Fourth Circuit Holds Virginia Lacks Standing to Challenge Individual Mandate

Today, in a unanimous decision authored by Judge Diana Gribbon Motz, the United States Court of Appeals for the Fourth Circuit ruled that the Commonwealth of Virginia has no standing to challenge the constitutionality of the individual mandate provision of the Patient Protection and Affordable Care Act (PPACA).  Unfortunately for those keeping a running tally, the Fourth Circuit did not reach the question of whether the individual mandate is a constitutional exercise of Congress’ power, as it decided the case based on lack of standing.

Virginia, the sole plaintiff, contended that it had standing to bring the action because the individual mandate conflicted with a newly-enacted state statute, the Virginia Health Care Freedom Act (VHCFA).  The VHCFA, signed into law the day after President Obama signed PPACA into law, declared that “[n]o resident of the Commonwealth . . . shall be required to obtain or maintain a policy of individual insurance coverage.”  Va. Code Ann. § 38.2-3430.1:1.  Virginia filed its lawsuit the day before the VHCFA was enacted, but, in an attempt to establish “injury-in-fact” necessary for standing, Virginia argued that the individual mandate hindered its “exercise of sovereign power to create and enforce a legal code” because it conflicted with the VHCFA.

The Fourth Circuit held that “the VHCFA does not confer on Virginia a sovereign interest in challenging the individual mandate . . . because the mandate threatens no interest in the enforceability of the VHCFA.”  The court explained that

the mere existence of a state law like the VHCFA does not license a state to mount a judicial challenge to any federal statute with which the state law assertedly conflicts.  Rather, only when a federal law interferes with a state’s exercise of its sovereign power to create and enforce a legal code does it inflict on the state the requisite injury-in-fact.

The VHCFA, declaratory in nature, merely purported to “immunize Virginia citizens from federal law” and actually regulated nothing.  Thus, it reflected no exercise of sovereign power which could conflict with the individual mandate.

Furthermore, the court stated, “the Constitution itself withholds from Virginia the power to enforce the VHCFA against the federal government.”  Therefore, even if the VHCFA had provided an enforcement mechanism, the individual mandate did nothing to affect Virginia’s ability to enforce the VHCFA:

[T]he VHCFA merely declares, without legal effect, that the federal government cannot apply insurance mandates to Virginia’s citizens.  This non-binding declaration does not create any genuine conflict with the individual mandate, and thus creates no sovereign interest capable of producing injury-in-fact.

In summarizing its decision, the Fourth Circuit stated that “[u]nder Virginia’s standing theory, a state could acquire standing to challenge any federal law merely by enacting a statute — even an utterly unenforceable one — purporting to prohibit the application of the federal law.”  The court concluded that it “cannot accept a theory of standing that so contravenes settled jurisdictional constraints.”

It is expected that issue of the individual mandate’s constitutionality will eventually reach the United States Supreme Court.

The Fourth Circuit’s entire decision is available here.

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