The Justice Department has reversed course on a key argument it has been using to defend the federal health care overhaul, a move that Liberty University says clears the way for a ruling on the merits in its case challenging the law. The department has argued in lower courts that a narrow section of U.S. code dealing with the power of Congress to levy taxes barred various legal challenges. The law requires that most taxes can be legally challenged only by someone who has paid the tax, applied for a refund and is dissatisfied with the refund.
A three-judge panel from the 4th Circuit Court of Appeals, which last month heard oral arguments in the two Virginia cases challenging the health care law, questioned whether the rule applied to Liberty University, which brought one of the suits, or to Virginia, on whose behalf state Attorney General Ken Cuccinelli is suing.
But the Justice Department joined with Liberty University and Cuccinelli in filing briefs with the court arguing that the rule should not apply.
“In the unique circumstances of this case, we do not believe that Congress intended a refund suit to be the sole recourse for a constitutional challenge to the minimum coverage provision,” lawyers for the Justice Department wrote.
The move was welcome news to university officials.
“I think this development clears the deck for the court of appeals to address the merits of this case now,” said Mathew Staver, dean of Liberty University’s School of Law. “I think that’s what everyone wants.”
The Justice Department had also challenged the state’s legal standing to bring the lawsuit. But Cuccinelli has argued that Virginia had standing to challenge the reforms because the state legislature passed a state law in 2010 stipulating that Virginians cannot be forced to purchase health insurance, as the federal reforms would require.
“The government is now doing the best they can in putting together a case they’ll be confident arguing in front of the Supreme Court,” said Stephen Presser, a Northwestern University law professor. “To spend time with arguments that don’t go to the merits … is a bad idea and I think the government has understood that.”
