Appellate Review of Standing in King v. Burwell (with Updates)

The latest hot topic in King v. Burwell is standing: Have the challengers’ hand-picked plaintiffs actually suffered an injury that allows them to sue to invalidate the IRS’s tax-subsidy rule? Nicholas Bagley does a nice job of walking through the legal and factual basics in a post this morning. I’m going to start with a short introduction to standing and King before moving on to what I think is the more interesting question: an appellate court’s power to reexamine the factual bases of plaintiffs’ standing.

Background on Standing and King

First, as you may already know, a person can’t just walk into court and sue to invalidate a federal statute or rule. Rather, a proper plaintiff must have standing to sue, which generally requires that the plaintiff has actually been harmed in some way, that the harm was caused by the challenged governmental action, and that a ruling in the plaintiff’s favor would redress the alleged harm. “I don’t like this law!” is not a basis to sue. (Sorry folks.)

The King plaintiffs claim to have standing based on some version of the following theory: They live in states that have not set up an insurance exchange, so the federal government has set up “such” exchanges in those states. Because of the IRS’s rule interpreting the ACA, the plaintiffs are eligible for tax subsidies on the federal exchanges. Those tax subsidies make insurance “affordable” on the exchange, which means that the individual mandate requires the plaintiffs to purchase insurance or face the tax penalty. But the plaintiffs don’t want to purchase insurance. So they are suing. If the IRS rule is invalidated, then the plaintiffs will not be eligible for subsidies, which means the insurance would not be affordable, which means they would be exempt from the mandate, which means they could go on living their insurance-free lives without penalty.

But as Professor Bagley thoroughly explained this morning, there might be a problem with the King plaintiffs’ theory: We have reason to believe that, regardless of how the Court rules, the plaintiffs will not actually be subject to the mandate’s penalty, either because they will be eligible for Medicare coverage, they will be eligible for coverage through the Department of Veterans Affairs, or they wouldn’t be subject to the penalty for more technical reasons. In other words, either the plaintiffs suffered no real injury or the injury is not redressable by invalidating the IRS rule.

What Can the Supreme Court Do About It?

But here is where things get interesting. The idea of standing goes to a court’s jurisdiction—that is, its power to decide a case. Therefore, even if no party challenges plaintiffs’ standing, a court has an independent obligation to ensure that it has the power to actually hear and resolve the case. Moreover, the plaintiffs have the burden of establishing their standing and that burden differs depending on the stage of litigation. As the Supreme Court has explained:

The party invoking federal jurisdiction bears the burden of establishing the[] elements [of standing]. Since they are not mere pleading requirements but rather an indispensable part of the plaintiff’s case, each element must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation.

At the pleading stage, general factual allegations of injury resulting from the defendant’s conduct may suffice, for on a motion to dismiss we “presum[e] that general allegations embrace those specific facts that are necessary to support the claim.” In response to a summary judgment motion, however, the plaintiff can no longer rest on such “mere allegations,” but must “set forth” by affidavit or other evidence “specific facts,” Fed. Rule Civ. Proc. 56(e), which for purposes of the summary judgment motion will be taken to be true. And at the final stage, those facts (if controverted) must be “supported adequately by the evidence adduced at trial.”

Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992) (citations omitted) (paragraph break added). This obligation applies not just to the trial court, but also the appellate courts and the Supreme Court.

In King, the plaintiffs submitted declarations in the trial court. Those declarations—factual statements signed under penalty of perjury—do not constitute “general factual allegations.” Rather, they contain the sort of “specific facts” that are “taken to be true” on summary judgment. If you want to read through the declarations, I’ve posted them here.

As Professor Bagley has observed, however, some of those facts might be wrong. For example, plaintiff King has sworn under oath that he is “not eligible for health insurance from the government.” Professor Bagley notes:

That allegation appears to be false. King is a Vietnam veteran and is eligible for coverage through the Department of Veterans Affairs. His lawyer says that he never enrolled, although, as Greg Sargent has noted, King told The Wall Street Journal that he had been to a VA medical center and had a VA identification card, “which typically serves as proof of VA-care enrollment.” If King was enrolled when the lawsuit was filed, he would have been ineligible for tax credits under the ACA—which means he wouldn’t have had standing.

But so what? This is not a case where the record is void of facts on the issue of standing. In such a case perhaps additional appellate fact-collection would be warranted. For example, in Ouachita Watch League v. Jacobs, 463 F.3d 1163 (11th Cir. 2006), the question of standing was raised for the first time on appeal and the trial record did not allow for a sufficient examination of the issue. The court of appeals therefore permitted the parties to supplement the record with declarations on the question of standing so the court could satisfy itself that the plaintiffs did in fact meet the jurisdictional requirements.

The King plaintiffs face no such void. Rather, based on the declarations submitted in the district court, they have sufficiently shown an injury, a causal link between that injury and the challenged IRS rule, and that the injury would be redressed by a ruling in their favor. In such a case, can the Supreme Court (or could the court of appeals) ask that the record be supplemented not to fill a void—but to contradict already-existing evidence? I’ve done a bit of poking around, but I have not found a case in which an appellate court has taken notice of additional facts on appeal to contradict standing-related evidence submitted in the trial court.

But let’s assume that an appellate court might have such a power. That raises a number of additional questions: What is the scope of that power? What triggers it? Is it waivable? (Though jurisdictional issues themselves are not waivable, I suspect a defendant could waive the ability to challenge jurisdiction-supporting facts that were submitted in the trial court.) If the appellate court is “suspicious,” could it order a remand sua sponte? Does it have discretion this area? And if so, what guides that discretion?

I don’t have answers to these questions (sorry), but they seem to be the relevant questions for those looking to challenge the standing of the King plaintiffs. The relevant facts are in the record and those facts seem to establish standing. Folks seeking to challenge those facts need to articulate some basis for an appellate court to hear that challenge.

Update February 16 at 1:40pm:

A few words from an interesting piece in the Illinois Law Review by Amy J. Wildermuth & Lincoln L. Davies, Standing, on Appeal:

When an appellate court entertains a standing challenge in a nonadministrative case, or an administrative case that was heard in the first instance in the district court, it is unlikely to be procedurally peculiar. If the district court already ruled on standing, the appellate court will simply apply traditional standards of review. It will defer to any factual findings the district court made unless they are clearly erroneous, and it will review the legal aspects of the court’s standing ruling de novo.

If standing was not considered in the district court, an appellate court will resort to what it typically does when new, non-waivable issues are raised on appeal. It will resolve the standing challenge to the extent the question is legal and, to the extent it is factual, the court will simply remand for any necessary factfinding by the district court.

The article goes on to discuss the unique situation where a court of appeals hears a case from an administrative proceeding without prior review in a district court. Such records may not contain standing-related facts because Article III’s standing requirements do not apply to administrative proceedings. But on my reading the article focuses on cases that lack a record to establish standing—not cases like King where the factual record is being challenged on review.

Another Update February 16 at 3:10pm:

Josh Blackman has weighed in. He notes that “at the appellate stage, courts will assume the facts, as pleaded, are true for purposes of standing” and that “the Supreme Court, as are all appellate courts, are not equipped to add factual evidence to the record.” Accordingly, “[i]f there [are] doubts about standing, the case should be remanded to the district court for further proceedings.”

Two quick points in response: First, Professor Blackman starts by discussing “pleaded” facts before discussing, in the context of King, the factual claims made in signed declarations. I don’t think the difference between allegations and sworn factual assertions matter much in King, but more generally it’s a distinction worth making. At the pleading stage the regular Twiqbal standard would apply to standing-related facts. But in King, on a motion for summary judgment with actual affidavits, we have facts in the record. If the trial court had made factual findings in connection with a hearing of some sort, then those findings could be reviewed for abuse of discretion. But here the trial court made no findings because the motion was decided on summary judgment and the government did not challenge the assertions in the plaintiffs’ affidavits; it merely challenged their legal sufficiency to establish standing. Given that lack of a factual challenge in the district court, the question becomes: What does it mean for the appellate court to have an independent obligation to assure itself of its own jurisdiction? How can the appellate court independently exercise that obligation if the record before it does not permit independent evaluation?

Second, and relatedly, Professor Blackman’s closing remark about “doubts” seems to underplay the critical question here. What are the permissible bases for such doubts when the underlying facts were not challenged in the district court? The Court’s own “BS” detector? Amicus briefs? A Mother Jones article? A blog post from Professor Bagley? An afternoon some law clerk spends on Google? A standard that permits (requires?) remand based on mere doubts would likely invite mischief—and perhaps a remand in King.

My own $0.02: The ability to challenge underlying facts that support standing can be waived, even though the challenge to standing itself is jurisdictional. That means normally neither the defendant nor third-parties should be able to raise factual challenges to the plaintiffs’ asserted bases for standing. But the appellate court should have some recourse if it suspects that the defendant’s failure to challenge the standing-related facts was willful or a connivance—that is, if the defendant and plaintiffs were somehow aligned in their desire for the court to exercise jurisdiction that it otherwise lacked. I’m not sure, however, what such a recourse would look like, either the standard the appellate court would employ or the manner in which it would create a record to determine if the standard had been met.