Health Care’s Sleeper Legal Issue

SCOTUSblog provides Analysis on Health care’s sleeper issue.

"Section 7421, indeed, does take a bit of explaining.  What is it, what does it actually do, how did it get into the legal and constitutional dispute over the Affordable Care Act, and why might it shut down the constitutional review of the insurance mandate until 2015 at the earliest?

Section 7421 is actually a section within the Anti-Injunction Act that traces its origins to 1867; that law is often referred to as the Tax Anti-Injunction Act to distinguish it from another congressional enactment that is similar.  Both have to do with defining the powers of the federal courts.  The tax version is a part of Title 26 of the code of federal laws, and Title 26 deals only with tax issues.  The section’s most important words are these: “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such a person is the person against whom such tax was assessed.”

What that comment and the actual language of the section mean is that no taxpayer can file a lawsuit in court to challenge a federal tax provision if that provision has not yet actually gone into effect and been applied to a specific taxpayer...For purposes of the health care law and its insurance mandate, this means that no taxpayer could challenge the mandate in court until after it has gone into effect (in 2014), the IRS has assessed a penalty for not having insurance by then, the taxpayer has paid the penalty with a 2015 federal tax return, and then seeks to get the penalty money back with a refund claim, or the taxpayer uses a constitutional challenge as a defense to the assessed penalty."

Apparently the administration lawyers mentioned it in the first few suits but were overruled and then stopped talking about it. As the various healthcare rulings have come out it's gone back and forth.

"Six days after that ruling came down, deepening the split among federal appeals courts on the Anti-Injunction Act question, the Court granted review of the government’s appeal in one of the cases (along with two other appeals) and added a question for counsel in the government case: whether the anti-injunction law barred the challenges to the mandate and its penalty. And, last Friday, the Court chose Washington attorney Long to “brief and argue” that very question. Long will make his oral argument, opposing lawyers for the federal government and for state governments, during a one-hour argument that will be held with other arguments in the cases next March.

Judge Kavanaugh’s comments about separation-of-powers concerns, and his suggestion that the “prudent” thing for a court to do is to wait for another day to rule on the mandate and its penalty, could have an impact on the Justices as they ponder the non-legal question of whether they should rule on those issues during the current Term, knowing — as they surely will — that their decision probably will come down in the midst of the 2012 presidential and congressional election campaign. The Anti-Injunction Act question provides a credible alternative basis for a ruling."