As if there were any doubt about where the four liberal justices (Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan) would come down, their questions made clear: Let customers on exchanges established by the federal government enjoy the same subsidies as those who buy on state-run exchanges.
On the other side, Justices Antonin Scalia and Samuel Alito were similarly unconstrained about where they’re heading: the law says subsidies are available on an exchange “established by the state”; that language doesn’t cover federal exchanges; and if Congress didn’t mean what it wrote, it can clean up its own mess. Justice Clarence Thomas stayed silent, as usual, but he can safely be counted to join them.
That leaves Chief Justice John Roberts, who was uncharacteristically quiet. If I had to guess, Roberts is less than pleased to find this political hot potato back in the lap of a court he devoutly wants the public to see as nonpartisan. Further, having been identified, and assailed by conservatives, as the late-deciding fifth vote to uphold the Affordable Care Act last time around, Roberts wanted to avoid any soupçon of hand-tipping.
On Wednesday, he was the Sgt. Schultz (“I say nothing! Nothing!”) of justices — but probably happy, to the extent he might be inclined to side with the government again, to hear Kennedy inclining in that direction. After all, it’s a lot easier to be the sixth vote than the fifth.
Kennedy’s concern involved whether prohibiting subsidies on federal exchanges would be unfair — not to citizens denied subsidies, mind you, but to states themselves. States, Kennedy noted, would be put to the coercive choice of either setting up their own exchanges or being stuck with the ensuing disaster.
“From the standpoint of the dynamics of Federalism, it does seem to me that there is something very powerful to the point that if your argument is accepted, the States are being told either create your own Exchange, or we’ll send your insurance market into a death spiral,” Kennedy told Michael Carvin, the lawyer representing four individuals challenging the federal subsidies. “It seems to me that under your argument, perhaps you will prevail in the plain words of the statute, there’s a serious constitutional problem if we accept your argument.”
Kennedy’s point has contradictory implications, one tilting in favor of those challenging the subsidies, one in the government’s direction. On the pro-challenger side, he could find that (a) the law clearly does not provide for federal subsidies and (b) is unconstitutional because it effectively forces states to establish their own exchanges.
The more likely judicial course, and the winning outcome for the government, would be for Kennedy to default to the doctrines that give the court wiggle room to duck constitutional questions: where a statute is at all ambiguous, or where Congress hasn’t been clear that it wants to intrude on state prerogatives, go for the interpretation that causes the least constitutional difficulty.
The federalism argument might not win the day. But the law’s supporters had more reason to be hopeful as the arguments ended than they did at the start.