Ever since a divided panel of the U.S. Court of Appeals for the D.C. Circuit held in Halbig v. Burwell that the PPACA does not authorize tax credits and cost-sharing subsidies for the purchase of health insurance on federally established exchanges, most commentators have assumed that the decision would be reversed by the full D.C. Circuit, rehearing the case en banc. Senior Judge Harry Edwards even called the majority’s decision a “proposed judgment” in his dissent.

The Administration, for its part, immediately announced its plan to seek review and filed a petition for en banc rehearing last Friday.  This was no surprise.  Thanks to Senate Majority Leader Harry Reid’s decision to nuke the filibuster of judicial nominees, Democratic nominees now hold a decisive 7-4 majority on the court, and Reid himself suggested this case was just the sort of thing that justified his move.

Is en banc review of Halbig guaranteed? Don’t be so sure.  While Halbig is a high-profile case of substantial importance to PPACA implementation, this does not mean it is worthy of en banc review, particularly as this standard has been traditionally applied by the D.C. Circuit.  Attorney Adam White makes this point in today’s WSJ:

If the D.C. Circuit rehears the case en banc, it would be a sharp break from history. The D.C. Circuit rehears virtually none of its cases. Each year the court’s three-judge panels make roughly 500 rulings, but the court averages roughly one en banc rehearing. This year has produced a bumper crop: two. The previous year: zero.
The low numbers are thanks to the court’s high standard, found in the Federal Rules of Appellate Procedure: En banc rehearing “is not favored and ordinarily will not be ordered” unless the case satisfies one of two standards. First, an en banc rehearing may be needed to “secure or maintain uniformity of the court’s decisions.” A three-judge panel is not allowed to overrule old precedents, even when precedents are in conflict; only the full court can do so, en banc.
Second, en banc rehearing is appropriate for what the federal appellate rules call cases of “exceptional importance.” For the D.C. Circuit, this standard has been met almost exclusively by cases raising serious constitutional issues. Over the past decade seven of the nine cases reheard en banc raised difficult questions of constitutional law, such as the rights of Guantanamo detainees or of terminally ill patients. . . .
Halbig checks none of these boxes. It is a straightforward statutory interpretation case. The administration’s supporters seem to believe that Halbig has “exceptional importance” because the Affordable Care Act is exceptionally important to them and the panel’s decision was, in their eyes, wrong.

It is well understood that just because a court’s opinion is “wrong” does not make it en banc worthy. Judge Jeffery Sutton U.S. Court of Appeals for the Sixth Circuit made this point some years ago. It’s also a point that Judge Edwards made in his opinion respecting the denial of en banc review in Bartlett v. Bowen (1987). Judge Edwards’s opinion in Bartlett is worth quoting at length:

The decision to grant en banc consideration is unquestionably among the most serious non-merits determinations an appellate court can make, because it may have the effect of vacating a panel opinion that is the product of a substantial expenditure of time and effort by three judges and numerous counsel. Such a determination should be made only in the most compelling circumstances. . . .
The dissent urges that en banc review is appropriate in these cases because they are cases of “exceptional importance” where the panel’s decision allegedly was either “clearly wrong” or “highly dubious.” The problem with this view, however, is that it reduces the “exceptional importance” test to a self-serving and result-oriented criterion. Under [this] standard, one judge’s case of “exceptional importance” is another judge’s “routine or run-of-the-mill” case . . .
the institutional cost of rehearing cases en banc is extraordinary. Each year, every judge has a heavy schedule of brief-reading, oral arguments, motions work and opinion-writing in connection with cases on the regular calendar. It is an enormous distraction to break into this schedule and tie up the entire court to hear one case en banc. It especially burdens judges who already are carrying a large backlog of cases, and it substantially delays the case being reheard, often with no clear principle emanating from the en banc court.
Underlying . . . resort to a “clearly wrong”/“highly dubious” test to determine when to rehear a case en banc . . . is the implicit view that every time a majority of the judges disagree with a panel decision, they should get rid of it by rehearing the case en banc. The error in this proposition is the concept that it is somehow desirable that majority rule should determine the outcome of cases. However salutary that principle may be in the context of popularly elected legislatures where a majority decision reflects the will of the voters who chose the lawmakers, it has no equivalent value in an intermediate court of review. The fact that 6 of 11 judges agree with a particular result does not invest that result with any greater legal validity than it would otherwise have. The reason we use majority rule on a panel is because there must be some device for reaching a decision where there is disagreement among three judges; it is not because correctness is assured by having as many legal minds as possible in agreement.
[The] “clearly wrong”/“highly dubious” test not only serves no useful purpose in this intermediate appellate judicial context, it does substantial violence to the collegiality that is indispensable to judicial decisionmaking. Collegiality cannot exist if every dissenting judge feels obliged to lobby his or her colleagues to rehear the case en banc in order to vindicate that judge’s position. Politicking will replace the thoughtful dialogue that should characterize a court where every judge respects the integrity of his or her colleagues. Furthermore, such a process would impugn the integrity of panel judges, who are both intelligent enough to know the law and conscientious enough to abide by their oath to uphold it.
The Federal Rules of Appellate Procedure explicitly recognize that en banc rehearing is “not favored and ordinarily will not be ordered,” except when consideration is necessary to secure or maintain uniformity of decisions or when a case involves a question of exceptional importance. FED.R.APP.P. 35(a). Under this rule, it is well-understood that it is only in the rarest of circumstances when a case should be reheard en banc. In other words, for the appellate system to function, judges on a circuit must trust one another and have faith in the work of their colleagues, including Senior Judges and visiting judges from other circuits. Obviously, no judge agrees with all of the decisions handed down in the circuit, nor would every judge write a particular opinion in the same fashion. But if such disagreements determined whether or not a case should be reheard en banc, the number of en banc rehearings would increase at least a hundredfold.

FRAP 35 identifies a conflict with another circuit as a potential reason for en banc review, but the D.C. Circuit has rarely granted en banc review on this basis.  Nor has the court regularly granted review when a panel has struck down important or high profile regulations. Thus the court refused to rehear decisions striking down the EPA’s Cross-State Air Pollution Rule or the Bush Administration’s proposed revisions to New Source Review under the Clean Air Act.  Indeed, as traditionally applied, the bar on en banc rehearing in the D.C. Circuit has been higher than the bar for certiorari in the Supreme Court.  The D.C. Circuit denied en banc in the aforementioned EME Homer case, as well as in two incredibly important greenhouse gas cases (Massachusetts v. EPA and UARG v. EPA), yet all three were subsequently heard by the Supreme Court.

As White notes, the D.C. Circuit usually grants en banc review when a case presents an important constitutional or jurisdictional question that is likely to affect a wide range of cases, or when a majority of judges wishes to reconsider a rule of decision announced in a prior case.  Thus the court granted en banc review in the American Meat Institute case because judges wished to reconsider a suggestion made in prior cases about the applicability of a test governing compelled commercial speech.  It did not rehear the case because a majority of the court had questions about the panel’s decision to uphold the country-of-origin labeling rules at issue.

An additional consideration for the D.C. Circuit in Halbig is whether en banc review could unnecessarily delay final resolution of the underlying question.  Both the D.C. Circuit and U.S. Court of Appeals for the Fourth Circuit expedited their consideration of the challenges to the IRS tax credits rule out of a recognition that there are significant reliance issues for both states and insured individuals.  States are already preparing to deal with the possibility that Halbig is upheld.  If the IRS rule is invalid, some states that refused to create their own exchanges may reconsider.  The sooner they know the outcome, the sooner they can make such decisions. (Ditto those states with their own exchanges that are considering whether to turn the exchanges over to the feds.)  If, as some suspect, Supreme Court review of this issue is inevitable, en banc rehearing could push off a final resolution of this question until the 2015-16 term. Even if the en banc rehearing discourages the Supreme Court from accepting certiorari in King — as Halbig critics hope — there are still two more cases pending against the rule.  Of course Halbig proponents don’t want to see an en banc review for the same reason.

So what happens now?  Immediately after receiving the government’s petition, the D.C. Circuit asked the plaintiffs for a response within 15 days.  The judges will consider this brief and vote shortly thereafter.  If rehearing is granted, we should know rather quickly, and the court will announce a rehearing schedule and whether it wants any additional briefing from the parties.  The en banc panel for such a rehearing will include the 11 active judges and the two senior judges who participated in the original panel (senior judges Edwards and Randolph).  Should the court deny rehearing, however, an announcement of this decision could be delayed if any of the judges would like to file related opinions supporting or dissenting from a denial of en banc review.  Stay tuned.