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SCOTUS “institutional legitimacy” not at stake in King v. Burwell

SCOTUS “institutional legitimacy” not at stake in King v. Burwell

Separation of Powers, Chevron Deference standard are safe

The upcoming Supreme Court case of King v. Burwell holds much in the balance, including the very financial sustainability of President Obama’s signature law, the Patient Protection and Affordable Care Act (PPACA). If the Supreme Court rules for the plaintiffs, the ability for the law to support itself would almost certainly collapse.

At issue in King is the legality of an IRS rule allowing exchanges operated by the federal government to issue tax subsidies to qualified individuals purchasing health insurance through the exchange.

This is an incredibly complex issue, and many courts, scholars, and commentators have spent thousands upon thousands (upon thousands) of pages of argument attempting to arrive at the proper conclusion. Ultimately, we must wait until the Supreme Court decides this case at the end of the term to learn the definitive conclusion.

The complexity of the law notwithstanding, many commentators remain convinced that any ruling against the government would be one for politics over the law, leading to familiar questions of the “institutional legitimacy” of the Supreme Court should they rule against the government. This is nothing new, especially when it comes to the issue of PPACA. Indeed, in the wake of the 2012 PPACA challenge, a litany of law professors and legal scholars shared in the assessment that striking down PPACA would result in substantial costs “for the Court as institution and for its credibility carrying out its vital national role going forward.”

Despite the pattern of many scholars to tie the legitimacy of the Court to ruling in favor of PPACA proponents, I honestly believe the “sky is falling” rhetoric regarding King v. Burwell to be severely overblown.

The primary contention of those who believe the institutional legitimacy of the Court is at stake in this case is that holding against the government would be a departure from a vital administrative law axiom known as the Chevron deference standard.

As Michael Cannon and Professor Jonathan Adler point out in their excellent article, the Chevron deference test is a two-step inquiry:

First, the reviewing court considers the statutory text to determine “whether Congress has directly spoken to the precise question at issue.” If so, the statute controls, “for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.” If the reviewing court concludes that the statute is “silent or ambiguous,” however, and determines the interpretive authority has been delegated to the agency, the court must defer to the agency’s statutory interpretation, so long as it ‘is based on a permissible construction of the statute.’”

In other words, step-two requires the agency interpretation of ambiguous statute prevail unless it is “arbitrary, capricious, or manifestly contrary to the statute.”

As a result, the government’s contention largely rests on the premise that ambiguity exists in the statutory language of Obamacare, and thus, the IRS should be accorded due deference to craft rules consistent with their interpretation (one that obviously would entail the continued existence of the federal exchange tax subsidies).

The entire issue of King can be boiled down to the IRS Rule’s inconsistency with the language of three sections of the PPACA: §1311, §1321 and §1401.

Section 1311 creates the authority for an “exchange established by the State.” Likewise, Section 1321 creates the authority for the federal government to create “such exchange” in the event a state refuses to establish a Section 1311 exchange (which, much to the surprise of the law’s drafters, has occurred in more than half the states).

Finally, Section 1401 allows for tax credits to be issued for “Exchanges established by the State under 1311.” And therein lies the problem for the government’s position. Section 1321 exchanges are not “established by the State,” and they certainly are not “established by the State under 1311.” No, Section 1321 exchanges are established by the federal government under Section 1321.

Lawyers may quibble all they want about whether Section 1321 exchanges, for all intents and purposes, are 1311 exchanges. For all their legal gymnastics, however, Section 1321 exchanges simply can never be “Exchanges established by the State.” Indeed, follow the absurdity of the government’s reading of the statute here:

A federally created Section 1321 Exchange = an Exchange established by the State under 1311.

Such a reading is simply too far a departure from the plain reading of the statute as to give it the weight necessary to create the statutory ambiguity required under Chevron.

With no need to grant deference under Chevron, separation of powers issues — at least with respect to Court — do not come into play in this case. As a result, even if the Court rules for the plaintiffs, the “institutional legitimacy” of the Court ought to (once more) be safe for another day.


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Thanks to John Roberts I now have zero confidence in the SCOTUS.

The Left prefers to downgrade our institutions, especially if they are in the way of enacting their agenda.

For the last four decades or so, suing in federal court has been the Left’s main method of enacting policies they could never get passed in Congress. Only when the Court threatens their steamroller are they concerned.

Only lawyers can see this as “terribly complex”, because in their world words mean nothing. Laws and regulations are pointless. Why even have them?

    Ragspierre in reply to gasper. | January 26, 2015 at 5:44 pm

    I’ll take strong exception to that.

    Many of us BECOME lawyers PRECISELY because words mean so very much to us, and the law certainly does.

    My “simple country lawyer” take on the case is that the court should apply one of the most basic of all cannons of statutory interpretation…you read the damn thing…AS WRITTEN. IF there is a plain meaning, you apply that, regardless of extraneous bullshit. That is your whole job, rat thar.

    This has two salutary effects;

    1. it gives all of us more confidence in the written law, and

    2. it helps train legislators to craft laws so they come out as intended.

    And that’s as “complex” as this case is, IMNHO.

      Unfortunately, about 50% of the country cannot read or reason, and that would include about half the lawyers…

      Sorry, but the law profession ain’t what it used to be 🙂

      gasper in reply to Ragspierre. | January 26, 2015 at 6:15 pm

      “. . .you read the damn thing…AS WRITTEN.” My point exactly. That is the missing link in your profession. If everyone did that there would be no need to go to court. But, that is not the case (no pun intended).

      sdharms in reply to Ragspierre. | January 26, 2015 at 7:30 pm


      gospace in reply to Ragspierre. | January 26, 2015 at 9:14 pm

      You said what Gasper said- using more words to make it complex. It’s a simple case, if you read the law as written. Elsewise you get into explaining what the meaning of “is” is, and how many angels can dance on the head of a pin.

Politics? Or the law? There were reports that the IRS ruled that states which had not established exchanges would not benefit from federal premium subsidies. Then the Obama Administration ordered to IRS to rule otherwise…which the IRS did. The actual words of the statute aside, how more clear could the determination of politics versus the law be?

“Rule against the government”. Isn’t that the purpose of the Supreme Court?

Obama’s signature law is a tax on survivors of “planned parenthood” and euphemistic “pro-choice” — characteristically selective — policy. It’s a revenue scheme that preserves the cost structure of health care services and products, while raising the poverty line, increasing the age of majority, and taxing everyone else, far removed from economic development. It represents a grand acrobatic leap of faith that requires a liberal dosage of opiates. Perhaps that’s the best outcome we can expect from a libertine society.

Anyone ever notice how the “institutional legitimacy” of the court is only ever in danger when progressives think they might lose the case.

Subotai Bahadur | January 26, 2015 at 8:32 pm

Legitimacy cuts both ways. It is not only the Left who could publicly declaim that the Supreme Court is illegitimate if they lose.

Keeping in mind that Federal courts seem to exist to thwart any voter approved measures, basically because they represent consent of the governed; and that the basis for the approval of Obamacare was a perfect example of politics, and probably extortion, determining the meaning of the law.

If you are a conservative, and if the Supreme Court “solves” this by another writ of Possunt quia posse videntur; continuing to accept the legitimacy of the courts becomes somewhat problematical.

Ragspierre: It is a good thing that we post under noms de blog, because if your bar association ever was able to identify you with the heresy you wrote, you would be disbarred. 😉

    Ragspierre in reply to Subotai Bahadur. | January 27, 2015 at 9:33 am

    …and then I’d have to drink at my place…

    But, seriously, folk, despite gobsmacking comments to the contrary, lawyers STILL read, and we STILL reason (though THAT can get you in a lot of trouble), and there are good, Conservative lawyers abroad in the land.

      Walker Evans in reply to Ragspierre. | January 28, 2015 at 3:15 pm

      “…and then I’d have to drink at my place…

      But, seriously, folk, despite gobsmacking comments to the contrary, SOME lawyers STILL read, and SOME STILL reason (though THAT can get you in a lot of trouble), and there are SOME good, Conservative lawyers abroad in the land.”

      There – fixed that for you!

“This is an incredibly complex issue…”

No. Its incredibly simple. The law is crystal clear.

What is making it complex is the sophistry being employed by the administration’s attorneys to convince judges that the plain language means the precise opposite of what it clearly says.

If the progressive fascists who wrote this terrible law had wanted the exchanges operated by the federal government to be able to provide subsidies then they should have written the law differently.

    Gremlin1974 in reply to ConradCA. | January 27, 2015 at 3:28 am

    Yep, you also have to remember 2 important things, first none of the people who passed the law actually had much to do with writing the law. Second, you have to remember the arrogance of progressives, they thought that since they wanted it that meant everyone else must want it as well.

There is a Gruber video where he explains that the state operated exchanges were the only subsidised exchanges that could provide subsidies in order to encourage the states to create exchanges.

    Elliott in reply to ConradCA. | January 27, 2015 at 7:55 am

    It was written this way specifically to act as a carrot and a stick or more accurately as Medicaid defunding (stuck down in the first Obamacare case) and a club. The first case, thanks to Roberts, allowed it to proceed EXCEPT for the threat that states who declined expanded Medicaid and/or state exchanges would not have ALL of their Medicaid funds yanked. This deprived the administration of the primary threat/leverage against the states forcing them to scramble to come up with the federal exchange so late in the process that they couldn’t make one that worked. ALL of their assumptions have been wrong and the bullying didn’t work. This suit is about the half witted butt covering they had to come up with called a federal exchange which has no basis in the ACA. They made it up on the fly.

      Gremlin1974 in reply to Elliott. | January 27, 2015 at 3:31 pm

      “forcing them to scramble to come up with the federal exchange so late in the process that they couldn’t make one that worked.”

      That is if you believe that they could have made it work given even more time. With the witless incompetence this administration has shown I think that is a bit of a stretch.

This is what happens when 535 elected representatives vote on a bill they have not read.

There is a patent distinction between the state exchange and the federal exchange. I doubt that they intended to do it that way, but SCOTUS does not exist to fix Congress’s mistakes.

This sort of drafting blunder is usually fixed (along with all the others) in a follow-on corrective bill. That obviously didn’t happen in this instance – so they want SCOTUS to protect them from their own lassitude.

I have a question for some of the Lawyers out there. Did the court address the lack of a severability (sp?) clause during the first case? If this is struck down, without a severability clause, shouldn’t it take the whole law down?

    Subotai Bahadur in reply to Gremlin1974. | January 27, 2015 at 11:56 pm

    Not a lawyer, nor do I play one on TV. I am a retired Peace Officer, so I have more exposure to courts than most, albeit criminal courts. And I have been active in politics for almost my entire life, so I am more familiar with the sausage-making process than most.

    In my limited view, subject to correction with no ill feeling, the lack of a severability clause should take it down. But then again, this law has had a unique charmed life being protected from reality at several levels including the courts and unconstitutional executive decrees.

    Ragspierre, could we get your take on this?

    I will say that if the Court throws out the Federal subsidies for states that have not set up Obamacare Exchanges, that I prediet the Republicans will pass a bill allowing the Federal subsidies for those states with no other changes to Obamacare. In today’s edition of THE HILL, Sen. Lamar Alexander (R-Tenn.), who is heading the “Plan B” effort along with Finance Committee Chairman Orrin Hatch (R-Utah) and Republican Policy Committee Chairman John Barrasso (R-Wyo.) along with Senate Budget Committee Chairman Mike Enzi (R-Wyo.) and Sen. Richard Burr (R-N.C.) said “If the Supreme Court were to say the law says what the law says, we would like to be ready with a response to that that makes practical sense for the 5 or 6 million Americans who would be affected”.

    Limiting any action to the 5-6 million who lose subsidies means that the main law will be left intact if they can. Which matches every Institutional Republican action since the day after the election; to preserve, protect, defend, and extend every action by Obama at the cost of betraying their own voters.

    If we have an election in 2016, the Republicans will be waving hello to the Whigs.