Few Clues, Con Law Issues in First Day of Health Reform Arguments

For those hoping to get an idea of where the Court is heading with the core constitutional issues in the ACA challenge, yesterday's oral arguments on the Anti-Injunction Act must have been a disappointment.  The Court yesterday drilled into the finer points of tax law--in particular, arguments whether the AIA is jurisdictional and, if so, whether it applies--but it gave few, if any, clues on the con law issues that will dominate oral argument today and tomorrow.  Yesterday's argument did suggest this, though: The Court will get to the merits now, and not punt based on the AIA.

The audio file and transcript are available here.

Justice Alito got right to a main con law point with SG Verrilli, asking how the government can consider the tax penalty a non-tax for AIA purposes but a tax for Article I purposes:

Justice Alito: General Verrilli, 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 [to support the universal coverage provision of the ACA].

Has the Court ever held that something that is a tax for purposes of the taxing power under the Constitution is not a tax under the Anti-Injunction Act?

General Verrilli: No, Justice Alito, but the Court has held in the license tax cases that something can be a constitutional exercise of the taxing power whether or not it is called a tax.  And that's because the nature of the inquiry that we will conduct tomorrow is different from the nature of the inquiry that we will conduct today.

Tomorrow the question is whether Congress has 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.

It's not clear whether this concern about the government's position on the tax penalty will have any constitutional traction today, however.  There's no requirement that a "tax" for taxing authority purposes must also be a "tax" for every other purpose.  The government's position may seem at odds with itself, but it probably doesn't matter for any constitutional reason.

Other Justices asked about those subject to the universal coverage requirement, but exempt from the tax penalty, particularly the poor, suggesting that the taxing authority alone isn't enough to support the universal coverage requirement for this population.  Several Justices were interested in whether the universal coverage requirement could be separated from the tax penalty, apparently setting up a line of inquiry today about whether the Commerce Clause alone could support the universal coverage provision for this population.  Again, though, it's not clear how much this will matter for arguments today: The Commerce Clause has always been a potentially independent authority--maybe even the best authority--to support the universal coverage provision for every population.

The Court asked some questions about whether the tax penalty raised revenue.  This line is almost certainly more important for AIA purposes than for taxing authority purposes, though.  And in any event, as SG Verrilli reminded the Court, the CBO has projected that the tax penalty will raise revenue. 

Finally, Justice Sotomayor asked a line of questions about state standing to challenge the universal coverage provision.  This line may come back today, but it's not clear from the brief exchange (on page 72 of the transcript) that it will get much play.

In short, argument yesterday gives few clues about the con law issues on display today and tomorrow.  At most, we have some likely themes for arguments today and tomorrow.  And we almost certainly have this: The Court is likely to address the merits now, and not punt under the AIA.

SDS