ACA subsidies and statutory semantics headed to SCOTUS

The D.C. Circuit of Court of Appeals opinion in Halbig v. Burwell Here (.pdf) is utter nonsense.

The government filed a petition for an en banc hearing before the entire D.C. Circuit to reconsider the July 22 ruling. Read the petition Here (.pdf). The D.C. Circuit on Friday called for a response from the challengers to the tax subsidies, with the filing on the question of en banc review due within fifteen days, and limited to fifteen pages.  The order is Here (.pdf).

Abbe Gluck, professor of law at Yale Law School, explains just how disingenuous and ridiculous the opinion in Halbig is, and why the D.C. Circuit Court should overturn this clearly erroneous decision by a three judge panel of the Court in a 2-1 decision (by conservative activist judges). The CBO score and the Made-Up Narrative of the ObamaCare Subsidies Case:

Two years ago, I posted on this blog that the CBO scoring of Obamacare was central, in the public eye, and intensely scrutinized by all involved with the statute. CBO never assumed in scoring the bill that subsidies would be unavailable on federal exchanges.

Justice Scalia and the joint dissent in NFIB v. Sebelius also relied on the CBO score, saying: “By 2019, 20 million of the 24 million people who will obtain insurance through an exchange are expected to receive an average federal subsidy of $6,460 per person”—numbers that only make sense if the federal exchanges are included.

Today,  a Talking Points Memo piece offers even more evidence supporting the argument.  Here is one snippet:

“It definitely didn’t come up. This possibility never crossed anybody’s mind,” David Auerbach, who was a principal analyst for the CBO’s scoring of the ACA, told TPM on Thursday. “If we started to score it that way, they would have known that, and they would have said, ‘Oh, oh my gosh, no, no no,’ and they probably would have clarified the language. It just wasn’t on anybody’s radar at all.”

It remains my view that the text of the ACA, when read not in isolation, but in context–the approach the Court (including the textualists) repeatedly cites as its preferred approach–clearly permits the Government’s interpretation of the subsidies. (If anyone is doubtful, the Court made such a statement as recently as this Term in Utility Air, through Justice Scalia:

“[W]e, and EPA, must do our best, bearing in mind the “‘fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.’” FDA  v. Brown & Williamson Tobacco Corp., 529 U. S. 120, 133 (2000). As we reiterated the same day we decided Massachusetts, the presumption of consistent usage “‘readily yields’” to context, and a statutory term—even one defined in the statute—“may take on distinct characters from association with distinct statutory objects calling for dif­ferent implementation strategies.”)

But the CBO story offers another datum–along with the testimonials of staffers and reporters that have been pouring out all week–that no one ever assumed the statute said otherwise.

Why is this so important? Remember this is a Chevron case–a case that turns on the doctrine of agency deference.  To win under the doctrine, all the Government has to do is show that its reading of the statute is plausible.

The challengers, on the other hand, have to prove that the statute clearly says what they want it to say and admits of no other interpretation.  To do that, they have to convince the Court their reading of the statutory text is not only plausible but is the only possible reading.  The challengers are now trying to strengthen their case by weaving a narrative that Congress actually intended the result they claim the statute requires.

All of the evidence, textual and otherwise, points the other way.  A major lawsuit, challenging a massive federal statute that already has been upheld once by the Supreme Court and whose repeal has been rejected by Congress more than 40 times, should not be based on a story that is made up.

A petition for review  has been filed in King v. Burwell  from the U.S. Court of Appeals for the Fourth Circuit, which rejected the same challenge to the ACA subsidies on July 22, within hours after the D.C. Circuit decision in Halbig v. Burwell. Lyle Denniston reports at SCOTUSblog.com, Health care subsidies issue rushed to Court:

At issue in the new case of King v. Burwell is whether government tax subsidies that have enabled millions of lower-income Americans to afford to sign up for individual health care coverage are illegal because they were granted for use on insurance marketplaces set up by the federal government.  Those exchanges are functioning in thirty-six states.

If those subsidies are now declared to be available only in the fourteen states that have created their own exchanges at the state government level, it is widely understood that this could cause the collapse of the entire economic edifice of the new health care law.  The number of customers getting insurance on exchanges in so few states, and the essential role the subsidies play in the overall scheme, apparently would mean that the pool of purchasers would be far too small to support the ACA nationwide, as it is now crafted.

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In the case that reached the Supreme Court Thursday, the Fourth Circuit had upheld the IRS rule, concluding that Congress had spoken ambiguously on the subsidies issue, but actually had intended that those tax offsets would be available all across the country, because that would be necessary to create a sufficient pool of customers to make the ACA work.

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In the new petition seeking review of the Fourth Circuit decision, the challengers’ lawyers argued that Supreme Court review of the issue is inevitable, not only because of the existing conflict in lower courts, but also because there are now other lawsuits on the issue working their way through the lower courts, and unanimity in results is not a realistic prospect.  It is imperative that the Supreme Court not wait, and that it take on the issue as soon as it could grant review of the controversy, the challengers asserted.

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UPDATE Monday 11:20 a.m.  The Supreme Court petition in King v. Burwell, filed by the challengers to the subsidies, has now been docketed as 14-114.   The government’s response is due September 3, unless it obtains added time to file. 

It looks like this bullshit legal argument by Libertarian anti-ObamaCare lawyers may be decided by the U.S. Supreme Court. This is a disgrace to jurisprudence and the rule of law. This bullshit legal theory should have been summarily dismissed in the trial court and never have advanced this far.