PUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT


                              No. 10-2347



LIBERTY   UNIVERSITY,   INCORPORATED,    a   Virginia   Nonprofit
Corporation; MICHELE G. WADDELL; JOANNE V. MERRILL,

                Plaintiffs − Appellants,

          and

MARTHA A. NEAL; DAVID STEIN, M.D.; PAUSANIAS ALEXANDER; MARY T.
BENDORF; DELEGATE KATHY BYRON; JEFF HELGESON,

                Plaintiffs,

          v.

TIMOTHY GEITHNER, Secretary of the Treasury of the United
States, in his official capacity; KATHLEEN SEBELIUS, Secretary
of the United States Department of Health and Human Services, in
her official capacity; HILDA L. SOLIS, Secretary of the United
States Department of Labor, in her official capacity; ERIC H.
HOLDER, JR., Attorney General of the United States, in his
official capacity,

                Defendants − Appellees.

−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−-------

MOUNTAIN STATES LEGAL FOUNDATION; REVERE AMERICA FOUNDATION,

                Amici Supporting Appellants,

AMERICAN CIVIL LIBERTIES UNION; AMERICAN CIVIL LIBERTIES UNION
OF VIRGINIA, INCORPORATED; AMERICAN NURSES ASSOCIATION; AMERICAN
ACADEMY OF PEDIATRICS, INCORPORATED; AMERICAN MEDICAL STUDENT
ASSOCIATION; CENTER FOR AMERICAN PROGRESS, d/b/a Doctors for
America;   NATIONAL  HISPANIC   MEDICAL   ASSOCIATION;  NATIONAL
PHYSICIANS ALLIANCE; HARRY REID, Senate Majority Leader; NANCY
PELOSI, House Democratic Leader; DICK DURBIN, Senator, Assistant
Majority Leader; CHARLES SCHUMER, Senator, Conference Vice
Chair; PATTY MURRAY, Conference Secretary; MAX BAUCUS, Senator,
Committee on Finance Chair; TOM HARKIN, Senator, Committee on
Health, Education, Labor and Pensions Chair; PATRICK LEAHY,
Senator, Committee on the Judiciary Chair; BARBARA MIKULSKI,
Senator, HELP Subcommittee on Retirement and Aging Chair; JOHN
D. ROCKEFELLER, IV, Senator, Committee on Commerce Chair; STENY
HOYER, Representative, House Democratic Whip; JAMES E. CLYBURN,
Representative, Democratic Assistant Leader; JOHN B. LARSON,
Representative, Chair of Democratic Caucus; XAVIER BECERRA,
Representative, Vice Chair of Democratic Caucus; JOHN D.
DINGELL, Representative, Sponsor of House Health Care Reform
Legislation; HENRY A. WAXMAN, Representative, Ranking Member,
Committee   on   Energy   and     Commerce;   FRANK   PALLONE,   JR.,
Representative, Ranking Member, Commerce Subcommittee on Health;
SANDER M. LEVIN, Representative, Ranking Member, Committee on
Ways and Means; FORTNEY PETE STARK, Representative, Ranking
Member, Ways and Means Subcommittee on Health; ROBERT E.
ANDREWS, Representative, Ranking Member, Education and Workforce
Subcommittee on Health; JERROLD NADLER, Representative, Ranking
Member,    Subcommittee     on     Constitution;    GEORGE    MILLER,
Representative, Ranking Member, Education and the Workforce
Committee; JOHN CONYERS, JR., Representative, Ranking Member,
Committee on the Judiciary; JACK M. BALKIN, Knight Professor of
Constitutional Law and the First Amendment, Yale Law School;
GILLIAN E. METZGER, Professor of Law, Columbia Law School;
TREVOR W. MORRISON, Professor of Law, Columbia Law School;
AMERICAN ASSOCIATION OF PEOPLE WITH DISABILITIES; THE ARC OF THE
UNITED STATES; BREAST CANCER ACTION; FAMILIES USA; FRIENDS OF
CANCER RESEARCH; MARCH OF DIMES FOUNDATION; MENTAL HEALTH
AMERICA; NATIONAL BREAST CANCER COALITION; NATIONAL ORGANIZATION
FOR RARE DISORDERS; NATIONAL PARTNERSHIP FOR WOMEN AND FAMILIES;
NATIONAL SENIOR CITIZENS LAW CENTER; NATIONAL WOMEN'S HEALTH
NETWORK; THE OVARIAN CANCER NATIONAL ALLIANCE; AMERICAN HOSPITAL
ASSOCIATION;    ASSOCIATION     OF    AMERICAN   MEDICAL    COLLEGES;
FEDERATION OF AMERICAN HOSPITALS; NATIONAL ASSOCIATION OF PUBLIC
HOSPITALS AND HEALTH SYSTEMS; CATHOLIC HEALTH ASSOCIATION OF THE
UNITED STATES; NATIONAL ASSOCIATION OF CHILDREN'S HOSPITALS;
CHRISTINE O. GREGOIRE, Governor; DR. DAVID CUTLER, Deputy, Otto
Eckstein Professor of Applied Economics, Harvard University; DR.
HENRY AARON, Senior Fellow, Economic Studies Bruce and Virginia
MacLaury Chair, The Brookings Institution; DR. GEORGE AKERLOF,
Koshland     Professor      of       Economics,     University     of
California−Berkeley, 2001 Nobel Laureate; DR. STUART ALTMAN, Sol
C. Chaikin Professor of National Health Policy, Brandeis
University; DR. KENNETH ARROW, Joan Kenney Professor of
Economics   and   Professor    of   Operations   Research,   Stanford

                                 2
University 1972 Nobel Laureate; DR. SUSAN ATHEY, Professor of
Economics, Harvard University, 2007 Recipient of the John Bates
Clark Medal for the most influential American economist under
age 40; DR. LINDA J. BLUMBERG, Senior Fellow, The Urban
Institute, Health Policy Center; DR. LEONARD E. BURMAN, Daniel
Patrick Moynihan Professor of Public Affairs at the Maxwell
School, Syracuse University; DR. AMITABH CHANDRA, Professor of
Public Policy Kennedy School of Government, Harvard University;
DR. MICHAEL CHERNEW, Professor, Department of Health Care
Policy, Harvard Medical School; DR. PHILIP COOK, ITT/Sanford
Professor of Public Policy, Professor of Economics, Duke
University;   DR.   CLAUDIA    GOLDIN,   Henry   Lee   Professor  of
Economics, Harvard University; DR. TAL GROSS, Department of
Health Policy and Management, Mailman School of Public Health,
Columbia   University;    DR.    JONATHAN   GRUBER,   Professor   of
Economics, MIT; DR. JACK HADLEY, Associate Dean for Finance and
Planning, Professor and Senior Health Services Researcher,
College of Health and Human Services, George Mason University;
DR. VIVIAN HO, Baker Institute Chair in Health Economics and
Professor of Economics, Rice University; DR. JOHN F. HOLAHAN,
Director, Health Policy Research Center, The Urban Institute;
DR. JILL HORWITZ, Professor of Law and Co   −Director of the
Program in Law & Economics, University of Michigan School of
Law; DR. LAWRENCE KATZ, Elisabeth Allen Professor of Economics,
Harvard University; DR. FRANK LEVY, Rose Professor of Urban
Economics, Department of Urban Studies and Planning, MIT; DR.
PETER LINDERT, Distinguished Research Professor of Economics,
University of California, Davis; DR. ERIC MASKIN, Albert O.
Hirschman Professor of Social Science at the Institute for
Advanced Study, Princeton University, 2007 Nobel Laureate; DR.
ALAN C. MONHEIT, Professor of Health Economics, School of Public
Health, University of Medicine & Dentistry of New Jersey; DR.
MARILYN MOON, Vice President and Director Health Program,
American Institutes for Research; DR. RICHARD J. MURNANE,
Thompson Professor of Education and Society, Harvard University;
DR. LEN M. NICHOLS, George Mason University; DR. HAROLD POLLACK,
Helen   Ross   Professor    of    Social   Service   Administration,
University of Chicago; DR. MATTHEW RABIN, Edward G. and Nancy S.
Jordan      Professor      of      Economics,      University     of
California−Berkeley, 2001 Recipient of the John Bates Clark
Medal for the most influential American economist under age 40;
DR. JAMES B. REBITZER, Professor of Economics, Management, and
Public Policy, Boston University School of Management; DR.
MICHAEL REICH, Professor of Economics, University of California
at Berkeley; DR. THOMAS RICE, Professor, UCLA School of Public
Health; DR. MEREDITH ROSENTHAL, Department of Health Policy and
Management, Harvard University, Harvard School of Public Health;

                                 3
DR. CHRISTOPHER RUHM, Professor of Public Policy and Economics,
Department of Economics, University of Virginia; DR. JONATHAN
SKINNER,   Professor  of   Economics,   Dartmouth  College,   and
Professor of Community and Family Medicine, Dartmouth Medical
School; DR. KATHERINE SWARTZ, Professor, Department of Health
Policy and Management, Harvard School of Public Health; DR.
KENNETH WARNER, Dean of the School of Public Health and Avedis
Donabedian Distinguished University Professor of Public Health,
University of Michigan; DR. PAUL N. VAN DE WATER, Senior Fellow,
Center on Budget and Policy Priorities; DR. STEPHEN ZUCKERMAN,
Senior Fellow, The Urban Institute; NATIONAL WOMEN'S LAW CENTER;
AMERICAN ASSOCIATION OF UNIVERSITY WOMEN; AMERICAN FEDERATION OF
STATE, COUNTY AND MUNICIPAL EMPLOYEES; AMERICAN MEDICAL WOMEN'S
ASSOCIATION; ASIAN & PACIFIC ISLANDER AMERICAN HEALTH FORUM;
BLACK WOMEN'S HEALTH IMPERATIVE; CHILDBIRTH CONNECTION; IBIS
REPRODUCTIVE HEALTH; INSTITUTE OF SCIENCE AND HUMAN VALUES;
MARYLAND WOMEN'S COALITION FOR HEALTH CARE REFORM; MENTAL HEALTH
AMERICA; NATIONAL ASIAN PACIFIC AMERICAN WOMEN'S FORUM; NATIONAL
ASSOCIATION OF SOCIAL WORKERS; NATIONAL COALITION FOR LGBT
HEALTH; NATIONAL COUNCIL OF JEWISH WOMEN; NATIONAL COUNCIL OF
WOMEN'S ORGANIZATIONS; NATIONAL EDUCATION ASSOCIATION; NATIONAL
LATINA INSTITUTE FOR REPRODUCTIVE HEALTH; OLDER WOMEN'S LEAGUE;
PHYSICIANS FOR REPRODUCTIVE CHOICE AND HEALTH; RAISING WOMEN'S
VOICES; SARGENT SHRIVER NATIONAL CENTER ON POVERTY LAW;
SOUTHWEST WOMEN'S LAW CENTER; WIDER OPPORTUNITIES FOR WOMEN;
WOMEN'S LAW CENTER OF MARYLAND, INCORPORATED; WOMEN'S LAW
PROJECT,

                Amici Supporting Appellees.


Appeal from the United States District Court for the Western
District of Virginia, at Lynchburg.     Norman K. Moon, Senior
District Judge. (6:10-cv-00015-nkm-mfu)


Argued:   May 10, 2011               Decided:   September 8, 2011


Before MOTZ, DAVIS, and WYNN, Circuit Judges.


Vacated and remanded by published opinion. Judge Motz wrote the
opinion, in which Judge Wynn concurred.     Judge Wynn wrote a
concurring opinion. Judge Davis wrote a dissenting opinion.



                                 4
ARGUED: Mathew D. Staver, LIBERTY COUNSEL, Orlando, Florida, for
Appellants.    Neal Kumar Katyal, UNITED STATES DEPARTMENT OF
JUSTICE, Washington, D.C., for Appellees.    ON BRIEF: Anita L.
Staver, LIBERTY COUNSEL, Orlando, Florida; Stephen M. Crampton,
Mary E. McAlister, LIBERTY COUNSEL, Lynchburg, Virginia, for
Appellants.    Tony West, Assistant Attorney General, Beth S.
Brinkmann, Deputy Assistant Attorney General, Mark B. Stern,
Alisa B. Klein, Samantha L. Chaifetz, UNITED STATES DEPARTMENT
OF JUSTICE, Washington, D.C.; Timothy J. Heaphy, United States
Attorney, Roanoke, Virginia, for Appellees.        Joel Spector,
MOUNTAIN STATES LEGAL FOUNDATION, Lakewood, Colorado, for
Mountain States Legal Foundation, Amicus Supporting Appellants.
Brian S. Koukoutchos, Mandeville, Louisiana; Charles J. Cooper,
David H. Thompson, COOPER & KIRK, PLLC, Washington, D.C., for
Revere   America    Foundation, Amicus   Supporting   Appellants.
Rebecca Glenberg, AMERICAN CIVIL LIBERTIES UNION OF VIRGINIA,
Richmond, Virginia; Daniel Mach, Heather L. Weaver, AMERICAN
CIVIL LIBERTIES UNION, Washington, D.C.; Andrew D. Beck,
Brigitte Amiri, AMERICAN CIVIL LIBERTIES UNION, New York, New
York, for American Civil Liberties Union and American Civil
Liberties Union of Virginia, Incorporated, Amici Supporting
Appellees.     Ian Millhiser, CENTER FOR AMERICAN PROGRESS,
Washington, D.C., for American Nurses Association, American
Academy of Pediatrics, Incorporated, American Medical Student
Association, Center for American Progress, d/b/a Doctors for
America, National Hispanic Medical Association, and National
Physicians Alliance, Amici Supporting Appellees.        Professor
Walter Dellinger, Washington, D.C.; Professor H. Jefferson
Powell, GEORGE WASHINGTON UNIVERSITY LAW SCHOOL, Washington,
D.C., for Senate Majority Leader Harry Reid, House Democratic
Leader Nancy Pelosi, and Congressional Leaders and Leaders of
Committees of Relevant Jurisdiction, Amici Supporting Appellees.
Gillian E. Metzger, Trevor W. Morrison, New York, New York;
Andrew J. Pincus, Charles A. Rothfeld, Paul W. Hughes, Michael
B.   Kimberly,    MAYER   BROWN  LLP,  Washington,    D.C.,   for
Constitutional Law Professors, Amici Supporting Appellees.
Rochelle Bobroff, Simon Lazarus, NATIONAL SENIOR CITIZENS LAW
CENTER, Washington, D.C., for American Association of People
with Disabilities, The ARC of the United States, Breast Cancer
Action, Families USA, Friends of Cancer Research, March of Dimes
Foundation, Mental Health America, National Breast Cancer
Coalition, National Organization for Rare Disorders, National
Partnership for Women and Families, National Senior Citizens Law
Center, National Women’s Health Network, and The Ovarian Cancer
National Alliance, Amici Supporting Appellees.         Sheree R.
Kanner, Catherine E. Stetson, Dominic F. Perella, Michael D.
Kass, Sara A. Kraner, HOGAN LOVELLS US LLP, Washington, D.C.;

                               5
Melinda Reid Hatton, Maureen D. Mudron, AMERICAN HOSPITAL
ASSOCIATION,    Washington,     D.C.;   Ivy     Baer,    Karen   Fisher,
ASSOCIATION OF AMERICAN MEDICAL COLLEGES, Washington, D.C.;
Jeffrey    G.   Micklos,    FEDERATION      OF    AMERICAN    HOSPITALS,
Washington, D.C.; Larry S. Gage, President, NATIONAL ASSOCIATION
OF PUBLIC HOSPITALS AND HEALTH SYSTEMS, Washington, D.C.; Lisa
Gilden, Vice President, General Counsel/Compliance Officer, THE
CATHOLIC HEALTH ASSOCIATION OF THE UNITED STATES, Washington,
D.C.; Lawrence A. McAndrews, President and Chief Executive
Officer,    NATIONAL    ASSOCIATION      OF    CHILDREN’S     HOSPITALS,
Alexandria,    Virginia,    for    American    Hospital     Association,
Association of American Medical Colleges, Federation of American
Hospitals, National Association of Public Hospitals and Health
Systems, Catholic Health Association of the United States, and
National Association of Children’s Hospitals, Amici Supporting
Appellees. Kristin Houser, Adam Berger, Rebecca J. Roe, William
Rutzick, SCHROETER, GOLDMARK & BENDER, Seattle, Washington, for
Christine O. Gregoire, Governor of Washington, Amicus Supporting
Appellees.    Richard L. Rosen, ARNOLD & PORTER LLP, Washington,
D.C., for Economic Scholars, Amici Supporting Appellees. Marcia
D. Greenberger, Emily J. Martin, Judith G. Waxman, Lisa
Codispoti, NATIONAL WOMEN’S LAW CENTER; Melissa Hart, UNIVERSITY
OF COLORADO LAW SCHOOL, Boulder, Colorado, for National Women's
Law Center, American Association of University Women, Amerian
Federation of State, County and Municipal Employees, American
Medical Women's Association, Asian & Pacific Islander American
Health Forum; Black Women's Health Imperative, Childbirth
Connection, Ibis Reproductive Health, Institute of Science and
Human Values, Maryland Women's Coalition for Health Care Reform,
Mental Health America, National Asian Pacific American Women's
Forum,   National    Association     of   Social    Workers,    National
Coalition for LGBT Health, National Council of Jewish Women,
National Council of Women's Organizations, National Education
Association, National Latina Institute for Reproductive Health,
Older Women's League, Physicians for Reproductive Choice and
Health, Raising Women's Voices, Sargent Shriver National Center
on   Poverty    Law,    Southwest     Women's     Law    Center,   Wider
Opportunities for Women, Women's Law Center of Maryland,
Incorporated,    and   Women's    Law    Project,     Amici   Supporting
Appellees.




                                   6
DIANA GRIBBON MOTZ, Circuit Judge:

       Liberty         University       and      certain    individuals       brought       this

suit     to      enjoin,          as   unconstitutional,            enforcement       of     two

provisions            of    the      recently-enacted          Patient      Protection       and

Affordable        Care        Act.        The     challenged       provisions       amend    the

Internal Revenue Code by adding:                        (1) a “penalty” payable to the

Secretary of the Treasury by an individual taxpayer who fails to

maintain         adequate         health        insurance      coverage       and     (2)     an

“assessable payment” payable to the Secretary of the Treasury by

a “large employer” if at least one of its employees receives a

tax credit or government subsidy to offset payments for certain

health-related              expenses.           The     district    court     upheld        these

provisions, ruling that both withstood constitutional challenge.

Because this suit constitutes a pre-enforcement action seeking

to restrain the assessment of a tax, the Anti-Injunction Act

strips      us    of       jurisdiction.          Accordingly,       we   must    vacate     the

judgment         of    the       district       court    and    remand      the     case    with

instructions to dismiss for lack of jurisdiction.



                                                  I.

                                                  A.

       On     March        23,    2010,     the    President       signed    into     law    the

Affordable Care Act, a comprehensive bill spanning 900 pages,

which institutes numerous changes to the financing of health

                                                   7
care in the United States.              See Pub. L. No. 111-148.           Liberty

and some individuals (collectively “plaintiffs”) challenge only

two provisions of the Act.

                                         1.

        The first amends the Internal Revenue Code (sometimes “the

Code”) by adding § 5000A (“the individual mandate”). 1                    See 

      The    individual      mandate    requires      an   “applicable

individual”      to    “ensure”     that      beginning       after   2013,    the

individual     “is     covered    under       minimum   essential      coverage.”

I.R.C. § 5000A(a).            The individual mandate lists a number of

health insurance programs that qualify for “minimum essential

coverage”:     government- and employer-sponsored plans, individual

market plans, and other health plans recognized as adequate.

§ 5000A(f)(1).        If an individual “taxpayer” fails to obtain the

required coverage, the “taxpayer” is subject to a “penalty.”

§ 5000A(b)(1).

      The Affordable Care Act uses the Internal Revenue Code’s

existing tax collection system to implement the penalty.                    Only a

“taxpayer” is subject to the penalty, 

Code defines

a   “taxpayer”   as    “any    person    subject   to   any    internal    revenue

tax.”     

       A taxpayer must include the penalty

      1
       The Affordable Care Act itself refers to the provision as
the “Requirement to maintain minimum essential coverage.”   Pub.
L. No. 111-148, § 1501. Because plaintiffs refer to it as the
individual mandate throughout their complaint and briefs, we
often do so as well.
                                          8
payment       with           his      regularly-filed               income           tax     return.

§ 5000A(b)(2).            The taxpayer owes the penalty only if he fails

to maintain minimum coverage for a continuous period of three

months or longer.                  § 5000A(e)(4)(A).                The individual mandate

also   makes       a     taxpayer      liable       for      a     penalty      imposed      on    his

“dependent,” as defined in § 152 of the Code.                                 § 5000A(b)(3)(A).

Akin to the joint liability of spouses for income taxes, I.R.C.

§ 6013(d)(3), a taxpayer is also jointly liable for a spouse’s

penalty if filing a joint income tax return.                                 § 5000A(b)(3)(B).

       A taxpayer subject to the penalty owes the greater of:                                      (1)

a    “flat   dollar          amount”       equal       to    $95    for       the     taxable     year

beginning 2014, $325 for 2015, $695 for 2016, and $695 indexed

to   inflation         for     every       year    thereafter;           or    (2)     a   graduated

percentage         (1%    in       2014,    2%     in       2015,       and    2.5%    every      year

thereafter) of the amount by which the “taxpayer’s household

income,” as defined by the Code, exceeds “gross income specified

in” I.R.C. § 6012(a)(1) (the amount of income triggering the

requirement to file a tax return).                          See § 5000A(c)(2), (3).                But

the penalty may not exceed the cost of the “national average

premium      for       qualified       health      plans”          of    a    certain      level    of

coverage.      § 5000A(c)(1).

       Section         5000A(g)(1)          authorizes             the       Secretary      of     the

Treasury (“the Secretary”) to assess and collect the penalty “in

the same manner as an assessable penalty under subchapter B of

                                                   9
chapter 68” of the Internal Revenue Code, which in turn contains

penalties that the Secretary is to “assess[] and collect[] in

the same manner as taxes.”                

                Accordingly, the

Affordable Care Act provides the Secretary with all the civil

enforcement tools of the Internal Revenue Code subject to only

one express limitation:            the Secretary may not seek collection

of the penalty by “fil[ing] [a] notice of lien with respect to

any    property”    or     “levy[ing]          on    [a       taxpayer’s]             property.”

§ 5000A(g)(2)(B).

                                              2.

       The other provision of the Act challenged by plaintiffs

amends     the   Internal       Revenue       Code       by    adding        §       4980H    (the

“employer    mandate”).          Pub.     L.       No.    111-148,       §       1513.        That

provision    imposes      an    “assessable         payment”        on   “any         applicable

large employer” if a health exchange notifies the employer that

at least one “full-time employee” obtains an “applicable premium

tax credit or cost-sharing reduction.”                        I.R.C. § 4980H(a), (b).

An    “applicable   premium       tax    credit          or   cost-sharing            reduction”

consists    of   either    (1)     a    tax    credit         to   assist        a    low-income

individual with financing premiums for qualified health plans or

(2) a government subsidy to help finance an individual’s share

of    out-of-pocket       health       care        costs,      as    provided            by   the

Affordable Care Act.           § 4980H(c)(3).



                                              10
       Section 4980H calculates the assessable payment differently

depending         on     whether     the     employer      offers         adequate     health

insurance coverage to its employees.                      If the employer fails to

offer       adequate       coverage        to     its   full-time          employees,       the

“assessable            payment”     is     calculated         by       multiplying     $2,000

(increased yearly by the rate of inflation), by the number of

total full-time employees, prorated over the number of months an

employer is liable.               § 4980H(a), (c)(1), (c)(5).                 If, however,

the     employer         does     offer     adequate      insurance         coverage,       the

“assessable payment” is calculated by multiplying $3,000 by the

number of employees receiving the “applicable premium tax credit

or    cost-sharing        reduction,”        prorated     on       a    monthly    basis    and

subject to a cap.           § 4980H(b)(1), (2).

       A large employer must pay these assessments “upon notice

and demand by the Secretary.”                    § 4980H(d)(1).          The Secretary has

the authority to assess and collect the exaction in the “same

manner as an assessable penalty” provided by subchapter B of

Chapter 68 of the Code.              

   March       23,    2010,      the    day   the    President          signed    the

Affordable Care Act into law, plaintiffs filed this action to

enjoin      the        Secretary     and     other      government         officials       from

enforcing the Act.                In their complaint, plaintiffs allege the

following facts.

                                                 11
       One    of    the    individual      plaintiffs,          Michele        G.    Waddell,

asserts that she “has made a personal choice not to purchase

health insurance coverage” and does not want to do so in the

future.       Waddell maintains that she pays for needed health care

services as she uses them.               Another individual plaintiff, Joanne

V. Merill, asserts that she too has “elected not to purchase

health insurance coverage” and does not want to do so.                                    Both

Waddell and Merill contend that the individual mandate requires

them    “to    either     pay    for    health      insurance    coverage”           or   “face

significant penalties.”

       They    seek       to    enjoin    the       Secretary     from     assessing        or

collecting the exaction prescribed for failure to comply with

the individual mandate.                 Waddell and Merill assert that, “as

part    of    his   oversight      of    the    Internal     Revenue      Service,”        the

Secretary has the “power to collect” the penalties “as part of

an     individual[‘s]          income    tax     return.”         They     describe        the

individual mandate as imposing a “penalty in the form of a tax

. . . on any taxpayer” who fails to maintain minimum essential

coverage.          They further allege that the “Taxing and Spending

Clause . . . only grants Congress the power to impose taxes upon

certain purchases, not to impose taxes upon citizens who choose

not to purchase something such as health insurance.”                                Similarly,

Waddell       and    Merrill      repeatedly        assert      that     the        individual

mandate assesses “a direct tax that is not apportioned according

                                               12
to   Census    data       or    other     population-based         measurement,”        in

violation of Congress’s Taxing Power.                  Accordingly, they ask to

be   “free    from       improper      taxation    [that]     is    likely    to     cause

significant financial hardships.”                   They also contend that the

individual     mandate          exceeds     Congress’s       authority       under    the

Commerce Clause of the Constitution.

      Liberty,       a     private        Christian     university        located      in

Lynchburg, Virginia, challenges the “employer mandate” as a tax

that will impose “tax penalties” on it because it has employees

who will likely receive a tax credit or cost-sharing reduction.

Liberty alleges that these “significant penalties” will cause it

to   suffer    “substantial            financial    hardship.”          According       to

Liberty,     the     employer       mandate      constitutes       an   “unapportioned

direct tax upon employers in violation of” the Constitution, and

“[i]mposition      of     the    tax    infringes     upon   Liberty      University’s

rights to be free from improper taxation.”                    Liberty also asserts

that the employer mandate exceeds Congress’s authority under the

Commerce Clause.

      For relief, plaintiffs ask for an injunction restraining

all defendants, including the Secretary of the Treasury, from

“acting in any manner to implement, enforce, or otherwise act

under the authority” of the Affordable Care Act.                          They seek a

declaration that the Act is unconstitutional and assert that



                                            13
they have no “adequate remedy at law to correct” the continuing

constitutional violation.

        Before the district court, the Secretary moved to dismiss

the   case,     contending      inter       alia    that    the     federal     tax     Anti-

Injunction      Act    (AIA),    I.R.C.       §    7421(a),    barred      the    district

court from reaching the merits because the challenged penalty is

to “be assessed and collected” in the same manner as a tax and

other penalties to which the AIA clearly applies.                                The court

rejected this argument, holding that Congress did not intend to

“convert the[se] penalties into taxes for purposes of the Anti-

Injunction Act.”         The court reasoned that (1) Congress did not

specifically extend the term “tax” in the AIA to include the

challenged exactions; and (2) the exactions did not qualify as a

“tax”     for   purposes       of     the    AIA     because       they   “function       as

regulatory penalties.”              After rejecting the AIA argument and the

Secretary’s other jurisdictional contentions, the district court

concluded that the challenged exactions are “valid exercise[s]

of federal power under the Commerce Clause” and dismissed the

complaint for failure to state a claim upon which relief can be

granted.

        Plaintiffs     then     filed       this    appeal,       asserting      that    the

district      court    erred    as     a    matter     of    law    in    upholding      the

Affordable      Care   Act.         The    Secretary       argued    to   the    contrary,

specifically declining to attack the district court’s “threshold

                                             14
determination[]” as to “the applicability of the Anti-Injunction

Act.”     The    Secretary       did,    however,            maintain     that     Congress’s

Taxing Power under Article I, § 8, cl. 1 of the Constitution

authorized      the   exactions        imposed      by       the    challenged       mandates

because    those      mandates     “operate             as    taxes.”            Because     the

Secretary’s      contention       as    to        the    constitutionality            of     the

mandates under the Taxing Power suggested that the AIA bar might

apply to this suit, we ordered the parties to file supplemental

briefs    to    address    the    applicability              of    the    AIA.      In     these

briefs, both the Secretary and plaintiffs contend that the AIA

does not bar this action.           We disagree.

       We initially explain why we believe that the plain language

of the AIA bars our consideration of this challenge.                                 We then

address the parties’ contrary arguments:                          first those offered by

the Secretary (and largely adopted by the dissent), then those

advanced by plaintiffs.



                                          II.

                                             A.

       We note at the outset the inescapable fact that federal

courts are courts of limited jurisdiction.                              They possess “only

that power authorized by Constitution and statute, which is not

to be expanded by judicial decree.”                          See Kokkonen v. Guardian

Life    Ins.    Co.   of   Am.,    

,      377    (1994)     (internal

                                             15
citations     omitted).             Accordingly,        a   federal       court   has   an

“independent       obligation”        to        investigate      the     limits   of    its

subject-matter jurisdiction.               See Arbaugh v. Y&H Corp., 

, 514 (2006).              This is so even when the parties “either

overlook     or    elect      not     to    press”       the     issue,    Henderson    v.

Shinseki, 

, 1202 (2011), or attempt to consent to

a court’s jurisdiction, see Sosna v. Iowa, 

, 398

(1975).           Our     obligation        to        examine     our     subject-matter

jurisdiction is triggered whenever that jurisdiction is “fairly

in doubt.”       Ashcroft v. Iqbal, 

, 1945 (2009).

      As part of the Internal Revenue Code, the AIA provides that

“no   suit   for        the   purpose      of    restraining       the    assessment    or

collection of any tax shall be maintained in any court by any

person.”     I.R.C. § 7421(a). 2            The parties concede, as they must,

that,     when    applicable,        the        AIA    divests    federal     courts    of

subject-matter jurisdiction.                The Supreme Court has explicitly

so held.     See Enochs v. Williams Packing & Navigation Co., 

, 5 (1962).




      2
       The Declaratory Judgment Act authorizes a federal court to
issue a declaratory judgment “except with respect to Federal
taxes.” 28 U.S.C. § 2201(a). In Bob Jones Univ. v. Simon, 

, 732 n.7 (1974), the Court held that “the federal tax
exception to the Declaratory Judgment Act is at least as broad
as the Anti-Injunction Act.” Accordingly, our holding as to the
Anti-Injunction Act applies equally to plaintiffs’ request for
declaratory relief.
                                                16
     By its terms the AIA bars suits seeking to restrain the

assessment or collection of a tax.                 Thus, the AIA forbids only

pre-enforcement        actions       brought    before    the   Secretary     of    the

Treasury or his delegee, the Internal Revenue Service (IRS), has

assessed or collected an exaction.               A taxpayer can always pay an

assessment, seek a refund directly from the IRS, and then bring

a   refund   action      in   federal      court.         See   United     States    v.

Clintwood Elkhorn Mining Co., 

, 4-5 (2008).

     The parties recognize that plaintiffs here have brought a

pre-enforcement        action.          Moreover,        although     Congress      has

provided numerous express exceptions to the AIA bar, see I.R.C.

§ 7421(a), the parties do not claim that any of these exceptions

applies here.      Resolution of the case at hand therefore turns on

whether plaintiffs’ suit seeks to restrain the assessment or

collection of “any tax.”

                                          B.

     A    “tax,   in    the   general      understanding        of   the   term,”   is

simply “an exaction for the support of the government.”                       United

States v. Butler, 

, 61 (1936).                   An exaction qualifies

as a tax even when the exaction raises “obviously negligible”

revenue    and    furthers       a    revenue    purpose    “secondary”      to     the

primary goal of regulation.              United States v. Sanchez, 

, 44 (1950); see also Bob 

n.12.                          Thus,

the term “tax” can describe a wide variety of exactions.                            See

                                          17
Trailer Marine Transp. Corp. v. Rivera Vazquez, 

, 5

(1st Cir. 1992) (surveying cases that have regularly “applied

the label ‘tax’” to a “range of exactions,” even those that

“might not be commonly described as taxes”).

      The Supreme Court has concluded that the AIA uses the term

“tax” in its broadest possible sense.                 This is so because the

AIA aims to ensure “prompt collection of . . . lawful revenue”

by preventing taxpayers from inundating tax collectors with pre-

enforcement lawsuits over “disputed sums.”                     Williams 

.         Thus, an exaction constitutes a “tax” for

purposes of the AIA so long as the method prescribed for its

assessment    conforms   to   the    process     of    tax   enforcement.        See

Snyder v. Marks, 

, 192 (1883) (defining a “tax” in

the AIA as any exaction “in a condition [of being] collected as

a   tax”).    Specifically,        the   AIA   prohibits       a   pre-enforcement

challenge to any “exaction [that] is made under color of their

offices by revenue officers charged with the general authority

to assess and collect the revenue.”              Phillips v. CIR, 

, 596 (1931) (citing 

); see also Bob

(applying the AIA bar when IRS action is

authorized by “requirements of the [Internal Revenue Code]”).

      The Supreme Court has steadfastly adhered to this broad

construction,     notably     in    holding     that     the       AIA   bars   pre-

enforcement     challenges    to     exactions    that       do    not   constitute

                                         18
“taxes” under the Constitution.              Compare Bailey v. George, 

(1922) with Bailey v. Drexel Furniture Co., 

(1922).      In Bailey v. Drexel Furniture, a refund action, the

Court held unconstitutional as beyond Congress’s Taxing Power a

“so-called tax,” finding it was in truth “a mere penalty, with

the characteristics of regulation and 

.     Yet the Court held the very same provision a “tax” for

purposes of the AIA and so dismissed a pre-enforcement challenge

to the exaction.         See Bailey v. 

.                    In

recent years, the Court has expressly affirmed these holdings,

reiterating that the term “tax” in the AIA encompasses penalties

that function as mere “regulatory measure[s] beyond the taxing

power   of   Congress”      and   Article    I   of   the    Constitution.      Bob

.

      The    Court’s     broad    interpretation        of    the    AIA   to   bar

interference with the assessment of any exaction imposed by the

Code entirely accords with, and indeed seems to be mandated by,

other provisions of the Internal Revenue Code.                  The AIA does not

use   the    term   “tax”    in   a   vacuum;     rather,     it    protects    from

judicial interference the “assessment . . . of any tax.”                     I.R.C.

§ 7421(a) (emphasis added).            The Secretary’s authority to make

such an “assessment . . . of any tax” derives directly from

another provision in the Code, which charges the Secretary with

making “assessments of all taxes (including interest, additional

                                        19
amounts, additions to the tax, and assessable penalties) imposed

by this title.”          § 6201(a) (emphases added); see also § 6202

(“assessment of any internal revenue tax” includes assessment of

“penalties”).          Thus,     for   purposes       of    the    very    assessment

authority      that    the     AIA   protects,     Congress       made    clear    that

“penalties”      (as    well    as   “interest,      additional      amounts,     [and]

additions to the tax”) count as “taxes.”                         Congress must have

intended the term “tax” in the AIA to refer to this same broad

range of exactions.            See Erlenbaugh v. United States, 

,     243   (1972)        (“[A]   legislative       body      generally      uses   a

particular word with a consistent meaning in a given context.”).

       In sum, the AIA forbids actions that seek to restrain the

Secretary      from    exercising      his   statutory        authority    to    assess

exactions imposed by the Internal Revenue Code.                      See, e.g., Bob

(holding AIA barred suit challenging IRS

regulatory action when action was authorized by “requirements of

the    [Internal      Revenue    Code]”);     Mobile      Republican      Assembly     v.

United    States,      

,    1362    &    n.5    (11th   Cir.    2003)

(holding AIA barred suits challenging “penalties imposed” for

violating      disclosure       conditions    of   tax-exempt       status);      In   re

Leckie Smokeless Coal Co., 

, 583 & n.12 (4th Cir.

1996) (holding AIA applied to “premiums” assessed and collected

by the Secretary under color of the Internal Revenue Code); cf.

Fed. Energy Admin. v. Algonquin SNG, Inc., 

, 558 n.9

                                         20
(1976) (holding AIA did not bar challenge to “fees” because fees

not “assessed under” the Internal Revenue Code).                       The exaction

imposed   for    failure     to    comply        with    the     individual   mandate

constitutes     a    “tax[]”      as    defined     in    the     Code’s   assessment

provisions.         See   I.R.C.   §§    6201(a),        6202,   5000A(g)(1).     For

these reasons, the AIA bars this action. 3



                                          III.

     The Secretary’s contrary contention primarily relies on the

fact that the individual mandate labels the imposed exaction a

“penalty,” not a “tax.”                § 5000A(b).        For the Secretary, the

Sixth Circuit, see Thomas More Law Center v. Obama, -- F.3d --

(6th Cir. 2011) [No. 10-2388], and now our friend in dissent,

this “penalty” label renders the AIA inapplicable.

                                           A.

     Indisputably, the AIA bars pre-enforcement challenges even

when Congress has “exhibit[ed] its intent” that a challenged

     3
       Although both parties generally contend that the AIA does
not bar this suit, neither offers any reason why the challenge
to the employer mandate escapes the AIA bar.      There is good
reason for that.   Because Congress placed the employer mandate
in the Internal Revenue Code, triggering the Secretary’s
authority to assess and collect payment, all of the reasons set
forth in the text as to why the AIA bars a pre-enforcement
challenge to the individual mandate also apply to the employer
mandate. We additionally note that Congress waived none of the
Secretary’s collection tools in imposing the employer mandate
and labeled the exaction a “tax” in certain subsections.     See
§ 4980H(b)(2), (c)(7), (d)(1).     Accordingly, the AIA clearly
bars Liberty’s challenge to the employer mandate.
                                           21
exaction function as a “penalty.”                  Compare Bailey v. 

, with Bailey v. 

.                              The term

“penalty” therefore describes a category of exaction to which

the Supreme Court has already applied the AIA. 4                             Given this

history, it seems inconceivable that Congress would intend to

exclude an exaction from the AIA merely by describing it as a

“penalty.”

      To be sure, Congress called the penalty at issue in the

Bailey    cases     a    “tax.”       That     fact,      however,    only     aids     the

Secretary     if    there    is     something       talismanic    about        the   label

“penalty” that removes a challenged exaction from the scope of

the   AIA.         The   Secretary       has      cited   no   case     even       remotely

supporting such a proposition.                 In fact, the Supreme Court has

repeatedly        instructed      that   congressional         labels       have     little

bearing      on    whether     an   exaction        qualifies    as     a    “tax”      for


      4
       This is not to elide the general distinction between taxes
and penalties.     We agree with the Sixth Circuit’s general
observation that there are “contexts” in which “the law treats
‘taxes’ and ‘penalties’ as mutually exclusive.” Thomas More, --
- F.3d at ___ (slip op. at 11) (citing one bankruptcy and two
constitutional cases). The question here is whether the AIA is
one of these “contexts.”    Neither the Secretary nor the Sixth
Circuit cites a single case suggesting that it is. The dissent
relies on some bankruptcy cases in an attempt to import the
distinction between a revenue-raising “tax” and a regulatory
“penalty” from that context. To accept the dissent’s view would
place us at odds with the Supreme Court’s explicit holding, in
the context of the AIA, that the distinction between “regulatory
and revenue-raising” exactions has been “abandoned.” Bob 

& n.12.

                                             22
statutory purposes.          See, e.g., Helwig v. United States, 

, 613 (1903) (holding “use of words” does not “change

the nature and character of the enactment” in the context of the

revenue laws); 5 see also United States v. Reorganized CF & I

Fabricators of Utah, Inc., 

, 220 (1996) (requiring a

court    to   look   “behind   the    label     placed    on    the   exaction   and

rest[] its answer directly on the operation of the provision”);

United    States     v.   Sotelo,    

,   275    (1978)   (holding

exaction’s “penalty” label not dispositive, but its “essential

character” controls, in determining whether exaction is a tax

for bankruptcy purposes); United States v. New York, 

, 515-16 (1942) (stressing that the term “tax” includes “any

pecuniary burden laid upon individuals . . . for the purpose of


    5
       Helwig does not, as the dissent contends, support its view
that an exaction’s label controls.         The Court in Helwig
acknowledged that Congress may expressly classify an exaction as
a “penalty or in the nature of one, with reference to the
further action of the officers of the government, or with
reference to the distribution of the moneys thus paid, or with
reference to its effect upon the individual,” and that “it is
the duty of the court to be governed by such statutory

(emphasis added).    The Court then
identified statute after statute illustrating the various ways
in   which   Congress  has   historically   directed   a  “duty,”
“additional duty,” or “penalty” to be treated “with reference
to” a specified governmental action.    

  Congress
has provided no such direction “with reference to” the AIA, and
Helwig makes clear that a mere label describing an exaction does
not constitute such direction. See 

(explaining that
“describing” an exaction “as ‘a further sum’ or ‘an additional
duty’ will not work a statutory alteration of the nature of the
imposition”).

                                           23
supporting the government, by whatever name it may be called”

(internal quotation omitted and emphasis added)).

     Indeed,     the    Court     has    specifically      found    an    exaction’s

label immaterial to the applicability of the AIA.                         See Lipke,

(1922).          In Lipke, the Supreme Court held that the

“mere use of [a] word” to describe a challenged exaction was

“not enough to show” whether a “tax was laid.”                   

        The

Court concluded that one of the challenged exactions, although

labeled a “tax,” functioned in reality to “suppress crime” and

so fell outside the AIA bar.             

the

“penalty” and “special penalty” labels of the other challenged

exactions, neither the majority nor Justice Brandeis in dissent

gave these labels any import in determining the applicability of

the AIA.       Compare 

with 

(Brandeis,

J., dissenting).

     In light of this history, it is not surprising that no

federal    appellate     court,      except     the    Sixth   Circuit        in   Thomas

More,    has   ever    held   that      the    label   affixed     to    an    exaction

controls, or is even relevant to, the applicability of the AIA. 6


     6
       We certainly respect the views of the courts, trumpeted by
the dissent, that have held the AIA inapplicable to suits like
the one at hand.    We note, however, that even unanimity among
the lower courts is not necessarily predictive of the views of
the Supreme Court. See CBOCS West, Inc. v. Humphries, 

, 472 (2008) (Thomas, J., dissenting) (collecting cases where
the Supreme Court has “reject[ed]” a “view uniformly held by the
courts of appeals”).
                                          24
Nonetheless, the Secretary and the dissent insist that the label

of    an    exaction       does    control    in     determining       if    the    AIA    bar

applies.           We    first    address    the     Secretary’s      argument      on    this

point and then the dissent’s.

       The     Secretary         acknowledges        that     when    “passing      on     the

constitutionality of a tax law,” a court places no weight on the

“precise form of descriptive words” attached to the challenged

exaction.          Nelson v. Sears, Roebuck & Co., 

, 363

(1941)       (internal         quotation    omitted)        (emphasis       added).        But

citing       the    twin       Bailey   cases      as    authority,         the    Secretary

contends that the opposite rule must apply for purposes of the

AIA, i.e. that for purposes of the AIA, the “precise form of

descriptive words” given an exaction becomes dispositive.

       The     Secretary’s         reliance     on      the   twin    Bailey       cases    is

mystifying.             In fact, they provide no support for his position.

In Bailey v. Drexel 

, a refund action,

the        Court        held     that   an      exaction        exceeded          Congress’s

constitutional            taxing    authority,       while    on     the    same    day,   in

Bailey v. 

, it dismissed a pre-enforcement

challenge to the same exaction, characterizing it as a “taxing

statute” for purposes of the AIA.                         When dismissing the pre-

enforcement action, the Court did not state or suggest that it

classified the challenged statute as a “taxing statute” because

Congress labeled it as such.                  Nor does it seem plausible that

                                              25
the Court implicitly relied on that label, given that it had

never       before       and    has    never   since      found   an   exaction’s    label

controlling for statutory purposes.                       See, e.g., Reorganized CF &

; 

; 

; 

.                     Rather, only one explanation of

the twin Bailey cases coheres with the Court’s precedents:                               the

term       “tax”    in    the    AIA    reaches     any    exaction    assessed     by   the

Secretary pursuant to his authority under the Internal Revenue

Code -- even one that constitutes a “penalty” for constitutional

purposes.

       The dissent’s contention that the Supreme Court’s reliance

on the statutory label in Bailey v. George is so “obvious” that

it required no explanation by the Court strikes us as unsound.

It    seems        doubtful      that    the   Court       departed    from   its   normal

practice of ignoring statutory labels without explaining why it

was     doing       so.        Instead,    the      more    likely     --   and   just    as

“straightforward” -- explanation is that the Court described the

exaction as a “taxing statute” because Congress had charged the

tax    collector          with    assessing      the      challenged    exaction.        See

. 7               Contrary to the dissent’s belief, this


       7
       The dissent argues that the statement in 

-93, that the term “tax” in the AIA refers to those
exactions “claimed by the proper public officers to be a tax,”
makes relevant the Secretary’s present litigation position that
the AIA does not bar this lawsuit. The most fundamental problem
with this argument is that the Secretary still does “claim” that
                                               26
holding   did    not     require   the    Court      to   perform   any    elaborate

“functional analysis,” but rather to recognize simply that the

challenged exaction formed part of the general revenue laws.

       The dissent’s related contention -- that our interpretation

of Bailey v. George brings that case into conflict with Lipke,

in which the Supreme Court held that the AIA did not bar a

certain pre-enforcement challenge -- also misses the mark.                          In

Lipke, the Court faced a challenge to the Secretary’s assessment

of an exaction imposed pursuant to the National Prohibition Act,

a statute “primarily designed to define and suppress 

(emphasis added).                    Congress had enacted the

statute to “prohibit intoxicating beverages” and authorized the

tax    collector    to     enforce   a     “tax”      against    persons    who    in

violation   of     this   criminal    statute        illegally    manufactured      or

sold   liquor.      41    Stat.    318.        The   National    Prohibition      Act,

however, did not authorize the collector to make an assessment

under his general revenue authority; rather, it converted him



the challenged exaction is a “tax,” albeit one authorized by the
Constitution’s Taxing Clause.    See Appellee’s Br. at 58.    We
cannot hold that the AIA does not apply to this “tax” merely
because the Secretary has changed his stance on the AIA and now
contends that the exaction is a tax only for constitutional
purposes. To give the Secretary’s lawyers such a veto over the
AIA bar would abdicate our “independent obligation” to assure
ourselves of our own jurisdiction.    

.
Moreover, Congress called the exaction in the employer mandate a
“tax.”    See 26 U.S.C. § 4980H(b)(2), (c)(7), (d)(1).       The
argument is for this reason, too, fatally flawed.

                                          27
into a federal prosecutor.           Specifically, it (1) conferred upon

the collector an array of prosecutorial powers, subject to the

control   of    the    Attorney      General,         and   (2)     predicated     the

enforcement of the challenged tax on proof of criminal guilt.

41 Stat. 305, 317-18.          The Lipke Court held that the AIA did not

bar   a   pre-enforcement        challenge       to     this      exaction    because

“guarantees of due process” required pre-enforcement review of

“penalties for 

.

      Lipke thus casts no doubt on our conclusion that the term

“tax” in the AIA reaches any exaction imposed by the Code and

assessed by the tax collector pursuant to his general revenue

authority.     Lipke held only that when Congress converts the tax

assessment process into a vehicle for criminal prosecution, the

Due Process Clause prohibits courts from applying the AIA.                         See

United States v. One Ford Coupe Auto., 

, 329 (1926)

(characterizing Lipke as “merely” a “due process” case); see

also Bob 

(describing Lipke as permitting

pre-enforcement       review    of   “tax    statutes”         that     function      as

“adjuncts to the criminal law”); Lynn v. West, 

,

594-95 (4th Cir. 1998) (citing Lipke for proposition that courts

possess   jurisdiction     to    enjoin     “a   tax    that      is   in   reality   a

criminal penalty”).       Of course, the individual mandate imposes

no such criminal penalty, and thus presents no constitutional

impediment to applying the AIA.

                                       28
      In sum, the Supreme Court has itself emphasized that Lipke

creates only a narrow constitutional limitation, not applicable

here, on the holding of the twin Bailey cases that the AIA

reaches a broader range of exactions than does the term “tax” in

the Constitution.          See Bob 

n.12 (citing

Lipke and noting, in the context of the AIA, that the Court has

since   “abandoned”          any   distinction         between     “revenue-raising”

taxes and “regulatory” penalties).                 Yet the theory propounded by

the   Secretary     and    the     dissent   --    that    a    label    transforms     a

constitutional “tax” into a “penalty” for AIA purposes –- would

yield   an    AIA     that     reaches     fewer       exactions       than   does     the

Constitution.         As     former    Commissioners       of    the    IRS    noted   in

criticizing this argument, this is the “opposite of what the

Supreme Court held” in the twin Bailey cases.                           See Brief for

Mortimer     Caplin    &     Sheldon     Cohen    as    Amici    Curiae       Supporting

Appellees at 24, Seven-Sky v. Holder, No. 11-5047 (D.C. Cir.

July 1, 2011).         The Secretary all but acknowledges this fact,

admitting that the Bailey cases show only the “converse” of the

position that he now propounds.                   We cannot upend the Supreme

Court’s settled framework for determining if an exaction is a

tax for statutory purposes on the basis of a theory for which

the Secretary musters only cases that hold the “converse.”

                                           B.



                                           29
      Perhaps in recognition of the dearth of case law supporting

their argument, the Secretary and the dissent rely heavily on an

inference they draw from the structure of the Internal Revenue

Code to support their position.

     Section   6665(a)(2)         provides       the    starting       point   for     this

inference; it states that “any reference in this title to ‘tax’

imposed by this title shall be deemed also to refer to the . . .

penalties   provided       by    this     chapter,”      i.e.    Chapter       68.      See

§ 6665(a)(2)(emphasis           added);    see    also    §    6671(a)    (redundantly

stating the same for “penalties and liabilities provided by”

subchapter B of Chapter 68).              According to the Secretary and the

dissent,    § 6665(a)(2)         necessarily      implies       that    any    “penalty”

outside of Chapter 68 does not qualify as a “tax” for purposes

of the Code.        Because Congress codified the individual mandate

in   Chapter   48    of    the     Code    (entitled          “Miscellaneous         Excise

Taxes”)     rather        than     Chapter        68      (entitled        “Assessable

Penalties”), the Secretary and the dissent urge us to infer that

Congress did not intend the individual mandate to constitute a

“tax” for purposes of the AIA.

     The    fundamental         difficulty       with    this    argument       is    that

§ 6665(a)(2) merely clarifies that the term “tax” encompasses

the penalties contained in Chapter 68; it does not limit the

term “tax” to only these penalties.                     Nor can we imply such an

limitation, for courts must not “read the enumeration of one

                                           30
case       to   exclude     another   unless   it    is   fair   to   suppose   that

Congress considered the unnamed possibility and meant to say no

to it.”         Barnhart v. Peabody Coal Co., 

, 168 (2003).

There is no evidence that in enacting the clarifying language of

§ 6665(a)(2), Congress intended to exclude a “penalty” codified

outside of Chapter 68 from also qualifying as a “tax.”                           See

United States v. Sischo, 

, 169 (1923) (holding no

inference can be made to imply an exclusion when Congress enacts

an “extension,” rather than “restriction,” of a term).

       Furthermore, the suggestion that we infer from § 6665(a)(2)

a categorical exclusion from the term “tax” of all non-Chapter

68   penalties        violates    Congress’s     express     instructions.       In

§ 7806(b)        of   the    Code,    Congress      has   forbidden   courts    from

deriving any “inference” or “implication” from the “location or

grouping of any particular section or provision or portion of

this title.”          I.R.C. § 7806(b).        The argument of the Secretary

and the dissent demands that we draw precisely such a forbidden

“inference,” for under their theory, the character of a penalty

turns entirely on the Chapter in which it is “locat[ed].” 8



       8
       Contrary to the dissent’s contention, this conclusion does
not “reject the legal force” of § 6665(a)(2).       When Congress
expressly directs that the location of a provision matters, as
it has in § 6665(a)(2), then a court need not infer anything and
Congress’s direction controls. But to adopt the position of the
Secretary and the dissent, a court would have to infer that an
exaction is not to be treated as a tax from the exaction’s place
                                          31
        Moreover,      the        Secretary’s        newly-minted            position     that

Congress has implicitly excluded any “penalty” codified outside

of    Chapter    68    from       qualifying        as     a    “tax”       contradicts    his

previous      interpretation         of     the     AIA.        In     Mobile    Republican

Assembly, 

, the Secretary defended against a pre-

enforcement challenge to an exaction imposed by I.R.C. § 527(j),

for failure to comply with the conditions attached to tax-exempt

status.       The     district       court    held        the    AIA    inapplicable       for

precisely     the     reasons       that    the     Secretary        now     espouses,    i.e.

because     Congress        had    labeled     the       exaction       a    “penalty”     and

codified it outside of Chapter 68.                       See National Federation of

Republican Assemblies v. United States, 

,

1280 (S.D. Ala. 2001).                But the Secretary appealed, insisting

that the AIA did apply because the challenged “penalty” was to

be “assessed and collected in the same manner as taxes.”                                Br. of

Appellant at 32, Mobile Republican Assembly, 

(Feb.

18,   2003)     (No.    02-16283),          

.           The    Eleventh

Circuit agreed and dismissed the suit because the exaction was

based    “squarely      upon       the     explicit       language      of     the    Internal

Revenue    Code”      and    “form[ed]       part    of    the    overall       tax   subsidy

n.5.




in the Code (here Chapter 48 rather than Chapter 68).                                    It is
this inference that the Code forbids.

                                              32
       The Secretary fails to explain his change in position or

even       refer    to   the    Eleventh      Circuit’s   holding   that   the   AIA

applies to “penalties” codified outside of Chapter 68.                     Instead,

the Secretary’s argument boils down to his intuition, accepted

by the Sixth Circuit and the dissent, that “Congress said one

thing in sections 6665(a)(2) and 6671(a), and something else in

section 5000A [the individual mandate], and we should respect

the difference.”           Thomas More, --- F.3d at ___ [No. 10-2388,

slip op. at 12].

       But we can easily “respect the difference” in congressional

wording without holding plaintiffs’ challenge exempt from the

AIA bar.           The legislative history of § 6665(a)(2) makes clear

that       Congress      inserted      that     provision   in   the   course     of

reorganizing and codifying the revenue laws in 1954, and did so

merely to declare explicitly what had been implicit -- that the

term “tax” for purposes of the Code also refers to “penalties”

imposed by the Code.             See H.R. Rep. No. 83-1337, at A420 (1954)

(noting that predecessor to § 6665(a)(2) “conforms to the rules

under      existing      law”    and   “contain[s]    no    material   changes    to

existing law”); S. Rep. No. 83-1622, at 595-96 (1954) (same). 9



       9
       Congress originally inserted the text of § 6665 as § 6659
of the 1954 Code, see Internal Revenue Code of 1954, Pub. L. No.
83-289, § 6659(a)(2), 68A Stat. 1, 827 (1954), but relocated it
to § 6665 in 1989 without making any changes to it, see Omnibus
Reconciliation Act of 1989, Pub. L. No. 101-239, tit. VII,
                                              33
Given this history, we cannot interpret § 6665(a)(2) as working

any substantive change to the Code; rather, it simply “mak[es]

explicit what” was already “implied” by the Code.                                

;    see    also       Walters       v.    Nat’l    Ass’n       of   Radiation

Survivors, 

, 317-18 (1985).                           That Congress did not

repeat this clarifying language when it enacted the individual

mandate,       which       is     not     part        of    any         reorganization      or

recodification of the Code, demonstrates nothing. 10

       Rather, Congress well knew that the Code had for decades

expressly      provided         that     for        purposes       of     the    Secretary’s

assessment power, the term “tax” “includ[es] . . . penalties.”

I.R.C. § 6201(a).          Specific direction that the term “tax” in the

AIA    encompass     the    individual         mandate      “penalty”        was     therefore

unnecessary.        Cf. Bob 

-42 (noting that

Congress      intended      AIA    to     adapt       to    evolving       “complexity      of

federal      tax   system”).        Put    another         way,    §     6201   specifically

provides the Secretary with authority to make “assessments of


§ 7721(a), (c)(2),          103    Stat.       2106,       2399    (1989)       (codified   at
I.R.C. § 6665(a)).
       10
        This does not mean that § 6665(a)(2), which includes
Chapter 68 penalties within the term “tax” throughout the Code,
serves no purpose.     For example, § 6665(a)(2) may well be
necessary to authorize a taxpayer to pursue a civil suit for the
illegal “collection of Federal tax” against a collector who
intentionally misinterprets the Code in collecting a Chapter 68
“penalty.”    See I.R.C. § 7433(a); cf. Sylvester v. United
States, 

, 1189 (E.D. Wis. 1997); Le Premier
Processors, Inc. v. United States, 

, 902 n.6
(E.D. La. 1990).
                                               34
all taxes (including . . . penalties),” and the AIA specifically

bars judicial interference with the Secretary’s power to make

“assessment . . . of any tax.”                     Given that Congress has not

provided to the contrary, these two provisions taken together

mandate the conclusion that the AIA bars this suit seeking to

“restrain”      an    “assessment”      of   the     exaction     challenged    here,

regardless of the exaction’s label.

     The Secretary’s contrary “label” argument not only fails to

persuade,    it      also   requires    a    strained      interpretation      of   the

Code.     The Secretary urges us to take the view that Congress

intended the individual mandate to constitute the only exaction

imposed   by    the    lengthy    Internal         Revenue     Code   that   does   not

qualify as a “tax.” 11         The consequences of this counterintuitive

argument extend well beyond the AIA.                 For example, accepting the

Secretary’s       contention     that   the       label    “penalty”     exempts    the

individual mandate from provisions applicable to “taxes” would

inexplicably eliminate a host of procedural safeguards against

abusive   tax     collection.        See,        e.g.,    §§   7217(a)   (prohibiting

     11
       The Secretary yet again employs faulty reasoning to reach
this remarkable conclusion.      He contends that three other
exactions labeled as penalties and codified outside Chapter 68 -
- I.R.C. §§ 5114(c)(3), 5684(b), 5761(e) -- constitute “taxes”
for purposes of the AIA because they shall be “assessed,
collected, and paid in the same manner as taxes, as provided in
section 6665(a).”    But the only meaningful difference between
these provisions and the individual mandate is the addition of
the phrase, “as provided in section 6665(a),” which refers only
to the previous clause and does not incorporate the separate,
unreferenced parts of § 6665(a).
                                            35
executive      branch       officials      from      requesting      IRS    officials      to

“conduct or terminate an audit . . . with respect to the tax

liability” of any particular taxpayer), 7433(a) (providing civil

damages      for    unauthorized          “collection      of    Federal     tax”),      7435

(providing         civil        damages     for       unauthorized         enticement     of

disclosure concerning the “collection of any tax”).                           We will not

presume that Congress intended such an anomalous result, and we

certainly cannot infer this intent on the basis of a mere label.

                                                C.

      The Secretary’s remaining contentions, some of which are

adopted by the dissent, are brief and unsupported by any statute

or    case    law.         All     are     policy      arguments,     relying       on    the

Secretary’s        view    of    what     the   2010     Congress,    in     enacting     the

individual         mandate,      assertedly          “would     regard”     as    “mak[ing]

sense,” or “would not have wanted,” or as the dissent would have

it,   what     the    2010       Congress       “intended.”         According       to   the

Secretary     and     the    dissent,       these      policy    concerns        demonstrate

that the 2010 Congress could not have wanted the AIA to bar pre-

enforcement challenges to the individual mandate.

      The most fundamental difficulty with this contention is its

focus   on    the    “intent”       of    the     2010   Congress     in    enacting      the

individual mandate.             Our task is not to divine the intent of the

2010 Congress but simply to determine whether the term “tax” in

the AIA encompasses the exaction challenged here.                                To resolve

                                                36
this question, we must look to the text of the AIA and the

intent      of    the     Congresses         that       enacted       and     re-enacted         that

statute, just as the Supreme Court has done in its AIA cases.

See, e.g., South Carolina v. Regan, 

, 375 (1984);

Bob 

-42; 

.

       Once      we    conclude      that        the    term    “tax”       in     the    AIA    does

encompass a challenged exaction, we can go no further.                                      For the

terms       of   the     AIA     declare         that     courts,          save    for     specific

statutory        exceptions,         not    applicable          here,      may     entertain       “no

suit for the purpose of restraining the assessment or collection

of    any    tax.”       26    U.S.C.       §    7421(a)        (emphasis         added).         This

expansive        language      leaves       no    room    for     a     court      to    carve     out

exceptions based on the policy ramifications of a particular

pre-enforcement challenge.                      The Supreme Court said as much in

Bob    Jones,         repudiating      its       old     cases     that       had       embraced    a

“departure        from     the    literal            reading     of     the       Act”    based    on

“exceptional 

.             In doing so, the

Court instructed that courts must give the AIA “literal force,

without      regard      to    the    .     .    .     nature    of     the       pre-enforcement

challenge.”           

       Of     course,      the    2010       Congress       could          have    exempted       the

individual        mandate      from        the    AIA.      But       to    date     it    has    not

provided for such an exemption, and surely we cannot hold it has

implicitly done so.              To infer an intent on the part of the 2010

                                                  37
Congress         to     exempt       this      pre-enforcement               challenge       from    the

otherwise-applicable AIA bar would be tantamount to finding an

implicit repeal of that bar; such an approach would violate the

“cardinal rule” that “repeals by implication are not favored.”

TVA v. Hill, 

, 189 (1978) (applying the implicit

“repeal” doctrine to the TVA’s argument that “the Act cannot

reasonably            be    interpreted           as        applying        to    [the     challenged]

federal project”); see also United States v. United Continental

Tuna Corp., 

, 169 (1976) (holding that courts must

be   “hesitant             to    infer     that        Congress,”          in    enacting     a     later

statute, “intended to authorize evasion of a [prior] statute”).

Given that the terms of the AIA encompass the exaction imposed

by     §    5000A(b),             the    “only         permissible              justification”       for

exempting         that          exaction       is      if     the     individual          mandate     is

“irreconcilable”                 with    the      AIA.             

.

Obviously, it is not.

       Accordingly, it is simply irrelevant what the 2010 Congress

would have thought about the AIA; all that matters is whether

the 2010 Congress imposed a tax.                              If it did, then the AIA bars

pre-enforcement challenges to that tax.                                 After all, were we to

embrace the argument pressed by the Secretary and the dissent

that       the    AIA       applies        only     when       a    subsequent           Congress    has

exhibited         an       intent    for    it      to      apply,     we    would       impermissibly

render      the       AIA       little   more       than      a    non-binding       suggestion       to

                                                       38
future Congresses, devoid of independent legal force.                                See Tuna

        (holding    that   courts    must    require

explicit      “expression               by       Congress”     that    it     intends      the

“compromise or abandonment of previously articulated policies”).

The Supreme Court has rejected this very view, holding that the

AIA establishes a nearly irrebuttable presumption that no tax

may be challenged in any pre-enforcement action.                             See Bob 

-46.

       Even       taken    on        their   own     terms,    however,      the    proffered

policy arguments fail.                     Neither the Secretary nor the dissent

has identified any persuasive evidence that the 2010 Congress in

fact     intended         to        permit   pre-enforcement          challenges      to   the

individual         mandate. 12             The    best   evidence      of    what    Congress


       12
        The Secretary offers only congressional floor statements
as evidence of this supposed congressional intent.      In those
statements, two Senators contemplated a potential onslaught of
challenges to the individual mandate but, as the Secretary puts
it, “never suggested that the only way for an individual to
obtain review would be . . . [through] a refund action.”     The
Supreme Court has long held that such statements are of little
assistance in ascertaining congressional intent.      See, e.g.,
Grove City College v. Bell, 465 U.S 555, 567 (1984). Moreover,
the floor statements relied on here are irrelevant, because at
most they signal an acknowledgment of potential lawsuits, not an
endorsement of challenges seeking pre-enforcement injunctive
relief.

     The dissent goes even a step further than the Secretary,
inferring an AIA exception because drafts of what became the
Affordable Care Act had previously called the challenged
exaction a “tax.” The Supreme Court has warned against such an
approach, cautioning courts not to read much into Congress’s
unexplained decision to change wording in a final bill.    See
                                                   39
intended, of course, is the legislation it actually enacted.

See   Carcieri   v.    Salazar,   129    S.   Ct.   1058,   1066-67   (2009).

Congress could have enacted an exemption from the AIA bar; it

did so in other instances.              See, e.g., I.R.C. §§ 4961(c)(1)

(second-tier tax exempt from AIA), 6703(c)(1) (penalty exempt

from AIA upon satisfying statutory conditions), 7421(a) (listing

several exactions and procedures exempt from AIA).             But Congress

has provided so such exemption here.                Alternatively, Congress

could have crafted a specific route to pre-enforcement judicial

review.   See Sigmon Coal Co. v. Apfel, 

, 301 (4th

Cir. 2000); see also Clinton v. City of New York, 

,

428-29 (1998).        Again, it did not do so here.          Thus, Congress

knows how to exempt a specific exaction from the AIA bar, and

that it did not do so here strongly undermines the contention

that Congress intended such an exemption.




Trailmobile Co. v. Whirls, 

, 61 (1947) (noting that
the “interpretation of statutes cannot safely be made to rest
upon mute intermediate legislative maneuvers”).    Moreover, the
dissent errs in suggesting that our holding “ignores” this
wording change; rather, we simply hold that change irrelevant to
the AIA bar.      Congress’s decision to call the challenged
exaction a “penalty” may affect its treatment under sections of
the Code that expressly distinguish “taxes” from “penalties,”
e.g. those pertaining to the timing of interest accrual.     See
Latterman v. United States, 

, 569-70 (3d Cir. 1989).
Or Congress’s wording change may have simply carried political
benefits.   See Florida v. HHS, 

, 1142-43
(N.D. Fla. 2010).     No evidence, however, indicates that the
change was intended to exempt the individual mandate from the
AIA.
                                    40
       Nor do the Secretary’s policy arguments, which the dissent

embraces, demonstrate that the AIA should not apply here.                                       The

Secretary       contends      that     “it     makes       sense       that    Congress        would

regard it as unnecessary to apply the AIA bar” to the individual

mandate        because,       in     the     mandate,         Congress        prohibited        the

Secretary from using his “principal tools” to “collect unpaid

taxes.”        Maybe so.           But the Secretary’s argument ignores the

fact    that     the   AIA      bars       challenges         seeking     to    restrain        the

“assessment       or     collection          of    any        tax.”       I.R.C.      § 7421(a)

(emphasis       added).            Congress’s          intent    to    waive       some   of     the

Secretary’s collection tools does not in any way evidence that

it     would    want     to     invite       pre-enforcement            challenges        to    the

Secretary’s remaining collection powers or all of his assessment

authority.         And    the       Supreme       Court       has     left    no    doubt       that

restraining even “one method of collection” triggers the AIA’s

prohibition on injunctive suits.                         United States v. Am. Friends

Serv. Comm., 

, 10 (1974).

       Alternatively,           the     Secretary          argues       that       because      the

individual mandate “is ‘integral’ to the [Affordable Care Act’s]

guaranteed-issue          and       community-rating            provisions”         and   has     a

“delayed . . . effective date,” Congress would have “wanted”

early resolution of challenges to it and “did not intend the AIA

to prohibit pre-enforcement challenges.”                            This argument ignores

that    any     holding       that     the    AIA       bar     does    not    apply      to     the

                                                  41
individual mandate might have serious long-term consequences for

the Secretary’s revenue collection.                   The Congressional Budget

Office projects that 34 million people will remain uninsured in

2014 and thus potentially subject to the challenged “penalty.”

Letter from Douglas W. Elmendorf, CBO Director, to Hon. Harry

Reid, Senate Majority Leader, at table 4 (Dec. 19, 2009).                             To

exempt the individual mandate from the AIA would invite millions

of taxpayers -- each and every year -- to refuse to pay the

§ 5000A(b) exaction and instead preemptively challenge the IRS’s

assessment.

       Moreover, some of those taxpayers will undoubtedly possess

a host of non-constitutional, individual grounds upon which to

challenge the assessment of the § 5000A(b) exaction.                         As former

IRS Commissioners warned in a recent brief, allowing these suits

would severely hamper IRS collection efforts.                         See Brief for

Mortimer    Caplin   &    Sheldon    Cohen       as   Amici    Curiae        Supporting

Appellees at 12-15, Seven-Sky v. Holder, No. 11-5047 (D.C. Cir.

July   1,   2011).       This   would   threaten       to   interrupt        the   IRS’s

collection of $4 billion annually from the challenged exaction.

See Letter from Elmendorf to Reid at table 4.                        Moreover, those

challenges could impede the collection of other income taxes by

preemptively    resolving       --   in        litigation     over     the     exaction

imposed by § 5000A(b) -- issues basic to all tax collection,



                                          42
such    as   a    taxpayer’s   adjusted       gross   income. 13       See   I.R.C.

§ 5000A(c)(2)(B); C.I.R. v. Sunnen, 

, 597-98 (1948)

(issue preclusion “applicable in the federal income tax field”).

       Thus, while the Secretary and the dissent may be correct

that we could resolve this one lawsuit with few adverse revenue

consequences, the holding necessary to reach the merits here

could, in the long-run, wreak havoc on the Secretary’s ability

to collect revenue.        If Congress is persuaded by the Secretary’s

present      litigation    position,     it    can    craft     a   specific   AIA

exception        for   constitutional     challenges      to     the   individual

mandate.      See I.R.C. § 7428(a) (inserting, after Bob Jones, an

exemption for the exact sort of pre-enforcement challenge the

Bob Jones Court had held barred by the AIA).                   Until it does so,

however, we are bound by its directive that we entertain “no

suit” restraining the assessment of “any tax.”                 § 7421(a).



                                        IV.

       Having dispensed with the Secretary’s arguments, we turn

finally to the arguments pressed by plaintiffs.

                                        A.

       13
        Other issues raised by the individual mandate that are
common to many taxes include certain deductions from income
taxes (§ 5000A(c)(4)(C)(i)), child dependency determinations
(§ 5000A(b)(3)(A)),      joint     liability   for     spouses
(§ 5000A(b)(3)(B)), the income level triggering a taxpayer’s
duty to file a return (§ 5000A(c)(2)(B)), and family size for
deduction purposes (§ 5000A(c)(4)(A)).
                                        43
       Plaintiffs        initially         contend      that    the    AIA      bar   does   not

apply       because      this        “case      does   not     seek        to   restrain     the

assessment or collection of a tax.”                      The plaintiff university in

Bob Jones tendered precisely the same initial argument.                                      Its

“first” contention was that the AIA did not apply because its

suit    was       not   brought        “for      the   purpose        of    restraining      the

assessment or collection of any 

.             The

Supreme      Court      held    that      the    university’s         complaint       “belie[d]

[this] notion.”           

is here.            For, in their complaint,

plaintiffs characterize the individual mandate as a “tax” and

ask for a judicial invalidation of this “tax[] upon citizens who

choose      not    to   purchase          something     such     as    health     insurance.”

They    assert      that       the    individual        mandate       provision,      although

labeled a “penalty,” is a “tax” not apportioned as required by

Article I of the Constitution, and a “tax” beyond the scope of

congressional           power        under      the    Sixteenth       Amendment       of    the

Constitution.            Thus,       as    in   Bob    Jones,    plaintiffs’          complaint

belies their initial contention. 14


       14
        Moreover, Bob Jones forecloses an argument that the AIA
allows a challenge to the requirement that an individual
maintain insurance, i.e. § 5000A(a), separate from a challenge
to the penalty for noncompliance with this requirement, i.e.
§ 5000A(b).   Some district courts have accepted this argument.
See, e.g., Goudy-Bachman v. U.S. Dep’t of Health & Human Servs.,

, 695 (M.D. Pa. 2011); Thomas More Law Center
v. Obama, 

, 891 (E.D. Mich. 2010).        But
invalidation   of  the  individual   mandate  would  necessarily
preclude the Secretary from exercising his statutory authority
                                                 44
       Plaintiffs’ remaining contention as to why the AIA does not

bar their challenge to the individual mandate is that it imposes

an unconstitutional regulatory penalty “not designed to raise

revenue,”       which    assertedly    violates     the   Commerce    Clause,    the

Taxing      and         Spending      Clause,       and    unspecified       “other

constitutional rights.”            The problem with this argument is that

a   claim      that   an   exaction    is    an    unconstitutional    regulatory

penalty does not insulate a challenge to it from the AIA bar.

Again, in Bob Jones, the Court confronted and rejected precisely

this argument.

       Like plaintiffs here, the university in Bob Jones asserted

that     the     IRS’s     “threatened       action”      would   “violate      [its

constitutional] rights.”              

(asserting various First

and Fourteenth Amendment rights).                 In fact, in its brief to the

Supreme Court, the university made an argument identical to that

here.     The university maintained that “what the government would

have the University do . . . involves not revenue but rather

unconstitutional compulsion,” Brief for Petitioner at 28, Bob

Jones Univ. v. Simon, 

(1973) (No. 72-1470), 

.        This mirrors the plaintiffs’ contention here that the



to assess the accompanying penalty. Moreover, in Bob Jones, the
Court held that the AIA barred a challenge to the IRS’s
interpretation of I.R.C. § 501(c)(3), even though that provision
itself did not impose any tax; only when coupled with § 501(a)
(making a 501(c)(3) organization exempt from income taxes) did
tax consequences 

.
                                            45
mandate    is    “not   designed     to   raise    revenue”       but    instead   to

unconstitutionally “compel[]” specific behavior.                        Just as the

Bob Jones Court held the university’s argument foreclosed by the

twin    Bailey    cases,    

,    we    must   hold

plaintiffs’ identical argument foreclosed by those cases.

       For in Bob Jones, the Supreme Court not only reaffirmed the

twin Bailey cases as setting forth the proper course by which a

taxpayer could challenge an exaction but also explained that it

had    “abandoned   .   .   .     distinctions”        between    “regulatory      and

revenue-raising taxes.”           

n.12.         The Court held that

the AIA bar applied even to an exaction implementing a social

policy unless a plaintiff could demonstrate that the IRS “has no

legal basis” in the Code for assessing the exaction or seeks an

objective “unrelated to the protection of the revenues.”                     

   Plaintiffs cannot and do not make any contention that the

IRS has “no legal basis” in the Code for assessing the penalty

in § 5000A or that this exaction is “unrelated to the protection

of the revenues.”

       In sum, we find plaintiffs’ argument that the AIA does not

apply here wholly unpersuasive.

                                          B.

       Perhaps recognizing the weakness of their argument as to

the inapplicability of the AIA, plaintiffs principally contend

that a narrow judicially-created exception to the AIA permits

                                          46
pursuit      of   their   action   seeking   a   pre-enforcement      injunction

against enforcement of the individual mandate.

        That exception allows a plaintiff to escape the AIA bar if

he demonstrates that (1) equity jurisdiction otherwise exists,

i.e. irreparable injury results if no injunction issues, and

that (2) “it is clear that under no circumstances could the

[Secretary] ultimately prevail.”             Williams 

. 15    When making the latter determination, a court must take

“the most liberal view of the law and the facts” in favor of the

Secretary.        

difficult to see how any irreparable

injury justifies the injunctive relief requested here.                  But even

assuming equity jurisdiction does exist here, plaintiffs cannot

meet the stringent standard of proving with certainty that the

Secretary has “no chance of success on the merits.”                   Bob 

.

        In   rejecting    the   university’s     contention    that    it   would

prevail on the merits, the Bob Jones Court explained that the

sole case in which a plaintiff had met this exacting standard

was Miller v. Standard Nut Margarine Co., 

(1932).

That case is a far cry from the case at hand.                 In Standard Nut,


        15
        The Court has carved out one other exception to the AIA
for “aggrieved parties for whom [Congress] has not provided an
alternative remedy.”     See 

.        That
exception clearly does not assist plaintiffs because, as the
Secretary concedes, they may challenge the individual mandate in
a refund action. See Bob 

.
                                       47
a tax collector attempted to assess a tax that federal courts

had already held in a proper post-enforcement action did not

apply to the plaintiff’s product.                      

      By contrast, to

date,       no    court      has     even    considered          the   validity     of   the

individual mandate in a post-enforcement action, let alone held

it invalid in such a proceeding.                       Moreover, in pre-enforcement

actions,         the    courts       of     appeals       have     divided     as   to   the

constitutionality of the individual mandate.                           Compare Florida v.

HHS, --- F.3d --- (11th Cir. 2011) (invalidating mandate) with

Thomas      More,      ---   F.3d     ---    (upholding          mandate).     Given     this

history and the presumption of constitutionality a federal court

must afford every congressional enactment, see United States v.

Morrison, 

, 607 (2000), we can hardly hold that the

Secretary has “no chance of success on the merits.”                             Bob 

.



                                                  V.

       In    closing,        we    recognize       “that    Congress     has   imposed”    a

potentially        “harsh         regime”    on    some    taxpayers.        

However, as in Bob Jones, the question of whether these concerns

“merit consideration” is a matter for Congress to weigh.                             

       Unless and until Congress tells us otherwise, we must

respect the AIA’s bar to the “intrusion of the injunctive power



                                                  48
of the courts into the administration of the revenue.”             

(O’Connor, J., concurring).

     For   all   these   reasons,   we   vacate   the   judgment   of   the

district court and remand the case to that court to dismiss for

lack of subject-matter jurisdiction.

                                                   VACATED AND REMANDED




                                    49
WYNN, Circuit Judge, concurring:



                                     I.

      I   concur   in   Judge   Motz’s   fine   opinion   holding   that   the

Anti-Injunction Act applies to this case.                 I therefore agree

that it should be remanded to the district court for dismissal.

      I note that my distinguished colleague, after vigorously

dissenting from the majority’s holding that the AIA applies,

chose to exercise his prerogative to address the merits. 1             While

I think that his position on the Commerce Clause is persuasive,

were I to reach the merits, I would uphold the constitutionality

of the Affordable Care Act on the basis that Congress had the

authority to enact the individual and employer mandates under

its   plenary   taxing    power. 2   However,    my   conclusion    that   the


      1
       The majority opinion vacates the district court’s decision
and remands plaintiffs’ lawsuit for dismissal.       Judge Davis
dissents from the majority’s dismissal of plaintiffs’ suit on
AIA grounds; nonetheless, on the merits, he, too, would dismiss
plaintiffs’ lawsuit.
      2
       Justices and judges have previously spoken on the merits
after stating that the court lacked jurisdiction; my approach
today is therefore nothing new.      See Stolt-Nielsen S.A. v.
AnimalFeeds Int’l Corp., 

, 1777 (2010) (Ginsburg,
J., dissenting) (“The Court errs in addressing an issue not ripe
for judicial review . . . .     I would dismiss the petition as
improvidently granted.    Were I to reach the merits, I would
adhere to the strict limitations the Federal Arbitration Act
(FAA), 9 U.S.C. § 1 et seq., places on judicial review of
arbitral awards.     § 10.    Accordingly, I would affirm the
judgment of the Second Circuit, which rejected petitioners’ plea
for vacation of the arbitrators’ decision.”); Pennzoil Co. v.
                                     50
mandates are (constitutional) taxes inevitably leads back to the

AIA’s bar to this case.



                                       II.



                                        A.

     Plaintiffs      contend    that    “[t]he      Taxing        and    Spending   or

General Welfare Clause does not vest Congress with the authority

to enact the mandates.”           Opening Brief of Appellants Liberty

University,   Michele     G.    Waddell      and   Joanne    J.     Merrill    at   40,

Liberty   Univ.     v.   Geithner,     No.    10-2347.        I    disagree.        The

individual    and    employer    mandate      provisions      are       independently

authorized    by    Congress’s       constitutional         power       to   “lay   and

collect Taxes, Duties, Imposts and Excises, to pay the Debts and

provide for the common Defence and general Welfare of the United

States . . . .”      U.S. Const. art. I, § 8, cl. 1.


Texaco, Inc., 

, 23 (1987) (Marshall, J., concurring in
the judgment) (“Were I to reach the merits I would reverse for
the reasons stated in the concurring opinions of Justices
Brennan and Stevens, in which I join. But I can find no basis
for the District Court’s unwarranted assumption of jurisdiction
over the subject matter of this lawsuit, and upon that ground
alone I would reverse the decision below.”); Veterans for Common
Sense v. Shinseki, 

, 900 (9th Cir. 2011) (Kozinski,
J., dissenting) (determining that court lacked jurisdiction but
also analyzing claims on their merits); Patel v. Holder, 

, 569 (7th Cir. 2009) (majority opinion doing same); cf.
Helvering v. Davis, 

, 639-40 (1937) (noting the
belief of Justices Cardozo, Brandeis, Stone, and Roberts that
the case should be dismissed but nevertheless reaching the
merits in an opinion authored by Justice Cardozo).
                                        51
     “A tax, in the general understanding of the term, and as

used in the Constitution, signifies an exaction for the support

of the government.”          United States v. Butler, 

, 61

(1936).     Stated differently, a tax is a “pecuniary burden laid

upon individuals or property for the purpose of supporting the

government.”       United States v. New York, 

, 515-16

(1942)    (quoting    New    Jersey     v.      Anderson,   

,   492

(1906)).

     Before    analyzing      whether      the    exactions   in    question      were

authorized under Congress’s taxing power, it is useful first to

clarify    that    neither    an    exaction’s      label   nor    its    regulatory

intent or effect is germane to the constitutional inquiry.                         To

determine whether an exaction constitutes a tax, the Supreme

Court has instructed us to look not at what an exaction is

called but instead at what it does.                Nelson v. Sears, Roebuck &

Co., 

, 363 (1941) (stating that when “passing on the

constitutionality of a tax law,” a court is “‘concerned only

with its practical operation, not its definition or the precise

form of descriptive words which may be applied to it’”) (quoting

Lawrence v. State Tax Comm’n, 

, 280 (1932)); see

also United States v. New 

(stating that

an exaction meeting the definition of a tax will be construed as

such regardless of “whatever name it may be called”).                             This

makes     sense,   given     that    the     Constitution     itself      uses    four

                                           52
different     terms     to    refer     to   the    concept       of    taxation:       taxes,

imposts, duties, and excises.                U.S. Const. art. I, § 8, cl. 1. 3

      Accordingly,           the        Supreme      Court         has        characterized

legislative acts as “taxes” without regard to the labels used by

Congress.     See, e.g., United States v. Sotelo, 

, 275

(1978) (deeming an exaction labeled a “penalty” in the Internal

Revenue Code a tax for bankruptcy purposes); License Tax Cases,

72   U.S.    (5    Wall.)     462,      470-71     (1866)    (sustaining            under    the

taxing     power    a   federal       statute      requiring       the       purchase       of    a

license before engaging in certain businesses and stating that

“the granting of a license . . . must be regarded as nothing

more than a mere form of imposing a tax”); see also In re Leckie

Smokeless Coal Co., 

, 583 (4th Cir. 1996) (holding

that, for purposes of the AIA, “premiums” constituted taxes).

      Further, a tax—regardless of its label—“does not cease to

be   valid    merely       because      it   regulates,          discourages,         or    even

definitely        deters     the   activities       taxed.”            United       States       v.

Sanchez,     

,   44    (1950).       As    long       as    a    statute       is

“productive of some revenue,” Congress may exercise its taxing

power     without    “collateral         inquiry     as     to    the    measure       of    the

regulatory effect [of the statute in question].”                                  Sonzinsky v.

      3
       Congress also does not have to invoke the source of
authority   for   its  enactments.      “The   question of   the
constitutionality of action taken by Congress does not depend on
recitals of the power which it undertakes to exercise.”    Woods
v. Cloyd W. Miller Co., 

, 144 (1948).
                                             53
United      States,      

,     514   (1937).         And     if    “the

legislation enacted has some reasonable relation to the exercise

of the taxing authority conferred by the Constitution, it cannot

be invalidated because of the supposed motives which induced

it.”    United States v. Doremus, 

, 93 (1919).

       I    recognize       that       some    cases     from      the    1920s    and    1930s

suggest that taxes are either regulatory or revenue-raising and

that   the     former       are    unconstitutional.            See,      e.g.,    Bailey      v.

Drexel Furniture Co., 

, 37-44 (1922) (holding that a

tax    on     goods    made       by    child        labor   was    an    unconstitutional

penalty).       However, both older and newer opinions indicate that

the revenue-versus-regulatory distinction was short-lived and is

now defunct.          See, e.g., United States v. Kahriger, 

,

28    (1953)    (upholding         tax    on     bookmakers        and    stating,       “It   is

conceded that a federal excise tax does not cease to be valid

merely because it discourages or deters the activities taxed.”),

overruled in part on other grounds, Marchetti v. United States,

    (1968);      

   (1937    case

upholding       a     tax     on       firearm        dealers      despite       registration

provision and alleged regulatory effects); 

(1919 case upholding the Narcotic Drugs Act, which taxed and

regulated sales of narcotics); McCray v. United States, 

, 59 (1904) (upholding tax on colored margarine and stating,

“Since . . . the taxing power conferred by the Constitution

                                                54
knows       no   limits     except         those    expressly               stated      in   that

instrument, it must follow, if a tax be within the lawful power,

the   exertion       of   that   power      may    not     be    judicially          restrained

because of the results to arise from its exercise.”).

       It is not surprising that this distinction did not endure,

given that taxes can, and do, both regulate and generate revenue

at the same time.           Indeed, as the Supreme Court recognized in

Sonzinsky, “[e]very tax is in some measure regulatory.                                   To some

extent      it   interposes      an   economic       impediment             to    the    activity

taxed as compared with others not taxed.                             But a tax is not any

the less a tax because it has a regulatory effect . . . 

.         And “[i]n like manner every rebate from a tax when

conditioned upon conduct is in some measure a temptation.                                       But

to hold that motive or temptation is equivalent to coercion is

to plunge the law in endless difficulties.”                                 Chas. C. Steward

Mach. Co. v. Davis, 

, 589-90 (1937).                                  Accordingly,

in    Bob   Jones    University       v.    Simon,       

   (1974),      the

Supreme      Court    recognized      that,       while    in        some    early      cases   it

“drew what it saw at the time as distinctions between regulatory

and   revenue-raising        taxes,”       the     Court       “subsequently            abandoned

such distinctions.”          

n.12, overruled in part on other

grounds by South Carolina v. Ragan, 

, 379 (1984).

       Courts,       therefore,       do    not    look         to    labels,        regulatory

intent, or regulatory effect.                Instead, we must consider whether

                                             55
something that operates as a tax is authorized under Congress’s

taxing     power,      which    has   been    described      as    “very       extensive,”

License Tax 

, and indeed “virtually without

limitation.”           United    States      v.    Ptasynski,      

,     79

(1983).     As Justice Cardozo recognized in Helvering,

      The discretion [to tax and spend for the general
      welfare] belongs to Congress, unless the choice is
      clearly wrong, a display of arbitrary power, [or] not
      an exercise of judgment.    This is now familiar law.
           “When such a contention comes here we naturally
      require a showing that by no reasonable possibility
      can the challenged legislation fall within the wide
      range of discretion permitted to the 

(quoting 

).

      There      are    essentially       three     features      that     a    tax      must

exhibit to be constitutional.                     First, to pass constitutional

muster, a tax must bear “some reasonable relation” to raising

revenue.      

.              The amount of revenue raised

is irrelevant:         A tax does not cease to be one “even though the

revenue obtained is obviously negligible, or the revenue purpose

of   the    tax     may   be     secondary.”         

(citations        omitted).        Instead,       the    measure     must      simply      be

“productive       of    some    revenue.”          

(upholding tax that raised $5,400 in revenue in 1934).

      Second, to be constitutional, a tax must be imposed for the

general welfare.          Congress enjoys wide discretion regarding what

is   in    the    general      welfare.      “The       discretion    .    .    .   is     not


                                             56
confided to the courts.                  The discretion belongs to Congress,

unless    the    choice     is     clearly      wrong,        a    display   of    arbitrary

power, not an exercise of judgment.”                          

.          Therefore,     in     determining          whether         a   congressional

enactment      furthers     the     general       welfare,         “courts     should     defer

substantially to the judgment of Congress.”                              South Dakota v.

Dole, 

, 207 (1987).

       Finally,     even     if    an    exaction        is       rationally      related      to

raising       revenue      and    furthers        the    general         welfare,        to   be

constitutional, it must not infringe upon another constitutional

right.       For example, a tax may not infringe on an individual’s

right    to    be   free    from    double        jeopardy         by   further    punishing

criminal conduct.            See Dep’t of Revenue of Montana v. Kurth

Ranch, 

, 780-83 (1994) (concluding that a drug tax

was actually a criminal penalty based on its high rate, its

deterrent       purpose,     and    a    criminal        prohibition         on    the    taxed

activity      and   holding       that    the     tax    consequently          violated       the

Double Jeopardy Clause of the Fifth Amendment).



                                             B.

       Turning now to the case at hand, the provisions at issue

are    the    exaction      provisions       in    the    individual         and    employer

mandates.        I would conclude, after examining their practical

operation, that these provisions impose taxes.

                                             57
      The individual mandate exaction in 26 U.S.C. § 5000A(b)

amends the Internal Revenue Code to provide that a non-exempted

individual who fails to maintain a minimum level of insurance

must pay a “penalty.”          Notably, while the individual mandate in

some places uses the term “penalty,” some form of the word “tax”

appears in the statute over forty times.                      26 U.S.C. § 5000A.

For example, it references taxpayers and their returns, includes

amounts due under the provision in the taxpayer’s tax return

liability,      calculates     the    penalty      by   reference     to   household

income    for    tax    purposes,     and    allows     the    Secretary      of   the

Treasury to enforce the provision like other taxes (with several

procedural exceptions).         

explained above, the label

applied to an exaction is irrelevant; instead, in assessing an

exaction’s      constitutionality,           we     look      to   its     practical

operation.

      The practical operation of the individual mandate provision

is as a tax.       Individuals who are not required to file income

tax   returns     are    not    required      to    pay    the     penalty.        

        The   amount    of   any    penalty     owed   is   generally

calculated by reference to household income and reported on an

individual’s federal income tax return.                    

4


      4
       The statute prescribes monthly penalties in an amount
calculated by identifying a specified “percentage of the excess
of the taxpayer’s household income for the taxable year over the
amount of gross income specified in section 6012(a)(1)” unless
                                        58
Taxpayers filing jointly are jointly liable for the penalty.

          And    the    Secretary      of     the   Treasury       is

empowered     to   enforce    the     provision      like    a     tax,   albeit     with

several procedural exceptions. 5             

         The individual

mandate      exaction,      codified    in     the     Internal       Revenue      Code,

therefore functions as a tax.

      Looking next at the employer mandate exaction in 26 U.S.C.

§   4980H,    it   amends    the    Internal    Revenue       Code    to     impose      an

“assessable payment” on large employers if a health exchange

notifies     the   employer     that    at    least    one       full-time    employee

obtains a premium tax credit or cost-sharing reduction.                            

        The     amount     of    the     assessable          payment       is

calculated     differently      based    on    whether       the    employer    offers

adequate     health   insurance      coverage     to   its       employees.        

calculation produces an amount that is less than certain
statutorily defined thresholds.      26 U.S.C. § 5000A(c)(2).
Ultimately, the penalty owed by a taxpayer is equal to the
lesser of either the sum of the monthly penalties owed by the
taxpayer or the cost of the “national average premium for
qualified health plans which have a bronze level of coverage,
provide coverage for the applicable family size involved, and
are offered through Exchanges for plan years beginning in the
calendar year with or within which the taxable year ends.” 

      5
       The fact that Congress considered it necessary to exempt
the individual mandate exaction from some traditional tax
collection  procedures   like  criminal  liability   and  liens
evidences that the exaction is a tax. 26 U.S.C. § 5000A(g)(2).
Otherwise, there would be no need to except the exaction from
some of the standard tax collection procedures, which otherwise
apply.

                                         59
4980H(a)–(c).       And instead of the term “penalty,” the employer

mandate uses the terms “assessable payment” and “tax.”                          

     Like the individual mandate exaction, the practical

operation of this provision is as a tax that is assessed and

collected     in   the   same   manner     as      other   Internal   Revenue     Code

penalties treated as taxes. 6           

       Having concluded that the individual and employer mandates

operate as taxes, 7 to determine whether they are constitutional,

I    must   consider     whether   they:      1)    are    reasonably   related    to

raising revenue; 2) serve the general welfare; and 3) do not

infringe upon any other right.

       The individual and employer exactions are surely related to

raising revenue.         The Congressional Budget Office estimated that

the individual mandate exaction will generate approximately $4

billion annually, and the employer mandate exaction, $11 billion

annually,     by   2019.     Letter     from       Douglas   W.   Elmendorf,    Dir.,

Cong. Budget Office, to Hon. Nancy Pelosi, Speaker, U.S. House

of    Representatives,      tbl.    4    (Mar.       20,     2010),   available    at

http://www.cbo.gov/ftpdocs/113xx/doc11379/AmendReconProp.pdf;

       6
       No exceptions to the standard collection procedures exist
in the case of the employer mandate. 26 U.S.C. § 4980H(d).
       7
       Since the Supreme Court long ago established that Congress
did not have to invoke the word “tax” to act within its taxing
power, Congress’s use of other verbiage in portions of the
individual and employer mandates, and most notably in the
“penalty” provision of the individual mandate, sheds little
light on Congressional intent. See 

.
                                         60
see also Patient Protection and Affordable Care Act, Pub. L. No.

111-148,    §     1563(a),    124    Stat.    119,    270   (stating    that   the

Affordable Care Act “will reduce the Federal deficit”).                        Not

only will the exactions raise significant amounts of revenue,

but the revenue raised can cover the “[h]igher government costs

attributable to the uninsured . . . implicitly paid for by the

insured . . . through increased taxes or reductions in other

government services as money is spent on the uninsured.”                    Brief

Amici    Curiae    of     Economic   Scholars   in    Support   of     Defendants-

Appellees at 13, Liberty Univ. v. Geithner, No. 10-2347.                        In

other words, as Judge Davis notes in his opinion, “[b]ecause the

uninsured effectively force the rest of the nation to insure

them with respect to basic, stabilizing care, this penalty is

something like a premium paid into the federal government, which

bears a large share of the shifted costs as the largest insurer

in the nation.”         Post at 125.    Clearly, then, the exactions bear

“some reasonable relation” to raising revenue.                       

.        See also 

(upholding tax

that raised $5,400 in revenue).

      Further,      the    individual   and     employer    mandate     exactions

serve the general welfare.           The Affordable Care Act is aimed at,

among other things, reducing the number of the uninsured as well

as the cost of those who remain uninsured imposed on those who

are     insured.        Congress     found    that,    nationwide,      hospitals

                                        61
provided $43 billion in uncompensated care to the uninsured in

2009 and that these costs were shifted onto insured individuals,

“increas[ing] family premiums by on average over $1,000 a year.”

42   U.S.C.    §   18091(a)(2)(F).              It    also     found      that        “[b]y

significantly      reducing      the     number       of     the     uninsured,        the

[individual    mandate],       together       with    the    other    provisions        of

th[e]   Act,   will   lower     health    insurance         premiums.”          

    individuals       to     purchase          health     insurance        and

employers to provide it, the individual and employer mandates

alleviate the costs associated with providing uncompensated care

to the uninsured and lower health insurance premiums.                       Such cost

reductions and expansions in access to health insurance surely

constitute contributions to the general welfare.

     Finally, neither the exaction in the individual mandate nor

that in the employer mandate infringes on other rights.                                The

exactions do not, for example, operate to impose duplicative

criminal   penalties      in    violation       of    the     prohibition        against

double jeopardy.       See Kurth 

(“Taxes

imposed upon illegal activities are fundamentally different from

taxes   with   a   pure   revenue-raising            purpose       that   are    imposed

despite their      adverse     effect    on    the    taxed    activity.”).            The

provisions lack the punitive character of other measures the

Supreme Court has held to be penalties.                     Id.; see also, e.g.,

.           And the provisions do not appear to

                                         62
violate any other rights:               No one has a right to be free from

taxation. 8



                                            C.

       It bears mention that the individual and employer mandate

exactions do not run afoul of the constitutional requirement

that       “[n]o   Capitation,    or    other     direct,      Tax       shall    be    laid,

unless in Proportion to the Census or Enumeration herein before

directed to be taken.”              U.S. Const. art. I, § 9, cl. 4.                      This

clause       has   its    origins      in   the    Constitutional           Convention’s

slavery debates.          The Northern states consented to count a slave

as three-fifths of a person for allocating representatives in

Congress in exchange for a corresponding increase in the tax

liability of Southern states.                 Brian Galle, The Taxing Power,

the    Affordable        Care   Act,    and      the    Limits      of    Constitutional

Compromise,        120   Yale    L.J.   Online         407,   414    (Apr.       5,    2011),

http://yalelawjournal.org/2011/4/5/galle.html.                            Even    at     that

time, the definition of “direct” tax was unclear.                          Id.; Springer

v. United States, 

, 596 (1880) (“It does not appear




       8
       Additionally, any contention that the individual mandate
violates either the First, Fifth, or Tenth Amendment is, in my
opinion, meritless.   See post at 134-40; Florida ex rel. Atty.
Gen. v. U.S. Dep’t of Health & Human Servs., --- F.3d ---, 

, at *113-17 (11th Cir. Aug. 12, 2011) (Marcus, J.,
dissenting).
                                            63
that an attempt was made by any one to define the exact meaning

of the language employed.”).

     It is therefore understandable that the Supreme Court has

demonstrated    reluctance    to   strike    a    tax    based   solely   on   the

direct/indirect distinction.          See Knowlton v. Moore, 

, 83 (1900) (“[I]t is no part of the duty of this court to

lessen, impede, or obstruct the exercise of the taxing power by

merely abstruse and subtle distinctions as to the particular

nature of a specified tax, where such distinction rests more

upon the differing theories of political economists than upon

the practical nature of the tax itself.” (quoting Nicol v. Ames,

, 515 (1899)).         Indeed, the Supreme Court restricted

the meaning of “direct” taxes to capitation, or head taxes, and

taxes on the ownership of real property.                

; Veazie Bank v. Fenno, 75 U.S. (8 Wall.) 533, 544 (1869).

Taxes on personal property have also been held to be direct.

Pollock v. Farmers’ Loan & Trust Co., 

, 637 (1895),

superseded on other grounds by constitutional amendment, U.S.

Const. amend. XVI, as recognized in Brushaber, 

.

     The Supreme Court has never struck down a federal tax as an

unapportioned    capitation    tax.         And    the    Supreme    Court     has

repeatedly upheld a variety of federal taxes as indirect and

therefore outside the apportionment requirement.                  See 

(upholding a federal estate tax); Bromley v.

                                      64
McCaughn, 

, 138 (1929) (upholding a federal gift

tax); United States v. Mfrs. Nat’l Bank of Detroit, 

, 199 (1960) (upholding a federal estate tax collected on an

insurance policy).           As the Supreme Court has explained, “[a] tax

laid upon the happening of an event, as distinguished from its

tangible     fruits,        is   an     indirect      tax    which     Congress     .     .    .

undoubtedly may impose.”                Tyler v. United States, 

,

502 (1930).

      The    individual          and     employer      mandate    exactions        are    not

capitation     taxes;        nor       are    they    direct     taxes    that     must       be

apportioned.           Far       from        being    imposed     without        regard       to

circumstance, they will be imposed only upon taxpayers who can

afford,     but   fail       to        maintain,      health     insurance,        or     upon

employers who fail to provide adequate and affordable insurance.

See   26    U.S.C.     §§    4980H,          5000A.     As     taxes     “laid    upon     the

happening    of   an    event,”          the    individual      and    employer     mandate

exactions are clearly indirect.                       See 

.

Nor are they property taxes, since they will not be assessed

based on the ownership of property.

      Indeed, the Supreme Court has so limited the application of

the Direct Tax Clause that the Sixth Circuit concluded that it

“relates solely to taxation generally for the purpose of revenue

only, and not impositions made incidentally under the commerce

clause exerted either directly or by delegation, as a means of

                                                65
constraining       and    regulating      what   may    be    considered     by    the

Congress    as    pernicious      or   harmful     to   commerce.”       Rodgers    v.

United States, 

, 995 (6th Cir. 1943).                         Since the

individual and employer mandate exactions are neither capitation

nor property taxes, the Direct Tax Clause is inapplicable, and

the individual and employer mandate taxes stand.



                                          III.

      In sum, I concur in Judge Motz’s fine opinion holding that

the AIA applies here.              Our distinguished colleague vigorously

dissents    from    our    holding     and   presents     a   credible    basis    for

upholding the constitutionality of the Affordable Care Act under

the Commerce Clause.         However, were I to rule on the merits, for

the     reasons    given     in    this      opinion,     I   would      uphold    the

constitutionality of the Affordable Care Act on the basis that

Congress had the authority to enact the individual and employer

mandates,    which       operate    as    taxes,    under     its   taxing    power.

Accordingly, I must agree with Judge Motz that the AIA bars this

suit.




                                          66
DAVIS, Circuit Judge, dissenting:

       Today we are asked to rule on the constitutionality of core

provisions of the Patient Protection and Affordable Care Act.

Appellants    advance     several     arguments     against    the    Act,    chief

among them their claim that Congress exceeded its power when it

sought to require all individuals (with narrow exceptions) to

obtain a certain minimum of health insurance coverage starting

in 2014. 26 U.S.C. § 5000A. In particular, appellants urge that

the    Commerce     Clause,   which   authorizes      Congress      “To    regulate

Commerce . . . among the several States,” U.S. Const. art. I, §

8, cl. 3, allows only regulation of economic activity. Thus,

they contend, Congress cannot regulate appellants’ “decision not

to purchase health insurance and to otherwise privately manage

[their] own healthcare,” which they characterize as “inactivity

in     commerce,”    Appellants’      Br.    1.    They   also      contend    that

upholding the Act under the Commerce Clause would “create an

unconstitutional national police power that would threaten all

aspects of American life,” 

suggesting in particular

that    “Congress     could   require       that   people     buy    and   consume

broccoli at regular intervals” or that “everyone above a certain

income threshold buy a General Motors automobile,” Appellants’

Reply Br. 9 (quoting Florida ex rel. Bondi v. Dep’t of Health

and Human Servs., --- F. Supp. 2d ----, ----, 

, at

*24 (N.D. Fla. Jan. 31, 2011), aff’d in part and rev’d in part

                                        67
sub nom. Florida v. U.S. Dept. of Health & Human Servs., ---

F.3d     ----,     

         (11th        Cir.    Aug.         12,     2011)).

Appellants        bring       a    similar              facial      challenge         to     the    Act’s

employer      mandate,            and        they            also     assert        Free         Exercise,

Establishment Clause, and Equal Protection claims against the

Act.

       My   good       colleagues         in      the        majority      hold      that    the     Anti-

Injunction        Act    strips         us     of       jurisdiction          in    this     case.      For

reasons I explain at length below, I disagree. As I reject the

reasoning     and       the       result          of         the    majority’s        jurisdictional

analysis,     I    am     entitled           to     reach          the    merits     of     appellants’

claims. Reaching the merits, I would hold that the challenged

provisions        of    the       Act    are        a    proper          exercise     of     Congress’s

authority under the Commerce Clause to regulate the interstate

markets     for    health         services          and        health      insurance.        I     do   not

believe that constitutional review of the Act requires courts to

decide      whether       the       Commerce                 Clause       discriminates            between

activity and inactivity. But even if I were to assume appellants

were “inactive,” I could not accept appellants’ contention that

a distinction between “activity” and “inactivity” is vital to

Commerce Clause analysis. I would therefore affirm the district

court’s dismissal of appellants’ suit.

       Appellants        raise      two        major          concerns       about    upholding         the

Act: first, they believe that individual liberty is infringed

                                                        68
when the federal government is permitted to regulate involuntary

market participants; second, they fear that our liberty will be

further eroded in the future, as a ruling sustaining the Act

would permit Congress to establish arbitrary purchase mandates.

Because I take these concerns very seriously, I explain at some

length why the Act is a far more limited exercise of federal

power than appellants fear.

                            I. Anti-Injunction Act

                                   A. My View

      The majority concludes that the Anti-Injunction Act (AIA)

applies to the challenged provisions of the Affordable Care Act,

depriving    us     of   subject-matter       jurisdiction.     Although      the

parties argue that we have jurisdiction, “federal courts have an

independent obligation to . . . raise and decide jurisdictional

questions    that    the    parties   either    overlook   or   elect   not    to

press.” Henderson ex rel. Henderson v. Shinseki, --- U.S. ---, -

--, 

, 1202 (2011).

      Before today, nine federal judges had expressly considered

the application of the Anti-Injunction Act, and all nine held it

inapplicable to the Affordable Care Act’s mandates. See Thomas

More Law Center v. Obama, --- F.3d ----, ----, 

,

at   *6-*8   (6th    Cir.   June   29,    2011);   Goudy-Bachman   v.   United

States Dept. of Health & Human Servs., 

, 695-

97 (M.D. Pa. 2011); Liberty University, Inc. v. Geithner, 

Supp. 2d 611, 627-29 (W.D. Va. 2010); United States Citizens

Ass’n v. Sebelius, 

, 909 (N.D. Ohio 2010);

Florida ex rel. McCollum v. United States Dept. of Health &

Human Servs., 

, 1130-44 (N.D. Fla. 2010);

Thomas More Law Center v. Obama, 

, 890-91

(E.D. Mich. 2010); Virginia ex rel. Cuccinelli v. Sebellius, 702

F.   Supp.    2d    598,   603-605   (E.D.     Va.   2010).     Although    the   two

circuit courts that have considered challenges to the mandates

have split, all six members of those panels agreed that the

courts should reach the merits; only the Sixth Circuit panel

thought it necessary to discuss the AIA. Florida v. U.S. Dept.

of Health & Human Servs., --- F.3d ----, 

(11th

Cir. Aug. 12, 2011) (reaching the merits without raising the

applicability of the AIA); Thomas More Law Center, --- F.3d at -

---,   2011    WL    at    *6-*8   (expressly    holding      the   AIA    does   not

apply). For the following reasons, I agree with these judges and

would hold that the AIA does not strip us of jurisdiction in

this case.

       The    Anti-Injunction        Act,     originally      enacted      in   1867,

directs      that   “no    suit    for   the    purpose    of    restraining      the

assessment or collection of any tax shall be maintained in any

court by any person,” certain enumerated exceptions aside. 26




                                         70
U.S.C. § 7421(a). 1 Thus, we have jurisdiction only if the penalty

provisions attached to the challenged mandates do not constitute

“tax[es]” for purposes of the AIA. 2

       The      Sixth   Circuit   recently     held   that   the   individual

mandate’s penalty provision was not a “tax” within the meaning

of the AIA. Thomas More Law Center, --- F.3d at ----, 2011 WL at

*6-*8. Its reasoning is straightforward: Congress spoke only of

“tax[es]” in the Anti-Injunction Act, while it deemed the amount

owed       by   those   in   violation    of   the    individual   mandate   a

“penalty.” See 

compare 26 U.S.C. § 7421(a) with 

(c), (e), (g). And Congress did not simply use the

term “penalty” in passing: Congress refers to the exaction no

fewer than seventeen times in the relevant provision, and each

time Congress calls it a “penalty.”



       1
       Although appellants also requested declaratory relief, the
Declaratory Judgment Act “enlarged the range of remedies
available in the federal courts but did not extend their
jurisdiction.” Skelly Oil Co. v. Phillips Petroleum Co., 

, 671 (1950); In re Leckie Smokeless Coal Co., 

, 582 (4th Cir. 1996). In any case, the Declaratory Judgment
Act expressly excludes claims “with respect to Federal taxes.”
28 U.S.C. § 2201(a). The Supreme Court has held this exclusion
to be “at least as broad as the Anti-Injunction Act.” Bob Jones
Univ. v. Simon, 

, 732 n.7 (1974).
       2
        This question of statutory interpretation is wholly
distinct from the constitutional question concerning Congress’s
power under the Taxing and Spending Clause, U.S. Const. art. I,
§ 8, cl. 1, to enact these mandates. Because I would hold the
Act constitutional under the Commerce Clause, I need not and do
not reach the latter issue.
                                         71
       In     fact,      Congress          considered     earlier      versions        of     the

individual mandate that clearly characterized the exaction as a

“tax” and referred to it as such more than a dozen times. See

H.R. 3962, § 501, 111th Cong. (2009) (“impos[ing] a tax” in

section entitled “Tax on individuals without acceptable health

care coverage,” and repeatedly referring to this exaction as a

“tax”); H.R. 3200, § 401, 111th Cong. (2009) (same); S. 1796, §

1301, 111th Cong. (2009) (“impos[ing] a tax” in section entitled

“Excise     tax     on   individuals          without     essential        health      benefits

coverage,” and repeatedly referring to exaction as a “tax”).

Congress deliberately deleted all of these references to a “tax”

in   the    final     version       of      the   Act   and   instead       designated        the

exaction      a    “penalty.”         As    the   Supreme     Court    noted     in     INS    v.

Cardoza-Fonseca, “[f]ew principles of statutory construction are

more   compelling         than    the       proposition       that    Congress      does      not

intend sub         silentio      to    enact      statutory       language      that    it    has

earlier discarded in favor of other language.” 

,

442-43 (1987). Thus, it seems odd for the majority to ignore

Congress’s deliberate drafting decision to call the exaction a

“penalty” rather than a “tax.”

       When       Congress    has      wished       “penalties”       to   be    treated       as

“taxes,” it has said so expressly. In Subchapter A of Chapter 68

of   the      Internal       Revenue        Code,      Congress      directed     that       “any

reference in this title [Title 26 of the United States Code (the

                                                  72
Internal Revenue Code)] to ‘tax’ imposed by this title shall be

deemed also to refer to the additions to the tax, additional

amounts,      and     penalties       provided         by        this     chapter.”           

Likewise, in Subchapter B of that chapter, Congress

instructed that “any reference in this title to ‘tax’ imposed by

this title shall be deemed also to refer to the penalties and

liabilities provided by this subchapter.” 

Yet,

Congress chose to place the individual mandate and its “penalty”

provisions not in Chapter 68 but in Chapter 48, which contains

no    such   instructions.        Though        Congress         did     provide       that       this

penalty “be assessed and collected in the same manner as an

assessable        penalty     under     subchapter           B    of     chapter        68,”        and

Chapter      68     “penalties”       are       treated          as     “taxes,”        the       term

“assessment and collection like a tax” does not imply that the

penalty      should      be   treated      as    a    tax    for        any    and     all     other

purposes.      

        As     the       Sixth    Circuit           recently

observed, “Congress said one thing in sections 665(a)(2) and

6671(a),     and     something    else      in       section      5000A,        and    we     should

respect the difference.” Thomas More, 2011 WL at *7.

       “Where,      as    here,   resolution          of     federal          law    turns     on    a

statute and the intention of Congress, we look first to the

statutory language and then to the legislative history if the

statutory language is unclear.” Blum v. Stenson, 

,

896   (1984).       Courts    look    to    legislative           history           first    to     see

                                                73
whether it indicates that Congress intended a particular result

and   then,    if     not,     to   find    evidence      of    the    purposes     of    the

statute. Cf. Dolan v. United States Postal Service, 

, 486 (2006) (“Interpretation of a word or phrase depends

upon reading the whole statutory text, considering the purpose

and context of the statute . . . .”). Even if the statutory text

were unclear here, legislative history indicates that the AIA

should not apply.

       Legislative history of the Affordable Care Act reveals that

Congress      never       considered   application         of    the    Anti-Injunction

Act. Nowhere in the Act’s voluminous legislative history can I

find a single reference to the AIA. And when members of Congress

discussed the inevitable judicial review of the Affordable Care

Act, no one appears to have contemplated that the AIA might bar

such review for the five years, post-enactment, that would have

to elapse before a tax refund suit could be brought.

       Looking,       then,    to   legislative        purpose,        it    appears     that

immediate judicial review of the individual mandate would do

little to frustrate the aims of the AIA. The Anti-Injunction Act

was    intended       to      “protect[]      the    expeditious            collection    of

revenue.” South Carolina v. Regan, 

, 376 (1984).

Revenue from the individual mandate’s penalty provision will not

be    assessed      and    collected       until    the   year    after       the   mandate

becomes operative—2015. Judicial review of the mandate in 2011

                                             74
most assuredly will not frustrate “the expeditious collection of

revenue” four years later. I also note that Congress forbid the

Internal Revenue Service from employing its primary enforcement

mechanisms to collect this penalty: the IRS may not seek the

institution of criminal prosecutions by the Justice Department

or impose a lien or levy on an individual’s property for failure

to pay the penalty. 26 U.S.C. § 5000A(g)(2). This indicates that

Congress had scant concern for “the expeditious collection of

revenue” from the penalty provision.

     A failure to provide immediate judicial review in reliance

on a rather strained construction of the AIA, on the other hand,

might undermine the core purpose of the Affordable Care Act. In

the absence of a conclusive ruling from the federal courts, some

individuals   may   well   decide   for   themselves   that   the   Act   is

unconstitutional and thus can be ignored. In the case of an

ordinary tax this would simply result in some lost revenue and

the costs of tax prosecutions; here, it would push the nation

farther from Congress’s goal of attaining near-universal health

insurance coverage. And, as leaving the constitutionality of the

Act unsettled would seem likely to create uncertainty in the

health insurance and health care industries, which might depress

these major sectors of the economy, it seems that application of

the AIA would be at cross-purposes with the Act’s reforms. Thus,

I believe that there is ample reason for me to conclude that

                                    75
Congress had no design that the Anti-Injunction Act might apply

to the individual mandate’s penalty provisions.

       The question of our jurisdiction over appellants’ challenge

to    the     analogous          penalty        attached       to    the    employer        mandate

presents       a        closer     question.          That     exaction         is    termed      “an

assessable payment” in the provision that imposes it, but it is

then    twice           referred      to       as    a    “tax”      in    later,         qualifying

provisions.          Compare       

       with      

(c)(7). “The . . . ambiguity of statutory language is determined

by reference to the language itself, the specific context in

which that language is used, and the broader context of the

statute as a whole.” Robinson v. Shell Oil Co., 

,

341 (1997). Given these mixed references, and mindful of the

Supreme Court’s warning in United States v. Am. Trucking Ass’ns,

, 542 (1940), that “[t]o take a few words from their

context       and       with   them    thus         isolated    to     attempt       to    determine

their meaning, certainly would not contribute greatly to the

discovery of the purpose of the draftsmen of a statute,” I find

the    text    of       the    employer        mandate       provision      ambiguous        on   the

application of the Anti-Injunction Act.

       Thus,        I    would     again        look      to    legislative          history      and

Congressional purpose. Cf. SEC v. C.M. Joiner Leasing Corp., 

,        350-51       (1943)    (Jackson,           J.)   (explaining           that   our

canons of statutory construction “long have been subordinated to

                                                     76
the doctrine that courts will construe the details of an act in

conformity with its dominating general purpose, will read text

in the light of context and will interpret the text so far as

the meaning of the words fairly permits so as to carry out in

particular cases the generally expressed legislative policy”).

For the reasons stated above, I would hold that Congress did not

intend the Anti-Injunction Act to block timely judicial review

of the employer mandate provisions. Accordingly, I would hold

that we have jurisdiction to consider all of appellants’ claims.

                          B. The Majority’s View

       The majority’s contrary conclusion relies on two arguments,

neither of which I find convincing. First, the majority contends

that    “the     Supreme    Court     has       repeatedly     instructed      that

congressional labels have little bearing on whether an exaction

qualified as a ‘tax’ for statutory purposes” and that “the Court

has specifically found an exaction’s label immaterial to the

applicability of the AIA,” displacing the ordinary methods of

statutory      interpretation      with    a    functional    analysis    of   the

challenged exactions. Ante pp. 22-24. Thus, in the majority’s

view, “it is simply irrelevant what the 2010 Congress would have

thought about the AIA; all that matters is whether the 2010

Congress    imposed   a    tax.”    Ante       p.   38.   Second,   the   majority

asserts that “[t]he Supreme Court has concluded that the AIA

uses the term ‘tax’ in its broadest possible sense” and thus

                                          77
that this functional analysis sweeps quite broadly: the majority

holds that “the AIA prohibits a pre-enforcement challenge to any

exaction that is made under color of their offices by revenue

officers      charged    with     the    general      authority       to    assess     and

collect the revenue.” Ante p. 18 (internal quotation marks and

braces omitted).

                                          1.

      The      majority’s        functional         approach        hinges     on      its

interpretation of two Supreme Court cases from 1922: Bailey v.

George, 

(1922), and Lipke v. Lederer, 

(1922). I read these cases differently from the manner in which

the majority reads them. Because the majority’s view of George

and   Lipke     brings    these     cases      into    conflict,       I    believe       my

approach, which harmonizes them, is preferable.

      The   majority      asserts       that   in     Lipke    “the    Court    .     .    .

specifically      found     an    exaction’s          label    immaterial       to     the

applicability of the AIA.” Ante p. 24. The Lipke Court held that

“[t]he mere use of the word ‘tax’ in an act primarily designed

to define and suppress crime is not enough to show that within

the true intendment of the term a tax was 

(emphases added). That is, “[t]he mere use of the word ‘tax’” in

a   criminal    statute—particularly           where,    as    in     the    statute      at

issue in Lipke, the word “tax” is immediately followed by the

word “penalty”—is not dispositive of Congress’s “true inten[t]”

                                          78
regarding     application      of    the      AIA.    

   an   ordinary

exercise in statutory interpretation, not an instruction from

the Court to disregard Congressional designations as “immaterial

to the applicability of the AIA.” Ante p. 24.

       The    Court    did    go    on   to     examine     the    function       of   the

exaction, noting that “[w]hen by its very nature the imposition

is a penalty, it must be so regarded,” but it did not do so in

the course of an ordinary application of the AIA. 

. Rather, it is clear that the Court considered the

function of the exaction because that function (as a criminal

penalty) was relevant to the Court’s due process concerns. It

was    to    resolve   this    constitutional          problem,        not    simply    to

construe the word “taxes” in the AIA, that the Court looked to

the exaction’s function.

       Thus, the Court reasoned,

       Before collection of taxes levied by statutes enacted
       in plain pursuance of the taxing power can be
       enforced, the taxpayer must be given fair opportunity
       for hearing; this is essential to due process of law.
       And certainly we cannot conclude, in the absence of
       language admitting of no other construction, that
       Congress intended that penalties for crime should be
       enforced through the secret findings and summary
       action of executive officers. The guaranties of due
       process of law and trial by jury are not to be
       forgotten or disregarded.

(emphasis added). This passage strongly indicates

that    the    Court    was    applying         the    canon      of    constitutional

avoidance, construing the exaction at issue together with the

                                           79
AIA so as not to run afoul of due process. Cf. South Carolina v.

Regan, 

, 398-400 (1984) (O’Connor, J., concurring in

the judgment) (relying on doctrine of constitutional avoidance

to interpret the AIA not to apply to original jurisdiction of

the Supreme Court). The functional analysis was required by the

Court’s   constitutional     concerns,     as   due   process       is   triggered

when   the   penalty    is   criminal,     whatever        its    designation   by

Congress. As the AIA was simply being interpreted to accord with

the constitutional mandate of due process—which binds Congress

and thus of course requires that we look beyond Congressional

labels to the nature and function of the exaction—Lipke did not

establish a new methodology for construing “taxes” under the

AIA. Instead, it recognized that the term “taxes” in the AIA is

flexible, like nearly all statutory language, and may admit to

alternative constructions. And it affirmed that a court’s goal

when applying the AIA, like any other statute, is to do so in

accord with the “true intendment” of Congress. 

       This reading of Lipke harmonizes it with the two Bailey

cases. As the majority explains, the Supreme Court considered a

tax refund suit in Bailey v. Drexel Furniture Co. and held the

Child Labor Tax Law unconstitutional as a “penalty” rather than

a “tax.” 

, 38-39 (1922). The same day, in Bailey v.

George,   the   Court    dismissed,    pursuant       to    the    AIA   (§ 3224,

precursor to the modern AIA), a pre-collection suit alleging the

                                      80
Child Labor Tax Law was unconstitutional. 

(1922).

The George Court’s reasoning is extremely brief (in a one-page

opinion):     “The      averment        that       a      taxing     statute     is

unconstitutional does not take this case out of [the AIA].” 

The question, of course, is why the statute, though an

unconstitutional     exercise      of     the      taxing    power     per   Drexel

Furniture, is still “a taxing statute” for purposes of the AIA.

       My answer is the more straightforward one: it constitutes a

“taxing statute” for purposes of the AIA because it purported to

be a taxing statute and appeared to be one on its face—that is,

because it was designated as a taxing statute by Congress. See

Drexel 

(noting exaction was called

“Tax on Employment of Child Labor,” part of “An act to provide

revenue . . .”). Thus, the Court provided no explanation because

it relied on the most obvious reason for deeming the statute at

issue a “taxing statute.” The majority disagrees, arguing that

“the Court never mentioned the statutory label” in George and

that “it [does not] seem plausible that the Court implicitly

relied on that label, given that it had never before and has

never since found an exaction’s label controlling for statutory

purposes.” Ante pp. 25-26.

       Under the majority’s approach, the George Court must have

conducted a functional analysis of the exaction and determined

that   it   qualified    as   a    tax.      Yet   this     supposed    functional

                                        81
analysis     appears      nowhere    in    the   opinion.     It    is    difficult   to

believe that the Court would not bother to specify any criteria

for determining when an exaction is functionally a tax, given

that the Court had just held the statute not to qualify as a tax

for constitutional purposes in Drexel Furniture. If the George

Court were relying on anything beyond the face of the statute,

surely the Court would have provided some explanation of why the

enactment qualified as a tax under the AIA but not under the

Taxing and Spending Clause.

      More      troubling    still,       the    majority’s    reading      of     George

brings     it    into     conflict    with       Lipke.     Under    the    majority’s

approach, the Court in George must have simply recognized that

“the AIA . . . [reaches] any exaction that is made under color

of their offices by revenue officers charged with the general

authority to assess and collect the revenue.” Ante 18 (internal

quotation marks and braces omitted). But these criteria fail to

distinguish the “penalty” in Lipke, which was held to be outside

the   AIA.      The     “penalty”    in     Lipke    also     met    the    majority’s

criteria:       the   National      Prohibition      Act    simply       doubled    taxes

already assessed and collected by the Commissioner, 41 Stat.

305, 317-18 (1919), which were laid down in the Revenue Act of

1918 “on all distilled spirits,” and were “to be paid by the

distiller or importer when withdrawn, and collected under the

provisions of existing law,” 40 Stat. 1057, 1105, Title VI – Tax

                                           82
on   Beverages,   §    600(a).   That   the   Court   found   the   exaction

tantamount to a criminal penalty does not change this. 3 Thus, by

the majority’s understanding of the AIA, there should have been

no room for constitutional avoidance, and the Court in Lipke

should have held the AIA applicable and refused jurisdiction. 4

      The   majority    seems    to   recognize   that   Lipke   may   appear

problematic, but it contends that it is not. It argues that

“Lipke held only that when Congress converts the tax assessment

process into a vehicle for criminal prosecution, the Due Process

Clause prohibits courts from applying the AIA.” Ante p. 28. That


      3
       The majority attempts to sidestep this conflict, nicely
arguing that the Act “did not authorize the collector to make an
assessment under his general revenue authority” because “it
converted him into a federal prosecutor.” Ante p. 27. But the
constitutional failings of the Act does not change the fact that
the Commissioner would be collecting the challenged tax “under
his general revenue authority.” The Act did not provide any
separate mechanism for the assessment and collection of this
tax, or even expressly assign those duties to the Commissioner;
it simply stated that “a tax shall be assessed . . . and
collected . . . in double the amount now provided by law” from
those illegally manufacturing or selling alcohol. Thus, the
Commissioner could only perform such assessments and collections
under the “general revenue authority” granted by the Internal
Revenue Code. 41 Stat. at 318. That such assessments violated
due process does not change the fact that the revenue officers
doing the assessment would be acting “under color of their
offices.” Ante p. 18 (internal quotation marks omitted).
      4
       This was the view of the dissenting opinion in Lipke,
which relied on George. See 

(Brandeis,
J., dissenting) (“The relief should therefore be denied,
whatever the construction of section 35, tit. 2, of the Volstead
Act, and even if it be deemed unconstitutional. Compare Bailey
v. George, 

, 42 Sup. Ct. 419, 

, decided
May 15, 1922.”).
                                       83
was the core holding of Lipke, yes, but the question is whether

the Court’s construction of the AIA in reaching that holding

accords         with     the     majority’s           rigid        interpretative          regime

constructed ninety years later. 5 Under the majority’s proposed

construction, the term “tax” in the AIA reaches all exactions

which the Commissioner is empowered to collect. Ante pp. 19-20.

Yet, the Lipke Court held that the AIA did not reach such an

exaction. Though the majority would prefer that Lipke “create[d]

only a narrow constitutional limitation” to the AIA, ante p. 28,

the    Court’s         holding      is    simply        not       framed    as    creating       an

exception        to    the     AIA.      Rather,      the     Court       explained      that   it

“constru[ed]”          the     term      “tax”     in       the     AIA    (in    accord      with

“Congress[’s] inten[t]”) and held that it was not so 

.      The      majority’s        view       of     the    AIA,   and     its

corresponding interpretation of these cases, inescapably places

George and Lipke in conflict.

       My reading of these cases, which is fully consistent with

my approach to the AIA, harmonizes them. Under my view of Lipke,

the    AIA’s      “taxes”      is     recognized        to     be,      like     any    statutory

language, a flexible term that must be interpreted in accord

with       Congressional         intent      and,        when        applicable,        bounding

       5
       Indeed, the rigidity of the majority’s approach prompts a
reminder   that   we   confront  here   the   court’s  statutory
jurisdiction, not its Article III jurisdiction. Congress grants,
and   Congress   restricts,   as  it   chooses,   the  statutory
jurisdiction of the lower federal courts.
                                                 84
constitutional mandates. In many cases, Congress’s decision to

designate something a “tax” will prove dispositive—indeed, the

designation did so in Bailey v. George. Lipke simply reflects

the recognition that Congress’s use of the word “tax” in an

otherwise        non-tax    provision   (followed      closely     by   the    word

“penalty”) does not invariably mandate that the AIA be applied—

constitutional concerns can override congressional designations.

This is fully in accord with my view of the AIA and its relation

to subsequent enactments, particularly an expansive programmatic

enactment such as the ACA that would alter the fabric of many

layers of American life. 6

      The majority cites several other cases for the proposition

that we are to ignore Congressional designations when applying

the       AIA,    instead    asking     only       whether    an    exaction     is

intrinsically a tax according to its “nature and character.”

Ante p. 23 (quoting Helwig v. United States, 

, 613

(1903)). I will briefly discuss two of them.

      Helwig      v.   United    States,     for    instance,      concerned    the

interaction       of   a   statute   that    imposed   “a    further    sum”   when

      6
       In this regard, Justice O’Connor nicely captured the
essential purpose of the AIA when she declared: “The AIA
‘depriv[es] courts of jurisdiction to resolve abstract tax
controversies . . . .’” South Carolina v. Regan, 

,
386 (1984) (O’Connor, J., concurring in the judgment); and see

(“the Act generally precludes judicial resolution of
all abstract tax controversies . . .”). The essential issues
presented in this case are about as far from “abstract tax
controversies” as one can get.
                                        85
importers declared a value more than 10% lower than customs’

subsequent appraisal and a statute that gave federal district

courts       exclusive            jurisdiction            over      “penalties”            and

“forfeitures.” The passage the majority excerpted from is quite

instructive:

      Although the statute . . . terms the money demanded as
      “a further sum,” and does not describe it as a
      penalty, still the use of those words does not change
      the nature and character of the enactment. Congress
      may enact that such a provision shall not be
      considered as a penalty or in the nature of one, with
      reference to the further action of the officers of the
      government, or with reference to the distribution of
      the moneys thus paid, or with reference to its effect
      upon the individual, and it is the duty of the court
      to be governed by such statutory direction, but the
      intrinsic nature of the provision remains, and, in the
      absence of any declaration by Congress affecting the
      manner in which the provision shall be treated, courts
      must decide the matter in accordance with their views
      of the nature of the act.

,     612-13     (emphases          added).       Thus,     the    Court

emphasized that it looked to “the nature and character of the

enactment” only “in the absence of any declaration by Congress”

giving     direction        to     the    court.         Far     from    supporting        the

majority’s        claim     that     “[t]he        Supreme      Court    has     repeatedly

instructed        that    congressional        labels      have     little       bearing    on

whether      an     exaction        qualifies       as     a     ‘tax’    for     statutory

purposes,”        Helwig     indicates        that       Congressional         labels    that

direct    the      court    may     of   course      be    dispositive.          Terming    an

exaction     “a     further      sum”    did    not      help    the     Court    determine


                                              86
whether       or        not     that     sum   was        a    “penalty”;       but     Congress’s

expressly      considering             calling       an       exaction      a   “tax”       and   then

deleting       the       dozens        of   references          to     a    “tax”     and    instead

designating it a “penalty” (as Congress did in the course of its

enactment          of     the     ACA)      does     help       courts      determine        whether

Congress wished us to view the exaction as a “tax” for purposes

of the AIA. 7 Though Congress did not expressly reference the AIA

here—and, judging from the legislative history, may well not

have       considered         application          of     the    AIA       specifically—it        did

consider whether to attach all the trappings of a “tax” to the

exaction (including, among many others provisions, the AIA), and

decided instead to specify the ones it wanted. The AIA is not

among them.



       7
       The majority focuses on Helwig’s use of the phrase “with
reference to,” suggesting that Helwig would have us consider
Congressional direction here only if it is expressly labeled as
being made “‘with reference to” the AIA.” Ante 23 n.5. But that
very sentence in Helwig goes on to describe such direction as
“any declaration by Congress affecting the manner in which the
provision shall be 

(emphasis added).
The following citations to “statute after statute” which the
majority references are part of the Court’s analysis, the Court
tells us, because it must determine whether the “words [employed
by Congress] are not regarded by Congress as imposing a penalty
and [thus] should not be so treated by the court,” for “[i]f it
clearly appear that it is the will of Congress that the
provision shall not be regarded as in the nature of a penalty,
the court must be governed by that will.” 

not mean to
suggest that Helwig teaches that “an exaction’s label controls,”
ante p. 23 n.5, only that any Congressional direction that
indicates “the will of Congress” on the application of the AIA
should be considered.
                                                   87
       The majority’s second citation for that proposition, United

States v. Reorganized CF & I Fabricators of Utah, Inc., 

, (1996), is much like Helwig. There the Court determined

whether    a   “tax”    imposed        on     certain    funding    deficiencies

constituted    an    “excise    tax”    for    Chapter   11   purposes     (as   “an

excise tax” was accorded higher priority than ordinary claims).

It prefaced its discussion by recognizing that “Congress could

have included a provision in the Bankruptcy Code calling [the

relevant] exaction an excise tax . . . ; the only question is

whether the exaction ought to be treated as a tax (and, if so,

an excise) without some such dispositive direction.” 

Its ultimate conclusion considered legislative history of the

exaction at issue and “conclude[d] that the 1978 Act reveals no

congressional       intent     to   reject      generally     the   interpretive

principle that characterizations in the Internal Revenue Code

are not dispositive in the bankruptcy context . . . .” 

  Here,   where    Congress       provided    one   of   the   most    direct

signals it can of its intentions—it expressly considered calling

the exaction a “tax” and ultimately decided not to do so—Helwig

and Reorganized CF & I would direct us to follow Congress’s

direction and treat an exaction denominated a “penalty” as a

penalty and not as a tax for purposes of the AIA.

                                        2.



                                        88
      Second, the majority’s approach relies upon its assertion

that “[t]he Supreme Court has concluded that the AIA uses the

term ‘tax’ in its broadest possible sense” and thus that “the

AIA prohibits a pre-enforcement challenge to any exaction that

is made under color of their offices by revenue officers charged

with the general authority to assess and collect the revenue.”

Ante p. 18 (internal quotation marks and braces omitted).

      This definition is far from self-evident. As the majority

concedes, taxes and penalties are distinguished in some federal

statutory “contexts.” Ante p. 22 n.4. In the very case discussed

above, Reorganized CF & I Fabricators, which dates from 1996,

the Court adopted these definitions for its “functional” inquiry

of the exaction at issue: “A tax is an enforced contribution to

provide for the support of government; a penalty . . . is an

exaction imposed by statute as punishment for an unlawful 

.    The   majority    reasons    that   “[n]either   the

Secretary nor the Sixth Circuit cites a single case suggesting

that [this distinction applies to the AIA].” Ante p. 22 n.4. Of

course, Lipke, on which the majority relies, is one major AIA

case that distinguishes between taxes and penalties. And, as the

Court in Reorganized CF & I Fabricators borrowed its definitions

of “tax” and “penalty” from a “somewhat different context,” it

appears   that    these   definitions      are   not   particularly   context-

. Thus, if a court is to perform a

                                      89
“functional examination” of its own, why would it not use these

well-settled definitions, under which the Affordable Care Act’s

exaction would clearly be a penalty (for noncompliance with the

individual mandate)?

     By my count, the majority puts forward three affirmative

arguments favoring the “broadest possible” definition for the

word “taxes” in the AIA: (1) Snyder v. Marks, 

(1883), established a broad definition of “tax” under the AIA;

(2) the twin Bailey cases show that the AIA is “broader” than

the taxing clause; and (3) the fact that the IRS grants the

Secretary   the   authority     to    make       “assessments   of   all     taxes

(including interest, additional amounts, additions to the tax,

and assessable penalties) imposed by this title” implies that

the AIA, which generally protects the Government’s interest in

effecting   unfettered    tax        assessments,      must     apply   to    all

exactions. 26 U.S.C. § 6201(a) (emphasis added). I find these

arguments unpersuasive.

     First, Snyder does not establish the broad definition the

majority cites it for. The Court explains that “tax” “meant that

which is in condition to be collected as a tax, and is claimed

by the proper public officers to be a 

(emphasis   added).    Thus,    Snyder       clearly    makes    relevant      the

Commissioner’s    designation        of     an    exaction    and,   reasonably

viewed, requires that the Commissioner “claim[]” an exaction “to

                                       90
be a tax.” Here, of course, the Secretary of the Treasury is a

party      before       us   and   supports    Congress’s    designation    of   the

mandate as a “penalty” rather than a “tax.” 8

       Second, the Bailey cases have already been dealt with at

length above. I agree that they show that the AIA is “broader”

than       the    taxing     clause   when    applied   to   exactions    that   are

designated by Congress as “taxes”—in the limited sense that they

include          some   exactions     that    purport   to   be   taxes    yet   are

unconstitutional—but they do no more than that.

       As for the majority’s final argument, it seems to require a

logical leap. I reproduce the relevant paragraph for ease of

reference:

             The Court’s broad interpretation of the AIA to
       bar interference with the assessment of any exaction
       imposed by the Code entirely accords with, and indeed
       seems to be mandated by, other provisions of the
       Internal Revenue Code. The AIA does not use the term
       “tax” in a vacuum; rather, it protects from judicial
       interference the “assessment . . . of any tax.”
       I.R.C. § 7421(a) (emphasis added).         The Secretary’s
       authority to make such an “assessment . . . of any
       tax” derives directly from another provision in the
       Code,    which    charges   the   Secretary    with   making
       “assessments     of   all   taxes    (including    interest,
       additional     amounts,   additions    to   the   tax,   and
       assessable penalties) imposed by this title.”              §
       6201(a) (emphases added); see also § 6202 (“assessment

       8
       The majority believes the “fundamental problem with this
argument is that the Secretary still does ‘claim’ that the
challenged exaction is a ‘tax,’ albeit one authorized by the
Constitution’s Taxing Clause.” Ante p. 26-27 n.7. As Snyder is
discussing the use of the word “tax” in the precursor to the
modern AIA, I read Snyder to refer to the Commissioner’s
designation with respect to the statute.
                                              91
         of any internal revenue tax” includes assessment of
         “penalties”).    Thus,  for   purposes  of   the  very
         assessment authority that the AIA protects, Congress
         made clear that “penalties” (as well as “interest,
         additional amounts, [and] additions to the tax”) count
         as “taxes.”     Congress must have intended the term
         “tax” in the AIA to refer to this same broad range of
         exactions.   See Erlenbaugh v. United States, 

, 243 (1972) (“[A] legislative body generally uses
         a particular word with a consistent meaning in a given
         context.”).

Ante p. 19-20 (large emphasis mine).

         I agree, of course, that “for purposes of the [Secretary’s]

assessment authority,” Congress made clear that the ‘penalties’

.    .    .    count     as    ‘taxes.’”        Indeed,      where   Congress       has   wished

“penalty” to be treated as a “tax,” it has said so. See, e.g.,

26       U.S.C.     §§    6665(a)(2),        6671(a)         (directing      that    “tax”    be

“deemed also to refer to . . . penalties” in Chapter 68 of the

Internal          Revenue       Code).     It     is    not    at    all    surprising      that

Congress          has     employed         this        shorthand     when     defining       the

Secretary’s authorities.

         The     problematic        leap     is     this:      simply      because    the    AIA

generally protects the Secretary’s assessment authority does not

mean      that     the        AIA   must    apply       to    all    exactions.      The     many

exemptions included in the AIA as currently codified show that

Congress has often wished to exempt certain exactions from the

AIA. As a matter of statutory interpretation, it seems improper

for a court to insist that “taxes” means any exaction (despite

the fact that Congress does not say so) and thereby to undercut

                                                  92
Congress’s deliberate decision to reject designating an exaction

as a “tax” and instead to call it a “penalty.” Given that we

have   been     cited   no     cases      that    would    require       such    a   large

redrafting of the AIA—other “penalties” to which the AIA have

been applied were placed in Chapter 68, which expressly directs

that all references to “tax” in the IRC are to refer also to the

Chapter’s      “penalties”—I     believe         that    this   “broadest       possible”

interpretation of the AIA is unwarranted and unwise.

       The majority appears to reject the legal force of sections

6665(a)(2) and 6671(a), arguing that section 7806(b) “forbid[s]

courts from deriving any ‘inference’ or ‘implication’ from the

‘location or grouping of any particular section or provision or

portion of this title.’” Ante p. 31. This puzzles me, as it is

absolutely      clear   that    sections         6665(a)(2)       and    6671   have    the

force of law. Section 6665(a)(2) directs that “any reference in

this title to ‘tax’ imposed by this title shall be deemed also

to refer to . . . penalties provided by this chapter.” This

instructs courts that Congress wished to make the word “penalty”

inclusive of the word “tax” in this particular chapter (Chapter

68). Congress remains free to do otherwise in other chapters;

indeed,   it    chose   not     to   do    so    in     Chapter    48,    in    which   the

individual mandate is found. Giving force to section 6665(a)(2)

in no way contradicts section 7806(b) by drawing a prohibited

implication from the “location or grouping” of Internal Revenue

                                            93
Code       (IRC)        provisions.     Section       7806(b)      prohibits       inferences

drawn from the location or group itself; instructions can still

flow       from    section      6665(a)(2)          that    are    to    apply     only    to   a

specified chapter. This seems to me to be beyond serious doubt.

Likewise, section 7806(b) does not prohibit courts interpreting

one provision of the IRC from looking to other provisions of the

IRC and noting that, where Congress has desired a particular

result, it has stated so. To suggest that a court cannot draw

the    traditional          inference        from    Congress’s         decision    to    define

“penalty”          as    inclusive      of    “tax”    in    other       chapters       and   its

failure       to    do     so   here    seems       wholly       unwarranted       by    section

7806(b). 9

       In the final analysis, the majority’s approach essentially

imposes       a    clear-statement           rule    on    Congress,       making       the   AIA

applicable to all exactions, regardless of statutory language

and    in     disregard         of     apparent       Congressional         intent,       unless

Congress had the foresight to expressly exempt an exaction from

the    AIA.       The     majority     concedes,      as    it    must,     that    the    111th

Congress could have exempted the individual mandate from the

AIA, but it suggests that the only way Congress could avoid the

       9
       I do not suggest that “we [should] infer from § 6665(a)(2)
a categorical exclusion from the term ‘tax’ of all non-Chapter
68 penalties.” Ante p. 31 (emphasis added). Rather, the fact
that Congress has directed us to treat some “penalties” as
“taxes” simply makes it less likely that Congress desired this
result where it enacted no such direction (and in fact expressly
rejected the term “tax” for the term “penalty”).
                                                94
AIA’s bar on immediate judicial review of the ACA is by amending

the AIA itself to include an express exemption for the ACA or

(in what amounts to the same thing) by referencing the AIA by

name in the ACA. That is, the majority seems to believe that a

clear-statement rule is operative here, and that absent a clear

statement     regarding     the        inapplicability      of    the    AIA,       it    must

apply to any and all exactions. Given that the Supreme Court has

never recognized such a clear-statement rule, it seems to me

that     this    turns      the         ordinary     principles         of      statutory

interpretation on their head.

       As Justice Kennedy recently recognized for a plurality of

the     Court,     clear-statement          rules     are    designed          to    “avoid

applications       of    otherwise        unambiguous        statutes        that        would

intrude on sensitive domains in a way that Congress is unlikely

to    have   intended     had     it    considered    the     matter.”       Spector       v.

Norwegian Cruise Line Ltd., 

, 139 (2005) (plurality

op.).    Justice    Kennedy       even     warned    in     his   plurality         opinion

against “convert[ing] the clear statement rule from a principle

of interpretive caution into a trap for an unwary Congress.” 

to be precisely what the majority does today.

       Presumably       because    the     majority       believes      such    a    clear-

statement rule applies, it asserts that “[t]o infer an intent on

the part of the 2010 Congress to implicitly exempt this pre-

enforcement challenge from the AIA bar would be tantamount to

                                            95
inferring an implicit repeal of that bar.” Ante p. 37. But our

case is nothing like implicit repeal cases like TVA v. Hill, 

(1978), which the majority cites in that paragraph. In

Hill,      the    Court        considered         whether      continued           federal

appropriations       for   a   dam     after      notice   that    construction          was

being   challenged     under     the       Endangered      Species    Act    worked       an

implicit    repeal    of   the       Act   with    respect    to     the    dam.    In    an

implicit repeal case, the Court is forced to consider whether

Congressional action definitively to the contrary of an earlier

enactment works an implied repeal. In our case, on the other

hand, we are simply asking whether Congress created with the ACA

the sort of exaction to which the earlier act (the AIA) applies.

This requires us to construe both the word “taxes” under the AIA

and the word “penalty” in the ACA, applying our ordinary tools

of statutory interpretation. We look first to the text itself,

and, after finding that it is at best ambiguous, we look to

legislative      history       and    Congressional        purpose.        Because       the

application of the AIA to the ACA is in doubt—this is precisely

the question we are deciding sua sponte—our case is nothing like

implicit repeal cases.

     Of course, my approach fully recognizes that the AIA has

legal force. But, as the AIA can undoubtedly be sidestepped by

any Congress as it creates a new exaction (at the very least, in

the majority’s view, by a clear statement that the AIA is not to

                                            96
apply), the AIA is non-binding on future Congresses. When courts

determine the application of the AIA to the ACA, they are only

considering the application of one Congressional enactment to a

later one. Because one Congress cannot bind a later one, the

111th Congress was fully within its prerogative to indicate,

even if only implicitly, that the AIA should not apply. See

United    States    v.    Winstar    Corp.,    

,    872   (1996)

(plurality    op.)       (quoting    Blackstone      for   “the     centuries-old

concept    that    one    legislature    may   not     bind   the     legislative

authority of its successors”). The independent legal force of

the AIA does not spring from the fact that it can trap future,

unwary Congresses, but rather from the fact that we must seek to

harmonize its terms with that of future legislation. That is,

the AIA is not binding on Congress, it is binding on us, the

judiciary.

     Finally,      as    for   the   majority’s      suggestion      that   policy

arguments favor its position because a contrary holding “might

have serious long-term consequences for the Secretary’s revenue

collection,” ante p. 41, I would simply note again that the

Secretary of the Treasury is a party before us and argues that

the AIA does not apply. Indeed, I cannot find a Supreme Court

case where the AIA has been applied over the objection of the

Secretary.

                                        3.

                                        97
       The majority suggests that the issue presented here is one

of    “context,”    and    I   agree.     The        majority   accepts     “the    Sixth

Circuit’s general observation that there are ‘contexts’ in which

the law treats ‘taxes’ and ‘penalties’ as mutually exclusive”

and explains that “[t]he question here is whether the AIA is one

of these ‘contexts.’” Ante p. 22 n.4 (internal quotation marks

omitted). To my mind, the proper question is not whether “taxes”

and “penalties” are always “mutually exclusive” under the AIA,

but    whether   Congress,        in   creating        a    later-enacted     exaction,

intended to create a “tax” for purposes of the AIA. But the more

important question of “context” is this: whether, in light of

the    context     provided       by   Congress’s           deliberate    decision     to

designate the individual mandate’s exaction a “penalty” rather

than a “tax” and the evidence of Congress’s desire to erect no

jurisdictional bar to immediate judicial review of the ACA, we

should nonetheless interpret the ACA as creating a “tax” within

the    meaning     of   the    AIA.      My        effort   here,   to    marshal     the

historical, jurisprudential, interpretive, and, yes, commonsense

factors necessary to answer this question, persuades me that we

should not. Given this larger context, I do not believe that one

interpretation of near century-old AIA cases—cases that fail to

devote enough space to the AIA analysis to even spell out their

reasoning—should          carry    the        day.     If     the   Supreme     Court’s



                                              98
vacillations      concerning        the    proper       interpretation               of    the    AIA

teach us anything, they teach us that context matters. 10

                                *         *        *         *

     Because I do not believe that Lipke and George instruct

courts     to     eschew       our        ordinary               methods        of        statutory

interpretation      and    I   do    not      agree      that       the    AIA       reaches      all

exactions though by its terms it is limited to “taxes,” I cannot

join the majority. Where Congress expressly rejected the term

“tax”     in    favor   of     “penalty,”          and       where        it        appears      that

application of the AIA would do little to further the purposes

of the AIA, but would do much to frustrate the Affordable Care

Act’s reforms desired by the Congress that approved the Act, I

would hold that the AIA does not strip us of jurisdiction. Thus,

I would reach (and I do indeed reach) the merits of appellants’

challenges.

                                     II. The Act


     10
        Justice Powell          summarized             the       history       of    the    AIA   as
follows, in part:

     [T]he Court's unanimous opinion in Williams Packing
     indicates that the case was meant to be the capstone
     to judicial construction of the Act. It spells an end
     to a cyclical pattern of allegiance to the plain
     meaning of the Act, followed by periods of uncertainty
     caused by a judicial departure from that meaning, and
     followed in turn by the Court's rediscovery of the
     Act's purpose.

Bob Jones 

. Rediscoveries of congressional
intent abound in the law and should not surprise us.
                                              99
     After a months-long national debate, the Patient Protection

and Affordable Care Act was signed into law on March 23, 2010.

Pub. L. No. 111-148, 124 Stat. 119, amended by The Health Care

and Education Reconciliation Act of 2010, Pub. L. No. 111-152,

124 Stat. 1029 (2010). The Affordable Care Act is comprised of a

half-dozen initiatives designed to reduce the costs of health

care and the number of Americans who remain uninsured.

     First, the Act creates “health benefit exchanges” in each

state, which are regulated to increase transparency concerning

premium increases and claim denials and which offer market-based

incentives tied to increases in efficiency and better health

outcomes. 42 U.S.C. § 18031(e), (g).

     Second, the Act prevents insurers from rejecting applicants

with preexisting conditions (the “guaranteed issue” requirement)

and bars insurers from charging higher premiums to those with

serious medical conditions or a history of past illness (the

“community rating” requirement). 

– 300gg-3.

     Third, the Act makes more Americans eligible for Medicaid,

and to many of those who earn too much to receive Medicaid it

grants tax credits to subsidize the cost of insurance premiums

and pledges federal dollars to reduce out-of-pocket expenses.

18071; 26 U.S.C. § 36B.

     Fourth, the Act requires that individuals keep up “minimum

essential   [health   insurance]     coverage.”   

  In

                                   100
particular, it directs that “[a]n applicable individual shall

for each month beginning after 2013 ensure that the individual,

and any [applicable] dependent . . ., is covered under minimum

essential coverage for such month.” 

this the

“individual mandate,” and it is the chief target of their suit.

Appellants’ Br. 3. Congress found that hospitals provided $43

billion in uncompensated care to the uninsured in 2009, and that

these costs were shifted onto insured individuals, “increas[ing]

family premiums by on average over $1,000 a year.” 42 U.S.C. §

18091(a)(2)(F). It also found that, “[b]y significantly lowering

the number of the insured, the [minimum coverage] requirement,

together   with   the     other    provisions    of    th[e]      Act,   will   lower

health insurance premiums.” 

two religious exemptions to the individual

mandate:   a   religious     conscience       exemption     and     a    health-care

sharing ministry exemption. 26 U.S.C. § 5000A(d)(2). I discuss

the   particulars    of    these    exemptions        in   Part    VIII,    where   I

consider appellants’ First Amendment claims.

      Fifth,   the   Act     created    tax     incentives        making   it   more

affordable for small businesses to offer health insurance to

their employees. 

      Finally, the Act required “applicable large employers . . .

to offer to its full-time employees (and their dependents) the

opportunity to enroll in minimum essential coverage under an

                                       101
eligible    employer-sponsored      plan”      if   at    least    one       full-time

employee is receiving federal subsidies for health insurance.

. Appellants call this the “employer mandate.”

Appellants’ Br. 3.

     Appellants   Michele       Waddell,      Joanne     Merrill,       and   Liberty

University assert an array of constitutional challenges to the

Act’s individual and employer mandates and request declaratory

and injunctive relief. They allege that the mandates are outside

Congress’s Article I powers and that the individual mandate’s

religious exemptions effect violations of the First Amendment’s

Free Exercise and Establishment Clauses as well as the equal

protection    component    of     the    Fifth      Amendment’s     Due        Process

Clause.    Appellants’    chief    contention       is    that    the    individual

mandate was not validly enacted pursuant to Congress’s commerce

power because it regulates what they call “inactivity.” 

The district court carefully parsed appellants’ arguments and

dismissed their suit pursuant to Federal Rule of Civil Procedure

12(b)(6),    concluding    that    appellants       had    failed       to    state   a

legally sufficient claim. Liberty University, Inc. v. Geithner,

(W.D. Va. 2010). For the following reasons,

I would affirm.

              III. Constitutionality, Inactivity Aside

     Putting aside appellants’ “inactivity” argument, to which I

return in Parts IV and V, I first consider whether the Act is

                                        102
otherwise     authorized       under   Congress’s        “power   to     regulate

activities       that   substantially        affect   interstate       commerce.”

Gonzalez v. Raich, 

, 16-17 (2005). In particular, I

ask whether the Act runs afoul of the teachings of United States

v. Lopez and United States v. Morrison, two cases in which the

Supreme Court enforced limits on the Commerce Clause so as not

to “convert congressional authority under the Commerce Clause to

a general police power.” Lopez, 

, 567 (1995); see

Morrison, 

, 617-19 (2000).

                            A. Lopez and Morrison

       In Lopez and Morrison the Supreme Court struck down two

congressional enactments because the objects of regulation—the

possession of guns in school zones in Lopez, violence against

women   in   Morrison—were      noneconomic.     Affirming     that     “Congress’

commerce     authority      includes    the     power     to   regulate      those

activities having substantial relation to interstate commerce,

i.e.,    those    activities    that    substantially      affect      interstate

commerce,” Lopez held that gun possession in schools did not

substantially      affect   interstate       

(internal citations omitted). The Court worried that to identify

the effect of guns in schools on interstate commerce it “would

have to pile inference upon inference in a manner that would bid

fair    to   convert    congressional     authority      under    the    Commerce

Clause to a general police power of the sort retained by the

                                       103
States.”     

      If gun possession in schools were held to

be substantially related to interstate commerce simply because

such    incidents      harmed         our    “national        productivity,”         then

“Congress could regulate any activity that it found was related

to   the    economic   productivity         of    individual        citizens”    and    it

would be “difficult to perceive any limitation on federal power,

even   in   areas    such   as    criminal        law    enforcement    or    education

where States historically have been sovereign.”                      

       Morrison further clarified the holding of Lopez. The Court

explained     that     “a   fair      reading       of    Lopez      shows    that     the

noneconomic, criminal nature of the conduct at issue was central

to our decision in that 

. Without “express

congressional       findings     regarding        the    effects     upon    interstate

commerce of gun possession in a school zone,” the Court refused

to find a substantial effect upon interstate commerce, as it

believed “the link between gun possession and . . . interstate

commerce was attenuated.” 

The Court noted that it

has “upheld Commerce Clause regulation of intrastate activity

only where that activity is economic in nature.” 

Because the Morrison Court found that “[g]ender-motivated crimes

of   violence    are   not,      in   any    sense       of   the   phrase,     economic

activity” and that their effects on interstate commerce (many of

which were expressly enumerated by Congress) are “attenuated,”

it struck down the challenged congressional regulation of these

                                            104
crimes.   

   615.    As   it   did   in   Lopez,    the     Court

emphasized that the “regulation . . . of intrastate violence . .

. has always been the province of the States” and affirmed that

“[t]he Constitution requires a distinction between what is truly

national and what is truly local.” 

doubt, appellants are correct to insist that Lopez

and Morrison     remind   us    that    any   formulation    of   the   Commerce

Clause must admit to limiting principles that distinguish the

“truly    national”     from    the    “truly    local.”    But   the    concern

directly animating Lopez and Morrison—the noneconomic character

of the regulated activities—is not present in this case, where

the failure to obtain health insurance is manifestly an economic

fact   with   direct   effects    on    the   interstate    markets     for   both

health insurance and health services. Cf. Thomas More, --- F.3d

at ----, 2011 WL at *11-12 (Martin, J.); Florida, --- F.3d, at -

---, 2011 WL at *94, *106 (Marcus, J., dissenting).

       Nor can it be said that health insurance or health services

have “always been the province of the states” in the way that

education, family law, and criminal law have been. 

. Since the Social Security Act of 1965, Pub. L. No.

89-97, 79 Stat. 286, established Medicare and Medicaid benefits,

the federal government has been the single largest provider in

the interstate health insurance market and the largest purchaser

in the health services market. Federal dollars have accounted

                                        105
for more than one-quarter of all health spending each year since

1974; in 2008, Americans spent $2.3 billion on health services,

of which the federal government paid more than $815 million—

nearly   35%.    Ctrs.       for        Medicare      &   Medicaid       Servs.,      National

Health Expenditure Amounts by Type of Expenditure and Source of

Funds:   Calendar         Years    1965-2019.         The    year    1974    also      saw    the

passage of the Employee Retirement Income Act (ERISA), which has

a “broadly worded” and “clearly expansive” preemption provision.

29 U.S.C. § 1144(a); Egelhoff v. Egelhoff ex rel. Breiner, 

, 146 (2001). Through ERISA, as well as later enactments

like the Health Insurance Portability and Accountability Act of

1996,    Pub.    L.       No.     104-191,          110   Stat.     1936,       the    federal

government      has       come     to    occupy       much    of     the    field      of     the

regulation of health benefits, and many state and local attempts

to   regulate    health          insurance      have      been    held     preempted.        See,

e.g., Retail Industry Leaders Ass’n v. Fielder, 

(4th Cir. 2007) (holding Maryland’s Fair Share Health Care Fund

Act, which regulated employer health care spending, preempted by

ERISA, as “ERISA establishes comprehensive federal regulation of

employers’ provisions of benefits to their employees”); but see

Metropolitan         Life    Ins.       Co.    v.    Mass.,      

   (1985)

(holding     that         state     mandated-benefit               law     survives         ERISA

preemption      as    a     law    that       “regulates      insurance,        banking,       or

securities” within the meaning of ERISA’s savings clause). Given

                                               106
nearly half a century of extensive federal involvement in the

national health insurance and health services sectors, it seems

clear that Lopez and Morrison’s interest in protecting areas of

traditional state sovereignty is not directly implicated.

       That said, Lopez and Morrison do remind us that the scope

of the Commerce Clause is finite and that its jurisprudence must

admit to bounding principles. Thus courts must assure themselves

that    upholding    the     Act   under     the     Commerce     Clause    would    not

effectively create a federal police power.

                             B. Substantial Effects

       Appellants argue that if we were to hold that failure to

obtain insurance substantially affects interstate commerce, we

would    be   forced    to    find    that     the    failure      to   purchase     any

marketed      product   substantially          affects       interstate     commerce.

Thus, they quote Florida ex rel. Bondi, where the district court

for     the    Northern       District       of      Florida       found    the      Act

unconstitutional in part because it believed that a Commerce

Clause    broad   enough     to    authorize       the     Act   must   also   support

purchase mandates for broccoli or GM cars. Appellants’ Reply Br.

9 (quoting Bondi, --- F. Supp. 2d at ----, ----, 

,

at *24). The Eleventh Circuit, upholding the district court on

that     point,     expressed      similar         fears    that    there      are    no

“cognizable,      judicially         administrable         limiting     principles.”

Florida, --- F. 3d at ----, 2011 WL at *54. This is not so.

                                         107
       I   begin    by     noting        that     whether    failure     to    purchase

insurance substantially affects interstate commerce relies on a

great number of factual determinations. These are to be made not

by the courts but by Congress, an institution with far greater

ability     to     gather        and     critically     evaluate       the     relevant

information.       As    the      Supreme       Court   noted    in     Raich,      “[i]n

assessing the scope of Congress’ authority under the Commerce

Clause, . . . [our] task . . . is a modest one. We need not

determine        whether     respondents’          activities,        taken    in    the

aggregate, substantially affect interstate commerce in fact, but

only whether a ‘rational basis’ exists for so 

.

       The Act’s effects on interstate commerce depend in large

part on an unusual feature of the health care market. By federal

law, a hospital participating in Medicare must stabilize any

patient who arrives at its emergency room, regardless of the

patient’s     ability       to     pay    for     treatment,    Emergency        Medical

Treatment and Active Labor Act, 42 U.S.C. § 1395dd(b)(1), and

many states impose similar requirements, see, e.g., H.R. Rep.

No. 99-241(III), at 5 (1985), reprinted in 1986 U.S.C.C.A.N.

726,   726-27      (noting       that    “at    least   22   states     have     enacted

statutes    or     issued        regulations       requiring    the     provision      of

limited medical services whenever an emergency situation exists”

and that “many state court rulings impose a common law duty on

                                            108
doctors and hospitals to provide necessary emergency care”). As

a result, the uninsured often receive care that they are unable

to     pay       for:       in    2008,          hospitals       provided          $43    billion       in

uncompensated care to the uninsured. 42 U.S.C. § 18091(a)(2)(F).

To cope with these costs, hospitals increase the price of health

care services, which in turn leads to rising health insurance

premiums;         Congress         found         that    “[t]his       cost-shifting           increases

family premiums by on average over $1,000 a year.” 

direct effects on the health insurance

and    health          services          markets        does     not    require          us    to    “pile

inference upon inference” in the way linking noneconomic acts

like    the       possession            of       guns    in    schools       or    gender-motivated

violence to interstate commerce might have done in Lopez and

Morrison. 

; see 

.

In Lopez, the Court rejected the Government’s argument that gun

possession in schools substantially affected interstate commerce

due to the general “costs of crime” or because “the presence of

guns    in       schools         poses       a   substantial       threat         to    the    education

process,”          which      “in       turn,      will       result    in    a    less        productive

.    Likewise,          the       Court       rejected

Congress’s            findings      in       Morrison         because    they      “follow[ed]          the

but-for          causal      chain       from      the    initial       occurrence            of    violent

crime        .    .     .    to     every         attenuated       effect          upon        interstate

commerce,” chiefly “deterring potential victims” from interstate

                                                        109
travel,    employment,    general    commercial     transactions,

“diminishing national productivity, increasing medical and other

costs, and decreasing the supply of and demand for interstate

(quoting H.R. Rep. No. 103-711, at

385 (1990), reprinted in 1994 U.S.C.C.A.N. 1803, 1853). Where

the proffered “substantial effects” in Lopez and Morrison were

attenuated, here the effects are direct: considered as a class

(per Wickard and Raich’s aggregation principle, see Wickard v.

Filburn, 

, 127-28 (1942); 

;

post pp. 46-48), those who fail to purchase health insurance

will seek and receive medical care they cannot afford; the cost

of that care ($43 billion in 2008) is borne by the hospitals,

which are forced to increase the price of health care services.

     And recognizing that the uninsured’s passing on $43 billion

in health care costs to the insured constitutes a substantial

effect on interstate commerce in no way authorizes a purchase

mandate for broccoli or any other vegetable. The health care

market is unique in that its product (medical care) must be

provided even to those who cannot pay, which allows some (the

uninsured) to consume care on another’s (the insured’s) dime.

Here the substantial effect on commerce comes not from simply

manipulating demand in a market, as it would in the case of a

broccoli or GM car mandate, but from correcting a massive market

failure caused by tremendous negative externalities. Thus, we

                               110
need   not     decide      today     whether      the     reasoning       of    Wickard     and

Raich, which were both concerned in part about limiting supply

in     interstate          markets        for     fungible        goods,        extends      to

artificially         inflating       demand       via    a      purchase       mandate.     See

(recognizing that even wheat grown for

home consumption “overhangs the market and if induced by rising

prices       tends    to     flow     into        the     market        and    check      price

increases”); 

(noting that “high demand in

the interstate market”—and consequent higher prices—is likely to

“draw [home consumed] marijuana into that market”).

       For these reasons, I would hold that the failure to obtain

health    insurance        substantially          affects       the    interstate      markets

for health insurance and health care services. Accord Thomas

More, --- F.3d at ----, 2011 WL at *12 (Martin, J.); 

25 (Sutton, J.); Florida, --- F.3d at ----, 2011 WL at *106

(Marcus, J., dissenting).

         IV. Universal Participation in the Health Care Market

       Nor    need     I    decide        today       whether     the    Commerce       Clause

discriminates         between        activity          and    inactivity.         Appellants

concede that virtually all persons will voluntarily enter into

the interstate health services market in their lifetimes, and

they     concede     further,        as    they       must,     that    this     constitutes

activity in commerce. Yet appellants insist that the Commerce

Clause    requires         Congress       to    adopt    an   extremely        narrow     time-

                                                111
horizon: it may regulate persons seeking health care, but only

once    they     have    sought      it.   Appellants’     Br.   34.     A    faithful

application of Wickard’s and Raich’s teachings requires us to

reject this contention.

       Wickard introduced the aggregation principle into Commerce

Clause jurisprudence: “That appellee’s own contribution to the

demand for wheat may be trivial by itself is not enough to

remove him from the scope of federal regulation where, as here,

his    contribution,         taken    together    with    that   of    many    others

similarly situated, is far from 

.

Raich   reaffirmed       this       approach,    noting   that   Commerce      Clause

analysis       looks    to    the    regulated    “activities,        taken   in   the

.

       Further, Raich emphasized that

       Congress   [need   not]   legislate  with   scientific
       exactitude. When Congress decides that the “total
       incidence” of a practice poses a threat to a national
       market, it may regulate the entire class. See United
       States v. 

(“[W]hen it is
       necessary in order to prevent an evil to make the law
       embrace more than the precise thing to be prevented it
       may do so.”). In this vein, we have reiterated that
       when a general regulatory statute bears a substantial
       relation to commerce, the de minimis character of
       individual instances arising under that statute is of
       no consequence.

(some internal quotation marks and citations omitted).

       Under Wickard and Raich, we are to take the view of the

legislators, not those who are regulated. Courts look at the


                                           112
aggregated impact of an activity, not the impact of individuals;

the    Commerce       Clause     authorizes          the   regulation        of    an    “entire

class,” regardless of “the de minimis character of individual

instances.” 

to put aside “the mechanical application

of legal formulas” and look instead to “the actual effects of

the activity in question upon interstate commerce.” 

,    124.     Indeed,         it   bears    repeating,         our     task    in

deciding Commerce Clause challenges “is a modest one” in which

we ask “only whether a ‘rational basis’ exists” for Congress to

find a substantial effect on interstate commerce. 

       Considering that hospitals are required to provide certain

care to the uninsured, that illness and accidents are nothing if

not unpredictable, and that the costs of medical care are often

catastrophic, I have no hesitation in concluding the Congress

rationally       determined         that    addressing        the     $43    billion      annual

cost-shifting from the uninsured to the insured could only be

done     via    regulation          before       the   uninsured         are      in    need     of

emergency medical treatment. Wickard and Raich teach that we are

to    take     the    longer    view       of    legislators;       it      is   difficult       to

imagine        that         Commerce       Clause       analysis         would         aggregate

individuals and allow regulation of entire classes but then,

when legislators confront a problem requiring a remedy before

emergencies          (and    their     ever-growing          costs)      occur,        refuse    to

permit       them    to     adopt    the    time-horizon        necessary         to     enact    a

                                                 113
solution.     Accord       Florida,    ---    F.3d    at     ----,   2011     WL   at   *93

(Marcus, J., dissenting).

     Thus,      as    Congress      rationally        found    virtually       universal

participation        in    the   interstate     health       care    market    over     the

course   of    residents’        lifetimes,     the    Act    does    not   present      an

issue of congressional regulation of inactivity. Accord Thomas

More, --- F.3d at ----, 2011 WL at *15 (Martin, J.); 

30 (Sutton, J.); Florida, --- F.3d at ----, 2011 WL at *93-*94

(Marcus, J., dissenting). Rather, courts are asked to pass on

regulation of voluntary participation in the interstate health

care market that, to be effective, must be preemptive. As it is

clear    that        the    regulated        behavior        substantially         affects

interstate commerce and appellants bring no other challenge to

Congress’s authority under the Commerce Clause, I would hold the

Act to be a proper exercise of congressional power.

                             V. Regulating Inactivity

     But even if I were to assume that the uninsured are, in

appellants’ phrase, “inactive in commerce,” I would be bound to

uphold   the     Act.      Despite     appellants’         several    arguments,        the

Commerce      Clause       is    not    offended        by     the    regulation         of

“inactivity” or, in proper circumstances, by a purchase mandate.

     Appellants urge that the Act is an “unprecedented attempt

to force private citizens who have decided not to participate in

commerce to engage in commerce by mandating that they purchase .

                                          114
. . health insurance . . . .” Appellants’ Br. 3. This argument

presents    two      distinct      questions:        (1)    “[w]hether        Congress       has

authority      under       the   Commerce      Clause       to    regulate         a    private

citizen’s      inactivity          in    commerce”;         and     (2)      whether       such

regulation can include “forc[ing] [a] citizen to participate in

commerce by mandating that she purchase a [commodity] . . . or

pay a penalty for noncompliance.” 

I consider these

questions in turn.

                  A. Regulating “Inactivity in Commerce”

       Appellants          characterize        Mss.       Waddell’s       and       Merrill’s

“decision      not    to     purchase      health     insurance        and    to       otherwise

privately      manage        her     own      healthcare”         as      “inactivity         in

commerce,” which they claim is beyond the reach of the Commerce

Clause. 

As the following brief review of the case law

will   show,    this       broader      Commerce      Clause      challenge—whether           it

reaches     non-market             participants            (those       “inactiv[e]          in

commerce”)—has already been litigated. The Supreme Court’s “case

law firmly establishes” that Congress may regulate those who

have   opted    not     to    participate       in    a    market      when    their      self-

provisioning,         considered         in    the        aggregate,         “substantially

affect[s]” an interstate market. 

. After

explaining why appellants’ broader challenge is foreclosed, I

consider the far narrower challenge to the Act that survives.

                     1. Regulating Non-Market Participants

                                              115
      Nearly seventy years ago, in the famous case of Wickard v.

Filburn, the Supreme Court upheld Congress’s power under the

Commerce Clause to regulate Mr. Filburn’s private, noncommercial

production of wheat. The Court squarely confronted the question:

it began its discussion by noting that “[t]he question would

merit little consideration . . . except for the fact that this

Act extends federal regulation to production not intended in any

part for commerce but wholly for consumption on the 

. Just six years ago, the Court reaffirmed Wickard’s

vitality in Raich, explaining,

      Our case law firmly establishes Congress’ power to
      regulate purely local activities that are part of an
      economic ‘class of activities’ that have a substantial
      effect on interstate commerce. As we stated in
      Wickard, “even if appellee’s activity be local and
      though it may not be regarded as commerce, it may
      still, whatever its nature, be reached by Congress if
      it exerts a substantial economic effect on interstate
      commerce.”

   (quoting            

)

(emphasis added). The Raich Court made clear that “Congress can

regulate    purely       intrastate           activity          that     is     not        itself

‘commercial,’      in    that      it    is    not       produced      for    sale,        if    it

concludes that failure to regulate that class of activity would

undercut    the    regulation           of    the       interstate       market       in    that

commodity.” 

Applying this principle, the Court upheld

the   regulation    of    individuals             who    grew    marijuana       solely         for

“home    consumption”—that          is,      it     allowed     Congress       to     regulate

                                              116
individuals      who    deliberately      chose       not   to    participate   in

commerce. 

true quarrel with the Act is more limited

than their language sometimes suggests. With subheadings like

“Wickard does not support the district court’s conclusion that

private economic decisions can be regulated under the Commerce

Clause,” appellants’ briefs muddy their real point. Appellants’

Br. 20. As just described, it is well settled that Congress may

regulate the private, noncommercial economic activities of non-

market participants when their self-provisioning (growing wheat

or marijuana for themselves) substantially affects an interstate

market.    Appellants     contend      that    this    “firmly     establishe[d]”

Commerce   Clause      law,   

,   is   inapplicable

because Wickard and Raich “involved voluntary activity, whereas

the Act regulates voluntary inactivity.” Appellants’ Br. 19. To

the extent that “voluntary inactivity” again suggests deliberate

non-participation       in    the   market,     this    fails     to   distinguish

Raich; yet appellants also seem to be raising a different point.

“[I]t was the fact that Mr. Filburn actively grew wheat beyond

the quota, even if for personal use, that was significant in

Wickard,” as “it was that activity that constituted economic

activity. By contrast, [appellants] have exerted no effort and

used no resources.” 

It is this “distinction between

activity   and    inactivity,”      

      inactivity,   not

                                        117
just inactivity (non-participation) in commerce—that carries the

true thrust of appellants’ argument.

                       2. Regulating the “Inactive”

      Before I can consider this narrower argument, I must be

sure I understand exactly what appellants mean by it. Appellants

say that “Mr. Filburn actively grew wheat beyond the quota, even

if for personal use” while Ms. Waddell and Mrs. Merrill “have

exerted no effort and used no resources.” Appellants’ Br. 21.

But   appellants    expressly      state      that   “Miss   Waddell    and     Mrs.

Merrill    have    voluntarily        and     deliberately    decided     not    to

purchase health insurance, but to instead save for and privately

manage health care.” 

(emphasis added). It is not clear

why   “sav[ing]    for     and   privately      manag[ing]    health    care,”    a

species    of   what     economists    call     “self-insurance,” 11     requires

neither “effort” nor “resources”—in fact, one would imagine that

“sav[ing]”      requires     “resources”        (namely,     money)     and     that


      11
        Cf. 42 U.S.C. § 18091(a)(2)(A) ("In the absence of the
[individual mandate], some individuals would make an economic
and financial decision to forego health insurance coverage and
attempt to self-insure . . . ."). Because individuals who self-
insure are unable to shift risk in the way that market insurance
does, self-insurance is far more common among collectives or
businesses, where it may be efficient. See generally M. Moshe
Porat, Uri Spiegel, Uzi Yaari, Uri Ben Zion, Market Insurance
Versus Self Insurance: The Tax-Differential Treatment and Its
Social Cost, 58 J. Risk & Ins. 657 (1991); Patrick L. Brockett,
Samuel H. Cox, Jr., and Robert C. Witt, Insurance Versus Self-
Insurance: A Risk Management Perspective, 53 J. Risk & Ins. 242
(1986); Isaac Ehrlich, Gary S. Becker, Market Insurance, Self-
Insurance, and Self-Protection, 80 J. Pol. Econ. 623 (1972).
                                        118
“manag[ing]”       requires    some      “effort.”       

,    21.    Though,

unlike wheat and marijuana, insurance is intangible, appellants

do not suggest that interstate markets in intangible goods or

services     are   less    subject       to     regulation      under      the    Commerce

Clause than markets in tangible goods; thus, it is difficult to

see   why    the   legal     import      of    the    appellants’       “sav[ing]”       and

“manag[ing]” should differ from that of Mr. Filburn’s sowing and

harvesting.

      But even if appellants had said nothing about saving and

managing and I accepted that Ms. Waddell and Mrs. Merrill had

truly “exerted no effort and used no resources” with respect to

health insurance—that is, that they had taken no steps to self-

insure—it is difficult to make out the legal relevance of this

point.   Mr.    Filburn      and   Ms.    Raich       deliberately      chose     to   meet

their own needs rather than enter commerce and purchase goods on

the market and thus they, too, “exerted no effort and used no

resources” in connection to the relevant markets; why are they

more susceptible to Commerce Clause regulation than appellants

simply      because   they     privately            exerted    effort      and    expended

resources for a noncommercial end?

      Appellants      have    provided         no    express    answer,     but    one   is

implicit in their arguments: in choosing to act, even privately,

with notice of regulation, one can be said to consent or at

least submit to that regulation. Under this view, Wickard and

                                              119
Raich      are   distinguishable        because    they    concerned       regulated

domains      which       individuals      voluntarily       entered      upon     the

commencement       of    some   “activity.”     Thus,     appellants’      complaint

that “appellants in Raich could avoid Congress’ reach by not

manufacturing or possessing marijuana, but here the Appellants

cannot     avoid     Congress’    reach     even   if     they    are    not     doing

anything.”       Appellants’      Br.     19.   Appellants       express       concern

throughout       their    brief   about    allowing     Congress    to     “regulate

[people] because they are legal citizens who merely exist,” 

12 likewise, the Eleventh Circuit majority worries that

“[i]ndividuals subjected to this economic mandate have not made

a voluntary choice to enter the stream of commerce . . . .”

Florida, --- F.3d at ---, 2011 WL at *48. So I will consider the

Commerce Clause ramifications of regulating “everyone.”

             3. Federalism & Regulations Affecting Everyone

      I am aware of no “substantial effect” case, in more than a

century of Commerce Clause jurisprudence, that looks beyond the

class of activities regulated to the class of persons affected.

And this is unsurprising, as the dispositive question is whether

the     object     of    regulation     substantially       affects      interstate

commerce; what the affected persons have done to consent (or

not) to the regulation is obviously irrelevant to that inquiry.


      12
        It is no coincidence that “voluntary” or “voluntarily”
appears twenty-eight times in appellants’ briefs.
                                          120
Appellants claim that their liberty concern springs from the

principles       of    federalism      rather     than   black-letter           Commerce

Clause    law.     Though    these     principles      serve      to    protect      state

sovereignty and the resulting division of power helps to secure

our liberty, federalism is not an independent font of individual

rights.

        As Justice Kennedy explained in his concurrence in Lopez,

“it was the insight of the Framers that freedom was enhanced by

the creation of two governments, not one,” as power could be

split between state and federal governments even before each

government’s       powers    were     further    separated     among        legislative,

executive,       and   judicial     

.    Thus,

“[s]tate       sovereignty    is    not   just   an   end    in     itself:     ‘Rather,

federalism secures to citizens the liberties that derive from

the diffusion of sovereign power.’” New York v. United States,

, 181 (1992) (quoting Coleman v. Thompson, 

,     759     (1991)      (Blackmun,     J.,       dissenting)).           Federalism

“enhance[s]” our liberty by disaggregating power; it helps to

secure all our individual rights, but it does not create new

ones.    The    Supreme     Court’s    recent    decision      in      Bond    v.    United

States, which granted an individual criminal defendant standing

to challenge a federal statute on the grounds that it usurped

powers reserved to the states and which discussed at length the

ways in which federalism protects individual liberty, is not to

                                          121
the contrary. 564 U.S. ---, ---, 

, 2364 (2011).

Appellants provide no support for their suggestion that some

novel, heretofore unknown, individual right can spring from the

principles of federalism.

       Federalism         was    properly        invoked       in   Lopez      and        Morrison,

where, to police the division of authority between state and

federal governments, the Court struck down federal regulation of

noneconomic         activity        within        “areas       such      as     criminal          law

enforcement     or        education    where       States       historically              have    been

sovereign.” 

; see 

.   Lopez    and        Morrison’s       concern        about      the      loss       of     state

authority      within       areas     traditionally            reserved        to    the       states

implicates      the       division     of    power       between      state         and     federal

governments         and    thus    goes     to     the     very     core      of     federalism.

Appellants’         individual       liberty        concerns        do      not.      Appellants

suggest      that    allowing       the     Act    to    touch      all       U.S.    residents,

whether or not they have voluntarily entered a regulated domain,

“threatens . . . the bedrock concept[] of . . . individual

freedom.” Appellants’ Br. 11-12. Federalism does not speak to

this issue.

       Nor    does        any    recognized        individual         right.         Appellants’

rhetoric      sometimes         suggests     a     generalized         right         to    be    left

alone; but outside of a limited right to privacy concerning “the

most   intimate       and       personal     choices       a    person        may     make       in   a

                                             122
lifetime,     choices   central      to   personal        dignity   and     autonomy,”

including       those        “relating          to      marriage,         procreation,

contraception,       family      relationships,            child     rearing,       and

education,” Planned Parenthood of Se. Penn. v. Casey, 

,   851    (1992),   no    such   right       exists.     And    any    such   right

springing from substantive due process would bind the states

under the Fourteenth Amendment as well as the federal government

under the Fifth, placing universal regulation outside the reach

of any government.

       Moreover, an extensive body of federal laws, many passed

pursuant to the Commerce Clause, targets all U.S. residents:

federal      criminal   law.     Indeed,        Raich     itself     concerned     the

Controlled Substances Act and the noncommercial production and

consumption     of   marijuana;       nowhere        in    Raich    did    the    Court

intimate concern that the federal government was regulating the

drug use of “everyone . . . just for being alive and residing in

the United States.” Bondi, --- F. Supp. 2d. at ---, 

, at *20. Though penalties do not attach until someone has

violated the statute, the same is true of the Act’s regulation.

Of course, appellants suggest that compelling action is less

legitimate under the Commerce Clause than prohibiting action. I

take up that question next.

                             VI. Compelling Action



                                          123
       Having established that the regulation of “inactivity in

commerce”       does       not    offend     the    Commerce         Clause,          I    consider

whether     federal        commerce     regulation        can       properly          “force       [a]

citizen     to      participate        in    commerce         by     mandating            that     she

purchase        a    [commodity]        .     .     .    or        pay      a     penalty          for

noncompliance.” Appellants’ Br. 1.

       As   I    explained        at   length      above,      the       Supreme          Court    has

taught that an enactment is authorized by the Commerce Clause

where    Congress         could    rationally       conclude         that       the       object    of

regulation          substantially       affects         interstate          commerce.             This

inquiry     looks         only    at   the   relation         between           the    object       of

regulation          and     interstate       commerce;         the        content           of     the

regulation—what it compels or prohibits—is irrelevant. Indeed,

it has long been recognized that “[t]he power of Congress over

interstate commerce is plenary and complete in itself, may be

exercised to its utmost extent, and acknowledges no limitations

other than are prescribed in the Constitution.” 

(quoting United States v. Wrightwood Dairy Co., 

,     119      (1942));     cf.   

     (“[S]tate

action cannot circumscribe Congress’ plenary commerce power.”).

The Necessary and Proper Clause makes clear that we are to defer

to Congress with respect to the means it employs to effectuate

legitimate ends. U.S. Const. art. I, § 8, cl. 18. In combination

with the Commerce Clause, it empowers Congress “‘to take all

                                              124
measures necessary or appropriate to’ the effective regulation

of the interstate market.” 

(Scalia, J.,

concurring) (quoting Shreveport Rate Cases, 

, 353

(1914)).

     But even if it were appropriate to review the method of

regulation Congress has chosen to employ, I would find that the

individual   mandate   fits   well   within   the   range   of   acceptable

commercial regulations.

      A. The Act Does Not Compel Citizens to Enter Commerce

     I first note that the Act does not “force” any citizen to

enter commerce. Appellants’ Br. 1. Instead, residents are given

a choice between obtaining health insurance (by market purchase

or otherwise) and paying a non-punitive tax penalty that, by

law, is capped at “the national average premium for qualified

health plans which have a bronze level of coverage.” 26 U.S.C. §

5000A(c)(1)(B); see 

5000A(b)(1). As the average cost of

providing the most basic insurance, this amount should roughly

approximate the expected costs to the regulatory scheme (in the

form of higher premiums) occasioned by an individual’s failure

to procure insurance. Because the uninsured effectively force

the rest of the nation to insure them with respect to basic,

stabilizing care, this penalty is something like a premium paid

into the federal government, which bears a large share of the

shifted costs as the largest insurer in the nation.

                                     125
                     B. History of Compelled Purchases

       Even if the individual mandate were properly characterized

as compelling residents to enter the market, this has long been

an acceptable form of regulation under the Commerce Clause. For

instance,      the     Federal     Motor        Carrier         Safety        Administration,

acting pursuant to the Motor Carrier Act of 1980, requires that

motor carriers purchase either liability insurance or a surety

bond in order to ensure that they are able to pay for damage

they   may   cause.     See   49       C.F.R.       §    387.    And        the    Comprehensive

Environmental Response, Compensation, and Liability Act of 1980

(CERCLA) requires that the owner of property contaminated by a

hazardous substance “provide removal or remedial action”—likely

requiring resort to the market—on pain of liability for punitive

damages,     even    where       the    owner           bears    “no[]        culpability       or

responsibility       for   the     contamination”               and    indeed       is   entirely

“passiv[e].” 42 U.S.C. § 9607(c)(3); Nurad, Inc. v. William E.

Hooper & Sons Co., 

, 846-47 (4th Cir. 1992). CERCLA

has    survived      all   Commerce        Clause          challenges,             and     it   was

expressly held a proper exercise of Congress’s Commerce Clause

power by the Second Circuit Court of Appeals. See Freier v.

Westinghouse      Elec.    Corp.,       

,        203    (2d    Cir.    2002),

cert. denied, 

(2003); cf. United States v. Olin

Corp.,   

,     1511    (11th          Cir.    1997)        (holding      CERCLA



                                              126
constitutional          Commerce   Clause         legislation    as   applied   to

appellants).

       Wickard        itself   suggests     that     compelled    purchases     are

permissible. The Court explained:

       It is said, however, that this Act, forcing some
       farmers into the market to buy what they could provide
       for themselves, is an unfair promotion of the markets
       and prices of specializing wheat growers. It is of the
       essence of regulating that it lays a restraining hand
       on the selfinterest of the regulated and that
       advantages from the regulation commonly fall to
       others. . . . And with the wisdom, workability, or
       fairness, of the plan of regulation we have nothing to
       

   (emphasis     added).     When    describing     how

noncommercial         wheat    production        decreased   demand   for   market

wheat, the Court explained that it “forestall[ed] resort to the

market” and “supplies a need of the man who grew it which would

otherwise be reflected by purchases in the open market.” 

128. Though Wickard did not involve an express purchase

mandate, the Court understood that Mr. Filburn was effectively

being “forc[ed] . . . into the market to buy” wheat when it

rejected his Commerce Clause challenge. 

           C. Compelled Purchases as Government’s Core Function

       Finally, I pause to consider why purchase mandates—whether

they be for health insurance or broccoli—occasion such fear of

federal aggrandizement. Cf. Thomas More, --- F.3d at ----, 2011

WL    at   *32   (conveying     author’s     “lingering      intuition—shared    by


                                           127
most Americans, I suspect—that Congress should not be able to

compel citizens to buy productions they do not want”) (Sutton,

J). Compelled purchases are the most fundamental function of

government of any sort, and the fact that the government here

allowed its residents additional freedom of choice over these

purchases      should    diminish,   not      exacerbate,    anxieties   about

federal tyranny.

      Governments exist, most fundamentally, to solve collective

action problems. Core governmental functions, like the provision

of    domestic     peace,     enforceable      property     rights,   national

defense, and infrastructure, are assigned to government because

the   market     fails   to   produce    optimal   levels    of   such   public

goods. 13 Since public goods are enjoyed by all, most individuals

refuse to purchase them themselves, hoping instead that they can

free-ride when someone else does. By forcibly collecting tax

revenue and using it to purchase public goods, governments are

able to solve this collective action problem. Thus, at root,




      13
       See generally R.H. Coase, The Lighthouse in Economics, 17
J.L. & Econ. 357, 357-360 (1974); Paul A. Samuelson, The Pure
Theory of Public Expenditure, 36 Rev. Econ. & Statistics 387
(1954). Public goods are goods that are "non-rival" and "non-
excludable." "Non-rival" means that enjoyment of the good by one
citizen does not reduce the enjoyment by another; "non-
excludable" means that all citizens will enjoy the good once it
is produced—none can be excluded. See, e.g., John P. Conley &
Christopher S. Yoo, Nonrivalry and Price Discrimination in
Copyright Economics, 157 U. Pa. L. Rev. 1801, 1805-11 (2009).
                                        128
governments are formed precisely to compel purchases of public

goods.

      Because hospitals are required to stabilize the uninsured,

the uninsured are able to pass along much of the cost of their

health care to the insured. 14 Solving this problem, as the Act

attempts to do, creates a public good: lower prices for health

services for all citizens. Thus, the Act compels the purchase of

a   public    good,   just   as   the    federal       government   does    when    it

collects taxes and uses it to fund national defense.

      Indeed, it is undisputed that Congress would have had the

power under the Taxing and Spending Clause to raise taxes and

use   increased       revenues    to     purchase       and   distribute        health

insurance for all. It seems quite odd that Congress’s attempt to

enhance individual freedom by allowing citizens to make their

own purchase decisions would give rise to such bloated concerns

about a federal power grab. Cf. Thomas More, --- F.3d at ----,

2011 WL at *31 (Sutton, J.) (“Few doubt that Congress could pass

an equally coercive law under its taxing power . . . .”).

      As     for   the   broccoli       mandate    appellants       fear,   I     have

explained at several points why nothing I have written would

authorize it. But I note that mandating the purchase (but not

the   consumption,       which    would        raise    serious     constitutional

      14
        In the language of economics, the failure to obtain
insurance has "negative externalities"—negative effects on those
not responsible for the decision.
                                         129
issues)    of    broccoli    in     order    to    bolster       the    broccoli      market

would, in practical effect, be nothing new. Since the time of

the Founding Fathers, when Alexander Hamilton called for federal

subsidies for domestic manufacturers, the federal government has

used tax revenues to subsidize various industries. See Algonquin

SNG, Inc. v. Federal Energy Administration, 

, 1061

(D.C.    Cir.    1975)     (“From     earliest         days,   the     tariff      authority

given Congress by the Constitution has been understood to apply

to the ‘protective tariff’ sponsored by Alexander Hamilton, a

measure focused . . . on the ‘non-revenue purpose’ of protecting

domestic       industry     against      foreign        competition.”),            rev’d   by

Federal Energy Administration v. Algonquin SNG, Inc., 

(1976). Though centralized subsidies are far more efficient

than purchase mandates—which is why a broccoli mandate is purely

fantastical—they are, in effect, the same. Since they, too, are

clearly within Congress’s power under the Taxing and Spending

Clause, allowing broccoli purchase mandates would not increase

federal power. For these reasons, I find appellants’ fears to be

unfounded. I would reject their novel and unsupported suggestion

that Commerce Clause jurisprudence ought to discriminate among

regulated persons according to the amount of effort or resources

they    have    expended    in    a   given    economic        arena.     Under      seventy

years    of     well-settled      law,    it      is    enough    that       the    behavior

regulated       (whether    characterized          as     activity      or    inactivity)

                                            130
substantially affects interstate commerce. Appellants can cite

neither       case    nor    constitutional               text      for     their     proposed

activity/inactivity distinction. They can explain neither why it

ought to be relevant to my Commerce Clause analysis nor why it

ought to impel courts to ignore seventy-year-old law that takes

a   wholly    different      approach.         And       they     cannot    even     provide    a

sufficiently concrete definition of “activity” and “inactivity”

to allow courts to reliably apply their distinction. Because I

find    the       individual      mandate       to        be     within     the     bounds     of

Congress’s commerce power defined by Wickard, Lopez, Morrison,

and Raich, I would reject appellants’ Commerce Clause challenge.

                                 VII. Employer Mandate

       Appellants         also    challenge          the         Affordable        Care   Act’s

employer mandate, arguing that it is not a proper exercise of

Congress’s power under the Commerce Clause. I disagree.

       It    is   well    settled       that    Congress          may    regulate    terms     of

employment        under    the    Commerce       Clause.          See     United    States     v.

Darby, 

(1941) (upholding minimum wage and overtime

provisions of the Fair Labor Standards Act); NLRB v. Jones &

Laughlin      Steel      Corp.,    

   (1937)        (upholding    National

Labor       Relations      Act     of    1935,           which     forbid     unfair      labor

practices); cf. Employee Retirement Income Security Act of 1974,

29 U.S.C. § 1001 et seq. (regulating employer retirement plans

and preempting state regulations under the Commerce Clause); 

  §   1082   et   seq.       (setting    minimum      funding     standards       for

employer    retirement          plans).    This   is     true,     of     course,    of

employers “engaged [solely] in intrastate commerce,” so long as

Congress could reasonably find that their intrastate activities

(considered     in   the    aggregate)      substantially        affect    interstate

commerce. Garcia v. San Antonio Metro. Transit Auth., 

, 537 (1985); accord 

; Jones &

.

     Appellants       do     not     challenge      Congress’s          finding     that

“employers who do not offer health insurance to their workers

gain an unfair economic advantage relative to those employers

who do provide coverage” and contribute to a negative feedback

loop in which “uninsured workers turn to emergency rooms for

health   care   which      in    turn   increases      costs   for   employers       and

families with health insurance,” making it more difficult for

employers to insure their employees. H.R. Rep. No. 111-443(II),

at 985-86 (2010). Nor do appellants dispute the fact that this

amounts to a substantial effect on interstate commerce. Instead,

they attempt to distinguish the employer mandate from the wage

and overtime provisions in Darby and the fair labor practices in

Jones & Laughlin and argue that the mandate compels “private

employers [to] enter into a contract with other private parties

for a particular product.” Appellants’ Br. 25.



                                           132
       These    arguments           fail.     Appellants            cannot          convincingly

distinguish Darby or Jones & Laughlin. They repeatedly suggest

that    regulated          employers        must     be    involved            in     interstate

commerce;      but,       as   explained     above,       it       is   well    settled       that

employers who conduct only intrastate business may be regulated

under the Commerce Clause so long as their economic activities,

considered      in    the      aggregate,      substantially            affect        interstate

commerce. Appellants emphasize the Court’s observation in Jones

&   Laughlin    that       the     National    Labor       Relations           Act    “does      not

compel agreements between employers and employees.” 

(quoting Jones & 

). Neither does the

employer mandate: like the minimum wage and overtime provisions

upheld in Darby, it merely requires that employment agreements

contain certain terms (or that the employer pay a penalty).

       Appellants         attempt    to   distinguish          Darby       by   arguing       that

“the wage and hour provisions in Darby . . . did not prescribe

what must be contained within the employment contract, other

than   setting        a    floor    for     wages    and       a    ceiling         for   hours.”

Appellants’ Br. 28. But the employer mandate, too, only “set[s]

a   floor”:     it        requires     employers          to       offer    employees         “the

opportunity to enroll in minimum essential coverage under an

eligible    employer-sponsored              plan,”    but      employers            are   free    to

select any plan (or create their own) and provide any level of



                                             133
coverage       above    the    “minimum         essential”       level,       the    mandate’s

“floor.” 26 U.S.C. § 4980H(a)(1).

       Appellants’ only other objection to the employer mandate is

that    it     allegedly       forces         employers    to    contract          with    third

parties. This is untrue: employers are free to self-insure, and

many    do.     See    Employee         Benefit       Research       Inst.,    Health          Plan

Differences:        Fully-Insured         vs.     Self-Insured         (2009)       (reporting

that 55% of employees with health insurance were enrolled in

self-insured plans in 2008); Christina H. Park, Div. of Health

Care Statistics at the Nat’l Ctr. for Health Statistics, Ctrs.

for Disease Control and Prevention, Prevalence of Employer Self-

Insured Health Benefits: National and State Variation, 57 Med.

Care    Res.    &     Rev.    340,      352    (2000)     (finding     that        21%    of    all

private-sector employers who offered health benefits offered a

self-insured health plan in 1993; 49% of employees were enrolled

in   self-insured        plans).        Even     if    employers      were     compelled         to

enter     the      market     to     purchase         health    insurance,         appellants’

objection would fail for the very reasons I would reject their

similar challenge to the individual mandate.

                             VIII. Religious Exemptions

       Appellants       also       allege      violations       of    the     Free       Exercise

Clause,      the    Religious          Freedom    Restoration         Act     of    1993,      the

Establishment Clause, and equal protection. The Act makes two

religious       exemptions:        a    religious       conscience      exemption          and    a

                                                134
health-care sharing ministry exemption. 26 U.S.C. § 5000A(d)(2).

The former exempts members of a recognized religious sect in

existence     since    December     31,    1950        who     are    “conscientiously

opposed to acceptance of the benefits of any private or public

insurance     which     makes     payments           in     the      event    of     death,

disability, old-age, or retirement or makes payments toward the

cost    of,   or    provides     services           for,    medical     care.”       

The latter exempts members of a “health care sharing

ministry”—a non-profit organization in existence since December

31, 1999 with members who “share a common set of ethical or

religious beliefs and share medical expenses among members in

accordance with those beliefs and without regard to the State in

which     a     member        resides       or        is       employed.”          

       Appellants     claim     that     these        exemptions       are     “religious

gerrymanders” demonstrating that the Act itself is hostile to

certain   religions,     Appellants’        Br.       45,     and    further    that       the

exemptions         themselves      are         unconstitutional              under         the

Establishment and Equal Protection Clauses. For the following

reasons, I reject these arguments.

                          A. Free Exercise Clause

       Appellants     allege    that     the    Act        compels    them   to    violate

their   “sincerely     held     religious       beliefs       against    facilitating,

subsidizing,       easing,     funding,        or     supporting       abortions”          and

                                          135
prohibits the University from “providing health care choices for

employees       that   do    not        conflict     with    the   mission     of     the

University and the core Christian values under which it and its

employees order their day to day lives.” Second Am. Compl. ¶

142; Pls.’ Opp’n 36. This argument is unavailing.

       “[T]he      right     of        free   exercise      does   not    relieve      an

individual of the obligation to comply with a valid and neutral

law    of    general   applicability            on   the    ground      that   the     law

proscribes (or prescribes) conduct that his religion prescribes

(or proscribes).” Dept. of Human Res. of Or. v. Smith, 

, 879 (1990). Appellants claim that the Act is not neutral

because its religious exemptions are “the type of ‘religious

gerrymanders’ that the Supreme Court warned against in Lukumi.”

Appellants’ Br. 45 (quoting Church of Lukumi Babalu Aye, Inc. v.

City of Hialeah, 

, 534 (1993)). They are not. In

Lukumi,      the   Supreme    Court       struck     down   city   ordinances        after

finding that “[t]he record in this case compels the conclusion

that   the    suppression         of    the   central    element   of    the   Santeria

worship service was the object of the 

. Here appellants never allege that “the object of [the Act]

[wa]s to infringe upon or restrict practices because of their

religious motivation.” 

is a neutral law of general

applicability and so does not violate the Free Exercise Clause.

                    B. Religious Freedom Restoration Act

                                              136
     I also reject the claim that application of the individual

mandate to appellants would run afoul of the Religious Freedom

Restoration    Act     of    1993    (RFRA).      The    RFRA    directs        that   the

“Government shall not substantially burden a person’s exercise

of religion even if the burden results from a rule of general

applicability,”        unless       the      Government        “demonstrates           that

application of the burden to the person (1) is in furtherance of

a   compelling    governmental            interest;      and    (2)   is    the    least

restrictive    means    of     furthering        that    compelling        governmental

interest.” 42 U.S.C. § 2000bb-1.

     If appellants had plead sufficient facts to demonstrate a

substantial burden to their exercise of religion, I would be

forced to consider the relevance of the RFRA to a subsequent act

of Congress. Cf. Gonzales v. O Centro Espirita Beneficente Uniao

do Vegetal, 

(2006) (applying RFRA to enforcement of

pre-RFRA    provisions       of     the    Controlled      Substances       Act).      But

appellants have not.

     To    survive   the     Government’s        12(b)(6)       motion     to   dismiss,

appellants’    complaint        must      “provide      the    grounds     of     [their]

entitlement to relief,” which “requires more than labels and

conclusions.” Bell Atlantic Corp. v. Twombly, 

, 555

(2007)     (internal        quotation       marks       omitted).     “[C]onclusory”

allegations are “not entitled to be assumed true.” Ashcroft v.

Iqbal, --- U.S. ---, ---, 

, 1951 (2009). Unless

                                           137
appellants’ allegations “nudge[] their claims across the line

from    conceivable     to     plausible,        their     complaint         must    be

dismissed.” 

.

       Here appellants merely alleged that the individual mandate

will   force   them   to     violate     their   “sincerely          held    religious

beliefs against facilitating, subsidizing, easing, funding, or

supporting abortions.” Second Am. Compl. ¶ 142. Nowhere does the

complaint explain how the Act would do this. The Act contains

provisions     to   ensure    that     federal    funds        are   not    used    for

abortions (except in cases of rape or incest, or when the life

of the woman would be endangered), see Affordable Care Act §

1303; see also Exec. Order No. 13,535 of Mar. 24, 2010, 75 Fed.

Reg. 15,599 (implementing Section 1303’s abortion restrictions),

and that each state’s health benefit exchange will include at

least one plan that does not cover (non-excepted) abortions, see

Affordable Care Act § 1334(a)(6). Without additional or more

particularized      allegations,       I    cannot       say    that       appellants’

complaint makes it plausible that the Act “substantially burdens

[their] exercise of religion.” 42 U.S.C. § 2000bb-1(b).

             C. Establishment Clause and Equal Protection

       Appellants   also     challenge     the   Act’s    religious         exemptions

themselves, claiming that they violate the Establishment Clause

and equal protection because “they grant preferred status only

to certain religious adherents.” Appellants’ Br. 45. I disagree.

                                        138
Like    the    “permissible     legislative       accommodation      of       religion”

upheld by the Supreme Court in Cutter v. Wilkinson, the Act’s

exemptions      alleviate     “government-created          burdens       on     private

religious      exercise,”       “do[]     not   override     other       significant

interests,” and neither “confer[] . . . privileged status on any

particular religious sect, [nor] single[] out [any] bona fide

faith    for    disadvantageous         treatment.”   

,       719-23

(2005).

       The religious conscience exemption simply incorporates the

exemption      created   by   section      1402(g)(1),      which    has       survived

every Establishment Clause challenge to it over the last forty

years. See, e.g., Droz v. Comm’r, 

, 1124 (9th Cir.

1995); Hatcher v. Comm’r, 

, 83-84 (10th Cir. 1979);

Jaggard v. Comm’r, 

, 1190 (8th Cir. 1978); Palmer

v. Comm’r, 

, 314-15 (1969). For the reasons set out

by our sister courts in these cases, I would reject appellants’

Establishment Clause challenge to the Act’s exemptions.

       The exemptions easily survive appellants’ equal protection

challenge as well. Legislation comports with equal protection

requirements so long as it employs “a rational means to serve a

legitimate end.” City of Cleburne v. Cleburne Living Ctr., 

,    442   (1985).    And     “where    individuals      in    the    group

affected by a law have distinguishing characteristics relevant

to interests the [legislature] has the authority to implement,

                                          139
the courts have been very reluctant . . . to closely scrutinize

legislative choices as to whether, how, and to what extent those

interests should be pursued.” 

Here Congress could

have reasonably believed that members of groups that provide

health care to their members are less likely to require public

medical care, and thus less likely to produce the externalities

the   Act   was    designed    to   diminish.      And   Congress    could   have

reasonably believed that if it did not limit these exemptions to

groups formed prior to a pre-enactment date, individuals who

simply wished to avoid the individual mandate would form groups

that insincerely claimed the required religious beliefs. Thus

the distinctions Congress drew in the Act’s religious exemptions

accord all equal protection under the law.

                                IX. Conclusion

      For the foregoing reasons, I would hold that the AIA does

not deprive federal courts of jurisdiction to adjudicate the

constitutionality of the Affordable Care Act. I would further

hold that each of appellants’ challenges to the Act lacks merit

and   that,   specifically,         both     the   individual    and    employer

mandates    pass    muster     as   legitimate     exercises    of     Congress’s

commerce power.

      Regrettably, my fine colleagues in the majority perceive a

jurisdictional      bar   in   this   case     that   simply    is   not   there.

Accordingly, I respectfully dissent.

                                       140