Adler on the Origin of Halbig v. Sebelius

January 26th, 2014

I’ve spent more time studying the Affordable Care Act litigation than I can count. One of the biggest challenges in this endeavor has been perspective. Because I am writing in the midst of the tsunami so to speak, I have to simultaneously balance the 30,000 foot view, to make sure I place everything in the proper context, but at the same time, identify and swoop in on the most important stories and details, that both paint a picture of how we arrived at this situation, but also intrigue the reader. This was one of the biggest challenges I had while writing Unprecedented, and in the early stages of the sequel, Unraveled.

At Volokh/WaPo, Jon Adler, on of the originators of the Halbig v. Sebelius case, offers his thoughts on how the case began.

In actuality, the central claim on which these suits are based was first made well beforeNFIB was argued (let alone decided), and well before anyone recognized how limiting the availability of tax credits to states with their own exchanges would affect implementation of the law.

Attorney Tom Christina noted the express language of the PPACA limited tax credits to exchanges established by states under Section 1311 of the Act in a December 2010 presentation at AEI.  I later discussed the relevant statutory language and its potential implications at a February 2011 symposium at sponsored by the Kansas Journal of Law & Public Policy at the Kansas University Law School.  That presentation led tothis paper.  At the time, most of us saw the relevant language as yet another manifestation of “cooperative federalism,” as it appeared the federal government was using the lure of tax credits to induce state cooperation (as some had proposed when the PPACA was being drafted).

It was only later that some, such as my co-author Michael Cannon, realized how these provisions interacted with other portions of the statutes, and how they could affect PPACA implementation if, as it came to pass, a majority of states refused to play along. And it was only after the IRS proposed its rule purporting to authorize tax credits in federal exchanges that Michael and I began making the case that the IRS was acting beyond the scope of its delegated authority.  As has also become clear, the IRS only belatedly considered whether it actually had the authority to issue such a rule in light of the statutory text. Given the tension between the statutory  text and the IRS rule, litigation was inevitable if (as we also argued) there were plaintiffs who could demonstrate standing to sue.

Depending on how the D.C. Circuit appeal goes, this could be another really important episode in the ongoing challenge against Obamacare.