A panel of the 4th Circuit Court of appeals has weighed in on the issue of the constitutionality of the Patient Protection and Accountable Care Act (the “Act”) colloquially known as Obamacare in the case of Liberty University et al. v. Geithner et al., 10-2347. The panel ordered the dismissal of the complaint seeking to render the Act unconstitutional under the Anti-Injunction Act (“AIA”) of the Tax Code. Justice Davis in giving the majority opinion found that the AIA stripped the federal courts of jurisdiction to render pre-enforcement decisions regarding the constitutionality of the Act. Interestingly, both the government and the plaintiffs were in agreement that the AIA did not apply.
There has been a great deal of discussion as to whether the so called “penalty” provisions under the Act, that provide for I.R.S. enforcement proceedings agains those who fail to obtain the mandatory health insurance coverage is in fact a tax. Judge Motz took a broad view of the AIA and determined that the exaction, whatever else you want to call it is a tax and attempts to challenge are barred under the AIA.
Justice Davis issued a strong, but respectful dissent, asserting that since Congress called it a penalty rather than a tax it was a penalty, not subject to the AIA, which he read very narrowly. He went on to opine that he would find the Act constitutional on its merits because of his more narrow interpretation of the reach of the AIA and his view that the failure to obtain health insurance has a substantial impact on interstate commerce and that the Act falls within the ambit of legitimate regulation by Congress under the scope of the Commerce Clause of the Constitution.
Judge Wynn was the concurring swing vote in the case agreeing that the AIA stripped the court of jurisdiction for an advance determination of the legality of the Act, and at the same time indicating concurrence with Judge Davis that on the merits the Act is constitutional.
Bottom line: no good news for the opponents of Obamacare.