Do States Have Standing?

Now that 14 states have sued to block the new health care law, the next question in the continuing federalist battle over this issue is whether the states have "standing" to sue. Under federal law, you can't challenge a law in court just because you don't like it; you have to show that the law injures you in some way. Do states satisfy this standard with respect to the new health care law?

First off, this question is a good illustration of why the rules of standing law are so often silly. As I have explained at length, standing doctrine doesn't serve much discernible purpose. The new health care law, and particularly its individual health insurance mandate, are obviously going to be challenged at some point, and courts will resolve the issue of the mandate's constitutionality. States would make excellent plaintiffs to bring these challenges -- they will have good lawyers and make all the arguments against the new law's constitutionality. And an important part of the case is whether the states or the federal government should be regulating health insurance. So what do we care whether the states are "injured" in some legal sense? Is there any actual value to waiting until suit is brought by some individual who has to pay the tax penalty for not having health insurance (and who would therefore clearly have standing to challenge it)? The courts are going to resolve this law's constitutionality one way or another, and it's hard to see what difference it makes who the plaintiff is.

Having said that, there is some real doubt as to whether the states have standing to challenge the health insurance mandate. The mandate applies to individuals, not to states. According to the states' complaint, many other parts of the act affect states directly, but it's not clear how the mandate does. So the direct injury could well be lacking. And that's not to mention that the mandate doesn't even kick in until 2014, making the suit somewhat premature.

States might try to assert standing under the parens patriae doctrine, under which governments can assert the rights of their citizens. But the Supreme Court declared long ago in Massachusetts v. Mellon that the states cannot use this doctrine to sue the United States. The Court said, "It cannot be conceded that a State, as parens patriae, may institute judicial proceedings to protect citizens of the United States from the operation of the statutes thereof." That's exactly what the states are trying to do with the present lawsuit, so it seems to be forbidden. For the same reason, it seems doubtful that a state passage of a law purporting to declare that citizens of that state don't have to buy health insurance if they don't want to makes any difference to the state's standing -- that's just more of the same.

On the other hand, in the recent case of Massachusetts v. EPA the Supreme Court took a more generous view and said that states were entitled to "special solicitude in our standing analysis." The standing of Massachusetts in that case was based primarily on its ownership of affected land (which might have been swamped by ocean level rises caused by global warming), but the Court included a footnote giving a narrow reading to Massachusetts v. Mellon and hinting that states could have standing to assert "quasi sovereign interests." The same footnote also, however, reiterates that states cannot sue to protect their citizens from the operation of federal statutes.

So while one hesitates to be dogmatic, and while there are cases that could be cited on both sides, the claim of the states to have standing to challenge the health care mandate seems doubtful. If it were up to me, I would say, let them go ahead, we might as well get these issues resolved now as later, but the courts may require us to wait until an individual with clearer standing brings suit.

Smart Aleck

By the way, in critiquing Chief Justice Robert's silly dissent in this week's standing case, I neglected to mention what he obviously regarded as his best shot. You will recall that the case involved potential plaintiffs who sold their legal claims to "aggregators," who sued the defendants and remitted any proceeds to the original claimants. The aggregators received a fee, but the fee was not dependent on the amount recovered in the lawsuits. Therefore, the dissenters argued, the aggregators had no interest in the lawsuits and so lacked standing to sue.

As I observed before, all nine Justices appear to agree that the aggregators standing would have been clear if only their contract with the original claimants had provided that the aggregators could retain one dollar out of the proceeds of a successful lawsuit. The Chief Justice's response? That makes no difference, because "Article III is worth a dollar."

What does that even mean? Have smart-alecky, snarky remarks taken the place of legal analysis? Apparently they have. The Chief Justice, that cool hipster, also said, "When you got nothing, you got nothing to lose." Bob Dylan, Like A Rolling Stone, on Highway 61 Revisited (Columbia Records 1965).

The Dylan quote at least has some meaning. "Article III is worth a dollar" leaves me baffled. There's a difference between smart remarks and cogent rebuttal.

Standing in Quicksand

Late June, when the Supreme Court ends its annual term, is the usual time for badly reasoned, hastily written decisions. Today's dissent in Sprint Communications v. APCC Services, joined by an embarrassingly substantial number of Justices, continues this fine tradition.

Today's case revisits one of my longstanding interests, the arcane doctrine of "standing to sue." The basic point is that you can't bring a lawsuit unless you're affected by the defendant's challenged behavior. You may be upset that the government is tapping phones without warrants and holding prisoners in Guantanamo Bay without judicial oversight (well, until recently), but you can't sue to claim that these actions are illegal unless you can show that your phone is being tapped or that you are being held at Guantanamo. Suits by well-meaning strangers are forbidden.

Today's case presents a curious variation on the usual fact patterns of environmentalists complaining about harm to areas they've never visited or parents complaining about racial discrimination at schools their children don't attend. In today's case, the plaintiff was suing for good old money -- it just wasn't exactly the plaintiff's money.

The case concerned the fees charged by payphone operators to long-distance carriers for calls made using access codes or 1-800 numbers. When the carriers don't pay, the operators have to sue to collect these fees, and because the fees are too small and numerous to be worth the trouble, the operators have taken to assigning their claims to "aggregators" for suit. The aggregator buys up many of these claims, sues on them, and then (by contractual agreement) remits the proceeds to the payphone operators. The aggregator gets paid a fee, but the fee is not based on success or failure in the lawsuit.

The law has long permitted assignment of monetary claims, and assignees have long been recognized as having standing to sue. Indeed, in 2000, the Supreme Court reaffirmed this rule, in a "qui tam" case, which involves the United States effectively assigning a portion of a claim of its own to a private party. The Court held that qui tam plaintiffs have standing.

But here's the question: does this standing exist if the assignee has contractually agreed to give back 100% of the money gained by suing to the assignor?

Fortunately, five Justices had the good sense to say yes. Surveying cases from over the centuries, the Court determined that this form of suit has in fact long been permitted and saw no good reason to change.

But four Justices dissented. Adhering firmly to formalism, they inisisted that if the plaintiff is obliged to give back 100% of the proceeds, it has no interest in the suit and therefore no standing.

Now, apart from the fact that I think justiciability doctrine is mostly a lot of purposeless nonsense anyway, this dissent seems even more absurd than usual.

The dissent admits that assignees normally have standing to sue. The dissent accepts the Supreme Court's 2000 reaffirmation of this principle. The only problem, the dissent says, is that in this case the assignee has agreed to give back 100% of the lawsuit proceeds and retains no interest in the outcome.

Well, as the Court points out, if one really believes that, then all the parties would need to do to arrange for a lawsuit that everyone would recognize as valid would be to agree that the assignee plaintiff is entitled to retain one dollar of the proceeds in the event the lawsuit succeeds.

Even the dissent admits this! (Page 8 -- "Perhaps it is true that 'a dollar or two' . . . would give respondents a sufficient stake in the litigation.")

I'm sorry, but once this is admitted, surely anyone could see that the dissent is utterly pointless? The dissent says that "the ease with which respondents can comply with the requirements of Article III is not a reason to abandon our precedents." Again, I'm sorry, but the law should not turn on meaningless distinctions. The whole trend of the law over centuries is to eliminate meaningless, formalistic requirements. We could require plaintiffs to say "pretty please" when filing their complaints, and if that were the tradition I'm sure some fusty old judges would say that the ease with which it could be done is no reason to abandon the rule, but it is precisely the reason.

The law should turn on real distinctions, not pointless ones. It's one thing (and usually, a pointless enough thing) to say that people can't sue if they aren't personally affected. But to say that potential plaintiffs are allowed to sell their claims, and the assignees are allowed to sue on them, and even that the assignees are allowed to give back most of the proceeds to the original potential plaintiffs, but only if the assignee gets to keep at least a dollar of the claim, would be pointless beyond description. And that's what the dissent says.

There will always be some people whose fondness for following rules leads them to act supremely foolishly when they can't perceive that the rules are causing an absurdly silly result. But one would hope there would be fewer than four at a time on the Supreme Court. Thank goodness that at least there were fewer than five.

Standing Down

Almost done with the Supreme Court Term! Many exciting decisions today. My favorite, of course, is Hein v. Freedom from Religion Foundation, the standing decision.

My, what hath the Court wrought. The rule has long been that if Congress directs federal money to be spent on religion, any taxpayer may challenge the expenditure as violative of the Establishment Clause of the Constitution (Flast v. Cohen). This rule has existed uncomfortably with the rule that if Congress directs property to be given to a religion, taxpayers lack standing to challenge the transfer (Valley Forge v. Americans United) -- not much of a distinction, you might say -- that is, if you were rational.

Today, the Court adds the following stunningly logical conclusion: if the Executive Branch directs funds toward religion, without congressional authorization, taxpayers cannot challenge the action. So if Congress tells the President to spend money on religion, and the President does it, the action is more vulnerable to challenge than if the President just does it without congressional instruction.

Fortunately, it is hardly necessary to explain how silly this all is. Justice Scalia has done so for us. Concurring in the dismissal of today's case, he explains that "there is simply no material difference" that explains the different results of the cases the Court has decided in this area, and that Valley Forge "achieved the seemingly impossible: It surpassed the high bar for irrationality set by Flast's" distinction of prior cases. Ah, Justice Scalia always knows how to nail bad arguments. He concludes that the whole area is a "jurisprudential disaster."

Justice Scalia is right that the jurisprudence in this area has become impossible. Half the decisions need to go. I would choose the opposite half from him -- taxpayers should have standing to challenge government action that allegedly violates the Establishment Clause. The result might be that the Clause would be enforced. And what would be so terrible about that?

Somewhat amusingly, the dissenters just explain why Flast should lead to standing for today's plaintiffs -- they don't take on Justice Scalia's arguments that Flast should go.

You're Getting Warmer

The Supreme Court ruled yesterday that there is a "well-documented rise in global temperatures," and that the EPA, contrary to its own opinion, has the authority to regulate the emission of greenhouse gases from motor vehicles, and that the agency was also wrong is deciding that it would decline to act even if it had the legal authority to do so. In a drearily predictable 5-4 lineup, the four more liberal Justices ruled in favor of the plaintiffs, the four conservatives ruled for the agency, and Justice Kennedy cast the deciding vote for the plaintiffs.

What was particularly disappointing, from a legal theoretical point of view, was the lineup of votes on the arcane question of "standing," mentioned in this earlier post about another case. The five-Justice majority held that the state of Massachusetts had standing to challenge the EPA's actions because it stands to lose coastal land as a result of the rise in ocean levels from global warming, and that, even if better regulation of motor vehicle emissions wouldn't solve the whole problem, it could at least give the state some relief -- a pretty sensible holding, I would say. All four Justices in the minority disagreed.

Now, all the cases say that the question of standing is supposed to independent of the merits of the case. Whether you're injured by a government action, and therefore entitled to challenge it, is independent of the question of whether the action is illegal. The government might injure you by doing something perfectly legal -- Congress raising your taxes, say -- and you could challenge it, but you'd lose. Or the government could do something illegal that has no effect on you, and then you couldn't challenge it, even though, if a court could reach the merits, it could strike down the action.

So why is it that all five Justices who thought the EPA's action was illegal on the merits also thought the plaintiffs had standing to challenge it, and all four Justices who disagreed on the merits also thought the plaintiffs lacked standing? If the two questions are really independent, wouldn't one expect to find at least one Justice who thought the plaintiffs had standing, but the agency's action was lawful, or unlawful but unchallengeable because the plaintiffs had no standing?

If the two questions were completely independent, so that there was no relationship between them whatever, then the chance that a Justice who agreed with the plaintiffs on standing would also rule for them on the merits of the case would presumably be 50%. Then the odds that all five Justices who ruled for the plaintiffs on standing would also rule for them on the merits, and all four Justices who ruled against the plaintiffs on standing would also rule against them on the merits, would be 1 in 2^9, which is 1 in 512, or about 1/5 of 1%.

Hmmm. My colleague Dick Pierce wrote an article once called "Is Standing Law or Politics," in which he concluded that standing law is not law at all, but just political game-playing by judges. I'm afraid yesterday's decision provides him with more ammunition.

Got standing?

Our esteemed Supreme Court recently heard oral argument in Hein v. Freedom from Religion Foundation. The plaintiff foundation claims that the Bush administration violated the Establishment Clause of the First Amendment ("Congress shall make no law respecting an establishment of religion") by hosting a series of regional conferences on the White House's "Faith-Based and Community Initiatives."

Nonlawyers might think the matter is pretty simple. The Establishment Clause (more or less) prohibits the government from spending money to promote religion. If that's what the White House is doing, a court should hold it unconstitutional and put a stop to it. End of story.

Well, not quite. You might think that it's the federal courts' job to interpret and enforce the Constitution and to make sure that the government behaves lawfully. But you would be wrong. According to the conventional view, the courts' job is to decide cases. In the course of doing so, the courts often have occasion to interpret and enforce the Constitution and to make sure that the government behaves lawfully. But their doing so is only an incident of their actual role, which is to decide cases.

So before a federal court can do anything, it has to be presented with a case. And what exactly constitutes a case? If we had about a month, I could explain most of the answer (and I'm not kidding here, that's how long it takes to cover the issue in class). But for now, the key point is that an essential element of a case is that it be presented by a plaintiff who claims to have been injured by what the defendant is doing. And not just anything constitutes an injury. It has to be something that hurts the plaintiff in a distinctive and individualized way. Just being upset that the government is doing something illegal, even unconstitutional, doesn't count, if the government isn't hurting you with its illegal activity.

A special, somewhat different rule applies, however, in the unique context of Establishment Clause claims. Thanks to a case from the 1960s (Flast v. Cohen), taxpayers are allowed to challenge government expenditures as violative of the Establishment Clause specifically.

But boy, it's complicated. In a later case, the Court held that taxpayers lacked standing to challenge the government's donation of property to a religious organization. The Court distinguished between government spending (in which taxpayers apparently have a legitimate interest) and government disposition of property (not a taxpayer's business). And this week's case is about whether taxpayers have standing to challenge religious spending that comes out of general appropriations, as opposed to a specific appropriation.

Hmm. So taxpayers have an interest if the government just gives money to a religious group, but not if it spends the money on property and then gives the property? And they have an interest in specific appropriations but perhaps not general ones? Someone unfamiliar with the fine distinctions of the legal mind might have to be forgiven for thinking this is crazy.

The problem is that the original rule of Flast just doesn't fit with modern standing doctrine. Let's face it, if a court orders the government to cease illegal expenditures, the impact on any individual taxpayer's taxes is zero. And I don't just mean it's small, because any of us contribute only a tiny amount to any particular government expenditure, I mean it's zero. Taxes are not determined by figuring out the appropriate share each of us must bear of the government's expenditures. Taxes are determined by the tax code. The tax code just imposes a certain percentage tax on income. Government expenditures can go up, down, or stay the same and none of it has any impact on taxes.

I suppose taxpayer plaintiffs might say that if government expenditures go down, by enough, for long enough, the government won't need as much money and Congress will lower taxes. But standing doctrine doesn't allow standing based on such speculation, particularly not speculation that maybe, someday, Congress will pass a statute.

And besides, the speculation isn't even correct. Just look at what Congress actually does. Does it raise taxes when the government needs more money and lower taxes when the government has plenty of money? Ha ha. It lowers taxes when it feels like it and raises taxes when it feels like it. The Republicans always want lower taxes, even when the budget is hundreds of billions in the red.

So trying to fit different taxpayer Establishment Clause claims into modern standing doctrine is hopeless. We either need to overrule Flast or just accept that we've established a special Establishment Clause rule.

The better answer is to accept the special rule. The Establishment Clause was specifically adopted to prevent the government from spending our tax money on religion. Madison famously said that the government can't be allowed to spend even threepence of taxpayer money on religion. Any taxpayer should be allowed to make sure that the Establishment Clause is serving its purpose.

And better still would be to relax standing doctrine altogether in public law cases. The result might be that the Constitution and the laws would be enforced. Could someone tell me what's so terrible about that?