Dismissed

A three-judge panel of the 4th U.S. Circuit Court of Appeals on Thursday dismissed on technical grounds two lawsuits filed by Liberty University and Virginia Attorney General Ken Cuccinelli opposing the federal healthcare overhaul.

The decisions leave President Barack Obama's signature initiative headed toward a final resolution in the U.S. Supreme Court as early as next year, perhaps ruling on the issue by June 2012, in the midst of Obama's reelection bid.

In Liberty University's lawsuit, both the federal government and the university had asked the court to consider the core legal issue: whether the law can require that individuals buy health insurance or pay a penalty starting in 2014. Instead, the court ruled 2-1 that the penalty amounted to a tax-and that a tax can't be challenged before it's collected.

In the Virginia lawsuit, the court ruled 3-0 that the state lacked legal standing. Cuccinelli had argued the federal law conflicts with a state law that says no Virginian can be forced to buy insurance.

Judge Diana Gribbon Motz, a Bill Clinton appointee, wrote that the only apparent function of the state law was "to declare Virginia's opposition to a federal insurance mandate." Virginia Gov. Bob McDonnell signed the state law a day after Obama signed the federal healthcare law. But according to Motz, states may not sue the federal government on behalf of its citizens (citizens must sue on their own behalf), and so the legal question was whether the federal insurance mandate genuinely infringes on Virginia's rights as a state or whether the law banning the insurance mandate, she wrote, is merely a "smokescreen for Virginia's attempted vindication of its citizens' interests."

It was the latter, she ruled, adding that allowing the suit to proceed would let states serve as "roving constitutional watchdogs," with the result that "no issue, no matter how generalized or quintessentially political, would fall beyond a state's power to litigate in federal court."

"Obviously, we are disappointed in the ruling," Cuccinelli said in a statement. He argued also that "contrary to the court's suggestion, this suit has always been about vindicating the power of the Virginia General Assembly to legislate about a subject that has historically been viewed as falling within the areas the Constitution left to the states."

Further, the Founding Fathers did intend the states to be "roving constitutional watchdogs," Cuccinelli said. "As James Madison wrote, under the Constitution, 'the power surrendered by the people is first divided between two distinct governments. . . . Hence a double security arises to the rights of the people. The different governments [state and federal] will control each other. . . ."

Legal analysts chalked up the second ruling as a serious loss for Cuccinelli and a victory for the Obama administration, and suggested he would have been better off joining one of the other state-sponsored suits that had citizen plaintiffs.

Three federal appeals courts have now weighed in on lawsuits filed over the healthcare law, and both opponents and advocates say the Supreme Court will ultimately review the overhaul. A decision by the 6th U.S. Circuit Court of Appeals in Cincinnati upholding the law already has been appealed. The Justice Department has yet to appeal the Aug. 13 decision by the 11th U.S. Circuit Court of Appeals in Atlanta, which struck down the insurance mandate, and was given 60 days to appeal or ask for more time.

Both Cuccinelli and Liberty University attorney Mathew Staver said they plan to appeal Thursday's rulings to the Supreme Court.

Staver noted that the lawsuit filed by Liberty, a Christian school founded by the Rev. Jerry Falwell, is just one of more than 30 that have been filed across the country challenging the healthcare overhaul.

"That in and of itself says something that this is unprecedented; it's unwanted and it's unconstitutional in my view," Staver said.

The Associated Press contributed to this report.