Today the Court handed down a 6-3 decision in King v. Burwell, upholding the Government’s regulation interpreting the Affordable Care Act to allow for tax subsidies in healthcare exchanges established by the Federal Government. This is a big win for the Obama Administration in a case that most felt could go either way after the Court heard the case earlier this year. Obviously this is a crucial victory for the future of the Affordable Care Act.

But the way the Court reached its decision broke new ground in administrative law. Many expected (myself included) that if the Court ruled for the Government, it would do so by applying the familiar Chevron deference regime—finding that the statute is ambiguous and deferring to the Government’s reasonable interpretation of that law. But, instead, the Chief Justice, writing for the six-Justice majority, ruled that Chevron deference does not apply to questions like this that are of “deep economic and political significance.” (Granted, Justice Kennedy perhaps foreshadowed such a conclusion at oral argument, as Nick Bagley has blogged about here.) 

Here is the key passage from the Chief’s opinion (from page eight of the slip opinion):

When analyzing an agency’s interpretation of a statute, we often apply the two-step framework announced in Chevron, 467 U. S. 837. Under that framework, we ask whether the statute is ambiguous and, if so, whether the agency’s interpretation is reasonable. Id., at 842–843. This approach “is premised on the theory that a statute’s ambiguity constitutes an implicit delegation from Congress to the agency to fill in the statutory gaps.” FDA v. Brown & Williamson Tobacco Corp., 529 U. S. 120, 159 (2000). “In extraordinary cases, however, there may be reason to hesitate before concluding that Congress has intended such an implicit delegation.” Ibid.

This is one of those cases. The tax credits are among the Act’s key reforms, involving billions of dollars in spending each year and affecting the price of health insurance for millions of people. Whether those credits are available on Federal Exchanges is thus a question of deep “economic and political significance” that is central to this statutory scheme; had Congress wished to assign that question to an agency, it surely would have done so expressly. Utility Air Regulatory Group v. EPA, 573 U. S. ___, ___ (2014) (slip op., at 19) (quoting Brown & Williamson, 529 U. S., at 160). It is especially unlikely that Congress would have delegated this decision to the IRS, which has no expertise in crafting health insurance policy of this sort. See Gonzales v. Oregon, 546 U. S. 243, 266–267 (2006). This is not a case for the IRS.

As I tell my students, a good sign that a court is departing from traditional administrative law principles is if it cites Justice O’Connor’s opinion in Brown & Williamson. And sure enough the Court cites Brown & Williamson extensively. But what does this novel holding mean for administrative law?

First, there’s the obvious, practical implication: Because the Court has provided its own, definitive interpretation of the ambiguous statute—and held that it will not defer to the agency’s interpretation—a subsequent presidential administration (say, a Republican Administration) cannot reinterpret the statutory provision to prohibit tax subsidies in exchanges established by the Federal Government.

But if that were the Court’s sole intention, it could have just ruled that the statute is unambiguous at Chevron Step One, after applying the traditional tools of statutory interpretation. Instead, the Chief went the extra step of reasserting the judiciary’s primary role of interpreting statutes that raise questions of “deep economic and political significance.” This is a major blow to a bright-line rule-based approach to Chevron deference. To be sure, the major questions doctrine—the presumption, as Justice Scalia artfully framed it in Whitman, that Congress “does not . . . hide elephants in mouseholes”—has been around for a while. But its application here seems strained and less obvious. And the Chief’s case-by-case approach of looking to the particular statutory subsection for congressional intent of delegation (at least for major questions) reads a lot like his dissent in City of Arlington v. FCC, which the Court (with Justice Scalia writing) rejected in the context of agency jurisdiction questions (which are arguably another type of major questions).

One could say that King v. Burwell—while a critical win for the Obama Administration—is a judicial power grab over the Executive in the modern administrative state. Some may say this judicial intervention is long overdue in light of the extraordinary amount of lawmaking authority Congress has delegated to federal agencies. It will be interesting to see if this is a one-off holding made under extraordinary circumstances, or whether there will be further cutting back on the scope of federal agency lawmaking authority. In some ways, this splitting-the-baby approach reminds me of the Chief’s opinion upholding the constitutionality of the Affordable Care Act where he said Congress didn’t have the power under the Commerce Clause but did under its taxing powers. But I’ll leave that potential parallel for others to explore (or not).

It will also be interesting to see how this amplified major questions doctrine affects other judicial challenges to executive action. Especially in light of the King Court’s citation to UARG, one context that immediately comes to mind is the EPA’s Clean Power Plan, which Bruce Huber has blogged about here. For more on those arguments, check out Laurence Tribe’s WSJ op-ed, which seems to provide the blueprint for how to use the analytic framework in King to challenge the EPA’s Clean Power Plant rulemaking under the Clean Air Act.

@chris_j_walker