The Volokh Conspiracy
Mostly law professors | Sometimes contrarian | Often libertarian | Always independent
On Sunday evening, Judge Reed O'Connor of the U.S. District Court for the Northern District of Texas took action to facilitate the prompt appeal of his decision in Texas v. U.S. that the so-called individual mandate is now unconstitutional (due to the lack of a tax penalty enforcing it) and the entire Affordable Care Act is likewise invalid because it is inseverable from the mandate. He issued a final judgment on this claim and an order staying the judgment pending appeal.
The order was accompanied by an opinion in which Judge O'Connor reiterated the legal analysis underpinning his decision. In the process, Judge O'Connor offered further evidence of the weakness of his analysis, particularly with regard to standing. Setting aside any procedural questions about Judge O'Connor's latest actions, I believe this opinion illustrates why the U.S. Court of Appeals for the Fifth Circuit should dismiss this case on standing grounds.
In his opinion, Judge O'Connor endeavors to explain why he does not believe the intervenor states will succeed in challenging his decision. This is because the likelihood of success on the merits is one element in the required analysis for whether to issue a stay. This portion of his opinion would seem to be unnecessary, as it can be assumed that a judge believes his or her decision is correct and will be affirmed. Judge O'Connor nonetheless spends twenty pages defending and reiterating the conclusions of his prior decision—and repeating many of the mistakes I've previously identified.
As standing is a threshold inquiry, the balance of this post will focus on Judge O'Connor's expanded standing analysis, which is no better than the standing analysis in his prior opinion, and is directly contrary to applicable precedent (including those cases Judge O'Connor cites throughout the course of his opinion).
The central problem plaintiffs face in Texas v. US is that they face no consequences from failing to comply with the ACA's minimum coverage provision. There is no penalty, financial or otherwise, from the failure to comply, nor do the plaintiffs allege any. This means that they cannot satisfy the requirement that they have suffered an actual or imminent injury-in-fact that is concrete and particularized.
Judge O'Connor attempts to get around this problem by arguing that denying standing "would run headlong into the well-established doctrine that individuals need not first disobey a law to earn standing to challenge it." There is such a well-established doctrine but, contra Judge O'Connor, this applies where there is an actual threat of prosecution or some other legal or practical consequence from failing to comply with the challenged law, and this point is made abundantly clear by the cases Judge O'Connor cites in the accompanying footnote.
The first case Judge O'Connor cites on this point is Steffel v. Thompson, 415 U.S. 452 (1974). As Judge O'Connor claims, this opinion explains that an individual is not required to disobey a law before challenging it, but this is because (as the Steffel court explained) an individual need not "first expose himself to actual arrest or prosecution to be entitled to challenge a statute that he claims deters the exercise of his constitutional rights" (emphasis added). Key to the Steffel court's analysis is that the petitioner would expose himself to an actual threat of prosecution by violating the law in question. Under the ACA, however, there is no such threat for there is no threatened consequence from failing to acquire a qualifying health insurance plan, nor do the plaintiffs even attempt to claim otherwise.
The second case Judge O'Connor cites in this footnote, Planned Parenthood of Gulf Coast, Inc. v. Gee, 862 F.3d 445 (5th Cir. 2017) makes the point even more explicitly—and in the precise portion of the opinion Judge O'Connor cites. In Gee, the Fifth Circuit noted "the well-established principle that a threatened injury may be sufficient to establish standing." This is absolutely true. An imminent injury, so long as it is concrete and particularized, is sufficient under Article III—but there must still be an injury. As Judge O'Connor notes, Gee goes on to explain that plaintiffs "need not wait to file suit until PPGC is forced to close its doors to them and all other Medicaid beneficiaries." Yet this is solely a question of timing—whether the plaintiff needs to wait to be harmed before filing suit—and in no way substantiates the claim that an individual may have standing to challenge a law, the violation of which threatens no consequences whatsover.
There are similar problems throughout Judge O'Connor's analysis. For instance, he later claims that plaintiffs have suffered a "constitutional injury" because the law is imposing an unconstitutional obligation upon them, and that this is sufficient to satisfy Article III. Yet Judge O'Connor fails to cite a single case in which the "constitutional injury" constitutes no more than an allegedly unconstitutional government action divorced from any practical or legal consequence for the plaintiff. Rather, the cases Judge O'Connor cites in support of this claim involve laws that imposed some adverse consequence upon those who failed to comply, whether a tangible regulatory burden or denial of a concrete government benefit or a threat of sanction. Moreover, as case after case Judge O'Connor cites makes clear, the actual or threatened imposition of such sanctions is key to the standing analysis.
Judge O'Connor later writes:
The Intervenor Defendants argue the Individual Plaintiffs cannot plead a constitutional injury (or any justiciable injury, for that matter) because the Individual Mandate no longer compels compliance. . . . But standing analysis and merits analysis are fundamentally separate inquiries, and this line of attack conflates them. That is, it rests on the premise that written law, like § 5000A(a), is not binding—which is one of the Intervenor Defendants' premiere merits arguments in this case.
Judge O'Connor is correct that standing analysis and merits analysis are separate, but he completely confuses what is required to establish standing. At the standing stage, plaintiffs must show that they have suffered or will suffer an injury. At the merits stage, they must show that the action causing the injury is unconstitutional. What this means is that the Texas plaintiffs need not show that they are unconstitutionally mandated to purchase insurance in order to show they have standing, but they are absolutely required to allege some actual consequence of their failure to comply with federal law, if not a financial penalty or legal sanction, something that is concrete and particularized to them. That the same fact is relevant at both stages—that the ACA imposes no legal or financial consequence on the failure to purchase insurance—is immaterial.
Under Judge O'Connor's approach to standing, anytime anyone thinks that federal law requires them to do something they would rather not do, they have standing to bring suit in federal court. Perhaps this is how standing should work, and perhaps plaintiffs should not be required to identify any tangible consequence that could befall them should they not comply with federal law, but that is not how decades of Supreme Court and Fifth Circuit precedent have understood the relevant inquiry.
The remainder of Judge O'Connor's analysis repeats the errors of his initial opinion, so I won't reiterate them here. Suffice it to say that now that Judge O'Connor has paved the way for an appeal, I do not expect his analysis to survive.