Obamacare

Justice Kennedy Offers Aid and Comfort to Both Sides in Obamacare Battle

Kennedy's vote in King v. Burwell is too close to call.

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Credit: C-SPAN

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.

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  1. Come on, why bother with all the drama. It means whatever the administration wants it to mean, at whatever time they choose. This case is a foregone conclusion.

    1. Yessir. Or your Holiness. Whatever works for you, Jesus.

    2. I’ve always wondered, what does the “H” stand for? Is it Harold? I bet it’s Harold.

      1. Herschel. He’s a Jew, after all.

        1. It stands for whatever I want it stand for.

          Unless I’m in trouble with Mom, then, HM is right, it’s Herschel.

  2. “Progressive era Justice Oliver Wendell Holmes Jr.”

    Ooh, I love that Holmes himself would get purple-faced with rage at this characterization. But there’s a measure of truth to it.

    Holmes was no progressive, but many of his fanboys were, and rubbing that fact posthumously in his face can do no harm.

    Of course, the rule of constitutional avoidance applies when two different statutory interpretations are “possible,” not when it uses a term with clear meaning, like, say, “State.”

    I wish the lawyer for the challengers had the guts to tell Kennedy, “well, Your Honor, you got me. I admit Obamacare is unconstitutional and should be struck down for its unconstitutional coercion of the states.”

    1. In order to understand the statutory language you need to ignore the actual sentence under debate and instead refer to the spirit of the bill. Only when you’re fully immersed in the context can you dispel any ambiguities surrounding the obvious and unmistakable distinction between state and federal exchanges.

      1. I’ve actually seen some quite clever arguments about how language seemingly that clear can be ambiguous when in context of other provisions. Kagan’s law clerk memo hypothetical was one, and the other can be found here:

        http://www.washingtonpost.com/…..ell-contd/

      2. the spirit of the bill

        Mean?

    2. The problem is that there is another word in that phrase that gets neglected but could potentially just as important: “Exchange” (capitalized).

      “Exchange” (capitalized) is defined elsewhere in the Act either as an exchange setup by a state agency or by the HHS within the state. If the Supremes were to latch onto any ambiguity to uphold the subsidies, that’s where it will be: the definition of “Exchange” is defined as such in the Act but this subsection uses the term in a way that not entirely compatible with that definition; if we rule as it is used in the subsection at issue, it will create constitutional issues; ergo, we that “Exchange” is meant to include exchanges set up by the HHS for subsidy purposes.

      (Not saying I agree with this reasoning, by the way. But smarter statutory interpreters — including those right-leaning — than me have brought this up.)

    3. Oliver Wendell “Three generations of imbeciles are enough” Holmes, Jr.!

  3. Any attempt at reading the tea leaves is foolishness. No one saw Roberts vote coming last time. We’ll see.

  4. It’s kind of pointless to try and read the Supreme Court Tea Leaves. A lot of people, even ardent supporters, were pretty convinced last time that Obamacare was going down until Roberts invented a new form of government income called the Penaltax.

    1. Beat me by less than a minute.

      1. My ears were burning….no wait, my eyes were stinging. Maybe just great minds thinking alike.

  5. Here is what I don’t get about the whole thing.

    Under Citizen United cash is speech. Therefore the mandate is coersive of speech and forces one into speaking the way the government wants and is unconstitutional. How many people have only bought insurance because they were forced to buy it by the penaltax?

    Who gave the administration the right to authorize the spending of the subsidies?

    Why don’t the States have the right to destroy their insurance markets if they so desire? That is what they are trying to do in the case of e-cigs.

    1. It always seems to be mostly about rationalizing the status quo, to me anyway.

      It’s sort of like how “possession is nine-tenths of the law”. Getting a court to take something away from you is just harder in practice than getting the court to let you keep it.

      If you want the court to uphold whatever the Administration is doing, it just seems to be much, much easier to get the court to side with you.

      If you want the court to stop the President’s implementation of something that Congress has authorized–to whatever extent–then you’re looking at an uphill battle, and the onus is on you.

      That isn’t the way it should be, but that’s the way it is.

  6. “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.”

    I’m sure Chief Justice Roger B. Taney would agree with Kennedy on that, wholeheartedly.

    Taney is the guy that wrote the majority opinion in Dred Scott v. Sandford.

  7. If a construction of the ACA requiring the states to create exchanges or suffer penalties would be coercive and therefore unconstitutional –

    – why isn’t even other statute requiring the states to take some action in order to receive funding not unconstitutional for that reason?

    Every highway bill. Every program in the CFDA with a maintenance of effort requirement or some performance requirement set on the states. Every education bill. Etcetera.

    Why all of a sudden is it superimportant for the states to not be coerced in this one context and this one context only?

    1. “If a construction of the ACA requiring the states to create exchanges or suffer penalties would be coercive and therefore unconstitutional”

      I’d like to pipe up, too, that they’re questioning whether it’s wrong to force the states to do something–but they’ve already decided that it’s okay for the feds to force me to eat broccoli.

    2. I believe this objection may be a reference to the Medicaid ruling from NFIB v. Sebelius? Feds were not allowed to cut existing Medicaid funding to states who did not choose the expansion.

      However, in this case, this is not cutting an existing subsidy to coerce state action, this is not granting something new. So, no, I don’t get the argument either.

  8. I find that theory to be asinine. If something could be interpreted as unconstitutional or non-lethal, why prefer the latter? I would always prefer the former, which gives more liberty to the People. I would never defer to the government, even if I worked for them. You know, because I have some semblance of sanity.

  9. It’s not clear to me whether Kennedy is referring to the plaintiff’s argument or the law itself when he introduces constitutional avoidance. There’s some chop logic here, but I think it looks like this:

    IF (lawsuit wins and subsidies are prevented on federal exchanges)
    THEN
    (law was coercive to the states in the first place)
    THUS
    (law ITSELF is therefore unconstitutional and is void)
    ELSE
    (lawsuit loses and subsidies are permitted on federal exchanges)
    THUS
    (coercion is avoided and law remains intact)
    ENDIF;

    If I’m parsing that right, then if the court finds for the plaintiffs, Kennedy concludes then the idea of subsidies if not the whole law must be voided.

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  11. So the ends justify the means. Well put Justice Holmes and Kennedy. . . And Roberts. God help us.

  12. They are in a very troubling spot. Do they bend again to the will of Obama or see what the consequences are for disobeying. My guess is they wont get that far before the cities burn.

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