Standing

One sunny day in 2018, I was walking home from class at UC Berkeley when I received a notification on my phone that almost made me trip on the sidewalk in surprise: it was a news article announcing that a federal judge had decided that the entirety of the Patient Protection and Affordable Care Act of 2010 (often shortened to just "the Affordable Care Act" or "ACA" or "Obamacare") was unconstitutional. How could this have happened? The Supreme Court of the United States had previously upheld the constitutionality of the ACA in 2012 in National Federation of Independent Business v. Sibelius, 567 U.S. 519 (often abbreviated to NFIB), so it was unthinkable to me that some federal district judge six years later could decide otherwise. I was wrong.

The Affordable Care Act is a complex piece of legislation that includes a plethora of different healthcare reforms. In my view, there are three key elements of the Act: Firstly, it required individual insurance providers to provide coverage to all applicants without regard to preexisting conditions. Before, if you had a preexisting medical condition, such as a disability, you could be denied health insurance coverage. People with preexisting conditions are more likely to file claims on their health insurance, so this change dramatically increased costs for insurance providers. Secondly, the Act expanded access to Medicaid, a government program which provides financial aid for healthcare costs to low-income or disabled individuals. In order to offset the costs associated with these expansions of health insurance coverage, the Affordable Care Act's third key element imposed an individual mandate, requiring most Americans to buy health insurance or else pay a fine.

NFIB revolved in large part around the individual mandate. The power of the U.S. federal government is limited by the U.S. Constitution, which enumerates the kinds of legislation that Congress is allowed to pass. If the Constitution does not specifically allow Congress to pass some kind of law, then Congress may not pass that law (see the Tenth Amendment)—if it tries to, then a court could find the law unconstitutional, thereby invalidating it. NFIB focused on two key questions: firstly, whether the individual mandate is constitutional, and secondly, if the individual mandate is unconstitutional, whether the entire Affordable Care Act needed to be invalidated (more precisely, whether the individual mandate is severable from the rest of the ACA). In NFIB, the Supreme Court held that the individual mandate was a valid exercise of Congress's taxing power under Article I of the Constitution, thereby upholding that part of the Affordable Care Act as constitutional. As a result, the Court did not need to answer the severability question.

What happened in the six years between NFIB and the 2018 federal judge’s decision? An election. In 2017, after the Republican Party gained control of both chambers of Congress and the White House, it decided to effectively eliminate the individual mandate by setting the penalty for not buying health insurance to $0. Because of a technicality in the way that Congress passed this change, the law on paper still requires Americans to buy health insurance, but because there is no penalty for violating this law, it is now toothless. In NFIB, the Supreme Court upheld the individual mandate’s penalty as a tax, but now that the penalty is zero, could it still be considered a valid exercise of Congress’s taxing power?

The state of Texas decided to put this legal argument to the test. It sued the federal government, arguing that (1) because the individual mandate could no longer be considered a tax, it is unconstitutional, and (2) because the individual mandate is so critical to the ACA, if it is invalidated, then the entire ACA must be invalidated (i.e. the individual mandate is inseverable from the rest of the ACA). That sunny day in 2018, a federal judge agreed with Texas and held that the entire ACA should be invalidated. The judge stayed his decision pending appeal, meaning that his decision would not take effect until the case is reviewed by an appellate court. Eventually, the case made its way to the U.S. Supreme Court on a writ of certiorari under the name California v. Texas. (Regarding certiorari, see my blog post about prerogative writs.)

Section 2 of Article III of the U.S. Constitution limits the scope of the federal judicial branch's power to deciding "Cases" and "Controversies". The U.S. Supreme Court has interpreted this to mean that not just anyone can bring a legal dispute before a court; it needs to be someone who has standing. Specifically, it needs to be someone who not only disagrees with someone else about the law, but also would suffer some kind of harm if this disagreement is not resolved by the court in their favor. If they cannot show that they would suffer harm if the court does not provide them relief, then their dispute is not a true "Case" or "Controversy" and is therefore beyond the jurisdiction of the United States federal judiciary. If they can show harm, then we can consider them to have standing. This idea of standing became the crux of California v. Texas, 593 U.S. ___ (2021).

In a 7–2 decision authored by Justice Stephen Breyer, the Supreme Court on June 17, 2021, instructed lower courts to dismiss Texas's case for lack of standing. The relative uniformity of the Court in this case is somewhat surprising. I was expecting a much more divided Court: rather than 7–2, I thought the Court would issue a 5–4 or 6–3 decision that could go either in favor of or against the ACA. When Justice Ruth Bader Ginsburg died in September 2020, there was considerable concern that the ACA was in jeopardy. With a 6–3 conservative majority on the current Court, it seemed quite plausible that the newest justice, Amy Coney Barrett, could join her fellow conservative justices (i.e. Chief Justice Roberts and Justices Thomas, Alito, Gorsuch, and Kavanaugh) to challenge the constitutionality of the ACA. To my surprise, the Chief Justice decided to assign Justice Breyer—who is considered a member of the Court's liberal bloc—the duty of authoring the opinion of the Court in the case. Additionally, not one, not two, but four members of the Court's conservative bloc joined Breyer's opinion (Roberts, Thomas, Kavanaugh, and Barrett).

In order for a plaintiff to show that they have standing to bring a lawsuit, they must show that they "can allege personal injury fairly traceable to the defendant’s allegedly unlawful conduct and likely to be redressed by the requested relief". California v. Texas, 593 U.S. ___, slip op. at 4 (quoting DaimlerChrysler Corp. v. Cuno, 547 U. S. 332, 342 (2006)) (internal quotation marks omitted). These requirements for establishing standing can be distilled into a three-part test, first established by the Court in a case called Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992):

1. Injury in fact: The plaintiffs have to show that they have suffered an "injury in fact", which means "that the injury is of a legally protected interest which is (a) concrete and particularized and (b) actual or imminent".
2. Redressability: The plaintiffs have to show that a decision in their favor would redress the injury they have alleged.
   
3. Traceability: The plaintiffs have to show that the injury they allege is traceable (i.e. caused by) the unlawful conduct that they allege the defendant has committed.

See the definition for standing in Wex. The key in California v. Texas is that third prong of traceability. Although Texas indeed suffers an "injury in fact" in the form of their increased financial burdens from "increased use of (and therefore cost to) state-operated medical insurance programs", 593 U.S. ___, slip op. at 10, and although Texas claims that the Court could redress this injury by holding unconstitutional the ACA's individual mandate, the issue is whether Texas's increased financial burdens are caused by the individual mandate.

According to the Court, they are not. Texas's increased financial burdens support programs that offer Texans healthcare benefits that "have nothing to do with [the individual mandate]". 593 U.S. ___, slip op. at 11. "Given these benefits," wrote Justice Breyer for the Court, "neither logic nor intuition suggests that the presence of [the individual mandate] would lead an individual to enroll in one of those programs that its absence would lead them to ignore. A penalty might have led some inertia-bound individuals to enroll. But without a penalty, what incentive could the provision provide?" 593 U.S. ___, slip op. at 12. In other words, Texas has failed to prove that their alleged injury is traceable to the individual mandate, which is the allegedly unlawful action the government has committed.

The most interesting theory of standing was one of the ones advanced by Justice Alito in his dissenting opinion. The theory—described as "standing-through-inseverability" by Justice Thomas in his concurring opinion (see 593 U.S. ___ (Thomas, J., concurring), slip op. at 4.)—was largely ignored by the Court, except for a single paragraph on page 10, which explained that the Court was declining to consider the argument because it "was not directly argued by the plaintiffs in the courts below". 593 U.S. ___, slip op. at 10. The idea of "severability" in constitutional law is as follows. Suppose the Court ended up holding that the individual mandate is indeed constitutional. Does that mean that the entire Affordable Care Act must be held unconstitutional, or could the individual mandate be "severed", leaving just the individual mandate inoperative, but the remainder of the ACA intact?

Justice Alito describes his idea of "standing-through-inseverability" as a two-step process: (1) if the plaintiffs are claiming that an unconstitutional part of a statute (i.e. the individual mandate) is inseverable from the rest of the statute, and (2) if the plaintiffs claim that those inseverable parts of the statute impose costly burdens on them, then the plaintiffs have standing. The only reason why the Court dismissed this argument was for technical reasons: the lawyers for the plaintiffs failed to articulate the argument properly in the lower courts, in their briefs, and at the oral arguments. I have to wonder, then, if the plaintiffs had made this their central claim to standing from the outset, would the Court have been more sympathetic to the argument? Justice Thomas seemed to be somewhat sympathetic, but the majority opinion authored by Justice Breyer waved it to the side as "novel". See 593 U.S. ___, slip op. at 10. In light of these developments, I suspect we will see more standing-through-inseverability cases crop up in federal courts in the future.

This idea of standing has been in the limelight for multiple recent Supreme Court decisions, including California v. Texas. On Friday, December 11, 2020, the Court dismissed a lawsuit filed—once again by the state of Texas—in its original jurisdiction against the state of Pennsylvania. Texas v. Pennsylvania attempted to overturn the results of the 2020 presidential election in Pennsylvania, where Joe Biden had defeated Donald Trump. In the order dismissing the lawsuit, the Court briefly explained its thinking:

The State of Texas’s motion for leave to file a bill of complaint is denied for lack of standing under Article III of the Constitution. Texas has not demonstrated a judicially cognizable interest in the manner in which another State conducts its elections.

In principle, standing is important because it allows the judicial branch to focus only on cases that truly matter, cases where there is an actual injury being alleged that was caused by an unlawful act being alleged. However, it is interesting how the Court has used its standing jurisprudence to throw out cases like California v. Texas and Texas v. Pennsylvania where, if the plaintiffs had prevailed, would have had unprecedented and monumental impact on American politics.