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Amicus Brief: King v. Burwell December 30, 2014

 

Read the full brief here: AMICUS Brief SCOTUS Galen Institute and State Legislators

In the Supreme Court of the United States

DAVID KING, ET AL., PETITIONERS v. SYLVIA BURWELL, SECRETARY OF HEALTH AND HUMAN SERVICES, ET AL., RESPONDENTS.

On Writ of Certiorari to the United States Court of Appeals for the Fourth Circuit

BRIEF OF THE GALEN INSTITUTE AND STATE LEGISLATORS AS AMICI CURIAE IN SUPPORT OF PETITIONERS

SUMMARY OF ARGUMENT

The Affordable Care Act (“ACA”) authorizes the Administration to provide a specific set of subsidies (and concomitant penalties) for health insurance purchased “through an Exchange established by the State under [§] 1311[.]” 26 U.S.C. § 36B(b)(2)(A). As Petitioners explain, this unambiguous provision reaches only Exchanges established by a State—and not, as the IRS contends, Exchanges established by the federal government in lieu of a State.

The Government decries what it call Petitioners’ “blinkered focus” on “a single phrase . . . considered in isolation,” and invokes a “fundamental canon of statutory construction” that statutory text be interpreted in light of its “context”—i.e., “structure, history, and purpose.” Gov’t Br. in Opp. 13. But the statute’s “context” actually confirms Petitioners’ interpretation, not the IRS’s. Pet’r Br. 27-30.

Amici write separately to stress two other fundamental canons of construction that refute the IRS’s position: the federalism canon and the “major questions” canon. For while the IRS focuses on the Exchange-subsidy provision’s place in the ACA, it fails to consider the provision’s place in our constitutional structure.

First, by interpreting the ACA’s section 1401 (26 U.S.C. § 36B) as injecting the Act’s elaborate new set of subsidies and penalties into the health insurance markets of States that chose not to establish Exchanges, the IRS substantially altered the longstanding “balance between the States and Federal Government.” But that can be done only when Congress “make[s] its intention to do so ‘unmistakably clear in the language of the statute.’” Gregory v. Ashcroft, 501 U.S. 452, 460 (1991).

While the ACA spoke with the requisite clarity as to State-established Exchanges, it did not state such clear intent to rearrange the federal-State balance for federally established Exchanges. Even the court below did not hold the statutory grant of power to be a clear statement in support of the IRS’s position; instead, it found the provision to be merely “ambiguous and subject to multiple interpretations.” See Pet. App. 6a; see also id. at 25a (“simply put, the statute is ambiguous and subject to at least two different interpretations”). But a “self-contradictory, ambiguous provision” (id. at 31a) cannot justify regulatory encroachment upon an “area[] of traditional state concern,” because Congress did not command that encroachment with “unmistakably clear” language. Gregory, 501 U.S. at 460. Indeed, by blurring the ACA’s federal-State distinction, the IRS Rule undermines the “clear lines of accountability” between voters and the governmental actors responsible for policy decisions and outcomes.

Second, the IRS Rule represents a “major policy decision[] properly made by Congress.” Bureau of Alcohol, Tobacco & Firearms v. FLRA, 464 U.S. 89, 97 (1983). The tax credit for individual insurance has major political and economic ramifications, and it triggers other tax consequences, including penalties for individuals and employers who fail to purchase or offer qualifying plans. Congress cannot be presumed to have “delegate[d] a decision of such economic and political significance to an agency in so cryptic a fashion.” FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 160 (2000).