California v. Texas

California v. Texas, decided on June 17, 2021, was a U.S. Supreme Court case concerning the constitutionality of the Affordable Care Act's individual mandate after Congress reduced the mandate's tax penalty to zero in 2017. Texas and other states, along with two individual plaintiffs, sued the federal government, arguing that the mandate without a penalty could no longer be justified as a tax and was unconstitutional, and that the entire ACA should fall. California and other states, together with the U.S. House of Representatives, intervened to defend the law. In a 7–2 decision authored by Justice Stephen Breyer, the Supreme Court held that the plaintiffs lacked Article III standing because they could not show a past or future injury traceable to the unenforceable mandate. The Court did not address the merits of constitutionality or severability, leaving the ACA intact.

The Supreme Court held 7–2 that the plaintiffs lacked standing and dismissed the case; it did not rule on the constitutionality of the individual mandate or severability. The Fifth Circuit's judgment was vacated and remanded with instructions to dismiss.

Whether the plaintiffs had Article III standing to challenge the ACA after the individual mandate penalty was reduced to zero; whether the individual mandate is unconstitutional; and if unconstitutional, whether it is severable from the rest of the Affordable Care Act.

The decision preserved the Affordable Care Act, ensuring continued health insurance coverage for millions of Americans and avoiding major disruption to the U.S. health care system. It also reinforced standing doctrine by requiring plaintiffs to show concrete and traceable injury, limiting ideological challenges to federal statutes.