Maryland v. United States (360 F. Supp. 3d 288, 2019)

Ellen Lipton Hollander, United States District Judge

The State of Maryland filed a declaratory and injunctive action, seeking, among other things, a declaration as to the constitutionality and enforceability of the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (Mar. 23, 2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (Mar. 30, 2010) (collectively, the "Affordable Care Act," the "ACA," or the "Act'). In 2017, the ACA was further amended by the Tax Cuts and Jobs Act of 2017 (the "TCJA"), Pub. L. 115-97, 131 Stat. 2054 (2017). The State explains that, in filing suit, it is "seeking to head off the myriad of serious harms that will befall the State and its residents if the Trump Administration... ceases [to] enforc[e] the ACA in whole or in part." ECF 27 at 7.

In its initial Complaint (ECF 1), filed on September 13, 2018, the State sued the United States of America; the United States Department of Justice ("DOJ"); Jefferson B. Sessions, III, in his official capacity as Attorney General; the United States Department of Health and Human Services ("PIHS"); Alex M. Azar, II, in his official capacity as Secretary of HHS; the United States Internal Revenue Service ("IRS"); and Charles P. Rettig, in his official capacity as Commissioner of the IRS. The State has since amended its Complaint (ECF 8, "Amended Complaint"), adding additional defendants.

On November 7, 2018, before the government's response to the suit was even due, Attorney General Sessions resigned. ECF 6-1 at 4. Almost immediately thereafter, President Trump, relying on the Federal Vacancies Reform Act ("FVRA"), 28 U.S.C. §§ 3345 et seq. , appointed Matthew G. Whitaker as Acting Attorney General. Mr. Whitaker had served as Chief of Staff to Mr. Sessions. In that capacity, he was not employed in a Senate-confirmed position. In contrast, Rod J. Rosenstein, the Deputy Attorney General, has been confirmed by the U.S. Senate.

President Trump has since nominated William P. Barr to serve as Attorney General. The Senate Judiciary Committee held confirmation hearings on January 15, 2019, and January 16, 2019. Barr's nomination is pending in the U.S. Senate.

On November 11, 2018, in response to the appointment of Mr. Whitaker, the State filed a "Motion for Preliminary Injunction and to Substitute Defendant" (ECF 6), supported by a memorandum of law. ECF 6-1 (collectively, "Motion for Preliminary Injunction" or "P.I. Motion"). According to the State, the appointment of Mr. Whitaker violates the Attorney General Succession Act, 28 U.S.C. § 508, as well as the Appointments Clause of the United States Constitution, U.S. CONST. art. II, § 2. ECF 6. Accordingly, the State seeks to enjoin Mr. Whitaker from appearing in this case as the Acting Attorney General. Id. at 1. Alternatively, under Fed. R. Civ. P. 25, the State seeks "to substitute Deputy Attorney General Rosenstein as Acting Attorney General in his official capacity." ECF 6-1, ¶ 3.

Soon after moving for a preliminary injunction, the State filed its Amended Complaint. ECF 8. It asserts the same allegations against defendants that were alleged in the Complaint. See id. However, the State added Mr. Rosenstein and Mr. Whitaker as defendants, both in their official capacities. Id. ¶ 15. I shall sometimes refer to the defendants collectively as the "government."

Defendants have moved to dismiss the Amended Complaint, pursuant to Rule 12(b)(1), for lack of subject matter jurisdiction, and under Rule 12(b)(6), for failure to state a claim (ECF 11), supported by a memorandum of law. ECF 11-1 (collectively, "Motion to Dismiss"). According to defendants, the State lacks standing to pursue its claims because it has merely asserted speculative harm. Id. at 8. Further, defendants maintain: "Even if the State of Maryland is able to overcome these jurisdictional obstacles, its single Declaratory Judgment Act claim fails to state a claim because the State has failed to identify a cause of action for this suit." Id.

Defendants also oppose the Motion for Preliminary Injunction. ECF 28. According to the government, the "State's challenge to Mr. Whitaker's designation ultimately fails for lack of standing ...." Id. Defendants also argue that, as a threshold matter, the Court must first resolve their Motion to Dismiss because, if the Court grants that motion, "the State's request for preliminary injunctive relief would be moot." Id. at 11. In any event, the government maintains that Whitaker's appointment is lawful under the FVRA.

The State opposes the Motion to Dismiss. ECF 27. It has also replied to the opposition to its P.I. Motion. ECF 31. And, defendants replied to the State's opposition to their Motion to Dismiss. ECF 33.

In addition, pursuant to Rule 15(a)(2), the State has filed a "Motion for Leave to File Second Amended Complaint" (ECF 29), supported by a memorandum of law. ECF 29-1 (collectively, "Motion for Leave"). The Motion for Leave "set[s] forth the amendments Maryland would propose to make to its Amended Complaint if the Court [i]s inclined to grant" the defendants' Motion to Dismiss. See ECF 27 at 8. The proposed Second Amended Complaint is docketed at ECF 29-3 ("Second Amended Complaint" or "SAC").

The battle lines in this ACA case have arguably been impacted by a decision issued on Friday, December 14, 2018, by United States District Judge Reed O'Connor of the Northern District of Texas, declaring the Individual Mandate of the ACA unconstitutional and the remaining provisions of the ACA inseverable and thus invalid. See Texas v. United States , 340 F.Supp.3d 579 (N.D. Tex. 2018) (hereinafter, Texas or the " Texas Case"). In the wake of the decision in Texas , I held a telephone conference with counsel on Monday, December 17, 2018, and directed counsel to submit supplemental briefing addressing the effect of the Texas Case, if any, on the State's standing to pursue its requests for declaratory and injunctive relief. See Docket.

The State submitted a supplemental brief on December 18, 2018 (ECF 40), contending that the Texas Case strengthens its standing to secure declaratory and injunctive relief. The government's supplemental brief is docketed at ECF 41. It adheres to its position that the State lacks standing. Moreover, it points out that HHS, the agency charged with enforcing the ACA, "has expressed its commitment to continue to enforce the ACA until there is a final decision or other judicial order directing otherwise." Id.

Several amici curiae also filed memoranda. They focused largely on the State's P.I. Motion concerning the lawfulness of the appointment of Matthew Whitaker.

Thereafter, on December 19, 2018, the Court held a lengthy motions hearing, at which argument was presented. ECF 42.

Then, on December 31, 2018, Judge O'Connor stayed his ruling of December 14, 2018. See Texas , No. 4:18-cv-00167-0, ECF 223. In light of Judge O'Connor's stay, this Court issued an Order on January 2, 2019 (ECF 45), inviting counsel to submit memoranda addressing the impact of the stay on the State's standing to bring suit in the instant case.

The government's response is docketed at ECF 50. It maintains that "the stay issued by Judge O'Connor confirms that the State of Maryland has neither standing nor a cause of action to sue on the basis that the State will be harmed by Defendants' alleged non-enforcement of the ACA." Id. at 1. Conversely, the State claims in its memorandum (ECF 51) that the stay in the Texas Case"does not eliminate Maryland's standing to pursue its claims regarding the continuing validity of the [ACA]." Id. at 1.

For the reasons that follow, I shall grant the State's Motion for Leave (ECF 29). And, I shall construe the government's Motion to Dismiss (ECF 11) as a motion lodged against the Second Amended Complaint. I shall also grant the Motion to Dismiss, without prejudice. Therefore, I shall deny, as moot, the State's Motion for Preliminary Injunction (ECF 6) and the State's Motion to Substitute (ECF 6).

I. Motion For Leave

As noted, the government has moved to dismiss the Amended Complaint under Rule 12(b)(1), on the basis that the State lacks "standing to pursue its declaratory relief claim." ECF 11-1 at 8. Alternatively, the government has moved to dismiss the State's Declaratory Judgment Act claim, pursuant to Rule 12(b)(6), claiming that "the State has failed to identify a cause of action for this suit." Id.

In response, the State maintains that, based on the allegations of the Amended Complaint, it has standing to bring suit. However, if the Court deems the allegations presented in the Amended Complaint deficient, Maryland seeks leave to file the Second Amended Complaint. ECF 29; ECF 29-3. The proposed SAC "adds allegations to respond to several arguments raised" in the government's Motion to Dismiss. ECF 29, ¶ 3.

Rule 15 of the Federal Rules of Civil Procedure governs amendments to pleadings. Under Rule 15(a)(1)(A), "[a] party may amend its pleading once as a matter of course," if done within 21 days after serving the pleading. Or, "if the pleading is one to which a responsive pleading is required," a party may amend once as a matter of course, provided that it does so within "21 days after service of a responsive pleading or 21 days after service of a motion under Rule 12(b), (e), or (f), whichever is earlier." FED. R. CIV. P. 15(a)(1)(B). Rule 15(a)(2) provides that, "[i]n all other cases," a party wishing to amend its pleading must obtain "the opposing party's written consent or the court's leave." Notably, Rule 15(a)(2) states, in part: "The court should freely give leave [to amend] when justice so requires." Id.

There are three circumstances when it is appropriate to deny leave to amend: "(1) 'the amendment would be prejudicial to the opposing party;' (2) 'There has been bad faith on the part of the moving party;' or (3) 'The amendment would have been futile.' " Scott v. Family Dollar Stores, Inc. , 733 F.3d 105, 121 (4th Cir. 2013) (quoting Laber v. Harvey , 438 F.3d 404, 426 (4th Cir. 2006) ). An amendment is futile "when the proposed amendment is clearly insufficient or frivolous on its face." Johnson v. Oroweat Foods Co. , 785 F.2d 503, 510 (4th Cir. 1986).

Certainly, the government would not be prejudiced by allowing the State to file the SAC. And, the State has not acted in bad faith. Although I ultimately conclude that the proposed SAC proves futile in regard to standing, that conclusion is apparent only after an analysis of the standing issue. Therefore, I shall grant the State's Motion for Leave and consider the allegations in the proposed Second Amended Complaint. Moreover, to avoid any further delay, I shall construe the Motion to Dismiss as if it were lodged against the SAC.

II. Background

A. The Affordable Care Act

The Affordable Care Act, enacted by Congress in 2010, was one of President Barack Obama's signature legislative accomplishments. The Act, sometimes called "ObamaCare," sought "to increase the number of Americans covered by health insurance and decrease the cost of healthcare." Nat'l Fed'n of Indep. Bus. v. Sebelius , 567 U.S. 519, 538, 132 S.Ct. 2566, 183 L.Ed.2d 450 (2012) (" NFIB "). In over 900 pages of text, Congress endeavored to provide the opportunity for "near-universal" health-insurance coverage and to reduce health insurance premiums through the "creation of effective health insurance markets" and new statutory requirements for individuals and insurance companies. See, e.g. , 42 U.S.C. §§ 18091 (2)(D), (2)(F), and (2)(I).

The ACA ushered in its seminal changes to the United States healthcare system through a series of provisions that created new requirements for individuals, employers, healthcare providers, and insurance companies. ECF 29-3, ¶ 21. Among these changes, the ACA adopted "three key reforms." King v. Burwell , 576 U.S. ----, 135 S.Ct. 2480, 2482, 192 L.Ed.2d 483 (2015).

First, the Act includes the "guaranteed-issue" and "community-rating" provisions to address "the problem of those who cannot obtain insurance coverage because of preexisting conditions or other health issues." NFIB , 567 U.S. at 547, 132 S.Ct. 2566 ; see 42 U.S.C. § 18091 (2)(I) ; id. § 300gg-1. Together, the guaranteed-issue and community-rating provisions "prohibit insurance companies from denying coverage to those with [preexisting] conditions or charging unhealthy individuals higher premiums than healthy individuals." NFIB , 567 U.S. at 548, 132 S.Ct. 2566 (citing 42 U.S.C. §§ 300gg, 300gg-1, 300gg-3, 300gg-4 ).

In particular, the guaranteed issue provision requires insurers "offering coverage in an individual and group market in a State" to "accept every employer and individual in the State that applies for such coverage." 42 U.S.C. § 300gg-1(a). And, as a corollary, an insurer "offering group or individual health insurance coverage may not" exclude coverage based on a preexisting condition. Id. § 300gg-3(a). The community-rating provision was enacted to prevent insurers from varying premiums within a geographic area based on "certain narrow factors," including race, age, gender, sexual orientation, occupation, health status, claims history, and several others. Id. § 300gg.

The second key reform concerns 26 U.S.C. § 5000A, which is titled "Requirement to maintain minimum essential coverage." This provision of the Act is commonly known as the "Individual Mandate." Pursuant to the "Individual Mandate," individuals are generally required to maintain minimal essential health insurance. Id. § 5000A(a). The provision represented "an effort 'plainly designed to expand health insurance coverage.' " ECF 29-3, ¶ 23 (citing NFIB , 567 U.S. at 574, 132 S.Ct. 2566 ).

To compel compliance, Congress imposed a financial penalty on individuals who were subject to the requirement but failed to purchase insurance. 26 U.S.C. § 5000A(b) ; see also NFIB , 567 U.S. at 574, 132 S.Ct. 2566. However, this penalty, known as the "shared responsibility payment," did not apply to those for whom "the cost of buying insurance would exceed eight percent of that individual's income." Burwell , 135 S.Ct. at 2482 ; see 26 U.S.C. § 5000A(b) ("shared responsibility payment"); id. § 5000A(e)(1) (exempting "individuals who cannot afford coverage").

Third, "to make insurance more affordable," Burwell , 135 S.Ct. at 2487, the Act provides tax credits, or subsidies, to purchase health insurance for individuals making between 100% and 400% of the federal poverty line. 42 U.S.C. §§ 18031, 18041.

The Act contains many other vital provisions. For example, it creates and subsidizes a health exchange in each state, i.e. , "a marketplace that allows people to compare and purchase insurance plans." Burwell , 135 S.Ct. at 2482 ; see 42 U.S.C. §§ 18031 -44. "The Act gives each state the opportunity to establish its own Exchange, but provides that the Federal Government will establish 'such Exchange' if the State does not." Burwell , 135 S.Ct. at 2482 (citing 42 U.S.C. §§ 18031, 18041 ). The tax credits provided under 26 U.S.C. § 36B"can be used to pay insurance premiums in advance through an exchange." ECF 29-3, ¶ 24 (citing 42 U.S.C. § 18082 ).

Further, the ACA expands "Medicaid, which the States administer, to make additional segments of the population eligible to receive coverage." ECF 29-3, ¶ 26 (citing 42 U.S.C. §§ 1396(a)(10)(A)(i)(VIII), 1396a(e)(14)(I)(i) ). Under the Act, the federal government must cover a significant portion of the expansion cost: 100% in 2014-2016, 95% in 2017, 94% in 2018, 93% in 2019, and 90% in 2020 and each subsequent year thereafter. 42 U.S.C. § 1396(d)(y)(1)(A)-(E).

In addition, the ACA contains a provision allowing dependent children to remain on their parents' health insurance until age 26. 42 U.S.C. § 300gg-14(a). The ACA also implemented an employer mandate and an employer-responsibility assessment. These provisions require employers with at least fifty full-time employees to pay the federal government a penalty if they fail to provide their employees with ACA-compliant health-plan options. See 26 U.S.C. § 4980H.

B. National Federation of Independent Businesses v. Sebelius

Since its passage, the Affordable Care Act has generated intense controversy. As Judge O'Connor observed in the Texas Case, "[h]ealth-insurance policy is ... a politically charged affair - inflaming emotions and testing civility." 340 F.Supp.3d 579, 585. Indeed, shortly after President Obama signed the Act into law, thirteen states filed suit, challenging the constitutionality of the provisions concerning minimum coverage and Medicaid expansion. And, an additional thirteen states and several individuals and organizations, including the National Federation of Independent Businesses, joined plaintiffs in the action.

On June 19, 2012, the United States Supreme Court issued its landmark decision in National Federation of Independent Business v. Sebelius , 567 U.S. 519, 132 S.Ct. 2566, 183 L.Ed.2d 450 (2012). By a 5-4 vote, the Court upheld the constitutionality of the Individual Mandate and the shared responsibility payment under 26 U.S.C. § 5000A as a valid exercise of Congress's taxing power. NFIB , 567 U.S. at 544-46, 132 S.Ct. 2566 ; see also ECF 29-3, ¶ 57 (summarizing NFIB ).

The majority opinion, authored by Chief Justice Roberts, rejected the contention that the Individual Mandate was a lawful exercise of Congress's power to regulate interstate commerce. NFIB , 567 U.S. at 562, 132 S.Ct. 2566. But, the Court observed that, despite the Act's reference to the payment of a "penalty," not a "tax," see 26 U.S.C. § 5000A, it "looks like a tax in many respects." NFIB , 567 U.S. at 563, 132 S.Ct. 2566.

In this regard, the Court noted first that the payment obligation "is found in the Internal Revenue Code and enforced by the IRS, which ... must assess and collect it in the same manner as taxes." Id. at 564, 132 S.Ct. 2566 (quotation marks and citation omitted). "This process yields the essential feature of any tax: It produces at least some revenue for the Government." Id. (citation omitted). "Although the payment will raise considerable revenue," the Supreme Court noted, "it is plainly designed to expand health insurance coverage." Id. at 567, 132 S.Ct. 2566. And, observed the Court, "taxes that seek to influence conduct are nothing new." Id.

Second, the price of the payment is "far less than the price of insurance, and by statute, it can be no more." Id. at 566, 132 S.Ct. 2566. Unlike a prohibitory penalty, "[i]t may often be a reasonable financial decision to make the payment rather than purchase insurance." Id. Third, "the individual mandate contains no scienter requirement," which is "typical of punitive statutes, because Congress often wishes to punish only those who intentionally break the law.' " Id. Finally, "the payment is collected solely by the IRS through the normal means of taxation ...." Id.

For these reasons, the Supreme Court upheld the financial penalty under the taxing power of Congress. Id. at 575, 132 S.Ct. 2566. It concluded: "[I]t is only because we have a duty to construe a statute to save it, if fairly possible, that § 5000A can be interpreted as a tax." Id. However, the Supreme Court found unconstitutional 42 U.S.C. § 1396c, a provision under the Act that coerced states to comply with the Act's expansion by threatening to "tak[e] away their existing Medicaid funding." Id. at 584, 132 S.Ct. 2566. "[F]or that constitutional violation," the NFIB Court determined that the appropriate remedy was "to preclude the Government from imposing such a sanction," but this did "not require striking down other portions of the Affordable Care Act." Id. at 588, 132 S.Ct. 2566.

In the wake of the Supreme Court's decision in NFIB , "Maryland finalized its implementation of the Affordable Care Act ...." ECF 29-3, ¶ 6. In particular, it enacted "a procedure to eliminate its state-operated risk pool; establish[ed] a funding stream for its fledgling independent agency, the Maryland Health Benefit Exchange; and expan[ded] Medicaid eligibility." Id. (citing Maryland Health Progress Act of 2013, 2013 Md. Laws ch. 139).

According to plaintiff, the NFIB decision did not put an end to the challenges to the ACA. Indeed, since the decision in NFIB , "members of Congress have attempted to repeal" the Act "an estimated 70 times." ECF 29-3, ¶ 7. See, e.g., H.R. 3762, 114th Congo (2015); H.R. 45, 113th Congo (2013); H.R. 6079, 112th Congo (2012).

C. The Tax Cuts and Jobs Act

As a candidate for President of the United States, Donald Trump repeatedly expressed his fervent opposition to the ACA. On January 20, 2017, just hours after President Trump was sworn into office, he signed Executive Order 13765, titled "Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal." ECF 29-3, ¶ 35; see Exec. Order No. 13765822 Fed. Reg. 8351 (Jan. 20, 2017). The Executive Order instructed HHS to "exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the [Affordable Care] Act that would impose a fiscal burden on any State ...." Id.

The Second Amended Complaint alleges that "the President has continued his campaign to undermine the enforcement of [the ACA], by launching a series of measures that include suspending cost-sharing reduction payments; directing his agencies to implement statutorily unauthorized rules disrupting enforcement of nondiscrimination provisions and disrupting individual and small group market reforms; and curtailing funding for the federally-facilitated exchanges." ECF 29-3, ¶ 11.

For example, on October 12, 2017, "the President announced that his Administration was reversing course on a longstanding policy of the Secretaries of Health and Human Services and Treasury to make cost-sharing reduction (one way the Act subsidizes individual purchase of health insurance) payments ('CSR payments') each month under the authority provided to them by the Affordable Care Act's permanent appropriation." Id. ¶ 36. In a statement "issued by the White House Press Secretary," the Trump Administration stated that HHS "had concluded" that the Act's "permanent appropriation [did] not apply to CSR payments." Id. Early the next day, DOJ "made a court filing including a copy of a new opinion by the Attorney General addressing the purported legal basis for the Administration's action." Id. Also on October 13, 2017, the President tweeted, id. : "The Democrats ObamaCare is imploding. Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!"

About two months later, on December 22, 2017, President Trump signed into law the TCJA, the most sweeping tax reform legislation in recent history. Of relevance here, "as part of a larger revision of federal income tax laws," Congress amended the tax code by reducing to zero the shared responsibility payment of the ACA, 26 U.S.C. § 5000A(b), "for individuals failing to demonstrate health insurance coverage, which is based on a percentage of the taxpayer's household income." ECF 29-3, ¶ 8. Notably, the TCJA "did not repeal any provision of the Affordable Care Act." Id. However, it "reduced the shared responsibility percentage from '2.5%' to 'zero percent,' and the applicable dollar amount from '$ 695' to '$ 0.' " Id. (citing Pub. L. 115-97, 2077 HR 1, at *2092 (Dec. 22, 2017) ). This change, which went into effect on January 1, 2019 (ECF 29-3, ¶ 8), essentially gutted the Individual Mandate.

Senator Pat Toomey (R-PA) made clear in floor debate that Congress intended to reduce the payment but sought to preserve the remainder of the Affordable Care Act. He said:

We don't change any of the subsidies. They are all available to anyone who wants to participate. We don't change the rules. We don't change eligibility. We don't change anything except one thing. We say that if you decide this plan doesn't fit your family or if you decide for all the subsidies you get it is still not worth it for you to have this plan and you opt out, you will no longer be punished with this tax. That is the only thing we do in this bill.

163 CONG. REC. S7672 (daily ed. Dec. 1, 2017); see also ECF 29-3, ¶ 30.

Several other senators echoed his view. Senator Shelley Moore Capito (R-WV) asserted: "There has been a lot of misinformation about this provision, so let me just clarify. No one is being forced off of Medicaid or a private health insurance plan by the elimination of the individual mandate. By eliminating the individual mandate, we are simply stopping penalizing and taxing people who either cannot afford or decide not to buy health insurance plans." 163 CONG. REC. S7383 (daily ed. Nov. 29, 2017); see also ECF 29-3, ¶ 31.

And, Senator Orrin Hatch (R-UT) explained during the Senate Finance Committee's markup of the tax bill:

[L]et us be clear, repealing the tax does not take anyone's health insurance away. No one would lose access to coverage or subsidies that help them pay for coverage unless they chose not to enroll in health coverage once the penalty for doing so is no longer in effect. No one would be kicked off of Medicare. No one would lose insurance they are currently getting from insurance carriers. Nothing-nothing-in the modified mark impacts Obamacare policies like coverage for preexisting conditions or restrictions against lifetime limits on coverage.

Continuation of the Open Executive Session to Consider an Original Bill Entitled the Tax Cuts and Jobs Act Before the S. Comm. on Fin. , 115th Congo 106 (2017); see also ECF 29-3, ¶ 32.

Senator Tim Scott (R-SC) declared: "Anyone who doesn't understand and appreciate that the individual mandate and its effects in our bill take nothing at all away from anyone who needs a subsidy, anyone who wants to continue their coverage-it does not have a single letter in there about preexisting conditions or any actual health feature." 163 CONG. REC. S7666 (daily ed. Dec. 1, 2017); see also ECF 29-3, ¶ 33.

The State acknowledges in the Second Amended Complaint that, notwithstanding the passage of the TCJA, the statements of congressional legislators demonstrate a "clear" congressional intent "to maintain all provisions of the Affordable Care Act as enacted...." ECF 29-3, ¶ 8. But, the State points to a speech delivered by President Trump on June 19, 2018, "shortly after another Congressional repeal effort had failed." Id. ¶ 37. Referring to the passage of the TCJA, President Trump "touted Congress's decision to reduce the shared responsibility payment to $ 0." Id. He proclaimed:

Our historic tax cuts also ended one of the most unfair taxes imaginable - Obamacare's individual mandate.... Government will no longer punish you if you cannot afford Obamacare's sky-high premiums. Think of this: You pay a lot of money to the government in order not to have to buy in health insurance. Think of that. So you're paying money that you don't - that's a penalty. Incredibly, it was allowed. But you're paying money so that you don't have to buy healthcare. That was a beauty. It's over. It's gone. It's done.

President Trump also praised "one of his executive actions," a final administrative rule exempting "association health plans"-a category of plans that allows small businesses to band together to obtain health coverage-"from certain Affordable Care Act requirements ...." ECF 29-3, ¶ 38. The President commented that this measure was a " 'truly historic step in [the Administration's] efforts to rescue Americans from ObamaCare and the ObamaCare nightmare.' " Id. Claiming that " 'ObamaCare has been especially brutal for small businesses,' " the President maintained that the final rule would "make it easier for small businesses to band together to negotiate lower prices for health insurance and escape some of Obamacare's most burdensome mandates through association health plans." See ECF 29-3, ¶¶ 37-38; see also supra note 11.

D. Texas v. United States

In February 2018, nearly two months after the enactment of TCJA, "a group of states, led by Texas," filed suit in the Northern District of Texas, seeking a declaratory judgment and a preliminary injunction. ECF 29-3, ¶ 9 (citing Texas v. United States , No. 4:18-cv-00167-O, ECF 1, 2018 WL 1061440 (N.D. Tex. Feb 26, 2018) ). The plaintiff states are Texas, Wisconsin, Alabama, Arkansas, Arizona, Florida, Georgia, Indiana, Kansas, Louisiana, Mississippi, Missouri, Nebraska, North Dakota, South Carolina, South Dakota, Tennessee, Utah, West Virginia, and Maine. They sued the United States of America; HHS; Alex Azar, in his official capacity as Secretary of HHS; the IRS; and David J. Kautter, in his official capacity as Acting Commissioner of IRS. However, they did not sue the Attorney General of the United States or DOJ. The States of California, Connecticut, Delaware, Hawaii, Illinois, Kentucky, Minnesota, New Jersey, New York, North Carolina, Oregon Rhode Island, Vermont, and Washington, along with the Commonwealths of Virginia and Massachusetts and the District of Columbia, intervened as defendants (collectively, the "Intervenor Defendants"). See Texas , No. 4:18-cv-00167-O, ECF 74 (N.D.Tex. May 16, 2018) (granting motion to intervene). As noted, Maryland did not participate in the suit.

The plaintiffs in Texas sought, inter alia , a declaration that the ACA, as amended by the TCJA, is unconstitutional and that the remainder of the ACA is not severable. Texas , No. ECF 27, ¶57 (N.D. Tex. April 23, 2018) ("Amended Texas Complaint"); see also ECF 29-3, ¶ 9. They asserted that once the TCJA Amendment becomes effective in 2019, the Mandate is no longer enforceable as a tax and is therefore invalid. Id. And, if the Mandate falls, so too must the entire Act. Id.

On June 7, 2018, pursuant to 28 U.S.C. § 530D, "Attorney General Sessions sent Congress a letter indicating that the Department of Justice will not defend the constitutionality of 26 U.S.C. § 5000A(a)," i.e. , the Individual Mandate provision, "in the context of Texas v. United States ...." ECF 29-3, ¶ 10; See also Letter from Jefferson B. Sessions, III to Paul D. Ryan, https://www.justice.gov/file/1069806/download (June 7, 2018) ("Sessions Letter").

Among his reasons for declining to defend the provision's constitutionality, Attorney General Sessions stated: "[T]he President has concluded that the statute is unconstitutional and made manifest that it should not be defended ...." See Sessions Letter, at 2. Moreover, he explained that "the Department's decision not to defend Section 5000A(a)'s constitutionality will not prevent the court in Texas v. United States from resolving the question, given the posture of the case." Id.

Sessions also indicated that DOJ would "argue that § 5000A(a) is not severable" from certain provisions of the Act: the guaranteed-issue provisions, see 42 U.S.C. §§ 300 gg-1, 300gg-4(a); the community-rating provisions, see id. §§ 300gg(a)(1), 300gg-4(b) ; and the preexisting conditions provisions. See id. § 300gg-3. ECF 29-3, ¶ 10. Notably, however, Sessions stated that "the Department will continue to argue that Section 5000A(a) is severable from the remaining provisions of the ACA." See Sessions Letter, at 3.

Thereafter, DOJ, as government counsel, "filed a brief [in the Texas Case ] urging the court to 'hold that the ACA's individual mandate will be unconstitutional as of January 1, 2019, and that the ACA's guaranteed-issue and community-rating provisions are inseverable from the mandate,' and further requesting that the court grant declaratory relief to that effect." ECF 29-3, ¶ 10 (citing Texas Case ). Of relevance, at oral argument in the Texas Case on September 5, 2018, DOJ represented that " 'the current administration supports protections for people with preexisting health conditions,' " but it also affirmed "the position that the minimum coverage requirement will be unconstitutional" and that the rest of the Act, including the community-rating and guaranteed-issue provisions, " 'must fall' as well." ECF 29-3, ¶ 10.

As mentioned, Judge O'Connor issued his ruling on December 14, 2018, declaring unconstitutional the Individual Mandate, 26 U.S.C. § 5000A(a). Texas , 340 F.Supp.3d 579. In his view, the Individual Mandate "is no longer fairly readable as an exercise of Congress's Tax Power and continues to be unsustainable under Congress's Interstate Commerce Power." Id. at 585. Further, he declared the remaining provisions of the Affordable Care Act inseverable and therefore invalid. Id.

Minutes after the decision was issued, President Trump tweeted: "As I predicted all along, Obamacare has been struck down as an UNCONSTITUTIONAL disaster! Now Congress must pass a STRONG law that provides GREAT healthcare and protects pre-existing conditions...." And, he tweeted: "Wow, but not surprisingly, ObamaCare was just ruled UNCONSTITUTIONAL by a highly respected judge in Texas. Great news for America!"

Two weeks later, on December 31, 2018, Judge O'Connor entered a partial judgment, invalidating the Individual Mandate and declaring the ACA's remaining provisions inseverable and therefore invalid. See Texas , 4:18-cv-00167-O, ECF 221 (N.D. Tex. Dec. 30, 2018). However, he also stayed his Order of December 14, 2018. See Texas , 4:18-cv-00167-O, ECF 223 (N.D. Tex. Dec. 31, 2088).

On January 3, 2019, the Intervenor Defendants noted an appeal to the United States Court of Appeals for the Fifth Circuit. ECF 221. See Texas, et al. v. United S lates, et al. , No. 19-10011. The Fifth Circuit stayed proceedings on January 11, 2019, in light of the partial government shutdown. Id. The shutdown ended on January 25, 2019. See Further Additional Continuing Appropriations Act, H.R.J. Res. 28, 116th Congo (2019).

III. Discussion

A.

Defendants argue that this Court is without subject matter jurisdiction to consider this case because plaintiff lacks Article III standing to pursue its suit. According to the defense, the State's claim is merely speculative.

It is a bedrock principle that Article III of the Federal Constitution limits judicial power to "actual, ongoing cases or controversies." Lewis v. Cont'l Bank Corp. , 494 U.S. 472, 477, 110 S.Ct. 1249, 108 L.Ed.2d 400 (1990) (citations omitted); see Clapper v. Amnesty Int'l USA , 568 U.S. 398,488, 133 S.Ct. 1138, 185 L.Ed.2d 264 (2013). "Indeed, 'no principle is more fundamental to the judiciary's proper role in our system of government than the constitutional limitation of federal-court jurisdiction to actual cases or controversies.' " Dreher v. Experian Info. Solutions, Inc. , 856 F.3d 337, 343 (4th Cir. 2017) (quoting Spokeo, Inc. v. Robins , 578 U.S. ----, 136 S.Ct. 1540, 1547, 194 L.Ed.2d 635 (2016) ).

The Supreme Court explained in Arizona Christian School Tuition Organization v. Winn , 563 U.S. 125, 133, 131 S.Ct. 1436, 179 L.Ed.2d 523 (2011) : "Continued adherence to the case-or-controversy requirement of Article III maintains the public's confidence in an unelected but restrained Federal Judiciary.... For the federal courts to decide questions of law arising outside of cases and controversies would be inimical to the Constitution's democratic character." See also DaimlerChrysler Corp. v. Cuno , 547 U.S. 332, 341, 126 S.Ct. 1854, 164 L.Ed.2d 589 (2006) ("[T]he constitutional limitation of federal-court jurisdiction to actual cases or controversies" is "fundamental to the judiciary's proper role in our system of government[.]"); Elk Grove Unified Sch. Dist. v. Newdow , 542 U.S. 1, 11, 124 S.Ct. 2301, 159 L.Ed.2d 98 (2004) (stating that Article III standing "enforces the Constitution's case-or-controversy requirement"), abrogated in part on other grounds by Lexmark Int'l, Inc. v. Static Control Components, Inc. , 572 U.S. 118, 134 S.Ct. 1377, 188 L.Ed.2d 392 (2014) ; United States v. Hardy , 545 F.3d 280, 283 (4th Cir. 2008) (stating that under Article III of the Constitution " 'the exercise of judicial power depends upon the existence of a case or controversy' ") (quoting DeFunis v. Odegaard, 416 U.S. 312, 316, 94 S.Ct. 1704, 40 L.Ed.2d 164 (1974) ); Miller v. Brown , 462 F.3d 312, 316 (4th Cir. 2006) (stating that Article III "gives federal courts jurisdiction only over cases and controversies") (internal quotation marks and citations omitted).

Therefore, during the pendency of a case, an actual controversy must exist. See Steffel v. Thompson , 415 U.S. 452, 459 n.10, 94 S.Ct. 1209, 39 L.Ed.2d 505 (1974) ; Williams v. Ozmint , 716 F.3d 801, 808 (4th Cir. 2013). Conversely, in the absence of a case or controversy, "the court's subject matter jurisdiction ceases to exist...." S.C. Coastal Conservation League v. U.S. Army Corps. of Eng'rs , 789 F.3d 475, 482 (4th Cir. 2015) ; see Gardner v. GMAC, Inc. , 796 F.3d 390, 395 (4th Cir. 2015) (same).

"One element of the case-or-controversy requirement" is that a plaintiff must establish standing to sue. Raines v. Byrd , 521 U.S. 811, 818, 117 S.Ct. 2312, 138 L.Ed.2d 849 (1997) ; see Spokeo, Inc. , 136 S.Ct. at 1547 ("Standing to sue is a doctrine rooted in the traditional understanding of a case or controversy."). The Clapper Court explained, 568 U.S. at 408, 133 S.Ct. 1138 : "The law of Article III standing, which is built on separation-of-powers principles, serves to prevent the judicial process from being used to usurp the powers of the political branches."

The "constraint of Article III" includes principles of standing as well as ripeness, which "presents a 'threshold question [ ] of justiciability.' " Scoggins v. Lee's Crossing Homeowners Ass'n , 718 F.3d 262, 269 (4th Cir. 2013) (citation omitted). Like standing, ripeness is an issue of subject matter jurisdiction. Sansotta v. Town of Nags Head , 724 F.3d 533, 548 (4th Cir. 2013) ; see Nat'l Ass'n for the Advancement of Colored People v. Bureau of the Census , PWG-18-891, 2019 WL 355743, at *8 (D. Md. Jan 19, 2019) (" NAACP ") (describing standing and ripeness as "overlapping facets" of subject matter jurisdiction).

As with standing, the ripeness doctrine is "drawn both from Article III limitations on judicial power and from prudential reasons for refusing to exercise jurisdiction ...." Nat'l Park Hospitality Ass'n v. Dep't of Interior , 538 U.S. 803, 808, 123 S.Ct. 2026, 155 L.Ed.2d 1017 (2003) (internal quotation marks omitted). Whereas standing focuses on who can sue, ripeness " 'concerns the appropriate timing of judicial intervention.' " Cooksey v. Futrell , 721 F.3d 226, 240 (4th Cir. 2013) (quoting Va. Soc'y for Human Life, Inc. v. FEC , 263 F.3d 379, 389 (4th Cir. 2001) ); see NAACP , 2019 WL 355743, at *8 (noting that standing addresses who may sue, and ripeness addresses when a party may sue).

Notably, a claim is not ripe for judicial review " 'if it rests upon contingent future events that may not occur as anticipated, or indeed may not occur at all.' " Scoggins , 718 F.3d at 270 (quoting Texas v. United States , 523 U.S. 296, 300, 118 S.Ct. 1257, 140 L.Ed.2d 406 (1998) ). In other words, "the ripeness requirement is designed 'to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements' ...." Ohio Forestry Ass'n, Inc. v. Sierra Club , 523 U.S. 726, 732-33, 118 S.Ct. 1665, 140 L.Ed.2d 921 (1998) (citations omitted); see also South Carolina v. United States , 912 F.3d 720, 730 (4th Cir. 2019) ; NAACP , 2019 WL 355743, at *14.

The doctrines of ripeness and standing have largely blurred in declaratory judgment action. See 13B CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE & PROCEDURE § 3532.5 (3d ed. 2018). In MedImmune, Inc. v. Genentech, Inc. , 549 U.S. 118, 127 S.Ct. 764, 166 L.Ed.2d 604 (2007), the Supreme Court recognized that "standing and ripeness boil down to the same question." Id. at 128 n.8, 127 S.Ct. 764 ; accord Susan B. Anthony , 573 U.S. at 157 n.5, 134 S.Ct. 2334 ; see South Carolina v. United States , 912 F.3d at 730 ; Miller v. Brown , 462 F.3d 312, 319 (4th Cir. 2006) ; NAACP , 2019 WL 355743, at *8 ; see also Capital Associated Indus., Inc. v. Stein , 283 F.Supp.3d 374, 380 (M.D.N.C. 2017) (characterizing discussion of standing and ripeness as "one involving 'standing' " in light of MedImmune and Susan B. Anthony ).

This case may be better decided under the doctrine of ripeness (which addresses when a party may sue) rather than standing (which addresses who may sue). Cf. South Carolina , 912 F.3d at 730 (quoting Miller , 462 F.3d at 319 ) ( (citing ERWIN CHEMERINSKY, FEDERAL JURISDICTION § 2.4 (4th ed. 2003) ) (" 'Although the phrasing makes the questions of who may sue and when they sue seem distinct, in practice there is an obvious overlap between the doctrines of standing and ripeness.' "); accord NAACP , 2019 WL 355743, at *8. Nevertheless, the parties have not addressed ripeness. Rather, they have addressed the question of justiciability through the lens of standing. Therefore, I shall do the same, given that the analysis is largely the same.

B.

The doctrine of standing consists of two distinct "strands": constitutional standing, pursuant to Article III, and prudential standing. Elk Grove Unified Sch. Dist. , 542 U.S. at 11, 124 S.Ct. 2301. As discussed, infra , "the standing inquiry asks whether a plaintiff had the requisite stake in the outcome of a case ...." Deal v. Mercer Cty. Bd. of Educ. , 911 F.3d 183, 187 (4th Cir. 2018) (citing Friends of the Earth. Inc. v. Laidlaw Envtl. Servs. (TOC), Inc. , 528 U.S. 167, 180, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) ). Under Article III, "a party invoking the jurisdiction of a federal court [must] seek relief for a particularized injury," which is a requirement that "serves vital interests going to the role of the judiciary in our system of separated powers." Hollingsworth v. Perry , 570 U.S. 693, 696, 133 S.Ct. 2652, 186 L.Ed.2d 768 (2013).

As indicated, the requirements for constitutional standing reflect that Article III "confines the federal courts to adjudicating actual 'cases' and 'controversies.' " Allen v. Wright , 468 U.S. 737, 750, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984), abrogated in part on other grounds by Lexmark Int'l, Inc., supra , 572 U.S. 118, 134 S.Ct. 1377 ; see also Lujan v. Defenders of Wildlife , 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ("[S]tanding is an essential and unchanging part of the case-or-controversy requirement of Article III[.]"); So. Walk at Broadlands Homeowner's Assoc. Inc. v. OpenBand at Broadlands, LLC , 713 F.3d 175, 185 (4th Cir. 2013) ).

In addition to satisfying constitutional standing requirements, a plaintiff must also demonstrate that his claims are not barred by prudential limitations on a federal court's exercise of jurisdiction. United States v. Windsor , 570 U.S. 744, 133 S.Ct. 2675, 2687, 186 L.Ed.2d 808 (2013) ; see also, e.g. , Elk Grove Unified Sch. Dist. , 542 U.S. at 11, 124 S.Ct. 2301 ; Doe v. Sebelius , 676 F.Supp.2d 423, 428 (D. Md. 2009). Prudential standing " 'embodies judicially self-imposed limits on the exercise of federal jurisdiction.' " Elk Grove Unified Sch. Dist. , 542 U.S. at 11, 124 S.Ct. 2301 (citation omitted).

One such limitation is that "a plaintiff generally must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties." Warth v. Seldin , 422 U.S. 490, 499, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). This limitation serves to "preclude a court from deciding 'questions of broad social import in cases in which no individual rights will be vindicated' " and to ensure that " 'access to the federal courts [is] limited to those litigants best suited to assert the claims.' " Buchanan v. Consolidated Stores Corp. , 125 F.Supp.2d 730, 738 (D. Md. 2001) (quoting Mackey v. Nationwide Ins. Co. , 724 F.2d 419, 422 (4th Cir. 1984) ).

Under Rule 12(b)(1), the plaintiff bears the burden of proving, by a preponderance of evidence, the existence of subject matter jurisdiction. See Lujan , 504 U.S. at 561, 112 S.Ct. 2130 ; Demetres v. East West Const., Inc. , 776 F.3d 271, 272 (4th Cir. 2015) ; Durden v. United States , 736 F.3d 296, 300 (4th Cir. 2013). When, as here, " 'standing is challenged on the pleadings, [the court will] accept as true all material allegations of the complaint and construe the complaint in favor of the complaining party.' " Deal , 911 F.3d at 187 (quoting So. Walk , 713 F.3d at 181-82 ); see Kerns v. United States , 585 F.3d 187, 192 (4th Cir. 2009). "At the pleading stage, general factual allegations of injury resulting from the defendant's conduct may suffice, [since] on a motion to dismiss [the court] presum[es] that general allegations embrace those specific facts that are necessary to support the claim." Lujan , 504 U.S. at 561, 112 S.Ct. 2130 (citation and quotation marks omitted); accord Button v. Nat'l Bd. of Exam'rs in Optometry, Inc. , 892 F.3d 613, 620 (4th Cir. 2018) ; Moore v. Blibaum & Assocs., P.A. , 693 F. App'x 205 (4th Cir. 2017) ; NAACP , 2019 WL 355743, at *17.

Therefore, in analyzing the standing issue, I shall accept as true the allegations in the SAC, so long as "there is sufficient 'factual matter' to render them 'plausible on [their] face.' " Beck v. McDonald , 848 F.3d 262, 270 (4th Cir.), cert. denied sub nom. Beck v. Shulkin , --- U.S. ----, 137 S.Ct. 2307, 198 L.Ed.2d 728 (2017) (quoting Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ); see also Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555-56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). In addition, "a court may properly take judicial notice of 'matters of public record' and other information that, under Federal Rule of Evidence 201, constitute 'adjudicative facts.' " Goldfarb v. Mayor & City Council of Balt. , 791 F.3d 500, 508 (4th Cir. 2015) ; see also Tellabs, Inc. v. Makor Issues & Rights, Ltd. , 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007) ; Katyle v. Penn Nat'l Gaming, Inc. , 637 F.3d 462, 466 (4th Cir. 2011), cert. denied , 565 U.S. 825, 132 S.Ct. 115, 181 L.Ed.2d 39 (2011) ; Philips v. Pitt Cty. Mem. Hosp. , 572 F.3d 176, 180 (4th Cir. 2009). However, under Fed. R. Evid. 201, a court may take judicial notice of adjudicative facts only if they are "not subject to reasonable dispute," in that they are "(1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned."

To establish Article III standing, a plaintiff must satisfy three elements. See Lujan , 504 U.S. at 560, 112 S.Ct. 2130. They are, id. (internal quotation marks and citations omitted):

First, the plaintiff must have suffered an injury in fact-an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical. Second, there must be a causal connection between the injury and the conduct complained of-the injury has to be fairly traceable to the challenged action of the defendant, and not the result of the independent action of some third party not before the court. Third, it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.

See also Susan B. Anthony List v. Driehaus , 573 U.S. 149, 168, 134 S.Ct. 2334, 189 L.Ed.2d 246 (2014) ; Clapper , 568 U.S. at 409, 133 S.Ct. 1138 ; Friends of the Earth, Inc. , 528 U.S. at 180-81, 120 S.Ct. 693 ; Sierra Club v. U.S. Dep't of the Interior , 899 F.3d 260, 284 (4th Cir. 2018) ; Cahaly v. Larosa , 796 F.3d 399, 406 (4th Cir. 2015) ; Lane v. Holder , 703 F.3d 668, 671 (4th Cir. 2012) ; Doe v. Obama , 631 F.3d 157, 160 (4th Cir. 2011).

To meet the injury-in-fact requirement, a plaintiff must establish that it "suffered 'an invasion of a legally protected interest' that is 'concrete and particularized' and 'actual or imminent, not conjectural and hypothetical.' " Spokeo, Inc. , 136 S.Ct. at 1548 (quoting Lujan , 504 U.S. at 560, 112 S.Ct. 2130 ). Alternatively, a threatened injury can satisfy Article III standing, although "not all threatened injuries constitute an injury-in-fact." Beck , 848 F.3d at 271 ; see South Carolina , 912 F.3d at 726. As the Fourth Circuit recently explained in Deal , 911 F.3d at 189, the two concepts-actual, ongoing injury or imminent injury-are "disjunctive"

An "allegation of future injury may suffice if the threatened injury is 'certainly impending,' or there is a " 'substantial risk" that the harm will occur.' " Susan B. Anthony , 573 U.S. at 158, 134 S.Ct. 2334 (quoting Clapper , 568 U.S. at 414 n.5, 133 S.Ct. 1138 ); see Lujan , 504 U.S. at 564, 112 S.Ct. 2130. In contrast, and of import here, " '[a]llegations of possible future injury' are not sufficient." Clapper , 568 U.S. at 409, 133 S.Ct. 1138 (quoting Whitmore v. Arkansas , 495 U.S. 149, 158, 110 S.Ct. 1717, 109 L.Ed.2d 135 (1990) ) (emphasis in original) ). This requirement serves "to ensure that the alleged injury is not too speculative for Article III purposes." Wikimedia Found. v. Nat'l Sec. Agency , 857 F.3d 193, 208 (4th Cir. 2017).

In some cases, it is enough that there is a "substantial risk" of a harm occurring that "prompt[s] plaintiffs to reasonably incur costs to mitigate or avoid that harm." Clapper , 568 U.S. at 414 n.5, 133 S.Ct. 1138. But, in such a case, the plaintiff cannot rely on an "attenuated chain of inferences" nor "on speculation about 'the unfettered choices made by independent actors not before the court.' " Id. (quoting Lujan , 504 U.S. at 562, 112 S.Ct. 2130 ). Nor can plaintiffs "manufacture standing merely by inflicting harm on themselves based on their fears of hypothetical future harm that is not certainly impending." Clapper , 568 U.S. at 416, 133 S.Ct. 1138. "If the law were otherwise, an enterprising plaintiff would be able to secure a lower standard for Article III standing simply by making an expenditure based on a nonparanoid fear." Id. ; see, e.g. , Wikimedia , 857 F.3d at 216 ("Nor can Plaintiffs establish standing on the ground that... surveillance compels them to take burdensome and costly measures.").

Generally speaking, "[a] case is fit for judicial decision when the issues are purely legal and when the action in controversy is final and not dependent on future uncertainties." Doe v. Va. Dep't of State Police , 713 F.3d 745, 758 (4th Cir. 2013) (internal quotation marks omitted). On the other hand, a claim "should be dismissed as unripe if the plaintiff has not yet suffered injury and any future impact remains wholly speculative." Id. (internal quotation marks omitted). As the Fourth Circuit recently reiterated, "an alleged harm is too 'speculative' to support Article III standing when the harm lies at the end of a 'highly attenuated chain of possibilities.' " South Carolina , 912 F.3d at 727 (quoting Clapper , 568 U.S. at 410, 133 S.Ct. 1138 ).

C.

The parties primarily dispute whether the injury-in-fact element is satisfied here. An injury-in-fact is the "[f]irst and foremost" of standing's three elements. Steel Co. v. Citizens for Better Env't , 523 U.S. 83, 103, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). To demonstrate an injury-in-fact, the plaintiff must have suffered " 'an invasion of a legally protected interest' that is 'concrete and particularized' and 'actual or imminent, not conjectural or hypothetical.' " Spokeo, Inc. , 136 S.Ct. at 1548 (quoting Lujan , 504 U.S. at 560, 112 S.Ct. 2130 ).

For the purposes of meeting the injury-in-fact requirement, states "are not normal litigants." Massachusetts v. E.P.A. , 549 U.S. 497, 518, 127 S.Ct. 1438, 167 L.Ed.2d 248 (2007). They may show harm to three kinds of interests: (1) proprietary or financial interests, (2) quasi-sovereign interest, and (3) sovereign interests. See, e.g. , Texas v. United States , 809 F.3d 134, 152-55 (5th Cir. 2015), aff'd by an equally divided court , --- U.S. ----, 136 S.Ct. 2271, 195 L.Ed.2d 638 (2016).

Maryland alleges harm to all three interests. I will discuss each, in turn.

I. Proprietary and Financial Interests

Maryland alleges that it has "fundamentally altered its healthcare" scheme in reliance on the ACA. ECF 29-3, ¶ 43. And, it contends that the State's finances will suffer harm if defendants cease to enforce part or all of the ACA.

Like any other party, a state can establish standing by alleging a direct injury to its financial or proprietary interests. See, e.g. , Wyoming v. Oklahoma , 502 U.S. 437, 112 S.Ct. 789, 117 L.Ed.2d 1 (1992) (concluding that Wyoming had standing to challenge an Oklahoma law that caused Wyoming to lose tax revenues). In this regard, Maryland asserts: "Substantial numbers of Maryland residents have been able to obtain health insurance by virtue of the guaranteed issue, community rating, and prohibition on pre-existing condition exclusions provisions." ECF 29-3, ¶ 25. But, if "those provisions cease to be enforced," the State insists that many Marylanders would lose their coverage. Id. In turn, this would "lead[ ] to a substantial increase in the amount of uncompensated care provided by Maryland hospitals and other healthcare providers, particularly through emergency room visits." Id.

Further, if the uninsured population in Maryland increases, the State contends that, as "a payer of hospital rates," it will "be directly injured by any increase to the uncompensated care rate ...." Id. ¶ 48. Therefore, the State posits that it is "directly injured by an increase to the uncompensated care rate that will occur if the uninsured population in Maryland increases." Id.

Maryland also asserts current harm to its finances as a consequence of the substantial risk that defendants will no longer enforce the ACA. It claims that it has made several investments in reliance on the ACA, which are now at risk. Id. ¶ 43. To name a few, the State established the Maryland Health Benefit Exchange (the "Exchange") to develop and operate the individual exchange; created a funding stream for the Exchange; and entered into a "Total Cost of Care Model" with the Centers for Medicare and Medicaid Services ("CMS"). Id. ; see also ECF 8, ¶ 43.

In the State's view, the "uncertainty regarding the Defendants' future enforcement of the Act harms Maryland." ECF 29-3, ¶ 44. It claims that the State lacks "clear guidance whether public dollars are better spent investing in market reforms compatible with the Affordable Care Act ... or in re-establishing needed consumer protections in the Maryland insurance market...." Id. Such "uncertainty," it claims, could cause "inefficient use" or the "waste of public funds." Id.

Moreover, the State alleges that "programmatic uncertainties" currently "pose a risk of injury to Maryland's financial well-being." Id. ¶ 54. In particular, the State asserts that it has an " 'above-average economic dependence on federal government employment and spending.' " Id. (citing S & P Global Ratings). Therefore, a "threatened decrease in federal spending requires Maryland to consider taking proactive financial management steps to maintain its bond rating, which could require either financial harm to Maryland or an inability to carry out desired programs to the fullest extent." Id. Further, it must proactively take steps to align its budget because of these uncertainties. Id. (citing statements of Maryland's Treasurer Nancy Kopp and S & P Global Ratings).

The government maintains that Maryland is merely speculating as to nonenforcement, and also speculating that nonenforcement will reduce insurance rates and increase the volume of uncompensated care. ECF 33 at 14. Further, it claims that the State is merely speculating "that it might see increased expenses associated with reinstituting state protections, restructuring its insurance market, or enforcing the law itself." Id.

2. Quasi-Sovereign Interests

Maryland alleges harm to its quasi-sovereign interests to establish so-called parens patriae standing. Quasi-sovereign interests include a state's interest "in the health and well-being-both physical and economic-of its residents in general." Alfred L. Snapp & Son, Inc. v. Puerto Rico , 458 U.S. 592, 607, 102 S.Ct. 3260, 73 L.Ed.2d 995 (1982). States also have a quasi-sovereign interest "in securing observance of the terms under which it participates in the federal system." Id. at 607-08, 102 S.Ct. 3260. "This means ensuring that the State and its residents are not excluded from the benefits that are to flow from participation in the federal system." Id. at 608, 102 S.Ct. 3260. Thus, "States have 'special solicitude' to sue the United States ... if a quasi-sovereign interest of the state is at stake." Indiana v. E.P.A. , 796 F.3d 803, 810 (7th Cir. 2015) (citing Massachusetts v. E.P.A. , 549 U.S. at 520, 127 S.Ct. 1438 ); see also Michigan v. E.P.A. , 581 F.3d 524, 529 (7th Cir. 2009) (" '[S]pecial solicitude' afforded to States for standing purposes when there is a quasi-sovereign interest at stake").

Although there are no "definitive limits on the proportion" of a state's residents harmed "by the challenged behavior," a state must allege injury on behalf of a "sufficiently substantial segment of its population." Alfred L. Snapp , 458 U.S. 592 at 607, 102 S.Ct. 3260, 73 L.Ed.2d 995. The "indirect effects of the injury must be considered as well in determining whether the State has alleged injury to a sufficiently substantial segment of its population." Id. A state cannot merely be "a nominal party without a real interest of its own ...." Id. at 600, 102 S.Ct. 3260.

However, a state cannot sue as parens patriae "to protect citizens of the United States from the operation" of federal statutes. Massachusetts v. Mellon , 262 U.S. 447, 485-86, 43 S.Ct. 597, 67 L.Ed. 1078 (1923). In such cases, "it is no part of [a state's] duty or power to enforce their rights in respect of their relations with the federal government. In that field it is the United States, and not the state, which represents them as parens patriae, when such representation becomes appropriate[.]" Id.

The parties disagree about whether states can ever bring parens patriae suits against the federal government. In the government's view, Mellon categorically bars such suits. ECF 33 at 17. Maryland rejects this theory, arguing that a state can sue federal agencies and officers to compel them to comply with federal law. ECF 27 at 19.

I am not persuaded by the government's position. In Massachusetts v. E.P.A., supra , 549 U.S. 497, 127 S.Ct. 1438, the Supreme Court rejected this position, noting " Mellon itself disavowed any such broad reading[.]"

Id. at 520 n.17, 127 S.Ct. 1438. The Court highlighted the "critical difference between allowing a State 'to protect her citizens from the operation of federal statutes' (which is what Mellon prohibits) and allowing a State to assert its rights under federal law (which it has standing to do)." Id. (quoting Georgia v. Pa. R. Co. , 324 U.S. 439,447, 65 S.Ct. 716, 89 L.Ed. 1051 (1945) ); accord D.C. v. Trump , 291 F.Supp.3d 725, 747 (D. Md. 2018) ; Aziz v. Trump , 231 F.Supp.3d 23, 31 (E.D. Va. 2017).

Further, the government's argument "ignores an established line of cases" in which states brought suit "to enforce the rights guaranteed by a federal statute." Texas v. United States , 86 F.Supp.3d 591 (2015), aff'd , 809 F.3d 134 (5th Cir. 2015), aff'd by equally divided court , --- U.S. ----, 136 S.Ct. 2271, 195 L.Ed.2d 638 (2016) ;see, e.g. , Wash. Utilities & Transp. Comm'n v. F.C.C. , 513 F.2d 1142 (9th Cir. 1975) (state regulatory agency filed parens patriae suit against Federal Communications Commission and the federal government); Kansas ex rel. Hayden v. United States , 748 F.Supp. 797 (D. Kan. 1990) (state brought suit against the federal government under parens patriae theory); Abrams v. Heckler , 582 F.Supp. 1155 (S.D.N.Y. 1984) (state used parens patriae theory to maintain suit against HHS).