Header graphic for print
Triage Healthcare reform winners & losers

Unexpected issue in the PPACA litigation may effect timing of a decision

Posted in PPACA

The recent decision(pdf) by the 4th Circuit Court of Appeals in the Liberty University case may change the path the PPACA cases take in the United States Supreme Court and could even mean that a definitive decision on the individual insurance mandate wouldn’t come until 2016 or later. 

Until now, most commentators have assumed that we would get a decision from the Supreme Court about whether Congress can constitutionally require individual participation in insurance — the only real question was whether the Court would rule before the 2012 elections or postpone the case until next term (yielding a decision in 2013).

Since the Liberty University decision, though, a previously-ignored theory under the Anti-Injunction Act has gotten more traction.  The argument goes that the that the Supreme Court should ultimately dismiss any case it takes right now for the technical reason that the lawsuit premature.  Under the Liberty University court’s reading of the Anti-Injunction Act, the federal court can’t get involved in pre-enforcement litigation because the penalty for not having insurance by 2014 is an “exaction” (often thought of as a “tax”). 

Under this theory, challengers of the law would have to wait until someone is assessed the penalty (after the law goes into effect in 2014), pays the penalty, and then sues the government for a refund.  Including time for filing a lawsuit and litigating it through the courts of appeals into the Supreme Court (again), this process could easily extend a final decision on the individual mandate into 2016 or later. 

The issue has been raised in both the government’s request (pdf) for Supreme Court review of the Florida v. HHS case and during oral arguments in the Seven-Sky v. Holder case in the D.C. Circuit.  Detailed discussion of these issues can be found at this story by BNA and recent postson the ACA Litigation Blog.  There isn’t much law on this subject, so it may be the type of thing the Supreme Court would be interested in resolving — which way the decision might go is anyone’s guess.