The DC Circuit Strikes A Blow Against The ACA: Is It Law Or Politics?

Jim Huffman Dean Emeritus, Lewis & Clark Law School
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A divided federal appellate court has ruled (Halbig v. Burwell) that the Affordable Care Act does not provide subsidies to individuals who purchase insurance through federal exchanges set up in the 36 states that did not create exchanges of their own. The ruling, if upheld on appeal, invalidates an IRS rule allowing for such subsidies, notwithstanding statutory language limiting subsidies to individuals obtaining health insurance through an exchange “established by the state.”

The government, and the almost simultaneous ruling (King v. Burwell) of a unanimous 4th Circuit panel, take the position that, in light of the overall objectives of the ACA, the statutory language should be interpreted as a drafting error properly corrected by the IRS.

This statutory interpretation dispute will play its way out through a likely en banc review by the full D.C. Circuit and, if the full court upholds the panel’s ruling, review by the U.S. Supreme Court. There will be confident assertions on both sides of the issue as the appellate process moves to a final resolution. In the meantime we should contemplate two questions of even broader concern: First, what is the constitutional role of the courts in matters such as this? And second, what is the role of the individual judges who serve on those courts?

As for the constitutional role of the courts, which has implications for the constitutional roles of the other two branches of government, we should ponder what a court is supposed to do where the statutory language is crystal clear but arguably inconsistent with the general purposes of the statute.  Deferring to an administrative “fix,” as the 4th Circuit does, either expands the powers of the executive at the expense of the legislature or allows the legislature to effectively delegate legislative authority by enacting vague statutes (though there is nothing vague about the ACA language in question). Applying the clear language of the statute, as the D.C. Circuit does, assumes that the legislature meant what it said and leaves it to that body to enact a “fix” if one is required.

Strict constructionists and originalists will prefer the latter view as more consistent with the constitutional separation of powers. Living constitution pragmatists will contend that the realities of modern life require broad administrative discretion in the executive branch. This philosophical divide will not be soon resolved, but where the legislative language is crystal clear, surely the courts should enforce the statutory language. Otherwise it will be assuming legislative power to itself or shifting it to the executive.

And what of the role of the judge? Accepting that judges will adhere to one or the other of the foregoing understandings of the judicial role (or perhaps some other theory of their own imagining), should judges be attuned to the particular results of their legal rulings? Is DC Circuit judge Harry Edwards right to dissent because the majority’s ruling “portends disastrous consequences?”

Although Judge Thomas Griffith acknowledged in his majority opinion that the ruling has “major consequences,” “disastrous consequences” are often in the eye of the beholder.  Democrats, as a general matter, contend that the demise of the ACA would be disastrous. Republicans, again as a general matter, believe that the ACA is disastrous. Propounding and acting on such divergent policy views is politics. But is it also appropriate to judging?

Unfortunately for constitutional government in the United States, the answer is quite clearly yes. While few judges will admit to making policy decisions, their positions in cases like Halbig and King are all too predictable. News reports will invariably note that the two judges voting to invalidate the IRS ruling were nominated by Republican presidents while the dissenter was a Democratic nominee, and that all three 4th Circuit judges were Democratic nominees. Harvard law professor Glenn Cohen predicts that the D.C. ruling is likely to be heard en banc because that court is now a “Democrat stacked group.” Professor Cohen is most probably right.

In cases with public policy implications we have come to expect judges to rule on the basis of their prior political allegiances, though always with legal arguments to cover their tracks. We expect it because they often rule that way, and they rule that way because we expect it. It is a vicious cycle of increasingly politicized federal courts that will have disastrous consequences for our constitutional separation of powers – and, therefore, for the freedom and liberty of American citizens.

Disagreements about the constitutional role of the judiciary and about the meaning of the constitution itself often lead to intense political battles over appointments to the federal judiciary, particularly to the Supreme Court and the appellate courts. It has always been so. But those controversies have grown ever more intense in recent decades because both parties know that prospective judges’ prior political allegiances will matter to their willingness to uphold or invalidate controversial legislation.

Thus, sadly, we can anticipate with some assurance that the seven democrats on the DC Circuit will agree to en banc review in Halbig and, in that event, will probably reverse the three-judge panel’s ruling, making Supreme Court review much less likely. I would love to be proven wrong. Not because I think the DC Circuit court got it right on the law, which I do, but because it would provide a glimmer of light in the fading torch of judicial independence.