Fourth Circuit Rules For Obama Administration On ACA Interpretation

US-CourtOfAppeals-4thCircuit-SealPresident_Barack_ObamaSoon after the D.C. Circuit delivered a major loss to the Administration in rejecting its statutory interpretation under the ACA in Halbig v. Burwell, the United States Court of Appeals for the Fourth Circuit has delivered an equally important victory on the very same issue in King v. Burwell. This tale of two circuits only increases the likelihood of a Supreme Court review and perhaps the case for expedited appeals.


Fourth Circuit Judge Roger Gregory (who was nominated by George W. Bush but given an recess appointment by Bill Clinton) wrote for the panel. Gregory adopts the deferential standard advocated by Judge Edwards in his Halbig dissent. He finds that the law is ambiguous and thus “Applying deference to the IRS’s determination . . . we uphold the rule as a permissible exercise of the agency’s discretion.” It is a victory for Chevron, which some of us believe gives far too much deference to agencies in their actions and interpretations.

In a ruling that should resonate with many ACA supporters, Gregory holds:

It is therefore clear that widely available tax credits are essential to fulfilling the Act’s primary goals and that Congress was aware of their importance when drafting the bill. The IRS Rule advances this understanding by ensuring that this essential component exists on a sufficiently large scale. The IRS Rule became all the more important once a significant number of states indicated their intent to forgo establishing Exchanges. With only sixteen state-run Exchanges currently in place, the economic framework supporting the Act would crumble if the credits were unavailable on federal Exchanges. Furthermore, without an exception to the individual mandate, millions more Americans unable to purchase insurance without the credits would be forced to pay a penalty that Congress never envisioned imposing on them. The IRS Rule avoids both these unforeseen and undesirable consequences and thereby advances the true purpose and means of the Act.

Here is the opinion: King decision

28 thoughts on “Fourth Circuit Rules For Obama Administration On ACA Interpretation”

  1. Another thing I thought of last night just before falling asleep was “what if the 4th Cir. goes en banc and negates this panel decision?

  2. Max-1

    Dredd,
    This could be a headline for you…
    “The Tennis of the Courts”
    ====================
    Good one Max-1 … this is a real back and forth.

  3. I’ve known Roger Gregory since his days partnering with former Va governor Doug Wilder to practice law. He’s a thoughtful and compassionate man and everything you’d ask for in a federal judge. I thought that even when he was against me in several jury trials. Good on you, Roger.

  4. David

    “One of the statutory bases of granting it is when two circuits are in conflict.

    So the Supreme 5 can “resolve the conflict” between or among the circuits.”

    That was always my understanding. But I’ve had the impression that the DC Circuit case would likely be looked at by the full court, rather than the three-judge panel, who could (and likely would) overturn the panel’s decision. Were that to happen, would the Supreme Court still find the DC & 4th circuit decisions to be in conflict? Thanks for the earlier reply.
    ===========================
    Exactly.

    So, if as expected the DC Cir. goes en banc, that will automatically dissolve the panel’s decision made today, and will therefore automatically dissolve the conflict between the 4th Cir. and the D.C. Cir.

    Next, if they then (as expected) rule in sync with the 4th Cir., there is no longer a Cir. conflict and … it wold seem … no longer jurisdictional basis for a writ of Cert.

    The only problem is that analysis is that we live in a nation with a Supreme Court that is capable of going “all rogue and mavericky.”

    Again, then, I am not as sure about what the S.Ct. will do as I am about what the en banc D.C. Cir. will do.

  5. “One of the statutory bases of granting it is when two circuits are in conflict.

    So the Supreme 5 can “resolve the conflict” between or among the circuits.”

    That was always my understanding. But I’ve had the impression that the DC Circuit case would likely be looked at by the full court, rather than the three-judge panel, who could (and likely would) overturn the panel’s decision. Were that to happen, would the Supreme Court still find the DC & 4th circuit decisions to be in conflict? Thanks for the earlier reply.

  6. The court clearly ruled what was not in the law. They debated this provision and thought it was a club to force states to adopt the exchange. Despite the club, several states did not make exchanges.

    If the court can rule this as law, they can rule anything. Beware of judges that pass laws contrary to the laws passed by legislatures. Isn’t this part of what we had a revolution about 240 years ago?

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