How Do the States Have Standing to Challenge an Unenforced and Unenforceable Mandate?
There is no longer any legal or financial consequence for failing to comply with the individual mandate, so how are states (or anyone else) harmed by it?
In a prior post (and an amicus brief) I have explained why I think the Justice Department's partial embrace of the states' severability arguments is completely wrong-headed. Yet this is not the only problem with the Justice Department brief. Another is the federal government's failure to challenge the states' legal standing to bring this suit in the first place.
DOJ's failure to contest the states' standing in the latest ACA case is notable for several reasons. First, it is quite rare for the federal government to not invoke justiciability concerns in defense of federal law. For decades, under both Republican and Democratic administrations, the Justice Department has maintained a particularly stingy view of Article III, raising questions about plaintiffs' standing as a matter of course. If there is any reason to question standing, DOJ would—but not here.
Second, the argument the states have standing to challenge the constitutionality of penalty-less mandate is exceedingly weak. Under current doctrine, in order to show standing the plaintiff must have suffered a concrete and particularized injury-in-fact that is fairly traceable to the challenged action. Here the states are complaining that the mandate is unconstitutional because it is not enforced with a tax penalty. Indeed, the mandate is not enforced at all, which it makes it hard to understand how the states can claim an injury from a statutory provision that has no legal or financial consequence. The same goes for the private plaintiffs that have joined the states' case.
In their brief, the states claim the ACA is "forcing" states and individuals to comply with the individual mandate and that it "requires" individuals to obtain qualifying health coverage. Neither claim is true. As Chief Justice Roberts explained in NFIB, the "only consequence" of failing to obtain qualifying health insurance under the ACA as enacted was paying a tax. "Neither the Act nor any other law attaches negative legal consequences to not buying health insurance, beyond requiring a payment to the IRS," Roberts wrote. Now that tax is set at zero, so no one is required to do anything at all. The law may say "Do X," but there is no consequence for a failure to comply.
Insofar as the states and their co-plaintiffs can claim to be injured, it is not due to the unenforced and unenforceable mandate but due to other provisions, such as the employer mandate or the Medicaid provisions. This doesn't cut it. As the Supreme Court explained in Lujan v. Defenders of Wildlife, "there must be a causal connection between the injury and the conduct complained of–the injury has to be "fairly … trace[able] to the challenged action of the defendant." The "challenged action" here is the zero-penalty mandate, not any of the other ACA provisions that actually impact states or anyone else.
The states try to get around this by pointing to the alleged inseverability of the rest of the ACA, but that doesn't work either (for reasons Kevin Walsh pointed out in this Stanford Law Review article at pp. 75-77). As the Court explained in Davis v. Federal Election Commission "a plaintiff must demonstrate standing for each claim he seeks to press and for each form of relief that is sought." Claiming inseverability is no way around this limitation. Were it otherwise, the requirements of Article III standing would be rendered toothless. As the Court noted in Lewis v. Casey, "the actual injury requirement would hardly serve the purpose . . . of preventing courts from undertaking tasks assigned to the political branches[,] if once a plaintiff demonstrated harm from one particular inadequacy in government administration, the court were authorized to remedy all inadequacies in that administration." Yet that is precisely what the plaintiffs here are trying to do.
As I explained in my prior post (and amicus brief), the plaintiffs are not entitled to the relief they seek. Even more fundamentally, they are not entitled to have federal courts hear their claims in the first place because they have no standing to raise their claims. As much as I might like to support a serious legal challenge to various aspects of the ACA, the proper course here is for the district court to dismiss the case.
UPDATE: A small technical point. As some readers have pointed out, the repeal of the individual mandate penalty is actually effective January 1, 2019. This is when the states claim that the mandate becomes unconstitutional, and this is the point at which one must assess their claimed injury.