An expedited appeal in the exchange litigation

Almost twenty years ago, the FDA attempted to address the scourge of youth smoking by moving to regulate nicotine as a “drug.” The agency hadn’t attempted to regulate tobacco in the past; in fact, it had long believed that it lacked authority to do so. In 1996, however, FDA changed its mind. Didn’t the agency have jurisdiction over “drugs”? Didn’t federal law define “drug” to include substances that are “intended to affect the structure or any function of the body”? Didn’t nicotine fit the bill?

As a narrow textual matter, FDA had the tobacco industry dead to rights. In 2000, however, the Supreme Court invalidated the FDA’s effort to regulate nicotine as a drug. Yes, the Court said, nicotine fit the statutory definition of a drug. But “a reviewing court should not confine itself to examining a particular statutory provision in isolation. The meaning—or ambiguity—of certain words or phrases may only become evident when placed in context.” When it came to nicotine, that context demonstrated that the statute couldn’t mean what it seemed at first to say.

I bring this up because the D.C. Circuit just issued an order expediting the litigation over whether the government can offer tax credits on federally facilitated exchanges. (I’ve written about the litigation here and here.) In the ordinary course, the case would have taken months to get briefed and argued. Per the order, the D.C. Circuit will now hear the case on March 25. The court will probably release an opinion several weeks after that, although the importance of the case and the urgency of getting a straight answer could prompt the panel to move faster.

In its order, the court also specified that Judges Griffith, Edwards, and Randolph would hear the appeal. If you think litigation over the ACA is all about politics, this is a good draw for the challengers—both Griffith and Randolph were appointed by Republican presidents. (Judge Edwards was appointed by President Carter.)

For my part, however, I’m not confident that the judges’ partisan affiliation says much about how they’re likely to rule. Conservative judges do tend to be somewhat more reluctant than liberal judges to invoke “congressional purpose” in construing statutes. That might sound like bad news for the government. As Judge Friedman noted, the statutory text, “viewed in isolation, appears to support plaintiffs’ interpretation.” Part of the reason that he rejected that interpretation is because it would so obviously thwart Congress’s purpose to extend near-universal insurance coverage.

But it bears emphasis that Friedman’s opinion is primarily a textual opinion. Like the Court in Brown & Williamson, Friedman refused to confine his statutory analysis to a snippet of the text. He instead did as any good interpreter would do: he tried to make sense of the words that Congress used in the context in which it used them. And once you start poking around the ACA, it quickly becomes apparent that Congress could not possibly have meant, through backhanded language tucked in a complex calculation, to withdraw tax credits from people in states with federally facilitated exchanges.

All of which is to say that I wouldn’t fret too much that it’s a “conservative” panel. It was, after all, a conservative five-justice majority that decided Brown & Williamson—and that endorsed just the sort of contextual approach that Friedman deployed here. A judge’s political affiliation may tell you something about his approach to statutory interpretation. But under any approach—conservative or liberal, textual or purposive—the government should win this case.


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