7th Circuit Dismisses Obamacare “Take Care” Clause Challenge For Lack of Standing, 3 Days After Argument

September 19th, 2014

This opinion by Judge Easterbrook (assigned by Judge Posner), tosses out a challenge to the Administration’s delay of the employer mandate on standing grounds.

The Patient Protection and Affordable Care Act requires almost everyone to have health insurance. See National Federation of Independent Business v. Sebelius, 132 S. Ct. 2566 (2012). The principal enforcement mechanism is a tax that most businesses must pay if they fail to provide health insurance as a fringe benefit, or that any-­‐‑ one not covered by an employer’s plan must pay in lieu of  purchasing insurance. 26 U.S.C. §§ 4980H, 5000A. The Inter-­‐‑ nal Revenue Service has announced that it will collect the tax in 2014 from uninsured persons, but not from certain busi-­‐‑ nesses that fail to provide insurance as a fringe benefit. IRS Notice 2013-­‐‑45, 2013-­‐‑31 I.R.B. 116. Plaintiffs asked the district court to enjoin what they describe as a violation of the sepa-­‐‑ ration of powers (perhaps more accurately of Art. II §3, which requires the President to “take Care that the Laws be faithfully executed”) and the Tenth Amendment.

Here is the key standing analysis:

In a market economy everything is connected to every-­‐‑ thing else through the price system. To allow a long, inter-­‐‑ mediated chain of effects to establish standing is to abolish the standing requirement as a practical matter—and the de-­‐‑ cisions we have cited are just a few among the many that re-­‐‑ fuse to follow that path.

Plaintiffs do not contend that the causal chain from the tax collector’s acts to their (asserted) injury is shorter than the ones held too long in Allen and similar decisions. Instead they assert that Allen is irrelevant because the claim there arose under the Equal Protection Clause, while plaintiffs’ claim rests on the Tenth Amendment and separation of powers. That has nothing to do with standing, however. A different substantive claim does not establish injury in fact, causation, and redressability, the three elements of constitu-­‐‑ tional standing to sue. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).

Plaintiffs rely especially on Bond v. United States, 131 S. Ct. 2355 (2011), which holds that a private person may pre-­‐‑ sent arguments based on the Tenth Amendment and the Commerce Clause. Yet Bond does not hold that everyone is entitled to litigate about the division between state and fed-­‐‑ eral authority. The Supreme Court does not think that the Constitution’s structural features are open to litigation by persons who do not suffer particularized injuries. See, e.g., Schlesinger v. Reservists Committee to Stop the War, 418 U.S. 208 (1974); United States v. Richardson, 418 U.S. 166 (1974). Bond was prosecuted, convicted, and sentenced to prison under a statute that, she contended, Congress lacked the au-­‐‑ thority to enact. She sought to remain free. Injury, causation, and redressability were easy to establish. Plaintiffs, by con-­‐‑ trast, invoke a long and contestable chain of causation; they do not complain about anything done to them personally. That’s why Allen and similar decisions require dismissal.

The case was argued on 9/16 and decided on 9/19. The 7th Circuit is the rocket docket!