How Obama’s court strategy may help save Obamacare

By Josh Gerstein

Last fall, President Barack Obama and Senate Majority Leader Harry Reid deployed the “nuclear option” to help get three liberal judges onto the D.C. Circuit appeals court.


Tuesday’s ruling on Obamacare is a dramatic example of why they forced the issue.


On Tuesday, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit issued a 2-1 decision that could gut much of Obamacare by preventing the federal government from offering subsidies to many Americans. The two judges in the majority were appointed by Republican presidents.


But the full court now has seven judges appointed by Democrats and four by Republicans. It took only an hour or so for the administration to announce that it plans to ask the entire bench to review the decision.


When Obama took to the Rose Garden last June to launch an aggressive campaign to confirm the slate of three new judges to the D.C. Circuit, experts pointed to the critical role that court plays in overseeing federal regulations — something especially important for a president now focused on implementing his agenda through executive actions in the face of the gridlock on Capitol Hill.


The D.C. Circuit has an often crucial impact on environmental and safety regulations, but Tuesday’s decision on Affordable Care Act subsidies is a reminder of just how directly Obama’s legacy — and his signature legislative achievement — may be linked to the Washington-based appeals court.


“I think it was wise strategy. … They’re probably patting themselves on the back,” Curt Levey of the conservative Coalition for Justice said Tuesday, referring to the White House’s confirmation drive, which he opposed. “We all knew it was highly unusual, nominating three people at a time to the same circuit. … We knew this wasn’t a coincidence. More than any president, this one is dependent on the D.C. Circuit and that’s why it was such a priority.”


To confirm three new judges last fall, Reid moved to change Senate rules and eliminate filibusters of certain judicial and executive branch nominees. Asked Tuesday whether the ruling by the three-judge panel of the D.C. Circuit vindicates his decision to deploy the nuclear option last year, Reid was blunt: “I think if you look at simple math, it does.”


A White House spokesperson declined to comment for this story, but one former official involved in the discussions about nominating the three new D.C. Circuit judges said the strategy is now looking prescient. It “was pretty brilliant,” said the ex-official, who asked not to be named.


Former White House communications director Anita Dunn said the decision to make a public push for the nominees involved some risk because Democrats don’t traditionally rally around the issue of judicial nominations except when a Supreme Court seat is in play.


“It’s a challenge because unlike the Republican Party, the Democratic Party hasn’t spent a lot of time educating grass-roots supporters about the role of the federal judiciary when it comes to issues progressives care about,” said Dunn. “The Republican Party has spent a huge amount of time, 20 to 30 years, educating their grass roots about why these issues are important.”


One conservative legal activist said she believes Obama was specifically worried about challenges to Obamacare when he made the decision to push to fill the three open D.C. Circuit seats at the same time, despite GOP complaints that there were simply not enough cases to justify the appointments.


“I think this is exactly what the president was thinking about when he decided to ram all those judges through,” said Carrie Severino of the Judicial Crisis Network. “The president for his whole first term dragged his feet and didn’t seem to think judges were really a priority. Then suddenly, out of the blue, he decides he needs to move on what I’d argue is the least busy circuit in the country. … This is the payoff for him.”


One liberal legal advocate said Tuesday that he’s hopeful the Obama D.C. Circuit appointees will side with other judges, including a three-judge panel of the 4th U.S. Circuit Court of Appeals that unanimously backed the government’s authority to interpret the law to allow the subsidies.


“I would hope President Obama’s four extraordinarily qualified nominees [to the D.C. Circuit] would side with the six other judges across the ideological spectrum in rejecting these challenges to affordable health care,” said Doug Kendall of the Constitutional Accountability Center. “One of the most important impact of filling the four vacancies to this court has been to change dramatically the makeup of the en banc panel.”


However, several experts cautioned that it’s not certain that all seven Democratic appointees on the court or the four Republican ones will vote along party lines — or even that the full bench of the D.C. Circuit will agree to take up the case.


“The new appointees really only took their seats in December and January and we’re only in July. We’re just getting first opinions from these new judges,” said Drexel University law professor Lisa McElroy. She studied five years of D.C. Circuit opinions and found that judges usually did not appear to decide cases along ideological lines.


However, McElroy said there are several reasons to think the Obamacare subsidies might be different. For one thing, there’s no precedent that directly dictates the outcome of the case, since it involves interpreting wording in the Affordable Care Act.


“While my statistics say it doesn’t necessarily make a difference, you do wonder in a case that is so political,” McElroy said. “I think that if I were the White House, I would be very glad I had done it,” she said, referring to the nomination and confirmation of the three newest Obama-appointed judges.


While Obama supporters may be celebrating his strategy now and continue to reap benefits from it for years to come, McElroy said at some point liberals could regret cutting out much of the filibuster power. “Hindsight is 20-20, but 10 years from now if there’s a Republican president and they want those nominees filibustered, they may feel differently,” she said.


Of course, even if the D.C. Circuit takes up the Obamacare subsidies case en banc, it might not have the final word since the Supreme Court could decide to consider the issue.


The Obama administration’s legal strategy appears to be to try to keep the issue out of the Supreme Court by getting the full bench of the D.C. Circuit to rule for the administration, doing away with the split with the 4th Circuit that developed on Tuesday.


If Tuesday’s rulings stand, it’s virtually certain the Supreme Court would take the case to prevent Obamacare from being interpreted differently in different parts of the country. However, if the conflict is resolved by the lower courts, it’s possible the high court might decide not to wade into the issue.


“If there’s no circuit split, I would not be surprised at all if the Supreme Court doesn’t hear this case,” Kendall said.


However, Levey said that, even without a split in the lower circuits, he thinks the Supreme Court could come up with the four votes needed to dive into the issue. “I certainly think there’s three,” he said. “It’s an existential threat to Obamacare.”


Levey also said he hopes Obama’s handling of the D.C. Circuit nominations serves as a reminder to conservatives that Supreme Court fights are not the only ones to take heed of. “Not only are there a lot of issues that don’t reach the Supreme Court, but what lower courts do affects whether the Supreme Court takes a certain case. At the end of the day, people should care, certainly, about the circuit court.”