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Wednesday, June 10, 2015

Sohoni on King v. Burwell

Mila Sohoni (San Diego) has a thoughtful new essay at the Yale Journal on Regulation Online about the Supreme Court's forthcoming decision on Obamacare. She responds to Justice Kennedy's apparent concern at oral argument that threatening the states with the loss of tax credits for their citizens--and the destruction of their individual insurance markets--would be unconstitutionally coercive under the Tenth Amendment:  “the states are being told either create your own exchange, or we’ll send your insurance market into a death spiral.” Some have speculated that Kennedy may use the canon of constitutional avoidance—a doctrine that allows the court to read a statute to avoid reaching a difficult constitutional question—to resolve the case in the government’s favor.
Sohoni argues that the Court should avoid using the doctrine of constitutional avoidance for such novel questions unless the Court has first "exhausted other tools of statutory interpretation."  Otherwise, the Court may unnecessarily "manufacture new doubts" about Congress’ spending power and its relationship to the states.  
As it happens, Sohoni observes, the Court can rely on another tool of statutory interpretation, the “clear statement” rule, to reach the same result without the same adverse consequences. That doctrine—apparent in cases like PennhurstGregoryBond, and Gonzales— already requires Congress to speak in unmistakable terms before imposing onerous requirements on states. By relying on the “clear statement” rule, however, the Court can avoid sending state insurance markets into a “death spiral” without raising new questions about our federalism. 
Sohoni's arguments about King v. Burwell echo a growing chorus of concerns raised by other prominent commentators in administrative law, like Thomas Merrill, Gillian Metzger, Nicholas Bagley and Abbe Gluck. But her essay also adds to the long debate about whether and how tools of statutory construction matter.  Compare Karl N. Llewellyn, Remarks on the Theory of Appellate Decision and the Rules or Canons about How Statutes Are to Be Construed, 3 Vand. L. Rev. 395, 401-06 (1950)(it is a “foolish pretense” for courts to justify their statutory constructions based on “a set of mutually contradictory rules on How to Construe a Statute.”) with Cass R. Sunstein, Is the Clean Air Act Unconstitutional?, 98 Mich. L. Rev. 303, 359 (1999) (“[T]he clear statement principles are a paradigmatic form of ‘democracy-promoting minimalism.’ They reflect a cautious judicial role, one that does not preempt democratic processes but instead attempts to fortify them, by ensuring that certain sensitive questions receive explicit and sustained attention from the national legislature.”).  See also Anita S. Krishnakumar, Dueling Canons, 65 Duke L.J. _ (forthcoming 2016). 
Even when the outcome looks the same, Sohoni illustrates how the Supreme Court's particular choice of a statutory interpretation can have dramatic collateral consequences on the way Congress interacts with states and their citizens. 

Posted by Adam Zimmerman on June 10, 2015 at 12:49 PM | Permalink


Forgive me as I am not trained in law but isn't the statutory regulation of health insurance under the purview of the State? Then would the imposition of insurance minimum standard set by HHS be unconstitutional? And then; the States that do not set up exchanges would not be bound by the HHS minimum standard and free to set their own lower standards (or none) for insurance companies and prevent the "death spiral".

Another argument: If Congress did not read the ACA, how could it be reasonable to assume that Congress would be trying to "avoid" a constitutional cliff?

This is why the whole thing should be thrown out in my opinion. The Congress over-stepped all the way around. Leave health care up to the States where it belongs.

Posted by: Paul | Jun 11, 2015 11:26:48 AM

I understand (though I'm not certain I agree with) why one would apply substantive canons, at Step One, that make some sort of difference - e.g., a difference in result because a clear-statement canon points in the opposite direction of Chevron in a given case, or a change in the burden challengers face away from semantic unambiguity to something else less or even more demanding. (For example, while Chevron merely resolves ambiguities, the canon in Bond seems to both create and resolve them.)

What seems odd to me, though, about all the enthusiasm for Pennhurst in Burwell is that it gets you to exactly the same place that Chevron does, in exactly the same way. If the Court uses it, it means they have to find the agency is unambiguously wrong for the agency to lose. The same's true if they apply Chevron (assuming the agency's reading is not only permissible but reasonable, which it easily is if it's permissible). So applying Pennhurst creates a redundant requirement of clarity in plaintiffs' favor in this case, and it does so in a somewhat novel way, because your regular Pennhurst case is about withholding funding from states, not tax credits from their citizens. In a very formal way, it makes sense to say that Pennhurst resolves ambiguity in this case and pretermits the application of Step Two. But it's quite unnecessary to say so; the Court could just as well say that, bracketing whether Pennhurst applies here, the agency wins at Step Two assuming there is an ambiguity. That would be the most minimalist way of resolving the case, not Pennhurst. My sense is that the people pushing Pennhurst in this case have no principled reason (such as the one you offer) for skipping over Chevron, but rather, rightly suspect that some key votes on the Court are reluctant to defer on such a large question, and that federalism is more likely to sway those votes. That's okay as a tactical matter; I just hope the Court at least explains why it's skipping over Chevron if it decides the case under Pennhurst or avoidance. Otherwise I'm concerned Burwell will be read as another addition to the canon of cases that apply a major questions exception to Chevron without saying so.

Posted by: Asher Steinberg | Jun 10, 2015 11:43:36 PM


Great question. I think the technical answer is that Pennhurst, the avoidance canon, and the other normative canons are applied by the Court at Chevron Step 1--meaning that the Court applies those canons before it decides to defer. See, e.g., Edward J. DeBartolo Corp. v. Fla. Gulf Coast Bldg. & Constr. Trades Council, 485 U.S. 568, 574-75 (1988); Solid Waste Agency v. U.S. Army Corps of Eng'rs, 531 U.S. 159 (2001). The Court then goes ahead and reads the statute in the way the canon would dictate (here, against the unclear condition), without reference to what the agency thinks at Step Two. So Pennhurst and company are in this sense “prior” to Chevron.

There’s scholarly disagreement about whether this is normatively desirable in light of Chevron and Brand X. For more cases, as well as discussion of whether this is good or bad, see Kenneth A. Bamberger, Normative Canons in the Review of Administrative Policymaking, 118 Yale L.J. 64, 77 (2008); Christopher J. Walker, Avoiding Normative Canons in the Review of Administrative Interpretations of Law: A Brand X Doctrine of Constitutional Avoidance, 64 Admin. L. Rev. 139, 143 (2012).

Do others have a view on this?

Posted by: Adam Zimmerman | Jun 10, 2015 8:35:34 PM

Why not go farther still? If the Court used Chevron, they'd effectively get a clear statement rule (the statute would have to clearly mean what plaintiffs say it does for them to win) without invoking federalism at all. After all, the plaintiffs don't concede that Pennhurst applies here and applying it would arguably make new federalism law of a sort.

Posted by: Asher Steinberg | Jun 10, 2015 7:59:23 PM

That's a very fair point, Brian. I was posting too quickly and being too glib.

I'm familiar with arguments about how various canons or tools of statutory interpretation lend themselves to Llewelyn's “dueling” uses—such that they can be employed to support competing statutory constructions and outcomes. But I haven't given much thought to the issue of "complementary canons"--the collateral problems that arise when the Court chooses among canons that otherwise would lead to the same interpretation of a statute.

One thing I found interesting about Mila's argument is that exposes how the Supreme Court's choice of among two canons that seem to lead to the same statutory construction--in this case, constitutional avoidance over "clear statement" rules--might have democratic consequences beyond the immediate outcome. You're right to say that's really a question raised by Sunstein and Ernie Young.

Posted by: Adam Zimmerman | Jun 10, 2015 4:48:25 PM

Thanks for the pointer, Adam. I like Mila's essay. This is just a note to mention that I don't think it makes sense to mention Llewellyn in the same breath with Sunstein or Sohoni. Llewellyn's essay, although it touches on some "substantive" canons, is mostly about the fact that the most prevalent canons of the time were built on contending intuitions about how Congress usually drafted statutes -- and, of course, that this permitted the interpreter to make value judgments concealed behind the choice of intuition. Sunstein's framework (Ernie Young should share in some credit for it, too) in essence surfaces the hidden value judgments, by requiring the interpreter to first articulate the value and only then proceeding to interpretation. One could still criticize substantive canons on lots of grounds, but it is an entirely different set of criticisms, in my view.

Posted by: BDG | Jun 10, 2015 3:51:30 PM

"threatening the states with the loss of tax credits for their citizens--and the destruction of their individual insurance markets--would be unconstitutionally coercive under the Tenth Amendment" may well be true. The simple solution is to send Obamacare back to Congress and the President to fix. That would absolve the Court of any charge of coercion!

Posted by: Jimbino | Jun 10, 2015 2:44:53 PM

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