Friday, September 05, 2014

Obamacare Lawsuits Just Suffered a Big Setback

What it means and how the legal challenge could play out

By Jonathan Cohn,

The latest big legal challenge to the Affordable Care Act—the one that could potentially deprive millions of people of subsidies, making it impossible for them to get insurance—just suffered a major setback in federal court.

The Circuit Court of Appeals in Washington on Thursday announced that it is withdrawing its July decision, in which a two-to-one majority upheld the challenge, so that the full panel of active judges on the court can rehear the case. Federal appeals courts don’t grant this sort of “en banc” rehearing very frequently. They do so only when the stakes of the case are big and when they think the initial decision is suspect. (It takes a majority of active judges to grant such a hearing.) “At a minimum, it signals discomfort from a majority of the Court with the [three-judge] panel’s reasoning,” says Nicholas Bagley, a University of Michigan law professor who has followed the case closely and written frequently about it.

That doesn’t guarantee that a majority of judges on the D.C. Circuit will ultimately vote to overturn the initial decision. But there are many reasons to think that’s what will happen, for reasons that Ian Millhiser lays out clearly at ThinkProgress. The lawsuits’ architects claim that Obamacare authorizes the federal government to help people pay for private insurance only in those states that have taken it upon themselves to reorganize and operate new insurance markets. The basis for that claim is some ambiguous language in one key section of the law. The law’s supporters, including just about everybody who worked on the legislation or followed its journey through Congress, say that’s nonsense—the ambiguity is merely a drafting error, the kind that happens all the time in complex legislation. The law’s supporters also point to prevailing legal doctrine, under which courts defer to executive agencies when legal language is ambiguous.

(More here.)


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