Monday’s argument involved the question of whether the Supreme Court could even rule on the case at this point. There is a federal law called the Anti-Injunction Act which says you can’t challenge a “tax” until you have paid it. You’ll recall that opponents are challenging the imposition of the penalty for not purchasing coverage. So, the questions for Monday, which are intertwined, are whether the penalty is a tax and even if it is, can the Court hear the case anyway.
Here are the major points of Monday’s arguments:
- Is the “penalty” in the ACA actually a tax? The ACA always refers to the individual responsibility provision as a “penalty,” although the IRS will be collecting it in the manner of a tax.
- One of the key differences between a tax and a penalty is that a tax is designed to raise revenue, while a penalty is intended to induce compliance. Justice Ginsburg pointed out that if everyone follows the law and purchases health insurance, no money will be collected.
- The Solicitor General, in arguing that the Anti-Injunction Act should not apply, argues that the ACA calls it a penalty, and the Court should look at that language as Congress’ intent not to treat the penalty as a tax. If the Court accepts this argument, then it can bypass the question of jurisdiction altogether and address the merits of the individual responsibility provision.
- Is the Anti-Injunction Act jurisdictional in nature? If it’s jurisdictional – meaning the law has to do with when and whether a particular court can rule on an issue – the Supreme Court would have no choice but to delay a decision on the merits of the individual responsibility provision if the penalty is determined to be a tax. A jurisdictional issue can not be waived by the parties to the case. So, even if everyone wanted the Court to hear the case now, it might be that if the Court believe the penalty is a tax, they would have to wait to hear the case until the tax has been paid by someone.
- Both sides argued that the Anti-Injunction Act is jurisdictional in nature and cannot be waived.
- Precedent on this issue is somewhat mixed, and exceptions have been made in the past, particularly when the government chooses to waive argument.
It’s too early to call, but many of the justices appeared skeptical that the Anti-Injunction Act would prevent them from deciding the merits of the case, and we think that it’s likely the Court will reach the merits of the case.