The Volokh Conspiracy
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Collins, California, and Standing-through-Inseverability
Part III-A-1 of Justice Alito's Collins opinion quietly endorses standing-through-inseverability, and is inconsistent with Justice Breyer's majority opinion in California.
This Term, I had long thought the standing analysis for California v. Texas would be connected with the standing analysis in Collins v. Yellin. Both cases had similar fact patterns. The plaintiffs were injured by Provision A of a statute, which was constitutional; but Provision A was inseverable from Provision B, which was unconstitutional. In short, the Plaintiffs sought to enjoin Provision B, even though Provision B did not injure the Plaintiffs. The concept of standing-through-inseverability became quite controversial because of the Obamacare litigation, but the concept, in principle at least, is unobjectionable.
Ultimately, California v. Texas deemed the argument waived, so Justice Breyer had no occasion to opine on standing-through-inseverability. Justice Thomas suggested that this theory can only be used during the remedial phase of a case, and not to establish standing at the outset of the case. (I have thoughts about that position, but I'll write on it a later time). Justices Alito and Gorsuch adopted that theory with respect to the state plaintiffs, but did not engage the theory with respect to the individual plaintiffs.
Yet, Part III-A-1 of Justice Alito's Collins opinion quietly endorses the standing-through-inseverability theory. This section explains why the shareholders have standing. Justice Alito walks through the three familiar factors from Lujan.
First, the injury in fact was a classic pocketbook injury. The FHFA forced the shareholders to transfer funds to the Treasury Department.
First, the shareholders claim that the FHFA transferred the value of their property rights in Fannie Mae and Freddie Mac to Treasury, and that sort of pocketbook injury is a prototypical form of injury in fact.
But let's pause for a moment. There is no allegation that the requirement to transfer those funds is unconstitutional. Those actions could only be unconstitutional because the structure of the FHFA is unconstitutional; for example, the tenure protections for the Director render his actions unconstitutional. The only way that the shareholders can suffer an injury in fact from an unconstitutional action is to bootstrap the constitutional provisions of the FHFA with the unconstitutional provisions of the FHFA. In other words, the injury in fact inquiry is premised on inseverability. If the tenure protections could be severed, then the bootstrap theory fails. But at least at the standing phase, the courts presume inseverability. The parallels to California v. Texas should be stark. But there is one important distinction. In California, the individual plaintiffs asserted an injury based on the unconstitutional provision–the naked command to purchase insurance. The private plaintiffs did not need to rely on the bootstrap theory to establish an injury in fact.
Second, the Court turned to traceability. Justice Alito responded to the opinion of Circuit Judge Costa.
The judges who thought that the shareholders lacked standing reached that conclusion on the ground that the shareholders could not trace their injury to the Recovery Act's removal restriction. See 938 F. 3d, at 620–621 (opinion of Costa, J.).
Again, the tenure protections, by themselves, do not injure the shareholders. Rather, they can only claim an injury based on the action taken by the Director who has those tenure protections. Thus, Judge Costa contended, the shareholders injuries cannot be traced to the allegedly unconstitutional tenure protections. If Judge Costa is right, then the shareholders would lack Article III standing. But this theory, if extended, would sweep further. An entity regulated by a Director with unconstitutional tenure protections would have a really, really hard time showing that a pocketbook injury is traceable to those tenure protections. In other words, but for the tenure protections, would the officer have taken the challenged course of action? (Ultimately, the Court seems to adopt this remedial approach in Collins). If this theory is correct, the only plaintiffs that could reliably bring an Appointments Clause challenge would be officers who are fired notwithstanding their tenure protections. For example, William Humphrey was fired by FDR. He–and later his estate–had standing to collect his salary. (It is unclear if a court could reinstate him, even if his termination was unlawful). Under this theory, I don't think Ted Olson would have had standing to challenge the tenure protections of the Independent Counsel, because his injury (the subpoena) was not directly traceable to Alexia Morrison's tenure protections. But for the tenure protections, would Morrison still have issued that subpoena? Rather, Olson could only argue that Morrison's course of conduct–including the subpoena–was tainted by the unconstitutional tenure protections. If this theory is correct, then several of the leading Appointments Clause challenges may have been wrong. Free Enterprise Fund, Seila Law, and other cases should have been dismissed for lack of standing. The Plaintiffs in those cases could not trace their injuries directly to the tenure protections.
Justice Alito rejects this argument. He contends that the injury need only be be traceable to the "allegedly unlawful conduct," and not to the allegedly unconstitutional provision. Under the majority's position, standing was present in all of the Court's Appointments Clauses cases. Ted Olson did't need to show that the tenure protections injured him. It was enough to show that Alexia Morrison's subpoena, which was issued by an officer with protected tenure, was unconstitutional. In other words, Ted Olson could bootstrap the otherwise-valid subpoena with the allegedly-unconstitutional tenure protections. Again, none of this analysis should be controversial in the abstract.
Here is Justice Alito's analysis. Pay special attention to the emphasized text.
But for purposes of traceability, the relevant inquiry is whether the plaintiffs' injury can be traced to "allegedly unlawful conduct" of the defendant, not to the provision of law that is challenged. Allen v. Wright, 468U. S. 737, 751 (1984); see also Lujan, supra, at 560 (explaining that the plaintiff must show "a causal connection between the injury and the conduct complained of," and that "the injury has to be fairly traceable to the challenged action of the defendant" (quoting Simon v. Eastern Ky. Welfare Rights Organization, 426 U. S. 26, 41 (1976); brackets, ellipsis, and internal quotation marks omitted)). Because the relevant action in this case is the third amendment, and because the shareholders' concrete injury flows directly from that amendment, the traceability requirement is satisfied.
The emphasized text should look familiar. This citation to Allen v. Wright played a critical role in California v. Texas. Remember, Justice Alito said that the injury must be traced to the "allegedly unlawful conduct." Not to the allegedly unconstitutional provision. The "allegedly unlawful conduct." Justices Breyer and Kagan joined Part III-A-1 of the majority opinion.
Now, here is an excerpt from Justice Breyer's majority opinion in California:
To show that the minimum essential coverage requirement is unconstitutional would not show that enforcement of any ofthese other provisions violates the Constitution. The state plaintiffs do not claim the contrary. The Government's conduct in question is therefore not "fairly traceable" to enforcement of the "allegedly unlawful" provision of which the plaintiffs complain—§5000A(a). Allen, 468 U. S., at 751.
Do you see what Justice Breyer did? He change "'allegedly unlawful conduct'" to "allegedly unlawful' provision of which the plaintiffs complaint." Specifically the individual mandate in §5000A(a). And only that provision. Justice Breyer altered the test from Allen v. Wright to eliminate the possibility of the bootstrap theory of standing. It has never been the rule that the injury must trace to the challenged "provision." If that rule existed, that Morrison and other leading cases were wrong. Rather, the rule is that the injury must trace to the "allegedly unlawful conduct." And that corpus of conduct can bootstrap together constitutional and unconstitutional provisions that are inseverable.
Justice Alito's dissent in California correctly stated the framework from Allen v. Wright:
Our cases explain that traceability requires "a causal connection between the injury and the conduct complained of." Lujan, 504 U. S., at 560 (emphasis added). In other words, the injury has to be "'fairly . . . trace[able] to the challenged action of the defendant.'" Ibid. (quoting Simon v. Eastern Ky. Welfare Rights Organization, 426 U. S. 26, 41 (1976); emphasis added). We have repeatedly and consistently described the traceability inquiry this way. . . . Lujan, 504 U. S., at 560 (requiring aninjury "fairly traceable to the challenged action of the defendant" (internal quotation marks and alterations omitted)); Allen v. Wright, 468 U. S. 737, 757 (1984) (requiring an injury "fairly traceable to the Government conduct respondents challenge as unlawful").
This passage is almost identical to Justice Alito's string cite in Part III-A-1. I suspect these lines were copied and pasted between opinions. But there was no cross citation.
Later in his dissent, Justice Alito criticizes Justice Breyer for altering the test from Allen v. Wright. He calls Breyer's analysis a "patent distortion" of the caselaw. Justice Alito is right.
The Court's primary argument rests on a patent distortion of the traceability prong of our established test for standing. Partially quoting a line in Allen, the Court demands a showing that the "Government's conduct in question is . . .'fairly traceable' to enforcement of the 'allegedly unlawful' provision of which the plaintiffs complain— §5000A(a)." Ante, at 15 (quoting 468 U. S., at 751; emphasis added). This is a flat-out misstatement of the law and what the Court wrote in Allen. What Allen actually requires is a "personal injury fairly traceable to the defendant's allegedly unlawful conduct," id., at 751 (emphasis added). And what this statement means is that the plaintiff 's "injury" must be traceable to the defendant's conduct, and that conduct must be "allegedly unlawful."7
FN7: 7 Allen repeated that point seven more times, see 768 U. S., at 752, 753, n. 19, 757–759, and that is precisely what countless other cases require, see supra, at 9–10, and n. 5. But the majority's rejection of the relevant theory of standing depends on this erroneous description of the law.
Critically, "allegedly unlawful conduct" refers to a course of conduct that bootstraps constitutional provisions with unconstitutional provisions. Justice Alito continues:
"Allegedly unlawful" means that the plaintiff must allege that the conduct is unlawful.(The States allege that the challenged enforcement actions are unlawful using a traditional legal argument, see infra, at 15–20.) But a plaintiff 's standing (and thus the court's Article III jurisdiction) does not require a demonstration that the defendant's conduct is in fact unlawful. That is a merits issue.
Moreover, the private plaintiffs argued that the mandate was unconstitutional. They suffered an injury from the unconstitutional mandate, bootstrapped to constitutional insurance regulations. Their injury could be traced to those bootstrapped provisions. And their injury could be redressed by enjoining those bootstrapped provisions.
The standing analysis in Part III-A-1 of Collins cannot be squared with Justice Breyer's distortion of Allen v. Wright in California. Once again, with Obamacare, the normal rules do not apply.
I really regret the Court took the path it did in California. It resolved nothing, and in the process, created doctrines that will make it much tougher to bring challenges based on the separation of powers. What a short-sighted loss.