Last week, citing a post by Allahpundit, I mentioned the case that could kill most ObamaCare subsidies: Halbig v. Sebelius. I have now listened to the oral argument (.mp3 audio download) from the appeal in the D.C. Circuit Court of Appeals, and I am now convinced that the judges on the panel will rule 2-1 against Obama. As the title implies, this is a Big F*cking Deal, and I’d like to go through the highlights of the oral argument to explain why I think so.
A decision could come down any day now, by the way:
To review from my original post on the matter: The law’s plain language says subsidies are available only when a health plan is purchased on an exchange “established by the state under section 1311.” 34 states refused to establish an exchange, after which the HHS Secretary invoked her authority to set up federal exchanges under a different section: section 1321. Then the IRS promulgated a rule that said exchanges set up by the Secretary under section 1321 were actually exchanges “established by the state under section 1311.”
The plaintiffs in the lawsuit say: “state” does not mean “federal government.” The exchanges established by the HHS Secretary under section 1321 are not “established by the state under section 1311.” Making the point even clearer: a “state” is defined in the ACA as “each of the 50 States and the District of Columbia,” they note, and not the federal government.
The Obama lawyers say: oh, come on. Don’t look at the plain language of that one provision. You gotta look at the whole law and the intent of Congress.
THE ORAL ARGUMENT
That sets the stage for the oral argument, and while I could give you a blow by blow, I want to concentrate on a couple of points that jumped out at me as significant. The plaintiffs, of course, rely on the plain language of the provision, which is the key to the outcome. But they also argue that Congress intended to limit subsidies to plans bought on state exchanges. The main argument made by the plaintiffs along these lines goes like this: Congress limited subsidies to plans bought on state exchanges in order to provide the states with an incentive to create their own exchanges. An interesting exchange along these lines was already reported in a Federalist Society blog post:
Judge Randolph seemed inclined to side with the plaintiffs, while Judge Edwards heatedly disputed with both the plaintiffs and Judge Randolph.
“Your argument makes no sense,” Judge Edwards said. “Who cares who sets up the exchanges?”
Judge Randolph retorted: “Ben Nelson.”
Mr. Nelson was a Democratic senator from Nebraska at the time the Affordable Care Act passed, and he was viewed as the key swing vote — and was seen as wary of expansive federal control of the health care system. . . .
Indeed. Judge Randolph makes a great point: the Democrats needed Ben Nelson’s vote, and he at least purported to be in favor of federalism. To pacify him, the law was set up so that the states would be the ones, in the first instance, that would supposedly set up the exchanges. Indeed, the plaintiffs argue, Congress apparently expected every state to go along — why turn down free money? — just like Congress was so confident that states would accept Medicaid expansion that they didn’t even provide subsidies for people making less than the poverty level, because they assumed (wrongly) that every state would expand Medicaid for those people.
When Judge Edwards argued that absolutely nobody believed that this would be the result, and that this was a recently concocted argument, Judge Randolph noted that Investors’ Business Daily pointed it out in a piece in 2011 (which is admittedly after the passage of the law. You can read that piece here).
There is no question where Judge Edwards stands, as he called the arguments of the plaintiffs “preposterous.” There is also no question that Judge Randolph will vote that there are no subsidies under the federal exchanges; as he said: “If the legislation is just stupid, I don’t see that it’s up to the court to save it.” That leaves Judge Griffith as the swing vote here, and in over an hour of arguments, I didn’t hear him say one thing supportive of Obama’s position. One point you may not have realized: Griffith is the judge nominated by George W. Bush after Miguel Estrada was filibustered into frustrated submission and withdrew his name from consideration.
The most important point I heard Griffith make during the whole argument was this: the states can still set up exchanges after this ruling. The states will have to explain to their citizens that the subsidies they thought they were going to get, they actually won’t get — only because the state declined to establish an exchange. That will put tremendous pressure, not just on Congress to amend the statute (which likely won’t happen), but also on individual states to establish their own exchanges (which probably will happen in several of the 34 states that have to date failed to establish an exchange).
In other words: Judge Griffith will argue that he is not preventing people from getting their subsidies. The states are, by not setting up the exchanges — which they can still do.
(It should be noted that, as the subsidies are removed, many people will, for the first time, be legally excused from the mandate. That’s because the law contains a provision that the penalty, er, tax, will not be imposed on people who can’t afford insurance — defined as people who would have to pay more than 8% of their income for health insurance. As the subsidies disappear, this group of people will greatly expand — removing even more revenue for insurers, and potentially causing the structure of ObamaCare to collapse.)
BOTTOM LINE: After hearing the entire argument, I am convinced that we are about to see a 2-1 ruling against Obama from this panel.
WHAT HAPPENS NEXT?
Even if the panel rules the right way, as I expect they will, there is a long road to a final decision, likely beginning with an en banc rehearing:
If the three-judge panel rules against federal Obamacare subsidies, sources close to the case say the administration is very likely to request an en banc ruling — a re-vote taken by the full D.C. Circuit. The math of the overall bench is friendlier to the White House: 7 judges are Democratic appointees and 4 are Republican appointees. Four of the judges were placed by President Barack Obama himself, all during his second term.
Any time you forego plain language in favor of rootless searches for legislative “intent,” you give dishonest leftists an opening. And the brute politics of the makeup of the full en banc panel — together with the malleable “intent” standard that gives those judges a warrant to write their own preferences into the law, and the text of the statute be damned — make a pro-Obama ruling from the en banc court seem likely.
Of course, the matter will likely eventually end up in the U.S. Supreme Court, unless they chicken out and refuse to hear it, which seems to me unlikely. I like our chances there better. Kennedy, often a squish, was a solid vote against ObamaCare in the previous major ObamaCare decision. I know you guys are skeptical about what John Roberts would do, but I think there is a better than even chance that he would choose the textualist approach.
In fact, if the Justices were to be honest, this would be a unanimous decision against Obama in the Supreme Court. Jonathan Adler has collected some recent quotes from the Supreme Court on rewriting statutes to reflect “intent” — and even the lefties are not supportive of the idea . . . in the right case. Justice Kagan said in one opinion: “This Court has no roving license, in even ordinary cases of statutory interpretation, to disregard clear language simply on the view that (in [the IRS’s] words) Congress ‘must have intended’ something broader.” But that was said in a boring lawsuit about American Indian tribal sovereign immunity. Somehow, I think Kagan will find a different principle applies when Obama’s health care subsidies are at stake.
THE TRIUMPH OF TEXTUALISM AND THE DEATH OF APPEALS TO “INTENT”
Once conservatives understand the issues at stake in Halbig, I believe that will be the death knell for the theory that says judges should choose unexpressed intent over the plain language of a statute — at least for conservatives. Choosing unexpressed intent over plain language is how leftists have undermined the rule of law in this country for decades. It must stop. The more conservatives awaken to the issues in Halbig, the better chance we have to make it stop.
Appealing to Congress’s subjective “intent” is the subsidies’ only hope for survival. An appeal to “intent” is the only method leftists have available in this case to twist the words to their purpose. A textualist approach means most ObamaCare subsidies will be found unlawful. There is zero debate: a plain language, textualist approach in this case means Obama loses. That’s why every Democrat rejects a plain language approach in this case, and tortures the text to argue that Congress’s “intent” was to provide subsidies for all. As one of the judges said at oral argument, the legislative history is a “wash” — which at least gives Democrats a fighting chance to argue for their version of “intent.”
Notably, Nancy Pelosi and others have filed a brief (.pdf) in Halbig saying: we really meant to provide subsidies on federal exchanges. If a court elevates subjective intent over the plain language of the law, that court might well give great weight to Pelosi’s brief.
But even if Pelosi is telling the truth, that does not end the matter. Even if we foolishly looked only to “intent” and not to the plain language, the “intent” of everyone who voted would be relevant, I would think. And there’s the rub. Pelosi might have “intended” one thing, and Ben Nelson another. This shows why trying to divine legislative “intent” is a fool’s errand. As I have argued before, legislative intent should not be a judge’s focus in interpreting a law. For one thing, you can’t ever discern a collective “intent” from a collection of different politicians, except by examining what they actually said. That’s why the only reasonable way to resolve the issue is to look at the plain language of the law, and enforce that.
Forget “intent.” Intent does not matter unless it is conveyed in the language of the law. Period. This isn’t just about one result, however important that result is. Original understanding alone preserves the rule of law.
IF YOU WANT TO GEEK OUT: The law is here. Jonathan Adler’s initial post on this is here, and a follow-up is here. The lower court decision ruling for Obama is here (.pdf). Pelosi’s brief is here (.pdf). Adler and Cannon’s amicus brief is here (.pdf). A great Federalist Society blog post on the oral arguments is here. Finally, the oral arguments can be heard here. If all that is not enough, there is a comprehensive list of resources here.
P.S. One more point: properly understood, the IRS rule here is just another example of executive overreach. Congress didn’t make subsidies available on the federal exchanges, so the IRS simply wrote a rule saying they are. This must be rejected — and I think the court will.
