On Sept. 30, Judge Ronald A. White of the U.S. District Court for the Eastern District of Oklahoma delivered his decision in Pruitt v. Burwell, the third of four related cases to have received a judgment. The four cases challenge the IRS ruling that ObamaCare subsidies will be given to policyholders who’ve purchased health insurance in exchanges established by the federal government. Like the verdict in Halbig v. Burwell, Judge White found for the plaintiffs and against the IRS, and he vacated the IRS regulation pending appeal. The other case to have received a judgment is King v. Burwell, which found for the government. So we have a 2-1 split. The U.S. Supreme Court must eventually weigh in.
In an article at National Review just after the Halbig decision, Kevin Williamson dilated on the importance of “the written law.” Federal judges might take to heart one of his formulations: “law is nothing if not language.”
In the text of ObamaCare there are 58 iterations of the word “behalf,” and not a one of them is connected to “State.” In the Halbigdissent (text) there are 18 iterations of the word “behalf” and each and every one of them is connected to “State,” such as “on the State’s behalf” or “on behalf of the State.” So when the dissent claims that “the Act empowers HHS to establish exchanges on behalf ofthe States,” he’s reading his own language into the Act.
The majority opinion in King (text) also buys this “behalf argument.” Of the four iterations of “behalf” in King, two concern “the state”; both on page 20:
In the absence of state action, the federal government is required to step in and create, by definition, “an American Health Benefit Exchange established under [§] 1311” on behalf of the state. […]
Given that Congress defined “Exchange” as an Exchange established by the state, it makes sense to read § 1321(c)’s directive that HHS establish “such Exchange” to mean that the federal government acts on behalf of the state when it establishes its own Exchange. [Italics added.]
That’s not what SEC. 1321(c) of the ACA says, which is: “… the Secretary shall (directly or through agreement with a not-for-profit entity) establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements.” (Page 186) When the dissent in Halbig and the majority opinion in King write about the feds having established exchanges on the State’s “behalf,” they’re injecting their own language; there’s no “behalf” connected to “State” to be found in the Act.
Another word that government lawyers have been stressing is “such,” such as in “such exchange.” On page 71 of the oral arguments inHalbig, Mr. Carvin, the lawyer for the appellants, addresses “such”:
The Government erects a cathedral around the word “such” and says that this somehow changes things, it doesn’t change things, all “such” means is they’re not telling the Secretary to set up any old exchange, it’s “such exchange,” they want it to replicate as best they can what’s in the state, but all that tells you is what kind of exchanges, and 36B doesn’t turn on what kind of exchange it is, it turns on who established the exchange. So, when HHS establishes “such exchange” then obviously it is not the state that is establishing “such exchange.” [Quote marks added.]
Williamson begins his NR article: “In the wake of the Halbig decision, liberals sniffed: Surely, Ezra Klein wrote, the Supreme Court is not going to gut the sublime work of policy poetry that is Obamacare in order to ‘teach Congress a lesson about grammar.’” (“Sublime work of policy poetry that is Obamacare”; now that’s language.)
But Halbig isn’t about grammar, and I suspect Klein knows it. There’s nothing ungrammatical about the language in question — “Exchange established by the State” — which appears ten times in the text of ObamaCare. The issue in these four cases is whether there is any other language in ObamaCare that would “undo” that unambiguous language. The other language would also need to be unambiguous; we can’t very well have ambiguous language “undoing” unambiguous language.
To get a different slant on how strained the government’s arguments are, consider this hypothetical scenario: ObamaCare clearly stipulates that subsidies are to be granted to policies purchased at state exchanges AND to policies purchased at federal exchanges, but after the law is enacted the IRS rules that it’s only going to grant subsidies to policies purchased at federal exchanges, (perhaps because the subsidies are getting too expensive). Such an IRS ruling would have lawyers filing suits all over the place, and rightly so. What that hypothetical happens to be is an analog of the situation now before the courts.
Those who think that the lack of clarity in ObamaCare is attributable to some “drafting error” should read the article by Sean Davis atThe Federalist that came out the day after the decision in Halbig. That the several States understood the availability of federal subsidies in the way alleged by the plaintiffs in these cases was demonstrated by Britanny La Couture at American Action Forum: “Building the Case for Halbig v. Burwell: What States Knew”
One problem for the government’s lawyers arguing for the retention of the IRS rule is that Congress has no authority to command the States to set up exchanges. If Congress did have that power, then why are the 34 States that have refused to establish exchanges not being sued by the feds? It’s because Congress can’t commandeer the apparatus of the States to fulfill a federal purpose. You see, in the United States of America we have a little thing called “dual sovereignty.” The States didn’t enact ObamaCare; the feds did. And the feds didn’t “give” the States the option to opt out of ObamaCare; the States already possessed that option.
ObamaCare is a federal program; compliance is handled by a federal agency, our beloved IRS. In establishing federal exchanges, the feds weren’t doing anything on “behalf” of the States.
Here’s where it gets messy. If the Supreme Court sides with the plaintiffs in these cases, then the IRS illegally dispersed a lot of taxpayer money to private insurance companies, which they continue to do. Will the IRS demand that it be returned? But the insurance companies will surely have paid out some of that money to settle insurance claims; they may have paid for expensive surgeries like coronary bypass operations. So who’s going to take the financial hit if the subsidies are found to be illegal: the insurance companies or the taxpayer?
That dilemma is just one reason why the Supreme Court should fast-track these cases before any more possibly illegal subsidies are handed out. The continuing abuse and degradation of language is another.
NOTE: Forbes ran an interesting analysis of the ruling in Pruitt by Michael Cannon that’s worth reading; it appeared on the day Judge White delivered his ruling. For more on these IRS cases, see my last article.
- How the 17th Amendment Ruined the Senate - October 15, 2017
- The US Tax Code: A Tool to Illegally Sidestep Constraints of the Constitution - March 7, 2016
- If the Feds Can’t Coerce States, Why Can They Coerce Individuals? - July 16, 2015