The Hypothetical Proving the Gov't Should Win King v. Burwell (and which Professor Adler Didn't Address).

by Eric Segall

The issue in King v. Burwell, if this were not the Affordable Care Act, would be simple. It would not be about the intricacies of statutory interpretation or the avoidance doctrines of constitutional law or grand issues of federalism. It would be about reading plain text. In the nine days since the case was argued, the textual nature of the case has been marginalized by many Court commentators and legal scholars (maybe because Justice Kennedy seemed to embrace non-textual concerns). That is a shame because King should be resolved based on text alone.

Everyone in the world agrees that HHS must create health exchanges in those states that don't create their own exchanges. Everyone in the world agrees that federal subsidies are available on exchanges created by the states. Everyone in the world agrees that the issue in the case is whether federal subsidies are also available on federal exchanges.

Everyone in the world agrees that the requirement Congress imposed on HHS was to create "such" exchange and the word "such" was referring to an exchange "established by the state." Based on these universally shared premises, Justice Breyer at the oral argument said that "the Federal government, the Secretary, is establishing a thing for the State. And what is the thing?  The thing that it is establishing for the State is defined as an Exchange established by the State." Because everyone in the world agrees that subsidies are available on exchanges "established by the state," Justice Breyer thought it was an easy case.

Professor Jonathan Adler, generously agreed to debate me in the University of Pennsylvania Law Review. I offered this hypothetical in my opening statement which captured the issues in this case exactly:

Imagine the federal government wanted to encourage people to save more money to ease the pressures on the Social Security Program. Congress enacts the following law:
Every state shall set up an investment exchange to encourage long term saving. Any taxpayer who invests in an exchange established by the state shall receive a $1000 federal tax credit. If a state does not create an investment exchange, the Secretary of the Treasury shall create such exchange.
Could the Secretary of the Treasury provide subsidies on the federal investment exchange based on this law? Of course. And, here is the main point. If he didn't, he wouldn't be creating "such" exchange. He would be creating an entirely different exchange. That being the case, the Secretary of Treasury's interpretation is not only reasonable, it is the only plausible interpretation.

In his response to my essay, Professor Adler did not respond to this hypothetical.  Really, what could he say?