As a young lawyer I practiced in Washington, D.C. and had the opportunity to work on several Supreme Court cases. While that hardly qualifies me as an expert on Constitutional Law, it does mean I have some experience in reading Supreme Court decisions and understanding them in a broader context. With that background in mind, I offer the following perspective on this puzzling Supreme Court decision. The full text of the decision is available online here: http://www.supremecourt.gov/opinions/14pdf/14-114_qol1.pdf.
Let’s be clear at the outset what King v Burwell is not about: it’s not about whether the Affordable Care Act (“ACA”) is a good idea or even whether it represents a constitutional exercise of legislative authority, a determination made in another rather perplexing Supreme Court decision, NFIB v. Sebelius, in 2012. Rather, the case involves an exercise in interpreting written law involving one line in the ACA: whether the phrase “an Exchange established by the State” in 26 U.S.C. §36B(a) can be fairly read to mean “an Exchange established by the State or the federal government.”
Before considering the reasoning of the court, pause to consider the language itself as an ordinary person would read and understand it. The ACA clearly envisions two types of exchanges: one type set up by the States and the other set up by the federal government. Given that, why would Congress include the qualifier established by the State unless Congress wanted to mean only those exchanges? The drafters could’ve just said “Exchanges” (implying both types of Exchanges) or spelled out “An Exchange established by the State or the federal government” (as they do in other places in the statute) but they chose instead to say “an Exchange established by the State.”
Why does it matter? Because, if the language means what it says, then the tax credit subsidies designed to help low income residents pay for health insurance are available only in the 16 states that have set up their own Exchanges. In the other 34 states, the federal government set up the Exchanges after the State elected not to. So, as a practical matter, low income residents in those states will *not* qualify for the subsidies if the language is given its plain meaning.
Justice Roberts, writing for the majority, concludes, in essence, that Congress could not have meant to exclude those citizens when it drafted the ACA. “A fair reading of legislation demands a fair understanding of the legislative plan,” he writes. “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter. Section 36B can fairly be read consistent with what we see as Congress’s plan, and that is the reading we adopt.” Put differently, Justice Roberts concludes that the plain language of Section 36B conflicts with the overall structure of the Act. As a result, he finds the language ambiguous, opening the door for the Court to step in and infer that when Congress wrote “by the State,” they actually meant something entirely different.
Justice Scalia, in a forceful dissent joined by Justices Thomas and Alito, will have none of it, calling the tortured reasoning of the majority “applesauce,” and suggesting that the ACA should be renamed “SCOTUSCare (Supreme Court of the United States Care)” because every decision upholding the Act has required the Court to engage in either unusual legal theories or a strained interpretation of otherwise plain language. In this case,
Words no longer have meaning if an Exchange that is not established by a State is “established by the State.” It is hard to come up with a clearer way to limit tax credits to state Exchanges than to use the words “established by the State.” And it is hard to come up with a reason to include the words “by the State” other than the purpose of limiting credits to state Exchanges. ‘[T]he plain, obvious, and rational meaning of a statute is always to be preferred to any curious, narrow, hidden sense that nothing but the exigency of a hard case and the ingenuity and study of an acute and powerful intellect would discover.’ Lynch v. Alworth-Stephens Co., 267 U. S. 364, 370 (1925). Under all the usual rules of interpretation, in short, the Government should lose this case. But normal rules of interpretation seem always to yield to the overriding principle of the present Court: The Affordable Care Act must be saved.
This debate isn’t just an abstract legal one or even confined in its import to tax credit subsidies available under the ACA; rather, it touches on the proper roles and responsibilities of Congress and the Courts–and the balance of power between the two–with profound implications for our Constitutional system. Should courts be free to correct plain statutory language–and substitute their own language–if they find that the language in question conflicts with the overall purpose and structure of the law? If so, what standards should apply that trigger such a remarkable exercise of judicial authority (the Court doesn’t suggest any clear ones) and how do we constrain the potential abuse of judicial authority, where un-elected judges “discover” ambiguity to negate clear and unambiguous language passed by elected representatives and then rewrite the statute, effectively substituting a policy outcome presumed by the courts for one duly enacted by the legislature?
Taking that position does not require putting the blinders on and ignoring the rest of the law. As Justice Scalia observes, “sound interpretation requires paying attention to the whole law, not homing in on isolated words or even isolated sections. Context always matters. Let us not forget, however, why context matters: It is a tool for understanding the terms of the law, not an excuse for rewriting them.” (Emphasis added.)
That’s why, at the end of the day, Justice Scalia clearly has the better argument. First of all, Congress may well have intended to provide subsidies for Exchanges set up by the States and not for those set up by the federal government to incentivize States to set them up in the first place. There’s nothing irrational in that statutory scheme and the majority opinion cites no legislative intent language or other evidence to show what that interpretation is untenable. In other words, there’s nothing that clearly demonstrates that the legislature actually mean X when it said Y. Second, and more importantly, even if Congress made a mistake, then it is the legislature’s duty and obligation to correct that mistake, and the courts should not presume to fix it for them. Why? Because, unless a court can perfectly discern legislative intent from the “legislative plan” (tricky business at best), we have the separation of powers problem identified above: where courts take upon themselves legislative authority to create law. As Justice Scalia observes:
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.
For those tempted to dismiss Justice Scalia’s argument as window dressing for his own partisan take on the ACA, remember that textualism–the idea that courts should interpret and apply statutes as written and not twist the words to mean something else based on vague notions of legislative intent–cuts both ways in the sense that it encourages legislatures (of whatever political stripe or partisan makeup) to draft laws as clearly as possible and courts to avoid the temptation to rewrite those laws or guess at intent unless the statute is vague and the meaning can be fairly discerned elsewhere. In other words, textualism promotes judicial restraint and the bedrock constitutional principle of separation of powers. Like any legal theory, it can be abused, but has its fullest and strongest application in situations like this one, where a court takes language that is clear on its face and substitutes its own language and its own judgment. No matter how well-intentioned, such an exercise of judicial power holds a high potential for abuse and sets a dangerous precedent moving forward.
In the absence of judicial restraint (and theories like textualism that enliven it), courts can–and too often do–substitute their own intent and desired policy outcomes for those of an elected legislature that remains accountable to the people in ways that courts do not. For that reason, I fear that the true lesson of King v. Burwell is less about the ACA and more what Justice Scalia laments in the closing lines of his dissent: “the confusion of honest jurisprudence” and “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.”
Timothy Hawkes 
I am not a layer, but it seems to me there are a couple of problems with this argument. You argue that congress rather than the supreme court should resolve any ambiguity or other question of meaning in Obamacare. The problem I see is that Obamacare was not passed by congress as an institution, but by a particular congress. That particular congress no longer exists. Congress changes every two years. And they change their minds even more frequently. It seems to me that the intended function of the supreme court was not to change dramatically every two years and thus be a stabilizing influence. So I don’t see why a later congress rather than the supreme court should judge on the intent of a law passed by an earlier congress.
One thing I have done is written large technical documents. One of the most difficult things is to keep them consistent as changes are made. So it is not surprising to me that some one would forget to update “state exchanges” to state and federal exchanges. This is not so much a case of substituting Y for X, but rather a case where there is Xa and Xb and someone left out an Xb in one case. So the court just replaced Xa with Xa or Xb. While I fully agree that the court sometimes twists the intent of lawmakers to match their own agenda (e.g that corporations are people), this does not seem to me to one of those cases. Some of these judges would be delighted to get rid of Obamacare but had to admit that the obvious intent of congress (that congress which passed Obamacare) was to include both state and federal exchanges.
Hi Russ:
Good comments and concerns. As to your first point, you are perfectly correct that today’s Congress isn’t the one that enacted the law in the first place. Even so, I think Congress is best viewed as an institution in this context: in other words, the critical question is “If legislation contains an error that isn’t an obvious typo (or equivalent), which institution should fix that error–the courts, which have to guess at legislative intent or the legislature itself?” One of those institutions is accountable to popular will in our Constitutional system, the other is not.
At the heart of this debate is a theory of statutory interpretation called textualism, which holds that statute’s should be read and interpreted based on their plain language and meaning. If that meaning is ambiguous, only then should a court engage in the difficult (and perilous) task for trying to decipher legislative intent from other sources. Most often, that means consulting what’s called the “legislative history” (committee reports, statements, commentary, etc.)
The trouble there–as many thoughtful commentators recognize–is that committee reports, statements, etc. aren’t the law; only the text is, and citing “soft” and often contradictory legislative history is rife with opportunities for abuse on all sides–from legislators who attempt to sway subsequent judicial opinions by sowing the record with statements that support a particular view to judges who cite legislative history selectively in order to support their own policy outcome.
Textualism puts the onus firmly on the legislature to MAKE YOUR INTENT CLEAR, and it lessens (though it can’t eliminate entirely) the risk that un-elected judges set policy instead of (or in spite) of the actions of elected representatives.
Your second point turns on whether the legislature’s intent is “obvious” or not, and I think that’s far from clear.
In other words, I see no evidence to suggest the intent was “obvious” here, particularly when the plain language in question contradicts that intent. (The ACA stands regardless of whether people falling between 100-400% of the federal poverty line in states that don’t set up their own exchanges qualify for a subsidy or not.)
The majority cites no clear evidence that this was merely a drafting error, which a court can–and should–correct without forcing the legislature into a costly do- over. In this case, however, the dissent cites numerous instances where the statute readily distinguishes between Xa and Xb, which suggests that Congress meant what it said when, in this all-important provision, it specified that subsidies would apply only to Exchanges set up by the States. As Justice Scalia and others point out, it makes perfect sense to create a strong incentive for States to set up their own exchanges, and the majority cites no clear evidence from the legislative history that demonstrates that Congress added the qualifier “by the States” by accident. What the majority says instead is, “Congress could not have meant that” given the structure of the overall document and its stated purpose of getting everyone involved in the health insurance market.
Even if Court magically got it right in this in this instance (i.e., they perfectly discerned legislative will and identified and corrected the mother-of-all-typos), I loathe the precedent it sets, which is that courts can and should presume to understand the intent of the legislation better than the legislators themselves, and, further, to effectively rewrite the statute to comport with that intent *without even relying on the drafting history.*
Think about it this way: you’re a judge, and you don’t like a law Congress passed. Based on the approach to statutory interpretation taken by the Majority in this case, a court is perfectly justified to discern legislative intent based on the “legislative plan” and then to *rewrite* key provisions to accomplish that purpose. Again, even if the Court is correct in this case, that approach has serious implications for separation of powers in our system of government and opens the door to judges frustrating–rather than giving effect to–the intent of the legislature.
For that reason, even if it was a colossal typo (which I doubt), far better for Congress to go back in and make a policy determination that the subsidies should apply to ALL exchanges than to have the Court legislate that policy from the bench.
Best,
Tim
The online version of the affordable care act is 995 pages. I suspect it was being edited up to the final vote. Although in a perfect world the legislature would make their intent clear, keeping a 1000 page document current and consistent is an impossible task. I have done some 500 pages documents and the difficulty tends to increase non-linearly as the length increases. I would guess that no piece of major legislation is 100% consistent and reflects exactly what the legislators thought at the time. And some things legislated are self contradictory or simply impossible. So the administration (mostly the civil service) always makes some “interpretations” as happened in this case. When this gets challenged it ends up n the courts.
The problem is complicated by politics. None of the three branches of government is free from political agendas. Although I am not generally a big fan of the supreme court, they at least are not running for re-election the moment they take office. And they tend to be more stable (for better or for worse) over time.
If you dismantled every piece of legislation that had an imperfection in it then the effect of congress which is already the most constipated body on earth, would drop to absolute 0. In the last while a new president tends to take a majority of congress into office with him or her and then promptly looses that majority during the first mid-term. So Jeb Bush might bring a Republican majority to congress, but by 2018 he is likely to loose it. Would you really like the new Democratic congress to have the power to re-interpret all the legislation passed between 2016 and 2018. They might find some inconsistency in a hypothetical “Freedom of Religion” bill and eviscerate it. Over time congress is a sine wave of alternating politics so if you allow them to do the interpretation it is just a matter of timing what answer you will get. The same can be said for the supreme court, the difference is in the period of the wave. For congress it is 2-6 years. For the supreme court it is more like 10-20.
Finally (I’ll stop after this), the legislature always has the last say (unless it is a question of constitutionality). In theory there is nothing to stop the current legislation from passing an amendment to Obamacare to make the intent of the current legislature clear. Or to repeal Obamacare altogether. Of course in practice any such legislation would be filibustered and vetoed. And the debate would not be over what the congress which passed Obamacare actually meant to happen, but grandstanding for a sound-byte damming Obamacare. There are clearly times when a piece of legislation is so broken it just has to be tossed out. But it can’t be just because the legislation has become unpopular with the current legislature. At the end of the day, I am a pragmatist. Theory might be all well and good, but someone has to make a judgement in a practical, non perfect, and very real world. And I guess I would prefer it to be a supreme court judge, even one whose political stance I differ with in almost every point, than a representative from Oregon who I happen to agree with on most points but whose number one concern is still to be re-elected. I am no fan of the current court, but I am afraid I am complete disillusioned with congress (although I do know some – well one – state representative of the highest intellect and integrity). If there were more people like you in congress, the pragmatist in me would switch my vote in this case.
It is certainly true that no branch of government is free from agendas, which is why the Framers gave us three to check and balance each other. Without judicial restraint, however, the one un-elected branch (the Courts) can negate the power of the other two. At bottom, that’s what this is all about. The law says subsidies will be available for exchanges established by the States. Period. Everyone knows what that means. No one suggests it’s a typo. But the Court finds ambiguity where there is none and then rewrites the text to mean something else. To my mind, that represents an abuse of power that invites more of the same. Justice Roberts, of all people, should know better. (Ironically, he turns around and writes a ringing condemnation of judicial over-reach in his dissent in the Obergefell v. Hodges case.)
If the law as passed is defective–i.e., without subsidies available in *all* exchanges, the law won’t work as intended–it is the constitutional obligation of the legislature to fix that mistake, not the courts to presume a fix and apply it, because it’s all to easy for the Court to get that wrong and wind up frustrating, rather than giving effect to, the legislative will. To do so is to exercise legislative authority, but with no one to check the Court in its exercise of that authority. And it doesn’t matter in that analysis whom you trust more to interpret the law in this particular instance or whether one thinks Congress is broken or not. It matters which branch has what responsibility in our constitutional system. This decision blurs those lines in what I think is a dangerous way. To my mind, Congress shouldn’t be passing 1,000 page laws that most of the Congress haven’t bothered to read, and, if they make a mistake in a key provision (that isn’t obviously a typo) it’s incumbent on them to pass an amendment to that legislation. Otherwise, we encourage legislatures to be sloppy and careless, and courts to over-reach in either a sincere effort to correct that or a cynical effort to substitute their own policy preferences for those of the legislature.
You talk of the federal legislature as if it is some kind of Platonic Ideal Form that has a real existence. I am more Aristotelian in this. What exist to me are only individual legislatures, each more pathetic than the last. And I doubt that whatever the current court decides any of these individual legislatures will be any less than sloppy or even that sloppy will be their worst feature. But that is probably just the cynicism of an old man.
And in this case I am probably just biased. I have a daughter and two sisters who got health care insurance for the first time in years through ACA so I tend to see it as a good thing and destroying ACA as a bad thing. It is probably the sign of an inconsistent and weak mind that I tend to look at court interpretation as reasonable if I agree with the decision and over-reach if I don’t. I guess we’ll just have to agree to disagree about this.
There is ambiguity in the language as evidenced by the definition of the term STATE:
A nation or territory considered as an organized political community under one government.
“Germany, Italy, and other European states”
synonyms: country, nation, land, sovereign state, nation state, kingdom, realm, power, republic, confederation, federation
“an autonomous state”
an organized political community or area forming part of a federal republic.
“the German state of Bavaria”
synonyms: province, federal state, region, territory, canton, department, county, district, shire
“the country is divided into thirty-two states”
informal term for United States.
plural noun: States; plural noun: the States
Zach: While the term *can* be ambiguous (as the definition you quote suggests), even the purest textualist will concede that context matters. No one–and I mean no one–seriously contends that the phrase “by the State” has the generic meaning you ascribe to it here in the context of the ACA. The statute clearly distinguishes between exchanges established “by the State” and exchanges established “by the federal government.” Even Justice Roberts–who’s looking for ambiguity to justify the radical step of re-interpreting the text–doesn’t go that far because he recognizes that it isn’t a credible argument. That’s the funny thing here. Everyone knows what the term means in context, but the majority concludes “Oh, but Congress couldn’t have actually meant that,” treats it as, effectively, a typo (inadvertent error, but without any evidence to suggest it is, in fact, a typo) and then rewrites it to mean what the the majority thinks it should mean.