class actions, disabled rights, copyright, attorneys general, online speech, law schools, obesity, New York, mortgages, legal blogs, safety, CPSC, pharmaceuticals, patent trolls, ADA filing mills, international human rights, humor, hate speech, illegal drugs, immigration law, cellphones, international law, real estate, bar associations, Environmental Protection Agency, First Amendment, insurance fraud, slip and fall, smoking bans, emergency medicine, regulation and its reform, dramshop statutes, hotels, web accessibility, United Nations, Alien Tort Claims Act, lobbyists, pools, school discipline, Voting Rights Act, legal services programs


A Rose or a Tax, By Any Other Name...

March 27, 2012 8:25 AM

Nadine Strossen
Professor of Law, New York Law School
President, American Civil Liberties Union (ACLU), 1991-2008

Although today's argument focused on a threshold issue about the timing of this litigation, U.S. Solicitor General Donald Verilli used it as an opportunity to preview tomorrow's argument about the most controversial substantive issue: whether Congress had power to pass the minimum coverage provision. At the very outset of his argument today, Verilli asserted that this provision "is an exercise of Congress's taxing power as well as its commerce power."

What is the link between the core constitutional issue of Congress's power and the seemingly disparate, technical issue on today's agenda: Whether an 1867 federal law, the Anti-Injunction Act (AIA), requires the Court to dismiss the litigation as premature? The AIA bars any "suit for the purpose of restraining the assessment or collection of any tax." Its purpose was well-captured in the opening argument by attorney Robert Long: it "imposes a pay first, litigate later rule that is central to Federal tax assessment and collection."

In words and purpose, the AIA applies only to a "tax." In contrast, the Affordable Care Act (Act) designates the payment it assesses for failing to obtain the required coverage as a "penalty," and the Act's proponents assiduously avoided the "T-word" not only in the Act itself, but also in the debates leading to its enactment. Verilli also stressed that the assessment doesn't function as a tax, because its primary purpose is not to generate revenue, but rather to enforce a regulatory requirement.

Today's argument was at least as interesting in terms of its preview of tomorrow's as it was in terms of the AIA issue, because the Justices largely seemed to regard the latter as a non-issue. Among other reasons, both the U.S. government and its opponents in this litigation agreed that the AIA doesn't bar it. That's why the Court appointed attorney Long to argue the opposite position. Moreover, as Justice Scalia noted, there is a presumption against courts being "ousted" from a case, so a statute such as the AIA will be narrowly construed and not enforced unless it clearly applies. While Long admirably carried out his assigned responsibility of arguing that the AIA clearly applies in this case - for which Chief Justice Roberts graciously thanked him -- he did not satisfy that heavy burden of proof.

As for tomorrow's more consequential argument, Justice Alito flagged the U.S.'s seemingly inconsistent positions on the tax/non-tax characterization and asked Verilli whether the Court had ever held something to be a tax within Congress's taxing power but not a tax under the AIA. Verilli acknowledged that there is no such precedent. But he did cite Court rulings that the constitutional issue about Congress's taxing power should not hinge on Congress's word choice, whereas the statutory construction issue about the AIA should do so. Speaking of word choice...Verilli twice in a row referred to the Act's assessment as a "tax," prompting Justice Breyer to ask, "Why do you keep saying `tax'?" In response, Verilli nimbly strove for the best of both worlds by referring instead to a "tax penalty."

As the Bard famously said, and the Court has echoed, nomenclature should not obscure the underlying identity of flowers or powers, respectively. And, to quote another famous literary work, "Tomorrow is another day."




Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.