March 26, 2012

Will the Court have jurisdiction to hear the Obamacare cases?

By Will the Court have jurisdiction to hear the Obamacare cases?

I think it’s safe to say the Court will not throw out the case under the Anti-Injunction Act. The justices seemed skeptical of the idea that this case is brought “for the purposes of restraining collection of a tax,” as opposed to, for the purpose of challenging the Individual Mandate. As Justice Alito pointed out, “for the purpose of” doesn’t mean “with the effect of.”

One question, of course, is whether it makes sense to treat the two as different–a point on which Chief Justice Roberts seemed skeptical, challenging plaintiffs’ lawyer Gregory Katsas on this point. But Katsas explained that the Mandate and the penalty are not the same thing: indigent persons are exempt from the penalty, but not the mandate (an argument Obama Administration Solicitor General Donald Virrelli strongly disputed), and states are injured by the Mandate, since they have to sign up more people for Medicaid, but aren’t subject to the penalty.

It’s also hard to argue that the penalty is a “tax” for purposes of the Anti-Injunction Act, when it’s not called a tax or anything, and where it’s obvious that the penalty was written to compel compliance with the Mandate, not vice-versa. The Court-appointed amicus argues that anything that is “collected like a tax” is a tax for purposes of the AIA, but that argument didn’t seem to attract the justices.

Justices Alito and, perhaps surprisingly, Breyer, seemed particularly to dislike the idea that something can be a tax under the Constitution but not under the AIA, which is the Obama Administration’s position. Yet it’s theoretically possible; if anything collected like a tax becomes a tax for jurisdictional purposes, then other penalties that aren’t taxes would also be harder to challenge in court.

The Administration’s main concern, said Solicitor General Virrelli, is that the AIA should be read as a jurisdictional bar…but that it shouldn’t apply in this case. This is significant because if it’s jurisdictional it can’t be waived by the parties to a lawsuit. And the Administration likes that because, as Virrelli told the justices, it would prevent courts from finding new ways to allow lawsuits to go forward in cases where the government uses taxes for social engineering purposes. Okay, I added that last part.

Tomorrow: the main event!

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