section 5,000-a penalty shall be assessed and collect maryland the same manner as taxes. that directive triggers the anti-injunction act that provides that no suit for the purpose of restraining the assessment of any tax may be maintained in any court by any person. >> that depends as the government points out on whether that directive is a directive to be secretary of the treasury as to how he goes about getting this penalty or a directive to him and the courts. all the other directives there seem to be addressed to the secretary. why should this time be directed to the courts. when you say in the same manner, he goes about doing nit the same manner. but the courts simply accept

that manner of proceeding, but nonetheless ajudd indicate the cases. >> i think i have a three-part answer to that justice scalia. first the text says that it should be assessed in the same manner as a tax without addressing any party particularly. >> he's assessing it and collecting it in the same manner as a tax. >> the other two parts of the answer are as a practical matter, i don't think there's any dispute in this case if the anti-injunction act does not apply this penalty, this section 5,000-a penalty will as a practical matter be assessed and collected in a very different manner from other taxes and other tax penalties. there are three main differences. first, you have the pay the tax

or the penalty first and then let gait later to get it back with interest. second, you have to exhaust administrative remedies even after you pay the tax you can't immediately go to court. you have to go to the secretary and give the secretary at least six months to see if the matter can be resolved administratively. and third, even in the very carefully defined situations in which congress has permitted a challenge to a tax or penalty before it's paid, the secretary has to make the first move. before the secretary sends a notice of deficiencies to start the process. now if the anti-injunction act does not apply here, none of those rules apply. that's not just for this case, it will be for every challenge to section 5,000-a penalty going

forward. the taxpayer will be able to go to court any time without exhausting administrative remedies. there will be none of the limitations that apply in terms of you have to wait for the secretary to make -- >> why will the administrative remedies not be applicable? >> because if the anti-injunction act doesn't apply there's no prohibition on courts restraining the assessment or collection of this penalty and you can simply -- >> courts apply the exhaustion rule. i know you studiesed this i'm just not following this. >> you could do that i think as a matter of common law or judicially imposed doctrine. in the code itself, the anti-injunction act is an absolutely central statute to litigation about taxes and the code says -- first it says you must pay the tax first and then litigate.

so that's the baseline. and then in addition it says you must -- it's not common law, it's in the code, you must apply for a refund. you must wait at least six months. many of these provisions are specific. >> they would apply even if the rule is not jurisdictional. the only difference would be that the court could enforce it or not enforce it in particular cases. which brings me to the davis case, which i think is your biggest hurdle. it's a case quite similar to this in which the constitutionality of the social security act was at issue. and the government waived its right to insist on the application of this act. of course, if it's injuries diggsal, you can't waive it. are you asking us to overrule the davis case? >> davis was decided during a period when this court interpreted the anti-injunction act as codified the prestatutory

equitable principals that usually but not always prohibited the court from enjoying the complex of taxes. that understanding which is what was the basis for the decision was rejected by the court of a series of subsequent cases. i would say effectively the davis case has been overruled by subsequent decisions of this court. >> mr. long, why don't we simply follow the statutory language. i don't know you argue the davis case has been overtaken by other cases. but the language of the anti-injunction act is no suit shall be maintained. it's remarkably similar to the language in -- that was at

issue -- no civil action for infringement shall be instituted. that formulation no suit may be maintained contrasts with the tax injunction act. it says a district court says it will shall not enjoin. that act is the same pattern that says course of united states may not stay a proceeding in state court. so both of those formulas the tia and the no injunction against at stake for are directed to court. the anti-injunction act like the sta constitute says no suit shall be maintained. that is argued that that is suitor directed in contrast to court directed. >> right. this court has said several times that the tax injunction

act was based on the anti-injunction act. you're quite right, the language is different. but we submit that the anti-injunction act itself by saying that no suit shall be maintained is addressed to courts as well as litigants. after all, the case may not go from beginning to end without the active cooperation of the court. >> but how is that different from no civil action for i think fringement shall be instituted? >> well, it's -- i mean it is perhaps a party could initiate an action without the act of cooperation from the court but to maintain it from beginning to end again requires the court's cooperation. and even if -- if the court were inclined to say the initial matter, if this statute were coming before us for the first

time today given the recent decisions on jurisdiction but you might be inclined to say this is not a jurisdictional statute, a lot of water has gone over the dam here, the court has said multiple times this is a jurisdictional statute. congress has not disturbed those decisions. >> the court has said that many times. but is there any case in which is result would have been different if the anti-injunction act were not viewed as jurisdictional, but instead were viewed as a mandatory claims processing rule. >> there's certainly a number of case where is the court dismissed saying it is jurisdictional. as i read the cases i don't think any of them without necessarily have come out differently. i don't think we had a case where the argument was well, the government has waived this so if it's not jurisdictional -- >> the clearest way of distinguishing between the jurisdictional provision and the mandatory claims processing role is whether it can be waived.

and whether the court feels that it has an obligation to raise the issue. if there are a lot of cases that call it jurisdictional, but none of them would have come out differently if the anti-injunction act were simply a mandatory claims processing rule, you have that on one side. on the other side you have davis where the court accepted a waiver by the solicitor general, the sunshine case where there also was a waiver. and there's the williams packing case which is somewhat hard to understand as dealing with anti-injunction act as a jurisdictional provision. if there's no way the government could win and the plaintiff could suffer harm. doesn't that sound like an exception to the anti-injunction act? >> no. i think the best interpretation of the court's cases is that it was interpreting a

jurisdictional statute. indeed in williams packing the court said it was a jurisdictional statute. but again, even if you have doubt about simply the cases, there's more than that because congress has not only not disturbed this court's decision stating that the statute is jurisdictional, they passed numerous amendments to this anti-injux act. >> you can't separate these two points. the idea that congress has akwee esed has helped you. you have said we have gone back and forth. i'm not sure. >> what you have said mr. chief justice has been absolutely consistent for 50 years since the williams packing case, the period of inconsistentsy was after the first 50 years since the statute was enacted in 1867 there was a period when the court was allowing extraordinary

circumstances, exceptions and equitable exceptions. then very quickly it cut back on that and since williams packing you've been utterly consistent. >> even since williams packing there was south carolina v regan. that case can also be understood as an equitable exception to the rule which could be inconsistent with thinking that the rule is jurisdictional. >> i think the best understanding is not it's an equitable exception. but the court interpreting a statute as it would interpret any statute in light of its purpose and deciding in that special case it's a narrow exception. >> mr. long, the court looked to the long history of appellate issues as being jurisdictional in its traditional sense. not as a claim processing. but as a pure jurisdiction rule

the power of the court to hear a case. from all the questions here, i count at least four cases in the court's history where the court has accepted a waiver by the solicitor general and reached the tax issue. i have at least three cases one of them just mentioned by justice kagen where kepgss to that rule were read in. given that history, regardless of how we define jurisdictional statutes and claim processing statutes, isn't the fairer statement that congress has accepted that in the extraordinary case we will hear the case? >> no many many of these amendments that have come in the 0s and 90s, the congress has

flamed the limited exceptions to the anti-injunction act in injuries dirksal terms. it's written many of the act -- >> doesn't that just proved that it knows the court will impose a claim processing rule in many circumstances and so in those in which it specifically doesn't want the court to, it has to be clear? >> the court shall have jurisdiction to restrain the assessment and collection of taxes. >> back to the question that the justice asked. assuming we find that this is not jurisdictional. what's the parade that you see occurring if we call this a mandatory claim processing rule. what kinds of cases do you imagine that courts will reach? >> right, first of all, i think

you'd be saying that for the refund statute as well as for the anteinjunction act which has very similar wording. if the anti-injunction act is not jurisdictional, i think that's going to apply to the refund statute. the statute that says you have to first act for a refund but file within certain time. it would be both of those statutes. we are dealing with taxes here -- >> listen to my question. my question was if we deem this a mandatory claim processing rule. >> right. >> what cases do you imagine courts will reach on what grounds assuming the government does its job and comes in and raises the aia as an immediate defense? what -- where can a court then reach the question despite -- >> that would certainly be the first class of cases that occurs

to me. if the government does not raise it in a timely way, could be waived. i would think plaintiffs would see if there was a clever way that would get a suit going that wouldn't be immediately apparent. >> this assumes the lack of competency of the government, which i don't. what other types of cases? >> mr. long, i don't think you're going to up with any. i think your response is you could say that about any jurisdictional rule. if it's not jurisdictional is you're going to have an intelligent federal court deciding if you're going to make an exception. there will be no parade because all federal courts are intelligent. it seems to me it's a question you can't answer. it's a question which asks why should there be any jurisdictional rules. you think there should be. >> and justice scalia, honestly, i can't predict what would happen, but i would say that not all people who litigate about

federal taxes are necessarily rational and i think there would be -- >> mr. long -- >> i don't want to lose the second half of your argument and we spent all the time so far on jurisdiction. i accept pretty much, i'm probably leaning in your favor on jurisdiction. but where i see the problem is in the second part because the second part says restraining the assessment or collection of any tax not here, congress has nowhere used the word tax what it says the penalty. more over this is not in the internal revenue code but for purposes of collection. so high is this a tax. i know you point to certain sentences that talk about taxes within the code. and this is not attached to a tax. it is attached to a health care requirement. why does it fall within that

word? >> the first point is our initial submission is you don't have to determine that this is a tax in order to find that the anti-injunction act applies because congress very specifically said that it shall be assessed and collected in the same manner as a. even if it's a tax penalty and not a tax. so that's one argument. >> that doesn't mean the aia applies. i mean, it means -- then they provide some exceptions. but that doesn't mean the aia applies. it says in the same manner as. it is then attached to chapter 68 when that preferences that as being a manner of. well, that it's being applied or if it's being collected in the same manner as a tax, doesn't automatically make it a tax. particularly since the reasons for the aia are to prevent

interference with revenue sources. and here an advance attack on this does not interfere with the collection of revenues. off read is arguments as have i. >> specifically on the argument that it is actually a tax even setting aside the point that it should be assessed and collected in the same manner as a tax. the anti-injunction act uses the term tax. it doesn't define it. tax is not defined anywhere in the internal revenue code. about the time that congress passed the anti-injunction act, congress has a broad definition.

whether you allow the liability is based in part on your income. it's assessed and collected by the irs. >> i thought that we had a principal that jurisdiction are narrowly construed. unless it's clear courts are not deprived of jurisdiction. i find it hard to think that this is clear. it's easy to think that it's not clear. >> well, the anti-injunction act applies not only to every tax in the code, but as far as i can tell to every tax penalty in the code. >> mr. long, you said before, and i think you were quite right that the tax injunction act is modelled on the anti-injunction

act. after the tax injunction act what can't be enjoined is an assessment for the purpose of raising revenue. the tax injunction act does not apply to penalties that are designed to induce compliance with the law rather than to raise revenue. and this is not a revenue raising measure because if it's successful, nobody will pay the penalty. and there will be no revenue to raise. >> well in bob jones the court said that they had gotten out of the business of trying to determine whether ab action is primarily revenue raising or regulatory. and this one certainly raises -- is expected to raise very substantial amounts of revenues at least $4 billion a year by the -- >> but bob jones involved the statute where it denominated the

tax. here we have one where the congress is not denominating it as a tax. it's nominating it as a penalty. >> that's absolutely right. and that's obviously why if it were called a tax there would be absolutely no question that the anti-junction applies. >> absolutely. even the section of the code that you refer to previously, the one following 7421, the aia, it does very clearly make a difference between tax and penalties. very excomplicit. >> yes, it does. that is correct. there are many other places in the code -- >> the best collection i found in your favor i think is in mort her captains brief on page 1617 he has a whole list. i had my law clerk look all those up. it seems to me that they all fall into the categories of either one, these are penalties that were penalties assessed for

not paying taxes. or two, they involve matters that were called by the court taxes. or three in some instances they were deemed by the code to be taxes. now what we have here is something that's in a different statute that doesn't use the word tax once except for a collection device and in fact, in addition, the underlying aia reason which is to say to the solicitor general we don't care what you think. we in congress don't want you in court where the revenue after a state tax injunction act or the revenue of the federal government is at stake. and therefore you can't waive it. i got that. here it's not as stake and all the differences i just mentioned. so i ask that because i want to hear your response. >> there are penalties in the

internal revenue code that you really couldn't say are related any close way to some other tax provision. there's a penalty that's discussed in the briefs for selling diesel fuel that doesn't comply with epas regulations. there are all kind of penalties in the code. >> mr. long, aren't there places in this act fees and penalties that were specifically put under the anti-injunction act? that's one on health care plans, there's one on pharmaceutical manufacturers. where congress said the anti-injunction act is triggered for those. that does not say that here. wouldn't that suggest that congress meant for a different result to obtain? >> congress didn't use the language the anti-injunction act should apply. >> no. it specifically referred to the part of the code where the

anti-injunction act is. >> all of sub title f which picks up lots of administration and procedure provisions. but those are fees. congress did not provide in the sections themselves that they should be paid with part of the tax return. they were free standing fees. by using that sub title f language, congress plugged in a whole set of rules for how to collect and administer the fees and it went not just to assessment and but to example, privacy, a whole series of additional things. i think it would be a mistake to look at that language and say here's congress saying they want the anti-injunction act to apply. they're doing more than that. you could look at section 5,000 a the individual coverage

requirement saying it could have been clearer without saying the anti-injux act applied and that's true. again they were trying to accomplish a lot. it's easier to talk about this case if we forget the words for purpose of restaining assessment or collection. in a sense rt brings the jurisdictional question. it seems to me, maybe you could comment on the language. is that sort of language usually contained in a injury dictional provision? you often don't know the purpose of the suit until it's underway. >> this does strike me as unusual but this is an old statute. the core language is unchanged since 1867. i think that's part of the

explanation for it. and again it's, you know, become the center of a series of provisions that very carefully control the circumstances in which litigation about federal taxes can take place. >> mr. long, if there's another argument that has been made, i would like you to address that is all this talk about tax penalties. all beside the point this suit is not challenging the penalty. this is a suit that is challenging the must buy provision. the argument is made that if indeed must buy is constitutional, then these complainants will not resist the penalty. so what they're seeking is a determination that the must buy requirement stated separately

from the penalty that must buy is uninstitutional and if so, that's the end of the case. if it's not so, they're not resisting the penalty. >> i think that argument doesn't work for two reasons. first, if you look at the complaints' own complaint, they clearly challenge the minimum requirement challenge and the penalty. page 122 of the joint appendix. they challenged the requirement that the individualing obtain health care coverage or pay a penalty. >> if it's a the problem, it's easy to amend a complaint. you can just take that out of the complaint. >> yes. another complaint would be filed. i think that's a serious problem. even if they filed a different complaint, i don't think in this case you can separate the minimum coverage requirement from the penalty because the penalty is the sole means of

satisfying it. the minimum coverage requirement is invalidated, the penalty however, remains standing. anybody who doesn't have insurance has to pay the penalty. then they'd have to pay a penalty equal to the cost of insurance and they couldn't even have insurance. i don't think that would be -- >> they say they want to obey the law. they say your argument puts them in the position of having to disobey the law in order to obtain review of your claim. >> first of all, i can't find that in the record in their declarations. i don't see a statement that they will never incur a penalty under any circumstances. but even if that were so, what this court has said in americans united the anti-injunction act bars any suit not just to enjoin

the collection of your own taxs, but the collection of anyone's taxes. even if it were really true that these plaintiffs were never interested in the pent and would never pay the penalty if they were to succeed in this case in striking down the minimum coverage requirement, the inevitable result would be that the penalty would fall as well because the government couldn't collect a penalty for failing to follow an unconstitutional requirement. it would still be barred. >> i take it you interpret the ta chute to mean the following for the purpose of means having the effect of, is that correct? >> well, this court many the bob jones case where a similar kind of argument was