'Four Potentially Ambiguous Words' - A Look at the Arguments in King v. Burwell

Topics: Health Care Reform, Legal Issues, Exchanges

by Joshua Zeitlin, staff writer 

Experts agree that while King v. Burwell is an extremely important case -- the fate of subsidies millions of U.S. residents have used to purchase coverage through the federal exchange hinges on the outcome -- it isn't a particularly novel legal matter. Where they disagree is on the strength of the parties' arguments.

The question before the Supreme Court, which hears oral arguments in the case on Wednesday, is whether it was legal for IRS to issue a rule in May 2012 interpreting the Affordable Care Act's section 36 B to make subsidies to help certain U.S. residents purchase coverage available through either state or federal exchanges. That provision, in part, says subsidies are available to help certain U.S. residents purchase coverage offered "through an exchange established by the State." The plaintiffs say that language should make the subsidies available only through state-run exchanges.

Abbe GluckAccording to Yale Law School professor Abbe Gluck, the case comes down to "how to interpret four potentially ambiguous words" -- established by the State -- "in the context of a really big law." She added, "The Supreme Court knows how to do that, and has spent the last half century developing a set of doctrines to make the way it does that kind of interpretation predictable."

How the Plaintiffs Could Win (Or, Is the Language Ambiguous?)

The experts American Health Line spoke with agreed that the plaintiffs' best chance to win would be to convince the court that the "established by the State" language in the ACA is not ambiguous, and that it only authorizes subsidies for state-run exchanges.

However, they were split on whether such a ruling would be in line with previous court decisions.

Gluck said that a ruling for the plaintiffs likely would be "a one-off case" based on a "hyper-literal kind of interpretation" that would go against what the court's conservatives "have been saying for 40 years is not what they're all about." Such a ruling would mean that "the court departed from its doctrine to help out in a very political case," she said.

Washington and Lee University law professor Timothy Jost agreed that the case likely would not be "a major precedent one way or the other." He said, "If they follow the law, I think they will rule with the government ... the alternative is that they vote with their politics."

Timothy JostHowever, Jost say that a ruling for the plaintiffs based on the ACA's text "would be somewhat precedent-setting in that I think it would mean that going forward courts would take a much narrower view of how to interpret statutes and focus only on particular words rather than on the entire statute."

Gluck and Jost think the case for ambiguity on the subsidy question is clear.

In their most recent brief, Gluck noted that the plaintiffs acknowledged that their interpretation would create internal conflicts within the ACA. She noted that they wrote it "would be a fool's errand to search for a construction that eliminates any conceivable tension in every part." As a result, Gluck said that "should really be enough for the government to win."

For his part, Jost has co-written an article on what he sees are about 50 ways the plaintiffs' reading of the text would create anomalies in the statue.

Jost added that to win, the plaintiffs would have to convince "the court to only look at four words" and then "get out [its] dictionary" and determine that "established by the State ... means the state set it up." If the justices instead take their "blinders off and look at the whole statute," he thinks the government will emerge victorious.

The question of ambiguity is crucial, as the court has long given federal agencies deference to interpret ambiguous statutes under what is known as Chevron deference. However, Jonathan Adler -- a law professor at Case Western University who helped to mount the challenge -- said the ambiguity question is not that simple.

For one, Adler has argued that among other textual issues, the "problem with the government's position is that it requires pretending as if the repeated phrase 'established by the State' has no real meaning."

Adler said a ruling for the government would indicate that the court did not "faithfully apply relevant precedent," while a ruling for the plaintiffs based on the ACA's text would not break new ground. Instead, he said such a ruling would be "in line with a wide range of cases in which the court has applied the plain text of the statue as if all words have meaning and left it to Congress to fix it in so far as Congress didn't like the result."

Jonathan AdlerMoreover, he said, "The justices are not of one mind about precisely what justifies concluding that there's ambiguity." According to Adler, the court typically has defined ambiguity as saying that certain statutory language "is susceptible to a range of meanings that are consistent with the text."

In addition, Adler noted that the court also could decide to find ambiguity by ruling that the subsidy section's language is clear but that it causes a "messy or otherwise problematic" reading of the other parts of the ACA. Adler said that some of the justices backed such an approach in the case Scialabba v. Cuellar de Osorio last term, but that the legal question remains unsettled.

Further, Adler disagreed that finding ambiguity would necessarily be enough to determine whether the court should defer to IRS. He said the court also would need to consider whether Congress intended to delegate interpretive authority to IRS given the "large, momentous" nature of the decision of whether to grant the subsidies.

How the Govt. Could Win the Battle but Lose the War

All of the experts pointed out that the high court also could side with the government based on some iteration of the federalism doctrine, which relates to states' rights.

Gluck said that "year after year," the court has applied the doctrine to say that it is "not going to interpret federal statutes to work a dramatic intrusion on states without crystal clear notice." She said the challengers' interpretation of the statute would represent a "dramatic and unprecedented" punishment on some states.

Adler said that the federalism questions are "serious arguments." However, the questions actually "ask the court to move beyond existing doctrine in some significant ways"; and, if adopted in a decision, would mean the court "would be breaking some new ground that could have some significant effects on their cases."

He detailed three separate federalism arguments:

  • The "notice" argument, put forward by 22 states and Washington, D.C., in an amicus brief, which he said would be novel in the case because "the statute was fairly clear" and would state "that notice requires more than clear statutory language";
  • The argument that Congress was threatening the states with severe consequences for not cooperating, which he said "the court has upheld before"; and
  • The argument that "accepting the plaintiffs' interpretation of the statue faces real constitutional questions."

Adler said that the federal government realizes that a decision based on the federalism doctrine could make it "win the battle and lose the war" in terms of federal power. That's why, "besides a very brief nod to the notice argument, the federal government largely stays away from these issues," he said.