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Volokh Conspiracy

New scholarship on King v. Burwell


The Supreme Court has not even decided King v. Burwell, and the case is already producing new legal scholarship.

For instance, Chapman law professor Ronald Rotunda has a new paper discussing King v. Burwell, "King v. Burwell and the Rise of the Administrative State." Here is the abstract:

The Patient Protection and Affordable Care Act (ACA) is a complex law totaling nearly a thousand pages in length. The litigation now before the Supreme Court in King v. Burwell presents, on the surface, a simple issue of statutory interpretation. However, that surface has a very thin veneer. If the Court allows administrators carte blanche to change the very words of a statute, we will have come a long way towards governance by bureaucrats. Over the years, Congress has delegated many of its powers, but it has never delegated the power to raise taxes or spend tax subsidies in ways that no statute authorizes.

For example, the ACA [ ] provides that territories of the United States (e.g., Guam) are "States," for purposes of this law. Section 1323 provides [ ] that if a "territory" creates an Exchange, it "shall be treated as a State" under this law. Congress knew how to define "state" to include more than "states." It did that when it defined "territory" as "State." It also says that the District of Columbia is a "State" for subsidy purposes. A section provides, "In this title, the term 'State' means each of the 50 States and the District of Columbia." However, no section of the law defines "State" to include the Federal Government. An earlier version of the bill—one that Congress did not enact—provided that "any references in this subtitle to [any] Health Insurance Exchange…shall be deemed a reference to the State-based Health Insurance Exchange." That would treat Federal Exchanges the same as State Exchanges. Congress did not enact that version.

If the IRS has this broad power to amend the statute to say that "federal" means "state," we will have come a long way from rule by an elected Congress to rule by unelected bureaucrats.

Professor Rotunda joined this amicus brief in support of the King petitioners.

On the other side of the spectrum, Harvard law professor Einer Elhauge has a paper suggesting that reading the PPACA as urged by the King plaintiffs would produce unconstitutional coercion. Here is the abstract for his paper, "Contrived Threats v. Uncontrived Warnings: A General Solution to the Puzzles of Contractual Duress, Unconstitutional Conditions, and Blackmail":

Contractual duress, unconstitutional conditions, and blackmail have long been puzzling. The puzzle is why these doctrines sometimes condemn threatening lawful action to induce agreements, but sometimes do not. This article provides a general solution to this puzzle. Such threats are unlawfully coercive only when they are contrived, meaning the threatened action would not have occurred if no threat could be made. I show that such contrived threats can be credible because making the threat strongly influences whether the threatened action occurs. When such threats are uncontrived warnings, meaning the threatened action would have occurred even if no threat could be made, they are not coercive and can only benefit the agreeing parties. However, sometimes (as with blackmail) agreements produced by uncontrived warnings are also unlawful on the different grounds that they harm third parties. The contrived-threat test explains why the Medicaid defunding threat in Obamacare was unconstitutional and why (in the pending Supreme Court case) interpreting Obamacare as threatening to withhold tax credits from States that do not create insurance exchanges should either be rejected under the canon of avoidance or result in constitutional invalidation of that threat.

Professor Elhauge's paper makes a serious argument that conditioning tax credits for the purchase of insurance on a state's creation of an exchange would be coercive, but it's also an argument that would threaten numerous other uses of conditional spending to induce state cooperation. Under Professor Elhauge's theory, for example, there's no way for a court to uphold the conditioning of federal highway funds on state cooperation under the Clean Air Act. I also think his theory makes Maine's argument in Mayhew v. Burwell (cert petition pending) a slam dunk. The paper confirms, as I've suggested before, that it will be difficult for the Court to rule for the government on federalism grounds without casting doubt on other federal programs.