First update: Liberals lead line in questioning of Petitioner in King, but Kennedy asks important question about disrupting federal state balance.

Counsel for the petitioners – who are seeking to invalidate subsidies in states with federal exchanges – faced tough questioning from the more liberal Justices in the first 20 minutes of today’s argument.  In particular, a perceptive hypothetical from Justice Kagan forced the petitioners to concede that context, rather than just the literal text of the statute, is important to understanding it.  Once the argument turned to context, however, Justice Kennedy expressed deep concern with a system where the statute would potentially destroy the insurance system in states that chose not to establish their own exchanges – likening this to an unconstitutional form of federal coercion. That made him seem skeptical of the petitioners’ reading of the statute, a hopeful point for defenders of the existing subsidies in all states.

While Justice Kennedy also suggested that perhaps this reading could not be avoided, his skepticism suggests that both sides will be trying hard to get his critical vote.

Second update: Perceptive hypothetical from Justice Kagan forces petitioners to focus on context, not just text.

Petitioners in King focus very heavily on the text, which they say only provides subsidies to states that set up their own exchanges under the literal terms.  After Justice Ginsburg asked about standing, Justice Breyer opened the merits questioning whether that’s even true based on the way the statute defines exchanges (namely, as state-created entities) and then directs the federal government to establish “such an exchange” when the state fails to do so.  But much of the early questioning was dominated by a real-life hypothetical from Justice Kagan, suggesting that petitioner’s reading does not accord with everyday usage.

She offered (something like) the following example:  Imagine I tell law clerk A to write a memo, and law clerk B to edit law clerk A’s memo, and then I tell law clerk C to write such memo if law clerk A is too busy.  And imagine that happens – law clerk A is too busy, so law clerk C writes it.  Should law clerk B edit it?  The answer seemed obvious:  of course, and Justice Kagan all but told petitioner’s counsel (and her clerks) that they would be fired if they didn’t do their job under those circumstances.  In response, petitioner’s counsel said that the context mattered, and it would depend on whether the Justice was indifferent between law clerk A and law clerk C writing the memo in the first instance.  But that seemed to play into Justice Kagan’s hand, who made clear that this was her point – that in understanding this text, the context obviously mattered.

 That turn to context seemed unprofitable initially for petitioners.  Many Justices, including Justice Breyer, Justice Sotomayor, and Justice Kennedy expressed skepticism that the statute would function as intended, in a reasonable fashion, and even constitutionally if petitioners’ reading were accepted.

Third update: Kennedy raises a critical question for the petitioners.

In the midst of a discussion of context and the consequences of petitioners’ reading, Justice Kennedy raised a question that will surely receive a lot of scrutiny in the coming discussion of the case.  He pointed out that, under petitioners’ reading, the federal government would be all but forcing states to create their own exchanges.  That’s true not just for the headline reason covered by this case – that their citizens would be denied benefits – but for a very perceptive reason that Justice Kennedy added:  namely, state insurance systems will fail if the subsidy/mandate system created by the statute does not operate in that particular state.  For Kennedy, that seemed to make this case an echo of the last healthcare decision, where the Court concluded that it was unconstitutional coercion for the federal government to condition all Medicaid benefits in the state on expanding Medicaid therein.  Simply put, Kennedy expressed deep concern with the federalism consequences of a reading that would coerce the states into setting up their own exchanges to avoid destroying a workable system of insurance in the state.  Justice Scalia attempted to respond on petitioners’ behalf that such concerns do not enter if the statute is unambiguous, but Justice Kennedy reiterated his concern with adopting a reading that would create such a “serious unconstitutional problem.”

Fourth update: The Chief Justice.

Those thinking that the decision in this case could potentially break along the same lines as the Court’s previous healthcare decision will be anxiously watching the Chief Justice, who was the swing vote the last time around.  This morning, he asked no questions to the petitioners and seemed skeptical of Justice Ginsburg’s efforts to question standing when the government stood up to give its case.

Posted in King v. Burwell, Featured, Merits Cases

Recommended Citation: Eric Citron, Mid-argument updates: King v. Burwell (Latest update: 11:06), SCOTUSblog (Mar. 4, 2015, 10:42 AM), http://www.scotusblog.com/2015/03/first-mid-argument-update-king-v-burwell/