Pre-Game's Over. Now Begins the Health-Care Fight.

What if you bought a ticket to The Hunger Games and ended up watching Life Cycle of the Soybean?

That may describe the feelings of bemused citizens listening to today’s recorded oral argument on the first of three days of hearings in the case against the Affordable Care Act. Instead of death panels and broccoli patrols, they got to hear a discussion for law nerds about statutory construction and the definition of “tax.”

The staggeringly dull question: Does the Anti-Injunction Act (AIA), which prohibits taxpayers from suing the government until after they have paid a tax, prohibit the Court from hearing the health-care case at all?

The resulting argument was abstruse, brilliantly conducted, and, well, snooze-worthy. The careful ear, however, could pick up the sound of the approaching guns. The health-care Armageddon arrives in full red-and-blue fury tomorrow. Today was just the opening shot.

Read literally, the AIA would seemingly require the challengers to wait until 2014—when the ACA becomes fully applicable—to pay the penalty for not carrying insurance, then sue for a refund. But the government wants the case to be heard now. At issue is whether, in extraordinary cases such as this, the Court should allow the government to waive application of the AIA.

Just a few minutes after argument had begun, Chief Justice John Roberts pointed out what is really at stake: In a related case, Helvering v. Davis, the constitutionality of the Social Security Act was at issue, and while it had not taken effect, the Court allowed the government to “[waive] its right to insist upon the application of [the AIA].” 

“Are you asking us to overrule the Davis case?” Roberts asked Robert Long, who was arguing that the AIA applies in this case.

History was in the room. Overruling Helvering v. Davis would mean voiding Social Security. But that’s not what Roberts was really asking Long. He was saying: This is a blockbuster case. When it comes to the ACA, the invitations are issued, the cake has been baked. You’re going to have to talk fast to convince me to send everybody home.

That is especially true because nobody really wants the AIA argument to prevail. Because the government dropped the AIA argument, the Court appointed Long, an unflappable former assistant solicitor general, to argue the AIA issue.

Helvering was a stockholder lawsuit against the Edison Electric Illuminating Company of Boston. The stockholder wanted an order forbidding the company from paying the new taxes imposed on it by Congress to fund Social Security. Since, the plaintiff argued, Social Security was unconstitutional, those payments were money out of the shareholders’ pockets.

Justice Cardozo wrote the opinion upholding Social Security, but at the outset, he noted that he and three other justices believed that the Court should have dismissed the case under the AIA.

The AIA is designed to keep irate taxpayers from filing suit every time they don’t want to pay taxes. It provides, with some listed exceptions, that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person.” Taxpayers are required to pay the taxes assessed, then sue afterward to ask for their money back.

That’s the way Cardozo read it in Helvering. But in its brief in Helvering, the government had begged the Court not to apply the AIA:

Each month of delay in a definite settlement of the constitutionality of [Social Security] raises for the Government most serious budgetary, fiscal and administrative problems which are equally important to the taxpayers. It is for this reason that the Government waives any technical objections whatever arising out of the stockholder's suit and desires to have a decision on the constitutionality of the statute and not merely on procedural points.

Helvering seems to stand for the principle that the government can waive the AIA when stakes are high enough. But several Court of Appeals judges have written separate opinions suggesting that the AIA applies to this case, and that it can’t be waived. The Fourth Circuit dismissed one challenge on this ground. And so, to be thorough, the Court appointed Long, now in private practice at Covington and Burling, and gave him the thankless (though not unpaid) task of defending what the government would not.


It was Long whom Roberts asked whether he wanted the Court to overrule Helvering v. Davis. Not at all, Long said. Practice has already overruled the waiver part of that case. Subsequent cases have decided that the AIA is “jurisdictional,” meaning that courts can’t hear this type of case whether the government waives it or not.

When he rose to answer Long, Solicitor General Donald Verrilli, speaking for the government, insisted that the AIA did not apply, and so the government does not need to waive it. Gregory Katsas, representing the challengers, told the Court that Helvering means that “there may be some cases including, for instance, constitutional challenges to landmark federal statutes where the government sensibly decides that its revenue-raising provisions are better served by allowing a party to come into court and waiving its defense.”

As the argument progressed, it seemed unlikely that five justices wanted to kick the case out on this preliminary ground, which would just bring it back, with all the attendant hoopla, sometime in the October term of 2015. Instead, they seemed genuinely to be seeking guidance on how to allow the government to waive the AIA without creating an exception that would produce what Justice Samuel Alito called a “flood of litigation.” Long said they can’t (“I would say that not all people who litigate about federal taxes are necessarily rational,“ he said); Verrilli said that it doesn’t apply to provisions like the penalty, of which there are very few. Katsas proposed the “landmark waiver rule.”

Verrilli’s argument was the legal equivalent of a hand grenade. The government isn’t waiving the AIA, he said; instead, the AIA does not apply because the “Congress has authority under the taxing power to enact a measure not labeled as a tax, and it did so when it put the [penalty] in the Internal Revenue Code” without labeling it a tax. So it’s a tax under the Constitution—but not, he argued, one covered by the language of the AIA.

 “General Verrilli,” Justice Samuel Alito noted, “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.” Verrilli cheerfully agreed. “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.”

This is a tricky argument indeed. One path to victory in the minimum-coverage aspect of the case is to claim that it is not a penalty, but a tax, and the Taxing Power is broader than the Commerce Power. So for today’s statutory purposes, the penalty is not a tax. For tomorrow’s constitutional argument, it is. We will see how that fine distinction flies.

A second skirmish broke out when the challengers argued that the AIA does not apply because they are not challenging the “penalty.” They are challenging the mandate itself. The mandate is separate from the “penalty,” they said, and so enjoining it doesn’t involve a “tax.” The NFIB’s brief has suggested that even a citizen who pays the mandate will be a kind of outlaw, almost like an undocumented immigrant, if he does not have insurance. Roberts tackled Katsas on this issue: “The idea that the mandate is something separate from the whether you want to call it a penalty or tax just doesn’t seem to make sense,” he said.

“It’s entirely separate, and let me explain why,” Katsas began, but Roberts didn’t let him. “It’s a command,” the chief said. “A mandate is a command. If there is nothing behind the command, it’s sort of, well, what happens if you don’t [comply]? The answer is nothing. It seems very artificial to separate the punishment from the crime.” Katsas was still explaining why that isn’t right when his time ran out.

Long rose for his rebuttal. He reviewed the Court’s post-Helvering decisions and urged the Court that “the presumption should be that [the AIA] is jurisdictional.”

With that, Roberts thanked Long for his role as an amicus. The question he will probably be thinking about tonight came from Justice Sonia Sotomayor: “[I]sn’t the fairer statement that Congress has accepted that in the extraordinary case we will hear the case?“

This is an extraordinary case, and odds are the Court will hear it and decide this case by June. We will get our first hint how that will go tomorrow, when the minimum coverage (or “individual mandate”) issue goes before the Court.

Life Cycle of the Soybean is over. Let the games begin.

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