West Virginia Files Motion to Dismiss in Obamacare Administrative Fix Case

November 18th, 2014

I previously blogged (here and here) about West Virginia’s suit, challenging the legality of the Obamacare Administrative Fix, whereby the administration unilaterally grandfathered plans that were void under federal law, and shifted to the states the burden of deciding whether or not those plans should be offered.

To recap, West Virginia pre-emptively filed a motion for summary judgment. The government responded by filing a motion to dismiss, arguing that there is no standing. Summary judgment was stayed pending resolution of MTD. Now WV has filed its opposition to the motion to dismiss. If WV survives the MTD, they move onto summary judgment, and the government will have to defend on the merits the legality of the so-called “administrative fix.”

In their motion, they focus on D.C. Circuit precedent concerning standing based on a commandeering argument (p. 20):

While the precise question whether a shift of political accountability from the Federal Government to the States amounts to impermissible commandeering is to be decided on the merits in each case, the D.C. Circuit has held based on these cases that a State always has standing to challenge a federal statute or regulation that the State can colorably claim violates its Tenth Amendment rights. Most relevant is the D.C. Circuit’s 2002 decision in Lomont v. O’Neill. There, a Bureau of Alcohol, Tobacco and Firearms (“ATF”) regulation provided that a person seeking permission to transfer a firearm had to obtain a certificate from “the local chief of police, sheriff of the county, head of the State police, State or local district attorney or prosecutor, or such other person whose certificate may in a particular case be acceptable to the Director” of the ATF. 258 F.3d at 12 (quoting relevant federal regulations). Two local chiefs of police challenged this regulation, arguing that it violated the Tenth Amendment. The D.C. Circuit expressly found first that the police chiefs had standing in light of their claimed Tenth Amendment injury, noting that no Justice of the Supreme Court had even “questioned” standing in Printz. Id. at 13. Then, the court rejected the claim on the merits based on its conclusion that the law merely permitted “state or local governments [to] voluntarily decide to assist in  administering federal laws.” Id. at 14. Put another way, even though the D.C. Circuit did not find a Tenth Amendment violation because the police chiefs only had a voluntary and minor role in the federal program, it easily found that the chiefs were allowed to challenge the program in federal court. Accord Fraternal Order of Police v. United States, 173 F.3d 898, 904-07 (D.C. Cir. 1999); Gillespie v. City of Indianapolis, 185 F.3d 693, 703-04 (7th Cir. 1999) (abrogated on other grounds by United States v. Skoien, 587 F.3d 803, 807 (7th Cir. 2009)).

Here is the key passage from Lomont:

This much may follow from Printz v. United States, 521 U.S. 898, 117 S.Ct. 2365, 138 L.Ed.2d 914 (1997), in which the Court reached the merits of a Tenth Amendment challenge to the Brady Act in cases brought by county sheriffs. Neither the majority opinion nor the opinions of the five Justices who wrote separately questioned the sheriffs’ standing to sue. The government believes that “chief law enforcement officers have standing only if they are authorized by state law to act on behalf of the State.” Brief for Appellees at 34 n.9. But as the government recognizes, to impose that prerequisite would be to depart from our decision 14*14 in the FOP case, and perhaps the Supreme Court’s disposition of Printz.

The brief notes that HHS does not event address Lomont:

In its Motion to Dismiss, HHS offers a scattershot of arguments in response to this basis for West Virginia’s standing, see MTD at 13-29, but none has merit. Several of the arguments are foreclosed by Lomont, which HHS does not even attempt to address. Indeed, HHS fails to cite a single case holding that a State alleging a violation of the anti-commandeering doctrine lacks the standing to bring its lawsuit at all. Its remaining arguments are directly contrary to Supreme Court precedent or rely on mischaracterizations of West Virginia’s alleged injury.

Once the plaintiffs have standing on the commandeering claim, it doesn’t even matter if they win on the merits with respect to commandeering. They can then win on the merits concerning the APA claim. This argument has gotten really sophisticated. I look forward to seeing HHS’s reply.