"Where there is no vision, the people perish: but he that keepeth the law, happy is he."
-- Proverbs 29:18, King James Bible (KJV)

Thursday, March 05, 2015

Obamacare and Oral Argument in King V. Burwell: A Question of ACA Section 1311 State Exchanges and Section 1321

Oral argument in King v. Burwell, the newest "political" Obamacare case to reach the Supreme Court Justices, did not seem to have much to do with "real law" but a lot to do with political gamesmanship, and some Supreme Court Justices appear to thrive on being in that particular limelight, elevating base political and linguistic banalities to the status of allegedly serious points of law.

Thankfully, "no-nonsense" Justice Breyer gets it right, right from the beginning:

    [T]his statute [the Affordable Care Act] is like the tax code more than it's like the Constitution. There are defined terms, and the words you just used concern a defined term. [bracketed material and link added by LawPundit]

    As I read the definition, there's a section, Definitions, and it says, quote, The term "Exchange" means, quote, an exchange established under [Section] 1311. And 1311 says, An Exchange shall be a government agency, et cetera, that is established by a State. Those are the definitions.

    So then you look to 1321. And 1321 says, if a State does not set up that Exchange, then the Federal, quote, secretary shall establish and operate such Exchange.

    So it says, "The Secretary is to establish and operate such Exchange," the only kind of Exchange to which the Act refers, which is an -- quote, "an Exchange established by a State under 1311." That's the definition. [emphasis added by Law Pundit]

    So the statute tells the Secretary, set up such Exchange, namely, a 1311 State Exchange.

    MR. CARVIN: Correct.

    JUSTICE BREYER: And there's nothing else in this statute.

    MR. CARVIN: Correct.

    JUSTICE BREYER: So that's throughout what they're talking about. So what's the problem?
A normal, sane reading of the statute -- sanity being an assumed element of proper statutory construction -- is that if a State does not set up a "1311 State Exchange" then, by default, the Federal Government is required by Section 1321 of the statue to set up that "1311 State Exchange" for the State, so that people in such a State are not discriminated against in terms of the benefits of the ACA versus States who establish a "1311 State Exchange" via Section 1311 and not via Section 1321. The Exchange remains a "1311 State Exchange" in all cases, and, indeed, as Justice Breyer notes, the statute uses the phrase "an Exchange established by a State" to apply to all Exchanges established.

So, as Justice Breyer correctly asks: "what's the problem?"

From the decision below, 759 F.3d 358, U.S. Supreme Court lower court case number 14-1158, the "Question Presented" to the court and upon which certiorari was granted on 11/7/2014 is as follows:
"Section 36B of the Internal Revenue Code, which was enacted as part of the Patient Protection and Affordable Care Act ("ACA"), authorizes federal tax-credit subsidies for health insurance coverage that is purchased through an "Exchange established by the State under section 1311" of the ACA. The question presented is whether the Internal Revenue Service ("IRS") may permissibly promulgate regulations to extend tax-credit subsidies to coverage purchased through Exchanges established by the federal government under section 1321 of the ACA."
Already the question presented upon which certiorari was granted is faulty, and should have been so clearly designated by the Court, which should not grant certiorari for questions which are phrased in a "begging the question" manner, i.e. presuming the correctness of the very thing in question.

The right question is whether the IRS must grant tax-credit subsidies to any "1311 State Exchange", whether established by 1311 or by the alternative mandated default 1321, and whether it would be lawful for the IRS to deny any such tax-credit subsidy by treating a "1311 State Exchange" differently depending on whether it was set up directly under 1311 or by alternative default as required under 1321. Then the whole legal question at issue looks a bit different and does not beg the question.

The plaintiffs in the case argue that if a 1311 State Exchange is not established directly by a State but rather via default as a result of the application of Section 1321, then that 1311 State Exchange has been "established by the federal government", rather than "by the State". There is no statutory language in the statute to support that claim. None. Rather, the federal government functions here as an "alter ego" for the State within the plain meaning of the context of the statutory language, and it does so to protect the people of a State. If a given State government -- that can change over time politically -- decides NOT to exercise 1311 directly, then a 1311 State Exchange is set up via 1321.

The entire tenor of the statute is that a "1311 State Exchange" is established "by the State" and "for the State" whether it is directly by 1311 or alternatively by default in the manner provided by Section 1321. That was clear to all when the statute was drafted and it is why there was no legislative discussion of this point in Congress at all. Only afterwards have clever lawyers brought a suit based on spurious linguistic grounds, trying to isolate Section 1311 from 1321.

Sadly for the country, political opponents of the ACA have left no straw unturned in trying to find strawman ways to torpedo the ACA in the courts, rather than letting Congress do its job and change the ACA system if that is what Congress wishes, and now that political movement has come up with this strawman variant before the court.

These kinds of spurious cases bother us greatly, because they bring the Supreme Court down to a low-denominator base level of political dogmatism, rather than functioning as a powerful court of law whose bench is filled with intellectually bright, serious, practical and politically impartial judges. Permitting low, base political motives to dictate the course of Supreme Court activity is something we would never tolerate as a judge. Never.

We hope particularly that Justice Kennedy, who we previously admired and respected, but who disappointed us terribly in the first Obamacare case at the Supreme Court, now regains his serious, sovereign bearing and abides by what he has now said in oral argument to the plaintiff lawyer in this case:
  • JUSTICE KENNEDY: Let me say that from the standpoint of the dynamics of Federalism, it does seem to me that there is something very powerful to the point that if your argument is accepted, the States are being told either create your own Exchange, or we'll send your insurance market into a death spiral.   We'll have people pay mandated taxes which will not get any credit on ­­ on the subsidies.   The cost of insurance will be sky­high, but this is not coercion.   It seems to me that under your argument, perhaps you will prevail in the plain words of the statute, there's a serious constitutional problem if we adopt your argument.
    [emphasis added by LawPundit]
You can bet on that.

The Supreme Court must let the political community know that their "supreme" job is to protect the nation, its laws and its institutions and not to play sides in ephemeral and base political battles, regardless of whose.

And wish the nation good health!