U.S. Supreme Court – Day One of Oral Arguments on the Affordable Care Act


The U.S. Supreme Court today heard the first of four sets of oral arguments challenging key provisions of the Patient Protection and Affordable Care Act (ACA) (Department of Health and Human Services, et al. v. Florida, et al.).  Today’s argument focused on an issue not challenged by either the government or the respondents.  At the Court’s request, appellate attorney Robert A. Long argued as an amicus that the federal Anti-Injunction Act (AIA), which dates from 1867, applies to ACA and, therefore, the Court is prevented from hearing a tax issue prior to the enforcement of the tax. The Act reads, in part, “…no suit for the purpose of restraining the assessment or collection of any tax may be maintained in any court by any person.”  Because ACA provides that these penalties will be collected “in the same manner as taxes,” Long argued that the penalties constitute a tax.  Lively questioning by eight of the nine Justices centered around two sets of issues:  (1) the jurisdictional issue of the power of the Court to hear the issue; and (2) whether the penalty starting with tax year 2014 for failure to become insured (the “individual mandate”) constitutes a “tax.”  

Justice Sotomayor commented on cases in which the Court either accepted waivers from the Solicitor General to reach a tax issue or where the Court read an exception to the AIA into a statute.  She stated, given that history, Congress has accepted “in the extraordinary case” that the Court would hear the case.  Justice Ginsburg noted that the AIA is suitor-directed not court-directed.

The Court then turned to whether the penalty constituted a tax for purposes of the AIA, with Justice Breyer noting that nowhere in the ACA did Congress use the word “tax” to refer to the penalty and that the penalty was attached to a health insurance requirement.  He further noted that just because a penalty would be collected in the same manner as a tax did not automatically make it a tax.  Justice Ginsburg stated that the penalty is not a revenue raising measure but rather is designed to induce compliance with the law.  Justice Kagan noted that Congress clearly specified sections of the law in which the AIA applied but did not do so with the penalty provisions.  

Respondents were represented by appellate attorney Gregory G. Katsas, who argued that the AIA did not apply because the purpose of the lawsuit was to challenge a legal requirement to buy health insurance and that requirement is not a tax. He noted that Congress had separated out mandate provisions from penalty provisions. Solicitor General Donald Verrilli, Jr. argued the government’s position that the AIA did not apply because the penalty is not a tax, to which Justice Alito commented “today you are arguing that the penalty is not a tax.  Tomorrow [when oral arguments will be heard on the constitutionality of the individual mandate] you are going to be back and you will be arguing that the penalty is a tax.”


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