Health Care

Republican Lawyers’ Latest Sneak Attack on Obamacare Is Their Most Brazen Yet

On Monday August 18, Affordable Care Act opponents’ legal champion, Michael Carvin, filed a little-noticed brief with the District of Columbia Circuit Court of Appeals, forbiddingly entitled “Opposition to Petition for Rehearing En Banc,” in the ongoing litigation challenging the legality of tax credits and subsidies for health insurance purchasers on federally operated exchanges. The D.C. Circuit’s decision on this procedural issue could play an outsized role in deciding the ultimate fate of the litigation, and determine whether those exchanges—currently covering several million Americans in 36 states—will continue their currently impressive growth, or collapse outright.

On July 22, a unanimous three-judge panel of the Fourth Circuit Court of Appeals in Richmond rejected the challenges and upheld the availability of premium assistance on all exchanges, whether state or federally run. However, on the same day, Carvin secured endorsement of his challenge from a D.C. Circuit panel split 2-1—with a Bush I appointee and a Bush II appointee voting to bar the credits and subsidies in federal exchange states, and a dissenting Carter appointee dismissing the lawsuit as a “not-so-veiled attempt to gut” the ACA.

On August 1, the Justice Department requested that all eleven active D.C. Circuit judges rehear the case “en banc” (legalese for “as a group”). Carvin fired back last Monday. Carvin’s brief exposes his and his allies’ fear that the resolution of their several last-ditch lawsuits to “drive a stake through the heart of Obamacare,” likely turns on whether they can persuade the DC Circuit to reject the Justice Department’s request. Revealingly, the brief observes that “if this Court denies rehearing, there is no doubt” that the Supreme Court will immediately take the case, by granting his pending petition for immediate high court review of last month’s contrary Fourth Circuit Court of Appeals decision. Of course, the unspoken obverse of Carvin’s forecast is that, if the D.C. Circuit grants “en banc” review, the Supreme Court may well opt not to preempt the DC Circuit’s review. If, as expected by many observers, the full D.C. Circuit overturns Carvin’s 2-1 July 22 victory, that would in turn eliminate any split between the two circuits, severely weakening Carvin’s argument to get the Supreme Court to take the case. That is precisely what Carvin and his allies dread. If the Supreme Court decides to wait and see how the DC Circuit rules, ACA opponents could well see this as a demoralizing sign of distaste, on the part of one or more of the conservative justices, for taking up another legally dubious attempt to cripple Obamacare, now that millions of Americans actually have health insurance because of the law.

On the face of the applicable rules, Carvin’s prospects for persuading the D.C. Circuit judges to sideline themselves would seem iffy at best. These rules spell out that a reason for granting en banc requests is that the case “presents a question of exceptional importance,” and goes further to prescribe one circumstance that ipso facto presents such a question—“if the initial panel decision conflicts with decisions of other circuits.” Carvin did not so much as cite this provision. Instead, he warned, horrific real-world consequences will flow, from granting the rehearing petition. It cited a conjecture by the New York Times’ Robert Pear, that “the contradictory rulings … inject uncertainty, confusion, and turmoil into health insurance markets,” and claimed that millions of individuals in federal exchange states could not only lose insurance, but that “they may be incurring thousands of dollars of debt to the Treasury, since the ACA contemplates a clawback of improperly paid subsidies.”

In fact, insurance market jitters have not materialized, and Carvin’s “clawback” specter is wrong, as a matter of law, as health law expert Timothy Jost has noted. But more important, a do-over by the full D.C. Circuit will do, quite literally, nothing to exacerbate these and other horribles paraded in Carvin’s brief. Carvin fears that the Supreme Court may well stay its hand, if the case is reheard at the appellate level. But the choice will still be up to that Court. If the justices consider it urgent to impose their take, rather than wait to see if the elimination of a circuit split vitiates the necessity for intervention, the lower court’s en banc deliberations certainly won’t stop them. On the contrary, a decision not to rehear the case will wrest the wait-and-see  option from the high court, increasing pressure for it to intervene before the appellate process has run its course.  In effect, Carvin seeks to bluff the D.C. Circuit into turning the usual roles of the courts of appeals and the Supreme Court upside down.

Carvin’s brief also hints at the strategy that he and his allies are settling on to carry the day if their case reaches the Supreme Court. Although the only question for the D.C. Circuit is, at least nominally, whether en banc review is warranted by the Federal Rules of Appellate Procedure, a full one third of the brief is devoted to defending the substantive case Judge Thomas Griffith made to justify invalidating federal exchange-based premium assistance.  Significantly, that case is narrower and different from the line of argument on which Carvin and his allies have relied for the past two years. They have insisted that, far from being a mere “glitch” with “unintended consequences,” Congress actually barred premium assistance through federal exchanges on purpose—to “incentivize” states to set up their own exchanges, by depriving their residents of premium assistance if the states opted out. Judge Griffith backed their bottom line, but he jettisoned the “purpose” part of their argument, pointedly observing that they “fail to marshal persuasive evidence in support of [key elements of] their theory.” In effect, he retreated to opponents’ original approach: insist that, viewed in isolation, the ACA’s reference to exchanges “established by the state” can mean only exchanges operated by a state government, not the federal government; then caricature—as “rewriting the text” to serve some hypothesized, non-textual “purpose”—contextual reading of that phrase, that avoids effectively nullifying numerous other provisions, and rendering unworkable the exchanges the statute was enacted to create. Never mind, Griffith acknowledged, that that interpretation “bodes ill” for “millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly”—the  very constituencies and markets the ACA aimed to benefit.

ACA opponents have jumped to push out Griffith’s hard-nosed approach. “Halbig v. Burwell: Plain Language Trumps ‘Purpose,’” National Review Online blared, in a typical headline. They evidently believe their chances of winning all five members of the Supreme Court’s conservative bloc will rise, if this brow-furrowing squabble over dense legislative terminology can be framed as an epochal front in a three-decade-old holy war between two schools of jurisprudential theory about how judges should interpret statutes. On one side, led by Justice Antonin Scalia, with prominent conservative judges and battalions of academics in support, are self-styled “textualists.” They turn the unobjectionable notion that deciding what a law means must start with its actual text, into an intense preoccupation with dictionary definitions of particular statutory words. Their adversaries, on whom they have hung the awkward label, “purposivists,” are led by former Justice John Paul Stevens and Justice Stephen Breyer, likewise supported by high-profile federal judges and academic legions. They counter that this loaded brand of textualism is inherently “conservative,” and an excuse for using isolated legislative language to “turn laws on their heads,” and “defeat the purpose for which a provision was enacted.”

“Purposivist” disciples may be tempted to seize upon the ACA premium assistance challenges to skewer their philosophical adversaries. Indeed, the day after Judge Griffith’s decision, University of California law professor Richard Hasen put the blame on “unfeeling” Scalian textualism, spotlighting the purposivist “counterargument that courts have an obligation to make laws work … especially these days, when Congress is not working.” But thus broadening the stakes in these lawsuits is a mistake. The better—and accurate—tack is that opponents’ route to interpreting federal exchanges into self-immolation is so hyper-blinkered that it flouts bedrock axioms common to all legitimate interpretational theologies. Justice Scalia has often reiterated that “Statutory construction is a ‘holistic endeavor.”In a June 2014 decision, he referenced the “fundamental canon that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme” adding that a statutory “provision that may seem ambiguous in isolation is often clarified by the remainder of the statutory scheme … because only one of the permissible meanings produces a substantive effect that is compatible with the rest of the law.” As determined by six of the eight judges who have ruled on the matter to date, when judges of any stripe conscientiously fulfill this “duty to construe statutes as a whole,” in the words of one of those judges, Richmond, Virginia Federal District Judge (and Reagan appointee) James Spencer, the ACA readily authorizes premium assistance on all exchanges, state or federal.

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