Scalia’s new rule of interpretation for ObamaCare: “statutes that make no sense”

by Russell's Rants

Originally published March 29, 2015

41705253a4c94fd4f433fba4149b517bThe Supreme Court has long used established canons of interpretation for federal statutes that yes, focus first on the plain meaning of the words that Congress used to express itself in drafting the text of law. But second, do not read words in isolation and instead, attempt to do justice to the legislative intent of the statute as a whole. Indeed, Justice Scalia has previously been a champion of what he called the “holistic endeavor” of statutory interpretation.

But that was until his considerable skills as the chief advocate for conservative results were called upon, again, to judge the legality of the Affordable Care Act.

Now Scalia has jettisoned his previously expressed position on statutory interpretation to do the right’s bidding in striking subsidies available to millions of lower income earners who wish to purchase health insurance under ObamaCare. In oral argument this month in King v. Burwell, Scalia actually suggested that in interpreting federal law, the High Court should keep in mind that Congress may well have intended laws that are both ill-conceived and make no sense – and that the Court should not be concerned if its interpretation might lead to an absurd result.

At issue in the case is one phrase in the 1,000-plus page law that allows healthcare subsidies for those that enrolled in ObamaCare through an “Exchange established by the State.” Since many red states refused to create their own “exchanges,” the argument goes, those who purchased insurance through a replacement federal exchange do not qualify for a subsidy.

Leave aside that no one who actually participated in the drafting of the law says that Congress intended such a narrow reading and that the lack of subsidies would send the federal exchanges into death spirals, undermining its carefully crafted architecture.

Legal scholars have explained that if the definition of “Exchange” as used in the statute is read in context, it includes those that the Department of Health and Human Services, now headed by Secretary Sylvia Burwell, established on behalf of states that chose not to do so for themselves.

First, Congress defined the term “exchange” with a capital “E,” three times, as an “Exchange” “established by the State,” [including in the sub-section of the statute under scrutiny]. . . . . That is what the term “means” each of the 280 times it appears in the statute.

Second, [another section of the Act] directs that if the State elects not to establish an “Exchange,” the Secretary of HHS shall “establish and operate such Exchange,” with a capital “E.” . . . . There is only one conceivable way the Secretary, a federal official, can establish an “Exchange” that has been defined. . . as an entity established by the state: She must act on behalf of the state.

To read the statute any other way would require the Secretary to do something that is, by definition, impossible. In contrast, there is nothing extraordinary about the Secretary acting for, or stepping into the shoes of, or standing in for, the state. This type of legal substitution happens frequently, with the federal government and others acting, for example, as proxies, trustees, lawyers, conservators, guardians, representatives, and agents. If an agent of the state, for example, performs an authorized act on the state’s behalf, it is an act by the state. Here, the authority comes from the state’s election to have the Secretary establish the exchange.

A little perspective goes a long way – both in terms of a reasonable textual reading of the phrase in question in the context of the statute as a whole and the law’s overall intent, which was to provide greater access to health care insurance, whether or not one happens to live in a state that established its own exchange or one in which the federal government stepped in to do so. The ACA is often said to be a three-legged stool, which only works if (1) insurance companies forgo pricing pre-existing conditions into their rates, in consideration for (2) the government imposing a mandate on all individuals to purchase insurance to broaden the risk pool, in consideration for (3) those individuals who would not otherwise being able to afford that insurance receiving subsidies to assist in paying for premiums. Remove any one leg, and the stool collapses.

In light of this perspective, the normal rules of statutory interpretation would reject this latest textual challenge to ObamaCare.

Rules of federal statutory construction include:

  • Follow the plain meaning of the statutory text, except when text suggests an absurd result or a scrivener’s error.
  • Each statutory provision should be read by reference to the whole act.
  • And avoid interpreting a provision in a way that would render other provisions of the act superfluous or unnecessary – or is inconsistent with the general policy, a necessary assumption of another provision or the structure of the statute.

In fact, Justice Scalia is on the record in a 1988 case saying,

“Statutory construction . . . is a holistic endeavor. A provision that may seem ambiguous in isolation is often clarified by the remainder of the statutory scheme — because the same terminology is used elsewhere in a context that makes its meaning clear, or because only one of the permissible meanings produces a substantive effect that is compatible with the rest of the law.”

But that was then. This is now.

At oral argument in Burwell, Scalia proposed a new rule of statutory interpretation.

When faced with the logical implication of the three-legged stool that the phrase providing subsidies to Exchanges was not written or intended to exclude those created by HHS, Scalia asked the Solicitor General the following question:

“I mean it may not be the statute they intended. The question is whether it’s the statute that they wrote. . . . [T]here are no provisions in the statute that turn out to be. . . ill­-considered and ill-­conceived?”

Then in Scalia-like fashion, he clarified exactly what he meant, in asking,

“There are no statutes that make no sense?”

The pretense for Scalia not getting beyond the plain meaning of an “Exchange established by the state” is that it is unambiguous and can only be read in one reasonable way. But this is inconsistent with another of Scalia’s offhanded comments at oral argument that “[t]his is not the most elegantly drafted statute,” which, if true, would appear to qualify the phrase in dispute, at worst, as a scrivener’s error capable of reformation to be read correctly. And most significantly, this pretense can only be true if one puts on blinders and ignores the rest of law and its legislative history.

In other words, Justice Scalia is advocating a narrow reading of the ACA without reference to the whole act that renders its general policy null and void – completely at odds with the original intent of its framers, all of whom are still around and have said so. Instead of a “holistic” approach, Scalia has adopted a new rule of interpretation — the heretofore unknown “Presumption of Irrationality” — to poke holes in ObamaCare so that it cannot survive as a statutory whole. When did we start presuming that legislators do not know how to craft legislation to enact their programs? The problem is not that the ACA makes “no sense.” It is that Scalia’s new rule is nonsense.