In a major blow to an Obama administration seeking to show that the lawsuits challenging Obamacare are “frivolous” by scoring an early dismissal—something it hoped to do before the November elections—a district court ruled to the contrary this morning.  Federal District Judge Henry Hudson rejected the motion by the United States to dismiss Virginia’s lawsuit and allowed it to proceed.

This is the first decision involving a major case challenging the constitutionality of the individual insurance mandate, and so its impact may reverberate beyond this individual case.  The United States made two jurisdictional arguments and two arguments on the merits for a preliminary dismissal of Virginia’s challenge, all of which were rejected by the district judge.

At this preliminary stage of the litigation, the jurisdictional arguments presented the most serious obstacle. The judge seemed to concede that the precedents were not absolutely clear, in part because the federal statute’s reach is novel and the state’s interest in challenging it is thus without much judicial precedent.  However, the district court ruled that Virginia has standing to challenge the federal individual mandate provision, not primarily because it was acting its “parens patriae” capacity to prevent general harm to its citizens, but because it was acting to protect its own sovereign interest in enacting a state provision that conflicts with the federal statutory scheme.

The court also ruled the claim was ripe for adjudication, even though the insurance purchase requirement does not affect individuals until 2014, because the Commonwealth “must revamp its health care program to ensure compliance with the enactment’s provisions” and that such actions are not hypothetical or distant.

On the merits, we are surprised the judge took as much space to conclude that Virginia stated a valid cause of action, namely, that Congress had exceeded its constitutional authority with the individual mandate.  At this stage in the litigation and on the particular motion that was filed (a Federal Rule of Civil Procedure 12(b)(6) motion to dismiss for the legal wonks), the judge need not and could not rule on who will win or even if one side is more likely to win.  The only question is whether Virginia stated a legal cause of action (or legal theory) that is cognizable in law.  Virginia certainly has at least a valid substantive theory to challenge the law, because someone with standing is always able to challenge the constitutionality of a statute on the ground that Congress has no constitutional authority to enact it, QED.  Indeed, we think Virginia ultimately should win on the merits, but it is even easier to show that the correct form of the argument was set forth in the complaint.  Nevertheless, unless the district court’s jurisdictional rulings are overturned, Judge Hudson’s discussion of the constitutional issues is somewhat instructive.  It shows he is not hostile or dismissive of Virginia’s claims, which is surely good for liberty.

Co-authored by Robert Alt.