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.”