Fourth Circuit’s Factual Error Throws Obamacare Decision in Doubt

Published September 14, 2011

In a recent ruling that the Commonwealth of Virginia lacks standing to challenge the individual mandate provision of Obamacare, a panel of the United States Court of Appeals for the Fourth Circuit made a “rookie” factual error serious enough to call for invalidation of its entire decision.

Virginia had enacted a state statute — the Virginia Health Care Freedom Act (VHCFA) — declaring the individual mandate contained in the Obamacare bill did not apply to its citizens. Virginia then filed a lawsuit alleging the individual mandate violates the Commerce Clause of the United States because the federal government lacks the constitutional power to require individual citizens to purchase health insurance or pay a penalty.

The federal appellate court held in September it could not reach the merits of this constitutional claim because Virginia lacked standing to assert it. The court’s reasoning was the federal individual mandate was already a law when the Virginia statute was passed, so the state statute amounted to nothing more than a political attack on it – a statement of “generalized grievances” about it.

Major Problem with Ruling

The problem here is the court is wrong on the timing.

The court says: “Virginia filed this action on March 23, 2010, the same day that the President signed the Affordable Care Act into law. The Governor of Virginia did not sign the VHCFA into law until the next day.”  This is important, the court asserted, because “the only apparent function of the VHCFA is to declare Virginia’s opposition to a federal insurance mandate. And, in fact, the timing of the VHCFA, along with the statements accompanying its passage, make clear that Virginia officials enacted the statute for precisely this declaratory purpose.”

In reality, the Virginia law was signed by Gov. McDonnell and codified on March 10, 2010. The “ceremonial” signing was held on March 24, 2010. So rather than a Virginia law seeking to invalidate an existing federal law, it was the other way around. It was a federal law seeking to invalidate an existing Virginia law.

The Court’s Mistake

It’s important to note the court was not misled on this point by the parties. The government states in its brief – correctly – that the Virginia statute was enacted “shortly before” Obamacare was signed. This point was gratuitous and off-handed because the timing issue wasn’t raised by either side. For that reason, Virginia didn’t address it.

So the Fourth Circuit panel seems to have done its own research on this point upon which the reasoning of its entire ruling hinged – and legal research is a required course for first-year law students.

I’d give the panel an “F.”