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. David

    As a layperson who knows enough to be dangerous, I don’t understand how it increases the likelihood for Supreme Court cert.

    =======================
    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.

  2. That’s a totally bizarre article Annie. But we live in bizarre times

  3. How would the Supreme Court deal with the power of an agency to adjust the words of a statute to fit the policy goals of the statute? Well, here’s an excerpt by Scalia writing for the conservatives in the UARG v. EPA case (greenhouse gas):

    “We conclude that EPA’s rewriting of the statutory thresholds was impermissible and therefore could not validate the Agency’s interpretation of the triggering provisions. An agency has no power to “tailor” legislation to bureaucratic policy goals by rewriting unambiguous statutory terms. Agencies exercise discretion only in the interstices created by statutory silence or ambiguity; they must always “‘give effect to the unambiguously expressed intent of Congress.’” (6/23/2014)

    It wouldn’t take much editing to apply the same words to the IRS and the subsidies.

  4. Send it to the Supreme Court, and let them sort out the “what’s mine is yours is yours is mine “ legal issue.

    The plan’s success hinges on enlarging the pool of the insured, including those of modest means who need financial aid, to subsidize insurance costs for those who are ill.

  5. Sorry, that is the full DC Circuit. My understanding was that the full court will review the decision of the three-judge panel.

  6. Wasn’t “HOPE” a campaign slogan in 2008? Now it’s I HOPE we survive this failed, lawless, Presidency

  7. As a layperson who knows enough to be dangerous, I don’t understand how it increases the likelihood for Supreme Court cert. if the view is the DC court will go the other direction on Halbig. Wouldn’t that mean there is no conflict between the two Circuits and thus no need for review by the Supreme Court?

  8. “As you’ve probably seen now, coincidentally – at least not by any schedule they had to follow – the 4th Circuit also ruled today on the same Obamacare subsidy question. And they sided with the government.

    Now, historically, the 4th Circuit has been very conservative. But the panel that issued this ruling was made up mainly of Democratic nominees. At first, I was anticipating a weird turn of events where the full DC Circuit and the full 4th Circuit both overruled their panels, thus leaving the Supreme Court again with a dispute at the appellate level to resolve – just with the two Circuits switching places.

    But my information was outdated. The 4th Circuit now has now 9 Democratic nominees and 5 Republican nominees. So things have changed pretty markedly.

    All of that suggests a somewhat different scenario than we saw this morning. Given the mix of the judges on each Circuit it seems more likely than not that the final word from each Circuit will be in the government’s favor.

    That would leave the Court with no dispute to resolve.

    The Court can do whatever it wants of course. But if the scenario I sketched out above is right, taking the case would mean reaching down to the appellate level where there’s unanimity rather than dispute to take a case which even many right-leaning legal would recognize iffy or at least a bit of a stretch.

    And to my admittedly non-lawyer and not very SCOTUS-knowledgable mind that seems to change the calculus, perhaps a lot. The takeaway from the Court’s main SCOTUS decision was that John Roberts has a personal and institutional agenda not wholly in line with his ideological agenda, which is very apparent and real. He seems to want his precedent-upending decisions on money in politics, regulatory issues and perhaps church and state issues but not to go so far or be too mercenary too many times to undermine the credibility of his tenure as Chief Justice or the Court more generally.

    By all means, wait to hear what others who know a lot more about the Court than I do have to say and predict. But based on what we know now I’m a bit more skeptical that the Court steps in goes for broke on this case.” Josh Marshall. TPM Certainly there is more hope for Obamacare than there was this morning.

  9. JT is incredibly on top of this stuff.

    I go out to mow the lawn with some cold suds, and this.

    That is why I love this blog.

    We be knowin’ in the wind.

  10. Nice to see Gregory appears to be non artisan, as opposed to SCOTUS. Based on their performance so far any decision on this from them will be consistent with their right leaning bent.

  11. Wow. I guess I need to read both opinions before I open my mouth again.

  12. Oh gosh, another Irish Poem is required to interpret this one:

    The King Court ‘s Speech???
    An Irish Poem by Squeeky Fromm

    The King Court said to our distress,
    This Obamacare law is a mess!
    This crap makes no sense,
    Sooo, wherefore and hence,
    We’ ll defer to the damned IRS!

    Squeeky Fromm
    Girl Reporter

  13. If Roberts didn’t use pretzel logic the first time this all would not have been necessary.

  14. Wow, same facts and same argument as Halbig, but this court rules it’s ok for the IRS to read into the law what wasn’t written, but rather it is ok to go to what they think Congress would have written, had they “known what was in it”.
    Destined to the USSC.
    There it is a toss up, some crazy logic could make it go either way.

  15. I agree with the decision in that the intention of Congress was to allow credits for all exchanges. However, let’s see what the Supremes come up with.

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