Liberty Univversity et al v. Lew et al

7/28/2019 Liberty Univversity et al v. Lew et al

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PUBLISHED

UNI TED STATES COURT OF APPEALSFOR THE FOURTH CI RCUI T

No. 10-2347

LI BERTY UNI VERSI TY, I NCORPORATED, a Vi r gi ni a Nonpr of i tCor porat i on; MI CHELE G. WADDELL; J OANNE V. MERRI LL,

Pl ai nt i f f s - Appel l ant s,

and

MARTHA A. NEAL; DAVI D STEI N, M. D. ; PAUSANI AS ALEXANDER; MARY

T. BENDORF; DELEGATE KATHY BYRON; J EFF HELGESON,

Pl ai nt i f f s,

v.

J ACOB LEW, Secr et ar y of t he Tr easur y of t he Uni t ed St at es,i n hi s of f i ci al capaci t y; KATHLEEN SEBELI US, Secr et ar y oft he Uni t ed Stat es Depar t ment of Heal t h and Human Ser vi ces,i n her of f i ci al capaci t y; SETH HARRI S, Act i ng Secr et ar y oft he Uni t ed St at es Depar t ment of Labor , i n hi s of f i ci al

capaci t y; ERI C H. HOLDER, J R. , At t or ney Gener al of t heUni t ed St at es, i n hi s of f i ci al capaci t y,

Def endant s - Appel l ees.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

MOUNTAI N STATES LEGAL FOUNDATI ON; REVERE AMERI CA FOUNDATI ON;AMERI CAN CI VI L RI GHTS UNI ON; FAMI LY RESEARCH COUNCI L; BREASTCANCER PREVENTI ON I NSTI TUTE; LI FE LEGAL DEFENSE FOUNDATI ON;LANDMARK LEGAL FOUNDATI ON; PROJ ECT LI BERTY; DAVI D BOYLE;

MEMBERS OF LEGATUS; CATHOLI C MEDI CAL ASSOCI ATI ON; FOUNDATI ONFOR MORAL LAW; VI RGI NI A FAMI LY FOUNDATI ON; WEST VI RGI NI AFAMI LY POLI CY COUNCI L; MARYLAND FAMI LY ALLI ANCE; NORTHCAROLI NA FAMI LY POLI CY COUNCI L; PALMETTO FAMI LY COUNCI L;AMERI CANS UNI TED FOR LI FE; ALLI ANCE DEFENDI NG FREEDOM,

Ami ci Suppor t i ng Appel l ant s,


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AMERI CAN CI VI L LI BERTI ES UNI ON; AMERI CAN CI VI L LI BERTI ESUNI ON OF VI RGI NI A, I NCORPORATED; AMERI CAN NURSESASSOCI ATI ON; AMERI CAN ACADEMY OF PEDI ATRI CS, I NCORPORATED;AMERI CAN MEDI CAL STUDENT ASSOCI ATI ON; CENTER FOR AMERI CANPROGRESS, d/ b/ a Doct or s f or Amer i ca; NATI ONAL HI SPANI CMEDI CAL ASSOCI ATI ON; NATI ONAL PHYSI CI ANS ALLI ANCE; HARRYREI D, Senat e Maj or i t y Leader ; NANCY PELOSI , House Democr at i cLeader ; DI CK DURBI N, Senat or , Assi st ant Maj or i t y Leader ;CHARLES SCHUMER, Senat or , Conf erence Vi ce Chai r ; PATTYMURRAY, Conf er ence Secr et ar y; MAX BAUCUS, Senat or , Commi t t eeon Fi nance Chai r ; TOM HARKI N, Senat or , Commi t t ee on Heal t h,Educat i on, Labor and Pensi ons Chai r ; PATRI CK LEAHY, Senator ,Commi t t ee on t he J udi ci ary Chai r ; BARBARA MI KULSKI , Senat or ,HELP Subcommi t t ee on Ret i r ement and Agi ng Chai r ; J OHN D.ROCKEFELLER, I V, Senat or , Commi t t ee on Commer ce Chai r ; STENYHOYER, Repr esent at i ve, House Democr at i c Whi p; J AMES E.CLYBURN, Repr esent at i ve, Democr at i c Ass i st ant Leader ; J OHN B

LARSON, Repr esent at i ve, Chai r of Democrat i c Caucus; XAVI ERBECERRA, Repr esent at i ve, Vi ce Chai r of Democrat i c Caucus;J OHN D DI NGELL, Represent at i ve, Sponsor of House Heal t h Car eRef orm Legi sl at i on; HENRY A. WAXMAN, Repr esent at i ve, Ranki ngMember , Commi t t ee on Ener gy and Commer ce; FRANK PALLONE,J R. , Represent at i ve, Ranki ng Member , Commer ce Subcommi t t eeon Heal t h; SANDER M LEVI N, Repr esent at i ve, Ranki ng Member ,Commi t t ee on Ways and Means; FORTNEY PETE STARK,Represent at i ve, Ranki ng Member , Ways and Means Subcommi t t eeon Heal t h; ROBERT E. ANDREWS, Repr esent at i ve, Ranki ngMember , Educat i on and Wor kf or ce Subcommi t t ee on Heal t h;

J ERROLD NADLER, Represent at i ve, Ranki ng Member , Subcommi t t eeon Const i t ut i on; GEORGE MI LLER, Repr esent at i ve, Ranki ngMember , Educat i on and t he Wor kf or ce Commi t t ee; J OHN CONYERS,J R. , Represent at i ve, Ranki ng Member , Commi t t ee on t heJ udi ci ar y; J ACK M BALKI N, Kni ght Pr of essor of Const i t ut i onalLaw and the Fi r st Amendment , Yal e Law School ; GI LLI AN EMETZGER, Pr of essor of Law, Col umbi a Law School ; TREVOR WMORRI SON, Pr of essor of Law, Col umbi a Law School ; AMERI CANASSOCI ATI ON OF PEOPLE WI TH DI SABI LI TI ES; THE ARC OF THEUNI TED STATES; BREAST CANCER ACTI ON; FAMI LI ES USA; FRI ENDSOF CANCER RESEARCH; MARCH OF DI MES FOUNDATI ON; MENTAL HEALTH

AMERI CA; NATI ONAL BREAST CANCER COALI TI ON; NATI ONALORGANI ZATI ON FOR RARE DI SORDERS; NATI ONAL PARTNERSHI P FORWOMEN AND FAMI LI ES; NATI ONAL SENI OR CI TI ZENS LAW CENTER;NATI ONAL WOMEN S HEALTH NETWORK; THE OVARI AN CANCER NATI ONALALLI ANCE; AMERI CAN HOSPI TAL ASSOCI ATI ON; ASSOCI ATI ON OFAMERI CAN MEDI CAL COLLEGES; FEDERATI ON OF AMERI CAN HOSPI TALS;NATI ONAL ASSOCI ATI ON OF PUBLI C HOSPI TALS AND HEALTH SYSTEMS;CATHOLI C HEALTH ASSOCI ATI ON OF THE UNI TED STATES; NATI ONAL


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ASSOCI ATI ON OF CHI LDREN S HOSPI TALS; CHRI STI NE O GREGOI RE,Governor ; DR. DAVI D CUTLER, Deput y, Ot t o Eckst ei n Pr of essorof Appl i ed Economi cs, Harvard Uni ver si t y; DR. HENRY AARON,Seni or Fel l ow, Economi c St udi es Br uce and Vi r gi ni a MacLaur yChai r , The Br ooki ngs I nst i t ut i on; DR. GEORGE AKERLOF,Koshl and Pr of essor of Economi cs, Uni ver si t y of Cal i f or ni a-Berkel ey, 2001 Nobel Laur eate; DR. STUART ALTMAN, Sol C.Chai ki n Pr of essor of Nat i onal Heal t h Pol i cy, Br andei sUni ver si t y; DR. KENNETH ARROW, J oan Kenney Pr of essor ofEconomi cs and Prof essor of Operat i ons Resear ch, St anf ordUni ver si t y, 1972 Nobel Laur eat e; DR. SUSAN ATHEY, Prof essorof Economi cs, Har var d Uni ver si t y, 2007 Reci pi ent of t he J ohnBat es Cl ar k Medal f or t he most i nf l uent i al Amer i caneconomi st under age 40; DR. LI NDA J . BLUMBERG, Seni orFel l ow, The Ur ban I nst i t ut e, Heal t h Pol i cy Cent er ; DR.LEONARD E. BURMAN, Dani el Pat r i ck Moyni han Prof essor ofPubl i c Af f ai r s at t he Maxwel l School , Syr acuse Uni ver si t y;

DR. AMI TABH CHANDRA, Prof essor of Publ i c Pol i cy KennedySchool of Government , Harvar d Uni ver si t y; DR. MI CHAELCHERNEW, Prof essor , Depar t ment of Heal t h Care Pol i cy,Harvar d Medi cal School ; DR. PHI LI P COOK, I TT/ Sanf ordPr of essor of Publ i c Pol i cy, Pr of essor of Economi cs, DukeUni ver si t y; DR. CLAUDI A GOLDI N, Henr y Lee Pr of essor ofEconomi cs, Harvard Uni ver si t y; DR. TAL GROSS, Depar t ment ofHeal t h Pol i cy and Management , Mai l man School of Publ i cHeal t h, Col umbi a Uni ver si t y; DR. J ONATHAN GRUBER, Prof essorof Economi cs, MI T; DR. J ACK HADLEY, Associ at e Dean f orFi nance and Pl anni ng, Pr of essor and Seni or Heal t h Ser vi ces

Researcher , Col l ege of Heal t h and Human Servi ces, Geor geMason Uni ver si t y; DR. VI VI AN HO, Baker I nst i t ut e Chai r i nHeal t h Economi cs and Pr of essor of Economi cs, Ri ceUni ver si t y; DR. J OHN F. HOLAHAN, Ph. D. , Di r ect or , Heal t hPol i cy Resear ch Cent er , The Ur ban I nst i t ut e; DR. J I LLHORWI TZ, Pr of essor of Law and Co- Di r ect or of t he Pr ogr am i nLaw & Economi cs, Uni ver si t y of Mi chi gan School of Law; DR.LAWRENCE KATZ, El i sabeth Al l en Prof essor of Economi cs,Harvar d Uni ver si t y; DR. FRANK LEVY, Rose Pr of essor of Ur banEconomi cs, Depar t ment of Ur ban St udi es and Pl anni ng, MI T;DR. PETER LI NDERT, Di st i ngui shed Resear ch Prof essor of

Economi cs, Uni ver si t y of Cal i f or ni a, Davi s; DR. ERI CMASKI N, Al ber t O. Hi r schman, Pr of essor of Soci al Sci ence att he I nst i t ut e f or Advanced St udy, Pr i ncet on Uni ver si t y, 2007Nobel Laur eat e; DR. ALAN C. MONHEI T, Prof essor of Heal t hEconomi cs, School of Publ i c Heal t h, Uni ver si t y of Medi ci ne &Dent i st r y of New J ersey; DR. MARI LYN MOON, Vi ce Pr esi dentand Di r ect or Heal t h Pr ogr am, Amer i can I nst i t ut es f orResear ch; DR. RI CHARD J . MURNANE, Thompson Prof essor of


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Educat i on and Soci et y, Harvar d Uni ver si t y; DR. LEN M.NI CHOLS, George Mason Uni ver si t y; DR. HAROLD POLLACK, Hel enRoss Pr of essor of Soci al Ser vi ce Admi ni st r at i on, Uni ver si t yof Chi cago; DR. MATTHEW RABI N, Edward G. and Nancy S. J ordanPr of essor of Economi cs, Uni ver si t y of Cal i f or ni a- Ber kel ey,2001 Reci pi ent of t he J ohn Bates Cl ark Medal f or t he mosti nf l uent i al Amer i can economi st under age 40; DR. J AMES B.REBI TZER, Prof essor of Economi cs, Management , and Publ i cPol i cy, Bost on Uni ver si t y School of Management ; DR. MI CHAELREI CH, Pr of essor of Economi cs, Uni ver si t y of Cal i f or ni a atBer kel ey; DR. THOMAS RI CE, Prof essor , UCLA School of Publ i cHeal t h; DR. MEREDI TH ROSENTHAL, Depar t ment of Heal t h Pol i cyand Management , Harvar d Uni ver si t y, Harvar d School of Publ i cHeal t h; DR. CHRI STOPHER RUHM, Prof essor of Publ i c Pol i cy andEconomi cs, Depar t ment of Economi cs, Uni ver si t y of Vi r gi ni a;DR. J ONATHAN SKI NNER, Pr of essor of Economi cs, Dar t mout hCol l ege, and Pr of essor of Communi t y and Fami l y Medi ci ne,

Dar t mouth Medi cal School ; DR. KATHERI NE SWARTZ, Pr of essor ,Depar t ment of Heal t h Pol i cy and Management , Har vard Schoolof Publ i c Heal t h; DR. KENNETH WARNER, Dean of t he School ofPubl i c Heal t h and Avedi s Donabedi an Di st i ngui shed Uni ver si t yPr of essor of Publ i c Heal t h, Uni ver si t y of Mi chi gan; DR. PAULN. VAN DE WATER, Seni or Fel l ow, Cent er on Budget and Pol i cyPr i or i t i es; DR. STEPHEN ZUCKERMAN, Seni or Fel l ow, The Ur banI nst i t ut e; NATI ONAL WOMEN S LAW CENTER; AMERI CAN ASSOCI ATI ONOF UNI VERSI TY WOMEN; AMERI CAN FEDERATI ON OF STATE, COUNTYAND MUNI CI PAL EMPLOYEES; AMERI CAN MEDI CAL WOMEN SASSOCI ATI ON; ASI AN & PACI FI C I SLANDER AMERI CAN HEALTH FORUM;

BLACK WOMEN' S HEALTH I MPERATI VE; CHI LDBI RTH CONNECTI ON; I BI SREPRODUCTI VE HEALTH; I NSTI TUTE OF SCI ENCE AND HUMAN VALUES;MARYLAND WOMEN S COALI TI ON FOR HEALTH CARE REFORM; MENTALHEALTH AMERI CA; NATI ONAL ASI AN PACI FI C AMERI CAN WOMEN SFORUM; NATI ONAL ASSOCI ATI ON OF SOCI AL WORKERS; NATI ONALCOALI TI ON FOR LGBT HEALTH; NATI ONAL COUNCI L OF J EWI SH WOMEN;NATI ONAL COUNCI L OF WOMEN S ORGANI ZATI ONS; NATI ONALEDUCATI ON ASSOCI ATI ON; NATI ONAL LATI NA I NSTI TUTE FORREPRODUCTI VE HEALTH; OLDER WOMEN S LEAGUE; PHYSI CI ANS FORREPRODUCTI VE CHOI CE AND HEALTH; RAI SI NG WOMEN S VOI CES;SARGENT SHRI VER NATI ONAL CENTER ON POVERTY LAW; SOUTHWEST

WOMEN S LAW CENTER; WI DER OPPORTUNI TI ES FOR WOMEN; WOMEN SLAW CENTER OF MARYLAND, I NCORPORATED; WOMEN S LAW PROJ ECT;PHYSI CI ANS FOR REPRODUCTI VE HEALTH; AMERI CAN COLLEGE OFOBSTETRI CI ANS AND GYNECOLOGI STS; AMERI CAN SOCI ETY FOREMERGENCY CONTRACEPTI ON; ASSOCI ATI ON OF REPRODUCTI VE HEALTHPROFESSI ONALS; AMERI CAN SOCI ETY FOR REPRODUCTI VE MEDI CI NE;SOCI ETY FOR ADOLESCENT HEALTH AND MEDI CI NE; AMERI CAN MEDI CALWOMEN S ASSOCI ATI ON; NATI ONAL ASSOCI ATI ON OF NURSE


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PRACTI TI ONERS I N WOMEN S HEALTH; SOCI ETY OF FAMI LY PLANNI NG;J AMES TRUSSELL; SUSAN F. WOOD; DON DOWNI NG; KATHLEENBESI NQUE; AMERI CANS UNI TED FOR SEPARATI ON OF CHURCH ANDSTATE; THE ANTI - DEFAMATI ON LEAGUE; THE I NTERFAI TH ALLI ANCEFOUNDATI ON; THE NATI ONAL COALI TI ON OF AMERI CAN NUNS; THENATI ONAL COUNCI L OF J EWI SH WOMEN; THE RELI GI OUS COALI TI ONFOR REPRODUCTI VE CHOI CE; THE RELI GI OUS I NSTI TUTE; THEUNI TARI AN UNI VERSALI ST ASSOCI ATI ON; THE UNI TARI ANUNI VERSALI ST WOMEN S FEDERATI ON,

Ami ci Support i ng Appel l ees.

On Remand f r om t he Supreme Cour t of t he Uni t ed Stat es.( S. Ct . No. 11- 438)

Ar gued: May 16, 2013 Deci ded: J ul y 11, 2013

Bef ore MOTZ, DAVI S, and WYNN, Ci r cui t J udges.

Af f i r med by publ i shed opi ni on. J udge Mot z, J udge Davi s, andJ udge Wynn wr ot e t he opi ni on.

ARGUED: Mat hew D. St aver , LI BERTY COUNSEL, Mai t l and, Fl or i da,

f or Appel l ant s. Al i sa Bet h Kl ei n, UNI TED STATES DEPARTMENT OFJ USTI CE, Washi ngt on, D. C. , f or Appel l ees. ON BRIEF: Ani t a L.St aver , LI BERTY COUNSEL, Mai t l and, Fl or i da; St ephen M. Cr ampt on,Mar y E. McAl i st er , LI BERTY COUNSEL, Lynchbur g, Vi r gi ni a, f orAppel l ant s. Ti mot hy J . Heaphy, Uni t ed St at es At t or ney, Roanoke,Vi r gi ni a; Neal Kumar Kat yal , Act i ng Sol i ci t or Gener al , TonyWest , Assi st ant At t orney Gener al , Bet h S. Br i nkmann, Deput yAssi st ant At t or ney Gener al , Mar k B. St er n, Samant ha L. Chai f et z,UNI TED STATES DEPARTMENT OF J USTI CE, Washi ngt on, D. C. , f orAppel l ees. J oel M. Spect or , MOUNTAI N STATES LEGAL FOUNDATI ON,Lakewood, Col orado, f or Ami cus Mount ai n St ates Legal Foundat i on.

Br i an S. Koukout chos, Mandevi l l e, Loui si ana; Char l es J . Cooper ,Davi d H. Thompson, COOPER & KI RK, PLLC, Washi ngt on, D. C. , f orAmi cus Revere Amer i ca Foundat i on. Pet er Fer r ara, AMERI CAN CI VI LRI GHTS UNI ON, Fal l s Chur ch, Vi r gi ni a; Dani el M. Gr ay, LAWOFFI CES OF DANI EL M. GREY, LLC, Fal l s Chur ch, Vi r gi ni a; Ri chardB. Roger s, RI CHARD B. ROGERS, PLC, Al exandr i a, Vi r gi ni a, f orAmi cus Amer i can Ci vi l Ri ght s Uni on. Kennet h A. Kl ukowski ,FAMI LY RESEARCH COUNCI L, Washi ngt on, D. C. , f or Ami cus Fami l y


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Research Counci l . Scot t J . Ward, Ti mot hy R. Obi t t s, GAMMON &GRANGE, P. C. , McLean, Vi r gi ni a; Cather i ne W. Shor t , LI FE LEGALDEFENSE FOUNDATI ON, Oj ai , Cal i f orni a, f or Ami ci Br east CancerPr event i on I nst i t ut e and Li f e Legal Def ense Foundat i on. Ri char dP. Hut chi son, LANDMARK LEGAL FOUNDATI ON, Kansas Ci t y, Mi ssour i ;Mar k R. Levi n, Mi chael J . O' Nei l l , Mat t hew C. For ys, LANDMARKLEGAL FOUNDATI ON, Leesburg, Vi r gi ni a, f or Ami cus Landmar k LegalFoundat i on. St ephen B. Pr esser , Raoul Ber ger Pr of essor of LegalHi st or y, NORTHWESTERN UNI VERSI TY SCHOOL OF LAW, Chi cago,I l l i noi s; Kathl een Cassi dy Goodman, LAW OFFI CE OF KATHLEENCASSI DY GOODMAN, Hel ot es, Texas; St even W. Fi t schen, THENATI ONAL LEGAL FOUNDATI ON, Vi r gi ni a Beach, Vi r gi ni a; Al l en E.Par ker , R. Cl ayt on Trot t er , THE J USTI CE FOUNDATI ON, San Ant oni o,Texas, f or Ami cus Pr oj ect Li ber t y. Davi d Boyl e, Long Beach,Cal i f or ni a, f or Ami cus Davi d Boyl e. Ni kol as T. Ni kas, Dor i ndaC. Bordl ee, BI OETHI CS DEFENSE FUND, Scot t sdal e, Ar i zona, f orAmi ci 281 Members of Legat us and Cat hol i c Medi cal Associ at i on.

J ohn A. Ei dsmoe, FOUNDATI ON FOR MORAL LAW, Mont gomer y, Al abama,f or Ami cus Foundat i on f or Moral Law. M. Casey Mat t ox, Mi chaelJ . Nor t on, St even H. Aden, ALLI ANCE DEFENDI NG FREEDOM,Washi ngton, D. C. ; Anna R. Fr anzonel l o, Mai l ee Smi t h, AMERI CANSUNI TED FOR LI FE, Washi ngt on, D. C. , f or Ami ci The Vi r gi ni a Fami l yFoundat i on, West Vi r gi ni a Fami l y Pol i cy Counci l , Mar yl and Fami l yAl l i ance, Nor t h Car ol i na Fami l y Pol i cy Counci l , Pal met t o Fami l yCounci l , Amer i cans Uni t ed f or Li f e and Al l i ance Def endi ngFr eedom. Rebecca Gl enber g, AMERI CAN CI VI L LI BERTI ES UNI ON OFVI RGI NI A, Ri chmond, Vi r gi ni a; Dani el Mach, AMERI CAN CI VI LLI BERTI ES UNI ON FOUNDATI ON, Washi ngt on D. C. ; Andr ew D. Beck,

Br i gi t t e Ami r i , AMERI CAN CI VI L LI BERTI ES UNI ON FOUNDATI ON, NewYor k, New Yor k, f or Ami ci The Amer i can Ci vi l Li bert i es Uni on,The Amer i can Ci vi l Li bert i es Uni on of Vi r gi ni a, Amer i cans Uni t edf or Separat i on of Chur ch and St ate, The Ant i - Def amat i on League,The I nt er f ai t h Al l i ance Foundat i on, The Nat i onal Coal i t i on ofAmer i can Nuns, The Nat i onal Counci l of J ewi sh Women, TheRel i gi ous Coal i t i on f or Repr oduct i ve Choi ce, The Rel i gi ousI nst i t ut e, The Uni t ar i an Uni ver sal i st Associ at i on, and TheUni t ar i an Uni ver sal i st Women s Feder at i on. I an Mi l l hi ser ,CENTER FOR AMERI CAN PROGRESS, Washi ngt on, D. C. , f or Ami ciAmer i can Nur ses Associ at i on, Amer i can Academy of Pedi at r i cs,

Amer i can Medi cal St udent Associ at i on, Cent er f or Amer i canPr ogr ess D/ B/ A Doct or s f or Amer i ca, Nat i onal Hi spani c Medi calAssoci at i on, and Nat i onal Physi ci ans Al l i ance. Pr of essor Wal t erDel l i nger , Washi ngt on, D. C. ; Pr of essor H. J ef f er son Powel l ,GEORGE WASHI NGTON UNI VERSI TY LAW SCHOOL, Washi ngton, D. C. , f orAmi ci Senat e Maj or i t y Leader Har r y Rei d, House Democrat i c LeaderNancy Pel osi , and Congr essi onal Leader s and Leader s ofCommi t t ees of Rel evant J ur i sdi ct i on. Gi l l i an E. Met zger , Tr evor


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W. Morr i son, New Yor k, New Yor k; Andr ew J . Pi ncus, Char l es A.Rot hf el d, Paul W. Hughes, Mi chael B. Ki mber l y, MAYER BROWN LLP,Washi ngt on, D. C. , f or Ami ci Const i t ut i onal Law Pr of essors .Rochel l e Bobr of f , Si mon Lazar us, NATI ONAL SENI OR CI TI ZENS LAWCENTER, Washi ngt on, D. C. , f or Ami ci The Amer i can Associ at i on ofPeopl e wi t h Di sabi l i t i es, The Ar c of t he Uni t ed St at es, Br eastCancer Act i on, Fami l i es USA, Fr i ends of Cancer Resear ch, Marchof Di mes Foundat i on, Ment al Heal t h Amer i ca, Nat i onal Br eastCancer Coal i t i on, Nat i onal Or gani zat i on f or Rar e Di sorder s,Nat i onal Par t ner shi p f or Women And Fami l i es, Nat i onal Seni orCi t i zens Law Cent er , Nat i onal Women s Heal t h Network, and TheOvar i an Cancer Nat i onal Al l i ance. Sher ee R. Kanner , Cat her i neE. St et son, Domi ni c F. Per el l a, Mi chael D. Kass, Sar a A. Kr aner ,HOGAN LOVELLS US LLP, Washi ngt on, D. C. ; Mel i nda Rei d Hat t on,Maur een D. Mudron, AMERI CAN HOSPI TAL ASSOCI ATI ON, Washi ngt on,D. C. ; I vy Baer , Kar en Fi sher , ASSOCI ATI ON OF AMERI CAN MEDI CALCOLLEGES, Washi ngt on, D. C. ; J ef f r ey G. Mi ckl os, FEDERATI ON OF

AMERI CAN HOSPI TALS, Washi ngt on, D. C. ; Lar r y S. Gage, Presi dent ,NATI ONAL ASSOCI ATI ON OF PUBLI C HOSPI TALS AND HEALTH SYSTEMS,Washi ngt on, D. C. ; Li sa Gi l den, Vi ce Pr esi dent , Gener alCounsel / Compl i ance Of f i cer , THE CATHOLI C HEALTH ASSOCI ATI ON OFTHE UNI TED STATES, Washi ngt on, D. C. ; Lawr ence A. McAndrews,Presi dent and Chi ef Execut i ve Of f i cer , NATI ONAL ASSOCI ATI ON OFCHI LDREN S HOSPI TALS, Washi ngt on, D. C. , f or Ami ci Amer i canHospi t al Associ at i on, Associ at i on of Amer i can Medi cal Col l eges,Cat hol i c Heal t h Associ at i on of t he Uni t ed St at es, Feder at i on ofAmer i can Hospi t al s, Nat i onal Associ at i on of Chi l dr en sHospi t al s, and Nat i onal Associ at i on of Publ i c Hospi t al s and

Heal t h Syst ems. Kr i st i n Houser , Adam Ber ger , Rebecca J . Roe,Wi l l i am Rut zi ck, SCHROETER, GOLDMARK & BENDER, Seat t l e,Washi ngton, f or Ami cus The Governor of Washi ngt on. Ri char d L.Rosen, ARNOLD & PORTER LLP, Washi ngt on, D. C. , f or Ami ci Economi cSchol ar s. Mar ci a D. Gr eenber ger , Emi l y J . Mar t i n, J udi t h G.Waxman, Li sa Codi spot i , NATI ONAL WOMEN S LAW CENTER, Washi ngt on,D. C. ; Mel i ssa Har t , UNI VERSI TY OF COLORADO LAW SCHOOL, Boul der ,Col orado, f or Ami ci The Nat i onal Women s Law Cent er , Amer i canAssoci at i on of Uni ver si t y Women, Amer i can Feder at i on of St ate,Count y and Muni ci pal Empl oyees, Amer i can Medi cal Women sAssoci at i on, Asi an & Paci f i c I sl ander Amer i can Heal t h For um,

Bl ack Women s Heal t h I mper at i ve, Chi l dbi r t h Connect i on, I bi sRepr oduct i ve Heal t h, I nst i t ut e of Sci ence and Human Val ues,Maryl and Women s Coal i t i on f or Heal t h Care Ref orm, Ment al Heal t hAmer i ca, Nat i onal Asi an Paci f i c Amer i can Women s For um, Nat i onalAssoci at i on of Soci al Wor ker s, Nat i onal Coal i t i on f or LGBTHeal t h, Nat i onal Counci l of J ewi sh Women, Nat i onal Counci l ofWomen s Or gani zat i ons, Nat i onal Educat i on Associ at i on, Nat i onalLat i na I nst i t ut e f or Repr oduct i ve Heal t h, Ol der Women s League,


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Physi ci ans f or Repr oduct i ve Choi ce and Heal t h, Rai si ng Women sVoi ces, Sargent Shr i ver Nat i onal Cent er on Pover t y Law,Sout hwest Women s Law Cent er , Wi der Oppor t uni t i es f or Women,Women s Law Cent er of Mar yl and, I ncorpor at ed, and Women s LawPr oj ect . B. Rober t Pi l l er , J enni f er Bl asdel l , PHYSI CI ANS FORREPRODUCTI VE HEALTH, New Yor k, New Yor k; Br uce H. Schnei der ,Mi chel e L. Pahmer , STROOCK & STROOCK & LAVAN LLP, New Yor k, NewYor k, f or Ami ci Physi ci ans f or Reproduct i ve Heal t h, Amer i canCol l ege of Obst et r i ci ans and Gynecol ogi st s, Amer i can Soci et y f orEmer gency Cont r acept i on, Associ at i on of Repr oduct i ve Heal t hPr of essi onal s, Amer i can Soci et y f or Repr oduct i ve Medi ci ne,Soci et y f or Adol escent Heal t h and Medi ci ne, Amer i can Medi calWomen s Associ at i on, Nat i onal Associ at i on of Nur se Pr act i t i oner si n Women s Heal t h, Soci et y of Fami l y Pl anni ng, J ames Trussel l ,Susan F. Wood, Don Downi ng, and Kat hl een Besi nque.


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MOTZ, DAVI S, and WYNN, Ci r cui t J udges:

Li ber t y Uni ver si t y and cer t ai n i ndi vi dual s ( col l ecti vel y,

Pl ai nt i f f s) br ought t hi s act i on chal l engi ng t wo pr ovi si ons of

t he Pat i ent Prot ect i on and Af f or dabl e Car e Act : t he i ndi vi dual

mandate, whi ch r equi r es i ndi vi dual s t o pur chase a mi ni mum l evel

of heal t h i nsur ance cover age, and t he empl oyer mandat e, whi ch

r equi r es cer t ai n empl oyer s t o of f er such cover age t o thei r

empl oyees and t hei r dependent s. The di st r i ct cour t di smi ssed

t he l awsui t , uphol di ng t he const i t ut i onal i t y of bot h mandat es.

On appeal we hel d t hat t he Ant i - I nj unct i on Act bar r ed us f r om

consi der i ng Pl ai nt i f f s cl ai ms and r emanded t he case to the

di st r i ct cour t wi t h i nst r ucti ons t o di smi ss f or l ack of

j ur i sdi ct i on. See Li bert y Uni v. , I nc. v. Gei t hner , 671 F. 3d 391

( 4t h Ci r . 2011) . The Supr eme Cour t gr ant ed Pl ai nt i f f s pet i t i on

f or cer t i or ar i , vacat ed our j udgment , and r emanded f or f ur t her

consi der at i on i n l i ght of Nat i onal Feder at i on of I ndependent

Busi ness v. Sebel i us, 132 S. Ct . 2566 ( 2012) ( NFI B) . See

Li ber t y Uni v. v. Gei t hner , 133 S. Ct . 679 ( 2012) . Af t er car ef ul

consi der at i on of t hat case, we af f i r m t he j udgment of t he

di s t r i ct cour t .

I .

On March 23, 2010, Presi dent Obama si gned t he Pat i ent

Pr ot ect i on and Af f or dabl e Car e Act ( Af f or dabl e Car e Act or


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t he Act ) i nt o l aw. See Pub. L. No. 111- 148, 124 St at . 119

( 2010) . Li ber t y and t wo unaf f i l i at ed i ndi vi dual s chal l enge t he

i ndi vi dual mandat e, whi ch wi l l become ef f ect i ve i n 2014, and t he

empl oyer mandate, whi ch wi l l become ef f ect i ve i n 2015. Bef ore

r esol vi ng t he l egal quest i ons, we summar i ze t he requi r ement s of

t he mandat es and t he r el evant f act s and pr ocedur al hi st ory of

t hi s case.

A.

1.

Wi t h l i mi t ed except i ons, t he i ndi vi dual mandat e i mposes a

penal t y on any t axpayer who i s an appl i cabl e i ndi vi dual and

f ai l s t o obt ai n mi ni mum essent i al cover age. 26 U. S. C.

5000A( a) - ( b) . Mi ni mum essent i al cover age i ncl udes cover age

under var i ous gover nment - sponsor ed progr ams, an empl oyer -

sponsor ed pl an, or a heal t h pl an of f er ed i n t he i ndi vi dual

mar ket wi t hi n a st at e, as wel l as cer t ai n ot her cover age. I d.

5000A( f ) .

Any i ndi vi dual who does not qual i f y f or a l i st ed exempt i on

i s an appl i cabl e i ndi vi dual . I d. 5000A( d) ( 1) . The Act

pr ovi des t wo r el i gi on- based exempt i ons. The [ r ] el i gi ous

consci ence exempt i on appl i es t o an i ndi vi dual who i s a member

of a r ecogni zed r el i gi ous sect or di vi si on t her eof , i d.

5000A( d) ( 2) ( A) , and an adher ent of est abl i shed t enet s or

t eachi ngs of such sect or di vi si on by reason of whi ch he i s


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consci ent i ousl y opposed t o accept ance of t he benef i t s of any

[ l i f e, di sabi l i t y, ol d- age, r et i r ement , or medi cal ] i nsur ance,

i d. 1402( g) ( 1) . The sect must have been i n exi st ence at al l

t i mes si nce December 31, 1950, and must make pr ovi si on f or

[ i t s] dependent member s. I d. The [ h] eal t h car e shar i ng

mi ni st r y exempt i on appl i es t o a member of a 501( c) ( 3)

or gani zat i on t hat has been i n exi st ence at al l t i mes si nce

December 31, 1999, t he members of whi ch shar e a common set of

et hi cal or r el i gi ous bel i ef s[ , ] . . . shar e medi cal expenses

among members i n accor dance wi t h t hose bel i ef s, and r etai n

member shi p even af t er t hey devel op a medi cal condi t i on. I d.

5000A( d) ( 2) ( B) .

The penal t y f or f ai l i ng t o obt ai n mi ni mum essent i al

cover age i s t i ed t o t he i ndi vi dual s i ncome but cannot exceed

t he cost of t he nat i onal aver age pr emi um f or qual i f i ed heal t h

pl ans meet i ng a cer t ai n l evel of cover age. See i d. 5000A( c) .

The Secr et ar y of t he Tr easur y has t he aut hor i t y t o assess[ ] and

col l ect [ ] [ t he penal t y] i n t he same manner as a t ax. I d.

5000A( g) ( 1) , 6671( a) .

2.

I f an appl i cabl e l ar ge empl oyer f ai l s t o pr ovi de

af f or dabl e heal t h car e cover age to i t s f ul l - t i me empl oyees and

t hei r dependent s, t he empl oyer mandat e may requi r e an

assessabl e payment by t he empl oyer . I d. 4980H( a) - ( b) . The


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Act def i nes an appl i cabl e l arge empl oyer as an empl oyer who

empl oyed an aver age of at l east f i f t y f ul l - t i me empl oyees dur i ng

t he pr ecedi ng year . I d. 4980H( c) ( 2) .

Such an empl oyer must make an assessabl e payment i f at

l east one of i t s f ul l - t i me empl oyees qual i f i es f or an

appl i cabl e pr emi um t ax credi t or cost - shar i ng r educt i on t o hel p

pay f or heal t h car e cover age. I d. 4980H( a) - ( b) . An empl oyee

i s el i gi bl e f or an appl i cabl e pr emi um t ax credi t or cost -

shar i ng r educt i on i f t he empl oyer f ai l s t o of f er t he empl oyee

af f or dabl e cover age pr ovi di ng mi ni mum val ue and t he

empl oyee s i ncome f al l s bet ween 100% and 400% of t he pover t y

l i ne. I d. 4980H( c) ( 3) , 36B( a) - ( c) ; Af f or dabl e Car e Act

1402( a) , ( b) , ( f ) ( 2) ( codi f i ed at 42 U. S. C. 18071( a) , ( b) ,

( f ) ( 2) ) . 1

The amount of t he assessabl e payment t hat an empl oyer

r equi r ed t o make such a payment must pay depends on whet her t he

empl oyer of f er s mi ni mum essent i al cover age t o i t s f ul l - t i me

empl oyees and t hei r dependent s. 26 U. S. C. 4980H( a) - ( b) . I f

t he empl oyer f ai l s t o of f er such cover age, t he assessabl e

1 Cover age i s af f or dabl e i f t he empl oyee s r equi r edcont r i but i on t o t he pl an does not exceed an i ndexed per cent ageof hi s househol d i ncome. 26 U. S. C. 36B( c) ( 2) ( C) ( i ) . A pl anf ai l s t o pr ovi de mi ni mum val ue i f t he pl an s shar e of t heempl oyee s heal t h cost s i s l ess t han 60% of t ot al cost s. I d. 36B( c) ( 2) ( C) ( i i ) .


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payment i s cal cul at ed by mul t i pl yi ng $2000 by t he number of

f ul l - t i me empl oyees ( l ess t hi r t y) , pr or at ed over t he number of

mont hs t he empl oyer i s l i abl e. I d. 4980H( a) , ( c) ( 1) ,

( c) ( 2) ( D) ( i ) . I f t he empl oyer does of f er such cover age, t he

assessabl e payment i s cal cul ated by mul t i pl yi ng $3000 by t he

number of empl oyees r ecei vi ng an appl i cabl e pr emi um t ax cr edi t

or cost - shar i ng r educt i on, pr or at ed on a mont hl y basi s. I d.

4980H( b) ( 1) . The amount of t he payment under 4980H( b)

cannot exceed the amount t he empl oyer woul d owe i f l i abl e under

4980H( a) . I d. 4980H( b) ( 2) . As wi t h t he i ndi vi dual mandat e,

t he Secr et ar y of t he Tr easury has t he aut hor i t y t o assess and

col l ect t he exact i on i n t he same manner as a t ax. I d.

4980H( d) ( 1) , 6671( a) .

Mi ni mum essent i al cover age i ncl udes cover age under an

el i gi bl e empl oyer - sponsored pl an, ot her t han cover age of onl y

cer t ai n except ed benef i t s ( l i ke l i mi t ed scope dent al or vi si on

benef i t s) , whi ch does not qual i f y. I d. 4980H( a) ( 1) ,

5000A( f ) ( 2) - ( 3) ; Publ i c Heal t h Ser vi ce Act 2791( c) ( codi f i ed

at 42 U. S. C. 300gg- 91( c) ) . An el i gi bl e empl oyer - sponsor ed

pl an i ncl udes a gr oup heal t h pl an, whi ch i s a pl an

est abl i shed or mai nt ai ned by an empl oyer f or t he pur pose of

pr ovi di ng medi cal care t o empl oyees and t hei r dependent s. 26

U. S. C. 5000A( f ) ( 2) ; 42 U. S. C. 300gg- 91( a) ; 29 U. S. C.

1002( 1) . Thus, empl oyer - pr ovi ded heal t h care cover age woul d


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seem t o qual i f y as mi ni mum essent i al cover age unl ess t hat

cover age appl i es onl y t o except ed benef i t s. I n ef f ect , t hen,

4980H( a) i mposes an assessabl e payment on an appl i cabl e

empl oyer who f ai l s t o of f er cover age t o i t s f ul l - t i me empl oyees

and t hei r dependent s, whi l e 4980H( b) i mposes an assessabl e

payment on an appl i cabl e empl oyer who provi des cover age t hat

does not sat i sf y t he mandat e s af f or dabi l i t y cri t er i a.

B.

On March 23, 2010, t he day t he Pr esi dent si gned t he

Af f or dabl e Car e Act i nt o l aw, Pl ai nt i f f s f i l ed t hi s act i on

agai nst t he Secret ar y of t he Tr easur y and ot her of f i ci al s

( col l ect i vel y, the Secr et ar y) . Pl ai nt i f f s sought a

decl arat i on t hat t he i ndi vi dual and empl oyer mandates are

i nval i d and an or der enj oi ni ng t hei r enf or cement .

1.

I n t hei r second amended compl ai nt , t he i ndi vi dual

pl ai nt i f f s, Mi chel e G. Waddel l and J oanne V. Mer r i l l , asser t

t hat t hey have made a personal choi ce not t o pur chase heal t h

i nsur ance cover age and [do] not want t o do so. 2 Fur t her ,

Waddel l and Mer r i l l al l ege t hat t he Act wi l l f or ce t hem t o pay

2 The di st r i ct cour t f ound t hat t hr ee of t he i ndi vi dualpl ai nt i f f s, Davi d St ei n, Kat hy Byr on, and J ef f Hel geson, l ackedst andi ng. Li ber t y Uni v. , I nc. v. Gei t hner , 753 F. Supp. 2d 611,621- 22 ( W. D. Va. 2010) . Pl ai nt i f f s do not chal l enge t hatdet er mi nat i on on appeal .


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f or heal t h i nsur ance cover age t hat i s not necessary or desi r abl e

or f ace si gni f i cant penal t i es. They al so asser t t hat t hey ar e

Chr i st i ans who have si ncer el y hel d r el i gi ous bel i ef s t hat

abor t i ons, except wher e necessary t o save t he l i f e of t he

pregnant mot her , are murder and moral l y r epugnant and t hat

t hey shoul d pl ay no par t i n such abor t i ons, i ncl udi ng no par t

i n f aci l i t at i ng, subsi di z i ng, easi ng, f undi ng, or suppor t i ng

such abor t i ons si nce t o do so i s evi l and mor al l y repugnant

compl i ci t y.

Li ber t y al l eges t hat i t empl oys appr oxi mat el y 3900 f ul l -

t i me f acul t y and st af f , and t hat i t i s sel f - i nsur ed and of f er s

heal t h savi ngs account s, pr i vat e i nsur ance pol i ci es and ot her

heal t h car e rei mbur sement opt i ons t o qual i f i ed empl oyees.

Li bert y assert s t hat dependi ng upon how t he f ederal government

def i nes mi ni mum essent i al cover age and t he af f or dabi l i t y

i ndex, t he Uni ver si t y coul d be f ound t o of f er cover age

i nsuf f i ci ent t o sat i sf y t he f eder al def i ni t i on of mi ni mum

essent i al cover age or cover age t hat i s deemed unaf f or dabl e . . .

and t her ef or e coul d be subj ect ed t o si gni f i cant penal t i es and

subst ant i al f i nanci al har dshi p. Li ber t y al so al l eges t hat t he

empl oyer mandat e wi l l i ncr ease t he cost of car e . . . [ and]

wi l l di r ect l y and negat i vel y af f ect [ t he Uni ver si t y] by

i ncr easi ng t he cost of pr ovi di ng heal t h i nsur ance cover age and


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t hus di r ectl y af f ect t he abi l i t y of t he Uni ver si t y t o car r y on

i t s mi ssi on.

Fi nal l y, Li bert y assert s that i t i s a Chr i st i an

educat i onal i nst i t ut i on whose empl oyees are Chr i st i ans who have

si ncer el y hel d r el i gi ous bel i ef s t hat abor t i ons, except wher e

necessary t o save t he l i f e of t he pr egnant mot her , are mur der

and mor al l y r epugnant . I t f ur t her expl ai ns t hat i t s r el i gi ous

bel i ef s bar i t f rom pl ay[ i ng] [ any] part i n abor t i ons,

i ncl udi ng [ any] par t i n f aci l i t at i ng, subsi di z i ng, easi ng,

f undi ng, or suppor t i ng abor t i ons si nce t o do so i s evi l and

mor al l y r epugnant compl i ci t y.

2.

Bef or e t he di str i ct cour t , Pl ai nt i f f s asser t ed t hat t he

i ndi vi dual and empl oyer mandates exceeded Congr ess s Ar t i cl e I

powers and vi ol at ed t he Tenth Amendment , t he Est abl i shment and

Free Exer ci se Cl auses of t he Fi r st Amendment , t he Rel i gi ous

Freedom Rest or at i on Act , t he Fi f t h Amendment , t he r i ght t o f r ee

speech and f r ee associ at i on under t he Fi r st Amendment , t he

Ar t i cl e I , Sect i on 9 pr ohi bi t i on agai nst unappor t i oned

capi t at i on or di r ect t axes, and t he Guar ant ee Cl ause. The

Secr et ar y moved t o di smi ss t he second amended compl ai nt f or l ack

of j ur i sdi cti on, ar gui ng t hat Pl ai nt i f f s l acked st andi ng and

t hat t he Ant i - I nj unct i on Act bar r ed t he sui t . Al t er nat i vel y,

t he Secret ar y moved t o di smi ss al l count s f or f ai l ur e t o st at e a


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cl ai m upon whi ch r el i ef coul d be gr ant ed. The di st r i ct cour t

concl uded t hat i t possessed j ur i sdi ct i on but gr ant ed t he

Secret ar y s mot i on t o di smi ss f or f ai l ur e t o st at e a cl ai m. See

Li ber t y Uni v. , I nc. v. Gei t hner , 753 F. Supp. 2d 611 ( W. D. Va.

2010) . Pl ai nt i f f s appeal ed onl y as t o t he Ar t i cl e I ,

Est abl i shment Cl ause, Free Exer ci se Cl ause, Rel i gi ous Freedom

Rest orat i on Act , and Fi f t h Amendment cl ai ms.

When we consi der ed t he case on appeal , we di d not r each t he

mer i t s of t hose cl ai ms because we concl uded t hat t he Ant i -

I nj unct i on Act depr i ved us of j ur i sdi ct i on. See Li ber t y Uni v. ,

671 F. 3d 391. Af t er i ni t i al l y denyi ng cer t i or ar i , Li ber t y Uni v.

v. Gei t hner , 133 S. Ct . 60 ( 2012) , on r econsi der at i on t he

Supr eme Cour t gr ant ed cer t i orar i , vacat ed our j udgment , and

di r ect ed us t o gi ve f ur t her consi der at i on t o t he case i n l i ght

of NFI B, see Li ber t y Uni v. , 133 S. Ct . 679. I n NFI B, t he Cour t

hel d t hat t he Ant i - I nj unct i on Act di d not bar a chal l enge t o t he

i ndi vi dual mandat e and uphel d that mandate as a l awf ul exer ci se

of Congr ess s t axi ng power . 132 S. Ct . at 2584, 2600. Fi ve

member s of t he Cour t , however , concl uded t hat t he i ndi vi dual

mandat e exceeds Congress s power under t he Commerce Cl ause. I d.

at 2593 ( Rober t s, C. J . ) ; i d. at 2644- 50 ( Scal i a, Kennedy,

Thomas, and Al i t o, J J . , di ssent i ng) ( j oi nt di ssent) .

On remand, we must deci de whether t he Ant i - I nj unct i on Act

bars t hi s pre- enf orcement chal l enge t o t he empl oyer mandat e, and


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whet her Pl ai nt i f f s have st andi ng t o chal l enge t he mandat es. I f

nei t her j ur i sdi ct i onal hur dl e pr event s our consi der at i on of t he

mer i t s of t he case, we must det ermi ne whet her Congress act ed

wi t hi n t he scope of i t s const i t ut i onal l y del egat ed power s when

i t enact ed t he empl oyer mandat e. Fi nal l y, i f we f i nd t hat t he

mandat es are a val i d exer ci se of Congr ess s Ar t i cl e I power s, we

must addr ess Pl ai nt i f f s r el i gi on- based ar gument s. 3 Our r evi ew

i s de novo. E. I . du Pont de Nemour s & Co. v. Kol on I ndus. ,

I nc. , 637 F. 3d 435, 440 ( 4t h Ci r . 2011) ( r evi ewi ng de novo

di st r i ct cour t s gr ant of mot i on t o di smi ss f or f ai l ur e t o st at e

a cl ai m under Fed. R. Ci v. P. 12( b) ( 6) ) ; Est at e of Mi chael ex

r el . Mi chael v. Lul l o, 173 F. 3d 503, 506 ( 4t h Ci r . 1999)

( r evi ewi ng de novo di st r i ct cour t s deci si on whet her t o di smi ss

f or l ack of j ur i sdi ct i on) .

I I .

The Ant i - I nj unct i on Act ( AI A) provi des t hat no sui t f or

t he pur pose of r est r ai ni ng t he assessment or col l ect i on of any

3 The pl ai nt i f f s r ai se on appeal new ar gument s t hat t heAf f or dabl e Car e Act vi ol at es t he Or i gi nat i on Cl ause andi mper mi ssi bl y conf l i cts wi t h var i ous st at e l aws. Pl ai nt i f f s hadt he oppor t uni t y t o r ai se t hese ar gument s i n t he di st r i ct cour tand i n t he or i gi nal br i ef i ng i n t hi s case but di d not do so;t hus t he argument s ar e wai ved. See Wash. Met r o. Ar ea Transi tAut h. v. Pr eci si on Smal l Engi nes, 227 F. 3d 224, 227- 28 ( 4t h Ci r .2000) .


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t ax shal l be mai nt ai ned i n any cour t by any per son. 26 U. S. C.

7421( a) . Wher e i t appl i es, t he AI A t hus depr i ves cour t s of

j ur i sdi ct i on t o enter t ai n pre- enf or cement sui t s seeki ng t o

enj oi n t he col l ect i on of f eder al t axes. See Enochs v. Wi l l i ams

Packi ng & Navi gat i on Co. , 370 U. S. 1, 5 ( 1962) . 4

Li ber t y s chal l enge t o t he empl oyer mandate i s a pr e-

enf or cement sui t t o enj oi n t he col l ect i on of an exact i on t hat i s

codi f i ed i n the I nt er nal Revenue Code, and whi ch t he Secr et ar y

of t he Tr easur y i s empowered t o col l ect i n t he same manner as a

t ax. I n NFI B, however , t he Supr eme Cour t made cl ear t hat t he

AI A does not appl y t o ever y exact i on t hat f unct i ons as a tax or

even to ever y exact i on t hat passes must er as a t ax f or

const i t ut i onal pur poses. Rat her , t he AI A appl i es onl y wher e

Congr ess i nt ends i t t o. See NFI B, 132 S. Ct . at 2583 ( not i ng

t hat , al t hough Congr ess cannot change whet her an exact i on i s a

t ax . . . f or const i t ut i onal pur poses, t he AI A and t he

Af f or dabl e Car e Act are cr eat ur es of Congr ess s own cr eat i on

and [ h] ow t hey rel at e to each ot her i s up t o Congr ess) .

4 We not e t hat Pl ai nt i f f s r equest decl ar at or y as wel l asi nj unct i ve r el i ef . The Decl ar at or y J udgment Act aut hor i zesf eder al cour t s t o i ssue decl ar at or y j udgment s, except wi t hr espect t o Feder al t axes. 28 U. S. C. 2201( a) . Because t heDecl ar ator y J udgment Act s t ax except i on i s coext ensi ve wi t h t heAI A, t he f ol l owi ng anal ysi s al so appl i es t o Pl ai nt i f f s r equestf or decl ar at or y r el i ef . See Si gmon Coal Co. v. Apf el , 226 F. 3d291, 299 ( 4t h Ci r . 2000) .


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When concl udi ng that Congr ess di d not i nt end t o bar pr e-

enf or cement chal l enges t o the i ndi vi dual mandat e, t he Cour t i n

NFI B f ound i t most si gni f i cant t hat Congr ess chose to descr i be

t he shar ed r esponsi bi l i t y payment as a penal t y rat her t han a

t ax. See i d. ( not i ng t hat [ t ] her e i s no i mmedi at e r eason t o

t hi nk t hat a st at ut e appl yi ng t o any t ax woul d appl y t o a

penal t y ) . Thus, we begi n our AI A i nqui r y wi t h par t i cul ar

at t ent i on t o how Congr ess char act er i zed t he exact i on set f or t h

i n t he empl oyer mandat e.

I n mai nt ai ni ng t hat t he AI A bar s t hi s chal l enge t o t he

empl oyer mandat e, t he Secr et ar y r el i es heavi l y on t he f act t hat

t he Act t wi ce ref er s t o t he empl oyer mandat e exact i on as a

t ax. See 26 U. S. C. 4980H( b) ( 2) , ( c) ( 7) . I n doi ng so, t he

Secret ar y vi r t ual l y i gnor es t he f act t hat t he Act does not

consi st ent l y char act er i ze t he exact i on as a t ax. Rat her , t he

Act i ni t i al l y i dent i f i es t he empl oyer mandat e exact i on as an

assessabl e payment . See i d. 4980H( a) . The Act t hen

pr oceeds t o character i ze t he exact i on as an assessabl e payment

si x mor e t i mes. See i d. 4980H( b) ( 1) , ( c)( 2) ( D) ( i ) ( I ) , ( d) ( 1) ,

( d) ( 2) , ( d) ( 3) . Addi t i onal l y, t he Act once r ef er s t o t he

exact i on as an assessabl e penal t [ y] . See i d.

4980H( c) ( 2) ( D) .

Fur t her , on one of t he t wo occasi ons i n whi ch t he Act

r ef er s t o t he empl oyer mandat e exact i on as a t ax, i t does so


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i n a t ax- speci f i c cont ext , wher e t he use of anot her word woul d

cr eat e conf usi on. Sect i on 4980H( c) ( 7) pr ovi des: For deni al of

deduct i on f or t he t ax i mposed by t hi s sect i on, see sect i on

275( a) ( 6) . Sect i on 275( a) st at es that [ n] o deduct i on shal l be

al l owed f or t he f ol l owi ng t axes and t hen l i st s var i ous t axes,

i ncl udi ng [ t ] axes i mposed by chapt er [ ] . . . 43. The empl oyer

mandate i s codi f i ed i n chapt er 43 of t he Code. Thus, t he Act

pr esumabl y r ef ers t o t he empl oyer mandat e exact i on as a t ax

when cr oss- r ef er enci ng 275( a) ( 6) t o make cl ear t hat , f or

pur poses of det er mi ni ng deduct i bi l i t y, t he exact i on i s a t ax

i mposed by chapter 43.

There may be no equal l y obvi ous expl anat i on f or t he ot her

i nst ance i n whi ch the Act character i zes t he empl oyer mandate

exact i on as a t ax. See 26 U. S. C. 4980H( b) ( 2) ( pr ovi di ng

t hat t he aggr egat e amount of t ax assessed f or of f er i ng

coverage t hat i s unaf f ordabl e cannot exceed t he amount t he

empl oyer woul d owe under sect i on 4980H( a) f or f ai l i ng to of f er

mi ni mum essent i al coverage) . But we si mpl y cannot pl ace much

si gni f i cance on a si ngl e unexpl ai ned use of t hat t er m. Because

Congr ess i ni t i al l y and pr i mar i l y r ef er s t o t he exact i on as an

assessabl e payment and not a t ax, t he st atut ory text

suggest s t hat Congr ess di d not i nt end t he exact i on t o be t r eat ed

as a t ax f or pur poses of t he AI A.


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Fur t her mor e, Congr ess di d not ot her wi se i ndi cat e t hat t he

empl oyer mandate exact i on qual i f i es as a t ax f or AI A pur poses,

t hough of cour se i t coul d have done so. As t he Supreme Cour t

poi nt ed out i n NFI B, 26 U. S. C. 6671( a) pr ovi des t hat t he

penal t i es and l i abi l i t i es f ound i n subchapt er 68B of t he

I nt er nal Revenue Code are t r eated as t axes f or pur poses of t he

AI A. See NFI B, 132 S. Ct . at 2583. The empl oyer mandat e, l i ke

t he i ndi vi dual mandat e, i s not i ncl uded i n subchapt er 68B, and

no ot her pr ovi si on i ndi cat es t hat we ar e t o t r eat i t s

assessabl e payment as a t ax. See i d. ( maki ng t he same poi nt

wi t h r egar d t o t he i ndi vi dual mandat e) .

Fi nal l y, we not e t hat t o adopt t he Secret ar y s posi t i on

woul d l ead t o an anomal ous resul t . The Supreme Cour t has

expr essl y hel d t hat a per son subj ect t o t he i ndi vi dual mandat e

can br i ng a pr e- enf or cement sui t chal l engi ng t hat pr ovi si on.

But , under t he Secr et ar y s t heory, an empl oyer subj ect t o t he

empl oyer mandat e coul d br i ng onl y a post - enf orcement sui t

chal l engi ng t hat pr ovi si on. I t seems hi ghl y unl i kel y t hat

Congr ess meant t o si gnal - - wi t h t wo i sol at ed r ef er ences t o t he

t er m t ax - t hat t he mandat es shoul d be t r eat ed di f f er ent l y

f or pur poses of t he AI A s appl i cabi l i t y. Tel l i ngl y, t he

Gover nment has poi nt ed to no rat i onal e support i ng such

di f f er ent i al t r eat ment .


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For t hese reasons, we hol d t hat t he empl oyer mandat e

exact i on, l i ke t he i ndi vi dual mandat e exact i on, does not

const i t ut e a t ax f or pur poses of t he AI A. Ther ef or e, t he AI A

does not bar t hi s sui t .

I I I .

The Secr et ar y ar gues t hat another j ur i sdi ct i onal hurdl e -

st andi ng - - pr event s our consi der at i on of t he mer i t s of t hi s

case. To est abl i sh st andi ng at t he mot i on t o di smi ss st age, a

pl ai nt i f f must pl ausi bl y al l ege t hat : ( 1) i t has suf f er ed an

i nj ur y i n f act t hat i s ( a) concrete and par t i cul ar i zed and ( b)

act ual or i mmi nent , not conj ect ur al or hypot het i cal ; ( 2) t he

i nj ur y i s f ai r l y t r aceabl e t o t he chal l enged act i on of t he

def endant ; and ( 3) i t i s l i kel y, as opposed t o mer el y

specul at i ve, t hat t he i nj ur y wi l l be r edr essed by a f avor abl e

deci si on. Fr i ends of t he Ear t h, I nc. v. Lai dl aw Envt l . Ser vs.

( TOC) , I nc. , 528 U. S. 167, 18081 ( 2000) ( i nt er nal quot at i on

mar ks omi t t ed) ; see Bel l At l . Cor p. v. Twombl y, 550 U. S. 544,

570 ( 2007) ( at mot i on t o di smi ss st age, pl ai nt i f f must al l ege

suf f i ci ent f act s t o r ender cl ai m pl ausi bl e) . The Secret ar y

cont ends t hat al l pl ai nt i f f s l ack st andi ng because t hey al l ege

no act ual or i mmi nent i nj ur y. We addr ess f i r st Li ber t y s

st andi ng and t hen t hat of t he i ndi vi dual pl ai nt i f f s.


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A.

Li ber t y has mor e t han f i f t y f ul l - t i me empl oyees, and t he

Secret ar y does not cont est t hat i t i s an appl i cabl e l ar ge

empl oyer subj ect t o t he empl oyer mandate. Never t hel ess, t he

Secret ar y ar gues t hat Li ber t y has f ai l ed t o est abl i sh st andi ng

because i t i s specul at i ve whet her Li ber t y wi l l be subj ect t o an

assessabl e payment under 26 U. S. C. 4980H. Speci f i cal l y, t he

Secr et ary cont ends t hat t he heal t h car e cover age Li ber t y

acknowl edges i t al r eady pr ovi des t o i t s empl oyees qual i f i es as

mi ni mum essent i al cover age t hat may al so sat i sf y t he empl oyer

mandat e s af f or dabi l i t y cri t er i a.

The Secr et ar y s ar gument may wel l be cor r ect - as f ar as

i t goes. 5 But Li ber t y need not show t hat i t wi l l be subj ect t o

an assessabl e payment t o est abl i sh st andi ng i f i t ot her wi se

5 Li ber t y al l eges t hat i t coul d be det er mi ned t o not of f ercover age suf f i ci ent t o sat i sf y the f eder al def i ni t i on of mi ni mumessent i al cover age or cover age t hat i s deemed unaf f or dabl e . . .and t her ef or e coul d be subj ect ed t o si gni f i cant penal t i es. Butmi ni mum essent i al cover age seems t o i ncl ude cover age under anyempl oyer- sponsor ed pl an, unl ess t hat pl an cover s onl y except edbenef i t s. See 26 U. S. C. 4980H( a) , 5000A( f ) ( 2) - ( 3) . Li ber t ydoes not suggest i t s cur r ent pl an cover s onl y except ed benef i t s.Thus, by def i ni t i on t hat pl an appears t o meet t he mi ni mumessent i al cover age r equi r ement . Fur t her , whi l e i t i s possi bl et hat Li ber t y s cur r ent pl an f ai l s t o pr ovi de af f or dabl ecover age, subj ect i ng Li ber t y t o an assessabl e payment under 4980H( b) , Li ber t y al l eges onl y t hat i t s cover age coul d bedeemed unaf f ordabl e. The Supreme Cour t has hel d t hatt hr eat ened i nj ur y must be cer t ai nl y i mpendi ng t o const i t ut ei nj ur y i n f act and [ a] l l egat i ons of possi bl e f ut ur e i nj ur y ar enot suf f i ci ent . Cl apper v. Amnest y I nt l USA, 133 S. Ct . 1138,1147 ( 2013) ( i nt er nal quotat i on mar ks omi t t ed) .


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al l eges f acts t hat est abl i sh st andi ng. I n t hi s case, i n

addi t i on t o al l egi ng t hat i t coul d be subj ect t o an assessabl e

payment , Li ber t y al l eges t hat t he empl oyer mandate and i t s

at t endant bur densome r egul at i ons wi l l . . . i ncr ease t he cost

of car e and di r ect l y and negat i vel y af f ect [ i t ] by i ncreasi ng

t he cost of pr ovi di ng heal t h i nsur ance cover age.

[ G] ener al f actual al l egat i ons of i nj ur y r esul t i ng f r om t he

def endant s conduct may suf f i ce, f or on a mot i on t o di smi ss we

pr esum[ e] t hat gener al al l egat i ons embr ace t hose speci f i c f act s

t hat ar e necessar y t o suppor t t he cl ai m. Luj an v. Def ender s of

Wi l dl i f e, 504 U. S. 555, 561 ( 1992) ( i nt er nal quot at i on mar ks

omi t t ed) ; see Bennet t v. Spear , 520 U. S. 154, 167- 68 ( 1997) .

Thus, t o est abl i sh st andi ng, Li ber t y need not prove t hat t he

empl oyer mandat e wi l l i ncr ease i t s cost s of pr ovi di ng heal t h

cover age; i t need onl y pl ausi bl y al l ege t hat i t wi l l .

Li ber t y s al l egat i on t o t hi s ef f ect i s pl ausi bl e. Even i f

t he cover age Li ber t y cur r ent l y pr ovi des ul t i mat el y pr oves

suf f i ci ent , i t may wel l i ncur addi t i onal cost s because of t he

admi ni st r at i ve bur den of assur i ng compl i ance wi t h t he empl oyer

mandat e, or due t o an i ncr ease i n t he cost of car e. See

gener al l y Ass n of Pr i vat e Sect or Col l s. & Uni vs. v. Duncan, 681

F. 3d 427, 457- 58 ( D. C. Ci r . 2012) ( i ncr eased compl i ance cost s

const i t ut e i nj ur y i n f act suf f i ci ent t o conf er st andi ng) ; N. Y.

Ci vi l Li ber t i es Uni on v. Gr andeau, 528 F. 3d 122, 131 ( 2d Ci r .


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2008) ( admi ni st r at i ve bur den const i t ut es i nj ur y i n f act f or

st andi ng pur poses) ; Frank v. Uni t ed St at es, 78 F. 3d 815, 823- 24

( 2d Ci r . 1996) ( same) , vacated on ot her gr ounds, 521 U. S. 1114

( 1997) .

Moreover , Li ber t y s i nj ur y i s i mmi nent even t hough t he

empl oyer mandate wi l l not go i nt o ef f ect unt i l J anuar y 1, 2015,

as Li ber t y must t ake measur es t o ensure compl i ance i n advance of

t hat dat e. See Vi r gi ni a v. Am. Booksel l er s Ass n, 484 U. S. 383,

392- 93 ( 1988) ( hol di ng booksel l er s had st andi ng t hough

chal l enged l aw had not yet been enf orced because t hey w[ oul d]

have t o t ake si gni f i cant and cost l y compl i ance measur es

bef or ehand i f t hei r i nt er pr et at i on of t he st at ut e [ wa] s

cor r ect ) . Thus, Li ber t y has st andi ng t o chal l enge t he empl oyer

mandat e.

B.

The i ndi vi dual pl ai nt i f f s, af t er al l egi ng t hat t hey do not

have or want t o pur chase heal t h i nsurance cover age, assert t hat

t he i ndi vi dual mandat e wi l l creat e a f i nanci al har dshi p i n t hat

[ t hey] wi l l have t o ei t her pay f or heal t h i nsur ance cover age

. . . or f ace s i gni f i cant penal t i es.

The Secr et ar y mai nt ai ns t hat t he i ndi vi dual pl ai nt i f f s l ack

st andi ng because t hey may be exempt f r om t he i ndi vi dual mandat e

penal t y, ei t her because thei r i ncome i s bel ow t he mandate s

t hr eshol d l evel or because t hey qual i f y f or a pr oposed har dshi p


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exempt i on. See 26 U. S. C. 5000A( e) ( 2) ( exempt i ng i ndi vi dual s

wi t h i ncome bel ow f i l i ng t hr eshol d) ; 78 Fed. Reg. 7348, 7354- 55

( Feb. 1, 2013) ( descr i bi ng pr oposed har dshi p exempt i ons) . But ,

agai n, at t hi s ear l y st age, pl ai nt i f f s need onl y pr ovi de

gener al f act ual al l egat i ons of i nj ur y. Luj an, 504 U. S. at

561. And, we must accept [ ] al l wel l - pl eaded al l egat i ons i n t he

pl ai nt i f f s compl ai nt as t r ue. De Lont a v. Angel one, 330 F. 3d

630, 633 ( 4t h Ci r . 2003) .

The i ndi vi dual pl ai nt i f f s al l ege t he i ndi vi dual mandat e

wi l l obl i gat e t hem t o buy i nsur ance or pay a penal t y, and t hei r

al l eged l ack of i nsur ance pr ovi des suf f i ci ent suppor t f or t hat

al l egat i on at t hi s st age of t he pr oceedi ngs. Fur t her , t he

i ndi vi dual pl ai nt i f f s i nj ur y i s i mmi nent because t hey must make

pr eparat i ons t o obt ai n i nsurance bef ore t he mandate goes i nt o

ef f ect . See Am. Booksel l er s Ass n, 484 U. S. at 392- 93.

Thus, we concl ude t hat t he i ndi vi dual pl ai nt i f f s have

st andi ng t o chal l enge t he i ndi vi dual mandate. We t her ef or e

pr oceed t o the mer i t s.

I V.

A.

Li bert y argues t hat t he empl oyer mandat e exceeds Congress s

commer ce power because Congr ess does not have t he power t o

order empl oyer s t o pr ovi de gover nment - def i ned heal t h i nsurance


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t o t hei r empl oyees. Post - Remand Openi ng Br . 18. Thi s i s so,

Li ber t y cont ends, because t he empl oyer mandat e compel [ s]

empl oyers t o engage i n part i cul ar conduct or pur chase an

unwant ed pr oduct , cont r ar y t o t he di ct at es of NFI B. Post -

Remand Repl y Br . 16. I n Li ber t y s vi ew, [ a] l l owi ng Congr ess t o

mandat e t hat empl oyer s pr ovi de heal t h i nsurance . . . goes f ar

beyond regul at i ons of wages and hours uphel d under t he Commerce

Cl ause. Post - Remand Openi ng Br . 19.

The Secr et ar y count er s t hat t he empl oyer mandat e i s a val i d

exerci se of Congr ess s aut hor i t y under t he Commerce Cl ause

because [ h] eal t h cover age benef i t s f or m par t of an empl oyee s

compensat i on package, and i t i s wel l - est abl i shed i n Supr eme

Cour t pr ecedent t hat Congr ess has t he power t o r egul ate t he

t erms and condi t i ons of empl oyment . Post - Remand Resp. Br . 25.

( quot i ng Li ber t y Uni v. , 753 F. Supp. 2d at 635) . Mor e

speci f i cal l y, t he Secret ar y ar gues t hat

[ i ] f empl oyees put t hei r i nsur ance at r i sk when t heychange j obs, t hey may be r el uct ant t o swi t ch j obs i nt he f i r st pl ace ( a phenomenon known as j ob l ock ) . [ Congr essi onal Budget Of f i ce, Key I ssues i n Anal yzi ngMaj or Heal t h I nsurance Pr oposal s 8 ( Dec. 2008)[ her ei naf t er CBO, Key I ssues] ] . As Congr essunder st ood, t he pr ospect of l osi ng empl oyee i nsur ance

benef i t s may obst r uct i nt er st at e mobi l i t y, whi ch t heConst i t ut i on general l y, and the commerce powerspeci f i cal l y, wer e desi gned t o pr event .

Or i gi nal Resp. Br . 4647. The Secr et ar y f ur t her cont ends t hat

Congr ess f ound t hat empl oyer s who do not of f er heal t hi nsur ance t o thei r wor ker s gai n an unf ai r economi c


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advant age r el at i ve t o those empl oyers who do pr ovi decover age, and mi l l i ons of hard- worki ng Amer i cans andt hei r f ami l i es ar e l ef t wi t hout heal t h i nsur ance. H. R. Rep. No. 111- 443( I I ) , at 985 ( 2010) . Congr essnot ed t hat t hi s st at e of af f ai r s resul t s i n a vi ci ouscycl e because t hese uni nsured worker s t ur n t oemergency r ooms f or heal t h care whi ch i n t ur ni ncr eases cost s f or empl oyer s and f ami l i es wi t h heal t hi nsur ance, maki ng i t mor e di f f i cul t f or empl oyer s t opr ovi de cover age. I d. at 98586.

I d. at 53. Thus, t he Secret ar y concl udes, [ t ] he pr ovi si on of

heal t h cover age subst ant i al l y af f ect s commer ce j ust as ot her

f or ms of compensat i on and terms of empl oyment do, and the

busi nesses run by l ar ge empl oyer s l i kewi se subst ant i al l y af f ect

commerce. Post - Remand Resp. Br . 2728. We t hi nk t he Secr et ary

has t he bet t er argument .

B.

[ T] he det er mi nat i ve t est of t he exer ci se of power by t he

Congress under t he Commerce Cl ause i s si mpl y whet her t he

act i vi t y sought t o be r egul at ed i s commerce whi ch concerns more

St at es t han one and has a real and subst ant i al r el at i on t o t he

nat i onal i nt er est . Hear t of At l ant a Mot el , I nc. v. Uni t ed

St at es, 379 U. S. 241, 255 ( 1964) ( i nt er nal quot at i on mar ks

omi t t ed) . The power of Congr ess i n t hi s f i el d i s br oad and

sweepi ng . . . . Kat zenbach v. McCl ung, 379 U. S. 294, 305

( 1964) ; see al so NFI B, 132 S. Ct . at 2585 ( Rober t s, C. J . ) ( [ I ] t

i s now wel l est abl i shed that Congr ess has br oad aut hor i t y under

t he [ Commerce] Cl ause. ) . [ T] he power t o r egul at e commerce i s


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t he power t o enact al l appr opr i at e l egi sl at i on f or i t s

pr ot ect i on or advancement ; t o adopt measur es t o promot e i t s

gr owt h and i nsur e i t s saf et y; t o f ost er , pr ot ect , cont r ol , and

r est r ai n. NLRB v. J ones & Laughl i n St eel Cor p. , 301 U. S. 1,

3637 ( 1937) ( i nt er nal ci t at i ons and quot at i on mar ks omi t t ed) .

Among Congress s expansi ve Commerce Cl ause powers i s t he

aut hor i t y t o r egul at e t hose acti vi t i es t hat subst ant i al l y

af f ect i nt er st at e commer ce. Uni t ed St at es v. Mor r i son, 529

U. S. 598, 609 ( 2000) . So br oad i s t hi s power t hat Congr ess may

r egul at e act i vi t y wi t hout showi ng t hat i t has any speci f i c

ef f ect upon i nt er st at e commer ce, so l ong as, i n t he

aggr egat e, t he act i vi t y woul d r epr esent a gener al pr act i ce

. . . subj ect t o f eder al cont r ol . Ci t i zens Bank v. Al af abco,

I nc. , 539 U. S. 52, 56- 57 ( 2003) ( el l i psi s i n or i gi nal ) ( quot i ng

Mandevi l l e I sl and Far ms, I nc. v. Am. Cr yst al Sugar Co. , 334 U. S.

219, 236 ( 1948) ) . Moreover , Congr ess need not show t hat t he

act i vi t y t aken i n t he aggr egat e, subst ant i al l y af f ect [ s]

i nt er st at e commer ce i n f act , but onl y t hat a r at i onal basi s

exi st s f or so concl udi ng. Gonzal es v. Rai ch, 545 U. S. 1, 22

( 2005) ( emphasi s added) ( quot i ng Uni t ed St ates v. Lopez, 514

U. S. 549, 557 ( 1995) ) .

To be sure, Congr ess s aut hor i t y under t he Commer ce Cl ause

i s not wi t hout l i mi t s. I n NFI B, f i ve j ust i ces of t he Supr eme

Cour t f ound t hat t he i ndi vi dual mandat e exceeded Congr ess s


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commer ce power . 132 S. Ct . at 258593 ( Rober t s, C. J . ) ; i d. at

264450 ( j oi nt di ssent ) . Al t hough [ t ] her e has been

consi derabl e debate about whet her t he st atement s [ i n NFI B] about

t he Commerce Cl ause ar e di ct a or bi ndi ng pr ecedent , 6 t hese f i ve

j ust i ces agreed t hat t he Commer ce Cl ause does not grant Congr ess

t he aut hor i t y t o compel or mandat e an i ndi vi dual t o ent er

commerce by pur chasi ng a good or servi ce. See NFI B, 132 S. Ct .

at 2587 ( Rober t s, C. J . ) ( f i ndi ng t he i ndi vi dual mandat e beyond

Congr ess s commerce power because i t compel s i ndi vi dual s t o

become act i ve i n commerce by purchasi ng a pr oduct ) ( emphasi s i n

or i gi nal ) ; i d. at 264647 ( j oi nt di ssent ) ( not i ng t hat

mandat i ng of economi c act i vi t y i s beyond t he scope of t he

Commer ce Cl ause) . Rather , t hese j ust i ces concl uded t hat t he

Commerce Cl ause permi t s Congr ess t o r egul at e onl y exi st i ng

act i vi t y.

Chi ef J ust i ce Rober t s s - - and, t o a l ar ge degr ee, t he

j oi nt di ssenter s - - anal ysi s f ocused on t he t ext of t he

Commer ce Cl ause, t he Cour t s cases i nt er pr et i ng that cl ause, and

6 Uni t ed St at es v. Henr y, 688 F. 3d 637, 641 n. 5 ( 9t h Ci r .2012) ( ci t i ng Davi d Post , Commerce Cl ause Hol di ng v. Di ct umMess Not So Si mpl e, The Vol okh Conspi r acy ( J ul y 3, 2012, 8: 17AM) , ht t p: / / www. vol okh. com/ 2012/ 07/ 03/ commer ce- cl ause- hol di ng- v-di ct ummess- not - so- si mpl e/ ) , cer t . deni ed, 133 S. Ct . 996( 2013) ; see al so Uni t ed St at es v. Roszkowski , 700 F. 3d 50, 58n. 3 ( 1st Ci r . 2012) ( decl i ni ng t o expr ess [ an] opi ni on as t owhether t he . . . Commerce Cl ause di scussi on was i ndeed ahol di ng of t he Cour t ) .


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t he pr act i cal ef f ect and oper at i on of t he i ndi vi dual mandat e.

As t o t he t ext , Chi ef J ust i ce Rober t s not ed t hat t he Commer ce

Cl ause grant s Congr ess t he power t o r egul ate Commer ce. I d.

at 2586 ( emphasi s i n or i gi nal ) ( ci t i ng U. S. Const . ar t . I , 8,

cl . 3) . I n t he Chi ef J ust i ce s vi ew, [ t ] he power t o r egul at e

commerce pr esupposes t he exi st ence of commerci al act i vi t y t o be

r egul at ed. I d. ( emphasi s i n or i gi nal ) . I n t he same vei n, t he

j oi nt di ssenter s ci t ed def i ni t i ons of r egul at e common at t he

t i me of t he Const i t ut i on s dr af t i ng, and concl uded t hat under

t hese def i ni t i ons r egul ate can mean t o di r ect t he manner of

somet hi ng but not t o di r ect t hat somet hi ng come i nt o bei ng.

I d. at 2644.

As t o t he Cour t s pr i or cases, t he Chi ef J ust i ce not ed t hat

al l have one t hi ng i n common: They uni f orml y descr i be t he

power as r eachi ng act i vi t y. I d. at 2587; see al so i d.

( ci t i ng Lopez, 514 U. S. at 560; Per ez v. Uni t ed St at es, 402 U. S.

146, 154 ( 1971) ; Wi ckar d v. Fi l bur n, 317 U. S. 111, 125 ( 1942) ;

NLRB, 301 U. S. at 37) . The j oi nt di ssent er s si mi l ar l y

di st i ngui shed t he Commerce Cl ause cases on whi ch t he government

r el i ed as i nvol v[ i ng] commer ci al act i vi t y, i d. at 2648

( emphasi s i n or i gi nal ) , and not r epr esent [ i ng] t he expansi on of

t he f eder al power t o di r ect i nt o a br oad new f i el d, i d. at

2646.


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Fi nal l y, bot h Chi ef J ust i ce Rober t s and t he j oi nt

di ssent er s expr essed subst ant i al concer n about t he pr act i cal and

oper at i onal ef f ect s of t he i ndi vi dual mandat e. Chi ef J ust i ce

Robert s suggest ed t hat const r ui ng t he commerce power t o al l ow

Congr ess t o mandat e t he pur chase of heal t h i nsur ance woul d

per mi t Congr ess t o regul at e i ndi vi dual s preci sel y because t hey

ar e doi ng not hi ng, and woul d br i ng count l ess deci si ons an

i ndi vi dual coul d pot ent i al l y make wi t hi n t he scope of f eder al

r egul at i on . . . . I d. at 2587 ( emphasi s i n or i gi nal ) . The

j oi nt di ssenter s expressed a si mi l ar concer n, st at i ng t hat

[ i ] f Congress can reach out and command even t hosef ur t hest r emoved f r om an i nt er st at e mar ket t opar t i ci pat e i n t he market , t hen t he Commerce Cl ausebecomes a f ont of unl i mi t ed power , or i n Hami l t on swords, t he hi deous monst er whose devour i ng j aws . . .spar e nei t her sex nor age, nor hi gh nor l ow, norsacred nor pr of ane.

I d. at 2646 ( el l i psi s i n or i gi nal ) ( ci t i ng The Feder al i st No.

33, at 202 ( Cl i nt on Rossi t er ed. , 1961) ) .

C.

For t he r easons set f or t h wi t hi n, we f i nd t hat t he empl oyer

mandate i s no monst er ; r ather , i t i s si mpl y another exampl e of

Congr ess s l ongst andi ng aut hor i t y t o regul ate empl oyee

compensat i on of f er ed and pai d f or by empl oyer s i n i nt er st at e

commer ce. To begi n, we note t hat unl i ke t he i ndi vi dual mandate

( as const r ued by f i ve j ust i ces i n NFI B) , t he empl oyer mandat e

does not seek t o cr eat e commer ce i n or der t o r egul at e i t . I n


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68. 5 percent of workers i n f i r ms wi t h 50 or more empl oyees were

i n sel f - i nsured pl ans . . . . ) . 7

Havi ng f ound t hat t he pr ovi si on r egul at es exi st i ng economi c

act i vi t y ( empl oyee compensat i on) , and t her ef or e st ands on qui t e

a di f f er ent f oot i ng f r om t he i ndi vi dual mandat e, we f ur t her

concl ude t hat t he empl oyer mandate i s a val i d exer ci se of

Congr ess s aut hor i t y under t he Commer ce Cl ause. I t has l ong

been set t l ed t hat Congr ess may i mpose condi t i ons on t erms of

empl oyment t hat subst ant i al l y af f ect i nt er st at e commer ce, see

Uni t ed St at es v. Darby, 312 U. S. 100 ( 1941) ( uphol di ng mi ni mum

wage and over t i me pr ovi si ons of t he Fai r Labor St andards Act ) ;

NLRB, 301 U. S. 1 ( uphol di ng Nat i onal Labor Rel at i ons Act of

1935, whi ch pr ohi bi t ed unf ai r l abor pr act i ces) , and r egul at e

act i vi t i es t hat have a subst ant i al i mpact on i nt er st at e

mobi l i t y, see Hear t of At l ant a Mot el , I nc. , 379 U. S. 241

( pr ohi bi t i ng di scr i mi nat i on by hot el oper at or s) ; Kat zenbach, 379

U. S. 294 ( pr ohi bi t i ng di scr i mi nat i on by r est aur ant owner s) .

Here, Congr ess di d bot h.

Fi r st , t he empl oyer mandate regul ates a t er m of empl oyment

( compensat i on) t hat subst ant i al l y af f ect s i nt er st at e commer ce.

7 We expr ess no opi ni on as t o whether t he l i mi t at i on on t hecommer ce power announced by f i ve j ust i ces i n NFI B const i t ut es ahol di ng of t he Cour t . Rather , we assume wi t hout deci di ng t hati t does, and concl ude t hat t he empl oyer mandat e i s notr est r i cted by t hat l i mi t at i on.


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Heal t h i nsurance pr ovi ded as par t of empl oyees compensat i on i s

t he pr i mary sour ce of cover age f or t he nonel der l y, CBO, Key

I ssues 4, and [ h] eal t h i nsur ance and heal t h car e ser vi ces are a

si gni f i cant par t of t he nat i onal economy, 42 U. S. C.

18091( 2) ( B) .

Nat i onal heal t h spendi ng i s pr oj ect ed t o i ncrease f r om[ $2. 5 t r i l l i on] , or 17. 6 per cent of t he economy, i n2009 t o [ $4. 7 t r i l l i on] i n 2019. Pr i vat e heal t hi nsur ance spendi ng i s pr oj ect ed t o be [ $854 bi l l i on]i n 2009, and pays f or medi cal suppl i es, dr ugs, andequi pment t hat are shi pped i n i nt erst at e commerce.

I d. [ E] mpl oyer s who do not of f er heal t h i nsur ance t o t hei r

worker s gai n an unf ai r economi c advant age r el at i ve t o t hose

empl oyers who do pr ovi de cover age, and perpetuat e a vi ci ous

cycl e, H. R. Rep. No. 111- 443( I I ) , at 985 ( 2010) : uni nsur ed

worker s t ur n t o emergency r ooms f or heal t h care t hey cannot

af f or d, i d. ; heal t h car e pr ovi der s pass on t he cost [ of t he

uncompensat ed car e] t o pr i vat e i nsur er s, 42 U. S. C.

18091( 2) ( F) ; and i nsur er s pass on t he cost t o f ami l i es

t hr ough pr emi um i ncr eases, i d. , maki ng i t mor e expensi ve - - and

t hus, mor e di f f i cul t - - f or empl oyer s t o i nsur e t hei r empl oyees.

The cost of pr ovi di ng uncompensat ed care t o t he uni nsur ed was

[ $43 bi l l i on] i n 2008, i d. , and [ t ] he economy l oses up t o

[ $207 bi l l i on] a year because of t he poor er heal t h and shor t er

l i f espan of t he uni nsur ed, i d. 18091( 2) ( E) . Accor di ngl y,


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heal t h i nsur ance pr ovi ded as par t of empl oyee compensat i on has a

subst ant i al i mpact on i nt er st ate commer ce.

Second, t he empl oyer mandate regul ates an act i vi t y

( empl oyee compensat i on) t hat subst ant i al l y af f ect s worker s

i nt er st at e mobi l i t y. The avai l abi l i t y and br eadt h of empl oyer -

sponsored heal t h cover age var i es, see, e. g. , CBO, Key I ssues 44

( observi ng that l ar ge empl oyer s ar e mor e l i kel y t han smal l

empl oyer s t o of f er heal t h i nsur ance) , and [ t ] he avai l abi l i t y

of heal t h i nsur ance opt i ons can af f ect peopl e s i ncent i ves t o

ent er t he l abor f or ce, wor k f ewer or mor e hour s, r et i r e, change

j obs, or even pr ef er cer t ai n t ypes of f i r ms or j obs, i d. at

162. [ E] mpl oyees and t hei r dependent s t ypi cal l y have t o change

pl ans when changi ng j obs and coul d become uni nsur ed i f t hei r new

empl oyer does not of f er cover age, i d. at 8; [ e]mpl oyment - based

i nsur ance of f er s a number of advant ages, i ncl udi ng l ower

admi ni st r at i ve cost s and f avor abl e t ax t r eat ment t hat may be

di f f i cul t or i mpossi bl e f or wor ker s t o obt ai n by pur chasi ng

i nsur ance i ndi vi dual l y, i d. at 164. And [ p] eopl e who have

medi cal probl ems ( or have f ami l y member s wi t h medi cal probl ems)

can have an i ncent i ve t o st ay i n a j ob t hat pr ovi des heal t h

i nsur ance benef i t s i n or der t o cover t hose pr eexi st i ng

condi t i ons, even i f mor e pr oduct i ve oppor t uni t i es exi st

el sewher e. I d. at 16465. Thus, heal t h i nsur ance pr ovi ded as


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par t of empl oyee compensat i on subst ant i al l y af f ect s i nt er st at e

mobi l i t y, and t her eby i nt er st ate commer ce.

Our r ecogni t i on of Congr ess s aut hor i t y t o enact t he

empl oyer mandat e does not open a new and pot ent i al l y vast

domai n t o congr essi onal aut hor i t y, NFI B, 132 S. Ct . at 2587

( Rober t s, C. J . ) , or enabl e t he Feder al Gover nment t o r egul at e

al l pr i vat e conduct, i d. at 2643 ( j oi nt di ssent ) . Requi r i ng

empl oyer s t o of f er t hei r empl oyees a cer t ai n l evel of

compensat i on t hr ough heal t h i nsurance cover age i s aki n t o

r equi r i ng empl oyers t o pay t hei r worker s a mi ni mum wage, Darby,

312 U. S. at 115, or t i me and a hal f f or over t i me, Over ni ght

Mot or Tr ansp. Co. v. Mi ssel , 316 U. S. 572, 577 ( 1942) . Thus,

our concl usi on f i t s squar el y wi t hi n t he exi st i ng cor e of t he

Supr eme Cour t s j ur i spr udence, i ncl udi ng t he admoni t i on of f i ve

j ust i ces i n NFI B t hat Congr ess may not , t hrough i t s commer ce

power , seek t o cr eate commer ce i n order t o regul ate i t .

D.

For al l t hese reasons, we concl ude that Congr ess had a

r at i onal basi s f or f i ndi ng t hat empl oyer s pr ovi si on of heal t h

i nsur ance cover age subst ant i al l y af f ect s i nt er st at e commer ce,

see Rai ch, 545 U. S. at 22, and Congr ess s r egul at i on of t hi s

act i vi t y does not r un af oul of NFI B s t eachi ngs. Accor di ngl y,

we hol d t hat t he empl oyer mandat e i s a val i d exerci se of

Congress s author i t y under t he Commerce Cl ause.


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V.

A.

Pl ai nt i f f s cont end t hat [ t ] he Taxi ng and Spendi ng or

Gener al Wel f are Cl ause does not vest Congr ess wi t h t he aut hor i t y

t o enact t he [ i ndi vi dual and empl oyer ] mandat es. Or i gi nal

Openi ng Br . 40. But i n NFI B, t he Supr eme Cour t hel d t hat t he

i ndi vi dual mandat e exact i on const i t ut ed a t ax and t hat Congr ess

act ed wel l wi t hi n t he scope of i t s const i t ut i onal l y gr ant ed

aut hor i t y i n i mposi ng i t . 132 S. Ct . at 2594- 2600. Cl ear l y,

t hen, Pl ai nt i f f s cont ent i on f ai l s wi t h r egar d t o t he i ndi vi dual

mandat e. And al t hough NFI B di d not present t he Supreme Cour t

wi t h an oppor t uni t y t o addr ess t he const i t ut i onal i t y of t he

empl oyer mandat e, we are convi nced t hat t he NFI B t axi ng power

anal ysi s i nevi t abl y l eads t o t he concl usi on t hat t he empl oyer

mandat e exact i on, t oo, i s a const i t ut i onal t ax.

B.

The Const i t ut i on unambi guousl y grant s Congr ess t he power t o

l ay and col l ect Taxes . . . . U. S. Const. ar t . I , 8, cl . 1.

The Supreme Cour t has def i ned a t ax as a pecuni ar y burden l ai d

upon i ndi vi dual s or proper t y f or t he pur pose of suppor t i ng t he

government , Uni t ed St at es v. New Yor k, 315 U. S. 510, 515

( 1942) , and descr i bed Congr ess s t axi ng power as ver y

ext ensi ve, Li cense Tax Cases, 72 U. S. 462, 471 ( 1866) .


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I n NFI B, t he Supr eme Cour t gl eaned f r om pr ecedent a

f unct i onal appr oach f or det er mi ni ng whet her an exact i on,

what ever Congr ess cal l s i t , const i t ut es a t ax. 132 S. Ct . at

2595. Under t hat appr oach, t he essent i al f eat ur e of any t ax

i s t hat i t pr oduces at l east some r evenue f or t he Gover nment .

I d. at 2594. Addi t i onal char acter i st i cs i ndi cat i ve of a t ax

i ncl ude: t he absence of a sci ent er r equi r ement , col l ect i on by

t he I nt ernal Revenue Servi ce t hr ough t he normal means of

t axat i on, and t he absence of negat i ve l egal consequences beyond

r equi r i ng payment t o t he I RS. I d. at 2595- 97. The Supr eme

Cour t i l l ust r at ed i t s f unct i onal appr oach wi t h a hypot het i cal :

Suppose Congr ess enact ed a st at ut e pr ovi di ng t hatever y t axpayer who owns a house wi t hout ener gyef f i ci ent wi ndows must pay $50 t o t he I RS. The amountdue i s adj ust ed based on f act or s such as t axabl ei ncome and j oi nt f i l i ng st at us, and i s pai d al ong wi t ht he t axpayer s i ncome t ax r etur n. Those whose i ncome

i s bel ow t he f i l i ng t hr eshol d need not pay. Ther equi r ed payment i s not cal l ed a t ax, a penal t y, or anythi ng el se. No one woul d doubt t hat t hi s l awi mposed a t ax, and was wi t hi n Congr ess s power t o t ax.. . . I nt er pr et i ng such a l aw t o be a t ax woul dhar dl y [ i ] mpos[ e] a t ax t hr ough j udi ci all egi sl at i on. Rat her , i t woul d gi ve pr acti cal ef f ectt o t he Legi sl at ur e s enact ment .

I d. at 2597- 98 ( ci t at i on omi t t ed) .

By cont r ast , t he Supr eme Cour t di smi ssed as l argel y

i r r el evant t he r egul at or y mot i ve or ef f ect of r evenue- r ai si ng

measur es. I d. at 2599. The Cour t recogni zed t hat some of i t s

ol der cases suggest ed a di chot omy between regul at ory and


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r evenue- r ai si ng t axes: A f ew of our cases pol i ced t he[ ] l i mi t s

[ of Congr ess s abi l i t y to use i t s t axi ng power t o i nf l uence

conduct] aggr essi vel y . . . . I d. ( ci t i ng Uni t ed St at es v.

But l er , 297 U. S. 1 ( 1936) ; Bai l ey v. Dr exel Fur ni t ur e Co. , 259

U. S. 20 ( 1922) ) . But t he Cour t r ej ect ed t he r evenue- ver sus-

r egul at or y di st i nct i on as def unct . I d. Accor di ngl y, t hat

Congr ess pl ai nl y desi gned t he Af f or dabl e Car e Act t o expand

heal t h i nsur ance cover age di d not i mpact t he Cour t s t axi ng

power anal ysi s i n NFI B. I d. at 2596. The Cour t di d, however ,

at t empt t o di st i ngui sh t axes f r om penal t i es, expl ai ni ng t hat i f

t he concept of penal t y means anyt hi ng, i t means puni shment f or

an unl awf ul act or omi ssi on. I d. ( quot at i on mar ks omi t t ed) .

C.

Fi r st , we exami ne the f actors t he Supr eme Cour t consi der ed

i n uphol di ng t he i ndi vi dual mandat e exact i on as a const i t ut i onal

t ax. I n appl yi ng i t s f unct i onal appr oach t o t hat exact i on,

t he Supr eme Cour t concl uded t hat i t l ooks l i ke a t ax i n many

r espect s. I d. at 2594. Fi r st and f or emost , i t wi l l pr oduce

at l east some r evenue f or t he Gover nment - - namel y about $4

bi l l i on per year by 2017. I d. Fur t her at t r i but es t hat

convi nced t he Supr eme Cour t t hat t he i ndi vi dual mandate exact i on

const i t ut es a t ax i ncl ude: i t s pa[ yment ] i nt o t he Tr easur y by

t axpayer s when t hey f i l e t hei r t ax ret ur ns; t he f act t hat i t s

amount i s det er mi ned by such f ami l i ar f actors as t axabl e i ncome,


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number of dependent s, and j oi nt f i l i ng st at us; and i t s

i ncl usi on i n t he I nt er nal Revenue Code and enf orce[ ment ] by t he

I RS, whi ch . . . must assess and col l ect i t i n t he same manner

as t axes. I d. ( ci t at i ons, quot at i on mar ks, and al t er at i ons

omi t t ed) . The Supr eme Cour t al so di st i ngui shed t he i ndi vi dual

mandat e t ax f r om an exact i on t he Cour t i nval i dat ed as an

i mper mi ssi bl e penal t y i n Bai l ey v. Dr exel Fur ni t ur e Co. The

Cour t not ed t hat t he i ndi vi dual mandat e, unl i ke t he pr ovi si on at

i ssue i n Dr exel , cont ai ns no sci ent er r equi r ement and does not

const i t ut e pr ohi bi t or y f i nanci al puni shment . I d. at 2596

( i nt er nal quot at i on mar ks omi t t ed) .

Underscor i ng t hat t he exact i on was no penal t y, t he Supr eme

Cour t st at ed t hat [ n] ei t her t he [ Af f or dabl e Car e] Act nor any

other l aw at t aches negat i ve l egal consequences t o not buyi ng

heal t h i nsurance, beyond r equi r i ng a payment t o t he I RS . . . .

[ I ] f someone chooses t o pay r at her t han obt ai n heal t h i nsurance,

t hey have f ul l y compl i ed wi t h t he l aw. I d. at 2597. The Cour t

not ed t hat an exact i on may become so puni t i ve t hat t he taxi ng

power no l onger aut hor i zes i t . I d. at 2599- 2600. But because

t he i ndi vi dual mandate exact i on easi l y passed t axi ng power

must er , t he Cour t r ef r ai ned f r om del vi ng deeper i nt o that i ssue.

I d. at 2600 ( [ T] he shar ed r esponsi bi l i t y payment s pr act i cal

charact er i st i cs pass must er as a t ax under our narr owest

i nt er pr et at i ons of t he t axi ng power . Because t he t ax at hand i s


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wi t hi n even t hose st r i ct l i mi t s, we need not her e deci de t he

pr eci se poi nt at whi ch an exact i on becomes so puni t i ve t hat t he

t axi ng power does not aut hor i ze i t . ( i nt er nal ci t at i on

omi t t ed) ) .

Fi nal l y, t he Supr eme Cour t swi f t l y di spel l ed any not i on

t hat t he i ndi vi dual mandat e const i t ut ed a di r ect t ax subj ect t o

t he const i t ut i onal appor t i onment r equi r ement . See i d. at 2598-

99; see al so U. S. Const . ar t . I , 9, cl . 4 ( No Capi t at i on, or

ot her di r ect , Tax shal l be l ai d, unl ess i n Pr opor t i on t o t he

Census . . . . ) . Havi ng r ecogni zed onl y t wo t ypes of di r ect

t axes - - t hose on i ndi vi dual s as i ndi vi dual s and t hose on

pr oper t y - - t he Supr eme Cour t hel d t hat t he i ndi vi dual mandate

payment f i t s i nt o nei t her cat egor y. NFI B, 132 S. Ct . at 2598-

99.

At t he end of t he day, t he Supreme Cour t concl uded t hat

when an exact i on need not be read t o do mor e t han i mpose a

t ax[ , ] [ t ] hat i s suf f i ci ent t o sustai n i t . I d. at 2598. The

Cour t hel d t hat because t he Af f or dabl e Car e Act s i ndi vi dual

mandat e coul d be r ead si mpl y as i mposi ng a t ax, Congress had t he

power t o enact i t . The Supr eme Cour t t hus squarel y r ej ect ed

Pl ai nt i f f s cont ent i on t hat t he i ndi vi dual mandat e exact i on i s

not a const i t ut i onal t ax.


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D.

Turni ng now t o t he empl oyer mandat e, i t i s cl ear f r om t he

pr ovi si on s f ace t hat i t possesses t he essent i al f eat ur e of

any t ax: i t pr oduces at l east some r evenue f or t he

Government . NFI B, 132 S. Ct . at 2594; see 26 U. S. C. 4980H.

I ndeed, t he Congr essi onal Budget Of f i ce est i mat ed t hat t he

empl oyer mandate exact i on wi l l gener ate $11 bi l l i on annual l y by

2019. See Li ber t y Uni v. , 671 F. 3d at 419 ( Wynn, J . , concur r i ng)

( ci t i ng Let t er f r om Dougl as W. El mendor f , Di r . , Cong. Budget

Of f i ce, t o Hon. Nancy Pel osi , Speaker , U. S. House of

Repr esent at i ves, t bl . 4 ( Mar . 20, 2010) , avai l abl e at

ht t p: / / www. cbo. gov/ f t pdocs/ 113xx/ doc11379/ AmendReconProp. pdf ) .

Looki ng beyond t he essent i al f eat ur e t o ot her

f unct i onal char act er i st i cs, t he exact i on t he Af f or dabl e Car e

Act i mposes on l arge empl oyer s l ooks l i ke a t ax i n many

r espect s. Cf . NFI B, 132 S. Ct . at 2594. The exact i on i s pai d

i nt o t he Tr easur y, f ound i n t he I nt er nal Revenue Code[ , ] and

enf or ced by t he I RS, whi ch must assess and col l ect i t i n t he

same manner as a t ax. I d. ; see al so 26 U. S. C. 4980H( d) ( 1) ,

6671( a) . Fur t her , t he empl oyer mandate l acks a sci ent er

r equi r ement , does not puni sh unl awf ul conduct , and l eaves l ar ge

empl oyer s wi t h a choi ce f or compl yi ng wi t h t he l aw - - pr ovi de

adequat e, af f ordabl e heal t h cover age t o empl oyees or pay a t ax.

26 U. S. C. 4980H( a) - ( b) . And f i nal l y, because t he exact i on


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t axes nei t her i ndi vi dual s as such nor pr oper t y, i t i s not a

di r ect t ax subj ect t o t he appor t i onment r equi r ement . Cf . NFI B,

132 S. Ct . at 2598- 99.

Rel yi ng excl usi vel y on Dr exel , Li ber t y cont ends t hat t he

empl oyer mandat e exact i on never t hel ess cr oss[ es] t he l i ne f r om

a r easonabl e payment t o a pot ent i al l y dest r uct i ve

unconst i t ut i onal penal t y. Post - Remand Openi ng Br . 24- 25.

Fat al l y f or Li ber t y s ar gument , Dr exel i s easi l y di st i ngui shabl e

f r om t he case at hand.

I n Dr exel , t he Supr eme Cour t i nval i dat ed a so- cal l ed t ax

on empl oyi ng chi l d l abor er s as an i mper mi ssi bl e penal t y. See

NFI B, 132 S. Ct . at 2595 ( ci t i ng Dr exel , 259 U. S. 20) . The

Supr eme Cour t di d so ost ensi bl y because t he penal t y: ( 1)

car r i ed a sci ent er r equi r ement t ypi cal of puni t i ve st at ut es,

because Congr ess of t en wi shes t o puni sh onl y t hose who

i nt ent i onal l y br eak t he l aw; ( 2) i mposed an exceedi ngl y heavy

f i nanci al bur den - - 10 per cent of an of f ender s net i ncome - -

even i f t he of f ender empl oyed onl y one chi l d l abor er f or onl y

one day of t he year ; and ( 3) was enf or ced at l east i n par t by

t he Depart ment of Labor , an agency r esponsi bl e not f or

col l ect i ng r evenue but r at her f or puni shi ng l abor l aw

vi ol at i ons. NFI B, 132 S. Ct . at 2595 ( ci t i ng Dr exel , 259 U. S.

at 36- 37) . I n st ar k cont r ast t o t he penal t y t he Cour t s t r uck

down i n Dr exel , t he empl oyer mandat e exact i on i s devoi d of any


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sci ent er r equi r ement and does not puni sh unl awf ul behavi or .

Fur t her , t he exact i on i s col l ect ed by the Secret ar y of t he

Tr easur y i n t he same manner as a t ax. 26 U. S. C. 4980H( d) ( 1) ,

6671( a) .

Mor eover , t he amount of t he empl oyer mandat e

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