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The Long-Term Effects of the Obamacare Decision

During oral arguments of the Burwell v Obamacare case before the Supreme Court, the U.S. Solicitor General Donald Verrilli made the case that the “court should defer to the interpretation of the Internal Revenue Service, which said the tax credits apply nationwide.” When the Obamacare decision was announced, it is clear that SCOTUS did apply deference, which was absolutely the worst possible solution.

The idea of “deference” refers “ to “Chevron deference,” “a doctrine mostly unknown beyond the halls of the Capitol and the corridors of the Supreme Court. It refers to a 1984 decision, Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., and it is one of the most widely cited cases in law. Boiled down, it says that when a law is ambiguous, judges should defer to the agency designated to implement it so long as the agency’s decision is reasonable.”

Given the current catastrophic state of the IRS, SCOTUS should have run from this idea as quickly as possible. The IRS has proven overwhelmingly in the last few years that no decision it makes is “reasonable” and therefore cannot be trusted as an unbiased, independent agency capable of carrying out a professional opinion on this or virtually any manner.

Even more unfortunately, not only did SCOTUS apply deference, which allowed the IRS rule to stand, it did so by taking expanding the concept of “Chevron Deference” even further in order to validate its decision. George Will, in a column written just after the Obamacare ruling was handed down, described how the decision now allows the executive branch to apply deference in situations that are not just ambiguous, but also “inconvenient for the smooth operation of something Congress created.” This is not interpreting law — this is legislating.

Therefore, the actions of the IRS — that is, willy-nilly creating rules which expanded the scope of Obamacare beyond its text — were indeed endorsed and given political cover by Roberts and his majority as they applied Chevron Deference. Instead of sending Obamacare back to the legislature for clarification, the judicial branch decided to step in and interpret the law for the sake of alleviating “inconvenience”. But this is wrong. Convenience, ease, and expediency should never be a rationale for the judicial branch to go beyond the scope of deciding whether or not a law is constitutional, as they did here.

The judicial branch, with this decision, seemed to act more in harmony with the legislative and executive one, instead of serving as a check against the others. What’s more, “besides violating the separation of powers, this approach raises serious issues about whether litigants before the courts are receiving the process that is due to them under the Constitution. It would result if its branches behaved as partners in harness rather than as wary, balancing rivals maintaining constitutional equipoise.”

Will summed up the damage Roberts has done, which is likely to have lasting effects in the courts for years to come. Roberts goes “beyond “understanding” the plan; he adopts a legislator’s role in order to rescue the legislature’s plan from the consequences of the legislature’s dubious decisions. By blurring, to the point of erasure, constitutional boundaries, he damages all institutions, not least his court.”

How the Supreme Court uses and applies Chevron Deference in the coming years, in the way they did with this decision, will be especially interesting, given the expanded roles of many government agencies such as the EPA and FCC.

SCOTUS EPA Ruling is a Breath of Fresh Air

The SCOTUS ruling against the EPA was a breath of fresh air (see what I did there?). Before adjourning until October, the Supreme Court decided that recent EPA rules did not consider cost compliance. The Washington Examiner had a good overview of the ruling. This decision will likely affect other recent EPA rules.

“The Supreme Court ruled 5-4 against Environmental Protection Agency pollution rules for power plants Monday, in a blow to President Obama’s environmental agenda.

The majority decision, written by Justice Antonin Scalia, said the EPA has to consider the costs of complying with the rules and sent the air pollution regulations back to the agency.

The EPA rules in question regulate hazardous air pollutants and mercury from coal- and oil-fired power plants, known as the MATS regulations. The regulations went into effect April 16. The utility industry had argued that the rules cost them billions of dollars to comply and that EPA ignored the cost issue in putting the regulations into effect.

“EPA must consider cost — including cost of compliance — before deciding whether regulation is appropriate and necessary. It will be up to the agency to decide (as always, within the limits of reasonable interpretation) how to account for cost,” Scalia wrote in agreeing with the industry.

The decision will have repercussions for other EPA regulations that are key to Obama’s climate change agenda. The EPA will now have to examine the cost of compliance for the Clean Power Plan, which is at the heart of the president’s environmental agenda.

Many of the companies have either made the investments or closed power plants to comply. If the investments necessary to upgrade a plant to comply with the regulation aren’t justified when considering the operational costs, revenues earned and other factors, then the decision is made to retire it.

The D.C. Circuit Court Appeals favored the EPA in a previous lawsuit filed by the industry, attempting to overturn the rules, which is why they took it to the Supreme Court to decide the cost issue.

The D.C. Circuit was split in its decision, but the majority ruling prevailed. At the center of the case is the question of whether the regulation of hazardous air pollutants from electric utilities are “appropriate and necessary.” On that issue the court was split, but a two-judge majority agreed that the EPA could ignore costs in determining whether to regulate the utility sector.

The D.C. Circuit majority also agreed the EPA could focus solely on the utilities’ contribution to the pollutants of concern, rather than identifying any specific health hazards attributable only to utility emissions.

The EPA had argued that the rules are both appropriate and necessary regardless of the costs, and that it has the discretion under the law to act as it deems fit in regulating hazardous pollutants.”

SCOTUS Upholds Obamacare, 6-3

From Scotusblog:

Decision of the Fourth Circuit is affirmed in King v. Burwell. 6-3.

This means that individuals who get their health insurance through an exchange established by the federal government will be eligible for tax subsidies.

Chief Justice writes for the Court. Six are the Chief, Kennedy, Ginsburg, Breyer, Sotomayor, and Kagan.

Dissent by Scalia, joined by Alito and Thomas.

Court refused to apply Chevron deference — that is, to find that the statute is ambiguous and that the federal government’s interpretation was reasonable.

From Scalia’s dissent: “We should start calling this law SCOTUScare.” From the intro to Scalia’s dissent: the majority’s reading of the text “is of course quite absurd, and the Court’s 21 pages of explanation make it no less so.”

From the majority opinion: “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them.”

The majority also acknowledges that the challengers’ “arguments about the plain meaning . . . are strong.”

‘In this instance, the context and structure of the Act compel us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase’…

The opinion is here

Justice Scalia’s dissent, via the WSJ: