Politics

Will John Roberts 'Redeem Himself' on Obamacare?

The specter of judicial deference still haunts Halbig v. Burwell.

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Obamacare appears to be headed back to the U.S. Supreme Court. On Tuesday the U.S. Court of Appeals for the D.C. Circuit and the U.S. Court of Appeals for the 4th Circuit issued dueling opinions on the legality of an I.R.S. rule which provides tax credits to individuals who purchased their health insurance from federally run health care exchanges.

The controversy here stems from the fact that the text of the 2010 Patient Protection and Affordable Care Act limits such tax credits to individuals who purchased their insurance from an "exchange established by a State." In other words, as the legal scholar Richard Epstein summarized, "Do the words an 'exchange established by a State' cover an exchange that is established by the federal government 'on behalf of a state'?" The D.C. Circuit held that those words do not cover the federally run exchanges while the 4th Circuit held that they do. Thus we have a clear split among the federal circuits on a legal question of undeniable national importance. Translation: The Supreme Court is likely to get involved.

How will the Supreme Court rule on the matter? Writing at National Review, conservative law professor and former Bush administration official John Yoo is optimistic that this dispute offers "a chance for the federal courts and Chief Justice John Roberts to redeem themselves" by ruling against Obamacare. According to Yoo, "If Congress wrote an inadequate, misguided, or inefficient law, it is Congress's fault. It is Congress's responsibility under our Constitution to repair the law." By contrast, Yoo continues, the Supreme Court need only interpret the law as written in order to nullify the tax subsidies now issuing via federally run exchanges. "This case will give the Chief Justice the opportunity to atone for his judicial sin of two years ago." Two years ago, of course, the chief justice of the United States invoked the principle of judicial deference in his decision upholding the constitutionality of Obamacare.

But unfortunately for the heath care law's many opponents, the specter of judicial deference still haunts this latest Obamacare battle. According to the Supreme Court's 1984 precedent in Chevron U.S.A. Inc. v. Natural Resources Defense Council, when the federal courts are confronted with an "ambiguous" statute, the default position is for the courts to defer to the judgment of the agency charged with enforcing that statute. "Federal judges—who have no constituency—have a duty to respect legitimate policy choices made by those who do," declared the majority opinion of Justice John Paul Stevens. And "while agencies are not directly accountable to the people, the Chief Executive is, and it is entirely appropriate for this political branch of the Government to make such policy choices." Put differently, the scales should tip in favor of the executive branch when it comes to agency enforcement of questionably drafted federal laws.

Not surprisingly, the 4th Circuit relied heavily on Chevron in its ruling this week in favor of the Obamacare tax subsidies. "We cannot discern whether Congress intended one way or another to make the tax credits available on HHS-facilitated Exchanges. The relevant statutory sections appear to conflict with one another, yielding different possible interpretations," the 4th Circuit argued in King v. Burwell. "Confronted with the Act's ambiguity, the IRS crafted a rule ensuring the credits' broad availability and furthering the goals of the law. In the face of this permissible construction, we must defer to the IRS Rule."

The D.C. Circuit, on the other hand, found the relevant portions of the health care law to be perfectly clear and therefore declined to grant Chevron-style deference to the Obama administration. The law "plainly makes subsidies available only on Exchanges established by states," the D.C. Circuit held in Halbig v. Burwell. "And in the absence of any contrary indications, that text is conclusive evidence of Congress's intent. To hold otherwise would be to say that enacted legislation, on its own, does not command our respect—an utterly untenable proposition."

Is the health care law clear or is it not? And if it's not, is the I.R.S. entitled to broad deference under Chevron? Those are the questions the Supreme Court will face if (when?) it agrees to hear one or both of these cases on appeal. As for Chief Justice John Roberts, here's what he had to say about the importance of judicial deference in his 2012 health care opinion: "It is not our job to protect the people from the consequences of their political choices."