Roberts Turns Kavanaugh’s Taxing Power Hypo Into a Holding

In his dissent in Seven-Sky v. Holder, Judge Kavanaugh opined that the Affordable Care Act’s “shared responsibility payment” is a tax, and that it is therefore subject to the Anti-Injunction Act, which deprives the court of pre-enforcement jurisdiction over “any tax.” A majority of the Supreme Court (Chief Justice Roberts, joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan) agreed with Judge Kavanaugh on the first point (that the mandate may be considered a tax) but disagreed with him on the second (that it is subject to the AIA).  The competing rationales behind these decisions reflect two different conceptions of judicial restraint.

Judge Kavanaugh acknowledged that Congress could opt to bring the individual mandate within its taxing power by eliminating mandatory language through “a minor tweak to the current statutory language.” And Kavanaugh noted further that Congress could exempt the shared responsibility payment from the AIA “at any time.” For Kavanaugh, the possibility of future congressional action to remove the Taxing Clause impediments or to eliminate unambiguously the jurisdictional defect he perceived in the AIA was another reason to avoid the merits for the time being.

For Chief Justice Roberts, by contrast, these statutory improvements could be judicially constructed to preserve Congress’s handiwork. In essence, Roberts interpreted Congress to have already had done what Judge Kavanaugh said Congress might do in the future.  Thus, in the interest of constitutional avoidance, Roberts read the individual mandate’s “shall” clause as an incentive consistent with the taxing power rather than a command that would have required the Court to strike down the statute as a violation of the Commerce Clause. And the Court interpreted Congress’s use of the term “penalty” instead of “tax” as evidence that Congress already intended to exempt the shared responsibility payment from the AIA’s jurisdictional bar.

Both judges agreed that there is nothing fundamentally inconsistent about treating the shared responsibility payment as a tax for constitutional purposes but not for purposes of the AIA. The difference lay in how much reconstructive work each was willing to undertake to effectuate that possibility in the absence of clear evidence of congressional intent.

The Supreme Court managed to disagree with all three judges on the Seven-Sky panel, even while reaching the same result as Judge Silberman.  A different majority (Chief Justice Roberts plus a separate opinion by Justices Scalia, Kennedy, Thomas, and Alito) held that the shared responsibility payment cannot be sustained as a valid exercise of Congress’s commerce power, because “[c]onstruing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority.”  Although he had conceded the mandate was “somewhat novel” in this respect, Judge Silberman had rejected the “inactivity” argument, declaring it “more redolent of Due Process arguments” and without “foundation in the Commerce Clause.”

National Federation of Indep. Business v. Sebelius (The Health Care Cases), No. 11-393 (S. Ct. June 28, 2012) (Roberts, C.J.)

Seven-Sky v. Holder, No. 11-5047 (D.C. Cir. Nov. 8, 2011) (Silberman, S.J., with concurrence by Edwards, S.J., and dissent by Kavanaugh, J.)

See also:

One response to “Roberts Turns Kavanaugh’s Taxing Power Hypo Into a Holding

  1. Pingback: Five D.C. Circuit Judges Will Speak at Federalist Society Convention | D.C. Circuit Review

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