Friday, March 23, 2012

Will Anti-Injunction Act bar suit against individual mandate?

As we discussed on Wednesday, the first issue the High Court will take up when it begins its marathon three-day session on the constitutionality of the Affordable Care Act will be whether a jurisdictional issue associated with a 19th century statute will prevent the Court from reaching the question of the constitutionality of the individual mandate. Here's a brief FAQ on the Anti-Injunction Act and its relationship to the ACA, based on the amicus brief filed by Robert Long of Covington & Burling.

What is the Anti-Injunction Act? The Anti-Injunction Act, enacted in 1867, bars pre-enforcement challenges to tax laws, unless an exception to the Act applies.

What's the purpose of the Act? According to prior rulings by the Supreme Court, the purpose of the Act is to protect the government's need to assess and collect taxes as expeditiously as possible with a minimum of pre-enforcement judicial interference. Legal rights to any disputed sums collected by the government are to be determined in a suit for a refund, after the tax has been collected.

Why might the Act apply to the ACA? The individual mandate is house in Internal Revenue Code Sec. 5000A, which requires individuals who fail to maintain minimum essential coverage for themselves to pay a penalty. The Congressional Budget Office has estimated the penalty provision would produce 5-6 billion dollars per year in revenue by the end of this decade.

Is the Obama Administration pursuing this argument? At the outset of litigation against the ACA, the Administration did argue that the Injunction Act barred suits prior to 2014. District courts rejected this argument, however, and the government did not raise the issue in front of the 11th Circuit.

However, once the case reached the Supreme Court, the government suggested that the Court appoint counsel as friend of the court to argue that the suit is indeed barred by the Act. The Court agreed and appointed Long, who, along with colleagues at Covington & Burling, LLP, wrote the amicus brief.

Why might the Anti-Injunction Act bar the suit against the individual mandate? According to the amicus brief, the suit falls within the scope of the Anti-Injunction Act for two reasons. First, Congress directed the Code Sec. 5000A penalty to be "assessed and collected in the same manner" as taxes. Second, the term "tax" is broad enough to include the penalty set forth in the individual mandate section.

What if the Court agrees? If the Court were to agree that the Anti-Injunction Act applies in this situation, presumably it would not need to reach the question of whether the individual mandate is constitutional. That question would not become ripe for judicial review until 2014, when the penalty provision becomes effective.


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