The U.S. Supreme Court on March 26 heard oral arguments on whether challenges to the Patient Protection and Affordable Care Act are premature under the Anti-Injunction Act and should be barred until penalties for failing to purchase health care insurance under the individual mandate have to be paid (Department of Health and Human Services, et al. v. State of Florida, et al., No. 11-398).
(Transcript available. Document #31-120404-005T.)
Monday's arguments pertaining to the AIA were the first of four issues the Supreme Court will hear arguments on this week after agreeing to review three challenges to the health care reform law. The AIA provides that "no suit for the purpose of restraining the assessment or collection of any tax may be maintained in court by any person." The provision means that assessed taxes must be paid before being challenged in court; the penalty for failing to comply with the individual mandate does not go into effect until 2014.
The plaintiffs and the government said the AIA does not bar apply to the challenges, while a court-appointed amicus curiae argued that the AIA does bar the suit.
U.S. Solicitor General Donald Verrilli argued for the government, saying that the AIA does not bar consideration of the issues surrounding the PPACA.
Justice Samuel A. Alito Jr. asked Verrilli how, if during today's arguments he argued that the penalty is not a tax, he could go back to arguing during Tuesday's arguments on the minimum coverage provision that the penalty is a tax. "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?" Justice Alito asked.
Verrilli responded that the court has not but that it has held in license-taxing cases that something can be a constitutional exercise of the taxing power regardless of whether it is called a tax. "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."
If the penalty contained in the PPACA is not covered by the AIA, Justice Ruth Bader Ginsburg asked why should the court deal with the jurisdictional issue at all. Verrilli responded that he agreed that there would be no reason to decide the jurisdictional issue.
Justice Anthony Kennedy asked Verrilli to comment further, saying it would seem that there would be some instances in which the government would want to litigate the validity of a tax right away and waive the bar.
Verrilli said he could see two problems with waiving the bar: The first is that if the AIA is not jurisdictional, then courts would have authority to craft equitable exceptions; the second is that if the AIA is not jurisdictional, then it would open up the possibility that the AIA argument is forfeited by its not having been raised by the government in an answer, Verrilli said.
Attorney Greg Kastas argued for the plaintiffs, saying that the AIA does not bar the court from considering the merits of their challenge to the individual mandate because the AIA is not jurisdictional and because the challenge is to the individual mandate and not the penalty.
Justice Stephen G. Breyer asked Kastas if the underlying reason for not wanting a waiver would be that Congress is trying to say that there already is a procedure for people to follow that does not provide for going to court in advance of paying the penalty because they do not want federal judges substituting their idea of what is a proper equitable defense of when there should be an exception.
Kastas responded that the justice gave an argument why as a policy matter it might make sense to have a nonjurisdictional statute but said that the court's recent cases have indicated time and time again that Congress has to clearly rank the statute as nonjurisdictional in its text and structure.
Upon further questioning, Kastas said that all of the court's cases analyze the AIA as if the statute is jurisdictional and not subject to waiver. If the court were to construe the AIA as a statute that would permit waiver, then the plaintiffs would still win because the solicitor general, with full knowledge of the AIA argument available to him, affirmatively gave it up, Kastas said.
The Supreme Court appointed Robert A. Long as amicus curie to argue in support of vacatur. Long told the court that the challenge to the PPACA falls within the scope of the AIA because Congress provided that the penalty imposed by Section 5000A of the act should be "assessed and collected in the same manner" as taxes and because the term "tax" is broad enough to include the penalty, particularly in light of provisions defining taxes to include "assessable penalties" for the purpose of assessment and collection.
During Long's arguments, Justice Sonia Sotomayor said that from all of the questions from the court, she could count a number of cases in which the court has accepted a waiver by the solicitor general and reached a tax issue. "Given that history, regardless of how we define jurisdictional statutes versus claim processing statutes in recent times, isn't the fairer statement that Congress has accepted that in the extraordinary case we will hear the case?"
Long responded no, saying that in recent times, Congress has framed the limited exceptions to the AIA in jurisdictional terms.
All of the challenges to the PPACA before the court stem from State of Florida, et al. v. Department of Health and Human Services [enhanced version available to lexis.com subscribers], in which the U.S. District Court for the Northern District of Florida held that the individual mandate contained in the PPACA is an unconstitutional regulation of commerce. The court also held that because the PPACA contains no severance clause, the entire law must fail. A split 11th Circuit panel affirmed that the individual mandate is unconstitutional but reversed the holding that the provision is not severable from the rest of the act. The court also affirmed that the act's expansion of Medicaid is constitutional.
Verrilli, Assistant Attorney General Tony West, Deputy Solicitor General Edwin S. Kneedler, Deputy Assistant Attorney General Beth S. Brinkmann, Assistant to the Solicitor General Joseph R. Palmore and attorneys Mark B. Stern, Alisa B. Klein, Samantha L. Chaifetz and Dana Kaersvang, all of the U.S. Department of Justice; George W. Madison of the Department of Treasury; M. Patricia Smith of the Department of Labor; William B. Schultz, acting general counsel, and Kenneth Y. Choe, of the Department of Health and Human Services, all in Washington, represent the government.Karen R. Harned of the National Federation of Independent Business Legal Center; Randy E. Barnett, professor at Georgetown University Law Center, and Michael A. Carvin, Gregory G. Katsas, C. Kevin Marshall, Hashim M. Mooppan and Yaakov M. Roth of Jones Day, all in Washington, represent the private petitioners.Kastas of Jones Day in Washington, Florida Attorney General Pamela Jo Bondi, Florida Solicitor General Scott D. Makar and Louis F. Hubener, Timothy D. Osterhaus and Blaine H. Winshop of the Florida Attorney General's Office, all in Tallahassee, Fla.; Paul D. Clement and Erin E. Murphy of Bancroft in Washington; Texas Attorney General Greg Abbott and Texas Deputy Attorney General Bill Cobb, both in Austin, Texas; South Carolina Attorney General Alan Wilson in Columbia, S.C.; Alabama Attorney General Luther Strange in Montgomery, Ala.; Michigan Attorney General Bill Schuette in Lansing, Mich.; Nebraska Attorney General Jon Bruning and Katherine J. Spohn, of Nebraska's Attorney General's Office, both in Lincoln, Neb.; Utah Attorney General Mark L. Shurtleff in Salt Lake City; Louisiana Attorney General James D. "Buddy" Caldwell in Baton Rouge, La.; Colorado Attorney General John W. Suthers in Denver; Washington Attorney General Robert M. McKenna in Olympia, Wash.; Pennsylvania Gov. Thomas W. Corbett Jr. and Pennsylvania Attorney General Linda L. Kelly, both in Harrisburg, Pa.; South Dakota Attorney General Marty J. Jackley in Pierre, S.D.; Indiana Attorney General Gregory F. Zoeller in Indianapolis; Georgia Attorney General Samuel S. Olens in Atlanta; Idaho Attorney General Lawrence G. Wasden in Boise, Idaho; Arizona Attorney General Tom Horne and Joseph Sciarrotta Jr. and Janice K. Brewer of the Arizona Attorney General's Office, all in Phoenix; Nevada Gov. Brian Sandoval in Carson City, Nev.; Alaska Attorney General Michael C. Geraghty in Juneau, Ala.; Ohio Attorney General Michael DeWine and David B Rivkin and Lee A. Casey of Baker & Hostetler, all in Columbus, Ohio; Wyoming Gov. Matthew Mead in Cheyenne, Wyo.; Maine Attorney General William J. Schneider in Augusta, Maine; Iowa Gov. Terry Brandstad in Des Moines; Michael B. Wallace of the Mississippi governor's office and Phil Bryant of Wise Carter Child & Caraway, both in Jackson, Miss.; Kansas Attorney General Derek Schmidt in Topeka, Kan.; and Wisconsin Attorney General J.B. Van Hollen in Madison, Wis.; represent the states.
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Lexis.com subscribers can access briefs, pleadings and motions in this case.
Related content on lexis.com:
Introduction to the PPACA and HCERA of 2010
Kopp, Paley, Bacon and Foster on New Federal Health Care Reform Legislation - Its Impact on Employers and Employee Benefits Plans
Kevin Bress on the Community Living Assistance Services and Support Act (the "Class Act")Like Your Health Plan? You Can Keep It (Maybe)
What Elder Law Attorneys Need to Know About PPACA and Health Care Reform David L. Bacon, David S. Foster, Peter H. Durant and Regina S. Rockefeller on the Dramatic Constitutional Challenges to the Patient Protection and Affordable Care Act
PPACA's Adult Child Coverage Mandate
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