A Legal Flaw in the VA Health Care Lawsuit?

By Mike Signer | March 30, 2011 | 3 Comments

The venerable University of Richmond Law Review has an interesting upcoming article about a potentially serious legal flaw in Attorney General Ken Cuccinelli’s lawsuit against President Obama’s Affordable Care Act (ACA), written by Professor Kevin Walsh, a Harvard Law School graduate and current Spider professor.  Apologies to those of you who are not practiced law review article readers.   The legal stuff here might be painful to walk through, but it’s important — we’ll try and make it brief.

To properly hear a case, a court must have what’s called “subject matter jurisdiction.” This is because all courts can’t be all things to all people. Federal courts, for instance, generally hear cases related to federal law, while local and state courts generally hear cases related to local and state law. Just as you wouldn’t expect a federal judge to hear your traffic ticket, you wouldn’t expect a Virginia circuit court judge to hear your bankruptcy claim.

This is where it gets problematic for Cuccinelli’s lawsuit against ACA. The AG’s lawsuit claims that the new law exceeds the narrow parameters set out for federal law by the Commerce Clause of the Constitution, impermissibly forcing Virginians to have health insurance. It does this by resting its argument on the so-called Health Care Freedom Act that the Republican-led General Assembly passed a year ago, declaring the individual mandate illegal in Virginia.

In other words, the AG’s suit requires the federal court to find a state law valid, as the means for declaring the federal law invalid.  As Walsh explains, “The premise of Virginia’s claim of standing to attack the individual mandate in federal court was the asserted need to defend the Virginia Health Care Freedom Act.”

The problem is that courts have very explicitly said that this sort of approach fails the subject matter jurisdiction test — it fails to satisfy the simple requirement that courts hear the sorts of complaints they’re designed for — because federal courts are not supposed to hear claims about state law.

As Professor Walsh explains, in 1983, the U.S. Supreme Court very clearly stated in a case Franchise Tax Bd. v. Construction Laborers Vacation Trust for So. Cal., that, “The situation presented by a State’s suit for a declaration of the validity of state law is . . . not within the original jurisdiction of the United States district courts.”  Professor Walsh explains,

This holding squarely forecloses federal jurisdiction in Virginia v. Sebelius, in which Virginia asks the court “to declare that § 1501 of PPACA is unconstitutional because the individual mandate exceeds the enumerated powers conferred upon Congress,” and also to “declare that [Virginia’s Health Care Freedom Act] is a valid exercise of state power.”  As the district court noted (in the course of analyzing a different point), the raison d’etre of Virginia’s federal declaratory judgment lawsuit is to determine the validity of Virginia law—which is why Franchise Tax Board requires dismissal.

There’s a broader underlying issue here as well:  states’ rights.  Law schools usually require their students to take a class called “Conflict of Laws” that determines the proper way to reconcile competing state and federal law, jurisdiction, and regulations.  It’s a tough subject that can put even the most steely-eyed “gunners” to sleep.  But the debate about how to achieve the proper balance between state and federal law is one of the most powerful and defining issues about America.

There is plenty of room for jockeying about hard policy issues.  The federal government is clearly constrained from eternal expansion by the Commerce Clause and other doctrines.  And federalism-a balance between the state and the federal government-is a venerated doctrine in America.

Yet the “states’ rights” doctrine has been employed to disastrous effect in Virginia and the nation.  This is the legal doctrine the Byrd machine hid behind to deny the rights of thousands of African-Americans, arguing that the state government could “nullify” acts of the federal government. Today, states’ rights have become another torpedo against more vigorous action by the federal government on a range of issues, from health care to environmental regulation.

These are healthy debates to have.  We should have no problem with energetic debates with Tea Partyers and anyone else about the proper scope of the federal government, about the Commerce Clause, and about federal health insurance reform.

But this doesn’t mean that crusaders have a right to jettison established legal doctrine through a super-creative scheme to defeat the Affordable Care Act.  Here in Virginia, the General Assembly passed a state law nullifying a federal law, and we now have a state lawsuit requiring a federal court to declare a state law valid, as a means to declare the federal law invalid.  And this only happened in Virginia, which filed this lawsuit alone.

If you had a hard time following that, then that is the point.  Professor Walsh concedes that “nobody has thought to address [this argument] until now.”  His provocative argument deserves just as much discussion and consideration as the overarching issue of federal health insurance reform.

Check out Professor Walsh’s article here.

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3 Responses to A Legal Flaw in the VA Health Care Lawsuit?

  1. JP Oddo says:

    Good stab at explaining it Mike. What do you make of the AGs argument that if the federal government can force you to purchase a product such as health care, then they could extend that to force you to buy a GM car etc?

  2. Mike Signer says:

    Joe: I don’t make much of it. I see it as pretty analogous to requiring all drivers to have car insurance. People without auto insurance causing tremendous costs for people with it. And folks who don’t have health insurance often are forced to use emergency rooms for both primary and catastrophic care, which imposes enormous costs on society. I think there’s a clear commerce issue for the federal government in addressing this systemic problem. The fix needs to be tailored to the problem — and the mandate (as a bipartisan team decided in Massachusetts) seems to be the best way to cut costs.


  3. Lawyer Mama says:

    Except the federal government doesn’t require us to have auto insurance. The state does. I agree that it’s definitely within the realm of the Commerce Clause, but auto insurance probably isn’t the best example.

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