That bit of horse-racing wisdom expressed on the TV show M*A*S*H (ironically, by the pious chaplain, Father Mulcahy) should have been heeded by the commentators speculating on the outcome of the Supreme Court's decision on the Affordable Care Act, a/k/a Obamacare, which was upheld on a ground, and by a vote, that surprised the punditry.
Individual Mandate: Tax or Penalty?
Of the four major issues before the Court in the case, most of the commentary, learned and otherwise, focused on whether the Court would strike down the law's "individual mandate" -- the requirement that everyone carry health insurance or else pay a penalty -- as beyond Congress' power under the Commerce Clause. The Court did indeed find, by a 5‑4 vote, that the law was unconstitutional under the Commerce Clause, making the ACA only the second piece of federal legislation struck down on Commerce Clause grounds since the New Deal era. However, the mandate was upheld in an opinion by Chief Justice Roberts, who was joined by the Court's solid left wing to make a majority, on the alternative ground that the monetary penalty is within Congress' power under Article I, § 8, cl. 1 of the Constitution to lay and collect taxes.
Among the commentary and predictions about the case, it is fair to say that few if any were predicting that the law would be upheld on the "taxing power" ground. The oral argument on the case in March 2012 made it easier to dismiss the tax rationale, as the Justices’ questioning highlighted the seeming contradictions and counterintuitive logic of the argument (i.e., Congress specifically said the penalty was not a tax, just a penalty; the penalty is not meant to raise revenue (ideally, everyone would comply with the insurance requirement); even if deemed a tax for Constitutional purposes, it is not really a tax per se for purposes of the tax code, and thus the case is not premature under the tax Anti-Injunction Act).
A Few Takeaways for Practitioners and Clients
Scholars will spend many hours analyzing the 193 pages of opinions issued by the Court, but in the immediate aftermath of the decision I will note a few principles for practitioners and clients that this high-profile case re‑affirms. First, the fact that an argument is counterintuitive and involves a certain level of intellectual heavy lifting to get from point A to point Z is not necessarily a detriment at the Supreme Court level. Virtuosos get applauded for playing a difficult piece, not for hitting the right notes on an easier, more aesthetically-pleasing tune.
Second, one often hears as a bit of advice on appellate advocacy that one should limit the number of issues that are raised in the brief -- the "less is more" philosophy. The recent decision, though, shows the usefulness of giving a judge an alternative path to the desired result. Solicitor General Verelli had to insist, against internal opposition, on including the "tax" argument in the briefing, yet that turned out to be the argument that won the case. The advice to concentrate on only your best arguments makes the dubious assumption that one knows in advance which arguments are most likely to succeed.
That point leads to the third point, which is that the experts get it wrong. Here, they were wrong twice -- first, when cert. was granted, by not taking the Commerce Clause argument seriously, and second, by underestimating the tax argument.
Fourth, and lastly, the judge's questions and the theatrics of oral argument are a poor indicator of how the case will come out. There are many cases in which the oral argument goes well but the decision does not.
