The Supreme Court’s recent grant in King v. Burwell has generated a lot of heat, and varying amounts of light, among the legal commentariat. There, the Court agreed to review the 4th Circuit’s rejection of the claim that the text of the Affordable Care Act precludes subsidies for health exchanges established by the federal government, as opposed to those established by the states themselves. (A divided D.C. Circuit panel accepted this very argument before its opinion was vacated in anticipation of rehearing en banc.)
Presently, I am not inclined to enter the public debate over whether, in light of the statute’s other provisions and broader structure, an “Exchange established by the State under section 1311” of the Act includes exchanges established by the federal government after individual states refused to create such exchanges. The SCOTUSBlog Symposium on that matter offers an exhaustive array of thoughtful views.
But I am intrigued the administrative law implications of some arguments floating around in defense of the government’s claim that federal exchanges are eligible for subsidies, namely the notions that the language quoted above is either a scrivener’s error (“an obvious typo ” in the words of Paul Krugman) or should yield because the plain meaning would lead to absurd results, namely the collapse of the entire ACA regime. Now, the government and its most thoughtful supporters are not leading with the scrivener’s error or absurdity doctrine as a defense for their position. This is understandable, since such arguments, especially absurdity, can be the interpretive equivalent of the Hail Mary pass; if you can go with the letter and the spirit of the statute, do that before pleading in the name of spirit alone.
Yet the notion of Congressional mistake and oversight pervade even the more textually anchored defenses of the government’s position here. The arguments based on broader structure labor to confer textual plausibility to the notion that the phrase “established by the State” means “established by the federal government when the State would not.” Now these two are not obvious equivalents at first glance and, without wading into the merits, even the best efforts at contextualizing this phrase strike me as arguing for a less obvious interpretation, even if it is a plausible or permissible one. This is not like looking to context to disambiguate meaning: we can agree that a prohibition on “drawing blood in the streets” can clearly apply to dueling and clearly does not apply to performing emergency surgery; there the legislature did not so much misspeak as opposed to speak unclearly (or appear to speak unclearly to a person deaf to context). Nor is it like taking a vague term like “reasonable” and giving it content. Treating “established by the State” as equivalent to “established by the federal government” is at best a statute-specific term of art that might well be justified in light of context, but it strikes me that the motivation to deeming it as such (or choosing that second-most-plausible meaning) is because of the policy misfit. So it strikes me that the following discussion is relevant even if the government’s defenders disclaim the absurdity doctrine in its strongest form.
The point here is not to rehash the merits of the scrivener’s error and absurdity doctrines, but to think about how they interact with Chevron deference to agency interpretations. The government’s interpretation, after all, comes to the courts in the form of a regulation issued by an agency, the IRS, with delegated authority to make rules with the force of law. Under the Court’s jurisprudence, there would be a strong presumption that the IRS would receive Chevron deference. In other words, if the statute was unclear, the IRS’s interpretation would stand if it were reasonable. But what it means to be clear here is not obvious. As noted above, the standard Chevron cases deal with ordinary ambiguity: Is a “source” of pollution an individual smokestack or a plant? Is a daily planner a “diary”? Is Miles Davis “cool” when he is playing in Death Valley? Or they deal with vagueness: Does an instruction to use “best available technology” permit cost-benefit consideration? Is a 7% rate of return “reasonable”?
But the interaction between the absurdity doctrine and deference does not map obviously onto these standard categories. From one perspective, when someone invokes absurdity, they are arguing that the text of the statute is “clear” but should be overridden because of broader considerations of law or policy. Or they are arguing that the (authoritative) intent is clear, even if it cuts against the text. This raises interesting questions about the “ordinary tools of statutory construction” Chevron contemplates at Step One and how they operate. If it’s unclear whether the statute leads to absurd result, should the agency win if an absurdity argument is plausible, or does the Court have exclusive control over the absurdity and scrivener’s error doctrines? Is there an intermediate position? And what do the answers to these questions have to say about cases like Brown & Williamson or Gonzales v. Oregon, where the Court does not invoke absurdity, but looks to square isolated clarity with broader policy context? I’ll have more on this in an upcoming post or two.