California v. Texas

This case represents the third major Supreme Court challenge to the Patient Protection and Affordable Care Act (ACA). After Congress reduced the individual mandate's tax penalty to zero in 2017, Texas and 17 other states, joined by two individuals, sued, arguing the mandate was unconstitutional without a tax and could not be severed from the rest of the ACA. The Trump administration declined to defend the law, leading California and 15 other states to intervene. The Northern District of Texas declared the entire ACA invalid, and the Fifth Circuit partially affirmed. The Supreme Court granted certiorari to address the plaintiffs' standing, the mandate's constitutionality, and severability. On June 17, 2021, the Court issued its decision.

The Supreme Court, in a 7-2 decision written by Justice Breyer, held that the plaintiffs—both the state of Texas and the individual claimants—lacked Article III standing. The Court found that the plaintiffs did not suffer a concrete and particularized injury traceable to a government action enforcing the unenforceable mandate. Because no party had standing, the Court did not reach the constitutional merits regarding the mandate's validity or the ACA's severability. The decision vacated the Fifth Circuit's judgment and dismissed the case, leaving the Affordable Care Act fully intact.

The central dispute was whether the plaintiffs had Article III standing to challenge the amended individual mandate after Congress eliminated the tax penalty. The legal arguments then extended to whether the now-toothless mandate constituted an unconstitutional command to purchase insurance, and if so, whether that provision could be separated from the remainder of the ACA without invalidating the entire statute.

The ruling preserved the Affordable Care Act and its protections for pre-existing conditions, effectively ending a decade of existential legal threats to the law. It was hailed as a victory by Democrats and healthcare advocates, while some conservatives framed it as a purely procedural outcome that left open future challenges. The decision reinforced the Court's standing doctrine, making it more difficult for states and individuals to bring sweeping policy lawsuits based on generalized grievances. By sidestepping the merits, the Court avoided a politically charged ruling that could have disrupted the insurance market and coverage for over 20 million Americans.