Health-care challenge at US Supreme Court: Justices seek way past Day 1 hurdle

Long said that the AIA was intended by Congress to impose a pay first, litigate later rule that would help prevent a flood of lawsuits threatening government revenue. The idea, he said, was to require that any lawsuits over tax issues be filed after the tax was paid with the payer seeking a refund.

He said the AIA applies to the Affordable Care Act in part because Congress required that financial penalties be assessed and collected in the same manner as a tax.

“If it’s being collected in the same manner as a tax [that] doesn’t automatically make it a tax,” Justice Stephen Breyer said.

Long countered that any penalty under the Affordable Care Act would be assessed and collected by the IRS. He added: “The Anti-Injunction Act applies not only to every tax in the [tax] code, but, as far as I can tell, to every tax penalty in the code.”

The AIA issue puts government lawyers in a difficult position. Solicitor General Donald Verrilli urged the justices to find that the financial penalty that would be imposed under the Affordable Care Act’s individual mandate was not actually a “tax” subject to the Anti-Injunction Act.

Nonetheless, he is preparing to argue on Tuesday that Congress used its taxing authority to pass the individual mandate.

The situational gymnastics caught the attention of Justice Samuel Alito. “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,” he said.

Mr. Verrilli said that Monday’s argument at the court involved an effort to construe the meaning of a statute, the Anti-Injunction Act, where the precise choice of words is critical. “Tomorrow the question is whether Congress has the authority under the taxing power to enact [the individual mandate] and the form of words doesn’t have a dispositive effect on that analysis,” he said.

Oral argument in the health-care reform case is scheduled to continue on Tuesday with two hours of argument on the constitutionality of the individual mandate.

Arguments will continue on Wednesday examining whether certain parts of the Affordable Care Act can survive alone if the individual mandate is declared unconstitutional. In addition, the court will hear argument on Wednesday afternoon on whether the health-care reform law violates states’ sovereignty by forcing them to accept significant increases in the Medicaid program.

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