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.
RTC ???. The SBA has on average ~400k businesses closing annually. During the recent recession the #’s were much higher. Yes, restaurants and bars have some of the highest failure rates, but I will now say in the last 50 years HUNDREDS OF MILLIONS of businesses have closed. I’m still waiting on the number of govt. agencies being closed down.
Ollie: If you want to call it crystal balling, so be it. I don’t gamble, or play fantasy league sports, but I do like to see how well I can predict social outcomes like election results, political moves, and court outcomes. Sometimes I nail it, sometimes I’m flatout wrong.
For instance, I predicted that Obama would support cuts to social security – he did – and that Republicans would vote to shutdown govt over the debt limit early this year – they didn’t.
My self-esteem doesn’t hinge on my success with these predictions.
Yeah Nick, and they hate children and old people too!
*Sigh* When is Mike going to get this thing back on the rails….again?
RTC, I know the definition of recalcitrant. I have called my son that on occasion. My point it for someone to call an overwhelming number of states acting in their own self interest, “recalcitrant,” is pretty arrogant in a democracy, don’t you think?
Nick: Millions of companies do not go out of business unless you include restaurants. Excluding restaurants and bars, more healthy businesses have been liquidated by vulture capitalists looking to sell off parts for profit than have gone under due to incompetence.
You’re not the only one who can play ipsa dixit
Gosh “C”, then I should say I miss her too! I could use some slicing and dicing rather than this BS crystal-balling.
Actually Oliver, the ACA is picking up support, particularly among younger people, and is beginning to work as intended. See my comment to Nick regarding Kentucky.
*Sigh* I miss the woman who could confirm it for us clear. She’d slice and dice you, Oliver. Believe it.
RTC, Millions of companies go out of business. How many govt. agencies have been cut for inefficiency? Hell, how many worthless govt. employees are fired? You simply can’t win that argument by naming a few huge “too big to fail” companied. Well, maybe w/ an MSNBC crowd, but not w/ normal folk.
Thanks Darren: Mr. On Top Of It!
Nick: Recalcitrant refers to an attitude or behavior without regard to number, majority or minority status.
The Equal Rights Amendment was ratified by 35 states and where is that right now. The people of Kentucky love their Obamacare so much that there’s a real chance that McConnell might get dumped, so don’t count on that state votoing to repeal. Perhaps the voters in Texas will decide that they’ve had enough nonsense from the corporate clowns that manage their state.
I cant find the click but just today read article the states that did not sign u p for the enchanges have the least insured and the worst health
Help! Lost another post in the filter.
Karen: “In a private company, that kind of mismanagement and waste just drives them out of business. An incompetent business does not survie long.”
This is the kind of BS that free marketeers have been pushing for over thirty years. I can still the expression on Alan Greenspan’s phlegmatic face as he insisted that any company that defrauded its customers or treated them unfairly would gain a reputation among consumers, and that they would stop doing business with that company and it would simply go out of business. Yet, Goldman Sachs, AIG, Bank of America, and Morgan Stanley are still going strong.
So is Haliburton, which had a hand in a little mishap down in the Gulf of Mexico several years ago.
So is Bechtel, which wired a barracks in Iraq so that a soldier was electrocuted while taking a shower. Just to be clear, water and electricity don’t mix. But Bechtel’s still knocking down gubmint contracts.
Incidentally, that insurance company down in Texas kept denying its legal obligation to pay for the Carr boys treatment – still in business.
Typical fiscal conservative; don’t acknowledge the facts when they get in the way of your point.
BTW, nice cite to Fox news. Now wipe your mouth off, you’ve got Kool-Aid stains on your lips.
RTC, I retrieved your comment at 8:47.
“The voters in those 36 states very well may decide that Obamacare is something worth having and vote out the recalcitrant party that’s preventing them from having access to affordable health insurance that cannot be denied for any reason, resulting in the Democratic Party gaining ascendancy in those states.”
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OR RTC, the other 14 states may very well decide they ARE governed by the recalcitrant party, resulting in the Republican Party “gaining ascendancy in those states.” I wouldn’t put any money on the former given the nearly 60% unpopularity of the *ahem*, Affordable Care Act.
RTC, That’s the first time ACA and shrewd thinking has ever been used in the same sentence. Congrats. Regarding the 36 states, doesn’t that number, almost enough to ratify a Constitutional amendment, say anything to you? “Recalcitrant” usually implies a rebellious minority.
Well Mike: As a layman, these are not opinions that I’m ever going to read; I get my take from the different views that are expressed here and elsewhere.
My view is that the ACA is an egregiously drafted law. Maybe. I believe that this issue will come before the Supreme Court, whether the full D.C. circuit court panel upholds the three-judge decision or not. I gotta believe that there will be a circuit court somewhere that will rule against the tax credit.
I think the Supreme Court will rule against the tax credit. And I think that might be a good thing. The voters in those 36 states very well may decide that Obamacare is something worth having and vote out the recalcitrant party that’s preventing them from having access to affordable health insurance that cannot be denied for any reason, resulting in the Democratic Party gaining ascendancy in those states .
That’s why I’m not sure if the ACA was poorly drafted and it’s just a stroke of dumb luck or if there was some shrewd thinking behind it.
“I just had an opportunity to read this thread. It certainly didn’t take long for the conversation to go off the rails. That’s a shame because the issues are both important and interesting. Mespo and a few others attempted to tackle the topic; Bob, Esq. fruitlessly attempted later on to redirect the thread back to the topic.”
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Mike Appleton,
I gave it a go “because the issues are both important and interesting”. I was moments away from agreeing with the 4th Circuit until IRS 36B only recognized the State’s exchange authority under 1311 and not the Federal’s exchange authority under 1321. The following paragraph from Bernadette Fernandez for Congressional Resource Service would also seem to support the subsidies are not eligible if the insurance wasn’t acquired through a State exchange. http://fas.org/sgp/crs/misc/R41137.pdf
“Enrolled in an Individual Exchange
Premium credits are available only to individuals and families enrolled in a plan offered through an individual exchange; premium credits are not available through the small business (“SHOP”) exchanges. Individuals may enroll in a plan through their state’s exchange if they are (1) residing in a state in which an exchange was established; (2) not incarcerated, except individuals in custody pending the disposition of charges; and (3) “lawfully present” residents.”
So now, can we dispense with the faux intellectualism and just admit what your ilk really means by “off the rails”; it’s that it wasn’t on “your enlightened” rail.
And given the fact I’m not “credentialed” enough for some in this thread, I’ll keep open the opportunity to learn something new.
Thank you Dredd; I had no aspirations to be in such learned company.
By the way, it probably stems from my 20 year Navy career and the focus on attention to detail. It would serve the citizens well to apply a bit more “anal retentive” skepticism towards government policy as opposed to being some gaping repository for whatever they ambiguously conjure up.
Speaking of reckless, “inattention” to detail; your suggestion reminds me of this moment in the movie, The Bedford Incident:
“Commodore Schrepke: This is insane!
Captain Finlander: Now don’t worry, Commodore. The Bedford’ll never fire first. But if he fires one, I’ll fire one.
Ensign Ralston: (launching the rocket) Fire One!”
John Oliver,
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The ACA section 1311 states the following:
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Yawn Ollie.
You make the same anal mistake that the 2 judges out of 6 made.
Describing a novel by one sentence in one chapter.
The ACA is like a book of 25 chapters with a thousand sentences.
It takes a grown up hermeneutics (or book review) to get it.
Don’t be so anal retentive sir.