Like a Sergio Leone scene, the Sixth Circuit issued an explosive en banc denial of CIC Services LLC v. Internal Revenue Service (a case we covered back in June).

As he did at the panel stage, Judge Clay defended the application of the Anti-Injunction Act, which here bars CIC Services from challenging the IRS’s categorization of an in-house insurance company as a tax shelter. He minced no words, characterizing Judge Thapar’s en banc “dissental” (itself a defense of Judge Nalbandian’s earlier panel dissent) as an attempt “to inflict death by distorted originalism on the modern administrative state.” According to Judge Clay, the case was “about statutory interpretation, not about the constitutionality of the so-called administrative state, or even the constitutionality of the AIA.”

Judge Thapar disagreed, writing (on behalf of six other judges) that the AIA shouldn’t apply because it only “applies to suits ‘for the purpose of restraining the assessment or collection of a tax.’” And this case wasn’t about taxes; it was about civil penalties for failing to report information to the IRS. See Autocam Corp. v. Sebelius (distinguishing the assessment or collection of a tax from an underlying policy rule), and Seven-Sky v. Holder, 661 F.3d 1, 8–10 (D.C. Cir. 2011), abrogated on other grounds by NFIB v. Sebelius, 567 U.S. 519. “Indeed, CIC currently has no ‘tax’ liability under this regulatory regime and may never incur any such liability.”

According to Judge Thapar, applying the AIA here unfetters the IRS’s “power to impose sweeping ‘guidance’ across areas of public and private life.” “In this country,” Thapar asserted, “people should not have to risk prison time in order to challenge the lawfulness of government action. In this circuit, they now do.”

Judge Sutton was in the pivot. His concurrence in the denial of rehearing expressed sympathy with the view of Judges Nalbandian and Thapar—at least “as an original matter.” Given the conflicting opinions from the Supreme Court, D.C. Circuit, and now the Sixth Circuit, however, he reminded his colleagues (and perhaps clerks reviewing a future cert petition?) that the ball had already passed to the high court:

“In a dispute in which the Court’s decisions plausibly point in opposite directions, it’s worth asking what value we would add to the mix by en-bancing the case in order to create the very thing that generally prompts more review: a circuit split.”

Particularly one involving a 2015 opinion of then-Judge Kavanaugh. Judge Sutton called on his colleagues that a “little caution” was “is in order when it comes to judging the efforts of our colleagues on this court and on the D.C. Circuit to sort this out.”