On the other hand: Fourth Circuit upholds ObamaCare subsidies for federal exchange consumers

posted at 2:01 pm on July 22, 2014 by Allahpundit

Well, this is awkward.

Unlike the D.C. Circuit, which split 2-1, the majority here was 3-0. Even so, the most noteworthy thing about the opinion is how tormented the court seems in trying to determine what Congress intended when it said that subsidies should be available only on “an exchange established by the State.” From page 20:


Page 24:


Page 28:


If they can’t decide what the key phrase was designed to do, why don’t they follow the D.C. Circuit’s lead and stick with the plain text? In the first excerpt above, the court frankly admits that the language of the law seems to support the plaintiffs’ argument more strongly than it does the government’s. But that’s not good enough, they go on to say; in a case like this, where they’re analyzing a rule promulgated by a federal agency (the, er, IRS) and the meaning of the underlying statute is unclear, it’s supposed to defer to the agency’s interpretation of the law if that interpretation serves the larger purposes of the statute. Which, says the court, it does. The purpose of ObamaCare is to encourage people to buy health insurance, whether through incentives like subsidies or penalties for noncompliance like the mandate. The IRS decided that it’d be silly to read “an exchange established by the State” as excluding the federal exchange, since that would remove a huge financial incentive to buy insurance for many millions of Healthcare.gov users. Plus, the only way to make O-Care work economically is to have lots of people, especially healthy people, jumping into the risk pool. Denying subsidies to federal exchange consumers would defeat that purpose. Held: The subsidies are still valid.

That means we have a circuit split — for now. Whenever two federal appellate courts rule differently on the same issue, it’s almost a cinch that the Supreme Court will end up taking the case to resolve the ambiguity. It would be weird, after all, for a key federal law to be drastically different depending upon which state you’re in, and doubly weird in this case since the Fourth Circuit covers Maryland and Virginia, the two states that surround Washington. Geographically, D.C. is now a “no subsidies” island in the middle of a “subsidies” sea. That’s odd, and that’s why the Supreme will probably take the case. It’s also why the White House insists on an en banc rehearing on Halbig in the D.C. Circuit. If the full court overrules today’s decision, it would eliminate the circuit split and reduce a bit of pressure on the Supremes to take this case. But then, it takes just four votes of the Court to grant cert and agree to hear a case from a circuit court, which means that even if all five justices who votes to uphold the mandate two years ago would rather pass on this one, Scalia, Thomas, Alito, and Kennedy could force them to take it up by voting for cert. Will they do it? (Spoiler: Yes.)

Update: I didn’t see it until after I scheduled this post, but DrewM made the same points about the circuit split and granting cert here.

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Comment pages: 1 2

If this 4th circuit case is so important, why didn’t we hear about it until today?

How is it equal in value? It isn’t the same case, the cases can’t be so similar as all that.

Why did it come out exactly when the administration needed it to, so that it blunted the impact of the DC circuit case?

I think there is major corruption going on here.

petunia on July 22, 2014 at 8:23 PM

I think there is major corruption going on here.

petunia on July 22, 2014 at 8:23 PM

and thus begins the millionth conspiracy theory regarding the obama administration.

Tlaloc on July 22, 2014 at 9:08 PM

and thus begins the millionth conspiracy theory regarding the obama administration.

Tlaloc on July 22, 2014 at 9:08 PM

This is by far the most corrupt government in the history of this country, and you want to ignore it? Of course you do. Because that gives you the power over other people that you crave.

Karma will come. You won’t like it.

petunia on July 22, 2014 at 9:53 PM

If they can’t decide what the key phrase was designed to do, why don’t they follow the D.C. Circuit’s lead and stick with the plain text?

Because the Court found the plain text is ambiguous. You’re a lawyer, right?

righty45 on July 22, 2014 at 10:08 PM

Sounds an awful lot like the Court is reaching for the “ambiguity defense” to say that a Federal exchange really is a State exchange “because the IRS said so”.
I say, “The IRS hath not the competence.”
(In more ways than one.)

On the 1st of July, 1535, Sir Thomas More was tried and found guilty of violating the Treason Act. Pushed through Parliament by Thomas Cromwell, it had expanded the parameters of treason to include not only speech against the person of the King and his government, but also denying the King’s right to his new spiritual powers as head of the Church. Throughout the trial More kept to his defense that silence, by the maxim of the law, gave consent, rather than Cromwell’s argument that it was a rebellion. In a final act of betrayal of his former friend, Solicitor General Richard Rich testified that More had in confidence revealed to him his opinion that Parliament had not the competence or authority to enact its Reformation legislation. In history, Richard even goes as far as to say that Sir Thomas had privately revealed to him his denial of Henry as Supreme Head of the Church. In both the film and historical sources, More rightly denies this perjury saying that after all his silence, why would he reveal himself to a treacherous man such as Rich. Richard’s testimony, although false, was enough to convince the jury that they should condemn Sir Thomas More to be hanged, drawn and quartered. Henry later changed the manner of execution to a more dignified beheading. Before he was sentenced, however, More finally spoke his mind in defiance of Henry, the court, and the government.

His speech was forceful and clearly in favor of the Petrine Doctrine, in which Christ gave the Apostle Peter, the first Pope, supreme authority over the Christian Church. “No temporal power can touch this, the immunity of the Church spelled out in Magna Carta and in the King’s own Coronation Oath.” His final words to the three justices, Lord Chancellor Sir Thomas Audley, Cromwell, and even the assembled father and brother of Anne Boleyn were “It is not for the Supremacy that you have sought my blood, but because I would not bend to the marriage!” More went to his execution on July 6th with considerable bravery and as a Martyr for Roman Catholicism. As his time on earth drew to a close on the scaffold, he declared, “I die his majesty’s good servant, but God’s first.”

AesopFan on July 23, 2014 at 5:44 AM

Comment pages: 1 2