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King v. Burwell: Who knew administrative law could be so much fun?

- June 27, 2015

“When I use a word,” Humpty Dumpty said in rather a scornful tone, “it means just what I choose it to mean — neither more nor less.”
“Quite absurd!”
“Full of “jiggery-pokery!”
Those lines, of course, and many others, are from Justice Antonin Scalia’s soundbite-laden dissent in the King v. Burwell case, in which he accuses six of his colleagues not just of stupidity but of judicial malpractice.
Who knew administrative law could be so much fun?
After all, unlike this week’s other big court decision on same-sex marriage, the health-care decision is not about interpreting the Constitution but about how to read a statute that at best suffers (as the majority opinion gently put it) from “inartful drafting.”
In the present case, the court decides to take that task on itself. This is a bit surprising: Normally in this sort of case the linchpin would have been the 1984 Chevron case, which laid out the court’s ideal relation to a federal agency’s interpretations of a given statute.
The court is supposed to follow three steps, namely:

  1. To ask, is the meaning of the law clear, or ambiguous?
  2. If the latter, did the agency come up with a “permissible” or “reasonable” interpretation of what it might mean?
  3. If yes, to let the agency interpretation stand, even if it is not the interpretation the judges themselves might prefer. That is, “When a challenge to an agency construction of a statutory provision, fairly conceptualized, really centers on the wisdom of the agency’s policy, rather than whether it is a reasonable choice within a gap left open by Congress, the challenge must fail.”

Indeed, the justices claimed that “the principle of deference to administrative interpretations has been consistently followed by this Court whenever decision as to the meaning or reach of a statute has involved reconciling conflicting policies.”
This was the logic followed by the Fourth Circuit Court of Appeals, which ruled in favor of the government. The Circuit Court, that is, decided that the language was ambiguous, that the agency (here, the IRS) had come up with a reasonable interpretation, and thus, that the tax credits for users of state exchanges could remain.
A panel of the DC Circuit decided instead that the language was unambiguous – as Scalia would have it, “so obvious there would hardly be a need for the Supreme Court to hear a case about it” — and thus that the tax credits were invalid.
Interestingly, the Supreme Court majority decided to do the interpreting itself, removing the issue from the agency. It held that the Chevron framework did not apply, because that framework is based on Congress delegating discretionary authority to the agency to make choices about how the law works.
But here, the majority argued, the tax credit program is too central to the working of the law for such delegation to be assumed. And the IRS is not in any case expert in health insurance and its workings. “This is not a case for the IRS,” Chief Justice John Roberts wrote; “It is instead our task to determine the correct reading of Section 36B.”
They do so, of course, in the government’s favor. Scalia, in his dissent, harrumphs that “Under all the usual rules of interpretation… the Government should lose this case.”
Among other things, he points out other places in the law where the two sorts of exchanges (state and federal) are distinguished from one another, while the government’s interpretation singles out only this appearance for this sort of unified treatment.
But the Roberts majority is unmoved: While a close call, perhaps, “Section 36B can fairly be read consistent with what we see as Con­gress’s plan, and that is the reading we adopt.” In short, taking the law as a whole, the notion of an exchange “established by the State” is indeed ambiguous. Under the plaintiff’s reading, the marketplace governed by the law, and thus the point of the law, would collapse in a “death spiral” – something Congress could not have meant to do.
As that suggests, the majority opinion puts a fair bit of weight on legislative intent – though not the traditional kind of legislative history that looks to floor debate and committee reports to get a sense of what Congress meant to do.
Judicial utilization of those latter materials is frowned upon by Scalia and others who argue that the plain meaning of the text is what governs. Thus, though the section itself may well be an elaborate typo arising from the unorthodox process the law followed to passage – one that caused Schoolhouse Rock’s “I’m just a Bill” to roll over in his legislative grave – the majority opinion does not dwell on this point.
Rather, Roberts tries to dwell on what Congress actually passed, not what it meant to pass: that taken as a whole, the law had a certain architecture, and the section in question can be read to support that architecture rather than to knock it down. This hardly mollified Scalia, of course.
It’s worth remembering that statutory interpretation is a much larger fraction of the federal courts’ docket than the big-ticket questions of Constitutional Rights That Will Shape Our Legacy and Make for Excellent PBS Documentaries.
Professor Edward Corwin wrote back in the 1940s that  “executive interpretations of statutes flower.”  Indeed, as Professor Shep Melnick wrote more than 20 years ago in his excellent book “Between the Lines“: “It would be difficult to find a domestic policy area in which statutory interpretation by the federal courts has not played a significant role in shaping the activities of government.”
In the current case, by moving away from Chevron, the court majority does this even more directly than might have been expected.
This may wind up being true not just for the Affordable Care Act but for a wide range of the Obama administration’s priorities.
The administration’s attempts to tighten regulation of greenhouse gas emissions – from a variety of coal-fired power plants, and recently to aircraft – spring from an expansive reading of the Clean Air Act enabled by the Supreme Court’s 2007 decision in Massachusetts v. EPA.  And the president’s actions on immigration have been held up, at present at least, not on the grounds that they represent an unconstitutional extension of executive authority but because their issuance may have violated the Administrative Procedure Act.
In short, we should probably pay more attention to administrative law, even as Congress should probably pay more attention to the laws it passes.  In the oral arguments, the solicitor general was asked why legislators couldn’t simply fix the problem, if it was after all just a drafting error. He replied, to knowing laughter, “this Congress?”  While Scalia’s accusations of policy partisanship are unfair (or at least hypocritical), he is surely right that it is not the court’s job to save Congress from being a punchline.
Note: This post has been corrected to replace the version originally published, which contained a factual error.