Antonin Scalia and the Rule of the Last Antecedent
…coming soon to a political theater near you.
It’s the summer, so of course the Supreme Court is hearing another legal challenge to Obamacare. The last time around, Chief Justice John Roberts joined the “liberal” justices on the Court and voted to uphold the law’s constitutionality. However, the plaintiffs in King v. Burwell — the case currently before the Court — are arguing that constitutionality is so 2012.
The issue the Court will be deciding in King all comes down to statutory interpretation. Specifically, it’s the interpretation of four very important words: “Established by a State.”
What’s statutory interpretation? Well, the hyper-quick Schoolhouse Rock version goes like this: Congress passes a bill, the President signs it, the bill becomes law, and then the law gets codified, i.e. organized and compiled into statutes. After all that, Federal agencies have some leeway to interpret the statutes and apply them as they see fit. The plaintiffs in King are basically saying that the US government has got its interpretation of the statutes all wrong (congrats, you just became a healthcare-law wonk).
As we all know and dread, Obamacare’s individual mandate forces almost everyone in the country to get health insurance. Lots of people get their coverage through their employer and/or their parents, but some people have to buy insurance on their own. If you fall into the latter category, you can use healthcare marketplaces or “Exchanges” (like Healthcare.gov) to choose a plan. Based on your income, you could qualify for a Federal subsidy to help pay for a health insurance plan that might be out of your reach economically.
This is where it gets complicated. You see, Section 1401 of Obamacare says the aforementioned subsidies are available to people who are enrolled in a healthcare policy acquired “through an Exchange established by a State” as they are defined in Section 1311. The problem is when we flip over to Section 1311, it says that a healthcare Exchange is “a governmental agency or nonprofit entity that is established by a State.” There’s nothing in there about an Exchange (like Healthcare.gov) that is established by the Federal government; no State-made Exchange, no subsidies. Since the majority of States in the country did not elect to set up their own exchanges and instead let the federal government do it for them, literally millions of people have been collecting subsidies who were ineligible to receive them.
Pretty cut and dry, right? It was actually pretty convincing to the D.C. Circuit Court of Appeals and at least one other District Court in the country. It was also somewhat convincing to the Fourth Circuit Court of Appeals, who “only slightly” found the Obama Administration’s position more defensible. At the time, this shocked journalists across the country who were dumbfounded as to how a bunch of lawyers knew more about statutory interpretation than they did.
The problem with the plaintiffs’ case in King is that the law is complicated and vague at times. In fact, another Section of the law over at 1321(c) even says the Secretary (i.e., the US government), “shall … establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements.” In other words, when the State doesn’t create a Healthcare Exchange, the Federal government will do it for them.
The Fourth Circuit Court of Appeals ultimately found this line of argument to be too convincing to rule in the plaintiffs’ favor:
Given that Congress defined “Exchange” as an Exchange established by the state, it makes sense to read § 1321(c)’s directive that HHS establish “such Exchange” to mean that the federal government acts on behalf of the state when it establishes its own Exchange. However, the court cannot ignore the common-sense appeal of the plaintiffs’ argument; a literal reading of the statute undoubtedly accords more closely with their position. As such, based solely on the language and context of the most relevant statutory provisions, the court cannot say that Congress’s intent is so clear and unambiguous that it “foreclose[s] any other interpretation.”
The key word in Section 1321 is “such.” If the word “such” is referring to a full-blown exchange as they are defined in Section 1311, then the logic is on the Obama Administration’s side and the Federal Exchange is an Exchange just like any other, with every bell and whistle.
Antonin Scalia, one of the most senior Justices on the Court, actually touched on how to interpret this fuzzy sort of language in Barnhart v. Thomas, a 2003 case about Social Security disability benefits. Not surprisingly, the Social Security disability process is similarly dictated by lots of boring regulations and statutes. When you apply for benefits and your case goes before a Judge, he decides your case by going through five steps, laid out below in five questions; if the answer to one of these questions is “No,” then you move on to the next one:
- Are you working?
- Do you have an impairment that will probably affect you for more than a year?
- Is that severe impairment almost life-threatening?
- OK, so it’s severe, but not life-threatening….can you deal with the pain and go back to your old job?
- Can you perform another job in the national economy?
If you make it through all these steps with the answer repeatedly being, “No,” then you win your case. In Barnhart, the Supreme Court looked at the part of this process normally found at the fourth and fifth steps. They tackled the definition of “disability” outlined in 42 U. S. C. § 423(d)(1)(A):
An individual shall be determined to be under a disability only if his physical or mental impairment or impairments are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy. . . .
Basically, a woman — Pauline Thomas — applied for disability benefits and got through the first three steps. However, when she got to step four, “Can you deal with the pain and go back to your old job?”, the Judge said that she could return to her old job as an elevator operator. The problem? The job didn’t actually exist anymore. Ms. Thomas pursued her case all the way up to the Third Circuit Court of Appeals and eventually won. However, the Federal Government took issue with that and brought it before the Supreme Court. A unanimous Supreme Court ultimately ruled on the side of the US Government.
You see, it all came down to one part of one sentence: Can someone “engage in any other kind of substantial gainful work which exists in the national economy.” The question the Court was deciding was whether or not it mattered if your past work still existed in the “national economy.” The Court found that it didn’t, because that wasn’t how the Social Security Administration interpreted the statute (and now we’re back to statutory interpretation!):
As the above description shows, step four can result in a determination of no disability without inquiry into whether the claimant’s previous work exists in the national economy; the regulations explicitly reserve inquiry into the national economy for step five. Thus, the SSA has made it perfectly clear that it does not interpret the clause “which exists in the national economy” in §423(d)(2)(A) as applying to “previous work.” The issue presented is whether this agency interpretation must be accorded deference.
The “agency interpretation” being “accorded deference,” is the same issue that is at stake in King v. Burwell. The Supreme Court has long held that if a statute is vague or unclear, they “must defer to a reasonable construction by the agency charged with its implementation.” Scalia cited directly to that line of reasoning when he granted the Social Security Administration leeway to interpret their own statutes; he even gave a little example to illustrate his point:
Consider, for example, the case of parents who, before leaving their teenage son alone in the house for the weekend, warn him, “You will be punished if you throw a party or engage in any other activity that damages the house.” If the son nevertheless throws a party and is caught, he should hardly be able to avoid punishment by arguing that the house was not damaged. […] The parents, foreseeing that assessment of whether an activity had in fact “damaged” the house could be disputed by their son, might have wished to preclude all argument by specifying and categorically prohibiting the one activity — hosting a party — that was most likely to cause damage and most likely to occur.
This isn’t all that dissimilar from a Pizza Hut/Dominos example cited in the Fourth Circuit’s decision (full quote is in the notes section on the right). Where it gets interesting is when Scalia starts referring to the “rule of the last antecedent:”
The Third Circuit’s reading disregards — indeed, is precisely contrary to — the grammatical “rule of the last antecedent,” according to which a limiting clause or phrase (here, the relative clause “which exists in the national economy”) should ordinarily be read as modifying only the noun or phrase that it immediately follows (here, “any other kind of substantial gainful work”). See 2A N. Singer, Sutherland on Statutory Construction § 47.33, p. 369 (6th rev. ed. 2000) (“Referential and qualifying words and phrases, where no contrary intention appears, refer solely to the last antecedent”). While this rule is not an absolute and can assuredly be overcome by other indicia of meaning, we have said that construing a statute in accord with the rule is “quite sensible as a matter of grammar.”
Granted, there are no “relative clauses” here, but it is certainly convincing that “such Exchange” is a clause modifying or referring to “Exchanges” as they are defined and referenced throughout the entire law. After reading this decision, it seems to me like the winning argument is very strongly on the Government’s side, but you could (less convincingly) reason that Scalia’s decision is consistent with the plaintiffs’ case. We’ll find out which way the Supreme Court rules later this month.
