Sunday, July 27, 2014

Following the Health Law Out the Window

      In the olden days of newspapers, typesetters were instructed in no uncertain terms to make no changes in a reporter’s copy even to correct an obvious mistake. “Follow the copy out the window,” typesetters were told.
      Two federal appeals court judges misapplied that rule in a decision last week that struck at the heart of President Obama’s health care reform for two-thirds of the country. Focusing on one 10-word phrase in the 2,000-page Affordable Care Act, the two D.C. Circuit judges barred the intended subsidies for people with marginal incomes in the 36 states that have left it to the federal government to run health insurance exchanges.
       The majority judges in Halbig v. Burwell ignored the act’s overall text and purpose. Instead, they followed the critical phrase straight out the window without exercising the judgment that judges, though not typesetters, are expected to apply. Not coincidentally, the two judges — Thomas Griffith and A. Raymond Randolph —  are Republican appointees who were applying the hyper-textual method of statutory construction propounded by that most Republican of Supreme Court justices, Antonin Scalia.
       The issues in the case — and the separate, same-day ruling the other way from the Fourth Circuit, King v. Burwell— have been rehashed endlessly over the last week. The Affordable Care Act provides that states “shall” establish health care exchanges to offer affordable insurance for people, for example, not covered through employer-provided plans. In a political compromise, however, the mandate became an option: the federal government would establish the exchange in any state that opted out.
       To make the new insurance marketplaces affordable, income-adjusted tax credits were to be provided for people with incomes between 100 percent and 400 percent of the federal poverty line — roughly, $11,000 to $44,000 for singles. In the critical statutory language, the tax credits are to be provided to participants in health care exchanges “established by the State under section 1311 of the act.”
       Nothing is said there about exchanges established by the federal government. In hindsight, this was oversight. But the legislative drafters most likely did not anticipate that Republican governors and lawmakers would dislike Obamacare so much that they would opt out of serving their constituents and leave it to the feds instead.
      The Internal Revenue Service (IRS) exercised its rulemaking authority under the law to make tax credits available to participants in the federal exchanges. The IRS cited two other sections of the law. One defines an exchange as “a governmental agency or nonprofit entity that is established by a State.” The other authorizes the federal government “to establish and operate such Exchange within the state” if the state declines (emphasis added).
       Clearly — though not to the D.C. Circuit majority — the law envisions that the federal exchanges have the same status as the state exchanges. One of the Fourth Circuit judges said the law says exactly that, unambiguously. The other Fourth Circuit judges and the D.C. Circuit dissenter said the law is ambiguous but the IRS is entitled under Supreme Court precedent to deference on how to resolve the ambiguity.
       Significantly, the health insurance tax credits are not gravy but the very meat and potatoes of Obamacare. Without the tax credits, health insurance is unaffordable for many; without those new customers, insurance rates will go up for the rest. And without the tax credits, the individual mandate to obtain insurance and the employer mandate to provide health insurance are not enforced. In short, as the Fourth Circuit stated, “the economic framework supporting the Act would crumble if the credits were unavailable on federal Exchanges.”
       In the D.C. Circuit decision, Griffith acknowledged the ruling would have “significant consequences” and insisted that he and Henderson were reaching their conclusion “frankly, with reluctance.” Regardless, their overly literalistic approach thwarts congressional intent. As Judge Andre Davis wrote in a concurring opinion in the Fourth Circuit case, “No case stands for the proposition that literal readings should take place in a vacuum, acontextually, and untethered from other parts of the operative text; indeed, the case law indicates the opposite.”
       Among outside commenters, Abbe Gluck, a Yale law professor and expert on statutory construction, also effectively skewered the D.C. Circuit decision. The ruling, Gluck wrote in an article for Politico, “does a deep disservice to conservative jurists and lawyers who have spent the last 30 years arguing that text-based interpretation is sophisticated, not literalistic, and serves democracy.”
       Judicial handicappers are betting that the D.C. Circuit decision will not stand. The Obama administration will ask for an en banc rehearing before the full court, which now includes seven Democratic- and four Republican-appointed judges. The Democratic appointees are seen as likely votes for the administration’s position not merely because of their background but because of their different, whole-law approach to statutory construction.
       The issue might reach the Supreme Court anyway, where Scalia would likely command two or three votes to uphold the D.C. Circuit’s decision. But Chief Justice John G. Roberts Jr. and Justice Anthony M. Kennedy are not wedded to Scalia’s nothing-but-the-text approach. And Roberts, many observers speculate, will again hesitate to risk the court’s institutional capital on Obamacare.
      Time will tell, but for now the case is an object lesson in the consequences of a judicial technique that proponents portray as restraint but operates instead as anti-democratic judicial activism.

Sunday, July 20, 2014

John Seigenthaler's Search for Justice

       John Seigenthaler put me behind bars barely a year after I started working for him as a reporter at was then called the Nashville Tennessean. It was not the kind of assignment I had anticipated when I started out in journalism in my hometown after graduating from Harvard in 1970. But after one day in the Nashville-Davidson County jail and three days in the county workhouse, I turned out a creditable series detailing the somewhat squalid conditions in the two facilities.
       Seigenthaler, who died earlier this month [July 11] at age 86 after a storied career as editor and publisher at what is now simply The Tennessean, loved the undercover reporter technique of getting at hard-to-get stories. A few years earlier, he had sent John Hemphill, later an editor at the New York Times, to do the jail and workhouse story. Other undercover stories he assigned included exposes of conditions in nursing homes (Nat Caldwell, a Pulitzer Prize winner), the state’s major mental hospital (Frank Sutherland, later editor in Nashville himself), and, most daringly, the Ku Klux Klan – infiltrated for nearly a year by Jerry Thompson, a good old boy who could pass as a redneck racist despite a heart of gold.
       Modern day journalism ethicists disapprove of the undercover technique; deception, they say, is incompatible with the truth-telling mission of the true journalism. But Seig — as he was known to his staff and countless friends was a newspaperman of the old school. As a cub reporter in the early 1950s, he earned his stripes by talking a would-be suicide off what was then the Shelby Street Bridge (now renamed the Seigenthaler Bridge in his honor). He won a National Headliner award for his story of tracking down a business executive and his wife who had faked their deaths to collect insurance money.
       Later, Seig uncovered corruption in Teamsters union locals in Tennessee, stories that led to the impeachment of a bribe-taking state court judge and eventually to the jury tampering trial of Teamsters president James Hoffa. The Teamsters stories brought him to the attention of the young Robert F. Kennedy, then counsel to a Senate investigating committee. Seig edited RFK’s book The Enemy Within, cementing a relationship that put him inside the Kennedy circle for life and took him to Washington to work for Kennedy at the Justice Department for a year.
       As Kennedy’s right-hand man, Seigenthaler was dispatched to Montgomery, Ala., in May 1961 to try to protect the group of Freedom Riders traveling from Nashville to Alabama to claim their rights to desegregated interstate transportation. A white mob blocked the buses and beat many of the riders; one in the crowd used a lead pipe to smash Seigenthaler’s skull. He lay unconscious at the scene for 45 minutes, according to the accounts, and spent 10 days in a hospital.
       Seigenthaler was remembered in the Tennessean’s obituary as “a fierce advocate for racial equality” — and so he was, but not from birth. He grew up unaware of the racial segregation that the family’s black maid lived with when she left their home.
      After becoming editor of the Tennessean in 1962, however, Seigenthaler put the paper’s news and editorial columns behind the civil rights revolution. He hired the first black reporter in the newsroom, W. A. (Bill) Reed. As religion editor, Reed’s assignments included the weekly Monday story “A Reporter Goes to Church.” When the influential pastor of one of the city’s biggest churches objected to being covered by a black reporter, Seigenthaler told him that Bill was the paper’s religion reporter. Period.
       Less visibly but just as sincerely, Seig later became a strong supporter of LGBT equality. Without fanfare, he supported and protected gay reporters in the newsrooms of the ’70s and ’80s from any unenlightened attitudes from inside or outside the newspaper. After he retired, he funded the National Lesbian and Gay Journalism Association’s awards for radio and TV coverage of LGBT issues. And in 2004 he was the moderator of what was described as Nashville’s first public forum on LGBT issues, cosponsored by the Human Rights Campaign and American Civil Liberties Union.
       After putting me on the court beat in fall 1971, Seigenthaler gave me valuable pointers and backed me up whenever I needed it in my often critical coverage of the bar and the judiciary. Forty years later, I am still covering the courts, and I still share the disappointment that Seigenthaler often voiced that the bench and bar so often fail to deliver justice, especially to racial and ethnic minorities and the poor.
       Not long after my jail story, Seigenthaler co-authored the book A Search for Justice with three of the newspaper’s reporters: Hemphill, Frank Ritter, and Jim Squires. The book was based on the reporters’ coverage of the trials of assassins James Earl Ray and Sirhan Sirhan and of Clay Shaw, the New Orleans district attorney turned JFK-assassination conspiracy theorist. Seig’s opening chapter is a blistering criticism of the criminal justice system.
       My copy includes this inscription: “For Ken — I gave him a look at ‘justice’ early and he gave me a look at injustice. With regards for his willingness to search, John Seigenthaler.” The search goes on, John. Requiescat in pace.
-- 30 --

Sunday, July 13, 2014

Roberts Court Still Friendly to Business

       The Supreme Court ended its term with an important victory for two businesses that claimed a religious-freedom exemption from the Obama administration’s mandate to provide cost-free coverage of contraception for employees in their health insurance plans. But you won’t find Burwell v. Hobby Lobby Stores in the list of business-related cases that the U.S. Chamber Litigation Center released at the end of the Supreme Court term.
       The U.S. Chamber of Commerce sat out the Hobby Lobby case and now is studiously ignoring the case. “We don’t comment on our decision not to get involved in a case,” says Kate Todd, vice president and chief counsel of the center’s Supreme Court program.
      Todd declines to comment on whether to count the bitterly divided ruling as a victory for business. She has no comment either on the majority’s prediction that the religious exemption extended to closely-held, family owned companies will not spread to the big publicly traded companies that the Chamber represents.
       The Chamber is less shy, however, about noting the increasing percentage of business-related cases on the Court’s docket or about touting its own winning record in the past term. Out of 16 decided cases in which the Chamber participated either as party or friend-of-the-court, the end-of-term tally sheet counts 12 wins and only four losses. “We regard [the term] overall as positive,” Todd says.
       “This term, the Court relied on established principles to reject the plaintiffs’ bar’s attempts to expand liability and regulatory agencies’ efforts to stretch executive power,” says Lily Fu Claffee, the center’s general counsel, in a prepared statement. “There were many important wins for the business community.”
       Oddly, the center appears to be exaggerating its success somewhat; it counts as wins at least two important decisions that other groups count as losses for business and victories for the broader public interest. Despite Claffee’s statement, the Chamber failed in separate cases to knock out controversial Environmental Protection Agency (EPA) regulations on air pollution and greenhouse gases. It failed as well to erase a 25-year-old precedent used as the foundation of the modern securities fraud class actions.
       The center’s positive spin on the term represents a change from the efforts a few years back by its former director, Robin Conrad, to minimize somewhat the Roberts Court’s favorable stance toward business interests. Conrad sought to defang the criticism from the political left of the “pro-business” court by depicting the court’s record as mixed even while touting the Chamber’s successes. Critics were never convinced.
       The designated scorekeeper for the critics continues to criticize the Chambe and the court. “The U.S. Chamber Continues Its Winning Ways,” the Constitutional Accountability Center wrote in its wrap-up.
      The center differed slightly with the Chamber’s count for the term: 11 and 5 instead of 12 and 4. But it reiterated its broader criticism of the Roberts Court for favoring the Chamber in 70 percent of the group’s cases over the years; the Chamber’s record had been lower: 56 percent record under the Rehnquist Court and 43 percent record during the Burger Court years.
       Analyzing the term’s rulings, Tom Donnelly, the center’s message director and counsel, conceded that the Chamber’s wins came mostly in low-profile cases. But he also emphasized that the Chamber made gains by taking very aggressive positions in some of the most important cases. The court “gave the Chamber less than it wanted,” Donnelly noted, “while still managing to shift the law in a business-friendly direction.”
       Donnelly’s scorecard differed with the Chamber’s on the securities fraud ruling: Halliburton v. Erica P. John Fund. The Chamber was asking the court to overrule the so-called “fraud on the market theory,” established in the 1988 decision Basic, Inc. v. Levinson. That decision eases requirements for investors defrauded by false or misleading financial statements from publicly traded companies. Donnelly counted the court’s refusal to overturn the precedent as a defeat for the Chamber, but the Chamber itself counted it as a win because the ruling gave defendants a better chance to knock out securities fraud suits at an early stage.
       The Chamber also counts as a win the mixed ruling in on the EPA’s greenhouse gas regulations in Utility Air Regulatory Group v. EPA. The court rejected on a 5-4 vote the EPA’s main attempt to limit greenhouse gas emissions by power plants and industry, but gave the agency a 7-2 win on an alternate approach. Donnelly agrees with the Chamber in calling that a win for business, but many other court watchers are calling it a victory for the government.
      The Chamber scored a more clear-cut win in the ruling that limits the president’s power to make recess appointments, NLRB v. Noel Canning, even though again the court did not go as far as the Chamber urged.
       Whatever the exact count may be, the Roberts Court remains a favorable venue for business interests. The five conservatives remain distrustful of government regulation and overtly unfriendly toward many forms of civil litigation. In addition, the conservative majority’s decision this term to strike down aggregate campaign contribution in McCutcheon v. FEC favors business donors and the business-friendly Republican Party. Even in a low-key term, Donnelly is right to note that the Roberts Court this term “continued to shift the law in a business-friendly direction.”

Wednesday, July 2, 2014

Ginsburg's Misfire in Birth Control Case Dissent

       Chief Justice Charles Evans Hughes famously observed that a dissenting opinion amounts to “an appeal to the brooding spirit of the law, to the intelligence of a future day when a later decision may possibly correct the error into which the dissenting judge believes the court to have been betrayed.” True, but a dissent at the Supreme Court also serves two immediate purposes that, somewhat paradoxically, are at odds with each other.
       Before a decision is final, a justice’s dissenting opinion amounts to perhaps one last chance to persuade one of the justices in the tentative majority to switch sides. To serve that purpose, the dissent must be forcefully argumentative, with dire warnings of the consequences of ruling according to the justices’ original vote in conference.
       Once the decision is final, the justice wants the public to hear those same forceful arguments for ruling the opposite way. Yet the dire warnings of slippery slopes and unintended or unacceptable consequences may disserve the dissenter’s purpose by providing a road map for the very results that the dissenter fears and hopes will not come to pass.
       Nothing better illustrates the dilemma than Justice Antonin Scalia’s dissents in the Court’s two landmark gay rights cases: Lawrence v. Texas (2003) and United States v. Windsor (2013). Both rulings, Scalia said in dissents that he read from the bench, set the country on an inevitable path toward recognizing a constitutional right for same-sex couples to marry. And over the past year one after another judge in federal and state courts have quoted Scalia’s dissent as authority for doing exactly what he feared.
       If there is a lesson in Scalia’s example, it apparently was lost to some extent on Justice Ruth Bader Ginsburg as she dissented this week [June 30] in the Court’s final decision: Burwell v. Hobby Lobby Stores, Inc. Ginsburg led the four dissenters from the ruling to grant some religiously motivated employers an exemption from the Obama administration’s controversial birth control insurance mandate.
      In dissenting, Ginsburg declined to accept the majority’s insistence that the ruling was a limited one. Instead, she warned – just as Scalia had done in the gay rights rulings – of broad implications in the legal rationale and ominous results down the slippery slope that the ruling supposedly opens up.
       Ginsburg effectively marshaled the legal arguments against the majority’s ruling in what one of those in the majority, Justice Anthony M. Kennedy, aptly called “the respectful and powerful dissent.” The Religious Freedom Restoration Act (RFRA), relied on by the majority to exempt religiously motivated companies from the birth control mandate, was surely not contemplated by Congress to protect some supposed freedom of religion for corporations, however structured or whatever size. And the Court’s previous jurisprudence signaled that religiously motivated employers had no right or privilege to impose those views on their employees.
       Without stopping, Ginsburg went on to suggest consequences far beyond the birth control mandate. “Can an employer opt out of coverage for blood transfusions, vaccinations, antidepressants, or medications derived from pigs, based on the employer’s sincerely held religious beliefs opposing those medical practices?” Ginsburg said, in the bench announcement of her opinion.
       “What of the employer whose religious faith teaches that it is sinful to employ a single woman without her father’s consent, or married women with her husband’s consent?” Ginsburg continued. “Can those employers opt out of Title VII’s ban on gender discrimination in employment?”
      Ginsburg noted that those examples “are not hypothetical.” Later, she surmised that the majority’s suggestion for the government to pay for birth control coverage for employees opened the door to an employer’s refusal on religious grounds to pay women equal pay with men. Such claims, she said, “have been made and accepted as sincere.”
      In his summary of the majority opinion from the bench, Justice Samuel A. Alito Jr. anticipated Ginsburg’s dissent and dismissed all of the warnings as unrealistic. “We do not hold,” Alito said, that corporations can opt out of generally applicable laws, that corporations have free rein to impose costs on the government, that claims involving vaccinations or transfusions are likely to succeed, or that religious motivations could be used to justify invidious discrimination.
      The results of the ruling, even within its own terms, remain to be seen. Ginsburg sees no reason to assume the exemption will remain limited to “closely held corporations,” but the majority finds it unlikely that a publicly held corporation would claim any exemption. The majority anticipates that employees of companies that reject the birth control mandate will get coverage one way or another – from the government or from the accommodation that the administration has crafted for religiously affiliated nonprofits, such as colleges and charitable organizations.
      Ginsburg is also right to suggest that nothing in the opinion prevents an exempted employer from refusing to cover the cost of any form of contraception, not just the four contraceptives that the Hobby Lobby family find objectionable. Alito did not address the point, but at the least the majority accepted the government’s legitimate “compelling” interest in ensuring the availability of contraception for women.
      The ruling surely opens the door to more religious litigation, but experts doubt how far those claims will go. Ginsburg might have served her own views better by stressing in dissent not how far the decision might go, but how narrowly lower courts ought to read it.