Have the practical effects of a plaintiffs' victory in King been exaggerated? (And does it matter?)

The conventional wisdom holds that if the plaintiffs in King v. Burwell prevail, all hell breaks loose and Obamacare would fall apart. Professor Nicholas Bagley, for instance, writes in the New York Times:

a ruling in the plaintiffs' favor would make the fallback exchanges dysfunctional. Without tax credits, many healthy people would forgo insurance; left to cover a sicker population, insurers would raise their prices; as a result, enrollment on the fallback exchanges would decline (by an estimated 70 percent) and premiums would rise drastically.

An analysis produced by the Urban Institute estimates a ruling for the plaintiffs would result in 8.2 million more uninsured and substantial premium increases. Several amicus briefs filed in support of the federal government paint even more dire scenarios.

Such scenarios generally assume that the political process fails to respond to a court decision recognizing that the PPACA's text only authorizes tax credits in state-established exchanges. Yet it's possible that Congress will swing into action, that states will reconsider whether to create exchanges, and even that the administration, when push comes to shove, discovers ways to ease the effects of ending illegal subsidies.

The amicus brief filed on behalf of Consumers Research by noted administrative law scholar Ronald Cass questions the nightmare scenarios painted by the government's defenders, and argues that such considerations are not province of the Court. Here's a brief excerpt:

Claims that health insurance markets would be disrupted and that essential goals of the legislation to be construed here, the Patient Protection and Affordable Care Act (ACA), Pub. L. No. 111-148, 124 Stat. 119, would be frustrated unless an ACA reference to exchanges "established by the State under Section 1311" is deemed to include exchanges established and operated by the federal government (federal exchanges) under a different Section of the ACA (Section 1321) have been advanced in the opinion of the court of appeals, in arguments of defendants and amici below, and in the Respondents' filing in this Court in opposition to the petition for certiorari. See, e.g., King v. Burwell, 759 F.3d 358, 374 (4th Cir. 2014) (King); Brief of Respondents in Opp. to Cert., at 12-13, 25-27. These claims are inappropriate as a basis for judicial construction of statutory text; they call for decisions within the province of the political branches, not the courts; and, as so often is the case with such claims, the assertions of dire consequences fail to account for a variety of potential adjustments that could well eliminate or vastly reduce any of the predicted effects.

First, the duty of courts, including this Court, is to say what the law is, not to determine what it should be to promote good consequences or to avoid ill consequences. See, e.g., Lewis v. City of Chicago, 560 U.S. 205, 217 (2010) (Lewis). Unlike the courts' role when construing the import of decisions that comprise common law, the judicial power in applying governing legal texts such as statutes is restricted to understanding the terms of the law and applying them to the case at bar. Courts should not refuse to give effect to the plain meaning of legal texts because they predict unfortunate practical consequences would result. See, e.g., Stern v. Marshall, 131 S. Ct. 2594 (2011); Lewis, supra, 560 U.S. at 217. Advertence to consequences may be appropriate to some determinations clearly within judicial purview, such as identifying the relation among statutory provisions for purposes of severability. See, e.g., National Fed'n of Indep. Bus. v. Sebelius, 132 S. Ct. 2566, 2607-08 (2012) (NFIB) (Roberts, C.J., Breyer, and Kagan, JJ.); id., at 2674 (Scalia, Kennedy, Thomas, and Alito, JJ., dissenting). However, reliance on judges' own assessments of practical consequences as a guide to deciphering what a legal text means risks letting the interpretive task morph into law creation.

Second, assessment of practical consequences from judicial construction of a particular legal command is different in kind from evaluation of a legal term by reference to the context in which it is used. Evaluation of a term's meaning in light of the nature and context of the legal instruction in which it is used calls on tools of construction within the core competence of lawyers and judges. See, e.g., Frank H. Easterbrook, Legal Interpretation and the Power of the Judiciary, 7 Harv. J. L. & Pub. Pol'y 87 (1984) (starting with the predicate that "Judges interpret words," and arguing that so far as ordinary sources of linguistic meaning fail, judges must be more modest about their task). In contrast, construction of meaning in light of predicted practical consequences requires judgments that draw on resources that often lie well beyond the lawyer's or judge's natural ken. See, e.g., id., at 97-98; Frederick Schauer, Thinking Like a Lawyer: A New Introduction to Legal Reasoning 29-35 (2009) (explaining the nature, role and importance of formalism-as contrasted with consequentialism-in judicial decisionmaking). Commonly, there are many different potential adjustments in behavior and in law that can be made to any judicial interpretation of the law, and judges simply are not well-positioned to evaluate the relative likelihood, the ultimate impact, or the relative social merit of any of these responses. Judges' assessments of practical consequences, thus, should not guide determinations respecting judicial construction of statutory provisions or judicial acceptance of administrative determinations under the Court's jurisprudence related to Chevron USA, Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 847 (1984) (Chevron).

Finally, the practical consequences that Respondents and some amici in filings below (repeated by Respondents before this Court) predicted would follow from a straightforward reading of the statutory provisions at issue do not take account of a number of potential adjustments that could eliminate or substantially ameliorate the predicted effects. Although the dire predictions were credited by the court of appeals below as a reason for accepting the interpretation of the Internal Revenue Service (IRS), King, supra, 759 F.3d at 374-75, they ignore evidence of related experience and do not account for potential actions by the states that have not set up exchanges, by the Department of Health and Human Services (HHS), or by Congress. Further, the predictions do not address the operation of various legal rules that would cushion the effect of any decision recognizing the unavailability of subsidies for purchases through the federal exchanges. The number, variety, and difficulty of predicting these potential adjustments-and the failure to take such adjustments seriously in the assertions by Respondents, the court below, and others making predictions of calamitous consequences from deciding that the ACA (Section 36B, 26 U.S.C. § 36B) limits subsidies to purchases through state exchanges established under ACA Section 1311, 42 U.S.C. § 18031, not federal exchanges established under ACA Section 1321, 42 U.S.C. § 18041-underscore why courts are not well-positioned to assess practical consequences.

The full brief is here.