Judge Rogers, writing for Judges Pillard and Wilkins, have rejected the origination clause challenge to Obamacare’s “tax.” The opinion is here.
Here is the introduction:
ROGERS, Circuit Judge: Section 5000A of the Patient Protection and Affordable Care Act, 26 U.S.C. § 5000A, mandates that as of January 2014, non-exempt individuals maintain minimum health care coverage or, with limited exceptions, pay a penalty. Matt Sissel, who is an artist and small-business owner who serves from time to time on active duty with the National Guard, appeals the dismissal of his complaint alleging that the mandate violates the Commerce Clause, U.S. CONST. art. I, § 8, cl. 3, and the Origination Clause, U.S. CONST. art. I, § 7, cl. 1. We affirm, because his contention that the mandate obligating him to buy government-approved health insurance violates the Commerce Clause fails under the Supreme Court’s interpretation of the mandate in National Federation of Independent Business v. Sebelius, 132 S. Ct. 2566, 2598 (2012) (“NFIB”), and his contention that the mandate’s shared responsibility payment was enacted in violation of the Origination Clause fails under Supreme Court precedent interpreting that Clause.
I’ll update this post as I make my way through the opinion.
The Court avoids deciding the origination issue by finding that the “tax penalty” was not a “Bill for raising Revenue.”
He states in his complaint that “[i]n September, 2009, the House [of Representatives] passed H.R. 3590, entitled the ‘Service Members Home Ownership Tax Act of 2009,’” to “‘amend the Internal Revenue Code of 1986 to modify [the] first-time homebuyers credit in the case of members of the Armed Forces and certain other Federal employees.’” Compl. ¶ 40. He alleges this bill “had nothing to do with health insurance reform,” and yet “[i]n November of , the Senate purported to ‘amend’ the House bill by gutting its contents, replacing them with health-insurance reforms (including the purchase requirement and associated payment), and renaming the bill the ‘Patient Protection and Affordable Care Act.’” Id. The “substitute legislation,” he alleges, was “a revenue-raising tax bill,” id., and the enactment of the Act violated the Origination Clause “[b]ecause the tax originated in the Senate, and not in the House,” id. ¶ 41. Because we conclude that the shared responsibility payment in Section 5000A is not a “Bill for raising Revenue” within the Supreme Court’s accepted meaning of that phrase, and thus was not subject to the Origination Clause, this court has no occasion to determine whether it originated in the House or the Senate.
Because the ACA was not designed strictly to “raise revenues,” but to expand the number of insured, it is not subject to the origination clause:
The purposive approach embodied in Supreme Court precedent necessarily leads to the conclusion that Section 5000A of the Affordable Care Act is not a “Bill for raising Revenue” under the Origination Clause. The Supreme Court’s repeated focus on the statutory provision’s “object,” Nebeker, 167 U.S. at 203, and “primary purpose,” Munoz-Flores, 495 U.S. at 399, makes clear, contrary to Sissel’s position, that the purpose of a bill is critical to the Origination Clause inquiry. And after the Supreme Court’s decision in NFIB, it is beyond dispute that the paramount aim of the Affordable Care Act is “to increase the number of Americans covered by health insurance and decrease the cost of health care,” NFIB, 132 S. Ct. at 2580, not to raise revenue by means of the shared responsibility payment. The Supreme Court explained: “Although the [Section 5000A] payment will raise considerable revenue, it is plainly designed to expand health insurance coverage.” Id. at 2596 (emphasis added); see id. at 2596–97. This court noted in Seven-Sky v. Holder, 661 F.3d 1, 6 (D.C. Cir. 2012), abrogated by NFIB, 132 S. Ct. 2566 (2012), that the “congressional findings never suggested that Congress’s purpose was to raise revenue.” See 42 U.S.C. § 18091(2) (congressional findings). To the contrary, “the aim of the shared responsibility payment is to encourage everyone to purchase insurance; the goal is universal coverage, not revenues from penalties.” Seven-Sky, 661 F.3d at 6. The Supreme Court acknowledged that the Section 5000A shared responsibility payment may ultimately generate substantial revenues — potentially $4 billion in annual income for the government by 2017, see NFIB, 132 S. Ct. at 2594 — if people do not “sign up” for coverage, but those revenues are a by- product of the Affordable Care Act’s primary aim to induce participation in health insurance plans. Successful operation of the Act would mean less revenue from Section 5000A payments, not more.
Sissel argued that the way the ACA operates does not fall squarely within the court’s precedents. The D.C. Circuit seems to concede this point, but says it doesn’t matter, as the Supreme Court hasn’t held clearly otherwise.
Sissel contends, however, that the Supreme Court cases rejecting Origination Clause challenges merely embody “two exceptions” to the general “presumpt[ion]” that “[a]ll taxes” are subject to the Clause. Appellant’s Br. 14; Reply Br. 6–7. He maintains that the Affordable Care Act does not fall within either exception because the Section 5000A payment neither funds a particular governmental program, as was true in Munoz- Flores, 495 U.S. at 397–98, nor enforces compliance with a statute passed under some other (non-taxing) constitutional power, as in Millard, 202 U.S. at 433. Yet even assuming Sissel is correct that the precedent can be classified in one or both of his categories, neither the Supreme Court nor this court has held that a statute must be so classifiable to avoid the requirements of the Origination Clause. All Sissel has demonstrated is that the Affordable Care Act’s mandate does not fall squarely within the fact patterns of prior unsuccessful Origination Clause challenges, not that his challenge should succeed.
Here is the conclusion:
In sum, under Supreme Court precedent, the presence of another constitutional power does not suggest that a provision is not a “Bill for raising Revenue,” and the absence of another constitutional power does not, in itself, suggest that it is. Because the existence of another power is not necessary (or sufficient) to exempt a bill from the Origination Clause, the mere fact that Section 5000A may have been enacted solely pursuant to Congress’s taxing power does not compel the conclusion that the entire Affordable Care Act is a “Bill for raising Revenue” subject to the Origination Clause. Where, as here, the Supreme Court has concluded that a provision’s revenue-raising function is incidental to its primary purpose, see NFIB, 132 S. Ct. at 2596, the Origination Clause does not apply. The analysis is not altered by the fact that the shared responsibility payment may in fact generate substantial revenues. In light of the Supreme Court’s historical commitment to a narrow construction of the Origination Clause, this court can only hold that the challenged measure — whose primary purpose “plainly” was not to raise revenue, id. at 2596 — falls outside the scope of the Clause.