Note: Paul Genchur, Hedgeye's legal analyst offers his take on the Fifth Circuit's request for additional briefs on standing:
The Fifth Circuit requested supplemental briefing to address the standing of the House of Representatives and interested Democratic state attorneys general to intervene and pursue the appeal to preserve Obamacare. The appeals court noted a recent Supreme Court decision that rejected the standing of the Virginia House of Delegates to appeal a court decision on racial gerrymandering.
The collective input of responsive filings will be critical to the panel when it holds oral arguments in early July. But the request for briefing highlights a genuine risk that the House of Representatives cannot pursue the appeal. Without the Senate participating, the court could rule the House cannot by itself represent the interests of the legislative branch of government that, as a complete institution, passed the ACA for President Obama’s signature.
The states likely represent a different interest, recognizing that the implementation of various ACA provisions has an enormous impact on their budgets and health care access for their citizens and residents. Still, the court’s inquiry extends to the intervening states and whether they can keep the appeal alive.
With the Trump Administration switching sides and now fully supporting the key rulings of Judge O’Connor in the District Court, the potential threat to the House and the states bringing the appeal suggests the case could be tossed as moot. Obviously, if no one else can pursue the appeal following the Administration’s leap to the other side, the case would indeed be moot.
There are exceptions to the general rule and the intervening states will consider whether a mootness exception could apply here. For example, one of the major issues on appeal is whether plaintiffs in the lower court had standing to challenge the constitutionality of the individual mandate. Without a financial penalty for failure to purchase insurance, there is arguably no “injury in fact,” the key test for determining standing to bring the lawsuit. The court may be reluctant to dismiss an appeal without an opportunity to determine whether Judge O’Connor had jurisdiction to hear the case in the first place.
The court could be reluctant to dismiss the case as moot without providing an opportunity to review the lower court standing issues. The range of possible procedural outcomes will be clearer after numerous parties brief the issues raised in the appeal court’s supplemental request.
