Why the Fourth Circuit was wrong about Virginia's lawsuit

September 10, 2011 | By PACIFIC LEGAL FOUNDATION

Author: Timothy Sandefur

The Fourth Circuit Court of Appeals this week rejected the state of Virginia’s lawsuit challenging the Individual Mandate on the grounds that the state lacked the constitutionally required standing to bring the lawsuit. This is a technical area of constitutional law, and one where the precedents are debatable. But I want to explain my argument—set forth more fully in PLF’s amicus brief in the case—as to why Virginia’s lawsuit should have proceeded.

First, the basics: to have standing, a plaintiff—whether an individual or a state—must show, among other things, that the defendant has harmed the plaintiff in a specific way, and that that injury is “judicially cognizable.” That phrase is important because the injury doesn’t have to be a very big one to qualify—but it has to be a genuine one. So I can sue over a single penny of damages, for example, because that’s a judicially cognizable injury; but I can’t sue the government just because I disagree with, say, the Iraq War, because mere disagreement is not a genuine injury. An injury doesn’t have to be money; I can also be injured if I’m deprived of rights like the right to freedom of speech. Or a business can sue if it’s deprived of the right to make certain kinds of agreements or rules.

Virginia argued that it was injured by the Individual Mandate because it had enacted the Virginia Health Care Freedom Act, a law declaring that no citizen could be forced to purchase health insurance. Since this is contrary to the Individual Mandate, Virginia argued that the Mandate intruded on its authority as a state to enact and enforce a legal code. Now, the Supreme Court has held that states can sue to defend their right to enact and enforce their legal codes. And that makes sense, because a state does have a sovereign interest—a “state right” if you want to use that parlance—in enacting legislation. States have been allowed to sue the federal government for interfering in their ability to regulate the drinking age, for example, or for interfering in their power to set the rules for elections, or to regulate hunting wildlife. PLF therefore argued that states should also have the authority to defend another kind of sovereign interest: namely, the sovereign interest in passing laws that articulate and defend individual rights. After all, the Tenth Amendment reserves a broad, undefined swath of power to the states—including the power to set drinking ages, or regulate hunting, or set the rules for election, or to recognize and articulate individual rights, including the right not to have to buy health insurance.

That’s the argument that the Fourth Circuit rejected. It held that the prior cases that allowed states to sue were different because in those cases the states were “regulat[ing] behavior or provid[ing] for the administration of a state program,” whereas the Virginia Health Care Freedom Act “regulates nothing and provides for the administration of no state program.”  The “only apparent function” of that law is “to declare Virginia’s opposition to a federal insurance mandate.”

Yet there’s no constitutional basis for distinguishing between cases where the state is operating some sort of state program and cases where the state is doing something else, like declaring what rights the state recognizes and respects. After all, states do the latter just as much as the former: they do everything from issuing property deeds to defining the age of consent to declaring that May 22 shall be Harvey Milk Day. Other kinds of declaratory pronouncements are more obvious: Proposition 8, for example, declared that only a marriage between a man and a woman would be recognized as a marriage; and the California Constitution was amended some decades ago to declare that the rights protected by the state Constitution are more expansive than those protected by the federal Constitution. These laws don’t administer state programs or regulate behavior so much as they declare something. (Yes, you could say such declarations or definitions or property deeds serve as components in a state’s legal system, but of course that’s also true of a Health Care Freedom Act.) Yet states surely have the authority to pass such laws, and to defend that authority in court if the federal government tries to strip them of it.

Imagine the federal government passed a law redefining, say, the rules of inheritance or property recordation, contrary to the rules established by a state. Could the state really not sue to defend its constitutionally reserved sovereign power to legislate on such matters? If the federal government passed a law defining marriage contrary to Prop. 8, or overruling Article I section 24 of the California Constitution, could the state really not challenge that in court?

The Fourth Circuit provided two other arguments for holding that states can defend some sovereign interests in court. One is strong, but ultimately unconvincing, and the other seems quite weak. The weak one is that if states could sue to defend laws like this, it would open the floodgates to lawsuits, making “each state” into “a roving constitutional watchdog” and “convert[ing] the federal judiciary into a ‘forum’ for the vindication of a state’s ‘generalized grievances about the conduct of government.’” But that’s not correct: finding that states have standing would not do away with the political question doctrine, or other rules whereby courts reject lawsuits about “generalized grievances.” Virginia was not asserting a generalized grievance, but defending the constitutionality of a particular statute which articulates a specific individual right—a right, by the way, that is among the “numerous and indefinite” matters that that the Constitution leaves to the jurisdiction of the states—just as it might defend a statute that, say, set out a recordation scheme for property ownership, or declared the age of consent.

As for states being “constitutional watchdogs,” that’s just what the framers expected the states to be. They say so in the Federalist, among other places: “In the compound republic of America, the power surrendered by the people is first divided between two distinct governments [state and federal], and then the portion allotted to each subdivided among distinct and separate departments. Hence a double security arises to the rights of the people. The different governments will control each other, at the same time that each will be controlled by itself.” The Constitution’s framers intended the states to help the people resist federal overreaching. Moreover, the “floodgates” argument is a little exaggerated, since it is not an easy matter to get a statute like the Health Care Freedom Act passed. It requires both houses of the legislature to pass it and the governor to sign it; it’s not just a matter of states making something up willy-nilly. A statute like the VHCFA is a solemn pronouncement of state policy and an exercise of sovereignty that the Constitution explicitly reserves to the states in the Tenth Amendment.

This is not to endorse “nullification.” The Fourth Circuit is right that “nullification” is an unconstitutional and rather silly idea. But the state’s Health Care Freedom Act is not nullification—it does not purport to absolve citizens of their obligation to obey federal law. It simply articulates and defends an individual right, and then the state has appropriately submitted to the federal courts the question of whether it has the sovereign right to do so. That’s not the same as declaring a federal law void. I may disagree with Prof. Akhil Amar on some things, but he’s right when he says that “while discarding the extremism of nullification,” we should not “throw[] away a rich antebellum tradition emphasizing state protection of constitutional norms against the federal government.”

The other, stronger argument the Court uses is the precedent of Massachusetts v. Mellon, which held that states could not act as “parens patriae” in lawsuits against the federal government. The famous line from that case is:

While the state, under some circumstances, may sue in that capacity for the protection of its citizens it is no part of its duty or power to enforce their rights in respect of their relations with the federal government. In that field it is the United States, and not the state, which represents them as parens patriae, when such representation becomes appropriate; and to the former, and not to the latter, they must look for such protective measures as flow from that status.

What does this mean, exactly? It can’t be the case that federal legislation is immune from constitutional challenge by the states simply because Congress has chosen to pass it—that would seriously undermine the federalist scheme, and contradict the statement earlier in the decision that “We need not go so far as to say that a state may never intervene by suit to protect its citizens against any form of enforcement of unconstitutional acts of Congress.” It’s certainly true that the Constitution makes the federal government parens patriae for Americans in certain respects—but those respects are enumerated in the Constitution. The federal government’s sovereignty is limited to its enumerated powers; in other respects, it the states, and not the federal government, are sovereign.

More importantly, Virginia is not proceeding as parens patriae at all! It’s not suing merely to defend the interests of an individual’ it’s suing to defend its own sovereign power to enact a statute—a statute that, like many other statutes, articulates and casts state protection over, a specific individual right. That’s a distinct sovereign interest, and one the Tenth Amendment reserves to the states.

Mellon is a confusing case that’s been subjected to strong criticism by prominent legal academics and re-assessed by the Supreme Court in the years since it was written. Most notably, Prof. David Currie noted that Mellon is better seen, not as a standing decision, but as a political question decision—a position the Supreme Court appeared to endorse in its later case, Baker v. Carr. The state in that case was not trying to defend the constitutionality of a specific statute that articulated a particular individual right—it was asserting a generalized grievance that the federal government was going too far. It had not articulated or extended its sovereign protection over an individual right with which the challenged federal statute interfered. The same is true of other cases in which courts have denied states the ability to challenge unconstitutional action. In New Jersey v. Sargent, for example, cited in the Fourth Circuit’s decision, the state had not enacted any statute or attempted to regulate the use of waterways that it claimed the federal government was unconstitutionally meddling with. It’s nothing like the Virginia case, where the state legislature has defined and cast its protection over a specified individual right.

Critics might say that that’s a minor distinction—but in fact it seems like the equal opposite to the distinction on which the Fourth Circuit relied, when it differentiated between cases in which the states were operating a state program or regulating behavior, and cases in which they were not. That distinction is weak because there’s little sense in differentiating declaratory or definitional statutes from other kinds of statutes—but certainly it makes sense to differentiate cases like Mellon or Sargent, where the state hasn’t even passed any statute at all, from a case like Virginia’s.

Probably most telling, though, is the case the Fourth Circuit ignored: M’Culloch v. Maryland. That’s the famous 1819 decision upholding the constitutionality of the National Bank against a lawsuit by the state of Maryland. The state, believing the Bank to be unconstitutional, passed a tax on banks, including the National Bank. Many believe—and the federal government argued before the Court—that this statute was only passed as a pretext for challenging the constitutionality of the Bank. Yet the Court—led by Chief Justice Marshall, who understood the doctrine of sovereign standing quite well, having written the Cherokee Cases—never doubted that the state had standing. Of course it had standing! States have a judicially cognizable interest in enforcing their tax laws. But they also have a sovereign interest in articulating and defending individual rights. I cannot see any relevant difference between Maryland’s standing in M’Culloch and Virginia’s standing in this case. Unfortunately, although that point was raised in our brief and in the oral argument, the Fourth Circuit ignored it.

I’m not saying the answer here is obvious—the precedent is confusing and none directly controls. But I don’t think Virginia’s lack of standing is so obvious as the Fourth Circuit and some bloggers seem to believe.