by Timothy Jost and Simon Lazarus*

Last Tuesday, January 20, Volokh Conspiracy blogger David Bernstein touted a largely unnoticed Supreme Court amicus curiae brief filed three weeks earlier by the Cato Institute, in King v. Burwell.  The reason why this particular brief had attracted relatively little attention is clear enough: it has nothing to do with the issues in the case.  Those issues are, as Professor Bernstein notes, whether the Affordable Care Act provides unambiguously for tax credits on both state-operated and federally facilitated exchanges, or, if the law is ambiguous, whether the Administration’s interpretation that credits are applicable nationwide is “reasonable” or “permissible.”   If the law is ambiguous, the courts must defer to the administration’s interpretation of the law under the landmark 1984 Supreme Court decision in Chevron v. NRDC. 

Rather than address these questions, the Cato brief, submitted on behalf of South Texas Law professor Josh Blackman, “details several examples of [asserted] Administration lawlessness in Obamacare enforcement” – other than its interpretation of the tax credit provisions. These, Bernstein alleges, document that “the Obama Administration has engaged in consistently lawless behavior with regard to implementing Obamacare, delaying, modifying, and changing the law on the fly . . . .”

Professor Bernstein parades these alleged transgressions because he thinks this tack could encourage the Court to reject the Administration’s tax credit regulation despite the fact that “the general rule is that courts should defer to agencies like the IRS [which made the nationwide availability ruling].”  The Blackman-Cato brief’s “message to the Court,” Bernstein celebrates, is, in effect, to ignore that “general rule,” because “if you rule in favor of the government, you will [be] implicitly endorsing [this] pattern of unlawful rulemaking.” 

One trusts that the Court will respect, not ignore, the legal rules applicable to the case. But, while the briefs’ “lawlessness” litany is irrelevant to King v. Burwell, it should be noted that it is also bogus.  The brief rehashes a meme trumpeted endlessly over the past two years in Republican floor speeches, attack ads, and conservative-libertarian blog posts.  Like these overtly partisan attacks, the Cato brief’s “examples” each distort or misstate the relevant facts.  In fact, the administration’s actions recited in the brief are altogether in line with the practice of past administrations from both parties, and are plainly within established statutory and constitutional boundaries. 

In particular, the Obama administration’s ACA implementation parallels earlier experiences with the roll-out of other major new health reform laws.  When the Bush administration implemented the 2003 Medicare prescription drug program, it waived enforcement of the unpopular late enrollment penalty for one year for some beneficiaries, delayed key elements of the law’s methodology for calculating the share of premiums paid by some beneficiaries to reduce premiums, and limited enforcement of the law’s medication therapy management requirement to ease the burden on insurers. A decade earlier, almost half of the statutory deadlines set for implementation of changes in Medicare under the massive 1997 Balanced Budget Act were not met.  No less than these actions by the Clinton and Bush administrations, the Obama administration’s approach to the ACA amounts to a prudent phasing-in of an important and complex new law, with multiple interdependent components and massive societal impacts.   

As such, these adjustments were certainly legal.  The federal Administrative Procedure Act (5 U.S.C. § 706) authorizes federal courts to rectify statutorily required actions that have been “unreasonably delayed.” The leading case interpreting “unreasonable” expressly makes statutory deadlines only one, not necessarily a determinative, consideration. As noted in a September 2014 Congressional Research Service report, (which cast grave doubt on House Republicans’ legal challenge to the ACA “employer mandate), claims of “unreasonable delay” “typically” involve missed statutory deadlines, though few succeed.  Agency postponements of enforcement of statutory provisions – or even outright determinations not to enforce – are subject to challenge only under high restrictive criteria established by former Justice William Rehnquist in the leading Supreme Court case, Heckler v. Chaney (1985).  Justice Rehnquist held that courts “generally will defer . . . to the procedures [an agency] adopts for implementing [a] statute.  The Court emphasized the agency’s superior ability to assess “the many variables in the proper ordering of its priorities,” prescribing leeway to effectuate that responsibility unless an agency’s enforcement default reflects “general polic[ies] so extreme as to amount to an abdication of its statutory responsibilities.” The phasing-in postponements described in the Cato-Blackman brief are not refusals to enforce at all, and there is no risk that the Obama Administration is “abdicating” its responsibility to carry into execution the President’s signature legislative accomplishment.

These established legal boundaries readily accommodate the delays in ACA implementation the Obama administration has instituted to date.  Incredibly, the Blackman-Cato brief does not even cite these fundamental statutory and Supreme Court authorities – let alone address the anomaly that its insistence on robotic adherence to regulatory effective dates, regardless of the circumstances and consequences for the statutory regime, would call into question decades of applications of a fundamental provision of the APA.

The brief is also marred by factual errors.  It begins, for example, by asserting that the administration unconstitutionally delayed or suspended the ACA’s individual mandate.  This assertion would surprise millions of Americans who are right now filling out tax forms, either indicating that they have minimum essential coverage or qualify for a statutory exemption from the mandate or paying the individual responsibility tax.  What the administration did in November of 2013 was to announce a transitional policy through which it would allow state insurance departments to decide whether or not to enforce certain market reform provisions against existing individual and small group coverage, first for 2014 and then for 2015 and 2016.  There was never a question as to whether these plans constituted minimum essential coverage; rather the issue was whether a limited category of policy-holders could, on a transitional basis, choose to retain policies that did not comply with certain of the law’s insurance reform protections. 

A second HHS action called out by Blackman-Cato as illegal is its December, 2013 decision to allow individuals whose existing coverage had been cancelled to request a hardship exemption so that they could purchase catastrophic coverage if other coverage options were more expensive than their cancelled plans.   The ACA gives HHS broad discretion to grant hardship exemptions from the mandate if an individual has “suffered a hardship with respect to the capability to obtain coverage under a qualified health plan.” HHS simply exercised the discretion granted it by law. 

Blackman-Cato also misstates the facts in asserting that the Administration “exempted” congressional employees from the ACA.  The ACA requires members of Congress and staff to purchase coverage through the health insurance exchanges.  The Office of Personnel Management implemented this provision.  OPM concluded, however, that the government had authority to continue contributions to help finance Congressional staffers’ exchange-based coverage.  This conclusion contravenes nothing in the ACA and was supported by a contemporaneous Congressional Research Service report, and by the legislative history of the provision.   

Tellingly, when House Speaker John Boehner’s lawyers reviewed these and other Cato-Blackman “examples,” they declined to include any but one of them in the Speaker’s lawsuit charging the administration with legal infidelity in implementing the ACA.  The only example challenged by that lawsuit was the delay of the law’s so-called “employer mandate.”  But this particular action is quintessentially the type of phasing-in adjustment that is altogether commonplace, as the Congressional Research Service explained in its September 2014 report, “often [because] the agency has simply not been able to accomplish the required action within the time provided by Congress.”

To be sure, deference is not carte blanche.  Some administrative “delays” have in fact constituted de facto non-enforcement, indefinitely and for policy reasons.  Intentional refusals to enforce – such, for example, as Governor Mitt Romney’s 2012 campaign pledge to halt implementation of the ACA – are, by definition, failures to faithfully execute the laws as required by the Constitution.  But good faith, prudent, reasonable phasing-in adjustments are routine and appropriate.      

In sum, the Cato brief’s claimed “troubling pattern of abuse” simply parrots a familiar pattern of partisan fabrication.  Of course, even if accurate, this string of tedious misdescriptions could hardly empower the Supreme Court to take up Professors Bernstein and Blackman’s invitation to ignore applicable law in order to overturn the Administration’s plainly reasonable reading of the exchange provisions at issue in King v. Burwell.   

* Timothy Jost is a Professor of Law at Washington and Lee University.  Simon Lazarus is Senior Counsel to CAC.