Corporate Accountability

How a Question from Justice Alito Helps Make the Government’s Case in King v. Burwell

Yesterday morning, the Supreme Court heard oral argument in King v. Burwell, the latest challenge to the Affordable Care Act.  It was apparent from the Justices’ questions that many of them came into oral argument with strong views about the case, and Justice Samuel Alito was no exception.  Although most of the questions that Justice Alito asked were critical of the government’s position, one actually helps demonstrate why the government should prevail.  


The issue at the heart of King v. Burwell is whether the ACA makes tax credits available to all individuals who qualify based on income, or only to those in states that set up their own Exchanges.  As many of the briefs in favor of the government have argued—and as some of the Justices recognized at argument—a ruling against the government would have serious consequences, rendering the health insurance markets in states with federally-facilitated Exchanges completely dysfunctional.  


Justice Alito tried to suggest that the Court itself could minimize this harm by staying a decision unfavorable to the government in order to give Congress an opportunity to respond: “Would it not be possible if we were to adopt Petitioners’ interpretation of the statute to stay the mandate until the end of this tax year as we have done in other cases where we have adopted an interpretation of the constitutional — or a statute that would have very disruptive consequences such as the Northern Pipeline case.”  


Justice Alito wasn’t wrong that the Court has done this on rare occasions, including in the Northern Pipeline case he mentioned.  In that case from 1982, the Court held that there were constitutional problems with the bankruptcy system, but stayed its decision for 90 days on the ground that “it is for Congress to determine the proper manner of restructuring the Bankruptcy Act of 1978 to conform to the requirements of Art[icle] III in the way that will best effectuate the legislative purpose.”  According to the Court, “[t]his limited stay [would] afford Congress an opportunity to reconstitute the bankruptcy courts or to adopt other valid means of adjudication, without impairing the interim administration of the bankruptcy laws.”  


The Court did the same thing in Buckley v. Valeo, the 1976 case in which, among other things, the Court held that the Federal Election Commission was unconstitutionally constituted.  The Court stayed its judgment “for a period not to exceed 30 days, insofar as it affects the authority of the Commission to exercise the duties and powers granted it under the Act.”  In that case, too, the Court explained that “[t]his limited stay w[ould] afford Congress an opportunity to reconstitute the Commission by law or to adopt other valid enforcement mechanisms without interrupting enforcement of the provisions the Court sustains, allowing the present Commission in the interim to function de facto in accordance with the substantive provisions of the Act.”


In response to Justice Alito’s question, Solicitor General Verrilli acknowledged that “Northern Pipeline is an example of [the Court] doing that [i.e., staying its judgment], and it will be up to the Court to decide whether it has the authority to do that,” but he correctly noted an important distinction between King, on the one hand, and Northern Pipeline (and Buckley), on the other: “I will say, this does seem different than Northern Pipeline to me, because this is about money going out of the Federal treasury, which is a different scenario,” a distinction that may be significant because the Constitution prohibits money being “drawn from the Treasury,” except by lawful appropriations. 


But there is another important difference between King and those older cases—and it’s one that helps explain why the government should prevail in King.


As I discuss in a 2012 article in the Washington Law Review, the Court should sometimes stay its judgment in cases in which a law is challenged on constitutional grounds because, in those cases, the Court’s decision is necessarily disrupting the intent of Congress.  In such cases, it may make sense to give Congress (or other policymakers) an opportunity to try to address that disruption before it occurs. Indeed, this need is particularly great when the Court strikes down a law on constitutional grounds because the Court’s decision will often give rise to what I call “collateral consequences,” significant disruptions to democratic preferences that are not constitutionally required. These disruptions occur because when policymakers enact laws, they do so in reliance on the existing state of the law; for example, because there is an existing law Z, the policymakers don’t also enact law Y, which they think is unnecessary in light of law Z. The problem, of course, is when the Court strikes down law Z as unconstitutional: law Y is not in place, even though policymakers would have enacted it had they known law Z was unconstitutional.  Thus, by staying its decision to strike down law Z, the Court can give Congress the time to enact law Y, or take other action in response to the Court’s decision.


Such a stay makes far less sense when the Court is only interpreting a statute.  After all, in that case, the Court’s decision should not be undermining Congress’s intent, it should be effectuating it.  In King, if the Court were to conclude that tax credits are not available on federally-facilitated Exchanges, the Court would likely be concluding that that was Congress’s intent when it drafted the law.  After all, while the parties in King disagree strongly about many things, one thing they agree on is that this language wasn’t a mistake.  The law’s challengers argue that Congress intentionally limited tax credits to state-run Exchanges to encourage states to set up their own Exchanges, while the government argues that Congress wanted to make clear that the Exchange referenced in the provision is the specific state Exchange on which an individual purchases insurance, whether run by the federal government or not.  


And that’s why Justice Alito’s question unintentionally helps make the case for the government.  In raising the possibility that a ruling for the law’s challengers would be so disruptive that it might be appropriate for the Court to stay its judgment, Justice Alito is implicitly recognizing that it would have made no sense for Congress to draft the law in a way that would leave states with federally-facilitated Exchanges with totally dysfunctional insurance markets.  This is especially so since, as the dissenting justices acknowledged when the Supreme Court considered the constitutionality of the individual mandate in 2012, everyone at the time the law was being debated recognized that some states might not set up their own Exchanges.  In raising this possibility, Justice Alito is, in effect, implicitly recognizing that if the Court were to rule against the government, it would be disrupting Congress’s intent when it enacted the law.  And that is exactly what the Court should not be doing when it is simply trying to understand a law’s meaning, especially when the meaning advanced by the government makes the most sense of the law’s text, structure, and history.   


In short, Justice Alito’s suggestion that the Court might impose a stay if the government loses not only makes little sense given the issue in the case, it underscores why the government shouldn’t lose at all.  Indeed, if the Court is thinking about what it did in Northern Pipeline, there’s one other lesson the Court should take from that experience.  At argument, Justice Scalia suggested that it was obvious that Congress would fix the problem if the government loses.  Solicitor General Verrilli voiced a skepticism no doubt shared by many Americans: “This Congress?,” but Justice Scalia continued to maintain that Congress would step in.  Interestingly, even though the Court stayed its judgment in Northern Pipeline explicitly to give Congress time to respond, it didn’t do so during the period of the stay.  In fact, the Court actually extended its stay to give Congress additional time to respond, but Congress still did not act until 1984, leaving it up to the courts to try to address the situation themselves in the meantime.  Unfortunately, in this case, if the Court were to rule against the government, there would not be anything the states or the courts could do if Congress did not step in to fix the problem—yet another reason to hope that the Court does what the ACA’s text requires and holds that the tax credits are available nationwide.