Civil Rights – PPACA – Individual Mandate – University Challenge – Civil Practice – Federal Jurisdiction – Anti-Injunction Act

Liberty University Inc. v. Geithner (Lawyers Weekly No. 11-01-0959, 140 pp.) (Motz, J.) No. 10-2347, Sept. 8, 2011; USDC at Lynchburg, Va. (Moon, J.) 4th Cir. Click here for the full-text opinion.

Holding: The 4th Circuit has no jurisdiction to hear Liberty University’s constitutional challenge to the “individual mandate” of the Patient Protection and Affordable Care Act, as the federal Anti-Injunction Act strips the federal court of jurisdiction; the 4th Circuit vacates the district court decision upholding the individual mandate and remands the case for dismissal.

Liberty University and certain individuals brought this suit to enjoin, as unconstitutional, enforcement of two provisions of the recently-enacted Patient Protection and Affordable Care Act. The challenged provisions amend the Internal Revenue Code by adding (1) a “penalty” payable to the Secretary of the Treasury by an individual taxpayer who fails to maintain adequate health insurance coverage and (2) an “assessable payment” payable to the Secretary of the Treasury by a “large employer” if at least one of its employees receives a tax credit or government subsidy to offset payments for certain health-related expenses. The district court upheld these provisions, ruling that both withstood constitutional challenge.

Because this suit constitutes a pre-enforcement action seeking to restrain the assessment of a tax, the Anti-Injunction Act strips us of jurisdiction. Accordingly, we must vacate the judgment of the district court and remand the case with instructions to dismiss for lack of jurisdiction.

In sum, the AIA forbids actions that seek to restrain the Secretary from exercising his statutory authority to assess exactions imposed by the Internal Revenue Code.

Vacated and remanded.

Concurrence

Wynn, J.: I concur in Judge Motz’s fine opinion holding that the Anti-Injunction Act applies here. Our distinguished colleague vigorously dissents from our holding and presents a credible basis for upholding the constitutionality of the Affordable Care Act under the Commerce Clause. However, were I to rule on the merits, for the reasons given in this opinion, I would uphold the constitutionality of the Affordable Care Act on the basis that Congress had the authority to enact the individual and employer mandates, which operate as taxes, under its taxing power. Accordingly, I must agree with Judge Motz that the AIA bars this suit.

Dissent

Davis, J.:  As I reject the reasoning and the result of the majority’s jurisdictional analysis, I am entitled to reach the merits of appellants’ claims. Reaching the merits, I would hold that the challenged provisions of the Act are a proper exercise of Congress’s authority under the Commerce Clause to regulate the interstate markets for health services and health insurance. I do not believe that constitutional review of the Act requires courts to decide whether the Commerce Clause discriminates between activity and inactivity. But even if I were to assume appellants were “inactive,” I could not accept appellants’ contention that a distinction between “activity” and “inactivity” is vital to Commerce Clause analysis. I would therefore affirm the district court’s dismissal of appellants’ suit.

I would hold that the AIA does not deprive federal courts of jurisdiction to adjudicate the constitutionality of the Affordable Care Act.

Regrettably, my fine colleagues in the majority perceive a jurisdictional bar in this case that simply is not there. Accordingly, I respectfully dissent.