Bench Memos

Federal Court Deals Another Blow to Obamacare

Today in Pruitt v. Burwell, District Judge Ronald A. White of the Eastern District of Oklahoma followed the reasoning of the D.C. Circuit’s opinion in Halbig v. Sebelius, striking down the extension of unlawful tax subsidies even though Oklahoma had declined to establish its own state insurance exchange. The court concluded that the phrase “established by the State” means what it says. This may foreshadow an even deeper circuit split, underscoring how important it is that the Supreme Court review these cases at the soonest opportunity. 

The court’s conclusion is worth quoting in full (sans citations):

The court is aware that the stakes are higher in the case at bar than they might be in another case. The issue of consequences has been touched upon in the previous decisions discussed. Speaking of its decision to vacate the IRS Rule, the majority in Halbig stated “[w]e reach this conclusion, frankly, with reluctance.”

Other judges in similar litigation have cast the plaintiffs’ argument in apocalyptic language. The first sentence of Judge Edwards’ dissent in Halbig is as follows: “This case is about Appellants’ not-so-veiled attempt to gut the Patient Protection and Affordable Care Act (‘ACA’).” Concurring in King, Judge Davis states that “[a]ppellants’ approach would effectively destroy the statute . . . .” Further, “[w]hat [appellants] may not do is rely on our help to deny to millions of Americans desperately-needed health insurance. . . ..”

Of course, a proper legal decision is not a matter of the court “helping” one side or the other. A lawsuit challenging a federal regulation is a commonplace occurrence in this country, not an affront to judicial dignity. A higher-profile case results in greater scrutiny of the decision, which is understandable and appropriate. “[H]igh as those stakes are, the principle of legislative supremacy that guides us is higher still. . . This limited role serves democratic interests by ensuring that policy is made by elected, politically accountable representatives, not by appointed life-tenured judges.”

This is a case of statutory interpretation. “The text is what it is, no matter which side benefits.” Such a case (even if affirmed on the inevitable appeal) does not “gut” or “destroy” anything. On the contrary, the court is upholding the Act as written. Congress is free to amend the ACA to provide for tax credits in both state and federal exchanges, if that is the legislative will. As the Act presently stands, “vague notions of a statute’s ‘basic purpose’ are nonetheless inadequate to overcome the words of its text regarding the specific issue under consideration.” It is a “core administrative-law principle that an agency may not rewrite clear statutory terms to suit its own sense of how the statute should operate.” “But in the last analysis, these always-fascinating policy discussions are beside the point. The role of this Court is to apply the statute as it is written – even if we think some other approach might ‘accor[d] with good policy.’”

The animating principles of this court’s decision have been articulated by the Tenth Circuit: “[C]ourts, out of respect for their limited role in tripartite government, should not try to rewrite legislative compromises to create a more coherent, more rational statute. A statute is not ‘absurd’ if it could reflect the sort of compromise that attends legislative endeavor.” “An agency’s rulemaking power is not ‘the power to make law,’ it is only the ‘power to adopt regulations to carry into effect the will of Congress as expressed by the statute.’” “In reviewing statutes, courts do not assume the language is imprecise … Rather, we assume that in drafting legislation, Congress says what it means.”

The court holds that the IRS Rule is arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law, pursuant to 5 U.S.C. §706(2)(A), in excess of statutory jurisdiction, authority, or limitations, or short of statutory right, pursuant to 5 U.S.C. §706(2)(C), or otherwise is an invalid implementation of the ACA, and is hereby vacated. The court’s order of vacatur is stayed, however, pending resolution of any appeal from this order.

It is the order of the court that the motion of the defendants for summary judgment (#91) is hereby denied. The motion of the plaintiff for summary judgment (#87) is hereby granted.

 

Jonathan KeimJonathan Keim is Counsel for the Judicial Crisis Network. A native of Peoria, Illinois, he is a graduate of Georgetown University Law Center and Princeton University, an experienced litigator, and ...

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