Symposium: No damage means no standing

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Posted Thu Nov 5th 2020 at 11:00 am by Katie Keith

This article is part of a symposium previewing California versus Texas.

Katie Keith is Associate Research Professor at Georgetown University’s Health Policy Institute and Associate Professor at Georgetown University Law Center. She writes the “Following the ACA” column on health issues. She joined an amicus letter on behalf of health policy scientists who support California.

Before deciding whether the individual mandate is constitutional or severable from the rest of the Affordable Care Act in California versus Texas, the Supreme Court must first determine whether it can answer these questions. Under Article III of the Constitution, federal courts can only rule on actual cases or controversies. This constitutional requirement – embodied in what is known as the standing doctrine – means that at least one plaintiff must be able to demonstrate a specific violation that is fairly mandate-based and likely to be remedied by a favorable court decision.

The challengers in California versus Texas – 18 Republican states led by Texas and two people who live in Texas and work as consultants – do not meet that burden. There is simply no such thing as an impunity mandate violation. The two individuals have a lawful choice of whether or not to purchase health insurance and will not be harmed by an unenforceable legal choice without negative financial or legal consequences. The states have not sufficiently demonstrated tax damage from the mandate that does not directly apply to states. And the arguments that the challengers are harmed by ACA provisions that flow from the mandate or that they see as inseparable should also fail. If accepted, this theory would turn a long-standing precedent on its head and pave the way for a dizzying array of challenges to federal law.

While the court in its previous ACA cases briefly summarized the standing analysis, in this case the standing questions should be examined carefully. The challengers are not harmed and the court should deny their request to overturn the ACA on that basis alone.

No harm from the mandate itself

The district court ruled that the individuals had suffered a constitutional violation by the impunity of the mandate and that declaring the mandate unconstitutional would remedy that violation by exempting them from “arbitrary governance”. A split panel of the U.S. 5th Circuit Court of Appeals upheld and concluded that states stand too.

These decisions are wrong. The challengers cannot claim harm from an unenforceable provision without negative consequences. The government’s only mechanism to enforce the mandate was the fine, which has now been set at $ 0. Without consequence there is no injury and therefore no standing. (Several law professors argue in an amicus letter that the case should be dismissed for the same reason due to a lack of factual jurisdiction.)

The reasoning of the court in the National Federation of Independent Business v. Sebelius remains valid. Just like in the previous mandate, individuals have a choice. Before 2019, you had a choice between buying cover or paying a fine. Since the change came into effect in 2019, individuals can choose to purchase coverage or pay a $ 0 fine. You are making a lawful choice in either case, and the existence of that choice does not create reputation. The fact that someone feels obliged to take out insurance even without penalty does not matter. Any damage from their decision to purchase coverage is “self-inflicted” and the court has rejected the argument that standing can be established through self-inflicted damage.

(In fact, it’s unclear whether the individuals even acquired qualified coverage. Their statements are dated April 2018, long before the 2019 amendment came into effect, and only suggest that they intended to maintain coverage. Not a reporter to my knowledge was able to confirm that they actually acquired and maintained qualified cover as of 2019.)

The arguments of the states are even weaker. First, states claim that the penalty-free mandate is tax-damaging because it “interacts” with the ACA’s administrative reporting requirements. However, these reporting requirements are not imposed by the mandate itself, and damage originating from other parts of the ACA does not entitle to challenge the mandate. The Trump administration also relaxed these reporting requirements precisely because the mandate penalty was set at 0 US dollars. Second, states cite higher costs as more residents sign up for state coverage (such as Medicaid). However, states are merely suggesting that there will be a higher enrollment without assessing the impact or providing evidence that the beneficiaries are enrolling because they believe it is necessary under the impunity mandate.

The kicker is that even if the challengers can convince the court that they have been injured, the relief they seek – the invalidation of the mandate – would not remedy their alleged violations. The invalidation of the mandate would maintain the status quo. Individuals are still free to choose whether or not to purchase a substantial minimum coverage. States would continue to comply with ACA reporting requirements while eligible residents would continue to enroll for the state coverage to which they are entitled. The lack of reparability also has a negative effect on the reputation of the challenger.

The charade of transparency

While the challengers claim to take care of the individual mandate, their real focus is on the rest of the ACA. Their complaints and pleadings read like anti-ACA whitepapers, citing a “multitude” of ACA requirements unrelated to the individual mandate – from the requirement to cover dependents up to the age of 26 to non-shared prevention services (Provisions that have come into effect) more than three years prior to mandate) affect the now-repealed Cadillac tax. The people also claim compensation because they pay higher premiums under the ACA and cannot take out so-called “market insurance” of their choice.

There are at least two problems with these arguments. First, these types of general complaints, which are fundamentally disagreements about politics, have long been insufficient to gain prestige and do not cause harm to the individual mandate. However, the challengers take these provisions as evidence of the damage done to the ACA anyway, and urge the court to strike them all under the separability doctrine and disregard the longstanding requirement of Article III that plaintiffs must prove a violation for each contested provision.

Second, even if the challengers had a specific violation of other provisions of the ACA (and not just a general complaint), this misguided theory of “enforceability of inseparability” would allow any person or organization with a complaint against the law to challenge the law Constitutionality of the mandate and argue that the ACA provision disliking it is inextricably linked to the mandate. Other plaintiffs would have a field day where they would question objectionable parts of the ACA, and the judiciary would see similar far-reaching challenges to other federal laws.

The Trump administration has fully endorsed this theory. The Justice Department openly admits that the individuals may not have the right to challenge the mandate, but argues that they have been violated by the ACA’s insurance rules. Higher premiums and less choice based on these rules, the department says, builds prestige even when what’s left of the individual mandate itself doesn’t. Worse still, the department is asking the court to first invalidate the entire ACA and then allow the lower courts to determine which provisions the challengers are actually violating, so that they can later select the ACA provisions they wish to keep. (Remarkably, the department never bothered to address the position of states.)

Constant teaching has long been considered flexible. But the alleged violations of the challengers in California against Texas extend the doctrine beyond the limits of Article III and should be strongly opposed.

Posted in California v Texas, Texas v California, pre-hearing symposium in California v Texas, Featured

Recommended citation:
Katie Keith, Symposium: No Injury Means No Standing,
SCOTUSblog (November 5, 2020, 11:00 a.m.), https://www.scotusblog.com/2020/11/symposium-no-injury-means-no-standing/