Supreme Court's historic case on Obama's healthcare reform opens

Supreme Court's historic case on Obama's healthcare reform opens

The Supreme Court indicated Monday that it probably will not delay ruling on President Obama’s healthcare reform law, and also raised questions about part of the administration’s legal case.

As hordes of protesters gathered outside the Supreme Court building on Capitol Hill on Monday, the nine justices began delving into legal arguments that will determine whether the central achievement of Obama’s first term lives or dies.

The courtroom was packed with attorneys, administration officials, members of Congress and everyday citizens who wanted to witness the historic deliberations.

Several people, who had begun lining up on Friday for a seat, nevertheless gave up their places in the Monday session so they’d be at the front of the line on Tuesday, which is when the court will take up the most controversial question of all — whether the federal government has the right to force citizens to buy health insurance.

The first of three days of oral arguments focused on whether the court would decide the matter now rather than waiting until after 2014, when the mandate to have insurance is scheduled to begin. The justices seemed to indicate they are leaning against a delay, which would be welcome news to both the Obama administration and the 26 states challenging the mandate.

The justices’ approach to this issue, however, could prove troublesome for the Obama administration because of its complicated argument about the penalty people would have to pay if they failed to buy insurance.

The Justice Department argues that the individual mandate is constitutional partly under Congress’s power to levy taxes. But in urging the court to deliver its judgment before 2014, the administration argued that the penalty for remaining uninsured is not a tax.

Justice Samuel Alito highlighted the apparent contradiction as he questioned Solicitor General Donald Verrilli Jr. 

“Today you are arguing that the penalty is a not a tax. Tomorrow you are going to be back and you will be arguing that the penalty is a tax,” Alito said.

Several other justices also hesitated to define the fee as a tax. This boosts the odds of a prompt ruling, but could undercut one of the arguments the Justice Department will have to defend Tuesday.

Despite the historical weight of the case, there were moments of levity, as when, for example, Justice Stephen Breyer jumped in during an exchange in which Verrilli repeatedly referred to the fine as a tax.

“Why do you keep saying ‘tax?’ ” Breyer interjected, prompting laughter in the courtroom. 

“Tax penalty,” Verrilli quickly returned.

Monday’s arguments centered on the Anti-Injunction Act, which says people cannot sue to block a tax that hasn’t yet taken effect. If the Anti-Injunction Act applies to the healthcare case, lawsuits against the mandate would have to wait until the policy has fully taken effect.

The Justice Department is arguing that the fine is not a tax for the purposes of the Anti-Injunction Act, but that it is a tax for constitutional purposes. Verrilli said he was not aware of any time the court has made that distinction in the past.

Justices Ruth Bader Ginsburg and Breyer said Congress passed the Anti-Injunction Act so that it wouldn’t be deprived of the revenues it needs in order to operate, and questioned whether it should block the mandate penalty.

“This is not a revenue-raising measure, because, if it’s successful, nobody will pay the penalty and there will be no revenue to raise,” Ginsburg said.

Neither the Justice Department nor the states challenging the mandate think the court cannot make a decision on the mandate, which forced the justices to appoint an outside attorney, Robert Long, to argue that the Anti-Injunction Act should bar a ruling in the healthcare case. 

But Long’s arguments met resistance Monday.

“Aren’t you trying to rewrite the statute, in a way?” Justice Elena Kagan asked him during an exchange about whether the mandate can be separated from the penalty for not buying insurance.

Justice Sonia Sotomayor asked Long to list the practical implications of letting the healthcare suit go forward, suggesting that it would not result in a “parade of horribles” in which the courts were suddenly second-guessing a slew of new taxes.

“From all the questions here, I count at least four cases in the court’s history where the court has accepted a waiver by the Solicitor General and reached a tax issue,” Sotomayor said. “Given that history … isn’t the fairer statement that Congress has accepted that in the extraordinary case we will hear the case?”

Attorneys who worked on the case were pleased with the questioning and said they expect the court to reach a decision on the merits of the insurance mandate.

“Most of the justices seem skeptical of the claim that the mandate and penalty are a tax. They seem ready, willing, and able to reach the merit of the Commerce Clause claim,” said Randy Barnett, who has worked on briefs for the National Federation of Independent Business, which joined the 26 state attorneys general in their lawsuit against the reform law.

The tax argument is not the Justice Department’s only defense of the mandate — no lower court has accepted the government’s tax defense, but several have upheld the mandate as a valid use of Congress’s power to regulate commerce.

The Justice Department has prioritized its Commerce Clause defense over the tax angle. The decision to remain uninsured affects economic activity, the government argues, because billions of dollars in unpaid medical bills are shifted to taxpayers and people with insurance.

The states argue that the mandate is unconstitutional because it requires people to purchase a product. Congress can regulate economic activity but cannot “compel” it, they argue.

The Supreme Court will devote two hours to those arguments on Tuesday.

All of the justices asked questions during Monday’s 90-minute proceedings with the exception of Justice Clarence Thomas, who makes a point of not speaking up during the court’s oral arguments.