Transcript: SCOTUS Affordable Care Act oral argument of Gregory Katsas

Department of Health and Human Services v. Florida, et al. 

Transcript of the oral argument of Gregory Katsas, attorney for respondents, before the U.S. Supreme Court on March 26, 2012:


MR. KATSAS: Mr. Chief Justice, and may it please the Court:

Let me begin with the question whether the Anti-Injunction Act is jurisdictional.

Justice Ginsburg, for reasons you suggested, we think the text of the Anti-Injunction Act is indistinguishable from the text of the statute that was unanimously held to be non-jurisdictional in Reed Elsevier. That statute said no suit shall be instituted. This statute says no suit shall be maintained. No -­

JUSTICE GINSBURG: They are different things.

JUSTICE SOTOMAYOR: Big difference, though -­

JUSTICE GINSBURG: This says “immediately” — the Reed Elsevier statute says immediately after instituted unless a copyright is registered.

MR. KATSAS: Unless the copyright is registered. And this goes — this goes to the character of the lawsuit. The statute in Reed Elsevier says register your copyright and then come back to court.

JUSTICE GINSBURG: So, why isn’t that like a filing fee? Before you can maintain a suit for copyright infringement, you have to register your copyright?

MR. KATSAS: It — it’s a precondition to filing suit. The — the analogous precondition here is pay your taxes and then come back to court. The point is -­

JUSTICE SOTOMAYOR: No, that — that’s not true. The suit here has nothing to do with hearing the action. It has to do with the form of relief that Congress is barring. It’s not permitting — it is not a tax case; you can come in afterwards. It’s not permitting the court to exercise what otherwise would be one of its powers.

MR. KATSAS: It has to be the same challenge, Justice Sotomayor, or else South Carolina v. Regan would say the Anti-Injunction Act doesn’t apply. You are right that once you file — once you pay your taxes and then file the refund action, the act of filing the taxes converts the suit from one seeking prospective relief into one seeking money damages. And in that sense, you could think of the statute as a remedial limitation on the courts.

But whether you think of it as an exhaustion requirement or a remedial limitation, neither of those characterizations is jurisdictional. In Davis v. Passman you said that a remedial limitation doesn’t go -­

JUSTICE SOTOMAYOR: It does seem strange to think of a — a law that says no court can entertain a certain action and give a certain remedy as merely a claim-processing rule. What the — the court is being ousted from — from what would otherwise be its power to hear something.

MR. KATSAS: The suit is being delayed, I think is the right way of looking at it. The jurisdictional apparatus in the district court is present. Prospective relief under 1331, money damages action under 1346. If the Anti-Injunction Act were jurisdiction-ousting, one might have expected it to be in Title 28 and to qualify those statutes and to use jurisdictional limits.

JUSTICE SOTOMAYOR: So, how do you deal with this case and our Gonzalez — our recent Gonzalez case, where we talked about -­

MR. KATSAS: Right.

JUSTICE SOTOMAYOR: — the language of the COA statute that no appeal will be heard absent the issuance of?

MR. KATSAS: Gonzalez — Gonzalez v. Thaler rests on a special rule that applies with respect to appeals from one Article III court to another. That’s — that explains Gonzalez, and it explains Bowles before it. You have five unanimous opinions in the last
decade in which you have strongly gone the other direction on what counts as jurisdictional.

JUSTICE SOTOMAYOR: There is an argument that we should just simply say that Bowles applies only to appeals, but we haven’t said that.

MR. KATSAS: No, you came very close. In Henderson, Justice Sotomayor, you said that Bowles, which is akin to Thaler, is explained by the special rule and understandings governing appeals from one Article III court to another. And you specifically said that it does not apply to situations involving a party seeking initial judicial review of agency action, which is what we have here.

So, while you’re right, the texts in Bowles and Thaler are not terribly different, those cases are explained by that principle. Under Henderson, it doesn’t apply to this case.

The text in this case speaks to the suit, the cause of action of the litigant. It doesn’t speak to the jurisdiction or power of the court. The Anti-Injunction Act is placed in a section of the taxcode governing procedure. It’s not placed in -­

JUSTICE SOTOMAYOR: Counsel, all of those -­ all of that in particular -­

MR. KATSAS: You did rely on that in Reed Elsevier as one consideration.

JUSTICE SOTOMAYOR: And we haven’t relied on it in other cases.

MR. KATSAS: Another — another consideration in Reed Elsevier that cuts in our favor is the presence of exceptions. You said three in Reed Elsevier cut against jurisdictional characterization. Here, there are 11. And -­

JUSTICE SOTOMAYOR: Many of which themselves speak in very clear jurisdictional language.

MR. KATSAS: Well, some of them have no jurisdictional language at all, and not a single one of them uses the word “jurisdiction” to describe the ability of the court to restrain the assessment and collection of taxes, which is what one would have expected -­

JUSTICE BREYER: Basically, it begs the difference — language is relevant. There are a lot of relevant things. But one thing that’s relevant in my mind is that taxes are, for better or for worse, the life’s blood of government.


JUSTICE BREYER: And so what Congress is trying to do is to say there is a procedure here that you go through. You can get your money back, or you go through the Tax Court, but don’t do this in advance for the reason that we don’t want 500 Federal judge -­ judges substituting their idea of what is a proper equitable defense, of when there is going to be an exception made about da, da, da, for the basic rule.

No. Okay?

And so there is strong reason that is there.

You tried to apply that reason to the copyright law.You can’t find it. Registration for the copyright register is not the life’s blood of anything. Copyright exists regardless. So the reasoning isn’t there.

The language — I see the similarity of language. I’ve got that. But it’s the reasoning, the sort of underlying reason for not wanting a waiver here that –that is — has a significant role in my mind of finding that it is jurisdictional. Plus the fact that we have said it nonstop since that Northrop or whatever that other case is.

MR. KATSAS: Justice Breyer, as to reasoning, you — you give an argument — you give an argument why, as a policy matter, it might make sense to have a non-jurisdictional statute. But of course, this Court’s recent cases time and again say Congress has to
clearly rank the statute as non-jurisdictional in its text and structure. It seems to me a general appeal to statutory policies doesn’t speak with sufficient clarity -­

JUSTICE BREYER: That’s fine. I just wanted to ask the question in case you wanted to answer the policy question.

MR. KATSAS: As to policy — as to policy, I think Helvering against Davis is the refutation of this view. It is true that in most cases, the Government doesn’t want and Congress doesn’t want people coming into court. But Davis shows there may be some cases including, for instance, constitutional challenges to landmark Federal statutes where the Government sensibly decides that its revenue-raising purposes are better served by allowing a party to come into court and waiving its defense. That’s what the Solicitor General did in Davis, and this Court accepted that waiver.

As for prior cases, we have the holding in Davis and the holding in all of the equitable exception cases like Williams Packing, the Government -­

JUSTICE SOTOMAYOR: So why don’t we say -­ why don’t we say it’s jurisdictional except when the Solicitor General waives?

MR. KATSAS: You have used -­

JUSTICE SOTOMAYOR: Why would that not promote Congress’s policy of ensuring — or Congress, explicitly says -­

MR. KATSAS: It’s jurisdictional except when the Solicitor General waives it?

JUSTICE SOTOMAYOR: Yes. It’s a contradiction in terms. I don’t disagree. I don’t disagree.

MR. KATSAS: It is a contradiction in terms. All of your cases analyze the situation as if the statute is jurisdictional, then it’s not subject to waiver. If you were to construe this as such a one-of unique statute, it seems to me we would still win because the Solicitor General with full knowledge of the Anti-Injunction Act argument available to him affirmatively gave it up. This is not just a forfeiture where a Government lawyer is — through inadvertence fails to raise an argument. This is a case where the Government -­

JUSTICE SOTOMAYOR: They raised it and then gave it up.

MR. KATSAS: They made it below. They know what it is; and not only are they not pursuing it here, they are affirmatively pursuing an argument on the other side.

JUSTICE KAGAN: Mr. Katsas, is your basic position that when we are talking about the jurisdiction of the district courts, a statute has to say it’s jurisdictional to be jurisdictional?

MR. KATSAS: I wouldn’t go quite that far. I think at a minimum, it has — it has to either say that or at least be directed to the courts which is a formulation you have used in your cases and which is the formulation that Congress used in the Tax Injunction
Act, but did not use in this Statute.

JUSTICE KAGAN: Well, how would — I mean, I suppose one could try to make a distinction between this case and Reed Elsevier by focusing on the difference between instituting something and maintaining something, and suggesting that instituting is more what a litigant does, and maintaining, as opposed to dismissing, is more of what judge does.

MR. KATSAS: I don’t think so, Justice Kagan, because we have an adversarial system, not an inquisitorial one. The parties maintain their lawsuits, I think, is the more natural way of thinking of it.

If I could turn — if I could turn to the merits question on the AIA before my time runs out.

The purpose of this lawsuit is to challenge a requirement — a Federal requirement to buy health insurance. That requirement itself is not a tax. And for that reason alone, we think the Anti-Injunction Act doesn’t apply.

What the amicus effectively seeks to do is extend the Anti-Injunction Act, not just to taxes which is how the statute is written, but to free-standing nontax legal duties. And it’s just -­

CHIEF JUSTICE ROBERTS: The whole point -­ the whole point of the suit is to prevent the collection of penalties.

MR. KATSAS: Of taxes, Mr. Chief Justice.

CHIEF JUSTICE ROBERTS: Well, prevent the collection of taxes. But the idea that the mandate is something separate from whether you want to call it a penalty or tax just doesn’t seem to make much sense.

MR. KATSAS: It’s entirely separate, and let me explain to you why.

CHIEF JUSTICE ROBERTS: It’s a command. A mandate is a command. Now, if there is nothing behind the command, it’s sort of, well, what happens if you don’t follow the mandate? And the answer is nothing, it seems very artificial to separate the punishment from the crime.

MR. KATSAS: I’m not sure the answer is nothing, but even assuming it were nothing, it seems to me there is a difference between what the law requires and what enforcement consequences happen to you. This statute was very deliberately written to separate mandate from penalty in several different ways. They are put in separate sections. The mandate is described as a “legal requirement” no fewer than 20 times, three times in the operative text and 17 times in the findings. It’s imposed through use of a
mandatory verb “shall.” The requirement is very well defined in the statute, so it can’t be sloughed off as a general exhortation, and it’s backed up by a penalty. Congress then separated out mandate exceptions from penalty exceptions. It defined one category of people not subject to the mandate. One would think those are the category of people as to whom Congress is saying: You need not follow this law. It then defined a separate category of people not subject to the penalty, but subject to the mandate. I don’t know what that could mean other than -­

CHIEF JUSTICE ROBERTS: Why would you have a requirement that is completely toothless? You know, buy insurance or else. Or else what? Or else nothing.

MR. KATSAS: Because Congress reasonably could think that at least some people will follow the law precisely because it is the law. And let me give you an example of one category of person that might be — the very poor, who are exempt from the penalty but
subject to the mandate. Mr. Long says this must be a mandate exemption because it would be wholly harsh and unreasonable for Congress to expect people who are very poor to comply with the requirement to obtain health insurance when they have no means of doing so. That gets things exactly backwards. The very poor are the people Congress would be most concerned about with respect to the mandate to the extent one of the justifications for the mandate is to prevent emergency room cost shifting when people receive uncompensated care. So they would have had very good reason to make the very poor subject to the mandate, and
then they didn’t do it in a draconian way; they gave the very poor a means of complying with the insurance mandate, and that is through the Medicaid system.

JUSTICE KAGAN: Mr. Katsas, do you think a person who is subject to the mandate but not subject to the penalty would have standing?

MR. KATSAS: Yes, I think that person would, because that person is injured by compliance with the mandate.

JUSTICE KAGAN: What would that look like? What would the argument be as to what the injury was?

MR. KATSAS: The injury — when that subject to the mandate, that person is required to purchase health insurance. That is a forced acquisition of an unwanted good. It’s a classic pocketbook injury.

But even if I’m wrong about that question, Justice Kagan, the question of who has standing to bring the challenge that we seek to bring seems to me very different — your hypothetical plaintiff is very different from the actual plaintiffs. We have individuals who are planning for compliance in order to avoid a penalty, which is what their affidavits say.

And we have the States, who will be subject no doubt to all sorts of adverse ramifications if they refuse to enroll in Medicaid the people who are forced into Medicaid by virtue of the mandate.

So we don’t have the problem of no adverse consequences in the case. And then, we have the separate distinction between the question of who has Article III standing in order to maintain a suit and the question of who is subject to a legal obligation. And you’ve said in your cases that even if there may be no one who has standing to challenge a legal obligation like the incompatibility
clause or something, that doesn’t somehow convert the legal obligation into a legal nullity.

Finally, with respect to the States, even if we are wrong about everything I’ve said so far, the States clearly fall within the exception recognized in South Carolina against Regan. They are injured by the mandate because the mandate forces 6 million new people
onto their Medicaid rolls. But they are not directly subject to the mandate, nor could they violate the mandate and incur a penalty.

JUSTICE KAGAN: Could I just understand, Mr. Katsas, when the States say that they are injured, are they talking about the people who are eligible now, but who are not enrolled? Or are they also talking about people who will become newly eligible?

MR. KATSAS: It’s people who will enroll -­ people who wouldn’t have enrolled had they been given a voluntary choice.

JUSTICE KAGAN: But who are eligible now.

MR. KATSAS: That’s the largest category. think there could be future eligibles who would enroll because they are subject to a legal obligation but wouldn’t have enrolled if given a voluntary choice. But I’m happy to — I’m happy to focus on currently eligible people who haven’t enrolled in Medicaid. That particular class is the one that gives rise to, simply in Florida alone, a pocketbook injury on the order of 500 to $600 million per year.

JUSTICE KAGAN: But that does seem odd, to suggest that the State is being injured because people who could show up tomorrow with or without this law will — will show up in greater numbers. I mean, presumably the State wants to cover people whom it has declared eligible for this benefit.

MR. KATSAS: They — they could, but they don’t. What the State wants to do is make Medicaid available to all who are eligible and choose to obtain it. And in any event -­

JUSTICE GINSBURG: Why would somebody not choose to obtain it? Why — that’s one puzzle to me. There’s this category of people who are Medicaid eligible; Medicaid doesn’t cost them anything. Why would they resist enrolling?

MR. KATSAS: I — I don’t know, Justice Ginsburg. All I know is that the difference between current enrollees and people who could enroll but have not is, as I said, on the — is a $600 million delta. And -­

JUSTICE GINSBURG: But it may be just that they haven’t been given sufficient information to understand that this is a benefit for them.

MR. KATSAS: It’s possible, but all we’re talking about right now is the standing of the States. And the only arguments made against the standing of the States — I mean, there is a classic pocketbook injury here. The only arguments made about — against the standing of the States are, number one, this results from third-party actions. That doesn’t work, because the third-party actions are not unfettered in — in the sense of Lujan; they are coerced in the sense of Bennett v. Spear. Those people are enrolling because they are under a legal obligation to do so.

The second argument made against the States’ standing is that the States somehow forfeit their ability to challenge the constitutionality of a provision of Federal law because they voluntarily choose to participate -­

JUSTICE SOTOMAYOR: I’m — I’m a little bit confused. And this is what I’m confused about. There — there is a challenge to the individual mandate.


JUSTICE SOTOMAYOR: All right. What is -­ the fact that the State is challenging Medicaid, how does it give the State standing to challenge an obligation that is not imposed on the State in any way?

MR. KATSAS: The — the principal theory for State standing is that States are challenging the mandate because the mandate injures them when people are forced to enroll in Medicaid. Now, it is true they are not directly subject to the mandate, but -­

JUSTICE SOTOMAYOR: Yes. That’s what I’m -­

MR. KATSAS: Okay. Let me — let me try to -­

JUSTICE SOTOMAYOR: — a little confused by.

MR. KATSAS: Let me try it this way — may I finish the thought?


MR. KATSAS: In South Carolina v. Regan, the State was not subject to the tax at issue. The State was harmed because — as the issuer of the bonds, and the bond holders were the ones subject to the tax. So the State is injured not because it is the direct object of the Federal tax, but because of its relationship to the regulated party as issuer/bond holder.

CHIEF JUSTICE ROBERTS: Thank you, Mr. Katsas.

MR. KATSAS: Thank you, Mr. Chief Justice.



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