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September 08, 2011

Fourth Circuit Good News and Bad News

There were two ObamaCare decisions today out of the Fourth Circuit. In both majority decisions, the judges disposed of the lawsuits without reaching the merits of the law.

This is not a double-post, by the way. Just my usual sum-up of legal issues and response to other posts. I talk about the issue that Ace raised about nullification waaaaay down there below the fold.

The first decision (PDF), in a case brought by Liberty University, was predictable. It is also easily dismissed because it is so farfetched. Unlike all other judges to have considered ObamaCare litigation, the judges in this case decided that the individual mandate is actually a tax because it is enforced by a penalty that is kinda-sorta like a tax. The judges' discussion isn't all that instructive (and similar reasoning hasn't persuaded any other Democratic judges who have ruled on the law), so I won't repeat it. You can click the link to my prior post on the issue, if you like.

As I said before, if these liberal judges are reaching for the tax argument, you can bet they couldn't bring themselves to agree that ObamaCare would pass constitutional muster on the merits. When the Supreme Court considers ObamaCare, you can bet that they won't consider the individual mandate to be a tax.

The second decision (PDF), in a case brought by Virginia AG Ken Cuccinelli, was, well, also predictable, though not dismissed so easily.

The background: Politically ambitious AG Cuccinelli was so eager to be first in line with an ObamaCare lawsuit that he went to court on only one issue -- the individual mandate -- and with only one plaintiff -- the Commonwealth of Virginia. Of course, the Commonwealth of Virginia won't be subjected to the individual mandate, only its residents will. And Cuccinelli didn't bother to name any residents of Virginia in his lawsuit.

This obvious error (fortunately not at issue in the very promising multi-state litigation which found the individual mandate unconstitutional in the Eleventh Circuit) means that Virginia had to find some other way to demonstrate standing to sue.

The ruling: Standing is a legal doctrine Ace and the cobs have discussed for years here. It's the idea that to sue, a party must have an actual stake in the outcome. The party can demonstrate standing by alleging an injury in fact, a causal connection between the injury and the complained-of action, and that judicial intervention can remedy the injury.

Virginia tried to manufacture standing in this case by passing a law that says its residents shall not "be required to obtain or maintain a policy of individual insurance coverage." Virginia claims that the state law will conflict with ObamaCare and, as a result, the state has standing to sue because if ObamaCare were enforced Virginia, the Commonwealth itself, would be injured when its law is overridden by the federal government.

The judges didn't buy it. They didn't for several reasons, but primary among them: (1) individual states do not have the authority to defend their residents from the laws of the United States; (2) state authority to make laws within a state's jurisdiction does not preempt the United States' authority to make laws within its jurisdiction; and (3) state laws cannot restrain federal officials from performing federal duties. The judges reasoned that because of these long-standing principles of federalism (and federal supremacy) any injury to Virginia is merely illusory.

Gabe's analysis: I think the judges are right. Consider this hypothetical law of Virginia: "No resident of this Commonwealth shall be prosecuted for growing or possessing marijuana, regardless of whether he intends to consume it himself or sell it." Can Virginia then sue the federal government to attempt to demonstrate the federal law is unconstitutional? In other words, would such a state law give Virginia standing to sue to invalidate federal marijuana law? Of course not. Virginia --- the state --- doesn't suffer any "injury in fact" from the federal government's drug laws and any injury to its sovereignty is illusory because Virginia's residents are also the United States' citizens. The hypothetical Virginia law protects its residents from being prosecuted by Virginia for growing or possessing marijuana; it does not protect U.S. citizens from being prosecuted by the U.S. for growing or possessing marijuana.

Virginia's attempt to manufacture standing in the ObamaCare lawsuit is analogous. When Virginia law says "No resident shall be required to maintain health insurance", at most, it has sovereign authority to mean: "No resident shall be required by the state of Virginia to maintain health insurance." It would make an absolute mockery of the concept of the United States as a country if Virginia had the sovereign authority to say "No resident shall be required by the United States to maintain health insurance." I avoided the obvious comparison to the series of state and federal laws that led up to the Civil War, but please note they are equally instructive on this point.

Nullificiation: With respect to the issue Ace raises below, that the judges made a factual error in claiming that the Virginia anti-mandate law was enacted after ObamaCare rather than before ObamaCare, the error is irrelevant to the reasoning or the conclusion of the Court. Virginia lacks the authority to override federal law and Virginia law will give way if federal law overrides it.

Appellate courts make factual errors like this (assuming they did here, I don't know actually what the order of the laws was) with unfortunate regularity. The usual course is for the party who wants the error fixed to file a motion for rehearing specifying the error. An amended opinion is then issued.

Finally: I said in the headline there was good news. There is. The multi-state lawsuit, which has a much better procedural and substantive foundation, is on track to be considered by the Supreme Court. It challenges not just the individual mandate, but several other portions of the law. And it has states, individuals, organizations, and employers as plaintiffs, so none of this pesky manufactured standing business will distract the justices.

AG Cuccinelli took a great big swing at ObamaCare. No doubt that will serve him well when he runs for governor. But if I were to put any money on these ObamaCare cases, I'd stick with the multi-state lawsuit.

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posted by Gabriel Malor at 03:57 PM

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