AMERICAN FREEDOM LAW CENTER et al v. OBAMA et al

Filing 25

MEMORANDUM OPINION. Signed by Judge Reggie B. Walton on May 15, 2015. (lcrbw1)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
)
AMERICAN FREEDOM LAW
)
CENTER, et al.,
)
)
Plaintiffs,
)
)
v.
)
Civil Action No. 14-1143 (RBW)
)
BARACK OBAMA, in his official
)
Capacity as President of the United
)
States, et al.,
)
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Defendants.
)
)
MEMORANDUM OPINION
Plaintiffs American Freedom Law Center and Robert Muise bring this civil action against
the United States Departments of Health and Human Services, Treasury, and Labor, as well as a
number of government officials in their official capacities, alleging violations of the United
States Constitution and the Administrative Procedure Act (“APA”), 5 U.S.C. § 706(2) (2012),
regarding the defendants’ implementation of certain provisions of the Patient Protection and
Affordable Care Act (“the Act”), Pub. L. No. 111-148, 124 Stat. 119 (2010). Complaint
(“Compl.”) ¶¶ 10–19, 52–74. Specifically, the plaintiffs challenge the federal government’s
“transitional policy” and “hardship exemption,” which permit individuals temporarily to
maintain health insurance coverage through plans not compliant with the general requirements of
the Act. Id. ¶¶ 34–37. The plaintiffs have moved for a preliminary injunction “to enjoin the
executive actions of the [defendants] that unlawfully revise the clear statutory terms of the
[Act].” [Plaintiffs’] Notice of Motion and Motion for Preliminary Injunction (“Pls.’ Mot. for
Inj.”) at 1. The defendants oppose the motion, Defendants’ Memorandum of Points and

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Authorities in Opposition to Plaintiffs’ Motion for Preliminary Injunction (“Defs.’ Opp’n to
Inj.”) at 3, and have moved to dismiss this matter in its entirety for lack of jurisdiction on
standing grounds, Defendants’ Memorandum of Points and Authorities in Support of Motion to
Dismiss (“Defs.’ Mem. to Dismiss”) at 1.
The Court conducted a hearing on November 5, 2014, to address the parties’ pending
motions. Subsequent to this hearing, but prior to the Court’s resolution of the motions, the
plaintiffs requested the opportunity to engage in additional briefing on the issue of their standing.
The Court permitted the supplemental briefing, see ECF No. 19, at 3, and the parties have now
had thorough opportunity to present their positions on the matter, see generally Am. Inst. of
Certified Pub. Accountants v. IRS, No. 14-cv-1190 (JEB), 2014 WL 5585334, at *3 (D.D.C. Oct.
27, 2014) (explaining that the Court has an “affirmative obligation to ensure that it is acting
within the scope of its jurisdictional authority” (internal quotation marks and citation omitted)).
Upon careful consideration of the parties’ motions and memoranda of law, the Court concludes
that it must grant the defendants’ motion to dismiss, and deny as moot the plaintiff’s motion for a
preliminary injunction. 1
I. BACKGROUND
The Affordable Care Act imposes in certain circumstances a “penalty” on those
individuals who fail to “maintain minimum essential coverage.” See 26 U.S.C. § 5000A (2012).
To meet this obligation, individuals must maintain health insurance coverage through an eligible

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In addition to the documents previously referenced, the Court considered the following submissions in reaching its
decision: (1) the Defendants’ Motion to Dismiss (“Defs.’ Mot. to Dismiss”); (2) the Plaintiffs’ Response to
Defendants’ Motion to Dismiss (“Pls.’ Opp’n to Dismiss”); (3) the Defendants’ Reply in Support of Motion to
Dismiss (“Defs.’ Reply to Dismiss”); (4) the plaintiffs’ Memorandum of Points and Authorities in Further Support
of Plaintiffs’ Standing (“Pls.’ Supp. Opp’n”); (5) the Defendants’ Response to Plaintiffs’ Sur-Reply to Defendants’
Motion to Dismiss (“Pls.’ Supp. Reply”); (6) the plaintiffs’ Memorandum of Points and Authorities in Support of
Plaintiffs’ Motion for Preliminary Injunction (“Pls.’ Mem. for Inj.”); and (7) the Plaintiffs’ Reply in Support of
Motion for Preliminary Injunction (“Pls.’ Reply for Inj.”).

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plan, see id., and the minimum standards for such coverage are set forth in the Act, see Defs.’
Opp’n to Inj. at 3. According to the plaintiffs, “a majority of group health plans . . . lost their
grandfather status [under the Act] by the end of 2013,” Compl. ¶ 29, and “millions of Americans
received notices that their health insurance was cancelled,” id. ¶ 31, because their plans were no
longer compliant with the Act’s requirements, see id. ¶ 34. In response to this dilemma, the
plaintiffs assert that the defendants implemented “a ‘transitional policy’ that would allow . . .
millions of Americans whose insurance companies cancelled their health care coverage to remain
in their non-compliant plans,” id. ¶ 34. On March 5, 2014, the defendants extended this
transitional policy until October 2016. Id. ¶¶ 38–39.
Also challenged by the plaintiffs is “another directive . . . which is separate from the . . .
‘transition policy,’ [and] provides further exemption from the penalty for not having health
insurance.” Id. ¶ 37. This directive, implemented by the Department of Health and Human
Services, provides a “hardship exemption” for individuals who “have been notified that [their]
policy will not be renewed.” Id. (internal quotation marks omitted). These individuals may
apply for “catastrophic coverage” if “the plan options available in the [m]arketplace in [their]
area are more expensive than [their] cancelled health insurance polic[ies].” Id. (internal
quotation marks omitted).
Plaintiff Muise is Co-Founder and Senior Counsel of co-plaintiff American Freedom Law
Center, id. ¶ 12, which is a nonprofit organization with the mission “to fight for faith and
freedom through litigation,” id. ¶ 11 (internal quotation marks omitted). Muise is a resident of
Michigan, and “receives health insurance for himself and his family through [American Freedom
Law Center].” Id. ¶ 12. Following the Act’s implementation, the plaintiffs’ insurer, Blue Cross
Blue Shield of Michigan (“Blue Cross”), informed the plaintiffs by letter that their “current plan

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[was] changing and [it would] be transitioning [the plaintiffs] into a reform-compliant plan.”
Pls.’ Mot. for Inj., Exhibit (“Ex.”) E (Blue Cross Letter) at 1. Blue Cross further noted in the
letter that it “responded to the new government mandates by creating an entire portfolio of health
plan options that are both comprehensive and compliant with federal requirements” and that the
plaintiffs may “select a plan from [Blue Cross’s] whole new menu of options.” Id.
While American Freedom Law Center expresses its “desire and intention to abide by
federal law as validly passed,” Compl. ¶ 45, and to “provide[] its employees with health
insurance that is compliant with the [Act] as passed by Congress and signed into law by
President,” the plaintiffs nonetheless lament the cost of doing so, id. ¶ 44. Prior to the plaintiffs’
transition to an Act-compliant plan, they claim that Muise’s monthly health insurance premiums
were $1,349.96, of which Muise contributed $600 and American Freedom Law Center
contributed the remaining amount. Pls.’ Mem. for Inj. at 10. Under their new plan, the plaintiffs
claim that the monthly premiums “will increase to $2,121.59,” which represents a “[fifty-seven]
percent cost increase.” Id. at 11.
The plaintiffs suggest that this rise is due, in part, to the defendants’ transitional policy
and hardship exemption. They argue that
as the pool of “applicable individuals” who are required to purchase “minimum
essential coverage” pursuant to the unambiguous language of the Affordable Care
Act is reduced, as [the defendants] ha[ve] done through [the hardship exemption
and transitional policy], the direct effect of this action is to financially burden those
who do maintain “minimum essential coverage” pursuant to the Act, specifically
including [the] [p]laintiffs, who are now suffering an economic injury directly
related to [the] [d]efendants’ unlawful actions.
Compl. ¶ 46. In other words, the plaintiffs contend that “Michigan is a state in which the ‘health
insurance risk pool’ has been narrowed” due to the challenged policies, “thereby increasing
(rather than reducing) ‘administrative costs’ and ‘health insurance premiums.’” Pls.’ Mot. for

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Inj., Ex. 1 (Declaration of Robert J. Muise), ¶ 31. And they posit that these assertions are
supported by “undisputed congressional findings (and fundamental economic principles).” Pls.’
Opp’n to Dismiss at 3.
II. STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(1) permits a party to move to dismiss for “lack of
subject-matter jurisdiction.” Fed. R. Civ. P. 12(b)(1). When a defendant moves to dismiss under
Rule 12(b)(1), “the plaintiff[] bear[s] the burden of proving by a preponderance of the evidence
that the Court has subject[-]matter jurisdiction.” Biton v. Palestinian Interim Self-Gov’t Auth.,
310 F. Supp. 2d 172, 176 (D.D.C. 2004); see also Lujan v. Defenders of Wildlife, 504 U.S. 555,
561 (1992). A court considering a Rule 12(b)(1) motion must “assume the truth of all material
factual allegations in the complaint and ‘construe the complaint liberally, granting [a] plaintiff
the benefit of all inferences that can be derived from the facts alleged.’” Am. Nat’l Ins. Co. v.
FDIC, 642 F.3d 1137, 1139 (D.C. Cir. 2011) (quoting Thomas v. Principi, 394 F.3d 970, 972
(D.C. Cir. 2005)). However, because the plaintiff has the burden of establishing the Court’s
jurisdiction, a “court must give [a] plaintiff’s factual allegations closer scrutiny when resolving a
Rule 12(b)(1) motion than would be required for a Rule 12(b)(6) motion for failure to state a
claim.” Byrum v. Winter, 783 F. Supp. 2d 117, 122 (D.D.C. 2011) (citing Macharia v. United
States, 334 F.3d 61, 64, 69 (D.C. Cir. 2003)).
“Although ‘the District Court may in appropriate cases dispose of a motion to dismiss for
lack of subject[-]matter jurisdiction under [Federal Rule of Civil Procedure] 12(b)(1) on the
complaint standing alone,’ ‘where necessary, the court may consider the complaint supplemented
by undisputed facts evidenced in the record, or the complaint supplemented by undisputed facts
plus the court’s resolution of disputed facts.’” Coal. for Underground Expansion v. Mineta, 333

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F.3d 193, 198 (D.C. Cir. 2003) (quoting Herbert v. Nat’l Acad. of Scis., 974 F.2d 192, 197 (D.C.
Cir. 1992)). Thus, “the district court may consider materials outside the pleadings in deciding
whether to grant a motion to dismiss for lack of jurisdiction.” Jerome Stevens Pharm., Inc. v.
FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005).
III.

ANALYSIS

As a preliminary matter, the Court must “begin . . . with the question of subject matter
jurisdiction” before turning to the merits of a preliminary injunction. Aamer v. Obama, 742 F.3d
1023, 1028 (D.C. Cir. 2014); see also Zukerberg v. D.C. Bd. of Elections & Ethics, 999 F. Supp.
2d 79, 82 (D.D.C. 2013) (“Before the Court may consider [preliminary injunction] factors, it
must first determine whether it has jurisdiction to hear the case because Article III jurisdiction is
always an antecedent question.” (internal quotation marks and citation omitted)). Indeed, the
Court “need not delve into [a plaintiff’s] myriad constitutional and statutory claims [where] the
[plaintiff] lacks Article III standing . . . .” Crow Creek Sioux Tribe v. Brownlee, 331 F.3d 912,
915 (D.C. Cir. 2003) (concluding that the plaintiff’s lack of standing precluded the Court’s
review of the merits of a preliminary injunction). This is because a court may not “resolve
contested questions of law when its jurisdiction is in doubt,” Steel Co. v. Citizens for a Better
Env’t, 523 U.S. 83, 101 (1998), as “[h]ypothetical jurisdiction produces nothing more than a
hypothetical judgment—which comes to the same thing as an advisory opinion, disapproved by
[the Supreme] Court from the beginning,” id.
Courts have “always insisted on strict compliance with this jurisdictional standing
requirement . . . [a]nd [this Court’s] standing inquiry [must be] especially rigorous when
reaching the merits of the dispute would force [this Court] to decide whether an action taken by
one of the other two branches of the Federal Government was unconstitutional.” Raines v. Byrd,

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521 U.S. 811, 819–20 (1997) (citations omitted). The irreducible constitutional minimum of
standing contains three elements: (1) injury in fact; (2) causation; and (3) the possibility of
redress by a favorable decision. Lujan, 504 U.S. at 560–61. The plaintiff bears the burden of
establishing each of these elements, id., and “[s]ince these elements ‘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,’”
Jack’s Canoes & Kayaks, LLC v. Nat’l Park Serv., 933 F. Supp. 2d 58, 68 (D.D.C. 2013)
(quoting Lujan, 504 U.S. at 561). Moreover, the plaintiff must demonstrate standing with
respect to each claim and form of relief sought. See Monsanto Co. v. Geerston Seed Farms, 561
U.S. 139, 153 (2010). “In analyzing whether [a plaintiff] has standing at the dismissal stage,”
the Court must “assume that [the plaintiff] states a valid legal claim and ‘must accept the factual
allegations in the complaint as true.’” Info. Handling Servs., Inc. v. Def. Automated Printing
Servs., 338 F.3d 1024, 1029 (D.C. Cir. 2003) (citations omitted) (quoting Sturm, Ruger & Co. v.
Chao, 300 F.3d 867, 871 (D.C. Cir. 2002)).
Yet where, as here, “a plaintiff’s asserted injury arises from the government’s allegedly
unlawful regulation (or lack of regulation) of someone else, much more is needed,” Lujan, 504
U.S at 562, and “it becomes ‘substantially more difficult’ to establish standing,” Nat’l Wrestling
Coaches Ass’n v. Dep’t of Educ., 366 F.3d 930, 938 (D.C. Cir. 2004) (quoting Lujan, 504 U.S. at
562). “In that circumstance, causation and redressability ordinarily hinge on the response of the
regulated (or regulable) third party to the government action or inaction,” and “[t]he existence of
one or more of the essential elements of standing ‘depends on the unfettered choices made by
independent actors not before the courts and whose exercise of broad and legitimate discretion
the courts cannot presume either to control or to predict.’” Lujan, 504 U.S. at 562 (quoting

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ASARCO Inc. v. Kadish, 490 U.S. 605, 615 (1989)). Thus, “it becomes the burden of the
plaintiff to adduce facts showing that those choices have been or will be made in such manner as
to produce causation and permit redressability of injury,” Nat’l Wrestling Coaches, 366 F.3d at
938 (internal quotation marks omitted), and “mere ‘unadorned speculation’ as to the existence of
a relationship between the challenged government action and the third-party conduct ‘will not
suffice to invoke the federal judicial power,’” id. (quoting Simon v. E. Ky. Welfare Rights Org.,
426 U.S. 26, 44 (1976)). Particularly relevant here is this Circuit’s observation that “[t]he
greater number of uncertain links in a causal chain, the less likely it is that the entire chain will
hold true.” Fla. Audubon Soc’y v. Bentsen, 94 F.3d 658, 670 (D.C. Cir. 1996).
The standard is not insurmountable, and this Circuit recognizes that there are “some cases
[that] have held that plaintiffs have standing to challenge government action on the basis of
injuries caused by regulated third parties where the record present[s] substantial evidence of a
causal relationship between the government policy and the third-party conduct, leaving little
doubt as to causation and the likelihood of redress.” Nat’l Wrestling Coaches, 366 F.3d at 941.
For example, this Circuit found that the manufacturer of PVC plastic components established
standing to challenge the government’s decision to characterize a chemical found in its product
as a carcinogen, where the “plaintiff introduced affidavits and other record evidence
demonstrating that municipalities and health care organizations opted to phase out their use of
PVC plastic as a direct result of the . . . decision” and because of the “pejorative and damaging”
nature of the carcinogen label. Id. (explaining Tozzi v. U.S. Dep’t of Health & Human Servs.,
271 F.3d 301, 307–10 (D.C. Cir. 2001)). Similarly, this Circuit “held that a film distributor had
standing to challenge a decision by the government to classify as ‘political propaganda’ certain
films that the plaintiff wished to distribute,” where the distributor “submitted several declarations

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and affidavits detailing specific instances in which potential customers declined to take the films
because of the classification.” Id. at 941–42 (explaining Block v. Meese, 793 F.2d 1303, 1308–
309 (D.C. Cir. 1986)).
Upon review of the plaintiffs’ submissions in support of standing in this case, it is evident
that they have fallen woefully short of meeting their burden. As the defendants aptly note,
“health insurance premiums fluctuate for myriad reasons, ranging from the particular terms of
coverage to various other actuarial factors.” Defs.’ Mem. to Dismiss at 15. Furthermore, as
correctly noted by the defendants,
[the] [p]laintiffs have not established any of the links in the causal chain . . . that
would be necessary to their apparent theory of standing to challenge this particular
exemption. [The] [p]laintiffs have not alleged, for example, that there are
individuals in Michigan with cancelled policies; that any such individuals consider
the other policies available to them to be unaffordable; that any such individuals
have availed themselves of [the defendants’] “hardship” exemption for consumers
with cancelled policies; that, but for this exemption, any such individual would
have purchased “minimum essential coverage” . . . ; that in purchasing such
coverage, that individual would have entered the same risk pool as these [p]laintiffs;
and that such individual’s addition to the risk pool would have lowered [the]
[p]laintiffs’ premiums.
Id. at 20 (citation omitted). As with the hardship exemption, the plaintiffs have similarly failed
to submit evidence to establish a causal connection between the transitional policy and the
increase in their premiums. Indeed, “[m]ost, if not all, of the individual links in the chain alleged
by [the plaintiffs] depend on some allegation that cannot be easily described as true or false,” and
courts “routinely refuse to permit such predictive assumptions to establish standing.” Fla.
Audubon Soc’y, 94 F.3d at 670. Tozzi and Block “require ‘formidable evidence’ of causation,”
Nat’l Wrestling Coaches, 366 F.3d at 942 (quoting Freedom Republicans, Inc. v. FEC, 13 F.3d
412, 418 (D.C. Cir. 1994)), and as the plaintiffs’ submissions here lack any such factual
foundation akin to that submitted in those cases, the Complaint “plainly falls far short of the
mark,” id. (citations omitted); see also W. Dairymen Co-op., Inc. v. Yeutter, No. 90-cv-0220
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(RCL), 1990 WL 547032, at *4 (D.D.C. Apr. 10, 1990) (“The Court of Appeals for the District
of Columbia Circuit has made clear that a plaintiff cannot obtain standing merely by
hypothesizing a series of events which, if they occurred, would harm [the] plaintiff.”).
In opposing the defendant’s motion to dismiss, the plaintiffs cite General Motors Corp. v.
Tracy, 519 U.S. 278 (1997), as controlling. In General Motors, the Supreme Court addressed the
constitutionality of an Ohio law that imposed “taxes on natural gas purchases from all sellers,
whether in-state or out-of-state, except regulated public utilities that me[t] Ohio’s statutory
definition of a natural gas company.” 519 U.S. at 281–82 (internal quotation marks omitted).
The Supreme Court held that while General Motors was not a seller subject to interstate
discrimination, it had standing to raise a Commerce Clause challenge to the law because
“customers of that class may also be injured, as in this case where the customer is liable for
payment of the tax and as a result presumably pays more for the gas it gets from out-of-state
producers and marketers.” Id. at 286. The plaintiffs’ reliance on General Motors is misplaced,
however, as the case is merely a reiteration of the causation standard articulated above; the
Supreme Court identified a clear causal connection between the law and the harm – “Ohio levied
a [five percent] tax on . . . natural gas,” id. at 282, the plaintiff “bought virtually all the natural
gas for its Ohio plants from out-of-state marketers,” id. at 285, and thus was injured by virtue of
being “liable for payment of the tax,” id. at 286. The plaintiffs here have not provided evidence
sufficient to establish a similar causal connection between the government action and the alleged
harm.
The plaintiffs rely also on language in the Act reflecting what they characterize as
“undisputed congressional findings ([grounded on] fundamental economic principles).” Pls.’
Opp’n to Dismiss at 3. They argue that these Congressional findings support their position that

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“unlawfully reducing the ‘health insurance risk pool’ by illegally exempting certain individuals
(and their health care plans)” imposes “increased financial costs and burdens to [the] [p]laintiffs
(and others) who must remain in the ‘pool.’” Id. Specifically, the plaintiffs assert that
invalidating the use of the hardship exemption and transitional policy would “‘broaden the health
insurance risk pool to include healthy individuals, which will lower health insurance premiums,’
and ‘significantly increas[e] health insurance coverage and the size of purchasing pools, which
will increase economies of scale . . . .’” Id. at 22–23. But this Circuit has rejected such
sweeping analytic “assertions,” and requires “actual evidence” concerning “the future actions of
third-party market participants . . . .” Crete Carrier Corp. v. EPA, 363 F.3d 490, 494 (D.C. Cir.
2004). For example, in Crete Carrier, large-haul truck operators challenged the Environment
Protection Agency’s diesel engine emissions standards, alleging that they suffered from
“increased prices for tractors with engines meeting the . . . emissions limit . . . .” Id. at 492. This
Circuit found that the truck operators lacked standing, noting that they
offer[ed] only assertions, not facts, to support their claims about the likely response
of engine manufacturers to repeal of the [emissions standard]. That will not do.
Speculative and unsupported assumptions regarding the future actions of thirdparty market participants are insufficient to establish Article III standing. Without
actual evidence of how engine manufacturers would respond to relaxation or
rescission of the [emissions standard] – and the Trucking Companies have proffered
none – we can not “wade into this morass of marketplace analys[i]s,” and emerge
with the conclusion the engine manufacturers would revert to producing pre[emissions standard] engines.
Id. at 494 (citations omitted). Similarly, the plaintiffs here have failed to offer any actual
evidence that supports their “fundamental economic principles,” see Pls.’ Opp’n to Dismiss at 3,
and without such a factual basis, the Court may not accept the plaintiffs’ assertions as sufficient
to establish standing.
The plaintiffs posit that if the Court declines to accept their marketplace analysis as truth,
the resulting holding would necessitate the conclusion that the Act’s “entire regulatory scheme is
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pointless.” Pls.’ Supp. Opp’n at 6 (emphasis omitted). However, this Circuit has rejected this
reasoning in analogous circumstances, explaining that “one need not adopt the view that a
challenged government policy is totally ineffectual to find that the likelihood of redress is too
speculative to confer standing upon a plaintiff.” Nat’l Wrestling Coaches, 366 F.3d at 943.
Accordingly, this argument does not absolve the plaintiffs of their failure to submit actual
evidence demonstrating causation and redressability. See id.
The plaintiffs contend also that their marketplace analysis is supported by specific
Congressional findings in the Act. Pls.’ Opp’n to Dismiss at 3. But again, this Circuit has held
that such arguments do not remedy a plaintiff’s evidentiary failures with respect to standing,
reasoning that “[w]e do not defer to the views of . . . Congress or its individual members in
determining whether a particular rule will cause injury to a particular plaintiff or as proof of any
causal chain necessary for standing.” Fla. Audubon Soc’y, 94 F.3d at 670 (quoting The Freedom
Republicans, 13 F.3d at 417).
The plaintiffs’ arguments in their supplemental brief fare no better. The supplemental
filing largely relies on a June 6, 2014 Actuarial Memorandum published by Blue Cross for its
2015 small group market rate submission. Pls.’ Supp. Opp’n, Ex. A (Blue Cross 2015 Small
Group Rate Filing) at 1. In that publication, Blue Cross proposed a “rate change of 2.7% for
2015 for all small group products that were offered in 2014.” Id. at 7. Listed among the four
“[s]ignificant drivers of the rate change” was Blue Cross’s observation of “[l]ower than
anticipated improvement of the [Act] compliant market level risk pool in 2014 and 2015 due to
the market being allowed to extend pre-[Act] non-grandfathered plans into 2016.” Id.
As a preliminary matter, the Court observes that the 2.7% rate increase is apparently the
average change across all small group plans; for the eighteen plans described in the filing, some

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of the premiums experienced an increase of up to 3.3%, but some experienced no change in
premiums, and some even experienced a decrease depending on the quarter in which the plan is
renewed. See id. at 8. The plaintiffs having failed to specify which plan they have elected to
join, the Court would have to engage in pure speculation to conclude that they are members of
one of the plans that experienced an increase in premiums due to the “significant driver” noted in
the Memorandum, as opposed to a plan that experienced no increase or a decrease of their
premiums. 2
But even if the plaintiffs claimed that they were members of a plan that experienced an
increase in premiums from the prior year, the Actuarial Memorandum suffers from the same
speculative deficiencies as the plaintiffs’ Complaint. It amounts to mere assertions by the
insurance company and does not constitute evidence that would permit the Court to conclude
that, but for the hardship exemption and transitional policy, individuals in Michigan would
necessarily elect to join the specific Blue Cross plan in which the plaintiffs are currently
enrolled. Indeed, “the presence and number of third-party links in this causal chain
independently corroborate that [the plaintiffs’] claim of causation is ‘entirely speculative’ and
insufficient for standing.” Fla. Audubon Soc’y, 94 F.3d at 670 (citation omitted). More
importantly, the Actuarial Memorandum does not establish that Blue Cross will necessarily
reduce their premiums in the future even if this Court invalidated the government’s policy

2

The plaintiffs represent that their monthly premiums rose from $1,349.96 to $2,121.59 during this time period—an
increase of approximately fifty-seven percent, Pls.’ Opp’n to Dismiss at 13, but do not address Blue Cross’s
explanation that the plaintiffs’ former insurance plan is “changing” and that they will be moved to a plan compliant
with the requirements of the Act, see Pls.’ Mot. for Inj., Ex. E (Blue Cross Letter) at 1 (“Your current plan is
changing and we will be transitioning you into a reform-compliant plan.”). Thus, the Court questions whether the
plaintiffs have even alleged a particularized and concrete harm. The two plans are plainly different—one is Actcompliant and one is not—and the plaintiffs have not demonstrated to the Court that the increased premiums they
now pay do not provide concomitant value through improved benefits and services. Nevertheless, the Court need
not reach the merits of this matter because it ultimately concludes that the plaintiffs have not established the
remaining elements of standing—causation and redressability.

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challenges. And the lack of such evidence of redressability is ultimately fatal to the plaintiffs’
assertions of standing. See, e.g., Nat’l Chicken Council v. EPA, 687 F.3d 393, 396 (D.C. Cir.
2012) (concluding that plaintiff chicken farmers who challenged an EPA decision that allegedly
resulted in an increase in the production of corn-based transportation fuel, and in turn, an
increase in the cost of corn that the farmers use as feed, “can only meet their burden of proof on
the redressability element of standing if they set forth specific facts in the form of an affidavit or
other evidence which show a substantial probability that vacatur of [EPA’s interpretation] would
cause corn prices to [fall]”); Nat’l Wrestling Coaches, 366 F.3d at 944 (plaintiffs “failed
completely to satisfy the redressability prong of Article III standing, for there is nothing to
support [their] claim that a favorable ruling would alter the [third parties’] conduct”); Crete
Carrier, 363 F.3d at 494 (plaintiffs failed to establish standing “[w]ithout actual evidence of how
[the regulated third-parties] would respond to relaxation or rescission of the [government’s
allegedly unlawful activity]”).
As a final point, the Court notes that other district courts have arrived at similar
conclusions. For example, in Peterson v. United States, the District of New Hampshire
concluded that the plaintiff’s alleged harm—that the Act “has caused his supplemental private
health insurance premiums to rise”—lacked redressability and therefore was insufficient to
confer standing. 774 F. Supp. 2d 418, 424 (D.N.H. 2011). The District of New Hampshire
reasoned that the plaintiff’s “supplemental insurer is not a party to this case, so a judgment in
[his] favor would not require it to rescind or reduce the premium increases.” Id. The Court
found that the plaintiff had not “alleged sufficient facts, relating either to his Medicare benefits
or his supplemental private health insurance premiums, to give him standing to challenge the
manner in which the Act was passed.” Id. at 425. Thus, the Court concluded that the plaintiff

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was “merely speculating about how a third party might respond if the Act is struck down as
unconstitutional.” Id. at 424. Similarly, in Butler v. Obama, the Eastern District of New York
declined to find standing where the plaintiff alleged that portions of the Act resulted in increased
insurance premiums because he “altogether failed to allege an injury and causation that are not
entirely conclusory in nature.” 814 F. Supp. 2d 230, 240 (E.D.N.Y. 2011). According to the
Eastern District of New York,
any conclusory assertion by [the] plaintiff in the instant case about current
premiums and the individual mandate—namely, that the individual mandate is
causing insurance premiums to increase for certain types of insurance he wishes to
purchase—is insufficient to establish standing where the setting of such premiums
involves the independent decisions of insurance companies in response to a whole
variety of potential factors—including the statutory and regulatory framework, as
well as general market conditions. Therefore, [the] plaintiff has no standing based
upon any alleged increases in insurance premiums arising from the passage of the
Act.
Id. at 241–42. The Court finds these decisions to be of sound reasoning and consistent with the
precedent of this Circuit and the Supreme Court. The Court therefore deems there to be no
reason to deviate from them.
IV.

CONCLUSION

For the foregoing reasons, the Court concludes that the plaintiffs lack standing to
challenge the allegedly unlawful activity in this case. Accordingly, the Court must grant the
defendants’ motion to dismiss. As the plaintiffs lack standing to bring their asserted claims, the
Court must also deny as moot the plaintiffs’ motion for a preliminary injunction.
SO ORDERED this 15th day of May, 2015. 3

REGGIE B. WALTON
United States District Judge

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An Order consistent with this Memorandum Opinion shall be issued contemporaneously.

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