Constitutional Faces: The Origin of Halbig

July 27th, 2014

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?