Supreme Court Convenes a Settlement Conference

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In a post-oral-argument order last week, the Supreme Court sought supplemental briefing from the parties to the latest religious challenge to Obamacare. Requests for supplemental briefing in the Supreme Court are unusual, but hardly unprecedented. Yet commentators referred to the order in Zubik v. Burwell as “puzzling,” “baffling,” and, as Indiana University Law School Professor Gerald Magliocca suggested, something like the kind of notice that an administrative agency typically provides to interested parties and the general public before issuing a final regulation.

After briefly setting out the factual and legal context, I will suggest a different analogy. The Supreme Court’s order looks very much like an attempt to perform a function that federal district judges routinely play: facilitating settlement. Although the high Court need not play this role in every case, I defend its effort in this context.

The Underlying Dispute

Like the Hobby Lobby case two years ago, Zubik involves the intersection of two statutes—the Patient Protection and Affordable Care Act (abbreviated as the ACA and sometimes called Obamacare) and the Religious Freedom Restoration Act (or RFRA). Under federal regulations that implement the ACA, employers that offer health insurance to their employees must provide plans that include zero-co-pay coverage for contraception. Pursuant to RFRA, employers with religious objections to providing contraception need not do so. Indeed, under an order the Supreme Court issued shortly after the Hobby Lobby case, such religious objectors need not even file the official government form noting their religious objection. They need only inform the government of the objection. At that point, the insurance provider offers the contraception coverage, at no cost to the employer or the employee.

The plaintiffs in Zubik object to that accommodation itself. Even without using the form, they say, they are complicit in the provision of contraception to their employees because—as they characterize the operation of federal law—their notice to the government triggers the contraceptive insurance coverage. Moreover, they argue that by “hijacking” the health insurance provider the religious employer has selected for the rest of the health insurance, the government further implicates them in providing contraception.

In its brief and during the oral argument, the government acknowledged the sincerity of the plaintiffs’ religious beliefs but contested their characterization of federal law. Furthermore, the government lawyers complained, the connection between the religiously-objecting employers and the provision of contraception under the accommodation now in place is too attenuated to count as a substantial burden under RFRA. And even if it does count, the government added, there is nothing else that can be done to accommodate the religious objectors without jeopardizing the compelling interest in providing women with expanded access to contraception.

Much of the oral argument focused on possible alternatives. The plaintiffs’ lawyer said that any contraceptive coverage offered by the insurance provider they selected for the rest of the health insurance policy would implicate them in sin. The one exception they allowed was a stand-alone government-funded single-payer system for contraception insurance. But the government objected on the ground that a separate stand-alone contraception policy would likely leave thousands of women with serious obstacles: If the government plan used a different network of doctors from the regular plan (as it surely would for a great many plans), then women seeking contraception would need to go to multiple doctors. The plaintiffs’ preferred alternative, the government said, would sacrifice the compelling goal of seamless coverage for contraception.

The Order

Last week’s Supreme Court’s order appears to accept that seamlessness is indeed a compelling government interest. The order asks the parties to consider whether it would be possible to devise a system by which an employee receives contraception coverage from her regular health insurer without the need for the religiously objecting employer to provide any notice to the government. The order outlines one such scheme in which the burden would fall on the insurance company to offer coverage to the employees upon learning from the employer that it wants a no-contraception plan.

The parties have until next week to file their briefs. The government might object to the Court’s suggestion on the ground that the hypothetical scheme violates some other federal law. Employee benefits programs are regulated by a very complex set of laws. I confess that I lack sufficient expertise in this area to have an informed opinion about whether the hypothetical proposal in the order would be lawful. However, as I argued in a blog post shortly after the Zubik oral argument, RFRA could be read to authorize accommodations that would otherwise be illegal. Accordingly, in my view the government ought to accept the proposed compromise, so long as the Court accepts (my view) that RFRA overrides any other statutory obstacles.

However, even if the government accepts the hypothetical accommodation suggested in the Court’s order or something similar, some or all of the plaintiffs might not. Based on the views they have already expressed, we might infer that, from the plaintiffs’ perspective, the hypothetical scheme is no better than the current accommodation to which they object. They could say that the communication of their objection to the insurance company would trigger contraception coverage, just as they say that under the current accommodation the communication of their objection to the government triggers contraception coverage. And if the current accommodation has the further problem that it “hijacks” the plan the employers have selected, the same could be said of the proposed compromise. The plaintiffs might still think that they will be implicated in sin.

But the plaintiffs are in a tough spot. If they say that even the new proposal is unacceptable, they look like they are demanding something that the government cannot fairly be asked to provide. It would be as if a religious employer said that contraception should not be available for sale to anyone, because so long as it is, his employees can use their paychecks to buy contraception, which would implicate the employer in sin. RFRA cannot possibly mean that the government must make contraceptives illegal or obtainable only by barter. Religious objections that demand very substantial sacrifices from third parties cannot be accommodated, no matter how sincere the belief.

The Supreme Court as Settlement Facilitator

It remains to be seen whether the parties to Zubik will agree that the Court’s proposal is mutually acceptable. Even if they do not, the justices deserve credit for the effort.

Despite the puzzlement with which the Court’s order has generally been greeted, in an important sense it is quite ordinary. American law has long favored out-of-court settlement of lawsuits on the grounds that settlement saves time and money for the parties and the court. In addition, the parties and their lawyers can, through creative negotiating, craft a resolution that is better accepted than one imposed by the court.

Thus, federal district judges routinely urge the parties that appear before them to try to settle their case without the need for a formal adjudication. Indeed, Federal Rule of Civil Procedure 16 expressly authorizes the district judge to facilitate settlement during a pre-trial conference. A judge may not impose a settlement or even negotiations on an unwilling party, but she certainly can cajole.

Of course, the Supreme Court is not a district court, and thus, one might think that it lacks the capacity to facilitate settlement. Yet that objection is wrong.

Workload is not an obstacle. On average, each federal judge disposes of over 300 civil cases per year, with only about one percent going to trial. (Statistics can be downloaded here.) In many of those cases, the parties reach a settlement without judicial intervention, but even so, the average district judge facilitates settlement in more cases than are even on the Supreme Court’s plenary docket in any given year. And in most of the cases that reach the Supreme Court, the parties will be divided by a pure question of law. If they have failed to settle by the time the case makes it to the high Court, then further negotiations seem unlikely to help.

Accordingly, the Supreme Court has the time to facilitate settlement in the relatively small number of cases on its docket where that might be possible. Zubik is a particularly appropriate case in which to make the effort because of the nature of RFRA. RFRA sometimes requires religious accommodations, and an accommodation is in the nature of a compromise.

The harder part in a case like Zubik is the nature of the proceedings. A district court settlement conference occurs in the judge’s chambers, with the judge supervising a back-and-forth conversation. By contrast, Supreme Court oral arguments are stylized affairs, with each lawyer taking his or her turn at the podium. That is hardly the best way to conduct a negotiation.

Even so, the Court has other tools at its disposal. It can appoint a special master. It can, as it did in Zubik, issue a post-argument order. Given its broad remedial power, it can even order the parties to negotiate, either directly, or via a remand to the district court.

There is a strong human tendency to confuse the familiar with the necessary. We are unaccustomed to the Supreme Court facilitating settlements rather than simply pronouncing what the law is. But that does not mean that this is an improper function. Chief Justice John Marshall famously declared in Marbury v. Madison that “[i]t is emphatically the duty of the Judicial Department to say what the law is.” It is no less emphatically the duty of courts—including the Supreme Court—to resolve concrete cases. The justices are entitled to kudos, not raised eyebrows, for taking that duty seriously in Zubik.

  • Joe Paulson

    “Obamacare” is misleading slang that shouldn’t be promoted. If necessary, in passing say “aka” or something, but unless you call Medicaid or Medicare by the President who signed it into law or something etc., don’t use that word.