On Thursday, the D.C. Circuit Court of Appeals agreed to rehear the latest challenge to the Affordable Care Act (ACA) en banc (with participation of all of the circuit’s judges, as opposed to the standard three-judge panel). In so doing, it illustrated why breaking out your victory celebration midway through the second quarter of a game is ill-advised.
Opponents of the Affordable Care Act thought they had much to celebrate earlier this summer when a D.C. Circuit Court of Appeals panel held that the Act’s subsidies for health insurance were available only to purchasers who obtained their insurance through a state-run exchange. Under this reading, which relied on a curiously rigid application of textualism that textualists themselves normally reject, those who bought from the federal exchange because their home states declined to create their own exchanges would be ineligible to receive the subsidy. If the ruling were to hold, it would fatally undermine Obamacare by stripping out the subsidies that make insurance affordable for millions of people who did not previously have insurance, but are now required to do so by the Act’s individual mandate. Lamentations and rending of garments, under those circumstances, would be an appropriate response for backers of Obamacare, not to mention the several million people who would lose their affordable health insurance.
As it turns out, though, a Fourth Circuit Court of Appeals panel rejected the argument that prevailed in the D.C Circuit, thereby generating a split among the circuits that increases the likelihood that the Supreme Court will grant review. The ACA opponents from the Fourth Circuit quickly petitioned the Supreme Court for review, in the hopes that the Court wouldn’t pass on a second opportunity to deliver a fatal blow to Obamacare. But the plan to fast-track the case to the Supreme Court was threatened by the Obama administration’s petition to the D.C. Circuit to rehear the case en banc, where a sizable majority of Democratic appointees (unlike the Republican majority on the panel that heard the case earlier) would be likely to reverse the panel’s holding. A ruling by the whole circuit in favor of the administration’s position would eliminate the circuit split and improve the odds that the Supreme Court would pass on the issue altogether.
To prevent this scenario, ACA opponents had to convince the D.C. Circuit not to agree to rehear the case, thereby preserving the circuit split. While the petition requesting review of the Fourth Circuit’s holding argued that Supreme Court review is crucial to resolve uncertainty about the continuing legality of subsidies, the argument against rehearing in the D.C. Circuit claimed that en banc review is unnecessary because the issue of statutory interpretation addressed by the panel review does not rise to the level of “exceptional importance” necessary to justify en banc review. Alternatively, had the Supreme Court granted review of the Fourth Circuit decision before a ruling on the D.C. Circuit rehearing petition could be issued, the en banc petition would have been left for naught. Thursday’s announcement precluded that possibility as well.
But ACA supporters might be advised to avoid excessively celebrating their recent good news. The absence of a circuit split decreases the probability of Supreme Court review, but not to zero. The Court could decide that the issue is sufficiently important to merit review even if all circuits that have spoken so far agree on the underlying legal issue. Should the Court go this route, we will be left with several cliffhangers. What will Justice Scalia’s brand of textualism lead him to do when confronted with a law he despises? Will Justice Kennedy, who does not typically share Scalia’s commitment to this interpretive approach, go along for the ride? Will Chief Justice Roberts continue to act strategically, as he had in the first round of Affordable Care Act litigation, in the face of the prospect of millions of people being stripped of affordable health insurance? The announcement of the en banc hearing reduces, but does not eliminate, the possibility that folks on both sides will face some anxiety until we eventually receive answers to these questions. As such, ACA supporters, as well as opponents, might want to wait before dumping the Gatorade buckets on the legal teams fighting for their respective positions.