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States' Rights A Focus In Affordable Care Act Subsidies Argument, Part Two

By Sean Marotta
March 4, 2015

Click here to read part one in this series.

 Solicitor General Donald Verrilli argued for the Government.  He was criticized for his sometimes halting performance at the previous Affordable Care Act case—he literally choked on a sip of water that went down the wrong way—but today his answers were strong and confident.  While he directly addressed the standing question, he was satisfied—and the Court seemed to be as well—that Carvin’s representation that at least one of his clients would pay the individual-mandate penalty for 2014 was enough for the Court to hear the case.

Justice Scalia, as expected, challenged Verilli’s position hard, asking sarcastically whether the Court was allowed to “twist words as necessary” to ensure that “every statute must make sense.”  But even these questions were telling because they suggested that Scalia understood the harmful practical consequences that a ruling for the challengers would have.  The key question, Scalia said, is whether the Act’s words were ambiguous.  If they were, they could be interpreted in light of their consequences.  But if they were not—and Scalia’s questions suggested he thought they were not—the Court must enforce the statute Congress wrote, not the one it meant to write.

Verilli also addressed Kennedy’s point regarding coercion, admitting that it put the government in a difficult spot.  On the one hand, Verrilli would have an obligation as Solicitor General to defend the statute against constitutional challenge.  But on the other hand, he said, the coercion question could warrant the Court reading the Act so as to side-step the states’ rights issue—a point on which Verrilli and Justice Kennedy appeared to agree. 

Justice Alito then raised the question of the Court’s remedy if it agreed with the challengers.  He pointed out that States could still establish Exchanges and— bringing up a point raised by a hospital amicus brief—the Court could delay the effectiveness of its ruling until the end of the year in order to give States time to respond.  But Verrilli emphasized that setting up Exchanges takes time, and even the end of the year may not be long enough to avoid serious harm to patients in the interim.

The justices and Verrilli then got into a long, technical argument about how specific provisions of the Act did, or did not, make sense in the light of the government’s position. The talk of ambiguity also drew the first substantive question from Chief Justice Roberts.  Many had identified Roberts as a key vote in the case, but he said next to nothing throughout.  Now he asked whether ambiguity meant a different IRS Commissioner in a different administration could change the IRS’s rule.  If the current IRS rule was a reasonable interpretation of an ambiguous statute, Roberts seemed to say, one that adopted the challengers’ view would be, too.  Verrilli admitted that could be true, but it would be hard for the challengers’ reading to be “reasonable” given how contrary to Congress’s intent of affordable care for all such a rule would be.

In the end, it is tricky to predict outcomes from oral argument.  It seems safe, to say, however, that Justice Kennedy’s concern for states’ rights under the challengers’ reading, combined with Chief Justice Roberts’ silence, should give Affordable Care Act supporters hope.  But whatever the outcome, one thing is crystal clear:  The outcome will matter for hospitals and the patients they serve.  When Justice Scalia suggested that Congress would legislatively overturn any ruling in the challengers’ favor, Verrilli’s response—to peals of laughter—said it all:  “This Congress, Your Honor?”

Topic: Access and Coverage
Tags: Coverage, access

Sean Marotta is an associate in the Washington office of Hogan Lovells, focusing on appellate and Supreme Court litigation. Sean has briefed multiple cases before the Supreme Court, including amicus curiae briefs for the American Hospital Association in NFIB v. Sebelius, Sebelius v. Auburn Regional Medical Center, and King v. Burwell.

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