A Preview Of What May Come In King v. Burwell
Ahead of the Supreme Court’s decision on King v. Burwell, it seems that Fed Chairwoman Janet Yellen is no longer the only one around Washington who gets to engage in high-stakes signaling.
As a matter of fact, two Justices, Justices Stephen Breyer and Sonia Sotomayor, and the conservative contingent seem to have potentially offered powerful clues on how they will be deciding the case.
My good friend, Martin Bienenstock, Partner and Chairman of the Business Solutions, Governance, Restructuring & Bankruptcy Group at Proskauer Rose, LLP, has come to this conclusion based on his examination of the case law, a judgment I concur with and believe is worthy of wide dissemination ahead of the ruling.
King v. Burwell takes on whether or not the federal government can subsidize health insurance policies purchased on the federal exchange. A few words in the statute have called this into question: “an exchange established by the state,” it reads. This reading of the law sharply questions the legality of a significant aspect of the Affordable Care Act (ACA), one in which the Obama administration has made clear would completely undercut the mission of the law to provide subsidies through the federal exchange.
WASHINGTON, DC – JUNE 23: A lone demonstrator protests against gay marriage in front of the U.S. Supreme Court building June 23, 2015 in Washington, DC. The court is scheduled to issue landmark decisions on the Affordable Care Act, also known as Obamacare, and gay marriage. (Photo by Chip Somodevilla/Getty Images)
In our discussion, Martin pointed out that the Court’s opinion last week on Baker Botts v. ASARCO, a dispute over whether or not the Bankruptcy Code allows attorneys to be awarded fees for time spent defending a challenge on their own fee request, may signal the forthcoming decision on King v. Burwell.
In short, a six-vote majority, comprised of the five conservative Justices along with Justice Sotomayor in concurrence, affirmed that the text of Bankruptcy Code section 330(a) does not allow compensation to bankruptcy attorneys to defend their fee requests.
While this decision is not terribly earth-shattering, Justice Sotomayor’s concurrence is noteworthy in its implications for King v. Burwell. Like Baker Botts v. ASARCO, this case asks whether or not the text of a statue matters most in its application or if the objective of the statue may rightfully supersede its text.
As the majority asserted in Baker Botts v. ASARCO, the Court’s “job is to follow the text even if doing so will supposedly ‘undercut a basic objective of the statute,’” which, given that “Section 330(a)(1) itself does not authorize the award of fees for defending a fee application,” adhering to the text brings the Court to “the end of the matter.”[1]
Within Justice Sotomayor’s concurring opinion, she agreed with the majority, so far as “the clarity of the statutory language” makes it “improper to allow policy considerations to undermine the American Rule in this case.”[2] However, Justice Sotomayor added the stipulation that she joins the majority on “all but Part III–B–2 of the Court’s opinion,” the part which asserts that the objective of a statute may not overcome its text.[3]
Considering this, my friend Martin asks, “Why would Justice Sotomayor agree with the majority, but explicitly opt out on this part, other than because she wants to avoid contradicting her likely position on King v. Burwell?” To this, I cannot be sure and can only speculate Justice Sotomayor forthcoming opinion.
Further, in regard to Justice Breyer, Martin mentions how striking it is that Justice Breyer wrote the dissent in the Baker Botts v. ASARCO case and also remarked at the oral argument of King v. Burwell that even a “person from Mars” would read the Affordable Care Act to allow subsides on the federal exchange. Understanding these two acts together, it appears quite clearly that Breyer recognizes the importance of a statue’s objective in its application and that the Justice may very well rule accordingly on King v. Burwell.
Regardless of Justice Breyer’s dissent and Justice Sotomayor’s reluctant concurrence though, my discussion with Martin came to a close with a foreboding question.
Above all, how can the five remaining Justices in the majority on Baker Botts v. ASARCO rule that they must follow the text even if it will supposedly undercut the objective of the statute, if they intend within the next two weeks to contradict that ruling by holding they will allow the supposed purpose of the Affordable Care Act to overcome the text?
Quite frankly, I don’t think they intend to contradict themselves and, consequently, we know all too well what dire straits that puts the ACA in.
[1] http://www.supremecourt.gov/opinions/14pdf/14-103_bpdg.pdf
[2] http://www.supremecourt.gov/opinions/14pdf/14-103_bpdg.pdf
[3] http://www.supremecourt.gov/opinions/14pdf/14-103_bpdg.pdf
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