I had the opportunity last Friday to speak with South Carolina Attorney General Henry McMaster, who graciously made himself available to me to answer some questions about the legal challenges to the Obamacare bill.  I have, in private, expressed skepticism about the legal merits of these challenges, for a couple of reasons: first, any challenge asserting that Congress has exceeded the scope of their authority under the Commerce Clause has not had a very good success rate in the past century, and second, I am skeptical of the arguments I have heard thus far for why the states in particular have standing to bring suit.

Attorney General McMaster discussed with me the particulars of the legal challenge brought by Florida AG (and presumptive GOP gubernatorial nominee) Bill McCollum.  This challenge was filed seven minutes after the bill was signed into law, and has been joined (for now) by 14 states, and it is anticipated that more will follow. A breakdown of my own analysis of this challenge is below the fold.

In my mind, the first hurdle the states have to clear is the standing question.  For the non-lawyers, a brief breakdown of this doctrine is here, but the one-sentence explanation is that not everyone can bring a suit in court challenging the constitutionality of a law; the party bringing the suit must be able to show that they either actually have been injured (or imminently will be injured), and that the Court is capable of redressing such injury.

This is a sticky question in this case.  The states have a pretty good argument that they are injured by Obamacare because the act contains a number of unfunded mandates (particularly to Medicaid) that will have an adverse impact on the State’s budget.  However, I’m not aware of a particularly plausible constitutional challenge to that aspect of the bill.  To my mind, the only plausible challenges to the bill deal with the individual mandate section of the bill.  The states, in and of themselves, are not harmed by virtue of the fact that individual persons within the state will be unconstitutionally required to purchase health insurance.  Admittedly, I haven’t done any thorough or exhaustive research on this question, but this seems to be a difficult hurdle for the states to mount.

Of course, recent Supreme Court decisions have indicated that as long as one party to the suit has standing, the states may join in the suit.  Therefore, it seems that as long as the states can join an individual who is fined for refusing to purchase health care under the law, they have standing.  However, there are two problems with this: first, looking at the complaint, they have not done so.  There are no individual plaintiffs. That, however, is a fixable problem.  Second, and somewhat less fixable (in the short term) the individual plaintiffs will not be required to purchase health insurance until 2014.  I am not sure if this counts as imminent harm. It might, and there might be case law demonstrating that it passes muster, but I haven’t seen any in the legal materials provided to me by the states to evaluate that at all.  It is also at least possible that the states may have parens patriae standing to sue here, but I am simply not well-versed enough in the doctrine to evaluate that. 

Additionally, even if the States can demonstrate standing here, the substantive problems with the challenge are not insignificant.  There can be no doubt that the Federal Government currently undertakes a great amount of activity that was never contemplated by the founders under the auspices of the Commerce Clause.  However, that very fact itself indicates that this activity has been undertaken with the constant and regular acquiescence of the Supreme Court.  However, recent Supreme Court decisions such as United States v. Lopez and United States v. Morrison may signal the turning of the tide.

Conceptually, if there is a law that demands that the Supreme Court reassert a reasonable interpretation of the Commerce Clause, this is it.  Obamacare mandates that individual citizens purchase a product, on penalty of fines, that is not available in interstate commerce, all theoretically in the name of regulating interstate commerce?  Just to speak the concept aloud is to be struck dumb by the breathtaking arrogance of Congress in passing this bill, and the disregard for the Constitutional limits on their power.  Of course, States (being entities of general powers as opposed to enumerated powers) might certainly decide to do this, if that is their prerogative, but there is absolutely no justification to be found within the Constitution for the breadth and scope of this action.

In the final analysis, we are treading in uncertain territory here.  There is no reasonable argument that what Congress has done is actually within the scope of its powers under the Commerce Clause, as envisioned by the founders.  However, until United States v. Lopez, suits brought challenging the constitutionality of Congressional actions on that ground were DOA.  Given the new composition of the court, trying to analyze where Supreme Court will come down on this question is a frank guessing game.  The most important challenge for the States at this point is to get their ducks in a row on the standing question and let the chips fall where they may.