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Halbig and Obamacare: What We Have Learned (Part II)

Herewith, as promised in Part I, a few additional thoughts on Halbig’s lessons. My humble observations aren’t intended as nuanced legal analysis; there’ll be time enough for that as the cases progress. Today’s subject is the broader context of how the doctrines and institutions that have sustained administrative law are coming apart at the seams.

The King and Halbig plaintiffs’ argument is that the statutory language must mean what it plainly says: Obamacare’s machinery of subsidies and mandates requires exchanges to be established by a state. The government and its defenders say that this can’t be right: since only some 14 states have established an exchange, plaintiffs’ position would render Obamacare inoperable for most of the country—and Congress cannot have intended that. “By a state,” they insist, must mean something like “by a state, or the federal government stepping into its shoes.”

Needless to say, the plaintiffs and defendants have spun out and buttressed the basic arguments in multiple ways; and one can have, and the bloggers have had, a learned discussion about “textualism” or “contextualism” or “purposivism” as the proper mode of statutory interpretation. Step back, though: would we actually be having this overwrought discussion over a perfectly straightforward Administrative Law and statutory interpretation question—and a perfectly conventional judicial resolution—if Halbig were about something other than Obamacare? Hardly.

By way of illustration, take a look at Sierra Club v. EPA, 536 F.3d 673 (D.C. Cir. 2008), a case over Title V permitting under the Clean Air Act. In defense of a regulation that took some liberty with the language of Title V, the EPA argued that (1) the statutory language (“each” permit) didn’t quite mean what it said, when read in connection with other provisions; (2) the statutory context warranted a more latitudinarian reading; and (3) EPA’s “programmatic” reading would better serve congressional purposes. In substance, that’s the government’s Halbig defense. Sierra Club rejected all three arguments; and you can clip entire paragraphs from the opinion and paste them into Halbig without anyone noticing. (Judge Griffith wrote both opinions.) No, it’s not a conservative cabal: in Sierra Club, the enviros won. And no, it’s not an outlier: some Administrative Law textbooks excerpt Sierra Club as an example of how Chevron (Step I) analysis works.

It takes real effort to get away from the conventional analysis of Halbig and its implications. Initially, the government’s defenders said that the statutory language at issue was just a “scrivener’s error” (as when a statute says “more” when it plainly meant “less”). That proved hogwash. Their next theory was that the language was “inartful” or a “glitch”; and that the plaintiffs’ theory that Congress meant to extend subsidies only to citizens in states with their own exchanges—as a way of incentivizing state compliance—is a post-hoc fabrication. That theory has collided with videotaped evidence to the contrary and is capsizing. But suppose that it’s right, or at least plausible: why isn’t the obvious judicial answer to give the statute its natural reading—and to say that it’s up to Congress to fix things? Why isn’t the supposed error precisely a case for a “we-messed-up-and-here-is-what-we-meant” statutory override, of the sort that Congress has enacted time and again for civil rights laws, Medicaid, Medicare, and any number of other entitlement statutes? In short, why isn’t Halbig obviously right? And why isn’t that answer congenial to liberals who, from the New Deal to infinity and beyond, have extolled statutory and even constitutional litigation as a “dialogue” between the Court and the political branches, especially the Congress?

Because they no longer believe it. Obamacare was no inartful compromise; it was a brutal cramdown. There’s no kicking this back to Congress; the judges’ rulings, Obamacare supporters wail, spell the life or death of the statute. And when in doubt, the liberals say (for once), choose life. To that end, liberal justices, judges and scholars—as well as the Solicitor General—now invoke modes of legal argument that are charitably described as novel: “Context trumps explicit legal text.” Or: “A legal interpretation that entails less than what Congress might or would have wanted is ‘absurd,’ and therefore impermissible.” Or: “An agency (such as the IRS) may propound a regulation without any legal analysis whatsoever; we will give Chevron deference to its ex post litigation position.” Or: “An agency needs no legal basis (beyond a statute authorizing its bare existence) for its actions; it may do whatever is not specifically prohibited by statute.” Judge Edwards’ dissent in Halbig propounds all these positions, more or less explicitly. In the judge’s defense, he did not make this up: it has become a pattern. The dissent ably articulates anything-goes Administrative Law doctrines of the sort now propagated by Justice Stephen Breyer, by Cass Sunstein, Adrian Vermeule, and by other prominent scholars.[1]

It’s tempting to think and say that the legal Obamagentsia, driven by the need to defend an embattled administration and its central accomplishment at all costs, has plainly left the Administrative Law reservation; and for the most part, that’s true. Still, to borrow a great movie line (addressed to a breathtaking Marilyn Monroe, in her first credited Hollywood appearance in All About Eve): “They have a point. A stupid point, but a point.” Since the New Deal and up to and including the modern-day Chevron edifice, Administrative Law has been predicated on an idealized construct: a reasonable, deliberative Congress, seeking to achieve reasonable ends by reasonable means, and capable of doing so. What happens when that premise can no longer be sustained, even as an ideal?

Unconstrained executive government, liberals say. That position, one has to hope, cannot prevail: while Harvard Law School hankers for Carl Schmitt with a smiley face, the country, and probably the Supreme Court, isn’t ready for it. The appeal to more conventional modes of argument, predicated on congressional responsibility, is the Halbig and King lawyers’ trump card: the Supreme Court rarely makes new Administrative Law in a big case, and so long as it doesn’t do so here, the plaintiffs win. Eventually, someone will have to pick up the liberal challenge and re-think a body of Administrative Law that in many respects has ceased to reflect modern-day institutional realities. But that is not the litigators’ job. It should and will happen elsewhere, in due course.

[1] See, e.g., Utility Air Regulatory Group v. EPA (2014) http://www.supremecourt.gov/opinions/13pdf/12-1146_4g18.pdf (Breyer, J., diss.); and Cass R. Sunstein & Adrian Vermeule, “Libertarian Administrative Law,” http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2460822

Reader Discussion

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on August 06, 2014 at 12:28:30 pm

Who wudda thunk it? - Norma Jean as a profound political thinker - perhaps that is what the Kennedy brothers found in her!!!

"Since the New Deal and up to and including the modern-day Chevron edifice, Administrative Law has been predicated on an idealized construct: a reasonable, deliberative Congress, seeking to achieve reasonable ends by reasonable means, and capable of doing so. What happens when that premise can no longer be sustained, even as an ideal?"

I suppose what will happen is that we will continue to see the same or even more strained legal justifications of this sort for the overreach of the Executive - until, of course, the Dems are no longer in power, at which time deep concern and respect will be shown for the "text" of a law AND the Presidents responsibility to "faithfully execute."

Although it does seem to me that the court, if it wishes, a la Roberts, to preserve its vaunted position and not inflame the populace / political power structure, could simply do as you suggest that they will not - turn it back to Congress and "Is it a "speak-o" or not? You decide.
Da ya think it would be re-written?

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gabe
on August 06, 2014 at 14:46:08 pm

Anyone who has encountered the IRS and its non statutory defense of income tax non laws, backed up by a complicit administrative tax court with a 98% IRS win rate, and a complicit judiciary which pretzelizes all logic , precedent and statutory construction appreciates how Halbig at least gave them a bit of a bloody nose!

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Brendan Trainor
on August 13, 2014 at 00:25:00 am

[…] was no inartful compromise; it was a brutal cramdown.” [Michael Greve, Law and Liberty, on […]

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August 13 roundup | Internet Tax Lawyers
on September 03, 2014 at 10:08:00 am

"... why isn’t the obvious judicial answer to give the statute its natural reading—and to say that it’s up to Congress to fix things?" I am amazed at how this can unfold in the country that made "checks and balances" its first principle where humans are fallible - let human wrangle with human, but each from its own constitutional role and things will. as the word says, be kept in check. I would surmise the drafters of the constitution would have said: "To hell with it, if the statute is not interpretable, let it lie dormant. Better a statute not applied (like 'in dubio pro reo' - another legal wisdom the US often collides with, q.v. death row and DNA analysis), better a statute not applied, better a stalemate, than a statute applied that was not actually passed as law but was later concocted out of the rubble left in its wake. Truly the solution though lies elsewhere: in free commerce. While I am totally against any subsidies anyway, the solution would have been for the inhabitants of "a" state that does not get subsidies because it has no exchange to let the Texans, say, shop in California, the Floridans in New Mexico, if they can find a better deal for their health insurance in that (existing) exchange. Immediately the insurers would be strengthened there, like ... farm produce probably comes less from New York, while finance products are more seldom bought by New Yorkers from Wyoming. Making this a "state-hide-bound" closed shop leads to inequities like this. Because: the FIRST AND FOREMOST checks and balances the fathers of the constitution would have wanted to see applied everywhere was that of a free market.

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Darragh McCurragh

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