Topic: Law and Civil Liberties

King v. Burwell: Six Humpty Dumptys Playing Calvinball

My King v. Burwell recap is up at SCOTUSblog. Excerpt:

In King v. Burwell, all nine Supreme Court Justices agreed on one thing. The King challengers claimed the Patient Protection and Affordable Care Act (ACA) authorizes the Internal Revenue Service to issue tax credits and impose the related penalties only “through an Exchange established by the State,” and not through exchanges established by the federal government. “Petitioners’ arguments about the plain meaning of Section 36B are strong,” Chief Justice John Roberts wrote, and their interpretation is “the most natural reading of the pertinent statutory phrase.” Justice Antonin Scalia agreed, finding the meaning of that phrase “so obvious there would hardly be a need for the Supreme Court to hear a case about it.”

There was no dissent about the plain meaning of the phrase “through an Exchange established by the State.” All seven of the other Justices joined one of those two opinions. Nor was there dissent about the fact that that phrase, used repeatedly in the statute, is the only provision of the Act that speaks directly to the question presented. Not a single Justice lent credence to the government’s assertions that this was a meritless case, or one that the Court should never have accepted. Nor was there dissent about the consequences of that provision’s plain meaning in the face of broad state resistance to the ACA. All agreed that withholding tax credits in the thirty-four states with federal exchanges could lead to adverse selection in those states, with premiums climbing higher and higher in a “death spiral.”

Where disagreement emerged was over the question of whether the former should alter the latter – whether the potential for adverse consequences “compels” the Court to disregard the universally acknowledged meaning of the operative text. The Court split six to three in favor of rewriting plain text, and rendering the requirement “established by the State” a nullity…

Roberts managed to conclude that “by the State” could be read to mean “by the federal government,” even though he acknowledged Congress explicitly defined “State” in a way “that does not include the Federal Government.” So perhaps spending more time with the statute would not have helped.

The King ruling is actually much, much worse than this excerpt suggests. Read the whole thing. For a reference guide to King, click here.

Big Win for Equal Liberty, Shows How Far We’ve Come

Just because today’s opinion was expected by all doesn’t make it any less momentous. A five-justice majority writing through Justice Kennedy finds that there’s a constitutional right for gay and lesbian couples to get marriage licenses – at least so long as everyone else gets them. (We’ll set aside the question of why the government is involved in marriage in the first place for a later time.)

In sometimes-soaring rhetoric Kennedy explains why the Fourteenth Amendment’s guarantee of both substantive liberty and equality means there is no further valid reason to deny this particular institution, the benefit of these particular laws, to gay and lesbian couples.

Not surprisingly, all four conservative justices dissented. Indeed, it’s interesting that each of them wrote his own dissent, each riffing on the same theme. That is, regardless of your views of how to define marriage this is a decision that should be left to the people in their states, not to courts.

Chief Justice John Roberts in particular said that people who benefit from today’s ruling should celebrate it, should celebrate this development in our society. But make no bones about it, this doesn’t relate to the Constitution. (Where was this principled logic yesterday?)

In any event, this will be a case that is studied for generations. There aren’t clear, bright-line rules about levels of scrutiny or any other legalisms – avoiding that artifice is all to the good – and it’s a landmark ruling that shows how far we’ve come.  It was in 2003 that the Court had to invalidate the criminalization of gay sex and a mere 12 years later it commands state officials to issue marriage licenses to same-sex couples.

Good for the Court – and I echo Justice Kennedy’s hope that both sides now respect each other’s liberties and the rule of law.

Libertarians and the Long Road to Gay Rights

Justice Anthony Kennedy has been called the most libertarian member of the Supreme Court (though Ilya Shapiro finds his libertarianism “faint-hearted”). So maybe it’s no surprise that in the Lawrence (2003), Windsor (2013), and Obergefell (today!) cases, Kennedy wrote a majority decision finding that gay people had rights to liberty and equal protection of the law.

As I note in The Libertarian Mind and in an article just posted at the venerable gay magazine The Advocate, libertarians and their classical liberal forebears have been ahead of the curve on gay rights for more than two centuries: 

As the Supreme Court prepares for a possibly historic ruling, most of the country now supports gay marriage. Libertarians were there first. Indeed John Podesta, a top adviser to Bill Clinton, Barack Obama, and Hillary Clinton and founder of the Center for American Progress, noted in 2011 that you probably had to have been a libertarian to have supported gay marriage 15 years earlier.

Just seven years ago, in the 2008 presidential campaign, Barack Obama, Joe Biden, and Hillary Clinton all opposed gay marriage. The Libertarian Party endorsed gay rights with its first platform in 1972 — the same year the Democratic nominee for vice president referred to “queers” in a Chicago speech. In 1976 the Libertarian Party issued a pamphlet calling for an end to antigay laws and endorsing full marriage rights.

That’s no surprise, of course. Libertarians believe in individual rights for all people and equality before the law. Of course they recognized the rights of gay people before socialists, conservatives, or big-government liberals.

One Consequence of King v. Burwell

Some say that today’s decision maintains business as usual for Obamacare, taxpayers and consumers. The Supreme Court upheld the subsidies (also known as the Premium Tax Credit) to consumers in the 34 states that rely on the federal exchange. Proponents of these subsidies argue they help keep health insurance affordable.

The subsidies lower the out-of-pocket cost to consumers who get them, but at what cost? Consider a 64-year-old consumer in Hialeah, Florida (one of the largest areas impacted by King v. Burwell) who is receiving the maximum subsidy of $7,488 per year. Of the 87 plans offered in the marketplace, 16 entail zero cost to the consumer. Premiums for these “free” plans range from $6,300 to $7,200. There is no incentive for the consumer to shop prudently from these 16 plans. The consumer does not get to keep any unused subsidy, creating incentives to choose health plans with additional features of only marginal value. The taxpayer – not the consumer – picks up the cost of the imprudent choices.

In addition to discouraging shopping based on plan value, the premium tax credit offers a set of perverse incentives, especially on the decision to earn more than 400% of the poverty line and on reporting your income for the upcoming year.

Today’s decision may very well mean business as usual, but there are serious economic issues with how the subsidy is set up.

SCOTUS OKs Liability for Unintentional Housing Discrimination

Stop calling it fair housing law. If it was ever a matter of fairness, it isn’t now.

Under today’s 5-4 Supreme Court holding in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, you can be held liable for housing discrimination whether or not you or anyone in your organization intended to discriminate. Instead – to quote Justice Anthony Kennedy, who joined with the Court’s four liberals in a 5-4 majority – you might have been influenced by “unconscious prejudice” or “stereotyping” when you lent money or rented apartments or carried on appraisal or brokerage or planning functions. What you did had “disparate impact” on some race or other legally protected group, and now you’re caught up in potentially ruinous litigation in which it’s up to you to show that you had a good reason for what you did and could not have arranged your actions in some other way that had less disparate impact.   

John Roberts Rewrites Obamacare Yet Again

“If we give the phrase ‘the State that established the Exchange’ its most natural meaning, there would be no ‘qualified individuals’ on Federal Exchanges.” You’d think that I pulled that phrase from Justice Scalia’s dissenting opinion in today’s big Obamacare ruling—it makes clear that Congress said what it meant in the ACA, giving states the incentive to create exchanges by making their citizens eligible for tax credits if they do—but you’d be wrong.

It comes from the pen of Chief Justice Roberts, who admits, as he did three years ago in the individual-mandate case, that those challenging the administration are correct on the law. Nevertheless, again as he did before, Roberts contorts himself to eviscerate that “natural meaning” and rewrite Congress’s inartfully concocted scheme, this time such that “exchange established by the state” means “any old exchange.” Scalia rightly calls this novel interpretation “absurd.”

Of course, Roberts explains his transmogrification by finding it “implausible that Congress meant the Act to operate in this manner,” to deny subsidies to millions of people as part of legislation intended to expanded coverage. But it’s hardly implausible to think that legislation that still says that states “shall” set up exchanges—the drafters forgot to fix this bit after lawyers pointed out that Congress can’t command states to do anything—would effectively give states an offer nobody thought they’d refuse. It was supposed to be a win-win: states rather than the federal government would run health care exchanges (yay federalism!) and all those who need subsidies to afford Obamacare policies would get them (yay universal healthcare!).

The Court Today: At Once Deferential and Activist

A few additional broader thoughts on the Court’s King v. Burwell ruling today. First, technically, this is not an administrative law ruling. That is, the Court did not apply so-called Chevron deference and thereby uphold the IRS’s reading of the relevant Affordable Care Act’s provision. But practically, it comes to the same thing. In both cases, a provision that makes tax credits available to eligible individuals who buy insurance on exchanges “established by the State” is read to mean that those credits are also available to individuals who buy on exchanges established by the federal government.

Rather, this is a statutory ruling—as if the IRS had never interpreted that provision and the Court were doing so as a matter of first impression. And the tangled web the Court weaves in reading “established by the State” as meaning “established by the State or by the federal government” is reduced to shreds by Justice Scalia’s devastating dissent. It is a tour de force that must be read.

Toward the end of his dissent, however, Scalia waxes more broadly, on the proper roles of Congress and the Court. “Our task,” he writes, “is to apply the text, not to improve upon it.” “Rather than rewriting the law under the pretense of interpreting it, the Court should have left it to Congress to decide what to do about the Act’s limitation of tax credits to state Exchanges.” “The Court’s insistence on making a choice that should be made by Congress both aggrandizes judicial power and encourages congressional lassitude.” And he concludes this important section of his dissent with Hamilton in Federalist No. 78: “What a parody today’s decision makes of Hamilton’s assurances [that the Court has] ‘neither FORCE nor WILL but merely judgment.’”

With Chief Justice Roberts’s opinion for the Court, therefore, we have a perverse blend of the opposing positions of the judicial restraint and activist schools that reigned a few decades ago. To a fault, the Court today is deferential to the political branches, much as conservatives in the mold of Alexander Bickel and Robert Bork urged, against the activism of the Warren and Burger Courts. But its deference manifests itself in the liberal activism of a Justice Brennan, rewriting the law to save Congress from itself. As Scalia writes, “the Court forgets that ours is a government of laws and not of men.”