King vs. Burwell: An Argument Analysis

Yesterday, the Supreme Court heard oral argument in the case of King vs. Burwell– a case which questioned the federal tax subsidies for those who purchased health insurance in the federal exchange.  Generally, it is tough to tell how any Justice will vote on a case from their questioning during oral argument.  As I have mentioned in many previous articles, they usually have some idea of where how they will vote based on the written briefs and their own ideologies.  However, in this case it became apparent early that the four liberals- Ginsburg, Sotomayor, Kagan and Breyer- will side with the government.  At one point, Breyer- focusing on the definition of the word “State exchange-” asked King’s lawyer, “So, what’s the problem?”  To him, this seemed clear cut- the definition meant that the if a state failed to set up an exchange, the back up plan was the federal exchange and everything that applied to the hoped-for state exchange applied to the federal exchange, including the federal tax subsidies.

Ginsburg, for her part, led the line of attack on the issue of standing.  The lawyer for King questioned back whether the Supreme Court was a proper venue for deciding this and asked Ginsburg whether she wanted to open a trial on this issue.  In the end, when the government spoke, they conceded that although the issue of standing was murky, they had to concede that at least one of the plaintiffs did have standing and as long as one did, the case could proceed to be decided on the merits.  In the end, the technicality that could have saved Obamacare is likely going to be dismissed and they will decide this case.

Given that, there are clearly four votes to uphold the subsidy.  There are also likely three votes to strike it down and this contingent was led by Scalia who noted that Congress often writes laws incorrectly or ambiguously and it is not the Supreme Court’s job to divine the intent, but to look at the clear wording of the law.  Alito seemed to join Scalia on this belief and Thomas likely will go along with that line of reasoning also.

That leaves Roberts and Kennedy.  For his part, John Roberts was strangely silent most of the argument although he is often one of the most questioning of the Justices in other cases.  During King’s part of the argument, a dispute developed about the possible consequences of a decision in their favor and how the entire law collapses without the subsidies and mandates.  This was an argument that was heard during the previous Obamacare case.  A back and forth between King’s counsel and Sotomayor was interrupted by Roberts who asked Carvin if he won that case.  When he said he did not, Roberts ended this back and forth by stating that because Carvin lost the previous case, it would be understandable that he changed his line of attack this time which elicited some laughter in the crowd.  But, that was basically it until the government’s turn.

Here, Roberts may have tipped his hand somewhat when the subject of Chevron deference came up.  This is a Supreme Court principle that provided the interpretation is not arbitrary and capricious, they usually defer to the judgment and interpretations of the administering agency (in this case, the IRS).  Donald Verilli, the Solicitor General defending the law, stated that he was confident the law would withstand Chevron deference.  He then asked whether the IRS of a future administration could come to an opposite interpretation and have that interpretation survive under Chevron, and Verilli conceded that fact.  Could this be where Roberts is leading?  Is it possible that he would uphold the law and use Chevron as an excuse to do so knowing that a future Republican administration could and should achieve what the Petitioners here could not do?  It is difficult to determine how Roberts will vote given his scant questioning.

Which brings me to Anthony Kennedy and his line of questioning.  He was the one who suggested that there could be a serious constitutional issue at stake in the case and one where he normally sides with states- Federalism.  To compress the arguments, Kennedy suggested that if the Court sided with King, it would seriously disrupt the insurance markets in non-participating states creating a death spiral and, in effect, killing those markets.  The reason for the subsidy in the first place was to act as a carrot to induce states to create exchanges.  If the Court sides with King, the carrot would be converted to a very loaded gun against the states.  It would not be inducement or encouragement; it would be coercion and that is a very serious federalism issue and a constitutional problem.

So Kennedy needs to do some soul-searching and investigation.  He needs to look at why this provision was placed in the law.  For example, is it conceivable that Congress- knowingly or unknowingly- intended to put the states in an impossible position where they would have to enact the ACA regimen?  Before one dismisses this, it would not be outside the range of possibilities that the administration would actually do this.  The Constitution is a delicate balance of checks and balances between the three branches of the federal government, and between the federal government and the states.  This administration has shown absolutely no respect for those checks and balances and has regularly run end-arounds the Constitution.  However, in this case I do not believe it was intentional, but no less real.  Of course, if they and Congress did not intend to put a gun to the states- the basic gist of this argument- then we are simply left with a case of statutory interpretation.  Kennedy was the one who was most concerned with the real world effects of a decision in favor of King and its effect on states and the Constitution.  He brought up the subject during questioning of both sides which seems to indicate he is wrangling with this issue and trying to resolve it.

As I stated earlier, we know this case is definitely 4-3 at this point.  Given the questions asked and the concerns raised, I am going out on a limb here and predicting a 6-3 decision to uphold the tax subsidies, but it will be a plurality decision.  The four liberals will stand by the definition of a state exchange and that the federal exchange is simply a back up plan B and that whatever applied to plan A also applies to Plan B.  The three conservatives will side with King and base their decision on the actual wording of the law despite the possible dire consequences.  I would suspect Scalia to write the dissent.  Roberts will likely use Chevron  to justify his decision in the hopes that a future administration will come to an opposite interpretation.  This has been his trend in the past- deference to the legislative process to fix a badly worded law.  Kennedy will likely decide the case on the belief that the Congress could not have possibly intended for the provision to be a loaded gun against the states.  For him to believe otherwise would be a belief that Congress was calculating in this area and that they were smarter than we know they are.  In the end, the stupidity of Congress in enacting a badly worded, ill-conceived law may actually save the law.