Will the Supreme Court grant certiorari in King v. Burwell?
On Friday, the justices of the Supreme Court held a conference to review petitions for certiorari and other procedural matters. Among the most-watched petitions before the justices was that in King v. Burwell, a challenge to the legality of an IRS rule authorizing tax credits for the purchase of health insurance in federally established exchanges. This morning, the Court released the order list from the conference, and King was absent. Rampant speculation about what this could mean ensued. (See Chris Walker's walk through the possibilities here.) Shortly thereafter, a notation on the King docket indicated that King has been relisted for this Friday's conference. According to avid court-watchers, this likely means that the justices are continuing to give this case some consideration, and the odds of a cert grant appear to have gone up. According to John Elwood, the likelihood that a typical cert petition will get granted is in the 2-4 percent range, whereas the odds for a relisted petition climb to 45 percent.
As a general rule, the Court is very unlikely to grant cert petitions in the absence of an active circuit split. When two or more lower courts produce conflicting judgments, the justices recognize the importance of resolving the conflict. Among other things, this ensures the uniformity of federal law. There is no current circuit split in King, however. In King itself, the U.S. Court of Appeals for the Fourth Circuit upheld the IRS rule, concluding that the PPACA is sufficiently ambiguous and that the IRS had offered a reasonable interpretation of the statutory text. On the very same day, in Halbig v. Burwell, the U.S. Court of Appeals for the D.C. Circuit reached the opposite result, concluding that the IRS rule was illegal and contradicted the plain text of the PPACA. While these two opinions are in conflict, the D.C. Circuit voted to rehear Halbig en banc, vacating the initial panel's judgment. So while the opinions remain in conflict, there are not conflicting appellate court judgments. Further, if the en banc court overturns the three-judge panel and agrees with the Fourth Circuit, the circuit split will disappear entirely.
If there is no active circuit split in King, why might some of the justices still believe King is cert worthy? Under the Supreme Court's own rules (Rule 10 in particular), other reasons for granting certiorari include when a lower court "has decided an important question of federal law that has not been, but should be, settled by this Court." Why might this apply in King? First, there is no question that the issue in King is important. Indeed, the D.C. Circuit would not have taken the case en banc did it not involve "an important question of federal law." Further, this is a matter that continues to divide lower courts. Not only did the initial panels on the Fourth and D.C. Circuits reach conflicting conclusions, but other courts have as well. Last month, in Pruitt v. Burwell, a district court in Oklahoma ruled against the IRS, and a decision in a fourth case—Indiana v. IRS—is expected shortly.
That lower courts disagree and that the question is important is usually not enough to merit an immediate cert grant, however. The justices often like to wait and let questions "percolate." So whether the Court agrees to hear King will likely depend on whether the justices (or, more precisely, four of the justices) believe that a) this is a question that will (or should) eventually fall on their plate, and b) this is a question that should be resolved sooner rather than later. I list both of these factors because, as I already noted, the justices are usually quite happy to let cases wait. This allows them to get the benefit of seeing how lower courts address the relevant issues and there is always the possibility that lower courts will reach a consensus, obviating the need for Supreme Court review altogether. (This is particularly true in constitutional cases as the error costs are so high. An erroneous statutory decision can be reversed by Congress; an erroneous constitutional judgment, is much harder to fix.)
Does King satisfy both criteria? It might. In King there is a serious argument that it would be better to resolve the underlying question of statutory interpretation sooner rather than later. The resolution of this litigation will alter the calculus for many political and private actors considering how to respond to the PPACA, and the statute contains various deadlines and timeframes that may become harder to navigate the longer this litigation drags on. Among other things, states may wish to reconsider whether to create their own exchanges and seek additional support grant. Some states that created their own exchanges are planning to shift to a federal exchange; Oregon's transition is already underway. A victory for the plaintiffs in King could force them to reconsider. It might also prompt HHS to develop rules to facilitate the state waiver process that begins in 2017. The more time they have to do this, the easier it will be. Further, the longer the IRS rule remains in place, the more disruptive it will be should the Supreme Court ultimately decide that rule is illegal, a point made by the petitioners in their briefing and highlighted by the WSJ. Of note, it appears some insurers are making contingency plans to prepare for the possibility that the King or Halbig plaintiffs prevail.
Note that up until this point, all of the lower federal appellate courts to consider challenges to the IRS tax credit rule expedited their proceedings. The D.C., Fourth and Tenth Circuits all recognized that there are good reasons to rush this litigation along so as to expedite resolution of the question and remove the cloud of uncertainty over exchange operations. If the Supreme Court agrees with this apparent lower court consensus that time is of the essence—and believe that the plaintiffs at least present a serious claim on the merits—this would be a good reason to grant the petition now so the question can be resolved once and for all. This would be a reason not to wait and see what happens in the D.C., Tenth and Seventh Circuits.
Interestingly enough, until this fall, the federal government had no objection to moving these cases at a faster pace. Then, once the King petition was filed, the Justice Department suddenly asked for more time to file its briefs and sought en banc review of Halbig. The result could be postponing final resolution of the underlying legal issue until 2016 or even later. There may be strategic reasons for slow-walking the case, such as a belief that the longer tax credits and subsidies flow, the harder it will be for the Court to undo them. But if the justices think the federal government is dragging this out, this strategy could backfire. Of course legal advocates can be expected to engage in tactical maneuvering to improve their odds of winning, but this is not a Court that takes kindly to being gamed, particularly by the Justice Department.
Some have argued rejecting King should be an easy call. Brianne Gorod made this argument at Balkinization, maintaining there's no reason to grant given the lack of a circuit split. Yet just a few weeks earlier she lamented the Court's refusal to grant cert in other statutory interpretation cases in which a meaningful circuit split was lacking. In both White v. Baptist Memorial Health Care Corp. and Hammond v. Kmart Corp. the petitioners tried to argue for the existence of splits, but the justices were not convinced—and for good reasons (as the briefs in opposition made clear). In King, however, various judges have reached directly opposite conclusions about the meaning of the PPACA and the legality of the IRS rule. Given what is at stake, it is hard to argue White and Hammond were cert worthy, but King is not—unless, of course, one just wants the Court to review those cases one believes the lower courts got wrong. Here I confess that I obviously would like to see King granted. My point here is not so much to make that case (or predict that a grant is forthcoming) so much as it is to explain why four justices may believe a grant is warranted.
Gorod and others also argued for en banc rehearing in the D.C. Circuit, even though the D.C. Circuit is generally much more stingy about en banc grants than the Supreme Court is with cert grants. As I noted at the time, there were reasonable arguments to made in favor of en banc review, but it is hard to argue simultaneously that Halbig was so important that en banc review was absolutely necessary but King is not nearly important enough to warrant the justices' time. The same cannot be said of the opposite argument, however. There are quite a few cases in which en banc petitions were denied, but cert petitions were granted, including cases like EME Homer City and UARG v. EPA. There are very few, however, in which the D.C. Circuit grants en banc and cert is denied. In other words, at least as revealed by the courts' behavior to date, there are far more cases that are cert-worthy-but-not-en-banc-worthy than there are cases that are en-banc-worthy-but-not-cert-worthy.
Whether or not to grant cert here is ultimately a question that four justices get to make, as it takes only four votes to grant the petition. With luck, we'll learn next Monday what the justices have decided to do. If they grant King, oral arguments will be heard in the spring and we can expect an opinion by the end of June. If not, we'll have to wait on the D.C. Circuit's en banc decision and eventual decisions from the Tenth and Seventh Circuit (each of which will unquestionably prompt a cert petition of its own) before knowing the ultimate fate of the IRS tax credit rule.