Monday, March 26, 2012

Health Act Arguments Open With 1867 Obstacle

Indeed, the lawyer, Paul D. Clement, who represents the 26 states challenging the law, said this month in remarks at the Georgetown University Law Center that the first day’s arguments are “a kind of practical joke that the court is playing on the public.”

The main event — arguments over the constitutionality of the law’s requirement that most Americans obtain insurance or pay a penalty — will not come until Tuesday. But early Monday morning, crowds continued to grow outside the court, as people gathered to demonstrate their support, or their opposition, to the health care law.

A sprawling picket of supporters of the law wound its way around morning commuters, police officers, TV camera crews and photographers, chanting, “Protect our law, protect our care.” Robert Yochem, a 45-year-old political activist from Baltimore, who described himself as a “general do-gooder,” said he had come early Monday to show his support for the law. Opponents of the law were in short supply, an absence that puzzled Mr. Yochem.

“They might show up later, I don’t know,” he said, standing facing a line of traffic on First Street in the bright morning sunshine with a sign that read, “Protect my health care.”

In the first case, the justices will consider whether they are barred from hearing the case until the first penalties come due in 2015.

The answer to that question is not obvious. The United States Court of Appeals for the Fourth Circuit, in Richmond, Va., ruled last year that it was powerless to decide the law’s constitutionality for now, and a prominent judge on the United States Court of Appeals for the District of Columbia Circuit agreed.

Their opinions relied on an 1867 federal law called the Anti-Injunction Act, which says that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person.” In other words, people who object to taxes must pay first and litigate later.

But the first penalties do not kick in until 2014, and they must be paid on federal tax returns by April 2015. That means, the appeals court judges said, that federal courts are forbidden for now to hear challenges to the health care law.

The Obama administration pressed this argument in trial courts but abandoned it on appeal. The challengers to the law have always said the 1867 law poses no obstacle to immediate review.

In the Supreme Court, the administration suggested that the justices appoint an outside lawyer to argue that the 1867 law bars the challenges. The justices asked Robert A. Long to do so, and he goes first on Monday.

Mr. Long is to be followed by two lawyers: Solicitor General Donald B. Verrilli Jr. and Gregory G. Katsas, who represents the private parties challenging the law.

Mr. Long says the 1867 law is “jurisdictional,” meaning it forbids courts to hear suits even if, as here, neither side objects.

In the health care law, Congress called the required payment a penalty rather than a tax. But the penalty is contained in the Internal Revenue Code, and the health care law says it is to be “assessed and collected in the same manner” as a tax.

Mr. Verrilli, representing the Obama administration, walks a fine line. He has told the court that the administration wants a prompt ruling on the health care law and that the 1867 law should not stand in the way. Yet the administration does not want to damage its ability to rely on the 1867 law in other cases.

There are other complications. Mr. Verrilli’s argument that the penalty is not a tax for purposes of the 1867 law is in potential tension with one he will make on Tuesday, that the mandate was authorized not only by Congress’s power under the commerce clause but also by its power to levy taxes.

Mr. Verrilli argues that the name that Congress gave the payment required for violating the mandate in the health care law — a penalty, not a tax — matters for purposes of the 1867 law but is irrelevant in connection with the constitutional taxing power, where “it is the practical operation of the provision, not its label, that controls.”

The challengers to the law, represented by Mr. Katsas, agree with Mr. Verrilli that the court may decide the case on the merits. He says the penalty for failing to obtain insurance is not the sort of tax the 1867 law concerns. Mr. Long responds that the term “tax” in the 1867 law has been interpreted very broadly.

Mr. Katsas also says the challenge is in any event to the mandate, which applies to virtually every American, rather than to the penalty, which applies to a smaller group. Mr. Long responds that the challenge is to both provisions and that striking down the mandate would have the same effect as a premature ruling to forbid the assessment of the penalty.

In a brief filed with the court, the states challenging the health care law press a further argument. They say the 1867 law does not, in any event, apply to them even if it applies to the private challengers.

An oddity of the case is that a ruling from the Supreme Court that it lacks jurisdiction could be easily reversed by Congress, which is free at any time to amend the 1867 law. The prospect of having to rehear the case in short order may not be attractive to the justices.


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