Plaintiffs Lack Standing To Challenge Health Care Act, 9th Circuit Affirms

SAN FRANCISCO - (Mealey's) A panel of the Ninth Circuit U.S. Court of Appeals on Aug. 13 affirmed a lower court ruling that plaintiffs challenging the Patient Protection and Affordable Act (PPACA) lacked standing to challenge the act because they failed to show an injury in fact or a genuine threat of prosecution (Steve Baldwin, et al. v. Kathleen Sebelius, et al., No. 10-56374, 9th Cir.).

Steve Baldwin, a former California assemblyman, and the Pacific Justice Institute, a public interest, education and legal defense organization that provides health care insurance to its employees, sued the Department of Health and Human Services and its secretary, Kathleen Sebelius; the Department of Labor and its secretary, Hilda Solis; and the Department of Treasury and its secretary, Timothy Geithner, in the U.S. District Court for the Southern District of California, challenging the PPACA. 

The plaintiffs sought, inter alia, declaratory and/or injunctive relief regarding the individual mandate provision set forth in Section 1501 of the act, which requires people to purchase health care insurance by 2014 or face a penalty.  Baldwin says he objects to being compelled to maintain health care insurance, and the institute says it objects to being compelled to comply with the act because the act imposed increased costs on it by preventing it from denying health care insurance coverage to part-time employees. 

On Aug. 27, Judge Dana M. Sabraw granted the federal government's motion to dismiss, finding that the plaintiffs lacked standing because they failed to demonstrate any actual injury.  In the same order, the judge denied the plaintiffs' motion for preliminary injunction. 

The plaintiffs appealed the dismissal to the Ninth Circuit. 

In an opinion written by Judge Pamela Ann Rymer, the court first found that it had jurisdiction to hear the appeal despite the plaintiffs having filed a notice of appeal before entry of the final judgment because the District Court simultaneously denied the plaintiffs' motion for a preliminary injunction.  Judges Ferdinand Francis Fernandez and Richard C. Tallman concurred. 

The court then affirmed the District Court's decision that the plaintiffs lacked standing to bring the complaint. 

Baldwin said that he objected to the individual mandate because he did not consent to being compelled to maintain health care insurance and that Congress lacked authority under Article I of the U.S. Constitution to enact such legislation, but the court said an objection of this sort is simply a generalized grievance, for which no standing lies. 

To establish standing, a plaintiff must show that he has suffered an "injury in fact," that the injury is fairly traceable to the challenged action and that it is likely that the injury will be redressed by a favorable decision.  Baldwin's allegations, however, fail to show an injury in fact because he does not aver that he currently lacks qualifying health insurance so that he would be noncompliant when the act goes into effect in 2014, the court said. 

Baldwin also does not claim that he must save money now to purchase the insurance, and he does not raise a justiciable pre-enforcement challenge because he has not established a "genuine threat of imminent prosecution," the court said, adding that it would not express a view as to what would pass muster to confer standing. 

The institute does not have standing to challenge the individual mandate because the provision does not apply to employers, the court said. 

To the extent that the institute challenges the employer shared responsibility provision, it does not have standing because it failed to allege that it had more than 50 employees, thereby being subject to the provision, 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 #31-110817-013Z.  For all of your legal news needs, please visit www.lexisnexis.com/mealeys.] 

For more information, email editor Cheryl Keely at cheryl.keely@lexisnexis.com.

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