Why Is the Federal Government Surrendering Its Best Argument to Defend the Attack of the Health Care Law?

On Monday, November 14, 2011, the Supreme Court agreed to hear the challenge to the Obama health care law (known as the Patient Protection and Affordable Care Act). It granted certiorari in the Florida case decided by the 11th Circuit Court of Appeals, the only decision by an appeal court to strike down the individual mandate, requiring every person to enlist in a medical insurance program or face a penalty for not doing so. Three other courts of appeal have either rejected the challenge to the law or voted to uphold it (the 4th, 6th and District of Columbia Circuits). Some well-known conservative judges on those courts, appointed by Republican presidents, have nevertheless voted in favor of the law. The latest decision, issued last week by the District of Columbia court, was written by Judge Laurence Silberman, a well-known conservative judge close to Justice Scalia. Silberman wrote the court of appeals decision upholding Second Amendment rights in the famous Heller case, later affirmed by the Supreme Court.

There is one curious anomaly in the way in the case has been handled by the Justice Department, charged with defending the law. A plausible argument can be made that no present attack can be made on the individual mandate provision, at least until the mandate goes into effect in 2014, and a person is "taxed" or "penalized" for failure to pay in 2015. Indeed on that basis, the 4th Circuit dismissed the case brought by the state of Virginia and others. That argument (which was also accepted by a dissenting judge, Brett Kavanaugh on the District of Columbia Circuit) is based on a federal law, the Anti-Injunction Act, that prohibits any attempt to restrain a "tax" in any court. It reads: "No suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court in any court by any person, whether or not such person is the person against whom such tax was assessed."

The Fourth Circuit (and Judge Kavanaugh) found that the "penalty" provided for in the law was really a "tax" since it was to be enforced by the IRS. Judge Kavanaugh explained:

"The Anti-Injunction Act applies here because plaintiffs' pre-enforcement suit, if successful, would prevent the IRS from assessing or collecting tax penalties from citizens who do not have health insurance. To be sure, the Affordable Care Act labels its exaction for failure to have health insurance as a tax 'penalty' and not as a 'tax.' But the Anti-Injunction Act still applies. That's because the Affordable Care Act requires that the tax penalty for failure to maintain health insurance 'be assessed and collected in the same manner'" as other penalties in the tax code.

Judge Kavanaugh clerked for Justice Anthony Kennedy and continues to have a personal relationship with him, suggesting that Justice Kennedy might be persuaded by this argument.

But the Justice Department has specifically rejected this argument in all its recent filings, even though many judges and many legal scholars believe it is a persuasive argument. Why has it taken this position and insist that the Supreme Court consider the merits of the case, rather than reject the attack on procedural grounds?

There are three plausible reasons.

One, the Justice Department is confident of winning the case on the merits. The fact that a number of conservative judges have upheld the individual mandate is a good indication of how the more conservative justices might vote. Why delay, if the law can be upheld now? Stuart Taylor, an acknowledged legal expert, wrote in September, even before the D.C. Circuit decision, that the odds of the law being struck down were only 25% to 33%. Earlier this summer, the intrade contract for the health care law being declared unconstitutional stood at 30%. But why take that chance if a Supreme Court decision striking down the law next June would be a political disaster for the Obama administration? Avoiding defeat on any basis would seem to be the best strategy.

Another possibility is that the Justice Department is concerned about the Republicans winning the presidential election next year. The new Attorney General may not be interested in defending the law in 2015. In addition there are possible changes in the Supreme Court's make-up by 2015 or 2016 (Justice Ginsburg is 78 years old and Justice Kennedy is 75). The selection of new justices has become so politicized that selection of a new justice inclined to uphold that law may prove to be very difficult, particularly if the Republicans add more seats in the Senate over the next elections.

A third possibility is that the uncertainty about the constitutionality of the law is bad for business. Many states (controlled by Republicans) have passed laws opting out of the health care law, prohibiting its citizens and insurance companies from participating in the law. If the federal law is upheld, it will prevail over inconsistent state laws under the doctrine of preemption. But until that happens, many states are passing laws rejecting the requirements of the law. Businesses need to be able to plan their health care costs for the future. Until the law is upheld, that may be difficult. So the Justice Department is willing to give up a significant argument that could avoid an immediate loss in order to arrive at some certainty for the business community.

So politics and economics do affect the way in which constitutional claims are presented to the Supreme Court. Unfortunately for the Justice Department, the Supreme Court insists on considering the issue, even if the Department itself does not press the question. The Court on Monday issued the following order: "the parties are directed to brief and argue the following question: Whether the suit brought by respondents to challenge the minimum coverage Provision of the [health care law] is barred by the Anti-Injunction Act."

Leon Friedman is a Professor of Constitutional Law at Hofstra Law School.