Comment Rescue – King v. Burwell Edition

As many of you are aware, this morning was oral argument on the King v. Burwell case that Burt detailed the other day.  Probably the biggest news items from the argument were that: (1) Justice Roberts, considered by many to be a swing vote, was mostly and uncharacteristically silent; (2) Justice Kennedy raised some skeptical questions of the petitioners suggesting that the petitioners’ interpretation of the ACA raises federalism concerns under the Constitution, and (3) the government appears to have largely (though not entirely) conceded the question of whether the petitioners have standing (which Burt thought was a winning issue for them).

That Justice Roberts was largely silent is perhaps curious, but doesn’t really tell us much one way or another and is of little newsworthiness other than as a triviality.  My suspicion, based on his vote in Yates v. United States last month and his vote in NFIB v. Sebelius upholding the ACA’s mandate as a tax, is that he’s pretty likely to vote for the government here on Chevron deference grounds (see Burt’s post for an explanation of this) and doesn’t want to cut the legs out from attempts by a future GOP President to weaken the ACA.  One of the few questions he did ask – whether a future administration could adopt the petitioners’ view of the statute – seems to confirm this view.

That the government conceded the standing question, to the chagrin of some liberals, no doubt, shouldn’t be terribly surprising, Burt’s views on that question notwithstanding.  The issue was not one the government had raised previously and was instead raised for the first time by the court when it expressed its interest in the issue prior to argument.  The Supreme Court’s restrictive view of standing in recent years has most frequently been to the detriment of liberal groups, and having the Court rule in the government’s favor on that issue in this case would thus mostly hurt liberal groups in the long run; to be sure, many liberals would no doubt be happy to accept that tradeoff if it meant saving the ACA, but unlike previous ACA cases, it seems pretty likely that the government is going to win here, albeit perhaps narrowly, with the primary question being the grounds on which it will win.

Additionally,with all due respect to Burt, I think the government’s position on this is the right one – the prohibition on taxpayer standing isn’t absolute, but instead applies only when there’s a lack of a “nexus” between the complained of behavior and the payment of the tax.  Here, the petitioners’ position is that they’re not supposed to have to pay the tax at all because the statute effectively exempts them, not that they shouldn’t pay the tax because they don’t like what it will be used for.  What’s more – and this is I think the real reason the government is uninterested in the issue – it will not be long before someone challenges the government’s interpretation of the statute without any standing issues at all.  At some point, someone will simply refuse to pay the mandate penalty, get an adverse ruling from the IRS, and then appeal that adverse ruling through appropriate channels.

Justice Kennedy’s line of questioning about federalism, however, is quite interesting.  Commenter morat20 reads that line of questioning as follows:

If I understand it right, Kennedy is basically poking around at this hypothetical: If the petitioners are correct (and the subsidies are denied to federally created backstops), would that not lead to an unconstitutional outcome due to the ‘penalty’? In short, he seems to be asking “If we assume your reading is right, would we not have to rule that the subsidies are universal to all exchanges in any case, to keep the law Constitutional?”.

The thought of the Supreme Court finding that “Cannon is right, the subsidies are for state backed exchanges only — however, that limitation is unconstitutional and so we strike that limitation down” would be amusing. (Although honestly, I’d expect that more in a footnote if they rule against the petitioners anyways. Along the lines of ‘We don’t want to see this under another President, only the other way around, because that’d run into this specific issue”).

In fact, however, Kennedy’s line of questioning is much more nuanced than this, and it’s worth explaining why, because it’s very interesting.  Kennedy is probably NOT suggesting, one way or another, that the petitioners’ literalist interpretation of the statute would render the statute unconstitutional on federalism grounds.  Instead, he’s indicating that the interpretation, if adopted, would force the Court to address the issue of whether or not the statute is constitutional on federalism grounds.  This is a reference to an important doctrine of statutory interpretation that even the most ardent of textualists recognize, which is called the “Constitutional Avoidance” doctrine.  Under that doctrine, courts are to avoid any interpretation of a statute that would so much as raise a constitutional question if it is at all possible to do so.

Sometimes, perhaps oftentimes, of course, it is not in fact possible to avoid the constitutional questions, which is why few non-lawyers know of this doctrine.  Indeed, in this case, the issue was never previously raised; this is, I suppose, the government’s fault, but it’s hard for me to blame the government too much for failing to raise the issue previously since Justice Kennedy’s perceptive questioning is the first I’ve seen anyone come up with this point.

But now that it’s been raised, it’s almost impossible to ignore.   Justice Kennedy’s suggestion in this line of questioning was that the petitioners’ interpretation might force the states who opted not to establish exchanges to effectively reinvent their health insurance markets and laws, which might violate principles of federalism, and specifically the Court’s decision on the Medicaid portion of NFIB v. Sebelius (including Kennedy’s own “dissent”). This “strict” concept of federalism is a cornerstone of modern conservative jurisprudence and one of the most significant achievements of conservative judges in the last 30 years.

That does not, of course, mean that Kennedy was saying that the petitioners’ interpretation is wrong and that they should lose.  However, by forcing that issue to be addressed, Justice Kennedy has painted himself into a corner (and almost certainly intended to do so).  Specifically, he is left with only three options on this case: (1) vote against the petitioners’ interpretation, whether on constitutional avoidance grounds or Chevron deference grounds; (2) vote in favor of the petitioners’ interpretation but rule that it’s unconstitutional, as Morat20 suggests above; or (3) vote in favor of the petitioners’ interpretation and rule that it’s constitutional.

I think he’s almost certain to choose option (1), and that he already had his mind made up to choose that option before oral argument.  If he intended to take the second route, he’d have requested briefing on the issue prior to oral argument; I cannot think of a single case in which the Supreme Court ruled something unconstitutional without the question of constitutionality being raised in briefing.  While courts do occasionally raise issues sua sponte like that, I can’t think of any cases where they ruled on an issue of constitutionality – and found the statute unconstitutional –  that wasn’t before them without providing the parties an opportunity to fully brief the issue.  What’s more, actually reaching the question and finding the interpretation unconstitutional, rather than simply expressly avoiding it would not only be extremely unusual, it would also mean holding that the government’s position here isn’t only reasonable, but actually required, such that a future GOP President would be bound to maintain the subsidies.*

I think it even more unlikely that he’ll take the third route, his statement at argument that the constitutional question is unavoidable notwithstanding.  To take the third route would be a terrible idea for him, for several reasons.  First, it would most likely require him to dissent, as I would be surprised if Chief Justice Roberts voted for the petitioners here for the reasons I indicated above, and I think Kennedy would be just as surprised as me.  That means that he’d be writing an opinion that would have no impact on the result of this case, but would require that he reach the federalism question and, in so doing, suggest a weaker version of federalism than conservative jurisprudence has carefully sought to cultivate. In other words, he’d be undermining, at least a little bit, one of his – and the other conservative justices’ – signature judicial accomplishments, with no payoff.  Indeed, he’d be creating the possibility that the liberal wing of the court would join the federalism discussion of his opinion even as it disagreed with the interpretation on other grounds, making it a majority opinion on the federalism issue.

And remember – no one had previously raised this issue, meaning there was no reason for Justice Kennedy to raise the issue if he planned to vote for the petitioners’ interpretation.  He could have voted for the petitioners without reaching the federalism issue and thus without potentially weakening one of his signature achievements.

I suspect, instead, that his line of questioning was really aimed at Justices Scalia, Alito, and Thomas, and that his hope was to paint them into that same corner that he knowingly painted himself into. In effect, my suspicion is that by raising this issue, Kennedy is telling Scalia, Alito, and Thomas “look, you’re not going to be able to save the petitioners in this case, but join me and I can probably get Chief Justice Roberts to go along with whatever I write so that I get to write the majority opinion in a way that limits the damage and helps us advance other parts of our jurisprudence.”

I think Alito and Scalia were taken off guard by Kennedy’s questions and, when they’ve had a chance to reflect, are going to see how those questions played right into Kennedy’s hands. Those responses suggest that they’ve pretty much conceded that the petitioners’ interpretation raises constitutional problems. They said that they can always rewrite the statute temporarily and give Congress time to fix the problems with the statute, but I think they’re going to find on reflection that this doesn’t get them very far – it addresses the notice argument the solicitor general made to bolster Justice Kennedy’s questions (which was a pretty good one), but doesn’t address the core of the federalism issues that Justice Kennedy raised. That means that they’re going to have to jump through a lot of uncomfortable hoops to rule for the petitioners – specifically, they’re going to run into the same problems I outlined above, and which Kennedy would run into if he actually reaches the question of whether or not the petitioners’ interpretation is constitutional, as opposed to saying simply that it would force the court to reach the constitutional question and thus should be avoided if at all possible, and that it is possible to do so.  What’s more, if Kennedy is indeed already committed to ruling in the government’s favor, Scalia, Alito, and Thomas will most definitely be writing a dissent on the fundamental question of whether the petitioner should win, meaning that a finding that the petitioners’ interpretation would be affirmatively constitutional would do nothing other than weaken their federalism jurisprudence.

If I had to bet, I’d say there’s a good chance, though by no means a guarantee, that Kennedy is able to win over Justice Alito in the long run on this.  Justice Alito’s concurrence in Yates v. United States last month demonstrates that Justice Alito is not particularly committed to a rigid textualism, so he would have little to lose by signing on to a decision premised on “constitutional avoidance.”  I think it much less likely that he succeeds in getting the votes of Justices Scalia and Thomas, both of whom are fairly committed textualists, with advocacy of strict textualism being at the very core of Justice Scalia’s jurisprudence.  But even that is not entirely out of the question – even strict textualists, to my knowledge, recognize the importance of the Constitutional avoidance doctrine.

But what Justice Kennedy’s line of questioning seems aimed at, in my view, is setting up a concurrence that he hopes to turn into a majority opinion.  Regardless, I think that his questions should allow supporters of the ACA to breathe a bit easier.

*On the other hand, as Michael Cain points out, Justice Kennedy has previously argued that finding a part of the statute unconstitutional should render the entirety of it unconstitutional, which provides him with a definite incentive to reach the question. However, that argument didn’t persuade Justice Roberts the first time around, and there’s little reason for Kennedy to expect that it would work the second time around.