Posts Tagged ‘AIA’

According to the Supreme Court’s December 8 briefing schedule in the challenges to the Affordable Care Act, the opening briefs are due today with respect to everything but the Medicaid issue. Here are a two related non-merits issues to look at in today’s filings:

  1. How does the NFIB’s brief address the standing of the individual plaintiffs? The Wall Street Journal reported back in December on the bankruptcy filing of Mary Brown, who was the only plaintiff that the government conceded had standing to challenge Section 5000A (the minimum essential coverage provision). Ms. Brown’s personal circumstances may render her eligible for an exemption from the penalty for non-compliance with the minimum essential coverage requirement in § 5000A. Earlier this week, the Wall Street Journal reported that the NFIB’s lawyers sought to add as individual plaintiffs two more NFIB members. This is an unusual move, and one that the challengers would not have taken without good reason. (That is not to go so far as to say that the additions should be viewed as an implicit concession about a lack of standing without the to-be-added plaintiffs, only that the lawyers viewed the downside of not seeking to add plaintiffs as higher than the downside of doing so.) In a letter filed with the Supreme Court disclosing Ms. Brown’s bankruptcy, the private plaintiffs said that they would explain in their opening brief why Ms. Brown still had standing. Today is the day they will make good on that promise.
  2. How does the court-appointed amicus curiae address the Anti-Injunction Act issue? There are several arguments that Mr. Long can make, and it will be interesting to see his assessment of their relative strength by their positioning in the brief.

These two issues may look unrelated on their face, but there is a connection between the AIA issue and Ms. Brown’s standing. One of the arguments that the challengers have previously advanced is that they are challenging the requirement to have insurance but not the penalty for non-compliance. In their view, the mandate is a “free-standing legal requirement” while the penalty is a means of enforcing it. Presumably, this assertion about the internal separability of §5000A with respect to the mandate and the penalty will also be part of the argument for Ms. Brown’s standing. The argument would presumably be that, although Ms. Brown’s financial hardship exempts her from the penalty (under § 5000A(e)), she is still subject to the legal requirement to have minimum essential coverage.

I’m skeptical that these arguments resting on the internal separability of § 5000A succeed. But I will withhold judgment until I see the best presentation of these arguments in the challengers’ briefs.

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Some challengers to the individual mandate now assert that the federal tax Anti-Injunction Act is not jurisdictional. Instead, they claim, it is a defense. From this characterization, they argue that the government has forfeited the AIA as a bar to the challenges.

The non-jurisdictional characterization of the federal tax AIA faces a number of difficulties, including the text of the statute and its authoritative construction by the Supreme Court as a jurisdictional bar (e.g., Enoch v. Williams Packing & Nav. Co., 370 U.S. 1, 5 (1962) (“The object of § 7421 (a) is to withdraw jurisdiction from the state and federal courts to entertain suits seeking injunctions prohibiting the collection of federal taxes.”); Bob Jones Univ. v. Simon, 416 U.S. 725 (1974) (affirming dismissal for lack of jurisdiction)) . Given these difficulties, it is not surprising to see inventive arguments about “jurisdictionality” appear in the recent cert filings.

One argument advanced by the NFIB in its response to the federal government’s cert petition in Florida v. HHS is that the Supreme Court has previously accepted the federal government’s “express ‘waiver of a defense under’ the AIA’s predecessor statute.” (NFIB BIO at 17, quoting Helvering v. Davis, 301 U.S. 619, 639-40 (1937).) The NFIB’s response does not elaborate too much on this argument–as perhaps may be expected given the setting in which the argument appears.

Although understandable, the absence of elaboration is unfortunate because a look at Helvering v. Davis suggests that the quotation lifted out of it by the NFIB has been misdeployed. The AIA provides that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court.” The suit in Helvering v. Davis was not such a suit. It was a shareholder suit against a corporation to prevent the corporation from paying a tax. As described by the Supreme Court:

This suit is brought by a shareholder of the Edison Electric Illuminating Company of Boston, a Massachusetts corporation, to restrain the corporation from making the payments and deductions called for by the act, which is stated to be void under the Constitution of the United States. The bill tells us that the corporation has decided to obey the statute, that it has reached this decision in the face of the complainant’s protests, and that it will make the payments and deductions unless restrained by a decree.

As the foregoing description indicates, the suit was not a suit brought against the federal government for the purpose of preventing the government from assessing or collecting a tax. Rather, the suit was brought against a corporation for the purpose of preventing it from paying a tax. Given the nature of the suit, it is far from obvious what relevance the government’s position as an intervenor defendant in the case has to the AIA’s status as a jurisdictional bar in Florida v. HHS. The plaintiffs in that case seek declaratory and injunctive relief against the federal government to prevent it from enforcing an exaction administered through the machinery of tax enforcement.

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