Wednesday, March 4, 2015

Why the ACA challenge violates federalism // Balkinization

This post - the day before oral argument in King v. Burwell - makes a point that Justice Anthony Kennedy seems to have grasped.  It is, in essence: states who did not establish exchanges (like Kynect or Covered California) did so expecting that via their citizens would get the benefit of the subsidies offered by the ACA.  If that was not true they states should have been given fair notice, rather than be forced to deal with the crisis created by depriving thousands of citizens of a federal economic benefit. - gwc
Balkinization: Why the ACA challenge violates federalism
by Simon Lazarus Tuesday, March 3, 2015
 Opponents of the Affordable Care Act have been caught off guard by the possibility that the challenge in King v. Burwell actually violates principles of constitutional federalism. The federalism argument has been made in two important Supreme Court amicus curiae briefs, one submitted on behalf of 22 states and the District of Columbia, and another on behalf of four law professors – Abbe Gluck, Gillian Metzger, Thomas Merrill, and Nicholas Bagley. The federalism argument is based on the doctrine of Pennhurst State Hospital v. Halderman, 451 U.S. 1 (1981), written by then-Associate Justice William Rehnquist.
The professors’ brief explains that “Pennhurst and related decisions . . . broadly reflect a strong interpretive presumption that when Congress intends to impose conditions on States’ choices that would result in significant consequences, it does so unambiguously.”  Only with “clear notice” of such consequences, can states exercise choices offered by federal statutes, in a manner that enables them to “serve their proper role in the legislative process and in our federal system.”
 Both briefs demonstrate that, if the King v. Burwell challengers’ interpretation is correct, states that refused to set up their own exchanges did not get the requisite “clear notice” that if they turned operation of their exchanges over to the federal government, they would strip their citizens of the tax credits and subsidies that currently help some 87% of them (on average) purchase insurance. Moreover, stripping these subsidies will likely cause the collapse of the exchanges themselves, and disrupt or quite possibly crash altogether these states’ entire individual (non-group) insurance markets.
 Under the doctrine of Pennhurst, these are pretty significant consequences and they require courts to interpret the statute to avoid springing these consequences on states unawares.  Hence, the challengers’ interpretation must be rejected, and the Obama administration’s competing interpretation – making tax credits and subsidies available nationwide – should be adopted. On Tuesday, C. Boyden Gray, Adam White, and Adam Gustafson, who authored their own amicus brief in support of petitioners, tried to rebut the federalism argument in a guest post on the Volokh Conspiracy. (The post also references Professor Gluck’s January 27 Politico article summarizing  that argument, and Professor Marty Lederman’s March 2 post on Balkinization to similar effect.) "
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