Let the Courts Decide

The DC Circuit and the 4th Circuit have arrived at directly contradictory rulings on the question of whether people who reside in states that did not set up their own exchanges under the PPACA are eligible for the subsidies specified by the law. The DC Circuit has said “no”; the 4th “yes”. Unless the DC Circuit reverses itself in an en banc decision this sets the stage for the matter being brought before the Supreme Court.

The editors of the Washington Post side with the 4th Circuit:

Given the contradictions, the administration’s interpretation deserves deference. That is particularly true because the administration’s reading accords with the law’s obvious intent: to offer affordable health-care coverage to a large number of Americans.

while the editors of the Wall Street Journal agree with the panel of the DC Circuit:

In Halbig v. Burwell, the D.C. Circuit Court of Appeals held that the Administration violated the Affordable Care Act by expanding subsidies to the 36 insurance exchanges run by the federal government. The plain statutory language of ObamaCare repeatedly stipulates that these credits shall flow only through “an Exchange established by the State.” The 2-1 panel majority thus did not “strike down” part of ObamaCare, as liberals and the media claim. Using straightforward textual construction, the court upheld the law the President signed but it vacated the illegitimate federal-exchange subsidies he tried to sneak in via regulation.

The point being ignored by the Post’s editors is brought forward by the editors of the WSJ:

Distinguishing between state and federal exchanges was no glitch or drafting error. In 2010 Democrats assumed that the unpopularity of ObamaCare would melt away and all states would run their own exchanges. Conditioning the subsidies was meant to pressure Governors to participate. To evade this language, the Internal Revenue Service simply pumped out a rule in 2012 dispensing the subsidies to all. The taxmen did not elaborate on niceties such as legal justification.

We know that the distinction wasn’t a “glitch or drafting error” because the issue was stated in the terms described by the WSJ by Sen. Max Baucus, the principle sponsor of the Senate bill that would become the PPACA, among others, contemporaneously with the passage of the law. By the way, you might be interested in this handy guide to the “Halbig” cases.

While much of the commentary is arguing the policy, the real question should be one of the law. Will we have a law that is circumscribed by the letter of the law and the expressed intentions of its authors or will we have a law that is determined by the unstated intentions and hopes of its supporters?

As Wittgenstein explained many years ago, it is impossible to make a perfectly unambiguous statement using natural language. Consequently, ambiguities in law are inevitable in every law and the longer and more intricate the law, the more ambiguities there will be. That means that if ambiguity in the law allows any possible interpretation, there is no law as we’ve known it. As I’ve written elsewhere, legislate in haste, repent at leisure.

Now let the courts decide.

27 comments… add one

  • ...

    I’m sure the Roberts Court will cover for Congress’s utter ineptitude and rule in favor of more corruption of the language. Is there anything that recent Congresses have managed to NOT Fuck up?

  • PD Shaw

    1. This is a close case. The Fourth Circuit wrote: “Having thus explained the parties’ competing primary arguments, the court is of the opinion that the defendants have the stronger position, although only slightly.” The D.C. Circuit was not quite so magnanimous, but found the legislative history provides “little indication one way or the other of congressional intent.”

    2. The Administration’s argument is premised on ambiguity, which is to say that the statute is capable of more than one interpretation. The Fourth Circuit specifically found that the Plaintiffs had presented a reasonable interpretation that comported with the text. (pp. 27-28) When the law is ambiguous, the executive has the discretion to select a meaning.

    3. A long-term consequence of statutory ambiguity is that Congress has not bound the executive. This, or any future executive, can select a different meaning to be given the statute (with adequate advance notice). If the ACA is held together by executive fiat, it begins to appear less like a law than a pilot program.

  • jan

    Is there anything that recent Congresses have managed to NOT Fuck up?

    Less than a screw-up by the democratic congress, it was a miscalculation, based on a carrots and stick maneuver to supply overt incentives for states to form their own exchanges. That’s how the mind’s eye of the PPACA was supposed to go — leaving the government off the hook, as much as possible, by withholding government subsidies to those states who did not comply with the government’s wishes.

    However, it didn’t work out that way. Instead 36 states waved off the idea of developing their own exchanges and opted, instead, for the government to carry the load. That’s what the Halbig decision was all about — simply validating the “unambiguous” language of an unread, sloppily designed law that was unilaterally rammed through at the last minute. Consequently, the obvious course of action should be revisiting Congress, having them adjudicate the flawed language, legislatively broadening it to include both the states and federal government in their subsidy giveaways.

    IMO, the 4th Circuit decision, representing an entirely opposite interpretation, is a prime example of legislating from the bench, rather than strictly deciding the stated law that’s before them. The very vagueness of trying to determine ‘intent,’ if used extensively by the courts, will end up nullifying or emasculating laws rather than enforcing them, as written, in an unbiased fashion. Essentially if the latitude of ‘intent’ can be legally used by the courts to uphold or decide law, they will become more tools of judicial circumvention around the Constitutionally provided “checks and balances” measures, provided in the Constitution, that keep congressional and execution powers in check and at bay in abusing and/or overreaching their limits of power.

  • PD Shaw

    Hmmmm, the OTB comment thread on this topic has become such a cesspool that they’ve released the Mods.

  • The problem with the 4th Circuit’s decision is that

    1) there are contemporaneous statements from senators that the plain language of the law was their intent.
    2) the government has not been able to produce contemporaneous statements from Congressmen that the plain language of the law was not their intent.
    3) the court is not allowed to consider post facto statements.

    Now the question becomes one of how much water the court is willing to carry for a Congress that miscalculated.

  • IMO the reason the thread’s comments have turned south is that the commenters refuse to acknowledge

    a) there’s more than one reasonable interpretation
    b) what the correct policy is should have nothing to do with the court’s decision

    It’s what the Congress did that’s important.

  • michael reynolds

    The courts were apparently unable to find what you believe you found, Dave. They said so explicitly.

  • jan

    Going over to OTB for a diverse dialogue is pointless, unless one is fully entrenched in social progressive ideology.

  • Court singular, Michael. The panel of the DC Circuit saw things as I’m suggesting.

    The points here are that

    a) there’s more than one way to look at it and
    b) if you’re looking for ambiguity in a law, you’ll find it. It’s inevitable.

  • jan

    The PPACA explicitly differentiated between giving subsidies to states who opted to create their own exchanges, versus those who left it up to the government. Even the DC court decision did so with explicit reluctance, as they realized the consequences of so many people being subject to losing their subsidy should their decision stand. Nonetheless, their mission was to interpret the law as it was written, rather than depend on the vagueness of ‘intent’ to augment a verdict making the government’s case.

    Therefore, I think the Halbig decision was derived from a more honest legal process than the 4th Circuits pretzel-like thinking, and quite frankly is one that sets a better precedent for future controversial rulings to be done without bias.

  • PD Shaw

    re legislative history. My impression was that the 4th Circuit found that there was unusually little legislative history, and therefore it was unwilling to give much, if any, weight to that which existed. The law was passed outside of the standard committee process, and put together without debate through the reconciliation process.

    I think that is just judicial discomfort with using legislative history at all. Some judges refuse to consider it, others use it to bolster a conclusion already reached.

  • Modulo Myself

    So Obamacare haters have gone from thinking the law sucks to thinking the ‘law’ sucks. And they’re just as hysterical now as the incompetence of Congress for crossing or not crossing their Ts as they were for the supposed failure of the actual program. I don’t know…when this fails and no one cares about the principles of people who were beside themselves but too clueless to grasp their position, what’s the next step?

    I can’t even wrap my mind around the quote from the guy who wrote about beetles not being in boxes and language being a tool rather than a fixed meaning.

  • jan

    The dems in Congress unilaterally wrote the PPACA, advancing it as a budget reconciliation bill to avoid needing any republican votes to assure it’s passage, and making it a couple thousand page juggernaut that hardly anyone read nor could understand.

    Of course there were flaws in this bill — plenty of them — which is why some 41 fixes have had to be made, including mandate delays, special waivers, obfuscation of language in the law, and a downright failure of managing subsidy verifications due to the ineptness of an incompetently built computer system. It was the deceitful, bully tactics of the large democratic majority, in both the House and Senate, who are responsible for the problematic and chaotic path the PPACA implementation has had. And, it’s far from over……

  • jan

    Why the Halbig Decision Should Be Taken Seriously

    First, whatever you may think of the merits of the case, this isn’t about “grammar,” nor is it about a typo — even the judges who have found for the government haven’t done so on the basis of a scrivener’s error. The law is poorly worded, and the issue is to what degree the courts will stick to that poor wording.

    Second, if this sounds a lot like the initial reactions to some of the theories surrounding the constitutional challenges to the ACA from 2012, it should, and that should worry supporters of the subsidies.

    Third, even the Fourth Circuit, when ruling against the plaintiffs, was not dismissive of their arguments. Consider: “[T]he Court is of the opinion that the defendants have the stronger position, although only slightly.” “Having considered the parties’ competing arguments on both of the above-referenced sections, we remain unpersuaded by either side.” “Both parties offer reasonable arguments and counterarguments that make discerning Congress’s intent difficult.” Obviously, the judges ultimately found the government’s arguments stronger. But they were hardly dismissive of the plaintiff’s arguments.

    Finally, having nothing to do with hysterics from either party, Sean Trende of RCP thinks jurists tend to look at the plain language when determining the legal merits of statutes.

    It might seem a bit odd, but as a general matter, while conservative jurists are likely to look to the intent of the framers for constitutional questions, for statutes the basic process is to look at the plain language of the statute first, either ignoring Congress’ intent entirely, or turning to it only in the case of an ambiguity in the statute. In this case, the law passed by Congress says that subsidies are available in exchanges established by a state. For a conservative justice, the temptation will be for the analysis to begin and to end there.

  • Andy

    I’m very rarely at the OTB comment section anymore. So they actually brought out the mods? It must be bad then.

    Dave’ point about more than one way to look at things applies in so many areas. The inability to see ambiguity is an enduring human problem unfortunately.

  • Andy

    Also, this and other issues with the PPACA illustrate why passing laws with a minimal support is problematic. When the inevitable problems with a law crop up, there isn’t political support to pass a fix. This comes at a time in our political history when Congress seems unually bad at legislating.

  • ...

    Good to see Chip Diller commenting.

  • ...

    And in other news, Darth Vader is out-polling all major 2016 Presidential Candidates.

  • CStanley

    I think people are ignoring or overlooking the legislative history. There was a push for the state exchanges because some swing state Dems couldn’t support anything that was primarily a national marketplace (politically that looked too much like single payer and/or federal commandeering.)

    So there definitely were carrots and sticks put in, since the federal government couldn’t directly command the states to create the exchanges. Without taking sides, I would just say that it is perfectly reasonable to postulate that there was intent for the subsidies to only go to purchasers on the state exchanges.

  • sam

    It might be interesting to look at some of the actual language at issue:

    42 U.S. Code § 18041:

    (a) Establishment of standards
    (1) In general
    The Secretary shall, as soon as practicable after March 23, 2010, issue regulations setting standards for meeting the requirements under this title, [1] and the amendments made by this title, [1] with respect to—
    (A) the establishment and operation of Exchanges (including SHOP Exchanges);
    (B) the offering of qualified health plans through such Exchanges;
    (C) the establishment of the reinsurance and risk adjustment programs under part E; and
    (D) such other requirements as the Secretary determines appropriate.
    The preceding sentence shall not apply to standards for requirements under subtitles A and C (and the amendments made by such subtitles) for which the Secretary issues regulations under the Public Health Service Act [42 U.S.C. 201 et seq.].
    (2) Consultation
    In issuing the regulations under paragraph (1), the Secretary shall consult with the National Association of Insurance Commissioners and its members and with health insurance issuers, consumer organizations, and such other individuals as the Secretary selects in a manner designed to ensure balanced representation among interested parties.
    (b) State action
    Each State that elects, at such time and in such manner as the Secretary may prescribe, to apply the requirements described in subsection (a) shall, not later than January 1, 2014, adopt and have in effect—
    (1) the Federal standards established under subsection (a); or
    (2) a State law or regulation that the Secretary determines implements the standards within the State.
    (c) Failure to establish Exchange or implement requirements

    (1) In general
    If—
    (A) a State is not an electing State under subsection (b); or
    (B) the Secretary determines, on or before January 1, 2013, that an electing State—
    (i) will not have any required Exchange operational by January 1, 2014; or
    (ii) has not taken the actions the Secretary determines necessary to implement—
    (I) the other requirements set forth in the standards under subsection (a); or
    (II) the requirements set forth in subtitles A and C and the amendments made by such subtitles; the Secretary shall (directly or through agreement with a not-for-profit entity) establish and operate such Exchange [my emphasis] within the State and the Secretary shall take such actions as are necessary to implement such other requirements.

    What do you all think the import of the words ‘such Exchange’ is in the statute?

  • ....

    Without taking sides, I would just say that it is perfectly reasonable to postulate that there was intent for the subsidies to only go to purchasers on the state exchanges.

    I’m having trouble seeing how that wouldn’t be a stupid policy.

    As it is, this is the kind of thing that Congress ought to get its ass back to DC for (I believe they’re on a break) and fix now.

  • As it is, this is the kind of thing that Congress ought to get its ass back to DC for (I believe they’re on a break) and fix now.

    That’s probably the most sensible thing that’s been written on this subject. Yes, that’s exactly what should happen. Unfortunately, we have a House that’s determined to repeal the PPACA and a Senate that really, really, really wants the courts to carry its water for them (to avoid leaving fingerprints, presumably).

  • PD Shaw

    @sam, I’ve never read the ACA, so don’t know how all the pieces work together. The answer presumably is either (a) its irrelevant or (b) its ambiguous.

    @Elipses, It certainly makes sense. Progressives wanted a national exchange and Baucus insisted that exchanges be created at the state level. Progressives feared that the states wouldn’t participate, resulting in the federal government mandating something that local or private insurance didn’t provide (the need for a public option). There was testimony taken on the various carrots and sticks that the feds have used in the past to encourage state participation in other programs, and conditioning subsidies was one tool mentioned. (The Medicaid expansion was built on a carrots and sticks approach; the carrot being insurance for the working poor paid 90% by the federal government and the stick being loss of all Medicaid for non-participating states, a stick the SCOTUS removed)

    Even then, a number of blue states (like Illinois) didn’t set up an exchange, and I think Illinois would have set up an exchange if Obama hadn’t provided the option of having the fed do the work on its own dime _with_ all of the same subsidies. The carrots and sticks were not sufficient.

  • CStanley

    That’s probably the most sensible thing that’s been written on this subject. Yes, that’s exactly what should happen. Unfortunately, we have a House that’s determined to repeal the PPACA and a Senate that really, really, really wants the courts to carry its water for them (to avoid leaving fingerprints, presumably).

    Well, yes…but even at the time of passage, they couldn’t meet the normal threshold for passage of the bill so it’s little wonder that they don’t have the votes to fix all of the problems with it now.

  • ...

    I don’t and haven’t liked the PPACA. However, people have been banking on the subsidies because that’s how it has been pitched. So Congress should do its job and fix this.

    Probably Congress will do nothing. But there is no conceivable way in which the law will be repealed or otherwise substantially changed while Obama is President. The Republicans should eat one of those shit sandwiches of Boehner’s, and the Dems should too. I know accountability, responsibility and professionalism are largely unknown to our leadership class these days, but this is more appalling than usual.

  • ...

    PD, if you haven’t read the PPACA, why aren’t you a Congressman or Senator?

    That said, I get how this could have been a stick. In that case the President should have used the fucking stick instead of Tue unicorn Gary story we’ve been told.

  • ....

    Wow, my cell phone did a number on that. Should read:

    “the unicorn fart story”

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