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West Virginia sues Federal Government for trusting West Virginia.

With all of the lawsuits against the ACA flying around over the years, there are some which I haven't even heard about. One of them just came to my attention this morning (thanks to Nicholas Bagley for the heads' up): The State of West Virginia vs. the HHS Dept:

Elbert Lin, Solicitor General, Office of the Attorney General for the State of West Virginia, argued the cause for appellant. With him on the briefs were Patrick J. Morrisey, Attorney General, and Julie Marie Blake, Assistant Attorney General.

Lindsey Powell, Attorney, U.S. Department of Justice, argued the cause for appellee. With her on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, and Alisa B. Klein and Mark B. Stern, Attorneys.

Before: KAVANAUGH and WILKINS, Circuit Judges, and SILBERMAN, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge SILBERMAN.

SILBERMAN, Senior Circuit Judge: This is rather an unusual case. West Virginia has sued to challenge the President’s determination not to enforce certain controversial provisions of the Affordable Care Act for a transitional period. That decision, implemented by a letter from the Secretary of the Department of Health and Human Services, left the responsibility to enforce or not to enforce these provisions to the States, and West Virginia objects to being put in that position. We conclude that West Virginia, not having suffered an injury in-fact, lacks standing.

So, what's this all about? The Transitional Policy Brouhaha. To summarize:

  • 2009-2010: During the contentious debate over the ACA prior to it being passed/signed into law, President Obama reassures people that "If You Like Your Plan, You Can Keep It."
  • 2010: The ACA is signed into law; health insurance carriers are given notice that they have over 3 years to make sure that their policies are brought up to ACA standards by January 1, 2014.
  • 2010-2013: Very few carriers bother updating their policies to ensure that they're compliant with the new provisions prior to the deadline.
  • October 2013: The ACA exchanges launch (with a whole mess of technical glitches), and several million people receive notices that their existing, non-compliant policies are being cancelled effective 12/31/13.
  • October-November 2013: Millions of people freak the f*ck out (or, as the actual Court decision puts it):

Millions of cancellation notices were sent out in the fall of 2013, warning policyholders their plans would be illegal once the new regulation took effect. All hell broke loose as policies were cancelled, leading to Congressional promises to modify the law to prevent cancellations.

  • November 13, 2013: In response to the backlash, President Obama and HHS announce that they're going to allow noncompliant policies which people enrolled in after March 2010 but before October 2013 to remain in effect for up to 1 extra year (ie, through 12/31/14). However, they're leaving this decision up to the individual states.
  • Some states stick to the original 12/31/13 cut-off date, but most decide to take HHS up on the 1-year "transitional" extension period. In turn, some of the insurance carriers within those states decide to stick with the original cut-off date while others decide to bump the deadline out another year.
  • West Virginia decides to stick with the 2013 cut-off date.
  • March 2014: The HHS Dept. decides to say, "to heck with it" and bumps out the transitional period by another two years, eventually allowing noncompliant plans to remain in effect as late as 12/31/17.
  • West Virginia changes their minds and decides to let carriers bump out their noncompliant plans for another couple of years after all (although only on the small group market, since the individual market enrollees had presumably all been shifted to compliant plans by this point anyway).
  • Presumably, WV's initial decision to enforce the 2013 cut-off pissed off a bunch of West Virginians...and, presumably, their later decision to change their minds and allow the extensions after all pissed off a bunch of other West Virginians.
  • At this point, the Attorney General of West Virginia, a Republican named Patrick Morrisey, apparently decided to sue the HHS Dept. over allowing the states to decide whether to extend the deadline in the first place.

Let me repeat that: West Virginia sued the federal government for ALLOWING West Virginia the authority to make the decision.

The jaw-dropping stupidity of this was not lost on Judge Silberman:

The President acted, allegedly, to pre-empt Congress. He announced the federal government would hold off on enforcing the statutory requirements. Accordingly, HHS sent a letter to the States announcing a “transitional policy,” allowing health insurers with certain conditions3 to continue policies that would be outlawed under the statute for a period of a year (later extended for another three years).

That left the States holding the bag. They had to decide whether to enforce or not to enforce the very conditions that the federal government determined to abandon for the transitional period. West Virginia initially decided to enforce, but after HHS extended the transitional period, West Virginia opted to decline to enforce the mandates.

The State brought suit for declaratory and injunctive relief. It argued that the new policy violates the plain language of the Act, which mandates that the Secretary “shall” enforce the requirements, when States do not. While there may be room for case-by-case enforcement discretion, the State claimed, HHS was not at liberty to decline wholesale enforcement of the provisions. Moreover, the State claimed the new policy violated the APA because it amounted to a substantive and binding rule that was issued without the required notice-and comment.

West Virginia also brought two constitutional claims. It contended that the federal non-enforcement policy unlawfully delegated away federal executive authority. And it argued that the policy violated the Tenth Amendment by foisting upon States the final and determinative decision as to whether the Act’s market requirements would be enforced within the State itself. This, the State alleged, blurred the lines of political accountability identified as crucial in previous cases such as Printz v. United States, 521 U.S. 898 (1997), and New York v. United States, 505 U.S. 144 (1992).

Perhaps the most peculiar aspect of the case is the preferred remedy sought. West Virginia seeks a declaratory judgment that the Administration’s actions are illegal, but not “vacatur” of the Secretary’s letter, apparently to induce the Administration to negotiate a statutory fix from Congress. Only if that failed would equitable relief be sought.

The district court concluded West Virginia lacked standing because it had not suffered an injury-in-fact, and this appeal followed.

Although Appellant challenges the federal government’s decision to decline enforcement, West Virginia conceded at oral argument that its claim of injury-in-fact is identical to that which would exist if Congress had initially provided that only States had authority to enforce the federal mandate. It is claimed that if Congress were to do that, it would be illegally enlisting States to bear the responsibility, politically, to decide whether to enforce, or implement, a federal statute. In this case, instead, it is the federal government’s enforcement decision that allegedly created the same injury. But we simply do not understand why, in either case, the grant of that discretion to the States creates an injury-in-fact.

Appellant relies on the Supreme Court case holdings, in Printz and New York, that federal statutes that compel States to implement those statutes violate the Constitution. The closer case, Printz, did hold that a statute requiring state legal officers to conduct background checks on gun purchases was unconstitutional (based primarily on implications from the structure of the Constitution). But in their opinion, the majority explained the key to its conclusion was that the State was compelled to carry out a federal command. See Printz, 521 U.S. at 924-35. The same was true in New York, which involved a federal law that required States to either pass legislation dealing with radioactive waste disposal, or to take title to and possession of it. See New York, 505 U.S. at 151-54. Since in both cases the States were compelled to act, no issue of standing was even raised or discussed.

Appellant would extend those cases to the proposition that when the federal government abandons enforcement of a federal statute, leaving States with the responsibility (or, for that matter, Congress delegates discretion to implement a federal statute 6 directly to a state), that also is unconstitutional. Requiring the States to assume the political responsibility of deciding whether or not to implement a federal statute supposedly creates an injury-in-fact.

There is simply no support for this extraordinary claim. Although Appellant dresses up its argument as a breach of State sovereignty in violation of the Tenth Amendment, its injury is nothing more than the political discomfort in having the responsibility to determine whether to enforce or not – and thereby annoying some West Virginia citizens whatever way it decides. And no court has ever recognized political discomfort as an injury-in-fact. We do not doubt that West Virginia now confronts different political terrain than it did before HHS announced its new non-enforcement policy. But we do not think that represents cognizable legal injury. Increased political accountability of this nature – greater likelihood of political consequence in making a decision – is the kind of inherently immeasurable harm that our standing doctrines have been designed to screen out. Time, and time again, it has been stressed that an injury must be “concrete.” See Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992).

Rather cleverly, West Virginia insists – which is generally true – that we must assume the merits of its claim when determining whether standing exists. See City of Waukesha v. EPA, 320 F.3d 228, 235 (D.C. Cir. 2003). Therefore, we have to acknowledge, according to Appellant, that the claimed encroachment into the State’s sovereignty was an injury-in-fact. Still, even assuming that the administration’s action created a theoretical breach of State sovereignty, West Virginia nevertheless lacks a concrete injury-in-fact. The case is analogous to those in which the government’s actions are asserted to be unconstitutional but the plaintiff raises only a 7 “generally available grievance;” its injury is not particular. See Lujan, 504 U.S. at 573-74.

West Virginia’s secondary argument is that any party, whether or not a governmental entity, has standing to challenge a delegation from the government to carry out a governmental responsibility. For that proposition, Appellant relies on Carter v. Carter Coal Co., 298 U.S. 238 (1936). Without belaboring the complexities of that case, it is sufficient to note that standing was never discussed so, as is well known, the case is not a precedent for standing. See, e.g., Will v. Mich. Dep’t of State Police, 491 U.S. 58, 63 n.4 (1989). In any event, Appellant’s claim is an untenable stretch. For instance, if Congress gave the D.C. Circuit authority, so long as we chose to use it, to set electrical rates in the country as we pleased, we certainly would not have standing to challenge that delegation as unconstitutional. Nor would the Secretary of Energy, if given the same authority.

For the foregoing reasons, the district court is affirmed. So ordered.

As far as I can tell, WV Republicans were hoping that the blame for the initial cancellations (from the POV of those whose plans were cancelled) would fall upon President Obama, and that the blame for extending the plans (from the POV of the insurance carriers who had been hoping to pick up some market share from the cancelled enrollees) would also fall upon President Obama.

The problem is that Obama/HHS left it up to the states, which means that the fallout for both decisions--whether positive or negative--lay at the feet of the state, not the feds. This apparently led to some amount of embarrassment in the WV corridors of power, I take it.

Put another way, West Virginia sued President Obama for trusting West Virginia to make the right decision about how to handle the situation.

As an aside, I should also note that, as I've stated several times in the past, President Obama's "If you like it you can keep it" statement would have been an impossible promise to keep regardless of how the ACA had been written, for a simple reason: Insurance companies drop one plan and replace it with another all the time, just like no one expects Apple to keep selling the same model of iPhone model for eternity. Even if the ACA had allowed existing noncompliant plans to remain in force forever, sooner or later those plans would have been discontinued by the carrier for various business reasons, including changing marketing strategies, mergers/acquisitions or going out of business altogether.