Book Reviews

The Letter of the Law

The new challenge to Obamacare is rooted in a conservative legal doctrine, “textualism,” that liberals never developed a response to. Until now.

By Simon Lazarus

Tagged Supreme Court

Judging Statutes By Robert A. Katzmann • Oxford University Press • 2014 • 184 pages • $24.95

Late last July, political news buffs were surprised by headlines announcing that an “ominous health care ruling” had the potential to deal a “major blow to Obamacare.” On July 22, a panel of District of Columbia federal circuit judges upheld, by a 2-1 majority, a lawsuit filed by bitter-end opponents of the Affordable Care Act (ACA). Over a fiery dissent that called the case a “not-so-veiled attempt to gut [the ACA],” two Republican appointees held that a theretofore obscure section of the ACA barred the provision of tax credits and subsidies to consumers in the 34 states that elected to have the federal Department of Health and Human Services operate their exchanges, rather than setting up an exchange on their own. The very same day, a second federal appeals court in Richmond, Virginia, unanimously rejected an identical challenge and ruled ACA tax credits legally available nationwide. Nevertheless, the upshot was undeniable: A significant chunk of the law might once again be in play in the courts.

Ever since the Supreme Court had upheld the ACA’s constitutionality two years earlier, it had been universally assumed, outside a tiny cadre of litigation-focused ACA fans and foes, that the law was home free from existential legal threat. But the Supreme Court announced in November that it would hear the Richmond case, King v. Burwell. If the high court rules against the subsidies, the result would strip several million individuals of tax credits necessary to afford insurance they had already purchased, effectively shut down affected exchanges altogether, and potentially crash the entire market for individual (non-group) policies.

At the heart of the dispute is a provision in the law that limits subsidies to purchases made on “an Exchange established by the State.” Opponents of the law argue that this phrase makes clear that only states that establish their own exchange are eligible for subsidies—even though the law requires the federal government to run “such” exchanges for states that don’t establish their own. The Administration—and the law’s authors in Congress—rebuts the opponents’ contention, pointing out that the law, read contextually and in its entirety, clearly prescribes tax credits for all states, whether their exchanges are state-operated or federally facilitated.

With the Supreme Court’s announcement, supporters of the law suddenly find themselves in a reprise of the 2012 roller-coaster drama, with the fate of President Barack Obama’s signature accomplishment once again in the hands of a Supreme Court that, in politically charged cases, usually—though not always—divides along fiercely partisan lines, five conservatives versus four liberals. The normally circumspect Court-watcher supreme, Linda Greenhouse, saw a “naked power grab by conservative justices.”

Where did all this come from? How could it be that progressives were so unprepared for the spectacle of conservative federal judges, including quite likely members of the Supreme Court, looking to nullify an epochal reform law by “arguing that [it] says something that literally everyone involved knows it doesn’t,” in the words of David Roberts, writer for the environmental magazine Grist? One leading interpreter of all things Supreme Court for progressive audiences, The New Yorker’s Jeffrey Toobin, suggested the answer could be unfamiliarity with an esoteric “legal theory known as textualism,” virtually unknown outside a small circle of legal academics and judges. This approach, which, as Toobin noted, “was pioneered and advocated by, most prominently, Justice Antonin Scalia,” means that the language of a statute, as opposed to, in Scalia’s words, “unenacted legislative intent,” should control its interpretation. But textualism, Toobin darkly concluded, “is not a dispassionate guide to a result; it’s merely a vehicle to a preferred outcome”—in this case, “the destruction of Obamacare.”

Toobin’s account is noteworthy for revealing to lay readers an important secret long hiding in plain sight. Since William Rehnquist became chief justice in 1986, the conservative bloc of justices that he led has systematically—and, under his successor, John Roberts, with accelerating aggressiveness—eviscerated major progressive laws in the name of strict fidelity to statutory text, without provoking critical headlines by overtly striking them from the books as unconstitutional. This trend, which has drawn impassioned counterattacks in judicial opinions—chiefly by former Justice John Paul Stevens and Justice Stephen Breyer—as well as in academic journals, has been powered by skillful advocacy on the part of Scalia and his allies. The justice himself, in 1997, sketched the precepts of his interpretational theory in a succinct and accessibly written 45-page tract entitled A Matter of Interpretation. In the 18 intervening years, no one has undertaken to produce a handy counterpoint to Scalia’s recipe for stingy interpretation of laws.

Until now. In September 2014, Robert A. Katzmann, chief judge for the U.S. Court of Appeals for the Second Circuit, published a compact volume that seems designed to fill that void (and to respond to a 2012 “treatise,” Reading Law, that Scalia co-authored with academic Bryan A. Garner). [See “Originalist Sin,” Issue #27.] Katzmann—once a member of both the law and political science faculties at Georgetown, one-time president of the Governance Institute, and author of numerous studies of Congress and its interplay with the judiciary—can legitimately lay claim to greater knowledge and savvy than perhaps any sitting judge about how Congress actually writes laws and how the judicial branch reads and misreads them. Though longer (at 184 pages) and more densely footnoted than Scalia’s 1997 pamphlet, Katzmann’s crisply argued volume, Judging Statutes, has already attracted serious attention on the left and right—including in Toobin’s New Yorker piece.

Katzmann mainly targets one key precept of the credo propounded by Scalia and his allies: that courts should never, or almost never, resort to legislative history (i.e., committee reports, floor debates, or hearing records) to divine the meaning or especially the purpose of statutes or particular textual provisions. On the contrary, they insist that, other than their own intuition, the only extrinsic sources judges may legitimately consider are dictionaries or other indicators of the “ordinary, everyday meanings” of words Congress elected to inscribe in statutes.

Should anyone other than devout legal geeks care about this arcane food fight? The answer is yes, for anyone interested in whether legislative reforms produce real-world results. To Scalia and similarly zealous conservatives, discrediting legislative history has become an essential first step in realizing an audacious political agenda. By divorcing judicial interpretation from the explanations legislators provided as to the purposes and meaning they sought to embed in statutory provisions, judges free themselves up to neutralize those purposes and meanings. The impact is not random or politically neutral. For over three-quarters of a century at least, most laws that federal courts have applied were products of the New Deal, Great Society, and like-minded Congresses, including the Obama-era Congress of 2009-10. The purposes and meanings that get short shrift tend to be distinctly progressive purposes and meanings.

Katzmann marshals the vast trove of academic and judicial critiques to skewer textualists’ most frequent knock on legislative history: its alleged un-reliability and inaccuracy. To be sure, he acknowledges, self-serving blather gets inserted in the record of congressional debates. But that fact, he notes, hardly justifies indiscriminate shunning of all legislative record materials. He quotes Chief Justice Roberts, among others, for the elementary point: “All legislative history is not created equal. There’s a difference between the weight that you give a conference report and the weight you give a statement of one legislator on the floor.” Katzmann blasts doctrinaire naysayers of legislative history for confecting arguments “in a vacuum, largely removed from the reality of how Congress actually functions.” He draws extensively from a groundbreaking 2013 empirical study by law professors Abbe R. Gluck and Lisa Schultz Bressman, which found that reports and similar materials, of the sort spotlighted by Roberts, are often far more reliable guides to legislators’ understanding of the laws on which they vote than statutory terms—which, Katzmann notes, are often “ambiguous, vague, or otherwise imprecise.”

As Justice Stevens acidly observed in a 2001 dissent, when the Court adopts conservative textualists’ blinkered approach, it often “skews its interpretation with its own policy preferences,” and “defeat[s] the very purpose for which a provision was enacted.” Conservative textualists’ studied indifference to Congress’s legislative record channels a broader philosophical hostility to Congress as an institution. As Katzmann notes, the source of this jaundiced view is a branch of economics known as “public choice theory.”

Public choice theory, explicit in the writings of many academic textualists and echoed by some of their judicial kin, casts legislatures solely as cabals of self-seeking legislators and organized special interests, who rig inherently unrepresentative processes to serve their own ends. Buying into the public-choice caricature as an irrebuttable, universally valid paradigm frees judicial conservatives to shed their traditional mantle of restraint and deference to the elected branches. Indeed, conservatives’ drive to undermine the efficacy and legitimacy of expert legislative committees and staff is only one of several techniques they have deployed that actually weaken Congress’s capacity to function. As Linda Greenhouse observed more than a decade ago, “The exercise of power is largely a zero-sum game, and the court, defining the rules of engagement…is winning.”

Greenhouse’s insight stands out between the lines of Katzmann’s critique, which is written in the discreet idiom one would expect from a sitting federal lower-court judge. Hopefully, his slim volume will teach broad audiences, in and outside the legal priesthood, that interpretive “textualism” can and too frequently does serve as cover for conservative judges’ ideological and institutional self-aggrandizement, with vast real-world consequences. In effect, these jurists deploy the very self-serving business model their academic counterparts extract from public choice theory to delegitimize their rivals in the elected branches of government.

How should Americans concerned about democratic governance respond to the phenomenon finally exposed to public view by King, and amply documented by Katzmann—this conservative Supreme Court’s appetite for, in the words of Senator Patrick Leahy, manipulating isolated legislative language to turn “laws on their heads”? Here are four quick observations.

First, conservative textualists are right about the importance of statutory interpretation. In A Matter of Interpretation, Scalia observes, “By far the greatest part of what I and all federal judges do is to interpret the meaning of federal statutes and agency regulations…[which is] the principal business of judges and (hence) lawyers.” Here the justice and his allies have a better grasp than most of their progressive adversaries, who have tended to treat divining the meaning of densely worded statutes as boring and inconsequential, compared to expounding the majestic commands of the Constitution. Not coincidentally, the ten-page exposition of constitutional originalism that concludes Scalia’s 1997 tract has provoked flood tides of progressive criticism. But critics have all but overlooked the book’s first 34 pages, in which he elaborates his textualist statutory-interpretation credo. Katzmann’s book, which similarly stresses “the centrality of statutes to our system of governance,” may help break progressives’ habit of inattention to the impact of how courts interpret legislation, and to questions of how, legitimately, they should go about that enterprise.

Second, textualists are right that the actual text must be the foundation—at the least, the starting point—for any legitimate approach to interpreting laws. In the three decades since Scalia (as a D.C. Circuit judge) first propounded his gospel, he has won over only one colleague, Justice Clarence Thomas, to his extreme version of the creed. But the Court as a whole, including its progressive members, has moved to embrace the primacy of text in applying statutes. And with good reason. Conservative textualists have a valid point when they criticize post-New Deal progressive judges for framing arguments that appeared to discount the importance of statutory words, hence seeming to make laws mean what the judges intuited that Congress intended or would have wanted. Such fast-and-loose ruminations were easily lampooned as evidence that “liberal activist” judges make up the law as they go along. This gave activist conservatives the high ground of claiming that they alone stand for following laws “as written.”

Third, embracing “text” as the default predicate for reading statutes is perfectly consistent with ensuring that progressive purposes are conscientiously enforced. Smart legal progressives, both in the academy and on the bench, have recognized that legal text has to matter. They have also grasped that respecting statutory language will, in the overwhelming majority of cases, vindicate legislators’ purposes, progressive or otherwise—if sensibly assessed in the context of the overall law, rather than in isolation, and further, when, as elaborated by Katzmann, ambiguous words are illuminated by disciplined analysis of legislative history. For example, near the end of the last Supreme Court term, rejecting a challenge aimed at gutting gun-purchaser reporting requirements essential to enforcing the Brady Act, Justice Elena Kagan wrote a methodically textualist opinion, which persuaded Justice Anthony Kennedy, the swing vote, to form a majority with the four-member progressive bloc. That important, if little-noticed, decision rejected Scalia’s willfully blinkered focus on one obscure paperwork provision, in isolation from the overall statutory scheme, that enabled him to reach a result that would have, in Kagan’s apt words, “virtually repeal[ed]…the gun law’s core provisions,” and “at a stroke, declare[d] unlawful a large part of what the ATF does to combat gun trafficking by criminals.”

Fourth, judicial conservatives’ offense is not excessive fidelity to laws as written; on the contrary, it is their pursuit of transparently ideological and political agendas, to which they readily subordinate inconvenient textualist (and other) principles. To take a particularly consequential example: In no area has the conservative bloc more richly earned its pro-corporate reputation than its cascade of decisions transmuting a long-obscure law, the Federal Arbitration Act (FAA), originally enacted in 1925 to streamline resolution of complex commercial disputes between businesses. Under Rehnquist and Roberts, the conservative justices have turned the FAA into a sweeping license, unrecognizable from its text and flagrantly at odds with its legislative history, for businesses to immunize themselves from private suits by individuals to enforce in court any law, state or federal, protecting consumers, employees, retirees, depositors, investors, or small suppliers and distributors.

To avail themselves of this get-out-of-jail-free protection, corporations simply add to the fine print of sales, employment, and similarly non-negotiable contracts clauses that channel all disputes into closed, substantially unreviewable arbitration proceedings before tribunals of the company’s choosing. “An edifice of its own creation” is how then Justice Sandra Day O’Connor pejoratively characterized the Court’s forced arbitration regime. On this and many other fronts, the conservative bloc’s affinity for textualist scruple goes poof when such principles prove inconvenient for their ideological and political agendas.

And that is precisely what the ACA opponents’ attempt to eviscerate the law in King v. Burwell is all about. They have framed their case as honoring statutory text over legislators’ contrary intent or purpose. But in truth, their argument flouts the ACA’s text—that is, the text of the entire statute and all pertinent provisions, not simply the four-word phrase on which they exclusively rely in isolation. Read in the “holistic,” contextual fashion accepted by even exponents of the most literalist brand of textualism, the ACA’s text manifestly prescribes affordability credits in all states, on all exchanges, whether state-run or federally facilitated. A section of the law, separate from the provision containing the “established by the State” phrase on which opponents rely, directs that in the event that a state fails to run an exchange on its own, the Secretary of Health and Human Services “shall…establish and operate such Exchange.” [emphasis added]

Multiple other provisions confirm the logical, common-sense reading of that language: that “such Exchange” is the functional equivalent of the exchange the state might have established, in all material respects, including having the essential authority to provide affordability tax credits. Indeed, the four conservative justices who dissented from Roberts’s 2012 decision upholding the constitutionality of the ACA well understood both that “Congress provided [for federally facilitated exchanges as] a backup scheme…to step in and operate an exchange [in a State that declines to set one up one its own],” and that “[w]ithout the federal subsidies…the exchanges would not operate as Congress intended and may not operate at all.” Scalia himself has often endorsed, most recently in a major 2014 decision interpreting the Clean Air Act (quoting a 1989 Anthony Kennedy opinion), the “fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.”

This “fundamental canon” underscores the real issue in King v. Burwell: Will he and his fellow conservatives follow common-sense principles fundamental to all legitimate approaches to interpreting laws and uphold the nationwide availability of affordable ACA tax credits—or will they bear out critics who denigrate textualism as merely a sham for rationalizing politically driven, legally flimsy results?

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Simon Lazarus served as Associate Director of President Jimmy Carter’s White House Domestic Policy Staff, and since then with private and public- interest law firms in Washington, D.C. He is currently working, with Robert Litan of the Brookings Institution, on a book examining the twenty-first century eclipse of the previous century’s liberal constitutional regime.

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