California v. Texas
593 U. S. ____ (2021) (2021)
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Rule of Law:
A plaintiff does not have Article III standing to challenge a statutory provision that is unenforceable because they cannot demonstrate a concrete injury that is fairly traceable to the defendant's conduct in enforcing that specific provision.
Facts:
- In 2010, Congress enacted the Patient Protection and Affordable Care Act (ACA), which included a provision requiring most individuals to maintain minimum essential health insurance coverage.
- As originally enacted, the ACA imposed a monetary penalty, calculated as a tax, on applicable individuals who failed to obtain such coverage.
- In 2017, Congress passed the Tax Cuts and Jobs Act, which amended the ACA by setting the amount of the penalty for failing to maintain coverage to $0, effective in 2019.
- Two individuals, Neill Hurley and John Nantz, alleged they incurred financial costs by continuing to purchase health insurance to comply with the minimum coverage provision.
- Texas and 17 other states alleged they suffered financial harm, including increased costs for state-operated medical insurance programs and direct administrative expenses associated with the ACA.
Procedural Posture:
- Texas and 17 other states, later joined by two individuals, sued federal officials in the U.S. District Court for the Northern District of Texas.
- Plaintiffs sought a declaratory judgment that the ACA's minimum coverage provision was unconstitutional and an injunction against the rest of the Act.
- California and other states intervened as defendants to defend the ACA.
- The District Court granted summary judgment for the plaintiffs, holding they had standing and that the entire ACA was invalid because the unconstitutional mandate was not severable.
- The U.S. Court of Appeals for the Fifth Circuit affirmed the District Court's rulings on standing and the unconstitutionality of the mandate.
- The Fifth Circuit, however, vacated the District Court's remedy and remanded the case for a more granular analysis of which, if any, parts of the ACA were severable from the mandate.
- The state intervenors (California et al.) and the plaintiffs (Texas et al.) both petitioned the U.S. Supreme Court for a writ of certiorari, which was granted.
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Issue:
Do individuals and states have Article III standing to challenge the constitutionality of the Affordable Care Act's minimum essential coverage provision after Congress reduced the associated tax penalty to zero?
Opinions:
Majority - Justice Breyer
No. The plaintiffs lack standing to challenge the minimum essential coverage provision because they have not shown an injury fairly traceable to the defendants' conduct in enforcing the specific statutory provision they attack as unconstitutional. The individual plaintiffs' financial injury from purchasing insurance is not traceable to any government action, as the minimum coverage provision is unenforceable without a penalty; the government is not causing their injury. The state plaintiffs' alleged indirect injuries from increased enrollment in state health programs are speculative, and their direct administrative costs are imposed by other, unchallenged provisions of the Act, not the minimum coverage provision itself. Because there is no cognizable injury fairly traceable to the challenged provision, a judicial declaration on its constitutionality would be an impermissible advisory opinion.
Concurring - Justice Thomas
Yes, I agree with the majority that the plaintiffs lack standing. The plaintiffs have not identified any unlawful government action that has injured them. The harm alleged by the individual plaintiffs stems from a bare statute that imposes no obligations or consequences, and the state plaintiffs' harms flow from provisions of the Act that they are not challenging as unlawful. While the Court has previously gone to great lengths to rescue the ACA, today's result is a correct application of standing doctrine to the particular claims the plaintiffs chose to bring.
Dissenting - Justice Alito
Yes. The state plaintiffs have standing because they suffer clear financial injuries from complying with burdensome and costly ACA provisions, such as reporting requirements and the mandate to cover employees' adult children. The majority distorts the traceability requirement; the states' injuries are traceable to government conduct (enforcement of those costly provisions), which is 'allegedly unlawful' because those provisions are inseverable from the now-unconstitutional minimum coverage mandate. The mandate is unconstitutional because a 'tax' that raises no revenue is not a valid exercise of the taxing power. Since the burdensome provisions are inseverable from the unconstitutional mandate, they are unenforceable against the states.
Analysis:
This decision resolves the third major constitutional challenge to the ACA by dismissing the case on procedural grounds, thereby avoiding the substantive questions of the individual mandate's constitutionality and its severability from the rest of the Act. The Court's holding reinforces a strict application of the 'fairly traceable' prong of the standing doctrine, requiring plaintiffs to link their injury directly to the government's enforcement of the specific provision they allege is unlawful. This precedent makes it more difficult for litigants to challenge a complex statute by attacking one component and arguing that other, injury-causing components must fall with it through an inseverability argument.
