Fourth Circuit: Virginia Lacks Standing to Challenge Federal Health Reform

A unanimous three-judge panel of the Fourth Circuit ruled today in Virginia v. Sebelius that the State of Virginia lacked standing to challenge the individual health insurance mandate under the federal Affordable Care Act.  The pointed language in the ruling only underscored the fact that states can't simply manufacture standing by enacting declaratory law in opposition to a federal statute.

Virginia based its standing argument on its statute, the Virginia Health Care Freedom Act, which it enacted in the wake of the ACA and which purported to shield Commonwealth residents from the ACA's requirement that they obtain health insurance.  The VHCFA thus declares that "[n]o resident of this Commonwealth . . . shall be required to obtain or maintain a policy of individual insurance coverage."

The VHCFA was a transparent attempt to manufacture standing for a state that otherwise couldn't show a concrete, particularized harm to challenge the mandate.  But that didn't stop the lower court from ruling in the state's favor.

The Fourth Circuit saw through the gambit, though.  In a terse and sharp analysis, Judge Motz wrote that states can't manufacture standing simply by enacting legislation that objects to federal law.  Instead, states have standing only when federal law interferes with a state's power to enact and enforce its law.  But VHCFA was merely declaratory; there was nothing to enforce.  Because the State of Virginia wasn't harmed by any interference with its ability to enforce its law, it lacked standing on that basis.

It also lacked standing as protecting its citizens from employers and localities enforcing the ACA's individual mandate.  Judge Motz wrote that the individual mandate regulates individuals, not employers and localities, and so there was nothing to protect against.

Judge Motz wrote that Virginia's theory of standing runs up against citizenship and federalism considerations--that state's can't move to protect their citizens from the federal government:

[Virginia's] claim would run afoul of the prohibition against states suing the United States on behalf of their citizens.  This prohibition rests on the recognition that a state possesses no legitimate interest in protecting its citizens from the government of the United States.  With respect to the federal government's relationship to individual citizens, "it is the United States, and not the state, which represents [citizens] as parens patriae."  When a state brings a suit seeking to protect individuals from a federal statute, it usurps this sovereign prerogative of the federal government and threatens the "general supremacy of federal law."

Op. at 22-23 (citations omitted).  She also highlighted the Article III problems with allowing states to manufacture standing to challenge federal law:

To permit a state to litigate whenever it enacts a statute declaring its opposition to federal law, as Virginia has in the VHCFA, would convert the federal judiciary into a "forum" for the vindication of a state's "generalized grievances about the conduct of government."  Under 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. . . .

Thus, if we were to adopt Virginia's standing theory, 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 federal court.

Op. at 29-30 (citations omitted).

The case is unlikely to go anywhere, especially since other circuits have now weighed in on the merits.  This "case" is--and always was--only Virginia's ill-conceived effort to showcase its political opposition to the individual mandate.  As the panel ruled, it never belonged in court.

SDS