Balkinization  

Sunday, February 01, 2015

The Amicus Briefs Supporting the Government's Position in King v. Burwell

Guest Blogger



Timothy Jost

On January 28, 2015, thirty amicus briefs were filed in the Supreme Court supporting the validity of the Internal Revenue Service rule in King v. Burwell.  That rule permits the federally facilitated marketplaces (FFM), which administer the Affordable Care Act insurance markets in two thirds of the states, to grant premium tax credits.  King is a lawsuit brought by the Competitive Enterprise Institute, an anti-government advocacy group, claiming that four words that appear in two subsections of the ACA that provide the formula for calculating premium tax credits and refer to exchanges “established by the State” limit premium tax credits to state-operated marketplaces (exchanges).  They ask the Court, therefore, to invalidate the IRS rule and terminate tax credits for more than five million Americans.

The thirty briefs were filed by an extraordinary assemblage of states and state legislators, members of Congress, leading legal scholars, academics from a variety of other disciplines offering a wide range of perspectives, insurers, providers, and patients and their advocates.  By contrast the twenty-one amicus briefs filed last month by the challengers are far more limited in scope.  The challengers submitted briefs signed by a few Republican Congressmen, seven states, and a handful of conservative and libertarian legal scholars.  The rest of their amici were right-wing advocacy groups. 

Among the most important briefs is the brief filed by the Virginia attorney general and the attorneys general of twenty-one other states and the District of Columbia.  Ten of the states have federal exchanges and eight have Republican governors.  By contrast, the six states that filed amicus briefs for the challengers are all dominated by Republicans. Tellingly, the biggest Republican federal exchange states, such as Florida, Texas, Wisconsin, and Ohio did not join. 


The Virginia brief argues that the Constitution does not permit Congress to impose financial penalties on the states in cooperative spending programs unless the state is given clear notice of the conditions under which the penalty will be imposed.  The brief documents the fact that both the states that decided to operate their own marketplace and those that decided to have the federal government operate the marketplace in their state made the decision fully understanding that premium tax credits would be available under either option.  The states were not on notice that their residents would lose access to affordable health insurance and that their state’s individual insurance markets would be destroyed if they opted for a federal exchange.  The Court must avoid the serious constitutional question raised by this lack of notice by interpreting the statute in the way the states understood it.

A second important brief was filed by the Constitutional Accountability Center on behalf of the Democratic members of Congress who played a key role in drafting the ACA in the 111th Congress and over 100 individuals who served in state legislatures at the time their states were deciding whether to operate their own exchange or invite the federal government to do so.  The members clarify that it was always the intent of Congress to permit FFM as well as state-operated marketplace states to have access to premium tax credits.

Significantly, the brief cites statements by Senator Ben Nelson that he understood that FFM states could grant tax credits.  A key element of the story that the plaintiffs have constructed as to why the ACA would not have allowed FFM states to grant the tax credits has been that Nelson demanded it.  This is simply false. 

It is also important that  the members who signed the brief not only point to contemporaneous evidence of their intent at the time the law was drafted but affirmatively state their understanding about what the law meant.  The Republican congressional members who filed an amicus for the challengers carefully avoided actually saying that they believed that the ACA prohibited FFMs from granting premium tax credits at the time they voted on the bill and offered no contemporaneous evidence that they had this understanding. 

The state legislators affirm that they did not understand at the time their states decided whether or not to operate their own marketplaces that they were under a threat that tax credits would be withheld if they went with a federal marketplace.  Of course, a secret threat is not a threat, again demonstrating that the challengers’ story about why the ACA would have limited tax credits to state marketplace states is a pure fiction.

Several briefs were filed by prominent legal scholars.  A brief filed by William Eskridge, John Ferejohn, Charles Fried, Lisa Marshall Manheim and David Strauss explains why a textualist analysis of the law would compel the Court to rule for the government.  Proper textualism does not single out a single phrase of a law and then try to determine whether a proposed reading of that phrase would render the rest of the law absurd, the approach taken by Judge Griffith in the now vacated Halbig D.C.Circuit decision.  Rather textualism requires the Court to consider the meaning of particular provisions in light of the entire text of the law.

A brief filed by Thomas Merrill, Gillian Metzger, Abbe Gluck, and Nicholas Bagley elaborates the Supreme Court’s jurisprudence mandating that doctrines designed to preserve the nation’s federalist structure should significantly influence interpretation of federal statutes to avoid interpretations that would damage that structure where Congress’ intent is not clear, or interpretations that would, without clear notice, link harmful consequences to choices that statutes offer to states.  Noting that the petitioners’ interpretation would, for states electing federal operation of their exchanges, put individual insurance markets in a worse position than prior to the ACA, the brief demonstrates that the court’s federalism doctrines and precedents compel rejection of petitioners’ interpretation.  In addition, the brief shows that a prohibition on premium tax credits for federal exchanges is inconsistent with the kind of cooperative federalism program represented by the ACA marketplaces.  The brief refutes claims made by the challengers and their amici that a program that would operate the way the challengers characterize the ACA program would resemble other existing federal programs.

Another brief filed by a group of constitutional and health law scholars also raises federalism issues.  It argues that if the Court adopts the challengers’ reading of the law it would effectively hold that the FFM states are subject to a set of regulatory mandates and requirements that in the absence of the premium tax credits would destroy the insurance markets in those states. This disparate threat of regulatory punishment would render the law constitutionally suspect but can be avoided by adopting the government’s reading of the law.  

Yet another brief filed by former federal government officials argues that even if the government’s reading of the law is not the only possible reading of the law, the Court should uphold the IRS rule under the Chevron rule, which requires deference to an administrative agency’s permissible interpretation of an ambiguous law.  Finally a brief submitted by lawyer Maurice F. Baggiano actually quotes a dictionary to show that an FFM is an exchange “established by the state.”

Other briefs were filed by a range of scholars from other disciplines.  Thirty-six prominent historians and political scientists filed a brief demonstrating that given the history of previous health reform efforts, of which Congress was aware, Congress could not possibly have created marketplaces without the ability to grant tax credits to make health insurance affordable.  This brief also traces the legislative history of the ACA, demonstrating that federal fallback exchanges that could grant tax credits were present in every version of the legislation. 

A brief filed by over 100 public health deans and scholars documents the devastating effect of a decision against the IRS rule on the nation’s health.  The brief predicts that a decision for the challengers could result in 9800 additional premature deaths annually.  Yet another brief by 52 distinguished economists (including 3 Nobel Prize winners) documents the economic effects of an adverse decision, not just on individuals now receiving premium tax credits, but also on the individual insurance markets in FFM states, which would be devastated through adverse selection by a decision for the challengers.

Separate amicus briefs were filed supporting the government by the American Hospital Association and by other associations representing most of the nation’s hospitals; the Catholic Hospital Association; Hospital Corporation of America; the American Thoracic Society; the National Alliance of State Health CO-OPs; the National Association of Community Health Centers, American Nurses Association, and American College of Physicians; and the American Academy of Pediatrics, together with the American Academy of Family Physicians, and Children’s Hospital Association demonstrating the disastrous effects that a decision against the government would have on American health care providers and insurers and their patients.  An excellent brief was also filed by Andy Pincus for America’s Health Insurance Plans demonstrating the effects that an adverse decision would have on insured Americans, whether they are insured through the marketplaces or in the outside market.  Tellingly, no stakeholders filed amicus briefs supporting the plaintiffs.

Finally, and most importantly, about a dozen briefs were filed by individuals with chronic medical conditions; organizations representing individuals with medical needs, unions, an organization representing small employers, and organizations representing various minority and ethnic groups.  These briefs demonstrate the real world effects that an adverse decision would have on actual Americans now receiving help through the Affordable Care Act, some of whose lives depend on that help.  Particularly worth reading is a brief filed by Robert Weiner for Families USA which develops with great clarity the legal argument for upholding the IRS rule.

All of the briefs reinforce the legal arguments made by the government in its excellent merits brief filed on January 21.   That brief demonstrated conclusively that the text of the ACA supports the IRS rule and that the arguments of the plaintiffs are transparently false.  The amicus briefs are helpful, however, in elaborating on elements of that argument and in demonstrating the real world consequences of a wrong decision.  It is to be hoped that the Court considers their message carefully.

Timothy Jost is Professor of Law at Washington and Lee University School of Law. You can reach him by e-mail at Jostt at wlu.edu


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