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October 4, 2015

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Supreme Court, attorneys seem eager to debate health care law on first day of arguments

On Day One of the health care debate at the Supreme Court, lawyers and justices alike appeared eager to argue the merits of this case -- indicating they're unlikely to take an available out that says the law is not ready for judicial review.

But their ability to rule rests largely on how the justices answer the central question raised in the first day’s proceedings: Is the health care mandate -- and the penalty for not complying with it -- a tax?

Under the health care law, a penalty is assessed against anyone who doesn’t obey the mandate to buy health insurance. If that penalty counts as a tax, the Anti-Injunction Act says it can’t be challenged until it has been collected -- and since the mandate doesn’t kick in until 2014, the penalty hasn’t been collected yet.

“Congress very specifically said that (the penalty) shall be assessed and collected in the same manner as a tax, even if it's a tax penalty and not a tax,” said Robert Long, the attorney arguing in favor of putting off a decision on the constitutionality of the health care law until 2015 or later. “I think it’s a rather clear indication that the Anti-Injunction Act applies.”

The justices weren’t buying it.

“Its being collected in the same manner as a tax doesn’t automatically make it a tax,” argued Justice Stephen Breyer, one of the more liberal members of the court. “It’s up to Congress within leeway, and they did not use that word ‘tax.’”

“We had a principle that ousters of jurisdiction are narrowly construed,” said Justice Antonin Scalia, one of the more conservative members of the court. “Unless it’s clear, courts are not deprived of jurisdiction, and I find it hard to think that this is clear, whatever else it is.”

The question of the Anti-Injunction Act is one issue on which President Barack Obama and his worst critics agree.

Lawyers for the Obama administration and National Federation of Independent Businesses -- also a party to the lawsuit filed by 26 states, including Nevada, against the federal government -- argued that the court did have jurisdiction and should consider the more meaty questions coming up later in the week on the constitutionality of the mandate to buy health care, the legality of the federal government’s demand that states expand their Medicaid coverage, and whether the health care law’s other provisions can survive if those central issues are found unconstitutional.

“The purpose of this lawsuit is to challenge a requirement -- a federal requirement to buy health insurance. That requirement itself is not a tax,” said Greg Katsas, who represented the National Federation of Independent Businesses. “For that reason alone, we think the Anti-Injunction Act doesn't apply.”

The government agreed.

“Congress has authority under the taxing power to enact a measure not labeled as a tax,” said U.S. Solicitor-General Donald Verrilli. “For purposes of the Anti-Injunction Act, the precise language Congress used is determinative.”

In order for the court to rule on the constitutionality of the health care law, the Obama administration has to argue that the penalties assessed on people who don’t comply with the mandate aren’t taxes -- or else the Anti-Injunction Act applies.

But a key part of their argument Tuesday is that Congress had the right to create a the mandate as it would have the right to create a tax. It’s a more nuanced argument than the one being made by the states and the NFIB, who say the mandate isn’t a tax, it’s the forced purchase of a good; the administration, on the other hand, says it isn’t a tax because it’s a mandate derived under Congress’ taxing power.

“The court has held in license tax cases that something can be a constitutional exercise of the taxing power whether or not it is called a tax,” Verrilli explained Monday.

But it's a subtle enough difference that even the government’s top lawyer started to trip over his own words at one point, when Justice Elena Kagan asked him whether it was illegal for someone not to pay the penalty that they argue is not a tax for disregarding the health care mandate.

“If they don’t pay the tax, they violated a federal law,” Verrilli said. “As long as they’ve paid the tax, they’re in compliance with the law.”

“Why do you keep saying tax?” Breyer interrupted, as the court erupted in laughter.

“If they pay the tax penalty, they're in compliance with the law,” Verrilli said, correcting himself. “Right. That’s right.”

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