Thursday, September 8, 2011
The same day that a unanimous three-judge panel ruled that the State of Virginia lacks standing to challenge the individual health insurance mandate in the Affordable Care Act, the same three-judge panel ruled by a vote of 2-1 in Liberty University v. Geithner that the Anti-Injunction Act bars individual plaintiffs from challenging the mandate as exceeding congressional taxation authority. (The AIA bars preenforcement suits challenging "any tax." The ACA imposes a tax penalty on anyone who doesn't obtain health insurance and on employers who get notice that an employee received a government subsidy for health insurance.) The ruling means that the AIA bars the suit (the first ruling of this kind by a circuit court). But it says nothing about the merits (although Judge Wynn in concurrence and Judge Davis in dissent both got to the merits--and both would have upheld the mandate).
Judge Motz wrote for herself and Judge Wynn on the AIA question. She looked to the plain language of the ACA to determine that the mandate was a tax for AIA purposes, and therefore that the AIA barred a preenforcement challenge to it. She rejected arguments that the ACA operated as a "penalty," not a "tax," that Congress intended it to operate as a penalty, and that it wasn't designed to raise revenue. But because she ruled that the AIA barred the suit, she said nothing about the underlying issue--whether Congress had authority to enact the mandate under its taxing power under the General Welfare Clause.
The ruling was (oddly) a loss for both the plaintiffs and the government on this narrow AIA question. The government previously argued that the AIA barred the suit, but it abandoned its previous position presumably to get a ruling on the merits. It didn't get such a ruling from this panel. But Judge Wynn, in addition to agreeing with Judge Motz that the AIA barred the suit, also wrote that Congress had authority to enact the health mandate under its taxation authority under the General Welfare Clause. And while Judge Davis dissented on the AIA point, he wrote that Congress had authority to enact the mandate under the Commerce Clause.
All this means that two judges on this Fourth Circuit panel would have ruled that the government had power to enact the mandate under some authority. That's the real story of the case.