The Court Next Term: Three More Potential Blockbusters- Part 2

Making their way to the US Supreme Court are three cases that have the potential to become blockbuster cases.  It is difficult to see the Court denying them.  They involve Guantanamo detainees, the potential fate of Obamacare, and gay marriage.

Recently, the DC Circuit Court of Appeals, sitting en banc (but with only seven justices) ruled that the convictions of three Guantanamo detainees were invalid.  It involved the charges of aiding and abetting a terrorist organization.  Another charge- that of conspiracy- was upheld on separate grounds.  One of the detainees was Osama Bin Laden’s communications director who released videos and messages in support of terrorist actions (including 9/11) before and after the attack.  After their capture, they were transferred to Guantanamo.

While appeals were pending in other cases, Congress in 2006 established the use of military tribunals to try detainees for specified crimes of which these three were convicted.  The DC Court ruled that under the Ex Post Facto Clause of the Constitution, trial for those crimes were invalid- including the convictions and ultimate life sentences.  The DC Court asserted that the military commission had no authority to try the subjects on the charges of aiding and abetting a terrorist organization for any action that occurred before the passage of the 2006 law.

Why, then, were the conspiracy charges allowed to stand? The reason was that there is a long history dating back to the Civil War of conspiracy charges being excluded from Ex Post Facto analysis.  In the other charges, their status as a “war crime” was not established as of 2006.  The 2006 law did make their crimes, as defined by Congress, a “war crime.”  Thus, if anyone commits a terrorist act against the United States post-2006, a military tribunal could try them on these charges.  Furthermore, they said the 2006 law did not specify retroactivity although the court did note that Congress clearly intended certain crimes related to 9/11 (but not these) to be covered.

Two things make this case interesting.  The first is the fact that this is the second constitutional right extended to Guantanamo detainees- the first being habeas challenges.  The Court did not hear other constitutional claims involving Due Process, Equal Protection and Free Speech that were part of the original claims.  Second, it will be interesting to see if the Obama administration will even appeal this decision.  The case was a unanimous 7-0 en banc one with Obama’s four most recent appointments not taking part in the case or decision.

The second case involves gay marriage.  As everyone should be aware, gay marriage has won a string of victories in the courts and state laws and constitutional amendments are falling by the wayside.  In some instances, the states are appealing these lower court decisions.  Utah is one such state.  What may fast-track this case to the Court is the nature of the lower court decisions.

When a District Court Judge struck down Utah’s ban on same sex marriage, that opened the door for such marriages to be performed before the state could appeal and have a stay granted.  In fact, some 1,300 people got married in this time period before another judge upheld the decision, but granted a stay pending an appeal by the state.  The case then went to the Tenth Circuit which agreed with the lower courts but granted a stay pending en banc review and/or appeal to the US Supreme Court.

The most recent drama involves the fate of those same sex marriages performed and whether Utah must recognize them.  The most recent decision is from a judge in Salt Lake City who said the state must recognize them and he placed no hold on the decision pending appeal.  It should be noted all this is going on while the state prepares appeals to the Supreme Court.  This most recent decision, Utah contends, is doing an end-around the appeals process.  They appealed directly to the Justice in charge of the Tenth Circuit- Sotomayor- who asked for briefs to be filed by today at 10:00 AM.  That brief was filed.  Complicating matters is a petition to the whole Court by four  married couples asking that Utah recognize their marriages.

There is so much going on here that it sounds complicated.  Obviously, Utah is currently fighting a two-front war.  The first part involves the fate of these marriages.  While they have delayed any further marriages and left the existing ones in legal limbo, their argument is that the most recent decision forcing the state to recognize them violates not only tenets of federalism, but also of federal procedure.  The bigger question, and one they intend to follow through on, is whether states have the right to define marriage as between a man and woman only.  That is the core issue and one that the Court will have to confront sooner or later to put this issue to constitutional rest.

The final case involves Obamacare and the subsidies offered for those who purchased health care coverage on the much-maligned federal Obamacare exchange.  The law was set up in the hopes that states would establish their own exchanges.  The subsidy was the federal carrot to get them to do so.  For a variety of reason- political and practical- many states refused or failed to set up exchanges.  The problem for Obamacare is that the law specifically states that the subsidies are for policies purchased on state exchanges, not the federal exchange.

Since the majority of states do not have an exchange, the only other option is the private market or the federal exchange.  Therefore, most of those people Obama crows about signing up for health care did so on the federal exchange and with the understanding that they would receive a federal tax subsidy because that is how the IRS interpreted the law.

The problem is that their interpretation in direct conflict with the clear wording of the law.  In the lower court the government argued that Congress must have intended the subsidies for the federal exchange also.  Four of the law’s sponsors have come out- after the fact- asserting that such.  They use, as evidence, other examples of the law where the IRS is granted some interpretive leeway in implementing the law from their end.

This may come down to the Chevron deference test.  Here, administrative agencies of the Executive Branch (like the IRS) are given deference in their interpretation of laws passed by Congress.  However, that interpretation cannot occur in a vacuum.  If the law is specific, then the administrative agency is bound by the clear wording of the law.  If the law is not specific enough, then the intent of Congress must be taken into account along with “deference” to the expertise of the administrative agency.

However, the government’s argument in court was tortuous and circuitous.  In effect, they asserted that the phrase “Exchange established by the state” means just that- the state, not the individual states, and under that interpretation the federal government’s exchange qualifies.  Defenders of this interpretation argue that regardless, the term is meaningless.  If so, the case would not have progressed this far.  They struggle very hard to provide this explanation, but use its meaningless as a fall back.

The statute is clearly written here, even following the word map the government provides to reach their conclusion.  Further, the legislative history supports the statute’s clear meaning: subsidies were offered to state residents who purchased health insurance on state exchanges.  If states did not have exchanges, the federal government would fill that void, a void they did not think would involve over 30 states.  As additional evidence, Senate Democrats attempted to pass the HELP bill to withhold federal subsidies for states that refused to set up exchanges (for up to 4 years) and permanently if they refused to implement the law’s mandates.  Again, the key words are that the action was directed at “the states,” but their interpretation is that “we really meant any exchange.”

Make no mistake: this represents the biggest existential threat to Obamacare. The subsidies are the financial grease that make the whole operation work.  In effect, a majority of the alleged 9 million who signed up for Obamacare may lose their subsidy if Halbig prevails.  That would leave them without health insurance since they rely on the subsidy to pay the bulk of the premium.

However, as some scholars have noted, although the language is clear and the legislative history complete, since the case involves the IRS, although the “evidence” may be 100% against them, the chances of defeating the IRS are about 20% in the courts.  Even if Halbig loses this round in the DC Court, we will have to wait to see if they appeal to the Supreme Court (a distinct possibility) and whether they take the case at all (a crap shoot).  It would depend if four Justices are willing to use the case to accomplish what they could not previously do and hopefully drag along John Roberts this time.

One final note: should Halbig ultimately prevail, it would be a thunderous repudiation of executive power and IRS interpretation of laws.  Today, the IRS is not a particularly trusted entity.  It could also potentially usher in an entirely new debate to “fix” the infirmities of Obamacare, or it could be used as an excuse by the Left to make yet another argument for a single-payer system.  It would be in the best interests of the law’s detractors to have ready a replacement plan as an alternative to the dreams of the Left.


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