Michael Greve on Halbig and its aftermath

August 6

Professor Michael Greve, author of The Upside-Down Constitution, has a pair of posts on the Liberty Law Blog discussing “what we have learned from Halbig v. Burwell.  The first post discusses what we’ve learned from the development of the case against the IRS tax credit rule and what it says about advocacy litigation of this type.  The second post discusses the underlying debate and how what are fairly conventional legal arguments have become controversial given the context of this case.  Greve writes:

The King and Halbig plaintiffs’ argument is that the statutory language must mean what it plainly says: Obamacare’s machinery of subsidies and mandates requires exchanges to be established by a state. The government and its defenders say that this can’t be right: since only some 14 states have established an exchange, plaintiffs’ position would render Obamacare inoperable for most of the country—and Congress cannot have intended that. “By a state,” they insist, must mean something like “by a state, or the federal government stepping into its shoes.”

Needless to say, the plaintiffs and defendants have spun out and buttressed the basic arguments in multiple ways; and one can have, and the bloggers have had, a learned discussion about “textualism” or “contextualism” or “purposivism” as the proper mode of statutory interpretation. Step back, though: would we actually be having this overwrought discussion over a perfectly straightforward Administrative Law and statutory interpretation question—and a perfectly conventional judicial resolution—if Halbig were about something other than Obamacare? Hardly.

By way of illustration, take a look at Sierra Club v. EPA, 536 F.3d 673 (D.C. Cir. 2008), a case over Title V permitting under the Clean Air Act. In defense of a regulation that took some liberty with the language of Title V, the EPA argued that (1) the statutory language (“each” permit) didn’t quite mean what it said, when read in connection with other provisions; (2) the statutory context warranted a more latitudinarian reading; and (3) EPA’s “programmatic” reading would better serve congressional purposes. In substance, that’s the government’s Halbig defense. Sierra Club rejected all three arguments; and you can clip entire paragraphs from the opinion and paste them into Halbig without anyone noticing. (Judge Griffith wrote both opinions.) No, it’s not a conservative cabal: in Sierra Club, the enviros won. And no, it’s not an outlier: some Administrative Law textbooks excerpt Sierra Club as an example of how Chevron (Step I) analysis works.

It takes real effort to get away from the conventional analysis of Halbig and its implications. Initially, the government’s defenders said that the statutory language at issue was just a “scrivener’s error” (as when a statute says “more” when it plainly meant “less”). That proved hogwash. Their next theory was that the language was “inartful” or a “glitch”; and that the plaintiffs’ theory that Congress meant to extend subsidies only to citizens in states with their own exchanges—as a way of incentivizing state compliance—is a post-hoc fabrication. That theory has collided with videotaped evidence to the contrary and is capsizing. But suppose that it’s right, or at least plausible: why isn’t the obvious judicial answer to give the statute its natural reading—and to say that it’s up to Congress to fix things? Why isn’t the supposed error precisely a case for a “we-messed-up-and-here-is-what-we-meant” statutory override, of the sort that Congress has enacted time and again for civil rights laws, Medicaid, Medicare, and any number of other entitlement statutes? In short, why isn’t Halbig obviously right? And why isn’t that answer congenial to liberals who, from the New Deal to infinity and beyond, have extolled statutory and even constitutional litigation as a “dialogue” between the Court and the political branches, especially the Congress?

Because they no longer believe it.

In a related guest-post, former OLC attorney Bill Levin adds his thoughts on the government’s arguments and the practical import of the case.

While commentators, and even Gruber, can seek to muddle the issue by talking about “typos,” a “speak-o” and poorly worded language, the government in court has embraced a contradictory argument. Far from being poorly drafted, the law, according to the government, consists of carefully crafted “nested exchange provisions.”

While lawyers are trained to argue in the alternative, the Supreme Court is not going to give credence to the Solicitor General if he says the law was drafted with such clarity as to envision nested provisions, or, if you don’t agree, then the law was a hastily composed mess in which the intent of affordability overrides the plain meaning limit on subsidies.

Setting aside the daunting legal landscape facing the government, in which its only recourse lies in an inapplicable finding of Chevron ambiguity, the case has a practical component that to date has received too little attention. During oral argument before the D.C. Circuit, it was established that nothing in the statute prevents 36 states from setting up an exchange, even if they initially failed to do so. . . .

the government in [Halbig] will be obliged to admit that if the Court upholds the plain meaning of the statute, the supposed harm of insufficient subsidies can be 100% resolved by the formation of state exchanges. It is on this point that even conservative commentators have incorrectly concluded that Chief Justice Roberts, having invented a tax penalty to avoid ruling Obamacare unconstitutional, or swing voter Justice Kennedy, will likewise ignore plain meaning whose consequence is fully resolvable by the political branches.

Food for thought.

Jonathan H. Adler teaches courses in constitutional, administrative, and environmental law at the Case Western University School of Law, where he is the inaugural Johan Verheij Memorial Professor of Law and Director of the Center for Business Law and Regulation.
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