I just finished listening to the two-plus hours of argument, and here are some impressions, in no particular order:
1. The court may well hold that Virginia lacks standing. Many have been pointing this out for quite some time, but Virginia really has a standing problem. Judge Davis, for one, clearly seemed to think there is no standing here. And the court let Virginia's lawyer talk about the merits for only about three minutes--his remaining twenty were on justiciability. A couple of items of note here: (1) Virginia never fell back to what is now the frontline state claim to standing in Florida v. HHS--that the mandate will force more individuals to enroll in Medicaid, and thus injure the state's fisc; and (2) the Virginia lawyer almost suggested that the Supreme Court had implicitly overruled Massachusetts v. Mellon--a claim that seems rather implausible since all nine justices reaffirmed its validity in Massachusetts v. EPA three years ago. This just seemed to undermine Virginia's claim to standing even further.
2. The court seemed skeptical of the activity-inactivity distinction. Indeed, the court seemed skeptical on two levels (and this was only really discussed in the Liberty University argument). First, the judges seemed skeptical that there was anything in the Supreme Court's precedent that drew any sort of a distinction, for commerce power purposes, between "activity" and "inactivity." (Judge Motz showed some historical chops in noting that many of Chief Justice Marshall's Commerce Clause decisions do not reference the term "activity" at all.) Second, they seemed skeptical that activity can be meaningfully distinguished from "inactivity"--that is, they appeared to embrace the idea that the distinction is largely (though perhaps not entirely) semantic.
3. The court did not press General Katyal too hard on the government's "limiting principle." Certainly, the judges did press the point. There was a fair amount of discussion of broccoli and GM automobiles and the housing market, for sure. But the judges did not seem skeptical or hostile to General Katyal's responses. In other words, it was a marked contrast to the hearing such explanations received from Judges Hudson and Vinson.
Overall, the judges were far more hospitable to the arguments presented by the United States than those presented by the plaintiffs. It is dangerous to draw too many inferences from oral argument, of course, but I think today went very well for General Katyal and the federal government.
In short, I will be surprised if the Fourth Circuit does not unanimously reject the challenges here. (There might be a split in Virginia v. Sebelius, however, over whether the Commonwealth has standing, and thus whether the court should even reach the merits in that case.)
