Health Care Briefs: Reply Brief of Solicitor General Donald Verrilli on Anti-Injunction Act

Over the next couple of months I will be reviewing the briefs filed in the health care case pending before the Supreme Court of the United States.  Today's entry concerns a reply brief filed by Solicitor General Donald Verrilli regarding a jurisdictional issue arising under the federal Anti-Injunction Act.


Yesterday I received in the mail a reply brief from the Solicitor General on the issue whether the Court should dismiss the case for lack of jurisdiction under the Anti-Injunction Act.  It does something I thought was not possible.  It makes a persuasive argument for the proposition that the Anti-Injuction Act does not apply to the penalty provision of the Affordable Care Act.  The brief walks a fine line, though, because the federal government does not wish to weaken the Anti-Injunction Act.  Accordingly, the SG's brief also rebuts a number of arguments proposed by the respondents that would have the effect of gutting the Anti-Injunction Act.

Beginning January 1, 2014, the Affordable Care Act imposes a penalty on any person who does not have health insurance coverage.  The penalty is collected with the income tax, and amounts to 2.5% of income up to a maximum of $675 per person. 

The General Welfare Clause of the Constitution gives Congress the power to enact taxes, duties, and excises.  The federal government quite naturally contends that the enforcement mechanism of the Affordable Care Act constitutes a "tax" for purposes of the General Welfare Clause.  In other words, when Congress enacted the individual mandate it was exercising the "power of the purse."

The problem with this case is that the federal Anti-Injunction Act prohibits any person from challenging the constitutionality of tax legislation until the tax is assessed.  The "penalty" associated with the Affordable Care Act will not be assessed until April 15, 2015.  Accordingly, if this law constitutes a "tax" under the Anti-Injunction Act the courts should wait until then to decide the case.

The SG's brief presents a seeming contradiction: that the penalty associated with the individual mandate is a "tax" within the meaning of the General Welfare Clause of the Constitution, but that it is not a tax for puposes of the Anti-Injunction Act.  How is this miracle achieved?

Verrilli contends that as a matter of statutory construction neither the Affordable Care Act nor the Anti-Injunction Act were intended to prevent the courts from determining the constitutionality of the individual mandate.  He notes that the Affordable Care Act was amended to call the enforcement mechanism a "penalty" rather than a tax.  He observes that the law instructs to collect the penalty "in the same manner" as taxes, but is careful not to call it a tax.  Most significantly, the Affordable Care Act does not provide that the   "penalty" is protected from pre-enforcement challenge under the Anti-Injunction Act, as other laws do.  Therefore, purely as a matter of statutory construction, this penalty which is a "tax" for purposes of the Constitution is not a "tax" for purposes of the Anti-Injunction Act.

This argument makes sense because Congress probably wanted the courts to determine the constitutionality of this law before it goes into effect.  No-one - not the government, not the states, not the individual plaintiffs - wants to wait until 2015 to find out whether this law is constitutional.  The Affordable Care Act creates dozens of offices and bureaus within the federal government as well as 50 state "exchanges" for the sale of health insurance.  Hundreds of billions of dollars are at stake.  It makes sense to hear the case now.  It is appropriate to assume that this was Congress' intent.

The rest of the government's brief is devoted to rebutting the arguments of the parties challenging the constitutionality of the Affordable Care Act that would weaken the Anti-Injunction Act.  The various states and individuals who brought this lawsuit contend that since both they and the government think that the Anti-Injunction Act does not apply, the courts are free to overlook the Act and hear the case.  In rebuttal, Verrilli cites cases for the proposition that the Anti-Injunction Act may not be waived by the parties; that it is in fact a jurisdictional provision abolishing the power of the courts to hear pre-enforcement challenges to tax laws, and not simply a law that restricts taxpayers from filing those challenges.

The Solicitor General also rejects the respondents' contention that they are only challenging the portion of the Affordable Care Act that imposes the individual mandate and are not challenging the penalty provision.  The SG correctly notes that the individual mandate is not a criminal law; there is no other enforcement mechanism other than the "tax penalty" in question.  And, in any event, the SG notes that the respondents' own complaint that started this case expressly challenged the constitutionality of the penalty imposed by the Affordable Care for failure to maintain insurance coverage.

In the final portion of his reply brief the SG restates its position that the states lack standing to challenge the individual mandate, so their arguments regarding the applicability of the Anti-Injunction Act are irrelevant.

All in all, it's a great brief.  If, however, the Supreme Court disagrees with the parties and finds that the Anti-Injunction Act applies to this case, it will dismiss the case for lack of jurisdiction, and the parties will have to refile in 2015.

Wilson Huhn is the author of "ObamaCare: Is It Necessary, What Will It Accomplish, Is It Constitutional" available from Amazon for Kindle or Kindle for PC.  He also submitted a brief to the Supreme Court for a committee of professors regarding the constitutionality of the individual mandate provision of the Affordable Care Act.