Below is my column today in the Chicago Tribune on the rivaling rulings in the D.C. Circuit and the Fourth Circuit over a critical provision under the Patient Protection and Affordable Care Act (ACA). As an academic interesting in statutory interpretation and legisprudence, the opinions are fascinating and capture two different but well-argued views of the role of both courts and agencies in dealing with legislative language.
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Call it the “Tale of Two Circuits.” It was either the best of times or the worst of times yesterday for Obamacare.
Within hours of each other yesterday, two federal appellate courts looked at the Patient Protection and Affordable Care Act (ACA) on the same issue involving the same provision and came to diametrically opposite conclusions.
In Halbig v. Burwell, the D.C. Circuit ruled that the Obama Administration changed the meaning of the ACA and wrongly extended billions of tax credits to citizens without congressional authority. It was a stunning loss for the Administration. However, a couple hours later, the neighboring Fourth Circuit across the river ruled in King v. Burwell. That three-judge panel ruled that the Administration was perfectly within its rights to interpret the law in this fashion. Depending on which bank of the Potomac you stand on, Obamacare is either in robust health or on life support.
While the decisions have caused a whirlwind of political controversy, neither really turn on the question of national health care. Indeed, these two cases represent well reasoned but conflicting views of the role of court in statutory interpretation. The conclusion of these rivaling approaches hold the very viability of the ACA in the balance. That answer may have to wait for another appeal to the full courts of these respective circuits and ultimately an appeal to the United States Supreme Court.
In Halbig, Judge Thomas B. Griffith ruled that the statute is clearly worded on a key point of the law. At issue is the very thumping heart of the Obamacare: the system of state and federal “exchanges” through which citizens are required to purchase insurance. The law links the availability of tax credits to those states with exchanges “established by the state.” However, the Administration was caught by surprise when some 36 states opted not to create state exchanges. That represented a major threat to Obamacare. Without the credits, insurance would be “unaffordable” for millions of citizens who can then claim an exemption from the ACA. It would allow a mass exodus from the law – precisely what many citizens and critics have wanted.
To avoid that threat, the Obama Administration released a new interpretation that effectively read out “state” from the language – announcing that tax credits would be available to even states with only a federal exchange.
The D.C. Circuit ruled that the “interpretation” was really a re-writing of the federal law and that President Obama had over-reached his authority in violation of congressional power.
The Fourth Circuit came to the opposite conclusion. The court believed that the IRS was entitled to deference by the courts in what these laws mean in cases of ambiguity. The panel considered the law to be unclear and found that it was reasonable for the IRS to adopt an interpretation that guaranteed tax credits to all citizens.
At the heart of the conflict is a fundamentally different view of the role not just of federal courts but also of federal agencies. I have long been a critic of the rise of a type of fourth branch within our system. The Framers created a tripartite system based on three equal branches. The interrelation of the branches guarantees that no branch could govern alone and protects individual liberty by from the concentration of power in any one branch.
We now have a massive system of 15 departments, 69 agencies and 383 nonmilitary sub-agencies with almost three million employees. Citizens today are ten times more likely to be the subject of an agency court ruling than a federal court ruling. The vast majority of “laws” in this country are actually regulations promulgated by agencies, which tend to be practically insulated and removed from most citizens.
The Supreme Court ruled in 1984 in Chevron that agencies are entitled to heavy deference in their interpretations of laws. That decision has helped fuel the growth of the power of federal agencies in this fourth branch. The court went even further recently in Arlington v. FCC in giving deference to agencies even in defining their own jurisdiction. In dissent, Chief Justice John Roberts warned: “It would be a bit much to describe the result as ‘the very definition of tyranny,’ but the danger posed by the growing power of the administrative state cannot be dismissed.”
Regardless of the merits of the statutory debate over the ACA, the question comes down to who should make such decisions. For my part, I agree with the change but I disagree with the unilateral means that the President used to secure it. President Obama has pledged to “go it alone” in circumventing opposition in Congress. The Fourth Circuit decision will certainly help him fulfill that pledge. The result is that our model of governance is changing not by any vote of the public but by these insular acts of institutional acquiescence.
The court may call this merely deferring to an agency but it represents something far greater and, in my view, far more dangerous. It is the ascendance of a fourth branch in a constitutional system designed for only three.
Jonathan Turley is the Shapiro Professor of Public Interest Law and has testified before Congress on the constitutional implications of the health care cases.
Oh, and what “state” does John Kerry work for, as Secretary of State?
No one has brought up the issue of Congressional intent. I believe that when the ACA was passed, the intent was that all citizens in all states would be included. Doesn’t that count for anything?
Deference, preference, Phd. Experts and leeway = no constitution = The Fourth Branch.
David Cosson
… “The three-judge panel of the D.C. court include one Democratic appointee and two Republican appointees, who reached the conclusions you might expect….The 4th Circuit in Virginia featured a three-member panel of Democratic appointees, who all sided with the Obama administration.”
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Actually, one of the 4th Cir. judges, the one who wrote the opinion, was finally appointed by George W. Bush.
The Fourth Circuit is composed of the states of Maryland, North Carolina, South Carolina, Virginia, and West Virginia.
Professor Turley is correct to be concerned about the expansion of Chevron deference of which the 4th Circuit decision is an example. I don’t see it as a “Fourth Branch” of government issue, however, as the agency involved is within the Treasury Department, i.e. an executive branch agency not an independent agency.
Another serious level of concern is the analysis in today’s Washington Post (p.A6, col.1) that attributes the difference in the two decisions, as well as the expected results of further litigation on the politics of the President appointing the judge: “The three-judge panel of the D.C. court include one Democratic appointee and two Republican appointees, who reached the conclusions you might expect….The 4th Circuit in Virginia featured a three-member panel of Democratic appointees, who all sided with the Obama administration.”
Either journalists today have no understanding of the presumption that judges should decide cases on the law and the facts, or have some reason to conclude that supposedly legal analysis is simply a charade designed to clock entirely political decisions. Either way we have a problem.
I find myself reminded of the Icelandic story of the Saga of Burnt Njal.
When there were only four courts, it was found necessary to create a fifth court (in the manner of a court to resolve differences among the four {north, west, south, east?} courts?).
The three “constitutional” branches of government may be modeled, so I guess, as forming a triangle. Triangles, in structural engineering, have a particular property; they are “just-rigid” plane structures. Regardless of whether the ends of the sides of a plane triangle are pin-connected or rigid-connected, a triangle is a just-rigid structure.
Plane triangles are flat; they have no volume, and so have nothing within them.
However, a tetrahedrons, made of four plane triangles are no less just-rigid than are plane triangles, yet they do have volume and do, therefore, have the capacity for having something within them.
A triangle may contain an unlimited number of dimensionless points, none of which contain anything. That is one way of indicating my personal and professional difficulty with philosophical (hence also legal-philosophical) arguments made of points made. I find arguments made of points to be empty arguments, because all points are empty, and an unlimited number of empty points, added together, remain empty.
What is missing in the ‘three branches” model of checks-and-balances government is there being no way to mediate disputes among the branches, a predicament that surely is clamoring for some useful attention?
I propose that the fourth branch of government may usefully be rigorously truthful honesty, if honesty is of subjective, social consensus-ethical reality, and if truthfulness is of objective, scientifically-verifiable reality.
Human social evolution may be making obsolete the social construction of reality;
What if human society is actually a construction of objective reality in the manner of creative evolution or evolving creativity?
Jane L,
If “state” and “federal” were meant to be equivalents and interchangeable … Progressive thinkers are experts at rationalizing any means to reach the glorious ends … observe progressive thinking judges assume pretzel like postures to avoid looking the failure of the glorious crown jewel in the eye.
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Before you dig yourself into a deeper hole by doubling down, research where the 4th Circuit is, and who the judge who wrote the opinion is.
Then tell us that “Department of State“, the first federal agency created in 1789 by Congress, is a state institution.
The overturning of the ACA is what the red states who have decided party is more important then their people wanted, and want, to happen by refusing the Medicaid funds.
If “state” and “federal” were meant to be equivalents and interchangeable, why would the congress have created a carrot (subsidies) for one (states) and not for the other (federal) in the first place? Wouldn’t they have just said “exchanges” receive subsidies? It was a fully intentioned ploy, devised by the elite academics that dreamed this behemoth up in the first place. And like most academic theories…it didn’t work in the real world. Progressive thinkers are experts at rationalizing any means to reach the glorious ends…observe progressive thinking judges assume pretzel like postures to avoid looking the failure of the glorious crown jewel in the eye.
Centinel2012
… that is the very definition of tyranny!
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The first federal agencies were created well before the Civil War:
(Wikipedia, Dept. of State).
The Civil War initiated by southern tyranny is a better source for examples of tyranny IMO.
sorry for the typos in that post I don’t type well … lol
An excellent analysis of the law but one must step back and look at the core issue as Turley and Robers both seems to agree on — have we created a 4th branch of government with no checks and balances on it — that is the very definition of tyranny! In my opinion that trumps and other cause no matter what the merits of it, for if this process continues much only we will lose the Republic just as the Romans did.
Squeeky Fromm, Girl Reporter
… the plain language of the rules, ambiguity or not.
Does that make any sense??? Because I haven’t had any coffee yet.
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I will defer to the agency that handles inquiries by people who get up before coffee and breakfast.
That is way too early for me.
Plus, that is a contradiction (plain language ≠ ambiguous).
Reblogged this on Centinel2012 and commented:
An excellant analysis of the law but one must step back and look at the core issue as Turley and Robers both seems to agree on — have we created a 4th branch of government with no checks and balances on it — that is the very definition of tyranny! In my opinion that trumps and other cause no matter what the merits of it, for if this process continues much only we will lose the Republic just as the Romans did.
Maybe the 4th Circuit ‘ s approach could be called The NFL Instant Replay Analysis since it worked the same way as the football thingy. That is, if there is a big mess, you don ‘t overturn the ruling but defer to the original official ‘s call..
The problem here is that the “original official ” is actually some guy in the stands wearing a cheese head with mustard and beer spilt all over his shirt who doesn ‘t have the right to negate the plain language of the rules, ambiguity or not.
Does that make any sense??? Because I haven’t had any coffee yet.
Squeeky Fromm
Girl Reporter
Actually I don’t see any danger at all since we still have the courts, and Congress itself can make changes to the laws if they feel an agency regulation is bad. A good case in point is how the age limit for pilots was changed. The law specifies that the FAA could only make changes in the regs if it could be demonstrated that such changes would increase safety. So it was necessary for Congress to pass a law raising the age limit.
Indeed the initial regulation making the age limit 60 was the product of a corrupt bargain under the Eisenhower administration between the first head of the FAA, Pete Quesada, and American Airlines CEO, Smith. The courts refused to take any action against this corrupt regulation even when it was demonstrated to be corrupt and had no basis in medical science. So the conservatives had NO PROBLEM granting such latitude to the FAA, and it took an act of Congress to change it. The only thing that has been demonstrated is that the courts are acting in a political manner, rather than with sole concern of legalities. So as long as there are avenues to change things, I think that the danger is overblown. If we get rid of those, THEN I will be concerned.
One of the key dynamics of statutory interpretation when it comes to determining whether or not there is an ambiguity in a statute comes into interesting play here.
That dynamic is asking and answering “whether reasonable people could interpret it differently.”
One would have to say that both courts are “reasonable people” or are composed of reasonable people.
Reasonable people who came to different interpretations and conclusions.
There is, then, a valid ambiguity eh?
Bailers,
Where the rubber meets the road on the 4th Cir. and DC Cir. decisions is statutory interpretation.
Specifically, the rubber meets the road at the place of determining what an ambiguity is.
Once a court holds that there is an ambiguity in a statute, then differing follow-up techniques are utilized to determine what to do about it.
When federal courts are deciding a case that involves a federal agency they give deference to that agency.
The basic premise is that a federal agency is specifically created to be an expert in a certain field.
They typically employ Phd. experts in that field.
Thus, the courts give them leeway in their particular field, which they would not a layperson.
I have a major disagreement with the fourth circuit arguing that federal agencies deserve such deference in setting policy. The question to me isn’t just one of legislative intent, but fiscal law as well. I’ll admit that I don’t know all the details of the federal exchange. Someone who is more knowledgeable of the ACA is welcome to correct me, but my understanding is that HHS is using funds appropriated for the state (as in the 50) operation of their exchanges. If HHS is using these funds, it would be worthwhile to go back to the funding language and see what the appropriation language says. HHS might be in violation of the anti-deficiency act. On the other hand if funding is available for state and federal operations of exchanges and subsidies, then the administration’s case is bolstered. Again this is just my opinion. I don’t know enough about the ACA to say one way or the other. But if the cases turn on the meaning of the word “state” it would be useful to help clear up the meaning by looking not just at the law but the funding as well.
That said, the IRS and HHS being able to interpret the law through administrative regulation is dangerous. It’s very similar to the recent Hobby Lobby case in the sense that it isn’t the law that is in question, but regulations. If enforced birth control coverage had been included in the ACA, a valid argument could have been made that Congress had the intent to carve out birth control as not being part of the religious exemptions. Instead it was enforced through a passage in the federal register. In the case of Halbig, the administration is using regulation to do what the law seemingly is silent on. Given the court’s recent adherence to strict construction when interpreting Congressional intent, I don’t see how this case will end any differently than all the recent others where the executive branch finds a new right or power.
I’m curious to see if I’m off base with this analysis.