Can Obamacare case jump right to the Supreme Court?
Well, that was fast.
Two U.S. Courts of Appeals separated by about a hundred miles reached opposite conclusions on the same day last week, about whether an individual who purchases required health insurance under the Affordable Care Act qualify for a federal tax subsidy where the purchase is made through an exchange established by the federal government rather than one established by a state.
A panel of the D.C. Circuit, by a 2-1 vote, said that such an individual does not qualify for the tax subsidy. Congress spoke plainly enough in the text of the law to get the last word and an IRS regulation to the contrary is invalid. A unanimous three-judge panel of the Fourth Circuit ruled that such an individual does qualify for the tax subsidy. Congress did not speak plainly enough and the IRS regulation extending the tax subsidy to those individuals is valid.
Those who are challenging this provision of the law commonly known as Obamacare are asking the Supreme Court to review the Fourth Circuit's ruling against them without first asking the full Fourth Circuit to reconsider the three-judge panel's ruling against them.
Is that a surprise? No, not at all.
Right now, there are two circuit courts of appeals whose rulings conflict on the meaning, really the clarity, of a landmark federal law. The Obama administration has announced its intention to seek review by the entire D.C. Circuit of the split three-judge panel decision against the administration. The broader panel would consist of all 11 active judges of the D.C. Circuit plus the two senior judges who participated in the split decision, who presumably would exercise their right to participate in the en banc panel. Of those 13 judges, eight were appointed by Democratic presidents. Four of those eight were appointed by President Obama. Three of those judges took their seats in the last twelve months. Judges do not base their rulings on partisan or political considerations, but opponents of the IRS regulation can't like that math.
If the full D.C. Circuit did agree to hear the case and the D.C. Circuit reversed the original three-judge ruling invalidating the provision at issue, the split between the circuits would disappear, making review by the Supreme Court less likely at least for now.
Those challenging the law cannot be said to be skipping a step on their road to the Supreme Court by not asking the full Fourth Circuit to review the panel decision upholding the challenged decision. En banc review is rare. According to the Fourth Circuit's website, of the hundreds of rulings issued by three-judge panels in the Fourth Circuit last year, the Court of Appeals granted en banc review in only two and has granted en banc review in only three cases so far this year.
The plaintiffs' petition for Supreme Court review relies heavily on the current split in the circuit rulings. The word "uncertainty" appears ten times in the 33 pages of the petition, sometimes twice in the same paragraph, in addition to numerous synonyms of the word. But that uncertainty could be eliminated by a clear ruling by the full D.C. Circuit in favor of the administration. Plaintiffs know that.
What is really driving the decision to seek high-court review now is the undisputed importance of the question. The numbers are astounding. A decision one way or the other affects billions of taxpayer dollars, millions of individuals, hundreds of thousands of employers, dozens of insurers, and, lest we forget, 36 states that have adopted the federally facilitated insurance exchanges at issue.
Plaintiffs assert in their petition: "It is far better for this Court to resolve this question now, to both preclude further detrimental reliance and to eliminate the Sword of Damocles that will hang over the IRS Rule otherwise." Maybe, maybe not.
It is up to the Supreme Court to decide whether to decide the question now. It would be surprising given the stakes if the Court never decided it at all.
Commentary by Dan Eaton, a partner with the San Diego law firm ofSeltzer Caplan McMahon Vitek where his practice focuses on defending andadvising employers. He also is a professor at the San Diego StateUniversity College of Business Administration where he teaches classes inbusiness ethics and employment law. Follow him on Twitter @DanEatonlaw.