Journalists and Justices

Behind all of this is that dreaded health insurance-industry term of art: the “death spiral.” It’s what happens when premiums rise so high that increasing numbers of relatively healthy people choose to go uninsured, but insurance companies are barred—as they are under Obamacare—from denying coverage to people who are already sick. The pool of the insured shrinks, premiums skyrocket (discouraging still more healthy people from buying policies), and, finally, the insurers either go bankrupt or flee, leaving nobody with coverage.

At issue in King are the five words “exchange established by the state” in a provision of the 974-page Patient Protection and Affordable Care Act that requires the Internal Revenue Service to give tax-credit subsidies to people of modest means to help them pay the sky-high premiums for “comprehensive” coverage mandated elsewhere in the Obamacare law, as long as they buy their policies through an “exchange,” a regulated marketplace where they can comparison-shop. Section 1311 of the Obamacare law allows states to set up their own exchanges—but a surprising number of them, 36, declined to do so, so the federal government set up exchanges in those states under another Obamacare provision, Section 1321. Then, in 2012, the IRS issued a regulation that extends the subsidies to policies purchased from either state or federal exchanges—a regulation that lawyers for the King petitioners insist flies in the face of the statutory words “established by the state.” They and their supporters argue that permitting the IRS regulation to stand means the executive branch of government has the power to override the plain meaning of a law passed by Congress just about whenever it feels like it.

The Fourth Circuit, which has jurisdiction over Virginia, home of the four King petitioners and a state that did not set up an exchange, ruled nonetheless last July 22 that, when read in conjunction with other parts of the Obamacare law that seemed to encourage subsidies, the five contested words were more ambiguous than they looked at first glance. The Fourth Circuit upheld the IRS regulation under a principle called “Chevron deference” (the name comes from a landmark Supreme Court ruling). That principle requires courts in most cases to defer to a federal agency’s interpretation of the law, as long as that interpretation is “reasonable.” But that very same day, another federal appeals court, for the D.C. Circuit, ruled 2-1 in another lawsuit challenging the IRS regulation, Halbig v. Burwell, that the five statutory words in question meant exactly what they said.

So—let the lobbying begin! Supreme Court lobbying takes two forms. One is the time-honored practice of filing an amicus curiae, or “friend of the court,” brief raising legal issues and policy considerations that might not have been argued in the lower courts by the parties themselves. Both the Fourth Circuit and the Supreme Court have been flooded with amicus briefs in the King case—according to the Court’s own website, 57 of them have been filed.

Then came the media. Their main target originally was Chief Justice John Roberts. Roberts, although a George W. Bush appointee and a conservative, had cast the swing vote with the High Court’s four liberals in National Federation of Independent Business v. Sebelius, the landmark 2012 ruling that Obamacare’s “individual mandate” to buy health insurance amounted to a constitutionally permissible “tax,” because those who violate the mandate have to pay a penalty collected by the IRS. Roberts’s lead opinion in NFIB was a huge disappointment to conservative court-watchers, because Roberts was one of five justices to hold that the mandate violated the Constitution’s commerce clause, which severely restricts Congress’s ability to tell individual people what to do. There were rumors that Roberts had at the last minute switched his vote to uphold the seemingly flimsier “tax” argument so as to avoid media obloquy for the Supreme Court as an institution.

As early as last July 30 Jonathan Chait of New York magazine derided the King challenge as a “desperation lawsuit .  .  . laughed out of court” and a “quixotic attempt by right-wing legal activists to capitalize on sloppy legislative language to carve a large chunk out of the Affordable Care Act.” The idea seemed to be that the Supreme Court justices would make fools of themselves if they read the words “established by the state” literally. Chait joked that the provision’s omission of a reference to federal exchanges was like the “Moops” episode on Seinfeld in which George Costanza insists that a typo for the word “Moors” on an answer card in a game of Trivial Pursuit renders the correct answer wrong. Other liberal journalists loved the “Moops” analogy, and it traveled around the media grapevine. A March 2 article by Robert Schlesinger in U.S. News retailed “Moops” one more time and also used the words “absurd,” “ridiculousness,” and “silliest” with respect to the King challenge.

On February 27, Washington Post Supreme Court reporter Robert Barnes flattered Roberts for being “the one trying to build [the High Court’s] legacy. He sees it as somehow exempt from the partisan fugue that long ago enveloped Washington.” Then Barnes warned that if Roberts votes to interpret the statutory language in the Obamacare law the way it’s written, he’ll be injecting “partisan” politics into Supreme Court rulings—and thereby turn into a “conservative activist” like Reagan appointee and progressive bugaboo Justice Antonin Scalia. In the Huffington Post on March 2, Mary Kay Henry, president of the Service Employees International Union, called the King challenge strictly “political” and pointed to the millions of people who wouldn’t be able to afford Obamacare-compliant health insurance without the subsidies.

A March 2 article by Mother Jones staff writer Stephanie Mencimer ridiculed the four King petitioners as ignorant rubes from rural Virginia dragooned into the lawsuit by clever lawyers because they didn’t like the president (one of the four, Rose Luck, had called Obama “the anti-Christ” on Twitter). Mencimer speculated that the lead petitioner, 64-year-old David King, a $39,000-a-year freelance limousine driver in Fredericksburg who called Obama “a joke” during Mencimer’s interview with him, would have qualified for a hardship exemption from the mandate anyway and was only a few months away from Medicare eligibility.

The meme that the King lawsuit and others like it (there are two other pending federal cases besides Halbig) are essentially fanciful concoctions of anti-Obama activists that have nothing to do with either the plight of real people or the actual language of the Affordable Care Act has been floating around the Internet for months. In a March 2 article in Vox, Sarah Kliff expounded what could be regarded as the progressive backstory on the King litigation: that conservatives and libertarians had been searching high and low since 2010 for some judicial way to get rid of Obamacare until they finally discovered the “exchange established by the state” loophole and the IRS regulation of 2012. At that point, according to Kliff, Jonathan Adler, a law professor at Case Western Reserve, and Michael Cannon, director of health policy studies at the libertarian Cato Institute, launched a three-pronged campaign to sculpt a plausible lawsuit, dig up some plaintiffs from somewhere, and persuade the majority of states not to set up exchanges so as to render the subsidy crisis more dramatic.

Kliff and other progressive analysts of the King case go so far as to assert that Adler, Cannon, and other anti-Obamacare activists, in their efforts to persuade the courts that the five words in question mean what they say, concocted a motive out of thin air for the omission of federal exchanges—that the Democratic Congress wanted to nudge the states via subsidies into setting up their own exchanges—that went far beyond the rhetoric of interpretation that the lawyers presented in court. That was the reason, says Kliff, that the anti-Obamacare activists trotted out for public consumption a video of Obama-care architect Jonathan Gruber saying, “If you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits.” (Gruber has maintained that this was just an off-the-cuff remark.)

“They made up a narrative about what Congress wanted to do with the states,” a liberal Supreme Court-watcher who agreed to speak only on background told me. “But there was no factual development of this in court. There was no evidence. So they used the Internet to tell the story on the blogs, while in court they were saying it was all just a matter of textual interpretation.” In short, the liberal told me, conservatives and libertarians are doing their own bit of extrajudicial Supreme Court lobbying.

Cannon, in a series of online articles for Forbes, has argued that the states had perfectly good reasons not to buy into the exchange concept: If IRS subsidies were available, businesses of a certain size with workers who qualified for the subsidies because their employers weren’t providing them with Obamacare-level health insurance would have to pay penalties themselves under the statute—and thus be motivated to move their operations to a non-exchange state. As for Adler, he wrote this to me in an email:

He added, “What’s most annoying about the ‘manufactured narrative’ argument is that the way it is usually presented involves a mischaracterization of our argument, and suggests that we’ve made specific claims that we don’t make.”

After the March 4 arguments in the King case, the Supreme Court lobbying took a different turn. The target became not so much Roberts as Justice Anthony Kennedy, a reliable swing vote for liberals in many a previous Supreme Court decision. Kennedy, who had voted with the conservative dissenters in the NFIB decision of 2012 and had thus been pretty much written off by the progressives this time around, injected a surprise issue into the King case that hadn’t appeared in either the petitioners’ or the government’s briefs—or indeed in the Fourth Circuit ruling. Kennedy, questioning Michael Carvin, the lawyer representing the King petitioners, declared that if their interpretation of the words of the Obamacare statute prevailed, the states would be essentially “told either create your own exchange or we’ll send your insurance market into a death spiral.” Coercing states to take action (in contrast to merely incentivizing them) interferes with the constitutional principle of federalism, so courts are supposed to follow a doctrine known as “constitutional avoidance” and interpret ambiguous federal laws so as not to be unconstitutional when they can. In the King case, that could mean ruling to uphold the IRS regulation. 

It is unclear whence Kennedy derived his thoughts about constitutional avoidance and federalism, but one likely source is an amicus curiae brief filed on January 28 by several law professors, including Abbe Gluck, a professor of constitutional law at Yale who holds the paradoxical view that sometimes expanding the power of the federal government can protect states’ rights. In any event, the Washington Post’s Ruth Marcus, in a blog post titled “Will Anthony Kennedy Save the Day for the Obama Administration?” nudged Kennedy to do exactly that, predicting that “the more likely judicial course would be for Kennedy to default to the doctrines that give the court wiggle room to duck constitutional questions: Where a statute is at all ambiguous, or where Congress hasn’t been clear that it wants to intrude on state prerogatives, go for the interpretation that causes the least constitutional difficulty.”

Gluck, for her part, wrote an article for Politico on March 5 arguing that the five-word passage at issue in the Obamacare law was indeed ambiguous and that the constitutional avoidance doctrine “is grounded in principles of separation of powers and judicial restraint: It safeguards against the concern that judges will legislate.” A March 8 editorial in the Wall Street Journal promptly accused Gluck of “faux federalism” and of having thrown a last-minute “Hail Mary pass” aimed at the Supreme Court’s deliberations on the King case, which were believed to have taken place on March 6. The editorial pointed out that she had clerked for liberal justice Ruth Bader Ginsburg and is close to liberal justices Elena Kagan and Sonia Sotomayor, and that “it’s possible the justices or their clerks urged her to give it one more try.”

The Journal’s implication of impermissible signaling from Supreme Court justices regarding a pending case outcome is farfetched, but the idea that the justices could be swayed by the Washington Post—or the Wall Street Journal, for that matter—is not. “The Supreme Court has been sensitive to the court’s place in the political system,” said Ilya Somin, a constitutional law professor at George Mason University in Virginia who has frequently blogged his own libertarian views about King. “Blowback works both ways. And you have to remember that Supreme Court justices have lots of political connections, or they wouldn’t come to anyone’s attention as candidates for the Supreme Court. They’re sensitive to public attention. They care about their reputations in the media, whether it’s the mainstream media or the conservative media.”

“I’m genuinely uncertain how this case will come out,” Somin added. “It’s a case in which both sides have lots of plausible arguments, and where statutory interpretations break down along ideological lines. The more they say the other guy’s obviously wrong, the more it seems that the other guy has a good case.”

Charlotte Allen, a frequent contributor to The Weekly Standard, last wrote on transgenders.