Another ill-conceived Obamacare lawsuit is rejected

Two weeks ago, a district court judge in Washington, D.C. dismissed West Virginia’s lawsuit challenging the “like it, keep it” fix. The fix gave the states permission to decline to enforce the Affordable Care Act’s new insurance rules for select health plans, effectively grandfathering them.

I’m sympathetic to West Virginia’s claim that the administrative fix is unlawful. The threshold question, though, was whether the state had standing to sue over it. West Virginia’s theory was that the administrative fix put it into a bind. It had to choose whether to implement the fix in the state—and then take the political lumps for whatever choice it made. When I wrote about the case last August, I was dubious.

For all practical purposes, West Virginia faced the same choice before and after the administrative fix: whether to use state resources to enforce the ACA. And it was a bona fide choice: prior to the fix, insurance commissioners in six states had announced they wouldn’t enforce the statute.

All the administrative fix did was change the political stakes of a non-enforcement decision. But that sort of shifting-the-political-stakes claim doesn’t tend to fare well in standing analysis. It’s too speculative—too non-concrete—to license federal courts to referee what is, even in West Virginia’s telling, essentially a fight about political optics.

In a careful opinion (h/t to Josh Blackman), the district court agreed with that analysis:

West Virginia’s claimed injury, at bottom, involves a general desire to challenge the legality of federal action, relying on the abstract concept of political accountability to define its alleged harm, which is itself rooted in abstract concepts of federalism and state sovereignty. The Supreme Court held long ago, however, that a State’s general challenge to the lawfulness of federal action, predicated on an abstract injury to the State’s sovereignty, is not sufficient to confer standing.

The court’s decision should put an end to West Virginia’s lawsuit. There’s only a slim chance that the D.C. Circuit will reinstate the lawsuit on appeal, and the Supreme Court isn’t likely to intervene, even at West Virginia’s urging.

That said, the current litigation out of Texas over the Obama administration’s immigration plan raises some similar questions about the standing of states to challenge federal administrative action. The outcome in the Texas case, which is likely to be heard at the Supreme Court this term, could bolster West Virginia’s standing argument.

By the time the Court decides the Texas case in June, however, the “like it, keep it” fix will be coming to an end, making West Virginia’s lawsuit moot. Whatever the Court decides in the Texas case, this lawsuit appears to have run its course.


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