The US Court of Appeals for the 4th Circuit released two opinions on Thursday in support of the Affordable Care Act (ACA), placing the Obama Administration ahead 2-1 in appellate rulings. The 4th Circuit rejected arguments from both Virginia and Liberty University that the individual mandate – or requirement that people purchase insurance or pay a penalty – is unconstitutional.
The Judges in the case were all Democratic appointees – Judge Diana Motz was appointed by President Clinton and Judges James Wynn and Andre Davis by President Obama. In this regard, many view the rulings as expected. However, both cases offer some twists that may provide the Supreme Court some new options for delaying a decision during a heated election year.
Virginia cannot stand in the way of the ACA According to the appeals panel, Virginia has no standing to challenge the ACA. Having no standing means that Virginia could not prove there was an injury due to the ACA, and thus could not bring a lawsuit against it. Rather, Judge Motz criticizes Virginia for passing a state law exempting Virginians from having to purchase health insurance only days after the passage of the ACA to create an injury. She notes, “Under Virginia’s standing theory, a state could acquire standing to challenge any federal law merely by enacting a statute.” Since the court ruled Virginia had no standing, there was no need to review the merits of the lawsuit. Therefore, the panel did not review the constitutionality question surrounding the individual mandate.
Liberty to tax? In the second opinion, the panel – unlike other courts – accepted the argument that the penalty associated with the individual mandate is a tax. Therefore, according to Judges Motz and Wynn, Liberty University cannot challenge the tax until its levied (they cite the Anti-Injunction Act). While Judge Davis did not concur with this opinion, he argued that the individual mandate is justified under the Commerce Clause. The interesting twist in the Liberty case is that, if the reasoning is accepted, the case cannot be heard until a penalty is charged – that moves any claim of injury out until after 2014 when the individual mandate is implemented.
Next stop SCOTUS… It remains clear, regardless of the victory for the ACA reflected in the 4th Circuit rulings, that the Supreme Court of the United States will review the Affordable Care Act – namely the constitutionality of the individual mandate. The differing substantive issues in the cases will force SCOTUS to step-up. However, one blogger noted that as more rulings are unveiled, there are more lines of reasoning floating around – offering the Justices additional latitude to schedule when they will decide the future of the ACA.
-- Eva Marie Stahl, Policy Analyst