federal law, which is clearly inconsistent with Supreme Court doctrine.
Thus, I expect the standing issue to turn on whether the court thinks that the federal government--through acting SG Neal Katyal--has articulated a principled explanation for why standing is not allowed in this case but is allowed in other cases in which States assert sovereign interests. What Katyal said on this subject is more or less the following: Where a State is regulating its citizens, and a federal law blocks that regulation, then a state has a sovereign interest in suing the federal government to make arguments that the federal law is unconstitutional; but where a State is simply declaring that its citizens have a right not to comply with federal law, then the State is only purporting to regulate but is really just asserting its parens patriae interest in disguise.
I think the distinction Katyal drew is consistent with, and makes sense of, the cases, but is not dictated by them. The Fourth Circuit, and ultimately the Supreme Court, will decide whether it's a sensible line. For now, I want to close by noting how it mirrors the argument that Virginia and the other plaintiffs make on the merits. I'll make the point using a pair of hypothetical examples.
Suppose that a State has a law forbidding the sale of cigarettes in packages that aren't labeled with a skull-and-crossbones. That law is pre-empted by the federal Cigarette Labeling and Advertising Act, which requires that cigarettes contain the Surgeon General's warning and pre-empts state requirements of additional labels. As I understand Katyal's position, a State would have standing to sue a federal official to enjoin enforcement of the federal law (perhaps making an argument that it violates the 10th Amendment). However, I think Katyal is saying that there is no standing if the State law confers rather than restricts rights. Suppose that a State passed a law permitting cigarettes to be sold in any packages their sellers liked, i.e., conferring a certain kind of freedom on private actors in the State. In those circumstances, under the federal government's theory, the State would not have standing to sue to enjoin the federal labeling law because the law doesn't interfere with the State's attempt to regulate; it only interferes with the State's effort to free its citizens and businesses from regulation.
And that's the irony or at least the interesting twist: The government's position on the standing issue draws a sharp distinction between a State's requiring or forbidding conduct--which it deems an exercise of sovereign regulatory power--and a State's permitting conduct--which it deems non-regulation and thus no exercise of sovereign authority. That distinction bears more than a passing resemblance to the activity/inactivity distinction that Virginia and the other plaintiffs draw for purposes of defining the limits of the Commerce Clause--albeit for different purposes and with respect to different sorts of actors. We will see whether that irony is noticed by the Fourth Circuit.