Agreeing on one thing: The Anti-Injunction Act does not apply
on Jun 28, 2012 at 2:49 pm
The following contribution to our post-decision symposium on the health care cases is written by Alan Morrison, Associate Dean for Public Interest, George Washington Law School
Amidst nearly 200 pages of disagreement, the Court unanimously concluded that the Anti-Injunction Act (AIA) did not apply and that the Court could decide the merits. As the lawyer representing former IRS Commissioners Mortimer Caplin & Sheldon Cohen in their amicus brief arguing the contrary, I continue to be unpersuaded by the Court’s conclusion that the ACA’s label on the amount payable for not purchasing health insurance as a penalty should have near-conclusive significance. It was quite clear from oral argument that no one on the Court was interested in the AIA argument; the only question was how it would get there.
To the Chief Justice, the fact that the AIA applies to any tax, that the ACA labeled other similar payments as taxes, and some penalties were deemed taxes under section 6671 made the difference. He also noted that, although these penalties are to be treated like taxes for some purposes, they were not for this purpose also supported his argument. He further agreed with the US that three specific exceptions to procedural rules were not limited assessment and collection and did not bear on the AIA issue, but did not deal with the counter-argument that the failure to exclude the AIA was the more significant inference to draw from these three exclusions. And he embraced the often-relied-on adage that Congress intends different meanings when it uses different words in the same statute, without explaining why that applied when interpreting those words in the AIA context, or why a little redundancy in the immense Tax Code should be surprising. The one thing that does seem clear is that, if the US had taken the opposite position, the Court would probably have come out the other way. For a variety of reasons, the Administration chose to defend the law on the merits and its gamble paid off
Circuit Judges Diana Motz & Brett Kavanaugh wrote lengthy opinions reaching the opposite result, and there were almost 100 pages of amicus briefs agreeing with their conclusion, yet the Court dealt with them in just four pages. Scholarly journals will review the merits in detail, but there are a few points that can be made now. First, the US agreed that a similar exactment placed on employers that did not purchase insurance for their employers (also called a mandate) is subject to the AIA: why would Congress have made the AIA applicable to one and not the other? Second, and related, why would Congress, which has made the AIA broadly applicable to many parts of the Tax Code not called taxes (a result that the courts have firmly embraced), exclude this provision, without so much as a hint that it was doing so and no apparent rationale? Third, Congress has made specific exceptions in other laws for constitutional challenges like this, but did not do so here. Why? Last, the exception created here applies not just to this case, but to any challenge to the amount or basis of these penalties, now and forever, with no explanation of any reason for opening such a large exception to the orderly collection and assessment of taxes.
Perhaps this exception will end up being narrow, but whenever Congress decides to enact anything in the Tax Code labeled a penalty, it will have to be on guard against inadvertently taking the AIA out of the picture. Indeed, it would be a good idea for the IRS, or better yet the Joint Committee [of Congress] on Taxation, to look at existing tax penalties to be sure that they do not fall within the Court’s rationale here. At the least, it will open up opportunities for disgruntled taxpayers (or should I say penalty payers) to use this approach and avoid all the routes that the Code otherwise requires.
There were several potentially more damaging options that the plaintiffs offered that were not accepted. One was to make the AIA waivable or subject to exceptions created by the parties or the courts. Another was to allow states to sue on taxes despite the AIA, and the third was to treat the suits as challenging only the mandate and not the penalty¸ even though paying the penalty is the only consequence to not having insurance.
I raised one other objection, not found in the lower court opinions or the other amicus briefs: since no one would owe any money until 2015, on what basis was the claim ripe now and/or who had proper standing. Given the anti-standing rampage of the Court, and in particular the Chief Justice, in recent years, it is odd that no one even raised the issue. One answer may be that the same impulse that led the Court to knock away the troubling AIA enabled it to avoid the ripeness/standing question as well.
Several friends have emailed me after the decision came out to congratulate my efforts, as if the Court accepted my argument, which it plainly rejected. But perhaps in one sense focusing on the AIA had one salutary effect. It helped the Court focus on how much this penalty was like a tax, which was the ground on which there were five votes to uphold it, which was one the reasons we took on the AIA issue in the first place.