Why the justiciability of the states’ challenge to the individual mandate in Florida v. HHS may matter

If the Fourth Circuit’s interpretation of the Anti-Injunction Act were to be adopted by the Supreme Court, that would knock out all the private party challenges to the individual mandate. That would return attention to the question of whether the states’ challenge to the individual mandate is justiciable.

The Virginia approach of relying on a conflicting state statute has all sorts of problems, including those identified by the Fourth Circuit in Virginia v. Sebelius.

The states in Florida v. HHS have developed additional theories of standing that do not require conflicting state statutes. They have done so because necessity is the mother of invention; the necessity arises from the simple fact that most of the state plaintiffs seeking to challenge the individual mandate do not have an anti-mandate state law like Virginia’s Health Care Freedom Act.

I have argued in an amicus curiae brief in the Eleventh Circuit and in The Ghost that Slayed the Mandate that Florida’s alternative theories do not succeed in establishing the justiciability of the states’ challenge to the individual mandate. The Eleventh Circuit said it did not need to address state standing. The issue was “purely academic,” said they, because at least one private plaintiff had standing and one is enough. I criticized that reasoning in an earlier post that focused on the relationship between inseverability and standing.

I can now add another criticism: It may very well be that there is no subject-matter jurisdiction over the private plaintiffs’ challenges because of the Anti-Injunction Act. If the AIA blocks the private plaintiff challenges, then the only way to reach the merits is by adjudicating the states’ challenge to the individual mandate. The states can likely get around the AIA with South Carolina v. Regan, 465 U.S. 367 (1984). Consequently, the jurisdictional action going forward should focus not only on the AIA but also on the states’ theories for why they can challenge a statutory provision that imposes no obligation on them.

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Some early observations about Florida v. HHS

The Eleventh Circuit’s 2-1 ruling holding the individual mandate unconstitutional, but severable from the remainder of the Affordable Care Act, should come as no surprise to close observers (or careful auditors) of the oral arguments in the case. In fact the ruling was portended by Judge Hull’s first question (if memory serves correctly), which was not about the constitutional merits, but about severability. In any event, here are some initial reactions:

(1) This decision makes Supreme Court review inevitable, most likely in this case.

(2) While most have speculated that the Supreme Court will decide the constitutionality of the individual mandate by the end of June 2012, this decision makes that timing prediction significantly more likely, almost a virtual certainty.

(3) The ruling has no implications for the jurisdictional obstacles facing Virginia in Virginia v. Sebelius. The Eleventh Circuit ruled that it did not need to decide whether the States were proper challengers to the individual mandate because at least one party — a private individual — did have standing.

(4) The ruling likely has very limited implications for the constitutional merits of the Fourth Circuit’s rulings in Liberty University v. Geithner or Virginia v. Sebelius. Given the tenor of oral argument in the Fourth Circuit, it is widely expected that the Fourth Circuit will rule against the constitutional challenge. The Fourth Circuit opinions will have the benefit of being able to address both the Sixth and Eleventh Circuits’ analyses, if the judges so choose.

(5) If the Eleventh Circuit’s ruling were to be affirmed by the Supreme Court, Congress would need to respond. The Eleventh Circuit’s severability analysis (which I believe reaches the right result) creates a terrible scenario for health insurers. The guaranteed issue and community ratings provisions remain, but the individual mandate is no longer operative to force healthy people into the insurance pool. Congress could legislate around this difficulty in a number of ways. The important practical point for present purposes, though, is that Congress would have to do something. Because the results of congressional action are so unpredictable, expect America’s Health Insurance Plans and the Chamber of Commerce (which filed an amicus curiae brief arguing for inseverability) to ratchet up pressure on the severability analysis. As AHIP made clear in its amicus curiae brief (filed in the Fourth Circuit), either (i) a decision upholding the individual mandate as constitution, or (ii) a decision holding the individual mandate unconstitutional and inseverable from the insurance-related provisions, would be preferable to the Eleventh Circuit’s holding of unconstitutional but severable.

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Eleventh Circuit Holds Individual Mandate Unconstitutional, But Severable, in 2-1 Decision

In a 2-1 ruling, the United States Court of Appeals for the Eleventh Circuit has held the individual mandate in the Affordable Care Act unconstitutional. CNN story here. An important detail (according to the Wall Street Journal) is that the court held the unconstitutional provision severable. More analysis to follow once the opinion is linkable.

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