The Fourth Circuit Court of Appeals has issued decisions in two of the many challenges to the insurance mandate in the health care reform law. These decisions are different from the other two appeals court decisions. Recall that the Sixth Circuit found the insurance mandate to be constitutional, while the Eleventh Circuit found it to be unconstitutional.
In the case of Liberty University v. Geithner, the Court, with one dissent, found that it did not have jurisdiction to hear the appeal. The Court found the law's challenge to be a pre-enforcement action seeking to restrain the assessment of a tax. Such pre-enforcement actions are prohibited by Tax Anti-Injunction Act.
The second case, Commonwealth of Virginia v. Sebelius, was also dismissed for lack of jurisdiction, but for a different reason. In this case, Virginia had enacted a statute declaring that the federal government cannot apply insurance mandates to Virginia’s citizens. According to a unanimous Court, this non-binding declaration does not create any genuine conflict with the individual mandate, and thus creates no sovereign interest capable of producing injury-in-fact. Bottom line, the insurance mandate applies to individuals and not states, and thus, Virginia did not have standing to challenge the mandate and the statute does not provide Virginia any countervailing interest in asserting the rights of its citizens.
These are the first cases to be dismissed on jurisdictional grounds and the Liberty case is the first case in which a court has found the insurance mandate to be a tax.
This decision is the result of two appeals from the Virginia district courts. In the Commonwealth case, the District Court for the Eastern District of Virginia found the mandatory insurance provision to be unconstitutional. In Liberty, the District Court for the Western District of Virginia granted the government's motion to dismiss and held the mandatory coverage provision to be constitutional. Both cases were appealed to the Fourth Circuit Court of Appeals.