an unanticipated consequence of
Jack M. Balkin
Jack Balkin: jackbalkin at yahoo.com
Bruce Ackerman bruce.ackerman at yale.edu
Ian Ayres ian.ayres at yale.edu
Mary Dudziak mary.l.dudziak at emory.edu
Joey Fishkin joey.fishkin at gmail.com
Heather Gerken heather.gerken at yale.edu
Abbe Gluck abbe.gluck at yale.edu
Mark Graber mgraber at law.umaryland.edu
Stephen Griffin sgriffin at tulane.edu
Bernard Harcourt harcourt at uchicago.edu
Scott Horton shorto at law.columbia.edu
Andrew Koppelman akoppelman at law.northwestern.edu
Marty Lederman marty.lederman at comcast.net
Sanford Levinson slevinson at law.utexas.edu
David Luban david.luban at gmail.com
Gerard Magliocca gmaglioc at iupui.edu
Jason Mazzone mazzonej at illinois.edu
Linda McClain lmcclain at bu.edu
John Mikhail mikhail at law.georgetown.edu
Frank Pasquale pasquale.frank at gmail.com
Nate Persily npersily at gmail.com
Michael Stokes Paulsen michaelstokespaulsen at gmail.com
Deborah Pearlstein dpearlst at princeton.edu
Rick Pildes rick.pildes at nyu.edu
Alice Ristroph alice.ristroph at shu.edu
Neil Siegel siegel at law.duke.edu
Brian Tamanaha btamanaha at wulaw.wustl.edu
Mark Tushnet mtushnet at law.harvard.edu
Adam Winkler winkler at ucla.edu
Sometimes, lawyers are fortunate that an opponent does not get the opportunity to reply to their argument and they get the last, unchallenged, word on an issue. The Halbig case presents a prime example. On Monday, the plaintiffs seeking to nullify a key provision of the Affordable Care Act filed their response to the Government’s petition for rehearing en banc. The response takes full-- albeit not fair -- advantage of being the last word before the D.C. Circuit considers the petition.
To begin with, the Halbig plaintiffs never cite Rule 35 of the Federal Rules of Appellate Procedure, even though it is the controlling authority regarding en banc review. The Rule expressly recognizes that rehearing en banc is appropriate in order to avoid intercircuit conflicts, and that provision is directly applicable here. Currently, there is a conflict between Halbig in the D.C. Circuit, denying tax subsidies to help low income families afford insurance in states with a Federal Exchange, and King in the Fourth Circuit, allowing such subsidies. A grant of en banc review by the D.C. Circuit will automatically vacate the Halbig decision ending the intercircuit conflict and presenting the full court the opportunity to avoid one altogether if the D.C. Circuit ultimately agrees with the Fourth. If there is no conflict, the Supreme Court will have no compelling reason to take this rather narrow, yet overblown issue of statutory interpretation.
The absence of a Government opportunity to reply may also have loosened the reins on the discussion of case law in the Halbig response. Arguing against rehearing en banc, the Halbig plaintiffs cite instances where the D.C. Circuit has denied such review in important cases. But the response fails to point out that most of those cases predate the amendment of Rule 35 in 1998 expressly identifying avoidance of a circuit split as a basis for en banc review and emphasizing in the Advisory Committee Notes the particular importance of such review in cases like this one, where rehearing could resolve the conflict. D.C. decisions that came before that change in Rule 35 shed no light on whether en banc review is appropriate on this ground.
Of the post-1998 D.C. cases cited by the Halbig plaintiffs, one involved a situation where the Supreme Court had already granted cert on the issue. The other casescited presented no conflict. Thus, none of these cases resolves whether en banc review is appropriate here, where the D.C. Circuit’s panel opinion is the source of the intercircuit split.
The Halbig plaintiffs also contend that en banc review by the D.C. Circuit will delay Supreme Court review. Had the Government been able to respond, it could have shown the fallacy of this argument. If the Supreme Court wants to review the King case, it will grant cert, whether the D.C. Circuit rehears Halbig or not. If the Supreme Court does wait for the D.C. Circuit to rule, that would suggest that the ruling could make a difference as to whether the Court accepts review. In any event, the argument of the Halbig plaintiffs rests on a flawed premise -- that Supreme court review is inevitable because a decision striking down the subsidies would have an enormous impact, and the uncertainty pending such a decision is destructive. That argument would apply to almost any suit challenging a major government program, and it assumes the conclusion, that the Court is likely not only to take the case but also to agree with the challengers. That assumption is unwarranted.
Professor Jonathan Adler is not so fortunate as the Halbig plaintiffs, for I do have an opportunity to reply to the inaccuracies and irrelevancies in his response to my last post on Balkinization. First, I never advanced the notion that a litigant’s motives dictate the disposition of the substantive legal issues in a case. Halbig would be nonsensical whatever the plaintiffs’ motives were. But the origins and purpose of a litigant’s case can play a part in discretionary determinations, such as whether a case merits en banc or Supreme Court review. Those factors are also relevant to the broader policy issues, including whether the fanatic effort to “drive a stake through the heart of” the Affordable Care Act, to quote Mr. Greve, has lost perspective on the proper role of courts in our democratic system, and whether that approach risks spreading within the judiciary the partisan virus that is disabling the other branches of our government.
Second, contrary to Professor Adler’s claim, when Congress referred in the ACA to insurance exchanges (as opposed to, say, exchanges of information or cash), it did not use the term “exchange” to mean one thing in one place and something else in another. Congress defined the word “Exchange” three times, as an “Exchange established by the State,” and it used that word -- with a capital “E” to signify that it is a defined term -- 280 times in the statute. Congress slipped only twice, using “exchange,” un-capitalized, in the Table of Contents and in section 6005, dealing with transparency for pharmacy benefit managers. Neither instance is significant. When Congress goes to the trouble of defining a term three times, and then capitalizes that defined term throughout the statute, it is fair to conclude that this was done on purpose. Given the definition of an Exchange as one “established by the State,” section 1321 is meaningless -- how does the Secretary establish an Exchange established by the State? -- and almost nothing else in the statute works, unless a State fulfills its obligation to establish an Exchange by passing that obligation to the Federal Government.
Third, Adler attacks my suggestion that almost everyone earning less than 400% of the federal poverty level gets a subsidy, because some people get Medicaid and Medicare or other benefits. This hair-splitting regarding subsidies and other forms of health benefits is irrelevant. The point is that Section 36B(a) of the Internal Revenue Code says that for “applicable taxpayers” -- mostly, people making less than 400% of the federal poverty level -- “there shall be allowed” a tax credit. The language about an “Exchange established by the State” appears in subsection (b), dealing with how the credit is calculated. Thus, under Professor Adler’s reading, Section 36B grants a credit in (a) but then says in (b) that the amount of the credit is zero for people in states with Federal Exchanges. That’s straightforward? If Congress wanted to provide that people in States with Federal Exchanges do not get credits or subsidies, it could have said just that. It didn’t.
Finally, Professor Adler suggests that Thomas Christina in his presentation at AEI “saw this provision as a clear example of Congress seeking to pressure states into cooperating — setting up yet another offer states would be loathe to refuse.” Professor Adler further suggests that from the time he personally first focused on the subsidy provision, he also believed that Congress deliberately sought to coerce States into setting up Exchanges, by denying tax credits to their residents if they did not. So one must suppose that is what Mr. Christina meant when he said at AEI that the denial of subsidies “could be an unintended consequence.” One must suppose further that it is also what Professor Adler meant when, in his Wall Street Journal op-ed of November 2011, he called the provision a “glitch” and suggested that “encouraging” States to set up exchanges was merely one of several “plausible” reasons why Congress might have wanted to confine assistance to State-run Exchanges. Or perhaps the plain meaning of those words is not so straightforward.
Rob Weiner, formerly Associate Deputy Attorney General in the United States Department of Justice, is a partner at Arnold & Porter LLP. You can reach him by e-mail at robert.weiner at aporter.com