Justice Anthony Kennedy gave a remarkably enigmatic performance at Wednesday's Obamacare oral arguments. At times he seemed to favor the legal challengers, coming close to describing the Obama administration's case as a textual loser. But then he also turned the tables on the legal challenge by seeming to offer the White House an escape hatch to victory. It was a genuine head scratcher.
To prevail in King v. Burwell, the Obama administration needs to persuade five or more justices that health care exchanges established by the federal government count as health care exchanges "established by the State" under the terms of the Patient Protection and Affordable Care Act. Otherwise, no tax credits will be available to individuals who purchased health insurance on those federally established exchanges.
"Our position textually," Solicitor General Donald Verrilli told the Supreme Court yesterday morning, is that "effectively what Congress is doing is saying that Exchanges established through whatever mechanism" qualify for those tax credits.
But Kennedy did not seem willing to buy what Verrilli was peddling. "That seems to me to go in the wrong direction for your case," he told the solicitor general.
Yet elsewhere in the morning's arguments, Kennedy made the following statement to conservative lawyer Michael Carvin, who was then telling the Court that the Obama administration's legal interpretation ran counter to the plain text of the health care law:
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…. 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.
A little while later, Kennedy circled back to the "dynamics of federalism" in this exchange with the solicitor general:
Justice Kennedy: [It] does seem to me that if Petitioners' argument is correct, this is just not a rational choice for the States to make and that they're being coerced.
General Verrilli: So what I —
Justice Kennedy: And that you then have to invoke the standard of constitutional avoidance.
The standard of constitutional avoidance says that when the courts are confronted with two reasonable interpretations of a law, and one of those interpretations holds the law to be unconstitutional, the courts should embrace the other, non-lethal interpretation. Chief Justice John Roberts invoked this very standard in his 2012 Obamacare decision, in which he quoted the following words from Progressive era Justice Oliver Wendell Holmes Jr.: "[T]he rule is settled that as between two possible interpretations of a statute, by one of which it would be unconstitutional and by the other valid, our plain duty is to adopt that which will save the Act."
Now consider how Solicitor General Verrilli responded to Kennedy's invocation of this pro-government judicial posture:
Well, what I was going to say, Justice Kennedy, is to the extent the Court believes that this is a serious constitutional question and this does rise to the level of something approaching coercion, then I do think the doctrine of constitutional avoidance becomes another very powerful reason to read the statutory text our way.
To summarize, Kennedy suggested at one point during oral argument that the Obama administration's case goes in the "wrong direction" but then at another point Kennedy invoked a standard of judicial deference that could ultimately allow the Supreme Court "to read the statutory text [Obama's] way."
How will Kennedy end up voting in King v. Burwell? We're going to have to wait until the decision is released in late June to find out.