United States District Court, D. Columbia
STATE OF WEST VIRGINIA, ex rel. Patrick Morrisey, Plaintiff:
Elbert Lin, LEAD ATTORNEY, OFFICE OF THE WEST VIRGINIA
ATTORNEY GENERAL, Solicitor General, Charleston, WV; Julie
Marie Blake, OFFICE OF THE WEST VIRGINIA ATTORNEY GENERAL,
Charleston, WV; Misha Tseytlin, OFFICE OF THE ATTORNEY
GENERAL/WV, Charleston, WV.
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant:
Daniel Schwei, LEAD ATTORNEY, U.S. DEPARTMENT OF JUSTICE,
Civil Division, Washington, DC.
PACIFIC LEGAL FOUNDATION, Amicus: Joshua P. Thompson, LEAD
ATTORNEY, PACIFIC LEGAL FOUNDATION, Sacramento, CA.
Mehta, United States District Judge.
of the Patient Protection and Affordable Care Act ("
ACA" or " the Act" ), all individual health
insurance plans are required to comply with eight federally
mandated market requirements, unless a plan qualifies for a
" grandfathering" exception. Responsibility for the
enforcement of these market requirements is
shared by the federal government and the States. The ACA does
not compel the States to enforce the market requirements, but
provides them with the option of doing so if they desire. If
a State declines to enforce the Act or does so inadequately,
the ACA provides that " the Secretary [of Health and
Human Services] shall enforce" the Act's provisions
" in such State."
all health insurance plans that went into effect or were
renewed after January 1, 2014, were required to be compliant
with the ACA's eight market requirements. However, after
some individuals and small businesses received cancellation
notices from their insurance companies, the federal
government--through Defendant Department of Health and Human
Services (" HHS" )--instituted a change in policy
(" the Administrative Fix"  or " the
Fix" ). On November 14, 2013, HHS announced that,
subject to certain conditions, it would refrain from
enforcing the eight market requirements through October 1,
2014, thereby allowing consumers to retain coverage under
non-compliant policies until that date. HHS further announced
that it would encourage States to follow the federal
government's lead and refrain from enforcing the eight
market requirements. States, however, remained free to
enforce the market requirements if they so wished. On March
5, 2014, HHS extended the Administrative Fix until October 1,
State of West Virginia brought this action to challenge the
Administrative Fix, claiming that the Fix violates the
Affordable Care Act and the Administrative Procedure Act;
constitutes an unlawful delegation of federal executive and
legislative power to the States; and contravenes state
sovereignty under the Tenth Amendment. The merits of the
State's contentions, however, must take a back seat to
the threshold issue advanced by HHS in its Motion to Dismiss:
that West Virginia lacks standing to challenge the
Virginia asserts that it has standing because the
Administrative Fix forces it to make an untenable choice:
either regulate under the ACA or decline to regulate, in
which case non-compliant policies will be sold within West
Virginia's borders because of HHS' policy decision
not to enforce the ACA's market requirements. These
circumstances, West Virginia argues, have caused it to suffer
two cognizable injuries. First, West Virginia contends that
HHS' policy decision not to enforce the ACA has shifted
enforcement responsibility to the State and made it the
" exclusive and unfettered" enforcer of the
ACA's eight market requirements within its borders. This
purported shifting of enforcement responsibility, West
Virginia claims, has caused it to suffer an "
anti-commandeering" injury under the Tenth Amendment.
Second, West Virginia contends that the shift in enforcement
responsibility has made the federal government less
politically accountable for the non-enforcement of the ACA at
the expense of the States. West Virginia alleges that this
heightened " political accountability" to its own
citizens constitutes a cognizable injury.
court rejects these arguments and concludes that West
Virginia lacks standing to challenge the Administrative Fix.
The State's asserted injuries are not the kind of
concrete and particularized injury-in-fact that is actual or
imminent--and not conjectural or hypothetical--that is
required to establish standing under the
standards set by Lujan v. Defenders of Wildlife, 504
U.S. 555, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). Therefore,
because this court lacks subject matter jurisdiction over
this matter, the court grants Defendant's Motion to
enacted the Patient Protection and Affordable Care Act
(" ACA" or " the Act" ) on March 23,
2010. Def.'s Mem. in Supp. of Mot. to Dismiss, ECF No.
13-1, at 4 [hereinafter Def.'s Mem.]. Among the reforms
initiated by the ACA was a requirement that all individual
health insurance plans that went into effect or were renewed
after January 1, 2014, were to meet eight federally mandated
market requirements, unless they fell under a grandfathering
exception. Compl., ECF No. 1, ¶ 20.
established a regime of " cooperative federalism"
to enforce these requirements. Under the Act, States are the
first line of enforcement and can elect to use their
resources to enforce the ACA, consistent with their own state
laws. Id. ¶ ¶ 25-26; 42 U.S.C. §
300gg-22(a)(1) (" [E]ach State may require that health
insurance issuers . . . meet the requirements of this part
with respect to such issuers." ). If a State elects not
to enforce the market requirements, the ACA then tasks the
Secretary of the Department of Health and Human Services
(" HHS" ) with making a " determination"
as to whether " a State has failed to substantially
enforce a provision (or provisions) in this part with respect
to health insurance issuers in the State." 42 U.S.C.
§ 300gg-22(a)(2). If the Secretary makes such a "
determination," the ACA provides that " the
Secretary shall enforce such provision (or
provisions) . . . in such State." Id. (emphasis
added). In other words, if a State decides not to enforce the
market requirements, the ACA authorizes the federal
government to enforce the market requirements within a
2013, before the ACA's market requirements went into
effect, health insurance companies began sending insurance
cancellation letters to customers whose plans were neither
covered by the grandfathering exception nor compliant with
the ACA-mandated market requirements. Compl. ¶ 35. In
response to those cancellations, on November 14, 2013, HHS
instituted a policy change--what West Virginia refers to as
" the Administrative Fix" --and announced that it
would not, subject to two conditions, enforce the eight
ACA-mandated market requirements until October 1, 2014.
Id. ¶ ¶ 40, 44-45. Health insurers would
be permitted to continue selling non-compliant insurance
coverage as long as (1) the plans had been in effect on
October 1, 2013, and (2) the insurers informed affected
customers of their plans' non-compliance and the
existence of the ACA's health insurance exchanges.
Id. ¶ ¶ 45-46. HHS " encouraged"
the States to adopt the same transitional policy and thus to
refrain from state-level enforcement of the market reforms.
Id. ¶ 49 & Ex. 6 at 3. On March 5, 2014, HHS
extended the Administrative Fix until October 1, 2016.
Id. ¶ ¶ 51-52.
West Virginia believes that its citizens should be able to
keep their individual health insurance plans if they like
them." E.g., id. ¶ 6. To that end, and in
anticipation of the Act going into effect, West Virginia had
given insurance carriers " the option to permit early
renewal for 2013 policyholders," so that they could
extend their current, possibly non-compliant insurance plans
through 2014. Compl., Ex. 13, at 2. Due to this prior action,
West Virginia Insurance Commissioner Michael D. Riley
initially announced that West Virginia would not "
accommodate the Administrative
Fix" because individuals and businesses had "
already made extensive changes to comply with the new
law." Compl. ¶ ¶ 80-81 (internal citation
omitted) (internal quotation marks omitted). After HHS
extended the Administrative Fix until 2016, Commissioner
Riley announced that West Virginia would refrain from
enforcement. Id. ¶ 82-83. The State "
committed not to restrict the renewal of certain
non-compliant plans for policy years that end by October
2017," and left it " up to the [insurance] carriers
as to whether they want[ed] to offer non-compliant plans
through that much longer period." Id. (citation
omitted) (internal quotation marks omitted).
months after HHS extended the Administrative Fix, West
Virginia filed this lawsuit. Its Complaint specifies the
nature of its alleged injury. West Virginia alleges that the
Administrative Fix caused it injury " by forc[ing it] to
become the sole and exclusive enforcer of federal law within
its borders" and by " reduc[ing] the political
accountability of the federal government at the expense of
the States." Id. ¶ ¶ 68-69.
after it filed its Complaint, West Virginia filed a Motion
for Summary Judgment. ECF No. 7. HHS then moved to stay
proceedings on the Motion for Summary Judgment, so that the
court first could resolve the question of its subject matter
jurisdiction over this suit. ECF No. 10. Judge Walton, who
was then presiding over this case, granted HHS' motion,
staying further briefing on West Virginia's Summary
Judgment Motion. Order, ECF No. 17.
filed its Motion to Dismiss on October 17, 2014. ECF No. 13.
The court heard argument on the Motion on September 3, 2015.
ECF No. 32.
motion to dismiss brought, as here, under Federal Rule of
Civil Procedure 12(b)(1), a federal court must presume that
it " lack[s] jurisdiction unless the contrary appears
affirmatively from the record." DaimlerChrysler
Corp. v. Cuno, 547 U.S. 332, 342 n.3, 126 S.Ct. 1854,
164 L.Ed.2d 589 (2006) (citation omitted) (internal quotation
marks omitted). The burden of demonstrating the contrary,
including establishing the elements of standing, " rests
upon the party asserting jurisdiction." Kokkonen v.
Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114
S.Ct. 1673, 128 L.Ed.2d 391 (1994); Lujan v. Defenders of
Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d
351 (1992). Standing must be demonstrated " for each
claim" and " for each form of relief sought,"
DaimlerChrysler, 547 U.S. at 352 (citation omitted)
(internal quotation marks omitted), " with the manner
and degree of evidence required at the successive stages of
litigation," Lujan, 504 U.S. at 561.
on a motion to dismiss, the court must accept "
well-pleaded factual allegations as true and draw all
reasonable inferences from those allegations in the
plaintiff's favor." Arpaio v. Obama, 797
F.3d 11, 19 (D.C. Cir. 2015). The court need not, however,
assume the truth of legal conclusions, see
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct.
1937, 173 L.Ed.2d 868 (2009), nor " accept inferences
that are unsupported by the facts set out in the
complaint," Islamic Am. Relief Agency v.
Gonzales, 477 F.3d 728, 732, 375 U.S.App.D.C. 93 (D.C.
Cir. 2007). " Threadbare recitals of the elements of
[standing], supported by mere conclusory statements, do not
suffice." Iqbal, 556 U.S. at 678. If a
complaint does not contain sufficient factual matter "
to state a claim [of standing] that is plausible on its
face," it must be dismissed.
Id. (quoting Bell A. Corp. v. Twombly, 550
U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007));
see generally Arpaio, 797 F.3d at 19-20
(setting forth the standard of review for a motion to dismiss
that asserts a lack of standing under Rule 12(b)(1)). In
evaluating a Rule 12(b)(1) motion, a court has broad
discretion to consider relevant and competent
evidence--including materials outside the pleadings.
Finca Santa Elena, Inc. v. U.S. Army Corps of
Eng'rs, 873 F.Supp.2d 363, 368 (D.D.C. 2012) (citing
5B Charles Wright & Arthur Miller, Federal Practice &
Procedure § 1350 (3d ed. 2004)).
Article III of the U.S. Constitution, the jurisdiction of the
federal courts is limited to " Cases" and "
Controversies." Art. III, § 1. The Constitution
does not define either of those terms, and so federal courts
have developed the doctrine of standing to identify exactly
which cases and controversies fall within the scope of
federal jurisdiction. Lujan, 504 U.S. at 560. At a
minimum, in order to establish that it has standing, a
plaintiff must allege: (1) injury-in-fact suffered by the
plaintiff; (2) a causal connection between the injury and the
complained-of conduct; and (3) a likelihood that the injury
will be " redressed by a favorable decision" from
the court. Id. at 560-61 (citation omitted)
(internal quotation marks omitted). Although HHS contends
that West Virginia cannot meet any of the three elements,
Def.'s Mem. at 11-13, the court only focuses on the
West Virginia's Alleged Injuries
cursory reading of West Virginia's Complaint reveals that
the injuries it asserts are not among the traditional kinds
of injuries that the Supreme Court has recognized as
sufficient to confer standing on a State that is challenging
federal action. West Virginia does not claim that the
Administrative Fix has caused it to suffer any financial
injury. See, e.g., Nat'l Fed'n of Indep.
Small Bus. v. Sebelius, 132 S.Ct. 2566, 2604-05, 183
L.Ed.2d 450 (2012); Tr. of Oral Arg., ECF No. 32, at 19
[hereinafter Tr.] (conceding that West Virginia has not
expended any state funds as a result of the Administrative
Fix). Nor does it allege that it has been compelled by the
federal government to take a specific action. See,
e.g., New York v. United States, 505 U.S. 144,
160, 112 S.Ct. 2408, 120 L.Ed.2d 120 (1992); Pl.'s
Opp'n to Mot. to Dismiss, ECF No. 20, at 30-31
[hereinafter Pl.'s Opp'n] (" The State has not
claimed harm from having to take any particular action."
). Nor does it contend that it brings this action in its
capacity as parens patriae to protect its
citizens' interests. See, e.g., Alfred L.
Snapp & Son, Inc. v. Puerto Rico, 458 U.S. 592, 597-610,
102 S.Ct. 3260, 73 L.Ed.2d 995 (1982); Compl. ¶ ¶
67-79 (describing the alleged injury to West Virginia without
any mention of harm to its citizens); Pl.'s Opp'n at
West Virginia alleges that it has suffered two, less
traditional types of injury: (1) harm from " being
forced to become the sole and exclusive enforcer of federal
law within its borders," Compl. ¶ 68, and (2) harm
from " the Administrative Fix reduc[ing] the political
accountability of the federal government at the expense of
the States," id. ¶ 69. Though West
Virginia presents these as distinct harms, the court agrees
with HHS that, upon closer scrutiny, they actually collapse
into one injury: the enhanced " political