The Daily Caller

The Daily Caller
In this photo taken Oct. 8, 2012, the justices of the U.S. Supreme Court gather for a group portrait at the Supreme Court Building in Washington. (AP Photo/Pablo Martinez Monsivais) In this photo taken Oct. 8, 2012, the justices of the U.S. Supreme Court gather for a group portrait at the Supreme Court Building in Washington. (AP Photo/Pablo Martinez Monsivais)  

Reporter’s Notebook: Obamacare’s first day at the Supreme Court: The calm before the storm

Photo of Ilya Shapiro
Ilya Shapiro
Senior Fellow in Constitutional Studies, Cato Institute

On an argument day that can best be described as the calm before the storm, the Supreme Court gave every indication that it would indeed have to decide the constitutionality of Obamacare’s centerpiece, the individual mandate.

But before reaching the issue of whether the federal government can constitutionally require people to buy health insurance, the Court must grapple with whether such a claim can even be heard in light of an obscure statute called the federal tax Anti-Injunction Act (AIA).

The AIA, first enacted in 1867 to facilitate tax-collection and protect courts from dubious tax protesters, bars lawsuits seeking to enjoin “any tax” before that tax is assessed or collected. One would think that such a law would have no application to the Obamacare litigation because there are no taxes at issue: the individual mandate is a command to do something and the penalty enforcing it is a punishment for not complying with that command.

Accordingly, all but one of the courts to take up the issue have found the AIA to be inapplicable. Indeed, the Atlanta-based U.S. Court of Appeals for the Eleventh Circuit, whose ruling is the one before the Supreme Court, didn’t even consider it.

Moreover, the government itself has long conceded that the AIA is inapplicable here. Still, out of an abundance of caution, and because the AIA may be a jurisdictional bar that the government cannot waive — itself a preliminary issue to this preliminary issue — the Supreme Court appointed an amicus curiae (“friend of the court”) to argue for the position that the AIA bars these suits.

Alas, the justices weren’t all that friendly to their appointed amicus, Robert A. Long, repeatedly expressing skepticism at his claim that the individual mandate (or at least its penalty) was the sort of “tax” contemplated by the AIA. (RELATED: Full coverage of the health care law)

“Congress has nowhere used the word ‘tax,’” Justice Stephen Breyer asserted, adding that “this is not in the Internal Revenue Code ‘but for purposes of collection [a requirement for AIA application].’ And so why is this a tax?”

“The Tax Injunction Act [a statute modeled on the AIA] does not apply to penalties that are designed to induce compliance with the law, rather than to raise revenue,” observed Justice Ruth Bader Ginsburg. “And this is not a revenue-raising measure because, if it’s successful … nobody will pay the penalty, and there will be no revenue to raise.”

The AIA “does very clearly make a difference … between tax and penalties,” said Justice Sonia Sotomayor. “It’s very explicit.”

Breyer then remarked that all of the legal precedent where the AIA barred suits against “penalties” involved penalties that were defined as taxes or that were used to enforce substantive tax provisions. (For more on this point, whether Breyer was thinking of it or not, see Cato’s AIA amicus brief.)