Obamacare

Oklahoma Court Rules that IRS Obamacare Subsidy Rule is "arbitrary, capricious, an abuse of discretion"

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Whitehouse.gov

The most significant legal challenge to Obamacare right now involves a somewhat complex debate about statutory interpretation, the legal validity of the insurance subsidies offered through federal exchanges, and multiple simultaneous waves of court challenges across the country. 

But at its heart is a single question: Should the text of the legislation be interpreted literally, according to its plain and unambiguous meaning, or, as the administration would prefer, should it not? 

The administration and its supporters hae argued that the challenge is frivolous and cynical, a legal ploy designed to gut the law, but it took another loss in court yesterday, suggesting once again that the argument from the challengers is not without merit. 

The challengers argue that Internal Revenue Service (IRS) and the administration acted illegally by interpeting the legislative language, which says only that subsidies may granted to insurance plans purchased in exchanges established by a state (defined as the 50 states plus the District of Columbia), to mean that subsidies may be granted for plans purchased on exchanges established by the state as well as the federal government, which last year set up and operated exchanges in 36 states. The final outcome of this dispute is potentially very significant: If the challengers win, then that means the subsidies offered in those 36 federally run exchanges will no longer be legally available. 

Several versions of this challenge are now making their way through the court system: In Virginia, a panel of judges from the Fourth Circuit decided in July that, even though "a literal reading of the statute undoubtedly accords more closely with [the challengers'] position," the administration had the better case overall, after giving "deference" to the IRS interpretation. On the same day, a panel of judges in the D.C. Circuit ruled in favor of the challengers, agreeing that the legislation "plainly makes subsidies available only on Exchanges established by states." That decision was later vacated when the full D.C. circuit has agreed to rehear the case; most observers believe that the full circuit decision is likely to favor the administration. 

In the meantime, the challengers have scored another victory, this time in a lower court in Oklahoma. Much like the three-judge panel in the D.C. Circuit, the Oklahoma judge ruled that the plain language of the legislation is clear, and that absent ambiguity in the plain language, its meaning cannot be ignored or conveniently interpreted away. 

"The court holds that the IRS rule is arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law," writes District Judge Ronald White, in the case of Pruitt v. Burwell. 

"This is a case of statutory interpretation. 'The text is what it is, no matter which side benefits'," White says, quoting Bormes v. United States. "Such a case…does not 'gut' or 'destroy' anything. On the contrary, the court is upholding the Act as written." 

How much will this matter? In the short term, not much. White stayed his decision, pending the resolution of any potential appeal, and with the full D.C. Circuit rehearing the other case decided in favor of the challengers, its likely that there will be no circuit split, at least for the moment. The question is how the Supreme Court will treat the case. It's rare for the High Court to take a case without a circuit split, but if the Oklahoma case is decided in favor of the challengers, it could result in a circuit clash. And it's at least possible, though not in any way certain, that the ruling could help convince the Supreme Court to take the case even without a circuit split.

"It's a judicious opinion," writes Cato Institute Health Policy Direct Michael Cannon, who helped conceive the underlying legal challenge, "and now that we (once again) have different courts in different jurisdictions that have issued opposing rulings, Pruitt greatly strengthens the case for the Supreme Court to review [the Fourth Circuit case] King.

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  1. IT’S THE LAW!* TRAITORS!

    (*unless we decide we don’t like it)

  2. In the meantime, the challengers have scored another victory, this time from in a lower court in Oklahoma, who, much like the three-judge panel in the D.C. Circuit, ruled that the plain language of the legislation is clear, and that absent ambiguity in the plain language, its meaning cannot be ignored or conveniently interpreted away.

    Now if only the courts would take that attitude towards the constitution.

  3. Not gonna lie : I hope this lawsuit gets shut down by the supreme court, simply for the hilarious precedent it will set.

    Imagine all the creative lawsuits that will be filed as a result of this.

  4. OT. Just saw that the head of the secret service “resigned” . You can’t fire a woman for sucking at her job. WAR ON WYMMYNZ.

    1. In fairness, no one ever is fired at that level.

      1. Even that tin-pot MacArthur was greased out under ‘retirement’.

      2. Pension.

        1. Politicals at that level don’t bet pensions. They just get shown the door. Only the President and members of Congress get pensions.

        2. I assume by pension you mean “consulting fees”.

          1. and speaker’s fees paid by their cult followers…

    2. Yeah, she should have stood up to Congress.

      “We’re not in the business of killing people. The president and first family were not in the White House at the time, and Secret Service on site recognized, pursued, and apprehended the perpetrator. This was simply not a situation where lethal or overwhelming force was required. So no, we didn’t kill him to keep him from getting into a White House where no one we protect was at the time. What do you think we are, the police?”

      At least that would have made her “resignation” meaningful.

      1. Why do people keep saying that the only alternative to letting the guy in the White House was shooting him? That is a straw man of the first order.

        She should have resigned and said “apparently I can’t do my job”.

        1. Like maybe they could lock the door?

    3. Didnt they get this “new” secret service chief when the last scandal came out…?

      I still think the whole SS scandal is bullshit, but this *was* supposed to be “Obama’s Top Person” – specifically chosen in response to the “prostitute” thing.

      “From 2008 to her appointment as director, Pierson served as the chief of staff and the assistant director of the Office of Human Resources and Training for the Secret Service.[3][7]

      Pierson was already the agency’s highest-ranking woman before being promoted to director.[8] She was tasked with improving the image of the USSS, following the Summit of the Americas prostitution scandal.[1]”

      So, I guess when your main priority (like Obama) is more “Image” than “Competence at your Core Mission”, then I suppose some ‘slip ups’ may occur.

      Note to CEOs: Do Not Promote Human Resources People to be “The Boss”

  5. “But at its heart is a single question: Should the text of the legislation be interpreted literally, according to its plain and unambiguous meaning, or, as the administration would prefer, should it not?”

    I seem to recall a statement concerning the US and “rule of law”, not rule of whatever some liar wants now.

  6. Administration: “So?”

  7. suggesting once again that the argument from the challengers is not without merit.

    FFS, must you continue to praise this piece of offal with such faint damnation? There is absolutely nothing about the PPACA that is not a disgusting, immoral and grossly unconstitutional power grab. There was a time when progressives had their “Keep Your Laws Off My Body” placards in the umbrella stand at the ready. To continue to ignore what a joke the law is in the hope of more invitations to the appropriate Georgetown soirees is pathetic. It is way past the time for acting as if there is anything positive to say about Obamacare.

    1. must you continue to praise this piece of offal

      Leave the haggis out of this!

    2. Progressives have been about universal healthcare pretty much since forever.

      You don’t know a goddamn thing about this law, do you? Except that it’s evil.

      1. And that’s it’s screwing over far more people than it’s helping, with a vast expense of tax dollars.

        1. And other scary vague things!

      2. Here’s what I know about this aspect of the law:

        1. ACA was purposefully written to prevent anyone outside of a state exchange from receiving subsidies in order to pressure the states to create their own exchanges.

        2. Most of the states called the federal government’s bluff on this and did not create exchanges.

        3. The administration decided to ignore the law because the political gambit did not work and hurt the reputation of the program.

        4. The executive has no authority to repeal aspects of a law because they are inconvenient to its political purposes. If the Democrat’s were more concerned with how thing worked than political power plays they would not be in this mess.

        1. So Congress could pass a simple fix to this badly written part of the law. Oh wait no they can’t, because Republicans are too busy being exclusively concerned with political power instead of policy.

          1. Oh wait, no they can’t, because the GOP would demand concessions in exchange for allowing Democrats to unfuck themselves, and having had a taste of unchecked power for a little while circa 2008, Democrats now believe that the nature order of things is for them to always get their way about everything.

            FTFY

        2. A very concise and accurate summary.

          But then, if the Demoncraps cared how things worked in the first place, they would never have passed Obozocare.

  8. What part of “L’Etat, c’est moi” don’t you understand?

  9. If the challengers win, then that means the subsidies offered in those 36 federally run exchanges will no longer be legally available.

    This misses the real reason for the challenge, and presents only the administration’s side.

    The real reason for the challenge isn’t to deny po’ folk their free stuff. Its because some employer penalties are triggered by employees getting tax credits for their HIE plan. No tax credit because no state exchange, means no employer in that state will get hit with those penalties.

  10. “The court holds that the IRS rule is arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law,” writes District Judge Ronald White, in the case of Pruitt v. Burwell. ”

    Don’t those attributes describe pretty much everything the IRS does?

  11. Here’s hoping the ruling is upheld and all the illegally-paid subsidies are treated as “income” by the IRS.

    Still more to love about the Demoncraps.

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