Greenhouse: The “Failed Commerce Clause attack” On Obamacare. Failed?

August 22nd, 2014

I recently contributed to a symposium issue in the Illinois Law Review, led by Professor David Hyman, asking why law professors “misunderestimated” the challenge to Obamacare. One of the threads several of the authors hit on, was how many law professors–mostly on the left– were shocked and stunned that the constitutional challenge to Obamacare went anywhere. To this day, many insist that the commerce clause argument was a joke, and had no validity. Although, most would at least acknowledge, at least begrudgingly, that a majority of the Supreme Court accepted that argument.

Not Linda Greenhouse.

But stay with me, because this latest round, catapulted onto the Supreme Court’s docket earlier this month by the same forces that brought us the failed Commerce Clause attack two years ago, opens a window on raw judicial politics so extreme that the saga so far would be funny if the potential consequences weren’t so serious.

The Commerce Clause challenge didn’t fail. It succeeded. Five Justices accepted it. And, the government was absolutely incapable of articulating a limiting principle on the commerce clause (though as I discuss in my book, this was a deliberate choice on the part of the SG).

I would usually not pounce on an error like this, but there is a special history with Greenhouse and the challenge to the ACA, which I discuss in Unprecedented, and my Illinois article. Throughout the entire debate, Greenhouse expressed a never-ceasing sense of shock and awe that this challenge even went anywhere. She even charged her successor at the Times, Adam Liptak with promoting a “false equivalency,” in covering the case.

Here is a segment from my article:

Linda Greenhouse, the Pulitzer Prize-winning reporter who covered the Supreme Court for the Times from 1978 to 2007, was not pleased with the coverage of the case in the paper of record. Greenhouse, who now writes in the Times opinion section and lectures at Yale Law School, appeared on a panel titled “Journalism and the Constitution outside the Courts,” along with Emily Bazelon (Slate), Charlie Savage (the New York Times), and Adam Liptak (the New York Times). Liptak was Greenhouse’s successor for the Supreme Court beat at the Times. Greenhouse asserted that Liptak and others at the Times, by giving the challengers so much attention, created a “false equivalency.” She claimed that Liptak validated Barnett and his frivolous ideas. Many oth- er professors in attendance shared this concern.

Liptak emphatically rejected Greenhouse’s “false equivalence” al- legation. At the conference, he quipped, “Do I sense some hostility?” Later, Liptak would tell me that he was “taken aback by what I per- ceived to be harsh and heartfelt criticism from people I respect at my alma mater” (Yale Law School). He added that at the conference “[t]here was something like a consensus that the press in general and perhaps The New York Times in particular had fallen down on the job by unduly dig- nifying the arguments in support of the Commerce Clause challenge to the Affordable Care Act.” Liptak, however, felt that he had “pre- sent[ed] both sides of the argument.” Courts are a “poor place to make the ‘false equivalency’ criticism,” Liptak explained. “The critique is weaker still when the arguments on one side were made by a majority of the states and had divided the lower courts.”

Legal arguments, however strong the political backing, only go anywhere because the argument has the power of persuasion. The uphill climb in NFIB was strong, as the challengers had to thread a needle between existing commerce clause precedents. But they did it!

In comparison, Halbig is much easier–the text is there. Now, there are lots of things beyond the text (purpose, structure, effects, etc.), which I won’t get into here, but this is an argument that should, and has been taken seriously.

On the point of Halbig, Greenhouse makes another misstatement in her column. She writes that all three judges on the 4th Circuit agreed that the statute, on its face, treats state exchanges in the same fashion as federal exchanges.

Section 1321(c) provides that if a state fails to establish an exchange, the secretary of Health and Human Services shall “establish and operate such Exchange within the state and the Secretary shall take such actions as are necessary to implement such other requirements.” The words “such Exchange,” the government argues, mean that the federal government stands in the state’s shoes when it complies with this instruction; for these purposes, the federal government is the state.

That interpretation “makes sense,” all three members of a three-judge panel of the United States Court of Appeals for the Fourth Circuit, in Richmond, Va., concluded in King v. Burwell, a decision that, by an amazing coincidence of timing, was issued the same day, July 22, as the contrary D.C. Circuit opinion. Those three judges, Roger L. Gregory, Stephanie D. Thacker and Andre M. Davis, examined the statute as a whole, in light of its purpose, and at the end of the day found the federal-state issue to be ambiguous. That’s all they needed to find for the government to win the case.

This isn’t  exactly right. Judges Gregory and Thacker found the statute ambiguous, and resolved the issue on Chevron Step 2, where the government gets the utmost deference. Only Judge Davis found the statute was unambiguous, and resolved it in favor of the government on Chevron Step 1. For that matter, all three judges in Halbig on the D.C. Circuit did not find the statute worked for the government on its face. Judge Edwards also turned to Chevron Step 2. In this post, I count the votes. 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.