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Day 1 Transcript - SCOTUS & ObamaCare

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  • suesarkis@aol.com
    Here is the transcript from the first day in oral arguments on the Affordable Care Act, as released this afternoon by the Supreme Court: Washington, D.C.
    Message 1 of 1 , Mar 26, 2012
      Here is the transcript from the first day in oral arguments on the
      Affordable Care Act, as released this afternoon by the Supreme Court:

      Washington, D.C. Monday, March 26, 2012


      IN THE SUPREME COURT OF THE UNITED STATES

      The above-entitled matter came on for oral argument before the Supreme
      Court of the United States at 10:12 a.m.

      APPEARANCES:
      ROBERT A. LONG, ESQ., Washington, D.C.; for
      Court-appointed amicus curiae

      DONALD B. VERRILLI, JR., ESQ., Solicitor General, Department of Justice,
      Washington, D.C.; on behalf of Petitioners.
      GREGORY G. KATSAS, ESQ., Washington, D.C.; on behalf of Respondents.

      ORAL ARGUMENT OF PAGE
      ROBERT A. LONG, ESQ.

      For Court-appointed amicus curiae
      3
      ORAL ARGUMENT OF
      DONALD B. VERRILLI, JR., ESQ.

      On behalf of the Petitioners
      30
      ORAL ARGUMENT OF
      GREGORY G. KATSAS, ESQ.

      On behalf of the Respondents
      55

      REBUTTAL ARGUMENT OF
      ROBERT A. LONG, ESQ.
      For Court-appointed amicus curiae
      72
      2




      1 P R O C E E D I N G S
      2 (10:12 a.m.)
      3 CHIEF JUSTICE ROBERTS: We will hear
      4 argument this morning in Case Number 11-398, Department
      5 of Health and Human Services v. Florida.
      6 Mr. Long.
      7 ORAL ARGUMENT OF ROBERT A. LONG
      8 ON BEHALF OF THE COURT-APPOINTED AMICUS CURIAE
      9 MR. LONG: Mr. Chief Justice, and may it
      10 please the Court:
      11 The Anti-Injunction Act imposes a pay first,
      12 litigate later rule that is central to Federal tax
      13 assessment and collection. The Act applies to
      14 essentially every tax penalty in the Internal Revenue
      15 Code. There is no reason to think that Congress made a
      16 special exception for the penalty imposed by section
      17 5000A. On the contrary, there are three reasons to
      18 conclude that the Anti-Injunction Act applies here.
      19 First, Congress directed that the section
      20 5000A penalty shall be assessed and collected in the
      21 same manner as taxes. Second, Congress provided that
      22 penalties are included in taxes for assessment purposes.
      23 And third, the section 5000A penalty bears the key
      24 indicia of a tax.
      25 Congress directed that the section 5000A
      3

      1 penalty shall be assessed and collected in the same
      2 manner as taxes. That derivative triggers the
      3 Anti-Injunction Act which provides that "no suit for the
      4 purpose of restraining the assessment or collection of
      5 any tax may be maintained in any court by any person."
      6 JUSTICE SCALIA: Well, that depends, as -
      7 as the government points out on whether that derivative
      8 is a directive to to the Secretary of the Treasury as to
      9 how he goes about getting this penalty, or rather a
      10 directive to him and to the courts. All — all of the
      11 other directives there seem to me to be addressed to the
      12 Secretary. Why — why should this one be directed to
      13 the courts? When you say in the same manner, he goes
      14 about doing it in the same manner, but the courts simply
      15 accept that — that manner of proceeding but nonetheless
      16 adjudicate the cases.
      17 MR. LONG: Well, I think I have a three-part
      18 answer to that, Justice Scalia. First, the text does
      19 not say that the Secretary shall assess and collect
      20 taxes in the same manner; it just says that it shall be
      21 assessed in the same manner as a tax, without addressing
      22 any party particularly.
      23 JUSTICE SCALIA: Well, he's assessing and
      24 collecting it in the same manner as a tax.
      25 MR. LONG: Well, the assessment — the other
      4

      1 two parts of the answer are, as a practical matter, I
      2 don't think there is any dispute in this case that if
      3 the Anti-Injunction Act does not apply, this penalty,
      4 the section 5000A penalty, will as a practical matter be
      5 assessed and collected in a very different manner from
      6 other taxes and other tax penalties.
      7 There — there are three main differences.
      8 First, when the Anti-Injunction Act applies, you have to
      9 pay the tax or the penalty first and then litigate later
      10 to get it back with interest. Second, you have to
      11 exhaust administrative remedies; even after you pay the
      12 tax you can't immediately go to court. You have to go
      13 to the Secretary and give the Secretary at least 6
      14 months to see if the matter can be resolved
      15 administratively. And third, even in the very carefully
      16 defined situations in which Congress has permitted a
      17 challenge to a tax or a penalty before it's paid, the
      18 Secretary has to make the first move. The taxpayer is
      19 never allowed to rush into court before the tax -
      20 before the Secretary sends a notice of deficiency to
      21 start the process.
      22 Now if — if the Anti-Injunction Act does
      23 not apply here, none of those rules apply. That's not
      24 just for this case; it will be for every challenge to a
      25 section 5000A penalty going forward. The — the
      5

      1 taxpayer will be able to go to court at any time without
      2 exhausting administrative remedies; there will be none
      3 of the limitations that apply in terms of you have to
      4 wait for the Secretary to make the -
      5 JUSTICE KENNEDY: Why — why will the
      6 administrative remedies rule not be applicable -
      7 exhaustion rule not be applicable?
      8 MR. LONG: Well, because if the
      9 Anti-Injunction Act doesn't apply there is — there is
      10 no prohibition on courts restraining the assessment or
      11 collection of this penalty, and you can simply -
      12 JUSTICE KENNEDY: Well, but courts apply the
      13 exhaustion rule. I mean, I know you've studied this.
      14 I'm just not following it. Why couldn't the court say
      15 well, you haven't exhausted your remedies, no
      16 injunction?
      17 MR. LONG: Well, in — you could do that, I
      18 think as a matter of — of common law or judicially
      19 imposed doctrine, but in the code itself which is all —
      20 I mean, the Anti-Injunction Act is an absolutely central
      21 statute to litigation -
      22 JUSTICE KENNEDY: Yes, yes.
      23 MR. LONG: — about taxes. And the code
      24 says, first it says you must pay the tax first and then
      25 litigate. So that's the baseline. And then in addition
      6

      1 it says you must — I mean, it's not common law; it's in
      2 the code — you must apply for a refund, you must wait
      3 at least 6 months. That's — many of these provisions
      4 are extremely specific, with very specific
      5 time limits -
      6 CHIEF JUSTICE ROBERTS: They would apply
      7 even if the rule is not jurisdictional. The only
      8 difference would be that the court could enforce it or
      9 not enforce it in particular cases, which brings me to
      10 the Davis case, which I think is your biggest hurdle.
      11 It's a case quite similar to this in which the
      12 constitutionality of the Social Security Act was at
      13 issue, and the government waived its right to insist
      14 upon the application of this Act.
      15 Of course, if it's jurisdictional, you can't
      16 waive it. So are you asking us to overrule the Davis
      17 case?
      18 MR. LONG: Well, Helvering v. Davis was
      19 decided during a period when this Court interpreted the
      20 Anti-Injunction Act as simply codifying the
      21 pre-statutory equitable principles that usually but not
      22 always prohibited a court from enjoining the assessment
      23 or collection of taxes. So that understanding, which is
      24 what was the basis for the Helvering v. Davis decision,
      25 was rejected by the Court in Williams Packing and a
      7

      1 series of subsequent cases — Bob Jones. And so I would
      2 say effectively, the Davis case has been overruled by
      3 subsequent decisions of this Court.
      4 JUSTICE GINSBURG: Mr. Long, why don't we
      5 simply follow the statutory language? I know that
      6 you've argued that the Davis case has been overtaken by
      7 later cases, but the language of the Anti-Injunction Act
      8 is "no suit shall be maintained." It's remarkably
      9 similar to the language in — that was at issue in Reed
      10 Elsevier: "No civil action for infringement shall be
      11 instituted." And that formulation, "no suit may be
      12 maintained," contrasts with of the Tax Injunction Act,
      13 that says the district court shall not enjoin. That Tax
      14 Injunction Act is the same pattern as 2283, which says
      15 "courts of the United States may not stay a proceeding
      16 in State court."
      17 So both of those formulas, the TIA and the
      18 no injunction against proceedings in State court, are
      19 directed to "court." The Anti-Injunction Act, like the
      20 statute at issue in Reed Elsevier, says "no suit shall
      21 be maintained," and it has been argued that that is
      22 suitor-directed in contrast to court-directed.
      23 MR. LONG: Right. Well, I mean, this Court
      24 has said several times that the Tax Injunction Act was
      25 based on the Anti-Injunction Act. You are quite right,
      8

      1 the language is different; but we submit that the
      2 Anti-Injunction Act itself, by saying that no suit shall
      3 be maintained, is — is addressed to courts as well as
      4 litigants. I mean, after all, a case cannot go from
      5 beginning to end without the active cooperation of the
      6 court.
      7 JUSTICE GINSBURG: But how is that different
      8 from no civil action for infringement shall be
      9 instituted — "maintained and instituted"? Anything
      10 turn on that?
      11 MR. LONG: Well, it's — I mean — perhaps a
      12 party could initiate an action without the act of
      13 cooperation of the court, but to maintain it from
      14 beginning to end again requires the court's cooperation.
      15 And — and even if — I mean, if the Court were inclined
      16 to say as an initial matter if this statute were coming
      17 before us for the first time today, given all of your
      18 recent decisions on jurisdiction, that you might be
      19 inclined to say this is not a jurisdictional statute.
      20 A lot of water has gone over the dam here.
      21 The Court has said multiple times that this is a
      22 jurisdictional statute. Congress has not disturbed
      23 those decisions. To the contrary -
      24 JUSTICE SOTOMAYOR: Counsel -
      25 JUSTICE ALITO: Well, Congress said that
      9

      1 many times, but is there any case in which the result
      2 would have been different if the Anti-Injunction Act
      3 were not viewed as jurisdictional but instead were
      4 viewed as a mandatory claims processing — rule?
      5 MR. LONG: There — there are certainly a
      6 number of cases where the Court dismissed saying it is
      7 jurisdictional.
      8 As I read the cases, I don't think any of
      9 them would necessarily have come out differently,
      10 because I don't think we had a case where the argument
      11 was, well, you know, the government has waived this, so,
      12 you know, even — if it's not jurisdictional -
      13 JUSTICE ALITO: Well, the clearest — the
      14 clearest way of distinguishing between the
      15 jurisdictional provision and a mandatory claims
      16 processing rule is whether it can be waived and whether
      17 the Court feels that it has an obligation to raise the
      18 issue Sua Sponte.
      19 Now, if there are a lot of cases that call
      20 it jurisdictional, but none of them would have come out
      21 differently if the Anti-Injunction Act were simply a
      22 mandatory claims processing rule, you have that on one
      23 side.
      24 And on the other side, you have Davis, where
      25 the Court accepted a waiver by the Solicitor General;
      10

      1 the Sunshine Anthracite coal case, where there also was
      2 a waiver; and, there's the Williams Packing case, which
      3 is somewhat hard to understand as viewing the
      4 Anti-Injunction Act as a jurisdictional provision.
      5 The Court said that there could be a
      6 suit if — there is no way the government could win, and
      7 the Plaintiff would suffer irreparable harm. Now,
      8 doesn't that sound like an equitable exception to the
      9 Anti-Injunction Act?
      10 MR. LONG: No. I think the — I think the
      11 best interpretation of the Court's cases is that it was
      12 interpreting a jurisdictional statute. And, indeed, in
      13 Williams Packing, the Court said it was a jurisdictional
      14 statute.
      15 But, again, even if you have doubt about
      16 simply the cases, there is more than that because
      17 Congress has — has not only not disturbed this Court's
      18 decision stating that the statute is jurisdictional,
      19 they've passed numerous amendments to this
      20 Anti-Injunction Act.
      21 CHIEF JUSTICE ROBERTS: Well, it seems -
      22 you can't separate those two points. The idea that
      23 Congress has acquiesced in what we have said only helps
      24 you if what we have said is fairly consistent. And you,
      25 yourself, point out in your brief that we've kind of
      11

      1 gone back and forth on whether this is a jurisdictional
      2 provision or not. So, even if Congress acquiesced in
      3 it, I'm not sure what they acquiesced in.
      4 MR. LONG: Well, what you have said,
      5 Mr. Chief Justice, has been absolutely consistent for
      6 50 years, since the Williams Packing case. The period
      7 of inconsistency was after the first 50 years, since the
      8 statute was enacted in 1867. And there was a period, as
      9 I said, when the Court was allowing extraordinary
      10 circumstances exceptions and equitable exceptions, but
      11 then, very quickly, it cut back on that. And since -
      12 and since Williams Packing, you have been utterly
      13 consistent -
      14 JUSTICE KAGAN: Well, even since
      15 Williams Packing, there was South Carolina v. Regan.
      16 And that case can also be understood as a kind of
      17 equitable exception to the rule, which would be
      18 inconsistent with thinking that the rule is
      19 jurisdictional.
      20 MR. LONG: Well, again, I mean, I think the
      21 best understanding of South Carolina v. Regan is not
      22 that its an equitable exception, but it's the court
      23 interpreting a jurisdictional statute as it would
      24 interpret any statute in light of its purpose, and
      25 deciding in that very special case, it's a very narrow
      12

      1 exception, where the -
      2 JUSTICE SOTOMAYOR: Mr. Long, in Bowles, the
      3 Court looked to the long history of appellate issues as
      4 being jurisdictional, in its traditional sense, not as a
      5 claim processing rule, but as a pure jurisdiction rule,
      6 the power of the Court to hear a case.
      7 From all the questions here, I count at
      8 least four cases in the Court's history where the Court
      9 has accepted a waiver by the Solicitor General and
      10 reached a tax issue. I have at least three cases, one
      11 of them just mentioned by Justice Kagan, where
      12 exceptions to that rule were read in.
      13 Given that history, regardless of how we
      14 define jurisdictional statutes versus claim processing
      15 statutes in recent times, isn't the fairer statement
      16 that Congress has accepted that in the extraordinary
      17 case we will hear the case?
      18 MR. LONG: No. No, Justice Sotomayor,
      19 because in many of these amendments which have come in
      20 the '70s and the '90s and the 2000's, Congress has
      21 actually framed the limited exceptions to the
      22 Anti-Injunction Act in jurisdictional terms. And it's
      23 written many of the express exceptions by saying
      24 notwithstanding Section 7421 -
      25 JUSTICE SOTOMAYOR: But doesn't that just
      13

      1 prove that it knows that the Court will impose a claim
      2 processing rule in many circumstances, and so, in those
      3 in which it specifically doesn't want the Court to, it
      4 has to be clearer?
      5 MR. LONG: Well, but Congress says,
      6 notwithstanding 7421, the Court "shall have jurisdiction
      7 to restrain the assessment and collection of taxes in
      8 very limited" -
      9 JUSTICE SOTOMAYOR: Could you go back to the
      10 question that Justice Alito asked. Assuming we find
      11 that this is not jurisdictional, what is the parade of
      12 horribles that you see occurring if we call this a
      13 mandatory claim processing rule? What kinds of cases do
      14 you imagine that courts will reach?
      15 MR. LONG: Right. Well, first of all, I
      16 think you would be saying that for the refund statute,
      17 as well as for the Anti-Injunction Act — which has very
      18 similar wording, so if the Anti-Injunction Act is not
      19 jurisdictional, I think that's also going to apply to
      20 the refund statute, the statute that says you have to
      21 first ask for a refund and then file, you know, within
      22 certain time — so it would be — it would be both of
      23 those statutes. And, you know, we are dealing with
      24 taxes here, if people -
      25 JUSTICE SOTOMAYOR: That wasn't my question.
      14

      1 MR. LONG: I'm sorry.
      2 JUSTICE SOTOMAYOR: My question was if we
      3 deem this a mandatory claim processing rule -
      4 MR. LONG: Right.
      5 JUSTICE SOTOMAYOR: — what cases do you
      6 imagine courts will reach on what grounds? Assuming the
      7 government does its job and comes in and raises the AIA
      8 as an immediate defense -
      9 MR. LONG: Well, that's -
      10 JUSTICE SOTOMAYOR: — where can a Court
      11 then reach the question, despite -
      12 MR. LONG: That would certainly be the first
      13 class of cases, it occurs to me, where, if the
      14 government does not raise it in a timely way, it could
      15 be waived. I would think plaintiffs would see if there
      16 was some clever way they could get a suit going that
      17 wouldn't immediately be apparent that -
      18 JUSTICE SOTOMAYOR: Assumes the lack of
      19 competency of the government, which I don't, but what
      20 other types of cases?
      21 JUSTICE SCALIA: Mr. Long, I don't think you
      22 are going to come up with any, but I think your response
      23 is you could say that about any jurisdictional rule. If
      24 it's not jurisdictional, what's going to happen is you
      25 are going to have an intelligent federal court deciding
      15

      1 whether you are going to make an exception. And there
      2 will be no parade of horribles because all federal
      3 courts are intelligent.
      4 So it seems to me it's a question you can't
      5 answer. It's a question which asks "why should there be
      6 any jurisdictional rules?" And you think there should
      7 be.
      8 MR. LONG: Well, and, Justice Scalia, I
      9 mean, honestly, I can't predict what would happen, but I
      10 would say that not all people who litigate about federal
      11 taxes are necessarily rational. And I think there would
      12 be a great -
      13 JUSTICE BREYER: I just don't want you to
      14 lose the second half of your argument. And we have
      15 spent all the time so far on jurisdiction. And I
      16 accept, pretty much, I'm probably leaning in your favor
      17 on jurisdiction, but where I see the problem is in the
      18 second part, because the second part says "restraining
      19 the assessment or collection of any tax."
      20 Now, here, Congress has nowhere used the
      21 word "tax." What it says is penalty. Moreover, this is
      22 not in the Internal Revenue Code "but for purposes of
      23 collection."
      24 And so why is this a tax? And I know you
      25 point to certain sentences that talk about taxes within
      16

      1 the code -
      2 MR. LONG: Right.
      3 JUSTICE BREYER: — and this is not attached
      4 to a tax. It is attached to a health care requirement.
      5 MR. LONG: Right.
      6 JUSTICE BREYER: — so why does it fall
      7 within that word?
      8 MR. LONG: Well, I mean, the first point
      9 is — our initial submission is you don't have to
      10 determine that this is a tax in order to find that the
      11 Anti-Injunction Act applies, because Congress very
      12 specifically said that it shall be assessed and
      13 collected in the same manner as a tax, even if it's a
      14 tax penalty and not a tax. So that's one -
      15 JUSTICE BREYER: But that doesn't mean the
      16 AIA applies. I mean — and then they provide some
      17 exceptions, but it doesn't mean the AIA applies.
      18 It says "in the same manner as." It is then
      19 attached to chapter 68, when that — it that references
      20 that as "being the manner of." Well, that it's being
      21 applied — or if it's being collected in the same manner
      22 as a tax doesn't automatically make it a tax,
      23 particularly since the reasons for the AIA are to
      24 prevent interference with revenue sources. And here, an
      25 advance attack on this does not interfere with the
      17

      1 collection of revenues.
      2 I mean, that's — you have read the
      3 arguments, as have I. But I would like to know what you
      4 say succinctly in response to those arguments.
      5 MR. LONG: So specifically on the argument
      6 that it — it is actually a tax, even setting aside the
      7 point that it should be assessed and collected in the
      8 same manner as a tax.
      9 The Anti-Injunction Act uses the term "tax";
      10 it doesn't define it. Somewhat to my surprise, "tax" is
      11 not defined anywhere in the Internal Revenue Code. In
      12 about the time that Congress passed the Anti-Injunction
      13 Act, tax had a very broad definition. It's broad enough
      14 to include this exaction, which is codified in the
      15 Internal Revenue Code. It's part of the taxpayers'
      16 annual income tax return. The amount of the liability
      17 and whether you owe the liability is based in part on
      18 your income. It's assessed and collected by the IRS.
      19 JUSTICE SCALIA: There — there is at least
      20 some doubt about it, Mr. Long, for the reasons that
      21 Justice Breyer said, and I — I thought that we — we
      22 had a principle that ousters of jurisdiction are — are
      23 narrowly construed, that, unless it's clear, courts are
      24 not deprived of jurisdiction, and I find it hard to
      25 think that this is clear. Whatever else it is, it's
      18

      1 easy to think that it's not clear.
      2 MR. LONG: Well, I mean, the Anti-Injunction
      3 Act applies not only to every tax in the code, but, as
      4 far as I can tell, to every tax penalty in the code.
      5 JUSTICE GINSBURG: Mr. Long, you — you said
      6 before — and I think you were quite right — that the
      7 Tax Injunction Act is modeled on the Anti-Injunction
      8 Act, and, under the Tax Injunction Act, what can't be
      9 enjoined is an assessment for the purpose of raising
      10 revenue. The Tax Injunction Act does not apply to
      11 penalties that are designed to induce compliance with
      12 the law rather than to raise revenue. And this is not a
      13 revenue-raising measure, because, if it's successful,
      14 they won't — nobody will pay the penalty and there will
      15 be no revenue to raise.
      16 MR. LONG: Well, in — in Bob Jones the
      17 Court said that they had gotten out of the business of
      18 trying to determine whether an exaction is primarily
      19 revenue raising or primarily regulatory. And this one
      20 certainly raises — is expected to raise very
      21 substantial amounts of revenues, at least $4 billion a
      22 year by the -
      23 JUSTICE SOTOMAYOR: But Bob Jones involved a
      24 statute where it denominated the exaction as a tax.
      25 MR. LONG: That's -
      19

      1 JUSTICE SOTOMAYOR: Here we have one where
      2 the Congress is not denominating it as a tax; it's
      3 denominating it as a penalty.
      4 MR. LONG: That's — that's absolutely
      5 right, and that's obviously why, if it were called a
      6 tax, there would be absolutely no question that the
      7 Anti-Injunction Act applies.
      8 JUSTICE SOTOMAYOR: Absolutely. But even
      9 the section of the Code that you referred to previously,
      10 the one following 7421, the AIA, it does very clearly
      11 make a difference — 7422 — make a difference between
      12 tax and penalties. It's very explicit.
      13 MR. LONG: Yes, that's — it does, that is
      14 correct, and there are many other places in the Code
      15 where -
      16 JUSTICE BREYER: The best collection I've
      17 found in your favor, I think, is in Mortimer Caplin's
      18 brief on page 16, 17. He has a whole list. All right.
      19 So — I got my law clerk to look all those up. And it
      20 seems to me that they all fall into the categories of
      21 either, one, these are penalties that were penalties
      22 assessed for not paying taxes, or, two, they involve
      23 matters that were called by the court taxes, or, three,
      24 in some instances they were deemed by the Code to be
      25 taxes.
      20

      1 Now what we have here is something that's in
      2 a different statute that doesn't use the word "tax" once
      3 except for a collection device, and, in fact, in
      4 addition, the underlying AIA reason, which is to say to
      5 the Solicitor General, we don't care what you think, we,
      6 in Congress, don't want you in court where the revenue
      7 of a state — Tax Injunction Act — or the revenue of
      8 the federal government is at stake, and, therefore, you
      9 can't waive it.
      10 Now I got that. Here it's not at stake and
      11 here are all the differences I just mentioned. So I ask
      12 that because I want to hear your response.
      13 MR. LONG: Well, I mean, there are penalties
      14 in the Internal Revenue Code that you really couldn't
      15 say are related in any — in any close way to some other
      16 tax provision. There is a penalty — it's discussed in
      17 the briefs — for selling diesel fuel that doesn't
      18 comply with EPA's regulations, you know. So there are
      19 all kinds of penalties in the Code, and I think it's -
      20 it could be -
      21 JUSTICE KAGAN: Mr. Long, aren't there
      22 places in this Act — fees and penalties — that were
      23 specifically put under the Anti-Injunction Act? There
      24 is one on health care plans, there is one on
      25 pharmaceutical manufacturers, where Congress
      21

      1 specifically said the Anti-Injunction Act is triggered
      2 for those. It does not say that here. Wouldn't that
      3 suggest that Congress meant for a different result to
      4 obtain?
      5 MR. LONG: Well, I mean, Congress didn't use
      6 the language the Anti-Injunction Act shall apply -
      7 JUSTICE KAGAN: No, but it — it in section
      8 9008 and in section 9010 -
      9 MR. LONG: Right.
      10 JUSTICE KAGAN: — it specifically referred
      11 to the part of the Code where the Anti-Injunction Act
      12 is.
      13 MR. LONG: Right, all of subtitle F, which
      14 picks up lots of administration and procedure
      15 provisions, but those — those are fees, and they are
      16 not — Congress did not provide, you know, in the
      17 sections themselves that they should be paid as part of
      18 a tax return. So they were free-standing fees, and by
      19 using that subtitle F language, Congress plugged in a
      20 whole set of rules for how to collect and administer the
      21 fees, and it went not just to assessment and
      22 collection — and the IRS has recognized this — but to
      23 examination, privacy, a whole series of additional
      24 things.
      25 So I think it would be a mistake to look at
      22

      1 that language and say, "oh, here's Congress saying they
      2 want the Anti-Injunction Act to apply." They are
      3 actually doing more than that. And, yes, I grant you,
      4 you could look at section 5000A, the individual coverage
      5 requirement, and say, well, they could have been clearer
      6 about saying the Anti-Injunction Act applied, and that's
      7 certainly true, but, again, they were trying to
      8 accomplish a lot. Maybe -
      9 JUSTICE KENNEDY: It's easier to talk about
      10 this case if we just forget the words "for the purpose
      11 of restraining assessment and collection." In a sense,
      12 that brings the jurisdictional question and
      13 Justice Breyer's question together.
      14 It seems to me — maybe you could just
      15 comment on that language. Is that sort of language
      16 usually contained in a jurisdictional provision? I
      17 mean, you often don't know the purpose of a suit until
      18 after the thing is underway. I can see it with
      19 malicious prosecution and some civil rights cases. Does
      20 it strike you as somewhat unusual to have this provision
      21 in a jurisdictional case?
      22 MR. LONG: It does strike me, honestly, as a
      23 bit unusual, but this is an old statute. I mean, this
      24 — the core language is essentially unchanged since
      25 1867, and, you know, I think that's part of the
      23

      1 explanation for it. And, again, it's, you know, become
      2 the center of a series of provisions that very carefully
      3 control the circumstances in which litigation about
      4 federal taxes can take place.
      5 JUSTICE GINSBURG: Mr. Long, there's another
      6 argument that has been made that I would like you to
      7 address, and that is all this talk about tax penalties
      8 is all beside the point because this suit is not
      9 challenging the penalty. This is a suit that is
      10 challenging the must-buy provision, and the argument is
      11 made that, if, indeed, "must-buy" is constitutional,
      12 than these complainants will not resist the penalty.
      13 So what they're seeking is a determination
      14 that that "must-buy" requirement, stated separately from
      15 penalty, that "must-buy" is unconstitutional, and, if
      16 that's so, that's the end of the case; if it's not so,
      17 they are not resisting the penalty.
      18 MR. LONG: Well, I think that argument
      19 doesn't work for two reasons. I mean, first, if you
      20 look at the Plaintiff's own complaint, they clearly
      21 challenge both the minimum coverage requirement and the
      22 penalty. At page 122 of the Joint Appendix they
      23 challenge the requirement that the individuals obtain
      24 health care coverage or pay a penalty.
      25 JUSTICE ALITO: Why is that?
      24

      1 JUSTICE GINSBURG: If that's — if that's
      2 the problem, it's easier to amend the complaint. They
      3 can just take that out of the complaint. So it can't
      4 turn on that.
      5 MR. LONG: Well, yes, I mean, it's — or
      6 another complaint would be filed, but, still, I think
      7 that's a serious problem. But even if they had filed a
      8 different complaint, I don't think you — in this case I
      9 don't think you can separate the minimum coverage
      10 requirement from the penalty because the penalty is the
      11 sole means of enforcing the minimum coverage
      12 requirement.
      13 So — so, first, I mean, I think these
      14 Plaintiffs would not be satisfied if the Court were to
      15 render a judgment saying the minimum coverage
      16 requirement is invalidated; the penalty, however,
      17 remains standing. Anybody who doesn't have insurance
      18 has to pay the penalty. Then they would have to pay a
      19 penalty equal to the cost of insurance and they wouldn't
      20 even have insurance. So I don't think that would be -
      21 JUSTICE ALITO: Well, they say they want to
      22 obey the law, and they say that your argument puts them
      23 in the position of having to disobey the law in order to
      24 obtain review of their claim. And what is your answer
      25 to that?
      25

      1 MR. LONG: Well, I mean, first of all, I
      2 can't find that in the record, in their declarations. I
      3 don't see a statement that they will, you know, never
      4 incur a penalty under any circumstances. But — but
      5 even if that were so, what this Court has said in
      6 Americans United is the Anti-Injunction Act bars any
      7 suit, not just to enjoin the collection of your own
      8 taxes, but to enjoin the collection of anyone's taxes.
      9 And so even if it were really true that
      10 these plaintiffs were not interested in the penalty and
      11 would never pay the penalty, if they were to succeed in
      12 this case in striking down the minimum coverage
      13 requirement the inevitable result would be that the
      14 penalty would fall as well, because the government
      15 couldn't collect the penalty for failing to follow an
      16 unconstitutional requirement, and so it would still be
      17 barred because it would be a suit that would prevent the
      18 collection of some of the -
      19 JUSTICE ALITO: Well, let me take us back to
      20 Justice Kennedy's question about the "for the purpose
      21 of" language. I take it you interpret the statute to
      22 mean the following: "For the purpose of" means having
      23 the effect of. Is that correct?
      24 MR. LONG: Well — — well, I mean, this
      25 Court in the Bob Jones case, where a similar kind of
      26

      1 argument was being made by the plaintiff in that case,
      2 said: Look, you know, where the — where it's
      3 inevitable that this is what the suit is about, they're
      4 sort of two sides of the same coin, that clearly is a
      5 primary purpose of the suit. And it's — and you can't
      6 by clever pleading get away from that. That's just the
      7 nature of the situation.
      8 JUSTICE KAGAN: But, Mr. Long, aren't you
      9 trying to rewrite the statute in a way? The statute has
      10 two sections. One is the you have to have insurance
      11 section and the other is the sanction. The statute has
      12 two different sets of exceptions corresponding to those
      13 two different sections. You are trying to suggest that
      14 the statute says: Well, it's your choice; either buy
      15 insurance or pay a — or pay a fee.
      16 But that's not the way the statute reads.
      17 And Congress, it must be supposed, you know, made a
      18 decision that that shouldn't be the way the statute
      19 reads, that it should instead be a regulatory command
      20 and a penalty attached to that command.
      21 MR. LONG: Well, I would not argue that this
      22 statute is a perfect model of clarity, but I do think
      23 the most reasonable way to read the entire statute is
      24 that it does impose a single obligation to pay a penalty
      25 if you are an applicable individual and you are not
      27

      1 subject to an exemption. And the reason I say that, if
      2 you look at the exemptions from the penalty, the very
      3 first one is you are exempt from the penalty because you
      4 can't afford to purchase insurance. And it just doesn't
      5 seem reasonable to me to interpret the statute as
      6 Congress having said, well, you know, this person is
      7 exempt from paying a penalty because we find they can't
      8 afford to buy insurance, however they still have a legal
      9 obligation to buy insurance. That just doesn't seem
      10 reasonable.
      11 So I — so I do think, although it's — I
      12 certainly wouldn't argue it's clear — that that's the
      13 best way to understand the statute as a whole.
      14 But again, I would say, you know, that's not
      15 essential to the question we're discussing now of
      16 whether the Anti-Injunction Act applies. Again, you
      17 know, I think -
      18 JUSTICE SOTOMAYOR: Could you tell me why
      19 you think the Solicitor General's reading creates a
      20 problem?
      21 MR. LONG: Well, in going back to — so if
      22 the result were to say simply, this is not — oh, I'm
      23 sorry. The Solicitor General's reading. So now it's
      24 not -
      25 JUSTICE SOTOMAYOR: That it is a
      28

      1 jurisdictional bar, but there's an exemption for those
      2 items that Congress has designated solely as penalties
      3 that are not like taxes.
      4 MR. LONG: Right. Well, I mean, I think the
      5 Solicitor General's reading would probably create the
      6 fewest problems, as I understand it. I mean, my — my
      7 main objection to the Solicitor General's reading is I
      8 don't think it makes a whole lot of sense. I mean,
      9 basically the Solicitor General says every penalty in
      10 the Internal Revenue Code, every other penalty in the
      11 Affordable Care Act is — 
      12 JUSTICE SOTOMAYOR: But that's not — that's
      13 carrying it too far, because he says if a penalty is
      14 designated as a tax by Congress then it's subject to the
      15 AIA, and that's most of the code, the tax code. And he
      16 says for those portions of the Affordable Care Act that
      17 designate things as taxes, the AIA applies. So it's
      18 only — and I haven't found another statute. I'm going
      19 to ask him if there's another one. It's only for those
      20 statutes in which Congress has designated something
      21 solely as a penalty.
      22 MR. LONG: Right.
      23 JUSTICE SOTOMAYOR: And not indicated that
      24 it is a tax.
      25 MR. LONG: Right.
      29

      1 JUSTICE SOTOMAYOR: They don't fall within
      2 the AIA.
      3 MR. LONG: I think my — my take on it is if
      4 you adopted the Solicitor General's approach there are
      5 probably three penalties for alcohol and tobacco-related
      6 offenses at 5114(c), 5684, and 5761 that I think would
      7 be very difficult to distinguish from this one, and
      8 possibly the 527(j) penalty for failure to disclose
      9 political contributions.
      10 If there are no further questions, I would
      11 like to reserve my time.
      12 CHIEF JUSTICE ROBERTS: Thank you, Mr. Long.
      13 General Verrilli.
      14 ORAL ARGUMENT OF DONALD B. VERRILLI, JR.,
      15 ON BEHALF OF THE PETITIONERS
      16 GENERAL VERRILLI: Mr. Chief Justice and may
      17 it please the Court:
      18 This case presents issues of great moment,
      19 and the Anti-Injunction Act does not bar the Court's
      20 consideration of those issues. That is so even though
      21 the Anti-Injunction Act is a jurisdictional limit that
      22 serves what this Court described in Clintwood Elkhorn as
      23 an exceedingly strong interest in protecting the
      24 financial stability of the Federal Government, and even
      25 though the minimum coverage provision of the Affordable
      30

      1 Care Act is an exercise of Congress's taxing power as
      2 well as its commerce power.
      3 Congress has authority under the taxing
      4 power to enact a measure not labeled as a tax, and it
      5 did so when it put section 5000A into the Internal
      6 Revenue Code. But for purposes of the Anti-Injunction
      7 Act, the precise language Congress used is
      8 determinative. And there is no language in the
      9 Anti-Injunction Act — excuse me, no language in section
      10 5000A of the Affordable Care Act or in the Internal
      11 Revenue Code generally that provides a textual
      12 instruction that -
      13 JUSTICE ALITO: General Verrilli, today you
      14 are arguing that the penalty is not a tax. Tomorrow you
      15 are going to be back and you will be arguing that the
      16 penalty is a tax.
      17 Has the Court ever held that something that
      18 is a tax for purposes of the taxing power under the
      19 Constitution is not a tax under the Anti-Injunction Act?
      20 GENERAL VERRILLI: No, Justice Alito, but
      21 the Court has held in a license tax cases that something
      22 can be a constitutional exercise of the taxing power
      23 whether or not it is called a tax. And that's because
      24 the nature of the inquiry that we will conduct tomorrow
      25 is different from the nature of the inquiry that we will
      31

      1 conduct today. Tomorrow the question is whether
      2 Congress has the authority under the taxing power to
      3 enact it and the form of words doesn't have a
      4 dispositive effect on that analysis. Today we are
      5 construing statutory text where the precise choice of
      6 words does have a dispositive effect on the analysis.
      7 JUSTICE SOTOMAYOR: Well, General, you also
      8 have the Bailey child labor tax cases, because there the
      9 Court said that the tax, which was a prohibitory tax
      10 alone, was a tax subject to the AIA, and then it said it
      11 was beyond the Court's taxing power in a separate case,
      12 correct?
      13 GENERAL VERRILLI: Yes. I do think, Justice
      14 Sotomayor, that, with respect to one of the arguments
      15 that my friend from the NFIB has made in of the brief,
      16 that Bailey v. George is a significant problem because I
      17 think their argument on the constitutionality under the
      18 taxing power is essentially that the Affordable Care Act
      19 provision is the same thing as the provision that was
      20 held unconstitutional in Bailey v. Drexel Furniture
      21 Company.
      22 JUSTICE SOTOMAYOR: That's a different
      23 issue.
      24 GENERAL VERRILLI: But on the same day -
      25 right, but on the same day as Bailey v. Drexel
      32

      1 Furniture, the court issued Bailey v. George, which held
      2 that the Anti-Injunction Act did bar a challenge to that
      3 provision, even though the Court had concluded that it
      4 was invalid under the tax power.
      5 So — and I think the reason for that has
      6 been — is clear now after Williams Packing and Bob
      7 Jones, in that in order to find that the Anti-Injunction
      8 Act doesn't apply to something that otherwise would be a
      9 tax that triggers it, you have to conclude essentially
      10 that there is no substantial argument that can be made
      11 in defense of it as a tax. We don't have that here, so
      12 I don't think you can get around the Anti-Injunction Act
      13 if the Court were to read it, as the amicus suggest it
      14 should be read, on that theory. But.
      15 JUSTICE GINSBURG: Mr. Verrilli, a basic
      16 question about your argument. If you are right about
      17 the second part, that is for purposes of the statute,
      18 the anti-injunction statute, this penalty does not
      19 constitute a tax, then does the Court need to decide
      20 whether the Anti-Injunction Act in other cases where it
      21 does involve a tax is jurisdictional?
      22 GENERAL VERRILLI: No. I — I apologize if
      23 I'm creating confusion about that, Justice Ginsburg. We
      24 think by far the better route here is to understand the
      25 statute as we have proposed that it be construed as not
      33

      1 applying here. From the perspective of the United
      2 States — and if I could, I'd like to take a minute on
      3 this — the idea that the Anti-Injunction Act would be
      4 construed as not being a jurisdictional provision is
      5 very troubling, and we don't think it's correct.
      6 And I — I would, if I could follow up on a
      7 question, Justice Ginsburg, that you asked Mr. Long in
      8 terms of the language of the Anti-Injunction Act
      9 7421(a), which can be found at page 16A of the appendix
      10 to our brief.
      11 I — I'd ask the Court to compare that to
      12 the language of the very next provision in the code,
      13 which is on the next page of our statutory appendix,
      14 17A, which is the refund statute which we've talked
      15 about a little bit so far this morning, 7422(a).
      16 The refund statute this Court held in Dolan
      17 was jurisdictional, and the Court in both Dolan and
      18 Brockamp held that the statute of limitations that
      19 applies to the refund statute cases is jurisdictional.
      20 The language in 7422(a) is virtually
      21 identical to the language in 7421(a) -
      22 JUSTICE KENNEDY: That — that is correct,
      23 although in the refund context, you have the sovereign
      24 immunity problem, in which we presume that has not been
      25 waived.
      34

      1 GENERAL VERRILLI: Right. But I -
      2 7421(a) — were the same -
      3 JUSTICE KENNEDY: The language is quite
      4 parallel.
      5 GENERAL VERRILLI: And — originally, they
      6 were the same statutory provision. They were only
      7 separated out later. So I do think that's the strongest
      8 textual indication, Justice Ginsburg, that — that
      9 7421(a) is jurisdictional.
      10 JUSTICE GINSBURG: But then, General, what I
      11 asked you is, if you're right that this penalty is not
      12 covered by section 7421, if you're right about that, why
      13 should we deal with the jurisdictional question at all?
      14 Because this statute, correct, the way you reading -
      15 read it, doesn't involve a tax that's subject to the
      16 Anti-Injunction Act.
      17 GENERAL VERRILLI: Yes, that is exactly our
      18 position. And the reason we don't -
      19 JUSTICE GINSBURG: So — so you — you agree
      20 that we would not — if we agree with you about the
      21 correct interpretation of the statute, we need not
      22 decide the jurisdiction.
      23 GENERAL VERRILLI: There would be no reason
      24 to decide the jurisdictional issue.
      25 JUSTICE KENNEDY: Don't you want to know the
      35

      1 answer?
      2 (Laughter.)
      3 GENERAL VERRILLI: Justice Kennedy, I think
      4 we all want to know the answer to a lot of things in
      5 this case. But — but I do — I do think that the
      6 prudent course here is to construe the statute in the
      7 manner that we read it.
      8 JUSTICE KENNEDY: But — but you
      9 indicated — there was a discussion earlier about why
      10 does the government really care, they have competent
      11 attorneys, et cetera. But — and you began your
      12 argument by saying it would be very troubling to say
      13 that it's not jurisdictional.
      14 I'd like you to comment on that — it's not
      15 for us to tell a party what's in its best interests. It
      16 would seem to me that there might be some instances in
      17 which the government would want to litigate the validity
      18 of a tax right away and would want to waive. But you
      19 say it's — that's not true; that it's very troubling.
      20 GENERAL VERRILLI: I think there are two
      21 problems. One is the problem that Justice Scalia
      22 identified, that if it's not jurisdictional, then courts
      23 have authority to craft equitable exceptions. And it
      24 may seem from where we stand now that that authority is
      25 or could be very, very tightly cabined, but if — if
      36

      1 this Court were to conclude that it isn't
      2 jurisdictional, that does empower courts to find other
      3 circumstances in which they might find it equitable to
      4 allow cases to go forward in the absence of — of -
      5 despite the existence of the Anti-Injunction Act.
      6 And second, although I certainly am not
      7 going to stand up here and disparage the attorneys from
      8 the United States in the slightest, the reality is that
      9 if this isn't jurisdictional, then it's — the argument
      10 — it's open to the argument that it's subject to
      11 forfeiture by a simple omission in failing to raise it
      12 in an answer. And that — and that's a troubling
      13 prospect.
      14 JUSTICE SOTOMAYOR: How, if you're troubled
      15 by -
      16 JUSTICE GINSBURG: Can I ask -
      17 CHIEF JUSTICE ROBERTS: Justice Ginsburg.
      18 JUSTICE GINSBURG: How — how likely is
      19 it — I mean, the government is going to be defending
      20 these suits, how likely is it that the government will
      21 overlook the Anti-Injunction Act? It seems to me that
      22 this is arming the government by saying it's waivable at
      23 the government's option.
      24 GENERAL VERRILLI: That's — that is not our
      25 assessment of the institutional interests of the United
      37

      1 States, Justice Ginsburg. And we do think that the -
      2 the right way to go in this case is to read the statute
      3 as not applying to the minimum coverage provision of the
      4 Affordable Care Act.
      5 CHIEF JUSTICE ROBERTS: It was — it was the
      6 calculation of the interests of the United States that
      7 your predecessor made in the Davis case.
      8 There, the — the Solicitor General
      9 exercised the authority that we sanctioned to waive
      10 the — the Anti-Injunction Act. And of course, that
      11 couldn't be done if it were jurisdictional.
      12 GENERAL VERRILLI: That's true,
      13 Mr. Chief Justice. Several points about that, though.
      14 We do agree with Mr. Long's analysis that
      15 Davis occurred in — during a time in — which under the
      16 Standard Nut case, the Court had interpreted the
      17 Anti-Injunction Act as doing no more than codifying the
      18 traditional equitable principles which allowed courts
      19 discretion to conclude that in certain circumstances, a
      20 case could go forward.
      21 Williams Packing repudiated that analysis,
      22 and Bob Jones v. Simon again repudiated that analysis
      23 and said, no, we're no longer abiding by that. It is
      24 true that the Davis case has not formally been
      25 overruled, but we do think it's fundamentally
      38

      1 inconsistent with the Court's understanding now of -
      2 JUSTICE BREYER: Davis was the case where a
      3 shareholder sues the corporation.
      4 GENERAL VERRILLI: Yes.
      5 JUSTICE BREYER: And the remedy is that the
      6 corporation shouldn't pay the money to the tax
      7 authority. Now, it's a little technical, but that isn't
      8 actually an injunction against the tax authority
      9 collecting. He's not — they're not restraining the
      10 collection of tax. They're saying to the taxpayer,
      11 don't pay it.
      12 GENERAL VERRILLI: Yes. And -
      13 JUSTICE BREYER: I don't know how far that
      14 gets you.
      15 GENERAL VERRILLI: Well, in fairness,
      16 Justice Breyer, the United States did intervene in the
      17 — in the Davis case and was a party, and so — not as
      18 far as I'd like, I guess is the answer.
      19 JUSTICE SCALIA: Don't do it again, because
      20 I think that goes too far. I don't think that's
      21 restraining the collection of a tax. It's restraining
      22 the payment of a tax.
      23 GENERAL VERRILLI: Well -
      24 JUSTICE SCALIA: You — you don't want to
      25 let that bone go, right?
      39

      1 GENERAL VERRILLI: Our view here is that it
      2 is jurisdictional. Because it's jurisdictional as this
      3 Court understands jurisdiction now, it's not waivable.
      4 And therefore, we don't think that — that that part of
      5 the Davis decision is good law.
      6 JUSTICE KAGAN: General, can I ask you about
      7 Reed Elsevier? Justice Ginsburg suggested that the
      8 language was very similar in Reed Elsevier as it is
      9 here, but there are even further similarities. Reed
      10 Elsevier pointed out that the provision in question
      11 wasn't in Title 28. Here, too, it's not in Title 28.
      12 In Reed Elsevier, it was pointed out that the provision
      13 there had numerous exceptions to it. Here, too, there
      14 are numerous exceptions that we find that have been
      15 created by the courts over the years.
      16 In Reed Elsevier, the question was
      17 essentially one about timing. Come to court after you
      18 file your registration. Here, too, the question is one
      19 about timing. Come to court after you make — after you
      20 pay your taxes.
      21 So Reed Elsevier seems in multiple respects
      22 on all fours with this case.
      23 Why is that wrong?
      24 GENERAL VERRILLI: I don't think so, Justice
      25 Kagan. First, we think — I guess I'm repeating myself
      40

      1 and I apologize, but — we think the closest analogue is
      2 the very next provision in the United States Code,
      3 7422(a), which this Court has held is jurisdictional,
      4 and is phrased in exactly the same way as 7421(a). In
      5 fact, as I said, they were the same provision back in
      6 the earlier days. That's the closest analogue.
      7 This isn't — and it's actually 7422 that's
      8 a statute that says do something first. But this -
      9 this statute is just a flat-out command that no suit
      10 shall be maintained to restrain -
      11 JUSTICE KAGAN: I take the point -
      12 GENERAL VERRILLI: — the assessment or
      13 collection.
      14 JUSTICE KAGAN: — bu if you would comment
      15 on the similarities of Reed Elsevier to this case.
      16 How do you think it's different, if at all?
      17 GENERAL VERRILLI: Well, because the — the
      18 — I think the best answer to that is there are no magic
      19 words. And that history and context matter, as the
      20 Court said in Henderson. And the history and context
      21 here is that 7422 and 7421 function together to protect
      22 an exceedingly strong interest that — that the Court
      23 has held with respect to 7422 sufficiently strong that
      24 it — it explains the jurisdictional nature of that.
      25 The same interest applies here.
      41

      1 This isn't just a matter of do X and then
      2 you can — and then you can come to court. It's just a
      3 fundamentally different set of interests at stake.
      4 So we — we do think that that makes a big
      5 difference. And -
      6 JUSTICE GINSBURG: Why, in Reed Elsevier,
      7 you were dividing jurisdiction from claims processing,
      8 says you have to register before you can sue. There are
      9 a lot of things you have to do before you can sue. So
      10 why isn't Reed Elsevier like you have to pay a filing
      11 fee before you can file a complaint?
      12 GENERAL VERRILLI: It is — we do think it's
      13 very much in — in that nature and different from this
      14 case, Your Honor.
      15 And one — one way I think it's helpful
      16 to — to get at this is — is to look at the history.
      17 We've cited a string of court of appeals cases in a
      18 footnote in our opening brief, and over time, it's been
      19 very consistent that the courts of appeals have treated
      20 the Anti-Injunction Act as a jurisdictional provision.
      21 Again, if the Court agrees with our
      22 statutory construction, you don't need to reach this
      23 issue. But they have — in fact, one of those cases,
      24 the Hansen case, the district court in that case had
      25 dismissed the complaint under Federal Rule of Civil
      42

      1 Procedure 12(b)(6). The Court of Appeals vacated and
      2 sent it back with instructions to dismiss under
      3 12(b)(1), which is the subject matter jurisdiction
      4 provision.
      5 So I do think that, to the extent
      6 this issue is before the Court, it is jurisdictional,
      7 but it doesn't need to be before the Court because of
      8 the statutory construction argument that we had offered.
      9 JUSTICE GINSBURG: On your statutory
      10 construction argument, is there any other exaction
      11 imposed under the Internal Revenue Codes that would not
      12 qualify as a tax for Anti-Injunction Act purposes, or is
      13 5000A just out there all by itself?
      14 GENERAL VERRILLI: It's not quite out there
      15 all by itself. There are other provisions that fall
      16 outside of subchapter B of chapter 68 and, therefore,
      17 wouldn't be governed by the instruction in Section
      18 6671(a), which answers the question about the
      19 applicability of the act for most penalties.
      20 The ones that we've identified, and I may be
      21 overlapping a little bit with Mr. Long here, one is 26
      22 U.S.C. 857, which poses certain penalties in connection
      23 with the administration of real estate investment
      24 trusts.
      25 There are provisions that Mr. Long
      43

      1 identified in his brief, Sections 6038(a) through (c) of
      2 the Code, which impose certain penalties with respect to
      3 reporting requirements for foreign corporations.
      4 We have, in addition, in footnote 22 at page
      5 36 of our brief, identified three provisions that Mr.
      6 Long also identified about — about alcohol and tobacco.
      7 Now -
      8 JUSTICE SOTOMAYOR: Could we address,
      9 General, the question of whether there are any
      10 collateral consequences for the failure to buy — to not
      11 buy health insurance? Is the only consequence the
      12 payment of the penalty?
      13 The private respondents argue that there are
      14 other collateral consequences such as for people on
      15 probation who are disobeying the law, if they don't buy
      16 health insurance they would be disobeying the law and
      17 could be subject to having their supervised release
      18 revoked.
      19 GENERAL VERRILLI: Yes. That is not a
      20 correct reading of the statute, Justice Sotomayor. The
      21 only consequence that ensues is the tax penalty. And
      22 the — we have made a representation, and it was a
      23 carefully made representation, in our brief that it is
      24 the interpretation of the agencies charged with
      25 interpreting this statute, the treasury department and
      44

      1 the Department of Health and Human Services, that there
      2 is no other consequence apart from the tax penalty.
      3 And I do think, if I could talk for a couple
      4 of minutes about the argument that was discussed as to
      5 whether this can be conceived of as a suit just
      6 challenging the requirement, which is entirely
      7 stand-alone based on inferences drawn from the
      8 exemptions. I really don't think that's right. And if
      9 I could spend a minute on it, I think it's important.
      10 The exemptions in section 5000A, it is true
      11 that there are two categories of exemptions. There are
      12 exemptions to the penalty and exemptions to the
      13 subsection (a) requirement. But the — but I think, not
      14 only as a practical matter, but as a textural indication
      15 and even as a legal matter, they — both function as
      16 exceptions to the requirement.
      17 First, as a practical matter, one of those
      18 exemptions is a hardship exemption. And if the Court
      19 will just bear with me for one minute here, it's at page
      20 11A of the appendix to our brief. It provides that a
      21 person can go to the secretary of HHS and obtain a
      22 hardship exemption for — which would, as a formal
      23 matter here, excuse compliance with the penalty.
      24 It seems to me to make very little sense to
      25 say that someone who has gone to an official of the
      45

      1 United States and obtained an exemption would,
      2 nonetheless, be in a position of being a law breaker.
      3 We think another way in which you can get to
      4 the same conclusion slightly differently is by
      5 considering the provision on the prior page, 10A, which
      6 is 5000A — 5000A(e)(3), members of Indian tribes.
      7 Members of Indian tribes are exempt only
      8 from the penalty as a formal matter under the structure
      9 of the statute here; but, the reason for that is because
      10 members of Indian tribes obtain their healthcare through
      11 the Indian Health Service, which is a clinic-based
      12 system that doesn't involve insurance at all. It's an
      13 entirely different system. They were taken out of this
      14 statute because they get their healthcare through a
      15 different system. And it doesn't make any sense to
      16 think that persons getting their health care through the
      17 Indian Health Service are violating the law because -
      18 exempt only from the penalty, but still under a legal
      19 obligation to have insurance, when the whole point of
      20 this is that they're supposed to be in a clinic-based
      21 system.
      22 JUSTICE SOTOMAYOR: Is your whole point that
      23 this was inartful drafting by Congress; that, to the
      24 extent that there is an exemption under the penalty,
      25 it's an exemption from the legal obligation?
      46

      1 GENERAL VERRILLI: I guess what I would say
      2 about it, Your Honor, is that the way in which this
      3 statute is drafted doesn't permit the inference that my
      4 friends from the NIB are trying to draw from it.
      5 And there is an additional textural
      6 indication of that, which one can find at page 13 of our
      7 reply brief. This is a provision that is 42 U.S.C. A,
      8 section 18022(e). This is a provision that provides for
      9 a certification that certain individuals can get. And
      10 it's the paragraph starting with the words "other
      11 provisions," contains the quote.
      12 And it says: "An individual with a
      13 certification that the individual is exempt from the
      14 requirement under section 5000A, by reason of section
      15 5000A(e)(1) of such code, is entitled to a certificate
      16 that allows for enrollment in a particular program for
      17 this category of people."
      18 But you can see here, Congress is saying
      19 it's an exemption under 5000A(e)(1), which is the
      20 exemption from the penalty, and not the underlying
      21 requirement is, as Congress says, an exemption from the
      22 requirement of section 5000A.
      23 JUSTICE ALITO: Sub-section A says directly,
      24 "an applicable individual shall ensure that the
      25 individual has the minimum essential coverage." And you
      47

      1 are saying it doesn't really mean that, that if you're
      2 not subject to the penalty, you're not under the
      3 obligation to maintain the minimum essential coverage?
      4 GENERAL VERRILLI: That's correct. And we
      5 think that is what Congress is saying, both in the
      6 provision I just pointed to, Your Honor, and by virtue
      7 of the way — by virtue of the way the exemptions work.
      8 I just think that's the — reading this in context, that
      9 is the stronger reading of the statute.
      10 CHIEF JUSTICE ROBERTS: Suppose it makes it
      11 easy for the government to drop the other shoe in the
      12 future, right? You have been under the law subject to
      13 this mandate all along. You have been exempt from the
      14 penalty, so all they have to do is take away the
      15 penalty.
      16 GENERAL VERRILLI: I don't — I don't think
      17 so, Mr. Chief Justice. I don't think it makes it easy
      18 for the government in the future. We think this is the
      19 fairest reading of the statute, that the — that the -
      20 you cannot infer from the fact that someone is exempt
      21 from the penalty, that they are still under an
      22 obligation to have insurance. That's just not the
      23 fairest reading of the statute.
      24 JUSTICE KAGAN: Could I -
      25 JUSTICE ALITO: I'm sorry, go ahead.
      48

      1 JUSTICE KAGAN: The nature of the
      2 representation you made, that the only consequence is
      3 the penalty, suppose a person does not purchase
      4 insurance, a person who is obligated to do so under the
      5 statute doesn't do it, pays the penalty instead, and
      6 that person finds herself in a position where she is
      7 asked the question, have you ever violated any federal
      8 law, would that person have violated a federal law?
      9 GENERAL VERRILLI: No. Our position is that
      10 person should give the answer "no."
      11 JUSTICE KAGAN: And that's because -
      12 GENERAL VERRILLI: That if they don't pay
      13 the tax, they violated a federal law.
      14 JUSTICE KAGAN: But as long as they pay the
      15 penalty -
      16 GENERAL VERRILLI: If they pay the tax, then
      17 they are in compliance with the law.
      18 JUSTICE BREYER: Why do you keep saying tax?
      19 GENERAL VERRILLI: If they pay the tax
      20 penalty, they're in compliance with the law.
      21 JUSTICE BREYER: Thank you.
      22 GENERAL VERRILLI: Thank you,
      23 Justice Breyer.
      24 JUSTICE BREYER: The penalty.
      25 GENERAL VERRILLI: Right. That's right.
      49

      1 JUSTICE ALITO: Suppose a person who has
      2 been receiving medical care in an emergency room — has
      3 no health insurance but, over the years, goes to the
      4 emergency room when the person wants medical care -
      5 goes to the emergency room, and the hospital says, well,
      6 fine, you are eligible for Medicaid, enroll in Medicaid.
      7 And the person says, no, I don't want that. I want to
      8 continue to get — just get care here from the emergency
      9 room. Will the hospital be able to point to the mandate
      10 and say, well, you're obligated to enroll?
      11 GENERAL VERRILLI: No, I don't think so,
      12 Justice Alito, for the same reason I just gave. I think
      13 that the — that the answer in that situation is that
      14 that person, assuming that person — well, if that
      15 person is eligible for Medicaid, they may well not be in
      16 a situation where they are going to face any tax penalty
      17 and therefore -
      18 JUSTICE ALITO: No, they are not facing the
      19 tax penalty.
      20 GENERAL VERRILLI: Right, right.
      21 JUSTICE ALITO: So the hospital will have to
      22 continue to give them care and pay for it themselves,
      23 and not require them to be enrolled in Medicaid.
      24 GENERAL VERRILLI: Right.
      25 JUSTICE ALITO: Will they be able to take
      50

      1 this out and say, well, you really should — you have a
      2 moral obligation to do it; the Congress of the United
      3 States has said, you have to enroll? No, they can't
      4 say?
      5 GENERAL VERRILLI: I do think it's — I
      6 think it's certainly fair to say that Congress wants
      7 people in that position to sign up for Medicaid. I
      8 think that's absolutely right. And I think the statute
      9 is structured to accomplish that objective; but, the
      10 reality still is that the only consequence of
      11 noncompliance is the penalty.
      12 JUSTICE SOTOMAYOR: General, but I thought
      13 the people who were eligible for Medicaid weren't
      14 subject to the penalty. Am I wrong? I could be just
      15 factually wrong.
      16 GENERAL VERRILLI: Well, it all — the
      17 penalty is keyed to income.
      18 JUSTICE SOTOMAYOR: Yes.
      19 GENERAL VERRILLI: And it's keyed to a
      20 number of things. One is, are — are you making so
      21 little money that you aren't obligated to file a tax
      22 return. And if you're in that situation, you are not
      23 subject to the penalty.
      24 It's also if the cost of insurance would be
      25 more than 8 percent of your income, you aren't subject
      51

      1 to the penalty. So there — there — there isn't
      2 necessarily a precise mapping between somebody's income
      3 level and their Medicaid eligibility at the present
      4 moment. That will depend on where things are and what
      5 the eligibility requirements are in the State.
      6 JUSTICE SOTOMAYOR: But those people
      7 below -
      8 GENERAL VERRILLI: But as a general matter,
      9 for people below the poverty line it's almost
      10 inconceivable that they are ever going to be subject to
      11 the penalty, and they would, after the Act's Medicaid
      12 reforms go into place, be eligible for Medicaid.
      13 JUSTICE BREYER: So is your point that the
      14 tax — so, what we want to do is get money from these
      15 people. Most of them get the money by buying the
      16 insurance and that will help pay. But if they don't,
      17 they are going to pay this penalty, and that will help,
      18 too. And the fact that we put the latter in brings it
      19 within the taxing power. And as far as this Act is
      20 concerned about the injunction, they called it a penalty
      21 and not a tax for a reason. They wanted it to fall
      22 outside that, it's in a different chapter, et cetera.
      23 Is that what the heart of what you are
      24 saying?
      25 GENERAL VERRILLI: That's the essence they
      52

      1 called it a penalty. They didn't give any other
      2 textural instruction in the Affordable Care Act or in
      3 the Internal Revenue Code or that that penalty should be
      4 treated as a tax for the Anti-Injunction Act purpose.
      5 CHIEF JUSTICE ROBERTS: You agree with
      6 Mr. Long, and, in fact, you just agreed with
      7 Justice Breyer that one of the purposes of the provision
      8 is to raise revenue.
      9 GENERAL VERRILLI: It will — well, it
      10 will raise revenue. It has been predicted by the CBO
      11 that it will raise revenue, Your Honor. But even though
      12 that's the case, and I think that would be true of
      13 any — of any penalty, that it will raise some revenue,
      14 but even though that's the case, there still needs to be
      15 textural instruction in the statute that this penalty
      16 should be treated as a tax for Anti-Injunction Act
      17 purposes, and that's what is lacking here.
      18 JUSTICE ALITO: After this takes effect,
      19 there may be a lot of people who are assessed the
      20 penalty and disagree either with whether they should be
      21 assessed the penalty at all, or with the calculation of
      22 the amount of their penalty. So under your
      23 interpretation of the Act, all of them can now go to
      24 court? None of them are barred by the Anti-Injunction
      25 Act?
      53


      1 GENERAL VERRILLI: Those are two different
      2 things, Justice Alito. I think for reasons that
      3 Justice Kennedy, I think, suggested in one of his
      4 questions to Mr. Long, all of the other doctrines that
      5 are an exhaustion of remedies and related doctrines
      6 would still be there. The United States would rely on
      7 them in those circumstances. And — and so, I don't
      8 think the answer is that they can all go to court, no.
      9 JUSTICE SOTOMAYOR: Well, why is it -
      10 JUSTICE ALITO: Two f<br/><br/>(Message over 64 KB, truncated)
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