The lead plaintiff in the Supreme Court case against Obama's health care act filed for bankruptcy. That raises some thorny legal questions about the future of the case.
Mary Brown became the face of the anti-Obamacare movement last year, as she and Kaj Ahlburg became the lead plaintiffs in a lawsuit to stop the administration's healthcare overhaul. The class action suit, which seeks to determine the constitutionality of Obamacare, formally known as the Affordable Care Act, or ACA, is being led by the National Federation of Independent Businesses. The ACA will require many small businesses with more than 50 employees to purchase health insurance by 2014, or face a penalty.
Brown, who owned and operated Brown & Dockery, a two-employee auto-repair shop in Panama City, Fla., ably encapsulated the sentiment of many small business owners unhappy with the ACA. "Both my business and myself will be harmed if I must purchase health care insurance coverage, which I neither want nor need, to comply with the ACA," Brown explained in an affidavit filed in October of 2010. "I believe that the added costs of ACA-compliant insurance will threaten my ability to maintain my own, independent business."
But in August, Brown closed Brown & Dockery. In September, she and her husband filed for personal bankruptcy. Now, legal experts are questioning whether the case will be able to continue with Brown as the lead plaintiff. According to some legal experts, her bankruptcy, first reported by The Wall Street Journal, may force the NFIB to find a new lead plaintiff.
At stake is whether Brown will maintain "standing" in the case -- whether she can show "that some personal legal interest has been invaded by the defendant." Adam Winkler, a specialist in American constitutional law and a professor at UCLA school of law, says standing "is of the utmost importance to the Supreme Court."
"It appears that Ms. Brown's business no longer has standing," says Winkler. "Standing requires that the person or entity suffer some direct harm from the government's action. But her business is now defunct, and so won't be harmed in any way by the insurance mandate. It is possible that the Supreme Court may allow someone else to have standing in place of Ms. Brown's business, but the law is unclear. This is not the type of issue the Supreme Court treats lightly. Standing is a basic procedural requirement grounded in the Constitution itself. If there's no standing, there's no case." Ahlburgh, however, still has standing.
The NFIB insists it won't go down that way. The small business lobbing group vehemently rejects any suggestion that Brown's case is now moot and argues that Brown does indeed still have standing. In their eyes, despite the personal bankruptcy, and the closing of the business, nothing has really changed in the case.
"In the district court, NFIB's standing was established by many individual small business-owners, in addition to Mary Brown, all of whom are members of NFIB and who have exercised their right to not purchase insurance," says Karen Harned, executive director of NFIB's legal center. "The lower courts have held that both the NFIB and Kaj Ahlburg have standing to challenge the individual mandate, and Mary Brown's bankruptcy in no way affects those rulings. Finally, Mary Brown still has standing because she does not have health insurance, and still does not want to be forced to buy it."
Among the small business owners also named in the case are Dana Grimes, owner of Premier Renovations, a home contracting service in Greenwich, New York; David Klemencic, who sells flooring through his West Virginia-based company, Ellenboro Floors; and Timothy Thompson, the sole proprietor of Thompson's Automotive, a repair shop in North Ashland, Ohio. All signed affidavits that claimed that Obama's health care plan will 'make it difficult, if not impossible, for me to remain in business.'
James Blumstein, a professor of law and the director of the Vanderbilt Health Policy Center, explains that if Brown had standing when she filed suit—originally—that's what matters most, since the NFIB, which is an institutional litigant, has members who are in similar circumstances as Brown.
"If there are members of the association who are injured, the association can bring those claims on their behalf as well," he says.
Brown's lawyers will e-mail her bankruptcy filing to the U.S. Solicitor General's office later this week, according to The Journal, and will address the bankruptcy in the January opening remarks. Until then, it's a waiting game to see what the Supreme Court justices will decide.
"Even if it were to become moot, I'm not sure it would be in anyone's interest to press that," says Rich Friedman, a professor of law at The University of Michigan. "The administration was not resisting [the presentation of the case before the Supreme Court]. They know the [Affordable Care Act] has got be tested."
Last updated: Dec 12, 2011
ERIC MARKOWITZ reports on start-ups, entrepreneurs, and issues that affect small businesses. Previously, he worked at Vanity Fair. He lives in New York City. @EricMarkowitz