Since the Patient Protection and Affordable Care Act ("Act") was passed by Congress and signed into law in March 2010 by President Obama, it has been subject to several legal challenges, and various circuits throughout the country have ruled on the legality of different parts of the Act. Last week, the Third Circuit rejected a challenge to the Act's individual mandate because the plaintiffs did not have standing to challenge the law. New Jersey Physicians, Inc. v. President of the United States, ____ F.3d ____ (3d Cir. 2011).
There were three plaintiffs in the case: 1) Mario A. Criscito, M.D., a licensed New Jersey physician; 2) "Patient Roe," one of Dr. Criscito's patients; and 3) New Jersey Physicians, Inc., a non-profit corporation whose main purpose is to advance patient access to affordable health care. The plaintiffs filed suit against four federal officials: President Obama; Timothy Geithner, the Secretary of Treasury; Eric Holder, the Attorney General; and Kathleen Sebelius, the Secretary of Health and Human Services.
In alleging that the Act was unconstitutional, plaintiffs claimed that two sections of the Act exceeded Congress's power to pass laws. The first was the Act's minimum essential coverage provision, which is known as the individual mandate, 26 U.S.C. § 500A. When it becomes effective in 2014, the mandate will require all non-exempt applicable individuals to have a certain minimum level of health insurance or pay a monetary penalty. The minimum coverage can be obtained in several ways, including by enrolling in employer-sponsored insurance plans, individual plans, or certain government-sponsored programs. The second relevant section of the Act was 26 U.S.C. § 4980H, the employer responsibility provision, which also takes effect in 2014. The provision applies only to employers that have fifty or more full-time employees on average over a calendar year and it penalizes such employers if they fail to offer those employees the chance to enroll in an employer-sponsored program that satisfies the individual mandate's minimum insurance level.
The District Court for the District of New Jersey granted the defendants' motion to dismiss. In so doing, the court ruled that the plaintiffs lacked standing to maintain their lawsuit. In arriving at that result, the court did not address the merits of the plaintiffs' challenge. The Third Circuit affirmed.
The Third Circuit began its analysis by reviewing well-established precedent concerning standing, the elements of which are: 1) an injury in fact; 2) a causal connection between the alleged injury and the conduct that allegedly caused the injury; and 3) a showing that a favorable decision will provide redress for the injury. To satisfy the first element, a plaintiff must allege an injury that is: 1) concrete and particularized; and 2) actual or imminent. Turning to the defendants' argument that the plaintiffs lacked standing, the Third Circuit noted that only one of the three plaintiffs needed to establish standing in order for the court to consider the merits of the challenge to the Act, but it determined that none of the plaintiffs had standing.
The Third Circuit first analyzed Patient Roe’s status. In the complaint, that plaintiff alleged that he was a patient of Dr. Criscito who paid for his care. Patient Roe further claimed that he was a citizen of New Jersey who chose who and how to pay for the care he received from Dr. Criscito. The Third Circuit found that those allegations were "factually barren" with respect to standing because they did not reveal who Roe paid or how he paid. Moreover, the court explained that Roe's allegations failed to indicate how Roe was presently impacted by the Act or the mandate, and that they also failed to show if he would be impacted in the future. In that regard, the allegations were insufficient to demonstrate the threshold issue of whether Roe would be subject to or exempt from the individual mandate. The court stated that "we simply cannot conclude that there is a realistic danger or genuine possibility that Roe will suffer a cognizable imminent injury resulting from the individual mandate."
The Third Circuit determined that the complaint was "similarly deficient" with respect to Dr. Criscito. The complaint only disclosed that he was a doctor who treats patients and that some of those patients pay him and do not rely on third-party payors. The Third Circuit pointed out that those allegations stated "very little[.]" As with plaintiff Roe, the court noted that the complaint did not set forth facts to prove that Dr. Criscito suffered or was about to suffer an imminent injury, and that the plaintiffs only argued that he might suffer some kind of injury in the future, which is insufficient to establish standing. The court also found that the complaint did not prove that Dr. Criscito would be harmed by the employer responsibility provision because there were no facts in the complaint to even prove that he would be subject to that provision. Lastly, the Third Circuit ruled that plaintiff New Jersey Physicians, Inc. could not establish standing.
In conclusion, the court declared that "the plaintiffs have not met their burden in pleading facts that establish the requisite injury in fact and therefore fail to demonstrate standing. We will affirm."