Friday the U.S. Supreme Court granted certiorari in a high-profile Obamacare case, King v. Burwell. (Disclosure: I’m credited/blamed for being one of the folks who outlined the theory upon which this lawsuit is based.) I posted a quick comment on the case grant earlier. With this post I wanted to briefly discuss the significance of the grant and revisit some of the points I made in Monday’s post on why the court might grant this case.
First a super-quick recap (so skip this paragraph if you’ve been following this litigation). Section 1311 of the PPACA calls upon states to create health insurance exchanges and Section 1321 requires the federal government to create exchanges in states which fail to do so (or fail to enact other mandated reforms). Section 1401 provides for tax credits for the purchase of qualifying health insurance plans in “exchanges established by the State under Section 1311.” The challengers in this case argue this means what it says: that tax credits are only authorized in exchanges established by the states. The government argues that the phrase “established by the State” does not mean that the exchange actually has to have been created by the state government because other provisions establish some degree of equivalence between Section 1311 and Section 1321 exchanges and the plaintiffs’ interpretation would undermine the goal of expanding health insurance coverage.
Earlier this year a divided panel of the U.S. Court of Appeals for the D.C. Circuit sided with the plaintiffs in Halbig v. Burwell and (on the very same day) the U.S. Court of Appeals for the Fourth Circuit sided with the federal government in King v. Burwell. The plaintiffs filed a petition for certiorari in King (which was granted today), and the government sought rehearing en banc in the D.C. Circuit (which was scheduled for December). In the meantime, a federal district court in Oklahoma also sided with the plaintiffs. A fourth case is pending in Indiana.
What does Friday’s cert grant mean? Because it takes the votes of four justices to grant cert, it means at least four justices believe this case is cert worthy. Nicholas Bagley writes that Friday’s cert grant likely means that at least four justices are skeptical of the government’s arguments and the Fourth Circuit’s decision in King. That may be true (and I’d like to think at least four justices will side with our arguments) but it’s not that simple.
Bagley is correct that, in the usual case, the Supreme Court does not grant certiorari to affirm, particularly where there are not conflicting lower court judgments. Yet this is not the usual case and, as I explained in Monday’s post, there are reasons four-or-more justices could have found King cert worthy apart from their views of the merits.
Under Rule 10, one of the reasons for granting certiorari is when a lower court “has decided an important question of federal law that has not been, but should be, settled by this Court.” While I see King as a straightforward case of statutory interpretation, it unquestionably concerns an “important question of federal law,” as the resolution of this case could have a significant impact on the implementation of the PPACA, particularly in the 36 states that have not established their own exchanges. Indeed, the importance of the legal issue was one of the things highlighted by the federal government and commentators in urging the D.C. Circuit to hear the case en banc.
An additional reason to take the case now is that this litigation creates substantial uncertainty about the operation of the law and, should the plaintiffs’ claims be upheld, policymakers, insurance companies, and those who would otherwise be eligible for subsidies will need time to figure out how to respond. This is one of the reasons all of the lower appellate courts to consider these claims have expedited their proceedings. They recognized that there are good reasons to treat these cases as more urgent and time-sensitive than the typical case.
Further, while the D.C. Circuit’s decision to rehear Halbig en banc vacated the original panel’s judgment, the Court is aware that this is a question upon which courts are divided. Two panels on two different circuits reached different conclusions, and even the panel which sided with the government was not unanimous in its rationale. The existence of another decision rejecting the government’s position provides further reasons for the justices to suspect that this is an issue that will eventually land on their lap. So, if one combines the time-sensitive nature of the litigation with the reasonable possibility that the case would end up in the Court’s lap anyway, there’s reason enough to take the case.