3rd Circuit Affirms Dismissal Of Health Care Act Case For Lack Of Standing

NEWARK, N.J. - (Mealey's) A Third Circuit U.S. Court of Appeals panel on Aug. 3 affirmed the dismissal of a challenge to the Patient Protection and Affordable Care Act (PPACA) brought by a New Jersey physician, one of his patients and a physician organization, saying that the plaintiffs failed to allege the prerequisite injury in fact to establish standing (New Jersey Physicians Inc., et al. v. the Hon. Barack Obama, et al., No. 10-4600, 3rd Cir.).

New Jersey Physicians Inc., Dr. Mario A. Criscito and "patient Roe" sued the federal government in the U.S. District Court for the District of New Jersey, challenging the PPACA.  The plaintiffs sought a declaration that the act, particularly the individual mandate, is not a valid exercise of Congress' power under the commerce clause of the U.S. Constitution or any of the federal government's enumerated powers.  The plaintiffs also alleged that the act violates their Fifth Amendment rights.  The individual mandate requires most people to purchase qualifying health insurance coverage by 2014 or face a penalty.   

On Dec. 7, Judge Susan D. Wigenton granted the defendants' motion to dismiss the case, saying the plaintiffs lacked standing.  The judge did not address any of the plaintiffs' other arguments. 

The plaintiffs appealed to the Third Circuit, saying they do have standing to bring the action because unless the court fails to stop the PPACA, the individual mandate will go into effect in 2014, and when it does, it will have a substantial, direct effect on them. 

Third Circuit Judges Michael A. Chagares, Kent A. Jordan and Joseph A. Greenaway Jr. heard oral arguments June 22. 

Only one of the plaintiffs must establish standing for the court to consider the merits of their challenge to the PPACA, but none of the plaintiffs established standing, Judge Chagares wrote for the court. 

Patient Roe's allegations were insufficient to establish injury in fact because he failed to set forth any current "actual" "concrete and particularized" injury, the court said.  Patient Roe also failed to establish that a future "concrete and particularized" injury was "imminent," the court said. 

The complaint was entirely silent as to whether patient Roe would be a nonexempt "applicable individual" subject to the mandate's requirement to obtain minimum essential coverage and alleged no predicate facts to demonstrate that his situation would even change when the individual mandate takes effect in 2014, the court said. 

Likewise, the allegations regarding Criscito stated very little - only that as a doctor, he treats patients and that some of those patients pay him out of pocket, the court said. 

However, the plaintiffs have pleaded no facts to buttress their arguments that the PPACA will have a direct, substantial impact on Criscito's medical practice, including the manner in which he may, or may not, seek payment for his services and the manner in which he provides treatment to his patients, the court said. 

The complaint also fails to demonstrate that Criscito will be injured by the act's employer responsibility provision because it fails to specify how many employees work for Criscito, the court said. 

Also, for the association to establish standing, the organization must make specific allegations that at least one member of its organization has suffered or would suffer harm, but the only member identified in the complaint - Criscito - failed to establish any injury in fact, the court said. 

Because the District Court's dismissal for lack of subject matter was without prejudice, the plaintiffs may pursue a new action and attempt to remedy the jurisdictional defects outlined in the opinion, the court said.

[Editor's Note:  Full coverage will be in the Aug. 17 issue of Mealey's Managed Care Liability Report.  In the meantime, the opinion is available at www.mealeysonline.com or by calling the Customer Support Department at 1-800-833-9844.  Document #31-110817-006Z.  For all of your legal news needs, please visit www.lexisnexis.com/mealeys.] 

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