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UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF VIRGINIA
LYNCHBURG DIVISION

LIBERTY UNIVERSITY, Inc., a Virginia )

Nonprofit corporation, MARTHA A.

)

NEAL, MICHELE G. WADDELL, DAVID )

STEIN, M.D., PAUSANIAS

)

ALEXANDER, MARY T. BENDORF,

)

JOANNE V. MERRILL, DELEGATE

)

KATHY BYRON, and JEFF HELGESON )

)

Plaintiffs

)

v.

)

TIMOTHY GEITHNER, Secretary of the )

Treasury of the United States, in his official )

capacity,KATHLEEN SEBELIUS,Secretary )

ofthe United States Department of Health )

and Human Serviices, in her official

)

capacity, HILDA L. SOLIS, Secretary of )

the United States Department of

)

Labor, in her official capacity, and ERIC )

HOLDER, Attorney General of the United )

States, in his official capacity,

)

)

Defendants )

Case No.: _ __ COMPLAINT

COMPLAINT FOR DECLARATORY, PRELIMINARY AND PERMANENT INJUNCTIVE RELIEF
COME NOW the Plaintiffs, LIBERTY UNIVERSITY, INC., MARTHA A. NEAL, MICHELE G. WADDELL, DAVID STEIN, M.D., PAUSANIAS ALEXANDER, MARY T. BENDORF, JOANNE V. MERRILLL, DELEGATE KATHY BYRON and JEFF HELGESON, by and through their undersigned counsel, and respectfully request this Court to issue a Declaratory Judgment and Preliminary and Permanent Injunctive Relief. In support thereof, Plaintiffs show unto the Court as follows:
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1. This is a civil action whereby Plaintiffs seek Declaratory Judgment and Preliminary and Permanent Injunctive Relief enjoining Defendants, Timothy Geithner, in his official capacity as the Secretary of the Treasury, Kathleen Sebelius in her official capacity as Secretary of the Department of Health and Human Services, Hilda L. Solis, in her official capacity as Secretary of the Department of Labor, and Eric Holder in his official capacity as Attorney General of the United States (hereafter collectively referred to as "Defendants"), their agents, servants and employees and those acting in active concert and with actual notice thereof, from: implementing and enforcing the provisions of the Patient Protection and Affordable Care Act of 2009 (hereafter the "Act"), including mandatory health insurance for individuals, mandatory provision of health insurance by employers, payment of penalties for failure to obtain and maintain health insurance, insurance exchange policies that are otherwise suitable but for requiring payment for elective abortion coverage, and other provisions as set forth herein which violate the Plaintiffs' rights to Free Exercise of Religion, Free Association, and Equal Protection, guaranteed under the First, Fifth and Tenth Amendments to the United States Constitution and from violating the Establishment Clause of the First Amendment to the United States Constitution and Article I of the United States Constitution, as well as the Religious Freedom Restoration Act, the Congressional Budget Act of 1974, and Section 38.2-3430.1: I of the Code of Virginia.. 2. Plaintiffs also pray for Declaratory Judgment to determine that certain provisions of the Act, requiring mandated insurance coverage by employers, fines, and allowing religious exemptions for only members of recognized religious denominations, are unconstitutional as a violation of the the First Amendment to the United States Constitution. 3. An actual controversy exists between the parties involving substantial constitutional issues, in that provisions of the Healthcare Act are unconstitutional on their face, violate
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Plaintiffs' rights to equal protection and free exercise of religion guaranteed under the First Amendment to the United States Constitution, and violate the Establishment Clause of the First Amendment to the United States Constitution.
JURISDICTION AND VENUE 4. This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §§ 1331, 1343, 1346, 2201, 2202, and 2412, and 42 U.S.C. § 2000bb et. seq. 5. This Court is authorized to grant Plaintiffs' Prayer for Relief and to award costs, including a reasonable attorney's fee, under 28 U.S.C. § 2412 and 42 U.S.C. § 2000bb-1. 6. This Court is authorized to grant Declaratory Relief under the Declaratory Judgment Act, 28 U.S.C. §§ 2201 and 2202 (1988), implemented through Rule 57 ofthe Federal Rules ofCivil Procedure, and to issue the Preliminary and Permanent Injunctive Relief requested by Plaintiffs under Rule 65 of the Federal Rules of Civil Procedure. 7. Venue is proper under 28 U.S.C. § 1391. Each and all ofthe acts alleged herein were done by Defendants, and each of them, not as individuals, but under the color and pretense of statutes, ordinances, regulations, customs, and uses ofthe United States of America..
PARTIES 8. Plaintiff Liberty University, Inc., is a not-for-profit corporation organized and existing under the laws of the Commonwealth of Virginia, which operates a private Christian university principally located in the city of Lynchburg, Virginia. 9. Plaintiff Martha A. Neal is a natural born person and citizen of the state of Georgia. She is more than 26 years of age and not yet eligible for Medicare.
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10. Plaintiff Michele G. Waddell is a natural born person and citizen of the state of Florida and a resident of the Commonwealth of Virginia. She is more than 26 years of age and not yet eligible for Medicare. 11. Plaintiff Dr. David Stein is a natural born person and citizen of the state of Wisconsin. He is a licensed and practicing medical doctor. 12. Plaintiff Pausanias Alexander is a natural born person and citizen of the Commonwealth of Virginia. He is more than 26 years of age and not yet eligible for Medicare. 13. Plaintiff Mary T. Bendorf is a natural born person and citizen of the state of Wisconsin. She is more than 26 years of age and not yet eligible for Medicare. 14. Plaintiff Joanne V. Merrill is a natural born person and citizen of the state of Florida. She is more than 26 years of age and not yet eligible for Medicare. 15. Plaintiff Kathy Byron is a delegate to the Virginia House of Delegates in good standing. She objects to the Act and its purported mandate to require states to perform certain actions implementing the Act and dramatically altering the balance of powers between the federal and state governments. 16. Plaintiff Jeff Helgeson is a natural born person and citizen of the Commonwealth of Virginia who lives in Lynchburg, Virginia He has been elected to City Council of the City of Lynchburg, Virginia, to the Third Ward District. He objects to the Act and the injury it will do to the employers and citizens of his City. 17. Defendant Timothy Geithner is the Secretary of the Treasury for the United States of America, responsible for formulating economic and tax policy, managing the public debt, and overseeing the collection of taxes and enforcement of the tax laws of this country, including the tax laws enacted and amended by the Act.
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18. Defendant Kathleen Sebelius is the Secretary of the Department of Health and Human Services of the United States of America, responsible for the operation of the largest civilian department in the federal government and the administration of federal health programs, including Medicare and Medicaid and health insurance programs established under the Patient Protection and Affordable Care Act of 2009. 19. Defendant Hilda L. Solis is the Secretary of Labor for the United States of America and is responsible for overseeing government programs, such as the Occupational Health and Safety Administration, analyzing and tracking employment data, and recommending and enforcing labor laws, including the laws enacted and amended in the Patient Protection and Affordable Care Act of 2009. 20. Defendant Eric Holder is the Attorney General of the United States of America who heads the United States Department of Justice and is the chief law enforcement officer of the United States responsible for enforcing the laws of the United States including the laws enacted and amended in the Act. 21. Each of the Defendants is sued in his or her official capacity only.
STATEMENT OF FACTS 22. On March 23, 2010, the President of the United States signed H. R. 3590, the Patient Protection and Affordable Care Act of 2009, into law. 23. Plaintiff Liberty University is a private Christian university founded in Lynchburg, Virginia in 1971 by Dr. Jerry Falwell. 24. Dr. Jerry L. Falwell, the late pastor of Thomas Road Baptist Church, founded the University as an outgrowth ministry of the local church. 25. Jerry Falwell Jr. is the son of Dr. Jerry Falwell and is the Chancellor and CEO of Liberty
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University. 26. Liberty University, originally known as Lynchburg Baptist College and subsequently Liberty Baptist College, used the church's educational facilities to offer courses until moving to its present location between 1977 and 1981. 27. The Commonwealth of Virginia granted the University permission to award degrees in 1974. The Commission on Colleges of the Southern Association of Colleges and Schools (SACS) granted the University candidate status for accreditation in June 1977 and accreditation in December 1980. In 1986, 1996, and 2006, SACS reaffirmed the University's accreditation. 28. Liberty University has eleven (11) colleges, including the School of Aeronautics, Center for Academic Support and Advising Services, College of Arts and Sciences, Helms School of Government, School of Business, School of Communication, School of Education, School of Engineering and Computational Sciences, School of Religion, School of Law, and Liberty Baptist Theological Seminary and Graduate School. 29. Liberty University enrolls approximately 12,000 residential students and more than 40,000 students in its online program throughout the world. 30. Liberty University employs approximately 466 full-time faculty, 1,362 adjunct faculty, 2,072 staff members and 1,242 students who are located in Lynchburg, Virginia and other states throughout the United States. Liberty University is the largest employer in Lynchburg, Virginia. 31. Liberty University is self-insured and makes available health savings accounts, private insurance policies and other healthcare reimbursement options to qualified employees under a salary reduction program. Currently, 1,879 employees have chosen to participate in health insurance coverage, which covers 4,340 lives.
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32. Liberty University does not mandate that its qualified employees accept healthcare coverage and some employees make personal decisions to not obtain healthcare coverage through a payroll deduction. 33. Liberty University ensures that the health care reimbursement options made available to its employees are consistent with the University's core Christian values, including the sanctity of human life from conception to natural death. 34. Liberty University does not cover abortion under its health insurance coverage. 35. Abortion is contrary to the Christian mission of Liberty University. 36. Plaintiff Martha A. Neal has elected to purchase health insurance coverage that provides the care she desires at an expense in keeping with her financial situation. Under the Act, she will be required to purchase coverage that conforms to government-imposed definitions of "minimum essential coverage," regardless of whether it is coverage that she needs, deisires or can afford. The individual mandate in the Act will create a financial hardship for Ms. Neal in that she will have to either pay for health insurance coverage that is not necessary or desirable or face significant penalties as set forth in the Act. 37. Plaintiff Michele G. Waddell is generally healthy, has not elected to purchase health insurance coverage and does not want to purchase health insurance coverage. She is a student and not employed. She pays for healthcare expenses as she needs and uses healthcare services. Under the Act, she will be required to purchase certain health insurance coverage that conforms to government-imposed definitions of "minimum essential coverage," regardless of whether it is coverage that she needs, deisires or can afford. She arranged her affairs such that it will be a financial hardship for her in that she will have to either pay for health insurance coverage that is not necessary or desirable or face significant penalties as set forth in the Act.
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38. Plaintiff Dr. David Stein is a physician practicing in Milwaukee, Wisconsin.and is board certified by the American Board of Pain Medicine and the American Board of Anesthesiology, which means he has successfully met the highest standards of his profession. Dr. David Stein has a relationship with eighteen (18) insurance plans and six (6) hospital affiliations. Implementation of the Act, together with the layers of bureaucratic regulation, will fundamentally change his practice for the worse and negatively impact his ability to serve his patients. 39. In September 2009, Investors Business Daily (IBD) reported that 65% of 1,376 physicians surveyed oppose a federal overhaul of the healthcare system, and 45% will consider quitting or retiring early. The IBD reported that 72% of the doctors polled disagreed with the claim that the government can give 47 million additional people better care at a lower cost. Dr. Stein is among the 72% of physicians who disagree with that claim and among the physicians who oppose the Act as antithetical to providing quality care to more patients at a lower cost. 40. The Secretary of HHS is required under Sec. 1323(b)(1) of the Act to set up a community health insurance option to offer healthcare coverage. Pursuant to Sec. 1323(b)(6)(A), the Secretary will negotiate rates for the reimbursement of healthcare providers for benefits covered under a community health insurance option. These health insurance options will affect medical practice for healthcare providers, including Dr. Stein, and will adversely affect their ability to continue to provide quality medical care for their patients. 41. Plaintiff Pausanias Alexander is generally healthy and has elected to purchase health insurance coverage that provides the care he desires at an expense in keeping with his financial situation. Under the Act, he will be required to purchase coverage that conforms to governmentimposed definitions of "minimum essential coverage," regardless of whether it is coverage that he needs, deisires or can afford. The individual mandate in the Act will create a financial
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hardship for Mr. Alexander in that he will have to either pay for health insurance coverage that is not necessary or desirable or face significant penalties as set forth in the Act. 42. Plaintiff Mary T. Bendorf is generally healthy, has elected not to purchase health insurance coverage and does not want to purchase health insurance coverage. She generally believes in pursuing healthful living through natural alternatives to traditional medicine. Under the Act, she will be required to purchase certain health insurance coverage for traditional medical benefits she does not want and will not use. She will be forced to purchase health insurance or pay penalties for failure to purchase health insurance under the Act. 43. Plaintiff Joanne V. Merrill has elected not to purchase health insurance coverage and does not want to purchase health insurance coverage. She has done so historically to retain control of her healthcare decisions and ensure her funds are never co-mingled in a way that would advance abortion of any kind. Under the Act, she will be required to purchase certain health insurance coverage. Under the Act, either she will be forced to purchase health insurance or, if she wishes to continue to control her individual health care expenditures by paying as she goes, she will be forced to pay penalties for failure to purchase health insurance. 44. Plaintiff Kathy Byron is a member of the House of Delegates of the Commonwealth of Virginia, serving the 22nd District. Delegate Byron voted for Bill H.1 0, which becomes effective July 1, 2010 and amends the Code of Virginia to add section 38.2-3430.1:1:
§ 38.2-3430.1:1. Health insurance coverage not required. No resident of this Commonwealth, regardless of whether he has or is eligible for health insurance coverage under any policy or program provided by or through his employer, or a plan sponsored by the Commonwealth or the federal government, shall be required to obtain or maintain a policy of individual insurance coverage. No provision of this title shall render a resident of this Commonwealth liable for any penalty, assessment, fee, or fine as a result of his failure to procure or obtain health insurance coverage. This section shall not apply to individuals voluntarily
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applying for coverage under a state-administered program pursuant to Title XIX or Title XXI of the Social Security Act. 45. The Act violaties Virginia law and the constitutional doctrine of separation of powers, as well as the Tenth Amendment to the United States Constitution, as set forth herein, in a manner that violates Delegate Byron's rights as an elected representative of the people of the Commonwealth of Virginia. 46. Plaintiff Lynchburg City Council Member Jeff Helgeson represents the district where Liberty University is located within the city of Lynchburg, Virginia. Implementation of the Act will have a negative impact on the city of Lynchburg, generally, and his district, in particular. Plaintiff Jeff Helgeson is also self-employed and will be subject to the Act's requirement that he purchase certain health insurance or pay penalties for failure to purchase health insurance under the Act. 47. The Act amends the Internal Revenue Code of 1986 by adding Section 5000A, which mandates that individuals obtain and maintain "minimum essential healthcare coverage" for themselves and their families (the "individual mandate"). 48. If an individual fails to obtain and maintain minimum essential healthcare coverage as defined in the Act, then he is subject to a penalty, payable as part of his income tax return. 49. The Act grants Defendant Geithner the power to collect said penalties as part of his oversight ofthe Internal Revenue Service. 50. In Section 150 I of the Act, Congress makes findings that the individual mandate is commercial and economic in nature and substantially affects interstate commerce in that it regulates economic and financial decisions about how and when healthcare is paid for and when health insurance is purchased.
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51. In that same section, Congress makes further findings that health insurance is a significant part of the economy, and that pursuant to United States v. South-Eastern Underwriters Association, 322 U.S. 533 (1944), insurance is interstate commerce so that the individual mandate can be viewed as part of Congress's power under the Commerce Clause, Article I, Section 8 ofthe Constitution. 52. Despite the findings in the Act, the Senate expressed some concerns about whether it had power to adopt the individual mandate under the Commerce Clause, Article I, Section 8 of the Constitution. As a consequence of these concerns, the Senate Finance Committee asked the Congressional Research Service for an opinion on the constitutionality of the individual mandate. The Service replied: "Whether such a requirement would be constitutional under the Commerce Clause is perhaps the most challenging question posed by such a proposal, as it is a novel issue whether Congress may use this Clause to require an individual to purchase a good or a service." Cong. Research Serv. Requiring Individuals to Obtain Health Insurance: A Constitutional Analysis 3 (2009). 53. As the Congressionl Research Service opinion indicates, Congress's power under the Commerce Clause does not embrace the individual mandate in that the individual mandate is not regulating a commercial transaction between two parties but is imposing upon a party who has chosen not to engage in interstate commerce, such as Plaintiffs Michele Waddell, Mary Bendorf and Joanne Merrill, an obligation to engage in interstate commerce. As such the individual mandate is antithetical to the Commerce Clause's power in that it seeks to regulate inherently noncommercial activity that does not affect interstate commerce and to interfere with the private economic decisions made by Plaintiffs Michele Waddell, Mary Bendorf and Joanne Merrill and other similarly situated individuals.
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54. Internal Revenue Code Section 5000A, added by the Act, exempts from the individual mandate anyone who can satisfactorily establish that he or she satisfies Section 1402(g)(l) of the Internal Revenue Code, which provides exemptions for those who are "a member of a recognized religious sect or division thereof and is an adherent of established tenets or teachings of such sect or division by reason of which he or she is 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 (including the benefits of any insurance system established by the Social Security Act [42 USCS §§ 301 et seq.]) and an adherent of established tenets or teachings of such sect or division as described in such section," provided that "it is the practice, and has been for a period of time which he deems to be substantial, for members of such sect or division thereof to make provision for their dependent members which in his or her judgment is reasonable in view of their general level of living, and such sect or division thereof has been in existence at all times since December 31, 1950." 55. Plaintiffs Martha A. Neal, Michele G. Waddell, Mary T. Bendorf, Pausanias Alexander Joanne V. Merrill and Jeff Helgeson are Bible-believing Christians but are not members of a religious sect or adherents of established tenets or teachings which are conscientiously opposed to acceptance of the benefits of any private or public insurance, as provided in Section 402(g)(l) of the Internal Revenue Code, and, therefore, would be prohibited from the exemption provided for such religious adherents in the Act. 56. Internal Revenue Code Section 5000A further exempts individuals who are members of a "healthcare sharing ministry," defined as a 501(c)(3) organization members of which share a common set of ethical or religious beliefs and share medical expenses among members m
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accordance with those beliefs, retain membership even after developing a medical condition, and which have been in existence at all times since December 31, 1999. 57. Liberty University is a 50l(c)(3) organization, whose employees and trustees share a common set of ethical or religious beliefs. However, Liberty University is precluded from the "healthcare sharing ministry" exemption provided under the Act because it did not institute the sharing of medical expenses as of December 3 1, 1999. The arbitrary inclusion of the date December 31, 1999 unreasonably precludes Liberty University from forming a healthcare sharing ministry to provide health coverage for its employees in a manner that does not violate their sincerely held religious beliefs in the way that the coverage required under the Act does, as set forth herein. 58. Part II of Subtitle F of the Act amends the Fair Labor Standards Act of 1938 by inserting Section 18A, which requires that an employer with more than 200 full-time employees which offers one or more health benefits plans shall automatically enroll new full-time employees in one of the plans offered and continue the enrollment of current employees in a health benefits plan offered through the employer, subject to the employee being provided an opportunity to opt out of coverage. This provision will add significant cost to Liberty University and will substantially burden and affect its mission. 59. The Act also amends Chapter 43 of the Internal Revenue Code of 1986 to add Section 4980H, "Shared Responsibility of Employers Regarding Health Coverage," which imposes upon employers with more than 200 employees a penalty of $400 per full-time employee for any waiting period for health coverage that exceeds 30 days but does not exceed 60 days and $600 per full-time employee for any waiting period for health coverage that exceeds 60 days. This
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provision will add significant cost to Liberty University and will substantially burden and affect its mission. 60. Liberty University requires that full-time employees be employed for 90 days before being eligible for health coverage, which will make Liberty University liable for a penalty of $600 per full-time employee. This provision will add significant cost to Liberty University and will substantially burden and affect its mission. 61. The Act creates a new program under which the Federal Office of Personnel Management (OPM) would administer multistate insurance plans, sometimes called exchanges, where persons who cannot otherwise obtain the mandated insurance coverage (i.e. not available through an employer plan, Medicare, Medicaid, etc.) must obtain the mandated insurance. 62. Such exchanges are made up of private insurance plans with certain minimum benefits specified by the OPM. 63. The Act does not require that every private health insurance plan offered through the exchanges with insurance coverage for elective abortions have an otherwise equivalent plan that does not cover abortions that are not necessary to save the life of the pregnant mother. 64. Accordingly, there will be an array of qualified health insurance plans offered through the exchanges, only one of which is required to have any limitations of abortion, and which plan may or may not otherwise meet the needs of Plaintiffs Martha A. Neal, Michele G. Waddell, Mary T. Bendorf, Pausanias Alexander and Joanne V. Merrill. 65. The Act prevents the qualified health insurance plans offered through the exchanges from advertising whether the plans provide coverage for abortions and requires insurers offering such plans to provide plan participants information about abortion coverage only in the summary of benefits at the time of enrollment (thus requiring that the enrolling participants either carefully
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read all the insurance benefits information or enroll while ignorant of their new connection with abortion and those who support abortion). 66. Collectively, the provisions of the Act summarized m the preceding paragraphs are referred to as "The Act's Private Exchange Provisions." 67. Plaintiffs Martha A. Neal, Michele G. Waddell, Mary T. Bendorf, Pausanias Alexander and Joanne V. Merrill. are Bible-believing Christians who believe that they should live out their sincerely held religious beliefs in everyday life, including the various choices they make in ordering their daily affairs. 68. Plaintiffs Martha A. Neal, Michele G. Waddell, Mary T. Bendorf, Pausanias Alexander and Joanne V. Merrill. have sincerely held religious beliefs that abortions, except where necessary to save the life of the pregnant mother, are murder and morally repugnant. 69. Plaintiffs Martha A. Neal, Michele G. Waddell, Mary T. Bendorf, Pausanias Alexander and Joanne V. Merrill. have sincerely held religious beliefs that they should play no part in such abortions, including no part in facilitating, subsidizing, easing, funding, or supporting such abortions since to do so is evil and morally repugnant complicity. 70. Plaintiffs Martha A. Neal, Michele G. Waddell, Mary T. Bendorf, Pausanias Alexander and Joanne V. Merrill. have sincerely held religious beliefs that they should not formally associate with or in any way yoke themselves with those who would facilitate, subsidize, ease, fund or support such abortions. 71. Plaintiff Liberty University has a sincerely held religious belief that it should play no part in abortions, including no part in facilitating, subsidizing, easing, funding, or supporting abortions since to do so is evil and morally repugnant complicity.
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72. Plaintiff Liberty University has a sincerely held religious belief that it should not formally associate with or in any way be yoked with those who would facilitate, subsidize, ease, fund or support abortions. 73. Under the Act Plaintiff Liberty University faces possible penalities of up to $600 per employee which could be used to fund or support abortions in violation of its sincerely held religious beliefs. 74. The Congressional Budget Act of 1974, Sec. 31 O(g), 2 U.S.C. § 641 (g) (1997), states, "Notwithstanding any other provision of law, it shall not be in order in the Senate or the House of Representatives to consider any reconciliation bill or reconciliation resolution reported pursuant to a concurrent resolution on the budget agreed to under section 632 or 635 of this title, or any amendment thereto or conference report thereon, that contains recommendations with respect to the old-age, survivors, and disability insurance program established under Title II of the Social Security Act [42 U.S.C.A. § 401 et seq.]." 75. On Sunday, March 21,2010, in a 220 to 211 vote, the House ofRepresentatives passed H. R. 4872, Reconciliation Act of 20 I0 (the "Reconciliation"). 76. Section 221, "Establishment and Administration of a Public Health Insurance Option as an Exchange-Qualified Health Benefits Plan," of the Reconciliation recommends changes to Title II of the Social Security Act. The Section specifically states, "The provisions of Medicare (and related provisions of Title II of the Social Security Act) relating to access of Medicare beneficiaries to Federal courts for the enforcement of rights under Medicare, including with respect to amounts in controversy, shall apply to the public health insurance option and individuals enrolled under such option under this title in the same manner as such provisions apply to Medicare and Medicare beneficiaries."
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77. Section 1232 of the Reconciliation, "Extended Months of Coverage of Immunosuppressive Drugs for Kidney Transplant Patients and Other Renal Dialysis Provisions," modifies the Social Security Act stating, "Section 226A(b)(2) of the Social Security Act (42 U.S.C. 426-1(b)(2)) is amended by inserting '(except for coverage of immunosuppressive drugs under section 1861 (s)(2)(J))' before ',within the thirty-sixth month'." 78. The Act, as to be implemented and enforced by Defendants has caused, and will continue to cause, the Plaintiffs to suffer undue and actual hardship and irreparable injury. 79. Plaintiffs have no adequate remedy at law to correct the continuing deprivations of their most cherished constitutional liberties.
COUNT I- THE ACT IS AN ULTRA VIRES ACT OF CONGRESS WHOLLY UNSUPPORTED BY ANY POWERS DELEGATED TO CONGRESS UNDER THE
CONSTITUTION. 80. Plaintiffs hereby reiterate and adopt each and every allegation m the preceding paragraphs numbered 1 through 79. 81. The Act violates the United States Constitution insofar as it mandates that Plaintiffs and other individuals and employers participate in interstate commerce by purchasing health insurance coverage for themselves and/or their employees without regard for financial, economic, social, religious and cultural considerations which affect the individuals and employers' particular decisions. 82. The Act, including the individual mandate and employer mandate, is not authorized under the powers delegated to Congress under the Commerce Clause, Article I, Section 8, clause 3 of the Constitution in that it is not regulating interstate commerce but requiring that individuals purchase a good or a service. 83. Plaintiffs' and other individuals' and employers' decisions to not purchase health
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insurance is a decision not to engage in interstate commerce, t.e., economic inactivity, not economic activity regulated by the Commerce Clause. 84. Requiring Plaitniffs and other citizens to engage m commercial activity (i.e. the purchasing of health insurance) constitutes involuntary commercial activity, and therefore IS beyond the scope of Congress's authority under the Commerce Clause, which reaches only voluntary interstate commercial activity. 85. The noneconomic inactivity of citizens declining to purchase health insurance does not result in substantial direct economic effects sufficient to warrant Congressional action under the Commerce Clause. Any effects upon commerce resulting from a decision not to purchase health insurance is at best indirect, insubstantial, and local. 86. The individual mandate in the Act is not authorized under the powers delegated to Congress under the General Welfare Clause, which only grants spending power to Congress and does not grant Congress power to regulate private choices not to spend. 87. The individual mandate in the Act is not authorized by the Taxing and Spending Clause, Article I, Section 8, clause 1 of the Constitution, which 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. 88. Furthermore, the individual mandate in the Act is not authorized under the Taxing and Spending Clause because Congress is required to impose any tax equally and not disproportionately, as is the case with the individual mandate. 89. The individual mandate in the Act is not authorized by the powers granted to Congress in the Sixteenth Amendment to the Constitution to tax income in that the Act imposes taxes upon individuals who fail to purchase health insurance regardless of whether they produce any mcome.
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90. The individual and employer mandate and its attendant burdensome regulations will directly and negatively affect the doctor-patient relationship, increase the cost of care, decrease the quality of care, and drive many healthcare workers from providing care. 91. The individual and employer mandate will directly and negatively affect Plantiff Liberty University by increasing the cost of providing health insurance coverage and thus directly affect the ability of the University to carry on its mission. 92. The mandates will interfere with the sovereignty of state and local governments, will increase the cost of providing Medicare coverage, and will thus negatively affect the budgets and operations of state and local governments.
WHEREFORE, Plaintiffs respectfully pray that the Court grant the declaratory and injunctive relief set forth herein and award such other relief to Plaintiffs as is reasonable, just and necessary.
COUNT II-- VIOLATION OF THE TENTH AMENDMENT 93. Plaintiffs hereby reiterate and adopt each and every allegation in the preceding paragraphs numbered I through 92. 94. The Act and, in particular, the individual and employer mandates violate the Tenth Amendment to the United States Constitution. 95. The Tenth Amendment of the Constitution provides that any powers not specifically granted to Congress are reserved to the states or the people. 96. The Supreme Court has held that the power granted to Congress under the Commerce Clause includes the power to regulate the insurance industry at the federal level. 97. However, the health insurance business, and, in particular, individuals' and employers' decisions regarding whether and what kind of health insurance to purchase is a wholly intrastate
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activity beyond the scope of the powers granted to Congress under the Commerce Clause. As such, they are specifically reserved to the people and the states. 98. Plaintiffs Liberty University, Martha A. Neal, Michele G. Waddell, Mary T. Bendorf, Pausanias Alexander, Joanne V. Merrill and Jeff Helgeson have exercised their individual rights reserved under the Tenth Amendement to decide whether and what type of health insurance they will purchase. 99. The individual and employer mandates in the Act violate the rights reserved to Plaintiffs under the Tenth Amendment in mandating that individuals and employers purchase health insurance coverage in an amount and type prescribed by the federal government or face penalities in the form of increased taxes. 100. Plaintiff Delegate Kathy Byron has exercised her rights under the Tenth Amendment, as an elected representative of the people of the Commonwealth of Virginia, to affirm and preserve the rights of its citizens to decide whether and what type of health insurance they will purchase. 101. The Act violates the rights of state legislators like Plaintiff Delegate Kathy Byron by mandating that residents of the Commonwealth of Virginia purchase health insurance in an amount and type prescribed by the federal government in contravention of state laws that specifically prohibit such mandates against citizens of the Commonwealth. I02. The Act as to be implemented and enforced by Defendants has caused, and will continue to cause, Plaitniffs to suffer undue and actual hardship and irreparable injury. Plaintiffs have no adequate remedy at law to correct the continuing deprivations of their most cherished constitutional liberties.
WHEREFORE, Plaintiffs respectfully pray that the Court grant the declaratory and injunctive relief set forth herein and award such other relief to the Plaintiffs as is reasonable and
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just. COUNT III-- VIOLATION OF THE ESTABLISHMENT CLAUSE UNDER THE FIRST AMENDMENT TO THE UNITED STATES CONSTITUTION
103. Plaintiffs hereby incorporate and adopt each and every allegation in the preceding paragraphs numbered 1 through 102. 104. The First Amendment's Establishment Clause prohibits the establishment of any national religion or excessive government entanglement with religion. 105. The Act's religious exemption violates the Establishment Clause in that it grants to Defendants discretion to determine which religion is "recognized" and demonstrates a preference for one denomination over another. 106. The Act's religious exemption is a per se violation of the Establishment Clause in that it vests in Defendants the right to determine what is a recognized religious sect entitled to exemption under the Act, and thereby discriminates between and among religions by preferring a "recognized" religion over one deemed not recognized. 107. The Act's religious exemption has no secular purpose. 108. The Act's religious exemption has the primary effect of advancing only recognized religions and of inhibiting Plaintiffs Liberty University, Martha A. Neal, Michele G. Waddell, Mary T. Bendorf, Pausanias Alexander, Joanne V. Merrill and Jeff Helgeson's religious beliefs. 109. The Act's religious exemption excessively entangles the government with religion by requiring the government to make doctrinal decisions concerning what is a "recognized" religion. 110. The Act's religious exemption violates the Establishment Clause by vesting m Defendants the power to determine what is orthodox in religion and by distinguishing between
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and favoring certain religions I I 1. The Act's limitation of religious exemptions to only members of certain recognized religious sects constitutes hostility toward Plaintiffs' religious beliefs. I 12. The Act's exemption for healthcare sharing ministries violates Plaintiff Liberty University's rights under the Establishment Clause, in that it discriminates against Liberty University's religious beliefs by implementing an arbitrary date of December 31, I999 for participation in a healthcare sharing plan and thereby prohibiting Liberty University and its employees from partaking in becoming or forming a healthcare sharing plan that would exempt them from the mandates under the Act. I 13. Defendants, in violation of the Establishment Clause, have caused, and will continue to cause, Plaintiffs to suffer undue and actual hardship and irreparable injury. Plaintiffs have no adequate remedy at law to correct the continuing deprivations of their most cherished constitutional liberties.
WHEREFORE, Plaintiffs respectfully pray that the Court grant the declaratory and injunctive relief set forth herein and award such other relief to Plaintiffs as is reasonable, just and necessary.
COUNT IV-- VIOLATION OF THE RIGHT TO FREE EXERCISE OF RELIGION UNDER THE UNITED STATES CONSTITUTION 114. Plaintiffs hereby reiterate and adopt each and every allegation in the preceding paragraphs numbered I through 113. 115. The Act violates Plaintiffs' rights to free exercise of religion, as guaranteed by the First Amendment to the United States Constitution. 116. Plaintiffs Liberty University, Martha A. Neal, Michele G. Waddell, Mary T. Bendorf, Pausanias Alexander, Joanne V. Merrill and Jeff Helgeson's religious beliefs are sincerely and Complaint for Declaratory, Preliminary and Permanent Injunctive Relief- Page 22

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deeply held. 117. The Act substantially burdens Plaintiffs' sincerely-held religious beliefs. 118. There is no compelling government interest sufficient to justify individual mandate and employer insurance coverage mandates, punitive penalties and religious exemptions of the Act. 119. The Act's provisions are not the least restrictive means to accomplish any permissible government purpose sought to be served. 120. The Act's insurance mandates and punitive penalties are not narrowly tailored restrictions on Plaintiffs' free exercise of religion, as guaranteed by the First Amendment to the United States Constitution. 121. The Act does not accommodate Plaintiffs' sincerely held religious beliefs. 122. The Act targets Plaintiffs' religious beliefs and is therefore not neutral or generally applicable. 123. The Act establishes a system of individualized exemptions but Plaintiffs' religious beliefs are not subject to an exemption. 124. The Act establishes categories of exemptions that do not provide exemptions for Plaintiffs' sincerely held religious beliefs. 125. The Act's Private Exchange Provisions create a system whereby, in order to meet the mandate to obtain private health insurance through the exchanges administered by the OPM, Plaintiffs either have to help pay for elective abortions, select an insurance plan that does not meet their needs or pay a punitive penalty. In short, Plaintiffs must choose between forced purchase or payment of a subsidy by fines, fees or taxes of a private insurance product that does not meet their needs, engaging in sinful behavior, or paying a punitive penalty for refusing to compromise their religious beliefs.
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126. The Act's Private Exchange Provisions create a system whereby, in order to meet the mandate to obtain private health insurance through the exchanges administered by the OPM, Plaintiffs either have to formally associate privately with others who are complicit in elective abortion, select an insurance plan that does not meet their needs, or pay a penalty. In short, Plaintiffs must choose between forced purchase of a private insurance product that does not meet their needs or formally and privately yoke themselves with individuals they believe are sinners. 127. The Act's Private Exchange Provisions exceed Defendants' authority to require taxpayers to pay taxes that support government services that taxpayers consider sinful: it effectively mandates that its citizens themselves engage in private transactions that they regard as sinful. 128. This federal government-sanctioned and mandated forced choice between individual needs and holding to sincerely held religious beliefs is a substantial burden on the sincerely held religious beliefs of Plaintiffs. 129. There is no compelling government interest sufficient to justify such provisions of The Act's Private Exchange Provisions. 130. Such provisions of the Act are not the least restrictive means to accomplish any permissible government purpose sought to be served by The Act's Private Exchange Provisions. 131. The Act's Private Exchange Provisions are not narrowly tailored restrictions on the free exercise of religion. 132. The Act's Private Exchange Provisions do not accommodate Plaintiffs' sincerely held religious beliefs. 133. The Act's violation of Plaintiffs' rights of free exercise of religion has caused, and will continue to cause, Plaintiffs to suffer undue and actual hardship and irreparable injury.
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134. Plaintiffs have no adequate remedy at law to correct the continuing deprivation of their most cherished constitutional liberties.
WHEREFORE, Plaintiffs respectfully pray that the Court grant the declaratory and injunctive relief set forth herein and award such other relief to Plaintiffs as is reasonable, just and necessary. COUNT V -- VIOLATION OF THE RELIGIOUS FREEDOM RESTORATION ACT 135. Plaintiffs reallege paragraphs 1 through 134, and incorporate them herein. 136. The Act substantially burdens Plaintiffs Michele G. Waddell, Mary T. Bendorf and Joanne V. Merrill's free exercise of religion in requiring that they either take part in funding abortions or accept only a prescribed healthcare plan that may not provide the services they require, or pay a penalty for failing to obtain such insurance. 137. The Act does not further a compelling governmental interest and IS not the least restrictive means of furthering a compelling governmental interest. 138. The Act violates 42 U.S.C. § 2000bb, et seg., the "Religious Freedom Restoration Act." The Act's violation of Plaintiffs' rights under the Religious Freedom Restration Act has caused, and will continue to cause, Plaintiffs to suffer undue and actual hardship and irreparable injury. 139. Plaintiffs have no adequate remedy at law to correct the continuing deprivation of their most cherished rights.
WHEREFORE, Plaintiffs respectfully pray that the Court grant the declaratory and injunctive relief set forth hereinafter.
COUNT VI- VIOLATION OF EQUAL PROTECTION UNDER THE FIFTH AMENDMENT TO THE UNITED STATES CONSTITUTION 140. Plaintiffs hereby incorporate and adopt each and every allegation in the preceding paragraphs numbered 1 through 139. Complaint for Declaratory, Preliminary and Permanent Injunctive Relief- Page 25

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141. Plaintiffs' right to equal protection under the laws is protected by the Fifth Amendment to the United States Constitution. 142. The Act differentiates between similarly situated religions and therefore violates the guarantee of equal protection. 143. The Act is an unconstitutional abridgement of Plaintiffs Liberty University, Martha A. Neal, Michele G. Waddell, Mary T. Bendorf, Pausanias Alexander, Joanne V. Merrill and Jeff Helgeson's affirmative rights to equal protection of the laws and is not facially neutral, but instead specifically targets Plaintiffs' religious viewpoints. 144. The Act is an unconstitutional abridgement of Plaintiffs' right to equal protection of the law because Plaintiffs are treated differently from other similarly situated residents on the basis of religious beliefs. 145. The Act is not supported by a compelling governmental interest sufficient to justify its enactment or enforcement against Plaintiffs. 146. The Act is not the least restrictive means to accomplish any permissible government purpose sought to be served by its provisions. 147. The Act does not serve a significant government interest. 148. The Act is irrational and unreasonable and imposes irrational and unjustifiable restrictions on the exercise of constitutionally protected religious beliefs. 149. Defendants, in violation of the guarantee of equal protection, have caused, and will continue to cause, the Plaintiffs to suffer undue and actual hardship and irreparable injury. Plaintiffs have no adequate remedy at law to correct the continuing deprivations of their most cherished constitutional liberties.
WHEREFORE, Plaintiffs respectfully pray that the Court grant the declaratory and Complaint for Declaratory, Preliminary and Permanent Injunctive Relief- Page 26

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injunctive relief set forth herein and award such other relief to Plaintiffs as is reasonable and just. COUNT VII-- VIOLATION OF PLAINTIFFS' FIRST AMENDMENT RIGHTS OF FREE SPEECH AND FREE ASSOCIATION
150. Plaintiffs hereby incorporate and adopt each and every allegation m the preceding paragraphs numbered 1 through 149. 151. The Act's Private Exchange Provisions create a system whereby, in order to meet the mandate to obtain private health insurance through the exchanges administered by the OPM, Plaintiffs either have to formally associate privately with others who are complicit in elective abortion, select an insurance plan that does not meet their needs, or pay a punitive penalty. 152. The Act, including the Act's Private Exchange Provisions, compels Plaintiffs to choose between forced purchase of a private insurance product that does not meet their needs, to formally and privately associate themselves with persons with whom they strongly do not want to associate or pay a punitive penalty. 153. This federal government-sanctioned and mandated forced choice between individual rights to freely associate with others with whom they agree and not associate with those with whom they do not agree violates Plaintiffs Liberty University, Michele G. Waddell, Mary T. Bendorf, and Joanne V. Merrill's rights of free association guaranteed by the First Amendment to the United States Constitution. 154. The Act imposes fines, fees and taxes on individuals and employers that are paid in part to subsidize insurance programs that fund abortion in direct violation of Plaintiffs' conscience, moral beliefs and religious conviction, thus forcing them to subsidize and associate with people and private companies or insurance providers that fund abortion. This forced association and compelled speech is repugnant to Plaintiffs and violates their rights under the First Amendment.
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155. Defendants' violation of Plaintiffs' rights of free speech and association has caused, and will continue to cause, Plaintiffs to suffer undue and actual hardship and irreparable injury. 156. Plaintiffs have no adequate remedy at law to correct the continuing deprivation of their most cherished constitutional liberties.
WHEREFORE, Plaintiffs respectfully pray that this Court will grant the declaratory and injunctive relief, as well as damages, set forth herein.
COUNT VIII- THE ACT VIOLATES THE CONSTITUTIONAL PROHIBITION ON UNAPPORTIONED CAPITATION OR DIRECT TAX
157. Plaintiffs hereby reiterate and adopt each and every allegation in the preceding paragraphs numbered 1 through 156. 158. The Act violates the prohibition against unapportioned captitation or direct tax set forth in article I, sections 2 and 9 of the United States Constitution. 159. The tax penalty on uninsured persons under the Act constitutes a capitation and a direct tax that is not apportioned among the states according to census data and is paid or directed to private third parties. 160. Defendants have caused, and will continue to cause, Plaintiffs to suffer undue and actual hardship and irreparable injury. 161. Plaintiffs have no adequate remedy at law to correct the continuing deprivations of their most cherished constitutional liberties.
WHEREFORE, Plaintiffs respectfully pray that the Court grant the declaratory and injunctive relief set forth herein and award such other relief to Plaintiffs as is reasonable and just.
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COUNT IX- CONGRESS'S PASSAGE OF THE RECONCILIATION ACT VIOLATED ESTABLISHED PROCEDURE
162. Plaintiffs hereby reiterate and adopt each and every allegation m the preceding paragraphs numbered 1 through 161. 163. Congress's consideration and adoption of the Reconciliation Act is barred by the Congressional Budget Act of 1974. 164. Such Congressional actions are illegal and thus null and void (or at least are voidable upon Declaration ofthis Court). 165. Consideration and adoption of the Reconciliation Act should not have been permitted over the objections and no votes of Congressional Representatives to the detriment of their constituents, including Plaintiffs. 166. Defendants have caused, and will continue to cause, Plaintiffs to suffer undue and actual hardship and irreparable injury. 167. Plaintiffs have no adequate remedy at law to correct the continuing deprivation of their most cherished constitutional rights.
WHEREFORE, Plaintiffs respectfully pray that this Court will grant the declaratory and injunctive relief set forth herein.
PRAYER FOR RELIEF WHEREFORE, Plaintiffs pray for judgment as follows: A. That this Court immediately issue a Preliminary Injunction enJommg the Defendants, Defendants' officers, agents, employees and all other persons acting in concert with them, from acting in any manner to implement, enforce or otherwise act under the authority of the Act or the Reconciliation Act so as to infringe upon the Plaintiffs rights, so that:
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1. Plaintiffs will not be subject to federal laws regulating people concerning subject matters for which they or their forefathers have never ceded authority to the federal government to regulate;
2. Plaintiffs will not be subject to federal laws concerning subject matters for which their state or commonwealth has never ceded authority to the federal government to regulate;
3. Plaintiffs will not be subject to any federal law mandate to obtain or maintain individual health insurance coverage where their state or commonwealth has expressly protected them as its citizens from such regulation;
4. Plaintiffs will not be subject to any federal employer or individual mandate to procure certain health insurance coverage;
5. Plaintiffs will not be subject to any federal individual mandate to procure certain health insurance coverage that does not apply to members of certain recognized religions approved by the federal government;
6. Plaintiffs will not be subject to any federal employer or individual mandate to procure health insurance coverage that precludes them from becoming, forming or joining a new "health sharing ministry" as defined by the Act and limited to those existing before 1999;
7. Plaintiffs will not be forced to choose between their sincerely held religious beliefs about abortion and support of abortion and following a mandate of the federal government;
8. Plaintiffs will not be forced to choose between exercising their rights to freely associate in private associations with those who share their convictions regarding support
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of abortion and following a mandate of the federal government; and 9. Plaintiffs will not be forced to suffer economic injury to their businesses,
practices and personal livelihood through the overreaching comprehensive federal laws contained in the Act and the Reconciliation Act.
B. That this Court issue a Permanent Injunction enjoining the Defendants, Defendants' officers, agents, employees and all other persons acting in concert with them, from acting in any manner to implement, enforce or otherwise act under the authority of the Act or the Reconciliation Act so as to infringe upon the Plaintiffs rights, so that:
I. Plaintiffs will not be subject to federal laws regulating people concerning subject matters for which they or their forefathers have never ceded authority to the federal government to regulate;
2. Plaintiffs will not be subject to federal laws concerning subject matters for which their state or commonwealth has never ceded authority to the federal government to regulate;
3. Plaintiffs will not be subject to any federal law mandate to obtain or maintain individual health insurance coverage where their state or commonwealth has expressly protected them as its citizens from such regulation;
4. Plaintiffs will not be subject to any federal employer or individual mandate to procure certain health insurance coverage;
5. Plaintiffs will not be subject to any federal individual mandate to procure certain health insurance coverage that does not apply to members of certain recognized religions approved by the federal government;
6. Plaintiffs will not be subject to any federal employer or individual Complaint for Declaratory, Preliminary and Permanent Injunctive Relief- Page 31

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mandate to procure health insurance coverage that precludes them from becoming, forming or joining a new "health sharing ministry" as defined by the Act and limited to those existing before 1999;
7. Plaintiffs will not be forced to choose between their sincerely held religious beliefs about abortion and support of abortion and following a mandate of the federal government;
8. Plaintiffs will not be forced to choose between exercising their rights to freely associate in private associations with those who share their convictions regarding support of abortion and following a mandate of the federal government; and
9. Plaintiffs will not be forced to suffer economic injury to their businesses, practices and personal livelihood through the overreaching comprehensive federal laws contained in the Act and the Reconciliation Act.
C. That this Court render a Declaratory Judgment declaring the Act and the Reconciliation Act null and void, and declaring the Act and the Reconciliation Act unconstitutional as a violation of Article I to the United States Constitution and the First, Fifth, and Tenth Amendments of the United States Constitution, as well as the Religious Freedom Restoration Act, the Congressional Budget Act of 1974, and Section 38.2-3430.1:1 of the Code of Virginia;
D. That this Court award Plaintiffs their reasonable costs; E. That this Court adjudge, decree, and declare the rights and other legal relations with the subject matter here in controversy, in order that such declaration shall have the force and effect of final judgment; F. That this Court retain jurisdiction of this matter for the purpose of enforcing this Complaint for Declaratory, Preliminary and Permanent Injunctive Relief- Page 32

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Court's order; G. That this Court take such other actions as are necessary and proper to remedy
Plaintiffs injuries; and H. That this Court grant such other and further relief as this Court deems equitable
and just under the circumstances.

Dated this 23rd day of March, 2010.

Mathew D. Staver* Anita L. Staver* Liberty Counsel 1055 Maitland Center Commons Second Floor Maitland, FL 32751 (800)671-1776 Telephone (407) 875-0770 Facsimile court@lc .org Email Attorneys for Plaintiffs *Motions for pro hac vice pending

Respectfully Submitted,
Is/ Mary E. McAlister Mary E. McAlister, Va Bar #76057 Liberty Counsel P.O. Box 11108 Lynchburg, VA 24506 (434) 592-7000 Telephone (434) 592-7700 Facsimile courUdlc.org Email Attorney for Plaintiffs
William E. McRorie, Va Bar #07541 717 Court Street Lynchburg, VA 24504 (434) 592-7000 Telephone (434) 592-7700 \vcmcroric(dlihertv.edu Email

Complaint for Declaratory, Preliminary and Permanent Injunctive Relief- Page 33

 
 Case 6:10-cv-00015-NKM Document 24 Filed 07/30/10 Page 1 of 40 Pageid#: 146

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF VIRGINIA
LYNCHBURG DIVISION

LIBERTY UNIVERSITY, Inc., a Virginia )

Nonprofit corporation, MICHELE G.

)

WADDELL, DAVID STEIN, M.D.,

)

JOANNE V. MERRILL, DELEGATE

)

KATHY BYRON, and 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, and ERIC )

HOLDER, Attorney General of the United )

States, in his official capacity,

)

)

Defendants )

) )

Case No.: 6:10-cv-00015-nkm
SECOND AMENDED COMPLAINT

SECOND AMENDED COMPLAINT FOR DECLARATORY, PRELIMINARY AND PERMANENT INJUNCTIVE RELIEF
COME NOW the Plaintiffs, LIBERTY UNIVERSITY, INC., MICHELE G. WADDELL, DAVID STEIN, M.D., JOANNE V. MERRILLL, DELEGATE KATHY BYRON and JEFF HELGESON, by and through their undersigned counsel, and respectfully request this Court to issue a Declaratory Judgment and Preliminary and Permanent Injunctive Relief. In support thereof, Plaintiffs show unto the Court as follows: 1. This is a civil action whereby Plaintiffs seek Declaratory Judgment and Preliminary and
Second Amended Complaint Page 1

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Permanent Injunctive Relief enjoining Defendants, Timothy Geithner, in his official capacity as the Secretary of the Treasury, Kathleen Sebelius in her official capacity as Secretary of the Department of Health and Human Services, Hilda L. Solis, in her official capacity as Secretary of the Department of Labor, and Eric Holder in his official capacity as Attorney General of the United States (hereafter collectively referred to as “Defendants”), their agents, servants and employees and those acting in active concert and with actual notice thereof, from: implementing and enforcing the provisions of the Patient Protection and Affordable Care Act of 2009 (hereafter the “Act”) and the Health Care and Education Reconciliation Act of 2010 (the “Reconciliation Act”), including mandatory health insurance for individuals, mandatory provision of health insurance by employers, payment of penalties for failure to obtain and maintain health insurance, insurance exchange policies that do not protect against payment for elective abortion coverage, and other provisions as set forth herein which were enacted without constitutional authority, and which violate, inter alia: 1) the Plaintiffs’ rights to Free Exercise of Religion and Free Association, guaranteed under the First Amendment to the United States Constitution; 2) the Plaintiffs’ rights to Equal Protection under the Fifth Amendment to the United States Constitution; 3) the Plaintiffs’ rights to be free from governmental violation of the Establishment Clause of the First Amendment to the United States Constitution; 4) the Plaintiffs’ rights to a Republican form of government under the Guarantee Clause of Article IV of the United States Constitution; 5) the Plaintiffs’ rights to be free from unapportioned direct or capitation taxes under Article I, Section 9 of the United States Constitution; 6) Plaintiffs’ rights under the Religious Freedom Restoration Act; 7) the Plaintiffs’ rights to be free from legislative overreaching under the Tenth Amendment to the United States Constitution; and 8) Plaintiffs Liberty University, Michele Waddell, Kathy Byron and Jeff Helgeson’s rights to be free from
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government mandated health insurance coverage under Section 38.2-3430.1:1 of the Code of Virginia. 2. Plaintiffs also pray for Declaratory Judgment to determine that certain provisions of the Act and Reconciliation Act, including, but not limited to, provisions which mandate that all citizens purchase health insurance coverage or face a civil penalty, that employers provide insurance coverage for full-time employees or face a civil penalty, that provide for individualized exemptions that favor certain religious sects over others, and that provide for insurance exchanges which do not protect against payment for elective abortions, are unconstitutional as a violation of the Article I Sections 8 and 9, Article IV, and the First, Fifth and Tenth Amendment to the United States Constitution and violate the Religious Freedom Restoration Act, 42 U.S.C. § 2000bb et. seq. 3. An actual controversy exists between the parties involving substantial constitutional issues, in that Plaintiffs assert that certain provisions of the Act and Reconciliation Act are unconstitutional on their face and as applied in that they, inter alia, violate Plaintiffs’ rights to Free Association and Free Exercise of Religion guaranteed under the First Amendment to the United States Constitution, violate the Establishment Clause of the First Amendment to the United States Constitution, violate the Equal Protection Clause of the Fifth Amendment to the United States Constitution, violate the Reserved Powers Clause of the Tenth Amendment, violate the Guarantee Claus of Article IV, violate the Commerce Clause of Article I, violate the prohibition against unapportioned direct or capitation taxes under Article I, while Defendants assert that the provisions in the Act and Reconciliation Act comport with the Constitution so that they are lawfully empowered to enforce and implement the Act and Reconciliation Act.
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JURISDICTION AND VENUE 4. This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §§ 1331, 1343, 1346, 2201, 2202, and 2412, and 42 U.S.C. § 2000bb et. seq. 5. This Court is authorized to grant Plaintiffs' Prayer for Relief and to award costs, including a reasonable attorney's fee, under 28 U.S.C. § 2412 5 U.S.C. §504 and 42 U.S.C. § 2000bb-1. 6. This Court is authorized to grant Declaratory Relief under the Declaratory Judgment Act, 28 U.S.C. §§ 2201 and 2202 (1988), implemented through Rule 57 of the Federal Rules of Civil Procedure, and to issue the Preliminary and Permanent Injunctive Relief requested by Plaintiffs under Rule 65 of the Federal Rules of Civil Procedure. 7. Venue is proper under 28 U.S.C. § 1391. Each and all of the acts alleged herein were done and are to be done by Defendants, and each of them, not as individuals, but under the color and pretense of statutes, ordinances, regulations, customs, and uses of the United States of America, including the Act and the Reconciliation Act.
PARTIES 8. Plaintiff Liberty University, Inc., is a not-for-profit corporation organized and existing under the laws of the Commonwealth of Virginia, which operates a private Christian university principally located in the city of Lynchburg, Virginia. 9. Plaintiff Michele G. Waddell is a natural born person and citizen of the United States of America and a resident of the Commonwealth of Virginia. She is more than 26 years of age and not yet eligible for Medicare. 10. Plaintiff Dr. David Stein is a natural born person and citizen of the United States of American and of the state of Wisconsin. He is a licensed and practicing medical doctor.
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11. Plaintiff Joanne V. Merrill is a natural born person and citizen of the United States of America and the state of Florida. She is more than 26 years of age and not yet eligible for Medicare. 12. Plaintiff Kathy Byron is a delegate to the Virginia House of Delegates in good standing. She objects to the Act and Reconciliation Act and their purported mandate to require states to perform certain actions implementing the Act and Reconciliation Act which dramatically alter the balance of powers between the federal and state governments. 13. Plaintiff Jeff Helgeson is a natural born person and citizen of the United States of America and the Commonwealth of Virginia who lives in Lynchburg, Virginia. He has been elected to City Council of the City of Lynchburg, Virginia, to the Third Ward District. He objects to the Act and Reconciliation Act and the injury they will do to the employers and citizens of his City. 14. Defendant Timothy Geithner is the Secretary of the Treasury for the United States of America, responsible for formulating economic and tax policy, managing the public debt, and overseeing the collection of taxes and enforcement of the tax laws of this country, including the tax laws enacted and amended by the Act and Reconciliation Act. 15. Defendant Kathleen Sebelius is the Secretary of the Department of Health and Human Services of the United States of America, responsible for the operation of the largest civilian department in the federal government and the administration of federal health programs, including Medicare and Medicaid and health insurance programs established under the Act and Reconciliation Act. 16. Defendant Hilda L. Solis is the Secretary of Labor for the United States of America and is responsible for overseeing government programs, such as the Occupational Health and Safety
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Administration, analyzing and tracking employment data, and recommending and enforcing labor laws, including the laws enacted and amended in the Act and Reconciliation Act. 17. Defendant Eric Holder is the Attorney General of the United States of America who heads the United States Department of Justice and is the chief law enforcement officer of the United States responsible for enforcing the laws of the United States including the laws enacted and amended in the Act and Reconciliation Act. 18. Each of the Defendants is sued in his or her official capacity only.
STATEMENT OF FACTS 19. On March 23, 2010, the President of the United States signed into law H. R. 3590, the Patient Protection and Affordable Care Act of 2009 (the “Act”). 20. On March 30, 2010, the President of the United States signed into law H.R. 4872, the Health Care and Education Reconciliation Act of 2010 (the “Reconciliation Act”). 21. Neither the Act nor the Reconciliation Act contains a severability clause. 22 Plaintiff Liberty University is a private Christian university founded in Lynchburg, Virginia in 1971 by Dr. Jerry Falwell, the late pastor of Thomas Road Baptist Church (the “Church”), who founded the University as an outgrowth ministry of the Church. 23. Jerry Falwell Jr. is the son of Dr. Jerry Falwell and is the Chancellor and CEO of Liberty University. 24. Liberty University, originally known as Lynchburg Baptist College and subsequently Liberty Baptist College, used the Church’s educational facilities. The Church and the University are located on the same contiguous property and continue to share some facilities. 25. The Commonwealth of Virginia granted the University permission to award degrees in 1974. The Commission on Colleges of the Southern Association of Colleges and Schools
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(SACS) granted the University candidate status for accreditation in June 1977 and accreditation in December 1980. In 1986, 1996, and 2006, SACS reaffirmed the University’s accreditation. 26. Liberty University has eleven colleges, including the School of Aeronautics, Center for Academic Support and Advising Services, College of Arts and Sciences, Helms School of Government, School of Business, School of Communication, School of Education, School of Engineering and Computational Sciences, School of Religion, School of Law, and Liberty Baptist Theological Seminary and Graduate School. 27. Liberty University enrolls approximately 12,000 residential students and more than 40,000 students in its online program throughout the world. 28. Liberty University employs approximately 466 full-time faculty, 1,362 adjunct faculty, 2,072 staff members and 1,242 students who are located in Lynchburg, Virginia and other states throughout the United States. 29. Liberty University is self-insured and makes available health savings accounts, private insurance policies and other healthcare reimbursement options to qualified employees under a salary reduction program. Currently, 1,879 employees have chosen to participate in health insurance coverage, which covers approximately 4,340 lives. 30. Liberty University does not mandate that its qualified employees accept healthcare coverage, and some employees make personal decisions to not obtain healthcare coverage through a payroll deduction. 31. Liberty University has chosen health care reimbursement options that provide the type and level of health care services that are desirable to its employees and consistent with the University’s core Christian values–including the sanctity of human life from conception to natural death. The Act and Reconciliation Act dictate, under penalty of civil fine, that Liberty
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University provide what the federal government defines as “minimum essential coverage” without regard for whether the health care services contained within that definition are essential to the University employees’ physical or financial situation or are services which violate the University’s and its employees’ Christian values. 32. Liberty University does not cover abortion under its health insurance coverage. 33. Abortion is contrary to the Christian mission of Liberty University. 34. Plaintiff Michele G. Waddell is generally healthy, has made a personal choice not to purchase health insurance coverage and does not want to purchase health insurance coverage. She is a student and not presently employed. Ms. Waddell receives the health care services she needs and desires and pays for them as she uses them. The Act and Reconciliation Act mandate, under penalty of civil fine, that Ms. Waddell purchase health insurance and dictate that said insurance must include what the federal government defines as “minimum essential coverage” without regard for whether the health care services contained within that definition are essential to Ms. Waddell’s physical or financial situation or are services to which she might have a conscientious or religious objection. The individual mandate in the Act and Reconciliation Act infringes upon Ms. Waddell’s individual liberty and will create a financial hardship in that she will have to either pay for health insurance coverage that is not necessary or desirable or face significant penalties as set forth in the Act and Reconciliation Act. 35. Plaintiff Dr. David Stein is a physician practicing in Milwaukee, Wisconsin, and is board certified by the American Board of Pain Medicine and the American Board of Anesthesiology, which means he has successfully met the highest standards of his profession. Dr. David Stein has a relationship with numerous private insurance plans, accepts Medicare and Medicaid and is affiliated with six hospitals. Implementation of the Act and Reconciliation Act, including the
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additional layers of bureaucratic regulation imposed upon practitioners, and particularly upon practitioners who accept Medicare and Medicaid, will interfere with Dr. Stein’s liberty interest in practicing his profession and providing essential health care services for his patients. 36. Dr. Stein is among the overwhelming majority of physicians–according to a September 2009, Investors Business Daily (IBD) report, 65 percent to 72 percent of physicians–who oppose a federal overhaul of the health care system and disagree with claims that government plans such as the Act and Reconciliation Act will provide quality care to more patients at a lower cost. 37. The Act and Reconciliation Act will significantly and adversely affect Dr. Stein’s practice and the ability of his patients, particularly low-income and senior citizen patients, to receive essential health care services in a timely and efficient fashion. Under the Act and Reconciliation Act, Dr. Stein will have to comply with additional, as yet unenumerated regulations as a condition of receiving reimbursement for treating his patients who have health coverage through Medicaid and Medicare. Dr. Stein will have to meet certain “quality reporting” standards and will have to attain an undefined quality of care to cost ratio that the federal government will deem appropriate or face reductions in Medicare reimbursement rates, with no administrative or judicial recourse. With no standards to guide the government’s determination of appropriate quality of care to cost ratios, Dr. Stein will be faced with uncertainty regarding his ability to provide appropriate care to his patients at a reimbursement rate that will permit him to continue his medical practice. 38. Plaintiff Joanne V. Merrill has elected not to purchase health insurance coverage and does not want to purchase health insurance coverage. She has tried historically to retain control of her healthcare decisions and to try to ensure that her funds are not co-mingled in a way that would advance abortion of any kind. The Act and Reconciliation Act mandate, under penalty of
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civil fines, that Ms. Merrill purchase health insurance and dictate that said insurance must include what the federal government defines as “minimum essential coverage” without regard for whether the health care services contained within that definition are essential to Ms. Merrill’s physical or financial situation or are services to which she might have a conscientious or religious objection. The individual mandate in the Act and Reconciliation Act infringes upon Ms. Merrill’s individual liberty and will create a financial hardship in that she will have to either pay for health insurance coverage that is not necessary or desirable or face significant penalties as set forth in the Act and Reconciliation Act. 39. Plaintiff Kathy Byron is a member of the House of Delegates of the Commonwealth of Virginia, serving the 22nd District. Delegate Byron voted for Bill H.10, which becomes effective July 1, 2010 and amends the Code of Virginia to add section 38.2-3430.1:1:
§ 38.2-3430.1:1. Health insurance coverage not required. No resident of this Commonwealth, regardless of whether he has or is eligible for health insurance coverage under any policy or program provided by or through his employer, or a plan sponsored by the Commonwealth or the federal government, shall be required to obtain or maintain a policy of individual insurance coverage. No provision of this title shall render a resident of this Commonwealth liable for any penalty, assessment, fee, or fine as a result of his failure to procure or obtain health insurance coverage. This section shall not apply to individuals voluntarily applying for coverage under a state-administered program pursuant to Title XIX or Title XXI of the Social Security Act. 40. The Act and Reconciliation Act violate Virginia law and the constitutional doctrine of separation of powers, the Guarantee Clause in Article IV of the United States Constitution and Reserved Powers doctrine in the Tenth Amendment to the United States Constitution, as set forth herein, in a manner that violates Delegate Byron’s rights as an elected representative of the people of the Commonwealth of Virginia.
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41. Plaintiff Lynchburg City Council Member Jeff Helgeson represents the district where Liberty University is located within the city of Lynchburg, Virginia. Implementation of the Act will have a negative impact on the city of Lynchburg, generally, and his district, in particular. Plaintiff Jeff Helgeson is also self-employed and will be subject to the Act’s requirement that he purchase what the federal government defines as minimal essential health insurance coverage or pay penalties. 42. Section 1501 of the Act adds Section 5000A to the Internal Revenue Code of 1986. Section 500A mandates that, with only four exceptions, all individuals must obtain and maintain “minimum essential healthcare coverage” for themselves and their families (the “Individual Mandate”). 43. Section 1302 of the Act provides that the Secretary of Health and Human Services, presently Defendant Sebelius, shall define what constitutes essential health benefits, but that such benefits must include ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, including behavioral health treatment, prescription drug coverage, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services and chronic disease management and pediatric services, including oral and vision care. 44. Section 1302 of the Act further provides that minimum essential healthcare coverage cannot require out of pocket costs of more than approximately $5,000 per year for an individual plan or $10,000 per year for a family plan, or, in the case of employer-sponsored plans, cannot require out of pocket costs of more than approximately $2,000 per year for an individual plan or $4,000 per year for a family plan.
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45. Section 1302 of the Act further provides that minimum essential healthcare coverage means that plans provide certain levels of coverage, denominated as “bronze,” “silver,” “gold,” and “platinum,” which cover from 60 percent to 90 percent, respectively, of the full actuarial value of the benefits provided under the plans. 46. Section 1302 of the Act provides for a “catastrophic plan” that covers essential health benefits only after an individual has spent more than $5,000 in out of pocket costs but such a plan is only available to individuals who are under age 30 or who demonstrate certain financial hardships. Under Section 1302 of the Act, a “catastrophic plan” cannot be offered as part of a group benefits plan. 47. Section 1501 of the Act provides that, beginning on January 1, 2014, an individual who fails to obtain and maintain minimum essential healthcare coverage as defined in Section 1302, is subject to a penalty in an amount equal to the lesser of the national average premium for a “bronze” level health insurance plan or the greater of a graduated flat dollar amount or graduated percentage of the difference between household income and gross income. 48. Section 1501 of the Act provides that the penalty imposed for failure to maintain minimum essential healthcare coverage shall be payable as part of an individuals income tax return. 49. The Act grants the Secretary of the Treasury, presently Defendant Geithner, the power to collect said penalties as part of his oversight of the Internal Revenue Service. 50. In Section 1501 of the Act, Congress makes findings that the Individual Mandate is commercial and economic in nature and substantially affects interstate commerce in that it regulates economic and financial decisions about how and when healthcare is paid for and when health insurance is purchased. Congress makes further findings that health insurance is a
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significant part of the economy, and that insurance is interstate commerce so that the Individual Mandate can be viewed as part of Congress’s power under the Commerce Clause, Article I, Section 8 of the Constitution. 51. Prior to passage of the Act, the Senate expressed some concerns about whether it had power to adopt the Individual Mandate under the Commerce Clause, and the Senate Finance Committee asked the Congressional Research Service for an opinion on the constitutionality of the individual mandate. The Service replied: “Whether such a requirement would be constitutional under the Commerce Clause is perhaps the most challenging question posed by such a proposal, as it is a novel issue whether Congress may use this Clause to require an individual to purchase a good or a service.” Cong. Research Serv. Requiring Individuals to Obtain Health Insurance: A Constitutional Analysis 3 (2009). 52. As the Congressional Research Service opinion indicates, Congress’s power under the Commerce Clause does not embrace the Individual Mandate in that the Individual Mandate is not regulating a commercial transaction between two parties but is imposing upon a party who has chosen not to engage in interstate commerce, such as Plaintiffs Waddell and Merrill, an obligation to engage in interstate commerce. As such, the Individual Mandate is antithetical to the Commerce Clause’s power in that it seeks to regulate inherently noncommercial activity or inactivity that does not affect interstate commerce and to interfere with the private economic decisions made by Plaintiffs Michele Waddell and Joanne Merrill and other similarly situated individuals who elect not to engage in commerce by purchasing health insurance policies. 53. Internal Revenue Code Section 5000A, added by Section 1501 of the Act, exempts four categories of individuals from the Individual Mandate: those who are incarcerated, those who are
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not legally present in the country, and those who qualify for two very specific and limited “religious exemptions.” 54. The first of the “religious exemptions” provided under Section 1501 exempts individuals who satisfy Section 1402(g)(1) of the Internal Revenue Code, which provides exemptions for those who are “a member of a recognized religious sect or division thereof and is an adherent of established tenets or teachings of such sect or division by reason of which he or she is 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 (including the benefits of any insurance system established by the Social Security Act [42 USCS §§ 301 et seq.]) and an adherent of established tenets or teachings of such sect or division as described in such section,” provided that “it is the practice, and has been for a period of time which he deems to be substantial, for members of such sect or division thereof to make provision for their dependent members which in his or her judgment is reasonable in view of their general level of living, and such sect or division thereof has been in existence at all times since December 31, 1950.” 55. Liberty University is a Christian educational institution and Plaintiffs Waddell, Merrill and Helgeson are Christians, but none of the Plaintiffs is “a member of a religious sect or adherent of established tenets or teachings” as described in Section 1501 and, therefore, all are prohibited from exercising a religious exemption under the Act regardless of whether they have religious objections to the Individual Mandate or other provisions in the Act. 56. The other “religious exemption” to the Individual Mandate under Section 1501 of the Act exempts individuals who are members of a “healthcare sharing ministry,” defined as a 501(c) (3) organization, members of which share a common set of ethical or religious beliefs and share
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medical expenses among members in accordance with those beliefs, retain membership even after developing a medical condition, and which have been in existence at all times since December 31, 1999. 57. Liberty University is a 501(c) (3) organization, which is also affiliated with the Church, whose employees and trustees share a common set of ethical or religious beliefs. However, Liberty University is precluded from the “healthcare sharing ministry” exemption provided under the Act because it did not institute the sharing of medical expenses as of December 31, 1999. The arbitrary inclusion of the date December 31, 1999 unreasonably precludes Liberty University from forming a healthcare sharing ministry to provide health coverage for its employees in a manner that does not violate their sincerely held religious beliefs in the way that the coverage required under the Act does, as set forth herein. 58. Section 1511 amends the Fair Labor Standards Act of 1938 by inserting Section 18A, which requires that an employer with more than 200 full-time employees which offers one or more health benefits plans shall automatically enroll new full-time employees in one of the plans offered and continue the enrollment of current employees in a health benefits plan offered through the employer, subject to the employee being provided an opportunity to opt out of coverage. 59. Section 1513 of the Act imposes a penalty upon employers who employ 50 or more fulltime workers by adding to the Internal Revenue Code Section 4980H, which provides that employers with more than 50 full-time employers will be subject to tax penalties if any of their employees receive federally subsidized tax credits or premium payment adjustments.
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60. Under Section 1513, if an employer does not offer minimum essential coverage to its employees and any employee purchases alternative coverage and receives a federal subsidy, then the employer will pay a penalty equal to $2,000 per employee per year. 61. Under Section 1513, if an employer offers at least minimum essential coverage to its employees, but it is deemed to not be affordable under the Act so that the employee has to receive a federal subsidy, then the employer will be assessed a penalty in the amount of $3,000 per employee per year. 62. Liberty University offers healthcare coverage to its full-time employees, but, depending upon how the federal government defines “minimum essential coverage” and the affordability index, could be determined to not offer coverage sufficient to satisfy the federal definition of minimum essential coverage or coverage that is deemed unaffordable under Section 1513 and therefore could be subjected to significant penalties under that section, subjecting the University, as a non-profit institution, to substantial financial hardship. 63. Section 9002 of the Act amends the Internal Revenue Code to require that employer provided healthcare coverage be included as part of an employees’ income to be reported to the Internal Revenue Service and subject to taxation beginning January 1, 2011. 64. Section 9003 of the Act amends the Internal Revenue Code to provide that only prescription drugs and insulin will be categorized as permissible medical expenses for purposes of health savings account or flexible spending account funds, beginning January 1, 2011. Health savings accounts permit employees to deposit their funds into tax-free portable accounts in order to save for routine medical care or future medical expenses. 65. Section 9004 of the Act amends the Internal Revenue Code to increase the penalty paid for use of health savings account funds for non-medical expenses from 10 percent to 20 percent
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beginning on January 1, 2011. As a result of Section 9003 of the Act, funds spent on prescriptions, over-the-counter medications and hygiene items, which were included as reimbursable medical expenses for health savings account and flexible spending accounts will be subject to the 20 percent penalty as non-medical expenses. 66. Section 9005 of the Act amends the Internal Revenue Code to limit taxpayer contributions to health flexible spending arrangements to $2,500 per year beginning January 1, 2013. 67. Section 1402 of the Reconciliation Act amends the Internal Revenue Code to impose a 3.8 percent Medicare tax on unearned income, including income from interest, dividends, annuities, royalties, and rents, of more than $200,000 for individuals or $250,000 for married couples, effective January 1, 2013. 68. Section 1311 of The Act mandates that, not later than January 1, 2014, each state create an American Health Benefit Exchange (“Exchange”), which must be a governmental agency or nonprofit entity created by the state that must make available “qualified health plans” to “qualified individuals” and “qualified employers.” 68. Section 1311 of the Act provides that the Secretary of Health and Human Services, presently Defendant Sebelius, shall determine whether an insurance coverage plan can be certified as a “qualified health plan” for purposes of an Exchange. Section 1311 states that a qualified plan shall not be required to provide coverage for any specific medical procedure, but otherwise does not limit the Secretary’s discretion in defining benefits to be made available under qualified health insurance plans for Exchanges. 69. Section 1303 of the Act provides that states may, but are not required to, elect to prohibit abortion coverage in qualified health plans offered through an Exchange, but only if the State
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enacts a law to provide for such prohibition. Section 1303 further provides that a state may repeal such a law at any time and thereby provide for abortion coverage in qualified health plans offered through an Exchange. 70. Section 1303 of the Act further provides that if a state elects to provide for abortion coverage in qualified health plans, then the state must segregate funds to ensure that no federal funds received by the Exchange are used to fund abortions for which federal funding is prohibited. However, Section 1303 does not require that non-federal funds received from either individual or employer enrollees in the qualified health care plans be so segregated to prevent the funds from being used to fund abortions. 71. Plaintiffs Michele G. Waddell and Joanne V. Merrill are Christians and Plaintiff Liberty University is a Christian educational institution whose employees are Christians who believe that they should live out their sincerely held religious beliefs in everyday life, including the various choices they make in ordering their daily affairs. 72. Plaintiffs Michele G. Waddell and Joanne V. Merrill are Christians and Plaintiff Liberty University is a Christian educational institution whose employees are Christians who have sincerely held religious beliefs that abortions, except where necessary to save the life of the pregnant mother, are murder and morally repugnant. 73. Plaintiffs Michele G. Waddell and Joanne V. Merrill are Christians and Plaintiff Liberty University is a Christian educational institution whose employees are Christians who have sincerely held religious beliefs that they should play no part in such abortions, including no part in facilitating, subsidizing, easing, funding, or supporting such abortions since to do so is evil and morally repugnant complicity.
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74. Plaintiffs Michele G. Waddell and Joanne V. Merrill are Christians and Plaintiff Liberty University is a Christian educational institution whose employees are Christians who have sincerely held religious beliefs that they should not formally associate with or in any way yoke themselves with those who would facilitate, subsidize, ease, fund or support such abortions. 75. Plaintiff Liberty University has a sincerely held religious belief that it should play no part in abortions, including no part in facilitating, subsidizing, easing, funding, or supporting abortions since to do so is evil and morally repugnant complicity. 76. Plaintiff Liberty University has a sincerely held religious belief that it should not formally associate with or in any way be yoked with those who would facilitate, subsidize, ease, fund or support abortions. 77. Section 5210 of the Act amends Section 204 of the Public Health Service Act, which established the Regular Corps and Reserve Corps. Section 5210 re-designates the Reserve Corps as the Ready Reserve Corps and provides that effective immediately members of the Ready Reserve Corps on active duty become members of the Regular Corps. Under the Public Health Service Act, officers of the Regular Corps are to be appointed by the President with the advice and consent of the Senate, but Reserve Corps are appointed by the President with no advice and consent of the Senate. 78. Article I, Section 8 of the United States Constitution grants Congress the power to raise and support armies, and provides that no appropriation of money to that use can be made for more than two years. 79. By providing that members of the Ready Reserve Corps are assimilated into the Regular Corps, Section 5210 grants the President the power to appoint officers that will immediately become members of a standing army without the advice and consent of the Senate, in violation
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of Article I, Section 8. Section 5210 also violates Article I, Section 8 by appropriating funds for the Ready Reserve Corps, which become Regular Corps, for more than two years. 80. Article IV, Section 4 of the United States Constitution provides that “The United States shall guarantee to every State in the Union a Republican Form of Government.” Plaintiffs, as citizens of the United States and of their individual states of residence, are guaranteed a Republican form of government, in which the rule of law prevails and separation of powers is observed. 81. The Act and the Reconciliation Act infringe upon Plaintiffs’ right to a Republican form of government in that they were enacted without constitutional authority, they invest the federal government with powers reserved to the people and to the states under the Tenth Amendment, they violate the individual rights granted to Plaintiffs under the First and Fifth Amendments to the United States Constitution and infringe upon Plaintiffs’ liberty interests in managing their personal and financial affairs without interference of the federal government. 82. Article I, Section 9 of the United States Constitution prohibits the imposition of unapportioned capitation or direct taxes. 83. Section 1501(b) of the Act imposes a penalty in the form of a tax, as of January 1, 2014, on any taxpayer who fails to demonstrate that he has what the federal government deems to be “minimum essential coverage” for health care costs. 84. The penalty imposed by Section 1501(b) is imposed directly on individual taxpayers and is not apportioned according to the Census or any other population-based measurement. As such, the penalty imposed by Section 1501(b) imposes an unapportioned direct tax upon taxpayers in violation of Article I, Section 9 of the United States Constitution.
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85. The penalty imposed by Section 1501(b) infringes upon Plaintiffs’ rights to be free from improper taxation and is likely to cause significant financial hardships to some or all of the Plaintiffs. 86. Section 1513 of the Act imposes a penalty in the form of a tax, as of January 1, 2014, on any employer of 50 or more full-time workers which either does not offer what the federal government deems to be “minimum essential coverage” or which offers what the federal government deems to be “minimum essential coverage” but is not what the government deems to be “affordable.” 87. The penalty imposed by Section 1513 is imposed directly upon employers and is not apportioned according to the Census or any other population-based measurement. As such, the penalty imposed by Section 1513 imposes an unapportioned direct tax upon employers in violation of Article I, Section 9 of the United States Constitution. 88. Imposition of the tax infringes upon Liberty University’s rights to be free from improper taxation and is likely to place a significant financial burden upon Liberty University, a non-profit Christian educational institution. 89. Sections 2201 to 2213 of the Reconciliation Act make sweeping changes to federal student loan programs, including but not limited to termination of the Federal Family Education Loan program, termination of the federal loan consolidation program and termination of unsubsidized Stafford Loans for middle-income taxpayers, effective July 1, 2010. 90. Plaintiff Liberty University receives funds from the federal student loan programs being terminated by the Reconciliation Act. 91. Termination of the programs poses a significant hardship to the University, which must institute immediate and substantial changes, at great expense, to revise its student financial aid
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programs to account for the loss of the federal student loan programs that will be effective just as students are receiving funds for the upcoming academic term. 92. The Reconciliation Act does not contain a severability provision. To the extent that the Reconciliation Act violates Plaintiffs’ rights under the United States Constitution, as described herein, the changes to the federal student loan program enacted in the Reconciliation Act are unconstitutional and ineffective for the University and other educational institutions, resulting in substantial injury to the University in the form of lost time and resources pursuing changes that were void ab initio. 93. The Act and Reconciliation Act, as to be implemented and enforced by Defendants have caused, and will continue to cause, the Plaintiffs to suffer undue and actual hardship and irreparable injury. 94. Plaintiffs have no adequate remedy at law to correct the continuing deprivations of their most cherished constitutional liberties.
COUNT I – THE ACT AND RECONCILIATION ACT ARE AN ULTRA VIRES ACTS OF CONGRESS WHOLLY UNSUPPORTED BY ANY POWERS DELEGATED TO CONGRESS UNDER THE CONSTITUTION.
95. Plaintiffs hereby reiterate and adopt each and every allegation in the preceding paragraphs numbered 1 through 94. 96. The Act and Reconciliation Act violate the United States Constitution insofar as they impose mandates upon Plaintiffs and other individuals and employers that require participation in interstate commerce by purchasing health insurance coverage for themselves and/or their employees without regard for financial, economic, social, religious and cultural considerations which affect the individuals’ and employers’ particular decisions. 97. The Act and Reconciliation Act, including their Individual Mandate and employer
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mandate, are not authorized under the powers delegated to Congress under the Commerce Clause, Article I, Section 8, clause 3 of the Constitution in that they do not regulating interstate commerce but require that individuals purchase a good or a service. 98. Plaintiffs’ and other individuals’ and employers’ decisions to not purchase health insurance is a decision not to engage in interstate commerce, i.e., economic inactivity, not economic activity regulated by the Commerce Clause. 99. Requiring Plaintiffs and other citizens to engage in commercial activity by purchasing health insurance constitutes involuntary commercial activity, and therefore is beyond the scope of Congress’s authority under the Commerce Clause, which reaches only voluntary interstate commercial activity. 100. The noneconomic inactivity of citizens declining to purchase health insurance does not result in substantial direct economic effects sufficient to warrant Congressional action under the Commerce Clause. Any effects upon commerce resulting from a decision not to purchase health insurance are at best indirect, insubstantial, and local. 101. The Individual Mandate in the Act and Reconciliation Act is not authorized under the powers delegated to Congress under the General Welfare Clause, which only grants spending power to Congress and does not grant Congress power to regulate private choices not to spend. 102. The Individual Mandate in the Act is not authorized by the Taxing and Spending Clause, Article I, Section 8, clause 1 of the Constitution, which 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. 103. Furthermore, the Individual Mandate in the Act and Reconciliation Act is not authorized under the Taxing and Spending Clause because Congress is required to impose any tax equally and not disproportionately, as is the case with the Individual Mandate.
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104. The Individual Mandate in the Act is not authorized by the powers granted to Congress in the Sixteenth Amendment to the Constitution to tax income in that the Act and Reconciliation Act impose taxes upon individuals who fail to purchase health insurance regardless of whether they produce any income. 105. The individual and employer mandates and their attendant burdensome regulations will directly and negatively affect the doctor-patient relationship, increase the cost of care, decrease the quality of care, and drive many healthcare providers away from providing care. 106. The individual and employer mandates will directly and negatively affect Plaintiff Liberty University by increasing the cost of providing health insurance coverage and thus directly affect the ability of the University to carry on its mission. 107. The mandates will interfere with the sovereignty of state and local governments, will increase the cost of providing Medicare and Medicaid coverage, and will thus negatively affect the budgets and operations of state and local governments.
WHEREFORE, Plaintiffs respectfully pray that the Court grant the declaratory and injunctive relief set forth herein and award such other relief to Plaintiffs as is reasonable, just and necessary.
COUNT II -- VIOLATION OF THE TENTH AMENDMENT 108. Plaintiffs hereby reiterate and adopt each and every allegation in the preceding paragraphs numbered 1 through 107. 109. The Act and Reconciliation Act and, in particular, the individual and employer mandates violate the Tenth Amendment to the United States Constitution. 110. The Tenth Amendment of the Constitution provides that any powers not specifically granted to Congress are reserved to the states or the people.
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111. The Supreme Court has held that the power granted to Congress under the Commerce Clause includes the power to regulate the insurance industry at the federal level. 112. However, the health insurance business, and, in particular, individuals’ and employers’ decisions regarding whether and what kind of health insurance to purchase is a wholly local or intrastate activity beyond the scope of the powers granted to Congress under the Commerce Clause. As such, these decisions or actions are specifically reserved to the people and the states. 113. Plaintiffs Liberty University, Michele G. Waddell Joanne V. Merrill, Jeff Helgeson and Dr. David Stein have exercised their individual rights reserved under the Tenth Amendment to decide whether and what type of health insurance they will purchase or provide. 114. The individual and employer mandates in the Act and Reconciliation Act violate the rights reserved to Plaintiffs under the Tenth Amendment in mandating that individuals and employers purchase health insurance coverage in an amount and type prescribed by the federal government or face penalties in the form of increased taxes. 115. Plaintiff Delegate Kathy Byron has exercised her rights and the rights of her constituents under the Tenth Amendment, as an elected representative of the people of the Commonwealth of Virginia, to affirm and preserve the rights of its citizens to decide whether and what type of health insurance they will purchase through the enactment of Section 38.2-3430.1:1 of the Code of Virginia. 116. The Act and Reconciliation Act violate the rights of state legislators like Plaintiff Delegate Kathy Byron, and the rights of her constituents, by mandating that residents of the Commonwealth of Virginia purchase health insurance in an amount and type prescribed by the federal government in contravention of state laws that specifically prohibit such mandates against citizens of the Commonwealth.
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117. Plaintiff Jeff Helgeson has exercised his rights and the rights of his constituents under the Tenth Amendment, as an elected representative of the people of the City of Lynchburg, to affirm and preserve the rights of its citizens to decide whether and what type of health insurance they will purchase. 118. The Act and Reconciliation Act violate the rights of local leader like Plaintiff Jeff Helgeson, and the rights of his constituents, by mandating that residents of the City of Lynchburg purchase health insurance in an amount and type prescribed by the federal government in contravention of state laws that specifically prohibit such mandates against citizens of the Commonwealth. 119. The Act and Reconciliation Act as to be implemented and enforced by Defendants have caused, and will continue to cause, Plaintiffs to suffer undue and actual hardship and irreparable injury. Plaintiffs have no adequate remedy at law to correct the continuing deprivations of their most cherished constitutional liberties.
WHEREFORE, Plaintiffs respectfully pray that the Court grant the declaratory and injunctive relief set forth herein and award such other relief to the Plaintiffs as is reasonable and just.
COUNT III -- VIOLATION OF THE ESTABLISHMENT CLAUSE UNDER THE FIRST AMENDMENT TO THE UNITED STATES CONSTITUTION 120. Plaintiffs hereby incorporate and adopt each and every allegation in the preceding paragraphs numbered 1 through 119. 121. The First Amendment’s Establishment Clause prohibits the establishment of any national religion or excessive government entanglement with religion. 122. The Act’s religious exemption violates the Establishment Clause in that it grants to
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Defendants discretion to determine which religion is “recognized” and demonstrates a preference for one denomination over another. 123. The Act’s religious exemption is a per se violation of the Establishment Clause in that it vests in Defendants the right to determine what is a recognized religious sect entitled to exemption under the Act, and thereby discriminates between and among religions by preferring a “recognized” religion over one deemed not recognized. 124. The Act’s religious exemption has no secular purpose. 125. The Act’s religious exemption has the primary effect of advancing only recognized religions and of inhibiting Plaintiffs Liberty University, Michele G. Waddell, Joanne V. Merrill, Dr. David Stein’s and Jeff Helgeson’s religious beliefs. 126. The Act’s religious exemption excessively entangles the government with religion by requiring the government to make doctrinal decisions concerning what is a “recognized” religion. 127. The Act’s religious exemption violates the Establishment Clause by vesting in Defendants the power to determine what is orthodox in religion and by distinguishing between and favoring certain religions 128. The Act’s limitation of religious exemptions to only members of certain recognized religious sects constitutes hostility toward Plaintiffs’ religious beliefs. 129. The Act’s exemption for healthcare sharing ministries violates Plaintiff Liberty University’s rights under the Establishment Clause, in that it discriminates against Liberty University’s religious beliefs by implementing an arbitrary date of December 31, 1999 for participation in a healthcare sharing plan and thereby prohibiting Liberty University and its employees from partaking in becoming or forming a healthcare sharing plan that would exempt
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them from the mandates under the Act. 130. Defendants, in violation of the Establishment Clause, have caused, and will continue to cause, Plaintiffs to suffer undue and actual hardship and irreparable injury. Plaintiffs have no adequate remedy at law to correct the continuing deprivations of their most cherished constitutional liberties.
WHEREFORE, Plaintiffs respectfully pray that the Court grant the declaratory and injunctive relief set forth herein and award such other relief to Plaintiffs as is reasonable, just and necessary.
COUNT IV -- VIOLATION OF THE RIGHT TO FREE EXERCISE OF RELIGION UNDER THE UNITED STATES CONSTITUTION 131. Plaintiffs hereby reiterate and adopt each and every allegation in the preceding paragraphs numbered 1 through 130. 132. The Act and Reconciliation violate Plaintiffs’ rights to free exercise of religion, as guaranteed by the First Amendment to the United States Constitution. 133. Plaintiffs Liberty University, Michele G. Waddell, Joanne V. Merrill and Jeff Helgeson’s religious beliefs are sincerely and deeply held. 134. The Act and Reconciliation Act substantially burden Plaintiffs’ sincerely-held religious beliefs. 135. There is no compelling government interest sufficient to justify Individual Mandate and employer insurance coverage mandates, punitive penalties and religious exemptions of the Act and Reconciliation Act. 136. The Act’s and Reconciliation Act’s provisions are not the least restrictive means to accomplish any permissible government purpose sought to be served. 137. The Act’s and Reconciliation Act’s insurance mandates and punitive penalties are not
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narrowly tailored restrictions on Plaintiffs’ free exercise of religion, as guaranteed by the First Amendment to the United States Constitution. 138. The Act and Reconciliation Act do not accommodate Plaintiffs’ sincerely held religious beliefs. 139. The Act and Reconciliation Act target Plaintiffs’ religious beliefs and are therefore not neutral or generally applicable. 140. The Act and Reconciliation Act establish a system of individualized exemptions but Plaintiffs’ religious beliefs are not subject to an exemption. 141. The Act and Reconciliation Act establish categories of exemptions that do not provide exemptions for Plaintiffs’ sincerely held religious beliefs. 142. The Act and Reconciliation Act create a system whereby Plaintiffs cannot protect their sincerely held religious beliefs against facilitating, subsidizing, easing, funding, or supporting abortions. Plaintiffs must choose between forced purchase of a private insurance product that does not protect their sincerely held religious beliefs or paying a punitive penalty for refusing to compromise their religious beliefs. 143. This federal government-sanctioned and mandated forced choice between individual needs and holding to sincerely held religious beliefs is a substantial burden on the sincerely held religious beliefs of Plaintiffs. 144. There is no compelling government interest sufficient to justify such provisions of The Act and Reconciliation Act. 145. Such provisions of the Act and Reconciliation Act are not the least restrictive means to accomplish any permissible government purpose sought to be served by The Act and Reconciliation Act.
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146. The Act’s and Reconciliation Act’s provisions are not narrowly tailored restrictions on the free exercise of religion. 147. The Act’s and Reconciliation Act’s provisions do not accommodate Plaintiffs= sincerely held religious beliefs. 148. The Act’s and Reconciliation Act’s violation of Plaintiffs= rights of free exercise of religion has caused, and will continue to cause, Plaintiffs to suffer undue and actual hardship and irreparable injury. 149. Plaintiffs have no adequate remedy at law to correct the continuing deprivation of their most cherished constitutional liberties.
WHEREFORE, Plaintiffs respectfully pray that the Court grant the declaratory and injunctive relief set forth herein and award such other relief to Plaintiffs as is reasonable, just and necessary. COUNT V -- VIOLATION OF THE RELIGIOUS FREEDOM RESTORATION ACT 150. Plaintiffs reallege paragraphs 1 through 149, and incorporate them herein. 151. The Act and Reconciliation Act substantially burden Plaintiffs Liberty University, Michele G. Waddell and Joanne V. Merrill’s free exercise of religion in requiring that they risk taking part in funding abortions or pay a penalty for failing to obtain such insurance. 152. The Act and Reconciliation Act do not further a compelling governmental interest and are not the least restrictive means of furthering a compelling governmental interest. 153. The Act and Reconciliation Act violate 42 U.S.C. § 2000bb, et seq., the “Religious Freedom Restoration Act.” The Act’s and Reconciliation Act’s violation of Plaintiffs’ rights under the Religious Freedom Restoration Act has caused, and will continue to cause, Plaintiffs to suffer undue and actual hardship and irreparable injury.
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154. Plaintiffs have no adequate remedy at law to correct the continuing deprivation of their most cherished rights.
WHEREFORE, Plaintiffs respectfully pray that the Court grant the declaratory and injunctive relief set forth hereinafter.
COUNT VI – VIOLATION OF EQUAL PROTECTION UNDER THE FIFTH AMENDMENT TO THE UNITED STATES CONSTITUTION 155. Plaintiffs hereby incorporate and adopt each and every allegation in the preceding paragraphs numbered 1 through 154. 156. Plaintiffs’ right to equal protection under the laws is protected by the Fifth Amendment to the United States Constitution. 157. The Act and Reconciliation Act differentiate between similarly situated religions and therefore violates the guarantee of equal protection. 158. The Act and Reconciliation Act are unconstitutional abridgements of Plaintiffs Liberty University, Michele G. Waddell, Joanne V. Merrill and Jeff Helgeson’s affirmative rights to equal protection of the laws and are not facially neutral, but instead specifically target Plaintiffs’ religious viewpoints. 159. The Act and Reconciliation Act are unconstitutional abridgements of Plaintiffs’ right to equal protection of the law because Plaintiffs are treated differently from other similarly situated residents on the basis of religious beliefs. 160. The Act and Reconciliation Act are not supported by a compelling governmental interest sufficient to justify their enactment or enforcement against Plaintiffs. 161. The Act and Reconciliation Act are not the least restrictive means to accomplish any permissible government purpose sought to be served by their provisions.
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162. The Act and Reconciliation Act do not serve a significant government interest.

163. The Act and Reconciliation Act are irrational and unreasonable and impose irrational and

unjustifiable restrictions on the exercise of constitutionally protected religious beliefs.

164. Defendants, in violation of the guarantee of equal protection, have caused, and will

continue to cause, the Plaintiffs to suffer undue and actual hardship and irreparable injury.

Plaintiffs have no adequate remedy at law to correct the continuing deprivations of their most

cherished constitutional liberties.

WHEREFORE, Plaintiffs respectfully pray that the Court grant the declaratory and

injunctive relief set forth herein and award such other relief to Plaintiffs as is reasonable and just.

COUNT VII -- VIOLATION OF PLAINTIFFS’ FIRST AMENDMENT RIGHTS OF FREE SPEECH AND FREE ASSOCIATION

165. Plaintiffs hereby incorporate and adopt each and every allegation in the preceding

paragraphs numbered 1 through 164.

166. The Act’s and Reconciliation Act’s provisions create a system whereby, in order to meet

the mandate to obtain private health insurance Plaintiffs either have to formally associate

privately with others who are complicit in elective abortion or pay a punitive penalty.

167. The Act and Reconciliation Act, compel Plaintiffs to choose between forced purchase of

a private insurance product that requires that they formally and privately associate themselves

with persons with whom they strongly do not want to associate or pay a punitive penalty.

168. This federal government-sanctioned and mandated forced choice between individual

rights to freely associate with others with whom they agree and not associate with those with

whom they do not agree violates Plaintiffs Liberty University, Michele G. Waddell and Joanne

V. Merrill’s rights of free association guaranteed by the First Amendment to the United States

Constitution.

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169. The Act and Reconciliation Act impose fines, fees and taxes on individuals and employers that are paid in part to subsidize insurance programs that fund abortion in direct violation of Plaintiffs’ conscience, moral beliefs and religious conviction, thus forcing them to subsidize and associate with people and private companies or insurance providers that fund abortion. This forced association and compelled speech is repugnant to Plaintiffs and violates their rights under the First Amendment. 170. Defendants’ violation of Plaintiffs’ rights of free speech and association has caused, and will continue to cause, Plaintiffs to suffer undue and actual hardship and irreparable injury. 171. Plaintiffs have no adequate remedy at law to correct the continuing deprivation of their most cherished constitutional liberties.
WHEREFORE, Plaintiffs respectfully pray that this Court will grant the declaratory and injunctive relief, as well as damages, set forth herein.
COUNT VIII – THE ACT AND RECONCILIATION ACT VIOLATE THE CONSTITUTIONAL PROHIBITION ON UNAPPORTIONED CAPITATION OR
DIRECT TAX 172. Plaintiffs hereby reiterate and adopt each and every allegation in the preceding paragraphs numbered 1 through 171. 173. The Act and Reconciliation Act violate the prohibition against unapportioned capitation or direct tax set forth in Article I, Section 9 of the United States Constitution. 174. The tax penalty on uninsured persons under the Act and Reconciliation Act constitute a direct tax that is not apportioned according to Census data or other population-based measurement in violation of Article I, Section 9. 175. Defendants have caused, and will continue to cause, Plaintiffs to suffer undue and actual hardship and irreparable injury as Plaintiffs are compelled to pay an unconstitutional direct
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unapportioned tax. 176. Plaintiffs have no adequate remedy at law to correct the continuing deprivations of their most cherished constitutional liberties.
WHEREFORE, Plaintiffs respectfully pray that the Court grant the declaratory and injunctive relief set forth herein and award such other relief to Plaintiffs as is reasonable and just. COUNT IX –THE ACT AND RECONCILIATION ACT VIOLATE THE GUARANTEE
OF A REPUBLICAN FORM OF GOVERNMENT 177. Plaintiffs hereby reiterate and adopt each and every allegation in the preceding paragraphs numbered 1 through 176. 178. The powers granted to Defendants under the Act and Reconciliation Act exceed the powers granted to the federal government under Articles I and II of the United States Constitution and infringe upon the powers reserved to the people and the states under the Tenth Amendment. 179. The individual and employer mandates under the Act and Reconciliation Act exceed the powers granted to Congress under Article I, Section 8, including the power to regulate interstate commerce, the power to collect taxes and provide for the general welfare, to raise and support armies with appropriations lasting no more than two years, and thereby violate Plaintiffs’ rights to a Republican form of government under Article IV, Section 4 of the United States Constitution. 180. The tax penalties imposed upon individuals and employers under the Act and Reconciliation Act exceed the powers granted to Congress under Article I, Section 9 of the United States Constitution to enact only apportioned direct or capitation taxes, and thereby
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violate Plaintiffs’ rights to a Republican form of government under Article IV, Section 4 of the United States Constitution. 181. Exercising the powers granted to Defendants under the Act and Reconciliation Act would violate the separation of powers, which violates Plaintiffs’ rights as citizens of the various states to a Republican form of government under Art. IV, Section 4 of the United States Constitution. 182. Defendants have caused, and will continue to cause, Plaintiffs to suffer undue and actual hardship and irreparable injury. 183. Plaintiffs have no adequate remedy at law to correct the continuing deprivations of their most cherished constitutional liberties.
WHEREFORE, Plaintiffs respectfully pray that the Court grant the declaratory and injunctive relief set forth herein and award such other relief to Plaintiffs as is reasonable and just.
PRAYER FOR RELIEF WHEREFORE, Plaintiffs pray for judgment as follows: A. That this Court immediately issue a Preliminary Injunction enjoining the Act, the Reconciliation Act, and the Defendants, Defendants’ officers, agents, employees and all other persons acting in concert with them, from acting in any manner to implement, enforce or otherwise act under the authority of the Act or the Reconciliation Act so as to infringe upon the Plaintiffs’ rights, so that:
1. Plaintiffs will not be subject to federal laws regulating people concerning subject matters for which they or their forefathers have never ceded authority to the federal government to regulate;
2. Plaintiffs will not be subject to federal laws concerning subject matters for which their state or commonwealth has never ceded authority to the federal government to
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regulate; 3. Plaintiffs will not be subject to any federal law mandate to obtain,
maintain or provide individual health insurance coverage where their state or commonwealth has expressly protected them as its citizens from such regulation;
4. Plaintiffs will not be subject to any federal employer or individual mandate to procure certain health insurance coverage;
5. Plaintiffs will not be subject to any federal individual mandate to procure certain health insurance coverage that does not apply to members of certain recognized religions approved by the federal government;
6. Plaintiffs will not be subject to any federal employer or individual mandate to procure health insurance coverage that precludes them from becoming, forming or joining a new “health sharing ministry” as defined by the Act and limited to those existing before 1999;
7. Plaintiffs will not be forced to choose between their sincerely held religious beliefs about abortion and support of abortion and following a mandate of the federal government;
8. Plaintiffs will not be forced to choose between exercising their rights to freely associate in private associations with those who share their convictions regarding support of abortion and following a mandate of the federal government; and
9. Plaintiffs will not be forced to suffer economic injury to their businesses, practices and personal livelihood through the overreaching comprehensive federal laws contained in the Act and the Reconciliation Act.
B. That this Court issue a Permanent Injunction enjoining the Act, the Reconciliation
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and the Defendants, Defendants’ officers, agents, employees and all other persons acting in concert with them, from acting in any manner to implement, enforce or otherwise act under the authority of the Act or the Reconciliation Act so as to infringe upon the Plaintiffs rights, so that:
1. Plaintiffs will not be subject to federal laws regulating people concerning subject matters for which they or their forefathers have never ceded authority to the federal government to regulate;
2. Plaintiffs will not be subject to federal laws concerning subject matters for which their state or commonwealth has never ceded authority to the federal government to regulate;
3. Plaintiffs will not be subject to any federal law mandate to obtain, maintain or provide individual health insurance coverage where their state or commonwealth has expressly protected them as its citizens from such regulation;
4. Plaintiffs will not be subject to any federal employer or individual mandate to procure certain health insurance coverage;
5. Plaintiffs will not be subject to any federal individual mandate to procure certain health insurance coverage that does not apply to members of certain recognized religions approved by the federal government;
6. Plaintiffs will not be subject to any federal employer or individual mandate to procure health insurance coverage that precludes them from becoming, forming or joining a new “health sharing ministry” as defined by the Act and limited to those existing before 1999;
7. Plaintiffs will not be forced to choose between their sincerely held religious beliefs about abortion and support of abortion and following a mandate of the federal
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government; 8. Plaintiffs will not be forced to choose between exercising their rights to
freely associate in private associations with those who share their convictions regarding support of abortion and following a mandate of the federal government; and
9. Plaintiffs will not be forced to suffer economic injury to their businesses, practices and personal livelihood through the overreaching comprehensive federal laws contained in the Act and the Reconciliation Act.
C. That this Court render a Declaratory Judgment declaring the Act and the Reconciliation Act null and void, and declaring the Act and the Reconciliation Act unconstitutional as a violation of Article I to the United States Constitution and the First, Fifth, and Tenth Amendments of the United States Constitution, as well as the Religious Freedom Restoration Act;
D. That this Court award Plaintiffs their reasonable costs, including attorneys’ fees as provided in, inter alia, 28 U.S.C. § 2412 5 U.S.C. §504 and 42 U.S.C. § 2000bb-1;
E. That this Court adjudge, decree, and declare the rights and other legal relations with the subject matter here in controversy, in order that such declaration shall have the force and effect of final judgment;
F. That this Court retain jurisdiction of this matter for the purpose of enforcing this Court’s order;
G. That this Court take such other actions as are necessary and proper to remedy Plaintiff’s injuries; and
H. That this Court grant such other and further relief as this Court deems equitable and just under the circumstances.
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Dated this 30th day of July, 2010.
Mathew D. Staver* Anita L. Staver* Liberty Counsel 1055 Maitland Center Commons Second Floor Maitland, FL 32751 (800)671-1776 Telephone (407) 875-0770 Facsimile court@lc.org Email Attorneys for Plaintiffs *Admitted pro hac vice

Respectfully Submitted,
/s/ Mary E. McAlister Mary E. McAlister, Va Bar #76057 Rena M. Lindevaldsen, Va. Bar #70697 Liberty Counsel P.O. Box 11108 Lynchburg, VA 24506 (434) 592-7000 Telephone (434) 592-7700 Facsimile court@lc.org Email Attorney for Plaintiffs
William E. McRorie, Va Bar #07541 717 Court Street Lynchburg, VA 24504 (434) 592-7000 Telephone (434) 592-7700 wemcrorie@liberty.edu Email

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CERTIFICATE OF SERVICE On July 30, 2010, I electronically filed this document through the ECF system, which will send a notice of electronic filing to the following:

Ethan P. Davis Trial Attorney United States Department of Justice Civil Division, Federal Programs Branch 20 Massachusetts Ave. NW, Room 6109 Washington, D.C. 20530 (202) 514-9242 Ethan.P.Davis@usdoj.gov

/s/ Mary E. McAlister Mary E. McAlister, Va Bar #76057 Rena M. Lindevaldsen, Va. Bar #70697 Liberty Counsel P.O. Box 11108 Lynchburg, VA 24506 (434) 592-7000 Telephone (434) 592-7700 Facsimile court@lc.org Email Attorney for Plaintiffs

Second Amended Complaint Page 40

 
 IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF VIRGINICURK'SOFJIIeEU.S.I)IST.~

· · · · . AT LYNCHBURG. VA .~;....·'

LYNCHBURG DIVISION

FILED

.

NOV 3 0 2010

LIBERTY UNIVERSITY, INC., a Virginia Nonprofit Corporation, MICHELE G. WADDELL, DAVID STEIN, M.D., JOANNE V. MERRILL, DELEGATE KATHY BYRON, and JEFF HELGESON,
Plaintiffs,

CASE No. 6:10-cv-00015-nkm

V.
TIMOTHY GEITHNER, Secretary of the Treasury of the United States, in his official capacity, KATHLEEN SEBELIUS, Secretary ofthe 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, and ERIC HOLDER, Attorney General of the United States, in his official capacity,
Defendants.

MEMORANDUM OPINION JUDGE NORMAN K. MOON

On the day the President signed into law the Patient Protection and Affordable Care Act of 2009, Plaintiffs filed this action, contesting the law's validity on constitutional and statutory grounds. Defendants (several government officials named in their official capacities) moved to dismiss the suit for lack of jurisdiction and for failure to state a claim on which relief can be granted. The parties' arguments have been fully briefed and heard, and for the reasons stated in this memorandum, I will grant Defendants' Motion to Dismiss (docket no. 25).

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I. BACKGROUND
Plaintiffs Liberty University, Inc., Michele G. Waddell, David Stein, M.D., Joanne V.
Merrill, Delegate Kathy Byron, and Council Member Jeff Helgeson (collectively "Plaintiffs")
challenge the legality of certain provisions of the Patient Protection and Affordable Care Act of
2009, Pub. L. No. 111-148, 124 Stat. 119 (Mar. 23, 2010), as amended by the Health Care and
Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (Mar. 30, 2010)
(collectively, the "Act"). Plaintiffs seek a declaration that the Act is unconstitutional and invalid
and an order enjoining its enforcement. Defendants in this action are the following government
officials, named in their official capacities: Timothy Geithner, Secretary of the Treasury;
Kathleen Sebelius, Secretary of the United States Department of Health and Human Services;
Hilda L. Solis, Secretary of the United States Department of Labor; and Eric Holder, Attorney General of the United States. This is not the first judicial ruling on a challenge to the Act. 1
The Act institutes numerous reforms to the national health care market. It removes many barriers to insurance coverage,2 supplies federal funds and expands Medicaid to assist the poor with obtaining coverage,3 and encourages small businesses to purchase health insurance for their employees through tax incentives.4 It creates health benefit exchanges, which are established
and operated by states to serve as marketplaces where informed individuals and small businesses
can enroll in health plans after comparing their features. See Act § 1311. The Act also requires
1 See Commonwealth of Virginia Ex Rei. Cuccinelli v. Sebelius, 702 F. Supp. 2d 598 (E.D. Va. 2010); Baldwin v. Sebelius, No. 10-cv-1033, 2010 U.S. Dist. LEXIS 89192, 2010 WL 3418436 (S.D. Cal. Aug. 27, 2010); Thomas More Law Ctr. v. Obama, ---F. Supp. 2d ----,No. 10-cv-11156, 2010 U.S. Dist. LEXIS 107416, 2010 WL 3952805 (E.D. Mich. Oct. 7, 2010); Florida ex ref. McCollum v. US. Dep't Health & Human Servs., 716 F. Supp. 2d 1120 (N.D. Fla. 2010). 2 See Act §§ 1101, 1201 (prohibiting insurers from denying coverage or increasing the price of coverage for individuals with preexisting medical conditions, from rescinding coverage or declining to renew coverage based on health status, and from capping the amount of coverage available to a policyholder). 3 See Act§§ 1401-02 (providing premium tax credits and reduced cost-sharing options for individuals and families with income between 100 and 400 percent of the poverty line); id. § 2001 (expanding Medicaid eligibility to individuals with income below 133 percent of the federal poverty level). 4 SeeAct§ 1421.
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certain large employers to offer health insurance to their employees and requires all individuals who do not meet a statutory exemption to purchase and maintain health insurance. Plaintiffs challenge these mandatory coverage provisions.
The "Shared Responsibility for Employers" provision of the Act, § 1513 (adding 26 U.S.C. § 4980H) (hereinafter "employer coverage provision" or "employer coverage requirement"), regulates the level and quality of health coverage that large employers provide to their employees. It provides that if an "applicable large employer . . . fails to offer to its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan ... for any month" and at least one full-time employee receives a "premium tax credit or cost-sharing reduction" through a health benefit exchange, then a civil fine is imposed on the employer. Act § 1513(a), (d). An "applicable large employer" is one who employs fifty or more full-time employees on average over a calendar year. Act § 1513(c)(2). The employer coverage provision goes into effect in 2014. Act§ 1513(d).
According to the "Requirement to Maintain Minimum Essential Coverage," § 1501 (adding 26 U.S. C. § 5000A) (hereinafter "individual coverage provision" or "individual coverage requirement") every "applicable individual" must obtain "minimum essential coverage" for each month or pay a penalty, which is included with the individual's tax return. Act § 1501(a)-(b). An "applicable individual" is any individual except one who qualifies for a religious exemption, who is not a United States citizen, national, or an alien lawfully present in the United States, or who is incarcerated. Act § 1501 (d).5 The individual coverage provision takes effect in 2014. Act§ 1501(a).
5 An "applicable individual" may still be exempted from the requirement to purchase health insurance if she cannot afford such coverage because the required contribution exceeds eight percent of her household income. Act § 150l(e). Taxpayers with income under 100 percent of the poverty line, members oflndian tribes, and individuals determined to suffer "a hardship" with respect to the capability to obtain coverage are also exempted. Jd.
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There are two religious exemptions to the requirement that individuals maintain minimum essential coverage. First, the "Religious conscience exemption" applies to an individual who "is a member of a recognized religious sect or division thereof described in section 1402(g)(1) and an adherent of established tenets or teachings of such sect or division as described in such section." Act § 1501(d)(2)(A). Section 1402(g)(l) exempts from the Internal Revenue Code any "member of a recognized religious sect or division thereof [who] is an adherent of established tenets or teachings of such sect or division by reason of which he is conscientiously opposed to acceptance of the benefits of any private or public insurance" which insures death, disability, retirement, or health care costs. 26 U.S.C. § 1402(g)(l). Second, the "Health care sharing ministry" exemption applies to a member of a 501(c)(3) organization, which has been in existence at all times since December 31, 1999, the members of which share a common set of ethical or religious beliefs, share medical expenses in accordance with those beliefs, and retain membership even after developing a medical condition. Act § 1501 (d)(2)(B).
Plaintiffs state that they are a Christian organization and Christian individuals holding religious beliefs that most or all forms of abortion are immoral (Second Am. Compl. ~ 72), and they claim that the Act does not protect against the mandatory insurance payments being used to fund abortion coverage. The Act explicitly states that no plan is required to cover any form of abortion services. Act§ 1303(b)(l)(A)(l). In every state health benefit exchange, there must be offered at least one plan that does not provide coverage of non-excepted abortion services, § 1334(a)(6), which, under current law, are any type of abortion services except in cases of rape or incest or where the life of the woman is endangered, Exec. Order No. 13,535 of Mar. 24, 2010, 75 Fed. Reg. 15,599 (Mar. 29, 2010). Any state may pass a law prohibiting health plans
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offered through that state's health benefit exchange from covering any form of abortion services. Act§ 1303(a)(1).
Plaintiffs allege that the employer and individual coverage provisions are beyond Congress' Article I powers (Count One), violate the Tenth Amendment (Count Two), violate the Establishment Clause of the First Amendment (Count Three), violate the Free Exercise Clause of the First Amendment (Count Four), violate the Religious Freedom Restoration Act (Count Five), violate the equal protection component of the Due Process Clause of the Fifth Amendment (Count Six), violate the right to free speech and free association under the First Amendment (Count Seven), violate the Article I, Section 9 prohibition against unapportioned capitation or direct taxes (Count Eight), and violate the Guarantee Clause (Count Nine). Defendants move to dismiss Plaintiffs' claims in their entirety pursuant to Federal Rule of Civil Procedure 12(b)(1) and Rule 12(b)(6). Defendants argue that the Court lacks subject matter jurisdiction to hear their claims because Plaintiffs do not have standing, the issues are unripe, and the Anti-Injunction Act withdraws jurisdiction over their suit. If jurisdiction is found, Defendants argue that all of the counts should be dismissed for failure to state a claim upon which relief can be granted.
II. APPLICABLE LAW A. Rule 12(b)(l}, Subject Matter Jurisdiction On a Rule 12(b)(l) motion, the plaintiff bears the burden of proving that subject matter jurisdiction exists. Piney Run Pres. Ass 'n v. County Comm 'rs, 523 F.3d 453, 459 (4th Cir. 2008). In considering the motion, a court must accept as true all material factual allegations in the complaint and must construe the complaint in favor of the plaintiff. Warth v. Seldin, 422 U.S. 490, 501 (1975). A court should "regard the pleadings as mere evidence on the issue, and may consider evidence outside the pleadings without converting the proceeding to one for
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summary judgment." Evans v. B. F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999). The moving party's motion to dismiss should be granted when "the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter oflaw." !d.
B. Rule 12(b)(6), Failure to State a Claim A motion to dismiss pursuant to Rule 12(b)(6) tests the legal sufficiency of a complaint to determine whether the plaintiff has properly stated a claim; "it does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992). Although a complaint "does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of a cause of action's elements will not do." Bell At!. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations and quotations omitted). A court need not "accept the legal conclusions drawn from the facts" or "accept as true unwarranted inferences, unreasonable conclusions, or arguments." E. Shore Mkts., Inc. v. JD. Assocs. Ltd. P'ship, 213 F.3d 175, 180 (4th Cir. 2000). "Factual allegations must be enough to raise a right to relief above the speculative level," Twombly, 550 U.S. at 555, with all the allegations in the complaint taken as true and all reasonable inferences drawn in the plaintiff's favor, Chao v. Rivendell Woods, Inc., 415 F.3d 342, 346 (4th Cir. 2005). In sum, Rule 12(b)(6) does "not require heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. Consequently, "only a complaint that states a plausible claim for relief survives a motion to dismiss." Ashcroft v. Iqbal, 556 U.S.----,----, 129 S. Ct. 1937, 1950 (2009).
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III. JURISDICTION Defendants raise three grounds for dismissing the complaint for lack of jurisdiction pursuant to Rule 12(b)(1): Plaintiffs lack standing, the claims are unripe, and the suit is barred by the Anti-Injunction Act.
A. Standing Article III of the Constitution limits federal-court jurisdiction to "Cases" and "Controversies." Massachusetts v. EPA, 549 U.S. 497, 516 (2007). Standing to sue is an aspect of the case or controversy requirement. The doctrine of standing serves to identify those disputes that are "appropriately resolved through the judicial process." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). To establish standing, Plaintiffs must show that: (1) they "suffered an injury in fact-an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical"; (2) "there [is] a causal connection between the injury and the conduct complained of'; and (3) "it [is] likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." !d. at 560-61 (citations and quotations omitted). An interest shared generally with the public at large in the proper application of the Constitution and laws will not do. See id. at 573-76. "The party invoking federal jurisdiction bears the burden of establishing" the elements of standing. !d. at 561. The plaintiff must support each element of the standing requirement with "the manner and degree of evidence" required at the motion to dismiss stage. !d. In the past, this meant that the plaintiff's allegations were accepted as true. See, e.g., Pennell v. San Jose, 485 U.S. 1, 7 (1988). The decisions of the Supreme Court of the United States in Iqbal and Twombly, however, clarifY that, to survive a motion to dismiss, the plaintiff's allegations must present sufficient facts to be plausible. Iqbal, 129 S. Ct. at 1950; Twombly, 550 U.S. at 570.
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Standing is determined as of the date the complaint was filed. See Friends of the Earth, Inc. v.
Laidlaw Envtl. Servs., Inc., 528 U.S. 167, 180 (2000) ("[W]e have an obligation to assure
ourselves that [the plaintiff] had Article III standing at the outset of the litigation."); Focus on the
Family v. Pinellas Suncoast Transit Auth., 344 F.3d 1263, 1275 (11th Cir. 2003) (collecting
cases).
At the outset, I find that Plaintiffs Delegate Kathy Byron, Council Member Jeff
Helgeson,6 and David Stein, M.D.7 lack standing, and I will dismiss them from the suit.
Plaintiff Liberty University, Inc. ("Liberty") is a nonprofit corporation organized under
Virginia law that operates a private Christian university and employs approximately 3,900 full-
time employees. (Second Am. Compl. ~~ 8, 28; Pls.' Opp'n 2.) Liberty "makes available health
savings accounts, private insurance policies and other healthcare reimbursement options to
qualified employees under a salary reduction program." (Second Am. Compl. ~ 29.) As of the
date of the filing of the second amended complaint, 1,879 employees of Liberty chose to
participate in its health insurance coverage; other employees opted not to participate. (!d. ~~ 29-
6 Kathy Byron is a member of the House of Delegates of the Commonwealth of Virginia, and she voted for the Virginia Health Care Freedom Act, Va. Code § 38.2-3430.1: l (2010), which declared that no state resident is required to purchase individual health insurance coverage. (Second Am. Compl. ~ 39.) Jeff Helgeson is a Lynchburg, Virginia city council member and objects to the Act because it "will have a negative impact on the city of Lynchburg, generally, and his district, in particular." (ld. ~~ 13, 41.) Plaintiffs' arguments that Byron and Helgeson have standing based on their status as legislators or on their policy objections to the Act plainly fail. See Raines v. Byrd, 521 U.S. 811, 822-26 (1997) (limiting scope of standing for legislators claiming an institutional injury); United States v. Richardson, 418 U.S. 166, 172 (1974) (finding that a plaintiff must show a personalized injury, "not merely that he suffers in some indefmite way in common with people generally"); McConnell v. FEC, 540 U.S. 93, 227 (2003) (rejecting voters' injuries as too "broad and diffuse" to entitle them to standing). Plaintiffs argue in the alternative that Byron and Helgeson have standing because they will have to comply with the individual coverage requirement. (Pis.' Opp'n 9.) But nowhere in the pleadings do Plaintiffs allege that Byron and Helgeson do not already have health insurance and will suffer an injury to obtain it. 7 Dr. David Stein is a licensed and practicing medical doctor who is opposed to the Act because he believes it will not provide quality care to more patients at lower cost. (Second Am. Compl. ~~ 10, 36.) To support his standing in this litigation Plaintiffs allege that regulations that likely will be passed pursuant to the Act may change the rate at which he can seek reimbursements for Medicaid and Medicare patients (id. ~ 37) and will interfere with his "liberty interest in practicing his profession and providing essential health care services for his patients" (id. ~ 35). These pleadings are too vague and conclusory to support standing-they do not specify which provisions of the Act harm Dr. Stein or how they do so. Dr. Stein appears to raise mere policy disagreements with the Act. This litigation is not the proper forum to air those grievances.
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30.) Liberty's health plan does not cover abortion, and "[a]bortion is contrary to the Christian mission of Liberty." (Id ,-r,-r 32-33.) Liberty represents that its current level of coverage "will almost certainly be determined insufficient" under the Act. (Pls.' Opp'n 3.)
Liberty challenges the constitutionality of the employer coverage provision, which, when it goes into effect in 2014, will require Liberty as an employer of more than fifty full-time employees to offer its employees the opportunity to enroll in minimum essential coverage, or face civil penalties.8 Liberty alleges that the provision will increase Liberty's cost of providing health insurance coverage when it goes into effect (Second Am. Compl. ,-r 106), and Liberty also represents that, as it takes steps to comply with the provision, it will incur "significant and costly changes" in its daily business operations well before 2014 (Pls.' Opp'n 9). As a large nonprofit organization, it claims that in the near future, it will have to rearrange its financial affairs to provide the requisite coverage, or budget for the penalties that it would incur for being out of compliance. (Pls.' Opp'n 6.) According to Liberty, such costs "cannot be postponed until the day that the law's provisions become effective." (Id)
Plaintiffs Michele G. Waddell and Joanne V. Merrill make similar arguments for standing. Waddell and Merrill are individuals who do not have health coverage and do not wish to purchase it. (Second Am. Compl. ,-r,-r 34, 38.) They state that they are Christians and have "sincerely held religious beliefs" that abortion is "murder and morally repugnant" and that they should not be obliged to support abortions in any way or "formally associate with" those who support abortions in any way. (Jd ~~ 71-76.) Waddell and Merrill challenge the validity ofthe
8
Liberty also challenges certain elements of the individual coverage provision. Where generalized declaratory and injunctive relief is sought, if one individual plaintiff demonstrates standing, the court need not inquire whether other plaintiffs have standing to assert the same claim. Rumsfeld v. Forum for Academic & Institutional Rights, Inc., 547 U.S. ~7, 52 n.2 (2006). Because I fmd below that Waddell and Merrill have alleged sufficient facts to support their standmg to challenge the individual coverage provision, I do not need to decide whether Liberty also has demonstrated standing.
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individual coverage requirement and various other provisions of the Act. They argue that, before the individual coverage requirement takes effect in 2014, they will have to make "significant and costly changes" in their personal financial planning, necessitating "significant lifestyle . . .
9l changes" and extensive reorganization oftheir personal and financial affairs. (Pls.' Opp'n 6,
Defendants contend that Plaintiffs Liberty, Waddell, and Merrill have not shown an injury in fact based on the obligation to purchase insurance for themselves or their employees, or based on the possibility of suffering a penalty for noncompliance, because those injuries will not take place until 2014 at the earliest, and thus are not imminent. The Supreme Court has acknowledged that imminence is "a somewhat elastic concept," but has defined it as at least a "certainly impending" injury. Lujan, 504 U.S. at 564 n.2. Defendants also argue that it is speculative whether or not Plaintiffs will even be subject to the coverage provisions. Defendants maintain that Liberty only alleged that it "could be" in violation of the employer coverage requirement when it goes into effect, leaving open the possibility that its current level of coverage offered may satisfy the requirements ofthe Act. (Defs.' Mem. Supp. Mot. Dismiss 14.) In addition, Defendants contend that any number of circumstances may intervene to relieve Waddell and Merrill of the obligation to purchase individual health insurance in 2014: they may find employment that offers health insurance, qualify for Medicaid or Medicare, qualify for an exemption under the Act such as that for low-income individuals, or illness or injury may force them to obtain health insurance independent ofthe Act's mandate. (See id. at 15-16.)
At the motion to dismiss stage, Plaintiffs shoulder a lightened burden to support their factual allegations of injury in fact and causation. Plaintiffs need not set forth by evidence specific facts, as they would have to at the summary judgment stage, Lujan, 504 U.S. at 561, but
9 Alth~ugh in most places in their brief Plaintiffs phrase the injury to Liberty, Waddell, and Merrill as one that will
occur m the near future, at points Plaintiffs state that injury has already occurred. (See Pis.' Opp'n 10, 13.)
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need only provide general factual allegations that are plausible. With this standard in mind, I hold that Plaintiffs' allegations of injury in fact and causation are within the realm of factual plausibility and sufficient to establish standing at this stage of the litigation.
The present or near-future costs of complying with a statute that has not yet gone into effect can be an injury in fact sufficient to confer standing. In Virginia v. American Booksellers Ass 'n, Inc., a group of booksellers brought a facial challenge to a state law prohibiting the knowing display for commercial purposes of certain material deemed harmful to juveniles on the basis that the law violated the First Amendment rights of adults. 484 U.S. 383 (1988). The state argued in defense that the plaintiff booksellers lacked standing because the law had not become effective at the time of their suit, and that any present economic harm they suffered was insufficient to show injury in fact. !d. at 392. The Court rejected those arguments and held that the booksellers had standing because upon the booksellers' interpretation of the law, they would "have to take significant and costly compliance measures or risk criminal prosecution." !d. As long as plaintiffs had "alleged an actual and well-founded fear that the law [would] be enforced against them," their case could proceed. !d. at 393.
The facts of American Booksellers are similar to those here. In the present suit, Plaintiffs allege that they will have to undertake a significant and costly reorganization of their financial affairs in order to comply with the Act when it takes effect or risk heavy civil penalties. Parts of the Act have already taken effect, and the employer and individual coverage requirements are to take effect in 2014. Plaintiffs' allegations plausibly state that, were the Act in force today, Plaintiffs would be obligated by the health insurance coverage requirements to purchase or provide coverage. Although Defendants are correct that there is some uncertainty whether, in 2014, Plaintiffs will continue to fall under the auspices of the Act, Plaintiffs' allegations, which I
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take as true, show that they have good reason to believe they will. Because the future expenditure required by the Act entails significant financial planning in advance of the actual purchase of insurance in 2014, Plaintiffs allege that they must incur the preparation costs in the near term, without knowledge of what their status under the Act will be in 2014. See Thomas More Law Ctr., 2010 U.S. Dist. LEXIS 107416, at *11-12.
I do not rest on American Booksellers alone. Other courts have recognized that the present, detrimental effect on a plaintiff of a future contingent liability can constitute an injury in fact. See Lac Du Flambeau Band ofLake Superior v. Norton, 422 F.3d 490, 498 (7th Cir. 2005) ("[T]he present impact of a future though uncertain harm may establish injury in fact for standing purposes."); Jones v. Gale, 470 F.3d 1261, 1267 (8th Cir. 2006) (holding plaintiffs had standing "to challenge the constitutionality of a law that has a direct negative effect on their borrowing power, financial strength, and fiscal planning") (quotations omitted); Protocols, LLC v. Leavitt, 549 F.3d 1294, 1298-1301 (lOth Cir. 2008) (finding that consultants whose present "financial strength and fiscal planning" was hampered by an agency interpretation of Medicare regulations that created liability for the consultants had standing to challenge the interpretation, even though the liability was contingent on Medicare paying certain expenses then seeking reimbursement); cf Aetna Life Ins. Co. v. Haworth, 300 U.S. 227 (1937) (allowing to proceed suit by insurer against policyholder who claimed insurer was liable for disability payments but policyholder had not yet sought payment). For example, in Lac Du Flambeau Band, the United States Court of Appeals for the Seventh Circuit, on a motion to dismiss, found that the plaintiff Indian tribe suffered present economic injury in the form of a higher cost of capital from a compact that made the state's rejection of the tribe's casino application more likely, even though the injury depended first on federal approval of the application. 422 F.3d at 498. Presently felt
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economic pressure, like that Plaintiffs claim to experience from the employer and individual coverage provisions, may originate from a future event that is in some respects uncertain to occur. Indeed, Plaintiffs' alleged injuries are not even contingent on the occurrence of a future event-if the employer and individual coverage provisions went into effect today, Plaintiffs allege that they would have to comply. Because of the delay in the effective date of the provisions, there is merely some uncertainty whether Plaintiffs will be in the same position in 2014 as they are in today.
Defendants argue that a plaintiff "could always assert a current need to prepare for the most remote and ill-defined harms" but that should not be sufficient to establish an injury in fact. (Defs.' Reply 4.) But the harm faced by Plaintiffs is not remote or ill-defined-in 2014, the provisions, which are already signed into law, will trigger the statutory requirement to purchase health insurance, and that obligation is weighty enough to require costly and advance financial preparation. The connection between the future harm and the alleged present injury is reasonably direct. In any case, recognizing standing for this type of injury does not make the courts vulnerable to plaintiffs bypassing traditional standing requirements to get into court. The need to show a concrete, particularized economic injury that is fairly traceable to the challenged conduct and redressable by the suit remains. In addition, the factual allegations about presently incurred compliance costs must have evidentiary support or the claims will be dismissed at successive stages of litigation when affidavits or evidence at trial are needed to support them. Attorneys or umepresented parties could be subject to sanction under Federal Rule of Civil Procedure 11 for alleging facts that do not have evidentiary support. Furthermore, the allegations of preparation costs must be plausible, which in most frivolous claims they would not
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be. Finally, if something happens to change Plaintiffs' circumstances in the future, the case may become moot. See Becker v. FEC, 230 F.3d 381, 386 n.3 (1st Cir. 2000).
Defendants also take the position that the near-term compliance costs are not fairly traceable to the employer and individual coverage provisions, but rather could stem from any number of factors. (Defs.' Reply 4-5.) A plaintiffs alleged injury is not "fairly traceable" to a challenged provision if that injury "stems not from the operation of [the provision] but from [his] own ... personal choice." McConnell v. FEC, 540 U.S. 93, 228 (2003). Taking the allegations as true, it is clear that the significant adjustments that Plaintiffs must make to their financial affairs in anticipation of the mandatory coverage requirements are fairly traceable to the Act's requirements. The coverage provided by Liberty as of the filing of the complaint encompassed 1,879 employees and enrollment was optional; under the Act, Liberty alleges it would have to make coverage available for all 3,900 of its full-time employees. (Tr. 47:14-48:2.) Liberty has made clear that it does not want to undertake the expansion in coverage that would be required by the Act, so it would not otherwise incur the near-term costs attendant to doing so. Similarly, the Act requires Waddell and Merrill to purchase insurance when they otherwise would not do so.
That those subject to the requirement to purchase insurance will need to make significant and costly changes well before the requirement takes effect is certainly a reasonable allegation. Liberty is a large nonprofit institution with thousands of employees, and under the employer coverage provision, it will need to offer affordable coverage to all of its full-time employees. Waddell and Merrill are individuals whose financial budgets do not include health insurance, and in order to accommodate the substantial cost of purchasing a policy, they will arguably need to make lifestyle changes. "There is nothing improbable about the contention" that the employer
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and individual coverage requirements cause Plaintiffs "to feel economic pressure today." Thomas More Law Ctr., 2010 U.S. Dist. LEXIS 107416, at *11. The allegations to support standing are plausible and sufficiently specific to survive the motion to dismiss.
B. Ripeness Plaintiffs' claims must also be ripe for adjudication. The requirement that a matter be ripe "prevents judicial consideration of issues until a controversy is presented in clean-cut and concrete form." Miller v. Brown, 462 F.3d 312, 318-19 (4th Cir. 2006) (quotation omitted). "[R]ipeness is peculiarly a question of timing ...." Blanchette v. Conn. Gen. Ins. Corp. (Reg'! Rail Reorganization Act Cases), 419 U.S. 102, 138-39 (1974). In determining whether a matter is ripe, the court must "decide whether the issue is substantively definitive enough to be fit for judicial decision and whether hardship will result from withholding court consideration." Bryant Woods Inn, Inc. v. Howard County, 124 F.3d 597, 602 (4th Cir. 1997) (citing Abbott Labs. v. Gardner, 387 U.S. 136, 148-49 (1967), modified on other grounds by Califano v. Sanders, 430 U.S. 99 (1977)). "A case is fit for judicial decision when the issues are purely legal and when the action in controversy is final and not dependent on future uncertainties." Miller, 462 F.3d at 319; see also Texas v. United States, 523 U.S. 296, 300-01 (1998). Hardship is determined by "the immediacy of the threat and the burden imposed on the petitioner who would be compelled to act under threat of enforcement of the challenged law." Charter Fed Sav. Bank v. Office of Thrift Supervision, 976 F.2d 203, 208-09 (4th Cir. 1992). The burden of proving ripeness is on the party bringing the action. Miller, 462 F.3d at 319. The issues raised in the standing and ripeness arguments overlap, see Miller, 462 F.3d at 319, and to the extent that I have addressed them in the discussion on standing above, I will not rehash them at length here. On this facial challenge, the issues to be decided are purely legal in
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nature and further development of the factual record would not clarify the issues for judicial resolution. Although the challenged provisions of the Act will not take effect for years, Plaintiffs have sufficiently alleged that in the present or near future they are or will be burdened by the need to undertake significant and costly changes in their financial affairs and lifestyles in order to be prepared to comply with the Act. See Am. Booksellers, 484 U.S. at 392-93 (finding jurisdiction for a pre-enforcement suit where plaintiff booksellers would have to take costly compliance measures to avoid criminal prosecution). The challenged provisions create a direct and immediate dilemma, forcing Plaintiffs to choose between extensively reorganizing their financial affairs before the provisions go into effect, or risking heavy civil penalties. Under Abbott Laboratories, such a predicament satisfies the hardship requirement of the ripeness inquiry. See Abbott Labs., 387 U.S. at 152-53 (holding pre-enforcement challenge ripe because regulation had "a direct effect on the day-to-day business" of prescription drug companies by forcing them to either re-label drug products at great expense or risk serious criminal and civil penalties). I am satisfied that Plaintiffs have met their burden at this stage in the litigation to allege their suit is not premature.
C. Anti-Injunction Act Defendants urge that Plaintiffs' assertions are barred by the Anti-Injunction Act, 26 U.S.C. § 7421(a). The Anti-Injunction Act, which is located in the Internal Revenue Code, provides, in pertinent part, that
no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed. 26 U.S.C. § 7421(a). The two primary objectives of the Anti-Injunction Act are "[1] to allow the federal government to assess and collect allegedly due taxes without judicial interference and
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[2] to compel taxpayers to raise their objections to collected taxes in suits for refunds." In re
Leckie Smokeless Coal Co., 99 F.3d 573, 584 (4th Cir. 1996); accord South Carolina v. Regan, 465 U.S. 367,376 (1984); Bob Jones Univ. v. Simon, 416 U.S. 725,736 (1974). 10
The individual coverage provision, which added § 5000A to the Internal Revenue Code,
provides that a failure to maintain individual minimum essential coverage results in "a penalty"
imposed on the offending taxpayer, which is to be included on the taxpayer's return for the
taxable year in which the violation occurred. Act § 1501 (b). The Act provides that the penalty
for violation of the individual coverage requirement "shall be assessed and collected in the same manner as an assessable penalty under [26 U.S.C. §§ 6671 et seq.]." Act § 1501(g)(1). 11
Likewise, the employer coverage provision, which added § 4980H to the Internal Revenue Code,
provides that the failure to offer employees the opportunity to enroll in health coverage results in
"an assessable penalty" which "shall be assessed and collected in the same manner as an
assessable penalty under [26 U.S.C. §§ 6671 et seq.]." Act§ 1513(a), (d).
Section 6671 states
(a) Penalty assessed as tax. The penalties and liabilities provided by this subchapter shall be paid upon notice and demand by the Secretary, and shall be assessed and collected in the same manner as taxes. Except as otherwise provided, 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. 26 U.S.C. § 6671(a).
Defendants take the position that the penalties for violating the employer and individual
coverage provisions are to be assessed and collected in the same manner as the penalties under
10 The Anti-Injunction Act is coextensive with the Declaratory Judgment Act, 28 U.S.C. § 220l(a), which withdraws federal court authority to grant declaratory relief in federal tax cases. Leckie, 99 F.3d at 583; see also Sigmon Coal Co. v. Apfel, 226 F.3d 291, 299 (4th Cir. 2000). If the Anti-Injunction Act does not bar the claims, neither does the Declaratory Judgment Act. !d.
11
Notwithstanding§ 1501(g)(l), failure to pay the penalty does not result in criminal sanctions or a lien or levy on the taxpayer's property. Act§ 1501(g)(2).
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§ 6671, and§ 6671 states that references to "tax" in the Internal Revenue Code are deemed also to refer to penalties. Thus, Defendants ask the Court to conclude that the reference to "tax" in the Anti-Injunction Act encompasses the penalties set forth in the Act. Characterizing this action as a suit for the purpose of restraining the assessment and collection of a tax, Defendants contend that the Court is without jurisdiction.
Defendants' argument is unconvincing. The Act merely directs that the penalties it imposes are to be "assessed and collected" in the same manner as the penalties under § 6671. Assessment and collection refers to the manner in which the amount of the tax is determined and the method by which the payment for the tax is gathered. Instructions to assess and collect the Act's exactions in the same manner as the penalties under § 6671 does not convey anything about the jurisdiction of a court to hear a suit challenging that assessment and collection. The Act does not provide that any textual reference to a penalty should be treated as a reference to a tax under the Internal Revenue Code, as § 6671 provides. Surely, Congress could have specified, as it did in § 6671, that it intended for the term "tax" in the tax code to refer to the penalties provided by the Act. It did not, and so I cannot conclude that § 150 I(g)(l) and § 1513(d) of the Act by themselves convert the penalties into taxes for the purposes of the AntiInjunction Act. 12
The exactions provided by the Act for violation of the employer and individual coverage provisions do not otherwise fall within the term "tax" under the Anti-Injunction Act. The AntiInjunction Act does not define "tax." In other contexts, the Supreme Court has recognized a difference between a tax and a penalty. See Dep 't of Revenue v. Kurth Ranch, 511 U.S. 767,

12
I need not determine whether the language of 26 U.S.C. § 6671 renders the penalties provided under that

subchapter as "taxes" for the purpose of the Anti-Injunction Act. I observe that other courts have held that it does.

See Barr v. United States, 736 F.2d 1134, 1135 (7th Cir. 1984); Underwood v. United States, No. CIV 06-0824

2007 U.S. Dist. LEXIS 9679, at *4-5, 2007 WL 914710 (D.N.M. Jan. 12, 2007).

'

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779-80 (1994) ("Whereas fines, penalties, and forfeitures are readily characterized as sanctions, taxes are typically different because they are usually motivated by revenue-raising, rather than punitive, purposes."); United States v. Reorganized CF&I Fabricators of Utah, Inc., 518 U.S. 213, 224 ( 1996) (" [A] tax is a pecuniary burden laid upon individuals or property for the purpose of supporting the Government," whereas "if the concept of penalty means anything, it means punishment for an unlawful act or omission."); United States v. La Franca, 282 U.S. 568, 572 (193 1) ("A tax is an enforced contribution to provide for the support of government; a penalty, as the word is here used, is an exaction imposed by statute as punishment for an unlawful act."). This distinction is not always easy to draw, as "[e]very tax is in some measure regulatory," Sonzinsky v. United States, 300 U.S. 506, 513 (1937), and a regulatory penalty can raise revenue much like a tax would. The attempt to distinguish a tax from a penalty with regard to the applicability of the Anti-Injunction Act is further complicated by Bob Jones University, in which the Court stated that no distinction exists between "regulatory and revenue-raising taxes." 416 U.S. at 741 n.12. While Bob Jones University maintains that the purpose of a tax is irrelevant to whether a suit to enforce the tax is barred by the Anti-Injunction Act, it does not purport to stretch the meaning of the term "tax" in the Anti-Injunction Act to encompass exactions that are by their name and nature regulatory penalties, not taxes. To make sense of this indeterminacy, the United States Court of Appeals for the Fourth Circuit has asked whether the assessment was "(a) [a]n involuntary pecuniary burden, regardless of name, laid upon individuals or property; (b) [i]mposed by or under authority of the legislature; (c) [f]or public purposes, including the purposes of defraying expenses of government or undertakings authorized by it; (d) [u]nder the police or taxing power of the state." Leckie, 99 F.3d at 583.
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After considering the prevailing case law, I conclude that the better characterization of the exactions imposed under the Act for violations of the employer and individual coverage provisions is that of regulatory penalties, not taxes. In the Act, Congress called them a "penalty" and an "assessable penalty." Congress specifically chose not to label them as taxes when drafting the Act, although it described several other exactions in the Act as taxes. See, e.g., Act § 1405 (imposing "on the sale of any taxable medical device by the manufacturer, producer, or importer a tax"); § 9001 (imposing a "tax" on high cost employer-sponsored health coverage); § 9015 (imposing a "tax" on additional hospital insurance for high-income taxpayers); § 10907 (imposing "on any indoor tanning service a tax"). To be sure, both mandatory coverage provisions are placed in the section of the tax code entitled "Miscellaneous Excise Taxes," but the tax code itself instructs that no inference of legislative construction is to be drawn from the location or grouping of any particular provision ofthe tax code. 26 U.S.C. § 7806(b).
Even more importantly, the assessments function as regulatory penalties-they encourage compliance with the Act by imposing a punitive expense on conduct that offends the Act. As I will discuss in Section IV, the statutory fees were enacted in aid of Congress' regulatory powers under the Commerce Clause. In its lengthy statutory findings on the individual coverage provision, § 1501(a), not once does Congress indicate that it was exercising its taxing authority to impose the penalties. Thus, the fourth criterion of the test applied in Leckie is deficient. 13 Although the penalties are expected to raise revenue (Defs.' Mem. Supp. Mot. Dismiss 37), they were not included among the "Revenue Provisions" of Title IX of the Act, which indicates that
13
Congress enacted the provisions as an amendment to the Internal Revenue Code, which might weigh in favor of finding that the penalties are taxes under the Leckie test. See Leckie, 99 F.3d at 583 n.l2. In this case, however, it is neither necessary nor advisable to determine whether the penalties would be constitutionally authorized under Congress' taxing power in order to apply the fourth prong of the Leckie test. It is enough that the penalties are a constitutional exercise of the power to regulate commerce, and that Congress did not purport to promulgate the legislation pursuant to its taxing power, to satisfactorily determine that the exactions are not "[u]nder the police or taxing power" of Congress for the purposes of Leckie. See id. at 583.
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generating revenue was not their main purpose. Indeed, Defendants do not seek to deny the regulatory purpose ofthe penalties. (See, e.g., Defs.' Mem. Supp. Mot. Dismiss 27-28, 37.) For these reasons, the Anti-Injunction Act does not divest this Court of jurisdiction to hear the present challenge.
IV. CONGRESSIONAL AUTHORITY UNDER ARTICLE I Plaintiffs allege in Count One of the complaint that the employer and individual coverage requirements are beyond the scope of Congress' authority provided by Article I of the Constitution. In response, Defendants identify three sources of constitutional authority for the provisions in question: the Commerce Clause, the General Welfare Clause, and the Necessary and Proper Clause. The burden is on Plaintiffs to make a "plain showing that Congress has exceeded its constitutional bounds." United States v. Morrison, 529 U.S. 598, 607 (2000). Because Plaintiffs bring a facial challenge, they must establish that "no set of circumstances exists under which the Act would be valid, i.e., that the law is unconstitutional in all of its applications." Wash. State Grange v. Wash. State Republican Party, 552 U.S. 442, 449 (2008) (quoting United States v. Salerno, 481 U.S. 739, 745 (1987)) (quotations omitted). For the reasons provided below, I hold that Congress acted in accordance with its constitutionally delegated powers under the Commerce Clause when it passed the employer and individual coverage provisions of the Act, and I will dismiss Count One. Because I find that the employer and individual coverage provisions are within Congress' authority under the Commerce Clause, it is unnecessary to consider whether the provisions would be constitutional exercises of power pursuant to the General Welfare Clause or the Necessary and Proper Clause.
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A. Individual Coverage Provision The Constitution grants Congress the power. to "regulate Commerce . . . among the several States ...." U.S. CoNST. art. I, § 8, c1. 3. The Supreme Court has identified three general categories of regulation of interstate commerce in which Congress is authorized to engage. Congress can regulate the channels of interstate commerce, the instrumentalities of interstate commerce and persons or things in interstate commerce, and activities that substantially affect interstate commerce. Gonzales v. Raich, 545 U.S. 1, 16-17 (2005). The third category is the focus of this claim. "In assessing the scope of Congress' authority under the Commerce Clause," the Court's task "is a modest one." /d. at 22. The Court need not itself determine whether the regulated activities, "taken in the aggregate, substantially affect interstate commerce in fact, but only whether a 'rational basis' exists for so concluding." /d. Congress must have a rational basis for determining that the "total incidence" of the class of activity substantially affects interstate commerce; "the de minimis character of individual instances arising under that statute is of no consequence." /d. at 17; see also id. at 22 ("That the regulation ensnares some purely intrastate activity is of no moment."). Where the regulated class of activities is within the reach of federal power, "the courts have no power to excise, as trivial, individual instances of the class." /d. at 23 (quotations omitted). The Supreme Court has emphasized that it is economic activity that must substantially affect interstate commerce. United States v. Lopez, 514 U.S. 549, 559-61 (1995); Morrison, 529 U.S. at 614 ("[T]hus far in our Nation's history our cases have upheld Commerce Clause regulation of intrastate activity only where that activity is economic in nature."). It has at the same time established that Congress' power to regulate activities that substantially affect
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interstate commerce extends to regulation of "purely local activities that are part of an economic class of activities that have a substantial effect on interstate commerce." Raich, 545 U.S. at 17 (quotations omitted); accord United States v. Malloy, 568 F.3d 166, 179 (4th Cir. 2009). Local activity, regardless of whether it is commercial in nature, may still be reached by Congress if it "exerts a substantial economic effect on interstate commerce." Raich, 545 U.S. at 17. In addition, Congress can regulate "purely intrastate activity that is not itself 'commercial' ... if it concludes that failure to regulate that class of activity would undercut the regulation of the interstate market in that commodity." Id. at 18.
It is well-established that Congress holds the authority to regulate the business of insurance. United States v. South-Eastern Underwriters Ass 'n, 322 U.S. 533, 552-53 (1944).
In question here is the Act's requirement that all individuals not exempted under the Act purchase and maintain minimum essential health care coverage. Plaintiffs make two interrelated arguments for finding that the individual coverage provision exceeds the authority granted to Congress under the Commerce Clause. According to Plaintiffs, the conduct regulated by the provision-the failure to purchase health insurance-is a decision not to engage in interstate commerce, and consequently it is not a form of activity; rather, it is better characterized as inactivity, or "simply existing." (Pls.' Opp'n 23.) Further, Plaintiffs charge that the failure to purchase health insurance is not commercial in nature, and does not "result in substantial direct economic effects" on interstate commerce. (Second Am. Compl. ~ 100.) In contrast, Defendants argue that decisions to forego health insurance coverage are economic and substantially affect the interstate health care market because the uninsured, when sick, are able to obtain emergency room care for little or no money, shifting the costs for that uncompensated care on to health care providers, the insured population in the form of higher premiums, and the government. (Defs.'
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Mem. Supp. Mot. Dismiss 30-31.)14 Defendants contend that the costs of providing health care are multiplied by individuals who make the economic calculation not to purchase health insurance during the years when they are healthy but opt back into the health insurance system later when they need care. (!d. 32.) It is Defendants' stance that every individual must choose a way to finance the health care services that he or she will inevitably require, and that by making these choices one becomes an active market participant, not a passive bystander. (!d. 32-33.)
Plaintiffs contend that the individual coverage provision is similar to the statutes struck down in Lopez and Morrison, in that those statutes and the provision of the Act here all involved
regulation of non-commercial activity or inactivity, and those cases should govern. Defendants respond that an individual's decision not to purchase health insurance is a form of economic activity, and the Court's decisions in Wickard v. Filburn, 317 U.S. Ill (1942) and Raich should dictate the result in the present matter. A review of those cases is helpful.
In Lopez and Morrison, the Supreme Court found that the challenged statutes legislated non-commercial activities, and it held that those activities were beyond the reach of federal power under the Commerce Clause. The Gun-Free School Zone Act of 1990, the statute at issue in Lopez, criminalized possession of a gun within a statutorily defined school zone. Lopez, 514 U.S. 549. The Court observed that the statute "by its terms has nothing to do with 'commerce'
or any sort of economic enterprise," id. at 561, and concluded that possessing a gun in a school zone was not an economic activity, id. at 567. Finding that the link between the regulated activity and any effects on interstate commerce was too attenuated, the Court rejected the
14 The Emergency Medical Treatment and Active Labor Act, 42 U.S.C. § 1395dd, imposes on hospitals that participate in Medicare and offer emergency services the requirement to provide to persons presented for treatment "an appropriate medical screening ... to determine whether or not an emergency medical condition ... exists," and to stabilize the condition or, if medically warranted, to transfer such persons to other facilities. § 1395dd(a)-(c); Williams v. United States, 242 F.3d 169, 173-74 (4th Cir. 2001 ). Under § 1395dd, hospitals are required to perform these duties uniformly, "regardless of whether the persons arriving in the emergency rooms are insured or are able to pay." Williams, 242 F.3d at 174. Section 1395dd in effect guarantees a minimum level of health care without discrimination based on ability to pay.
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government's arguments that possession of a gun in a school zone may result in violent crime and thereby affect the national economy through insurance costs, reduced travel, and diminished education and productivity. !d. at 567. The statute invalidated in Lopez regulated a single subject, the possession of firearms in a school zone, and was not "an essential part of a larger regulation of economic activity, in which the regulatory scheme could be undercut unless the intrastate activity were regulated." !d. at 561. Similarly, in Morrison, the Court invalidated a federal civil remedy for the victims of gender-motivated crimes of violence based on its conclusion that the regulated conduct was noneconomic and of a criminal nature. Morrison, 529 U.S. at 613.
In Wickard and Raich, the Court upheld the laws being challenged as valid exercises of Congress' power under the Commerce Clause. Wickard concerned a penalty exacted under federal law on the wheat production of a commercial farm that exceeded marketing quotas established by statute. Wickard, 317 U.S. at 113. The penalty was part of a general statutory scheme to control the volume of wheat being sold in interstate commerce in order to avoid wheat surpluses and shortages, which caused wheat prices to fluctuate. !d. at 115. The Court upheld application of the penalty to wheat grown on the farm solely for personal consumption, reasoning that Congress could have rationally believed that a farmer's choice to grow his own wheat, when he otherwise would have had to purchase that wheat on the market, would substantially undermine the statute's purpose to control wheat prices. Id at 128-29. The Court dismissed the plaintiff's arguments that the act forced farmers to purchase wheat in interstate commerce when they could otherwise grow it for themselves. !d. at 129.
Raich, the Court's most recent elaboration of Commerce Clause power pertinent to this case, also concerned the extent of federal power to regulate intrastate production for personal
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consumption. In that case, the Court sustained Congress' authority to prohibit the local cultivation and possession of homegrown marijuana intended solely for personal use because the act as a whole regulated the "production, distribution, and consumption" of marijuana "for which there is an established, and lucrative, interstate market." Raich, 545 U.S. at 26. It was rational for Congress to believe that the failure to include locally cultivated marijuana for personal use in the law's regulatory scope would undermine the orderly enforcement of the entire regulatory scheme and significantly impact "the supply and demand sides of the market for marijuana." !d. at 28, 30. Together, Wickard and Raich teach that Congress has broad power to regulate purely local matters that have substantial economic effects, even where the regulated individuals claim not to participate in interstate commerce.
I will examine the congressional findings contained in the Act because they can be helpful in reviewing a statutory scheme, see Raich, 545 U.S. at 21, but I pause to observe that such findings are not sufficient, by themselves, to sustain the constitutionality of the Act, see Morrison, 529 U.S. at 614. In the congressional findings set forth in § 1501(a)(2), Congress explained that the national market in health insurance and health care services amounted to $2.5 trillion in 2009 and consumed 17.6 percent of the annual gross domestic product. It recognized that administrative costs for private health insurance were $90 billion in 2006 and constituted 26 to 30 percent of premiums in the individual and small group insurance markets. In addition, the costs of providing uncompensated care for the uninsured amounted to $43 billion in 2008 and were passed on to consumers in the form of substantially higher premiums. In order to reduce these significant costs and make coverage more affordable for consumers, Congress required non-exempted individuals to obtain health insurance coverage, which, together with the other provisions of the Act, Congress found would add millions of new consumers to the health
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insurance market and increase the number of insured individuals. Without an individual coverage requirement, Congress found that healthy individuals would wait to purchase health insurance until they needed care, driving up the cost of health insurance premiums. Congress stated that the individual coverage requirement "is essential to creating effective health insurance markets" with broad health insurance pools including healthy individuals. Act § 1501 (a)(2)(I).
While the unique nature of the market for health care and the breadth of the Act present a novel set of facts for consideration, the well-settled principles expounded in Raich and Wickard control the disposition of this claim. I hold that there is a rational basis for Congress to conclude that individuals' decisions about how and when to pay for health care are activities that in the aggregate substantially affect the interstate health care market.
The conduct regulated by the individual coverage provision-individuals' decisions to forego purchasing health insurance coverage-is economic in nature, and so the provision is not susceptible to the shortcomings of the statutes struck down by the Court in Lopez and Morrison. Nearly everyone will require health care services at some point in their lifetimes, and it is not always possible to predict when one will be afflicted by illness or injury and require care. The "fundamental need for health care and the necessity of paying for such services received" creates the market in health care services, of which nearly everyone is a participant. Thomas More Law Ctr., 2010 U.S. Dist. LEXIS 107416, at *28. Regardless of whether one relies on an insurance policy, one's savings, or the backstop of free or reduced-cost emergency room services, one has made a choice regarding the method of payment for the health care services one expects to receive. Far from "inactivity," by choosing to forgo insurance, Plaintiffs are making an economic decision to try to pay for health care services later, out of pocket, rather than now, through the purchase of insurance. Id at *26. As Congress found, the total incidence of these
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economic decisions has a substantial impact on the national market for health care by collectively shifting billions of dollars on to other market participants and driving up the prices of insurance policies.
The conclusion that decisions to pay for health care without insurance are economic activities follows from the Supreme Court's rulings in Wickard and Raich. Plaintiffs' preference for paying for health care needs out of pocket rather than purchasing insurance on the market is much like the preference of the plaintiff farmer in Wickard for fulfilling his demand for wheat by growing his own rather than by purchasing it. Plaintiffs do not consider themselves to be engaging in commerce, but as in Wickard, economic activity subject to regulation under the Commerce Clause need not involve transacting business in the marketplace. See Wickard, 317 U.S. at 128 ("[T]he power to regulate commerce includes the power to regulate ... the practices affecting" the prices of commodities in interstate commerce.) (emphasis added). In Wickard, the plaintiff argued that his production of wheat was "not intended in any part for commerce but wholly for consumption on the farm." !d. at 118. The Court rejected that argument, stating that one effect of Congress' regulation was to "forestall resort to the market by producing to meet [one's] own needs." !d. at 127. Because of the nature of supply and demand, Plaintiffs' choices directly affect the price of insurance in the market, which Congress set out in the Act to control.
Raich is equally applicable. The plaintiffs there, neither of whom bought or sold marijuana, claimed that they were not participating in commerce at all. But the Court held that it was rational to conclude that growing marijuana at home, whatever the nature of that activity, exerted in the aggregate a substantial economic effect on interstate commerce because it affected the supply and demand in the national market for marijuana. Raich, 545 U.S. at 19. Here, similarly, the choice of individuals to go uninsured affects national market conditions for health
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insurance, reducing the supply of consumers of health insurance who are in good health, and thereby increasing the cost of covering the insured population. Plaintiffs cannot avoid extension of the Act to their conduct just because they allege they provide for their own care and will not, in fact, obtain uncompensated care at the expense of other market participants. As long as the regulated class of activities is within the reach of federal power, "the courts have no power to excise, as trivial, individual instances ofthe class." !d. at 23 (quotations omitted).
The conduct regulated by the individual coverage provision is also within the scope of Congress' powers under the Commerce Clause because it is rational to believe the failure to regulate the uninsured would undercut the Act's larger regulatory scheme for the interstate health care market. See id. at 18; cf Wickard, 317 U.S. at 128-29 ("Congress may properly have considered that wheat consumed on the farm where grown, if wholly outside the scheme of regulation, would have a substantial effect in defeating and obstructing its purpose to stimulate trade therein at increased prices."). The Act institutes a number of reforms of the interstate insurance market to increase the availability and affordability of health insurance, including the requirement that insurers guarantee coverage for all individuals, even those with preexisting medical conditions. As Congress stated in its findings, the individual coverage provision is "essential" to this larger regulatory scheme because without it, individuals would postpone health insurance until they need substantial care, at which point the Act would obligate insurers to cover them at the same cost as everyone else. This would increase the cost of health insurance and decrease the number of insured individuals-precisely the harms that Congress sought to address with the Act's regulatory measures.
For these reasons, the individual coverage requirement is a valid exercise of federal power under the Commerce Clause, even as applied to the facts of this case.
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B. Employer Coverage Provision Plaintiffs also maintain that the requirement that applicable large employers supply minimum essential coverage for their employees is an unconstitutional exercise of power under the Commerce Clause. In the complaint, Plaintiffs allege that employers are being compelled by the Act to participate in interstate commerce when they otherwise would not, just as individuals are forced into the marketplace by the individual coverage provision. (Second Am. Compl. ~~ 96-99.) According to Plaintiffs, the Commerce Clause does not grant Congress the authority to require employers to provide "certain additional benefits" to all of their employees, i.e., to "purchase a particular product at a particular price." (Pls.' Opp'n 26.) Defendants respond that the employer coverage provision facially regulates interstate economic matters. Regulating the terms by which an employer sponsors health insurance for its employees is the same as regulating the terms of employment, which is within the Commerce Clause power. (Defs.' Mem. Supp. Mot. Dismiss 38). As Defendants correctly point out, it is well-established in Supreme Court precedent that Congress has the power to regulate the terms and conditions of employment. See United States v. Darby, 312 U.S. 100 (1941) (upholding the Fair Labor Standards Act ("FLSA"), which requires certain employers to pay their employees a minimum wage and to pay overtime wages for work in excess of a statutorily-specified amount of hours); NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 33-43 (1937) (upholding the National Labor Relations Act ("NLRA") of 1935, which prohibits unfair labor practices and restricts employer interference with union membership); NLRB v. Fainblatt, 306 U.S. 601, 604-09 (1939) (upholding Congress' authority to enforce the NLRA against a small garment business); Baltimore & Ohio R.R. Co. v. Interstate Commerce Comm'n, 221 U.S. 612, 619 (1911) (upholding statute prescribing maximum hours
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for employees engaged in intrastate activity connected with the movement of any train); Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528, 537 (1985) (upholding Congress' authority to enforce the FLSA' s minimum wage and overtime standards against both private and public employers); see also EEOC v. Wyoming, 460 U.S. 226, 248 (1983) (Stevens, J., concurring) ("Today, there should be universal agreement on the proposition that Congress has ample power to regulate the terms and conditions of employment throughout the economy.").
The opportunity provided to an employee to enroll in an employer-sponsored health care plan is a valuable benefit offered in exchange for the employee's labor, much like a wage or salary. The Act requires that certain large employers offer employees the opportunity to enroll in "minimum essential coverage under an eligible employer-sponsored plan." Act § 1513(a)(l ). The requirement imposed by the Act on employers to offer a minimum level of health insurance resembles the requirement imposed by the FLSA on employers to offer a minimum wage upheld in Darby, and Plaintiffs fail to distinguish the two. Plaintiffs' depiction of the employer coverage provision as requiring employers to purchase a product against their will is misleading; the employer coverage requirement is more accurately described as regulating the terms of the employment contract. Employers regulated under § 1513 are already engaged in commercethat employers need to arrange with third party insurers to offer such coverage to their employees is of no consequence.
A rational basis exists for Congress to conclude that the terms of health coverage offered by employers to their employees have substantial effects cumulatively on interstate commerce. Maintaining adequate health care coverage is among the foremost concerns of employees when considering whether to take advantage of better job opportunities. "Job lock" occurs when a worker declines to accept a better job because taking the new job requires giving up the worker's
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current health plan, and he fears he will be unable to obtain a comparable one. See CONG. BUDGET OFFICE, KEY ISSUES IN ANALYZING MAJOR HEALTH INSURANCE PROPOSALS 8, 164-65 (2008). In this way, the interstate economy is impeded by the failure of certain large employers to offer adequate health care coverage. Accordingly, the employer coverage provision is a lawful exercise of Congress' Commerce Clause power.
V. TENTH AMENDMENT Plaintiffs charge in Count Two of the complaint that the Act is unconstitutional for violating the Tenth Amendment. The Tenth Amendment states, "[t]he powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." U.S. CoNST. amend. X. The amendment is violated if (1) Congress does not have authority under the Constitution to pass the regulation, or (2) the means of regulation employed impermissibly infringe on state sovereignty by undercutting and displacing state authority and by commandeering state legislative functions. United States v. Johnson, 114 F.3d 476, 480-81 (4th Cir. 1997); New York v. United States, 505 U.S. 144, 159 (1992). The first basis for invalidity fails because the Act is a valid exercise of Congress' Commerce Clause power. See New York, 505 U.S. at 156 ("If a power is delegated to Congress in the Constitution, the Tenth Amendment expressly disclaims any reservation of that power to the States."). The second basis also lacks merit. Plaintiffs allege that the requirement that individuals obtain health insurance and that states create health benefit exchanges undercuts and displaces state authority, although they do not explain in any detail what state authority is being intruded upon. (Pls.' Opp'n 32.) Plaintiffs rest their argument on Johnson, 114 F.3d 476. There, the
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Fourth Circuit addressed the claim that the Child Support Recovery Act, which criminalized the willful non-payment of state-ordered child support, impermissibly undercut and displaced state authority over the areas of criminal law and family law. !d. at 480-81. The court rejected the challenge, holding that federal laws criminalizing conduct are "commonplace under the dualsovereign concept" and involve no violation where they are constitutionally authorized. !d. at 481. Johnson does not help Plaintiffs; Congress has the constitutional power to regulate the business of insurance, South~Eastern Underwriters Ass 'n, 322 U.S. at 552-53, and has frequently regulated health insurance and health care services. 15 Apart from exceeding Congress' enumerated powers under Article I, which the Act does not, there is no foundation under Johnson for invalidating the regulatory scheme.
Plaintiffs also say that the Act commandeers state legislative functions because it directs states to create health benefit exchanges. (Pls.' Opp'n 32-33.) But states are merely given the option to set up the exchanges. The Act authorizes each state to adopt the federal standards for health benefit exchanges or pass state laws that satisfactorily implement the standards. Act § 1321(b). If a state chooses not to do so, then the federal government must establish and operate the exchange within the state. Act § 1321 (c). Congress has the power to offer states the choice of regulating private activity according to federal standards or having state law preempted by federal regulation. New York, 505 U.S. at 167. In this respect, the Act is plainly constitutional. Count Two will be dismissed.
15
See, e.g., Medicare Act, Pub. L. No. 89-97, 79 Stat. 286, 42 U.S.C. § 1395 et seq. (providing government-funded health insurance for the aged); Employee Retirement and Income Security Act of 1974, Pub. L. No. 93-406, 88 Stat. 829, 29 U.S.C. § 1001 et seq. (establishing federal requirements for health insurance plans offered by private employers); Consolidated Omnibus Budget Reconciliation Act of 1985, Pub. L. No. 99-272, I00 Stat. 82, § 1161 et s.eq. (enabling workers who lose their health benefits to continue receiving certain benefits from their plans for a time); Health Insurance Portability and Accountability Act of 1996, Pub. L. No. 104-191, 110 Stat. 1936,42 U.S.C. § 1320d et seq. (directly regulating private health insurance plans).
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VI. ESTABLISHMENT CLAUSE Plaintiffs raise Establishment Clause challenges to the religious conscience exemption and to the health care sharing ministry exemption to the individual coverage provision. See Act § 150l(d)(2). Plaintiffs allege that, because the Act invests in Defendants the right to determine which sects are "recognized" pursuant to the religious conscience exemption, it presents a host of Establishment Clause difficulties, including: lacking a secular purpose, privileging certain religious sects over others, fostering excessive entanglement by requiring the government to make doctrinal decisions, and demonstrating hostility toward Plaintiffs' religious beliefs. (Second Am. Compl. ~~ 120-128.) Plaintiffs further allege that the healthcare sharing ministries exemption violates the Establishment Clause because it arbitrarily excludes Plaintiffs from availing themselves of its benefits. (Id ~ 129.) The First Amendment to the Constitution provides that "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof ...." U.S. CONST. amend. I. While these two clauses, known as the Establishment Clause and Free Exercise Clause, "express complementary values, they often exert conflicting pressures." Cutter v. Wilkinson, 544 U.S. 709, 719 (2005) (citing Locke v. Davey, 540 U.S. 712, 718 (2004); Walz v. Tax Comm 'n, 397 U.S. 664, 668-69 (1970)). Despite this tension, '"there is room for play in the joints' between the Clauses." Cutter, 544 U.S at 719 (quoting Walz, 397 U.S. at 669). That is, there is an interstice in which Congress can take action "neither compelled by the Free Exercise Clause nor prohibited by the Establishment Clause." Id at 719. The accommodation of religious exercise fits within this category. In Cutter, the Supreme Court upheld a provision of the Religious Land Use and Institutionalized Persons Act of 2000 ("RLUIPA") against an Establishment Clause challenge.
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Jd. at 713. Among other things, RLUIPA requires courts to apply a strict scrutiny standard of review where the government imposes a "substantial burden on the religious exercise" of institutionalized persons. 42 US.C. § 2000cc-1(a)(l)-(2). Respondent, the director of the Ohio Department of Rehabilitation and Correctipn, brought a facial challenge to RLUIPA. Speaking for the unanimous Court, Justice Ginsburg wrote "[t]his Court has long recognized that the government may . . . accommodate religious practices ... without violating the Establishment Clause."' Cutter, 544 U.S. at 713 (quoting Hobbie v. Unemployment Appeals Comm'n, 480 U.S. 136, 144-45 (1987)); see also Corp. of the Presiding Bishop of the Church of Jesus Christ of Latter-day Saints v. Amos, 483 U.S. 327 (1987) (upholding exemption of Title VII's prohibition on religious discrimination as applied to secular nonprofit activities of a church).
While the Court noted that certain accommodations might "devolve into 'an unlawful fostering ofreligion,"' RLUIPA did not cross the line. Cutter, 544 U.S. at 714 (quoting Corp. of the Presiding Bishop, 483 U.S. at 334-35). First, the statute "alleviated exceptional governmentcreated burdens on private religious exercise." !d. at 720 (citing Bd. ofEd. ofKiryas Joel Village Sch. Dist. v. Grumet, 512 U.S. 687, 705 (1994)). That is, RLUIPA created accommodations for "institutionalized persons who are unable freely to attend to their religious needs ...." Jd. at 721. In the same vein, the Court noted with approval Congress' accommodation of religious practice in the military. Id. at 722. Second, RLUIPA's accommodation was "measured so that it does not override other significant interests." !d. The act was unlike that struck down in Estate ofThornton v. Caldor, Inc., 472 U.S. 703, 709 (1985), which "arm[ed] Sabbath observers with an absolute and unqualified right not to work on whatever day they designate[d] as their Sabbath." Third, the Court found it significant that "RLUIPA does not differentiate among bona fide faiths." Cutter, 544 U.S. at 723. The Court distinguished Kiryas Joel, which invalidated a
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state law creating a special school district for the Satmar sect of Hasidic Jews. Kiryas Joel, 512 U.S. at 690.
Significantly, in Cutter, the Court declined to follow Lemon v. Kurtzman, 403 U.S. 602 (1971), which has long provided the standard means of analyzing Establishment Clause cases. See Cutter, 544 U.S. at 717 n.6. Lemon's three-part test requires that "[f]irst the statute must have a secular legislative purpose; second, its principal or primary effect must be one that neither advances nor inhibits religion; [and] finally, the statute must not foster an excessive government entanglement with religion." 403 U.S. at 612-13. In Agostini v. Felton, 521 U.S. 203, 218, 22333 (1997), the Court "folded the entanglement inquiry into the primary effect inquiry ... because both inquiries rely on the same evidence, and the degree of entanglement has implications for whether a statute advances or inhibits religion." Zelman v. Simmons-Harris, 536 U.S. 639, 668 (2002) (O'Connor, J., concurring) (citation omitted); see also Madison v. Reiter, 355 F.3d 310, 319-20 (4th Cir. 2003 ). Although critics have been sounding the death knell of Lemon for some time, 16 it remains good law and merits this Court's attention. See McCreary County, Ky. v. Am. Civil Liberties Union of Ky., 545 U.S. 844, 859 (2005) (interpreting the "secular purpose" requirement).
A. Religious Conscience Exemption Considering first the religious conscience exemption, I observe at the outset that the exemption adopts the § 1402(g)(l) exemption from the Internal Revenue Code, and every court to consider an Establishment Clause challenge to § 1402(g)(l) over the last forty years has upheld the exemption. See Varga v. United States, 467 F. Supp. 1113, 1118-19 (D. Md. 1979);
16
See Cutter, 544 U.S. at 726 n.l (Thomas, J., concurring) (calling the Lemon test "discredited"); Van Orden v. Perry, 5~5 U.S. ~77, 6.85-86"(2005) (declining to apply the Lem.on test); Walla~e v. Jaffree, 472 U.S. 38, 110 (1985) (Rehn~mst, J., dissentmg) (The. three-part [Lemon] test has simply not provided adequate standards for deciding Establishment Clause cases, as this Court has slowly come to realize.").
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Droz v. Comm 'r, 48 F.3d 1120, 1124 (9th Cir. 1995); Hatcher v. Comm 'r, 688 F.2d 82, 83-84 (lOth Cir. 1979); Jaggard v. Comm 'r, 582 F.2d 1189, 1190 (8th Cir. 1978); Henson v. Comm 'r, 66 T.C. 835,838 (1976); Palmer v. Comm'r, 52 T.C. 310,314-15 (1969). While the mere fact of a long history cannot cure an otherwise unconstitutional practice, it is "not something to be lightly cast aside." Walz, 397 U.S. at 678.
Moreover, the provision falls well within the bounds for permissible religious accommodation under Cutter. First, the exception relieves a government-imposed burden on religious exercise. It ameliorates the burden that the Act would otherwise impose on those who have a conscientious objection to the receipt of medical benefits. Second, the exception does not override other significant interests. Unlike the accommodation struck down in Caldor, the religious conscience exemption does not arm its beneficiaries with the right to trample over the interests of others.
Finally, the exemption does not "differentiate among bona fide faiths" in any relevant sense. The accommodation ensures that similarly situated groups are treated similarly. See Kiryas Joel, 512 U.S. at 703; see also id. at 727 (Kennedy, J., concurring) ("Nor is it true that New York's failure to accommodate another religious community facing similar burdens would be insulated from challenge in the courts."). Accommodations may ''justify treating those who share [a particular] belief differently from those who do not; but they do not justify discriminations based on sect." !d. at 715 (O'Connor, J., concurring). By its terms, the religious conscience exemption applies to all members of all recognized faiths that have a sincere, conscientious objection to receiving medical benefits. Plaintiffs in this case have no such objection, and therefore cannot claim that they are burdened in the same way that the religious conscience exemption contemplates. Nor is there any reason to believe that the exemption will
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be applied in a way that would result in disparate treatment of similarly situated persons. The accommodation is therefore not problematic under Cutter.
Plaintiffs urge that the religious conscience exemption creates excessive entanglement under Lemon, because it "vests Defendants with the right to determine what is a recognized religious sect entitled to exemption under the Act" and calls for surveillance and "monitoring of the tenets of certain religious sects and sincerity of adherents' beliefs." (Pls.' Opp'n 41-42.) First, it bears repeating that the Supreme Court and Fourth Circuit have recognized that the entanglement inquiry is largely subsumed into the primary effects prong of Lemon. See Zelman, 536 U.S. at 668; Madison, 355 F.3d at 319-20. The parties do not seem to dispute that the primary effect of the legislation in this case is neither to advance nor inhibit religion. Evaluating a religious exemption to Title VII in Corporation ofthe Presiding Bishop, the Court recognized that "[f]or a law to have forbidden 'effects' under Lemon, it must be fair to say that the government itselfhas advanced religion through its own activities and influence." 483 U.S. at 337. The Court has also distinguished between the impermissible grant of affirmative benefits on the basis of religion, and "allow[ing] religious communities and institutions to pursue their own interests free from governmental interference." Kiryas Joel, 512 U.S. at 706 (citing Corp. ofthe Presiding Bishop, 483 U.S. at 336-37).
Furthermore, there is no indication--other than Plaintiffs' naked assertion-that the exemption in issue would require "monitoring" of religious practices. In Lemon, the challenged statute used state funds to pay teachers of non-sectarian subjects in religious schools. The state would have to "be certain, given the Religion Clauses, that subsidized teachers do not inculcate religion ... [and therefore a] comprehensive, discriminating, and continuing state surveillance will inevitably be required ...." Lemon, 403 U.S. at 619. In contrast, the religious conscience
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exemption would merely require a one-time or periodic inquiry into the existence of a religious sect, the existence of that sect's tenets pertaining to abstention from acceptance of medical benefits, and an individual's bona fide belief in those tenets. A one-time or periodic review does not by itself create impermissible entanglement. See Bowen v. Kendrick, 487 U.S. 589, 615 (1988) (upholding law allowing government to "police the grants that are given out ... to ensure that federal funds are not used for impermissible purposes."); Roemer v. Bd. ofPub. Works, 426 U.S. 736, 764-65 (1976) (upholding law contemplating the occasional audit of universities to assure non-sectarian use of funds). After all, "[e]ntanglement must be 'excessive' before it runs afoul ofthe Establishment Clause." Agostini, 521 U.S. at 233.
Nor is it constitutionally problematic to inquire into whether a belief is "religious" in nature and sincerely held. See Benning v. Georgia, 391 F.3d 1299, 1313 (11th Cir. 2004); Sutton v. Rasheed, 323 F.3d 236, 250-51 (3d Cir. 2003). I note in this regard that RLUIPA's requirement that a plaintiff show a substantial burden on the free exercise of religion requires a threshold showing that a religious belief or practice exists. To hold that courts or the government cannot inquire into the existence of such beliefs or practices would severely hamper the government's ability to thwart frivolous or fraudulent claims.
Finally, Plaintiffs' assertion that the exemption lacks a secular purpose is without merit. The secular purpose requirement "does not mean that the law's purpose must be unrelated to religion . . . . Rather, Lemon's 'purpose' requirement aims at preventing the relevant governmental decisionmaker from abandoning neutrality and acting with the intent of promoting a particular point of view in religious matters." Corp. ofthe Presiding Bishop, 483 U.S. at 335. Accordingly, "[u]nder the Lemon analysis, it is a permissible legislative purpose to alleviate
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significant governmental interference with the ability of religious organizations to define and carry out their religious missions." Id
As the religious conscience exemption falls within permissible boundaries set in Cutter and Lemon, the Court finds that it is unproblematic under the Establishment Clause.
B. Health Care Sharing Ministries Exemption Plaintiffs' allegations concerning the health care sharing ministries exemption are far leaner than their allegations regarding the religious conscience exemption. In sum, Liberty alleges that the health care sharing ministries exemption "discriminates against Liberty University's religious beliefs by implementing an arbitrary date of December 31, 1999 for participation in a healthcare sharing plan." (Second Am. Compl. ,-r 129.) As an initial matter, it is worth noting that I.R.C. § 1402(g)(l), which has been upheld numerous times, see part A, supra, is similarly limited in applicability to members of sects which have "been in existence at all times" since 1950. Moreover, the Court must read the time limitation in light of Cutter's requirement that an accommodation be "measured so that it does not override other significant interests." 544 U.S. at 722. If Congress allowed any and all groups to form healthcare sharing 501(c)(3) organizations, it could effect an end-run around the mandatory coverage provisions. For reasons substantially similar to those discussed above, the health care sharing ministries exemption is a constitutionally permissible accommodation of religion under Cutter and Lemon. Therefore, Plaintiffs' Establishment Clause claims are without merit and will be dismissed.
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VII. FREE EXERCISE CLAUSE AND RELIGIOUS FREEDOM RESTORATION ACT Counts Four and Five of Plaintiffs' complaint raise challenges under the Free Exercise Clause and Religious Freedom Restoration Act ("RFRA"), 42 U.S.C. § 2000bb-l. The essence of those claims is that the Act forces Plaintiffs to violate their "sincerely held religious beliefs against facilitating, subsidizing, easing, funding, or supporting abortions." (Second Am. Compl. ~ 142.)17 Liberty also alleges that the Act will prohibit it 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." (Pls.' Opp'n 36.)
A. Free Exercise Clause The Free Exercise Clause does not excuse individuals from compliance with neutral laws of general applicability. Employment Div., Dep 't ofHuman Res. v. Smith, 494 U.S. 872, 878-79 (1990). However, "[a] law burdening religious practice that is not neutral or not of general application must undergo the most rigorous scrutiny." Church ofthe Lukumi Babalu Aye, Inc. v. City ofHialeah, 508 U.S. 520, 546 (1993). To survive a free exercise challenge, such a law must "advance interests of the highest order and must be narrowly tailored in pursuit of those interests." Id (quotations omitted). Plaintiffs contend that the Act is not a neutral law of general applicability, and that this Court should apply the "most rigorous scrutiny" in evaluating any free exercise implications. In support of this contention, Plaintiffs submit that the religious exemptions identified above render the Act non-neutral on its face. I disagree.
17
Plaintiffs' brief characterizes the complaint as raising other Free Exercise claims: "Plaintiffs (also] state that they conduct their daily lives in accordance with their sincerely held religious beliefs, which includes making healthy lifestyle choices, paying only for health care procedures that are necessary ... and paying for their health care services as they need them." (Pis.' Opp'n 35-36.) A fair reading of the complaint does not support this novel characterization, and the parties have not briefed these issues.
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At the outset it bears repeating that Congress is free to accommodate religious practices without running afoul of either of the religion clauses. Accommodation occupies the "play in the joints" between the Establishment Clause and the Free Exercise Clause. Cutter, 544 U.S. at 719. Moreover, Lukumi shows that the neutrality inquiry in the free exercise context seeks to protect "against governmental hostility [toward religion] which is masked, as well as overt." Lukumi, 508 U.S. at 534 (emphasis added). The Act demonstrates no such hostility. Contrary to Plaintiffs' contention, the Act does not effect a "religious gerrymander" of the sort that animated the Lukumi decision. In Lukumi, the Court overturned a facially neutral city ordinance where there was overwhelming evidence that the law was imposed to prevent practitioners of the Santeria religion from performing ritual animal sacrifice. !d. at 526. The law was appropriately described as a "gerrymander" because "[t]he net result ... is that few if any killings of animals [were] prohibited other than Santeria sacrifice ...." !d. at 536. The Act is a far cry from the ordinance at issue in Lukumi, the only purpose of which was to single out a religious sect for negative treatment.
Moreover, the Court in Locke significantly softened the facial neutrality rule of Lukumi. In Locke, the Court upheld the constitutionality of a state statute that established a scholarship program for post-secondary students, but explicitly prohibited use of scholarship funds to support studies in devotional theology. 540 U.S. at 715. While the respondent charged that the statute was presumptively unconstitutional because of its apparent lack of facial neutrality, the Court rejected the claim:
[T]o do otherwise would extend the Lukumi line of cases well beyond not only their facts but their reasoning. . .. In the present case, the State's disfavor of religion (if it can be called that) is of a far milder kind. It imposes neither criminal nor civil sanctions on any type of religious service or rite. It does not deny to ministers the right to participate in the political affairs of the community.
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And it does not require students to choose between their religious beliefs and receiving a government benefit. Id. at 720-21 (citations omitted). Similarly, the Act presents none of the above identified infirmities. It cannot fairly be said to display a "disfavor" of religion. Instead it shows a respect for religious exercise by carving out exceptions for those who are conscientiously opposed to receiving health care benefits, and those who share medical benefits in accordance with their religious beliefs. The mere fact that Plaintiffs may not avail themselves of either of the religious exemptions does not show disfavor or hostility. In addition, Plaintiffs have not raised a plausible claim that the Act burdens religious practice. They fail to allege how any payments required under the Act, whether fines, fees, taxes, or the cost of the policy, would be used to fund abortion. Indeed, the Act contains strict safeguards at multiple levels to prevent federal funds from being used to pay for abortion services beyond those in cases of rape or incest, or where the life of the woman would be endangered. See Act§§ 1303, 1334; Exec. Order No. 13,535 of Mar. 24, 2010, 75 Fed. Reg. 15,599. In plans that do provide non-excepted abortion coverage, a separate payment for nonexcepted abortion services must be made by the policyholder to the insurer, and the insurer must deposit those payments in a separate allocation account that consists solely of those payments; the insurer must use only the amounts in that account to pay for non-excepted abortion services. Act § 1303(b)(2)(B), (C). Insurers are prohibited from using funds attributable to premium tax credits or cost-sharing reductions in out-of-pocket maximum limits for individuals with income below 400 percent of the federal poverty level to pay for non-excepted abortion services. Act § 1303(b)(2)(A). Furthermore, at least one plan that does not cover non-excepted abortion services will be offered for enrollment through each of the state health benefit exchanges, as required by the Act.
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Act § 1334(a)(6). Moreover, the Act specifically allows plans in the exchanges to decline to cover all abortion services whatsoever, including excepted abortion services. Act § 1303(b)(1 ). Liberty already makes available private insurance policies, and provides "health care services that are desirable to its employees and consistent with the University's core Christian values ...." (Second Am. Compl. ~~ 29, 31.) Plaintiffs have raised no plausible allegation that they will be unable to participate in providing or purchasing similar health care services when the Act is fully implemented. As such, their free exercise claim is not plausible under Iqbal, 129 S. Ct. at 1949-51.
B. Religious Freedom Restoration Act RFRA, which was enacted as a direct response to the Court's decision in Smith, generally forbids the government from imposing a substantial burden on the free exercise of religion, "even if the burden results from a rule of general applicability." 42 U.S.C. § 2000bb-1 (a). A substantial burden is only permissible if 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." !d. § 2000bb-1(b). As discussed in part A, supra, Plaintiffs' conclusory allegations that they will be burdened are not entitled to a presumption of truth under Iqbal, 129 S. Ct. at 1950-51. Because Plaintiffs' RFRA claim, like their free exercise claim, fails to allege more than a "mere possibility" of harm, it is insufficient to withstand a motion to dismiss. !d. at 1949.
VIII. EQUAL PROTECTION In Count Six, Plaintiffs allege that the individual coverage provision infringes on their right to equal protection under the due process clause of the Fifth Amendment. Specifically,
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Plaintiffs argue that the religious conscience exemption and the health care sharing ministries exemption treat Plaintiffs, who have religious objections to the Act but do not qualify for either of the exemptions, differently than other similarly situated individuals and organizations that have religious objections and do satisfy the requirements of one of the exemptions. (Second Am. Compl. ~~ 157-59; Pls.' Opp'n 44.)
Under equal protection law, "all persons similarly circumstanced shall be treated alike." Plyler v. Doe, 457 U.S. 202, 216 (1982). "Unless a statute provokes strict judicial scrutiny because it interferes with a fundamental right or discriminates against a suspect class, it will ordinarily survive an equal protection attack so long as the challenged classification is rationally related to a legitimate governmental purpose." Kadrmas v. Dickinson Pub. Sch., 487 U.S. 450, 457-58 (1988) (quotations omitted). "Heightened scrutiny is applied to an equal protection challenge to a regulation which applies selectively to religious activity only if the plaintiff can show the basis for the distinction was religious and not secular in nature." Olsen v. Comm 'r, 709 F.2d 278, 283 (4th Cir. 1983) (citing Gillette v. United States, 401 U.S. 437, 452 (1971)). "If the justification for the distinction is secular, it need only be rational." Id.
A rational basis exists where the distinction "advances legitimate legislative goals in a rational fashion." Schweiker v. Wilson, 450 U.S. 221, 234 (1981). The distinction need not be perfect, and may in practice result in some inequity. I d. The court does not ask whether the distinction will advance the legislative goals in fact, only whether the legislature rationally could have believed that the distinction would promote those goals. W & S. Life Ins. Co. v. State Bd. of Equalization, 451 U.S. 648, 671-72 (1981). That a statute is underinclusive because it contains an exemption does not make it irrational. "[T]he reform may take one step at a time, addressing itself to the phase of the problem which seems most acute to the legislative mind. The
- 45-

legislature may select one phase of one field and apply a remedy there, neglecting the others." Williamson v. Lee Optical ofOkla., 348 U.S. 483, 489 (1955) (citation omitted).
I must first determine which level of scrutiny to apply to these classifications. Although Plaintiffs state in a footnote in their brief that they do not concede that rational basis review applies, they do not provide any argument for reviewing the classification under heightened scrutiny. (Pls.' Opp'n 45 n.l.) Notably, neither exemption is addressed on its face to a particular religious sect or division thereof; instead, both exemptions identify characteristics that cut across denominations. The exemptions serve the valid secular purpose of accommodating the religious practice of persons who have religious objections to accepting the benefits of health insurance or who already share health expenses with others in accordance with shared religious beliefs. Alleviation of significant governmental interference with religious practice is a legitimate, secular legislative purpose. See Corp. of the Presiding Bishop, 483 U.S. at 335; Gillette, 401 U.S. at 453-54; Ward v. Comm 'r, 608 F.2d 599, 602 (5th Cir. 1979); Jaggard, 582 F.2d at 1190. Accordingly, with no reason to believe the exemptions were designed to favor or penalize a particular religious group, I proceed to analyze the exemptions under rational basis review.
Both exemptions easily satisfy the rationality standard. The religious conscience exemption accommodates those religious adherents who meet the criteria of § 1402(g)(l ); courts have repeatedly held, when confronted with an equal protection challenge, that § 1402(g)(1) is rationally related to legitimate government objectives. See Droz, 48 F.3d at 1125; Bethel Baptist Church v. United States, 822 F.2d 1334, 1341-42 (3d Cir. 1987); Templeton v. Comm 'r, 719 F.2d 1408, 1413-14 (7th Cir. 1983); Ward, 608 F.2d at 602. Here, Congress could have rationally believed that the religious conscience exemption to the requirement to purchase individual health care coverage would alleviate interference with religious adherents' ability to exercise their faith.
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Congress found that the individual coverage provision is "essential" to the operation of the Act, § 1501(a)(2)(H)-(I), and consequently had good reason to limit the scope of exemptions granted from the requirement to those individuals who are members of religious groups that make provision for their dependent members and whose religious convictions are irreconcilable with the requirements of the Act, see Templeton, 719 F.2d at 1413-14. The limitation to religious sects in existence since December 31, 1950 may prevent others from taking advantage of the exemption, but it is not irrational. See Bethel Baptist Church, 822 F.2d at 1342.
For substantially the same reasons, the distinction made in the health care sharing ministries exemption is rationally related to the legitimate goal of accommodating the exercise of religion while limiting the scope of the exemption. It is reasonable to believe that, of individuals without health care coverage, members of religious organizations that share medical expenses among their members are less likely to incur uncompensated care-which would shift their health care costs on to third parties-than other individuals. Congress could have believed that the limitation to such ministries in existence since December 31, 1999 operates to exempt only ministries with established records of providing for their members. The distinction need not be perfect, Schweiker, 450 U.S. at 234, only rational, and I conclude that it is. Plaintiffs' equal protection challenge will be dismissed.
IX. FREEDOM OF SPEECH AND ASSOCIATION In Count Seven, Plaintiffs charge that the Act violates their rights of freedom of speech and association guaranteed under the First Amendment. Plaintiffs primarily frame the constitutional violation as one of compelled association. The challenge amounts to an allegation that the employer and individual coverage provisions, by requiring Plaintiffs to purchase health insurance for themselves or their employees, force Plaintiffs to associate with those who
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"support or engage in abortion" and with insurers who fund abortions. (Second Am. Compl. ,-r 169; Pls.' Opp'n 41.) Plaintiffs allege that this involuntary association interferes with their ability to exercise their religious beliefs, which include "not being yoked with those who support or engage in abortions." (Pls.' Opp'n 41.)
The Constitution protects one's right to associate with others for the purpose of engaging in activities protected by the First Amendment, such as speech, assembly, petition for the redress of grievances, and the exercise of religion. Roberts v. US. Jaycees, 468 U.S. 609, 618 (1984). First Amendment rights cannot be adequately protected unless one has the right to join together with others to exercise those rights. !d. at 622. The Supreme Court has recognized that forcing a group engaged in expressive activity to accept members it does not desire may impair the freedom of association. !d. at 623 ("Freedom of association [] plainly presupposes a freedom not to associ•ate.").18
Plaintiffs' challenge---essentially a restated free exercise claim-is misplaced. Plaintiffs allege that they hold the religious belief that they should not associate with those who support or engage in abortion. In that case, the problem is the possibility of Defendants' infringement on Plaintiffs' free exercise of their religious belief not to "yoke" themselves with others. 19 No impairment of their ability to associate with others to engage in activities protected by the First Amendment appears to be alleged. As Defendants correctly point out, the requirement to purchase health insurance does not prevent Plaintiffs from expressing their views about anything and does not require them to endorse a view with which they disagree. (Defs.' Mem. Supp. Mot.
18 Government actions also may infringe on the freedom to associate by imposing penalties or withholding benefits from individuals because of their membership in a disfavored group, Healy v. James, 408 U.S. 169, 180-84 (1972), requiring disclosure of the fact of membership in a group seeking anonymity, Brown v. Socialist Workers '74 Campaign Comm., 459 U.S. 87, 91-92 (1982), or by interfering with the internal affairs of a group, Cousins v. Wigoda, 419 U.S. 477,487-88 (1975).
19
United States v. Lee, 455 U.S. 252 (1982), the only case Plaintiffs cite in support of this argument, addressed a challenge under the right to freely exercise one's religion, not to freely associate with others.
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Dismiss 45.) To the extent that Plaintiffs must associate with others, the association is minimally disruptive, as it was in Rumsfeld v. Forum for Academic & Institutional Rights, Inc., 547 U.S. 47, 69-70 (2006) (hereinafter "FAIR"). In that case, the Supreme Court held that a law requiring law schools to accept military recruiters on campus did not affect the schools' associational rights because the schools were merely required to "interact with" recruiters, not accept recruiters as part of the school. !d. at 69-70 ("A military recruiter's mere presence on campus does not violate a law school's right to associate, regardless of how repugnant the law school considers the recruiter's message."). The Act does not require health plans to cover abortion, and it ensures that at least one policy offered through each health benefit exchange will not cover nonexcepted abortion services. Act §§ 1303, 1334; see also discussion in Section VILA, supra. Consequently, the purported association here is merely that Plaintiffs will be forced to hold insurance policies in the same health care system in which other policies cover abortion. The connection is too remote to intrude upon Plaintiffs' free association rights.
Plaintiffs' free speech claim fares no better. It is not elaborated in much detail in either the complaint or Plaintiffs' brief, however, I will read the pleadings as raising two grounds for violation of Plaintiffs' free speech rights. First, according to Plaintiffs, decisions about paying for health care are a form of speech, and by requiring Plaintiffs to purchase health insurance, the Act allegedly forces Plaintiffs' speech. (See Pls.' Opp'n 41.) Freedom of speech prohibits the government from telling people what they must say. FAIR, 547 U.S. at 63. The government's ability to force a speaker to host or accommodate another speaker's message where it affects the complaining speaker's message is also limited. !d. 20 Plaintiffs argue that Wooley v. Maynard,
20
See also Hurley v. Irish-American Gay, Lesbian & Bisexual Group ofBoston, 515 U.S. 557, 566 (1995) (state law cannot require a parade to include a group whose message the parade's organizer does not wish to send); Pac. Gas & E~e~. Co. v. Pub. Ut~ls. Comm'n ofCal., 475 U.S. I, 20-21 (1986) (plurality opinion) (state agency cannot require a utJhty company to mclude a third-party newsletter in its billing envelope); accord id., at 25 (Marshall, J.,
-49-

430 U.S. 705 (1977) supports their claim. There, the Court held that the state ofNew Hampshire could not force the appellees to display a license plate bearing the motto "Live Free or Die," to which the appellees had moral, religious, and political objections. Wooley, 430 U.S. at 713. But Plaintiffs cite no case for the proposition that compelling the purchase of insurance expresses a message, let alone would express a particular message about Plaintiffs' position on abortion with which Plaintiffs disagree. Obtaining a health care policy is a commercial transaction that reflects a personal choice about the best mix of coverage and price that serves one's medical needs. While one's religious beliefs may factor into the choice about which health care policy to purchase, the purchase and maintenance of the policy is not itself a speech activity, thus the First Amendment is not implicated.
Plaintiffs' second argument for infringement is that the mandatory payment for health insurance, or any payment of "fines, fees and taxes" imposed by the Act, are being used to subsidize speech with which Plaintiffs disagree; specifically, the funds are being used to cover abortion services. (Second Am. Compl. ~ 169.) Free speech protection is implicated where the government requires an individual to subsidize a private message with which he disagrees. Johanns v. Livestock Mktg. Ass 'n, 544 U.S. 550, 557 (2005). Such forced subsidies of speech were held to be unconstitutional where nonunion public school teachers were required to pay a fee to unions that was used to fund political speech, Abood v. Detroit Bd. of Ed., 431 U.S. 209 (1977), and where lawyers admitted to practice in California were forced to pay a state bar association which it used for political expression, Keller v. State Bar of Cal., 496 U.S. 1 (1990). But free speech rights are not violated where the individual is required to subsidize a government message with which he disagrees. See Johanns, 544 U.S. at 559. Compelled support of
c.oncurring); M_iami Herald Publ'g Co. v. Tornillo, 418 U.S. 241,258 (1974) (right-of-reply statute violates editors' nght to determme the content of their newspapers).
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government programs, even those that advocate a position on a particular issue, is "perfectly constitutional, as every taxpayer must attest." !d.; accord Bd. ofRegents of Univ. of Wis. Sys. v. Southworth, 529 U.S. 217, 229 (2000) ("The government, as a general rule, may support valid programs and policies by taxes or other exactions binding on protesting parties.").
Here, Plaintiffs fail to allege how any payments required under the Act, whether fines, fees, taxes, or the cost of the policy, would be used to fund abortion. See Twombly, 550 U.S. at 570 (requiring "enough facts to state a claim to relief that is plausible on its face."). As I explained in detail in the discussion of Plaintiffs' free exercise claim, see Section VILA, supra, the Act contains safeguards to prevent federal funds from being used to pay for abortion services beyond those in cases of rape or incest, or where the life of the woman would be endangered, and requires the segregation of payments for non-excepted abortion services. Act §§ 1303, 1334; Exec. Order No. 13,535 ofMar. 24, 2010, 75 Fed. Reg. 15,599. Even if those provisions were not considered sufficient to protect against Plaintiffs' payments being used to support nonexcepted abortion coverage, the government may support by taxes or other exactions a health care delivery program, even one that could be considered to express a perspective on abortion, without violating Plaintiffs' free speech rights. See Bd. ofRegents ofUniv. ofWis. Sys., 529 U.S. at 229.21 Count Seven will be dismissed.
X. CAPITATION TAX AND DIRECT TAX The Constitution directs 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,
21 In regard to forced subsidization of private speech, Plaintiffs have not alleged in sufficient detail for this Court's evaluation any mechanism whereby Plaintiffs' funds would be used to cover abortion services. On this facial challenge, where Plaintiffs must allege the Act is unconstitutional in all of its applications, the Court does not need to speculate about the possibility that the segregation of funds into allocated accounts would fail to prevent Plaintiffs' funds from contributing to abortion services.
-51 -

§ 9, cl. 4, and provides that "direct Taxes shall be apportioned among the several States ... according to their respective Numbers," U.S. CONST. art I, § 2, cl. 3. Plaintiffs allege in Count Eight that the penalty provisions set forth in the Act for the employer and individual coverage requirements are unconstitutional capitation or direct taxes. Whether the Act was authorized under the commerce power or the power to tax is relevant to this consideration. Edye v. Robertson (Head Money Cases), 112 U.S. 580, 595-96 (1884). The imposition of assessments is a legitimate means of regulating commerce, and "[i]f regulation is the primary purpose of a statute, revenue raised under the statute will be considered a fee rather than a tax." South Carolina ex rel. Tindal v. Block, 717 F.2d 874,887 (4thCir. 1983) (exaction on commerciallysold milk not a tax); see also Rodgers v. United States, 138 F.2d 992, 994 (6th Cir. 1943) (cotton marketing quotas not a tax); United States v. Stangland, 242 F.2d 843, 848 (7th Cir. 1957) (wheat marketing quotas not a tax).
As I held above, the employer and individual coverage provisions are a regulation of interstate commerce authorized by the Commerce Clause. Although the penalties collected under the Act are expected to raise revenue, their main purpose is to enforce the requirement that individuals and employers purchase or provide health insurance. Therefore, the penalty provisions, as "mere incident[s] of the regulation of commerce," Head Money Cases, 112 U.S. at 595, are not considered taxes for the purpose of the present claim. See Thomas More Law Ctr., 2010 U.S. Dist. LEXIS 107416, at *29-31 (rejecting a challenge to the constitutionality ofthe penalty provisions of the individual coverage requirement of the Act). Count Eight will be dismissed.
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XI. GUARANTEE CLAUSE The Guarantee Clause provides that "[t]he United States shall guarantee to every State in this Union a Republican Form of Government ...." U.S. CONST. art. IV, § 4. The meaning of the Guarantee Clause has not been clearly delineated, but it is rarely a basis for finding an act of Congress unconstitutional. See Largess v. Sup. Jud. Ct. for the State of Mass., 373 F.3d 219, 226-27 (1st Cir. 2004) ("If there is any role for federal courts under the Clause, it is restricted to real threats to a republican form of government."). The United States Court of Appeals for the First Circuit defined a republican form of government as having the characteristics of a supreme power resting in a body of citizens entitled to vote and exercised by elected officers and representatives responsible to them and governing according to law. !d. at 227. Plaintiffs' claim in Count Nine is that the Act grants to Congress the ability to "veto" the private choices about health care made by individuals, employers, and states, giving the federal government "absolute sovereignty" and "censorial power" over the people. (Pls.' Opp'n 3435.)22 The Act does no such thing; nothing prevents the people and their representatives from amending or repealing the Act through the democratic process. Because I hold above that the challenged provisions of the Act are well within Congress' authority under the Commerce Clause, I find the Guarantee Clause claim to lack merit.
XII. CoNCLUSION For the reasons stated herein, the Court will grant Defendants' Motion to Dismiss. An appropriate order will follow.

22 Pl~intiff~ also allege that t~e A~t force~ state governments to adopt federal standards "or lose their sovereignty."
(Pis. Opp n ~5.) As I explamed m SectiOn V, supra, Congress has the power to give states the choice whether to

adopt regulatwns or have the federal government adopt and implement those regulations. See New York 505 U.S. at

167.

'

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The Clerk of the Court is hereby directed to send a certified copy of this Memorandum

Opinion and the accompanying Order to all counsel of record.

3O~ay Entered this

ofNovember, 2010.

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 Appeal: 10-2347 Document: 103 Date Filed: 09/08/2011 Page: 1 of 140 Case 6:10-cv-00015-NKM Document 51 Filed 09/08/11 Page 1 of 140 Pageid#: 674
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 ALE XANDER; 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 SE BELIUS, 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 cap acity; ERIC H. HOLDER, JR., At torney General of the United States, in his official capacity,
Defendants − Appellees.
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−-------
MOUNTAIN STATES LEGAL FOUNDATION; REVERE AMERICA FOUNDATION,
Amici Supporting Appellants,
AMERICAN CIVIL L IBERTIES UNION; AMERICAN CIVIL L IBERTIES UNION OF VIRGINIA, INCORPORATED; AMERICAN N URSES 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

Appeal: 10-2347 Document: 103 Date Filed: 09/08/2011 Page: 2 of 140 Case 6:10-cv-00015-NKM Document 51 Filed 09/08/11 Page 2 of 140 Pageid#: 675

Majority Leader; CHARLES SCHUMER, Senator, Conference Vice

Chair; PATTY MURRAY, Conference Secretary; MAX BAUCUS, Senator,

Committee on Finance Chair; TOM HARKIN, Senator, Comm ittee on

Health, Education, Labor and P ensions Chair; PATRICK LEAHY,

Senator, Committee on the Judiciary Chair; BARBARA MIKULSKI,

Senator, HELP Su bcommittee on Re tirement and Agi ng 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 Membe r, Committee on

Ways and Means; FORTNEY PETE STARK, Representative, Ranking

Member, Ways a nd Means Subco mmittee on Hea lth; 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 Fir st Amendment, Ya le Law School;

GILLIAN E. METZGER, Professor of Law, Columbi a Law School;

TREVOR W. MORRISON, Professor of Law, Columbi a Law School;

AMERICAN ASSOCIATION OF PEOPLE W ITH DISABILITIES; THE ARC OF TH E

UNITED STATES; BREAST CANCER ACTION; FAMILIES USA; FRIENDS OF

CANCER RESEARCH; MARCH OF DI MES FOUNDATION; MENTAL HEALT H

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 F ellow, Economic Studies Bruce and Virginia

MacLaury Chair, The Brookings In stitution; DR. G EORGE AKERLOF,

Koshland

Professor of Economics, University of

California−Berkeley, 2001 Nobel Laureate; DR. STUART ALTMAN, Sol

C. Chaikin Professor of National Health Policy, Brand

eis

University; DR. KENNETH ARROW , Joan Kenney Professor of

Economics and Professor of Operations Research, Stanford

2

Appeal: 10-2347 Document: 103 Date Filed: 09/08/2011 Page: 3 of 140 Case 6:10-cv-00015-NKM Document 51 Filed 09/08/11 Page 3 of 140 Pageid#: 676

University 1972 Nobel Laureate; DR. SUSAN ATHEY, Professor of

Economics, Harvard University, 2007 Recipient of the John Bates

Clark Medal f or the most influential American economist under

age 40; DR. L INDA J. BLUMBE RG, Senior Fel low, 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 CH ERNEW, 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 GOLD IN, Henry Lee Professor of

Economics, Harvard University; DR. TAL GROSS, Department of

Health Policy an d Management, Ma ilman 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 Healt h and Human Ser vices, George Ma son University;

DR. VIVIAN HO, Baker Institute Chair in Healt h Economics and

Professor of Economics, Rice University; DR. JOHN F. HOLAHAN,

Director, Health Policy Researc h Center, The U rban Institute;

DR. JILL HORWIT Z, Professor of Law an−dDiCroector of the

Program in Law & Economics, Un iversity of Mic higan 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 He alth Economics, School of Public

Health, University of Medicine & Dentistry of New Jersey; DR.

MARILYN MOON, Vice President a nd Director Health Progra m,

American Institutes for Resea rch; DR. RICHA RD J. MURNANE,

Thompson Professor of Education and Society, Harvard University;

DR. LEN M. NICHO LS, George Mason University; DR. HAROLD POLLACK,

Helen Ross Professor of Social Service A

dministration,

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 mo st influential A merican economist under age 40;

DR. JAMES B. RE BITZER, 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. ME REDITH ROSENTHAL, Department of Health Policy and

Management, Harvard University, Harvard School of Public Health;

3

Appeal: 10-2347 Document: 103 Date Filed: 09/08/2011 Page: 4 of 140 Case 6:10-cv-00015-NKM Document 51 Filed 09/08/11 Page 4 of 140 Pageid#: 677

DR. CHRISTOPHER RUHM, Professor of Public Policy and Economics, Department of E conomics, University of Virgini a; DR. JONATHAN SKINNER, Professor of Economics, Dartmouth College, and Professor of Co mmunity and Fam ily Medicine, D artmouth Medical School; DR. KAT HERINE SWARTZ, Professor, Department of Health Policy and Management, Harvard School of Public Health; DR. KENNETH WARNER, Dean of the Sch ool 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 Pri orities; DR. STE PHEN 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 H EALTH CARE REFORM; MENTAL HEALTH AMERICA; NATIONAL ASIAN PACIFIC AMERICAN WOMEN'S FORUM; NATIONAL ASSOCIATION OF SOCIAL WORKERS; NATIONA L 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 R EPRODUCTIVE CHOICE AND HEALTH ; RAISING WOMEN'S VOICES; SARGENT SHRIVER NATIO NAL CENTER ON POVERTY LAW; SOUTHWEST WOMEN'S LAW CENTER; WIDER OPPORTUNITIES FOR WOMEN; WOMEN'S LAW CE NTER OF MARYLA ND, 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

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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. Ch aifetz, UNITED S TATES DEPARTMENT

OF JUSTICE, Wash ington, D.C.; Ti mothy J. Heaphy, United States

Attorney, Roanoke, Virginia, for Appellees. Joel Spector,

MOUNTAIN STATES LEGAL FOUNDATION, Lakewood, Colorado, for

Mountain States Leg al Foundation, Amicus Supporting Appellants.

Brian S. Koukoutchos, Mandeville, Louisiana; Charles J. Cooper,

David H. Thompso n, COOPER & KIR K, PLLC, Washing ton, D.C., for

Revere America Foundation, Amicus Supporting Appellants.

Rebecca Glenberg, AMERICAN CIVIL LIBERTIES UNI ON 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 Stude nt

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. Metzge r, 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 Supp orting Appellees. Sh eree R.

Kanner, Catherine E. Stetson, Dominic F. Perel la, Michael D.

Kass, Sara A. K raner, HOGAN LOV ELLS US LLP, Wa shington, D.C.;

5

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Melinda Reid H atton, Maureen D. Mudron, A MERICAN 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 HOSPIT ALS AND HEALTH SYSTEMS, Washington, D.C.; Lisa

Gilden, Vice President, Ge neral Counsel/Compliance Officer, THE

CATHOLIC HEALTH ASSOCIATION OF THE UNITED STA TES, Washington,

D.C.; Lawrence A. McAndrews, President and Chief Executive

Officer, NATIONAL ASSOCIATION OF CHILDREN’S HOSPITALS,

Alexandria, Virginia, for American Hospita

l Association,

Association of American Medical Colleges, Federation of American

Hospitals, National Association of Public Hospit als and Health

Systems, Catholic Health Associa tion of the Uni ted States, and

National Association of Children’s Hospitals, Amic i 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, Ame rican Association of University Women, Amerian

Federation of S tate, County an d Municipal Emp loyees, American

Medical Women's Association, Asian & Pacific Is lander American

Health Forum; Black Women's Health Imperative, Childbirth

Connection, Ibis Reproductive He alth, Institute of Science and

Human Values, Maryland Women's Coalition for Health Care Reform,

Mental Health Am erica, National Asian Pacific Am erican Women's

Forum, National Association of Social Workers, National

Coalition for LGBT Health, Nat ional Council o f 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 Wome n'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

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DIANA GRIBBON MOTZ, Circuit Judge:

Liberty University and certain individuals brought this

suit to enjoin , as unconstit utional, 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 ins urance coverage and (2) an

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

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

tax credit or go vernment subsidy to offset payme nts for certain

health-related expenses. The

district cour t 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 th e district cou rt and remand the case wit h

instructions to dismiss for lack of jurisdiction.

I. A. On March 23, 2 010, the Presid ent signed into law the Affordable Care Act, a comprehensive bill spanning 900 pages, which institutes numerous chang es to the fina ncing of health 7

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care in the United States. See Pub. L. No. 1 11-148. 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 id.,

§ 1501(b). The indiv idual mandate requires an “applicable

individual” to “ensure” tha t beginning a fter 2013, th e

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, a nd other health plans recogniz ed as adequate.

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

required coverage, the “taxpaye r” 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, id., and the Code defines

a “taxpayer” as “any person subject to

any internal revenue

tax.” Id. § 7701(a)(14). 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.
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payment with his regularly

-filed income tax return.

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

to maintain mini mum coverage for a continuous p eriod of three

months or longe r. § 5000A(e)( 4)(A). The ind ividual 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 penalt y owes the great er 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 fo r every year t hereafter; or ( 2) a graduated

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

thereafter) of the amount by which the “taxpa yer’s household

income,” as defined by the C ode, exceeds “gross income specified

in” I.R.C. § 60 12(a)(1) (the a mount 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 qua lified health p lans” of a cer tain 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

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chapter 68” of the Inte rnal Revenue Code, which in turn contains

penalties that t he Secretary is to “assess[] a nd collect[] in

the same manner as taxes.”

Id. § 6671(a). Accordingly, the

Affordable Care Act provides the Secretary with all the civil

enforcement tools of the Inte rnal Revenue Code subject to only

one express limitation: the Secretary may not seek collection

of the penalty b y “fil[ing] [a] notice of lien w ith respect to

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

§ 5000A(g)(2)(B).

2.

The other provi sion of the A ct challenged by plaintiffs

amends the Int ernal 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 exch ange notifies the employer that

at least one “fu ll-time employee” obtains an “ap plicable premium

tax credit or co st-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 assi

st 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 p rovided by the

Affordable Care Act. § 4980H(c)(3).

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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, th e

“assessable payment” is calculated by m

ultiplying $2,000

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

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

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

the employer does offer adequate insurance cover

age, 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 m ust pay these assessments “upon notice

and demand by th e Secretary.” § 4980H(d)(1). T he Secretary has

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

manner as an as sessable penalty” provided by s ubchapter B of

Chapter 68 of the Code. Id.

B.

On March 23, 2010, the day the President signed the

Affordable Care Act into law, p laintiffs filed this action to

enjoin the Secretary and other government officials from

enforcing the Ac t. In their co mplaint, plaintiffs allege the

following facts.

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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 t o do so in the

future. Waddell maintains that she pays for needed health care

services as she uses them. Anot her individual plaintiff, Joanne

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

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

Waddell and Merill contend that the individual mandate requires

them “to either pay fo r health insurance coverage” or “face

significant penalties.”

They seek to enjoin the Sec retary from as sessing or

collecting the exaction prescribed for failure to comply with

the individual mandate. Wadde ll and Merill a ssert that, “as

part of his oversi ght of the Internal Revenue Service,” the

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

an individual[‘s] income tax return.” Th ey describe th e

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

. . . on any taxpayer” who fail s to maintain minimum essential

coverage. They further allege that the “Taxi ng and Spending

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

certain purchases, not to impose taxes upon citi zens who choose

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

Waddell and Me rrill repeatedly assert that

the individua l

mandate assesses “a direct tax t hat is not appor tioned according

12

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to Census data or other pop ulation-based measurement,” in

violation of Con gress’s Taxing P ower. Accor dingly, they ask to

be “free from improper taxation [that] is li kely 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 C hristian 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 cr edit or cost -sharing reduction.

Liberty alleges that these “significant penalties” will cause it

to suffer “sub stantial financial hardship.” According t

o

Liberty, the employer mandate constitutes an “unapportioned

direct tax upon employers in violation of” the C onstitution, 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, pla intiffs ask for an injunction restraining

all defendants, including the Secretary of the Treasury, from

“acting in any manner to implem ent, enforce, or otherwise act

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

a

declaration that the Act is unconstitutional and assert that

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

constitutional violation.

Before the distr ict court, the Secretary moved to dismiss

the case, conte nding inter alia that the fed eral 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 ar gument, holding that Congress di d not intend to

“convert the[se] penalties into taxes for purpos es 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 purp oses of the A IA because they “function as

regulatory penalties.” After re jecting the AIA argument and the

Secretary’s other jurisdictional contentions, the district court

concluded that t he challenged ex actions are “val id exercise[s]

of federal power under the Comm erce 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 c

ontrary,

specifically declining to attack the district court’s “threshold

14

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

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

Taxing Power und er Article I, § 8, cl. 1 of t he Constitution

authorized the exactions imposed by the chall enged mandates

because those mandates “operate as taxes.” Because the

Secretary’s contention as to

the constitut ionality of th e

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 beli eve that the plain language

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

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 ine scapable fact t hat federal

courts are courts of limited jurisdiction. They possess “only

that power autho rized by Constit ution and statut e, which is not

to be expanded by judicial decree.”

See Kokkonen v. Guardian

Life Ins. Co. of Am. , 511 U .S. 375, 377 (1994) (internal

15

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citations omitted). Accordin gly, a federal court has an

“independent obligation” to i nvestigate the limits of it s

subject-matter jurisdiction. See Arbaugh v. Y&H Corp., 546 U.S.

500, 514 (2006). This is so

even when the parties “either

overlook or el ect not to pr ess” the issue , Henderson v.

Shinseki, 131 S. Ct. 1197, 1202 (2011), or attempt to consent to

a court’s jurisdiction, see Sosna v. Iowa , 419 U.S. 393, 398

(1975). Our obligation to examine our subject

-matter

jurisdiction is triggered whenever that jurisdiction is “fairly

in doubt.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1945 (2009).

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

“no suit for t he purpose of restraining the assessment or

collection of any t ax shall be maintained in any court by any person.” I.R.C. § 7421(a). 2 The parties concede, as they must,

that, when app licable, the A IA divests fed eral courts of

subject-matter jurisdiction. Th e Supreme Court has explicitly

so held. See Enochs v. Will iams Packing & Navi gation Co., 370

U.S. 1, 5 (1962).

2 The Declaratory Judgment Act authorizes a federal court to issue a declara tory judgment “ except with res pect to Federal taxes.” 28 U.S. C. § 2201(a). I n Bob Jones Univ. v. Simon, 416 U.S. 725, 732 n. 7 (1974), the Co urt held that “t he 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 equa lly to plaintiffs’ request for declaratory relief.
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By its terms the AIA bars suits seeking to

restrain the

assessment or co llection of a ta x. Thus, the A IA 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., 553 U.S. 1, 4-5 (2008).

The parties reco gnize that plain tiffs here have brought a

pre-enforcement action. Moreover, although Congress has

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

§ 7421(a), the p arties do not cl aim that any of these exceptions

applies here. R esolution 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 unders tanding of the term,” is

simply “an exaction for the suppo rt of the government.” United

States v. Butler , 297 U.S. 1, 61 (1936). An exaction qualifies

as a tax even w hen the exaction raises “obvious ly negligible”

revenue and furthers a revenue purpose “secondary” to the

primary goal of regulation. United States v. Sanchez , 340 U.S.

42, 44 (1950); see also Bob Jones, 416 U.S. at 7 41 n.12. Thus,

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

See

17

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Trailer Marine Transp. Corp. v. Rivera Vazquez , 977 F.2d 1, 5

(1st Cir. 1992) (surveying cases that have re gularly “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 th e

AIA aims to ensure “prompt colle ction of . . . lawful revenue”

by preventing taxpayers from inundating tax collectors with pre-

enforcement lawsuits over “disp uted sums.” Williams Packing,

370 U.S. at 7 -8. Thus, an ex action constitutes a “tax” for

purposes of the AIA so long as the method pre scribed for its

assessment conforms to the process of tax enforcement.

See

Snyder v. Marks , 109 U.S. 189, 192 (1883) (defi ning 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 reven ue officers char ged with the ge neral authority

to assess and co llect the revenu e.” Phillips v. CIR, 283 U.S.

589, 596 (1931) (citing Snyder, 109 U.S. at 192) ; see also Bob

Jones, 416 U.S. at 740 (applying the AIA bar when IRS action is

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

The Supreme Cou rt has steadfas tly adhered to this broad

construction, notably in holding that the AI

A bars pre -

enforcement challenges to exactions that do

not constitute

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“taxes” under the Constitution. Compare Bailey v. George , 259

U.S. 16 (1922) with Bailey v. Drexel Furniture Co. , 259 U.S. 20

(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 regulatio n and punishment .” 259 U.S. at

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

purposes of the AIA and so dismi ssed a pre-enforcement challenge

to the exaction. See Bailey v. George, 259 U. S. at 20. I n

recent years, th e Court has exp ressly affirmed these holdings,

reiterating that the term “tax” in the AIA encom passes penalties

that function as mere “regulator y measure[s] bey ond the taxing

power of Congress” and Article I of the Constitution.

Bob

Jones, 416 U.S. at 740.

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 fro m

another provision in the Code, w hich charges the Secretary with

making “assessments of all taxes (including interest, additional

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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 pu rposes of the very assessme nt

authority that th e 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 , 409 U.S.

239, 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

Jones, 416 U.S. at 740 (holding AIA barred suit challenging IRS

regulatory action when action wa s authorized by “requirements of

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

United States, 353 F.3d 1357, 1362 & n.5 (11th Cir. 2003)

(holding AIA ba rred suits chal lenging “penalties imposed” for

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

Leckie Smokeless Coal Co. , 99 F .3d 573, 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., 426 U.S. 548, 558 n.9

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(1976) (holding AIA did not bar challenge to “fees” because fe es 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 re lies on the fact that the individual mandate labels the imposed exaction a “penalty,” not a “tax.” § 5000 A(b). For the Secretary, the Sixth Circuit, see Thomas More L aw Center v. Oba ma, -- 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 h as “exhibit[ed] its intent” t hat a cha llenged

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 goo d

reason for that. Because Con gress 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 t he AIA bars a pre-enforcement

challenge to the individual mandate also a pply to the employer

mandate. We additionally note that Congress waived none of the

Secretary’s collection tools in imposing the e mployer mandate

and labeled the exaction a “tax” in certain subsections.

See

§ 4980H(b)(2), (c)(7), (d)(1). Accordingly, th e AIA clearly

bars Liberty’s challenge to the employer mandate.

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exaction function as a “penalty.” Compare Bailey v. Drexel, 259

U.S. at 38, with Bailey v. George , 259 U.S. at 20. The term

“penalty” therefore describes a category of exaction to which the Supreme Cou rt 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 th ere is somethin g talismanic ab out 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 whe ther an exacti on qualifies a s a “tax” for

4 This is not to elide the general distinction between taxes and penalties. We agree with the Sixth Cir cuit’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 wit h 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 Jones, 416 U.S. at 741 & n.12.
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statutory purposes. See, e.g., Helwig v. Unit ed States, 188
U.S. 605, 613 (1903) (holding “use of words” does not “change
the nature and c haracter of the enactment” in the context of the
revenue laws);5 see also United States v. Reor ganized CF & I
Fabricators of Utah, Inc. , 518 U.S. 213, 220 (1996) (requiring a
court to look “behind the label placed on the exaction and
rest[] its answe r directly on th e operation o f the provision”);
United States v . Sotelo, 436 U.S. 268, 275 (1978) (holding
exaction’s “penalty” label not dispositive, but its “essential
character” controls, in determining whether exaction is a tax
for bankruptcy p urposes); United States v. New York, 315 U.S.
510, 515-16 (1942) (stressing th at the term “tax ” includes “any
pecuniary burden laid upon individuals . . . for the purpose of
5 Helwig does not, as the dissent contends, support its vie w that an exacti on’s label con trols. The C ourt in Helwig acknowledged that Congress may e xpressly classify an exaction as a “penalty or in the nature of one, with reference to the further action of the officers of the govern ment, 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 direction.” 188 U.S. at 613 (e mphasis added). The Court then identified statute after statu te illustrating th e various ways in which Congress has historically directed a “duty,” “additional duty,” or “penalty” to be treated “with reference to” a specified governmental action. Id. at 614-19. Congress has provided no such direction “with referen ce to” the AIA, and Helwig makes clear that a mere label describing an exaction does not constitute such direction. See id. at 613 (explaining that “describing” an exaction “as ‘a further sum’ or ‘an additional duty’ will not work a statutory alteration o f the nature of the imposition”).
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supporting the g overnment, by whatever name it may be called”

(internal quotation omitted and emphasis added)).

Indeed, the Cou rt has specific ally found an exaction’s

label immaterial to the applicability of the AIA.

See Lipke,

259 U.S. 557 (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.” Id. at 561. The

Court concluded that one of the challenged exac tions, although

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

so fell outside the AIA bar. Id. Moreover, notwithstanding the

“penalty” and “s pecial penalty” labels of the o ther challenged

exactions, neither the majority nor Justice Brandeis in dissent

gave these labels any import in determining the applicability of

the AIA. Compare id. at 561-62 with id. at 563-65 (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, how ever, that even unanimity among the lower courts is not necessari ly predictive of the views of the Supreme Court. See CBOCS West, Inc. v. Humphries , 553 U.S. 442, 472 (2008) (Thomas, J., dissenting) (collecting cases where the Supreme Court has “reject[ed]” a “view uniformly held by the courts of appeals”).
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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 “passi ng on the

constitutionality of a tax law,” a court places n o weight on th e

“precise form of descriptive wor ds” attached to the challenged

exaction. Nelson v. Sears, Roe buck & Co. , 312 U.S. 359, 363

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

citing the twi n 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 tw in Bailey cases is

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

In Bailey v. Drexel Furniture , 259 U.S. at 38, a refund action,

the Court held that an exaction exceeded Congress’s

constitutional taxing authority, while on the same day, in

Bailey v. George, 259 U.S. at 16, 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. N or does it seem plausible that

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the Court implicitly relied on that label, given that it had never before an d has never si nce found an e xaction’s label controlling for statutory purposes. See, e.g., Reorganized CF & I, 518 U.S. at 2 20; Sotelo, 436 U.S. at 275; Lipke, 259 U.S. at 561; Helwig, 188 U.S. at 613. 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 autho rity under the Internal Revenue Code -- even one that constitutes a “penalty” fo r constitutional purposes.
The dissent’s contention that the Supreme Court ’s reliance on the statu tory label in Bailey v. George is so “obvious” that it required no explanation by the Court strikes us as unsound. It seems doubtf ul that the Co urt departed fr om its normal practice of ignoring statutory labels without explaining why it was doing so. Ins tead, the more likely -- and just as “straightforward” -- explanation is that the Cour t described the exaction as a “t axing statute” b ecause Congress had charged the tax collector w ith assessing t he challenged e xaction. See Snyder, 109 U.S. at 192.7 Contrary to the dissent’s belief, this
7 The dissent argues that the statement in Snyder, 109 U.S. at 192-93, that the term “tax ” in the AIA r efers 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
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holding did not require the C ourt to perform any elaborate

“functional analysis,” but rathe r 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 challen ge to the Secret ary’s assessment

of an exaction i mposed pursuant to the National Prohibition Act,

a statute “prim arily designed to define and suppress crime.”

259 U.S. at 561 (emphasis added). Congress had enacted the

statute to “prohibit intoxicating beverages” and aut horized 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 A IA does n ot apply to thi s “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 “i ndependent obligation” to assure

ourselves of our own jurisdiction. Arbaugh, 546 U.S. at 514.

Moreover, Congress called the ex action in the em ployer mandate a

“tax.” See 26 U.S.C. § 4980H(b)(2), (c)(7), (d)(1). The

argument is for this reason, too, fatally flawed.

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into a federal p rosecutor. Spec ifically, 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 t he challenged ta x 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 d ue process” requ ired pre-enforcement review of

“penalties for crime.” 262 U.S. at 562.

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. , 272 U.S. 321, 329 (1926)

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

also Bob Jones, 416 U.S. at 743 (describing Lipke as permitting

pre-enforcement review of “t ax statutes” t hat function a s

“adjuncts to the criminal law”); Lynn v. West , 134 F.3d 582,

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.

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In sum, the Supr eme Court has it self emphasized that Lipke

creates only a narrow constitutional limitation, not applicable

here, on the ho lding of the tw in Bailey cases that the AIA

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

the Constitution. See Bob Jones, 416 U.S. at 741 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 theo ry propounded by

the Secretary and the dissent -- that a label transfor ms a

constitutional “tax” into a “pen alty” for AIA pu rposes –- would

yield an AIA that reaches fewer exactions than does th e

Constitution. As former Commi ssioners of the IRS noted in

criticizing this argument, this is the “opposi te of what the

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

Mortimer Caplin & Sheldon Co hen as Amici C uriae 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 de termining if an exaction is a

tax for statutory purposes on the basis of a t heory for which

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

B.

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Perhaps in recognition of the de arth 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. Cha pter 68. See § 6665(a)(2)(emphasis added); see also § 6671(a) (redundantly stating the sam e for “penaltie s and liabiliti es provided by” subchapter B of Chapter 68). Ac cording to the S ecretary and the dissent, § 6665(a)(2) necessarily implies that any “penalty” outside of Chapt er 68 does not qualify as a “ta x” 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 dissen t 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 t hat the term “t ax” encompasses the penalties contain ed in Chapter 68; it does not limit the term “tax” to only these penalties. Nor can we imply such an limitation, for courts must no t “read the enu meration of one
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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. , 537 U.S. 149, 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 als o qualifying as a “tax.” See United States v. Sischo , 262 U.S. 165, 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 fro m § 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 sect ion 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 the ory, the charact er 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 th e dissent, a cou rt would have to infer that an exaction is not to be treated as a tax from the exaction’s place
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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, 353 F.3d 1357, the Secretary defended against a pre -

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

for failure to c omply with the c onditions attached to tax -exempt

status. The d istrict court held the AIA in applicable 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, 148 F . Supp. 2d 1273,

1280 (S.D. Ala. 2001). But th e Secretary appe aled, 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, 353 F.3d 1357 (Feb.

18, 2003) (No. 02-16283), 2003 WL 23469121. The Eleventh

Circuit agreed and dismissed the suit because the exaction was

based “squarely upon the exp licit language o f the Internal

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

scheme.” 353 F.3d at 1362 n.5.

in the Code (here Chapter 48 rather than Chapter 68). this inference that the Code forbids.
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The Secretary fa ils to explain his change in p osition or even refer to the Eleventh Ci rcuit’s holding that the AIA applies to “penalties” codified outside of Chapter 68. Instead, the Secretary’s argument boils d own to his intuition, accepted by the Sixth Circuit and the dissent, that “Congress said one thing in section s 6665(a)(2) and 6671(a), and so mething 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 eas ily “respect the difference” in congressional wording without holding plaint iffs’ challenge exempt from th e 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 pre decessor to § 66 65(a)(2) “conforms to the rules under existing law” and “conta in[s] no materi al 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 witho ut making any changes to it, see Omnibus Reconciliation Act of 1989, Pu b. L. No. 101 -239, tit. VII,
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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.

Sischo, 262

U.S. at 169; see also Walters v. Nat’l Ass’n of Radiation

Survivors, 473 U.S. 305, 317 -18 (1985). That Congress did not

repeat this clar ifying 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 f or decades

expressly provided that for

purposes of the Secretary ’s

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

I.R.C. § 6201(a). Specific dire ction that the t erm “tax” in the

AIA encompass the individual mandate “penalty” was therefore

unnecessary. Cf. Bob Jones, 416 U.S. at 74 1-42 (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 § 6 665(a)(2), which includes

Chapter 68 penal ties 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 th e Code in collecting a Chapter 68

“penalty.” See I.R.C. § 7433 (a); cf. Sylvester v. United

States, 978 F. Supp. 1186, 1189 (E.D. Wis. 1997);

Le Premier

Processors, Inc. v. United States , 775 F. Supp. 897, 902 n.6

(E.D. La. 1990).

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all taxes (including . . . penalties),” and the AIA specif ically 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 ch allenged 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 Secr etary urges us to take the view that Congress intended the individual mandate to constitute the only exaction imposed by the lengthy Intern al Revenue Code that does not qualify as a “ta x.”11 The consequences of this co unterintuitive argument extend well beyond the AIA. For example, accepting the Secretary’s contention that the label “penalty ” exempts the individual mandate from provisio ns applicable to “taxes” would inexplicably eliminate a host o f procedural saf eguards against abusive tax collection. See, e.g., §§ 7217(a) (prohibi ting

11 The Secretary yet again employs faulty reasoning to reach

this remarkable conclusion. He contends that three other

exactions labeled as penalties a nd codified outside Chapter 68 -

- I.R.C. §§ 511 4(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 sect ion 6665(a),” which refers only

to the previous clause and doe s not incorporat e the separate,

unreferenced parts of § 6665(a).

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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 una uthorized “collection of Federa l tax”), 7435 (providing civil damages for unauthorized enticement of disclosure concerning the “collection of any tax”). We will not presume that Con gress intended s uch an anomalous result, and we certainly cannot infer this intent on the basis of a mere label.
C. The Secretary’s remaining cont entions, some o f 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, assert edly “would regard” as “mak[ing] sense,” or “would not have wante d,” 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 wa nted 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 t he 2010 Congress but simply to determine whether the term “tax” in the AIA encompas ses the exaction challenged here . To resolve
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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 , 465 U.S. 367, 375 (1984);

Bob Jones, 416 U.S. at 741-42; Snyder, 109 U.S. at 191.

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 th at courts, sav e for specific

statutory exceptions, not applicable here, may entertain “ no

suit for the pur pose of restraining the assessment or collection

of any tax.” 26 U.S.C. § 74 21(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 circumstances.” 416 U.S. at 743. In doing so, the

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

without regard to the . . . nature of the pre

-enforcement

challenge.” Id. at 742.

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 ca nnot hold it has

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

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Congress to exempt this pre -enforcement challenge from the

otherwise-applicable AIA bar wou ld be tantamount to finding a n

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

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

TVA v. Hill , 437 U.S. 153, 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., 425 U.S. 17 0, 169 (1976) (holding that courts must

be “hesitant to infer that Co ngress,” in ena cting 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 p ermissible justification” for

exempting that exaction is if the individual mandate is

“irreconcilable” with the AIA .

Hill, 437 U.S. at 189.

Obviously, it is not.

Accordingly, it is simply irrelevant what the 2010 Congress

would have thought about the AIA; a ll that matters is whether

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

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

embrace the argu ment pressed by the Secretary and the dissent

that the AIA applies only when a subseque

nt Congress has

exhibited an intent for it to apply, we would impermissibly

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

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future Congresses, devoid of ind ependent legal f orce. See Tuna

Corp., 425 U.S. at 169 (holding that courts must requir

e

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 Jones,

416 U.S. at 743-46.

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 o ffers only congr essional floor s tatements

as evidence of this supposed c ongressional intent. In those

statements, two Senators contemplated a potentia l onslaught of

challenges to th e individual man date 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 th at 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 fu rther than the Secretary,

inferring an AI A exception bec ause drafts of what became the

Affordable Care Act had previously cal

led 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

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intended, of co urse, is the l egislation it ac tually enacted.

See Carcieri v. Salazar, 129 S. Ct. 1058, 1 066-67 (2009).

Congress could ha ve 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 AI A), 6703(c)(1) (penalty exempt

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

several exactions and pr ocedures 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, 226 F.3d 291, 301 (4th

Cir. 2000); see also Clinton v. City of New York , 524 U.S. 417,

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

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

that it did not do so here strongly undermines the contention

that Congress intended such an exemption.

Trailmobile Co. v. Whirls , 331 U.S. 40, 61 (1947) ( noting that

the “interpretation of statutes cannot safely be made to rest

upon mute interm ediate legislative maneuvers”). Moreover, the

dissent errs in suggesting tha t our holding “ignores” this

wording change; rather, we simply hold that chan ge irrelevant to

the AIA bar . Congress’s decision to call the challenged

exaction a “pena lty” may affect its treatment un der sections of

the Code that e xpressly distinguish “taxes” fr om “penalties,”

e.g. those pertaining to the timing of interest accrual.

See

Latterman v. United States , 872 F.2d 564, 569 -70 (3d Cir. 1989).

Or Congress’s wo rding change may have simply ca rried political

benefits. See Florida v. HHS , 716 F. Supp. 2 d 1120, 1142 -43

(N.D. Fla. 2010). No evidence, however, indicates that the

change was i ntended to exempt t he individual ma ndate from the

AIA.

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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 unn ecessary 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 challe nges 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” tri ggers the AIA’s

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

Serv. Comm., 419 U.S. 7, 10 (1974).

Alternatively, the Secretary argues that because the

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

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

“delayed . . . effective date ,” Congress wou ld have “wanted ”

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

to prohibit pre -enforcement challenges.” This argument ignores

that any holdin g that the AIA bar does not apply to th e

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individual mandate might have serious long-term consequences for the Secretary’s revenue collec tion. The Cong ressional Budget Office projects that 34 million people will rema in uninsured in 2014 and thus p otentially subject to the chall enged “penalty.” Letter from Doug las W. Elmendorf , CBO Director, to Hon. Harry Reid, Senate Majority Leader, at ta ble 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 ta xpayers 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 re cent brief, allowing these suits would severely hamper IRS coll ection efforts. See Brief for Mortimer Caplin & Sheldon Co hen as Amici C uriae 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 c hallenged exaction. See Letter from Elmendorf to Rei d at table 4. Moreover, those challenges could impede the coll ection of other income taxes by preemptively resolving -- in litigation ov er the exactio n imposed by § 5000A(b) -- issues basic to all tax c ollection,
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such as a taxp ayer’s adjusted gross income. 13 See I.R.C. § 5000A(c)(2)(B); C.I.R. v. Sunnen , 333 U.S. 591, 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 neces sary 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). Un til 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 Secre tary’s arguments, we turn finally to the arguments pressed by plaintiffs.
A.

13 Other issues r aised by the in dividual 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)).

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Plaintiffs initially contend that the AIA bar does not

apply because this “case doe s not seek to

restrain the

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

Bob Jones tendered precisely t he same initial argument. I ts

“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 tax.” 416 U.S. at 738. The

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

[this] notion.” Id. So it is here. For, in t heir 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 tha t the individual mandate provi sion, although

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

Article I of the Constitution, a nd a “tax” beyon d 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 ch allenge to the r equirement that an individual maintain insurance, i.e. § 5000 A(a), separate f rom a challenge to the penalty for noncompliance with this re quirement, i.e. § 5000A(b). Som e district court s have accepted this argument. See, e.g., Goudy-Bachman v. U.S. Dep’t of Health & Human Servs. , 764 F. Supp. 2d 684, 695 (M.D. Pa. 2011); Thomas More Law Center v. Obama, 720 F. Supp. 2d 882, 891 (E.D. Mich. 2010). But invalidation of the individual mandate would necessarily preclude the Sec retary from exer cising his statu tory authority
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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 de signed to raise revenue,” which assertedly violates the Commerce Clause, the Taxing and Spending Clause, and unspecified “other constitutional rights.” The pro blem with this a rgument 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 c onfronted and rejected precisely this argument.
Like plaintiffs here, the university in Bob Jones asserted that the IRS’ s “threatened action” woul d “violate [i ts constitutional] rights.” Id. at 736 (asserting various First and Fourteenth Amendment rights). In fact, in its brief to the Supreme Court, the university made an argument i dentical to that here. The unive rsity maintained that “what the government would have the Univers ity do . . . i nvolves not reve nue but rather unconstitutional compulsion,” B rief for Petiti oner at 28, Bob Jones Univ. v. S imon, 416 U.S. 7 25 (1973) (No. 7 2-1470), 1973 WL 172321. 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 i mpose any tax; o nly when coupled with § 501(a) (making a 501(c) (3) organization exempt from in come taxes) did tax consequences result. 416 U.S. at 738.
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mandate is “not designed to raise revenue” b ut instead to unconstitutionally “compel[]” sp ecific behavior. Just as the Bob Jones Court held the university’s argument foreclosed by the twin Bailey cases, see 416 U.S. at 740 -41, 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 c hallenge an exac tion but also ex plained that it had “abandoned . . . distinc tions” between “ regulatory and revenue-raising taxes.” Id. at 741 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 seek s an objective “unrelated to the protection of the revenues.” Id. at 740. Plaintiffs cannot and do not make any contention that the IRS has “no legal basis” in the Code for assess ing 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 prin cipally contend that a narrow ju dicially-created exception to the AIA permits
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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 injunct ion issues, and that (2) “it is clear that under no circumstances could the [Secretary] ultimately prevail.” Williams Packing, 370 U.S. at 7.15 When making the latter det ermination, a co urt must take “the most liberal view of the law and the facts” in favor of the Secretary. Id. It is diffic ult to see how any irreparable injury justifies the injunctive relief requested here. But eve n assuming equity jurisdiction does exist here, plaintiff s cannot meet the stringent standard of proving with certainty that the Secretary has “no chance of success on the merits.” Bob Jones, 416 U.S. at 745.
In rejecting th e 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. , 284 U.S. 498 (1932). That case is a far cry from the case at hand. In Standard Nut,
15 The Court has carved out one ot her exception to the AIA for “aggrieved parties for whom [Congress] has not provided an alternative remedy.” See Regan, 465 U.S. at 378. That exception clearly does not ass ist plaintiffs b ecause, as the Secretary concedes, they may cha llenge the individual mandate in a refund action. See Bob Jones, 416 U.S. at 746.
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a tax collector attempted to assess a tax that fede ral courts had already hel d in a proper post-enforcement action did not apply to the plaintiff’s product. Id. at 510. By contrast, to date, no court has even con sidered the va lidity 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 individu al 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, 529 U.S. 598, 607 (2000), we can hardly hold that the Secretary has “n o chance of success on the merits.” Bob Jones, 416 U.S. at 745.
V. In closing, we recognize “that Congress has imposed” a potentially “harsh regime” on some taxpayers. Id. at 749. However, as in Bob Jones, the question of whether these concerns “merit consideration” is a matte r for Congress t o weigh. Id. at 750. Unless and until Congress tells us otherwise, we must respect the AIA’s bar to the “intrusion of the injunctive power
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of the courts into the administration of the revenue.”

Regan,

465 U.S. at 388 (O’Connor, J., concurring).

For all these reasons, we vac ate the judgmen t of the

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

lack of subject-matter jurisdiction.

VACATED AND REMANDED

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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 majo rity’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 Ac t on t he basis that Congress had the
authority to enact the individual and employer mandates under its plenary taxing power. 2 However, my conclusion that th e
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; non etheless, on the merits, he, too , would dismiss plaintiffs’ lawsuit.
2 Justices and judges have previo usly spoken on t he merits after stating that the court lacked jurisdiction; my approach today is theref ore nothing new . See Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 130 S. Ct. 1758, 1777 ( 2010) (Ginsburg, J., dissenting) (“The Cou rt 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., place s on jud icial 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.
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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 ma ndates.” Openi ng Brief of App ellants 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 an

d

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

provide for the common Defen ce and general Welfare of the United

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

Texaco, Inc., 481 U.S. 1, 23 (1987) (Marshall, J ., concurring in the judgment) (“ Were I to reach the merits I w ould 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 juri sdiction over the subject matter of this lawsuit, and upon that ground alone I would re verse the decision below.”); Veterans for Common Sense v. Shinseki , 644 F.3d 845, 900 (9th Cir. 2011) (Kozinski, J., dissenting) (determining that court lacked jurisdict ion but also analyzing claims on their merits); Patel v. Holder , 563 F.3d 565, 569 (7th Cir. 2009) (majority opinion doing same); cf. Helvering v. Davis , 301 U.S. 619, 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).
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“A tax, in the general understanding of the term, and as used in the Cons titution, signifies an exaction for the support of the governmen t.” United States v. Butler , 297 U.S. 1, 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 , 315 U.S. 510, 515 -16 (1942) (quoting New Jersey v. Anderson, 203 U.S. 483, 492 (1906)).
Before analyzing whether the exactions in question were authorized under Congress’s taxi ng 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. T o determine whether an exaction constitutes a ta x, the Supreme Court has instructed us to loo k not at what an exaction is called but instead at what it does. Nelson v. Sears, Roebuck & Co., 312 U.S. 35 9, 363 (1941) (s tating that when “passing on the constitutionality of a tax law, ” a court is “ ‘concerned only with its practic al operation, no t its definition or the precise form of descriptive words which may be applied to it’”) (quoting Lawrence v. State Tax Comm’n , 286 U.S. 276, 280 (1932)); see also United States v. New York , 315 U.S. at 515 -16 (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
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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, 436 U.S. 268, 275 (1978) (deeming an exaction labe led a “penalty” in the Internal Revenue Code a t ax for bankruptc y purposes); License Tax Cases , 72 U.S. (5 Wal l.) 462, 470 -71 (1866) (sustai ning under the taxing power a federal statut e requiring the purchase of a license before e ngaging in certa in businesses an d 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. , 99 F.3d 573, 583 (4th Cir. 1 996) (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 r egulates, discourages, or even definitely deters the activitie s taxed.” United States v. Sanchez, 340 U.S. 42, 44 (1950). As long as a statute is “productive of s ome revenue,” Co ngress may exerc ise 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., 333 U.S. 138, 144 (1948).

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United States, 300 U.S. 506, 514 (1937). And if “the

legislation enacted has some rea sonable relation to the exercise

of the taxing au thority conferred by the Constit ution, it cannot

be invalidated because of the supposed motives which induced

it.” United States v. Doremus, 249 U.S. 86, 93 (1919).

I recognize tha t some cases f rom 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. , 259 U.S. 20, 37 -44 (1922) (ho lding that a

tax on goods made by child labor was an unconstitutional

penalty). Howev er, both older a nd newer opinion s indicate that

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

now defunct. See, e.g., United States v. Kahriger, 345 U.S. 22,

28 (1953) (upho lding tax on b ookmakers and s tating, “It is

conceded that a federal excise tax does not c ease to be valid

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

overruled in par t on other groun ds, Marchetti v. United States ,

390 U.S. 39 (1968); Sonzinsky, 300 U.S. at 514 (1937 case

upholding a ta x on firearm dealers despi te registration

provision and alleged regulatory effects); Doremus, 249 U.S. at

95 (1919 case upholding the Narcotic Drugs Act, which taxed and

regulated sales of narcotics); McCray v. United States, 195 U.S.

27, 59 (1904) (upholding tax on colored margarine and stating,

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

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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 surpri sing that this d istinction did n ot endure,

given that taxes can, and do, both regulat e 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 . . . .” 300

U.S. at 513. And “[i]n like man ner 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 , 301 U.S. 548, 589 -90 (1937). Accordingly,

in Bob Jones Univ ersity v. Simon, 416 U.S. 725 (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.” Id. at 741 n.12, overruled in part on other

grounds by South Carolina v. Ragan, 465 U.S. 367, 379 (1984).

Courts, therefore, do not lo ok to labels, regulatory

intent, or regulatory effect. I nstead, we must consider whether

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something that o perates as a tax is authorized u nder Congress’s taxing power, which has been described as “very extensive,” License Tax Cases, 72 U.S. at 471, and indeed “virtually without limitation.” United States v. Ptasynski, 462 U.S. 74, 79 (1983). As Justice Cardozo recognized in Helvering,
The discretion [to tax and spend for the general welfare] belongs to Congress, unless the c hoice is clearly wrong, a display of arbitrary power, [or] not an exercise of judgment. This is now familia r law.
“When such a co ntention comes here we naturally require a showi ng that by no reasonable possibility can the challen ged legislation fall wit hin the wide range of discretion permitted to the Congress.” 301 U.S. at 640-41 (quoting Butler, 297 U.S. at 67). There are essentially three features that a tax must exhibit to be constitutional. First, to pas s constitutional muster, a tax m ust bear “some reasonable relation” to raising revenue. Doremus, 249 U.S. at 93. The amount of revenue raised is irrelevant: A tax does not c ease to be one “ even though the revenue obtained is obviously ne gligible, or the revenue purpose of the tax may be second ary.” Sanchez, 340 U.S. at 44 (citations omitted). Instead, the measure must simply be “productive of some revenue.” Sonzinsky, 300 U.S. at 514 (upholding tax that raised $5,400 in revenue in 1934). Second, to be constitutional, a tax must be imposed f or the general welfare. Congress enjoy s wide discretion regarding what is in the general welfare. “The discretion . . . is not
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confided to the courts. The discretion belongs to Congress,

unless the choi ce is clearly wrong, a displa y of arbitrary

power, not an exercise of judgment.”

Helvering, 301 U.S. at

640. Therefor e, in determin ing whether a congressional

enactment furthers the general welfare, “courts should defer

substantially to the judgment o f Congress.” South Dakota v.

Dole, 483 U.S. 203, 207 (1987).

Finally, even i f an exaction is rationally r elated to

raising revenue and furthers the general welfare, to be

constitutional, it must not infringe upon another constitutional

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

right to be fr ee from double jeopardy by f urther punishing

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

Ranch, 511 U.S. 767, 780 -83 (1994) (concluding that a drug tax

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

deterrent purpose, and a crim inal 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 exactio n provisions in the individual and employer mandates. I w ould conclude, a fter examining their practical operation, that these provisions impose taxes.
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The individual mandate exaction in 26 U.S.C. § 5000A(b)

amends the Inter nal Revenue Code to provide that a non -exempted

individual who f ails to maintain a minimum leve l of insurance

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

some places uses the term “penal ty,” some form o f the word “tax”

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

For example, it references taxpayers and their r eturns, includes

amounts due und er the provisio n in the taxpay er’s tax return

liability, calculates the penal ty by reference to household

income for tax purposes, and allows the Secretary of the

Treasury to enforce the provision like other tax es (with several

procedural exceptions). Id. Yet, as 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.

Id.

§ 5000A(e)(2). The amount of any penalty owed is generally

calculated by reference to household income an d reported on an

individual’s federal income tax return.

Id. § 5000A(b)-(c).4

4 The statute prescribes monthly penalties in an amount calculated by identifying a specified “percentage of the exces s of the taxpayer’s household income for the taxable year over the amount of gross income specifie d in section 60 12(a)(1)” unless
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Taxpayers filing jointly are j ointly liable fo r the penalty.

Id. § 5000A(b)(3)(B). And the Secretary of the Treasury is

empowered to en force the provi sion like a ta x, albeit with several procedural exceptions.5 Id. § 5000A(g). The individual

mandate exaction, codified in the Internal Revenue Code,

therefore functions as a tax.

Looking next at the employer man date 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 em ployer that at least one fu ll-time employee

obtains a premium tax credit or cost -sharing reduction. Id. §

4980H(a)–(b).

The amount of the assessa ble payment is

calculated differently based on whether the e mployer offers

adequate health insurance coverage to its employees.

Id. §

that calculation produces an am ount that is le ss 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 ha ve a bronze lev el of coverage,

provide coverage for the applicable family size involved, and

are offered thro ugh Exchanges fo r plan years be ginning in the

calendar year with or within which the taxable year ends.” Id.

§ 5000A(c)(1).

5 The fact that Congress considered it necessary to exempt the individual mandate exact ion from some traditional t ax 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 col lection procedures, which otherwise apply.

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

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

Id. §

4980H(b). Like the individual mandate exactio n, the practical

operation of thi s provision is as a tax that i s assessed and

collected in the same manner as other Internal Revenue Code penalties treated as taxes.6 Id. § 4980H(d).

Having concluded that the individua l and employer mandates operate as taxes ,7 to determine whether they are constitutional,

I must consider whether they: 1) are reason ably 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 Congressio nal Budget Office estimated that

the individual m andate exaction will generate ap proximately $4

billion annually, and the employ er mandate exaction, $11 billion

annually, by 201 9. 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 t o the standard c ollection 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 w ord “tax” to act within its taxing power, Congress’s use of other verbiage in p ortions of the individual and employer mandates, and most notably in the “penalty” provision of the ind ividual mandate, sheds little light on Congressional intent. See Nelson, 312 U.S. at 363.
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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 redu ce 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 p aid 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 n ation to insure

them with respec t to basic, sta bilizing care, t his penalty is

something like a premium paid in to the federal g overnment, 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. Doremus, 249

U.S. at 93. See also Sonzinsky, 300 U.S. at 514 (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 th e number of the uninsured as well

as the cost of those who remain uninsured impos ed on those who

are insured.

Congress found that, nationwide, hospitals

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provided $43 billion in uncompensated care to the uninsured in

2009 and that th ese costs were s hifted 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 nu mber of the uninsured, the

[individual mandate], together with the other provisions of

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

Id. By

encouraging 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 e xpansions in acc ess to health i nsurance surely

constitute contributions to the general welfare.

Finally, neither the exaction in the individual mandate nor

that in the employer mand ate infringes on other rights. The

exactions do no t, for example, operate to im pose duplicative

criminal penalties in violation of the prohibition against

double jeopardy. See Kurth Ranch, 511 U.S. at 780 -83 (“Taxes

imposed upon illegal activities are fundamentally different from

taxes with a pure revenue-raising purpose tha t are imposed

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

provisions lack the punitive character of oth er measures the

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

Bailey, 259 U.S. at 36. And the provisions do not appear to

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violate any othe r rights: No one has a right to be free from taxation.8
C. It bears mention that the indi vidual and employ er mandate exactions do no t run afoul of the constituti onal requirement that “[n]o Capi tation, or othe r direct, Tax shall be laid, unless in Propor tion to the Cens us or Enumeratio n herein before directed to be t aken.” U.S. Con st. art. I, § 9 , cl. 4. This clause has its origins in t he 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 exc hange for a cor responding increase in the tax liability of Sou thern states. Brian Galle, The Taxing Power, the Affordable Care Act, and the Limits of Constitutional Compromise, 120 Yale L.J. Onl ine 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 , 102 U.S. 586, 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 ---, 2011 WL 3519178, at *113 -17 (11th Cir. Aug. 12, 2011) (Marcus, J., dissenting).
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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 , 178 U.S.

41, 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 di stinctions as to the particular

nature of a spe cified tax, whe re such distinc tion rests more

upon the differing theories of political economists than upon

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

173 U.S. 509, 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. Springer, 102 U.S. at

602; 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. , 158 U.S. 601, 637 (1895),

superseded on o ther grounds by constitutional amendment , U.S.

Const. amend. XVI, as recognized in Brushaber, 240 U.S. 1.

The Supreme Court has never stru ck down a federa l tax as a n

unapportioned capitation tax. And the Supreme Court ha s

repeatedly upheld a variety of federal taxes as indirect and

therefore outside the apportionment requirement. See Knowlton,

178 U.S. at 83 (upholding a federal estate tax);

Bromley v.

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McCaughn, 280 U .S. 124, 138 (1 929) (upholding a federal gift

tax); United States v. Mfrs. Nat’l Bank of Detroit , 363 U.S.

194, 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 , 281 U.S. 497,

502 (1930).

The individual and employer mandate exactions are not

capitation taxes; nor are they direct taxe

s that must be

apportioned.

Far from being imposed witho ut 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 ad equate 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 Tyler, 281 U.S. at 502.

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 app lication of

the Direct Tax Clause that the Sixth Circuit concluded that it

“relates solely to taxation generally for the pu rpose of revenue

only, and not i mpositions made incidentally under the commerce

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

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constraining and regulating what may be considered by the

Congress as pernicious or harmful to commerce.”

Rodgers v.

United States, 138 F.2d 992, 99 5 (6th Cir. 194 3). 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 applie s 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 en act the individu al and employer mandates, which operate as taxes, under its taxing power. Accordingly, I must agree with J udge Motz that t he AIA bars this suit.

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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 argu ments against t he 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 hea lth insurance co verage starting in 2014. 26 U.S.C. § 5000A. In particular, appellants urge that the Commerce Clause, which aut horizes Congress “To regulate Commerce . . . among the several States,” U.S. Const. art. I, § 8, cl. 3, allow s only regulati on of economic activity. Thus, they contend, Congress cannot regulate appellants’ “decision not to purchase health insurance and to otherwise p rivately manage [their] own healthcare,” which they characterize as “inactivity in commerce,” Appellants’ Br. 1. They also contend that upholding the A ct under the Co mmerce Clause w ould “create an unconstitutional national police power that wou ld threaten all aspects of American life,” id. at 11, suggesting in particular that “Congress could require that people buy and consum e 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 ----, ----, 2011 WL 285683, at *24 (N.D. Fla. Jan. 31, 2011), aff’d in part and rev’d in part
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sub nom. Florida v. U.S. Dept. of Health & Hum an Servs., ---

F.3d ----, 2011 WL 3519178 (11th Cir. Aug . 12, 2011)).

Appellants bring a similar f acial challenge to the Act’s

employer mandate, and they also assert Free Exercise,

Establishment Clause, and Equal Protection cla ims against the

Act.

My good colleagues in the majority hold that the Anti

-

Injunction Act strips us of j urisdiction in this case. For

reasons I explai n at length belo w, I disagree. A s I reject the

reasoning and the result of the majority’ s jurisdictional

analysis, I am entitled to r each the merits of appellants’

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

provisions of t he Act are a proper exercise of Congress’s

authority under the Commerce Cla use to regulate the interstate

markets for hea lth services an d health insura nce. I do not

believe that constitutional review of the Act re quires 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 appe llants’ 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

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when the federal government is p ermitted to regulate involuntary market participants; second, the y fear that our liberty will be further eroded in the future, as a ruling sustaining the Act would permit C ongress to establish arbitrary purchase mandates. Because I take these concerns very seriously, I explain at some length why the Act is a far mo re limited exerc ise of federal power than appellants fear.
I. Anti-Injunction Act A. My View
The majority concl udes that the Anti-Injunction Act (AIA) applies to the c hallenged provisions of the Affo rdable Care Act, depriving us of subject -matter jurisdiction. Although the parties argue that we have juris diction, “federal courts have an independent obligation to . . . raise and decid e jurisdictional questions that the parties eit her overlook or elect not to press.” Henderson ex rel. Henderson v. Shinseki , --- U.S. ---, --, 131 S. Ct. 1197, 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 C are Act’s mandat es. See Thomas More Law Center v. Obama , --- F.3d ----, ----, 2011 WL 2556039, at *6-*8 (6th Cir. June 29, 2011); Goudy-Bachman v. United States Dept. of Health & Human Servs. , 764 F. Supp. 2d 684, 695 97 (M.D. Pa. 2011); Liberty University, Inc. v. Geithner , 753 F.
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Supp. 2d 611, 6 27-29 (W.D. Va. 2010); United States Citizens

Ass’n v. Sebelius , 754 F. Supp. 2d 903, 909 (N .D. Ohio 2010);

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

Human Servs., 716 F. Supp. 2d 1120, 1130 -44 (N.D. Fla. 2010);

Thomas More Law Center v. Obam a, 720 F. Supp. 2d 882, 890 -91

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

F. Supp. 2d 598, 60 3-605 (E.D. Va. 2010). Although the two

circuit courts t hat have conside red challenges t o the mandates

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

courts should r each the merits ; only the Sixt h Circuit panel

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

of Health & Huma n Servs., --- F.3d ----, 2011 WL 3519178 (11th

Cir. Aug. 12, 2 011) (reaching the merits with out raising the

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

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

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

would hold that the AIA does n ot strip us of jurisdiction in

this case.

The Anti-Injunction Act, originally enacted in 1867,

directs that “no suit for the purpose of res

training the

assessment or collection of any tax shall be maintained in any

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

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U.S.C. § 7421(a).1 Thus, we have jurisdiction only if the penalty provisions attached to the chall enged 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 st raightforward: Congress spoke only of “tax[es]” in the Anti-Injunction Act, while it d eemed the amount owed by those in violation of the indiv idual mandate a “penalty.” See id. at *7; compare 26 U.S.C. § 7421(a) with id. § 5000A(b), (c), (e), (g). And Cong ress did not simply use the term “penalty” i n passing: Congr ess refers to t he 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 ex

tend their

jurisdiction.” Skelly Oil Co. v. Phillips Petr oleum Co., 339

U.S. 667, 671 (1 950); In re Leck ie Smokeless Coa l Co., 99 F.3d

573, 582 (4th Cir. 1996). In any case, the Declaratory Judgment

Act expressly ex cludes claims “w ith 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, 416 U.S. 725, 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.

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In fact, Congr ess considered earlier versi ons 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 indivi duals without ac ceptable 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 exactio n as a “tax”).

Congress deliberately deleted al l of these refer ences 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.” 480 U.S. 421,

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

Congress’s deliberate drafting d ecision to call the exaction a

“penalty” rather than a “tax.”

When Congress h as wished “pena lties” to be treated as

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

of the Internal Revenue Co de, Congress directed that “any

reference in this title [Title 2 6 of the United States Code (the

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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.” Id. §

6665(a)(1). 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 th e penalties and

liabilities provided by this subchapter.” Id. § 6671(a). Yet,

Congress chose to place the indi vidual 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 ma nner 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. Id. § 5000A(g)(1). A s the Sixth C ircuit recently

observed, “Congress said one t hing 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 t urns 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 , 465 U.S. 886,

896 (1984). Courts look to legislative history fi rst to see

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whether it indicates that Congress intended a particular result and then, if n ot, to find ev idence of the purposes of the statute. Cf. Dolan v. United S tates Postal Se rvice, 546 U.S. 481, 486 (2006) (“Interpretation of a word or phrase depends upon reading the whole statutory text, consideri ng 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 Aff ordable 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 re ference to the A IA. And when mem bers of Congress discussed the inevitable judicial review of the Afforda ble 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 app ears that immediate judicial review of t he individual ma ndate 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. Re gan, 465 U.S. 3 67, 376 (1984). Revenue from the individual mandate’s penalty provision will not be assessed and collected unti l the year aft er the mandate becomes operative—2015. Judicial review of the mandate in 2011
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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 c riminal prosecutions by the Jus tice 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 relian ce on a rather stra ined 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 f or themselves t hat 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 leav ing the constitutionality of the Act unsettled w ould seem likel y to create unc ertainty 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 t o conclude that
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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 ref erred to as a

“tax” in lat er, qualifying

provisions. Compare Id. § 4980H(a) with id. § 4980H(b)(2),

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

by reference to the language i tself, the spec ific context in

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

e

statute as a whole.” Robinson v. Shell Oil Co. , 519 U.S. 337 ,

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

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

310 U.S. 534, 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 th e

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 Le asing Corp., 320

U.S. 344, 350 -51 (1943) (Jacks on, J.) (explai ning that our

canons of statutory construction “long have been subordinated to

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

conformity with its dominating g eneral 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 carr y 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 t o 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 convinci ng. First, the m ajority contends

that “the Sup reme Court ha s 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 exac tion’s label imm aterial to the

applicability of the AIA,” displacing the o rdinary 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 Co urt has conclud ed that the AIA

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

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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, 259 U.S. 16 (1922), and Lipke v. Ledere r, 259 U.S. 557

(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 im

material 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 pri marily designed

to define and su ppress crime is not enough to show that within

the true intendment of the term a tax was laid.” 259 U.S. at 561

(emphases added). That is, “[t]h e 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]”

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regarding application of the A IA. Id. This is an ordinary

exercise in sta tutory interpretation, not an i nstruction 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 rega rded,” but it did not do so in

the course of an ordinary application of the AIA.

Lipke, 259

U.S. at 561. Rat her, it is cle ar that the Court considered the

function of the exaction becaus e that function (as a criminal

penalty) was rel evant to the Co urt’s due proces s concerns. It

was to resolve this constitutional problem,

not simply to

construe the wor d “taxes” in the AIA, tha t 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; thi s is essent ial 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 shou ld be enforced through the secret findings and summary action of execu tive officers. The guaranties of due process of law and trial by jury are not to be forgotten or disregarded.

Id. at 562 (em phasis added). T his passage str ongly indicates

that the Court was applying the canon of constitutional

avoidance, construing the exaction at issue together with the

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AIA so as not to run afoul of due process. Cf. South Carolina v.

Regan, 465 U.S. 367, 398-400 (1984) (O’Connor, J., concurring in

the judgment) (r elying on doctri ne of constituti onal avoidance

to interpret the AIA not to apply to or iginal jurisdiction of

the Supreme Cour t). The function al 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 d ue process—which binds Congress

and thus of cou rse requires tha t we look beyon d Congressional

labels to the nature and function of the exaction —Lipke did not

establish a new methodology fo r construing “t axes” 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 i t affirmed that a court’s goal

when applying the AIA, like any other statute, is to do s o in

accord with the “true intendment” of Congress. Id. at 561.

This reading of Lipke harmonizes it with the two Bailey

cases. As the ma jority explains, the Supreme Cou rt considered a

tax refund suit in Bailey v. Dre xel Furniture Co . and held the

Child Labor Tax Law unconstitutional as a “penal ty” rather than

a “tax.” 259 U.S. 20, 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

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Child Labor Ta x Law was uncons titutional. 259 U.S. 16 (1922).

The George Court’s reasoning is extremely brief (in a one -page

opinion): “The averment th

at a taxing

statute is

unconstitutional does not take this case out of [the AIA].” Id.

at 20. 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 co nstitutes a

“taxing statute” for purposes of the AIA bec ause 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 Furniture, 259 U.S. at 34 (noting exac tion was called

“Tax on Employme nt of Child Labo r,” 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 plaus ible that the C ourt implicitly

relied on that label, given tha t it had never before and has

never since found an exaction’s label controlling for statutory

purposes.” Ante pp. 25-26.

Under the majori ty’s approach, the George Court must have

conducted a func tional analysis of the exaction and determined

that it qualified as a tax. Yet this supposed functional

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analysis appears nowhere in the opinion. It is difficult to believe that the Court would not bother to spe cify 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 o f the statute, surely the Court would have provided some explanation of why the enactment qualified as a tax un der the AIA but not under the Taxing and Spending Clause.
More troubling still, the majo rity’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 off icers charged wi th the general authority to ass ess and collect the revenue.” Ante 18 (internal quotation marks and braces omitt ed). But these c riteria 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 N ational Prohibition Act simply doubled taxes already assessed and collected by the Commissi oner, 41 Stat. 305, 317-18 (1919), which were l aid down in the Revenue Act of 1918 “on all di stilled spirits,” and were “to be paid by the distiller or importer when withdrawn, and collected under th e provisions of existing law,” 40 Stat. 1057, 1105, Title VI – Tax
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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 u nderstanding of the AIA, there s hould have been no room for constitutional avoidance, and the Court in Lipke should have held the AIA applicable and refused jurisdiction.4
The majority se ems to recogniz e that Lipke may appear problematic, but it contends that it is not. It argues that “Lipke held only that when Congr ess converts the tax assessment process into a v ehicle 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 r evenue 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 colle cting the challe nged tax “under his general revenue authority.” The Act did not provide any separate mechanism for the ass essment and coll ection of this tax, or even e xpressly assign th ose duties to th e 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 alco hol. 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 assess ments violated due process does not change the fact that the revenue officers doing the asses sment would be acting “under color of thei r offices.” Ante p. 18 (internal quotation marks omitted).

4 This was the view of the dissenting opinion in

Lipke,

which relied on George. See Lipke, 259 U.S. at 563 (Brandeis,

J., dissenting) (“The relief should therefore be d

enied,

whatever the construction of section 35, tit. 2, of the Volstead

Act, and even if it be deemed unconstitutional. Compare Bailey

v. George, 259 U. S. 16, 42 Sup. Ct. 419, 66 L. Ed. 816, decided

May 15, 1922.”).

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was the core holding of Lipke, yes, but the question is whether

the Court’s con struction of th e 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 reache s all exactions

which the Commis sioner is empow ered to collect. Ante pp. 19-20.

Yet, the Lipke Court held that the AIA did not reach such an

exaction. Though the majority wo uld prefer that Lipke “create[d]

only a narrow constitutional limitation” to the AIA, ante p. 28,

the Court’s ho lding is simpl y not framed as creating an

exception to th e AIA. Rather, the Court exp lained that it

“constru[ed]” the term “tax” in the AIA (in accord wit h

“Congress[’s] inten[t]”) and held that it was not so broad. 229

U.S. at 561 -62. The majority’s view of the AIA, and it

s

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 t he AIA, harmonizes them. Under m y view of Lipke,

the AIA’s “taxe s” is recognize d to b e, like any statutory

language, a fle xible term that must be interp reted 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 c ourt’s statutory

jurisdiction, not its Article III jurisdiction. Congress grants,

and Congress restricts, as it chooses,

the statutor y

jurisdiction of the lower federal courts.

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constitutional mandates. In many cases, Congress ’s decision to

designate something a “tax” wil l prove disposit ive—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 wor d

“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 layers of American life.6

would alter the fabric of many

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 (quot ing Helwig v. Un ited States, 188 U.S. 605, 613

(1903)). I will briefly discuss two of them.

Helwig v. Unit ed States, for instance, con cerned the

interaction of a statute that imposed “a fu rther sum” when

6 In this reg ard, Justice O’Connor nicely cap tured 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 , 465 U.S. 367, 386 (1984) (O’Connor, J., concurring in the judgment); and see id. at 392 (“the Act generally p recludes judicial resolution of all abstract ta x controversies . . .”). The essential issues presented in this case are about as far from “abstract tax controversies” as one can get.
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importers declared a value mor e 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 th e money demanded as “a further sum,” and does not describe it as a penalty, still t he use of those words does not c hange the nature and character of th e enactment. Co ngress may enact that such a p rovision shall no t be considered as a penalty or in the natu re of one, with reference to the further action of the officers of the government, or with reference to the distribution o f the moneys thus paid, or with re ference to its e ffect upon the individual, and it is the duty of the court to be governed by such st atutory direction, but the intrinsic nature of the provi sion 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.

188 U.S. 605, 612-13 (emphases added). Th us, the Court

emphasized that it looked to “the nature and character of the

enactment” only “in the absence of any declarati on by Congress”

giving direction to the cou rt. Far from supporting th e

majority’s claim that “[t]he

Supreme Court has repeatedl y

instructed that congressional labels have lit tle bearing on

whether an exa ction qualifies as a ‘tax’

for statutory

purposes,” Helwig indicates that Congressional labels that

direct the cour t may of cours e be dispositiv e. Terming an

exaction “a fur ther sum” did not help the C ourt determine

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whether or not that sum was a “penalty”; but Congress’ s

expressly considering calling a n exaction a “tax” and then

deleting the dozens of references to a “tax” and inste

ad

designating it a “penalty” (as C ongress did in t he course of its

enactment of t he ACA) does help courts de termine 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 leg islative 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 no t

among them.

7 The majority focuse s on Helwig’s use of the phrase “with

reference to,” suggesting that Helwig would have us consider

Congressional direction here onl y if it is expre ssly 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 treated .” 188 U.S. at 613 (emphasis added).

The following c itations to “st atute after sta tute” which the

majority references are part of the Court’s analysis, the Court

tells us, because it must determ ine 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.” Id. I do not mean to

suggest that Helwig teaches that “an exaction’s label controls,”

ante p. 23 n.5 , only that an y Congressional direction that

indicates “the will of Congress” on the application of the AIA

should be considered.

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The majority’s second citation for that proposition, United States v. Reorganized CF & I Fabricators of Utah, Inc., 518 U.S. 213, (1996), is much like Helwig. There the C ourt determined whether a “tax ” imposed on certain fundi ng 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 t he Bankruptcy Co de 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 dis positive direction.” Id. at 219. Its ultimate co nclusion 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 Interna l Revenue Code are not dispositive in the bankr uptcy context . . . .” Id. at 224. Here, wher e Congress prov ided one of th e most direct signals it can o f 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 exactio n denominated a “penalty” as a penalty and not as a tax for purposes of the AIA.
2.
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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 a ny 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 se lf-evident. As th e 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 Fabri cators, which da tes from 1996, the Court adopted these definitions for its “fun ctional” 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 p unishment for an unlawful act.” 518 U.S. at 22 4. 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 Fabr icators borrowed its definitions of “tax” and “penalty” from a “somewhat different context,” it appears that these defini tions are not particularly context specific. 518 U.S. at 224. Thus, if a court is to perform a
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“functional examination” of its own, why would it not use these well-settled definitions, under which the Affordable Care Act’s exaction would c learly be a pena lty (for noncomp liance with the individual mandate)?
By my count, the majority puts forward three affirmative arguments favoring the “broades t possible” def inition for the word “taxes” in the AIA: (1) Snyder v. Marks , 109 U.S. 189 (1883), established a bro ad definition of “tax” under the AIA; (2) the twin Bailey cases show that the AIA i s “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 Governmen t’s interest in effecting unfettered tax asse ssments, 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 def inition 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 tax .” 109 U.S. at 192 (emphasis added). Thus, Snyder clearly makes relevant the Commissioner’s designation of an exaction and, reasonably viewed, requires that the Commis sioner “claim[]” an exaction “to
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be a tax.” Here, of course, the Secretary of th e 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 a lready been deal t with at

length above. I agree that they show that the AI A is “broader”

than the taxing clause when a pplied to exact ions that are

designated by Congress as “taxes”—in the limited sense that they

include some e xactions that purport to be taxes yet ar e

unconstitutional—but they do no more than that.

As for the majority’s final argument, it se ems to require a

logical leap. I reproduce the relevant paragraph for ease of

reference:

The Court’s bro ad interpretation of the AIA t o

bar interference with the asses sment of any ex action

imposed by the Code entirely accords with, and indeed

seems to be mandated by, othe r provisions of the

Internal Revenue Code. The AIA does not use the term

“tax” in a v acuum; rather, it protects from ju dicial

interference the “ assessment . . . of any tax.”

I.R.C. § 7421(a ) (emphasis add ed). The Secre tary’s

authority to make such an “assessment . . . of any

tax” derives di rectly from ano ther 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 “fund amental problem with this argument is tha t the Secretary still does ‘c laim’ 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 u se of the word “tax” in the pr ecursor to the modern AIA, I read Snyder to refer to the Commissioner’s designation with respect to the statute.
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of any internal revenue tax” i ncludes 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] additi ons 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 , 409 U.S. 239, 243 (1972) (“[ A] legislative body generally uses a particular word with a consist ent meaning in a given context.”).

Ante p. 19-20 (large emphasis mine).

I agree, of cour se, that “for pu rposes of the [S ecretary’s]

assessment authority,” Congress made clear that the ‘pe nalties’

. . . 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 wh en defining t he

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 in terpretation, 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

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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 n o cases that would require such a large redrafting of th e AIA—other “penalties” to which the AIA have been applied wer e placed in Chap ter 68, which ex pressly directs that all references to “tax” in the IRC are to refer also to th e Chapter’s “penalties”—I believe that this “broadest possible” interpretation of the AIA is unwarranted and unwise.
The majority app ears to reject t he legal force o f sections 6665(a)(2) and 6671(a), arguing that section 7806(b) “forbid[s] courts from deri ving any ‘infere nce’ or ‘i mplication’ from the ‘location or gro uping of any par ticular 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. Se ction 6665(a)(2) directs that “a ny reference in this title to ‘t ax’ imposed by t his title shall be deemed also to refer to . . . penalties p rovided by this chapter.” This instructs courts that Congress w ished to make th e word “penalty” inclusive of the word “tax” in this particular c hapter (Chapter 68). Congress re mains free to d o 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 contr adicts section 7 806(b) by drawin g a prohibite d implication from the “location or grouping” of Internal Revenue
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Code (IRC) provisions. Section 7806(b) prohibits inferences

drawn from the l ocation 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 p rovisions of the

IRC and noting that, where Con gress has desir ed a particular

result, it has stated so. To suggest that a court cannot dra w

the traditional inference from Congress’s decision to define

“penalty” as in clusive of “tax ” in other cha pters and its

failure to do 7806(b).9

so here seems

wholly unwarranted by section

In the final anal ysis, the majority’s approach essentially

imposes a clear -statement rule on Congress, making the AIA

applicable to all exactions, regardless of st atutory language

and in disrega rd of apparent Congressional intent, unles s

Congress had the foresight to ex pressly exempt a n exaction from

the AIA. The majority concedes, as it must, that the 111th

Congress could have exempted t he individual m andate 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 (emp hasis added). R ather, the fact that Congress h as 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”).
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AIA’s bar on imm ediate judicial review of the ACA is by amending the AIA itself to include an express exemption for the ACA o r (in what amounts to the same th ing) by referencing the AIA by name in the ACA. That is, the majority seems to believe that a clear-statement rule is operativ e here, and tha t absent a clear statement regarding the inapplicability of the AIA, it must apply to any and all exactions. Given that the S upreme Court has never recognized such a clear -statement rule, it seems to me that this tur ns the ordina ry principles of statutory interpretation on their head.
As Justice Kenne dy recently reco gnized for a p lurality of the Court, cle ar-statement rules are design ed to “avoid applications of otherwise unambiguous statutes that would intrude on sensitive domains in a way that Congress i s unlikely to have intende d had it consi dered the matte r.” Spector v. Norwegian Cruise Line Ltd. , 545 U.S. 119, 139 (2 005) (plurality op.). Justice K ennedy even war ned in his pl urality opinion against “convert[ing] the clear statement rule from a principle of interpretive caution into a trap for an unwary Congress.” Id. That seems 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 t he 2010 Congress to implicitly exempt this pre enforcement challenge from the AIA bar would b e tantamount to
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inferring an imp licit repeal of that bar.” Ante p. 37. But our case is nothing like implicit repeal cases like TVA v. Hill, 437 U.S. 153 (1978), wh ich 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 wi th respect to the dam. In a n implicit repeal case, the Court is forced to c onsider 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 exac tion to which th e earlier act (t he AIA) applies. This requires us to construe bot h the word “taxe s” under the AIA and the word “penalty” in the ACA, applying our ordinary tools of statutory interpretation. We look first to t he text itself, and, after finding that it is at best ambigu ous, 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 nothi ng like implicit repeal cases.
Of course, my a pproach fully re cognizes that th e 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 stateme nt that the AIA is not to
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apply), the AIA is non-binding on future Congresses. When courts

determine the ap plication 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 withi n its prerogati ve to indicate,

even if only implicitly, that the AIA should not apply.

See

United States v. Winstar Corp. , 518 U.S. 839, 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 fr om the fact that we must seek to

harmonize its te rms with that o f future legisla tion. 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 bec ause 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 th e

Secretary.

3.

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The majority sug gests that the i ssue presented h ere is one of “context,” a nd I agree. Th e majority acce pts “the Sixth Circuit’s general observation that there are ‘co ntexts’ in which the law tre ats ‘taxes’ and ‘penalties’ as mutually exclusive” and explains that “[t]he question here is whethe r 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 “mutu ally exclusive” under the AIA, but whether Con gress, in creat ing a later -enacted exaction, intended to create a “tax” for purposes of the AIA. But the more important question of “context” is this: wheth er, in light of the context pr ovided by Cong ress’s deliberate decision to designate the in dividual mandate’s exaction a “ penalty” rather than a “tax” and the evidence of Congress’s desi re to erect no jurisdictional bar to immediate judicial review of the ACA, we should nonetheless interpre t 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, persu ades me that we should not. Given this larger co ntext, 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 d ay. If the S upreme Court’s
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vacillations concerning the proper interpre tation of the AIA teach us anything, they teach us that context matters.10

* * * *

Because I do no t believe that Lipke and George instruct

courts to es chew our ord inary methods of statutor y

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 th e 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 cons truction of the Act. It spells a n end to a cyclical pattern of alle giance to the plain meaning of the Act, followed by periods of uncertainty caused by a judicial departure from that meaning, and followed in tur n by the Cou rt's rediscovery o f the Act's purpose.
Bob Jones Univ., 416 U.S. at 742 . Rediscoveries of congressional intent abound in the law and should not surprise us.
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After a months-long national debate, the Patient Protection and Affordable C are Act was sign ed into law on March 23, 2010. Pub. L. No. 111 -148, 124 Stat. 1 19, amended by The Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111 -152, 124 Stat. 1029 ( 2010). The Affordable Care Act i s 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 ar e regulated to i ncrease transparency concerning premium increases and claim deni als and which of fer market-based incentives tied to increases in efficiency an d better health outcomes. 42 U.S.C. § 18031(e), (g).
Second, the Act prevents insurers from rejec ting applicants with preexisting conditions (the “guaranteed issue” requirement) and bars insurer s from charging higher premiums to those with serious medical conditions or a history of pa st illness (the “community rating” requirement). Id. §§ 300gg – 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 fed eral dollars to reduce out -of-pocket expenses. Id. §§ 1396a(10)(A)(i)(VIII), 18071; 26 U.S.C. § 36B.
Fourth, the Act requires that individuals keep up “minimum essential [health insurance] coverage.” Id. § 5000A. In
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particular, it directs that “[ a]n applicable individual shall for each month b eginning after 2013 ensure that the individual, and any [applicable] dependent . . ., is covered under minimum essential coverage for such mont h.” Id. Appellants term 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 ov er $1,000 a year .” 42 U.S.C. § 18091(a)(2)(F). It also found that, “[b]y significantly lowering the number of t he insured, the [minimum covera ge] requirement, together with the other provisions of th[e] Act, will lower health insurance premiums.” Id.
Congress created two religious e xemptions to the individual mandate: a reli gious conscience exemption and a health -care sharing ministry exemption. 26 U.S.C. § 5000A(d )(2). I discuss the particulars of these exem ptions in Part VIII, where I consider appellants’ First Amendment claims.
Fifth, the Act created tax incen tives making it more affordable for small businesses to offer heal th insurance to their employees. Id. § 45R.
Finally, the Act required “applicable large employers . . . to offer to its full -time employees (and their dependents) the opportunity to enroll in minimum essential co verage under an
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eligible employer-sponsored plan” if at least one full -time

employee is rec eiving federal subsidies for h ealth insurance.

Id. § 4980H(a). Appellants cal l this the “em ployer 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 m andates and requ est declaratory

and injunctive relief. They allege that the mand ates are outside

Congress’s Article I po wers and that the individual mandate’s

religious exemptions effect violations of the First Amendment’s

Free Exercise a nd Establishment Clauses as wel l as the equal

protection component of the

Fifth Amendment’s Due Proces s

Clause. Appellants’ chief conte ntion is that the individual

mandate was not validly enacted pursuant to Congress’s commerce

power because it regulates what they call “inactivity.” Id. at

1. The district court carefully parsed appellants’ arguments and

dismissed their suit pursuant to Federal Rule of Civil Procedure

12(b)(6), concluding that appel lants had faile d to state a

legally sufficient claim. Liberty University, Inc. v. Geithner ,

753 F. Supp. 2d 611 (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

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otherwise authorized under Congress’s “power to regulate activities that substantially affect interstate commerce.” Gonzalez v. Raich , 545 U.S. 1, 16 -17 (2005). In particular, I ask whether the Act runs afoul o f the teachings of United States v. Lopez and United States v. Mo rrison, two case s in which the Supreme Court enforced limits on the Commerce Clause so as not to “convert congressional authority under the Co mmerce Clause to a general police power.” Lopez, 514 U.S. 549, 567 (1995); see Morrison, 529 U.S. 598, 617-19 (2000).
A. Lopez and Morrison In Lopez and Morrison the Supreme Court struc k down two congressional enactments because the objects of regulation —the possession of gu ns in school zo nes in Lopez, violence against women in Morrison—were noneconomic. Affirming that “Congress’ commerce authority includes t he 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 commerce. 514 U.S. at 559 -60 (internal citations omitted). The Court worried that to identify the effect of guns in schools on interstate commerce it “would have to pile inf erence upon inference in a manne r that would bid fair to convert congressional authority under the Commerce Clause to a gen eral police powe r of the sort retained by the
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States.” Id. at 567. If gun possession in schools were held to

be substantially related to int erstate commerce simply because

such incidents harmed our “national productivity,” then

“Congress could regulate any act ivity that it fo und 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.” Id. at 564.

Morrison further clarified the holding of Lopez. The Court

explained that “a fair read ing of Lopez shows that the

noneconomic, criminal nature of the conduct at i ssue was central

to our decision in that case.” 5 29 U.S. at 610. Without “express

congressional findings regarding the effects upon interstate

commerce of gun possession in a school zone,” the Court refused

to find a subst antial effect u pon interstate commerce, as it

believed “the link between gun possession and . . . interstate

commerce was attenu ated.” Id. at 612. The Court noted that it

has “upheld Com merce Clause re gulation of int rastate activity

only where that activity is economic in nature.”

Id. at 613.

Because the Morrison Court found that “[g]ender-motivated crimes

of violence are not, in a ny sense of the phrase, economic

activity” and that their effects on interstate c ommerce (many of

which were expre ssly enumerated by Congress) are “attenuated,”

it struck down the challenged congressional regulation of these

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crimes. Id. at 613, 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 d istinction between what is truly

national and what is truly local.” Id. 617-18.

Without 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 “t ruly local.” B ut the concern

directly animating Lopez and Morrison—the noneconomic character

of the regulated activities —is not present in this case, where

the failure to o btain health insurance is manifestly an economic

fact with direct effects on the interstate markets for both

health insurance and health serv ices. 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 provi nce of the states” in the way tha t

education, family law, and crim inal law have b een. Raich, 529

U.S. at 618. Since the Social Security Act of 1965, Pub. L. No.

89-97, 79 Stat. 286, established Medicare and Me dicaid benefits,

the federal government has bee n the single largest provider in

the interstate health insurance market and the l argest purchaser

in the health services market. Federal dollars have accounted

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for more than one -quarter of all health spending each year since

1974; in 2008, A mericans spent $2.3 billion on h ealth services,

of which the fe deral government paid more than $815 million —

nearly 35%. Ctr s. for Medicare & Medicaid S ervs., National

Health Expenditure Amounts by Ty pe of Expenditur e and Source of

Funds: Calendar Years 1965 -2019. The yea r 1974 also saw the

passage of the E mployee Retirement Income Act (E RISA), which has

a “broadly worded” and “clearly expansive” preemption provision.

29 U.S.C. § 1144(a); Egelhoff v. Egelhoff ex rel. Breiner , 532

U.S. 141, 146 (2001). Through ERISA, as wel l as later enactments

like the Health Insurance Portability and Accountability Act of

1996, Pub. L. No. 104 -191, 110 Stat. 19 36, the federa l

government has come to occupy much of the field of the

regulation of health benefits, and many state an d local attempts

to regulate health insurance have been held preempted.

See,

e.g., Retail Industry Leaders Ass’n v. Fielde r, 475 F.3d 180

(4th Cir. 2007) (holding Maryland’s Fair Share H ealth 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. , 471 U.S. 724 (1985)

(holding that state mandated -benefit law survives ERISA

preemption as a law that “re gulates insurance, banking, or

securities” within the meaning o f ERISA’s savings clause). Given

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nearly half a c entury of extens ive federal invo lvement in the

national health insurance and health services sectors, it seems

clear that Lopez and Morrison’s interest in prot ecting 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 a ssure themselves

that upholding the Act under the Commerce Cl ause 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 North ern District of Florida fo und the Ac t

unconstitutional in part becau se it believed that a Commerce

Clause broad en ough to authori ze the Act mus t also support

purchase mandates for broccoli o r GM cars. Appel lants’ Reply Br.

9 (quoting Bondi, --- F. Supp. 2d at ----, ----, 2011 WL 285683,

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.

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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 ga ther and crit ically 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 concluding.” 545

U.S. at 22.

The Act’s effects on interstate commerce depend in large

part on an unusu al feature of th e health care ma rket. By federal

law, a hospital participating in Medicare mus t stabilize any

patient who arr ives at its eme rgency room, re gardless of the

patient’s ability to pay for

treatment, Em ergency Medical

Treatment and Ac tive Labor Act, 42 U.S.C. § 13 95dd(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 is sued regulations requiring th e provision of

limited medical services whenever an emergency situation exists”

and that “many s tate court rulin gs impose a comm on law duty on

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doctors and hospitals to provide necessary emergency care”). As

a result, the uninsured often receive care that they are unable

to pay for: i n 2008, hospi tals provided $ 43 billion in

uncompensated care to the uninsu red. 42 U.S.C. § 18091(a)(2)(F).

To cope with these costs, hospitals increase the price of health

care services, w hich in turn le ads to rising h ealth insurance

premiums; Congress found that “[t]h is cost-shifting increases

family premiums by on average over $1,000 a year.” Id.

Recognizing these direct effect s on the health insurance

and health services markets does not require us to “pile

inference upon inference” in the way linking noneconomic ac ts

like the posses sion of guns in schools or gender-motivated

violence to int erstate commerce might have don e in Lopez and

Morrison. Lopez, 514 U.S. at 567; see Morrison, 529 U.S. at 615.

In Lopez, the Co urt rejected the Government’s ar gument 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, wil l result in a less productiv e

citizenry.” 514 U.S. at 564. 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 atten uated effect u pon interstate

commerce,” chiefly “deterring pote ntial victims” from interstate

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travel, employment, general commercial transactions, “diminishing national productivity, increasing medical and other costs, and decre asing the supply of and demand for interstate products.” 529 U.S. at 615 (quoting H.R. Rep. No. 103-711, at 385 (1990), reprinted in 1994 U.S.C.C.A.N. 1803, 1853). Where the proffered “s ubstantial 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, 317 U.S. 111, 127 -28 (1942); Raich, 545 U.S. at 22; post pp. 46-48), those who fai l to purchase h ealth insurance will seek and receive medical care they cannot afford; the cost of that care ($43 billion in 2008) is borne by the hospita ls, 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 in sured constitutes a substantial effect on inters tate commerce in no way authori zes a purchase mandate for bro ccoli or any ot her 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 subst antial effect on commerce comes n ot 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 n egative externalities. Thus, we
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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 goo ds, extends t o

artificially inflating demand via a purcha

se mandate. See

Wickard, 317 U.S. at 128 (recognizing that even wheat grown for

home consumption “overhangs the market and if in duced by rising

prices tends t o flow into the market and check price

increases”); Raich, 545 U.S. at 19 (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 insu rance and healt h care services . Accord Thomas

More, --- F.3d at ----, 2011 WL at *12 (Martin, J.); id. at *24-

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 whe ther the Comme rce Clause

discriminates between activity and inactivity. Appellants

concede that vir tually all perso ns will voluntar ily enter into

the interstate health services market in their lifetimes, and

they concede further, as they must, that this constitutes

activity in commerce. Y et appellants insist that the Commerce

Clause requires Congress to adopt an extremely narrow time

-

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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 appe llee’s own contr ibution to the
demand for wheat may be trivia l 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 trivial.” 317 U.S. at 127 -28.
Raich reaffirmed this approach, noting that C ommerce Clause
analysis looks to the regulated “activ ities, taken in the
aggregate.” 545 U.S. at 22.
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 nat ional market, it may regulate the entire class. See United States v. Perez , 402 U.S. at 154-55 (“[W]hen it is necessary in order to prevent an evil to make the law embrace more than the precise th ing to be preven ted it may do so.”). I n this vein, we have reiterated that when a general re gulatory statute bears a substantial relation to com merce, the de minimis character of individual instances arising under that statute is of no consequence.
Id. at 17 (some internal quotation marks and citations omitted).
Under Wickard and Raich, we are to take the vi ew of the
legislators, not those who are regulated. Cou rts look at the
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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.” Id. We are to put as ide “the mechani cal application

of legal formulas” and look instead to “the actual effects of

the activity in question upon interstate commerce.” Wickard, 317

U.S. at 120, 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. Id. at 22.

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 regul ation before the uninsured a re 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 Comm erce Clause analysis would aggregate

individuals and allow regulati on of entire c lasses but then,

when legislators confront a problem requiring a remedy before

emergencies (and their ever -growing costs) occ ur, refuse to

permit them to adopt the tim e-horizon necessary to enact a

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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.); id. at *2730 (Sutton, J.); Florida, --- F.3d at ----, 2011 WL at *93 -*94 (Marcus, J., dis senting). Rather, courts are as ked to pass on regulation of vo luntary participation in the in terstate health care market that, to be effective, must be preemptive. As it is clear that the regulated behavior substantially affects interstate commerce and appellan ts bring no oth er challenge to Congress’s authority under the C ommerce Clause, I would hold the Act to be a proper exercise of congressional power.
V. Regulating Inactivity But even if I w ere to assume t hat the uninsure d are, in appellants’ phrase, “inactive in commerce,” I would be bound to uphold the Act. Despite appellants’ several arguments, the Commerce Clause is not off ended by the regulation of “inactivity” or, in proper circumstances, by a purchase mandate. Appellants urge that the Act i s an “unprecedent ed attempt to force private citizens who have decided not to participate in commerce to engage in commerce by mandating that they purchase .
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. . 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 comme rce”; and (2) whether such

regulation can include “forc[ing] [a] citizen to participate in

commerce by mand ating that she p urchase a [commo dity] . . . or

pay a penalty fo r noncompliance.” Id. at 1. 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 he

althcare” as “inactivity in

commerce,” which they claim is beyond the reach of the Commerce

Clause. Id. at 1. 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 esta blishes” that C ongress may reg ulate those who

have opted not to participate in a market when their self

-

provisioning, considered in the aggregate, “substantially

affect[s]” an interstate market. Raich, 545 U.S . at 17. After

explaining why appellants’ broader challenge i s foreclosed, I

consider the far narrower challenge to the Act that survives.

1. Regulating Non-Market Participants

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Nearly seventy years ago, in the famous ca se of Wickard v.

Filburn, the Su preme Court uph eld Congress’s power under the

Commerce Clause to regulate Mr. Filburn’s private, noncommercial

production of wheat. The Court s quarely confronted the question:

it began its di scussion by not ing that “[t]he question would

merit little con sideration . . . 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 farm.” 317

U.S. at 118. Just six years ago, the Court reaffirme d Wickard’s

vitality in Raich, explaining,

Our case law firmly establishes Congress’ power to

regulate purely local activities that are pa rt of an

economic ‘class of activities’ that have a subst antial

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.”

Raich, 545 U.S. at 17 (quoting

Wickard, 317 U.S. at 125)

(emphasis added). The Raich Court made clear tha t “Congress can

regulate purely intrastate a ctivity that is not itself

‘commercial,’ in that it is not produced for sale, if it

concludes that f ailure to regula te that class of activity would

undercut the r egulation of t he interstate market in that

commodity.” Id. at 18. Applying this principle, the Court upheld

the regulation of individuals who grew marijuana solely for

“home consumption”—that is, it allowed Congre ss to regulate

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individuals who deliberately chose not to participate in commerce. Id.
Thus, appellants’ true quarrel w ith the Act is m ore limited than their lang uage sometimes suggests. With subheadings like “Wickard does not support the d istrict court’s conclusion that private economic decisions can be regulated und er 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 nonmarket 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, Raich, 545 U.S. at 17, 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 “i t was that act ivity that const ituted economic activity. By con trast, [appellants] have exerted no effort and used no resources.” Id. at 21. It is this “distinction between activity and inactivity,” id. at 19—absolute inactivity, not
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just inactivity (non -participation) in commerce —that carries the
true thrust of appellants’ argument.
2. Regulating the “Inactive”
Before I can co nsider this nar rower argument, I must be
sure I understand exactly what a ppellants 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 effor t and used no r esources.” Appellants’ Br. 21.
But appellants expressly state that “Miss W addell and Mrs.
Merrill have voluntarily and deliberately decided not to
purchase health insurance, but to instead save f or and privately
manage health care.” Id. at 10 (emphasis added). It is not clear
why “sav[ing] f or and privatel y manag[ing] he alth care,” a species of what economists call “self -insurance,”11 requires
neither “effort” nor “resources”—in fact, one wo uld 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 indi viduals would m ake an economic and financial de cision to forego health insuranc e 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 mo re common among collectives or businesses, where it may be eff icient. See generally M. Moshe Porat, Uri Spieg el, Uzi Yaari, Uri Ben Zion, Market Insurance Versus Self Ins urance: 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 Eh rlich, Gary S. Becker, Market Insurance, SelfInsurance, and Self-Protection, 80 J. Pol. Econ. 623 (1972).
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“manag[ing]” requires some “effort.” Id. at 10, 21. Though, unlike wheat and marijuana, insurance is intangible, appellants do not suggest that interstate markets in intan gible 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 le gal import of the appellants’ “sav[ing]” and “manag[ing]” should differ from that of Mr. Filb urn’s sowing and harvesting.
But even if app ellants 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 dif ficult 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 n o resources” in connecti on to the relevant markets; why are they more susceptible to Commerce Cl ause regulation than appellants simply because they privately exerted effort and expende d 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 t o consent or at least submit to that regulation . Under this vi ew, Wickard and
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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 mari juana, but here the Appellants cannot avoid C ongress’ reach even if they are not doin g anything.” Appellants’ Br. 19. Appellants express concern throughout their brief about a llowing Congress to “regulate [people] because they are legal citizens who mer ely exist,” id. at 20;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 unsu rprising, as the dispositive question is whether the object of regulation substantially affects interstate commerce; what the affected pe rsons have done to consent (or not) to the regu lation is obviou sly irrelevant t o that inquiry.
12 It is no coincidence that “vol untary” or “volu ntarily” appears twenty-eight times in appellants’ briefs.
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Appellants claim that thei r liberty concern sp rings from the

principles of federalism rather than black

-letter Commerce

Clause law. Tho ugh these princ iples serve to protect state

sovereignty and the resulting di vision of power helps to secure

our liberty, federalism is not a n independent font of individual

rights.

As Justice Kenne dy 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 s tate and federa l governments even before each

government’s powers were further separated among legislative,

executive, and judicial departments. 514 U.S. at 576. Thus,

“[s]tate sovereignty is not just an end in itself: ‘Rather,

federalism secures to citizens the liberties that d erive from

the diffusion of sovereign power.’” New York v. United States ,

505 U.S. 144, 181 (1992) (quoting Coleman v. Thompson , 501 U.S.

722, 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 fe deralism protects individual lib erty, is not to

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the contrary. 56 4 U.S. ---, ---, 131 S. Ct. 235 5, 2364 (2011).

Appellants provide no support for their sugges tion that some

novel, heretofore unknown, individual right can spring from the

principles of federalism.

Federalism was properly invoked in Lopez and Morrison,

where, to polic e the division of authority be tween state and

federal governments, the Court s truck down federal regulation of

noneconomic activity within “ areas such as criminal law

enforcement or education where States historically have been

sovereign.” Lopez, 514 U.S. at 564; see Morrison, 529 U.S. at

599. Lopez and Morrison’s concern about the loss of state

authority within areas traditionally reserved to the states

implicates the division of pow er between stat e and federal

governments and thus goes to

the very core of federalism.

Appellants’ individual liberty concerns do not. Appellants

suggest that al lowing the Act to tou ch all U.S. residents ,

whether or not t hey have voluntarily entered a r egulated domain,

“threatens . . . the bedrock c oncept[] 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

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lifetime, choices central to personal dignity and auto nomy,”

including those “relating to marriage, procreation,

contraception, family relationships, child rearing, and

education,” Planned Parenthood of Se. Penn. v. Casey , 505 U.S.

833, 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 fe deral 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 Claus e, targets all U.S. residents:

federal criminal law. Indeed,

Raich itself concerned the

Controlled Substances Act and t he noncommercial production and

consumption of marijuana; no where in Raich did the Cour t

intimate concern that the f ederal government was regulating the

drug use of “everyone . . . just for being alive and residing in

the United States.” Bondi, --- F. Supp. 2d. at ---, 2011 W L

285683, at *20. Though penalties do not attach until someone has

violated the statute, the sam e is true of the Act’s regulation.

Of course, appe llants suggest that compelling action is les s

legitimate under the Commerce Clause than prohibiting action. I

take up that question next.

VI. Compelling Action

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Having established that the reg ulation of “in activity in commerce” does not offend the Commerce Clause, I consider whether federal commerce regul ation can prope rly “force [a] citizen to par ticipate in co mmerce by mand ating that she purchase a [commodity] . . . or pay a penalty for noncompliance.” Appellants’ Br. 1.
As I explained at length abo ve, the Supreme Court has taught that an enactment is aut horized 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 c ommerce; the content of th e 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 t he Constitution.” Wickard, 317 U.S. at 124 (quoting United States v. Wrightwood Dairy Co. , 315 U.S. 110, 119 (1942)); cf. Raich, 545 U.S. at 29 (“[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 Commer ce Clause, it e mpowers Congress “‘to take all
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measures necessary or appropriat e to’ the effec tive regulation of the interstate market.” Raich, 545 U.S. at 38 (Scalia, J., concurring) (quoting Shreveport Rate Cases, 234 U.S. 342, 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 tha t 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) a nd paying a non -punitive tax p enalty that, by law, is capped at “the national average premium for qualified health plans which have a bronze level of covera ge.” 26 U.S.C. § 5000A(c)(1)(B); see id. at § 5000A(b)(1). As the average cost of providing the mo st basic insuran ce, this amount should roughly approximate the expected costs t o the regulatory scheme (in the form of higher premiums) occasioned by an indi vidual’s failure to procure insu rance. Because the uninsured e ffectively force the rest of the nation to insu re them w ith respect to basic, stabilizing care, this penalty i s 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.
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B. History of Compelled Purchases

Even if the individua l mandate were properly characterized

as compelling residents to enter the market, this has long been

an acceptable fo rm of regulation under the Comme rce Clause. For

instance, the Federal Motor Carrier Safety Administration,

acting pursuant to the Motor Ca rrier Act of 1980, requires that

motor carriers p urchase either l iability 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, an d 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 liabil ity for punitive

damages, even where the owne r bears “no[ ] culpability o r

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. , 966 F.2d 837, 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. , 303 F.3d 176, 203 (2d Cir. 2002),

cert. denied, 538 U.S. 998 (2003); cf. United States v. Olin

Corp., 107 F.3d 1506, 1511 (11th Cir. 1997) (holding CERCLA

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constitutional Commerce Clause legislation as applied to

appellants).

Wickard itself suggests that compelled purchases are

permissible. The Court explained:

It is said, however, that thi s Act, forcing some

farmers into the market to buy what they could p rovide

for themselves, is an unfair promotion of the markets

and prices of sp ecializing 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 wi sdom, workability, or

fairness, of the plan of regulat ion we have noth ing to

do.

317 U.S. at 129 (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.” Id. at

127, 128. Thoug h Wickard did not involve an e xpress purchase

mandate, the Cou rt understood th at Mr. Filburn was effectively

being “forc[ed] . . . into the market to buy” wheat when it

rejected his Commerce Clause challenge. Id. at 129.

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

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most Americans, I suspect—that Congress should n ot be able to compel citizens to buy productions they do not want”) (Sutton, J). Compelled p urchases are th e most fundamen tal function of government of any sort, and the fact that the government here allowed its residen ts 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 fail s to produce o ptimal levels o f such public goods.13 Since public goods are en joyed by all, mo st individuals refuse to purchase them themselves, hoping instead that they can free-ride when someone else do es. By forcibly collecting tax revenue and using it to purchase public goods, governments are able to solve t his 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 Publi c Expenditure, 36 Rev. Econ. & Statistics 387

(1954). Public g oods 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).

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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 proble m, as the Ac t

attempts to do, creates a publi c 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 h ave 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 thei r

own purchase dec isions would giv e rise to such b loated concerns

about a federal power grab. Cf. Thomas More, --- F.3d at ----,

2011 WL at *31 (Sutton, J.) (“Few doubt that Con gress could pass

an equally coercive law under its taxing power . . . .”).

As for the broccoli mandate appellants fe ar, I have

explained at se veral points wh y 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 langua ge of economics , the failure to obtain insurance has "negative externalities" —negative effects on those not responsible for the decision.
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issues) of broccoli in ord er 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. Fed eral Energy Admi nistration, 518 F.2d 1051, 1061

(D.C. Cir. 1975) (“From earliest days, the tariff authority

given Congress b y the Constituti on has been unde rstood to apply

to the ‘protective tariff’ sponso red by Alexander Hamilton, a

measure focused . . . on the ‘non -revenue purpose’ of protecting

domestic industry against foreign competition.”),

rev’d by

Federal Energy A dministration v. Algonquin SNG, Inc., 426 U.S.

548 (1976). Though centralized subsidies are far more efficient

than purchase mandates—which is why a broccoli m andate 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 purcha se mandates would not increase

federal power. For these reasons, I find ap pellants’ fears to be

unfounded. I would reject their novel and unsupported suggestion

that Commerce Cl ause jurisprudence ought to dis criminate among

regulated persons according to t he amount of effort or resources

they have expended in a given economic arena. Under seventy

years of well -settled law, it is enough tha t the behavior

regulated (whether characterized as activity or inactivity)

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substantially affects interstate commerce. Appellants can cite

neither case n or constitutional text for

their proposed

activity/inactivity distinction. They can explain neither why it

ought to be rele vant to my Commerce Clause analy sis 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 indiv idual mandate to be within the bounds of

Congress’s commerce power define d 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, 312 U.S. 100 (1941) (upho lding minimum wa ge and overtime

provisions of the Fair La bor Standards Act); NLRB v. Jones &

Laughlin Steel Corp. , 301 U.S. 1 (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 Comme rce Clause); id.

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at § 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. , 469 U.S. 528, 537 (1985); accord Darby, 312 U.S. at 118 -119; Jones & Laughlin, 301 U.S. at 36-38.
Appellants do not challenge Congress’s finding that “employers who d o not offer hea lth insurance to their workers gain an unfair economic advantage relative to those employers who do provide coverage” and contribute to a neg ative feedback loop in which “ uninsured workers turn to emerg ency 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 sub stantial effect on interstate commerce. Instead, they attempt to distinguish the employer mandate from the wage and overtime provisions in Darby and the fair labor practic es in Jones & Laughli n and argue tha t the mandate c ompels “private employers [to] e nter into a cont ract with other private parties for a particular product.” Appellants’ Br. 25.
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These arguments fail. Appellants cannot convincingly distinguish Darby or Jones & Laughlin. They rep eatedly suggest that regulated employers mus t be involved in interstate commerce; but, as explained ab ove, it is wel l settled that employers who conduct only intrastate business may be regulated under the Commer ce Clause so lon g as t heir 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 employ ees.” Id. at 27 (quoting Jones & Laughlin , 301 U.S. at 31). Neither does the employer mandate: like the minimum wage and overtime provisions upheld in Darby, it merely requ ires that employ ment 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 c ontained within the employment contract, other than setting a floor for wages and a ceiling for hours.” Appellants’ Br. 28. But the empl oyer mandate, to o, only “set[s] a floor”: it requires employers to offer employees “the opportunity to enroll in minim um essential co verage under an eligible employer-sponsored plan,” but employers are free to select any plan (or create their own) and provid e any level of
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coverage above the “minimum es sential” level, the mandate’s

“floor.” 26 U.S.C. § 4980H(a)(1).

Appellants’ only other objection to the employ er mandate is

that it allegedly forces employers to contract with third

parties. This is untrue: employe rs are free to s elf-insure, and

many do. See Employee Benefit Research Inst., Health Plan

Differences: Fully-Insured vs. Self -Insured (2009) (reporting

that 55% of emp loyees with hea lth insurance w ere 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 B enefits: National and State Var iation, 57 Med.

Care Res. & Re v. 340, 352 (2 000) (finding t hat 21% of all

private-sector employers who off ered health bene fits offered a

self-insured health plan in 1993 ; 49% of employe es 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 violati ons of the Fre e Exercise

Clause, the Rel igious Freedom Restoration Act of 1993, the

Establishment Clause, and equal protection. The Act makes two

religious exemptions: a religious conscience exemption and a

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health-care sharing ministry exemption. 26 U.S.C. § 5000A(d)(2).

The former exem pts 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 th e

cost of, or p rovides services for, medical care.” Id. §

1402(g)(1). The latter exempts members of a “hea lth care sharing

ministry”—a non-profit organization in existence since December

31, 1999 with m embers 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.”

Id. §

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

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 Protect ion Clauses. Fo r 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

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prohibits the University from “providing health care choices for

employees that do not confl ict 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 o f free exercise does not relieve an

individual of the obligation to comply with a valid and neutral

law of general applicability on the groun d that the la w

proscribes (or prescribes) conduct that his religion prescribes

(or proscribes).” Dept. of Human Res. of Or. v. Smith, 494 U.S.

872, 879 (1990). Appellants claim that the Act is not neutral

because its rel igious exemptions are “the typ e 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 , 508 U.S. 520, 534 (1993)). The y 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 ordinances.” 508 U.S. at

534. Here appellants never allege that “the object of [the Act]

[wa]s to infring e upon or restr ict practices be cause of their

religious motivation.” Id. The Act is a neutral law of ge neral

applicability and so does not violate the Free Exercise Clause.

B. Religious Freedom Restoration Act

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I also reject th e claim that app lication of the individual mandate to appellants would run afoul of the Religious Freedom Restoration Act of 1993 (R FRA). The RFRA di rects that the “Government shall not substantia lly burden a pe rson’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 g overnmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest.” 42 U.S.C. § 2000bb-1.
If appellants ha d plead sufficie nt facts to de monstrate a substantial burden to t heir exercise of religi on, I would be forced to consider the relevance of the RFRA to a subsequent act of Congress. Cf. Gonzales v. O C entro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418 (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 , 550 U.S. 544, 555 (2007) (internal quotation marks omitted). “[C]onclusory” allegations are “not entitled to be assumed true.” Ashcroft v. Iqbal, --- U.S. ---, ---, 129 S. Ct. 1937, 1951 (2009). Unless
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appellants’ allegations “nudge [] their claims a cross the line from conceivable to plausibl e, their comp laint must be dismissed.” Twombly, 550 U.S. at 570.
Here appellants merely alleged that the individual mandate will force them to violate t heir “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 r ape or incest, o r 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 s tate’s health benefit exchange w ill include at least one plan t hat does not cov er (non-excepted) abortions, see Affordable Care Act § 1334(a) (6). Without add itional 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 protec tion because “th ey grant preferr ed status only to certain religious adherents.” Appellants’ Br. 45. I disagree.
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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 disadvan tageous treatment.” 544 U.S. 709, 719 -23 (2005).
The religious conscience exemption simply incorporates the exemption created by section 1 402(g)(1), which has survived every Establishment Clause challenge to it over the last forty years. See, e.g., Droz v. Comm’r, 48 F.3d 1120, 1124 (9th Cir. 1995); Hatcher v. Comm’r , 688 F.2d 82, 83 -84 (10th Cir. 1979); Jaggard v. Comm’r , 582 F.2d 1189, 1190 (8th Cir. 1978); Palmer v. Comm’r, 52 T. C. 310, 314 -15 (1969). For the r easons set out by our sister courts in thes e cases, I would reject appellants’ Establishment Clause challenge to the Act’s exemptions.
The exemptions easily survive appellants’ equal protection challenge as we ll. Legislation comports with equal protection requirements so long as it employs “a rati onal means to serve a legitimate end.” City of Cleburne v. Cleburne Living Ctr. , 473 U.S. 432, 442 (1985). And “wh ere individuals in the group affected by a l aw have distingu ishing characteristics relevant to interests the [legislature] h as the authority to implement,
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the courts have been very reluctant . . . to clo sely scrutinize legislative choices as to whether, how, and to what extent those interests should be pursued.” Id. at 441-42. Here Congress could have reasonably believed that members of grou ps that provide health care to their members are less likely to require public medical care, an d thus less like ly to produce th e externalities the Act was de signed to dimin ish. And Congre ss could have reasonably believed that if it did not limit these exemptio ns to groups formed p rior to a pre -enactment date, individuals who simply wished to avoid the indiv idual mandate wo uld form groups that insincerely claimed the re quired religious beliefs. Thus the distinctions Congress drew i n the Act’s reli gious exemptions accord all equal protection under the law.
IX. Conclusion For the foregoing reasons, I would hold that the AIA does not deprive fed eral 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 cas e that simply is not there. Accordingly, I respectfully dissent.
140

 
 Case 6:10-cv-00015-NKM Document 54 Filed 11/07/11 Page 1 of 2 Pageid#: 825

IN THE UNITED STATESD ISTRICT COURT CLERK'SoFrttnEU.s.talsT.counr

FoR THE W ESTERN D ISTRICT OF V IRGINIA ., ATLYIkGHBURG VA
,txy. rluso

SW CHRURGX W ISIOX

M

N0# 2 2 2211

LIBERTY UNIVERSITY,lNC.,aVirginia N onprofitCorporation,M ICHELEG. W ADDELL,DAVID STEm ,M .D .,JOANNEV . M ERRILL,DELEGATEKATHY BYRON,andJEFF HELGESON,
Plaintffs,

BYJ.Ul6 DUD.'ajz' c,.:-ajkjç. DEPU uu-Rx
CASEN O.6:l0-cv-00015

TIMOTHY GEITIINER,Secretary OftheTreasury
oftheUnitedStates,inhisoy cialcapacity,
KATHLEEN SEBELIUS,SecretaryOftheUnited StatesD epartm entofH ealth and Hum an
Services,inherom cialcapacity,
H ILDA L.SOLIS,Secretary oftheU nited
StatesDepartmentofLabor,inherofhcial
capacity,andERIC HOLDER,Attorney General
oftheUnitedStates,inhisoy cialcapacity,

JUDGEN ORM AN K .M OON

Defendants.

In accordance with the m andate issued by the United States CourtofA ppeals forthe
FourthCircuitinfiberty University,Inc.v.Geithner,No.10-2347(4thCir.Oct.31,2011),this court'sOrderofNovember30,2010,grantingDefendants'm otionto dism iss(docketno.46)is herebyVACATED,andthecaseisDISMISSED forlackofjurisdiction.SeeLïicr/.pUniv.,Inc. v.Geithner,No.10-2347,2011W L3962915,at*1(Sept.8,2011),petitionforcert.hled(U.S. Oct.7,2011)@ o.l1-438)CEBecausethissuitconstitutesapre-enforcementaction seekingto restraintheassessmentofatax,theAnti-lnjunctionAd stripsusofjurisdiotion.Accordingly,

Case 6:10-cv-00015-NKM Document 54 Filed 11/07/11 Page 2 of 2 Pageid#: 826

wemustvacatethejudgmentofthedistrictcourtand remand the casewith instructionsto dismissforlackofjurisdiction-').
ltissoORDER ED . The Clerk ofthe Courtis hereby directed to send a certified copy of this Orderto a1l counselofrecord.
.k
EnteredthisY NayofNovember,201l.

NO

K.M OO

U NITED STA TES DISTRICT JUD GE

 
 Appeal: 10C-2a3s4e76:10D-covc-:01000915-NKMFiDleodc: u0m8/e1n3t/250512FiledP0g8: /113o/f152 Page 1 of 5 Pageid#: 827
FILED: August 13, 2012
UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
___________________
No. 10-2347 (6:10-cv-00015-nkm-mfu)
___________________ 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 Appellant

Appeal: 10C-2a3s4e76:10D-covc-:01000915-NKMFiDleodc: u0m8/e1n3t/250512FiledP0g8: /213o/f152 Page 2 of 5 Pageid#: 828
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;

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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 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, Ph. D., 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,

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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 CaliforniaBerkeley, 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; 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; 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; WOMEN'S LAW PROJECT
Amici Supporting Appellee

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___________________ O R D E R
___________________ Upon consideration of submissions relative to the motion to stay mandate, the court denies the motion. Entered at the direction of the panel: Judge Motz, Judge Davis and Judge Wynn.
For the Court /s/ Patricia S. Connor, Clerk

 
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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.
JACOB LEW, 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; SETH HARRIS, Acting Secretary of the United States Department of Labor, in his 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; AMERICAN CIVIL RIGHTS UNION; FAMILY RESEARCH COUNCIL; BREAST CANCER PREVENTION INSTITUTE; LIFE LEGAL DEFENSE FOUNDATION; LANDMARK LEGAL FOUNDATION; PROJECT LIBERTY; DAVID BOYLE; MEMBERS OF LEGATUS; CATHOLIC MEDICAL ASSOCIATION; FOUNDATION FOR MORAL LAW; VIRGINIA FAMILY FOUNDATION; WEST VIRGINIA FAMILY POLICY COUNCIL; MARYLAND FAMILY ALLIANCE; NORTH CAROLINA FAMILY POLICY COUNCIL; PALMETTO FAMILY COUNCIL; AMERICANS UNITED FOR LIFE; ALLIANCE DEFENDING FREEDOM,
Amici Supporting Appellants,

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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
2

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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 CaliforniaBerkeley, 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 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, Ph. D., 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
3

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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; 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; PHYSICIANS FOR REPRODUCTIVE HEALTH; AMERICAN COLLEGE OF OBSTETRICIANS AND GYNECOLOGISTS; AMERICAN SOCIETY FOR EMERGENCY CONTRACEPTION; ASSOCIATION OF REPRODUCTIVE HEALTH PROFESSIONALS; AMERICAN SOCIETY FOR REPRODUCTIVE MEDICINE; SOCIETY FOR ADOLESCENT HEALTH AND MEDICINE; AMERICAN MEDICAL WOMEN’S ASSOCIATION; NATIONAL ASSOCIATION OF NURSE
4

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PRACTITIONERS IN WOMEN’S HEALTH; SOCIETY OF FAMILY PLANNING; JAMES TRUSSELL; SUSAN F. WOOD; DON DOWNING; KATHLEEN BESINQUE; AMERICANS UNITED FOR SEPARATION OF CHURCH AND STATE; THE ANTI-DEFAMATION LEAGUE; THE INTERFAITH ALLIANCE FOUNDATION; THE NATIONAL COALITION OF AMERICAN NUNS; THE NATIONAL COUNCIL OF JEWISH WOMEN; THE RELIGIOUS COALITION FOR REPRODUCTIVE CHOICE; THE RELIGIOUS INSTITUTE; THE UNITARIAN UNIVERSALIST ASSOCIATION; THE UNITARIAN UNIVERSALIST WOMEN’S FEDERATION,
Amici Supporting Appellees.

On Remand from the Supreme Court of the United States. (S. Ct. No. 11-438)

Argued: May 16, 2013

Decided: July 11, 2013

Before MOTZ, DAVIS, and WYNN, Circuit Judges.

Affirmed by published opinion. Judge Motz, Judge Davis, and Judge Wynn wrote the opinion.
ARGUED: Mathew D. Staver, LIBERTY COUNSEL, Maitland, Florida, for Appellants. Alisa Beth Klein, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellees. ON BRIEF: Anita L. Staver, LIBERTY COUNSEL, Maitland, Florida; Stephen M. Crampton, Mary E. McAlister, LIBERTY COUNSEL, Lynchburg, Virginia, for Appellants. Timothy J. Heaphy, United States Attorney, Roanoke, Virginia; Neal Kumar Katyal, Acting Solicitor General, Tony West, Assistant Attorney General, Beth S. Brinkmann, Deputy Assistant Attorney General, Mark B. Stern, Samantha L. Chaifetz, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellees. Joel M. Spector, MOUNTAIN STATES LEGAL FOUNDATION, Lakewood, Colorado, for Amicus Mountain States Legal Foundation. Brian S. Koukoutchos, Mandeville, Louisiana; Charles J. Cooper, David H. Thompson, COOPER & KIRK, PLLC, Washington, D.C., for Amicus Revere America Foundation. Peter Ferrara, AMERICAN CIVIL RIGHTS UNION, Falls Church, Virginia; Daniel M. Gray, LAW OFFICES OF DANIEL M. GREY, LLC, Falls Church, Virginia; Richard B. Rogers, RICHARD B. ROGERS,PLC, Alexandria, Virginia, for Amicus American Civil Rights Union. Kenneth A. Klukowski, FAMILY RESEARCH COUNCIL, Washington, D.C., for Amicus Family
5

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Research Council. Scott J. Ward, Timothy R. Obitts, GAMMON & GRANGE, P.C., McLean, Virginia; Catherine W. Short, LIFE LEGAL DEFENSE FOUNDATION, Ojai, California, for Amici Breast Cancer Prevention Institute and Life Legal Defense Foundation. Richard P. Hutchison, LANDMARK LEGAL FOUNDATION, Kansas City, Missouri; Mark R. Levin, Michael J. O'Neill, Matthew C. Forys, LANDMARK LEGAL FOUNDATION, Leesburg, Virginia, for Amicus Landmark Legal Foundation. Stephen B. Presser, Raoul Berger Professor of Legal History, NORTHWESTERN UNIVERSITY SCHOOL OF LAW, Chicago, Illinois; Kathleen Cassidy Goodman, LAW OFFICE OF KATHLEEN CASSIDY GOODMAN, Helotes, Texas; Steven W. Fitschen, THE NATIONAL LEGAL FOUNDATION, Virginia Beach, Virginia; Allen E. Parker, R. Clayton Trotter, THE JUSTICE FOUNDATION, San Antonio, Texas, for Amicus Project Liberty. David Boyle, Long Beach, California, for Amicus David Boyle. Nikolas T. Nikas, Dorinda C. Bordlee, BIOETHICS DEFENSE FUND, Scottsdale, Arizona, for Amici 281 Members of Legatus and Catholic Medical Association. John A. Eidsmoe, FOUNDATION FOR MORAL LAW, Montgomery, Alabama, for Amicus Foundation for Moral Law. M. Casey Mattox, Michael J. Norton, Steven H. Aden, ALLIANCE DEFENDING FREEDOM, Washington, D.C.; Anna R. Franzonello, Mailee Smith, AMERICANS UNITED FOR LIFE, Washington, D.C., for Amici The Virginia Family Foundation, West Virginia Family Policy Council, Maryland Family Alliance, North Carolina Family Policy Council, Palmetto Family Council, Americans United for Life and Alliance Defending Freedom. Rebecca Glenberg, AMERICAN CIVIL LIBERTIES UNION OF VIRGINIA, Richmond, Virginia; Daniel Mach, AMERICAN CIVIL LIBERTIES UNION FOUNDATION, Washington D.C.; Andrew D. Beck, Brigitte Amiri, AMERICAN CIVIL LIBERTIES UNION FOUNDATION, New York, New York, for Amici The American Civil Liberties Union, The American Civil Liberties Union of Virginia, Americans United for Separation of Church and State, The Anti-Defamation League, The Interfaith Alliance Foundation, The National Coalition of American Nuns, The National Council of Jewish Women, The Religious Coalition for Reproductive Choice, The Religious Institute, The Unitarian Universalist Association, and The Unitarian Universalist Women’s Federation. Ian Millhiser, CENTER FOR AMERICAN PROGRESS, Washington, D.C., for Amici American Nurses Association, American Academy of Pediatrics, American Medical Student Association, Center for American Progress D/B/A Doctors for America, National Hispanic Medical Association, and National Physicians Alliance. Professor Walter Dellinger, Washington, D.C.; Professor H. Jefferson Powell, GEORGE WASHINGTON UNIVERSITY LAW SCHOOL, Washington, D.C., for Amici Senate Majority Leader Harry Reid, House Democratic Leader Nancy Pelosi, and Congressional Leaders and Leaders of Committees of Relevant Jurisdiction. Gillian E. Metzger, Trevor
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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 Amici Constitutional Law Professors. Rochelle Bobroff, Simon Lazarus, NATIONAL SENIOR CITIZENS LAW CENTER, Washington, D.C., for Amici The 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. Sheree R. Kanner, Catherine E. Stetson, Dominic F. Perella, Michael D. Kass, Sara A. Kraner, HOGAN LOVELLS US LLP, Washington, D.C.; 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, Washington, D.C., for Amici American Hospital Association, Association of American Medical Colleges, Catholic Health Association of the United States, Federation of American Hospitals, National Association of Children’s Hospitals, and National Association of Public Hospitals and Health Systems. Kristin Houser, Adam Berger, Rebecca J. Roe, William Rutzick, SCHROETER, GOLDMARK & BENDER, Seattle, Washington, for Amicus The Governor of Washington. Richard L. Rosen, ARNOLD & PORTER LLP, Washington, D.C., for Amici Economic Scholars. Marcia D. Greenberger, Emily J. Martin, Judith G. Waxman, Lisa Codispoti, NATIONAL WOMEN’S LAW CENTER, Washington, D.C.; Melissa Hart, UNIVERSITY OF COLORADO LAW SCHOOL, Boulder, Colorado, for Amici The 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,
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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. B. Robert Piller, Jennifer Blasdell, PHYSICIANS FOR REPRODUCTIVE HEALTH, New York, New York; Bruce H. Schneider, Michele L. Pahmer, STROOCK & STROOCK & LAVAN LLP, New York, New York, for Amici Physicians for Reproductive Health, American College of Obstetricians and Gynecologists, American Society for Emergency Contraception, Association of Reproductive Health Professionals, American Society for Reproductive Medicine, Society for Adolescent Health and Medicine, American Medical Women’s Association, National Association of Nurse Practitioners in Women’s Health, Society of Family Planning, James Trussell, Susan F. Wood, Don Downing, and Kathleen Besinque.
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MOTZ, DAVIS, and WYNN, Circuit Judges: Liberty University and certain individuals (collectively,
“Plaintiffs”) brought this action challenging two provisions of the Patient Protection and Affordable Care Act: the “individual mandate,” which requires individuals to purchase a minimum level of health insurance coverage, and the “employer mandate,” which requires certain employers to offer such coverage to their employees and their dependents. The district court dismissed the lawsuit, upholding the constitutionality of both mandates. On appeal we held that the Anti-Injunction Act barred us from considering Plaintiffs’ claims and remanded the case to the district court with instructions to dismiss for lack of jurisdiction. See Liberty Univ., Inc. v. Geithner, 671 F.3d 391 (4th Cir. 2011). The Supreme Court granted Plaintiffs’ petition for certiorari, vacated our judgment, and remanded for further consideration in light of National Federation of Independent Business v. Sebelius, 132 S. Ct. 2566 (2012) (“NFIB”). See Liberty Univ. v. Geithner, 133 S. Ct. 679 (2012). After careful consideration of that case, we affirm the judgment of the district court.
I. On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act (“Affordable Care Act” or
9

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“the Act”) into law. See Pub. L. No. 111-148, 124 Stat. 119

(2010). Liberty and two unaffiliated individuals challenge the

individual mandate, which will become effective in 2014, and the

employer mandate, which will become effective in 2015. Before

resolving the legal questions, we summarize the requirements of

the mandates and the relevant facts and procedural history of

this case.

A.

1.

With limited exceptions, the individual mandate imposes a

“penalty” on any taxpayer who is an “applicable individual” and

fails to obtain “minimum essential coverage.” 26 U.S.C.

§ 5000A(a)-(b). “Minimum essential coverage” includes coverage

under various government-sponsored programs, an employer-

sponsored plan, or a health plan offered in the individual

market within a state, as well as certain other coverage. Id.

§ 5000A(f).

Any individual who does not qualify for a listed exemption

is an “applicable individual.” Id. § 5000A(d)(1). The Act

provides two religion-based exemptions.

The “[r]eligious

conscience exemption” applies to an individual who is “a member

of a recognized religious sect or division thereof,” id.

§ 5000A(d)(2)(A), and “an adherent of established tenets or

teachings of such sect or division by reason of which he is

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conscientiously opposed to acceptance of the benefits of any [life, disability, old-age, retirement, or medical] insurance,” id. § 1402(g)(1). The sect must have been in existence at all times since December 31, 1950, and must “make provision for [its] dependent members.” Id. The “[h]ealth care sharing ministry” exemption applies to a member of a 501(c)(3) organization that “has been in existence at all times since December 31, 1999,” the “members of which share a common set of ethical or religious beliefs[,] . . . share medical expenses among members in accordance with those beliefs,” and “retain membership even after they develop a medical condition.” Id. § 5000A(d)(2)(B).
The penalty for failing to obtain minimum essential coverage is tied to the individual’s income but cannot exceed the cost of “the national average premium for qualified health plans” meeting a certain level of coverage. See id. § 5000A(c). The Secretary of the Treasury has the authority to “assess[] and collect[] [the penalty] in the same manner” as a tax. Id. §§ 5000A(g)(1), 6671(a).
2. If an “applicable large employer” fails to provide affordable health care coverage to its full-time employees and their dependents, the employer mandate may require an “assessable payment” by the employer. Id. § 4980H(a)-(b). The
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Act defines an “applicable large employer” as an employer who employed an average of at least fifty full-time employees during the preceding year. Id. § 4980H(c)(2).
Such an employer must make an assessable payment if at least one of its full-time employees qualifies for “an applicable premium tax credit or cost-sharing reduction” to help pay for health care coverage. Id. § 4980H(a)-(b). An employee is eligible for an “applicable premium tax credit” or “costsharing reduction” if the employer fails to offer the employee “affordable” coverage providing “minimum value” and the employee’s income falls between 100% and 400% of the poverty line. Id. §§ 4980H(c)(3), 36B(a)-(c); Affordable Care Act § 1402(a), (b), (f)(2) (codified at 42 U.S.C. § 18071(a), (b), (f)(2)).1
The amount of the assessable payment that an employer required to make such a payment must pay depends on whether the employer offers “minimum essential coverage” to its full-time employees and their dependents. 26 U.S.C. § 4980H(a)-(b). If the employer fails to offer such coverage, the assessable
1 Coverage is “affordable” if the employee’s required contribution to the plan does not exceed an indexed percentage of his household income. 26 U.S.C. § 36B(c)(2)(C)(i). A plan fails to provide “minimum value” if the plan’s share of the employee’s health costs is less than 60% of total costs. Id. § 36B(c)(2)(C)(ii).
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payment is calculated by multiplying $2000 by the number of

full-time employees (less thirty), prorated over the number of

months the employer is liable. Id. § 4980H(a), (c)(1),

(c)(2)(D)(i). If the employer does offer such coverage, the

assessable payment is calculated by multiplying $3000 by the

number of employees receiving an applicable premium tax credit

or cost-sharing reduction, prorated on a monthly basis. Id.

§ 4980H(b)(1). The amount of the payment under § 4980H(b)

cannot exceed the amount the employer would owe if liable under

§ 4980H(a). Id. § 4980H(b)(2). As with the individual mandate,

the Secretary of the Treasury has the authority to assess and

collect the exaction in the same manner as a tax. Id.

§§ 4980H(d)(1), 6671(a).

“Minimum essential coverage” includes coverage under an

“eligible employer-sponsored plan,” other than coverage of only

certain excepted benefits (like limited scope dental or vision

benefits), which does not qualify.

Id. §§ 4980H(a)(1),

5000A(f)(2)-(3); Public Health Service Act § 2791(c) (codified

at 42 U.S.C. § 300gg-91(c)). An “eligible employer-sponsored

plan” includes a “group health plan,” which is a plan

established or maintained by an employer for the purpose of

providing medical care to employees and their dependents. 26

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

§ 1002(1). Thus, employer-provided health care coverage would

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seem to qualify as minimum essential coverage unless that

coverage applies only to excepted benefits. In effect, then,

§ 4980H(a) imposes an assessable payment on an applicable

employer who fails to offer coverage to its full-time employees

and their dependents, while § 4980H(b) imposes an assessable

payment on an applicable employer who provides coverage that

does not satisfy the mandate’s affordability criteria.

B.

On March 23, 2010, the day the President signed the

Affordable Care Act into law, Plaintiffs filed this action

against the Secretary of the Treasury and other officials

(collectively, “the Secretary”).

Plaintiffs sought a

declaration that the individual and employer mandates are

invalid and an order enjoining their enforcement.

1.

In their second amended complaint, the individual

plaintiffs, Michele G. Waddell and Joanne V. Merrill, assert

that they have “made a personal choice not to purchase health insurance coverage and [do] not want to” do so.2 Further,

Waddell and Merrill allege that the Act will force them to “pay

2 The district court found that three of the individual plaintiffs, David Stein, Kathy Byron, and Jeff Helgeson, lacked standing. Liberty Univ., Inc. v. Geithner, 753 F. Supp. 2d 611, 621-22 (W.D. Va. 2010). Plaintiffs do not challenge that determination on appeal.
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for health insurance coverage that is not necessary or desirable or face significant penalties.” They also assert that they are Christians “who have sincerely held religious beliefs that abortions, except where necessary to save the life of the pregnant mother, are murder and morally repugnant” and that “they should play no part in such abortions, including no part in facilitating, subsidizing, easing, funding, or supporting such abortions since to do so is evil and morally repugnant complicity.”
Liberty alleges that it employs approximately 3900 fulltime faculty and staff, and that it is self-insured and offers “health savings accounts, private insurance policies and other health care reimbursement options to qualified employees.” Liberty asserts that “depending upon how the federal government defines ‘minimum essential coverage’ and the affordability index,” the University could be found to offer coverage insufficient “to satisfy the federal definition of minimum essential coverage or coverage that is deemed unaffordable . . . and therefore could be subjected to significant penalties” and “substantial financial hardship.” Liberty also alleges that the employer mandate will “increase the cost of care . . . [and] will directly and negatively affect [the University] by increasing the cost of providing health insurance coverage and
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thus directly affect the ability of the University to carry on its mission.”
Finally, Liberty asserts that it “is a Christian educational institution whose employees are Christians who have sincerely held religious beliefs that abortions, except where necessary to save the life of the pregnant mother, are murder and morally repugnant.” It further explains that its religious beliefs bar it from “play[ing] [any] part in abortions, including [any] part in facilitating, subsidizing, easing, funding, or supporting abortions since to do so is evil and morally repugnant complicity.”
2. Before the district court, Plaintiffs asserted that the individual and employer mandates exceeded Congress’s Article I powers and violated the Tenth Amendment, the Establishment and Free Exercise Clauses of the First Amendment, the Religious Freedom Restoration Act, the Fifth Amendment, the right to free speech and free association under the First Amendment, the Article I, Section 9 prohibition against unapportioned capitation or direct taxes, and the Guarantee Clause. The Secretary moved to dismiss the second amended complaint for lack of jurisdiction, arguing that Plaintiffs lacked standing and that the Anti-Injunction Act barred the suit. Alternatively, the Secretary moved to dismiss all counts for failure to state a
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claim upon which relief could be granted. The district court

concluded that it possessed jurisdiction but granted the

Secretary’s motion to dismiss for failure to state a claim. See

Liberty Univ., Inc. v. Geithner, 753 F. Supp. 2d 611 (W.D. Va.

2010).

Plaintiffs appealed only as to the Article I,

Establishment Clause, Free Exercise Clause, Religious Freedom

Restoration Act, and Fifth Amendment claims.

When we considered the case on appeal, we did not reach the

merits of those claims because we concluded that the Anti-

Injunction Act deprived us of jurisdiction. See Liberty Univ.,

671 F.3d 391. After initially denying certiorari, Liberty Univ.

v. Geithner, 133 S. Ct. 60 (2012), on reconsideration the

Supreme Court granted certiorari, vacated our judgment, and

directed us to give further consideration to the case in light

of NFIB, see Liberty Univ., 133 S. Ct. 679. In NFIB, the Court

held that the Anti-Injunction Act did not bar a challenge to the

individual mandate and upheld that mandate as a lawful exercise

of Congress’s taxing power. 132 S. Ct. at 2584, 2600. Five

members of the Court, however, concluded that the individual

mandate exceeds Congress’s power under the Commerce Clause. Id.

at 2593 (Roberts, C.J.); id. at 2644-50 (Scalia, Kennedy,

Thomas, and Alito, JJ., dissenting) (“joint dissent”).

On remand, we must decide whether the Anti-Injunction Act

bars this pre-enforcement challenge to the employer mandate, and

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whether Plaintiffs have standing to challenge the mandates. If neither jurisdictional hurdle prevents our consideration of the merits of the case, we must determine whether Congress acted within the scope of its constitutionally delegated powers when it enacted the employer mandate. Finally, if we find that the mandates are a valid exercise of Congress’s Article I powers, we must address Plaintiffs’ religion-based arguments.3 Our review is de novo. E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011) (reviewing de novo district court’s grant of motion to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6)); Estate of Michael ex rel. Michael v. Lullo, 173 F.3d 503, 506 (4th Cir. 1999) (reviewing de novo district court’s decision whether to dismiss for lack of jurisdiction).
II. The Anti-Injunction Act (“AIA”) provides that “no suit for the purpose of restraining the assessment or collection of any
3 The plaintiffs raise on appeal new arguments that the Affordable Care Act violates the Origination Clause and impermissibly conflicts with various state laws. Plaintiffs had the opportunity to raise these arguments in the district court and in the original briefing in this case but did not do so; thus the arguments are waived. See Wash. Metro. Area Transit Auth. v. Precision Small Engines, 227 F.3d 224, 227-28 (4th Cir. 2000).
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tax shall be maintained in any court by any person.” 26 U.S.C. § 7421(a). Where it applies, the AIA thus deprives courts of jurisdiction to entertain pre-enforcement suits seeking to enjoin the collection of federal taxes. See Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 5 (1962).4
Liberty’s challenge to the employer mandate is a preenforcement suit to enjoin the collection of an exaction that is codified in the Internal Revenue Code, and which the Secretary of the Treasury is empowered to collect in the same manner as a tax. In NFIB, however, the Supreme Court made clear that the AIA does not apply to every exaction that functions as a tax or even to every exaction that passes muster as a tax for constitutional purposes. Rather, the AIA applies only where Congress intends it to. See NFIB, 132 S. Ct. at 2583 (noting that, although “Congress cannot change whether an exaction is a tax . . . for constitutional purposes,” the AIA and the Affordable Care Act “are creatures of Congress’s own creation” and “[h]ow they relate to each other is up to Congress”).
4 We note that Plaintiffs request declaratory as well as injunctive relief. The Declaratory Judgment Act authorizes federal courts to issue declaratory judgments, except “with respect to Federal taxes.” 28 U.S.C. § 2201(a). Because the Declaratory Judgment Act’s tax exception is coextensive with the AIA, the following analysis also applies to Plaintiffs’ request for declaratory relief. See Sigmon Coal Co. v. Apfel, 226 F.3d 291, 299 (4th Cir. 2000).
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When concluding that Congress did not intend to bar pre-

enforcement challenges to the individual mandate, the Court in

NFIB found it most significant that Congress chose to describe

the shared responsibility payment as a “penalty” rather than a

“tax.” See id. (noting that “[t]here is no immediate reason to

think that a statute applying to ‘any tax’ would apply to a

‘penalty’”). Thus, we begin our AIA inquiry with particular

attention to how Congress characterized the exaction set forth

in the employer mandate.

In maintaining that the AIA bars this challenge to the

employer mandate, the Secretary relies heavily on the fact that

the Act twice refers to the employer mandate exaction as a

“tax.” See 26 U.S.C. § 4980H(b)(2), (c)(7). In doing so, the

Secretary virtually ignores the fact that the Act does not

consistently characterize the exaction as a tax. Rather, the

Act initially identifies the employer mandate exaction as an

“assessable payment.” See id. § 4980H(a). The Act then

proceeds to characterize the exaction as an “assessable payment”

six more times. See id. § 4980H(b)(1), (c)(2)(D)(i)(I), (d)(1),

(d)(2), (d)(3). Additionally, the Act once refers to the

exaction as an “assessable penalt[y].”

See id.

§ 4980H(c)(2)(D).

Further, on one of the two occasions in which the Act

refers to the employer mandate exaction as a “tax,” it does so

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in a tax-specific context, where the use of another word would create confusion. Section 4980H(c)(7) provides: “For denial of deduction for the tax imposed by this section, see section 275(a)(6).” Section 275(a) states that “[n]o deduction shall be allowed for the following taxes” and then lists various taxes, including “[t]axes imposed by chapter[] . . . 43.” The employer mandate is codified in chapter 43 of the Code. Thus, the Act presumably refers to the employer mandate exaction as a “tax” when cross-referencing § 275(a)(6) to make clear that, for purposes of determining deductibility, the exaction is a tax imposed by chapter 43.
There may be no equally obvious explanation for the other instance in which the Act characterizes the employer mandate exaction as a “tax.” See 26 U.S.C. § 4980H(b)(2) (providing that the “aggregate amount of tax” assessed for offering coverage that is unaffordable cannot exceed the amount the employer would owe under section 4980H(a) for failing to offer minimum essential coverage). But we simply cannot place much significance on a single unexplained use of that term. Because Congress initially and primarily refers to the exaction as an “assessable payment” and not a “tax,” the statutory text suggests that Congress did not intend the exaction to be treated as a tax for purposes of the AIA.
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Furthermore, Congress did not otherwise indicate that the employer mandate exaction qualifies as a tax for AIA purposes, though of course it could have done so. As the Supreme Court pointed out in NFIB, 26 U.S.C. § 6671(a) provides that the “penalties and liabilities” found in subchapter 68B of the Internal Revenue Code are “treated as taxes” for purposes of the AIA. See NFIB, 132 S. Ct. at 2583. The employer mandate, like the individual mandate, is not included in subchapter 68B, and no other provision indicates that we are to treat its “assessable payment” as a tax. See id. (making the same point with regard to the individual mandate).
Finally, we note that to adopt the Secretary’s position would lead to an anomalous result. The Supreme Court has expressly held that a person subject to the individual mandate can bring a pre-enforcement suit challenging that provision. But, under the Secretary’s theory, an employer subject to the employer mandate could bring only a post-enforcement suit challenging that provision. It seems highly unlikely that Congress meant to signal -- with two isolated references to the term “tax” –- that the mandates should be treated differently for purposes of the AIA’s applicability. Tellingly, the Government has pointed to no rationale supporting such differential treatment.
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For these reasons, we hold that the employer mandate exaction, like the individual mandate exaction, does not constitute a tax for purposes of the AIA. Therefore, the AIA does not bar this suit.
III. The Secretary argues that another jurisdictional hurdle –standing -- prevents our consideration of the merits of this case. To establish standing at the motion to dismiss stage, a plaintiff must plausibly allege that: “(1) it has suffered an injury in fact that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180–81 (2000) (internal quotation marks omitted); see Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) (at motion to dismiss stage, plaintiff must allege sufficient facts to render claim plausible). The Secretary contends that all plaintiffs lack standing because they allege no actual or imminent injury. We address first Liberty’s standing and then that of the individual plaintiffs.
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A. Liberty has more than fifty full-time employees, and the Secretary does not contest that it is an “applicable large employer” subject to the employer mandate. Nevertheless, the Secretary argues that Liberty has failed to establish standing because it is speculative whether Liberty will be subject to an assessable payment under 26 U.S.C. § 4980H. Specifically, the Secretary contends that the health care coverage Liberty acknowledges it already provides to its employees qualifies as minimum essential coverage that may also satisfy the employer mandate’s affordability criteria. The Secretary’s argument may well be correct -– as far as it goes.5 But Liberty need not show that it will be subject to an assessable payment to establish standing if it otherwise

5 Liberty alleges that it “could be determined to not offer

coverage sufficient to satisfy the federal definition of minimum

essential coverage or coverage that is deemed unaffordable . . .

and therefore could be subjected to significant penalties.” But

“minimum essential coverage” seems to include coverage under any

employer-sponsored plan, unless that plan covers only excepted

benefits. See 26 U.S.C. §§ 4980H(a), 5000A(f)(2)-(3). Liberty

does not suggest its current plan covers only excepted benefits.

Thus, by definition that plan appears to meet the “minimum

essential coverage” requirement. Further, while it is possible

that Liberty’s current plan fails to provide affordable

coverage, subjecting Liberty to an assessable payment under

§ 4980H(b), Liberty alleges only that its coverage “could” be

deemed unaffordable.

The Supreme Court has held that

“threatened injury must be certainly impending to constitute

injury in fact” and “[a]llegations of possible future injury are

not sufficient.” Clapper v. Amnesty Int’l USA, 133 S. Ct. 1138,

1147 (2013) (internal quotation marks omitted).

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alleges facts that establish standing. In this case, in addition to alleging that it “could” be subject to an assessable payment, Liberty alleges that the employer mandate and its “attendant burdensome regulations will . . . increase the cost of care” and “directly and negatively affect [it] by increasing the cost of providing health insurance coverage.”
“[G]eneral factual allegations of injury resulting from the defendant’s conduct may suffice, for on a motion to dismiss we presum[e] that general allegations embrace those specific facts that are necessary to support the claim.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992) (internal quotation marks omitted); see Bennett v. Spear, 520 U.S. 154, 167-68 (1997). Thus, to establish standing, Liberty need not prove that the employer mandate will increase its costs of providing health coverage; it need only plausibly allege that it will.
Liberty’s allegation to this effect is plausible. Even if the coverage Liberty currently provides ultimately proves sufficient, it may well incur additional costs because of the administrative burden of assuring compliance with the employer mandate, or due to an increase in the cost of care. See generally Ass’n of Private Sector Colls. & Univs. v. Duncan, 681 F.3d 427, 457-58 (D.C. Cir. 2012) (increased compliance costs constitute injury in fact sufficient to confer standing); N.Y. Civil Liberties Union v. Grandeau, 528 F.3d 122, 131 (2d Cir.
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2008) (administrative burden constitutes injury in fact for standing purposes); Frank v. United States, 78 F.3d 815, 823-24 (2d Cir. 1996) (same), vacated on other grounds, 521 U.S. 1114 (1997).
Moreover, Liberty’s injury is imminent even though the employer mandate will not go into effect until January 1, 2015, as Liberty must take measures to ensure compliance in advance of that date. See Virginia v. Am. Booksellers Ass’n, 484 U.S. 383, 392-93 (1988) (holding booksellers had standing though challenged law had not yet been enforced because they “w[ould] have to take significant and costly compliance measures” beforehand “if their interpretation of the statute [wa]s correct”). Thus, Liberty has standing to challenge the employer mandate.
B. The individual plaintiffs, after alleging that they do not have or want to purchase health insurance coverage, assert that the individual mandate “will create a financial hardship in that [they] will have to either pay for health insurance coverage . . . or face significant penalties.” The Secretary maintains that the individual plaintiffs lack standing because they may be exempt from the individual mandate penalty, either because their income is below the mandate’s threshold level or because they qualify for a proposed hardship
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exemption. See 26 U.S.C. § 5000A(e)(2) (exempting individuals with income below filing threshold); 78 Fed. Reg. 7348, 7354-55 (Feb. 1, 2013) (describing proposed hardship exemptions). But, again, at this early stage, plaintiffs need only provide “general factual allegations of injury.” Lujan, 504 U.S. at 561. And, we must “accept[] all well-pleaded allegations in the plaintiff’s complaint as true.” De’Lonta v. Angelone, 330 F.3d 630, 633 (4th Cir. 2003).
The individual plaintiffs allege the individual mandate will obligate them to buy insurance or pay a penalty, and their alleged lack of insurance provides sufficient support for that allegation at this stage of the proceedings. Further, the individual plaintiffs’ injury is imminent because they must make preparations to obtain insurance before the mandate goes into effect. See Am. Booksellers Ass’n, 484 U.S. at 392-93.
Thus, we conclude that the individual plaintiffs have standing to challenge the individual mandate. We therefore proceed to the merits.
IV. A. Liberty argues that the employer mandate exceeds Congress’s commerce power because Congress does not have “the power to order employers to provide government-defined health insurance 27

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to their employees.” Post-Remand Opening Br. 18. This is so,

Liberty contends, because the employer mandate “compel[s]

employers to engage in particular conduct or purchase an

unwanted product,” contrary to the dictates of NFIB. Post-

Remand Reply Br. 16. In Liberty’s view, “[a]llowing Congress to

mandate that employers provide health insurance . . . goes far

beyond regulations of wages and hours upheld under the Commerce

Clause.” Post-Remand Opening Br. 19.

The Secretary counters that the employer mandate is a valid

exercise of Congress’s authority under the Commerce Clause

because “[h]ealth coverage benefits form part of an employee’s

compensation package, and ‘it is well-established in Supreme

Court precedent that Congress has the power to regulate the

terms and conditions of employment.’” Post-Remand Resp. Br. 25.

(quoting Liberty Univ., 753 F. Supp. 2d at 635). More

specifically, the Secretary argues that

[i]f employees put their insurance at risk when they

change jobs, they may be “reluctant to switch jobs in

the first place (a phenomenon known as ‘job lock’).”

[Congressional Budget Office, Key Issues in Analyzing

Major Health Insurance Proposals 8 (Dec. 2008)

[hereinafter “CBO, Key Issues”]].

As Congress

understood, the prospect of losing employee insurance

benefits may obstruct interstate mobility, which the

Constitution generally, and the commerce power

specifically, were designed to prevent.

Original Resp. Br. 46–47. The Secretary further contends that

Congress found that “employers who do not offer health insurance to their workers gain an unfair economic

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advantage relative to those employers who do provide coverage, and millions of hard-working Americans and their families are left without health insurance.” H.R. Rep. No. 111-443(II), at 985 (2010). Congress noted that this state of affairs results in “a vicious cycle because these 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 provide coverage. Id. at 985–86. Id. at 53. Thus, the Secretary concludes, “[t]he provision of health coverage substantially affects commerce just as other forms of compensation and terms of employment do, and the businesses run by large employers likewise substantially affect commerce.” Post-Remand Resp. Br. 27–28. We think the Secretary has the better argument.
B. “[T]he determinative test of the exercise of power by the Congress under the Commerce Clause is simply whether the activity sought to be regulated is commerce which concerns more States than one and has a real and substantial relation to the national interest.” Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241, 255 (1964) (internal quotation marks omitted). “The power of Congress in this field is broad and sweeping . . . .” Katzenbach v. McClung, 379 U.S. 294, 305 (1964); see also NFIB, 132 S. Ct. at 2585 (Roberts, C.J.) (“[I]t is now well established that Congress has broad authority under the [Commerce] Clause.”). “[T]he power to regulate commerce is
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the power to enact all appropriate legislation for its protection or advancement; to adopt measures to promote its growth and insure its safety; to foster, protect, control, and restrain.” NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 36–37 (1937) (internal citations and quotation marks omitted).
Among Congress’s expansive Commerce Clause powers is the authority to regulate “those activities that substantially affect interstate commerce.” United States v. Morrison, 529 U.S. 598, 609 (2000). So broad is this power that Congress may regulate activity without showing that it has “any specific effect upon interstate commerce,” so long as, “in the aggregate,” the activity “would represent ‘a general practice . . . subject to federal control.’” Citizens Bank v. Alafabco, Inc., 539 U.S. 52, 56-57 (2003) (ellipsis in original) (quoting Mandeville Island Farms, Inc. v. Am. Crystal Sugar Co., 334 U.S. 219, 236 (1948)). Moreover, Congress need not show that the activity “taken in the aggregate, substantially affect[s] interstate commerce in fact,” but only that “a ‘rational basis’ exists for so concluding.” Gonzales v. Raich, 545 U.S. 1, 22 (2005) (emphasis added) (quoting United States v. Lopez, 514 U.S. 549, 557 (1995)).
To be sure, Congress’s authority under the Commerce Clause is not without limits. In NFIB, five justices of the Supreme Court found that the individual mandate exceeded Congress’s
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commerce power. 132 S. Ct. at 2585–93 (Roberts, C.J.); id. at

2644–50 (joint dissent).

Although “[t]here has been

considerable debate about whether the statements [in NFIB] about the Commerce Clause are dicta or binding precedent,”6 these five

justices agreed that the Commerce Clause does not grant Congress

the authority to “compel” or “mandate” an individual to enter

commerce by purchasing a good or service. See NFIB, 132 S. Ct.

at 2587 (Roberts, C.J.) (finding the individual mandate beyond

Congress’s commerce power because it “compels individuals to

become active in commerce by purchasing a product”) (emphasis in

original); id. at 2646–47 (joint dissent) (noting that

“mandating of economic activity” is beyond the scope of the

Commerce Clause). Rather, these justices concluded that the

Commerce Clause permits Congress to regulate only existing

activity.

Chief Justice Roberts’s -- and, to a large degree, the

joint dissenters’ -- analysis focused on the text of the

Commerce Clause, the Court’s cases interpreting that clause, and

6 United States v. Henry, 688 F.3d 637, 641 n.5 (9th Cir. 2012) (citing David Post, Commerce Clause “Holding v. Dictum Mess” Not So Simple, The Volokh Conspiracy (July 3, 2012, 8:17 AM), http://www.volokh.com/2012/07/03/commerce-clause-holding-vdictum-mess-not-so-simple/), cert. denied, 133 S. Ct. 996 (2013); see also United States v. Roszkowski, 700 F.3d 50, 58 n.3 (1st Cir. 2012) (declining to “express [an] opinion as to whether the . . . Commerce Clause discussion was indeed a holding of the Court”).
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the practical effect and operation of the individual mandate. As to the text, Chief Justice Roberts noted that the Commerce Clause “grants Congress the power to ‘regulate Commerce.’” Id. at 2586 (emphasis in original) (citing U.S. Const. art. I, § 8, cl. 3). In the Chief Justice’s view, “[t]he power to regulate commerce presupposes the existence of commercial activity to be regulated.” Id. (emphasis in original). In the same vein, the joint dissenters cited definitions of “regulate” common at the time of the Constitution’s drafting, and concluded that under these definitions “regulate” “can mean to direct the manner of something but not to direct that something come into being.” Id. at 2644.
As to the Court’s prior cases, the Chief Justice noted that “all have one thing in common: They uniformly describe the power as reaching ‘activity.’” Id. at 2587; see also id. (citing Lopez, 514 U.S. at 560; Perez v. United States, 402 U.S. 146, 154 (1971); Wickard v. Filburn, 317 U.S. 111, 125 (1942); NLRB, 301 U.S. at 37). The joint dissenters similarly distinguished the Commerce Clause cases on which the government relied as “involv[ing] commercial activity,” id. at 2648 (emphasis in original), and “not represent[ing] the expansion of the federal power to direct into a broad new field,” id. at 2646.
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Finally, both Chief Justice Roberts and the joint dissenters expressed substantial concern about the practical and operational effects of the individual mandate. Chief Justice Roberts suggested that construing the commerce power to allow Congress to mandate the purchase of health insurance would “permit Congress to regulate individuals precisely because they are doing nothing,” and “would bring countless decisions an individual could potentially make within the scope of federal regulation . . . .” Id. at 2587 (emphasis in original). The joint dissenters expressed a similar concern, stating that
[i]f Congress can reach out and command even those furthest removed from an interstate market to participate in the market, then the Commerce Clause becomes a font of unlimited power, or in Hamilton’s words, “the hideous monster whose devouring jaws . . . spare neither sex nor age, nor high nor low, nor sacred nor profane.” Id. at 2646 (ellipsis in original) (citing The Federalist No. 33, at 202 (Clinton Rossiter ed., 1961)).
C. For the reasons set forth within, we find that the employer mandate is no monster; rather, it is simply another example of Congress’s longstanding authority to regulate employee compensation offered and paid for by employers in interstate commerce. To begin, we note that unlike the individual mandate (as construed by five justices in NFIB), the employer mandate does not seek to create commerce in order to regulate it. In
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contrast to individuals, all employers are, by their very nature, engaged in economic activity. All employers are in the market for labor. And to the extent that the employer mandate compels employers in interstate commerce to do something, it does not compel them to “become active in commerce,” NFIB, 132 S. Ct. at 2587 (Roberts, C.J.) (emphasis in original); it merely “regulate[s] existing commercial activity,” id., i.e., the compensation of employees, see Congressional Budget Office, CBO, Key Issues 5 (observing that “[e]mployers’ contributions [to health insurance coverage] are simply a form of [employee] compensation”). Liberty fails to recognize the distinction between individuals not otherwise engaged in commerce and employers necessarily so engaged.
Further, contrary to Liberty’s assertion, the employer mandate does not require employers to “purchase an unwanted product.” Post-Remand Reply Br. 16. Although some employers may have to increase employee compensation (by offering new or modified health insurance coverage), employers are free to selfinsure, and many do. See 78 Fed. Reg. 7314, 7318 (Feb. 1, 2013) (confirming that a self-insured group health plan is an eligible employer-sponsored plan satisfying the Act’s “minimum essential coverage” requirement); Paul Fronstin, “Self-Insured Health Plans: State Variation and Recent Trends by Firm Size,” Notes (Employee Benefit Research Inst.), Nov. 2012, at 2 (“In 2011,
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68.5 percent of workers in firms with 50 or more employees were in self-insured plans . . . .”).7
Having found that the provision regulates existing economic activity (employee compensation), and therefore stands on quite a different footing from the individual mandate, we further conclude that the employer mandate is a valid exercise of Congress’s authority under the Commerce Clause. It has long been settled that Congress may impose conditions on terms of employment that substantially affect interstate commerce, see United States v. Darby, 312 U.S. 100 (1941) (upholding minimum wage and overtime provisions of the Fair Labor Standards Act); NLRB, 301 U.S. 1 (upholding National Labor Relations Act of 1935, which prohibited unfair labor practices), and regulate activities that have a substantial impact on interstate mobility, see Heart of Atlanta Motel, Inc., 379 U.S. 241 (prohibiting discrimination by hotel operators); Katzenbach, 379 U.S. 294 (prohibiting discrimination by restaurant owners). Here, Congress did both.
First, the employer mandate regulates a term of employment (compensation) that substantially affects interstate commerce.
7 We express no opinion as to whether the limitation on the commerce power announced by five justices in NFIB constitutes a holding of the Court. Rather, we assume without deciding that it does, and conclude that the employer mandate is not restricted by that limitation.
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Health insurance provided as part of employees’ compensation “is the primary source of coverage for the nonelderly,” CBO, Key Issues 4, and “[h]ealth insurance and health care services are a significant part of the national economy,” 42 U.S.C. § 18091(2)(B).
National health spending is projected to increase from [$2.5 trillion], or 17.6 percent of the economy, in 2009 to [$4.7 trillion] in 2019. Private health insurance spending is projected to be [$854 billion] in 2009, and pays for medical supplies, drugs, and equipment that are shipped in interstate commerce. Id. “[E]mployers who do not offer health insurance to their workers gain an unfair economic advantage relative to those employers who do provide coverage,” and perpetuate a “vicious cycle,” H.R. Rep. No. 111-443(II), at 985 (2010): “uninsured workers turn to emergency rooms for health care” they cannot afford, id.; “health care providers pass on the cost [of the uncompensated care] to private insurers,” 42 U.S.C. § 18091(2)(F); and insurers “pass on the cost to families” through premium increases, id., making it more expensive -- and thus, more difficult -- for employers to insure their employees. “The cost of providing uncompensated care to the uninsured was [$43 billion] in 2008,” id., and “[t]he economy loses up to [$207 billion] a year because of the poorer health and shorter lifespan of the uninsured,” id. § 18091(2)(E). Accordingly,
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health insurance provided as part of employee compensation has a substantial impact on interstate commerce.
Second, the employer mandate regulates an activity (employee compensation) that substantially affects workers’ interstate mobility. The availability and breadth of employersponsored health coverage varies, see, e.g., CBO, Key Issues 44 (observing that “large employers are more likely than small employers to offer health insurance”), and “[t]he availability of health insurance options can affect people’s incentives to enter the labor force, work fewer or more hours, retire, change jobs, or even prefer certain types of firms or jobs,” id. at 162. “[E]mployees and their dependents typically have to change plans when changing jobs and could become uninsured if their new employer does not offer coverage,” id. at 8; “[e]mployment-based insurance offers a number of advantages,” including “lower administrative costs” and “favorable tax treatment” that “may be difficult or impossible for workers to obtain by purchasing insurance individually,” id. at 164. And “[p]eople who have medical problems (or have family members with medical problems) can have an incentive to stay in a job that provides health insurance benefits in order to cover those preexisting conditions, even if more productive opportunities exist elsewhere.” Id. at 164–65. Thus, health insurance provided as
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part of employee compensation substantially affects interstate mobility, and thereby interstate commerce.
Our recognition of Congress’s authority to enact the employer mandate does not “open a new and potentially vast domain to congressional authority,” NFIB, 132 S. Ct. at 2587 (Roberts, C.J.), or “enable the Federal Government to regulate all private conduct,” id. at 2643 (joint dissent). Requiring employers to offer their employees a certain level of compensation through health insurance coverage is akin to requiring employers to pay their workers a minimum wage, Darby, 312 U.S. at 115, or “time and a half for overtime,” Overnight Motor Transp. Co. v. Missel, 316 U.S. 572, 577 (1942). Thus, our conclusion fits squarely within the existing core of the Supreme Court’s jurisprudence, including the admonition of five justices in NFIB that Congress may not, through its commerce power, seek to create commerce in order to regulate it.
D. For all these reasons, we conclude that Congress had a rational basis for finding that employers’ provision of health insurance coverage substantially affects interstate commerce, see Raich, 545 U.S. at 22, and Congress’s regulation of this activity does not run afoul of NFIB’s teachings. Accordingly, we hold that the employer mandate is a valid exercise of Congress’s authority under the Commerce Clause.
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V. A. Plaintiffs contend that “[t]he Taxing and Spending or General Welfare Clause does not vest Congress with the authority to enact the [individual and employer] mandates.” Original Opening Br. 40. But in NFIB, the Supreme Court held that the individual mandate exaction constituted a tax and that Congress acted well within the scope of its constitutionally granted authority in imposing it. 132 S. Ct. at 2594-2600. Clearly, then, Plaintiffs’ contention fails with regard to the individual mandate. And although NFIB did not present the Supreme Court with an opportunity to address the constitutionality of the employer mandate, we are convinced that the NFIB taxing power analysis inevitably leads to the conclusion that the employer mandate exaction, too, is a constitutional tax. B. The Constitution unambiguously grants Congress the power to “lay and collect Taxes . . . .” U.S. Const. art. I, § 8, cl. 1. The Supreme Court has defined a tax as a “pecuniary burden laid upon individuals or property for the purpose of supporting the government,” United States v. New York, 315 U.S. 510, 515 (1942), and described Congress’s taxing power as “very extensive,” License Tax Cases, 72 U.S. 462, 471 (1866).
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In NFIB, the Supreme Court gleaned from precedent a
“functional approach” for determining whether an exaction,
whatever Congress calls it, constitutes a tax. 132 S. Ct. at
2595. Under that approach, the “essential feature” of any tax
is that “it produces at least some revenue for the Government.”
Id. at 2594. Additional characteristics indicative of a tax
include: the absence of a scienter requirement, collection by
the Internal Revenue Service through the normal means of
taxation, and the absence of negative legal consequences beyond
requiring payment to the IRS. Id. at 2595-97. The Supreme
Court illustrated its functional approach with a hypothetical:
Suppose Congress enacted a statute providing that every taxpayer who owns a house without energy efficient windows must pay $50 to the IRS. The amount due is adjusted based on factors such as taxable income and joint filing status, and is paid along with the taxpayer’s income tax return. Those whose income is below the filing threshold need not pay. The required payment is not called a “tax,” a “penalty,” or anything else. No one would doubt that this law imposed a tax, and was within Congress’s power to tax. . . . Interpreting such a law to be a tax would hardly “[i]mpos[e] a tax through judicial legislation.” Rather, it would give practical effect to the Legislature’s enactment.
Id. at 2597-98 (citation omitted).
By contrast, the Supreme Court dismissed as largely
irrelevant the “regulatory motive or effect of revenue-raising
measures.” Id. at 2599. The Court recognized that some of its
older cases suggested a dichotomy between regulatory and
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revenue-raising taxes: “A few of our cases policed the[] limits [of Congress’s ability to use its taxing power to influence conduct] aggressively . . . .” Id. (citing United States v. Butler, 297 U.S. 1 (1936); Bailey v. Drexel Furniture Co., 259 U.S. 20 (1922)). But the Court rejected the revenue-versusregulatory distinction as defunct. Id. Accordingly, that Congress “plainly designed” the Affordable Care Act “to expand health insurance coverage” did not impact the Court’s taxing power analysis in NFIB. Id. at 2596. The Court did, however, attempt to distinguish taxes from penalties, explaining that “if the concept of penalty means anything, it means punishment for an unlawful act or omission.” Id. (quotation marks omitted).
C. First, we examine the factors the Supreme Court considered in upholding the individual mandate exaction as a constitutional tax. In applying its “functional approach” to that exaction, the Supreme Court concluded that it “looks like a tax in many respects.” Id. at 2594. First and foremost, it will produce “at least some revenue for the Government” -- namely “about $4 billion per year by 2017.” Id. Further attributes that convinced the Supreme Court that the individual mandate exaction constitutes a tax include: its “pa[yment] into the Treasury by taxpayers when they file their tax returns”; the fact that “its amount is determined by such familiar factors as taxable income,
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number of dependents, and joint filing status”; and its inclusion “in the Internal Revenue Code and enforce[ment] by the IRS, which . . . must assess and collect it in the same manner as taxes.” Id. (citations, quotation marks, and alterations omitted). The Supreme Court also distinguished the individual mandate tax from an exaction the Court invalidated as an impermissible penalty in Bailey v. Drexel Furniture Co. The Court noted that the individual mandate, unlike the provision at issue in Drexel, contains no scienter requirement and does not constitute “prohibitory financial punishment.” Id. at 2596 (internal quotation marks omitted).
Underscoring that the exaction was no penalty, the Supreme Court stated that “[n]either the [Affordable Care] Act nor any other law attaches negative legal consequences to not buying health insurance, beyond requiring a payment to the IRS . . . . [I]f someone chooses to pay rather than obtain health insurance, they have fully complied with the law.” Id. at 2597. The Court noted that an exaction may become so punitive that the taxing power no longer authorizes it. Id. at 2599-2600. But because the individual mandate exaction easily passed taxing power muster, the Court refrained from delving deeper into that issue. Id. at 2600 (“[T]he shared responsibility payment’s practical characteristics pass muster as a tax under our narrowest interpretations of the taxing power. Because the tax at hand is
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within even those strict limits, we need not here decide the precise point at which an exaction becomes so punitive that the taxing power does not authorize it.” (internal citation omitted)).
Finally, the Supreme Court swiftly dispelled any notion that the individual mandate constituted a direct tax subject to the constitutional apportionment requirement. See id. at 259899; see also U.S. Const. art. I, § 9, cl. 4 (“No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census . . . .”). Having recognized only two types of direct taxes -- those on individuals as individuals and those on property -- the Supreme Court held that the individual mandate payment fits into neither category. NFIB, 132 S. Ct. at 259899.
At the end of the day, the Supreme Court concluded that when an exaction “need not be read to do more than impose a tax[,]” “[t]hat is sufficient to sustain it.” Id. at 2598. The Court held that because the Affordable Care Act’s individual mandate could be read simply as imposing a tax, Congress had the power to enact it. The Supreme Court thus squarely rejected Plaintiffs’ contention that the individual mandate exaction is not a constitutional tax.
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D.

Turning now to the employer mandate, it is clear from the

provision’s face that it possesses the “essential feature” of

any tax:

“it produces at least some revenue for the

Government.” NFIB, 132 S. Ct. at 2594; see 26 U.S.C. § 4980H.

Indeed, the Congressional Budget Office estimated that the

employer mandate exaction will generate $11 billion annually by

2019. See Liberty Univ., 671 F.3d at 419 (Wynn, J., concurring)

(citing 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).

Looking beyond the “essential feature” to other

“functional” characteristics, the exaction the Affordable Care

Act imposes on large employers “looks like a tax in many

respects.” Cf. NFIB, 132 S. Ct. at 2594. The exaction is paid

into the Treasury, “found in the Internal Revenue Code[,] and

enforced by the IRS,” which “must assess and collect it in the

same manner as” a tax. Id.; see also 26 U.S.C. §§ 4980H(d)(1),

6671(a). Further, the employer mandate lacks a scienter

requirement, does not punish unlawful conduct, and leaves large

employers with a choice for complying with the law -- provide

adequate, affordable health coverage to employees or pay a tax.

26 U.S.C. § 4980H(a)-(b). And finally, because the exaction

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taxes neither individuals as such nor property, it is not a

direct tax subject to the apportionment requirement. Cf. NFIB,

132 S. Ct. at 2598-99.

Relying exclusively on Drexel, Liberty contends that the

employer mandate exaction nevertheless “cross[es] the line” from

a reasonable payment to a “potentially destructive”

unconstitutional penalty.

Post-Remand Opening Br. 24-25.

Fatally for Liberty’s argument, Drexel is easily distinguishable

from the case at hand.

In Drexel, the Supreme Court invalidated a “so-called tax

on employing child laborers” as an impermissible penalty. See

NFIB, 132 S. Ct. at 2595 (citing Drexel, 259 U.S. 20). The

Supreme Court did so ostensibly because the penalty: (1)

carried a scienter requirement “typical of punitive statutes,

because Congress often wishes to punish only those who

intentionally break the law”; (2) imposed an “exceedingly heavy”

financial burden -- 10 percent of an offender’s net income --

even if the offender employed only one child laborer for only

one day of the year; and (3) was enforced at least in part by

the Department of Labor, an agency responsible not for

collecting revenue but rather for punishing labor law

violations. NFIB, 132 S. Ct. at 2595 (citing Drexel, 259 U.S.

at 36-37). In stark contrast to the penalty the Court struck

down in Drexel, the employer mandate exaction is devoid of any

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scienter requirement and does not punish unlawful behavior. Further, the exaction is collected by the Secretary of the Treasury in the same manner as a tax. 26 U.S.C. §§ 4980H(d)(1), 6671(a).
Moreover, the amount of the employer mandate exaction is proportionate rather than punitive. If Liberty offers adequate health coverage, but that coverage fails to satisfy the employer mandate’s affordability and minimum value requirements, Liberty will be taxed $3000 times the number of employees who receive government assistance, prorated on a monthly basis and subject to a cap. Id. § 4980H(b)(1)-(2); see supra at 13. And if Liberty fails to offer adequate health coverage to its full-time employees, it will be taxed $2000 times thirty less than its number of full-time employees -- presumably all of whom are being deprived of coverage -- prorated over the number of months for which Liberty is liable. 26 U.S.C. § 4980H(a), (c)(1), (c)(2)(D)(i); see supra at 12-13.
We therefore reject Liberty’s argument that the employer mandate imposes a penalty rather than a tax.
E. In conclusion, the Supreme Court has already upheld the individual mandate exaction as a constitutional tax. NFIB, 132 S. Ct. at 2594-2600. Similarly, the employer mandate exaction “need not be read to do more than impose a tax.” Id. at 2598.
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Accordingly, Congress had the power to enact it, and we must uphold it. For these reasons, as well as those provided supra in Part IV, we reject Plaintiffs’ contention that Congress lacked authority under Article I of the Constitution to enact the employer mandate.
VI. Finally, Plaintiffs challenge the Act on various religionbased grounds. In their second amended complaint, Plaintiffs allege that the Act violates their rights under the First and Fifth Amendments and the Religious Freedom Restoration Act (“RFRA”), 42 U.S.C. § 2000bb-1. For the first time on this appeal, they also seek to challenge on religious grounds certain regulations implementing the Act. We initially consider the claims alleged in the second amended complaint and then those raised for the first time on this appeal.
A. 1. Plaintiffs maintain that both the employer mandate and the individual mandate violate their free exercise rights under the First Amendment and RFRA. Specifically, they allege that the mandates unlawfully force them to violate their religious belief
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that “they should play . . . no part in facilitating, subsidizing, easing, funding, or supporting . . . abortions.”8
The Free Exercise Clause provides that “Congress shall make no law . . . prohibiting the free exercise” of religion. U.S. Const. amend. I. However, the Clause does not compel Congress to exempt religious practices from a “valid and neutral law of general applicability.” Emp’t Div., Dep’t of Human Res. v. Smith, 494 U.S. 872, 879 (1990) (internal quotation marks omitted). This is so even if such a law “has the incidental effect of burdening a particular religious practice.” Church of the Lukumi Babalu Aye, Inc. v. City of Hialeah, 508 U.S. 520, 531 (1993).
A neutral law of general applicability thus does not violate the Free Exercise Clause. The Act is just such a law. It has no object that “infringe[s] upon or restrict[s] practices because of their religious motivation,” id. at 533 (emphasis added), and imposes no “burden[] only on conduct motivated by religious belief,” id. at 543 (emphasis added). Relying on
8 Plaintiffs have also attempted to characterize their complaint as raising other religious liberty claims, for example, that “[t]hey are Christians who believe in living out their sincerely held religious beliefs in everyday life, including in the lifestyle choices they make, of which managing their health care privately is but one example.” See, e.g., Original Opening Br. 10. But, as the district court recognized, “[a] fair reading of the complaint does not support this novel characterization, and the parties have not briefed these issues.” Liberty Univ., 753 F. Supp. 2d at 641 n.17.
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Lukumi, Plaintiffs contend that the Act somehow effects a

“religious gerrymander[].” Original Opening Br. 45; see Lukumi,

508 U.S. at 534-35 (internal quotation marks omitted). But it

does no such thing. Unlike the ordinances struck down in

Lukumi, the Act does not set apart any particular religious

group. See 508 U.S. at 535-38. The Act therefore does not

violate the Free Exercise Clause.

Plaintiffs’ RFRA claim fares no better. RFRA provides

that, “even if the burden results from a rule of general

applicability,” the “Government may substantially burden a

person’s exercise of religion only if it 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(a)-(b).

Thus, by its own terms, RFRA directs application of strict

scrutiny only if the Government “substantially burden[s]”

religious practice. Id.; see also Goodall by Goodall v.

Stafford Cnty. Sch. Bd., 60 F.3d 168, 171 (4th Cir. 1995) (“[I]f

the [plaintiffs] cannot show that their exercise of religion is

substantially burdened by the [government’s] policy, the

[government] is not required to come forth with proof of its

interest.”).

A substantial burden, in turn, requires

“substantial pressure on an adherent to modify his behavior and

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to violate his beliefs.” Thomas v. Review Bd. of Ind. Emp’t Sec. Div., 450 U.S. 707, 718 (1981).
Plaintiffs present no plausible claim that the Act substantially burdens their free exercise of religion, by forcing them to facilitate or support abortion or otherwise. The Act specifically provides individuals the option to purchase a plan that covers no abortion services except those for cases of rape or incest, or where the life of the mother would be endangered. See 42 U.S.C. § 18054(a)(6) (requiring that at least one plan on each exchange exclude non-excepted abortions from coverage). The Act also does nothing to prevent employers from providing such a plan. Furthermore, the Act allows an individual to obtain, and an employer to offer, a plan that covers no abortion services at all, not even excepted services. See 42 U.S.C. § 18023(b)(1)(A)(i).9
Given that the mandates themselves impose no substantial burden, the option of paying a tax to avoid the mandates’ requirements certainly imposes no substantial burden. On the
9 Plaintiffs also argue that a requirement “that individuals and employers pay at least one dollar per person per month directly into an account to cover elective abortions” unlawfully burdens their religious exercise. Post-Remand Opening Br. 37 (citing 42 U.S.C. § 18023(b)(2)). But this provision applies only if individuals choose to enroll in a plan through a health insurance exchange that elects to cover abortions, for which federal funding may not be used. Post-Remand Resp. Br. 34-35 n.13; see 42 U.S.C. § 18023(b)(1)(B)(i), (b)(2)(A)-(B).
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contrary, this option underscores the “lawful choice” Plaintiffs have to avoid any coverage they might consider objectionable. See NFIB, 132 S. Ct. at 2600; see also Goodall, 60 F.3d at 171 (“It is well established that there is no substantial burden placed on an individual’s free exercise of religion where a law or policy merely operates so as to make the practice of the individual’s religious beliefs more expensive.” (internal quotation marks omitted)).
To the extent Plaintiffs contend that the tax payment itself is a substantial burden, as the district court explained, the Act “contains strict safeguards at multiple levels to prevent federal funds from being used to pay for [non-excepted] abortion services.” Liberty Univ., 753 F. Supp. 2d at 642-43; see 42 U.S.C. § 18023(b)(2)(A) (prohibiting use of the Act’s cost-sharing reduction or tax credits for abortion coverage); id. § 18023(b)(2)(B)-(C) (requiring separate premiums for coverage of abortion services); Exec. Order No. 13,535, 75 Fed. Reg. 15,599 (Mar. 29, 2010) (implementing abortion restrictions). We note also that “[t]axpayers generally are not permitted to avoid payment of a tax when their objections concern the manner in which government revenues are expended.” Olsen v. Comm’r, 709 F.2d 278, 282 (4th Cir. 1983) (collecting cases); see also Doremus v. Bd. of Educ., 342 U.S. 429, 433 (1952) (“[T]he interests of a taxpayer in the moneys of the
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federal treasury are too indeterminable, remote, uncertain and

indirect to furnish a basis for an appeal to the preventive

powers of the Court over their manner of expenditure.”).

Accordingly, Plaintiffs’ free exercise claims –- both under

the Constitution and under RFRA -- fail.

2.

Plaintiffs also allege that the two religious exemptions in

the Act violate the Establishment Clause and their Fifth

Amendment equal protection rights.

Of course, the mere

existence of religious exemptions in a statute poses no

constitutional problem. Rather, the Constitution freely permits

exemptions that will allow “religious exercise to exist without

sponsorship and without interference.” Walz v. Tax Comm’n, 397

U.S. 664, 669 (1970). Permissible benevolence morphs into

impermissible sponsorship only when the “proposed accommodation

singles out a particular religious sect for special treatment.”

Bd. of Educ. of Kiryas Joel Vill. Sch. Dist. v. Grumet, 512 U.S.

687, 706-07 (1994). Thus, a court applies strict scrutiny only

to statutes that “make[] explicit and deliberate distinctions

between different religious organizations.” Larson v. Valente,

456 U.S. 228, 246-47 & n.23 (1982).

A statute without such distinctions, even one that has a

disparate impact on different denominations, need only satisfy

the less rigorous test set forth in Lemon v. Kurtzman, 403 U.S.

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602 (1971). See Hernandez v. Comm’r, 490 U.S. 680, 695 (1989);

Koenick v. Felton, 190 F.3d 259, 264-65 (4th Cir. 1999)

(“[U]ntil the Supreme Court overrules Lemon and provides an

alternative analytical framework, this Court must rely on Lemon

in evaluating the constitutionality of legislation under the

Establishment Clause.” (internal quotation marks omitted)); cf.

Cutter v. Wilkinson, 544 U.S. 709, 717 n.6, 720 (2005)

(rejecting an Establishment Clause challenge to a statute making

no explicit religious distinction, without reaching Lemon,

“because it alleviates exceptional government-created burdens on

private religious exercise”). The Lemon test requires “a

secular legislative purpose,” a “principal or primary effect

. . . that neither advances nor inhibits religion,” and no

“excessive government entanglement with religion.” 403 U.S. at

612-13 (internal quotation marks omitted).

The first exemption Plaintiffs challenge is the individual

mandate’s religious conscience exemption.

See 26 U.S.C.

§ 5000A(d)(2)(A). Plaintiffs maintain that this exemption

discriminates against their religious practice by applying only

to sects that conscientiously oppose all insurance benefits,

provide for their own members, and were established before

December 31, 1950. The religious conscience exemption adopts an

exemption of the Social Security Amendments of 1965 under 26

U.S.C. § 1402(g), which courts have consistently found

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constitutional under the Establishment Clause and the Fifth Amendment. See, e.g., Droz v. Comm’r, 48 F.3d 1120, 1124-25 (9th Cir. 1995); Hatcher v. Comm’r, 688 F.2d 82, 84 (10th Cir. 1979) (per curiam); Jaggard v. Comm’r, 582 F.2d 1189, 1189-90 (8th Cir. 1978) (per curiam); Henson v. Comm’r, 66 T.C. 835, 838-40 (1976); Palmer v. Comm’r, 52 T.C. 310, 314-15 (1969). As the Supreme Court explained with respect to the § 1402(g) exemption, “Congress granted an exemption . . . [to] a narrow category which was readily identifiable,” i.e., “persons in a religious community having its own ‘welfare’ system.” United States v. Lee, 455 U.S. 252, 260-61 (1982).
Moreover, this exemption makes no “explicit and deliberate distinctions” between sects, Larson, 456 U.S. at 246 n.23, and so is subject only to the Lemon test, see Droz, 48 F.3d at 1124. The exemption passes the Lemon test because it has a secular purpose: “to ensure that all persons are provided for, either by the [Act’s insurance] system or by their church.” Id.; see also Corp. of Presiding Bishop of the Church of Jesus Christ of Latter-Day Saints v. Amos, 483 U.S. 327, 335 (1987) (“[I]t is a permissible legislative purpose to alleviate significant governmental interference with the ability of religious organizations to define and carry out their religious missions.”). The exemption’s principal effects also neither advance nor inhibit religion, but only assure that all
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individuals are covered, one way or the other. And there is no excessive entanglement with religion. Cf. Zelman v. SimmonsHarris, 536 U.S. 639, 668 (2002) (O’Connor, J., concurring) (noting that the Court has previously “folded the entanglement inquiry into the primary effect inquiry,” which “ma[kes] sense because both inquiries rely on the same evidence”); Madison v. Riter, 355 F.3d 310, 319 (4th Cir. 2003) (same).
The second individual mandate exemption challenged by Plaintiffs is the health care sharing ministry exemption. See 26 U.S.C. § 5000A(d)(2)(B). Plaintiffs maintain that it unconstitutionally selects an arbitrary formation date of December 31, 1999 as the eligibility cutoff. But even if the exemption’s cutoff date is arbitrary, it is not unconstitutional. For neither the cutoff’s text nor its history suggests any deliberate attempt to distinguish between particular religious groups. Accordingly, the cutoff need only satisfy the Lemon test. See Hernandez, 490 U.S. at 695-96; cf. Larson, 456 U.S. at 254 (applying strict scrutiny only when the legislative history demonstrated “the provision was drafted with the explicit intention of including particular religious denominations and excluding others”).
Applying Lemon, the date serves at least two “secular legislative purpose[s].” 403 U.S. at 612. First, the cutoff ensures that the ministries provide care that possesses the
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reliability that comes with historical practice. Second, it accommodates religious health care without opening the floodgates for any group to establish a new ministry to circumvent the Act. The “primary effect” of the cutoff accordingly “neither advances nor inhibits religion.” Id. Further, given that it applies only secular criteria, the cutoff does not “foster an excessive government entanglement with religion.” Id. at 613 (internal quotation marks omitted).
Plaintiffs additionally contend that both the religious conscience exemption and the health care sharing ministry exemption violate their Fifth Amendment equal protection rights. In furtherance of this argument they maintain that both exemptions are subject to the heightened scrutiny that applies “if the plaintiff can show the basis for the distinction was religious . . . in nature.” Olsen, 709 F.2d at 283; Post-Remand Opening Br. 56. Of course, “[i]f the justification for the distinction is secular, it need only be rational.” Olsen, 709 F.2d at 283; see also City of Cleburne v. Cleburne Living Ctr., 473 U.S. 432, 441-42 (1985). Here, the distinction made between sects that oppose insurance and provide for themselves in their own welfare system and those that do not, and the distinction made between ministries formed before 1999 and those formed after, are secular and thus subject only to rational basis review. See Olsen, 709 F.2d at 283. Both distinctions are
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rationally related to the Government’s legitimate interest in accommodating religious practice while limiting interference in the Act’s overriding purposes. Cf. Corp. of the Presiding Bishop, 483 U.S. at 335.
We therefore conclude that Plaintiffs have failed to state any plausible claim that the Establishment Clause or the Fifth Amendment provide a basis for relief.
B. In their recent post-remand briefs, Plaintiffs argue at length that certain regulations implementing neither the individual nor the employer mandate but another portion of the Act -- § 1001, codified in part at 42 U.S.C. § 300gg-13 -violate their religious rights.10 See, e.g., Post-Remand Opening Br. 2-5, 43-44. These new regulations require group health plans to cover all FDA-approved contraceptive methods. See 45 C.F.R. § 147.130(a)(1)(iv) (2011); HRSA, Women’s Preventive Services: Required Health Plan Coverage Guidelines, available at http://www.hrsa.gov/womensguidelines. Plaintiffs’ second amended complaint mentions neither § 1001 of the Affordable Care Act nor 42 U.S.C. § 300gg-13.
10 Section 1001 of the Affordable Care Act, inter alia, amended the Public Health Service Act to require “[a] group health plan and a health insurance issuer offering group or individual health insurance” to provide, “with respect to women,” free “preventative care and screenings.”
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Further, the complaint does not mention contraception. To be sure, the complaint specifies that Plaintiffs have “sincerely held religious beliefs that abortions . . . are murder and . . . they should play . . . no part in facilitating, subsidizing, easing, funding, or supporting . . . abortions.” But the complaint gives no notice that Plaintiffs challenge methods of contraception or include within their challenge to “abortion” all the forms of contraception they now label “abortifacients.”11
Moreover, Plaintiffs did not challenge these regulations, or make any argument related to contraception or abortifacients, in the district court, in their first appeal before us, or in their Supreme Court briefs. The Supreme Court in turn ordered a limited remand simply “for further consideration in light of National Federation of Independent Business v. Sebelius,” which did not discuss this issue. See Liberty Univ., 133 S. Ct. 679.

11 In their new briefs, Plaintiffs seek to challenge as

abortifacients forms of FDA-approved contraception that may act

after fertilization, including emergency contraceptive pills and

intra-uterine devices. See Post-Remand Opening Br. 3-5. But

the Government does not define such contraceptives as

abortifacients or abortion.

Well-established federal law

defines “pregnancy” to “encompass[] the period of time from

implantation until delivery.” 45 C.F.R. 46.202(f) (2001). The

forms of contraception that Plaintiffs now challenge, as they

themselves recognize, do not act after implantation, so they do

not terminate a “pregnancy” as defined in this regulation. See

FDA, Birth Control: Medicines To Help You, available at

http://www.fda.gov/ForConsumers/ByAudience/ForWomen/FreePublicat

ions/ucm313215.htm.

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Nevertheless, for the first time in their post-remand briefs, Plaintiffs seek to challenge these regulations. Generally, “a federal appellate court does not consider an issue not passed upon below.” Singleton v. Wulff, 428 U.S. 106, 120 (1976); accord Muth v. United States, 1 F.3d 246, 250 (4th Cir. 1993). This rule applies with equal force when a party attempts to raise an issue for the first time after remand. See Rowland v. Am. Gen. Fin., Inc., 340 F.3d 187, 191 n.1 (4th Cir. 2003).
Of course, in our discretion, we can make “[e]xceptions to this general rule” but we do so “only in very limited circumstances.” Muth, 1 F.3d at 250. The Supreme Court has explained that we are “justified” in making such an exception when the “proper resolution is beyond any doubt” or “injustice might otherwise result.” Singleton, 428 U.S. at 121 (internal quotation marks omitted). We have also recognized that certain other “limited circumstances” may justify such action, e.g., when refusal to do so would constitute plain error or result in a fundamental miscarriage of justice, Muth, 1 F.3d at 250, or where there is an intervening change in the case law, Holland v. Big River Minerals Corp., 181 F.3d 597, 605 (4th Cir. 1999).
Plaintiffs do not contend that any of these “limited circumstances” apply here. There is good reason for this; none does. We recognize that the Government initially promulgated the regulations in question while this case was pending (i.e.,
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approximately a month before the issuance of our earlier opinion). See Liberty Univ., 671 F.3d 391; 76 Fed. Reg. 46,621 (Aug. 3, 2011). But a new implementing regulation cannot “become a vehicle for converting plaintiffs’ lawsuit into a challenge to the new regulation” when a “challenge to th[at] regulation would raise substantially different legal issues from the . . . arguments [already] propounded in th[e] lawsuit.” Phillips v. McLaughlin, 854 F.2d 673, 676-77 (4th Cir. 1988); see also Kinney v. Dist. of Columbia, 994 F.2d 6, 10 (D.C. Cir. 1993) (“[T]he term ‘intervening change in the law,’ [does] not refer[] to a prospective [regulatory] change that could not affect rights already accrued . . . .”).
Furthermore, several compelling reasons counsel against taking up Plaintiffs’ challenge to the new regulations here. To do so would require us not only to resolve a claim not considered below, but also to do this in a second appeal three years after the initiation of this lawsuit. To do so would also require us to interpret new regulations, implementing a provision of the Act never challenged in the second amended complaint.12 And to do so would require us to consider at this
12 Contrary to the Plaintiffs’ assertion, the second amended complaint’s reference to § 1302 of the Affordable Care Act did not preserve for our review a challenge to 42 U.S.C. § 300gg-13. See Post-Remand Reply Br. 17–20 & n.7 (arguing that the definition of “‘minimum essential coverage’ requires a (Continued)
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premature stage an argument that other appellate courts have
before them in cases in which plaintiffs have properly pled the
issue and a district court has addressed it.
Indeed, several of our sister circuits are considering such
cases, timely filed after the regulations at issue were
promulgated. See, e.g., Hobby Lobby Stores, Inc. v. Sebelius,
No. 12-6294, 2013 WL 3216103 (10th Cir. June 27, 2013) (en
banc); Gilardi v. U.S. Dep’t of HHS, No. 13-5069 (D.C. Cir.
docketed Mar. 5, 2013); Conestoga Wood Specialties Corp. v.
Sec’y of HHS, No. 13-1144, 2013 WL 1277419 (3d Cir. Feb. 8,
circuitous trip through various sections of the Act,” including § 1302, which defines “essential health benefits” to “include at least preventive and wellness services partially defined in 42 U.S.C. § 300gg-13” and “has been part of Plaintiffs’ challenges from the outset”). Section 1302, codified at 42 U.S.C. § 18022, gives the Secretary authority to define what must be included in an “essential health benefits package,” a “wholly different term” from “minimum essential coverage.” Florida ex rel. Att’y Gen. v. U.S. Dep’t of HHS, 648 F.3d 1235, 1251 (11th Cir. 2011), rev’d in part on other grounds, NFIB, 132 S. Ct. 2566.
The term “essential health benefits package” refers to the comprehensive benefits package that must be provided by plans in the individual and small group markets by 2014. The Act does not impose the essential health benefits package on plans offered by large group employers to their employees . . . . “Minimum essential coverage” is the type of plan needed to satisfy the individual mandate . . . . Many . . . plan types will satisfy the mandate even if they do not have the “essential health benefits package” and regardless of the level of benefits or coverage.
Id. at 1250–51 (internal citations omitted).
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2013); Grote v. Sebelius, 708 F.3d 850 (7th Cir. 2013); Annex Med., Inc. v. Sebelius, No. 13-1118 (8th Cir. docketed Jan. 14, 2013); Korte v. Sebelius, No. 12-3841, 2012 WL 6757353 (7th Cir. Dec. 28, 2012); Autocam Corp. v. Sebelius, No. 12-2673 (6th Cir. docketed Dec. 26, 2012); Wheaton Coll. v. Sebelius, 703 F.3d 551 (D.C. Cir. 2012); O’Brien v. U.S. Dep’t of HHS, No. 12-3357 (8th Cir. docketed Oct. 4, 2012).
Finding no circumstance justifying a premature resolution of Plaintiffs’ new arguments and compelling reasons for refusing to do so in this case, we decline to reach Plaintiffs’ challenge to the new regulations.13
VII. In sum, in light of the Supreme Court’s teachings in NFIB, we hold that we have jurisdiction to decide this case. On the merits, we affirm the judgment of the district court dismissing the complaint in its entirety for failure to state a claim upon which relief can be granted.
AFFIRMED
13 For similar reasons, we decline to address Plaintiffs’ post-remand arguments that the regulations exempting religious employers from required contraception coverage and accommodating eligible non-profit employers unconstitutionally discriminate against their religious views. See 45 C.F.R. 147.130; 78 Fed. Reg. 39,869 (July 2, 2013).
62

 
 CLOSED,CASREF
U.S. District Court Western District of Virginia (Lynchburg) CIVIL DOCKET FOR CASE #: 6:10−cv−00015−NKM

Liberty University, Inc. et al v. Geithner et al Assigned to: Judge Norman K. Moon Case in other court: Case Manager Donna Lett, 10−02347 Cause: 28:2201 Constitutionality of State Statute(s)
Plaintiff

Date Filed: 03/23/2010 Date Terminated: 11/07/2011 Jury Demand: None Nature of Suit: 440 Civil Rights: Other Jurisdiction: U.S. Government Plaintiff

Liberty University, Inc. a Virginia Nonprofit corporation

represented by Anita L. Staver Liberty Counsel P.O. Box 540774 Orlando, FL 32854−0774 800−671−1776 Fax: 407−875−0770 Email: court@lc.org LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED

Mary Elizabeth McAlister Liberty Counsel 100 Mountain View Road, Suite 2775 Lynchburg, VA 24502 434−592−7000 Fax: 592−7700 Email: court@lc.org LEAD ATTORNEY ATTORNEY TO BE NOTICED

Mathew D. Staver Liberty Counsel 1053 Maitland Center Commons Maitland, FL 32751 800−671−1776 Fax: 407−875−0770 Email: court@lc.org LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED

William Edward McRorie LAW OFFICE OF WILLIAM MCRORIE 717 COURT STREET LYNCHBURG, VA 24504 434−592−4123 Fax: 592−7700 Email: wemcrorie@liberty.edu LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff
Martha A. Neal TERMINATED: 07/30/2010

represented by Anita L. Staver (See above for address) LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED

Mary Elizabeth McAlister (See above for address)

Plaintiff Michele G. Waddell
Plaintiff David Stein M.D.
Plaintiff Pausanias Alexander TERMINATED: 07/30/2010

LEAD ATTORNEY ATTORNEY TO BE NOTICED
Mathew D. Staver (See above for address) LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
William Edward McRorie (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Anita L. Staver (See above for address) LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
Mary Elizabeth McAlister (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Mathew D. Staver (See above for address) LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
William Edward McRorie (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Anita L. Staver (See above for address) LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
Mary Elizabeth McAlister (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Mathew D. Staver (See above for address) LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
William Edward McRorie (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Anita L. Staver (See above for address)

Plaintiff Mary T. Bendorf TERMINATED: 07/30/2010
Plaintiff Joanne V. Merrill

LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
Mary Elizabeth McAlister (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Mathew D. Staver (See above for address) LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
William Edward McRorie (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Anita L. Staver (See above for address) LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
Mary Elizabeth McAlister (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Mathew D. Staver (See above for address) LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
William Edward McRorie (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Anita L. Staver (See above for address) LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
Mary Elizabeth McAlister (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Mathew D. Staver (See above for address) LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
William Edward McRorie (See above for address) LEAD ATTORNEY

Plaintiff Delegate Kathy Byron
Plaintiff Jeff Helgeson
V. Defendant Timothy Geithner Secretary of the Treasury of the United States, in his official capacity

ATTORNEY TO BE NOTICED
represented by Anita L. Staver (See above for address) LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
Mary Elizabeth McAlister (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Mathew D. Staver (See above for address) LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
William Edward McRorie (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Anita L. Staver (See above for address) LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
Mary Elizabeth McAlister (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Mathew D. Staver (See above for address) LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
William Edward McRorie (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Ethan Price Davis United States Department of Justice − Civil Division Federal Programs Branch P.O. Box 883 Washington, DC 20044 202−514−9242 Fax: 616−8470 Email: ethan.p.davis@usdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED

Defendant Kathleen Sebelius Secretary of the United States Department of Health and Human Services, in her official capacity
Defendant Hilda L. Solis Secretary of the United States Department of Labor, in her official capacity
Defendant Eric Holder Attorney General of the United States, in his official capacity

Joel L. McElvain U. S. DEPARTMENT OF JUSTICE, CIVIL DIVISION FEDERAL PROGRAMS BRANCH, ROOM 7332 20 MASSACHUSETTS AVENUE, NW WASHINGTON, DC 20530 202−514−2988 Fax: 616−8202 Email: joel.mcelvain@usdoj.gov ATTORNEY TO BE NOTICED
represented by Ethan Price Davis (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Joel L. McElvain (See above for address) ATTORNEY TO BE NOTICED
represented by Ethan Price Davis (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Joel L. McElvain (See above for address) ATTORNEY TO BE NOTICED
represented by Ethan Price Davis (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Joel L. McElvain (See above for address) ATTORNEY TO BE NOTICED

Date Filed 03/23/2010
03/23/2010 03/23/2010

# Docket Text
1 COMPLAINT against Timothy Geithner, Kathleen Sebelius, Hilda L. Solis, Eric Holder (Filing fee $ 350.oo Receipt #04230000000001082959), filed by Mary T. Bendorf, Joanne V. Merrill, Kathy Byron, Jeff Helgeson, Liberty University, Inc., Martha A. Neal, Michele G. Waddell, David Stein, Pausanias Alexander. 100 Day Notice due by 7/2/2010 120 Day Service due by 7/22/2010 (Attachments: # 1 Civil Cover Sheet)(jcf) (Entered: 03/24/2010)
2 MOTION to Appear Pro Hac Vice as to Mathew D. Staver by Mary T. Bendorf, Joanne V. Merrill, Kathy Byron, Jeff Helgeson, Liberty University, Inc., Martha A. Neal, Michele G. Waddell, David Stein, Pausanias Alexander. (Attachments: # 1 Text of Proposed Order)(jcf) (Entered: 03/24/2010)
3 MOTION to Appear Pro Hac Vice as to Anita L. Staver by Mary T. Bendorf, Joanne V. Merrill, Kathy Byron, Jeff Helgeson, Liberty University, Inc., Martha A. Neal, David Stein, Pausanias Alexander. (Attachments: # 1 Text of Proposed Order)(jcf) (Entered: 03/24/2010)

03/24/2010 03/24/2010 03/26/2010 04/14/2010 04/14/2010 04/14/2010 04/14/2010 04/14/2010 04/15/2010 04/22/2010
04/22/2010
04/22/2010
04/22/2010
07/02/2010

4 ORDER granting 2 MOTION for Mathew D. Staver to Appear Pro Hac Vice. Signed by Judge Norman K. Moon on March 24, 2010. (jcf)
5 ORDER granting 3 MOTION for Anita L. Staver to Appear Pro Hac Vice. Signed by Judge Norman K. Moon on March 24, 2010. (jcf)
6 Negative Corporate Disclosure Statement by Mary T. Bendorf, Joanne V. Merrill, Kathy Byron, Jeff Helgeson, Liberty University, Inc., Martha A. Neal, Michele G. Waddell, David Stein, Pausanias Alexander. (McAlister, Mary)
7 AMENDED COMPLAINT FIRST against Timothy Geithner, Kathleen Sebelius, Hilda L. Solis, Eric Holder, filed by Mary T. Bendorf, Joanne V. Merrill, Kathy Byron, Jeff Helgeson, Liberty University, Inc., Martha A. Neal, Michele G. Waddell, David Stein, Pausanias Alexander.(McAlister, Mary)
8 Proposed Summons by Mary T. Bendorf, Joanne V. Merrill, Kathy Byron, Jeff Helgeson, Liberty University, Inc., Martha A. Neal, Michele G. Waddell, David Stein, Pausanias Alexander as toTimothy Geithner.(McAlister, Mary)
9 Proposed Summons by Mary T. Bendorf, Joanne V. Merrill, Kathy Byron, Jeff Helgeson, Liberty University, Inc., Martha A. Neal, Michele G. Waddell, David Stein, Pausanias Alexander as toKathleen Sebelius.(McAlister, Mary)
10 Proposed Summons by Mary T. Bendorf, Joanne V. Merrill, Kathy Byron, Jeff Helgeson, Liberty University, Inc., Martha A. Neal, Michele G. Waddell, David Stein, Pausanias Alexander as toHilda L. Solis.(McAlister, Mary)
11 Proposed Summons by Mary T. Bendorf, Joanne V. Merrill, Kathy Byron, Jeff Helgeson, Liberty University, Inc., Martha A. Neal, Michele G. Waddell, David Stein, Pausanias Alexander as toEric Holder.(McAlister, Mary)
12 Summons Issued as to Timothy Geithner, Kathleen Sebelius, Hilda L. Solis, Eric Holder. (Amended Complaint)(jcf)
13 AFFIDAVIT of Service for Summons in Civil Action 6:10−cv−00015−nkm served on Timothy Geithner on April 15, 2010, filed by Mary T. Bendorf, Joanne V. Merrill, Kathy Byron, Jeff Helgeson, Liberty University, Inc., Martha A. Neal, Michele G. Waddell, David Stein, Pausanias Alexander., SUMMONS Returned Executed by Mary T. Bendorf, Joanne V. Merrill, Kathy Byron, Jeff Helgeson, Liberty University, Inc., Martha A. Neal, Michele G. Waddell, David Stein, Pausanias Alexander. Timothy Geithner served on 4/15/2010, answer due 6/14/2010.(McAlister, Mary)
14 AFFIDAVIT of Service for Summons Civil Action 6:10−cv−00015−nkm served on Kathleen Sebellius on 04/15/2010, filed by Mary T. Bendorf, Joanne V. Merrill, Kathy Byron, Jeff Helgeson, Liberty University, Inc., Martha A. Neal, Michele G. Waddell, David Stein., SUMMONS Returned Executed by Mary T. Bendorf, Joanne V. Merrill, Kathy Byron, Jeff Helgeson, Liberty University, Inc., Martha A. Neal, Michele G. Waddell, David Stein. Kathleen Sebelius served on 4/15/2010, answer due 6/14/2010.(McAlister, Mary)
15 AFFIDAVIT of Service for Summons Civil Action 6:10−cv−00015−nkm served on Hilda L. Solis on 04/15/2010, filed by Mary T. Bendorf, Joanne V. Merrill, Kathy Byron, Jeff Helgeson, Liberty University, Inc., Martha A. Neal, Michele G. Waddell, David Stein, Pausanias Alexander., SUMMONS Returned Executed by Mary T. Bendorf, Joanne V. Merrill, Kathy Byron, Jeff Helgeson, Liberty University, Inc., Martha A. Neal, Michele G. Waddell, David Stein, Pausanias Alexander. Hilda L. Solis served on 4/15/2010, answer due 6/14/2010.(McAlister, Mary)
16 AFFIDAVIT of Service for Summons Civil Action 6:10−cv−00015−nkm served on Eric Holder on 04/15/2010, filed by Mary T. Bendorf, Joanne V. Merrill, Kathy Byron, Jeff Helgeson, Liberty University, Inc., Martha A. Neal, Michele G. Waddell, David Stein, Pausanias Alexander., SUMMONS Returned Executed by Mary T. Bendorf, Joanne V. Merrill, Kathy Byron, Jeff Helgeson, Liberty University, Inc., Martha A. Neal, Michele G. Waddell, David Stein, Pausanias Alexander. Eric Holder served on 4/15/2010, answer due 6/14/2010.(McAlister, Mary)
17 100 Day Notice Letter. (jcf)

07/02/2010 07/09/2010
07/19/2010 07/20/2010 07/30/2010
07/30/2010 07/30/2010 08/13/2010 08/13/2010 08/16/2010 08/17/2010 08/18/2010 08/30/2010 08/31/2010 09/03/2010 09/07/2010
09/08/2010 09/21/2010

18 Notice of Correction: Document #17 was deleted & resubmitted. Deputy Clerk had wrong date on notice. (jcf)
19 AFFIDAVIT of Service for First Amended Complaint dated April 14, 2010 served on Defendants Geithner, Sebelius, Solis, and Holder on May 26, 2010, filed by Mary T. Bendorf, Joanne V. Merrill, Kathy Byron, Jeff Helgeson, Liberty University, Inc., Martha A. Neal, Michele G. Waddell, David Stein, Pausanias Alexander., ACKNOWLEDGEMENT OF SERVICE Executed May 26, 2010 Acknowledgement filed by Mary T. Bendorf, Joanne V. Merrill, Kathy Byron, Jeff Helgeson, Liberty University, Inc., Martha A. Neal, Michele G. Waddell, David Stein, Pausanias Alexander.(McAlister, Mary)
20 MOTION for Extension of Time to File Response/Reply as to 7 Amended Complaint, by Timothy Geithner, Kathleen Sebelius, Hilda L. Solis, Eric Holder. (Attachments: # 1 Text of Proposed Order)(Davis, Ethan)
21 ORDER granting 20 Motion for Extension of Time to File Response/Reply. Responses due by 8/9/2010. Signed by Judge Norman K. Moon on July 20, 2010. (jcf)
22 Consent MOTION for Leave to File Second Amended Complaint by Joanne V. Merrill, Kathy Byron, Jeff Helgeson, Liberty University, Inc., Michele G. Waddell, David Stein. (Attachments: # 1 Text of Proposed Order Granting Motion for Leave to File Second Amended Complaint)(McAlister, Mary)
23 ORDER granting 22 Motion for Leave to File Second Amended Complaint. Signed by Judge Norman K. Moon on July 30, 2010. (sfc)
24 AMENDED COMPLAINT SECOND against all defendants, filed by Joanne V. Merrill, Kathy Byron, Jeff Helgeson, Liberty University, Inc., Michele G. Waddell, David Stein.(McAlister, Mary)
25 MOTION to Dismiss by Timothy Geithner, Kathleen Sebelius, Hilda L. Solis, Eric Holder. (Davis, Ethan)
26 Brief / Memorandum in Support re 25 MOTION to Dismiss. filed by Timothy Geithner, Kathleen Sebelius, Hilda L. Solis, Eric Holder. (Davis, Ethan)
27 CERTIFICATE OF SERVICE by Timothy Geithner, Kathleen Sebelius, Hilda L. Solis, Eric Holder re 26 Brief / Memorandum in Support (Davis, Ethan)
28 Magistrate's Notice to counsel. (jcf)
29 PRETRIAL ORDER; ORDER REFERRING CASE to Magistrate Judge Michael F. UrbanskiMotions referred to Michael F. Urbanski. Signed by Judge Norman K. Moon on August 18, 2010. (jcf)
30 NOTICE by Kathy Byron, Jeff Helgeson, Liberty University, Inc., Joanne V. Merrill, David Stein, Michele G. Waddell OF AGREED SCHEDULING ORDER (McAlister, Mary)
31 AGREED SCHEDULING ORDER. Signed by Judge Norman K. Moon on August 31, 2010. (sfc)
32 Brief / Memorandum in Opposition re 25 MOTION to Dismiss. filed by Kathy Byron, Jeff Helgeson, Liberty University, Inc., Joanne V. Merrill, David Stein, Michele G. Waddell. (McAlister, Mary)
33 Consent MOTION for Extension of Time to File Response/Reply as to 25 MOTION to Dismiss by Timothy Geithner, Eric Holder, Kathleen Sebelius, Hilda L. Solis.Motions referred to Michael F. Urbanski. (Attachments: # 1 Text of Proposed Order)(Davis, Ethan)
34 ORDER granting 33 Motion for Extension of Time to File Reply re 25 MOTION to Dismiss. Reply due by 9/22/2010. Signed by Magistrate Judge Michael F. Urbanski on September 7, 2010. (sfc)
35 NOTICE of Hearing on Motion 25 MOTION to Dismiss : Motion Hearing set for 10/22/2010 10:00 AM in Lynchburg before Judge Norman K. Moon. (hnw)

09/22/2010 10/18/2010 10/19/2010 10/19/2010 10/19/2010 10/22/2010 10/27/2010 11/03/2010
11/30/2010 11/30/2010 12/01/2010 12/02/2010
12/03/2010 02/22/2011 09/08/2011 09/08/2011

36 REPLY to Response to Motion re 25 MOTION to Dismiss. filed by Timothy Geithner, Eric Holder, Kathleen Sebelius, Hilda L. Solis. (Davis, Ethan)
37 ORDER regarding oral argument scheduled for 10/22/2010 as to MOTION to Dismiss 25 . Signed by Judge Norman K. Moon on October 18, 2010. (sfc)
38 NOTICE of Appearance by Joel L. McElvain on behalf of Timothy Geithner, Eric Holder, Kathleen Sebelius, Hilda L. Solis (McElvain, Joel)
39 NOTICE by Timothy Geithner, Eric Holder, Kathleen Sebelius, Hilda L. Solis re 25 MOTION to Dismiss Notice of Supplemental Authority (Attachments: # 1 Exhibit Exhibit A: Thomas More Law Center v Obama, # 2 Exhibit Exhibit B: State of Florida v HHS)(McElvain, Joel)
40 NOTICE by Timothy Geithner, Eric Holder, Kathleen Sebelius, Hilda L. Solis re 25 MOTION to Dismiss CORRECTED Notice of Supplemental Authority (Attachments: # 1 Exhibit Exhibit A: Thomas More Law Center v Obama, # 2 Exhibit Exhibit B: State of Florida v HHS)(McElvain, Joel)
41 Minute Entry for proceedings held before Judge Norman K. Moon: Motion Hearing held on 10/22/2010 re 25 MOTION to Dismiss filed by Kathleen Sebelius, Timothy Geithner, Eric Holder, Hilda L. Solis. (Court Reporter Sonia Ferris) (jcf)
42 TRANSCRIPT REQUEST by Joel McElvain for proceedings held on 10−22−2010 before Judge Norman K. Moon. (Sonia Ferris, OCR) (jfs)
44 TRANSCRIPT of Proceedings: Motions Hearing held on October 22, 2010 before Judge Norman K. Moon. Court Reporter/Transcriber Sonia Ferris, Telephone number SoniaF@vawd.uscourts.gov. NOTICE RE REDACTION OF TRANCRIPTS:The parties have seven (7) calendar days to file with the Court a Notice of Intent to Request Redaction of this transcript. If no such Notice is filed, the transcript will be made remotely electronically available to the public without redaction after 90 calendar days. The policy is located on our website at www.vawd.uscourts.gov Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER. Redaction Request due 11/24/2010. Redacted Transcript Deadline set for 12/6/2010. Release of Transcript Restriction set for 2/1/2011. (sf)
45 MEMORANDUM OPINION. Signed by Judge Norman K. Moon on November 30, 2010. (sfc)
46 ORDER granting 25 Motion to Dismiss. The case shall be dismissed from the docket. Signed by Judge Norman K. Moon on November 30, 2010. (sfc)
47 NOTICE OF APPEAL as to 45 Memorandum Opinion, 46 Order on Motion to Dismiss by Liberty University, Inc., Joanne V. Merrill, Michele G. Waddell. Filing fee $ 455, receipt number 0423−1213479. (McAlister, Mary)
48 Transmittal of Notice of Appeal to 4CCA re 47 Notice of Appeal NOTE: The Docketing Statement, Transcript Order Form and CJA−24(s) forms (if you are court appointed counsel) are available on the 4th Circuit Court of Appeals website at www.ca4.uscourts.gov. If CJA24(s) are applicable, complete items 1−14, 18 for each court reporter from whom you wish to order a transcript, and file each one separately in this case with the event Appeal Transcript − Proposed CJA 24. The CJA−24 forms will then be processed by the U.S. District Court Clerk's Office. (sfc)
49 NOTICE of Docketing Record on Appeal from USCA re 47 Notice of Appeal filed by Joanne V. Merrill, Liberty University, Inc., Michele G. Waddell. USCA Case Number 10−2347, Case Manager Donna Lett. (sfc)
50 Appeal Remark re 47 Notice of Appeal : USCA Order granting motion to withdraw counsel. (sfc)
51 USCA Memorandum Opinion from 4th Circuit re 47 Notice of Appeal remanding ( decided on 9/8/2011 ) (sfc)
52 USCA JUDGMENT as to 47 Notice of Appeal filed by Joanne V. Merrill, Liberty University, Inc., Michele G. Waddell (sfc)

10/31/2011 11/07/2011
08/13/2012 07/11/2013 07/11/2013 08/06/2013 09/03/2013

53 MANDATE of USCA as to 47 Notice of Appeal filed by Joanne V. Merrill, Liberty University, Inc., Michele G. Waddell (sfc)
54 Order Vacating 46 Order on Motion to Dismiss after remand from USCA. Case is dismissed for lack of jurisdiction. Signed by Judge Norman K. Moon on November 7, 2011. (sfc)
55 Appeal Remark re 47 Notice of Appeal : USCA Order denying motion to stay mandate (sfc)
56 USCA Memorandum Opinion from 4th Circuit Affirmed by published opinion decided: July 11, 2013(hnw)
57 USCA JUDGMENT(hnw)
58 Appeal Remark re 47 Notice of Appeal : STAY OF MANDATE Under Fed.R.App.P.41(d)(1) (hnw)
59 MANDATE of USCA as to 47 Notice of Appeal filed by Joanne V. Merrill, Liberty University, Inc., Michele G. Waddell (sfc)

 
 Supreme Court of the United States Office of the Clerk
Washington, DC 20543-0001

June 29, 2012

William K. Suter Clerk of the Court (202) 479-3011

Clerk United States Court of Appeals for the Fourth Circuit 1100 East Main Street Room 501 Richmond, VA 23219

Re: Liberty University, et al. v. Timothy F. Geithner, Secretary of the Treasury, et al. No. 11-438 (Your No. 10-2347)

Dear Clerk: The Court today entered the following order in the above-entitled case: The petition for a writ of certiorari is denied.

Sincerely, William K. Suter, Clerk

 
 Supreme Court of the United States Office of the Clerk
Washington, DC 20543-0001

December 28, 2012

William K. Suter Clerk of the Court (202) 479-3011

Clerk United States Court of Appeals
for the Fourth Circuit 1100 East Main Street, Room 501 Richmond, Virginia 23219

Re: Liberty University, et al. v. Timothy F. Geithner, Secretary of the Treasury No. 11-438 (Your docket No. 10-2347)
Dear Clerk:
Attached please find a certified copy of the judgment of this Court in the aboveentitled case. You may obtain a copy of the opinion cited in the judgment by visiting our website @www.supremecourt.gov.

Enc. cc: Mathew D. Staver, Esq.
Solicitor General

Sincerely, WILLIAM K. SUTER, Clerk
By Elizabeth Brown Judgments/Mandates Clerk

Supreme Court of the United States Office of the Clerk
Washington, DC 20543-0001

December 28, 2012

William K. Suter Clerk of the Court (202) 479-3011

Mr. Mathew D. Staver Liberty Counsel 1055 Maitland Center Commons, 2nd Floor Maitland, FL 32751

Re: Liberty University, et al. v. Timothy F. Geithner, Secretary of the Treasury, et al. No. 11-438

Dear Mr. Staver:

Today, a certified copy of the judgment of this Court in the above-entitled case was emailed to the Clerk of the United States Court of Appeals for the Fourth Circuit.

The petitioners are given recovery of costs in this Court as follows:

Clerk’s costs:

$300.00

This amount may be collected from the respondents.

Sincerely,

WILLIAM K. SUTER, Clerk

By
Elizabeth Brown Judgments/Mandates Clerk

cc: Solicitor General Clerk, USCA for the Fourth Circuit (Your docket No. 10-2347)

Supreme Court of the United States

No.

11-438

LIBERTY UNIVERSITY, ET AL., v.

Petitioners

TIMOTHY F. GEITHNER, SECRETARY OF THE TREASURY, ET AL.

The petition for rehearing is granted. The order entered June 29, 2012,

denying the petition for writ of certiorari is vacated.

ON PETITION FOR WRIT OF CERTIORARI to the United States Court

of Appeals for the Fourth Circuit.

THIS CAUSE having been submitted on the petition for writ of certiorari

and the response thereto.

ON CONSIDERATION WHEREOF, it is ordered and adjudged by this

Court that the petition for writ of certiorari is granted. The judgment of the above court is

vacated with costs, and the case is remanded to the United States Court of Appeals for the Fourth Circuit for further consideration in light of National Federation of Independent Business v. Sebelius, 567 U.S. ___ (2012).

Clerk’s costs:

$300.00

November 26, 2012