UPDATED 10:50 p.m.  In a different federal appeals court, the Sixth Circuit Court, another challenge to the health care law came up for oral argument. The Circuit Court has linked, in three segments, to audiotapes of the hearing: opening remarks, arguments on the U.S. motion to dismiss, and arguments on the merits of the constitutional challenge. The links are available on that court’s website, under “other information.” Links to a series of news stories about the argument may be found on the ACA Litigation Blog, here.
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 The Obama Administration, fully explaining its changed view that a federal tax law does not take away from federal courts the power to rule on a crucial section of the new health care law, has urged the Fourth Circuit Court to go forward and decide that constitutional question.  Similarly, two challengers to that law also told the Circuit Court that the tax law at issue will not bar a final ruling in the two pending cases.
The Administration, the state of Virginia, and Liberty University filed new briefs in the Circuit Court Tuesday night, responding to a series of questions that the Circuit’s three-judge panel had raised — following oral argument — about the potential impact on the case of the federal Anti-Injunction Act.  The U.S. brief was filed in nearly identical form in the two cases; one of those can be read here; Virginia’s supplemental filing is here, and Liberty University’s is here.
The Circuit Court panel held a hearing May 10 on the constitutionality of the new law’s mandate that virtually every American must have health insurance by the year 2014. The potential impact of the Anti-Injunction Act has not had a prominent role in the case, because the government has changed its position. Still, nearly two weeks after the oral argument, the Circuit panel called for new briefs on that very issue.
Depending upon how the panel reacts to the new filings, it presumably could go ahead to decide the merits of the constitutional challenge to the insurance-purchase mandate, or it could decide, on its own, not to take the advice offered in the new briefs and throw out the case under the Anti-Injunction Act. In view of the new filings, a dismissal seems the less likely option.
The Anti-Injunction Act, sometimes referred to as the Tax Anti-Injunction Act, is a federal law that dates back to 1867. It is designed to stop federal courts from issuing orders that seek to block the collection of federal taxes. The aim, of course, is to insure that there is no judicial interruption of the flow of federal revenues. If a taxpayer believes that a tax is invalid or wrongly applied, the taxpayer generally has the option of paying under protest, and suing for a refund.
In its May 23 order seeking further briefs, the Fourth Circuit panel wondered if the Act applied to the two challenges to the health care law, whether the Act required that the case be dismissed, whether the insurance-purchase mandate’s penalty for not having insurance was a tax under the Act, and whether a challenger to the mandate would have to wait to be assessed a penalty for not having inusrance and then sue for a refund.
When the first challenges to the new health care law were filed in the federal courts, the Obama Administration argued, among other points, that the Anti-Injunction Act did bar the lawsuits. The penalty, it contended, was, indeed, a penalty in the form of a tax, so its collection could not be barred by a court.
The Administration has since abandoned that position, and its new brief told the Fourth Circuit: “On further reflection, and on consideration of the decisions rendered thus far [in health care law cases], the United States has concluded that the AIA does not foreclose the exercise of jurisdiction in these cases.”
That new brief also spelled out a variety of reasons why at least one of the cases in that court should proceed to a decision on the merits.  Among those reasons were that, while the government still insists that the penalty is a tax, it does not come under the specific provisions of the anti-injunction law, Congress treated the penalty in the new law differently from other taxes, and Congress did not want to delay a final court decision on the constitutionality of the mandate until some taxpayer in the future could sue for a refund — something that could not occur before at least 2015, under the terms of the new law.
Congress, the government brief said, “would not have wanted to wait” until all the interconnected parts of the insurance-purchase scheme were put into effect “and relied upon by millions of individuals as well as the insurance industry,” for challenges to the constitutionality of that provision to be resolved. In fact, it said, delaying a ruling on that ultimate question would seriously disrupt the implementation of the new law.
In another part of the new filing, the government contended that a taxpayer would have the option of suing for a refund in the future, but went on to argue that  “Congress did not intend to dictate a single pathway to judicial review” of the mandate — that is, did not mean to limit challenged to a refund lawsuit in the future.
The state of Virginia, in its new brief, argued that it is barred from filing any refund lawsuit, because it would never face the penalty for not having health insurance.  Thus, it contended, it has a right to challenge the insurance mandate, in order to protect a state law that supposedly insulated its citizens from ever being forced to buy insurance. Only the state itself, the brief asserted, can undertake to defend its own laws.  (The federal government disputes that Virginia has a legal right to be pursuing its challenge, and renewed that opposition in the new brief Tuesday night. The government and the state disagreed explicitly on whether a prior Supeme Court ruling, in the 1984 case of South Carolina v. Regan, had cleared the way for Virginia to sue against a law like the federal health care law.)
Liberty University’s new brief said that the university and its employees were not seeking to bar the assessment or collection of a tax, and insisted that the penalty is not a tax, anyway. But, even if the penalties are treated as a tax, the brief said, the Anti-Injunction Act would still not apply because it is the mandate itself that is being challenged, not the penalty that would be used to enforce it.
There is no specific timetable for the Circuit Court to rule on the two challenges, although that Court has a reputation of moving its decisions along quite rapidly.
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