WASHINGTON — The U.S. Supreme Court began its historic three-day examination of the challenge to the federal health care law by taking up an issue that could stop the case in its tracks: whether the Anti-Injunction Act bars courts from considering challenges to the law before it is fully implemented in 2015.
There are two questions: Is the penalty for not obtaining health care coverage a tax? And if so, is the Anti-Injunction Act a jurisdictional bar preventing courts from hearing challenges at all, or merely a defense that the government can raise?
Government switches sides
There was already an odd twist to this part of the case before arguments began. The administration raised the AIA issue early in the litigation, but it has since abandoned that argument and is now urging the court to find that the insurance penalty is not a tax and allow the challenge go forward instead of waiting until 2015.
“Congress has authority under the taxing power to enact a measure not labeled as a tax, and it did so when it put [the individual mandate] into the Internal Revenue Code,” Solicitor General Donald Verrilli, Jr., argued to the justices on Monday.
But Justice Samuel A. Alito, Jr., asked whether that stance could backfire on the government once the court takes up the constitutionality of the individual mandate on Tuesday. On that issue, the government’s chief argument is that Congress had the power to pass such a measure under its taxing powers.
“Today you are arguing that the penalty is not a tax. Tomorrow you are going to be back and you will be arguing that the penalty is a tax,” Alito said. “Has the court ever held that something that is a tax for purposes of the taxing power under the Constitution is not a tax under the Anti-Injunction Act?”
Verrilli said that the nature of the inquiry in each case was different.
“Tomorrow the question is whether Congress has the authority under the taxing power to enact it and the form of words doesn’t have a dispositive effect on that analysis,” Verrilli said. “Today we are construing statutory text where the precise choice of words does have a dispositive effect on the analysis.”
Gregory G. Katsas, a partner in the Washington office of Jones Day who represented the states challenging the law, argued that the health care law isn’t about imposing monetary fees.
“The purpose of this lawsuit is to challenge a federal requirement to buy health insurance,” Katsas said. “That requirement itself is not a tax. And for that reason alone, we think the Anti-Injunction Act doesn’t apply.”
Chief Justice John G. Roberts, Jr., wasn’t so sure.
“The whole point of the suit [is] to prevent the collection of taxes,” Roberts said. “The idea that the mandate is something separate … just doesn’t seem to make much sense.”
4th Circuit ‘orphan’
Both the federal government and the states challenging the law are largely on the same side of the AIA issue. As a result, the Supreme Court had to appoint an attorney to defend a 4th U.S. Circuit Court of Appeals’ ruling holding that the act barred courts from hearing challenges by plaintiffs until they had incurred the penalty for non-compliance, since that penalty is a tax. In its certiorari petition the federal government requested that the court consider the Anti-Injunction Act issue in the current 11th Circuit case.
Robert A. Long, a partner in the Washington office of Covington & Burling who was appointed to argue the case, said that Congress intentionally set a high jurisdictional bar for appealing tax matters in court.
“First … you have to pay the tax or the penalty first and then litigate later,” Long said. Second, you have to exhaust administrative remedies, even after you pay the tax you can’t immediately go to court. [Third,] even in the very carefully defined situations in which Congress has permitted a challenge to a tax or a penalty before it’s paid, the Secretary [of the Treasury] has to make the first move [by sending] a notice of deficiency to start the process.”
Justice Stephen Breyer said that wasn’t the tough issue.
“I’m probably leaning in your favor on jurisdiction,” Breyer said. “But where I see the problem is in the second part, because the [AIA] says ‘restraining the assessment or collection of any tax.’ Now [in the health care law] Congress has nowhere used the word ‘tax.’ What it says is penalty.”
“You don’t have to determine that this is a tax in order to find that the Anti-Injunction Act applies, because Congress very specifically said that it shall be assessed and collected in the same manner as a tax, even if it’s a tax penalty and not a tax,” Long said.
The balance of the issues in this case, HHS v. Florida, as well as the other cases challenging the law, will be considered by the court Tuesday and Wednesday.
A ruling is expected before the court’s term ends in June.
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