March 27, 2012
Johnson: ObamaCare Oral Argument, Day 1
Steve Johnson (Florida State), ObamaCare Oral Argument, Day 1:
I just finished reading the transcript of the Supreme Court oral argument today in HHS v. Florida on whether the Anti-Injunction Act currently bars on-the-merits review of challenges to the individual mandate portion of the Affordable Care Act. The two big questions are: will the Court resolve the issue correctly and will it do so on the right ground(s). I have complete confidence in “yes” as the answer to the first question and guarded optimism in “yes” as the answer to the second question
My view has been and is that the AIA should not prevent on-the-merits review now. Today’s oral argument makes it clear that the Court will hold to that effect. Eight of the Justices (all save Justice Thomas, as is his practice) asked questions today. None of the eight indicated a disposition to hold the AIA an obstacle. Based on today’s argument, it would be a massive surprise for the Court (or even one justice) to accept the “AIA precludes current review” contention.
While the result may well be unanimous, it is less clear that the justices will all agree on the rationale. Many grounds have been debated in the briefs, and most of them were probed today.
I am concerned about unintended consequences in an area as technical as the AIA. Thus, my preference is for as narrow a rationale as possible, one that would dispose of the AIA in this case without saying much or anything about the AIA in other contexts. For me, the best argument in that vein is a textual/purposive reading of the AIA. The AIA prohibits suit “for the purpose of” restraining tax assessment or collection. Since the shared responsibility payment (which is the enforcement device for the individual mandate) could not be assessed before 2014/2015 in any event, decision in HHS v. Florida will long precede any possible assessment and collection. Thus, decision now would not compromise the purpose of the AIA. This is similar to the argument advanced by Professors Michael Dorf and Neil Siegel.
Acceptance of this argument would not undermine the useful purposes of the AIA in true tax cases. Justice Breyer was thinking along these lines in his questioning. Most other justices did not comment on it.
Early in the questioning today, many justices signaled support for the idea that the AIA is not jurisdictional. This would end the argument because the AIA could then be waived by the Government and it has been so waived. This argument scares me, though. If the AIA isn’t jurisdictional, federal courts could invent additional exceptions to it. This would be dangerous for tax administration. The Government opposes this rationale, and it seemed to me that there was some diminution of support for it among the justices as the argument proceeded. It is quite possible that some justices will accept this rationale, but my guess is that a majority will not. The Court will probably defer to the Government’s perception of where the fiscal interests of the United States lie.
The Government opposes application of the AIA on statutory grounds. It offers something close to a bright line: that Congress must have provided textual instruction that the mesure in question is a tax for AIA purposes and that such instruction is lacking in the Affordable Care Act and the Code. My guess is that the Court will adopt this rationale.
The State and private plaintiffs offer several other contentions, including that States are not “persons” for AIA purposes thus are not barred from suing, that their suit is directed against the individual mandate not the shared responsibility payment, and that the South Carolina v. Regan exception applies. These contentions appeared to have limited traction today. They are unlikely to be adopted as the Court’s rationale.
- Double Taxation, Scoring Day 1 of the Obamacare Hearings
- Forbes, Tax Or Penalty? SCOTUS Unlikely to Let Arcane Jurisdictional Issue Stand in the Way of Deciding Constitutionality of Obamacare
- NPR, Tax Fight a Prelude to Supreme Court Fireworks, by Nina Totenberg
- Slate, You Say Tax, I Say Penalty, by Dahlia Lithwick
- Volokh Conspiracy, Justices Skeptical of Claims that the Individual Mandate is a Tax, by Ilya Somin
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From the Volokh Conspiracy link:
"Still, it’s interesting that the tax argument – which has attained great popularity among academic supporters of the mandate – has been overwhelmingly repudiated by the courts, including several judges who voted to uphold the law on other grounds. And it looks like the Supreme Court may well go the same as the lower courts on this issue."
Paul, you have featured works of professors claiming that the mandate penalty is really a tax, in desperate hopes that they could build a case supporting Obamacare. Now, they are looking pretty stupid. It's too bad that so many professors put political agenda above straightforward scholarship.
Posted by: Woody | Mar 27, 2012 7:16:40 AM
Professor Johnson, you write like a true academic. "[A] textual/ purposive reading of the AIA" is what every tax protestor in history, and not a few lawyers, has put up as the reason the law does not apply to their tax case. The beauty of the anti-injunction act is that it is relatively simply and clear, with a limited number of exceptions. No court can maintain an action for an injunction against federal tax assessment or collection. The motive for bringing the suit is completely irrelevant. My great concern with these nine justices is that between them, there isn't a whit of practical knowledge of federal taxes. My great fear is that the anti-injunction act is going to be gutted, because these nine justices, and the vast majority of the academics who have commented, have never litigated a federal tax case. There are hundreds and hundreds of tax injunction suits filed against the U.S. and IRS every year. 99% are dismissed quickly and efficiently due to the anti-injunction act. If the anti-injunction act doesn't apply in this case, DOJ's Tax Division will be in a hiring mode by early next year.
Posted by: Publius Novus | Mar 27, 2012 12:14:26 PM