Bill Levin on The Worm Turns: King v. Burwell

My friend and former colleague from the Office of Legal Counsel, Bill Levin, has been following the Halbig case closely.  Here are his thoughts on the Supreme Court’s cert grant.  For his previous thoughts on the case, see here

First, election night and now the highly significant decision by the Supreme Court to grant cert in the Obamacare tax subsidy case, King v. Burwell.

After such a week, it is justifiable to speculate as to why the court accepted King.

The initial item of interest is timing.  The case was considered by the Court in normal course at its October 31 Conference, but relisted to November 7 when cert was granted.  It is utterly plausible, though unprovable, to assume the Court did not want a high profile determination released just days before the mid-term elections.

The conventional wisdom was that the Court would deny cert since there is presently no split in the circuits, following the D.C. Circuit grant of en banc review vacating the Halbig decision.  In days to come it will surely be repeated ad nauseam on the left that the Court is indulging in politics by taking King out of normal order.

Professor Rappaport on this site correctly bucked the conventional wisdom in predicting cert acceptance.  His reasoning, that four of the five conservative justices would refuse to let stand the D.C. Circuit end run to vacate Halbig, is appealing from a visceral perspective.  The D.C. Circuit vacated the decision in Halbig, but not the panel’s well-reasoned opinion.  From every practical perspective, a fully litigated split in the circuit currently exists with respect to the correct statutory construction of the ACA.

Regardless, King independently justifies expedient resolution on standard grounds.

Supreme Court rules provide for cert to decide “an important question of federal law that has not been, but should be, settled by this Court.”  There is no genuine controversy as to the signal importance of the ACA subsidy.  In recognition of its vast and complex reach, the courts to this point have regularly accelerated review.  And as has been widely noted, the ACA’s importance was the basis for the government seeking en banc review in the D.C. Circuit, which typically limits such actions to one case per year.  As to politics, Justice Sotomayor is regularly praised by liberals for issuing a rare 11 opinions dissenting from the denial of cert precisely on the ground of importance.  Nor is there any shortage of examples where the Court has granted cert in the absence of a circuit conflict.

A secondary argument, that cases deserve to percolate at lower levels to develop a full record, is peculiarly ill-suited to King.  For all its prominence, the issue in question is a standard, not especially complex, exercise in statutory construction.  The arguments by now are already repetitive.  The government’s brief in opposition to cert is indistinguishable from a brief on the merits, only shorter, because the real argument against cert was the government’s self-consuming proposition that the ACA permits federal subsidies.  Only the Supreme Court can render a final decision here.

While an appellate case is likely to move forward in the tenth circuit, with more sure to develop elsewhere, even the most advanced undecided circuit case, the D.C. Circuit en banc review, was never going to produce a split and was not scheduled for argument until December 17, 2014.  Under no circumstance could a circuit split have developed leading to Supreme Court review before 2016, and possibly even 2017.

It is this delay, and its demonstrably unacceptable cost, that provides the truest explanation of last week’s action.  It is estimated that 5.4 million people are currently receiving a subsidy from the federal exchanges, averaging $4,700 per year, or $25 billion in annual disbursements, forecast to grow rapidly.  Absent a lawful subsidy, 250,000 employers in federal exchange states are not subject to fines and therefore under no obligation to provide mandated insurance.  Millions of Americans would not be subject to the individual mandate and thus would be free to buy catastrophic coverage or forego coverage altogether. Insurers cannot reasonably calculate the “death spiral” cost of unsubsidized insurance.  And states with disastrous exchange experiences, such as Oregon, would be falsely induced to join a federal exchange, at the same time the 36 states with federal exchanges would be deprived of maximum notice to consider opening a subsidized state exchange.

This is the inevitable consequence and true meaning of legislating blindly to 15% of the economy, affecting every American in the most vital of personal decisions on healthcare.  At a minimum, these extraordinary dislocations justify prompt and final Supreme Court review.

Consider finally, two political points.  29 of the Senators who voted for Obamacare are no longer in the Senate, including 15 that have been replaced by Republicans (16 once Louisiana goes Republican).  And in the state legislatures that will make the ultimate decision on running a state exchange, fully 70% of chambers are now in Republican control after the mid-term elections, a record high in this country.

Oral argument in King will likely be scheduled in early March, with the decision issuing in June, 2015.  Assuming a fifth vote joins the four votes already cast in support of cert, a very good assumption on the legal merits, Obamacare cannot survive in present form, the presidential election landscape is headed for a major shake-up, and Republicans have every reason to believe a good week past can be followed by an even better night on November 8, 2016.

William Levin is a graduate of Yale Law School.