How the Supreme Court’s King v. Burwell Debacle Will End [Addendum added]

I have known for the last five weeks—since January 27, to be exact—that the Supreme Court will uphold the Administration’s interpretation of the federal-subsidies provisions in the ACA when it issues its decision in the infamous King v. Burwell case whose argument date at the Court is Wednesday.  I also have known since then that the opinion will be unanimous, or nearly so, and that Antonin Scalia is likely to write it but if not will join it.

I considered revealing this to AB readers earlier, but feared an F.B.I. inquiry into suspicions that I hacked into the computer system in Scalia’s chambers, so I hesitated.  But it’s now or never—Scalia will make his position clear at the argument, and then I will have lost my one chance, ever, for a career as a Vegas oddsmaker—and I think I can persuade the F.B.I. that I received my information not illegally but instead from a report recounting extensive, pointed comments Scalia made in open court on January 21, in a case that is not about the ACA but is, like King, about the methods the Court uses to interpret lengthy, highly complex federal statutes with multiple interconnecting sections and subsections whose purpose is to establish a cohesive policy.

The case argued on January 21 concerns the federal Fair Housing Act, and it threatens to undermine the very essence of that statute.  It is part of the now-three-decades-long juggernaut by the Reagan-era-devised Conservative Legal Movement to end legal protections against various forms of what originally was known in civil rights law as invidious discrimination against racial minorities or other politically weak groups.  A case in point (literally) was the destruction of the Voting Rights Act two years ago, in a case claiming a fundamental constitutional principle—the source of which the Court didn’t identify, but which appears to have been the Dred Scott opinion in 1856—that the federal government must treat sovereign states (no, not, say Canada and Mexico and France, but, say, Alabama and New York) equally.  (There apparently is a notable exception to this fundamental constitutional principle that allows the dramatic difference in per capita federal expenditures between Mississippi and Massachusetts, although the Court did not, in fact, note it.)

An alternative theory about the unidentified source of the fundamental constitutional principle was that it was interpreting the Fourteenth Amendment’s equal protection clause, which protects individuals and groups from discrimination by the states, also protected states from discrimination by the federal government.  This would be similar, I guess, to the Court’s by-now-routine interpreting of the Fourteenth Amendment’s due process clause, which protects individuals from denials of due process by states, as instead providing states the constitutional right to violate the due process rights of individuals, although this usually is limited to the states’ judicial branches; the legislative and executive branches aren’t sovereigns like the judicial branches are, and do see this Court strike down a piece of their legislation from time to time.  Usually when it violates the rights of the wealthy to buy state legislators, and the like.  But occasionally other statutes as well.

Another case in point was the Court’s decision, issued the same week as the Voting Rights Act opinion, in which it allowed a white high school senior named Abigail Fisher from an upscale suburb of Houston to piggyback on the “strict scrutiny” standard of judicial review established by the Court back in, I believe, the ‘40s to protect racial minorities and other politically weak groups, in her equal protection challenge to the University of Texas’s use of race to determine admissions for a small number of students who were just below the top 10% of the graduating class.  The Court offered no explanation for this, and the “strict scrutiny” test continues to be otherwise limited only to groups who have experienced invidious prejudice.  (That case is back at the Court, at Fisher’s behest, although the Court has not decided whether to grant Fisher’s petition to hear it.)

In both King, the ACA case, and Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, the Fair Housing Act case argued on January 21, the parties trying to have the Court unravel the fabric of the respective statute—private parties, in King; the Texas Republican-controlled executive branch, in Texas Dept.—need to have the Court treat a selected clause or short subsection or the statute in a precisely “textualist” way, devoid of context or connection to or with clauses, subsections or sections with which they necessarily and logically intertwine.  (At least, I think that’s true in Texas Dept.; I haven’t followed that case closely. It’s definitely true in King, which I have followed very closely.)

In King, the challengers’ original theory was that the controversial phrase at issue—insurance plans bought “through an exchange established by the state”, referencing the mechanism by which people who qualify for subsidies can obtain those subsidies—was an inadvertent oversight by the drafters, but that the language was clear.  The words appear in a subsection that sets out the mechanism for obtaining subsidies to purchase the policies offered on each state’s exchange; subsidies are available only for policies bought through an exchange.

The challengers claimed until recently that, although inadvertent, the language clearly precludes subsidies for purchases on state exchanges set up and operated by the federal government for the 36 states that did not set up their own online website.  The challengers, though, now claim that  the language was no inadvertent error it was instead a deliberate attempt to coerce the states into setting up their own websites—although these folks never explain what, then, the purpose was for the provision in the statute requiring the federal government to set up and run state exchanges for states that did not do so themselves.  But, whatever.

But back last November, before the challengers’ discovery that Niccolo Machiavelli had drafted the controversial sentence, Antonin Scalia, speaking to the Appellate Judges Education Institute Summit while on a book-promotion tour, was reported to have said something along the lines of, “Even when the U.S. Congress makes ‘garbage’ laws, judges don’t have the power to interpret those statutes to avoid an undesired outcome.”

“Garbage” is a direct quote; the rest is the paraphrase of a reporter at Law360.  This appeared to be not a coincidence but instead a preview of the 5-4 majority’s opinion in King, which the Court one week earlier had, to the astonishment of … well … lots of people, agreed to hear.  The remark appeared intended to ensure the troops out there that all that talk (and there was quite a bit of it) about the fact that Scalia had authored an opinion just last spring reiterating explicitly the Court’s long-established and absolutely consistent methodology of statutory interpretation: the Court must read each part in the context of the larger statute, its clearly intended purpose, and the normal understanding of how the various parts fit together as cohesive legislation; the Court will not read this or that phrase or clause in isolation, as if it existed alone. Which, of course, was why the challengers switched from inadvertent-error-but-language-too-clear-for-the-Court-to-“rewrite” to Machiavelli-as-legislative-drafter.

But then … then … things went astray.  The Tea Party crowd began to lose control of the script.  First, there were reports that healthcare insurers and hospital chains were beginning to panic, and began making their concerns known to Republican congressional members.  Then, as the repercussions of what looked to be a runaway train came fully into focus, other major business interests reportedly began to panic and joined the mounting Republican Establishment pressure to come up with a solution.  And then, finally, as it became clear that the House caucus would never allow a legislative solution, news analysis articles began to trickle in indicating what had been in plain sight all along: this was gonna be the Republican congressional and state legislators’ Waterloo.  O.M.G.

It’s not a secret that Scalia socializes with some rightwing pundits and others deeply involved in the Conservative Movement (Dick Cheney’s no longer available for duck hunting trips), and it was widely suspected back in 2012 in the weeks after the Court heard the first ACA case that it was Scalia who perpetrated the infamous leak from inside the Court to rightwing pundits that John Roberts had suddenly switched sides on the mandate issue.  The purpose of the leak was to have pundits exert public pressure on Roberts to switch back, for fear of permanent excommunication from Federalist Society circles.

This time, though, something akin to the reverse seems to have happened.  This time, top Republicans (my guess is, Mitch McConnell) worked behind the scenes, through Scalia’s pundit buddies, to clue him in that the Court needed to find a way to end this debacle.  And soon.  Soon turned out to be January 21, during the hearing in Texas Dept.

In a guest post for the blog of The American Constitution Society (the Progressive Legal Movement’s answer to the Federalist Society) on January 26, University of Michigan law professor Nicholas Bagley wrote:

During oral argument in the Fair Housing Act case this past week, Justice Antonin Scalia explained how another high-profile case coming later this term—King v. Burwell—ought to be decided. The King case involves the latest challenge to the Affordable Care Act. The challengers argue that the ACA does not authorize tax credits for people purchasing insurance on exchanges set up by the federal government rather than the states. They rely on a provision in the law that says such credits are available for insurance bought “through an Exchange established by the State.” Read in isolation, that provision would seem to suggest that the credits are available only on the 14 exchanges run by the states, not in the 36 states with exchanges run by the federal government.

In the hearing in the Fair Housing Act case, however, Justice Scalia—whose vote is almost certainly necessary for the ACA challengers to win their case—elucidated why the ACA challengers should lose. The Court’s obligation in interpreting a statute, Scalia said, is to “look at the entire law,” not just “each little piece” in isolation. “We have to make sense of the law as a whole,” Scalia insisted. Whether or not something is allowed by a statute can only be determined “when all parts are read together.”

Anyone who reads the “whole law” in the ACA case would easily conclude that credits are available on the federally run exchanges. Start with the basic objectives of the law. According to the authors of the law, “The Affordable Care Act was designed to make health-care coverage affordable for all Americans, regardless of the state they live in. Providing financial help to low- and moderate-income Americans was the measure’s key method of making insurance premiums affordable.” That basic goal would be completely undermined if federally run exchanges couldn’t offer the tax credits.

The text of the ACA clearly says that any health insurance exchange established under the law is one “established by the State,” even ones run by the federal government. The law defines an exchange as “a governmental agency or nonprofit entity that is established by a State.” Yet the law clearly envisions exchanges set up by the federal government too. Indeed, the law requires it, mandating that if states fail to do it on their own, the federal government “shall . . . establish and operate such Exchange within the State.” In other words, there aren’t two different types of exchanges under the law, one federal and one state. There’s only one type of exchange: those “established by a State,” even if the federal government had to do all the work.

Other provisions of the law support this reading. For example, Congress imposed on the federal government certain reporting requirements that only make sense if the exchanges run by the federal government on behalf of the states can offer tax credits. The ACA requires the federally run exchanges to report on whether taxpayers received “advance payment of such credit” and information about individuals’ “eligibility for, and the amount of, such credit.” If the ACA did not allow the federal government to provide such credits, why would Congress require the federal government to report this information? Under the ACA challengers’ interpretation, these provisions have no meaning whatsoever.

Reading the “whole law,” not just the one “little piece” that, on its surface, appears to restrict credits to exchanges run by states, indicates that tax credits are available on any exchange created under the ACA. The overriding purpose of the law, the provisions defining all exchanges under the act as “established by the State,” and the federal exchange tax credits reporting requirements all point in the same direction. King v. Burwell is actually quite an easy case when one follows Justice Scalia and views the law in its entirety.

I read the post the next day.

Bagley’s post highlights what for me has been an amusing twist.  When the challengers’ switched from sure-it’s-a-drafting-error-but-too-bad-so-sad to this-was-intended!, this opened a what’s-good-for-the-goose door for the government and several states as amici, such as Virginia that don’t operate their own exchanges, to cry Federalism!!  States’ rights!  In the part of the Court’s 2012 ruling upholding most of the ACA as constitutional, the Court did strike down as unconstitutionally coercive to state legislatures the part of the ACA’s Medicaid expansion that provided that states would have to agree to the expansion in order to continue to participate in the Medicaid program at all.  The states had argued that killing the Medicaid program entirely was politically untenable for its legislators and governors, so it would have to agree to the expansion.  (My reaction was: So?)   Once the challengers argued that the phrase at issue in the case was deliberate—calculated to, um, coerce states into setting up their own exchange websites, the government and the amici states said: Well, okay, say you’re right, challengers, and Machievelli, er, Congress, intended this, that’s unconstitutional.

More specifically—and in tandem with the argument that Congress intended nothing of the sort, and in fact make that very, very clear elsewhere in the statute—the government and the amici states are citing to Supreme Court precedent making clear that federalism principles require that Congress provide adequate notice to states of what the consequences will be if they opt out of one or another program or part of a program.

But that’s not the amusing part.  The amusing part is the recognition that in order for anyone other than Conservative Legal Movement folks to have a chance in this Supreme Court, they must—they must—try to piggyback on some right that their state has as against the federal government.  Sure, millions of people will lose healthcare coverage and access to healthcare, and some of them will die because of it.  But their interests are only incidental to the interests of the entities that matter: their statesA huge amount of the coverage of the responses to the challengers in recent weeks has been all about the states’ federalism claim.

I’m a regular reader of Greg Sargent’s Plum Line blog at the Washington Post, and have been pained to read what has become a recurring theme for him: Would these justices really care so little about the loss of access to medical care, some of it lifesaving, for millions of Americans that they’d be willing to destroy this law upon a contrived legal claim that contravenes the Court’s own statutory-interpretation rules?  The answer, of course, is yes. But that’s the wrong question.

Sargent, and others now, are finally asking the right one: Will these justices really cause a likely Republican electoral calamity, despite panicky pleas by Republican leaders?  The answer to that is, no.

As for the outcome in Texas Dept., Linda Greenhouse, who like Bagley wrote about Scalia’s comments at the argument in that case and what it should indicate for the outcome in King, said that legal observers mostly have interpreted the comments as suggesting a victory for those hoping to see the Fair Housing Act remain a legal force.  But she said she expects that the Scalia majority will interpret the statute as saying what the courts have interpreted it as saying for decades, and then strike down that part of the Act as unconstitutional. If so, Scalia will have his cake (the Republican Party will avoid electoral calamity) and eat it too (the essence of the Fair Housing Act will be devoured).

As for King, there is something in Supreme Court practice called a DIG, which is an acronym for Dismissed as Improvidently Granted.  As in: the cert petition we granted agreeing to heat the case was improvidently granted, and we are spontaneously dismissing the case.  This occurs, I guess, about once a Court term, and the DIG order usually comes shortly after argument in the case.  This probably won’t happen in such a high-profile case as King, but it could.  But one way or another, the ACA, and the Republican Party’s chances in November 2016, will be rescued.

“Garbage” in, garbage out.


ADDENDUM: In the comments thread to this post, Mark Jamison mentioned a legal issue that will come at the argument tomorrow that I did not get into in the post: whether the four challengers in the case have “legal standing” as a matter of fact to be entitled to challenge the ACA AT ALL.  Mark wrote:

I hope you’re right but I’ll offer two bets. First, they’ll toss the case on standing. If not and your scenario plays out the decision will have at least one dissenter, Alito, probably one of the least legal minded and most partisan justices ever.

Here’s how I responded to him:

Hi, Mark. Yeah, A LOT of people are predicting that the “standing” issue will play heavily at the argument, and I considered getting into that in my post but there were only so many complex legal issues I thought I needed to get into, and the “standing” issue I thought was just too much for this one post.

But “standing” is actually what I had in mind when I mentioned a possible “DIG.”  That is how the Court traditionally deals with a “standing” problem that becomes evident after the Court has agreed to hear the case.  That, of course, is as opposed to when a “standing” issue is the central legal issue in the case, or one of them; then the Court issues and opinion on the “standing” issue and then, if it does find “standing”, goes on to resolve the “substantive” legal issues.  That, in fact, is what is going to happen in a case that was argued at the Court yesterday.

The Court’s DIG orders just dismiss the case without explaining why, and if they do “DIG” King it will look like it’s because they’ve concluded that none of the four challengers in the case does have standing to challenge the ACA because, as it happens, none of them actually are required under the ACA to purchase insurance.  (Apparently, three of the four have Veteran’s benefits, and the fourth one’s income is too low to have the ACA’s mandate apply; thus these people apparently are not actually being “harmed” by the ACA’s mandate provision.)

So Scalia & Friends might actually get lucky and be able to DIG the case on what will look pretty clearly like “standing” grounds.  But, really, if they do DIG it, I think that’s what they would have done anyway.

Added 3/3 at 2:30 p.m.