Supreme Court

  • February 26, 2015
    Guest Post

    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.

  • February 26, 2015
    Guest Post

    by Douglas L. McSwain, Partner, Wyatt, Tarrant & Combs LLP

    *This post is part of the ACSblog King v. Burwell symposium.

    On March 4, 2015, the Supreme Court of the United States (SCOTUS) will hear King v. Burwell, a lawsuit attacking premium assistance tax credits under the Affordable Care Act (ACA) for those who live in states where the only Obamacare health insurance marketplace is the federal “exchange,” i.e., Healthcare.gov.

    The King v. Burwell Dispute:  Text vs. Context

    Background:  The ACA grants tax credits, based on income level, for individual health insurance purchased in the Obamacare marketplaces, also known as “exchanges.”  These credits may be claimed as premium assistance subsidies for a health plan selected by the taxpayer. In 2015’s open enrollment, over 9 million people purchased plans in the federal exchange, and of those about 87 percent, or over 7.5 million, purchased with premium subsidies. The King case questions the legality of these subsidies, and its outcome may determine whether 7.5 million or more taxpayers can continue to purchase insurance.

    There are two types of Obamacare marketplaces: state exchanges and the federal exchange. The ACA created the federal exchange for individuals who live in states that refuse or fail to set up their own state exchange. Currently, a total of 37 states do not have state exchanges, and those states’ taxpayers must use the federal exchange.  

    The King Challengers’ Argument: Premium subsidies are not allowed in the federal exchange.  The ACA’s text[1] creating the tax credit only provides for subsidies in “an Exchange established by the State.” The federal exchange has not been established by any state.  So, no tax subsidies can be provided in it, and taxpayers who live in the federal-exchange states cannot benefit from subsidies. 

    The King challengers’ argument is simple: “textualism” is supreme, and the specific statutory text creating the tax credit is controlling!

    The Obama Administration’s Response: The text creating the tax credit cannot be taken out of context. The challengers read it myopically, in spite of the ACA’s whole text and meaning, and in disregard of the law’s overall intent.

  • February 25, 2015
    Guest Post

    by Clark Taylor, Paul H. Tobias Attorney Fellow, The Employee Rights Advocacy Institute For Law & Policy

    In 2008 Samantha Elauf applied for a job at her local Abercrombie & Fitch clothing store in Tulsa, Oklahoma. During her interview Elauf, who is a practicing Muslim, wore a hijab or headscarf. Though her headscarf was clearly visible to the hiring manager who interviewed her, Elauf was never asked if she needed a religious accommodation as provided for by law. This is despite the fact that there is a company policy prohibiting the wearing of headwear by “models”—the in-house name for what are essentially sales associates, the position to which Elauf applied.

    Though she initially received a high score from her interviewer, Elauf was denied the job after the hiring manager spoke with a district manager who said that the headwear was against company policy. After being denied the position, the Equal Employment Opportunity Commission (EEOC) filed a suit on her behalf alleging that Elauf was not hired as a result of her religion in a violation of Title VII of the Civil Rights Act of 1964 and subsequent amendments. While the EEOC prevailed on summary judgment and at trial on damages, the Tenth Circuit Court of Appeals reversed and held that because Elauf never explicitly informed her potential employer that she needed a religious accommodation, Abercrombie & Fitch was not liable for violating the statute. Today the United States Supreme Court hears oral argument in the case, EEOC v. Abercrombie & Fitch Stores, Inc.

  • February 25, 2015
    Guest Post

    by Rob Weiner, formerly Associate Deputy Attorney General In the United States Department of Justice, is a partner at Arnold & Porter LLP.

    *This post is part of the ACSblog King v. Burwell symposium.

    In King v. Burwell, the Petitioners challenge an IRS rule granting tax subsidies under the Affordable Care Act to low income families in states with federal insurance Exchanges so that those families can buy health insurance.  The Government’s brief to the Supreme Court predicted that without the subsidies, insurance markets in the states with federal Exchanges would descend into death spirals.  Petitioners’ reply brief countered that even if this prediction were true:

    [T]hese consequences are the result of the IRS Rule [allowing the subsidies], not the statute.  Had the IRS from the start made clear that subsidies were limited to state Exchanges, states would not have overwhelmingly refused to establish them.

    The irony of this claim is thick.  From the start, opponents of the ACA mounted a campaign against the Exchanges, going so far as to dispatch traveling road shows in 2011-12 to lobby state legislatures against establishing them.  Ultimately, 34 states did as urged and declined to set up their own Exchanges.  Nonetheless, Petitioners now blame the IRS rule for that result.

    The accusation is especially brazen because the opponents did not base these pitches on the IRS rule.  The American Legislative Exchange Council (ALEC), an influential right-wing group that focuses on state legislation and that commissioned its own anti-Exchange road show, adopted a resolution in October 2011 entreating states not to establish Exchanges.  Notably, the resolution assured the states that, “There is no penalty for a state in allowing the federal government to implement an Exchange.”  But the resolution mentioned neither the tax subsidies nor the IRS rule proposed two months earlier.  Likewise, the Heritage Foundation exhorted states to refuse to establish Exchanges, and it, too, did not base its argument on subsidies and the IRS rule.

  • February 18, 2015
    Guest Post

    by Rob Weiner, formerly Associate Deputy Attorney General in the United States Department of Justice, is a partner at Arnold & Porter LLP. This post first appeared at Balkinization.

    The issue of standing to sue has prompted the latest commotion in King v. Burwell, where the Petitioners ask the Supreme Court to deny low-income families the tax subsidies granted under the Affordable Care Act to help them purchase health insurance.  To bring a lawsuit in federal court, plaintiffs must have standing to sue.  The prerequisite for standing is injury.  Plaintiffs challenging a federal law thus must show either that it caused them injury or that they face an imminent risk of injury.  If the risk abates or is too speculative, the litigants have no standing, and the court therefore no longer has jurisdiction.

    The plaintiffs (now Petitioners) in King asserted standing based on a roundabout explanation of the harm they would suffer if they received this tax relief.  The subsidies, they claimed, would lower their cost of insurance below eight percent of their income, the threshold for the individual mandate to apply.  They therefore would be required under the ACA to purchase health insurance or pay a tax penalty—a sufficient injury to confer standing.

    Recently, however, some enterprising investigative reporters have raised doubts whether the subsidies would in fact cause any of the plaintiffs in King to be subject to the individual mandate.  Two of the four plaintiffs, it turns out, are veterans.  Eligibility for VA benefits, or at least enrollment in the program, would exempt them from the individual mandate.  A third plaintiff has relocated since the case was filed, and geographic variation in the cost of insurance could affect whether the subsidies put her under the eight percent threshold.  And reporters have questioned whether the fourth plaintiff has so little income that she would be exempt from the mandate even with the subsidies.