Hobby Lobby (partially) resolves question unanswered in NFIB: Is Anti-Injunction Act jurisdictional?

June 27th, 2013

In case all of you fedcourts wonks are finished chewing through the jurisdictional issues in Perry and Windsor, today the en banc court in Hobby Lobby revisited an issue that was unanswered in NFIB –is the Anti-Injunction Act jurisdictional, or can it be waived?

In NFIB, the Solicitor General took the odd position that the AIA was jurisdictional, but at the same told the Justices that they could resolve the case now, and not wait until 2014 when the mandate would be implemented. (I won’t even bother explaining the intricacies of that decision here). The Supreme Court ducked that issue, because under Chief Justice Roberts’s opinion, the mandate was not a tax. Thus the AIA was inapplicable.

The Affordable Care Act does not require that the penalty for failing to comply with the individual mandate be treated as a tax for purposes of the Anti–Injunction Act. The Anti–Injunction Act therefore does not apply to this suit, and we may proceed to the merits.

HOWEVER, it would be construed as a tax for purposes of the saving construction. (If you’re confused read my book. Unfortunately I spend way too much time discussing the AIA, which turned out to be critical). 

So, is the AIA jurisdictional? In Hobby Lobby, three judges of the en banc 10th Circuit (Gorsuch, Kelly, and Tymkovich) find that it is not.

We could not, of course, reach the merits of the RFRA question if we thought the Anti-Injunction Act barred our way. The AIA precludes our consideration of suits seeking to “restrain the assessment or collection of any [federal] tax.” 26 U.S.C. § 7421(a). Though they agree on little else, both sides before us insist this lawsuit doesn’t meet that description. But a non-trivial argument could be made that they are all wrong: the plaintiffs, after all, seek to restrain the government’s use of any of the ACA’s enforcement mechanisms, including one that is expressly labeled a “tax.” See 26 U.S.C. § 4980D(a). And Congress’s decision to label something a tax usually is enough for it to trigger the AIA, “even where that label [is] inaccurate.” See NFIB v. Sebelius, 132 S. Ct. 2566, 2583 (2012).

I write to emphasize that, even if the parties are wrong and the AIA does apply to this case, it still wouldn’t allow us to avoid reaching the merits. It wouldn’t because the government has expressly waived any reliance on the AIA: not only did it fail to raise the AIA as a defense in the district court, it discouraged us from applying the statute when we invited additional briefing on the matter. So long as the AIA affords the government only a waivable defense — so long as it doesn’t impose on the courts a jurisdictional limit on our statutory authority to entertain this case — we are bound to reach the merits. And a waivable defense, we are persuaded, is all the AIA provides.

Gorsuch pokes some fun at the Supreme Court for ducking this issue.

And more recently the Supreme Court has approached the AIA much more gingerly, taking care to avoid the jurisdictional epithet. See NFIB v. Sebelius, 132 S. Ct. 2566, 2582 (2012) (holding that the AIA didn’t apply in that case by its own terms). In the end, the AIA shows none of the hallmarks of a jurisdictional restriction, and has many features that collectively indicate otherwise. The government can waive its application, and it has done so before us. Given that, we can be sure, perhaps doubly sure, that reaching the merits of this case is appropriate and indeed our duty

Granted, only three judges reached this, but at least we have *some* clarity.

There were also a number of citations to NFIB throughout the opinion worth highlighting. Interestingly, this subtle bit acknowledged the fact that (according to Roberts) NFIB was not about a challenge to a stand-alone mandate, but a challenge to the tax (remember there is no mandate):

And just as the AIA does not apply to any suit against the individual mandate, which is enforced by the IRS, see NFIB, 132 S. Ct. at 2584, so too does the AIA not apply to any suit against the contraceptive-coverage requirement, even though it also may be enforced by the IRS.