Wednesday, March 04, 2015

Dueling Visions of Reality in King v. Burwell


One of the strongest arguments for the government's position in King v. Burwell has been based on consequences: if the Supreme Court denied insurance subsidies to customers on federal exchanges, the consequences will be disastrous both for insureds and for the states.

But the problem with arguments for consequences is that they assume that the judges share your view of reality.  If judges deny that these consequences will actually happen, the argument from consequences falls flat. Consider in this context the continuing belief by many conservative politicians that climate change is not due to human activity. Therefore there is no need to pass stricter environmental regulations because human activity is not the cause of any change that might be occurring.

Put another way, if you and the judges don't see reality the same way, then you can't assume that your arguments about disastrous consequences will do very much to change their minds.

This point is especially important in our current world of polarized media, in which liberal and conservative elites increasingly look to their own trusted sources of information.  Justice Scalia, for example, pointed out in a recent interview that he doesn't read the Washington Post anymore because he thinks it is too liberal, and mostly sticks to conservative news sources.  If these sources are telling him that a particular issue is not a problem, then he is unlikely to believe that it is a problem, no matter how much people talk about it in newspapers or on the Internet. Why should he trust their account of reality when he doesn't trust their sources of information?

Therefore it was crucial in the oral argument in King v. Burwell to discover whether any of the Justices actually doubted that denying subsidies in federal exchanges would have disastrous consequences. As far as we can tell, all of the Justices accepted this proposition. (Obviously, we don't know what Justice Thomas thinks, because he doesn't talk at oral arguments.) Justices Scalia, Alito, and especially Justice Kennedy, however, spoke as if they accepted that dire consequences would flow from accepting the challengers' position. Although the Chief Justice said little, it would be very surprising if his views about reality were different.

Scalia and Alito, however, also appeared to believe that Congress would quickly come up with a fix that would avoid the problem, and therefore no serious harm would come from upholding the petitioners' challenge. Here's a key exchange between Justice Scalia and Solicitor General Don Verrilli:

JUSTICE SCALIA: What about what about Congress? You really think Congress is just going to sit there while while all of these disastrous consequences ensue. I mean, how often have we come out with a decision such as the you know, the bankruptcy court decision? Congress adjusts, enacts a statute that
that takes care of the problem. It happens all the time. Why is that not going to happen here?

GENERAL VERRILLI: Well, this Congress, Your Honor, I-  I-

GENERAL VERRILLI: You know, I mean, of course, theoretically of course, theoretically they could.

JUSTICE SCALIA: I-- I don't care what Congress you're talking about. If the consequences are as disastrous as you say, so many million people without without insurance and whatnot, yes, I think this Congress would act.

Verrilli offers the conventional wisdom-- that the current Republican-controlled Congress is hopelessly dysfunctional and that Republicans have been unable to agree on a fix for Obamacare--in part because there is no consensus on a substitute for Obamacare, and in part because their more radical elements will punish politicians who attempt to fix the program.  Moreover, he assumes that it is vain to hope that there will be a bipartisan solution because Republicans and Democrats disagree so pointedly about Obamacare.

Scalia, however, sees things differently. He believes that when push comes to shove, Republicans will overcome their internal divisions and come up with a sensible solution that will preserve insurance coverage for millions while getting rid of the hated Obamacare.  If you read the media that Scalia reads, you might well believe that this is the case.

But even if you don't agree with that view, and you don't regularly get your news from conservative media, you might well believe (or at least hope!) that Congress will respond in the face of a genuine disaster. Republicans will back down from their complete rejection of Obamacare and pass a technical fix.

But that assumes that the Republicans in Congress see the world the way that you do. Some of them may, but some of them may not.  Your judgment of the likely consequences depends on other people's vision of reality.

Scalia's optimism about the consequences of holding for the petitioners is premised on the view that Congress is not really dysfunctional, and that this is an unfair portrait painted by a liberal media. People with a different view of the world will probably disagree-- Congress is broken. Or, at the very least, they have insufficient faith in the current political system to want to gamble that Congress will be able to avoid a disaster.

Competing visions of the world matter greatly in making arguments about consequences. And there many many ways that liberal and conservative elites can find ways to disagree about what is actually happening. Even if the Justices all agree on the consequences of denying subsidies in federal exchanges, they may still have very different views of the world when it comes to how the current political system works and whether Congress can be trusted to work things out. And that difference in their views of reality may be crucial to how the case comes out.

Initial Reaction to the Argument

Gerard N. Magliocca

After reading the transcript (and I certainly defer to the impressions of anyone who was actually at the Court today), I have the following observations:

1.  I was pleased that the standing issue was addressed.  Nobody except Justice Ginsburg was very interested, but at least they grappled with the problem.

2.  The Chief Justice said hardly anything other than introducing the lawyers and keeping time.  I found that rather odd, though it does suggest he was not enthusiastic about hearing this case.

3.  If Justice Kennedy has constitutional doubts about the petitioners' view of the statute but thinks that their interpretation is correct, then he should just accept that reading and find it unconstitutional.  I'm not terribly keen on the expansion of the constitutional avoidance canon under the Roberts Court, as I think that the concept cannot be applied in a principled way.  For example, Justice Kennedy was completely uninterested in the statutory interpretations that would have avoided the First Amendment issue raised in Citizens United.  (Justice Stevens pointed out this problem in his dissent.)  Why is this case any different from that point of view?  

Tuesday, March 03, 2015

Why the ACA challenge violates federalism

Guest Blogger

Simon Lazarus

Opponents of the Affordable Care Act have been caught off guard by the possibility that the challenge in King v. Burwell actually violates principles of constitutional federalism. The federalism argument has been made in two important Supreme Court amicus curiae briefs, one submitted on behalf of 22 states and the District of Columbia, and another on behalf of four law professors – Abbe Gluck, Gillian Metzger, Thomas Merrill, and Nicholas Bagley.

The federalism argument is based on the doctrine of Pennhurst State Hospital v. Halderman, 451 U.S. 1 (1981), written by then-Associate Justice William Rehnquist.  The professors’ brief explains that “Pennhurst and related decisions . . . broadly reflect a strong interpretive presumption that when Congress intends to impose conditions on States’ choices that would result in significant consequences, it does so unambiguously.”  Only with “clear notice” of such consequences, can states exercise choices offered by federal statutes, in a manner that enables them to “serve their proper role in the legislative process and in our federal system.”

Both briefs demonstrate that, if the King v. Burwell challengers’ interpretation is correct, states that refused to set up their own exchanges did not get the requisite “clear notice” that if they turned operation of their exchanges over to the federal government, they would strip their citizens of the tax credits and subsidies that currently help some 87% of them (on average) purchase insurance. Moreover, stripping these subsidies will likely cause the collapse of the exchanges themselves, and disrupt or quite possibly crash altogether these states’ entire individual (non-group) insurance markets. Under the doctrine of Pennhurst, these are pretty significant consequences and they require courts to interpret the statute to avoid springing these consequences on states unawares.  Hence, the challengers’ interpretation must be rejected, and the Obama administration’s competing interpretation – making tax credits and subsidies available nationwide – should be adopted.

On Tuesday, C. Boyden Gray, Adam White, and Adam Gustafson, who authored their own amicus brief in support of petitioners, tried to rebut the federalism argument in a guest post on the Volokh Conspiracy. (The post also references Professor Gluck’s January 27 Politico article summarizing  that argument, and Professor Marty Lederman’s March 2 post on Balkinization to similar effect.)

The gist of their argument is that:
                “We’re not afraid to acknowledge Gluck’s . . . federalism argument; we just think it’s wrong on the merits.  [In the professors’ brief] she offers the following version . . . .
1.       Congress intended to subsidize all health insurance exchanges.

2.       If Congress had further intended to take subsidies away from States that did not establish their own exchanges, then it needed to state this intent with clearly stated terms.

3.       Because Congress did not state in sufficiently clear terms any intent to remove subsidies from those States, the statute should be construed not to take the subsidies away from them.”
. . . .
 “The problem with this argument, however, is that it presumes the very issue before the Court: whether Congress intended to grant those subsidies to all States in the first place. Gluck and her colleagues are not answering the question presented-they're begging it.”

But Gluck’s argument does not have to assume that “Congress intended to subsidize all health insurance exchanges.” All she has to assume is (2) and (3)—that draconian consequences followed from a choice offered to states by a federal law, and that there was no clear notice of those consequences; therefore courts should adopt the Government’s reasonable alternative interpretation that avoids those consequences (and also avoids the serious constitutional questions that would arise if courts accepted the challengers’ interpretation). 

In the record of Congress’ enactment of the ACA, and Executive and state implementation, there is little if any room for serious dispute about the factual predicates of this simple two-step argument.  Even the challengers' lawyers had no inkling of their own subsidy-nullifying interpretation until several months after the statute was signed into law.  As demonstrated by the amici brief submitted by the Constitutional Accountability Center on behalf of key Congressional leaders and state legislators, there is no contemporaneous evidence that states actually thought that they were being threatened with loss of subsidies when they made their decisions about whether to establish an exchange in the months after the ACA’s enactment. Gray, White, and Gustafson’s post does not even try to refute these facts; instead they offer an irrelevant lament that the Obama administration has tried to "replace federalism with nationalism."

If the opponents of the ACA have an answer to the Pennhurst federalism argument, they have not yet managed to articulate it. 

Simon Lazarus is Senior Counsel to the Constitutional Accountability Center.  You can reach him by e-mail at

The "plain meaning" of blogposts and of briefs: A response to Gray, White and Gustafson

Marty Lederman

Over on the Volokh Conspiracy, C. Boyden Gray, Adam White and Adam Gustafson--the authors of an amicus brief filed on behalf of the Galen Institute and 21 state legislators (19 from Tennessee and two from Ohio)--take issue with my post from yesterday.

In my post, I emphasize "a federalism canon of statutory construction that the Court invoked and applied just last Term, but that the challengers entirely ignore--a canon that is the focus of an important amicus brief filed by Jim Feldman on behalf of Professors Tom Merrill, Gillian Metzger, Abbe Gross and Nick Bagley."  The canon in question was applied by the Chief Justice, on behalf of six Justices, in last year's Bond decision--namely, “the well-established principle” that “‘it is incumbent upon the federal courts to be certain of Congress' intent before finding that federal law overrides' the ‘usual constitutional balance of federal and state powers.’”  Bond slip op. at 12 (quoting Gregory v. Ashcroft, 501 U.S. at 460).

The Galen Institute attorneys write:  "Georgetown’s Marty Lederman asserted on the Balkinization blog yesterday that 'the challengers entirely ignore' the federalism argument."  This "comes as quite a surprise to us," they write, "because federalism was a central point in our own brief (on behalf of State Legislators and the Galen Institute), as well as the brief filed by Oklahoma and several other States."

Much as they might wish otherwise, the Galen attorneys and their clients are not the "challengers" to which my post was referring--four individuals represented by Michael Carvin are.  (This is self-evident from my post, which repeatedly quotes from and cites their briefs.)  And my representation was correct: those challengers have entirely ignored the Gregory canon that is a central focus of my post and of the Merrill brief.

For what it's worth, however, the Galen brief and the Oklahoma amicus brief also fail even to mention, let alone contend with, the Gregory/Bond canon that “‘it is incumbent upon the federal courts to be certain of Congress' intent before finding that federal law overrides' the ‘usual constitutional balance of federal and state powers.’”*

Those top-side amicus briefs do make other federalism-based arguments, some of which Gray and his colleagues summarize in their post.  My post was not about those arguments.  Part III of the Merrill amicus brief, however, does address Oklahoma's arguments directly.  That brief speaks for itself (quite powerfully, I think), and I commend it to interested readers.

* In an earlier version of this post, I mistakenly stated that the Oklahoma brief mentions the Gregory "certainty of congressional intent to upset the balance" canon.  That brief does quote selectively from parts of Gregory surrounding the statement of the canon, but does not mention the canon itself.

Monday, March 02, 2015

"Plain meaning," absurdity, and the (almost forgotten) Gregory/Bond federalism canon, in King v. Burwell

Marty Lederman

There are over 400,000 words in the Affordable Care Act.  The challengers in King v. Burwell rely upon a single one of those words—a simple preposition (“by”) buried in a provision (26 U.S.C. § 36B) setting forth the formula for individuals' monthly tax credits—as the basis for an interpretation of the Act that would unravel Congress’s efforts to guarantee affordable health care for all Americans.

According to the challengers, Congress’s use of the word “by” in the phrase “an Exchange established by the State” (rather than, for example, referring to an Exchange established “within” or “for” the State) has a world-changing impact:  On their reading, when a State chooses to allow the federal government to set up a health-insurance Exchange for its residents—an option the Act plainly allows, and one that almost three dozen states have adopted—that choice would have catastrophic consequences, namely, the denial of tax credits for all of the State’s residents who wish to purchase insurance on that Exchange . . . which would in turn lead to the virtual destruction of the insurance market in that State, thereby making the State’s residents much worse off than if Congress had not enacted the ACA at all.  See, e.g., NFIB v. Sebelius, 132 S. Ct. at 2674 (Scalia, Kennedy, Thomas, and Alito, JJ., dissenting) (“[The Act’s] system of incentives collapses if the federal subsidies are invalidated.… With fewer buyers and even fewer sellers, the exchanges would not operate as Congress intended and may not operate at all.”).

For good reason, the challengers make little effort to demonstrate that any members of Congress, let alone majorities of both houses and the President, actually intended to put the States to such a terrible choice, with such ruinous consequences if a State chooses one of the options Congress has offered.  (Indeed, such an argument would be belied by the fact that no legislators mentioned, or were aware, that they had done so--and that no one else realized it either, until an attorney stumbled upon the idea nine months after the law's enactment.)  

Even so, the challengers say, Congress’s actual intent “is legally irrelevant” (page 14 of their reply brief).  It is enough, they contend, that this sort of bullet-to-the-head of the States would facilitate one of Congress’s subsidiary goals—namely, to induce the States to create Exchanges—even if the cost of not fully realizing that goal would be not only to render unachievable the principal objective of the Act (guaranteeing affordable health care for all Americans), but also to destroy the existing health-insurance markets, such that health care would be much less affordable than it was before Congress enacted the law.

A great deal has already been written—in the briefs, online and elsewhere—about the substantive merits of the challengers’ account of the Act, and, in particular, about the proper interpretation of the subsidy-calculation phrase in section 36B on which the challengers rely: “an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act.”  To oversimplify a bit, there are three basic positions regarding the interpretation of that phrase:
-- The government argues, and I agree, that the phrase, read in the context of the Act's text as a whole, plainly does not disqualify individuals who purchase a plan through a federal Exchange from being eligible for the tax credits that make such a purchase possible, because when a State declines to create an Exchange under section 1311 of the Act, and HHS steps in to set up “such Exchange” under section 1321, that federal Exchange qualifies as an “Exchange established by the State under section 1311” for purposes of the Act.
-- Others, such as the majority of the Fourth Circuit panel in King, conclude that the phrase in section 36B is ambiguous on that question—in which case the proper outcome for the Court (under Chevron) would be to defer to the IRS’s reasonable interpretation that such credits are available in States where the federal government has established the Exchange.
-- The challengers stake out the third position—that the “plain meaning” of the contested phrase in section 36B precludes such tax credits in States where the federal government operates the Exchange.
For the purposes of this post, I will assume the challengers are correct, i.e., that the “plain meaning” of the words of section 36B isolation, would preclude tax credits in States where HHS has established the Exchange.  As noted above, I think the opposite is true—that the government’s reading is compelled.  But the purpose of this post is to examine what the Court should do if it were to agree with the challengers on the “plain” meaning of that particular statutory language.  In particular, and as explained more fully below, such a plain meaning would not resolve the case in the challengers' favor, not only because it would establish a fundamental absurdity at the heart of the statute, but also because of a federalism canon of statutory construction that the Court invoked and applied just last Term, but that the challengers entirely ignore--a canon that is the focus of an important amicus brief filed by Jim Feldman on behalf of Professors Tom Merrill, Gillian Metzger, Abbe Gross and Nick Bagley.

Read more »

What are the facts of King v. Burwell?


Steve Brill, who recently wrote an exhaustive--and often critical--history of the genesis of Obamacare, and who interviewed virtually everyone involved with it, reports that the petitioners' claim that “Congress could not have chosen clearer language to express its intent to limit subsidies to state exchanges,” is a complete fiction. If the petitioners are making a claim about what Congress intended or what its purposes were, Brill explains, there is nothing to their case.

It is possible to argue, as the architects of the lawsuit originally did, that Congress may have wanted to make subsidies available on all exchanges, whether operated by the federal government or by the states, but that Congress didn't succeed in doing so because of a "glitch" in the wording of the statute.  But that approach--call it the glitch theory--would have greatly weakened their case. Instead  they decided to make a far stronger-- and far more daring--argument.  First, they argue that the language denying subsidies on federal exchanges is both clear and unambigious (so that Chevron deference to the IRS's interpretation does not apply). Second, they argue that the language is clear because it reflected a deliberate choice by the people who drafted the legislation, if not by each and every member of Congress who voted for the legislation.

Brill's point is that there is no evidence to substantiate that claim.
I know what the legislators intended because in researching my book, I interviewed pretty much everyone involved in the conception and writing of the law. Moreover, I did that long before King v. Burwell had become the Obamacare opponents’ favorite new weapon, which means that those opponents had no reason to spin the fairytale that Congress did not intend for those subsidies to go to the millions of Americans signing up on the federally run exchange. At the time, no one had a dog in a fight over congressional intent, because there was no fight.

I also reviewed reams of internal emails and memos generated by congressional staffers working for both Democrats and Republicans. In no document from start to finish, in a legislative process that spanned more than two years, is there even a hint of anything but the unambiguous assumption that the law, whose first section is titled “Quality, Affordable Health Care for All Americans,” would indeed provide these insurance subsidies for all Americans who needed them.

In short, I had a catbird seat for doing exactly that kind of fact-based reporting that anyone judging a case like this — reporters, as well as judges — should do. But I didn’t appreciate it because neither I nor the people I was interviewing had any expectation that this case would become something the Supreme Court would take seriously.

Indeed, when I mentioned the case to several of those sources during the spring and summer of last year, all of them – Democrats and Republicans – did some version of an eye roll. This is why there is only scant mention of the case in my book, the draft of which was completed before the court took the case.

I’ve now gone back and looked at my notes and can report that I interviewed 21 congressional staffers and members last year in my effort to reconstruct the day-by-day narrative of how Obamacare happened. None ever mentioned the possibility that the subsidies did not apply to the states in the federal exchange.

On the contrary, everything they told me — and all of the contemporaneous emails and other internal documents I reviewed — assumed that the federal exchange would simply be a substitute for a state exchange if a state decided not to launch its own, and that the same rules would apply.
Brill repeatedly refers to legislative intent in his discussion.  King v. Burwell is being fought primarily on textualist grounds, rather than on grounds of legislative intent. Even so, the petitioners have not thought it enough merely to argue that the text is clear and admits of no other reasonable construction. That is because the government has an equally viable textualist argument-- that the meaning of the terms in the statute must be understood in the context of the statute as a whole. If we take the entire text into account, petitioners must deal with the fact that there is more than one reasonable construction. (Indeed, my own view is that, because of the havoc it would wreak on the entire statutory scheme, the petitioners'  construction is not reasonable. Moreover, as Marty points out above, the federalism and avoidance canons would also support the Government's construction.).

To meet the government's textual argument, the petitioners must do more than point to one small portion of the text. They must argue that the language of the statute reflects a clear purpose to deny subsidies for health insurance if states did not create their own exchanges. That argument, however, brings the question of Congress's purpose back to the forefront of the litigation. The question of Congress's purpose is, as Brill says, a question that can be addressed through gathering evidence about the real world.  And there is no evidence that Congress actually wanted to threaten states that it would withhold tax subsidies  unless states created their own exchanges. Petitioners' account of Congress's purpose, Brill concludes, is simply made up.

King – Obamacare subsidies as textualism’s big test

Abbe Gluck

In November, I participated in a SCOTUSblog symposium on King, the Obamacare case that the Court will hear this week. The case, as I argued then and still deeply believe, is textualism's biggest test yet. Will the textualists show us -as they have been arguing for the past 30 years--that textualism is indeed a sophisticated and objective method of statutory interpretation that is a safeguard against judicial activism?  Textualism has had enormous success in the federal courts over the past decade, but those judges who have moved in textualism's direction will surely question those moves if textualism doesn't deliver what it promised.  Given that we are going to hear a lot of textualism talk this week and in the coming months, and to help folks get up to speed on these issues, I have reprinted (with permission ) my SCOTUSblog contribution below:

Obamacare’s opponents have depicted the challenges in King v. Burwell, Halbig v. Burwell, and the other subsidies cases as the choice between clear statutory text and vague notions of statutory purpose.   This is a smart strategy, because it creates the illusion of an easy choice for the Court’s textualists, and even for most of the other Justices. Textualists have spent three decades convincing judges of all political stripes to come along for the ride, and have had enormous success in establishing “text-first” interpretation as the general norm. In so doing, textualists have repeatedly emphasized that textual interpretation is to be sophisticated, “holistic” and “contextual,” not “wooden” or “literal,” to use Justice Scalia’s words. A lot of us (myself included) have gone to bat for this version of textualism, arguing that it is democracy enhancing and in furtherance of rule-of-law values, such as predictability.
The King challengers put all that on the line, and threaten all that textualists have accomplished. This is because King is not actually a text-versus-purpose case. Rather, King is about the proper way to engage in textual interpretation; specifically, about the interpretation of five words in a long and complex modern statute. And no one has to – or should – go outside the four corners of the Affordable Care (ACA) to decide it. So let’s cast aside the red herring of untethered purpose, and ask the question that gives King significance beyond the politics of health reform (and is a reason for the Court to avoid those politics): Will the Court follow, what Justice Scalia just five months ago (in Utility Air Regulatory Group v. EPA) called “the fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme”?
The five words at issue sit in a provision that requires the ACA’s insurance subsidies to be calculated based on premiums for individuals enrolled through an “Exchange established by the State under 1311” (ACA § 1401); the question is whether the IRS properly interpreted the ACA to allow those subsidies also to be available on federally operated exchanges (which now are the majority of exchanges). Section 1311 establishes the state-run exchanges and so, read in a vacuum, Section 1401 appears at first glance to deny the subsidies on federal exchanges. In context, however, the words are at a minimum highly ambiguous, and arguably actually clearly provide for subsidies on the federal exchanges.
Justice Scalia, an ardent proponent of judges not engaging in “legislation” under the guise of interpretation, has argued that the Court’s role is to adopt the interpretation that “does least violence to the text” (Green v. Bock Laundry). The IRS’s interpretation accomplishes that goal: Section 1401 can still be read literally because the section that authorizes the federal exchanges, Section 1321, provides that if a state does not establish an exchange under Section 1311, the Department of Health and Human Services (HHS) “shall . . . establish and operate such Exchange within the State.” In other words, HHS must “establish” a Section 1311 exchange, which is a state exchange. Moreover, the Act defines “Exchange,” with a capital E, three times in the statute as a “state” exchange. And HHS, in Section 1321, is told to establish “such [capital E] Exchange.” The Court need not add or delete a single word of the ACA to reach this conclusion. (In fact, the Court shouldn’t be engaging in that enterprise in the first place. This is a Chevron case: an agency interpretation is at issue, and so all that is required is that the agency’s own construction be reasonable.)
On the other hand, as amply detailed in the briefing, the ACA’s text – not its purpose or its legislative history, or anything else that textualists don’t generally consider – is slashed to pieces under the challengers’ reading. Two examples from a list of many offered in the briefing:
  •  Section 36B(f)(3) requires “[e]ach Exchange (or any person carrying out 1 or more responsibilities of an Exchange under section 1311(f)(3) or 1321(c)” to report the premiums doled out. Section 1321 is the federal exchange provision, and so this section is rendered meaningless if the federal exchanges have no subsidies.
  • Likewise Section 1312(f) provides that only “qualified individuals” can purchase on an Exchange but defines a qualified individual as one who “resides in the State that established the Exchange.” Failure to understand a federally operated exchange as the legal equivalent of a state exchange would mean that federal exchanges have no customers.
Justice Scalia’s own statutory interpretation treatise argues (at pages 63 and 168) that “there can be no justification for needlessly rendering provisions in conflict if they can be interpreted harmoniously,” and that statutory provisions should not be interpreted to render them ineffective or superfluous.
Textualists also advocate structural, contextual interpretation. As Justice Scalia’s treatise puts it (at 168): “[N]o interpretive fault is more common than the failure to follow the whole-text canon, which calls on the judicial interpreter to consider the entire text, in view of its structure and of the physical and logical relation of its many parts.” The subtitles of the ACA immediately surrounding the provision in question are a set of interlinking pieces: they add new requirements on insurers to make insurance accessible; impose the infamous individual mandate on the public to populate the insurance pools; and create the federal and state exchanges and authorize the subsidies (which the exchanges deliver) to make insurance purchase accessible and affordable enough for the individuals now required to purchase it. In their 2012 joint dissent in NFIB v. Sebelius, Justices Scalia, Kennedy, Thomas, and Alito read these parts as making no logical sense without one another and also read the statute to include subsidies on federal exchanges:
“Congress provided a backup scheme; if a State declines to participate in the operation of an exchange, the Federal Government will step in and operate an exchange in that State.”
and then:
“That system of incentives collapses if the federal subsidies are invalidated. Without the federal subsidies, individuals would lose the main incentive to purchase insurance inside the exchanges, and some insurers may be unwilling to offer insurance inside of exchanges. With fewer buyers and even fewer sellers, the exchanges would not operate as Congress intended and may not operate at all.
The 2012 Supreme Court brief of the state governments likewise read the statute as providing subsidies through the federal exchanges: “If a State is not willing to create and operate an exchange, the federal government will step in and do so itself. ACA § 1321(c). Subtitle E then establishes tax credits and other subsidies for the lower-income individuals and small businesses that purchase plans on the exchanges. ACA §§ 1401–21.” It is no coincidence that the section of the ACA in which all this appears is entitled “State Flexibility Relating to Exchanges”; the provision establishing the federal exchange (Section 1321) also has the title “State Flexibility.” By using this terminology, the text by its own terns gives states the choice – without penalty – between operating an exchange or letting the feds do it for them.
The 2012 plaintiffs – represented by the same lawyer in King – even argued that the entire Affordable Care Act should have been struck down without the subsidies, because it could not function without them.
Textualists apply several canons of construction premised on the assumption that Congress does not write statutes to fail. One is constitutional avoidance. Another is severability. (Both were used to save the ACA in NFIB.) Related is the major questions rule, which presumes that Congress is not subtle when it makes a major statutory move. The King challengers are asking the Court to adopt a reading that assumes that Congress purposefully designed the federal exchanges without the very same subsidies that in 2012 even the ACA’s opponents viewed as essential to the statute’s functioning. In other words, they are now arguing that Congress intentionally configured the federal exchanges to be doomed to fail. If that isn’t a major question that requires an explicit statutory statement, what is? The purpose of all of these rules – avoidance, severability, major questions – is to keep judges from “legislating”; that is, from interpreting a statute in ways that would make it unrecognizable to enacting Congress, as the proposed reading surely would.
In an effort to lend plausibly to their interpretation, the challengers have spent the past year constructing a narrative that the Exchange provisions operate exactly like Medicaid does: that Congress needed a “stick” – taking away the subsidies – to convince the states to operate the exchanges themselves. I have illustrated elsewhere that this reading of legislative history is inaccurate, but more importantly for this post, note that the challengers have to look outside the text of the statute to even try to construct this narrative. The text is fatal to this argument. Another common textual rule of interpretation, exclusio unius, draws strong inferences from Congress’s utilization of statutory structure in one part of a statute or related statutes and its omission from another. Medicaid is explicit that states lose their funding (and there is no federal fallback) if they do not cooperate. The ACA has not one word on that point in the exchange context and instead does what Medicaid doesn’t: the ACA provides fallback federal exchanges. This is exclusio unius 101: Medicaid shows that Congress knows how to be explicit if it wishes to use a federalism “stick.” The lack of an analogous provision for the exchanges leads to precisely the opposite of the challengers’ reading under textual analysis.
Textualists have spent the past thirty years persuading even their opponents of the jurisprudential benefits of a sophisticated text-based interpretive approach. The King challengers put that all at risk. To be clear: my argument isn’t about the merits of the ACA. The ACA isn’t perfect health policy. But the King challenge is all about the ACA’s merits. They have vowed to destroy the statute at any cost, even if it means corrupting textualism to do it.

Saturday, February 28, 2015

Gay Rights, Religious Accommodations, and the Purposes of Antidiscrimination Law

Andrew Koppelman

Religious conservatives feel that it would be sinful for them to personally facilitate same-sex marriages, and they have sought to amend the laws to accommodate their objections.  These efforts have been fiercely resisted.  The resistance is largely unnecessary.  Gay rights advocates have misconceived the tort of discrimination as a particularized injury to the person rather than the artifact of social engineering that it really is.  Religious conservatives likewise have failed to grasp the purposes of antidiscrimination law, and so have demanded accommodations that would be massively overbroad.  If those purposes are carefully disaggregated, the result is different from what advocates on either side have demanded. 

This issue exposes a major flaw in progressive thought, one that entrenches the very inequalities the left seeks to combat.  The individual-injury-based conception of antidiscrimination law has not only produced excessively harsh treatment of religious conservatives.  It has entrenched racial and gender subordination, by imagining discrimination to be the conduct of a few bad actors rather than a structural wrong that demands structural remedies. 

I elaborate in a forthcoming piece in the Southern California Law Review, available in draft on SSRN, here.

Windsor: Encouraging Constitutional Change, Not (Just) Clearing the Channels of Political Change

Neil Siegel

In recent posts describing a new article, Heather Gerken offers an account of the U.S. Supreme Court’s decision in United States v. Windsor that draws from John Hart Ely’s theory of judicial review. Gerken contrasts her “internalist” account of Windsor with “psychoanalytic” ones offered by scholars such as Rick Pildes, Michael Klarman, Mary Dudziak, and myself. Gerken describes her work as reflecting a distinctive focus on what Justice Kennedy’s majority opinion in Windsor “actually says,” as opposed to divining what it may portend doctrinally.

There is a more accurate way to characterize our disagreement. Gerken offers a process account of the majority opinion in Windsor, according to which the Court “dislodge[ed] an outdated consensus at the national level” about the status of gay people, thereby “ensur[ing] that the interlocking gears of our democracy—rights and structure—were free to move without committing to them moving in a particular direction.” In contrast, I view the Windsor Court as accomplishing something more substantive than just clearing the channels of political change. I view the Windsor Court as encouraging—but not yet requiring—citizens and courts to secure marriage equality.

Read more »

Friday, February 27, 2015

Where have the federalists gone? Obamacare, King, and Federalism at the Court

Abbe Gluck

The Obamacare case, King v. Burwell, which the Court will hear next week, has deep importance not only for health care but also for law.  I have previously detailed why the case is textualism's big test. Today, in Politico, I explain why the case is also fundamentally about state rights.  The question is whether the Court's federalism doctrines--which, let's not forget, the Court applied against the Government in the last Obamacare case--whether these federalism doctrines, like the Court's  textualist rules, are sufficiently legitimate and objective such they will apply regardless of which side they happen to support, even in a case as politicized as this one.  After all, isn't that the point of having a rule of law in the first place?

 Here is an excerpt and a link.

The issue in King is whether the ACA penalizes states that opt out of setting up their own health insurance exchanges and, instead, let the federal government do it for them. The challengers have seized on four words in this 2,000-page law that, they contend, contain a dramatic consequence for the 34 states that have made this choice and allowed the federal government to step in: the loss of critical insurance subsidies that make health insurance affordable and sustain the insurance markets under the law. Without the subsidies—which are estimated at $25 billion across the 34 states—more than eight million Americans will likely lose their insurance. And, as a result, the insurance markets in those states will face near-certain collapse.

The challengers maintain that the case is simply about reading plain language. (I have detailed elsewhere why their hyper-literal reading of four words out of context is anything but plain and is not how the Supreme Court usually reads statutes.) But King is about a lot more than this. The case is about federalism—the role of states in our national democracy. The reason the challengers don’t want anyone to realize that is because the very text-oriented justices to whom they are appealing are the exact same justices who have consistently interpreted federal laws to protect states’ rights. And the challengers would read the ACA in the opposite way—as having devastating implications for the states.

The challengers’ interpretation turns Congress’s entire philosophy of states’ rights in the ACA upside down. Congress designed the exchanges to be state-deferential—to give the states a choice. But under the state-penalizing reading that challengers urge, the ACA—a statute that uses the phrase “state flexibility” five times—would be the most draconian modern statute ever enacted by the U.S. Congress that included a role for the states. What’s more, if interpreted as the challengers hope, the ACA would have been debated, enacted and implemented for two whole years under intense public scrutiny, including the scrutiny trained on it during the last major constitutional challenge in the Supreme Court in 2012, without anyone—no state, congressman or blogger—noticing these consequences or objecting to them.

A brief filed by Virginia and more than 20 other states attests that any clue of the dramatic penalty the challengers have read into the statute was entirely lacking. In the end, King is about whether an invented narrative that only emerged for purposes of this case should be permitted to work the greatest bait and switch on state governments in history.

Read more:

Wednesday, February 25, 2015

Judge Hanen's--and Michael McConnell's--mistakes about "affirmative action" in DAPA

Marty Lederman

One week ago, Judge Andrew Hanen, of the U.S. District Court for the Southern District of Texas (Brownsville), issued an opinion and order in which he preliminarily enjoined nationwide operation of the Department of Homeland Security’s new “Deferred Action for Parents of Americans" (DAPA) program--the regulatory initiative that was the subject of a wide-ranging Balkinization symposium last November.  

On Monday, the federal government made a motion to Judge Hanen to stay the preliminary injunction pending the U.S.'s appeal.  In the alternative, the government asks that the injunction be amended to cover only aliens residing in Texas, since the State of Texas is the only plaintiff that Judge Hanen found to have standing--or, at the very least, that the judge should tailor his injunction so that it does not apply in states that are not party to the suit, including a dozen states that have filed a brief explaining that DAPA will substantially benefit them and their residents.*

In the meantime, Professor Michael McConnell has published a defense of Judge Hanen's judgment in a recent the Wall Street Journal.  Professor McConnell's condemnation of the DAPA program, however--like Judge Hanen's--rests on a fundamental misunderstanding of the relevant law.

Before discussing the merits, it's important to stress that Michael McConnell is right about three significant things:

First, he is absolutely correct that "we should all be able to agree that the executive branch must follow the law until it has been amended by Congress."  Indeed, everyone does agree on that--including the President, Jeh Johnson, Secretary of DHS, and the Office of Legal Counsel.  Notwithstanding the efforts of many of the President's opponents to characterize the case as raising a constitutional question concerning executive authority to disregard the law, it does not.  It might be a nice talking point for partisan wrangling, but in fact the case does not implicate any questions of a so-called "imperial" President.  As I explained here back in November, the federal government is not claiming that it can disregard statutory limitations, nor even that it can act without congressional authorization.  This is and always has been simply a matter of statutory interpretation:

If, as the government argues, Congress has conferred upon the Secretary the discretion to defer removal of these aliens – and to authorize employers to hire those aliens, see 8 U.S.C. § 1324a(h)(3) -- then the Secretary obviously does not cause the President to violate his "take Care" duty if he decides to exercise that statutorily conferred discretion.

And if, on the other hand, Congress has clearly precluded the Secretary from exercising such discretion, then that's an ordinary statutory/APA violation, just as is alleged every day in countless other cases challenging agency actions. 

Secondalthough Judge Hanen nominally issued his injunction on procedural grounds (namely, that DHS did not subject the new program to a notice-and-comment rulemaking procedure), his opinion makes it crystal clear that, if and when he reaches the merits, Judge Hanen will find that DAPA exceeds DHS's statutory authority.  Accordingly, Professor McConnell’s column is focused—as is this post—on the merits questions.  (The notice-and-comment issues warrant separate treatment elsewhere, as does the government's argument that Texas lacks Article III standing to challenge the DAPA program.)

Third, Professor McConnell is correct to emphasize a very important and largely overlooked point about Judge Hanen’s decision:  The judge does not rest his injunction on DHS's expected failure to remove (or "deport") DAPA-eligible aliens from the U.S.

Heckler v. Chaney establishes a strong presumption that Congress has afforded the agency the discretion to choose to enforce the removal laws against particular categories of aliens rather than others—a presumption that is especially strong here, because immigration law expressly directs the Secretary to “[e]stablish[] national immigration enforcement policies and priorities,” 6 U.S.C. § 202(5).  As the Supreme Court recently recognized in Arizona v. United States, “a principal feature of the removal system is the broad discretion exercised by immigration officials,” which includes the decision “whether it makes sense to pursue removal at all.”

Judge Hanen acknowledges all of this.  Accordingly, in his balancing of interests for the purposes of determining whether a preliminary injunction is warranted, he stresses (pp. 118-19) that the injunction does not require DHS to begin removing or “prosecuting” the aliens in question.  As Michael McConnell puts it, “the district court narrowly crafted its order not to touch on prosecutorial discretion.  The administration remains free to decide which illegal aliens to deport and which to permit to remain in this country.”

Why, then, does Judge Hanen conclude that DHS lacks the authority to issue the DAPA Guidance?  Because, he reasons (p.85), the program “is actually affirmative action rather than inaction.”  

What does the judge mean by this purportedly crucial action/inaction distinction? 

As noted above, the permissible DHS “inaction,” in Judge Hanen's view, is that agency may in the exercise of its prosecutorial discretion decline to remove the aliens in question from the United States, and to shift limited federal resources to the removal of other categories of aliens.  The judge writes, however, that such a permissible exercise of “prosecutorial” discretion “does not also entail bestowing benefits” (p. 87).  And because DHS purportedly has “bestowed benefits” here, Judge Hanen reasons, it has acted beyond its statutory nonenforcement authority.  Michael McConnell emphasizes the same point—that the case is centrally about DHS’s alleged conferred of benefits.

Judge Hanen and Professor McConnell are certainly correct about one thing:  DHS's conferral of deferred-action status on an alien will afford that alien at least one very significant benefit--it will free up an employer to hire that alien, something the employer could not otherwise do under federal law.  Moreover, the Judge and Professor are also correct that the Heckler v. Chaney doctrine about a presumption of unreviewable nonenforcement discretion does not address this work authorization aspect of the DAPA policy.

So where do Judge Hanen and Professor McConnell go wrong?  Simply in this:  There is no basis for their underlying assumption that DHS would bestow upon DAPA-eligible aliens certain “benefits” that are not authorized by statute and by pre-existing regulations that have been promulgated pursuant to the notice-and-comment rulemaking process.
Read more »

Older Posts