In an opinion which deals a heavy blow to our foundational separation of powers, the Supreme Court ruled 6-3 today in King v. Burwell that the federal government could give out Affordable Care Act tax credits on its own health insurance exchange if a state did not set one up. Why? According to the Court, incredibly, the statutory term "established by the state" actually means "established by the state or the federal government."
In the majority opinion, written by Chief Justice Roberts and joined by Justices Kennedy, Ginsburg, Breyer, Sotomayor, and Kagan opinion, the Court basically saves Congress from its own bad handiwork, scrutinizing and considering how the law would fail to work if it ruled on the plain meaning of the statute. In doing so, it illustrates how courts are not supposed to act -- as legislator (considering the policy implications of a decision) as opposed to how they should -- as judge (ruling on what the law means).
The trouble begins when the Court decides "established by the state" can't just mean "state," but must mean more given the "context and structure of the Act." Because, in the Court's view, this term has been deemed "ambiguous," it is compelled "to depart from what would otherwise be the most natural reading of the pertinent statutory phrase."
Once the provision is considered "ambiguous," the Court is left free to jump through all sorts of hoops to reach its desired conclusion. It fruitlessly cautions: "Reliance on context and structure in statutory interpretation is a 'subtle business, calling for great wariness lest what professes to be mere rendering becomes creation and attempted interpretation of legislation becomes legislation itself.'" I don't know how the Court has avoided doing that here.
The Court's mental machinations continue; it claims that while "'the presumption of consistent usage readily yields to context,' . . . a statutory term may mean different things in different places."
After declining to apply a method of statutory interpretation that says words should not be construed to be mere rhetorical surplus, the Court had to admit the ACA is the type of muddled mess that should have encouraged the Court to have less confidence in its ability to "figure it out" and instead send it back to Congress for fixing, noting that "with respect to this Act, rigorous application of the canon [against surplus words] does not seem a particularly useful guide to a fair construction of the statute."
Why? Even the pro-ACA majority recognizes that "[t]he Affordable Care Act contains more than a few examples of inartful drafting. . . . Several features of the Act's passage contributed to that unfortunate reality." The majority further notes that the law "does not reflect the type of care and deliberation that one might expect of such significant legislation."
However, as the dissent notes, the Court "has no free-floating power 'to rescue Congress from its drafting errors.'" And "[l]aws often include unusual or mismatched provisions. . . . This Court 'does not revise legislation . . . just because the text as written creates an apparent anomaly.'"
Much of what the Court does here is try to determine what Congress intended to do. Yet with a law containing such obvious, glaring problems and omissions, which we know Members of Congress did not even read, how can we even trust any guesses about what "Congress intended to do?" At one point, the majority cites an illustration "describing a cartoon in which a senator tells his colleagues 'I admit this new bill is too complicated to understand. We'll just have to pass it to find out what it means.'" This is a clear reference to former House Speaker Nancy Pelosi's astonishing comment that Obamacare would have to be passed before what is in it could be determined. I'm not sure if the Court intended it, but the irony -- and the jab at Mrs. Pelosi -- are rich.
The silver lining of this decision is that it did not expand the administrative state through excessive deference to the IRS interpretation of "established by the state." The not-so-silver lining is that the Court's endorsement of mushy reasoning allows anyone and everyone (which includes the administrative state and courts) to play with statutory terms to make them mean what they want them to mean.
The Court properly claimed it had the authority to interpret the provision, but then improperly seized a different type of authority to "save" the law. The Court should have resisted the temptation to play the hero -- in what would have been a noble exercise of self-limitation -- and deflected the statute back to Congress for fixing.
There is also a subtle assumption of congressional incompetence in this ruling. So inept was Congress in drafting and passing this legislation that the Court had to assume an intent distinctly missing from the text presented to it for review. In doing so, the Court has de facto made law by defining terms comporting with the Court's desire to save Congress from itself.
Thus, the problem now is that "context" means anything a court wants it to mean. And that's not a power our Constitution intended courts to have. As the dissent says, if "all it takes to make something ambiguous" is reasoning like the majority's, then "everything is ambiguous."
The majority concludes that "[a] fair reading of legislation demands a fair understanding of the legislative plan." Fair enough, perhaps. But even if one were to accept that assertion, I'm not sure how, in this case, which features one of the most muddled pieces of legislation in existence (which many Members of Congress have admitted they didn't even read), there can be any understanding of any "legislative plan."
Justice Scalia's dissent, joined by Justices Alito and Thomas, has the better argument: "The Court has not come close to presenting the compelling contextual case necessary to justify departing from the ordinary meaning of the terms of the law."
The majority's "reasoning suffers from no shortage of flaws. To begin with, 'even the most formidable argument concerning the statute's purposes could not overcome the clarity [of] the statute's text.' . . . Statutory design and purpose matter only to the extent they help clarify an otherwise ambiguous provision."
Exactly. And making such clarifications is exactly the job of Congress. The Court should have ruled based on the words of the statute. If Congress disagreed with the result and wanted it fixed, it would have then had the opportunity to fix the ACA.
As the dissent points out, if the majority's concern about potentially dooming the ACA is valid, then "these projections would show only that the statutory scheme contains a flaw; they would not show that the statute means the opposite of what it says." Moreover, "[h]ow could the Court pronounce it 'implausible' for Congress to have tolerated [the same] instability in insurance markets in States with federal Exchanges . . . when even the Government maintained until recently that Congress did exactly that in American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the Virgin Islands?"
The dissent nicely summed up the problems with this decision:
"The Court's decision reflects the philosophy that judges should endure whatever interpretive distortions it takes in order to correct a supposed flaw in the statutory machinery. That philosophy ignores the American people's decision to give Congress '[a]ll legislative Powers' enumerated in the Constitution. Art. I, §1. They made Congress, not this Court, responsible for both making laws and mending them. This Court holds only the judicial power -- the power to pronounce the law as Congress has enacted it. We lack the prerogative to repair laws that do not work out in practice, just as the people lack the ability to throw us out of office if they dislike the solutions we concoct. . . . [T]his Court 'has no roving license . . . to disregard clear language simply on the view that . . . Congress 'must have intended' something broader.' . . .
Even less defensible, if possible, is the Court's claim that its interpretive approach is justified because this Act 'does not reflect the type of care and deliberation that one might expect of such significant legislation.' It is not our place to judge the quality of the care and deliberation that went into this or any other law. A law enacted by voice vote with no deliberation whatever is fully as binding upon us as one enacted after years of study, months of committee hearings, and weeks of debate. Much less is it our place to make everything come out right when Congress does not do its job properly. It is up to Congress to design its laws with care, and it is up to the people to hold them to account if they fail to carry out that responsibility.
Rather than rewriting the law under the pretense of interpreting it, the Court should have left it to Congress to decide what to do about the Act's limitation of tax credits to state Exchanges. . . The Court's insistence on making a choice that should be made by Congress both aggrandizes judicial power and encourages congressional lassitude. . . . What a parody today's decision makes of Hamilton's assurances to the people of New York: 'The legislature not only commands the purse but prescribes the rules by which the duties and rights of every citizen are to be regulated. The judiciary, on the contrary, has no influence over . . . the purse; no direction . . . of the wealth of society, and can take no active resolution whatever. It may truly be said to have neither FORCE nor WILL but merely judgment.'
The dissent points out that several years ago, the Court twisted the individual mandate (which imposes a penalty for volitional inaction) into the shape of a "tax" in order to save its constitutionality. It also "rewrote the law to withhold only the incremental funds associated with the Medicaid expansion" in order to save another provision's constitutionality under the Spending Clause. Now, the Court believes the limitation regarding state exchanges "would prevent the rest of the Act from working as well as hoped. So it rewrites the law to make tax credits available everywhere."
Such reasoning reveals the "discouraging truth that the Supreme Court of the United States favors some laws over others, and is prepared to do whatever it takes to uphold and assist its favorites." Such expansionary reading by the Supreme Court to save unprecedented and large-scale government initiatives harkens back to the New Deal era. While the ACA has multiple problematic implications for religious freedom, the Court got this decision wrong based on an improper understanding of its role and erroneous view of the separation of powers. These are constitutional issues with far reaching implications that go beyond religious freedom.
As Justice Scalia rightly observes: "We should start calling this law SCOTUScare."UScare."