Jul 27, 2014

Constitutional Faces: The Origin of Halbig

While Halbig is not really a constitutional case (I think there is a non-trivial Article II take care issue at play in all of the Obamacare rewrites), it’s origin makes for a fascinating story. The Wall Street Journal has a detailed profile of Thomas Christina, a South Carolina lawyer who discovered that the text of the Affordable Care Act limited tax credits to exchanges “established by the states.”

The lawyer, who is not seeking the limelight, recalled that discovery was a “gradual process.”

“It wasn’t like lightning struck,” said Mr. Christina, 59, a shareholder at the labor and employment law firm Ogletree Deakins. “It was a gradual process. But I knew this was a significant enough issue that it would end up in the courts.”

Mr. Christina is reluctant to discuss his reasons for scouring the law. “It’s not really that I was looking for anything in particular,” he said. “My role at the firm was to be the person keeping up with the statute.”

Soon Christina got in touch with the American Enteprise Institute:

“He’s the person who came up with this,” said Thomas Miller, a resident fellow at the conservative American Enterprise Institute. “He deserves full credit.”

In December 2010, Mr. Christina presented his findings at the American Enterprise Institute. AEI’s Mr. Miller was intrigued. He saw the seed of a potential legal challenge to the health law.

And Jon Adler and Michael (not Mike) Cannon found out about it:

The issue gained steam in 2011 when Jonathan Adler, a law professor at Cleveland’s Case Western Reserve University, began looking at the language of the statute, he said, and did a Google search where he found information on Mr. Christina’s work. Mr. Adler emailed Michael Cannon, an acquaintance and the director of health policy studies at the libertarian Cato Institute, about the statute’s language. “When I got this email, my jaw dropped,” said Mr. Cannon, a vocal opponent of the law. In May 2012, the IRS issued a final rule allowing subsidies to be distributed to people who buy health coverage on the federal exchange. To Mr. Adler and Mr. Cannon, that ran afoul of the statutory language of the law.

Then CEI got involved, and retained Jones Day to bring the suit:

In June 2012, the Supreme Court handed opponents of the law a defeat by upholding the individual mandate. That day, Mr. Miller jumped on a conference call with Mr. Christina and others to discuss moving ahead with a lawsuit on the law’s language.
He drew on Sam Kazman, general counsel at the Competitive Enterprise Institute, a libertarian think tank. They coordinated the lawsuits and funded the effort. The institute reached out to Michael Carvin, a lawyer at Jones Day who brought the two cases the courts ruled on Tuesday. The first lawsuit raising the claim was filed in September 2012 and there are currently four cases in the courts.

Imagine if no one had ever discovered this flaw, and the government started paying out the tax credits in violation of the statute, without the benefit of the promulgated rules?

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Jul 27, 2014

I am Quoted in Bloomberg BNA about Halbig and Timing of Appeals

Kimberly Robinson and her colleagues at Bloomberg BNA put together a detailed piece about Halbig. I am quoted at some length:

But in an e-mail to Bloomberg BNA July 23, Josh Blackman, a professor at South Texas College of Law, Houston, said that the plaintiffs challenging the rule in the Fourth Circuit case will, in all likelihood, ‘‘immediately’’ file a petition requesting Supreme Court review.

This creates ‘‘a race for the Court house,’’ Blackman, who teaches constitutional law and focuses on the Supreme Court, wrote on his blog.

The plaintiffs challenging the law in the D.C. Circuit could then ask the court to delay its en banc proceedings until after the Supreme Court decides whether to take the Fourth Circuit case, Blackman said.

This would effectively prevent a circuit-split-killing reversal, he said.

Blackman added that the plaintiffs in the Fourth Circuit case likely have their certiorari petition ‘‘ready to roll,’’ and that the petition could be filed in time for the justices’ fall conference.

And, here is my line that Rick Hasen labeled “quote of the day”:

But Blackman noted, ‘‘John Roberts wasn’t willing to kill Obamacare in 2012 when no one was relying on it. Why would he do so in 2015 when millions are relying on it?’’

Since I gave that quote, I was taken by Kevin Walsh’s post about why Halbig will be different than NFIB for Chief Justice Roberts. In any event, the voxtimidation has commenced.

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Jul 27, 2014

Obamacare Deja Vu: The Full Court Press of Chief Justice Roberts Has Already Started

Shortly after Halbig was decided, I perceived this Marquez-esque sense of deja vu. We’ve been here before. The argumentation process is almost second-nature at this point.

In particular, I observed that soon there would be attempts to intimidate the Chief Justice to rule the right (left?) way:

“Soon enough, the full-court press on Chief Justice Roberts will commence. As I said, deja vu.”

Little did I know that within hours of the D.C. Circuit’s decision, Ezra Klein voxsplained how the Chief Justice would not rule in Halbig’s favor because horrible things would happen. Or did Ezra voxtimidate the Chief Justice Justice not to rule in Halbig’s favor because horrible things would happen.

For Halbig to unwind Obamacare the Supreme Court would ultimately have to rule in the plaintiff’s favor. And they’re not going to do that. By the time SCOTUS even could rule on Halbig the law will have been in place for years. The Court simply isn’t going to rip insurance from tens of millions of people due to an uncharitable interpretation of congressional grammar.

For five unelected, Republican-appointed judges to cause that much disruption and pain would put the Court at the center of national politics in 2015 and beyond. It would be a disaster for the institution. Imagine when the first articles come out recounting the story of someone who lost their insurance due to the SCOTUS ruling and then died because they couldn’t afford their diabetes or cancer treatment. Imagine when every single Democrat who had any hand at all in authoring the law says the Court is completely wrong about what the law meant. Imagine when every single Democrat runs against the Court.

Chief Justice John Roberts realized that in 2012 when he ruled the individual mandate constitutional. All evidence suggests he didn’t want to rule the mandate constitutional. But he thought it would harm the Court to do otherwise. Deciding for the plaintiffs in Halbig would do far more damage to the law than striking down the mandate and it would do so when the law is actually providing insurance to people. It’s not going to happen.

There is a blurred line between voxsplaining and voxtimidating, that pundits walked delicately in the runup to NFIB v. Sebelius. Now, it is a well-worn path. And there is one key difference. We know the Chief blinked in 2012. Why should we think he will act any differently in 2015. Whether the full court press on the Chief  worked in 2012, it is certainly worth a shot again.

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Jul 27, 2014

At Long, Long Last, D.C.’s Ban on Bearing Firearms Falls

After five years, two mandamus petitions, two different federal district judges, and an intervention by Chief Justice Roberts, at long, long last, the District of Columbia’s blanket ban on bearing arms outside the home has fallen.

The procedural posture of this case redefines “tortured.” This case was first filed on August 6, 2009. Summary judgment was filed on August 26, 2009. There was a hearing on 1/22/10, and the matter was taken under advisement. Then, on July 18, 2011, eighteen months later (!), Chief Justice John Roberts reassigned the case from Judge Henry. H. Kennedy to Judge Frederick J. Scullin, Jr. of the Northern District of New York. Why? Because of the delay!? There was a status conference on July 22, 2011. There was a motion hearing scheduled for 8/29/2012 , which was then rescheduled for 10/1/12 (a full year later?!). Matters were taken under advisement. A motion to expedite was filed on 8/9/13 (another year later?!). On October 21, 2013, Gura sought mandamus in the D.C. Circuit. On December 16, 2013, Mandamus was denied by the D.C. Circuit. Gura sought mandamus again in March 2014, which was pending when Judge Scullin finally got around to ruling on it.

In my last post from December, I commented ” I hope this is the magnum opus of Second Amendment opinions, because with all this time to work on it, it better be.”

Well, it’s not that. It is 19 pages long, and effectively parrots the 9th Circuit’s decision in Peruta. Putting aside the merits–which I agree with–it is totally inexcusable for a constitutional right to remain void for 5 years.

In any event, congratulations to Alan Gura, my co-author, on his dedication to this case. To the nuclear D.C. Circuit we go.

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Jul 25, 2014

Chemerinsky’s “Case Against the Supreme Court” cites Decisions of the Roberts Court including Bush v. Gore and United Citizens

Dean Chemerinsky needs to fix the blurb of his new book, “The Case Against the Supreme Court,” which lists decisions of the Robert’s Court, including Bush v. Gore (2000) and United Citizens (no such case):

Most Americans share the perception that the Supreme Court is objective, but Erwin Chemerinsky, one of the country’s leading constitutional lawyers, shows that this is nonsense and always has been. The Court is made up of fallible individuals who base decisions on their own biases. Today, the Roberts Court is promoting a conservative agenda under the guise of following a neutral methodology, but notorious decisions, such as Bush vs. Gore and United Citizens, are hardly recent exceptions. This devastating book details, case by case, how the Court has largely failed throughout American history at its most important tasks and at the most important times.

Only someone of Chemerinsky’s stature and breadth of knowledge could take on this controversial topic. Powerfully arguing for term limits for justices and a reassessment of the institution as a whole, The Case Against the Supreme Court is a timely and important book that will be widely read and cited for decades to come.

 

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Jul 24, 2014

What do you call it when a federal court stays a case while a Catholic priest’s canon law proceeding continues?

Abstinence Abstention.

I kid. But this actually kinda happened. A priest asked a federal bankruptcy court to hold off on a ruling”premised upon an anticipated ruling in a Canonical action.”

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Jul 23, 2014

Colorado District Judge Puts Head In Stand, Refuses To Grant Stay in Same-Sex Marriage Ruling

I lost count of how many district court judges read Lawrence and Windsors as unmistakeable evidence that the Supreme Court wanted lower courts to invalidate bans on same-sex marriage. Even though both decisions specifically went out of their way not to address that issue. I don’t think those were unreasonable conclusions. In fact, I think that was a reasonable conclusion, especialyl in light of Justice Scalia’s sky-is-falling dissents (which were cited with glee by the lower courts). District judges often have to follow the lead set by the Supreme Court, and make inferences on how they would decide similar issues. Sometimes it isn’t clear, but that’s why judges get paid the big bucks. That’s the way things work.

But not when it comes to something as mundane as a stay to maintain the ex ante status quo. A federal district judge in Colorado has invalidated Colorado’s ban on same-sex marriage. But, he refused to grant a stay of his ruling, and only put the judgment on hold till the Court of Appeals rules on it.

I’m not sure if the Judge is knowingly putting his head in the sand, or wishes instead to flaunt some Article III chutzpah, but I’m not buying what Lyle charitably referred to as a “gentle chiding of the Supreme Court”:

Based on the most recent stay [in Evans v. Herbert], it appears to the Court that it may well be that a message is being sent by the Supreme Court. But this Court is not some modern day haruspex skilled in the art of divination. This Court cannot – and, more importantly, it will not – tell the people of Colorado that the access to this or any other fundamental right will be delayed because it “thinks” or “perceives” the subtle – or not so subtle – content of a message not directed to this case. The rule of law demands more.

Let me deconstruct this line by line. First, the Court’s stay in Evans v. Herbert is about as clear as the Supreme Court could have done under the circumstances (It wasn’t going to weigh in on the merits of the issue). At the time, I thought it abundantly clear that lower courts should stay all rulings. Second, it doesn’t take a “haruspex” (someone who reads the future in animal entrails) to know that the Court wants to minimize the disorder caused by not staying the rulings. The Justices will resolve this case definitively sooner rather than later. Third, the message is not “subtle.” In two high-profile cases, almost immediately, the Court has instructed the lower court what to do. Fourth, this is a bizarre notion of the “rule of law,” where district judges usurp the direction of the Supreme Court.

Let’s hope the 10th Circuit has enough sense to grant a stay.

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Jul 23, 2014

The Winners and Losers of Obamacare. July 2014 Edition.

In a column I wrote in October 2013, shortly after the launch of Obamacare, I offered an attempt to understand the winners and losers of the new law. Without a doubt, there would be those who benefit from the law. Healthcare was now more affordable for some, due to the Medicaid expansion (in some states), cost controls, and generous tax subsidies. Without a doubt, the uninsured rate would decrease. People who never had insurance before would now be able to afford insurance. A study by the New England Journal of Medicine found that 10.3 million new people have health insurance, decreasing the number of uninsured people from 21% in September 2013 to 16.3% in April 2014. These are all great things. But, as we learned with Halbig, context is everything.

What are the costs of this law on the other millions of Americans? Who are the forgotten men (and women) of Obamacare:

At the forefront of all social welfare programs are the people being helped — the poor, the sick, the disadvantaged. The beneficiaries of such laws are obvious. Who are really forgotten are those who are being harmed by the law. And those harmed by the law are not merely the super wealthy, or those paying higher taxes. In the case of Obamacare, the harm will be felt most severely, not by the wealthy, but by those forgotten men and women squeezed in the middle.

First, there are also those who were covered by their employers’ plans, but were dropped, and forced onto the insurance exchanges. Second, and even more pernicious, are those who are dropped from full-time employment to part-time employment because their employer cannot afford to pay for Obamacare’s more expensive plans. Obamacare perversely creates incentives for employers to do both of these things.

Third, there are those who had individual plans, which their insurers cancelled. Obamacare rendered many cheaper plans with less coverage illegal, so insurers simply stopped offering them. Fourth, those who live in states where insurers exit the markets will have less choice, and higher prices. This flight is especially prominent in rural areas where low populations do not justify the costs of participating in the exchanges. Insurers shrugged.

Fifth, there are those who will have to pay higher premiums, and more out-of-pocket costs, to cover the cost of insuring the poor and sick. The director of Covered California admits as much. “People could have kept their cheaper, bad coverage, and those people wouldn’t have been part of the common risk pool. We are better off all being in this together.” Obamacare helps the winners (makes their health care more affordable), by penalizing the losers (makes their health care less affordable).

Now, we are beginning to realize the costs of the law, beyond those who have gained insurance. A new CNN poll suggests that barely 1 in 5 are better off under Obamacare, and many more are worse off.

Eighteen percent of Americans, or fewer than one in five, say they or someone in their family is better off because of the Affordable Care Act, according to a new poll by CNN. Nearly twice that number, 35 percent, say they or someone in their family is worse off. A larger group, 46 percent, say they are about the same after Obamacare as before.

In nearly all demographic categories — age, income, education, etc. — more people say they are worse off because of Obamacare than say they are better off.

For example, one might expect respondents with incomes below $50,000 to be somewhat likely to say Obamacare has helped them. And that is the case: 21 percent say they are better off because of the Affordable Care Act. But 35 percent say they are worse off. (Forty-four percent are the same.)

Likewise, one might expect young respondents to report benefits from Obamacare. And they do: 23 percent say they’re better off. But 33 percent say they’re worse off. (Forty-three percent are the same.)

In other categories, the gap between better off and worse off is larger. In just one demographic group, nonwhites, is the group of those who say they are better off, 29 percent, bigger than the group who say they are worse off, 17 percent. (Fifty-four percent say they are the same.)

The “worse off” numbers will continue to grow, as millions of Americans are thrown off their employer plans and put onto the Obamacare exchanges. Remember, within a decade, nearly 80% of Americans will be on the exchanges. Plus, the unpopularity rate of the law holds steady at 59%.

We cannot lose sight of the fact that this law was sold on a series of dangerous lies about how this would affect people. “If you like your plan, you can keep your plan.” As I noted back in October, if the Administration had been forthright about the impact of this law, it would have never passed.

Maybe our collective empathy for the plight of those helped by the law should reduce our concerns for the middle-class. Perhaps that would have been an important national debate to have had in 2010, or during the 2008 election. But Americans never had the conversation that would sanction such a radical transformation of our society. Arguably, we had the conversation in the early 1990s with HillaryCare, and the American people spoke decisively against it.

Obamacare was sold to the American people with the promise of helping both groups. In addition to promising that the poor and sick would be helped, everyone else was promised that they could keep their doctors. They were promised that health care costs would go down. They were promised that there would be no new taxes (the administration reversed this position as soon as the litigation began to defend Obamacare’s constitutionality). None of these things proved to be true.

Had the full picture of this law been understood back in 2010 — the impact on both the winners and losers — rather than the sugarcoated version rammed through Congress on a straight party-line vote, it is doubtful the law would have ever been passed.

But now, we are stuck with Obamacare, and its 2010 veneer is quickly decaying into its 2014 reality.

One of the main accusations of supporters of the ACA is that challenges to the law are “mean-spirited,” and are aimed at depriving millions of health insurance. Perhaps another way of looking at this dynamic is that challengers of the law recognize that the ACA is a boondoggle that will make things worse of in the long run for countless more Americans, and this is a last-ditch effort to avert disaster.

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Jul 23, 2014

Will Halbig be different than NFIB for the Chief Justice?

On my book tour, I frequently am asked the same question: will the Court take the opportunity to strike down the mandate in Halbig? My answer usually goes something like this. Chief Justice Roberts could have invalidated the entirety of the Affordable Care Act in 2012, before anyone relied on it. He didn’t. Why would he do so in 2015, when millions are relying on it. (Though it is far from clear whether there are more winners than losers under the law).

Kevin Walsh has an astute post that challenges some of my own thinking. First, he notes that unlike NFIB, which involved serious doctrinal developments, Halbig is a fairly straightforward application of statutory interpretation, that will not change any constitutional doctrine (other than the fact that the Administration can’t arbitrarily rewrite the law).

First, a ruling for the individual mandate challengers required the development of constitutional doctrine in a way that a ruling for the ACA subsidies challengers would not. The political branches have long been on fair notice that text of enacted law controls, whereas they may have been lulled into complacency by the Court’s own latitudinarian constructions of the scope of congressional authority under Article I over time. Second, there is no statutory inseverability issue in the ACA subsidies challenge. The decision in NFIB v. Sebelius was made under the shadow of potential statutory inseverability, such that a newly formulated limitation on congressional power could be used to take down the entire ACA in one judicial ruling. While the practical effects of invalidating the IRS regulation in the ACA subsidies could be severe, the legal ruling would itself be much narrower by comparison

Kevin’s latter rationale, focusing on the rule of law, is much more persuasive in my mind.

Nor can one discount the possibility that, over time, Chief Justice Roberts has come to view President Obama’s commitment the rule of law in a manner similar to how Chief Justice Marshall understood President Jefferson’s commitment to the same.

This is exactly right.

Since 2012, a lot has changed.  The President has unilaterally rewritten the law nearly 40 times (by my rough count). He sees no bounds to his ability to change the law, and has even taunted Congress to “sue me.” So here we are, in Court. To the extent that these issues present close issues, the government should not receive its normal presumption of constitutionality. To the contrary, the reckless and lawless manner with which this law has been drafted, enacted, and implemented, should deprive the government of this benefit of the doubt. Specifically, with respect to Halbig, the United States notified the D.C. Circuit in a letter brief that they would effectively not comply with an invalidation of the IRS rule.While the Chief may have thought a saving construction was warranted in NFIB, a similar favor may no longer be warranted.

For some time, I have toyed with the idea of filing a brief in one of the Obamacare cases focusing on the rule of law. This may present the right opportunity.

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Jul 23, 2014

Obamacare Deja Vu: Frivolous Arguments Now On The Wall, and Parade of Horribles

There is an odd sense of deja vu with the current Obamacare litigation.

In the early days of the individual mandate debate, a common ploy was to label arguments about the individual mandate’s constitutionality as “frivolous.” Then, when courts began to invalidate the mandate, the arguments, in the words of Jack Balkin went from “off the wall” to “on the wall.” Then, supporters of the ACA had to develop sophisticated legal arguments as to why these arguments were wrong. At this point, there was a serious legal debate. But, this effort was augmented by the standard parade of horribles, which I document at some length in my book.  If the Court strikes down the President’s signature piece of legislation of a 5-4 vote in an election year it will delegitimize the Court. If the Court strikes down the mandate, millions will lose their health insurance. The supporters of the law were playing games with people’s lives. And so on.

Let’s review the Halbig litigation, which has followed an eerily similar pattern. For nearly two years, virtually all scholars argued that the argument advanced by Jon Adler and Mike Cannon was “frivolous.” Yet, by my count, 5 out of 6 Judges (including 3 Democratic-appointed Judges) agreed that the government can’t win at Chevron Step 1. 5 out of 6!  Only one judge, Judge Davis, found that this case was open and shut at Chevron step 1.

I should remind you that Judge Davis was on the 4th Circuit panel in Liberty v. Geithner, and was the only judge who reached the commerce clause issue–the other two judges on the panel resolved it at the taxing power. He basically reached the issue, even though he agreed with the taxing power analysis. So much for judicial restraint.

Only by applying the uber-deferential Chevron Step two did 4 out of the 6 judges find that the IRS’s position was reasonable. The government being forced to win by the graces of Chevron Step 2 means this position is not frivolous. This is even less impressive than beating the rational basis test. Now, as Rick Hasen noted, this argument is now “on the wall.”

There is another parallel with Obamacare. I could not find a *single* person who argued in 2009 and 2010 that the Affordable Care Act imposed a tax on those who do not have insurance. No one. One government lawyer I interviewed for Unprecedented assured me this was how the Administration viewed it. But I could not find any contemporaneous evidence to substantiate this. Ditto for the legislative history of the issue in Halbig. As Adler and Cannon note in their WSJ Op-Ed:

If that were Congress’s intent, certainly one should be able to find some statutory language to that effect. Or contemporaneous quotes from the law’s authors explaining that they intended the Affordable Care Act to authorize subsidies in federal exchanges. The president’s supporters have had three years to find such evidence supporting their theory of congressional intent. They have come up empty.

Again, 5 out of 6 Justices agreed on this point. I suppose this is what happens when you ram a 3,000 page law through the process without any meaningful reconciliation or conferences. This was necessary because of Scott Brown’s election, as Megan McCardle recalls. They passed the law. And now, we found out what is in it.

Now that the argument is on the wall, debates are raging between textualism, purposivism, contextualism, and so many other -isms. The canons of construction are firing away at full blast. All this argumentation is evidence that the argument is not, nor has ever been “frivolous.”

And, following the pattern we saw with Obamacare I, the parade of horribles has commenced. For those of you on the ConLaw Prof list-serve, the barbs were charged at a very high level yesterday, with accusations of mean-spiritedness being thrown around vividly. Andy Koppelman, in a post titled “Halbig and hurting the innocent as a political tactic,” asks:

Q. What’s the difference between a Ukrainian rebel with a rocket launcher and a lawyer challenging the Obamacare subsidies?

A. The Ukrainian doesn’t intend to hurt innocent people.

Too soon? Koppelman piles on in a piece in TNR titled “Obamacare Opponents Are Hurting 4.5 Million Workers to Win a Political War.” Beyond the legal merits of the case, people will lose their insurance if the challengers win.

But merits aside, the case raises important questions about the ethics of political warfare. When is it acceptable to deliberately aim to harm huge numbers of people in order to score a symbolic point? The point here is to discredit Obamacare; the casualties are simply a means to that end….

If the argument is ultimately accepted by the Supreme Court, then about 4.5 million low- and middle-income workers in those states who are already receiving assistance from Obamacare will abruptly lose their benefits—not because they did anything wrong, but because this destruction furthers the political war. Their personal disasters are not unintended side effects of the litigation, but the very goal that the challengers are seeking.

The opponents of Obamacare have from the beginning found themselves driven by the logic of their position to make arguments that are increasingly morally repulsive. This was on display in the Supreme Court argument in March 2012. The government argued that the state legitimately could compel Americans to purchase health insurance, because the country is obligated to pay for the uninsured when they get sick. Justice Antonin Scalia responded: “Well, don’t obligate yourself to that.”

Echoing that charge is Tim Jost, who in the early days called both the mandate argument, as well as the Halbig frivolous.

Should the plaintiffs ultimately win, millions of Americans will lose their premium assistance and probably their health insurance. The individual health insurance markets may collapse in several states. This is mean-spirited litigation, intended to deny health insurance to those who Congress intended to help. It is to be hoped that in the end the courts will interpret the law as it was meant to be interpreted, and uphold the IRS rule.

Soon enough, the full-court press on Chief Justice Roberts will commence. As I said, deja vu.

Before this week, I was weighing against writing another book on the Affordable Care Act. Now, I am leaning towards continuing my work on “Unraveled,” focusing more broadly on executive power in the age of Obama. Hobby Lobby, Boehner, Halbig, Immigration, Libya, Bergdahl, etc. There’s more than enough important facts to chronicle for the ages. My article, “Congressional Intransigence and Executive Power” provides the basis of my theories.

 

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Jul 23, 2014

The 4 NFIB Dissenters, and Not the En Banc D.C. Circuit, Will Decide What Happens Next

Yesterday I wrote two posts concerning the timing of the appeals in Halbig (CADC) and King (CA4). I then engaged with an extended twitter dialogue with Steve Vladeck and Ian Millhiser (that cost me way too much cruise wifi money). Here, let me add some additional thoughts.

The plaintiffs in both Halbig and King are represented by Mike Carvin at Jones Day (who represented NFIB in NFIB v. Sebelius). It would behoove Carvin to file, as soon as possible, a cert petition. The United States will be filing, not quite as soon, a petition for rehearing en banc in the D.C. Circuit. The United States will certainly oppose the cert petition, and ask the Court to let the Circuit split ripen. (Translation, let the nuclear panel eliminate the Circuit split).

Under normal circumstances, this would be the prudent course of action. Let the full En Banc D.C. Circuit take a stab at it, and then review that cert petition.

But we aren’t in normal circumstances. This is Obamacare. Four justices were very, very bitter that the Chief upheld the mandate in NFIB. Four justices now have the opportunity to strike down–effectively–the mandate in 36 states. Four votes are all you need for certiorari. Plus, even if the United States requests a extension, this case would still be argued during OT 14. If en banc goes forward, the decision would come OT 15, right before another presidential election.

In fact, I had this odd premonition that if the Court grants cert on King before Halbig en banc proceedings, there may even be a dissent from the grant of certiorari (Sotomayor), arguing that this case should be allowed to ripen. (Remember Justice Breyer did something like that two years ago in a campaign finance case from Montana).

Gerard Magliocca offers similar thoughts at Balkin:

First, I think that there are four Justices who will be waiting on the front steps of the Court for the certiorari petition from the Fourth Circuit (which ruled in favor of the Administration on the same issue yesterday).  Thus, the question of whether the DC Circuit will go en banc in Halbig is, to my mind, largely beside the point.  In an ordinary case, one would expect the Justices to wait and see if a circuit split could be healed before acting, but this is not an ordinary case.  The Justices who lost in 2012 on the individual mandate challenge would love to get another at-bat.

All this talk about the nuclear option is besides the point. The 4 NFIB dissenters will hold the key to when this case reaches the Supreme Court.

Update: Harry Reid continues to extoll the benefits of the nuclear option:

Asked by reporters if his decision to employ the nuclear option to fill the circuit was vindicated, Reid said based on “simple math, you bet.”

Senate Majority Whip Richard J. Durbin, D-Ill., said he wouldn’t be surprised if the full court ruled in the White House’s favor.

“There was a strong conservative Republican majority on the D.C. Circuit until we filled the vacancies,” Durbin said. “Now it’s a balanced circuit, so since one of the Republicans of the three who ruled was on our side I wouldn’t give up on a…ruling coming our way, toward the administration.”

 

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Jul 23, 2014

Explaining Halbig at Sea

Obamacare has become a burden, even of vacation. While on a snorkeling trip, I mentioned to my parents something about the Halbig decision yesterday, and said Affordable Care Act. Someone on the boat works at CMS, and asked what happened. While bathing in the warm, coral waters of Bermuda, I gave a brief discussion of Halbig and King. No, I didn’t pitch my book. For what its worth, she was glad Secretary Burwell was easily confirmed.

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Jul 23, 2014

Neighbor Stops Construction of Neighbors “Modern” House In Historic District

Under modern land-use law, cities effectively have approval over all designs to build houses, based on aesthetics. This is often an arbitrary, and daunting process, as it is very difficult to know in advance which designs will, and will not comply with the government’s tastes (unless you hire one of their preferred architects). There are serious First Amendment, Takings, and Due Process issues with these vague and nebulous standards, but they have been upheld by courts, except in some really egregious cases.

The Times has a lengthy feature about neighborly spat to stop the construction of a modern house in a historic district. Even though a design made its way through the gauntlet of the approval process, a neighbor and other concerned citizens have now held it up in court.

historic-houseIN September, Louis Cherry, an architect here, received a building permit and the necessary approvals to begin constructing a house for himself and his wife, Marsha Gordon, on an empty lot in Oakwood, a historic district in Raleigh. The neighborhood features a variety of architectural styles, from postwar bungalows to Greek Revivals, shotguns to Queen Annes. Construction began in October and the home, modern but modestly so, is nearly complete.

But it is also at risk of demolition. Not because of a tornado or termites or some other natural disaster, but because one of his neighbors doesn’t want it there.

Through a series of protracted appeals, the neighbor has been successful in getting the city to reverse its approval of Mr. Cherry’s permit. The house passed its building inspections and is 85 percent complete, yet sits empty, its future dependent on who finally wins a legal battle that never should have been allowed to happen.

Gail Wiesner, who lives across the street from Mr. Cherry — not incidentally, in a house built in 2008 — doesn’t like it in her neighborhood. In her appeal, she complained not only that the house was too modern for the area’s historical character, but also that the impact of its completion posed a threat to the community. Testifying to the Raleigh City Council, Ms. Wiesner argued that past attempts to engage in similar stylistic treachery had been made by architects who had been “churned out from a very modernist school,” and like to “show off their abilities.”

For the most part, these rebels have been prevented from building homes like this one, she continued in her public comments, but thanks only to “scrupulous, agonizing” processes.

Over a period of about four months Ms. Wiesner filed a series of appeals to the Board of Adjustment to reverse the ruling with the intent of halting construction.

A small group of Oakwood neighbors, who call themselves the Oak City Preservation Alliance, rallied to the cause. The actions of Ms. Wiesner and her allies have created “such a weird hysteria in the neighborhood,” Mr. Cherry told me. “Words like ‘holocaust’ have been used in reference to the idea that our house could inspire a rash of tear-downs which could then be replaced with modern homes. I designed my house specifically within the design guidelines of this historic district and to be compatible, a good neighbor. But the term ‘modernism’ just clicks a switch in people’s brain and they can’t see the house for what it is.”

Does this construction decrease property values?

Ms. Wiesner, who works in real estate, has also argued that having a modern house on the block will adversely affect the resale value of her own home. Here, too, Mr. Howard begs to differ: “The Cherry house doesn’t bring her property value down; in fact, it probably has a more positive affect on the neighborhood than Wiesner’s. Her house is two-thirds bungalow and one-third Victorian cottage. This is like putting strawberries and broccoli in the blender together. I love strawberries and I love broccoli, but not together.”

Those who support the construction of the house are those dastardly “libertarians.”

Some of the staunchest supporters of the Cherry-Gordon house are, says Mr. Cherry, “people who believe in property rights and are sort of libertarian.” However, those live-and-let-live types feel as if they’re in a minority. Increasingly, it seems, building a house that doesn’t fit in with your neighbor’s vision of home has become grounds for legal action, often in places emblematic of the American dream, like historic districts and gated communities.

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Jul 22, 2014

Standing to Challenge The Rewriting of Obamacare: Senator Ron Johnson edition

It wasn’t bad enough that BOTH the D.C. and Fourth Circuit decided to drop a total of 120+ pages of opinions in the tax credit case while I drifted at sea from Bayonne to Bermuda. In addition, our courts gave us a third Obamacare decision. (The Bermuda triangle? I’m sure Sissel will drop later this week).

The District Court for the District of Wisconsin dismissed Senator Ron Johnson’s complaint, filed by the Badger State’s native son Paul Clement, for lack of jurisdiction. Though the opinion is (thankfully) is only 20 pages, but there is a lot of significant discussion about standing.

First, a brief background. When Obamacare was being debated in the Senate, Senators made it abundantly clear that members of Congress, and their staff, should be subject to the same Obamacare exchanges as their constituents. They would not be able to receive the cushy plans of other federal employees. Unlike Halbig, there was fairly clear legislative history on this, as the Senate considered proposal to allow staff to participate in the exchanges, and it was rejected. Anyway, as it is wont to do, when people started complaining that the Congressional staffers would be put on the Obamacare exchanges—without any tax credits—OPM did its thing. They wrote a regulation saying that members of Congress could designate employees who would not have to go onto the exchanges.

Needless to say, OPM totally lacked the authority to do so. Zero. Zilch. Not even the pretense of statutory authority. Unlike Halbig, where at least there is a colorable argument that the IRS was acting within the scope of the statute, this is a case where the Executive clearly rewrote the statute. Remarkably, in a lengthy discussion, the District Court effectively acknowledged this fact.

Indeed, the allegations of the complaint here, which must be accepted as true at this stage of the proceedings, Navarro v. Neal, 716 F.3d 425, 429 (7th Cir. 2013), are that the executive branch has rewritten a key provision of the ACA so as to render it essentially meaningless in order to save members of Congress and their staffs from the consequences of a controversial law that will affect millions of citizens. If proven, this would be a violation of Article I of the Constitution, which reposes the lawmaking power in the legislative branch.

Believe it or not, this may be the clearest judicial statement of the Obama administration’s modus operandi—rewrite statutes to save people from the unpopular ramifications of laws it enforces. And the court did not find this “tweak” was within the President’s Article II discretions. If the allegations are “true,” it would be a “violation of Article I” and an assumption of the “lawmaking power.” This is big.

The decision continues, with references to Madison about the dangers of the executive assuming the legislative powers.

The violation alleged is not a mere technicality. It strikes at one of the most important safeguards against tyranny that the framers erected—the separation of powers. As James Madison explained in response to the objection that the proposed Constitution disproportionally distributed the powers of government:
No political truth is certainly of greater intrinsic value, or is stamped with the authority of more enlightened patrons of liberty, than that on which the objection is founded. The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self- appointed, or elective, may justly be pronounced the very definition of tyranny. THE FEDERALIST NO. 47.

Tweaks to reduce the harms caused by Obamacare are not a “mere technicality.” It is an affront to the separation of powers itself. This should provide some confidence to those planning the Boehner lawsuit on the merits. Rewriting the law, outside the scope of executive discretion, is a per se violation of Article II.

But that cannot be the holding of this case, as Sen. Johnson lacks standing.

Nevertheless, absent a concrete injury to the party bringing the lawsuit, there is no “case” or “controversy” over which the courts have jurisdiction. For the judiciary to intervene under these circumstances would violate the same principle Plaintiffs seek to vindicate in their own lawsuit with far less opportunity for correction by either the other branches or the people. For all of these reasons, the dispute must be left to the “Nation’s elected leaders, who can be thrown out of office if the people disagree with them.” Nat’l Fed. of Indep. Bus. v. Sebelius, 132 S. Ct. 2566, 2579 (2012). “It is not our job to protect the people from the consequences of their political choices.” Id.

The rest of the decision addresses numerous arguments concerning Article III standing. Here I’ll highlight a few of the most salient discussions.

First, Johnson and his staffer argue that he suffers an injury because he is participating in an “unlawful” scheme. Even though the court acknowledged that, if the allegations are true (and they are) the scheme is unconstitutional, he is not willing to assert that the violation to the Constitution, in and of itself, is an injury for purposes of Article II.

Plaintiffs also argue that they experience injury even if there is no actual administrative burden because the very act of classifying employees forces them to participate in a scheme they view as unlawful. This argument is unpersuasive for at least two reasons. First, it puts the cart before the horse. The question of the legality of the regulation has not been determined yet; although Plaintiffs believe the regulation is unlawful, such a belief cannot be enough to create standing because that would open the door to any uninjured party who had a generalized grievance with a government regulation. Under such an approach, there would be no principled limit on standing because a plaintiff need only allege a belief that the challenged regulation is illegal. Valley Forge Christian Coll. v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 485 (1982) (“Although respondents claim that the Constitution has been violated, they claim nothing else. They fail to identify any personal injury suffered by them as a consequence of the alleged constitutional error, other than the psychological consequence presumably produced by observation of conduct with which one disagrees.”) In short, one’s personal belief that a regulation is unlawful is not itself an “injury” sufficient to confer standing.

This argument strikes me as problematically circular. If you read Coleman v. Miller in light of Raines v. Byrd, a violation of the separation of powers that results in a “nullification” of the legislative vote can be, by itself, an injury for purposes of Article III. (More on that later, as I’m working on something on point). With the right case, this theory would offer a grounds for standing based on an injury to the separation of powers. Though, this is not that case.

The Court also addresses an argument raised by amici—if the court doesn’t fix this case, no one will, and the President can continue to act unlawfully.

Finally, it is necessary to address an argument advanced primarily by the amici curiae. In short, they argue that if these Plaintiffs do not have standing, then there will be no recourse to stop the Obama Administration from ignoring the laws Congress passes and from exceeding its authority in other ways. They portray the OPM rule as just one more example of an administration that has on multiple occasions usurped the powers entrusted to Congress by rewriting or amending laws the Congress has passed or simply refusing to enforce them. If the courts—a co-equal branch of government—do not step in, amici argue, then there will be no check on executive authority.
First, there is nothing in the Constitution stipulating that all wrongs must have remedies, much less that the remedy must lie in federal court….
Second, as the above quotation also makes clear, it is not true that the courts are the only remedy for the Administration’s alleged unlawfulness. The Congress itself is surely not helpless to rein in the executive: it has spending authority, investigative powers, and it even wields the blunt instrument of impeachment; it has the power to pass, delay, or kill initiatives the executive branch might propose; and it may delay or thwart consideration of executive branch nominees .… In sum, the fact that the allegations advanced in this action might be difficult or even impossible to pursue in federal court for any other plaintiffs does not mean that these Plaintiffs have suffered the kind of injury that could give rise to standing.

This discussion raises the important issue of proportionality, that was addressed at some length by Elizabeth Price Foley during her testimony last week before the House. What is a proportional response by Congress for a violation of Article II. Let’s consider each item identified by the court. With respect to the “spending authority,” Congress made a deliberate decision in 2009 not to spend money for staffers to receive federal health benefits. The President’s rewriting, and suspension of the law, disregarded that authority. So much for that. The “investigative powers” would reveal that OPM issued this regulation, without even the pretense of authority, and is damn proud of it. Not much help there, with such an open, flagrant violation of the law. Impeachment is certainly a “blunt” instrument, that is totally out of whack to this significant, but fairly minor scale violation of the Constitution.

Repeated efforts to “pass, delay, or kill” executive branch initiatives have only emboldened President Obama to take further unilateral executive action. This is the Catch 22 of congressional intransigence and executive power. The more Congress thwarts the President, the more he exercises “self help” and takes matters into his own hand. In sum, the issue of proportionality, with respect to the various remedies Congress has at its disposal, renders the suspension and rewriting of the law a unique type of constitutional injury.

 

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Jul 22, 2014

Video: Harlan Institute’s FantasySCOTUS Featured in USA Today

Check it out here:

FantasySCOTUS is a fantasy supreme court league that allows users to submit their own briefs in the form of blog posts. These briefs are then judged by members of the Harlan Institute, a non-profit dedicated to expanding citizens’ knowledge of our nation’s most fundamental laws. A select group of players moves to the next round where teams present oral arguments on Google+ Hangout. This is judged by members of the Harlan Institute and ConSource, an online library featuring constitutional history.

 

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Jul 22, 2014

Counting Votes in Halbig and King

While the D.C. Circuit invalidated the rule by a 2-1 vote, a unanimous 4th Circuit panel upheld the rule, the votes were more complicated.

Judges Edwards (CADC) and Davis (CA4)  found the tax credits unambiguously apply to the federal exchange.
Judges Gregory and Thacker (CA4) found the statute ambiguous, and through Chevron step 2, deferred to the IRS.
Judges Griffith and Randolph (CADC) found that the statute unambiguously blocks the tax credits for the federal exchanges.
In a bit of a flashback, Judge Davis was on the CA4 panel that decided Liberty University v. Geithner. He was the only judge who reached the commerce clause issue and found the ACA’s mandate. constitutional on those grounds. Likewise, Judge Edwards was on the D.C. Circuit panel that unanimously upheld the ACA’s mandate.
This is going to be fun with competing cert petitions an en banc petitions. Even if the SG files a petition for rehearing en banc, and opposes the 4th Circuit cert petition, I suspect there are 4 votes on the Court (the NFIB dissenters) who would want to grant cert, before this issue fully percolates.

Update: On a closer read, even Judge Edwards thought the statute was ambiguous, so he should be lumped in with Judges Gregory and Thacker. So 5 out of 6 judges agreed the statute is ambiguous, and does not clearly provide for the tax credits. Three judges had to rely on the uber-deferential Chevron Step 2 to resolve the issue.

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Jul 22, 2014

Halbig, “Legislative Supremacy,” and the Boehner Law Suit

The gravamen of the complaint in Halbig, and the imminent Boehner lawsuit, is that the Administration unilaterally rewrote provisions of the Affordable Care Act that are clear, because they would generate results the Administration did not like, and Congress was in no position to fix the law.

The Court in Halbig rejected that, citing a presumption of “legislative supremacy.”

We reach this conclusion, frankly, with reluctance. At least until states that wish to can set up Exchanges, our ruling will likely have significant consequences both for the millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly. But, high as those stakes are, the principle of legislative supremacy that guides us is higher still. Within constitutional limits, Congress is supreme in matters of policy, and the consequence of that supremacy is that our duty when interpreting a statute is to ascertain the meaning of the words of the statute duly enacted through the formal legislative process. This limited role serves democratic interests by ensuring that policy is made by elected, politically accountable representatives, not by appointed, life-tenured judges. Thus, although our decision has major consequences, our role is quite limited: deciding whether the IRS Rule is a permissible reading of the ACA. Having concluded it is not, we reverse the district court and remand with instructions to grant summary judgment to appellants and vacate the IRS Rule.

Tea leaves.

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Jul 22, 2014

Halbig Appeal Timing

As I noted in an earlier post, the United States will go for en banc review on the nuclear panel. The 4th Circuit plaintiffs will almost certainly go for certiorari. This presents an interesting timing issue, and a race for the Court house.

I suspect the plaintiffs will file for certiorari first. If the government files a petition for en banc, I suspect the plaintiffs to ask the D.C. Circuit to put en banc on hold while the certiorari petition is pending. That would have the result of preventing the D.C. Circuit from vacating the panel opinion–which would have the result of killing the Circuit split.

In any event, the Court should have a cert petition on its docket this fall. Then, the government could oppose cert, by asking the Court to delay its resolution pending the D.C. Circuit’s en banc proceedings. Thus, the Court can deny certiorari on King (4th Circuit case) and wait for Halbig. Oh what fun!

It’s so rare that a Circuit split forms in one day.

Update: Let’s think about the timing this way. Let’s assume that the plaintiffs file a cert petition in the next week or so. The following week the United States files a petition for rehearing en banc. The plaintiffs will reply that a cert petition is pending, and the en banc proceedings should be put on hold pending resolution of the cert petition. The government will certainly raise the en banc petition in their opposition to cert. But, the plaintiffs can say, if the Court denies certiorari from the 4th Circuit, then the en banc proceedings can continue in the D.C. Circuit. If the Court grants certiorari, then there is no point in the D.C. Circuit granting en banc review bc the Justices will go for it. Really, there is no point in the D.C. Circuit considering en banc, or even vacating the panel decision, if the Court takes it. That is, unless the D.C. CIrcuit sua sponte grants en banc–without the need for briefing–and vacates the opinion. I think that outcome is unlikely.

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Jul 22, 2014

To Save the ACA, the Supreme Court Will Have to Rewrite It. Again.

Judge Griffith’s opinion for the D.C. Circuit boiled down to one point–he was not willing to rewrite the ACA to save it.

The point is that we don’t know, and in asking us to ignore the best evidence of Congress’s intent—the text of section 36B—in favor of assumptions about the risks that Congress would or would not tolerate—assumptions doubtlessly influenced by hindsight—the government and dissent in effect urge us to substitute our judgment for Congress’s. We refuse. As the Supreme Court explained just this term, “an agency may not rewrite clear statutory terms to suit its own sense of how the statute should operate.” UARG, 134 S. Ct. at 2446. And neither may we. “The role of th[e] [c]ourt is to apply the statute as it is written—even if we think some other approach might ‘accor[d] with good policy.’” Burrage v. United States, 134 S. Ct. 881, 892 (2014) (quoting Comm’r v. Lundy, 516 U.S. 235, 252 (1996)) (third alteration in original); see also Lewis v. City of Chicago, 560 U.S. 205, 217 (2010) (“[I]t is not our task to assess the consequences of each approach [to interpreting a statute] and adopt the one that produces the least mischief. Our charge is to give effect to the law Congress enacted.”); United States v. Locke, 471 U.S. 84, 95 (1985) (“[T]he fact that Congress might have acted with greater clarity or foresight does not give courts a carte blanche to redraft statutes in an effort to achieve that which Congress is perceived to have failed to do.”).

This has to be a not-too-veiled note to the other Court down Constitution Ave. Then again, rewrite the statute is exactly what Chief Justice Roberts did, twice. First, to treat the mandate as a tax, and second to totally rework the Medicaid expansion. Only time will tell if the Court is willing to rewrite the ACA one more time. Ditto for the other lingering bomb, Sissell, and the origination clause challenge.

A related issue–will the Court (Roberts) be willing to “gut” the ACA with adverse consequences to millions. As I noted many times during my talk: John Roberts wasn’t willing to kill Obamacare in 2012 when no one was relying on it. Why would he do so in 2015 when millions are relying on it: For this, perhaps Judge Griffith will be right, or wrong:

We reach this conclusion, frankly, with reluctance. At least until states that wish to can set up Exchanges, our ruling will likely have significant consequences both for the millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly. But, high as those stakes are, the principle of legislative supremacy that guides us is higher still. Within constitutional limits, Congress is supreme in matters of policy, and the consequence of that supremacy is that our duty when interpreting a statute is to ascertain the meaning of the words of the statute duly enacted through the formal legislative process. This limited role serves democratic interests by ensuring that policy is made by elected, politically accountable representatives, not by appointed, life-tenured judges. Thus, although our decision has major consequences, our role is quite limited: deciding whether the IRS Rule is a permissible reading of the ACA. Having concluded it is not, we reverse the district court and remand with instructions to grant summary judgment to appellants and vacate the IRS Rule.

 

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Jul 22, 2014

In case you weren’t busy enough, a District Court threw our Sen. Ron Johnson’s Obamacare Suit

The opinion is here.

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