Which Justices Are in Play in the New Obamacare Case?

Posted in: Constitutional Law

The Patient Protection and Affordable Care Act (ACA or Obamacare) has already survived over fifty votes for its repeal in the House of Representatives, and even after Republicans gain control of the Senate in January, the President’s veto power ensures that it will continue to survive repeal efforts so long as a Democrat occupies the Oval Office. Yet the ACA remains in danger. Its survival may hinge on just one vote—that of United States Chief Justice John Roberts. The Supreme Court’s recent decision to review the ruling of the U.S. Court of Appeals for the Fourth Circuit in King v. Burwell once again places the ACA in the high Court’s crosshairs.

In 2012, the ACA narrowly survived a constitutional challenge when Chief Justice Roberts joined the Court’s four Democratic appointees to rule that the ACA was a valid exercise of the congressional power to tax. King is a statutory case rather than a constitutional one, and accordingly, commentary on King has mostly focused on the statutory issue it presents. Yet, as I shall explain below, the four conservative Justices who voted to invalidate Obamacare in 2012 could reject the statutory challenge in King but nonetheless vote to invalidate the Act. If they do so, then it would only take one vote for the statutory challenge to doom the ACA in most states.

The Issue in King

The question in King is whether a provision of the ACA that authorizes federal health insurance subsidies for policies purchased on exchanges “established by the State” can also be read to authorize such subsidies when a state fails to establish a health insurance exchange, so that people in the state must purchase their insurance on a federally operated exchange.

If the Court answers “no”, that could spell doom for Obamacare, at least in the majority of states that have not established their own exchanges. Without subsidies, many people otherwise eligible to purchase health insurance on the exchanges will be unable to do so, and without their participation, the insurance pools will contain too few healthy insureds to be viable. Obamacare would go into what has been called a “death spiral.”

Fortunately, there are very good reasons for concluding that subsidies are available on federal exchanges. One can only reach a contrary conclusion by ignoring numerous other provisions of the ACA and the statute’s overriding purposes.

To be sure, some observers view the King case as presenting a conflict between two approaches to statutory construction. Purposivists like Justice Stephen Breyer believe that a statute should be construed to achieve its underlying purposes. By contrast, textualists like Justice Antonin Scalia argue that statutes serve multiple, sometimes conflicting purposes, and that therefore judges should stick closely to the text.

Yet, as I explained in a column in July when King and another case presenting the same issue were decided in the appeals courts, the conflict is illusory here. In both his academic writings and his work on the Court, Justice Scalia himself has long maintainted that textualists should not construe snippets of statutory text in isolation; context matters. Only by applying an extreme version of textualism could the Court conclude that the ACA as a whole forbids subsidies on federally operated exchanges.

Does that mean that the Court will unanimously reject the challenge to the federal subsidies? Hardly.

Supreme Court Justices are subject to the same sorts of cognitive distortions as other human beings. Thus, conservative Justices who are inclined to think that Obamacare is bad policy may also be inclined to find persuasive the argument offered by the challengers to the subsidies. They contend that Congress chose to make subsidies unavailable on federally-run exchanges as a means of inducing states to establish their own exchanges.

There is no persuasive evidence for that claim, either in the ACA itself or its legislative history. Nonetheless, a Justice who is predisposed against the ACA might be persuaded by unpersuasive evidence. Experienced Court watchers can call to mind numerous examples of Justices being persuaded by bad arguments that fit their ideological druthers—whether conservative or liberal.

Could Four Justices Renew Their Constitutional Objection?

Let us suppose, however, that at least one of the conservative Justices rejects the very radical version of textualism that would be needed to invalidate subsidies on the federally run ACA exchanges. Would the law survive?

Not necessarily. A Justice might conclude that the law is best read to permit subsidies on federally run exchanges but nonetheless adhere to his prior position that the ACA’s so-called “individual mandate” to purchase health insurance is beyond the power of Congress. Because the four Justices who voted to invalidate the individual mandate in 2012 also thought that the entire law had to fall with the mandate, adherence to that position would also invalidate the subsidies.

If those four Justices—Scalia, Kennedy, Thomas, and Alito—stick to their constitutional guns, then the challengers to the subsidies would only need to persuade one of the remaining five Justices of their position in order to prevail. The most likely candidate for defection would be Chief Justice Roberts, not only because he is generally conservative but also because he has sometimes exhibited what we might call “textualist tendencies.”

When Do Justices Accept the Judgment of Their Colleagues?

The likelihood that the ACA will survive thus depends in part on whether the 2012 dissenters adhere to their prior constitutional position, or instead, accept the contrary judgment of their colleagues that the law falls within the power of Congress.

The question whether a Justice who dissented in one case should adhere to her dissent when the issue arises in a later case has no clear answer. Justices sometimes accept the contrary judgment of a majority of their colleagues—especially if the parties have not expressly asked for the Court to revisit the earlier case. And the certiorari petition in the King case did not ask the Court to overrule its 2012 judgment upholding the ACA.

Nonetheless, Justices also sometimes refuse to accept the earlier precedent. The most famous example in American constitutional law was established by the late Justices William Brennan and Thurgood Marshall. They believed that the death penalty was unconstitutional in all circumstances. Despite numerous precedents rejecting their position, Justices Brennan and Marshall repeatedly and consistently voted to invalidate every death penalty to come before the Court, regardless of whether the party challenging his death penalty specifically asked the Court to revisit the precedents upholding capital punishment.

One might understand the Brennan/Marshall approach as extraordinary: Even if there are ordinarily good reasons to sublimate one’s own views to those of the majority, those reasons are outweighed by the life-and-death stakes in a capital case.

Yet Justices have followed the practice of non-adherence in a wide variety of cases. For example, some conservative Justices have refused to apply liberal precedents rejecting states’ rights and finding abortion rights; and some liberal Justices have refused to apply conservative precedents favoring states’ rights and rejecting free exercise rights of religious minorities.

Is there a principle that explains when a Justice should adhere to his prior views and when he should accept the contrary judgment of his colleagues? Perhaps. The adherence question faced by individual Justices is roughly equivalent to the question for the Court as a whole of whether a precedent should be overruled. And the Court has offered criteria for when a precedent should be overruled.

It is not sufficient that the Court would reach a different result if faced with the issue for the first time. To overrule a precedent requires some special reason. As the cases often put the test, the original decision must be not merely wrong but unsound in principle and unworkable in practice.

That is a high bar for overruling, and one which is not met by the arguments for overruling the 2012 ACA case. Even if one thinks—as the four dissenters may well think—that the ruling sustaining Congress’s power was unsound in principle, there is little reason to think it is unworkable in practice. Despite a rough rollout and continued political opposition, the ACA itself is working well enough. Meanwhile, the rule established by the 2012 case—that Congress cannot impose mandates under the Commerce Clause but can provide incentives under the Taxing power—is certainly not unworkable. Indeed, even the dissenters in the 2012 case appeared to think that Congress could have used the taxing power had it simply phrased the law differently.

Accordingly, the four dissenters from the 2012 ruling shouldn’t adhere to their prior votes. But that does not mean that they won’t adhere to their prior votes. Political scientists studying the statistical pattern of votes in the Supreme Court have found that Justices rarely give any weight at all to precedent as such. In other words, if faced with the opportunity to overrule a precedent, most Justices usually vote exactly as they would if facing the issue as an original matter. Stare decisis—the supposed rule that courts should adhere to their past decisions absent extraordinary reasons for disavowing them—is a rule that is at best honored in the breach.

If the dissenting Justices from the 2012 case follow the rules as written, they will put aside their constitutional objections to the ACA and focus only on the statutory argument in King. But if they follow the usual unwritten practice, they could well reject the statutory objections and nonetheless vote to invalidate the ACA. Should that happen, then the domestic policy legacy of President Obama will once again rest in the hands of Chief Justice Roberts.

  • pvine

    One thing is almost certain, Roberts will not afford any deference to the IRS’s interpretation of the phrase “established by the State” (in section 36B). (See his dissent in City of Arlington.) And, I don’t see Roberts or any of the dissenters in NFIB interpreting that phrase to mean “established by the State [or federal government],” regardless of which canons of statutory interpretation they (selectively) decide to utilize.

    By selectively plucking language from the whole PPACA, a reasonable argument can be made that the phrase includes federal exchanges, and doesn’t include federal exchanges. Given the tie, the Court should adhere to the plain text of section 36B. If Congress believes that the plain text doesn’t mean what it says, they can amend the law accordingly. The Court shouldn’t be in the business of rewriting poorly drafted statutes. And Kagan and Scalia, just last term, reiterated that position.

    The overarching concern regarding separation of power will, in my opinion, lead at least five Justices to deny Chevron deference (to the IRS’s interpretation) and interpret section 36B according to its plain text.

  • xuinkrbin

    I must disagree in part with You. I think Professor Volokh’s blog presents a more compelling case as to why the subsidies do not apply to federally run exchanges.

  • 1SkyCaptain1

    Yet another liberal bastion of disinformation willfully ignoring the indisputable fact that the ACA was written as hammer to be used against political opponents who refuse to be subjugated to tyranny.

    Justice Roberts was quite clear in his majority opinion that states are free to not participate. What the IRS has done is rewrite legislation so that it now reads that you are not free to chose to not to.

  • andrewp111

    What about the uniformity issue for tax laws? This is a constitutional issue regarding this case, but isn’t discussed much.


  • mike rappeport

    There will not be a “death spiral” on a national basis if the court rules against the existence of a national exchange. Each states pool of potential insurees includes both good risks and bad ones. That is one of the reasons why individual insurance companies sell ACA policies in some states and not in others. Two things will happen
    a) some states now in the federal exchange will establish a state exchange.
    b) The people of states with state exchanges will continue to be subsidized by federal dollars which means that (since we all pay national taxes) the people of states with state exchanges will be subsidized by people in states without state exchanges (irony of irony – the people of texas will subsidize the people of California)