The limits of reading law in the Affordable Care Act cases.

• Author: Walsh, Kevin C.
• Position: Patient Protection and Affordable Care Act

INTRODUCTION

One of the most highly lauded legacies of Justice Scalia's decades-long tenure on the Supreme Court was his leadership of a movement to tether statutory interpretation more closely to statutory text. His dissents in the Affordable Care Act cases--National Federation of Independent Business v. Sebelius (1) and King v. Bunnell (2)--demonstrate both the nature and the limits of his success in that effort.

These were two legal challenges, one constitutional and the other statutory, that threatened to bring down President Obama's signature legislative achievement, the Patient Protection and Affordable Care Act. Both times the Court swerved away from a direct collision. And both times Justice Scalia accused the Court majority--led by Chief Justice Roberts--of twisting the statutory text. (3)

Justice Scalia was right about the twistifications. But that does not mean he was right to condemn them both. Sometimes the governing law of interpretation calls on judges to adopt an interpretation other than the one that most straightforwardly follows from the application of standard interpretive conventions to statutory text. (4)

NFIB v. Sebelius was just such a case. The Supreme Court had to choose between two interpretations of a provision regarding mandatory insurance coverage. (5) The most straightforward interpretation--as a requirement to have the right kind of insurance, backed up by a financial penalty for noncompliance--would have resulted in a holding of unconstitutionality. (6) A textually inferior interpretation--as a tax on not having the requisite insurance--would have avoided such a holding. (7) Under the Court's precedent governing that kind of choice, the Court was required to choose the constitutionally salvific interpretation--even over the textually superior one--as long as it was "reasonable" and "fairly possible" to read it that way. (8) And it was.

In King v. Burwell, by contrast, the law of interpretation did not authorize the Justices to opt for the textually inferior interpretation. Chief Justice Roberts found ambiguity in unambiguous statutory text and then resolved that ambiguity by reference to an interpretation that would make the "legislative plan" work. (9)

Because Chief Justice Roberts avoided explicit reference to legislative purpose and legislative history--two hallmarks of the "bad old days" before the rise of Scalian textualism (10)--he was constrained to generate ambiguity through textual analysis. And it is precisely because of this constraint that careful opinion readers can see where his reasoning comes up short. This is a testimony to Justice Scalia's success in leading the Court away from a more purposive approach toward a more textualist approach. But Justice Scalia and his textualism were still losers in King. Scalia's need to dissent in that case shows not only the limits of textualism's ascendancy, but also the need for a sounder jurisprudential footing for textualist interpretive practice.

The interpretive intentionalism elaborated by Richard Ekins in recent years would have provided a jurisprudential foundation that enabled engagement of Roberts on his own terms. (11) A comparison of Ekins's account of legislative intent with Roberts's conception of the legislative plan enables one to understand why the plan legislated by Congress--not the altered plan advanced by the Obama Administration and accepted by the Court majority--should have been treated as authoritative in King. (12)

A jurisprudentially grounded theory of interpretation--whether textualist, intentionalist, pragmatist, or what have you--matters in a peculiarly important way in actual adjudication. It does not legally control, at least not directly. The law of interpretation does. But the law of interpretation is largely unwritten and largely uncodified. It yields no uniquely correct directive in some cases. And there are more of these "hard cases" the further one goes into the courts and up the appellate hierarchy.

In these hard cases, a jurisprudentially grounded theory of interpretation orients attention and choice. The orientation it provides is just that. It is about the object of interpretation, more about interpretive outlook than algorithm. And its implementation is never pure, in the sense of being unconstrained by prior authoritative settlements and institutional considerations. But by providing an account of the central case or ideal type of legislation and interpretation and adjudication, jurisprudentially grounded theory not only orients interpreters in particular cases. It also explains how changes in (he law of interpretation may be justified and provides a basis for evaluating changes over time.

This Essay's exposition proceeds in three Parts. The first presents NFIB v. Sebelius as an illustration of the law of interpretation--as distinct from any particular theory of interpretation--at work. The decisive judicial activity was "interpretation" in only a loose, nonfocal use of the term. The second Part examines King v. Burwell. The dueling opinions in this case show how the success of Scalian textualism in practice has left it theoretically impoverished in answering appeals to the legislative plan on their own terms. The third Part introduces the intentionalism elaborated by Richard Ekins as an improved jurisprudential foundation for an approach to statutory interpretation in theory that dovetails significantly with Justice Scalia's textualism in practice. I conclude with the contention that Justice Scalia's leadership moved the law of interpretation closer to the central case of statutory interpretation appropriate for our constitutional order. He thereby lawfully improved that law over the course of his judicial tenure even though--over time--this involved transforming rather than simply transmitting the law of interpretation that had been handed down to him.

1. THE LAW OF INTERPRETATION AT WORK IN NFIB V. SEBELIUS

   The Supreme Court's legal assessment of 26 U.S.C. [section] 5000A in NFIB v. Sebelius shows how specific guidance supplied by the law of interpretation can override the orientation supplied by a general theory of statutory interpretation. The statutory text in question--[section] 5000A--was the home for the part of the Affordable Care Act commonly known as the individual mandate. (13) This was a mechanism for inducing insurance coverage. Just how to understand or describe that mechanism is the interpretive issue that divided the Court. Was the "individual mandate" a requirement enforced by a penalty for noncompliance, or was it instead a tax on going without the required coverage?

   The driver of this interpretive inquiry was a prior constitutional analysis. If [section] 5000A was a requirement enforced via a financial penalty for noncompliance, it would be unconstitutional because it would be outside of Congress's regulatory authority under the Commerce and Necessary and Proper Clauses. (14) But if [section] 5000A was only a tax on going without the required insurance, it would be within Congress's tax-laying authority (as long as it was not a direct tax). (15)

   Chief Justice Roberts, writing for a majority of the Court, went with the "just a tax" interpretation. (16) This was not "[t] he most straightforward reading," Chief Justice Roberts openly acknowledged, but it was a "reasonable one." (17) And that was enough.

   Everyone knew there was a thumb on the interpretive scale; both the majority and dissenting opinions acknowledged as much. The requirement-enforced- by-penalty interpretation would result in constitutional invalidation, while the tax interpretation could bring the provision within Congress's taxing power (as long as it was not a direct tax). This state of affairs triggered the principle that "every reasonable construction must be resorted to, in order to save a statute from unconstitutionality." (18) The interpretive question before the Court, then, was not whether the saving construction "is the most natural interpretation of the mandate, but only whether it is a 'fairly possible' one." (19) For its part, the dissent agreed with the "fairly possible" standard as well. (20) The differences came in application.

   Chief Justice Roberts's investigation of whether it was "fairly possible" to treat [section] 5000A as a tax drew a "functional approach" from Supreme Court precedent policing the tax/penalty line. (21) This approach looks at how the provision functions rather than how Congress labeled it. Roberts identified a number of features that made it "fairly possible" to view [section] 5000A as a tax: the amount due was close to, and sometimes lower than, the price of insurance (in contrast with a prohibitively high penalty masquerading as a "tax"); there was no scienter requirement (in contrast with many requirements backed up by penalties); and the IRS was prohibited from using certain enforcement tools, including criminal prosecutions (in contrast with other requirements labeled as "taxes" but held to be penalties). (22) Roberts also noted that the Court had previously upheld many taxes that were also designed to influence conduct. (23)

   The joint dissent had a number of strong counterarguments. Perhaps the strongest was that [section] 5000A had separate exemptions from the insurance requirement and from the financial penalty, suggesting that the two had distinct legal effect (rather than being combined to operate as a tax on not having compliant insurance). (24) Another strong argument was that the Court had never previously taken something denominated a "penalty" and treated it as a tax; the functional approach from the Court's...