The second case mostly turns on a narrower question: whether Virginia had "standing" to file its lawsuit, given that the state sued in federal court on behalf of all of its citizens, whereas the Liberty case involved individual plaintiffs. The lower court had little trouble getting past the standing issue in striking down the mandate. The panel today can't seem to get over it. Katyal opens his second argument by pointing out that states may not simply challenge all federal action on behalf of their citizens; if they could, states could file federal suits opposing the war in Afghanistan or declining to have state residents pay their Social Security taxes. Wynn points out that such lawsuits are a useful way to get to the merits of such cases. Katyal replies that a better way of getting to the merits is with plaintiffs who have standing to bring suit—like the Liberty University plaintiffs.
Katyal explains that the text of the statute says that no Virginian can be forced to purchase health insurance. Davis, laughing aloud, asks how Virginia plans to enforce that.
Motz asks Katyal whether his side loses if the panel determines it's inactivity being regulated. Katyal says calling "activity" vs. "inactivity" isn't the central question. "Those are just words they use."
"Words they use a lot of times," chuckles Motz. Katyal says again that the uninsured cost $43 billion per year, whereas the whole budget for the federal judiciary is just $7 billion. Motz, on a roll, grins, "You get a lot of bang for the buck with that judiciary."
Virginia Solicitor General E. Duncan Getchell Jr. argues on behalf of Attorney General Cuccinelli, who mostly sits at the counsel table shaking his head in bafflement that nobody can talk about anything but standing. "So a state could challenge any federal statute in court as long as the state passed a law?" asks Motz. Then Wynn presses Getchell on where the state has found standing to bring suit on behalf of all its citizens. Getchell replies that "maintaining federalism is in the interest of its citizens." Getting increasingly riled by a panel that is quite literally giggling at the mental image of Virginia enforcing its "nobody has to buy health insurance" law, Getchell eventually huffs that "co-sovereignty is not to be deprecated," and that "I don't know why it's a low trick to pass a law." (It's not clear to me that a panel comprised of two African-Americans and a woman, sitting in Richmond no less, will be all that receptive to arguments about the wonders of nullification. But Getchell seems undeterred.)
Wynn admits he's bothered at the prospect that a state can just create standing to file a federal lawsuit by enacting a statute, and Katyal revisits this argument on rebuttal. He closes by reminding the panel that "activity and inactivity are not a touchstone that map onto the Commerce Clause." What matters in the end is whether there is an effect on interstate commerce.
Don't let anyone tell you that this appeal was over as soon as it began merely because of who appointed this panel. This case was always going to be a tough one to win, and the reason has nothing to do with which president appointed the judges. The case is tough on the merits, as they say. The argument that the individual mandate is flatly unconstitutional because 1) it's unprecedented; and 2) it's a fast train to forced broccoli is fanciful and interesting. But it has limited doctrinal merit. The panel today was respectful of both those contentions, and more respectful of the second than was absolutely warranted. But as each judge insisted at various times today, they are ultimately constrained by the words of the Constitution itself, the case law, and the Commerce Clause doctrine—and for those reasons alone, this law will be upheld.
Correction, May 11, 2011: This article originally misspelled Judge Noman Moon's name as "Normal." (Return to the corrected sentence.)