Appeals Court Tosses VA Challenges to Health Reform Law

A federal appeals court on Thursday overturned a lower court and rejected Virginia's challenge to the federal healthcare reform law, ruling that the state lacked the standing to proceed with the suit.

The 4^th Circuit Court of Appeals court tossed aside a ruling by U.S. District Judge Henry Hudson last December, who had sided with Virginia's Republican Attorney General Kenneth Cuccinelli and ruled that the individual mandate in the Affordable Care Act was unconstitutional. The appeals court sent the suit back to Hudson and told him to dismiss it.  

Also on Thursday, the appeals court rejected a separate lawsuit from Liberty University in Lynchburg, VA, that challenged the constitutionality of the individual mandate. The appeals court judges ruled that the university had no legal standing to challenge the mandate because it has not yet gone into effect.

In the Virginia challenge, Cuccinelli argued that the individual mandate to buy health insurance or pay a penalty conflicted with the Virginia Health Care Freedom Act, which says that state residents are not required to buy health insurance. The law enacted in Virginia in 2010 as Congress was debating the Affordable Care Act. 

"Under Virginia's standing theory, a state could acquire standing to challenge any federal law merely by enacting a statute – even an utterly unenforceable one – purporting to prohibit the application of the federal law," Judge Diane Gribbon Motz in her opinion.

"The VHCFA regulates nothing and provides for the administration of no state program.  Instead, it simply purports to immunize Virginia citizens from federal law. In doing so, the VHCFA reflects no exercise of 'sovereign power,' for Virginia lacks the sovereign authority to nullify federal law," Motz wrote.

The judges in the 4^th Circuit Court of Appeals -- all of whom were appointed by Democratic presidents -- did not comment on the merits or the constitutionality of the healthcare reform laws. Still, it was a clear procedural victory for the Obama administration in a case that is expected to be heard next year in the U.S. Supreme Court, with a ruling expected next summer.

The law is the subject of multiple suits by Attorneys General in 26 states, most of whom are Republicans. For a status update on the various legal challenges to the healthcare reform law, click here.