Fourth Circuit Rules, but Challenge to Obamacare Still Stands
Robert Alt /
Today the Fourth Circuit Court of Appeals rejected two challenges to the Patient Protection and Affordable Care Act (PPACA)—better known as ObamaCare—on procedural grounds. Because the court found procedural problems in both cases, it did not reach the constitutional question of whether the individual mandate is constitutional. Importantly, the procedural problems identified in these cases either don’t exist, or will be unpersuasive to the Supreme Court, which already has a petition before it to hear another challenge to ObamaCare. Accordingly, today’s decisions add nothing to the discussion over the constitutionality of ObamaCare, and add almost nothing to the speculation about how the Supreme Court will ultimately rule.
A fourth circuit panel composed of three Democratically-nominated judges dismissed the case brought by the Commonwealth of Virginia on standing grounds. Standing requires litigants to be able to demonstrate a concrete and particularized injury in order to sue, and prevents individuals (and states) from suing in most cases for injuries which occur to other people. Here the court found that the mandate applies to individuals, not the state. The court further found that Virginia’s Health Care Freedom Act, which provides that “[n]o resident of this Commonwealth . . . . shall be required to obtain or maintain a policy of individual insurance coverage” did not create a sovereign injury for Virginia that would permit standing. Accordingly, the Court dismissed the case without reaching the constitutional questions.
But other cases challenging ObamaCare do not raise similar standing questions. For example, the case brought by Florida on behalf of 26 states also includes the National Federation of Independent Business and its members—individuals who clearly will be injured by ObamaCare. And so, while the dismissal of Virginia is a procedural victory, it is a far cry from winning the war. Not only will a challenge to ObamaCare be able to move forward, but the states—indeed a majority of the states—will be able to take part in that challenge.
The court also dismissed a lawsuit brought by Liberty University based upon the Anti-Injunction Act (AIA). The AIA states that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person,” subject to enumerated exceptions. The Court found that Liberty’s challenge to the mandate was barred by the AIA. There is just one problem: the penalty imposed by the government for failing to purchase insurance is not a tax, it is a penalty, and it does not fall within the jurisdictional prohibition of the AIA. Don’t take my word for it? Well, then why not listen to the nine other courts that have addressed challenges to ObamaCare. Every single one—those that upheld the mandate, and those that struck it down; those with Democratically-nominated judges, those with Republican nominated judges, and those with both—found that the penalty was not a tax, and when they addressed the distinct issue of the AIA, found that the AIA did not apply.
The nine courts other courts were correct in finding that the penalty is not a tax—indeed, the statute makes this clear by stripping the IRS of certain enforcement authority and criminal sanctions that apply to taxes, and by denominating the mandate’s exaction as a penalty. But Congress knows how to create a tax—as April 15th vividly reminds us. Indeed, other provisions in ObamaCare expressly create taxes (e.g., the tanning bed tax). And so, while the Justice Department garnered another procedural victory in this case, it is a genuine outlier—contrary to every other court to hear the case, and contrary to the law. As such, it is very unlikely that the Supreme Court will rule in this fashion, or will be persuaded by this decision.
Looking for a silver lining, some have put stock in the fact that the concurring judge and the dissenting judge stated that they would have ruled in favor of ObamaCare, if the court had reached the merits. We have a word for such statements in the law—it is “dicta.” Such superfluous couldda-wouldda-shouldda discussions have no legal authority, and stand for nothing more than the individual opinions and ruminations of the judge offering them. Think of it as the legal equivalent of a judge’s blog post. Or maybe a tweet.
But the award for most ridiculous statement about the decisions goes to the Justice Department, which CNN quoted as saying: “Throughout history, there have been similar challenges to other landmark legislation such as the Social Security Act, the Civil Rights Act, and the Voting Rights Act, and all of those challenges failed as well.” It is telling that this Justice Department would compare acts like the Civil Rights Act and the Voting Rights Act—acts which restore and protect rights—to an act that infringes individual liberty and abuses Congress’s constitutional authority by requiring every citizen to buy a product from a third party from cradle to grave against their will. The comparison is so inapt, it should make the spokesman who wrote it blush.
The circuits that actually did reach the merits of the constitutionality of the mandate split on the question, and a petition is already pending before the Supreme Court. It is therefore only a matter of time before the Supreme Court hears a challenge to ObamaCare. Contrary to the excessive celebration of those supporting the mandate and ObamaCare, today’s procedural decisions will have little or no impact on the merits of that eventual Supreme Court ruling.