Federal appeals judges dropped an Obamacare bombshell today that could change the calendar of when the Supreme Court will ultimately decide whether the president’s signature law is unconstitutional.
Two major lawsuits challenging the constitutionality of Obamacare were argued on May 10 before the U.S. Court of Appeals for the Fourth Circuit. One case was brought by Virginia Attorney General Ken Cuccinelli, arguing that the “individual mandate” that people must buy health insurance is unconstitutional. The other case was brought by Liberty University, where law school dean Mat Staver is challenging both the individual mandate and a similar requirement on companies employing 50-plus people, called the “employer mandate.”
Federal appeals are heard by three-judge panels chosen at random. The three on this Fourth Circuit panel are one Clinton-appointed judge and two Obama-appointed judges.
This seemed like very good news for Ken Cuccinelli and Mat Staver. It appeared they were sure to lose their appeals quickly (probably sometime between July and September), putting them in a position to immediately petition the Supreme Court.
But now the Fourth Circuit may be angling to ruin those plans. This afternoon, the panel ordered the parties to file supplemental briefs by May 31 explaining the consequences if the court holds that the Anti-Injunction Act applies. That’s a bomb for one simple reason: The Anti-Injunction Act applies to federal taxes.
This means that the appellate judges on this case may hold that the Obamacare individual mandate is okay because it is a tax. While the political repercussions of such a decision seem obvious, the legal implications are serious, too.
Under the Anti-Injunction Act, no one can sue to challenge the legality of a tax until after the tax has been paid. The statute specifies that no federal court has jurisdiction to hear a challenge until someone who has already paid the tax files suit, demanding a refund and the tax’s termination.
The individual mandate doesn’t go into effect until 2014. Therefore, if it is ruled to be a tax, then no one will have standing to sue until 2014. The Fourth Circuit cases would be dismissed.
It is a bedrock rule of constitutional law that when courts lack jurisdiction, they must limit their decision to that issue. Therefore in these cases, the Fourth Circuit would only explain why the individual mandate (or employer mandate) is a tax, explain why this means the court lacks jurisdiction to hear these constitutional challenges, and dismiss the case. There would be no discussion of the Commerce Clause or the Necessary and Proper Clause, or any other argument as to why Obamacare is unconstitutional.
Although General Cuccinelli and Dean Staver could ask the Supreme Court to take up the entire case immediately, such a ruling would make the High Court unlikely to do so. Or the Court might take the case, but limit the parties to arguing about whether the individual mandate and employer mandate are taxes.
This means that the main arguments over Obamacare would likely wait another few months, until the Eleventh Circuit federal appeals court decides the big multistate case that will be argued on June 8. Then the Supreme Court could take one or all of these cases.
Before this order, it looked like Obamacare might be argued at the Supreme Court next spring, with a decision in June 2012. Now it might instead be argued in October 2012, right before the presidential election, with a decision after the election.
This unexpected turn in the Obamacare cases serve as a stark reminder that presidential elections shape the federal courts, and with them the binding interpretation of the Constitution.