Can Congress use its commerce power to require people to eat broccoli, or to buy American cars? Is a “shared responsibility payment” for failure to purchase health insurance—one that will work like a tax but that Congress called a “penalty”—a constitutionally valid exercise of the power of Congress to levy taxes? In agreeing to consider a challenge to the minimum coverage provision of the 2010 federal health care law, the Patient Protection and Affordable Care Act (ACA), the Supreme Court appears to have signaled that it will resolve these questions.
But before the High Court can provide answers, it must first reckon with a limit on the power of the federal courts that dates back to 1867, the federal tax Anti-Injunction Act. As a federal appeals court in Richmond explained in a September ruling, the Anti-Injunction Act requires taxpayers who object to the federal government’s assessment or collection of a tax to first pay up and only then bring a lawsuit seeking a refund, rather than marching immediately into court to ask for an order restraining the Internal Revenue Service.
Yet if the Justices were to dismiss the current cases as barred by the Anti-Injunction Act, it could take years for the issue to make it back to the Supreme Court. This is because the ACA’s minimum coverage provision, or “individual mandate,” does not become effective until 2014. A refund lawsuit could not be filed until 2015, and then it would have to start working its way back up the federal courts’ ladder.
Acceptance of the Anti-Injunction Act Arguments That Are Being Made Will Cause Costly Delay
Everyone’s interests will be served if the Supreme Court decides the constitutional questions sooner, rather than later. Delay would mean that many federal agencies, states, insurers, providers, and individuals would have to endure years of legal uncertainty, during which time many billions of dollars and enormous effort will be expended in implementing the myriad provisions of the health care law. Some or all of these provisions may not survive if the minimum coverage provision is invalidated, in which case all that money and effort will have been wasted.
In light of these practical worries, the Obama Administration has joined the plaintiffs in arguing that the federal courts can hear challenges to the health care law now, notwithstanding the Anti-Injunction Act. And most of the federal judges who have considered the issue have agreed, concluding that the Anti-Injunction Act does not apply because Congress avoided calling the “penalty” for going without insurance a “tax.”
That reasoning, however, is flawed. For many years now, courts have uniformly applied the Anti-Injunction Act to bar suits challenging “penalties.” Thus, last month, D.C. Circuit Judge Brett Kavanaugh suggested that his colleagues had erred because of their pragmatic desire to reach the merits of a health law challenge. “There is no ‘early-bird special’ exception to the Anti-Injunction Act,” Judge Kavanaugh chided in a mostly procedural dissent from an opinion upholding the ACA on the merits.
Another Path to An Early Resolution of the Constitutional Challenges
Nevertheless, the Supreme Court should reach the merits of the ACA dispute, and it can do so without violating or bending the Anti-Injunction Act for a reason that the parties and judges have thus far overlooked. Rather than determining whether the meaning of the word “tax” in the Anti-Injunction Act is broader than, coextensive with, or sometimes narrower than its meaning in the Constitution, we focus on other language in the statute.
The Anti-Injunction Act forbids lawsuits that have “the purpose of restraining the assessment or collection of any tax.” As we argue in a paper forthcoming in the Yale Law Journal Online, when the government’s authority to assess or collect a tax does not yet exist, a lawsuit challenging the tax does not have “the purpose” of restraining tax assessment or collection. Because the “penalty” for going without health insurance cannot lawfully be assessed or collected until 2014, challenges to the minimum coverage provision fall outside the prohibition of the Anti-Injunction Act. In this sense, there is indeed an “early-bird special” exception to the law.
More specifically, we argue that to avoid absurdity, one must read the Anti-Injunction Act as if it barred suits having “the immediate purpose of restraining the assessment or collection of any tax.” One must read the statute this way because otherwise it would bar even post-enforcement constitutional challenges. Such challenges may have the primary purpose of preventing future assessments or collections, in addition to the immediate purpose of avoiding payment of past assessments or collections; yet they have long been treated as clearly permissible notwithstanding the literal language of the Anti-Injunction Act.
Even assuming for the sake of argument that the ACA exaction for going without insurance qualifies as a “tax” for purposes of the Anti-Injunction Act, the present pre-enforcement challenges do not have “the [immediate] purpose of restraining the assessment or collection” of this tax because, to reiterate, the legal authority to assess and collect it will not exist until 2015.
In other words, the most sensible reading of the Anti-Injunction Act’s text and purpose is that it does not apply until the authority to assess and collect taxes has come into being, just as it does not apply after that authority has been exercised. Rather than having the immediate purpose of restraining the assessment or collection of taxes, the present challenges to the minimum coverage provision have the immediate purpose of preventing the assessment and collection authority of the federal government from going into effect, or of seeking clarification from the courts about the present and future legal obligations of the many individuals and entities subject to the ACA.
As a Hedge Against a Supreme Court Dismissal, Congress Should Pass a Law Limiting the Anti-Injunction Act’s Reach
Will the Supreme Court embrace our proposed reading of the statute and prevent the substantial problems that continued uncertainty would generate? We hope so, but prudence suggests that an alternative approach should also be tried: Congress should enact a special-purpose statute stating that the Anti-Injunction Act does not bar pre-enforcement challenges to the minimum coverage provision until that provision actually goes into effect.
Everyone agrees that Congress has the authority to do this. Indeed, it has taken similar action before. Moreover, if the political branches were to turn their attention to the matter, there would be good reason to expect that the bill would pass both chambers and be signed into law by the President.
The substance of the health care law was, and remains, politically divisive. The timing of litigation over its constitutionality should not be. The time for Congress and the Obama Administration to act is now.