The Other (More Important) Obamacare Case Argued Today

March 26th, 2014

Today, the legal gods were working against me, by placing two key Obamacare cases at the same time about a mile away. While Hobby Lobby v. Sebelius was being argued at One First Street, down the block at the D.C. Circuit, arguments were held in Halbig v. Sebelius. This is the Obamacare exchange case, which in truth, if successful would inflict a much deeper wound than Hobby Lobby.

The Legal Times has this writeup:

“If legislation is stupid, I don’t see that it’s up to the court to save it,” said Senior Judge A. Raymond Randolph, who described the federal health care law as “cobbled together and badly written.”

Randolph and Judge Thomas Griffith seemed inclined to side with foes of the law, who told the panel that lower-income people are only eligible for tax credits if they buy health insurance through an exchange established by a state—not one set up by the federal government. Senior Judge Harry Edwards, by contrast, found the argument “preposterous” and said it would effectively “gut” the health care law. A Washington federal trial judge in January ruled for the government.

But Randolph didn’t seem to find it far-fetched that Congress might have intended the subsidies as an incentive to get states to set up their own exchanges.

The judge called the Affordable Care Act “a last-minute deal filled with a lot of predictions, even the title,” and said the predictions have not been born out. “The launch was an unmitigated disaster,” and the costs of implementation “have gone sky-high,” he said. “Suppose Congress made another prediction”—that if the tax credits were conditioned on setting up exchanges “all the states would line up for this deal.” But this prediction too was not borne out, he said.

Delery had a hard time persuading the judges that legislative history supported his position.

“The legislative history is a wash,” Griffith said. “There doesn’t seem to be any clear legislative history.” Without evidence of congressional intent, Griffith said, “You have a special burden” to show that the plain language of the statute “doesn’t mean what it appears to mean.”

Randolph added, “What we’ve got here is language that doesn’t seem malleable.”

If the court knows “the clear purpose of the statute”—in this case, to provide affordable health insurance—but Congress “didn’t legislate clearly enough, is it our job to fix the problem?,” Griffith wondered.

Randolph said no. The court can overrule plain statutory language based on the “absurdity principle, but I don’t see a stupidity principle.”

The long-and-short of it is this. Judge Randolph seems fairly intent on striking down the law [Update: It’s a rule not a law. I’ve fallen into the government-by-blog post mentality], and holding that the clear text will control. Judge Edwards, who ruled in Seven-Sky v. Holder to uphold the mandate, insists that if there was any intent to deprive states of subsidies if they don’t set up exchanges. Judge Griffith seems somewhat on the fence, though he suggested that the legislative history is a wash.

This is a toss-up. Though, in fact, a dissent here is enough for a cert grant. Almost certainly the Obama Administration will go for en banc review with the post-Nuclear option D.C. Circuit (7 Democrats, 4 Republicans). But even a divided en banc court is bound for One First Street.

You know, I can see Breyer and Kagan having a problem with the government’s position here. NFIB deja vu? A compromise that allows states to receive the subsidies if they want them?

You can listen to the argument here. It was particularly enjoyable to hear Mike Carvin and Judge Harry Edwards bully each other. My favorite part was when Edwards said the only purpose of this suit was to “kill the individual mandate.”