Opinion ID: 223249
Heading Depth: 3
Heading Rank: 1

Heading: Repeated Use of the Term Penalty in the Individual Mandate

Text: As in any case involving statutory construction, we begin with the plain language of the statute. Hemispherx Biopharma, Inc. v. Johannesburg Consol. Invs., 553 F.3d 1351, 1362 (11th Cir.2008) (citing Consumer Prod. Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980)). The plain language of the individual mandate is clear that the individual mandate is not a tax, but rather, as the statute itself repeatedly states, a penalty imposed on an individual for failing to maintain a minimum level of health insurance coverage in any month beginning in 2014. Title 26 U.S.C. § 5000A(a) requires [a]n applicable individual to ensure that the individual. . . is covered under minimum essential coverage. 26 U.S.C. § 5000A(a). In order to enforce this requirement, Congress stated that [i]f a taxpayer who is an applicable individual . . . fails to meet the requirement of subsection (a) for 1 or more months, then . . . there is hereby imposed on the taxpayer a penalty with respect to such failures. Id. § 5000A(b)(1) (emphasis added). Nor could we construe Congress's choice of language as a careless one-time invocation of the word penalty, because the remainder of the relevant provisions in § 5000A uses the same term over and over again, without exception and without ever describing the penalty as a tax. See, e.g., id. § 5000A(b)(3)(B) (individual with respect to whom a penalty is imposed by this section who files joint tax return shall [along with individual's spouse] be jointly liable for such penalty  (emphasis added)); id. § 5000A(c)(1) (describing [t]he amount of the penalty imposed by this section on any taxpayer for any taxable year (emphasis added)); id. § 5000A(c)(2) (describing the monthly penalty amount with respect to any taxpayer (emphasis added)); id. § 5000A(g)(1) (The penalty provided by this section shall be paid upon notice and demand by the Secretary . . . . (emphasis added)); id. § 5000A(g)(2)(A) (providing that taxpayer shall not be subject to any criminal prosecution or penalty for failure to timely pay any penalty imposed by this section (emphasis added)); id. § 5000A(g)(2)(B) (providing that the Secretary shall not file notice of lien or levy on any property of a taxpayer by reason of any failure to pay the penalty imposed by this section (emphasis added)). Thus, the text of the individual mandate unambiguously provides that it imposes a penalty. The penalty encourages compliance with the Act's requirement to obtain minimum essential coverage by imposing a monetary sanction on conduct that violates that requirement. The text is not unclear and was carefully selected to denote a specific meaning. As the Supreme Court most recently recognized in United States v. Reorganized CF & I Fabricators of Utah, Inc., 518 U.S. 213, 116 S.Ct. 2106, 135 L.Ed.2d 506 (1996), `[a] tax is an enforced contribution to provide for the support of government; a penalty . . . is an exaction imposed by statute as punishment for an unlawful act.' Id. at 224, 116 S.Ct. at 2113 (quoting La Franca, 282 U.S. at 572, 51 S.Ct. at 280). The Court further expounded upon La Franca: We take La Franca 's statement of the distinction [between a tax and penalty] to be sufficient for the decision of this case; if the concept of penalty means anything, it means punishment for an unlawful act or omission. . . . Id.; see also Dep't of Revenue of Mont. v. Kurth Ranch, 511 U.S. 767, 779-80, 114 S.Ct. 1937, 1946, 128 L.Ed.2d 767 (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.). It is clear that the terms tax and penalty are not interchangeable one for the other. . . . and if an exaction be clearly a penalty it cannot be converted into a tax by the simple expedient of calling it such. La Franca, 282 U.S. at 572, 51 S.Ct. at 280.