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District Court Upholds Obamacare Exchanges

Earlier today, Judge Friedman (D.D.C.) sustained an IRS rule to the effect that Obamacare’s subsidies and coverage mandates apply in all states with a health care exchange–not just those with a state-run exchange but also those with a federal or federally “facilitated” exchange. That is so, the judge held, despite statutory language that specifically refers to exchanges established by or ”a state.” The IRS (or for that matter HHS) is not a state but never mind. The opinion is here; news coverage here.

The judge’s opinion is (in my humble estimation) not a “let’s-save-Obamacare” blow-off: it wrestles with a serious problem of statutory interpretation—a Chevron problem. The judge says that the overriding purpose (universal coverage) is so blazingly obvious that in the context of the statute, the plaintiffs’ literal interpretation makes no sense. I think that’s mistaken (and I think I’d say that even if I weren’t affiliated with the Competitive Enterprise Institute, which helped to engineer this case), and I hope that it will be corrected on an already-pending appeal. But I think the real problem lies elsewhere.

All of AdLaw rests on the premise of Congress as a deliberative assembly that wants reasonable ends, reasonably pursued. Sometimes (Chevron says) Congress speaks with precision, and we courts follow; at other times, it delegates, and then we ask whether the agency acted within the statutory bounds, and reasonably.

That may make sense in the context of statutes that Congress actually thought about, like (say) the Clean Air Act at issue in Chevron (and now that I wrote that sentence, I want to shoot myself). But the ACA?? The basic design question—state or federal exchanges—has proved kind of important, don’t you think? But the harsh fact is that the Congress that enacted this statute had very specific intentions with respect to interest groups pay-offs (that’s why the ACA runs over 1,000 pages) but no discernible intent with respect to anything beyond that—except to cram it down our throats. The text could have committed the exchanges to Evita Peron or Mylie Cyrus: it still would have passed. Everyone knows that. The litigants and judges know it better than most; but none of them can say that.

The deep challenge here, and in an increasing number of cases, is to improvise public law rules for a nihilistic Congress and political process.

Reader Discussion

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on January 15, 2014 at 20:21:36 pm

All good points, but isn't there a deeper problem. The reason why the Court should defer to Congress, and give it the benefit of the doubt when deciding whether a law is constitutional, is that Congress is one of three equal branches of the government. Hence the constitutional presumption is that Congress would not intentionally write an unconstitutional law. And the presumption is that Congress has the right to its own interpretation of the Constitution. Hence the Court must have very good reason to defer to laws passed by Congress.

Doesn't the presumption in statutory construction cut the other way? When power to write legal code is delegated by Congress to others, it is already doing something that is at the boundaries of what is constitutional (to say the least). That being the case, if there is a question as to whether an agency has a given authority or not, the presumption should be against them. If the authority is questionable, they should have to go back to the legislature to verify that the legislature really meant to grant the power in question.

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Richard S
on January 16, 2014 at 00:51:41 am

Here is another question: Mr Greve writes "...at other times, it delegates, and then we ask whether the agency acted within the statutory bounds, and reasonably." Before that however, he summarizes the Judge's decision as "[t]he judge says that the overriding purpose (universal coverage) is so blazingly obvious that in the context of the statute, the plaintiffs’ literal interpretation makes no sense."

The issue then is can Congress delegate a vague, ambiguous or contradictory power (so vague, in fact, that the only way to conclude it is Constitutional is to simply assume that it is) so that the administrative agency can rewrite the grant of power anyway it wants? Congress after all must have intended to delegate something and if the the statutory language says "May I mambodogface to the banana patch purple monkey dishwasher," hell, let the agency decide what that means.

Put another way, can Congress delegate a constitutional power with gibberish or word salads or baby-talk, such that the agency is allowed to determine the extent of the grant of that power, on the grounds that Congress could not have meant what it said?

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z9z99
on January 16, 2014 at 10:07:58 am

"All of AdLaw rests on the premise of Congress as a deliberative assembly that wants reasonable ends, reasonably pursued. . . . . But the harsh fact is that the Congress that enacted this statute had very specific intentions with respect to interest groups pay-offs (that’s why the ACA runs over 1,000 pages) but no discernible intent with respect to anything beyond that—except to cram it down our throats."

As a one-time Research Director of the Administrative C0nference of the US, I can attest that Michael has put his finger on the crux of the matter, on why Ad Law has become a joke. Once an agency is captured by ideological or economic special interests ("factions" in Madison's term), and is no longer committed to promoting the general welfare, the basic logic of deference becomes absurd. And the Justices most responsible for this fairy-tale edifice of law are, I fear, Scalia and Thomas, plus Breyer.

The courts have abdicated the important role they once played in guarding the political structure of the Republic. For more reading, see Michael's fine discussion of the nature of democracy, in "Commerce, Competition, and the Court" [AEI Bradley Lecture 2009); discussions of the General Welfare concept by Barry Cushman, John Eastman, & Howard Gillman [easily Google-able]; and my "Ending Big SIS (The Special Interest State)" [also Google-able].

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JVDeLong
on January 16, 2014 at 13:24:28 pm

JV:

May I ask you something?

From what you say about Scalia, Thomas, etc. and taking into account the ongoing cry against "judicial activism", would it be say to say that one can attribute this intermittent affinity for "deference" to a reaction to "activism.?

I recall reading an essay by (I think) Hadley Arkes in which he called for something a little different, i.e., "judicial engagement, by which (I think) he meant taking a reasoned look at text, structure, intent, and the totality of the constitution in order to properly decide a case. sometimes one would defer, sometimes not depending upon how the law / regulation withstood this scrutiny. In short it would permit neither blind deference nor policy making on the part of the Black Robes.
Of course, I suspect that it would be difficult for the Court to issue a pronouncement that the Agency has been made captive by faction - but surely it could recognize that there are, or should, be clear limits on what powers the Congress may rightly relinguish and correspondingly limits on what an Agency may arrogate to itself.

take care
gabe

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gabe
on January 16, 2014 at 18:21:41 pm

Then again if the Black robes would simply follow Congressional hearings they may be compelled to acknowledge that the Executive Agencies have been taken over by factions.

http://www.powerlineblog.com/archives/2014/01/is-obama-a-liar-epa-administrator-cant-say.php

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gabe

Law & Liberty welcomes civil and lively discussion of its articles. Abusive comments will not be tolerated. We reserve the right to delete comments - or ban users - without notification or explanation.