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What Will the Supremes Do About the Latest D.C. Circuit Atrocity?


For those that missed it yesterday, I have a piece up about Halbig v. Burwell. The bottom line:

The sole dissenting judge, Harry Edwards, in his tour de force dissent, made clear his distaste for appointed judges making new law – and pointed out that the majority opinion requires the courts to ignore all the sound principles of statutory construction.

Congress clearly thought the subsidies were essential to the functioning of the exchanges, and it permitted the federal government to establish exchanges in order to prevent states from thwarting the aims of the ACA – which is to help people buy more affordable health insurance.

The majority’s reading, however, would allow hostile states to do exactly what the law was designed to prevent: by refusing to establish a state exchanges, they could effectively stop the exchanges from working properly in their states.

As Edwards observes, the majority’s interpretation “is implausible because it would destroy the fundamental policy structure and goals of the ACA that are apparent when the statute is read as a whole”. Plus, not a single state government – even those hostile to the law – believed that the statute demands what the majority says it does. Nobody is confused about what the law intended, but some people who oppose the ACA on political grounds are opportunistically pretending to be.

To be clear, the position taken by 4 of the 6 judges to have ruled on the question yesterday (see the 4CA opinion here) does not entail “re-writing the law” or binding the public to the subjective intent of the legislators rather than what they wrote. Statutes have to be read as a whole, not in isolated phrases. When one reads the statute properly, that Congress intended to make the subsidies available is not merely plausible but blindingly obvious. As Judge Davis noted in his concurrence:

I am not persuaded and for a simple reason: “[E]stablished by the State” indeed means established by the state – except when it does not, i.e., except when a state has failed to establish an Exchange and when the Secretary, charged with acting pursuant to a contingency for which Congress planned, establishes and operates the Exchange in place of the state. When a state elects not to establish an Exchange, the contingency provision authorizes federal officials to establish and operate “such Exchange” and to take any action adjunct to doing so. When a state elects not to establish an Exchange, the contingency provision authorizes federal officials to establish and operate “such Exchange” and to take any action adjunct to doing so.

That disposes of the Appellants’ contention. This is not a case that calls up the decades-long clashes between textualists, purposivists, and other schools of statutory interpretation. The case can be resolved through a contextual reading of a few different subsections of the statute. If there were any remaining doubt over this construction, the bill’s structure dispels it: The contingency provision at § 1321(c)(1) is set forth in “Part III” of the bill, titled “State Flexibility Relating to Exchanges,” a section that appears after the section that creates the Exchanges and mandates that they be operated by state governments, ACA § 1311(b). What’s more, the contingency provision does not create two-tiers of Exchanges; there is no indication that Congress intended the federally-operated Exchanges to be lesser Exchanges and for consumers who utilize them to be less entitled to important benefits. Thus, I conclude that a holistic reading of the Act’s text and proper attention to its structure lead to only one sensible conclusion: The premium tax credits must be available to consumers who purchase health insurance coverage through their designated Exchange regardless of whether the Exchange is state- or federally operated.

I might have more on this in another post, but the idea that Congress intended for the federal exchanges not to work is transparently absurd, which hasn’t stopped some people from trying to make the argument.

The Supreme Court may not hear this case, since it’s overwhelmingly likely that the D.C. Cicuit en banc will end the silliness, upholding the proper reading of the statute and eliminating the circuit split. If they do hear it, some commentators — for example, Goldtsein and Klein, — are confident that the Supreme Court would side with the 4th Circuit. In a rational universe, we could indeed expect that “[t]he Supreme Court simply isn’t going to rip insurance from tens of millions of people in order to teach Congress a lesson about grammar.” But I’m less sure. After all, in their gratingly disingenuous attempt to claim that their gutting of the ACA was an act of judicial restraint, the D.C. Circuit majority acknowledged the terrible consequences of their decision — but didn’t care. Republican statehouses know that turning down the Medicaid expansion will cause many people to go without coverage — they don’t care. I don’t put anything past a Supreme Court controlled by the contemporary Republican Party.

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