Reading the Tea Leaves on King v. Burwell


Words have meaning. But what meaning? That’s the debate going on now as lawyers, politicians, healthcare analysts, and pundits try to read the tea leaves to discern how the Supreme Court will decide King v. Burwell. The decision will have a major impact on the future of ObamaCare.

If you’re a regular follower of this blog, you know that I’m talking about the recent oral arguments heard by the Supreme Court concerning the subsidies granted by the Obama administration to those individuals enrolling in ObamaCare on the federal exchange. The plain wording of the statute says these subsidies are only available on those exchanges “established by the state.” But now everyone is arguing about what these four simple words really mean.

After listening to the oral arguments on March 4, and the response of the nine Supreme Court justices, pundits are debating in particular the questioning of Justice Anthony Kennedy. Kennedy is often the “swing vote” in cases that split evenly on ideological grounds. This case may also hinge on his vote.

Faux Federalism

The critical issue seems to be the argument that finding for the plaintiff, King, would constitute a violation of the constitution’s “clear notice” standard of federalism. That concept holds that the federal government must give adequate warning if it is going to impose new conditions on the states.

Liberal Yale law professor Abbe Gluck, former clerk of Justice Ruth Bader Ginsburg, presented this argument in an amicus brief for the government and seems to have swayed Justices Ginsburg, Sotomayor, and Kagan. Now the question is whether or not Kennedy has also been persuaded.

The Wall Street Journal editorial board sharply disagrees with Ms. Gluck. They say there was no lack of notice. The states knew what their options were from the day the law was passed, as states made clear in their amicus briefs in King v. Burwell and as Oklahoma Attorney General Scott Pruitt made clear in an Op-ed in their newspaper.

Pruitt writes: “There is no merit to the argument that the states were unaware of the consequences of refusing to establish an exchange. Oklahoma, for example, where I am attorney general, sued the Internal Revenue Service months before making its decision to decline to set up an exchange, arguing that the ObamaCare tax credits and subsidies could not be given in Oklahoma. Oklahoma knew the consequences of its decision but was not coerced into cooperating with implementation of the Affordable care Act.”

Pruitt gives three reasons why the Gluck argument fails:

First – in the last ObamaCare case, NFIB v. Sebelius (2012), the Supreme Court said a statute is coercive only if it amounts to “a gun to the head” that “leaves the States with no real option but to acquiesce.” Here, we know that states had an option not to acquiesce in establishing health-care exchanges because they did not, as a matter of fact, acquiesce.

Second – there is no legal precedent for  a finding of coercion based solely on the fact that a federal program does not work well when the states decline to assist in its implementation. The solicitor general, Donald Verilli never made this argument and was quick to distance himself from it at oral argument.

Third – this sort of federal program isn’t antithetical to federalism, it is federalism. This carrot-and-stick approach is found in dozens of federal programs sprinkled throughout the United States Code. The states are not children that the federal government must paternalistically “protect” from the consequences of their choices by rewriting statutes. In our constitutional system, states are free to make decisions and bear the political consequences, good or bad, of those choices.

Pruitt summarizes his article with a comment to Justice Kennedy: “King v. Burwell isn’t about protecting the states from their choices, it is about allowing coequal sovereigns to make their choice and bear the consequences of that choice. That is accountability, and that is federalism at work.”


(Next post: Other opinions on “reading the tea leaves.”)

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