The broader lessons from the ObamaCare decision

Most people understand the Supreme Court’s decision in King v. Burwell to have resolved, finally and definitively, the validity of the ObamaCare system. However, the case is important in two ways that go beyond the future of ObamaCare. The first is the breadth of the circumstances under which a court should defer to an agency’s interpretation of an ambiguous statute. The second is degree to which federal courts should allow a statute’s plain meaning to trump a statute’s underlying purpose.

The King case involved an interpretation by a federal agency — the IRS — of language in the Patient Protection and Affordable Care Act (ACA). Years ago, the Supreme Court in Chevron U.S.A. v. Natural Resources Defense Council set out the normal course for a court to follow when faced with an agency’s interpretation of a federal statute. Under the two steps of Chevron analysis, the court must first decide whether the statutory language at issue is ambiguous. If it is not ambiguous, then the court must assign the statutory language its unambiguous meaning; if the agency interpretation does not conform to that meaning, then the agency’s regulation must be stricken. However, if the court finds the statutory language to be ambiguous, then the court must defer to the agency’s interpretation so long as that interpretation is reasonable in light of the statutory language.

{mosads}Despite what seemed to be the facial applicability of Chevron — indeed, the Fourth Circuit below, whose judgment the Supreme Court affirmed, relied on Chevron to uphold the agency’s interpretation — the Supreme Court made clear that Chevron did not apply here. In a few earlier cases, the court has explained that Chevron does not apply where the issue as to which the agency would like to offer an interpretation is so important and fundamental that it is implausible that Congress intended to vest the agency with interpretive freedom. Thus, for example, the court some years ago in Food and Drug Administration v. Brown & Williamson Tobacco held on this basis that the Food and Drug Administration lacked interpretive freedom to classify nicotine as a drug subject to its regulatory power. The King court relied upon this exception to Chevron here, categorizing the issue in the case as “a question of deep ‘economic and political significance’ that is central to this statutory scheme; had Congress wished to assign that question to an agency, it surely would have done so expressly.” Thus, even though the court expressly concluded that the statutory language was “ambiguous,” it nonetheless found it “our task to determine the correct reading” of the statute.

Perhaps the most important aspect for the future of the Chevron lesson is the court’s varying description of the breadth of the Brown & Williamson exception to Chevron. While the King Court at one point quoted Brown & Williamson for the proposition that the exception to Chevron applies only in “‘extraordinary cases,'” it elsewhere stated — rather surprisingly — that it relied upon Chevron analysis in evaluating agency interpretations not as in the ordinary course, but merely “often.” King may signal that Chevron should be used less often than it has been.

King is also notable in that the court turned to the statute’s purpose to resolve the ambiguity. There was a time — the middle of the last century — when resort to a statute’s purpose was the courts’ primary interpretive tool. This changed with the ascendance of textualism. Indeed, so wide was textualism’s reach that every modern justice at one time or another has professed to practice at least some version of textualism. At the same time, some justices — perhaps most notably Supreme Court Justice Stephen Breyer — have continued to emphasize the importance of having the judiciary vindicate a statute’s purpose. The pure textualist response to a focus on purpose have been that legislation is in reality the result of horse-trading that belies the notion of a unitary statutory purpose.

Despite this, the court in King turned to purpose in resolving the statute’s meaning. The court explained that the purpose of ObamaCare was to protect the insurance market for individual healthcare coverage. Thus, the court felt obliged to reject the ObamaCare challengers’ statutory interpretation, since it would have put those markets again at risk. To be fair, the court’s resort to purpose was only in the shadow of the inapplicability of Chevron. Still, as noted above, the decision in King casts some doubt on the continued breadth of Chevron. And the reliance on purpose in King appears in an opinion authored by Chief Justice John Roberts that attracted the vote of Justice Anthony Kennedy. Only three justices — Antonin Scalia, Clarence Thomas and Samuel Alito — held the traditional textualist line.

King casts some doubt on the scope of the time-honored Chevron doctrine, and also on the vitality of textualism. Time will tell the extent to which King is an exceptional case on an exceptional topic, or a harbinger of things to come.

Nash is professor of law and David J. Bederman Research Professor (2014-15) at Emory University School of Law. He specializes in the study of courts and judges, federal courts and federal jurisdiction, legislation and regulation, and environmental law. Follow him on Twitter @JonathanRNash.