One of the most important functions of oral argument in the Supreme Court is that it can strongly shape the next round: the private deliberations among the nine Justices as they start work on a decision.  The much-awaited hearing Wednesday on the stiff new challenge to the Affordable Care Act strongly suggested that Topic A in private could well be: how bad will we make things if we rule against the government?

Justice Anthony M. Kennedy, who seemed decidedly more sympathetic to the government than might have been expected, worried over a constitutional blow against the states.  But even the two Justices most openly sympathetic to the challengers — Justices Samuel A. Alito, Jr., and Antonin Scalia — seemed to concede the dire consequences that could follow, by suggesting ways to alleviate it.  Alito said the Court could delay its ruling to allow time to adjust, and Scalia said Congress could be counted on to fix it.

On Friday morning, when the Justices start their private conversation on the case of King v. Burwell, what those three said in public in an eighty-four-minute hearing Wednesday could set the tone, and the public signs were that the tone could be mostly favorable to the government — that is, the chances seemed greater for a ruling salvaging a nationwide subsidy system that makes the new health care insurance exchanges actually work in an economic sense, thus keeping it alive.

From the time that the Supreme Court agreed in November to hear the challenge to subsidies on the thirty-four insurance exchanges set up by the federal government instead of by the states, the Obama administration and its supporters have talked darkly about the collapse of the entire ACA if that challenge succeeded.  Both President Obama and his top health policy aide, Health and Human Services Secretary Sylvia M. Burwell, publicly stressed that the administration would have no way to fix the law if that happened.

The uncertain thing, as the hearing approached, was whether that message would get through to the nine members of the Court who would be the deciders.  If there was one dominant theme at the actual hearing, aside from how to read a complex federal statute, it was that a victory for the challengers would come at perhaps a serious loss — perhaps a constitutional loss, but at least a human and social loss in the end of the most ambitious (and audacious) health care plan ever enacted in America.

The Court’s more liberal members harped on the expected problems of the demise of the ACA throughout the arguments of the lawyers for both the challengers and the government, and they left almost no doubt that they would vote to uphold the nationwide subsidy system — in the thirty-four states where the insurance marketplace is run by the federal government, as well as in the sixteen where states set up exchanges (and where there is no doubt that subsidies are available).

That would give the government a four-vote start, from Justices Stephen G. Breyer, Ruth Bader Ginsburg, Elena Kagan, and Sonia Sotomayor.

It did not take long, at least when the government lawyer was at the lectern, to create the distinct impression that Justice Scalia was with the challengers, and Justice Alito was rather plainly leaning that way.  Everyone assumes, of course, that Justice Clarence Thomas, though he said nothing, as usual, is also very likely a vote for the challengers.

If those impressions hold, that means Chief Justice John G. Roberts, Jr., and Justice Kennedy could be holding the deciding vote when the Court makes up its mind in the end of the process.  The Chief Justice said so little that there was no dependable reading on what was on his mind.  One might suspect, though, that he would not necessarily be comfortable in voting on the losing end in this historically profound case.

That leaves Justice Kennedy.  In one sense, he sort of leaned toward the idea that the language of the ACA as it deals with the subsidy system and the exchanges might be clear enough that the Court would have no choice but to rule against the government, and find that Congress made subsidies available only on marketplaces run by the state governments.

But in a broader sense, he displayed a deep concern — entirely consistent with his long-held view that the Court owes utmost respect to the semi-sovereign states and their role under what he calls the Constitution’s “design” — that Congress should ordinarily not be allowed to coerce the states into doing something that Congress wants.

On Wednesday, as the challengers’ lawyer, Washington attorney Michael A. Carvin, who opened the hearing, was under heavy and sometimes impatient questioning by the more liberal Justices, Kennedy bided his time.   In recent years, he has seemed to be a more hesitant questioner, so he appeared to be sitting back to see where the hearing was going.

But then, starting with a reference to “the dynamics of federalism,” he raised the coercion point.  “If your argument is accepted,” Kennedy told Carvin, and “the states were told to establish exchanges in order to receive money [for their citizens] or send the insurance market into a death spiral; isn’t that coercion?   Under your argument, there would be a serious constitutional problem.”

Carvin replied that “the government has not made that argument,” Kennedy shot back tartly that the members of the Court can come up with arguments of their own.

That led Justice Scalia to try to help out Carvin, asking rhetorically whether, if a correct reading of a law creates a constitutional problem, the Court has the authority to rewrite it.

Kennedy persisted, saying that “the Court and counsel” on both sides had to address the potential problem.  “Your argument,” he again said to Carvin, “raises a serious constitutional question that is in the background of how we interpret this statute.”   And he quickly brought up a prior precedent (South Dakota v. Dole, in 1987) in which the Court had cautioned Congress to make sure states knew what was expected of them when federal money grants had conditions attached — that is, had to avoid coercing their choices.

When the government’s lawyer, Solicitor General Donald B. Verrilli, Jr., took his turn, Kennedy at one point suggested that, if the language of the law pointed in favor of the challengers, the government would have to argue that such a reading should be avoided in order to avert a constitutional problem — another suggestion that the Justice was keeping his focus on what he called the “difficult constitutional question.”

It was during Verrilli’s side of the argument when Justices Alito and Scalia most clearly implied that the “dire consequences” argument was one they were going to have to neutralize, if the decision were to come out in favor of the challengers.

Alito suggested to the Solicitor General that negative consequences from a cut-off of subsidies in the thirty-four states with federal exchanges would not occur immediately.  “It would not be too late,” he said, for those states to create exchanges to qualify their citizens for subsidies, and “going forward there could be no harm.”

Verrilli disputed that, saying that a ruling against the government would lead to an immediate cut-off of subsidies.  So, Alito responded, the Court might do what it did in a 1982 case, Northern Pipeline v. Marathon Oil, postponing for about three months a decision striking down an important new bankruptcy law, giving Congress a chance to fix the situation — as Congress did, but only belatedly and partially.

“That would be a proper disposition,” if the Court were to rule against the government, the Solicitor General said.

Scalia immediately jumped in: “Do you think Congress is just going to sit there and let all of these disastrous consequences occur?….If there are disastrous consequences, Congress will react.”

There was nothing in those remarks, by either of those two Justices, to indicate that they were questioning whether the predictions of a serious social problem would, in fact, follow the ruling against a nationwide subsidy system.



Posted in King v. Burwell, Affordable Care Act ‘Exchange’ Challenges, Featured, Merits Cases

Recommended Citation: Lyle Denniston, Argument analysis: Setting up the private debate on the ACA, SCOTUSblog (Mar. 4, 2015, 1:43 PM),