The Anti-Injunction Act Complications

The big news from [last Friday’s] two decisions was not that Virginia lacks standing; that was a problem lurking in that case from the beginning, a nettlesome issue going all the way back to Judge Hudson’s first opinion (in August 2010) rejecting the United States’s motion to dismiss on 12(b)(1) grounds. Virginia would have stood on much stronger ground had it also alleged an injury in fact from the effect of the minimum essential coverage provision’s necessarily pushing more Virginia residents onto the state’s Medicaid rolls, and thus imposing a significant financial cost on the state. But the Commonwealth failed to do this, instead resting on the claim that it had standing based on the alleged “conflict” between its Virginia Health Care Freedom Act and the individual mandate. This was a weak argument from the beginning, and the Fourth Circuit’s holding was entirely unsurprising.

What is surprising–perhaps not on the merits, but in relation to the attention the issue has received to date, from the courts and the parties–is the court’s holding in Liberty Universityv. Geithner that federal courts lack any subject matter jurisdiction over a suit seeking to enjoin enforcement of the individual mandate because such jurisdiction is precluded by the Anti-Injunction Act. In this respect, there are some important points worth noting:

* This is a potential problem in every lawsuit currently challenging the individual mandate. That is, if the Fourth Circuit’s analysis is correct, then the Supreme Court would lack jurisdiction to hear any private plaintiff’s claim that the minimum coverage provision exceeds Congress’s enumerated powers until after a taxpayer was assessed a penalty under ACA 1501, paid the penalty, and sued the federal government for a refund. The case thus would not reach the Supreme Court until somewhere in the neighborhood of 2015 or 2016.

* It is conceivable, though, that the AIA does bar suits brought by state governments. Of course, state governments have problems establishing standing under Article III, as discussed above. But if the states could overcome the Article III hurdle, it might be that they (unlike private plaintiffs) could avoid the AIA bar. (I remember Judge Hudson analyzing this issue in his August 2010 ruling denying the United States’s motion to dismiss. Obviously, I need to look at it more carefully now.)

* One solution is that which Kevin Walsh has just proposed, which you can read here. In essence, Congress could pass a law repealing the AIA (since it is a statutory bar to jurisdiction) as applied to the ACA lawsuits. As Kevin documents, such a “retroactive” restoration of jurisdiction appears to be viable, even if there actually was not jurisdiction when the case was initially filed in the district court. (I agree with Kevin that Democrats and the President likely have an incentive to appear publicly to support this. But I am not sure there is quite the bipartisan consensus in fact to which Kevin refers. I can think of several reasons that most Democrats would much rather this case be decided by the Supreme Court in 2013 rather than June 2012.)

* What does the Justice Department do now? It has already essentially flip-flopped on this question–initially arguing that the AIA precluded subject matter jurisdiction, but then changing its tune, most notably in the letter brief it filed with the Fourth Circuit after oral argument. Does it now wish to flip back, given that the argument now seems to have gained greater credibility? Or is there too high a political cost for the administration in appearing to run from a fight on the merits? Or is there just too much to gain politically from delaying Supreme Court review (something the Court might well welcome) and pushing the decision past the 2012 election, such that it is worth taking whatever the hit will be from appearing so irresolute? I’m sure the DOJ lawyers working on this case were happy to have prevailed yesterday. But they simultaneously had a new strategic headache thrown into their laps.

There is much more to say, but I need to look into the various legal questions with more care. For now, it suffices to say that the Fourth Circuit’s decision may well have complicated matters considerably, at least if Judge Motz’s analysis proves difficult for the Supreme Court to refute.

UPDATE: One other point worth emphasizing: Probably the most important analytic move in Judge Motz’s opinion was to hold that the meaning of “tax” for purposes of the Anti-Injunction Act and the meaning of “tax” for purposes of the General Welfare Clause (relevant to whether the individual mandate is a valid exercise of Congress’s taxing power) are distinct. More specifically, the category of “taxes” (or exactions) to which the AIA applies is potentially much broader than that under the General Welfare Clause. Most (and perhaps all–I would need to go back and check carefully) of the other judges to have analyzed the AIA issue thus far have treated the issues as one and the same. (Recall Judge Vinson’s opinion in October 2010, where he held that the individual mandate imposed a “penalty” rather than a “tax,” and thus concluded from this both that the AIA was inapplicable and that the individual mandate could not be justified by the taxing power.) My suspicion is that Judge Motz’s analysis on this point will be much harder to refute than the government’s claim that the mandate is a valid exercise of the taxing power.

Bradley W. Joondeph is a Professor of Law at Santa Clara Law School who publishes the aca litigation blog, an invaluable resource in following the various lawsuits pending against the Patient Protection and Affordable Care Act (PPACA or ACA). He specializes in Tax and Constitutional Law and is a well regarded author on the topics of federalism, judicial behavior, and American constitutional development. He has had extensive experience with the Supreme Court, having served as judicial clerk to the Honorable Sandra Day O’Connor. This article was first published in the aca ligation blog and Health Reform Watch, the web log of Seton Hall Law School’s Center for Health & Pharmaceutical Law & Policy.

8 replies »

  1. How wizardly witty.

    We’re still waiting for YOUR detailed vision and plan. The iterative (notwithstanding the equally iterative “I’m Done Here” declaration), intractably pissed-off-at-everyone-and-everything adolescent tirades have long worn threadbare.


  2. Pop Quiz: what does the Congress of the United States of America have in common with the Wizard of Oz?

    Representation that does not have a heart, a brain, or courage.

    And a leader who needs to get in a hot air balloon and fly to the land of Munchkins and become their leader. Because leadership in Oz is about pomp and pagentry. Oh, that seems to echo what the voters are interested in as well.

    Wow, 2 days have gone by and no one addressed my concern that a state governor made a clinical decision without any group process.

    THAT is what PPACA will be. And I really, sincerely hope that if it comes to pass, those of you who support this legislation get screwed by it personally.

    You deserve it. And you are welcome for my hopes and dreams for your lack of vision and insight. have a nice day!

  3. I’m particularly enjoying the scholarly, Latinate debates over whether or not the mandate is a ‘tax”. I’m concluding it is a tax on Wednesdays, when the moon is in Orion, except for purple. Ibid., op.cit.

    But here is my real question: if the government can tell you to buy insurance, can the government tell you to buy only the tea on those ships in the harbor?

    Can anyone make an argument (with a straight face) that there is a constitutional power to make you buy health insurance, but no attendant constitutional power to adjust your premium by any known or conceivable biometric? And…why wouldn’t we?

  4. Fascinating stuff, including the Kevin Walsh link.

    “The Tax Anti-Injunction Act, currently codified at 26 U.S.C. § 7421(a), is a United States federal law enacted in 1867. The statute provides that with fourteen specified exceptions, “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed”.”

    See also


  5. Having just read a review about the Republican debate last night, I was at first intrigued and then appalled in learning Perry was able to mandate vaccinations for HPV without a legislative action. That should be a loud wake up call to what PPACA can do if allowed to stay in place. If a state can have that level of mandating treatment options and get away with it, just imagine what the feds will do once they are in place with PPACA.

    You people who, in my simple and yet strong opinion, are ardent supporters of what the Democrats are basically mandating for health care options and eventual accesses, you are basically saying it is ok for politicians to dictate the course of health care hereon. Just one thing, who has clinical care experience who was behind this legislation? Obama? Pelosi? Reid? I don’t remember reading or hearing any physician legislators in Congress being out front touting this legislative intent as being marvelous or improving our lives the next day.

    This judicial process playing out now is just politics in a court room. It is not about the merits or true logistics if this legislation is legit. In the end, judges who are out to please their cronies and political base will rule solely on that position. And watch how Kagan will not recuse herself after being an active supporter in the judicial system prior to being nominated to the S.C.

    And watch further, if it is repealed by the S.C., and then Congress goes back to attempt to re-legislate the process, you think the republicans will do any better in making the process open and fair?

    Say goodbye to incumbents longer than 12 years in office if you want real and effective change and responsible legislation hereon!!!