Standing May Be Critical to How SCOTUS Rules on Student Loan Relief

Some of Insider’s reporting, Justice Barrett and the courts wording, and my comments intermingled in this post.

Amy Coney Barrett Might Have Undermined Student-Debt-Relief Lawsuit, businessinsider, Ayelet Sheffey

On Thursday, Justice Amy Coney Barrett delivered the opinion in Haaland v. Brackeen, which challenged the Indian Child Welfare Act of 1978 allowing Native American children to remain with Native American families in custody battles.

Texas was among the petitioners that sued the federal government over the law. The opinion said the petitioners argued the law was unconstitutional because it employed “racial classifications unlawfully hindering non-Indian families from fostering or adopting Indian children” and it exceeded federal authority and infringed on state sovereignty. Or state rights are also being infringed upon.

The court ruled 7-2 that none of Texas’ challenges had any merit, upholding the law. And the states lacked standing to bring suit.

The issue of standing, revolves around whether a plaintiff actually has a right to sue which proved to be significant in this case. “Standing” may also be central to the court’s decision on student-debt relief.

In June 2021, the court ruled 7-2 red states did not have standing to challenge the ACA’s individual mandate. The opinion said the states did not show a “past or future injury” related to the enforcement of the ACA mandate.

Included in the ACA state suit were also two individuals. The same standing requirement holds true for individuals. Federal law requires a plaintiff has to have standing and can point to a personal injury traceable to the defendant’s unlawful conduct. The court’s ruling was . . .

“Neither the individual nor the state plaintiffs have shown that the injury they will suffer or have suffered is ‘fairly traceable’ to the ‘allegedly unlawful conduct’ of which they complain.”

Fast forward to the Student Suit by states.

In Biden v. Nebraska, six GOP-led states are arguing in part the student debt relief would hurt the revenue of the student-loan company known as MOHELA, or the Missouri Higher Education Loan Authority. Texas was also suing the government on behalf of parents. While the student-debt case is certainly different from the ACA one, the question of standing “still” persists. The ACA opinion . . .

“The two individual plaintiffs didn’t prove they would be harmed by the individual ACA mandate and thus it (the suit) must be struck down as the penalty for not following the mandate was zeroed out.

There is no possible government action that is causally connected to the plaintiff’s (state) injury — the costs of purchasing health insurance.”

The lawsuit did not prove how the federal government would enforce the mandate. The states also did not show how they would be injured by the mandate. The lawsuit had claimed the individual mandate led state residents to enroll in state programs such as Medicaid.

The states also failed to show how the mandate will harm them since there isn’t any prospect of a penalty.

The hint to the outcome of how the student-debt relief will come to pass lies in Justice Amy Barett’s questioning on Student Loan Debt relief.

In Biden v. Nebraska, six Republican-led states sued the Biden administration over his student-loan-forgiveness plan, arguing the relief would hurt their states’ tax revenue and MOHELA’s revenue.

During oral arguments in February, Barrett and the liberal justices scrutinized the states’ standing to invoke MOHELA in their case. The company wasn’t present in court and had previously denied any involvement in the lawsuit. Barrett asking James Campbell, the solicitor general for Nebraska who was representing the states.

“Do you want to address why MOHELA’s not here?” .

“Why didn’t the state just make MOHELA come then?” she asked. “If MOHELA is an arm of the state, why didn’t you just strong-arm MOHELA and say, ‘You’ve got to pursue this suit’?”

James Campbell told Barrett,

“That’s a question of state politics, but we believe as a matter of law that the state has the authority to assert its interests.”

Barrett continued to push back, arguing that “it would be hard to see how a win for the state would benefit MOHELA, or a win for MOHELA would benefit the state, if the assets are completely separate — you don’t get any money out of it.”

The states in the student-debt case may have a stronger case for standing than Texas did with the ACA mandate.

The distinction (David Nahmias, a staff attorney with the UC Berkeley Center for Consumer Law and Economic Justice) between the decision Barrett issued on Thursday and the student-debt lawsuit was the six GOP-led states “were really arguing they were directly injured,” adding, “I think they tried not to make this argument about the parens patriae theory of standing probably because they know it’s not a winning argument.”

Barrett’s thought process could suggest she and other justices are considering whether the six GOP-led states have standing to bring that case against the federal government. A final decision is expected in the coming weeks. In Haaland v. Brackeen (above) Barrett wrote in a footnote in the opinion on Thursday. 

“”Texas claims that it can assert third-party standing on behalf of non-Indian families. This argument is a thinly veiled attempt to circumvent the limits on parens patriae standing.”

In other words, states are searching for a way to get past previous court decisions through selective wording in presentation. We such see what the court decides. Much is dependent upon stating.