On Tuesday, I will be giving a lecture on Unraveled at my law school in Houston.
On Wednesday, I will be discussing 3D-Printed Guns at the University of Missouri in Columbia.
On Thursday, I will be discussing the election and the Supreme Court at the University of Kentucky. Josh Douglas will be commenting on my talk.
On Friday, I will be speaking at the Loyola Chicago Law School ConLaw Colloquium on a new paper, Presidential Maladministration.
I hope to see you there!
On Friday, October 28, I was a guest on Midday Mobile on 106.5 with host Sean Sullivan to discuss Unraveled. We also got in a few bits about FantasySCOTUS. Enjoy.
The petitioners in Gloucester County School Board v. G.G. asked the Supreme Court to review three questions.
1. Should this Court retain the Auer doctrine despite the objections of multiple Justices who have recently urged that it be reconsidered and overruled?
2. If Auer is retained, should deference extend to an unpublished agency letter that, among other things, does not carry the force of law and was adopted in the context of the very dispute in which deference is sought?
3. With or without deference to the agency, should the Department’s specific interpretation of Title IX and 34 C.F.R. § 106.33 be given effect?
Last week, the Court granted the petition, limited to Questions 2 and 3. As soon as I saw that order, I had a premonition–really a flashback–to the Chief Justice’s opinion in King v. Burwell. You may recall that virtually every judge who ruled for the government in the tax subsidies litigation did so on the basis of Chevron deference: they found that the phrase “established by the state” was ambiguous, and the IRS Rule interpreting that phrase was “reasonable.” Only one judge–Andre Davis of the Fourth Circuit held that “established by the state” unambiguously provided that subsidies could be provided on the federal exchange. That was, until Chief Justice Roberts.
During oral arguments, Roberts asked only two questions, one of which was about Chevron:
If you’re right — if you’re right about Chevron, that would indicate that a subsequent administration could change that interpretation?
At the time, I thought Roberts was suggesting that indeed the next President could rescind the IRS rule by adopting a different “reasonable interpretation.” However, in hindsight (as I discuss in Unraveled), Roberts had a different meaning altogether: Chevron was irrelevant, and the next President could not unravel Obamacare, because the statute unambiguously permitted subsidies on the federal exchange.
Roberts, in what has become his typical fashion, found a way to rule for the government while pairing back doctrines he does not like. In NFIB, he upheld the mandate and Medicaid expansion, but only by putting further constraints on commerce and spending clause doctrines. In King, he affirmed the payment of subsidies on the federal exchange, but only by expanding the scope of the “major question” doctrine, which I view as part of Chevron Step 0. This has become his modus operandi.
That brings us back to Gloucester County. The fact that the Court expressly rejected the first question means that Auer deference is not going anywhere. So how will Roberts vote here? If NFIB and King are any guide, my prediction: Roberts will hold that that the “Dear Colleague” letter is not entitled to Auer deference (question 2), but even without deference, the Department’s interpretation of Title IX is correct (question 3). That is, discrimination on the basis of “sex” unequivocally prohibits discrimination on the basis of gender identity.
Then again, I’m almost always wrong with my predictions, so feel free to disregard this post.
As Obamacare continues to unravel, the same genius central planners who got us in this mess now propose a solution to get us out of it. Leading the charge is Jonathan Gruber–yes that Jonathan Gruber–who had this proposal:
“I think probably the most important thing experts would agree is we need a larger mandate penalty.”
From a policy perspective, an increase in the mandate must be accompanied by an increase in the level of subsidies being offered. Often, politicians talk about increasing subsidies as if it has no cost–but it does. All pretenses of the ACA being budget neutral have long since been discarded–especially with the delay-cum-repeal of the Cadillac Tax. So this is not a free solution. Further, the chances of both houses of Congress agreeing to expand the mandate–the single most unpopular aspect of the ACA–is unlikely.
Beyond the policy implications, increasing the mandate raises constitutional problems: under the Chief’s saving construction, if the “tax” becomes too punitive, it is transformed into an unconstitutional “penalty.” Trevor Burrus addresses the issue here.
So could raising the “tax” turn it into a “penalty” and thus make it unconstitutional? Possibly. At some point, the tax would take on a punitive character, and, if people like Gruber get their way, the tax might have to be pretty stiff. With health insurance prices going up, it can still be cheaper to pay the “tax” rather than purchase insurance. And that tax might have to go up a lot to make some people change their minds. If the government ever tries to attach criminal penalties to noncompliance, then the argument is even stronger that it would become an unconstitutional regulation of commerce, given that the Court held that the individual mandate isn’t a valid use of the commerce power.
But we may not even have to wait for the penalty to be increased by statute. On its own terms, certain wealthy individuals may be confronted with the punitive choice in the absence of legislative change.
I wrote about this back in 2014, based on the Epilogue of Unprecedented, and repeat that post here.
In NFIB v. Sebelius, the Chief Justice applied a saving construction to the Affordable Care Act’s penalty, and treated it as a tax, to uphold its constitutionality. (Thom Lambert has a great piece in Regulation Magazine on this topic). But, the Chief Justice placed limitations on the application of the saving construction. The first such limitation stated that because the cost of the “tax” is less than the cost of insurance, a person has a legitimate choice, and there is no coercion:
The same analysis here suggests that the shared responsibility payment may for constitutional purposes be considered a tax, not a penalty: First, for most Americans the amount due will be far less than the price of insurance, and, by statute, it can never be more. FN 8 It may often be a reasonable financial decision to make the payment rather than purchase insurance, unlike the “prohibitory” financial punishment in Drexel Furniture. 259 U. S., at 37.
FN 8 In 2016, for example, individuals making $35,000 a year are expected to owe the IRS about $60 for any month in which they do not have health insurance. Someone with an annual income of $100,000 a year would likely owe about $200. The price of a qualifying insurance policy is projected to be around $400 per month. See D. Newman, CRS Report for Congress, Individual Mandate and Related Information Re-quirements Under PPACA 7, and n. 25 (2011).
Though it is not entirely correct that the “tax” can never be more than the cost of insurance.
The relevant statute is (our favorite) 26 U.S. Code § 5000A. The penalty starts at $95 a month, and will increase to $325 in 2015, $695 in 2016, and will grow with inflation after that. It’s expected to hit $800 a month by 2023. For wealthier Americans, the penalty (when fully phased in) will be even greater, between 1% and 2.5% of income.
(B) Percentage of income
Though, this penalty is capped by statute.
The amount of the penalty imposed by this section on any taxpayer for any taxable year with respect to failures described in subsection (b)(1) shall be . . . amount equal to the national average premium for qualified health plans which have a bronze level of coverage, provide coverage for the applicable family size involved, and are offered through Exchanges for plan years beginning in the calendar year with or within which the taxable year ends.
In plain English, this says that the amount of the penalty (not “tax” in case anyone bothered to read the law Congress passed) will not exceed the “national average premium for qualified health plans which have a bronze level of coverage.” So the Chief is wrong to say that the amount will always be less. Why? Because the cost of bronze plans varies by states. In some states it may be more expensive than other. Due to the very nature of an average, in some states it will be above the average, and in some states it will be below the average. In no way can the prices be the same nationwide.
Now it may be true for “most Americans” (those above the average) but not for all Americans (below the average). In fact, the wealthiest Americans, who live in states with the lowest bronze-priced plans, will almost certainly be faced with a false choice–the “tax” will be more expensive than the cost of insurance. 2% of their income will almost certainly be more than the cost of the cheapest bronze plan.
Let’s do some math. CBO projects that the average national bronze plan will be $5,000 a year in 2016. Therefore, if the penalty would be capped at $5,000 a year, who would pay a $5,000 penalty? An individual earning $200,000 a year (200,000 * .025 = 5,000). But what if the cheapest available plan that qualifies under the Affordable Care Act in that person’s state is less than $5,000 a year? Say the cheapest bronze plan is $4,000 a year. Because the statute pegs the penalty to the national average, rather than a local average–and it is impossible to buy across state lines–for some wealthier individuals, there is no meaningful choice.
By it’s very terms, this would seem to run headlong into the Chief Justice’s saving construction, which misstated the nature of the statutory cap. At this point, it would no longer be a “constitutional tax” but an “unconstitutional penalty.”
Certainly, somewhere, there is some wealthy person who stands to pay more under the Obamacare “tax” than insurance would cost. Such a challenge could assert that there are limits on the scope of the penalty.
On Thursday, October 27, I happened to be in Montgomery to speak to the Montgomery Chapter of the Federalist Society. My timing was fortuitous. First, some background. In September 2016, the Alabama Court of the Judiciary issued an order suspending Chief Justice Moore for the remainder of his term, roughly 2.5 years. Chief Justice Moore appealed that order to the Alabama Supreme Court. However, the Justices of that Court voted to recuse. Under Alabama law, when the Supreme Court lacks a quorum, a procedure is put in place to select lower-court judges to form a special Supreme Court. This procedure was used back in 2003 the first time Moore was removed from the bench.
The procedure is almost too surreal to believe–but I was there in person, it actually happens in this fashion. The clerk of court placed in a gold candy box fifty slips of papers, with the names of retired judges written on them. (The same box was used in 2003). The clerk then places the box on top of her head–so there can be no accusation that she is peaking–and pulls out a slip of paper, and hands it to a deputy clerk. The deputy clerk then reads the name out loud, and hands the paper to another clerk who writes the name down on the list. This ritual is repeated 50 times, as 50 names were called. The first seven will presumptively be on the court, unless one recuses, or (I suspect) is challenged for impartiality. If a judge is struck, the eighth person on the list moves up. The procedure took about 15 minutes.
The only thing stranger than the procedure, was what happened beforehand. The Acting Chief Justice presided over the procedure, though she was not on the bench, and not wearing a robe. Moments before the drawing began, Chief Justice Moore’s attorney objected on the grounds that the judges who selected this procedure should have recused. I didn’t fully understand the objection, but he was seeking a continuance to further develop the argument. The acting Chief Justice, who was standing off to the side of the room, said the motion would not be ruled on because there “was no Court.” Moore’s attorney said there was a Court–the Justices were down the hall–and they could be called on. The acting Chief Justice repeated that the motion would not be ruled on, and told the lawyer to be seated. At that point, the lawyer and Moore exited the chamber, and announced that they will hold a press conference on the court house steps. After that, the name-drawing procedure commenced.
It was surreal. This video from Alabama.com does not even do the scene Justice–pun intended. If you look carefully in the first few seconds, you can see me sitting in the front row behind Moore. I’m wearing a red tie. Also, at around 0:37, you can see me as Moore and his attorney leave the chamber. My 15 seconds of fame, quite literally.
On a separate note, I saw the location of the former Ten Commandments memorial, which resulted in Moore’s 2003 removal. You can still some scratches on the marble floor from when the monument was removed.
WSFA.com Montgomery Alabama news.
I do plan on writing about Moore’s case. Along the lines of my co-authored article with Howard Wasserman, the Court of the Judiciary made some foundational errors about the scopes of injunctions, Cooper v. Aaron, and the erroneous view of federal courts as supreme over state courts. Stay tuned.
Update: I discussed the case before the Mobile Federalist Society Chapter. Here is the video: