Balkinization  

Friday, August 01, 2014

[UPDATED evening of August 1] Petition for certiorari filed in King, the Fourth Circuit ACA "exchange" case; and Government files petition for rehearing en banc in the D.C. Circuit in Halbig

Marty Lederman

The plaintiff in the Fourth Circuit King case has petitioned the U.S. Supreme Court for a writ of certiorari.  Meanwhile, the government has petitioned the court of appeals in the D.C. Circuit for rehearing en banc.  [UPDATE:  Within hours of receiving the petition, the court of appeals ordered the appellants to file a response to the rehearing petition within 15 days (which presumably will mean 17 days, or Monday, August 18), not to exceed 15 pages.]

Halbig, King, and the Procedural Path Ahead

Neil Siegel

Forgive me if this is too obvious, but I fear it may not be to everyone interested in whether tax subsidies will be available in federally facilitated exchanges.

The reason the plaintiffs in King are petitioning for certiorari now is that they realize their argument has little chance of prevailing before an en banc Fourth Circuit or an en banc DC Circuit. The reason is not that there is so much uncertainty and exigency that the Supreme Court’s review is genuinely required at this time. Indeed, there will be no circuit split for the Supreme Court to resolve if (as seems very likely) the DC Circuit in Halbig (1) grants the federal government’s petition for rehearing en banc, (2) vacates the panel majority’s decision, and (3) affirms the judgment of the district court upholding the IRS regulation that makes subsidies available in federally run exchanges.

If the Justices take King, it will be because they want to take King notwithstanding the absence of a circuit split. If the Justices follow their ordinary procedure of resolving circuit splits under Rule 10, they will sit on the petition for certiorari in King until the Halbig litigation is resolved—and then deny the petition.

The CBO Score and the Made-Up Narrative of the Obamacare Subsidies Case

Abbe Gluck

Two years ago, I posted on this blog that the CBO scoring of Obamacare was central, in the public eye, and intensely scrutinized by all involved with the statute. CBO never assumed in scoring the bill that subsidies would be unavailable on federal exchanges. Justice Scalia and the joint dissent in NFIB v. Sebelius also relied on the CBO score, saying: “By 2019, 20 million of the 24 million people who will obtain insurance through an exchange are expected to receive an average federal subsidy of $6,460 per person”—numbers that only make sense if the federal exchanges are included.  Today,  a Talking Points Memo piece offers even more evidence supporting the argument.  Here is one snippet:

"It definitely didn't come up. This possibility never crossed anybody's mind," David Auerbach, who was a principal analyst for the CBO's scoring of the ACA, told TPM on Thursday. "If we started to score it that way, they would have known that, and they would have said, 'Oh, oh my gosh, no, no no,' and they probably would have clarified the language. It just wasn't on anybody's radar at all."

It remains my view that the text of the ACA, when read not in isolation, but in context--the approach the Court (including the textualists) repeatedly cites as its preferred approach--clearly permits the Government's interpretation of the subsidies. (If anyone is doubtful, the Court made such a statement as recently as this Term in Utility Air, through Justice Scalia:

“[W]e, and EPA, must do our best, bearing in mind the “‘fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.’” FDA  v. Brown & Williamson Tobacco Corp., 529 U. S. 120, 133 (2000). As we reiterated the same day we decided Massachusetts, the presumption of consistent usage “‘readily yields’” to context, and a statutory term—even one defined in the statute—“may take on distinct characters from association with distinct statutory objects calling for dif­ferent implementation strategies.”)

But the CBO story offers another datum--along with the testimonials of staffers and reporters that have been pouring out all week--that no one ever assumed the statute said otherwise.  Why is this so important? Remember this is a Chevron case--a case that turns on the doctrine of agency deference.  To win under the doctrine, all the Government has to do is show that its reading of the statute is plausible.  The challengers, on the other hand, have to prove that the statute clearly says what they want it to say and admits of no other interpretation.  To do that, they have to convince the Court their reading of the statutory text is not only plausible but is the only possible reading.  The challengers are now trying to strengthen their case by weaving a narrative that Congress actually intended the result they claim the statute requires.  All of the evidence, textual and otherwise, points the other way.  A major lawsuit, challenging a massive federal statute that already has been upheld once by the Supreme Court and whose repeal has been rejected by Congress more than 40 times, should not be based on a story that is made up.

Gaza Names Project

John Mikhail

Jewish Voice for Peace and the Institute for Middle East Understanding have put together this moving video memorial for the victims of Israel's latest military operation in Gaza.  The video is narrated by Wallace Shawn, and other participants include Angela Davis, Roger Waters, Chuck D, Mira Nair, Naomi Klein, Michael Ratner, Tony Kushner, Jonathan Demme, Urvashi Vaid, Jody Williams, Desmond Tutu, and Gloria Steinem, among many others.  According to this BBC report, more than 1,400 Palestinians have been killed and 450,000 have been forced to leave their homes since July 8.  The Israeli human rights group, B'Tselem, has gone to court to win the right to publicize the names and ages of some of the dead children.  Apparently, the Israeli Broadcasting Authority has banned B'Tselem from running its radio ad because its content is "politically controversial."

Thursday, July 31, 2014

Why the Law Does Not (and Should Not) Allow Religiously Motivated Contractors to Discriminate Against Their LGBT Employees

Marty Lederman

Last Monday, the President signed an historic executive order that does two things:  It protects most federal employees – who are already protected from discrimination on the basis of sexual orientation – from discrimination based on gender identity, as well.  And it prohibits most federal contractors from discriminating on the basis of sexual orientation or gender identity.

In the weeks preceding the President's signing, many groups and individuals urged him to include in the contracting order an exemption that would have allowed certain federal contractors to invoke religious tenets as a justification for discrimination against gay, lesbian, bisexual and transgender employees.  The President did not do so.

In the wake of the President's order, the Cornerstone blog, run by Georgetown's Berkley Center for Religion, Peace & World Affairs, convened a blog debate on the legal questions raised by the order (and the absence of a new religious exemption).

Here's my contribution, which was published earlier today:  

Since 1998, it has been the policy of the U.S. government to prohibit discrimination in civilian federal employment on the basis of sexual orientation, just as it prohibits discrimination on the basis of race, color, religion, sex, national origin, handicap and age for such federal jobs.  Sometimes, of course, the federal government does not perform federal functions itself, but instead contracts out that work.  It therefore makes perfect sense that, in making its highly selective contracting decisions, the federal government would not want to choose bidders that discriminate among their employees in a way that the federal government itself could not do. 

Accordingly, in 1965 President Johnson signed Executive Order 11246, which Presidents have regularly amended since then to prohibit most federal contractors from discriminating in employment decisions on certain grounds that are off-limits to the federal government itself:  race, color, religion, sex, national origin—and now, pursuant to President Obama’s amendment of the Order last week, sexual orientation and gender identity, as well.

As President Obama’s order explains, the purposes of E.O. 11246 are twofold: not only (i) “to provide for a uniform policy for the Federal Government to prohibit discrimination,” but also (ii) “to promote economy and efficiency in Federal Government procurement.”  After all, work on a federal contract is liable to be less effective if the contractor arbitrarily excludes from its work force an entire category of qualified and talented employees simply on the basis of a characteristic that has nothing whatsoever to do with their ability to do the work.  As the President said in his announcement, “equality in the workplace is not only the right thing to do, it turns out to be good business. . . .  It’s also about attracting and retaining the best talent.”

It was therefore somewhat disconcerting that many groups and individuals urged the President to include in the Order an unprecedented exemption that would have allowed certain federal contractors to discriminate against gay, lesbian, bisexual and transgender individuals.  Think about what that would mean in practice.  Say, for instance, that a federal agency is considering bids for a highly coveted, competitive contract for highway construction or provision of social services, and one of the bidders has a policy of excluding gays and lesbians from its workforce, or of denying spousal benefits for some of its employees based upon their sexual orientation.  It would be quite alarming and counterproductive—most would say unfair, and even offensive—for the agency to award the contract to that bidder, knowing that qualified individuals would thereby be precluded from working on the federal project because of their sexual orientation.  

And so it makes all the sense in the world that the President formally precluded such a result once and for all, and rejected the calls for a religious exemption.

Professor Carl Esbeck argues on Conerstone that, even after the new order goes into effect, certain contractors will be legally entitled to engage in such discrimination.  Not surprisingly, however, the law does not afford anyone the right to use federal contracting dollars to discriminate in such a way.  Nor is it a close question.
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A Modern Censure Resolution

Gerard N. Magliocca

In 1834, the Senate passed a resolution censuring President Jackson for his "unconstitutional" decision to withdraw the Treasury's deposits from the Bank of the United States.  The Senate argued that Jackson's unilateral executive action attacking the Bank was unauthorized by Congress.  In 2014 we have a resolution from the House of Representatives authorizing a suit against President Obama claiming that his unilateral executive actions regarding the Affordable Care Act are unconstitutional.  How are these resolutions related?

In both cases, the institutional action was a second-best solution to a political problem.  The Censure Resolution, which I discuss at length in my book on Jacksonian Democracy, was an unorthodox reply to the fact that President Jackson's opponents could not impeach him since Democrats held the House of Representatives. Since they believed that the destruction of the Bank was a constitutional disaster and wanted to continue that debate in the next midterm elections, their solution was to take a formal position defending the Bank and castigating the President.  Jackson (being Jackson) did not take this measure lightly--he issued a written Protest to the Censure Resolution denouncing the Senate's act as unconstitutional. That battle continued until Democrats were able to take control of the Senate and "expunge" the Censure Resolution from the Senate Journal in 1837.  (They literally brought out the Journal and drew black lines around the Censure Resolution.)

Today House Republicans want to take another stand in the great constitutional controversy of the day--Obamacare--as they head into the midterms, but in their case impeachment is either politically unpalatable or dead on arrival in the Senate.  Just passing a resolution attacking the President, though, lacks the punch that such an act had in the 1830s.  (Why is an interesting question--probably because political honor was taken more seriously by men like Jackson who had fought in duels.) Thus, we get the modern equivalent, which is a lawsuit.  This is more than a resolution, less than impeachment, and reflects the ongoing judicialization of politics.

 

Thursday, July 24, 2014

Don't Buy the Cooperative-Federalism-Makes-Halbig-Logical Argument

Abbe Gluck

      I had hoped to take a day off blogging about Halbig and King (the ObamaCare Subsidies cases), but I cannot allow another inaccurate narrative about ObamaCare to take hold. Over at Volokh, my friend Ilya Somin argues that the holding in Halbig is not absurd because Congress uses statutory schemes all the time that try to incentivize states to administer federal law (and to penalize them if they don't).  It is true we see schemes like that all the time--Medicaid is a prime example--but the insurance exchange design is NOT one of them.  This federalism argument was made before the D.C. Circuit and even Judge Griffith didn't buy it in his ruling for the challengers.  I tried to dispel this myth back in March, when I wrote the following on this blog:

 "This is not a conditional spending program analogous to Medicaid.
    
      The challengers' strategy in this round has been to contend that the subsidies are part of an overarching ACA "carrots and sticks" strategy to lure states into health reform and penalize them if they decline.  On that version of the story, it might make sense that subsidies would be unavailable in states that do not run their own exchanges. In their view, the subsidies are therefore exactly like the ACA’s Medicaid provision (from appellants’brief: “The ACA’s subsidy provision offered an analogous ‘deal’ to entice states to establish Exchanges—because Congress (wisely, in hindsight) knew it had to offer huge incentives for the states to assume responsibility for that logistically nightmarish and politically toxic task.”)


Putting aside the fact that no one thought the states wouldn’t want to run the exchanges themselves (indeed, Senators were demanding that option for their states), the exchange provisions simply do not work in the same way as Medicaid.  Unlike the ACA’s Medicaid provisions, the exchange provisions have a federal fallback:  Medicaid is use it or lose it; the exchanges are do it, or the feds step in and do it for you.  In other words, this isn’t Medicaid; it’s the Clean Air Act (CAA).  If a state decides not to create its own implementation plan under the CAA, its citizens do not lose the benefit of the federal program—the feds run it. The same goes for the ACA’s exchanges and so it would be nonsensical to deprive citizens in federal-exchange states of the subsidies.  More importantly, if we are going to compare apples to oranges, the ACA’s Medicaid provisions have an explicit provision stating that if the state declines to participate, it loses the program funds (this was the provision at issue in NFIB v. Sebelius in 2012).   The ACA’s subsidy provisions, in contrast, have no such provision, strong evidence that the subsidies were was not intended to be forfeited if the states did not participate.  If the challengers are going to insist on strict textual arguments, this is exclusio unius 101: the rule of interpretation that provides that where Congress includes a specific provision in one part of the statute but does not include an analogous provision elsewhere, that omission is assumed intentional."
 
                                                                * * *

It may be true that the ACA’s politics have created a landscape no one ever predicted—one in which federalism-focused states, whose congressional representatives were demanding the states’ rights to establish exchanges instead of the federal government—have decided that politics is more important than federalism and opted out.  But what’s happened in hindsight doesn’t change what happened when the statute was enacted and how the statute is actually designed.  What happened when the statute was designed was that no one thought the states needed a carrot to do this and the statute was never designed as a "use or lose it" incentive, like Medicaid.

 
  

Halbig, King, and the Limits of Reasonable Legal Disagreement

Neil Siegel

I participated in the debates over the constitutionality of the Affordable Care Act (ACA). Although I thought the federal government had substantially stronger arguments on its side, I did not dismiss the arguments of those who disagreed with me. There often has been reasonable, irreconcilable disagreement over the meaning of the Constitution, and the Supreme Court had never before allowed Congress to impose a purchase mandate under the Commerce Clause or an exaction labeled a penalty under the Taxing Clause. I thought the “Lopez question” required an answer.

Halbig and King (plus the Indiana and Oklahoma cases) are different. I can accept as reasonable, even if ultimately unpersuasive, the argument that the relevant provisions of the ACA are ambiguous. What I cannot accept as reasonable or responsible, however, is the argument—accepted by the D.C. Circuit panel majority in Halbig—that the ACA Congress clearly and unambiguously accomplished what no Member of Congress, no one in the Congressional Budget Office, none of the four dissenting Justices in NFIB v. Sebelius, and no state official realized that Congress had accomplished when it passed the ACA: self-destructively limit the tax subsidies that make health insurance affordable for millions of Americans to those who have the good fortune of happening to reside in states that set up their own health insurance exchanges.

Yes, the statute provides that the subsidies are to be calculated in part based on the cost of the monthly premium for the health insurance plan that an individual buys “through an Exchange established by the State under [Section] 1311” of the ACA. 26 U.S.C. §36B(b). But for goodness sake, that is an odd place in the statute for Congress to say—no, for Congress to whisper—that subsidies are not available in federally facilitated exchanges, thereby placing the viability of the entire statute in jeopardy if state officials decline to create exchanges. The part of the law that determines who is eligible for the subsidies—as opposed to how they are to be calculated—does not distinguish between state and federally facilitated exchanges. See 26 U.S.C. §36B(a).

More importantly, Section 1311 purports to require each state to establish an exchange: “Each State shall, not later than January 1, 2014, establish an American Health Benefit Exchange (referred to in this title as an ‘Exchange’)[.]” The section then defines an “Exchange” as an entity that necessarily has been established by a state: “An Exchange shall be a governmental agency or nonprofit entity that is established by a State.” See also § 1563(b) (stating that “[t]he term ‘Exchange’ means an American Health Benefit Exchange established under [§] 1311”). Section 1321 later makes plain that Section 1311 must be taken stipulatively, not literally. That is, a state may, as a matter of fact, “elect” to establish an exchange or not, and if it does not, then the federal government “shall . . . establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements” (my emphasis).

In other words, the part of the ACA that uses the “established by the State” language asserts by definition, regardless of the fact of the matter, that the state is establishing the exchange. Another part of the statute directs the federal government to stand in the shoes of the state—to be the state for purposes of the statutory language and structure—if a state as a matter of fact does not create an exchange.

No doubt, Congress could have been clearer. So what else is new? Cf. Bond v. United States, 134 S. Ct. 2077 (2014). And yes, that lack of perfect clarity may cause some interpreters reasonably to view the statute as ambiguous, as opposed to clearly favoring the government’s position. But it is not reasonable to conclude that the statute clearly and insanely says what the plaintiffs say it says.

In light of these straightforward statutory interpretation arguments, as well as other arguments offered by six of the eight federal judges to decide the question so far (including, by the way, a Republican appointee), how can it be maintained that the statute—as clear as day yet unbeknownst to anyone at the time—denies subsidies to individuals who purchase health insurance policies in federally run exchanges?

Some may conclude that I am not as tolerant of reasonable legal disagreement as I think I am or used to be. Others may conclude that I care too much about the draconian financial consequences for millions of Americans and insurance companies if this litigation succeeds.

I have considered these possibilities, and I have rejected them. The plaintiffs’ case is so weak and transparently political that it is dismaying to see it be taken seriously.

Confirmation that the Supreme Court's suggested fix will almost certainly not mollify the plaintiffs: Recent developments in the nonprofit challenges to the contraceptive coverage accommodation

Marty Lederman

As I've discussed, the Supreme Court in Hobby Lobby in effect redirected the most contentious questions in the contraceptive-coverage challenges to those cases in which nonprofit organizations are challenging the government's regulatory accommodation for objecting religious nonprofit organizations.  Subsequently, in its order in the Wheaton College case, the Court invited the federal government to develop a regulatory fix that might both satisfy the nonprofit challengers to the contraceptive coverage rule and at the same time guarantee that the women who work for those employers will continue to receive cost-free contraceptive coverage. 

I've suggested that the Court’s proposal (or plea, or hope) for such a cost-free regulatory solution might be far easier said than done, since some of the objecting organizations are likely to continue to raise RFRA objections even to the sort of compromise that the Court appears to contemplate.

Now, we have the first two important moves in the next phase of litigation challenging the accommodation . . . the first of which announces that the government is accepting the Court's invitation to modify the accommodation, and the second of which confirms that such a modification will not fully bridge the gap, and that the RFRA challenges will continue nonetheless.
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Halbig as Opt-In Federalism

Joey Fishkin

The commentary about Halbig so far has viewed it mainly through two lenses.  Through one lens, most obviously, it’s a statutory interpretation case—one that illustrates some shortcomings of a certain hyper-formalistic, acontextual approach to reading statutory text.  Through the other lens, Halbig is a political case: a highly charged proxy fight about Obamacare that illustrates how thin and permeable the membrane is between some judges’ substantive political views of a law and their interpretation of it.

I think Halbig is even more interesting through a third lens: as a federalism case.

Here, ironies abound.  In NFIB v. Sebelius, the majority decided that the ACA’s Medicaid expansion raised constitutional questions because it put a gun to the head of the states: you will lose an enormous chunk of federal money unless you agree to expand Medicaid.  To the utter consternation of the legislators who wrote and voted for the ACA, the 2-1 majority in the DC Circuit in Halbig has interpreted the exchange portion of the statute to similarly threaten states with a catastrophic loss of federal funds if they don’t comply with the federal government’s demands—this time, supposedly, the demand that the state set up an insurance exchange.

As many commentators (including other judges, in dissent in Halbig and in the majority in the 4th Circuit) have noted, it’s abundantly clear not only from the legislative history of the statute but also from other parts of its text that no such threat was ever actually contemplated.  The whole point of the backup federal exchange was to give states a different kind of choice: they can either take control of (and responsibility for) the regulation of the new insurance plans in their state by establishing an exchange, or they can wash their hands of it, and let the federal government take the full credit and blame for the system that results.  That was the kind of federalism the ACA had in mind: backstop federalism, in which every individual American would have access to the same substantive benefits, but they could be administered either in a cooperative-federalism way, or, in uncooperative red states, by the feds alone.  This gives states real choices about how much involvement they want in the ACA’s new insurance system.  It doesn’t give states the option to deprive their citizens of access to affordable health insurance.

But the Halbig panel majority doesn’t read the statute in terms of what subsidies the ACA, by its terms, intends to make available to individual citizens.  Instead the panel majority manages to take the individual citizens out of the picture, and tell a simple story of a threatening federal government, holding a gun and demanding that the states set up an exchange or lose all subsidies.  This analysis is overly simplistic in a couple of ways.  For a start, it ignores where the gun is actually pointing.  The analysis also manages to obscure the question of what a state actually has to do to set up an exchange “under” Section 1311.   It may not be much at all, for reasons I discuss below, in which case the real story here is not one of the federal government requiring onerous action by states, but instead, one in which the Halbig court would turn what Congress intended as universal individual entitlement into a program of opt-in federalism, where the federal government might try to create a universal program, but it’s actually up to states to decide whether they want to opt in.

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Wednesday, July 23, 2014

Halbig and hurting the innocent as a political tactic

Andrew Koppelman



Q.  What’s the difference between a Ukrainian rebel with a rocket launcher and a lawyer challenging the Obamacare subsidies? 

A.  The Ukrainian doesn’t intend to hurt innocent people.

I elaborate the point in a discussion of the ethics of political warfare, posted at The New Republic, here.

Some Roundups on Halbig and King (the ObamaCare Subsidies Cases)

Abbe Gluck

Much commentary has been posted in the past 24 hours on the Obamacare subsidies rulings.  Here are just a few:

Emily Bazelon comments  at Slate about how implausible it is, as the D.C. Circuit holding would have it, "that Congress included in Obamacare the seeds of its own destruction, giving naysaying governors the power to kill it—without ever saying so."   I have my own op-ed at Politico, arguing that the opinion does a disservice to the credibility smart textualists have been trying to build for years and is not the way that complex laws should be interpreted in a well-functioning democracy. My piece also points out that the D.C. Circuit's reading of the statute contradicts the description of the exchanges by Justices Scalia, Kennedy, Thomas and Alito in the ACA Joint Dissent, which assumed the validity of the federal-exchange subsidies and understood that the statutory scheme depends on them.

Further on the health law academic front, Tim Jost has a post on the Health Affairs blog analyzing the opinion, as does Nicole Huberfeld at HealthLawProfBlog, and Nick Bagley at Incidental Economist. 

Jonathan Cohn, Ezra Klein, and Wonkblog each have posts detailing how no one involved in the drafting the statute or reporting on its enactment over 2009 and 2010 sees any any proof of the story that the challengers are telling about what the ACA means or what Congress intended. As Klein writes:

"For Congress to write a law that provides for federal exchanges but doesn't permit money to flow through them would have been like Congress writing a transportation law that builds federal highways but doesn't allow cars, bikes or buses to travel on them. That was...not what Congress thought it was doing. As Jonathan Cohn writes, 'not once in the 16 months I reported on the formal congressional debate did any of the law's architects suggest they were thinking along these lines.' My experience was precisely the same: architects of the bill underestimated how many states would let the federal government run their exchanges, but they always thought there would be a few, and they always assumed those exchanges would feature subsidies. Everyone in Congress — including the Congressional Budget Office in its estimates of Obamacare's cost — assumed subsidies would flow through federal exchanges."

More to follow.....

Some Thoughts on Halbig

Gerard N. Magliocca

I posted after the oral argument in the DC Circuit to say that I thought the argument that prevailed there yesterday needed to be taken seriously, so now I feel compelled to talk about what comes next.

First, I think that there are four Justices who will be waiting on the front steps of the Court for the certiorari petition from the Fourth Circuit (which ruled in favor of the Administration on the same issue yesterday).  Thus, the question of whether the DC Circuit will go en banc in Halbig is, to my mind, largely beside the point.  In an ordinary case, one would expect the Justices to wait and see if a circuit split could be healed before acting, but this is not an ordinary case.  The Justices who lost in 2012 on the individual mandate challenge would love to get another at-bat.

Second, the split yesterday supports my argument from last year that the Affordable Care Act remains unsettled law.  The fact is that many statutes are poorly drafted or have errors.  What normally happens when that is true?  One option is for Congress to fix that problem.  That cannot be done because the Republican Party is still overwhelmingly opposed to the Act.  Another option is that the courts fix or overlook the drafting issue.  That assumes, though, there is a consensus that the statute should be fixed, which is also lacking along partisan lines.

Third, I argue in my new draft article that the Chief Justice's opinion in NFIB is best understood as expressing a norm that it is wrong for the Justices of one party to invalidate the signature law of the other party.  Does this convention include crippling the same law with statutory construction?  The Chief Justice will have a year to mull that one over.

UPDATE:  Typos in the original post are now corrected.

Tuesday, July 22, 2014

Fourth Circuit Rules in FAVOR of Government in Obamacare Subsidies Case

Abbe Gluck

Making sure our readers keep up with this roller-coaster day in health reform land: The Fourth Circuit released its own opinion (3-0, with a strong concurrence from J. Davis) rejecting the subsidies challenge pending in that court right after the DC Circuit released its own opinion sustaining the same challenge there . The Fourth Circuit went with a straight Chevron argument, but indicated it thought the government had the better reading of the statutory text in any event. Judge Davis concurred specially to make the point that Chevron wasn't even necessary: that the statute clearly requires the subsidies on the federal exchanges. Of interest to statutory interpretation types (and along the lines of what I've been arguing in previous posts), Judge Davis also argued that this isn't a case of "textualism v. purposivism" or statutory text versus some amorphous concept of congressional intent.  Davis argued that the text of the statute as a whole answers the question definitely in favor of the Government.

The Loss in Halbig

Abbe Gluck

As Marty notes, the opinion is out. Initial quick reaction, more to come:  The opinion is terribly disappointing from a statutory interpretation perspective. It relies in part on irrelevant legislative history (from the HELP committee, whose bill wasn't even the basis for these provisions--the Finance committee's was) and gets it wrong anyway (as I argued here);  it bends over backwards to come up with reasons why Congress might have intended this result (which we all know it certainly did not); and it attaches far too much significance to a line in the statute that expressly deems exchanges in the territories to be state exchanges and does not replicate the special deeming language for the federal exchanges.  The territories language is boilerplate language used by Congress when talking about territories in statutes even beyond the ACA, and should have been attached no significance here. What's more, applying the exclusio unius presumption  (that when Congress specifies X we can assume that it meant not to specify X elsewhere) to a statute as long and complicated as the ACA -- and one that did not go through the usual linguistic "clean up" process in Conference (as I wrote here) does a disservice to textualism and all those who have defended it over the years--turning it into a wooden unreasonable formalism  rather than the sophisticated statutory analysis that textualists have been claiming they are all about.

Halbig decided [UPDATED -- King too!: quickest circuit split ever?]

Marty Lederman

2-1, Edwards dissenting, as oral argument suggested.  I'm sure we'll have more on the opinion shortly here on the blog.

On the other hand . . . the Court of Appeals for the Fourth Circuit in King just decided the issue the other way!


Monday, July 21, 2014

The Anti-Partisan Principle

Gerard N. Magliocca

I've posted the draft of my new paper here.  Comments and criticism are always welcome.

Sunday, July 20, 2014

Rest in Peace, Dan Markel (1972-2014)

JB

Our deepest condolences to the family, friends and colleagues of Professor Dan Markel of Florida State (and Prawfsblawg), who was shot at his home in Tallahassee on Friday. The latest details are here. Paul Caron has a collection of links and other remembrances are here and here.

Saturday, July 19, 2014

Hobby Lobby: Who, exactly, is exercising religion? And why does the contraceptive coverage rule burden that religious exercise?

Marty Lederman

As part of a terrific symposium on Hobby Lobby over at the Conglomerate, I published a post with that title today, focusing principally on some of the corporate-law questions that the Court unfortunately elides or confuses in Hobby Lobby.

Will the ACA litigation be decided based on a mistake?

Guest Blogger



Timothy Jost

In a recent blog post, Cato scholar Michael Cannon admitted that he and his colleague, Case Western University professor Jonathan Adler, had made a mistake in an amicus brief they submitted to the courts in the Halbig and King cases.  We all make mistakes—indeed Michael has claimed that I have made many mistakes in my analysis of these cases, some of which were indeed mistakes.  This mistake is important, however, because it goes to the central argument that he and Jonathan have relied on in their brief.  There is a real danger that the Halbig case could be decided by the D.C. Circuit Court of Appeals, perhaps as early as next week, based on a mistaken understanding of the law, its purpose and history, propagated by Cannon and Adler and apparently adopted by one of the judges in the case.  Studies released in the past week demonstrate that this mistake could have devastating consequences for the country.
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Compendium of posts on Hobby Lobby and related cases

Marty Lederman

For our readers' convenience, I'm collecting here in one place links to all Balkinization posts about Hobby Lobby, Conestoga Wood, Notre Dame, and Little Sisters, et al., along with links to the briefs and oral argument in Hobby Lobby/Conestoga Wood and to a few other important posts about these cases.  We'll try to keep the list relatively current as the litigation proceeds.
 

Marty Lederman's Posts on Hobby Lobby

Hobby Lobby Part I -- Framing the issues (Dec. 11, 2013)

Hobby Lobby Part II -- What's it all about? (contraception?  abortifacients?  other religious objections to elements of health insurance?) (Dec. 13, 2013)

Hobby Lobby Part III -- There is no "employer mandate" (Dec. 16, 2013)


Hobby Lobby Part III-A -- Does federal law substantially pressure employers to offer health insurance coverage in violation of religious obligations, even though there is no “employer mandate”? (Dec. 28, 2013)


Hobby Lobby Part III-B -- Is it necessary that the government-imposed pressure to violate a religious obligation be substantial? (Jan. 8, 2014)


Hobby Lobby Part IV -- The myth of underinclusiveness (Jan. 21, 2014)


Hobby Lobby Part V -- Whose Religious Exercise?  Of corporations, for-profit employers, and individual plaintiffs acting in their various corporate capacities (Jan. 28, 2014)


Hobby Lobby Part VI --  The parties' common ground . . . and a fundamental divide about religious exemptions for for-profit employers (Feb. 16, 2014)


Hobby Lobby Part VII -- Hobby Lobby's arguments on compelling interest and the alleged exemption "honeycomb" (Feb. 17, 2014)


Hobby Lobby Part VIII -- Hobby Lobby's identification of the "precise religious exercise at issue here," and some thoughts on whether federal law substantially burdens it (Feb. 19, 2014)

Hobby Lobby Part IX -- There is no "employer mandate," redux: The plaintiffs' arguments about the option of not offering an employee health insurance plan (Feb. 21, 2014)

How to Understand Hobby Lobby [on SCOTUSblog] (Feb. 23, 2014)

Hobby Lobby Part X -- A quick word on the Conestoga Wood reply brief (Mar. 12, 2014)  

Hobby Lobby Part XI -- Governor Brewer’s Veto in Arizona . . . and Hobby Lobby (Mar. 12, 2014)

Hobby Lobby Part XII -- On Abortions and "Abortifacients" (Mar. 22, 2014)

Hobby Lobby Part XIII -- Shareholder claims, Professor Bainbridge, and the red herring of "insider reverse veil piercing" (Mar. 24, 2014)

Asking the Wrong Questions in Hobby Lobby [on the Conglomerate Blog] (Mar. 24, 2014) 

The myth of "exemptions" that are said to undermine the government's compelling interests [on the Conglomerate Blog] (Mar. 25, 2014)

Hobby Lobby Part XIV -- How this week’s Sixth Circuit decision in a nonprofit case can inform the Supreme Court's "substantial burden" analysis in Hobby Lobby (June 14, 2014)

Hobby Lobby Part XV -- “There’s No Employer Mandate” Update: The Justices’ engagement at oral argument, and an important new Standard & Poor’s report (June 15, 2014)

Hobby Lobby Part XVI -- A half-dozen possibilities that shouldn't surprise you in today's decision (June 30, 2014)

Hobby Lobby Part XVII -- Upshot of the decision: A possible win-win solution (and now all eyes turn to Notre Dame) (July 1, 2014)

Hobby Lobby Part XVIII -- The one (potentially) momentous aspect of Hobby Lobby: Untethering RFRA from free exercise doctrine (July 6, 2014)

Who, exactly, is exercising religion? And why does the contraceptive coverage rule burden that religious exercise? [on the Conglomerate] (July 19, 2014)


* * * *
 

Marty Lederman's posts on the nonprofit and and other contraceptive-coverage cases
 
Not Quite Hobby Lobby: The Nonprofit Cases (including Little Sisters and Notre Dame), and Opting Out as Complicity [with UPDATE on Little Sisters "church plan" situation] (Jan. 1, 2014)


Government brief in Little Sisters
(Jan. 3, 2014)

Little Sisters State of Play (Jan. 5, 2014)


Not With a Bang . . . (The Supreme Court wisely preserves the status quo in Little Sisters) (Jan. 24, 2014)
  

How This Week’s Sixth Circuit Decision in a Nonprofit Case Can Inform the Supreme Court's "Substantial Burden" Analysis in Hobby Lobby (June 14, 2014)
 
Is the Court’s attempt at a compromise order in Wheaton College based upon a misunderstanding of the law? [on SCOTUSblog] (July 4, 2014)

What next in Wheaton College?  Is it also a "win/win" compromise? (July 4, 2014)

Unpacking the forthcoming RFRA challenges to the government's accommodation (with emphasis on self-insured plans) (July 18, 2014)

Confirmation that the Supreme Court's suggested fix will almost certainly not mollify the plaintiffs: Recent developments in the nonprofit challenges to the contraceptive coverage accommodation (July 24, 2014)

* * * *

The Briefs in Hobby Lobby and Conestoga Wood

can all be found here.

The Oral Argument transcript and audio

are here, and here, respectively

* * * * 

Other Balkinization posts on Hobby Lobby, Wheaton College, et al.

Nelson Tebbe, Richard Schragger, and Micah Schwartzman, The Establishment Clause and the Contraception Mandate (Nov. 27, 2013)

Joey Fishkin, Hobby Lobby: Federal Agent (Nov. 30, 2013)


Nelson Tebbe, Richard Schragger, and Micah Schwartzman, Hobby Lobby and the Establishment Clause, Part II: What Counts As A Burden on Employees? (Dec. 4, 2013)

Nelson Tebbe, Richard Schragger, and Micah Schwartzman, Hobby Lobby and the Establishment Clause, Part III: Reconciling Amos and Cutter (Dec. 9, 2013)

Nelson Tebbe, Richard Schragger, and Micah Schwartzman, Hobby Lobby and the Establishment Clause: Gedicks and the Government (Jan. 21, 2014)

David Gans, Can Corporations Exercise Religion?: A Response to Douglas Laycock (Feb. 20, 2014)

Priscilla Smith, Whose Faith Does RFRA Protect? Everyone’s, No One’s, Or Not Mine? (Mar. 24, 2014)

Andrew Koppelman, Invisible Women (Mar. 25, 2014)

Nelson Tebbe, Today's Oral Argument in Hobby Lobby (Mar. 25, 2014)

Gerard N. Magliocca, What the Affordable Care Act Subsidy Case Tells Us (Mar. 26, 2014)

Mark Tushnet, Shelby County and Hobby Lobby (Apr. 20, 2014)

Andrew Koppelman, Hobby Lobby, a small victory for women's rights (June 30, 2014)

Sandy Levinson, Justice Ginsburg's inexplicable first two pages (June 30, 2014)

Joey Fishkin, Hobby Lobby and the Politics of Recognition (June 30, 2014)

Jason Mazzone, Hobby Lobby as Separation of Powers (June 30, 2014)

Jason Mazzone, Hobby Lobby: Breyer and Kagan (July 1, 2014)

Jason Mazzone, Horwitz on Hobby Lobby (and notes on Putnam and Campbell) (July 2, 2014)

Richard Schragger, Micah Schwartzman, and Nelson Tebbe, Not Bill Clinton’s RFRA (July 3, 2014)

Andrew Koppelman, Wheaton v. Hobby Lobby (July 4, 2014)

Sandy Levinson, The elephant in the room (July 4, 2014)

Mark Tushnet, Congress Enacted Single-Payer Health Care! (July 11, 2014)

* * * *

Other important online writing about Hobby Lobby

Eugene Volokh, My Hobby Lobby Posts, in a Single Word Document

Mark Tushnet, Do For-profit Corporations Have Rights of Religious Conscience?

Ira Lupu & Robert Tuttle, Religious freedom and savings constructions

Doug Laycock, Congress answered this question:  Corporations are covered

Michael Dorf, Why is RFRA still valid against the federal government?

Contraception v. Religious Freedom: Hobby Lobby Heads to the Supreme Court - See more at: http://religionandpolitics.org/2014/03/19/contraception-v-religious-freedom-hobby-lobby-heads-to-the-supreme-court/#sthash.4Hl2IXMW.dpuf

Tracy Fessenden, Contraception v. Religious Freedom:  Hobby Lobby Heads to the Supreme Court

Pema Levy, When Is a Mandate Not a Mandate? Ask the Supreme Court

Walter Dellinger, Contraception as a test of equality

There are also a bunch of valuable posts over at Dorf on Law and on the Conglomerate.

 

Contraception v. Religious Freedom: Hobby Lobby Heads to the Supreme Court - See more at: http://religionandpolitics.org/2014/03/19/contraception-v-religious-freedom-hobby-lobby-heads-to-the-supreme-court/#sthash.4Hl2IXMW.dpuf
Contraception v. Religious Freedom: Hobby Lobby Heads to the Supreme Court - See more at: http://religionandpolitics.org/2014/03/19/contraception-v-religious-freedom-hobby-lobby-heads-to-the-supreme-court/#sthash.4Hl2IXMW.dpuf
Contraception v. Religious Freedom: Hobby Lobby Heads to the Supreme Court - See more at: http://religionandpolitics.org/2014/03/19/contraception-v-religious-freedom-hobby-lobby-heads-to-the-supreme-court/#sthash.4Hl2IXMW.dpuf

Contraception v. Religious Freedom: Hobby Lobby Heads to the Supreme Court - See more at: http://religionandpolitics.org/2014/03/19/contraception-v-religious-freedom-hobby-lobby-heads-to-the-supreme-court/#sthash.4Hl2IXMW.dpuf
Contraception v. Religious Freedom: Hobby Lobby Heads to the Supreme Court - See more at: http://religionandpolitics.org/2014/03/19/contraception-v-religious-freedom-hobby-lobby-heads-to-the-supreme-court/#sthash.4Hl2IXMW.dpuf
Contraception v. Religious Freedom: Hobby Lobby Heads to the Supreme Court - See more at: http://religionandpolitics.org/2014/03/19/contraception-v-religious-freedom-hobby-lobby-heads-to-the-supreme-court/#sthash.4Hl2IXMW.dpuf

 


Friday, July 18, 2014

Unpacking the forthcoming RFRA challenges to the government's accommodation (with emphasis on self-insured plans)

Marty Lederman

With its order in the Wheaton College case, the Supreme Court invited the federal government to develop a regulatory fix that might both satisfy the nonprofit challengers to the contraceptive coverage rule and at the same time guarantee that the women who work for those employers will continue to receive cost-free contraceptive coverage. 

In an earlier post, I suggested that the Court’s proposal (or hope) for such a cost-free regulatory solution is far easier said than done, at least in cases involving “self-insured” employers.  For example, the government may well conclude—as the Court appeared to anticipate it would—that an employer can simply notify the government of its religious objection, and the government will then have the legal authority to turn around and instruct the insurance plan’s third-party administrator to offer contraceptive coverage, subject to reimbursement from the government in the form of an adjustment to ACA exchange user fees.  If the government promulgates such a modification to its regulation, it might mollify some of the nonprofit plaintiff organizations; but I think it is likely that most of those organizations will not be satisfied:  They will argue that such a “fix,” too, violates their rights under RFRA, because their act of opting out will continue to establish the legal authority for the government to require another party to provide coverage.

If I’m right about that, and if the government cannot come up with an alternative regulatory solution that is satisfactory to all parties, then the courts will have little choice but to continue adjudicating the applicability of RFRA to the government’s “accommodation.”  The first set of such cases—many already pending—will involve nonprofit organizations currently eligible for the accommodation.  But the government is also likely to extend the accommodation to at least some for-profit employers with religious objections, as the Court suggested it could and should do in the Hobby Lobby decision.  Many of those for-profit employers may accept the accommodation.  Almost certainly, however, some will not—which will mean that the nonprofit cases challenging the accommodation will soon be joined by similar challenges from for-profit companies.

In this post, I’ll try to canvass the primary RFRA issues in these cases challenging the accommodation, and how should the courts should—or are likely to--address them.
Read more »

Misrepresenting Transfers

Mark Graber


One of my research assistants transferred to another law school last week.  This was hardly a surprise.  His rejection letter from the other school might as well have said, “Do not worry.  We plan to admit you as soon as we do not have to report your relatively low GPA and LSAT to US World News and Reports or other institutions that rank law schools.  We look forward to having you pay two years of full tuition.”  Similar winks and nods occur throughout contemporary legal pedagogy.

Whether law schools should encourage transfers is a fair question on which I have no intelligent opinion.  On the one hand, if faculty are free to move to higher ranking institutions, so should students.  On the other hand, for purposes of institutional stability, there is an obvious difference between faculty members who over a thirty year career spend ten years at three different institutions and law students changing schools after a year.  I’m a bit of a stick in the mud, so I do not like lots of transferring, but that is hardly a good reason to impose my preference on others.

The problem with continuing the above line of analysis is that contemporary law school transfer practices are strategies for increasing tuition dollars without risking the paper credentials of the class that have nothing to do with such concerns as institutional stability and free choice.  Administrators are well aware that in normal times they cannot gain more tuition dollars by increasing the size of their first year class without lowering their institution's average GPA and LSAT numbers ( in recent years, you cannot even maintain the size of your class without lowering average GPA and LSAT).  If, however, the same students are told go elsewhere for a year and then transfer, the law school gets two-thirds the tuition revenue with no cost to paper credentials. 

The result is that law school student credential reports are presently often as misleading as law school student employment reports.  The unreported credentials of the second and third year students in schools that accept substantial transfers are likely to be much weaker than the reported credentials of their first year class. No good reason exists, however, for thinking first year credentials far more important than second or third year credentials.  To the extent students have an interest in peers with strong paper credentials, that interest remains constant over time.  Employers making decisions whether to hire a law school graduate should be more concerned with the unreported credentials of that student’s third year class than with the reported credentials of the first year class. 

Of course, a fair case can be made that these credentials are meaningless.  But to the extent they are meaningful they ought to be accurate.  And the present practice of not counting transfers in student body credentials promotes or is misrepresentation.  

Once upon a time, we thought that universities ought to have high ethical standards in large part because, as the place where professional socialization took place, modeling the very best professional ethics was extraordinarily important (we also thought universities were places of higher learning rather than revenue generating bodies, but that is another post).  Increasingly, however, as universities are told they ought to behave more like businesses, those who insist on higher standards are mere eggheads, who no doubt are unfamiliar with practice.  I think a bar ethics commission would look askance at a lawyer who cooked numbers in the same way as we encourage law schools to cook the credentials of their students.  Perhaps law schools with “University” as part of the name ought to set a better example.

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