The Strategy in NFIB v. Sebelius, Part I: The Anti-Injunction Act

In a series of posts, I will explore in some detail how the government and the challengers developed their strategies before the Supreme Court in NFIB v. Sebelius. I elaborate on these themes at some length in Chapter V of Unprecedented (“Strategizing for the Supreme Court, p. 159″). Please note that I am not trying to persuade anyone of the merits of the competing arguments. You have all read enough about why the mandate and expansion are, or are not constitutional. My goal is to show how the advocates framed the issue.

First I will talk about the Anti-Injunction Act, which was argued on the first day of oral arguments. Next, I will talk about the commerce clause/taxing power positions, and the “saving construction, ” which were argued on the second day. Third, I will discuss the Medicaid expansion, which was argued on the final day.

Although the Anti-Injunction act was the least interesting aspect of the ACA, and received the least amount of attention, in the end it proved to be critical to the outcome of NFIB. A brief refresher. The Anti-Injunction (grossly oversimplified) prevents a person from challenging a tax in court until it is enforced. The proper route is to pay the tax, and later seek a refund. In the early days of the government’s defense of the Affordable Care Act, the United States argued that the individual mandate’s penalty was a tax, and therefore it could not yet be challenged in court because it had not yet been enforced. The lower courts consistently rejected this argument, finding that the individual mandate was not a tax, and thus not subject to the AIA.

At the courts of appeals, the government changed course, and argued that the AIA did not apply. This decision was part-legal, and part-political. For the former, it was clear that the courts were not buying the argument that the AIA applied. For the latter, the Administration wanted to get this issue teed up before the Supreme Court in 2012, and not wait until 2014 when the mandate was enforced (and perhaps after a new President was in the White House). But this generated an odd tension in the government’s position. On the one hand, the government asserted that the mandate was constitutional under the taxing power. On the other hand the government claimed that the AIA did not apply because it was not a tax.

Writing a brief for the United States before the Supreme Court is a very different enterprise than writing a brief for a private party. It is not enough to make the arguments that will persuade a majority of the Court. The United States, through the Solicitor General, must balance countless competing interests that tip-toe the line between law and policy. It is not fully appreciated how controversial it was within the government to argue that the AIA did not apply. One lawyer for the challengers told me that it was “remarkable” that the government conceded that the Anti-Injunction Act did not apply. It was “pretty powerful” for the government to abandon the AIA issue, as the federal government had a strong “institutional interest in having it apply.”

Indeed, internally many in the Treasury Department vigorously opposed this decision. In fact, Alan Morrison submitted an amicus brief on behalf of two former commissioners of the Internal Revenue Service, arguing that the AIA should apply. I’ve heard that the government tried to talk them out of filing that brief. (On September 16 at 6:00 p.m., the Georgetown Supreme Court Institute will be hosting an event about the strategy in NFIB, followed by a book signing for Unprecedented, featuring an All-Star cast: Randy Barnett, Mike Carvin, Greg Katsas, Alan Morrison, Erin Murphy, and Paul Smith. Adam Liptak of the New York Times will moderate).

On appeal to the Supreme Court, the recently-confirmed Solicitor General Donald Verrilli had to decide what to do with the AIA. After considering views from the various government departments, cabinet secretaries, and the Justice Department, the Solicitor General’s office “made a judgment to stay where we were.” One senior DOJ lawyer told me, as an “initial matter,” it might have been better not to give up that issue, but that it would “risk our credibility to switch positions on this issue not once, but twice.” This might seem “opportunistic.” The “best course of action was to argue that the Anti-Injunction Act did not apply.” So the solicitor general stayed the course with respect to the AIA.

The representation that the AIA did not apply, however, did not simply allow the Court to resolve the issue before 2014. Rather, it was crucial for paving the way for the Chief Justice’s savings construction. In my next post, I will turn to the saving construction, and how the government framed the commerce and taxing power arguments.

Cross-Posted at JoshBlackman.com.

Update: Updated to fix a typo.