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Wednesday, March 28, 2012

I'm An SC Justice, Not A Bricklayer!


For me the big surprise in today's argument over severing the individual mandate from this horta of a bill, practibility thereof, misery thereof, torture of innocent justices (Scalia), aka ham acting, aka the old farts are tired, aka why do we have to read it if Congress didn't, was how unrestrained the implications of the remarks were.
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In short, they're not happy at being put in this position. I disagree that the argument assuming a hypothetical shows the way they will eventually decide the case. This was argument devoted to the question of IF THE INDIVIDUAL MANDATE WERE STRUCK, what else in the bill must be struck? I think some of the reporting misunderstood the matter.

Still, I was almost astonished at how close some of them are to Vinson's ending point, even if Vinson's activity/inactivity distinction doesn't stand. The cars/broccoli bits came up earlier in the week, and what I thought was clearly out of the ballpark in Vinson's reasoning on severability may not be. Vinson dumped his legal career on the trash heap with that ruling, but it appears he wrote himself a memorable epitaph.

What surprised me first were the oblique and not so oblique references to the way ACA was passed. It starts sort of quietly with Roberts (basically addressing legislative intent):
CHIEF JUSTICE ROBERTS: The reality of the passage -- I mean, this was a piece of legislation which, there was -- had to be a concerted effort to gather enough votes so that it could be passed. And I suspect with a lot of these miscellaneous provisions that Justice Breyer was talking about, that was the price of the vote.Put in the Indian health care provision and I will vote for the other 2700 pages. Put in the Black Lung provision, and I'll go along with it. That's why all -- many of these provisions, I think, were put in, not because they were unobjectionable. So presumably what Congress would have done is they wouldn't have been able to put together, cobble together the votes to get it through.
Now this contradicts the observation earlier that there are provisions which are renactments of long-standing legislation, and Roberts was the one who made that observation:
CHIEF JUSTICE ROBERTS: Well, but it would have -- it would have passed parts of the hollow shell. I mean, a lot of this is reauthorization of appropriations that have been reauthorized for the previous 5 or 10 years and it was just more convenient for Congress to throw it in in the middle of the 2700 pages than to do it separately. I mean, can you really suggest -- I mean, they've cited the Black Lung Benefits Act and those have nothing to do with any of the things we are talking about.
So I was startled into a "huh?" (Because I'm not a justice of the Supreme Court of the United States of America, so I can make comments like "huh?" or "wow!" without earning any law professor's august disapproval.)

Breyer had earlier asked for suggestions on extent:
JUSTICE BREYER: Could I ask you one question, which is a practical question. I take as a given your answer to Justice Kennedy, you are saying let's look at it objectively and say what Congress has intended, okay? This is the mandate in the community, this is Titles I and II, the mandate, the community, pre-existing condition, okay? Here's the rest of it, you know, and when I look through the rest of it, I have all kinds of stuff in there. And I haven't read every word of that, I promise. As you pointed out, there is biosimilarity, there is breast feeding, there is promoting nurses and doctors to serve underserved areas, there is the CLASS Act, etcetera.

What do you suggest we do? I mean, should we appoint a special master with an instruction? Should we go back to the district court? You haven't argued most of these. As I hear you now, you're pretty close to the SG. I mean, you'd like it all struck down, but we are supposed to apply the objective test. I don't know if you differ very much.

So what do you propose that we do other than spend a year reading all this and have you argument (sic) all this?
Now we come to Kneedler's argument. He is the Deputy Solicitor General and so represents the government. The very first question he gets is a gloomy one from Roberts about the possibility of further litigation (for example, from insurance companies) with the question of whether they even have standing. Then Scalia clambers into the melee of misery:
JUSTICE SCALIA: Mr. Kneedler, there are some provisions which nobody would have standing to challenge. If the provision is simply an expenditure of Federal money, it doesn't hurt anybody except the taxpayer, but the taxpayer doesn't have standing. That -- that just continues.

Even though it is -- it should -- it is so closely allied to what's been struck down that it ought to go as well. But nonetheless, that has to continue because there's nobody in the world that can challenge it.

Can that possibly be the law?
Kneedler is trying to say it is, and then Breyer joins in again:
JUSTICE BREYER: What he's thinking of is this: I think Justice Scalia is thinking, I suspect, of -- imagine a tax which says, this tax, amount Y, goes to purpose X, which will pay for half of purpose X. The other half will come from the exchanges somehow. That second half is unconstitutional. Purpose X can't possibly be carried out now with only half the money.

Does the government just sit there collecting half the money forever because nobody can ever challenge it? You see, there -- if it were inextricably connected, is it enough to say, well, we won't consider that because maybe somebody else could bring that case and then there is no one else?

I mean, is that -
Kneedler responds again, yes. Ginsburg jumps in to second:
JUSTICE GINSBURG: Mr. Kneedler, it's not a choice between someone else bringing the case and a law staying in place. And what we're really talking about, as Justice Sotomayor started this discussion, is who is the proper party to take out what isn't infected by the Court's holding -- with all these provisions where there may be no standing, one institution clearly does have standing, and that's Congress.

And if Congress doesn't want the provisions that are not infected to stand, Congress can take care of it.

It's a question of which -- which side -should the Court say, we're going to wreck the whole thing, or should the Court leave it to Congress?
Unfortunate choice of words there! One could read that as implying that Congress will wreck it - but she has a point. Roberts speaks to bring Kneedler back to Breyer's implicit point, and then Scalia intervenes:
JUSTICE SCALIA: -- don't you think it's unrealistic to say leave it to Congress, as though you're sending it back to Congress for Congress to consider it dispassionately: On balance, should we have this provision or should we not have provision? That's not what it's going to be. It's going to be these provisions are in effect; even though you -- a lot of you never wanted them to be in effect, and you only voted for them because you wanted to get the heart of the -- of the Act, which has now been cut out; but nonetheless these provisions are the law, and you have to get the votes to overturn them.

That's an enormously different question from whether you get the votes initially to put them into the law.

What -- there is no way that this Court's decision is not going to distort the congressional process. Whether we strike it all down or leave some of it in place, the congressional process will never be the same. One way or another, Congress is going to have to reconsider this, and why isn't it better to have them reconsider it -- what should I say -- in toto, rather than having some things already in the law which you have to eliminate before you can move on to consider everything on balance?
Remember, there are cuts and limitations to Medicare in the bill, and I think Breyer is uncomfortable with leaving such provisions, and at this point he had my sympathy. They would not have been passed separately - even wild dingoes roaming the Australian outback know this. I do think this is a violation of legislative intent. Breyer usually decides in favor of leaving Congressional scope intact, and this is no different. Not only that, but the purpose of the Medicare cuts is really to fund some of the other portions, so if you do strike those other portions, it's legislation without a purpose.

Then Kennedy surprised me:
JUSTICE KENNEDY: When you say judicial restraint, you are echoing the earlier premise that it increases the judicial power if the judiciary strikes down other provisions of the Act. I suggest to you it might be quite the opposite. We would be exercising the judicial power if one Act was -- one provision was stricken and the others remained to impose a risk on insurance companies that Congress had never intended. By reason of this Court, we would have a new regime that Congress did not provide for, did not consider. That, it seems to me, can be argued at least to be a more extreme exercise of judicial power than to strike -than striking the whole.
Some might call it hoisting Congress with its own petard.

Sotomayor asks for guidance - remember, she's asking the federal government's representative, not on powers (scope of judicial power) but on "discretion". Kneedler kind of bobbles this, and she says no, policy, discretion. Well, I really don't understand that, and maybe Kneedler doesn't either, because he kind of goes around in a circle:
MR. KNEEDLER: -- blend into -- blend into discretion and, in turn, blend into the merits of the severability question. And as to that, just to answer a question that several Justices have asked, we think that severability is a matter of statutory interpretation. It should be resolved by looking at the structure and the text of the Act, and the Court may look at legislative history to figure out what the text and structure mean with respect to severability. We don't
Here Scalia cuts him off:
JUSTICE SCALIA: Mr. Kneedler, what happened to the Eighth Amendment? You really want us to go through these 2,700 pages?
(Laughter.)
JUSTICE SCALIA: And do you really expect the Court to do that? Or do you expect us to give this function to our law clerks?
(Laughter.)
JUSTICE SCALIA: Is this not totally unrealistic? That we're going to go through this enormous bill item by item and decide each one?
Kagan tries to rebut this:
JUSTICE KAGAN: I mean, we have never suggested that we're going to say, look, this legislation was a brokered compromise, and we're going to try to figure out exactly what would have happened in the complex parliamentary shenanigans that go on across the street and figure out whether they would have made a difference.

Instead, we look at the text that's actually given us. For some people, we look only at the text. It should be easy for Justice Scalia's clerks.
Thwap, bam! Kneedler says "Yes, indeed, Ma'am,", and Roberts:
CHIEF JUSTICE ROBERTS: Well, how is that -what's exactly right? It's a question of statutory interpretation; that means you have to go through every line of the statute. I haven't heard your answer to Justice Scalia's question yet.
Kneedler responds that there's an easy way out - just strike the textually linked provisions of community rating and guaranteed coverage. Note that Breyer doesn't accept this. Roberts demurs also, and then Alito:
JUSTICE ALITO: May I ask you about the argument that's made in the economists' amicus brief? They say that the insurance reforms impose 10-year costs of roughly $700 billion on the insurance industry, and that these costs are supposed to be offset by about 350 billion in new revenue from the individual mandate and 350 billion from the Medicaid expansion. (Isn't he wrong here?)
Now, if the 350 billion -- maybe you'll disagree with the numbers, that they're fundamentally wrong; but assuming that they're in the ballpark, if the 350 million from the individual mandate were to be lost, what would happen to the insurance industry, which would now be in the -- in the hole for $350 billion over 10 years?
Note that severability case law does look at such issues. Kneedler's like hey, the economists are wrong. Kennedy pipes up again, and this shocked me:
JUSTICE KENNEDY: But I still don't understand where you are with the answer to Justice Alito's question. Assume that there is a -- a substantial probability that the 350 billion plus 350 billion equals 7 is going to be cut in half if the individual mandate is stricken. Assume there is a significant possibility of that. Is it within the proper exercise of this Court's function to impose that kind of risk? Can we say that the Congress would have intended that there be that kind of risk?
Kneedler's reply is that this is not the court's function, but again, that seems a bit odd based on case law.
JUSTICE KENNEDY: But isn't that -- isn't that the point, then, why we should just assume that it is not severable?
...
JUSTICE KENNEDY: If we -- if we lack the competence to even assess whether there is a risk, then isn't this an awesome exercise of judicial power?
MR. KNEEDLER: No, I don't -
JUSTICE KENNEDY: To say we're doing something and we're not telling you what the consequences might be?
Breyer again:
JUSTICE BREYER: I mean, I think it's not uncommon that Congress passes an act, and then there are many titles, and some of the titles have nothing to do with the other titles. That's a common thing. And you're saying you've never found an instance where they are all struck out when they have nothing to do with each other.

My question is, because I hear Mr. Clement saying something not too different from what you say. He talks about things at the periphery. We can't reject or accept an argument on severability because it's a lot of work for us. That's beside the point. But do you think that it's possible for you and Mr. Clement, on exploring this, to get together and agree on -(Laughter)

JUSTICE BREYER: -- I mean, on a list of things that are, in both your opinions, peripheral. Then you would focus on those areas where one of you thinks it's peripheral and one of you thinks it's not peripheral. And at that point, it might turn out to be far fewer than we are currently imagining, at which point we could hold an argument or figure out some way or somebody hold an argument and try to -- try to get those done.

Is that a pipe dream or is that a -

MR. KNEEDLER: I -- I just don't think that is realistic. The Court would be doing it without the parties, the millions of parties -

JUSTICE SCALIA: You can have a conference committee report afterwards, maybe.
I take that Scalia comment as a direct reference to the fact that most of Congress never even read the bill and that it was negotiated among committee members and given to Congress to vote up or down before they even had a chance to read it. Scalia appears irked at the the suggestion that Congress carefully balanced all the competing claims. Are we really at the point where SC justices are basically insinuating the Congress is incompetent to deal with this mess?

Farr picks up the argument. His position is all the rest of the act should stand. I think this is the Sotomayor default position. Here is one of his exchanges with Kennedy:
JUSTICE KENNEDY: So do you want us to write an opinion saying we have concluded that there is an insignificant risk of a substantial adverse effect on the insurance companies, that's our economic conclusion, and therefore not severable? That's what you want me to say?

MR. FARR: It doesn't sound right the way you say it, Justice Kennedy.
But Farr is arguing that the court shouldn't accept the economists argument, so he is asking the court to make an economic conclusion that guaranteed-issue and community rating are saveable even though the government and the text link them to minimum coverage.

Most of the justices probably don't accept this argument, and Scalia's response is just to whack the whole thing as the judicially minimalist position, and it appears that Kennedy might agree. Kagan steps into query whether minimum coverage, being a tool to achieve guaranteed coverage and community rating, shouldn't cause guaranteed coverage and community rating to go down, and Farr still disagrees.

It is an unfortunate position for any Supreme Court, and this doesn't even begin to cover the tremendous number of other provisions in the bill. Most of them cost some money. The boards, the panels, the thousand and one studies, the changes to Medicare funding and incentive payments, the ACOs, etc.

I do sympathize with the justices, but this is their job.

I don't see much recourse to throwing it all back in Congress' lap or striking certain provisions and running a very high risk that Congress won't do the fixes. The 60 vote provision does make it difficult.

On the other hand, if the court does the blanket strike per the text (minimum coverage, guaranteed issue and community rating), absolutely everyone will be furious with Congress, so the pressure increases to address the problems with a bill that Congress has not read. That way, at least they'll find out what was in it.

The Sotomayor theory of handing it back to Congress has a real appeal, but Kennedy, at least, appears to doubt that they WILL deal with it. He doubts that they can, and Scalia agrees. And Kennedy is very worried about doing damage to the whole financing system.

Finally, there's an ugly reality, and only those who have really read the bill can grasp this. The court would really have to rewrite sections of the bill to make a selective strike work. Clement touches on this in closing:
MR. CLEMENT: Mr. Chief Justice, I will make four points in rebuttal, but I will start with Justice Sotomayor's question; which is to simply say this isn't just a tool; it's the principal tool. Congress identified it as an essential tool. It's not just a tool to make it work. It's a tool to pay for it, to make it affordable. And again, that's not my characterization; that's Congress's characterization in subfinding I on page 43A of the government's brief.

Now, that bring me to my first point in rebuttal, which is Mr. Kneedler says, quite correctly tells this Court don't look at the budgetary implications. Well, the problem with that, though, is once it's common ground that the individual mandate is in the statute at least in part to make community rating and guaranteed-issue affordable, that really is all you have to identify. That establishes the essential link that it's there to pay for it. You don't have to figure out exactly how much that is and which box -- I mean, it clearly is a substantial part of it, because what they were trying to do is take healthy individuals and put them into the risk pool, and this is quoting their finding, which is in order -- they put people into the market "which will lower premiums." So that's what their intent was.
So you don't have to get to the -- the final number. You know that's what was going on here, and that's reason alone to sever it.

Now, the government -- Mr. Kneedler also says there is an easy dividing line between what they want to keep and what they want to dish out. The problem with that is that, you know, you -- you read their brief and you might think, oh, there is a guaranteed-issue and a community rating provision subtitle in the bill. There is not.

To figure out what they are talking about you have to go to page 6 of their brief, of their opening severability brief, where they tell you what is in and what's out. And the easy dividing line they suggest is actually between 300ga-1 and 300ga-2, because on community rating they don't -- they say that a-1 goes, but then they say a-2 has to stay, because that's the way that you'll have some sort of, kind of Potemkin community rating for the exchanges. But if you actually look at those provisions, a-2 makes all these references to a-1. It just doesn't work.
Etc. Clement's closing begins on page 80. It's worth reading. The bill is very complex, and the construction is complex. I doubt the regulators can carry out their instructions under the bill if minimum coverage is ruled unconstitutional, and I don't think the Supreme Court should be sorting through anything like this to essentially construct a workable remnant. When you veer into bill construction, you have passed your own powers as granted in the Constitution.

So that leaves you with the Kennedy/Scalia pole (kill it all) opposed to the Ginsburg(probably)/Sotomayor pole. Sotomayor's position - just strike minimum coverage (the individual mandate), let Congress deal with the fallout - is the most facially reasonable approach. It may prove to be very damaging to the country and the lives of millions of Americans, but the failure will be due to Congress, anger and pressure will be focused on Congress, and perhaps only an outright "throw the bums out" approach can fix Congress. In the long run, the court finds itself in this position only because individual congressional members are willing to vote for thousands of pages of legislation that they have not read and that bind their powers in the future.

A possible alternative approach not mentioned in today's debate is to strike both sets of provisions - the ones limiting Congressional powers to modify the bill & amend the regulatory decision-making plus the ones over the individual mandate. That would at least leave Congress with an easier task. It is quite reasonable to assume that Congress would not have included those legislative provisions restricting the powers of future Congresses if it knew it had to revise the legislation. If I were on the Supreme Court, this is what I would do.

We have reached an odd passage in which the justices of the SC doubt the powers of Congress to do their job. This should not make anyone of any individual political bent at all happy. Nonetheless, the purpose of judicial review is not to make life easy or simple for Congress - it is to preserve the fundamental governmental structure set up by the Constitution, and if Congress is incompetent, it is for the electorate to amend that situation, not for the SC to try to fix their legislative errors.


Comments:
Outstanding post: I was able to follow the logic, and enjoyed it greatly. Thank you.
 
It is an unfortunate position for any Supreme Court, and this doesn't even begin to cover the tremendous number of other provisions in the bill. Most of them cost some money. The boards, the panels, the thousand and one studies, the changes to Medicare funding and incentive payments, the ACOs, etc.

I do sympathize with the justices, but this is their job.


No it isn't. It is not the court's job to do any economic balancing act whatsoever. That is Congress's job.

Basically we have a chicken-shit Congress that is too goddamned lazy to write real statutory/civil law and wants to fall back on letting everything become case law. Congress wants to have it both ways to avoid responsibility. Kennedy and Scalia are right to tear up the whole thing because Congress' intention was to basically have the courts write the law. What's the old saying? Be careful what wish for...
 
That would at least leave Congress with an easier task.

I don't think the goal should be making Congress's job easier. The job is SUPPOSED to be hard!
 
Thanks for 'splainin' all the twists and turns. It does make one's eyes cross and one's brain cramp. Now I know why law school would have been a disaster for me.
 
Charles - the comment about money just refers to the complexity of trying to separate funding from all the dependent provisions.

The individual mandate (no telling whether it would have worked) was one of the chief funding mechanisms.

It's emphatically not the SC's job to make it all add up. At least some of them are worried that Congress can't or won't make it add up - the questioning focused on that. When they are asking questions about whether the parties affected would have legal recourse, it means they don't have confidence that Congress will fix it.

The horrifying prospect Farr raises of having all the entities involved pursue court case after court case is truly daunting, and Scalia is right that many wouldn't have a cause of action.

No court can make such a thing work.
 
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