The Supreme Court created quite a stir on November 26, 2012, by resurrecting from the dead a challenge to the ACA brought by Liberty University.  The Court vacated its earlier denial of Liberty’s petition for certiorari, vacated the 2011 judgment of the Fourth Circuit Federal Court of Appeals dismissing Liberty’s case for lack of jurisdiction, and remanded the case to the Fourth Circuit for further consideration in light of the Supreme Court’s June 28 National Federation of Independent Business decision.

It is important, however, not to read too much into this decision, however, which is likely to lead nowhere.

It is not uncommon for the Supreme Court to grant what are known as GVR (grant, vacate, and remand) orders in lower court cases following a major decision that changes the law.  The Supreme Court granted nearly 800 of them between 2004 and 2006 following a major decision on criminal sentencing.  The usual purpose of a GVR order is to allow the lower court to reconsider an earlier decision in light of a new Supreme Court opinion (or statute) that has changed or clarified the law on which its earlier decision was based.

It is less common for the Court to grant a GVR order on rehearing following a denial of certiorari, but here the Department of Justice, whose opinion had been requested by the Court, did not object to the GVR request.  The Fourth Circuit in the original appeal had held that the courts had no jurisdiction to hear Liberty University’s claims because of the Tax Anti-Injunction Act.  The Supreme Court held in the NFIB decision that the Tax Anti-Injunction Act did not apply to the individual mandate claim, and it remanded the case to the Fourth Circuit “for further consideration” in light of its NFIB decision.

What Will The Fourth Circuit Reconsider?

It is not altogether clear what exactly the Fourth Circuit is supposed to reconsider.  Liberty had raised three issues in its certiorari petition before the Supreme Court:  whether Congress had the power to adopt the individual responsibility provision of the ACA; whether Congress had the power to adopt the ACA’s employer responsibility requirement; and whether the Tax Anti-Injunction Act deprived the federal courts of jurisdiction to hear both claims, as the Fourth Circuit held.

The Supreme Court, of course, held that Congress did have the power to adopt the individual responsibility requirement as a tax, and that the Tax Anti-Injunction Act did not bar the courts from deciding that question, so those two issues are off the table.  The Court did not decide the constitutionality of the employer mandate, which presumably the Fourth Circuit will consider further.  But the Fourth Circuit would have to reject decades of law to hold that Congress cannot regulate employee benefits under the Commerce Clause.  Employers are clearly engaged in commerce, and their commerce is subject to regulation.

Moreover, the ACA expressly refers to the penalty enforcing the employer mandate as a tax, thus it is also justifiable as an exercise of the taxing power.  Indeed, a challenge to the employer mandate is probably in fact barred at this point by the Tax Anti-Injunction Act, since the Supreme Court’s reason for holding that the Anti-Injunction Act did not apply to the individual mandate was that the penalty enforcing the mandate was not called a tax in the ACA, and the employer mandate penalty is.

The Fourth Circuit could also perhaps consider other issues raised by Liberty University in its original complaint and its appeal from the district court’s decision against it,   including First Amendment Free Exercise, Religious Freedom Restoration Act, Equal Protection, and Establishment Clause issues.  Liberty claimed that the ACA violated these rights by requiring the plaintiffs to purchase coverage for abortion and by refusing the plaintiffs an exemption from the individual mandate that was granted other groups.  Judge Moon in the district court rejected these claims, finding that abortion was in fact not an ACA mandated benefit and that the religious exemptions granted under the ACA to groups that object to all forms of insurance (like the Amish) were based on long-established legal precedent.

The Contraception Coverage Mandate Will Not Be Before The Fourth Circuit

One issue that will not be before the Fourth Circuit will be the contraception coverage mandate that is currently being challenged in other lawsuits across the country.  Nowhere in its complaint, appeal, or certiorari petition does Liberty mention either contraception coverage or the ACA preventive services requirement on which the contraception mandate is based.  Indeed, the rules clarifying the contraception preventive services requirement were not published until August of 2011, long after the district court and shortly before the Fourth Circuit decision.

Moreover, as a religious employer, Liberty is still protected by a moratorium recognized by the final preventive services rule as the Administration is considering how to reconcile the interests of religious organizations with the preventive services requirement, and so its challenge to the mandate is not even yet timely.  The contraceptive coverage requirement is being actively considered by the district courts, several of which have dismissed challenges as untimely or granted or denied injunctions. Appeals of these decisions will certainly soon result in appellate court decisions, but the contraception mandate is not an issue in this case.

The Liberty University case will likely be remanded to the three-judge panel that heard the case initially.  The plaintiffs have little reason to hope that their claims will succeed before this panel.  One of the members of the panel, Judge Davis, dissented from the original decision, rejecting the court’s holding that the Tax Anti-Injunction Act applied. He proceeded to address the merits of the case, rejecting the plaintiffs’ employer mandate, Free Exercise, Establishment Clause, Equal Protection, and Religious Freedom Restoration Act challenges.  Another member, Judge Wynn concurred in the Tax Anti-Injunction Act challenge, but stated in a separate opinion that he would have upheld the employer mandate as a tax.  It is hard to believe that Liberty University is going to do better the second time around.