Fourth Circuit Dismisses Health Reform Challenges as Premature

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The legal battle over President Obama’s 2010 health care overhaul has been a messy affair. With two prior rulings at the appellate level, one upholding the Affordable Care Act and another ruling against it on Commerce Clause grounds, Thursday’s opinions delivered by the Fourth Circuit in Richmond, Virginia, dismissed challenges from state attorney general Ken Cuccinelli and Liberty University for entirely different reasons. That puts the overall appellate score at 2-1 in favor of the Obama administration, but the nature of the rulings leaves little in the way of judicial consensus for the Supreme Court to consider when it almost inevitably weighs the constitutionality of the law.

Judges Diana Motz, a Clinton appointee, James Wynn and Andre Davis, both Obama appointees, unanimously ruled that the state of Virginia, represented by Cuccinelli, was ineligible to challenge the law because the individual health insurance mandate only dictates the actions of individuals and not the state itself. In addition, they bucked the suit because it was based on a Virginia law, passed just after the ACA, that merely said no Virginia resident “shall be required” to buy health insurance. Allowing the case to proceed, the judges argued, would encourage states to use federal courts as a “forum” for working out grievances with government action. “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,” Motz wrote. Cuccinelli intends to appeal the dismissal.

A second opinion issued on Liberty University’s challenge to the ACA may prove far more consequential. While most federal courts have so far not accepted the Obama administration’s argument that the individual mandate’s penalty counts as a tax, the Fourth Circuit did.  The judges split on the tax issue, with Motz, joined by Wynn, arguing in the majority that the challenge was subject to the Anti-Injuction Act, which states that taxes cannot be challenged in court before they are levied. (The individual mandate doesn’t kick in until 2014.) In his long dissent, Davis argued that while he didn’t think the majority’s interpretation of the AIA applied, he nonetheless would have found the individual mandate constitutional on Commerce Clause grounds.

Given the composition of the three-judge panel, it doesn’t come as a complete shock that the ACA passed through the Fourth Circuit unscathed. But the opinions, which join heterogeneous rulings from the 11th Circuit and the Sixth Circuit, open up new lines of argument, most notably the novel notion that the AIA bars litigation until after the individual mandate is in place. That doesn’t mean a Supreme Court hearing will necessarily be delayed, but it’s further evidence that Chief Justice Roberts’ court will have the latitude to pick over a vast swath of opinions whenever it renders its final judgment.