California v. Texas
Headline: Challenge to the Affordable Care Act’s insurance mandate dismissed after Court rules challengers lack standing, preventing them from striking down the law and leaving the rest of the Act in place for now.
Holding: The Court held that the States and individuals do not have the right to sue over the ACA’s minimum coverage requirement because they failed to show any past or future injury fairly traceable to government enforcement of it.
- Prevents these plaintiffs from striking down the ACA because they lacked standing.
- Keeps the challenged individual mandate and the rest of the law in place for now.
- Makes it harder to challenge unenforceable statutory provisions without a traceable enforcement action.
Summary
Background
Texas, 17 other States, and two individuals sued federal officials, arguing that the ACA’s minimum essential coverage requirement is unconstitutional now that Congress set its penalty to $0. The District Court found the individual plaintiffs had standing and declared the requirement unconstitutional and inseverable from the rest of the Act. The Fifth Circuit agreed the provision was unconstitutional and that plaintiffs had standing, but remanded the severability question. California and other States intervened to defend the law.
Reasoning
The Court decided the case only on standing. The key question was whether the plaintiffs showed a concrete injury that was fairly traceable to government enforcement of the specific statute they attacked. The Court held they had not. With the penalty set to zero, the statute has no practical enforcement mechanism and the IRS stopped related reporting. The individual plaintiffs’ out-of-pocket payments are not traceable to any current or threatened government action. The States’ alleged increased program costs and administrative expenses either rest on speculative third-party choices or arise from other provisions enforced independently of the challenged mandate.
Real world impact
Because the Court found no Article III injury, it reversed the Fifth Circuit and instructed dismissal of this suit. The opinion did not decide whether the mandate or other ACA provisions are constitutional or not. Practically, this ruling prevents these plaintiffs from invalidating the law in this case and leaves the ACA and its other enforcement mechanisms intact for now.
Dissents or concurrances
Justice Thomas wrote separately agreeing with dismissal on the same standing ground. Justice Alito (joined by Justice Gorsuch) dissented, arguing the States do have traceable injuries and that the mandate is unconstitutional and inseverable from burdensome ACA provisions.
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