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August 5, 2015

Recent Supreme Court Term: The Supreme Court Openly Challenges Its Own Legacy

One of the more politically opportune reactions to the final week of the Supreme Court Term came from Senator Ted Cruz. His proposal: a Constitutional amendment that would replace life tenure for the Supreme Court with periodic retention elections. Under the Cruz plan, each Justice would face the voters in the second national election after initial confirmation, and every eight years thereafter. Justices would need a simple majority of “retain” votes to stay on the bench. Justices who are not retained would be replaced and would not be eligible for reappointment.

The Senator couched his proposal as a response to “a long line of judicial assaults on our Constitution and the common-sense values that have made America great.” Offering some red meat for his conservative base, he added that retention elections would provide a remedy for “the decisions that have deformed our constitutional order and have debased our culture” by “giving the people the regular, periodic power to pass judgment on the judgments of their judges.”

As a tool of partisan accountability, the proposal shouldn’t work. Retention elections have been used at the state level for 75 years, and only in very rare instances—California in 1986, Iowa in 2010—have multiple justices on a single court lost retention elections in the wake of a politically controversial ruling. Citizen anger over controversial decisions generally does not translate into judges being kicked off the bench. Put another way, retention voters are assessing something more than mere case outcomes when determining whether to keep a judge in office.

This may seem surprising, given that politicians routinely try to rally their bases in reaction to Supreme Court decisions they disfavor. (Consider the left’s reaction to Citizens United or Heller, or the right’s reaction to Sebelius or Obergefell.) But ordinary voters don’t think like politicians. As I have documented here and here, to everyday citizens, a judge’s perceived commitment to a fair legal process is far more important than specific case outcomes. Voters will forgive a judge with whose rulings they disagree as long as those rulings appear to have been reached fairly and with respect for the court’s (often circumscribed) institutional role. Voters are less forgiving, however, when a judge appears to have intruded into the domain of the legislature, acted obnoxiously, or reached a decision that lacks a solid legal grounding.

Senator Cruz is a smart man, and he must know that voters assess judges differently than they do legislators or executives. So I doubt he is using retention merely as a conduit for channeling partisan anger. Quite the opposite: he appears to be counting on voters to assess the Justices on their commitment to procedural fairness and institutional humility, and to find that commitment lacking.

Unfortunately, in this regard the Supreme Court has not helped its own cause. The series of befuddling opinions in Obergefell v. Hodges nicely illustrates the problem. Justice Kennedy’s majority opinion on same-sex marriage was laden with soaring, poetic rhetoric about the profundity of marriage and the entitlement of all people to “equal dignity in the eyes of the law.” One is apt to agree with these sentiments as a matter of policy or even morality. But a constitutional exegesis demands something more. The Obergefell majority never cleanly and clearly explained why it was the province of the Supreme Court to accomplish what Congress and state legislatures might have (eventually) done themselves. Indeed, Obergefell was arguably far less grounded in the constitutional text than either of the equivalent efforts on same-sex marriage offered by the Iowa Supreme Court and Massachusetts Supreme Judicial Court years earlier. In doing so, the majority opened the door to criticisms that the Court had overstepped its institutional bounds.

The dissenting opinions subsequently pulled that door right off its hinges. The Chief Justice lamented, “The majority’s decision is an act of will, not legal judgment…. Just who do we think we are?” He went on: “Five lawyers have closed the debate and enacted their own view of marriage as a matter of constitutional law.” Justice Scalia went further, charging that the majority opinion “lack[ed] even a thin veneer of law” and ruling a “system of government that makes the People subordinate to a committee of nine unelected lawyers.” Justice Alito picked up the same theme, warning that the Constitution forbids “five unelected Justices from imposing their personal vision of liberty upon the American people.” Only Justice Thomas constrained his dissenting opinion to a legalist discussion about constitutional meaning.

As a debate over national policy or constitutional philosophy, the five Obergefell opinions make fascinating and important reading. As a vehicle for increasing, or even sustaining, the institutional legitimacy of the court, however, they are collectively a train wreck. Anyone who reads the majority opinion and suspects the court of moderately overstepping its institutional role will, upon reading the dissents, find a far more grievous critique. The Court, we are told, undermined the core of American democracy through unelected lawyers and (in Justice Scalia’s inimitable words) “judicial Putsch.” Even if one agrees with the outcome of the case (and I count myself among them), the internecine squabbling over institutional overreach is deeply unsettling. The majority could have worked harder to formulate an opinion that sounded less like public policy, and the dissenters could have made their points with far more responsible rhetorical flourish. No wonder Senator Cruz felt that the public might be ready for retention elections.

Thanks to the court’s self-flagellation, the Cruz proposal cannot be treated as mere pandering to his right-leaning base. Public respect for the judiciary is near a 15-year low, and allegations by the Justices that their own colleagues do not respect the rule of law cannot help. Those who want to see the Court regain its lost institutional legitimacy can only hope that the Justices recognize the damage that comes from their public dysfunction, and collectively work to repair it.

Jordan M. Singer

Recent Supreme Court Term: King v. Burwell

“The issue in this case is whether the Act’s [the Affordable Care Act] tax credits are available in States that have a Federal Exchange rather than a State Exchange.” King v. Burwell, 576 U.S. __ (2015) (p. 5). The Affordable Care Act (ACA) requires each state to create its own health insurance Exchange, however, if a state refuses to do so, then the Secretary of Health and Human Services (HHS) is authorized to “establish and operate such Exchange within the State.” Sec. 18041(c)(1).” (p. 5). Only sixteen States and the District of Columbia created their own Exchanges, while thirty-four States utilize the federal Exchange administered by the Department of Health and Human Services. (p. 6).

The tax credits, which are authorized by IRC sec. 36B, are allowed to “applicable taxpayers” who obtain health insurance through “an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care act….” (p. 5). The IRS addressed the availability of tax credits to individuals acquiring health insurance through an HHS Exchange by adopting the definition of “Exchange” as used in an HHS regulation, 45 CFR sec. 155.20, which provided that taxpayers are eligible for a tax credit if they are enrolled in an Exchange which serves the individual market, “regardless of whether the Exchange is established and operated by a State… or by HHS….” (p. 6).

In prior proceedings, the U.S. District Court for the Eastern District of Virginia granted the Defendants’ Motion to Dismiss, 997 F.Supp.2d 415 (2014), and the District Court judgment was affirmed by the U.S. Court of Appeals for the 4th Circuit, 759 F.3d 358 (2014).

Justice Roberts, who was joined by Justices Kennedy, Ginsberg, Breyer, Sotomayor, and Kagan, wrote the majority opinion, and held that tax credits for health insurance under IRC sec. 36B applied to individuals acquiring coverage on federal health insurance exchanges under the Affordable Care Act (ACA), even though sec. 36B states that the credits apply to insurance plans that are enrolled in through “an Exchange established by the State under [42 U.S.C. sec. 18031].” Justice Roberts’ reasoning was based on the ambiguity reflected in sec. 36B when it was interpreted in connection with other provisions of the ACA, and the manner in which those ambiguities were either consistent or inconsistent with Congress’ intent that the ACA expand health care coverage, and lower the cost of health insurance as a means of facilitating that expansion of coverage. The Congressional intent to expand health insurance coverage through the ACA would have been undermined if the sec. 36B tax credits were not applicable to individuals enrolled in health insurance plans through the federal exchanges.

Justice Roberts discussed the history of health reform in the United States and how states which instituted guaranteed issue, which required insurers to cover persons regardless of health status, and community rating, which restricted insurers from taking health status into account in setting premiums, ultimately led to “adverse selection,” which occurred when a person would only seek insurance once they became sick or in need of health care coverage. Because insurers were required to cover persons regardless of health status and could not take health status into account in setting premiums for specific insureds, they were forced to raise rates for all insureds in order to account for the higher health costs, increasing the cost of coverage and reducing the numbers of individuals who could afford coverage. Justice Roberts wrote that “This led to an economic “death spiral.” As premiums rose higher and higher, and the number of people buying insurance sank lower and lower, insurers began to leave the market entirely.” (p. 2).

Congress, relying on the Massachusetts health reform effort in 2006, included in the ACA a guaranteed issue and community rating component, but also included an individual mandate requiring most individuals to maintain health insurance coverage (either employer-provided, private coverage, or government-subsidized coverage), or pay a penalty. For individuals whose household income is between 100% and 400% of the federal poverty level income amount, they are eligible for a tax credit pursuant to IRC sec. 36B. The tax credit lowers the cost of health insurance for working class and middle class taxpayers, while the mandate brings into the health insurance pool more young and healthy persons (who would otherwise not obtain coverage) whose premiums subsidize the cost of coverage for sick and older persons under the ACA. ( p.4).

Justice Roberts, in discussing Congress’ awareness of the necessity of the individual mandate and the tax credit to the reform effort, writes: “These three reforms are closely intertwined. As noted, Congress found that the guaranteed issue and community rating requirements would not work without the coverage requirement. Sec. 18091(2)(I). And the coverage requirement would not work without the tax credits. “The reason is that, without the tax credits, the cost of buying insurance would exceed eight percent of income for a large number of individuals, which would exempt them from the coverage requirement. Given the relationship between these three reforms, the Act provided that they should take effect on the same day—January 1, 2014….” (p. 5).

Justice Roberts determined that due to the “economic and political significance” of the tax credits and their central role in the statutory scheme Congress created under the ACA, “It is especially unlikely that Congress would have delegated” to the IRS the authority to resolve any ambiguities with the tax credit under its regulatory authority without expressly doing so. He concludes that it is the Court’s, and not the IRS’s duty to determine the correct interpretation of sec. 36B. (p 8).

Justice Roberts’ analysis first finds that the authority granted to the Secretary of HHS to “establish and operate such Exchange within the State,” pursuant to sec. 18041(c)(1) of the ACA, shows that the HHS exchanges and the state Exchanges under sec. 18031 “are equivalent” by virtue of HHS establishing “such Exchange” under 18041, or, that HHS is to establish “the same Exchange that the State was directed to establish under Section 18031.” (p. 9–10).

Justice Roberts then analyzes sec. 36B in context with other provisions of the ACA (sec. 18032 defining “qualified individual” and sec. 300gg-91(d)(21) defining “Exchange”) and determines that a federal Exchange may be considered as one “established by the State” in order for the federal Exchange to function consistently with those other provisions within the statutory scheme of the ACA, resulting in ambiguity in the interpretation of sec. 36B within the context of the ACA’s statutory scheme, as compared to a literal interpretation of “established by the State” under sec. 36B. (p. 10–13).

Applying the principle of statutory interpretation that “the words of a statute must be read in their context with a view to their place in the overall statutory scheme,” Justice Roberts concludes that a strict interpretation of sec. 36B must be rejected because “it would destabilize the individual insurance market in any State with a Federal Exchange, and likely create the very ‘death spirals’ that Congress designed the Act to avoid.” (p. 9, 15).

Justice Roberts holds that the sec. 36B tax credits are allowed for health insurance purchased on “any Exchange created under the Act.”

Justice Scalia wrote the dissenting opinion and was joined by Justices Thomas and Alito. Justice Scalia applies a literal interpretation of sec. 36B and concludes that the tax credits only apply to Exchanges established by the States, therefore, no tax credits are allowed for health insurance purchased on a federal Exchange. (p. 2).

In contrast to Justice Roberts’ broad-based ambiguity analysis, which relies on his interpretation of sec. 36B in the context of the purpose and design of the ACA and his conclusion that a literal interpretation of the statute would conflict with the ACA’s design and purpose, Justice Scalia focuses solely on the language of the statute itself in determining whether there is any ambiguity, and finding no ambiguity in the statutory language, concludes that there is no reason to consider the ACA’s purpose and design for the purpose of interpreting sec. 36B. (p. 13).

Justice Scalia suggests that the design of the ACA was intended to incentivize states to create and operate their own exchanges and that limiting the 36B tax credits to health insurance plans purchased on a state exchange was one means of encouraging states to create their own exchanges. (p. 15-16). In light of that suggestion, he finds that interpreting sec. 36B to allow tax credits for health insurance purchased on a federal Exchange eliminates any need on the part of the state to create its own Exchange since the tax credit will be available on a federal Exchange. (p. 16).

Justice Scalia also states that the majority, rather than interpreting sec. 36B is actually rewriting the statute, which is a duty belonging to Congress.


This case, at its most basic level, is a statutory interpretation dispute. The lower courts which decided this case came to the same judgment as the Supreme Court, but each with slightly different reasoning.

Justice Roberts’ opinion applies a broad and policy-based analysis of both the legislative intent and design of the ACA in order to determine not only how the health insurance Exchanges were intended to operate, but also as a means of determining which interpretation of sec. 36B was most consistent with Congress’ purpose and design for the ACA.

Justice Scalia applied a more limited analysis, focusing solely on the statutory language of sec. 36B, and finding no ambiguity in the statute itself, determined that there was no need to analyze the purpose and the design of the ACA in interpreting the statutory language.

Justice Scalia’s criticism that the Court is rewriting the statute, not interpreting it, is very interesting. I think that your conclusion as to whether the Court is interpreting sec. 36B, or rewriting it, depends upon whether you agree with Justice Roberts’ or Justice Scalia’s approach in determining and analyzing statutory ambiguity. In light of the complex design and interlocking provisions of the ACA, and the need to analyze sec. 36B in the context of those aspects of the law in order to fully comprehend how it fit within the statutory scheme, Justice Roberts, as well as the lower courts, decided the case correctly.

Wilton B. Hyman