A third federal appeals court has now weighed in on the federal health reform law’s “individual mandate,” dismissing a challenge to the mandate not on constitutional grounds, but on procedural grounds.
Last month we wrote in a client Alert about a federal appeals court that ruled the individual mandate is unconstitutional. That decision is at odds with a contrary decision reached by another federal appeals court a few weeks earlier. We noted that the split in decisions ripened the constitutional question for Supreme Court review.
Yesterday, a third federal appeals court issued a decision involving the individual mandate, in a case arising in Virginia. The Commonwealth of Virginia had sued to overturn the mandate, arguing it conflicted with a state law and was unconstitutional in any event, and a federal trial judge had agreed. Yesterday, the appeals court tossed out the trial court’s decision. The appeals court never reached the question of the individual mandate’s constitutionality. Rather, it dismissed Virginia’s lawsuit on the basis that the Commonwealth is not truly an interested party with respect to the individual mandate, and therefore did not have “standing” to legally challenge the mandate.
Virginia had passed a state law providing that no individual could be required to buy an individual health insurance policy. Because the state law conflicted with the health reform law’s individual mandate, Virginia claimed it had standing to challenge the mandate. But the federal court of appeals disagreed, concluding that because the health reform law’s individual mandate applies only to individuals, only individuals can sue to challenge it.