by Eric J. Segall, the Kathy and Lawrence Ashe Professor of Law, Georgia State University College of Law
*This post is part of the ACSblog King v. Burwell symposium.
The plaintiffs in the latest Obamacare case, King v. Burwell, to be argued next Wednesday in the Supreme Court, have (so far) pulled off an amazing magic trick right in front of the eyes of the American people and possibly the Supreme Court of the United States. They, along with Professor Jonathan Adler, the architect of the litigation strategy, have focused their audiences’ attention on one part of a 900 page law that, read in isolation, supports their case while masterfully diverting the audience’s attention away from the part of the law that shows why their claims have no merit. They have crated this illusion not simply by focusing on one specific statutory provision (as others have shown), but based on the order in which they have asked the Court to interpret the statutory provisions at issue. This may seem too obvious but the best magic tricks are often based on a single instance of substantial misdirection.
The plaintiffs and Professor Adler tell the following story: They start with Section 1311 of the Affordable Care Act (“ACA”) and argue that it requires “qualified individuals” eligible for federal health insurance subsidies to purchase their insurance from an “exchange established by the state.” The federal government is not a “state,” they argue (persuasively) and therefore the plain text of Section 1311 forbids subsidies on federal exchanges. That common-sense interpretation, they claim, can only be overcome if the result is absurd. They argue that it is not absurd, and thus the plaintiffs have to win.
This discussion of the issue, set up by the plaintiffs, and their lawyers and allies through lower court briefs, social media, and newspaper op-eds, while successful at putting the government on the defensive, is wildly out of touch with the true legal nature of the case.
The question whether the Secretary of the IRS exceeded his legal authority by interpreting the ACA to allow subsidies on federal exchanges starts, not with Section 1311 as the plaintiffs would have you believe, but instead with the section of the law actually relied on by the Secretary for that authority--Section 1321. If we start there, with that baseline, it is easy to see why the plaintiffs’ claims have no merit.