SCOTUS Docketwatch–Constitutionality of the Affordable Care Act: Day 1

Today the Supreme Court begins hearing arguments as to the constitutionality of the Affordable Care Act.  For some background, the Court will hear 6 hours of oral arguments over 3 days.  Each day will focus on different challenges to the law, as follows:

• Monday 3/26 –  Does the Anti-Injunction Act of 1867 prohibit a legal challenge to the Affordable Care Act until after 2014, when the law takes effect?
• Tuesday 3/27 – Does the ACA’s “individual mandate” violate the Constitution?  (The BIG question)
• Wednesday 3/28  - If the ACA’s individual mandate does violate the constitution, then how much of the law should remain in effect?

Today’s arguments focused on whether or not parties can challenge the ACA before provisions are enacted in 2014.  The context revolves around whether or not the ACA’s mandatory penalties for not buying insurance constitute a “tax”.  If so, then the act bars any party (in this case the 26 states and consortium of private businesses) from bringing a lawsuit until they have actually been ‘taxed’ or suffered a financial penalty in their 2015 income tax returns.  Think of this as a first hurdle Jurisdictional issue that is necessary to decide whether or not the Court should even hear the oral arguments in the first place.

In rare unity, both opposing parties in the case agreed that the act does not apply, and filed briefs calling for the Court to decide on the constitutionality of the case.  Yes, this does seem weird – the Court, without any challenges from either the Obama administration or the challengers calling for repeal of the law, appointed a neutral 3rd party lawyer (Robert Long) to advocate on behalf of the law. 

Long’s argument characterized the ACA’s penalties as a tax, based on the way it was collected.  From the oral argument transcript:

“First, Congress directed that the section 5000A penalty shall be assessed and collected in the same manner as taxes.  Second, Congress provided that penalties are included in taxes for assessment purposes.  And, third, the section 5000A penalty bears the key indicia of a tax. 

Congress directed that the section 5000A penalty shall be assessed and collected in the same manner as taxes.  That directive triggers the Anti-Injunction Act, which provides that ‘no suit for the purpose of restraining the assessment or collection of any tax may be maintained in any court by any person.’”

This argument appeared to fail to convince the justices.  Justices Breyer and Scalia pushed back, challenging that even if the penalty is “being collected in the same manner of a tax, doesn’t automatically mean it’s a tax.” 

The Obama administration’s Solicitor General Donald B. Verrilli Jr. argued in favor of the justices deciding the constitutionality of the individual mandate, but his argument treaded carefully on the tax question.  Key to the government’s argument of whether or not the Individual Mandate is constitutional (to be argued on Tuesday), is that Congress does have the authority to pass the ACA as part of its tax powers.  Here is some fine legal parsing – separating the 2 arguments into a “how to read the law” (Monday’s argument) context vs. “Congressional authority” (Tuesday’s constitutionality argument argument): (p. 31 –32 of Transcript)

JUSTICE ALITO: General Verrilli, today you are arguing that the penalty is not a tax.  Tomorrow you are going to be back and you will be arguing that the penalty is a tax.  Has the Court ever held that something that is a tax for purposes of the taxing power under the Constitution is not a tax under the Anti-Injunction Act?

GENERAL VERRILLI: No, Justice Alito, but the Court has held in the license tax cases that something can be a constitutional exercise of the taxing power whether or not it is called a tax. And that's because the nature of the inquiry that we will conduct tomorrow is different from the nature of the inquiry that we will conduct today.
Tomorrow the question is whether Congress has the authority under the taxing power to enact it and the form of words doesn't have a dispositive effect on that analysis. Today we are construing statutory text where the precise choice of words does have a dispositive effect on the analysis.

For more details and analysis, check out Lyle Denniston's excellent SCOTUSBlog recaps, and the Volokh Conspiracy Blog’s coverage.

The Court will move on to the next question, THE BIG QUESTION, of the constitutionality of the individual mandate tomorrow at 10 AM.  Be here tomorrow for some more breakdowns.