• Halbig said it was applying the law as written. Don’t believe it.

    In the Wall Street Journal this morning, Jonathan Adler and Michael Cannon, the two principal architects of the exchange litigation, have an op-ed about Halbig and King. They write that “[t]he president’s defenders often concede that he is doing the opposite of what federal law says. Yet he claims that he is merely implementing the law as Congress intended.”

    The not-so-implicit suggestion is that Adler and Cannon are the staunch defenders of the law, and that those who disagree with them just ignore the law when they think Congress didn’t really mean what it said. That suggestion pervades the debate over the exchange litigation: either you apply the law as written or you just don’t care about the law.

    Let me be blunt: the suggestion is false. Those who disagree with Adler and Cannon care every bit as much about the law as they do. They just don’t buy their artificially cramped understanding of how to figure out what the law is.

    To understand the legal fight, keep in mind that words don’t have meaning in a vacuum. Words have meaning only because they mean something to those who speak and to those who listen. They’re communication devices. (As Ludwig Wittgenstein famously explained, you can’t have a private language. Language is public or it’s not really language at all.)

    So if you’re trying to make sense of a statute, the question for an interpreter is what Congress meant to communicate by the words that it chose. Usually, that’s easy to figure out. Words are not infinitely malleable. They have meaning in our linguistic community. And it’s a good rule of thumb that Congress means what it says and says what it means.

    But not always. Sometimes a statute uses words that don’t track what Congress meant. Sometimes that’s because Congress made a mistake. But more often, loose language fails to get corrected because, when taken in the context of the statute as a whole, the meaning of the statutory text is pretty clear.

    This is not an especially controversial point. Words always accrue meaning from context, and that context can affect the meaning of the words that the speaker selects to convey that meaning. If my wife says to me, “Do you mind taking out the garbage?” and I say “yes,” even as I dutifully take out the garbage, it’s clear from context that by yes I meant no. And yelling “fire!” means something very different in a crowded theater than it does at a firing squad.

    So too with statutes. Text really is the best guide to meaning. But sometimes the broader statutory context demonstrates that Congress meant to convey something very different than what a literal construction of an isolated snippet of a statute might suggest.

    Now, one might adopt the view—and I take this to be something like the D.C. Circuit’s view in Halbig—that courts are really bad at figuring out the meaning of words from their broader context. They can too easily justify whatever outcome they prefer by referring some amorphous “context.” In the face of uncertainty, maybe courts do better if they blind themselves to that broader context and mechanically apply the statute’s literal terms.

    But I don’t think that’s an attractive way of making sense of what Congress meant by the language that it chose. Statutory drafters aren’t writing a computer program that will be interpreted by a machine. They’re human beings using words to communicate meaning to other human beings. Why not use every contextual tool available to understand what Congress was driving at, much in the same way we labor to understand what people really mean when they speak to us?

    This case showcases the hazards of a myopic approach to statutory interpretation. The plaintiffs’ claim is that Congress meant to withdraw subsidies from people in states with federal exchanges because doing so would encourage states to set up exchanges. Congress was basically making a threat: set up your own exchanges or you’ll lose out on tax credits.

    But it’s easy, from context, to demonstrate that Congress didn’t mean anything of the kind. For threats to work, they have to be communicated. When Vito Corleone made the proverbial offer that can’t be refused, he didn’t just say “sign the contract.” He had Luca Brasi hold a gun to the head of a guy and “assured him that either his brains or his signature would be on the contract.” Without the gun, there’s no threat.

    In the ACA, it would have been simple for Congress to threaten the states. But it didn’t. Instead, it crafted a statute that gave the states the option to set up their own exchanges and used federal exchanges as a backstop. In context, that’s all it did. It’s outlandish to think that Congress meant to threaten the states it inserted the innocuous phrase “established by the State under 1311” into the complex calculation of the tax credit. Why? Because the supposed threat was so well-hidden that the states didn’t even notice it. No gun, no threat.

    So if the “established by the State under 1311” language wasn’t an implicit threat, what was it? In context, Congress used the phrase as shorthand for an exchange, whether established by the state (the default) or the federal government (the fallback). In his concurring opinion in the Fourth Circuit, Judge Davis makes the point beautifully:

    If I ask for pizza from Pizza Hut for lunch but clarify that I would be fine with a pizza from Domino’s, and I then specify that I want ham and pepperoni on my pizza from Pizza Hut, my friend who returns from Domino’s with a ham and pepperoni pizza has still complied with a literal construction of my lunch order. That is this case: Congress specified that Exchanges should be established and run by the states, but the contingency provision permits federal officials to act in place of the state when it fails to establish an Exchange. The premium tax credit calculation subprovision later specifies certain conditions regarding state-run Exchanges, but that does not mean that a literal reading of that provision somehow precludes its applicability to substitute federally-run Exchanges or erases the contingency provision out of the statute.

    In its decision yesterday, the D.C. Circuit draped itself in the mantle of legislative supremacy: “Within constitutional limits, Congress is supreme in matters of policy, and the consequence of that supremacy is that our duty when interpreting a statute is to ascertain the meaning of the words of the statute duly enacted through the formal legislative process.”

    I wholeheartedly agree that the point of statutory interpretation is “to ascertain the meaning of the words of the statute.” But I deplore a method of statutory construction that leads to a result so manifestly at odds with what Congress actually meant.


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