Behind Justice Scalia’s ‘jiggery pokery’

Behind Justice Scalia’s ‘jiggery pokery’

As you know, the U.S. Supreme Court upheld the availability of tax credits for the purchase of insurance on the federal exchange by a six-to-three majority last month — the second time the Court has affirmed the overall structure and viability of the Affordable Care Act.

The issue in King v. Burwell was whether the federal premium tax credits established under the ACA to help low- and middle-income individuals afford health insurance were made available for insurance plans purchased through the federal health insurance marketplace,  A section of the ACA that deals with how to calculate the tax credits has a provision that says the tax credits are available for insurance plans purchased on “an Exchange established by the State.” The King plaintiffs argued that that phrase meant the tax credits were only available through state marketplaces, like Connect for Health Colorado in our state. So, the case hinged on the meaning of “Exchange established by the State” and, specifically, whether or not the phrase includes the federal marketplace.

Chief Justice Roberts’ majority opinion acknowledged that the ACA wasn’t particularly well written, but after examining how the “three-legged stool” of affordability, guarantee issue and the individual mandate were intended to work together, the majority concluded that the provision in question meant that all exchange participants may access premium tax credits, whether through the federal or state-based exchanges.

By contrast, Justice Scalia took a more literal approach. As Scalia sees it, premium assistance is limited to individuals who have enrolled in health plans through a state-based exchange, and is not available to those who enroll in health plans through an exchange set up by the federal government. The opening paragraph of Scalia’s dissent opinion makes his views clear:

“The Court holds that when the Patient Protection and Affordable Care Act says ‘Exchange established by the State’ it means ‘Exchange established by the State or the Federal Government.’ That is of course quite absurd, and the Court’s 21 pages of explanation make it no less so.”

Furthermore, his attitude toward the majority opinion in the King v. Burwell case is captured by a few select phrases. He writes:

“The Court comes up with argument after feeble argument.”

“The Court’s next bit of jiggery pokery.”

“Pure applesauce.”

“Had the Court bothered to look at the rest of the tax code”

“Perhaps sensing the dismal failure of its efforts.”

Why does Scalia call find the majority opinion “absurd?” He’d have us believe that his conclusions come from a textualist analysis of the statute. A longtime proponent of the theory of textualism, Scalia lays out the basics of that approach when he acknowledges that a court may diverge from a literal or “most natural” reading of statutory languagealso noting when he writes that interpretation “requires paying attention to the whole law.” Justice Roberts uses similar language in the majority opinion, demonstrating his own penchant for textualism and writing that the Court must read the words “in their context and with a view to their place in the overall statutory scheme.” However, Scalia seems to ignore the “whole law” and how the words operate in the statutory scheme, instead focusing on the most concrete and literal meaning of the phrase in question.

According to Cornell law professor Michael Dorf, this approach might better be termed literalism or strict constructionism. Scalia himself criticized such a literal approach in earlier writings, opining that “textualism should not be confused with so-called strict constructionism, a degraded form of textualism that brings the whole philosophy into disrepute.”

Scalia first stresses the importance of adhering to the “natural and ordinary significance of words.” The ordinary significance – the literal reading — of the phrase “established by the State” is plain. But is it really that simple? And where did Scalia get that phrase, “natural and ordinary?” It comes in fact from an 1878 Supreme Court case, Pensacola v. Western Union, where the “natural and ordinary significance” of the words in question was determined in the context of not just the whole statutory scheme, but also in light of existing antitrust laws, the functioning of which would be hampered if the words in question were interpreted literally. That Court’s approach was certainly not literalism.

Scalia refers also to the principle that the meaning of a term should be its “obvious” meaning: “[T]he plain, obvious, and rational meaning of a statute is always to be preferred to any curious, narrow, hidden sense that nothing but the exigency of a hard case and the ingenuity and study of an acute and powerful intellect would discover.”

He contrasts his “plain, obvious” reading of the phrase in question with the majority’s supposedly “curious, narrow, hidden sense.” But again, the 1916 case that is the earliest source of the quote, U.S. v. Deans, took a non-literal view of the meaning of the word “continuous,” finding that language requiring “continuous” residence of five years before application for citizenship should have a “rational, sensible construction” such that an applicant who left the country for six months in the middle of that five-year period was still eligible to apply for citizenship. Scalia seems to be grasping for precedent to support his literalist interpretation, but appears to have been unable to find it.

Scalia then looks at how federal exchanges or marketplaces are distinct from “Exchanges established by the state.” For example, two clauses deal separately with who has authority to establish state and federal exchanges. Two clauses deal separately with funding of state and federal exchanges. He finds other instances where the terms are clearly not interchangeable: Medicaid funding to a state could be jeopardized if the state-based exchange doesn’t have a secure electronic interface, but the state could not be penalized in this way for a lapse in the federal exchange. Similarly, a clause provides that states can control contracting decisions by a state-based exchange, but this would obviously not be the case for a federal exchange. Scalia contends that the majority opinion would equate the two types of exchanges and that would simply not work.

Scalia also makes much of the fact that the phrase “exchange established by the state” appears seven times in connection with tax credits, and that section 36B accounts for two of those uses. Section 36B is part of the tax code and concerns how tax credits are calculated and what information must be provided to consumers regarding those credits.

In addition to the two uses of the phrase “exchange established by the state,” there are six more appearances of the unmodified term “exchange.” How is one to understand this inconsistency? Scalia ignores the context, and as a result ignores the inconsistency, showing no discomfort at the idea that parts of the calculation refer only to exchanges established by the state, while other aspects of the calculation apply to plans purchased on any exchange.

Another argument made by Justice Scalia is that the majority errs by seeing inconsistencies where there are none. In my view, section 36B doesn’t cohere and function unless all of it concerns exchanges established by the state or all of it concerns exchanges in general. Scalia simply disagrees. The requirement that exchanges provide a premium and subsidy calculator? No problem – using his interpretation, the subsidy calculation would be 0 in federal marketplace states. The requirement in all states to give fair and impartial information about the availability of credits? Again, no problem – as those in federal marketplace states would simply be informed credits were not available. What happened to the textualist notion that one must view particular language “with a view to its place in the overall statutory scheme”? Scalia seems to have abandoned it. While that quote comes from a citation in the majority opinion, it’s a line that Scalia has used in majority opinions in the past.

Despite reservations about looking at Congressional intent, Scalia addresses the majority’s argument that Congress intended making subsidies available to all. He says no, arguing that the availability of subsidies in states that established their own exchanges was a carrot of a sort, a form of encouragement to step up. He does not address whether that structure might be considered coercive, though in oral argument others raised the concern that the loss of subsidies could cause state markets to fail, and might thus be considered coercion; nor does he address the many amicus briefs from states that demonstrated that governors assumed that subsidies would be available under either structure.

Scalia strongly opposes the majority’s consideration of what Scalia terms extrinsic circumstances, such as the so-called “death spiral” for the insurance industry. I’ll note again, though, that his case citation is questionable, if not just plain wrong. He cites an 1819 case for the notion that it would be “dangerous in the extreme to infer from extrinsic circumstances,” but the same case provides strong support for a contextual reading: it says “where words conflict with each other, where the different clauses of an instrument bear upon each other and would be inconsistent unless the natural and common import of words be varied, construction becomes necessary, and a departure from the obvious meaning of words is justifiable.”

Finally, Scalia charges the Roberts court with favoritism toward the ACA, an abandonment of principles of statutory construction, and activism. As he puts it, the in NFIB v. Sebelius, the Roberts court rewrote the individual mandate and called it a tax; considered the Medicaid expansion requirement coercive, and rewrote the law so that only the incremental funds would be held back from states that failed to expand; and in King v. Burwell, now rewrites the law on tax credits.

Scalia is undoubtedly correct that a statute should be drafted thoughtfully and that a Court should not have to fill in substantial blanks or alter language to fit intent or extrinsic circumstances. However, the justice doth protest too much. His decision is overloaded with rhetorical devices and sarcasm and accusations of deceit, and he seems to have adopted a literalism he theoretically scorned. It’s interesting that he relies on quotes from cases that do support textualism in its more standard form – one in which language is considered in the context of the law as a whole. That, perhaps, is why six members of the Court declined to join his opinion.

-Bethany Pray