Whether the New York Opioid Stewardship Act's surcharge is a 'tax' within the meaning of the Tax Injunction Act

QUESTION PRESENTED The Tax Injunction Act (TIA) forbids federal courts from enjoining “the assessment, levy or collection of any tax under State law” when state-court remedies are adequate. 28 U.S.C. § 1341. The lower courts are in disarray over what constitutes a “tax” within the meaning of this language. All agree that injunctions against “classic” taxes are verboten, while injunctions against penalties and fees are not. But the distinctions among taxes, penalties, and fees have produced open discord among the lower courts. This case squarely implicates the disagreement. It involves a challenge to New York’s Opioid Stewardship Act (OSA), which imposes a levy that bears no resemblance to a traditional tax and has all the hallmarks of a punitive fee: It is assessed in recurring lump sums of $100 million annually; it reaches just 97 companies out of millions doing business in the State; it is collected by regulators, not tax authorities; it is placed in a segregated account and used to pay for remedial programs related to the opioid crisis; and the law expressly bans the payers of the surcharge from passing it on. The Second Circuit nevertheless concluded that the OSA levies a “tax” within the meaning of the TIA because the opioid-abuse programs that it funds provide a general “public benefit.” In that court’s view, the charge would be a non-tax fee only if it were used to pay for a benefit enjoyed narrowly by its payers (like a highway toll) or to defray the cost of regulation (like a licensing fee). That reasoning conflicts squarely with decisions of the First, Fourth, and Ninth Circuits. The question presented is whether the New York Opioid Stewardship Act’s surcharge is a “tax” within the meaning of the Tax Injunction Act, despite having features that other circuits repeatedly have held indicative of a punitive fee.