So what does the Halbig decision in the DC Circuit mean for the Exchanges? On a practical matter, not much at the moment. And longer term, probably not much unless there are five assholes on the Supreme Court who decide that fucking with Obamacare is worth fucking with one hundred years of administrative law precedent.
The Halbig decision says that the IRS can not offer premium assistance tax subsidies to people who signed up for insurance on federally run exchanges as it was the clear intent of Congress to use tax subsidies as a hammer to get states to establish their own exchanges (bullshit) but that is their argument. People who live in states that have their own exchanges (like Kentucky and California) would still qualify for subsidies.
Under the original Senate logic of the bill, the state exchanges would be the default option as it would devolve power to the states instead of having a one size fits all federal solution. A federal exchange would be the back-up for states too small or too poor to establish their own exchange. The expectation was the federal exchange would carry states like Delaware, Wyoming and Vermont across the finish line. So even under the bullshit reading advanced by the majority of the DC panel, the federal exchanges would screw small state residents. Again, bullshit. The 4th circuit demolishes this idea.
And why am I not particularly worried? The government can ask for the entire active DC Court of Appeals to hear the case as a body. En Banc review is used for high profile cases or where the vast majority of the circuit thinks their colleagues fucked up big time.
The DC Court of Appeals currently has a 7-4 Democratic appointee majority and they’ll apply normal administrative law procedures to this case and tell their colleagues that they are fucking hacks in appropriately judgy language. Assuming the en banc review goes the way I think it does, all circuits will then agree that the IRS has the right to interpret ambiguous law as it sees fit as long as the interpretation passes a rationale basis/giggle test . If there is an all circuit agreement, the Supreme will have a real hard time taking the case to gut Red State subsidies.
And now let’s talk about the asshole of the day.
The two “intellectual fathers” of the anti-Obamacare lawsuits are Michael Cannon and Jonathan Adler. Their major brief on the Halbig case contains a massive factual error that invalidates their argument. Balkinization explains:
In a recent blog post, Cato scholar Michael Cannon admitted that he and his colleague, Case Western University professor Jonathan Adler, had made a mistake in an amicus brief they submitted to the courts in the Halbig and King cases. We all make mistakes—indeed Michael has claimed that I have made many mistakes in my analysis of these cases, some of which were indeed mistakes. This mistake is important, however, because it goes to the central argument that he and Jonathan have relied on in their brief….
When Michael Cannon first noticed this provision in the fall of 2011, he described it as a glitch. He must have realized, however, that the federal courts would be reluctant to invalidate a major federal program based on a “glitch.” He and Jonathan Adler, therefore, have constructed an increasingly elaborate legislative history for the provision.
First, they wrote a papersuggesting that the Senate HELP Committee, which developed its own draft of the legislation, wanted deliberately to threaten states with withholding subsidies from states that did not set up Exchanges. Since then, in amicusbriefs, Michael and Jonathan have argued that earlier health reform laws enacted or considered by Congress similarly threatened withholding of subsidies from individuals or businesses unless states agreed to comply with federal requirements.
Of course, Congress did not adopt the HELP bill or earlier proposals, but rather adopted the ACA, which contains federal fallback exchanges which step into the shoes of states that fail to establish their own exchanges, a different approach to encouraging the states to take action. In his “erratum,” Cannon admits that he was wrong as to at least one of those earlier proposed programs, further weakening his argument.
Cannon’s error is one of a flood of misstatements that the opponents of the ACA have propagated, from “death panels” at the outset to “no federal exchange tax credits” now.
Michael Cannon and Jonathan Adler did not withdraw their brief or otherwise attempt to get Halbig et al to drop the case based on significant error. It is almost like Cannon and Adler are neo-feudalists who want to fuck the poor, the middle class and anyone else in this strand of the multiverse who is slightly less privileged than themselves. So they get the asshole of the day award.
NB Remember legal “history” is not concerned with verifiable truth, rather it is concerned with creating a patina of “truthiness” to win an argument.
SiubhanDuinne
Didn’t realize that was up for debate :-)
SiubhanDuinne
Actually, snark and silliness aside, I find this a reassuring post.
rikyrah
Glad to see you reply on this. was wondering what you thought about it.
The DEMS need to make this PERSONAL to the 20 million people who have been helped by Obamacare. Stop being afraid and club the GOP over the head with what the loss of the subsidies would mean to them.
Richard Mayhew
@SiubhanDuinne: The key question is two fold — are there five justices who really want to make a hash of a century of administrative law precedent to take another swing at Obamacare especially when the punch is aimed at Republican base voters and Republican base donors (Blue states either have or will quickly establish their own Exchanges and continue to get the Obamacare money flows to boom their local economies). And if the first answer is yes, will one or both of Scalia and Thomas die before the decision is set.
kc
Well . . .
kc
Is Balkin just being generous in characterizing Cannon’s misstatement as a “mistake” rather than a “lie?”
JPL
@Richard Mayhew: What the Roberts’ court giveth the Roberts’ court can take away.
When Roberts’ ruled states rights in allowing the fed to set up exchanges, it seemed to me to be a poison pill. It would be unfortunate if Roberts had another seizure.
Baud
When are insurance companies going to get pissed enough to fight the Republicans on this?
dmsilev
@Richard Mayhew: The irony is that if this decision does end up standing, it will amount to a fairly large transfer tax from the Red states to the Blue.
SiubhanDuinne
@Richard Mayhew:
It’s a very good question. If you were talking about Members of Congress (House), we already know the answer. But I do continue to hold out a modicum of hope that SCOTUS will think, however occasionally or briefly, of its legacy, and Do the Right Thing. Also, as they are in the pockets of Wall Street, I imagine there’s some good old-fashioned economic pressure being brought to bear on the justices.
Why yes, I am a total cynic at this point.
Linnaeus
@Richard Mayhew:
They’re going all out on this one. Because a functioning – albeit suboptimal – health care insurance system with expanded access is a major threat to TPTB. It might get people thinking that such programs are with supporting and expanding. It might get people thinking that 40 years of dismantling the public sector in the name of a radical laissez-faire philosophy (which has never been the operating principle of any functioning capitalist economy) really wasn’t a good idea. Worst of all, from the viewpoint of TPTB, it might get people thinking that their “natural” betters aren’t better at all.
Linnaeus
@Richard Mayhew:
They’re going all out on this one. Because a functioning – albeit suboptimal – health care insurance system with expanded access is a major threat to TPTB. It might get people thinking that such programs are with supporting and expanding. It might get people thinking that 40 years of dismantling the public sector in the name of a radical laissez-faire philosophy (which has never been the operating principle of any functioning capitalist economy) really wasn’t a good idea. Worst of all, from the viewpoint of TPTB, it might get people thinking that their “natural” betters aren’t better at all.
Bobby Thomson
@kc: yes.
Karen in GA
Whether we have a functioning democracy depends on the honor of a bunch of yahoos who think honor is a character flaw.
(I was going to write something about the ACA, but the knots these people will tie themselves in to destroy it is just a symptom, so to speak, of a much nastier disease.)
jl
IANAL, but last I raslted with the BJ laywers, conclusion was that any sensible person would not call this a ”glitch’ but a tendentious and dishonest word game (in the worst sense of that term).
Omnes Omnibus (the first of his name)
I am really rather shocked at the number of people who have taken this decision as an excuse to fall into the pit of despiar and predict the end of our democracy. I think that RM’s analysis is spot on and the Court will not fuck up 100 years of admin law precedent over this. There are no Constitutional issues involved in this case and, if the en banc hearing goes as everyone expects, there will be no split between the Circuits.
Just as a FWIW, the two supreme court justices with the worst record of agreement (RBG and Alito) agree 75% of the time.
Omnes Omnibus (the first of his name)
@Omnes Omnibus (the first of his name): Sotomayor and Alito are also at 75%. Source.
Woody Peckerwood
Yeah, we can simply look at the statute and substitute “federal” for “state”.
Who needs absolutes?
jheartney
TPM has a story up to the effect that some minor paperwork would let states deem the federal website to be their state exchange, at which point the subsidies could go forward. I think if it comes to that (i.e. if SCOTUS decides to take another dump on long-established law), there’ll be enormous pressure on local legislatures to fix the problem. Not necessarily because of local ACA beneficiaries (though there’ll be plenty of those), but because insurance companies, hospitals and doctors are all wired into ACA, and will be more so in a year or two when SCOTUS rules. Suddenly ripping it out will be highly destructive to these extremely well-connected parts of local political establishments.
We’re past the point when a legal technicality could bring down ACA. It’s way too big, and has way too many well-connected constituencies, for it to be brought down. (I’d love to say that it’s too beneficial to be brought down, but alas that does not mean so much these days.)
Howard Beale IV
@Omnes Omnibus (the first of his name): So what? Doesn’t mean these fucksticks won’t go before the Supreme’s who won’t be at all hesitant to fillet it to appease their corporate paymasters.
Omnes Omnibus (the first of his name)
@Howard Beale IV:
My post said that I disagree with that assessment.
burnspbesq
@Richard Mayhew:
There is definitely one. Scalia has never made any secret of the fact that he’d like to stick a chainsaw up the ass of the Chevron doctrine.
Omnes Omnibus (the first of his name)
@efgoldman: We can assume that Rogers Brown is a hack.
pseudonymous in nc
I recommend sending medical bills to Professor Adler and Mr Cannon, or at very least, inform their medical and insurance providers that those two fuckers have agreed to cover them.
Volokh Sociopathy.
Baud
@burnspbesq:
Scalia doesn’t hate Chevron. He hates Auer deference.
burnspbesq
@pseudonymous in nc:
I was thinking about having pepperoni and ham pizzas delivered to their respective offices, but they’ll probably get a hundred of them, and the libertarian fucks will toss them in the nearest dumpster rather than call the local food bank to come get them.
Omnes Omnibus (the first of his name)
@burnspbesq: Pizza Hut or Domino’s?
Suffern ACE
This is a “I might not have paid enough attention in Civics Class” question for the lawyers who hang out here. Why is it that these cases always seem to be automatically appealable until someone can find a decision that they want. It seems like if you have a business case, you can just appeal it all the way up the chain if you aren’t happy with the outcome. I know that the supreme court decides what cases it wants to take, but is it simply the case in our system, if you have the money, you can just appeal and appeal?
Omnes Omnibus (the first of his name)
@Suffern ACE: As you noted the Supreme Court chooses which cases it will take. As far as appeals of civil case go, if you can afford it you can do it.
catclub
@dmsilev:
Well, my theory (which is mine) is that since that would be so unfair to red state citizens, Roberts will invoke equal state sovereignty to invalidate the whole thing, rather than leave in place the happy blue state citizens.
Which amendment demands equal treatment under the law?
burnspbesq
@Omnes Omnibus (the first of his name):
Doesn’t matter. They both suck.
Roger Moore
@jheartney:
Which would be fine if it weren’t state officials who were suing to get the subsidies overturned. What are the chances of a state whose attorney general was part of the suit turning around and asking for its citizens to get the subsidies anyway?
catclub
@jheartney:
I used to think that, when I thought that all the holdouts on Medicaid expansion would last about a year. Those doctors and hospitals have had zero clout to change the minds of redstate governors.
Now I think they will go forever.
Maybe I will be wrong on THAT prediction.
Roger Moore
@Suffern ACE:
Because that’s the whole point of an appeal; if you think you got jobbed by the court, you can ask a higher court to reverse the decision. Of course it isn’t quite that simple; you can’t just say you don’t like the outcome. You actually have to come up with something the lower court did wrong that you’re appealing or, in rare cases, claim that the judge made the right call according to existing precedent but that the precedent deserves to be overturned. If you’re just appealing because you’re unhappy with the decision, the appeals court will slap you down in a hurry and may make you pay the other side’s fees for the appeal while they’re at it.
raven
Looks like Jody Hice in GA 10. The morons win the day.
TriassicSands
Unfortunately, we already know those five justices’ names and how much they think of precedent when it stands in the way of their political agenda. It seems the five have come to accept Justice Thomas’ opinion that “precedent” is merely “that which came before” and not something that deserves consideration and possibly even respect.
This could be the opportunity Roberts has been waiting for to redeem himself in the eyes of the country’s radical right, a group to which he proudly belongs. But his vote on the constitutionality of Obamacare undoubtedly raised doubts among the true believers. Now, he could deal a lethal blow to the hated Obamacare (what’s not to hate about a law that provides affordable health care coverage to millions of Americans?), while allowing him to continue to claim that he had also given Obamacare a chance with his original ruling. Having it both ways is the hallmark of the slippery Roberts.
The Raven on the Hill
“are there five justices who really want to make a hash of a century of administrative law precedent?”
After Citizens United you need to ask? I hope this is reversed by the en banc review.
Omnes Omnibus (the first of his name)
@The Raven on the Hill: What does Citizens’ United have to do with a willingness to make a complete mess of administrative law? Please try for something other than “Those assholes will do anything.” Citizens’ United is a extension of previous precedent – my opinion it was a bad extension of bad precedent, but it was not a lawless opinion.
Kay
@Omnes Omnibus (the first of his name):
I think people are just tired. This has been going on for 5 years now. It starts to seem really malicious and ugly and it wears people down. The complete disconnect between the preening Federalist Society lawyers and their Grand Theories and what this would mean as a practical matter disgusts me.
Mnemosyne
@Omnes Omnibus (the first of his name):
Little Caesar’s.
catclub
@Kay: Yes. if you step back and ask ‘Is this the intent of the Congress’?
then the obvious answer is no. Finding a yes there is malicious – towards all the people this is designed to benefit.
Omnes Omnibus (the first of his name)
@Kay: I am tired as well. I am tired of what the right is doing, but I am also tired of my side focusing on the negative so damned often.
Kay
@catclub:
It’s also how impressed they are with their own brilliance. It doesn’t take a genius to dismantle something. Now we’re all supposed to spend the next year trying to read Justice Scalia’s mind. Forget that. He’ll do whatever he’ll do. I’m tired of trying to figure out what they’re going after next and what their career goals are.
We don’t have a Congress. It’s broken. Opportunistic ideologues on courts have stepped into that void. Our system wasn’t designed to work without a functioning legislative branch, and it won’t work with just the executive and judicial branches. At this point conservatives are destroying the structure itself. The Roberts court is eagerly tearing down every law they can possibly bring up there, and nothing replaces what they throw out because the conservatives in Congress have simply decided to abandon lawmaking completely.
Kay
@Omnes Omnibus (the first of his name):
Well, I get sad but then I get fatalistic and I’m happier in that frame of mind :) I lose enough in my work to have a whole process in place. We’re at Stage One.
I actually had a good night. I met with the candidate for the statehouse. He’s interesting. He’s a physician and he’s funding his own campaign. He met with labor tonight. He’s brutally honest. I can’t imagine how they managed to recruit a physician with 300 acres of farmland to run as a Democrat in this area. It’s like he was a mirage :)
cmm
@catclub:
Pressure is still building. I live in GA and there is lots of news about hospitals closing or teetering on the brink because they can’t afford to stay open.
it’s only been 9 months since the ACA truly started to go into effect. I think the “no Medicaid expansion” states will begin to fold after the 2014 elections. Carter (D Governor candidate) and other state level candidates are running on this issue.
We focus so much at this point on the nitty gritty of the final stage of ACA implementation but try to stop every once in a while and think back to the horrendous insurance stories that were getting press in 2008-2009. They seem like ancient history now in terms of recission and terrible policies that don’t cover anything and all that stuff. It is amazing to see that much is in the rearview mirror. This too will pass.
Omnes Omnibus (the first of his name)
@cmm:
This.
eemom
@Omnes Omnibus (the first of his name):
This. What a day of brain dead, hair-on-fire, playing right into the emmessemm faux frenzy it’s been.
Kay
I hope this is true. They have to say something about it if they’re asked, and what are they going to say? “I’m glad that a court said that people in my state might lose their health insurance subsidy”?
If they don’t say it’s good their Tea Party base will be mad, and if they do say it’s good it’s like they’re picking on individual people, half of whom (in this state) probably voted for them.
burnspbesq
@eemom:
That’s not entirely fair. For the two hours between when the D.C. Circuit opinion came out and the Fourth Circuit opinion came out, it was quite reasonable to believe that y’all in the 36 states that don’t have their own exchanges were well and truly fucked.
Eric U.
@Kay: the ACA decision has resulted in people dying. The asshole 5 on the SCOTUS don’t care. It seems to me that there isn’t much more to be said about these people, they are really are living proof that evil walks among us. But after they installed Bush, it was obvious that they could do anything they wanted. It’s a little surprising that they waited as long as the ACA case and Hobby Lobby to go off the rails
eemom
@burnspbesq:
um, if you’re assuming that the full DC CTA would reverse this for no other reason than that the 4th Circuit came out the other way, sure, I guess.
Mnemosyne
@eemom:
It’s buried in previous comments, but apparently the DC CTA was one of the beneficiaries of the recent Senate deal to stop filibustering all judges, so the majority is now Obama appointees. It would be pretty shocking if the full court went the same way as these two Bush (I and II) appointees.
eemom
@Mnemosyne:
Right, and my point is that was the case (pun intended) from the instant the panel decision came down, regardless of how the 4th Circuit ruled.
JohnM
I’m sorry, the card says moops.
http://youtu.be/Ia02fGpUQfU
Dexter's New Approach
So worst-case, (mostly) blue states will have a much more insured population with all the benefits that go with that, while the (mostly) red states will have the opposite. And the (mostly) blue states will recoup some of the net federal tax payout deficit that still favors red states. The red states will effectively be financing the ACA subsidies for blue state residents.
It would suck for the uninsured in red states, but maybe it’s better to have the ACA only in places where the people – and the people that run it – actually want it to succeed. At least in the earlier stages.
Conservatives have yet to show a single compelling victim of the ACA – the ones they put out there are easily debunked (which is odd, there should be some really bad stories.) But if this ruling becomes law, there will be millions of stories of people’s lives temporarily improved under the ACA, but then suddenly fucked again. Real stories, juxtaposed by the same people in covered states, lives improved or even saved by the ACA. And below the surface, the technocratic improvements, in care and cost, that will be more obvious in ACA states over time.
So it’s possible that a “bad” ruling helps the long-term case for universal healthcare.
patrick II
That is pretty much how I felt about recess appointments.
boatboy_srq
@Dexter’s New Approach: If I’m reading some of the fearmongering about the Roberts court right, the worst-case is that the five wingnuts on SCOTUS will deem the subsidy itself unconstitutional, and void all payments to red and blue states alike, state exchange or no.
The case you present is actually pretty tame compared to that, and has the (unfortunate) virtue of visiting the worst of the wingnuts’ own designs on their own followers. It would be instructive – not to mention entertaining – to watch the oi polloi react to the Teahad’s desperate push to scr3w them just for being
poornon-whiteinsufficiently XtianunElect. I had the same reaction to LCR and GOProud as they desperately tried to pretend that their supposed allies weren’t insisting that they FOAD as a matter of principle (and doing their part to make it as uncomfortable and demeaning a FOADing as possible).Matt McIrvin
@boatboy_srq: At this point I have a hard time believing it wouldn’t just be blamed on Obama and Obamacare somehow. One of the things that grinds us down is watching the lack of accountability in public opinion; the Republicans usually gain politically from sabotage, and it’s as if cause and effect have been divorced from one another.
Matt McIrvin
… Then again, I figured the endpoint of Hobby Lobby would be that they consider the contraceptive mandate non-separable and void the entire ACA over it.
Kay
@Eric U.:
Yeah, I don’t defend them anymore. I think you’re right to be mad and you’re right to second-guess why they rule the way they do. It IS tiring and frustrating. I agree.
Ultimately, though, the problem is (IMO) a structural failure, a system failure. Courts will continue to have an outsize role, be way out in front, as long as Congress is broken. Conservative judges are stepping into a void left by Congress, just as the President is stepping into a void left by Congress with administrative actions. It’s inevitable. There’s a hole and it gets filled.
I read yesterday that the Tea Party is quietly targeted those few Republican House members who hinted they might write some legislation to replace the gutted Voting Rights Act. We’re not going to get any new law to replace those parts of the Voting Rights Act. Roberts repealed a big chunk and now conservatives in Congress will block any rewrite. Conservatives win that round, I guess, but John Roberts isn’t supposed to be setting policy for tens of millions of people on everything from voting rights to labor rights to gun control to intricate details like which prescription drugs are covered by insurance plans. Our system wasn’t designed to work this way, where Roberts is leading on policy by default.
That’s a system problem. We can’t have a functioning system that consists of the President and judges, executive and judicial.
Bobby Thomson
@Omnes Omnibus (the first of his name): Well, although I admit that Josh Marshall’s initial breathless panic was embarrassing and failed to recognize the decision would almost certainly get en banc review, it’s not exactly Defcon 5, either. It’s not a gimme that there will be no circuit split after the D.C. and Fourth Circuits both have en banc rehearing. It’s also not a gimme that the SCOTUS would deny cert even in the absence of one. It just takes four votes, and last I counted there were five assholes on the Court, of whom at least three are true believers. They will have no problem ignoring decades of precedent – they didn’t in Lopez, and they didn’t when they invalidated the VRA. And I’m not convinced that Roberts isn’t as much of a hack as the others – he’s just playing a long game like Rehnquist.
Bobby Thomson
@Omnes Omnibus (the first of his name):
Why? Face facts. Or aren’t you a legal realist?
Richard Mayhew
@boatboy_srq: I’m not worried about the tax credits being deemed unconstitutional. Congress has the power to tax and not tax as it generally sees fit, and saying tax credits are in and of themselves unconstitutional makes a general hash of almost all Republican pet rocks.
Kamron
@Richard Mayhew: “are there five justices who really want to make a hash of a century of administrative law precedent”
I would hazard the guess that *if* there are five votes upholding the tendentious reading of the law that subsidies aren’t permitted on the federal exchange, they’ll either:
1)as the appeals court did, claim that Chevron doesn’t apply because this tendentious reading is the only possible reading or
2)add one of those this-is-complicated-ergo-no-precedent clauses that have been all the rage ever since the court discovered back in December of 2000 that they could get away with that and not end up strung up on the nearest lamppost