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Continued updates on oral arguments in King v. Burwell (Last update 11:33)

(11:13 AM) I stepped out of the room approximately five minutes into the Solicitor General’s argument. Here’s what happened since Eric’s last update.

The Justices focused their questioning for the remainder of Michael Carvin’s argument for the petitioners on whether his interpretation of the statute had put an “elephant in a mousehole,” i.e., whether it would have made any sense for Congress to put such an important condition for receiving subsidies inside a technical formula for calculating the amount of the subsidy. Justices Ginsburg and Kagan focused on this point. Carvin parried that if one was looking for information about who should get a tax credit (the form of the subsidy at issue), then the natural place to look would be in the tax code, and not in the title of the U.S. code relating to public health and exchanges. That didn’t sit well with Justice Kagan, who tested the argument against Carvin’s other claim, which is that Congress was trying to create an incentive for states; in Justice Kagan’s view, the states would look to the provisions relating to establishing exchanges, and not to the technical coverage formula, to decide whether to set one up. Thus, if Congress was trying to create incentives for states, it would put those incentives in the place where they would look. Justice Alito jumped in to help Carvin, saying that if a state was looking for information about tax credits, it would look to the tax code.

Carvin’s argument closed with a long question from Justice Breyer about the supposed anomalies that his interpretation would create with the statute. I’ll discuss those in more detail in an update shortly.

When the Solicitor General took the lectern, he elected to begin by talking about standing, which had been raised by Justice Ginsburg. The short version of his point is that as long as one of the plaintiffs had to pay a tax penalty in 2014, one of the plaintiffs would have standing. The SG explained that the government simply does not know whether that is true because there has been no fact-finding in the case. He further stated that as long as the other side does not represent that their clients lack standing, he would assume that they do in fact have it, and proceed to the merits. There was a little bit of skeptical questioning about this: the Chief Justice and Justice Alito both suggested that standing should not be adjudicated at this stage. And the SG did not fight them on that. Interestingly, Justice Sotomayor also jumped in to say that the Court could accept Carvin’s representation that there is standing, thus suggesting her desire to reach the merits.

First update (11:26 AM): Skepticism about anomalies from Justices Breyer and Kagan

A bit more detail about the “anomalies” discussion at the end of Carvin’s argument: Justice Breyer began by offering Carvin “5 to 10 minutes to respond” to the idea that his interpretation of the statute would create anomalies, i.e., that if the phrase “established by the state” is read to exclude exchanges created by HHS, then other provisions of the statute that also use that phrase would be rendered inoperative or nonsensical. Carvin responded by going through Breyer’s list of anomalies and offering his responses to them. He also argued that the federal government’s interpretation would create more anomalies, including the potential loss of Medicaid funding for states that don’t establish exchanges because they could not ensure coordination between the federal exchanges in their states and other relevant officials (a prerequisite to Medicaid funding).

The most interesting “anomaly” raised, and the one that received the most attention, refers to “qualified individuals” under the statute. The statute provides that insurance shall be made available on exchanges to “qualified individuals,” and further defines a “qualified individual” to mean, “with respect to an Exchange, an individual who” both wants to enroll in a qualified plan, and also “resides in the State that established the Exchange.” The government, as well as Justices Breyer and Kagan, argue that if the only way for a state to “establish” an exchange is to create it on its own, then there would be no “qualified individuals” in states that failed to do so, and therefore there would be nobody on the exchanges (and, as Justice Kagan surmised, no product to sell on the exchanges).

Carvin’s answer was very interesting. Basically, he argued that this argument was a bluff by the government. He argued that if the petitioners prevail in this case, the federal government will never concede that there are no qualified individuals, but will instead try to find other ways to shoehorn people into the definition, or find ways to argue that federal exchanges are not limited to offering insurance only to qualified individuals. He offered some of those possible arguments, but did not go into detail.

Second update (11:33 AM): The broad outlines of the government’s merits argument, and Justice Scalia’s first reaction

After the Solicitor General briefly discussed the standing issue, he outlined the government’s two broad arguments on the merits. The first is that the government’s interpretation of the statute, which makes subsidies available on exchanges created by both the states and HHS, is the best way to give meaning to all the words of the statute. The second point is that the government’s reading “is compelled by” the structure and design of the statute–specifically that it was designed to ensure state flexibility in setting up exchanges, to avert death spirals, and to provide affordable care for all. He argued that in light of these goals, Congress simply could not have intended for the statute to function as intended.

That provoked an immediate and sharp response from Justice Scalia, who said that “of course” Congress could have enacted a statute that functions the way petitioners describe. Justice Scalia then engaged the Solicitor General in a back and forth about whether statutes can ever be written in less-than-optimal ways, and about whether they can ever be nonsensical. The argument implicit in the questioning was that even if Congress wanted to enact a law that works, it doesn’t mean that it actually did so. In that sense, Justice Scalia seemed to be drawing an even harder line than the petitioners.

At that point I left the room to come talk to you all. Justice Scalia’s questions are very interesting in light of recent statements he’s made reiterating that statutes should be read as a whole. Of course, the government urges such a reading in this case, arguing that a holistic reading supports its view of the subsidy provisions, but the petitioners make whole-statute arguments as well even as they emphasize the particular words in Section 36B that support their argument most clearly.

We’ll have more updates once the argument is done. The buzzer just sounded, so stay tuned.

Recommended Citation: Tejinder Singh, Continued updates on oral arguments in King v. Burwell (Last update 11:33), SCOTUSblog (Mar. 4, 2015, 11:13 AM),