Appeals Court Turns Down Two Challenges to Reform Law

The U.S. Court of Appeals for the Fourth Circuit in Richmond, Va., has refused to consider the merits of two challenges to the Affordable Care Act, citing a lack of legal standing.

The State of Virginia, a day after President Obama signed the health reform legislation, enacted a state law to prohibit residents from being forced to buy health insurance in essence challenging the Affordable Care Act's individual mandate--and then filed suit against the Obama administration. In December, Judge Henry Hudson of the U.S. District Court for the Eastern District of Virginia ruled the individual mandate was unconstitutional but upheld the rest of the Act.

Now, the three-judge appeals panel in Richmond--comprising President Obama and Clinton appointees--ruled the state lacked standing to sue, vacated Hudson's ruling and remanded the case back to him with instructions to dismiss the case for lack of subject-matter jurisdiction.

"To permit a state to litigate whenever it enacts a statute declaring its opposition to federal law, as Virginia has, would convert the federal judiciary into a 'forum' for the vindication of a state's 'generalized grievances about the conduct of government,'" the Appeals Court in Richmond ruled. If the panel permitted this, "each state could become a roving constitutional watchdog of sorts; no issue, no matter how generalized or quintessentially political, would fall beyond a state's power to litigate in the federal court. We cannot accept a theory of standing that so contravenes settled jurisdictional constraints."

The Richmond Appeals Court also ruled that the court itself lacked standing to rule on another lawsuit challenging tax penalties for noncompliance with the individual mandate, "Liberty University v. Timothy Geithner," from the U.S. District Court in the Western District of Virginia. "Because this suit constitutes a pre-enforcement action seeking to restrain the assessment of a tax, the Anti-Injunction Act strips us of jurisdiction. Accordingly, we must vacate the judgment of the district court and remand the case with instructions to dismiss for lack of jurisdiction."

But the court took issue with another argument from Liberty University that the individual mandate violates a "generalized" right to be left alone contained in the U.S. Constitution, and also violates the Commerce Clause. However, the court ruled the "generalized" right was not a constitutional right, and the mandate is within the range of acceptable commercial regulations.

The Richmond Appeals Court is the third appeals court to consider the constitutionality of one or more provisions of the Affordable Care Act. The Court of Appeals for the 11th Circuit in Atlanta in August ruled the individual mandate unconstitutional, but ruled the rest of the law is constitutional. The appeals court issued that ruling after review of a lower court ruling by U.S. District Court Judge Roger Vinson in Florida that the mandate could not be separated from the rest of the law, which led him to rule "with reluctance" that the entire law was unconstitutional.

In June, the U.S. Court of Appeals for the Sixth Circuit in Cincinnati affirmed a U.S. District Court ruling in Michigan that the individual mandate is constitutional. Now, the Court of Appeals in Richmond has essentially punted and dismissed two challenges without formally ruling on the questions of constitutionality. The U.S. Supreme Court will have the final say.

The Richmond court opinions (102347.P for Liberty University and 111057.P for Commonwealth of Virginia), are available at http://pacer.ca4.uscourts.gov/opinions/opinion.htm.