New York Times

Solicitor General Will Try, Again, to Keep Health Care Law Alive

March 5, 2015

by Adam Liptak

WASHINGTON — Three years ago this month, Solicitor General Donald B. Verrilli Jr. stood before the Supreme Court to defend President Obama’shealth care law against a constitutional challenge that threatened to destroy its central provision. His oral argument drew harsh reviews, but in the end he managed to persuade five justices to accept his backup argument, saving the law.

Mr. Verrilli returned to the lectern on Wednesday morning to defend the law once again, and he has reason to be nervous. In 2012, four members of the court — Justices Antonin Scalia, Anthony M. Kennedy, Clarence Thomas and Samuel A. Alito Jr. – were ready to strike down the entire law, as they made clear in a bitter joint dissent.

It is certainly possible that Chief Justice John G. Roberts Jr. will again desert his usual allies to vote to save the law. But that is hardly a certainty.

Mr. Verrilli again faced Michael A. Carvin, who represented the plaintiffs last time. Mr. Carvin will argue that the law forbids the federal government from providing tax subsidies to help people buy insurance in the three dozen states that have refused to establish their own insurance marketplaces, known as exchanges.

The federal government runs the exchanges in those states. If subsidies are not available in them, more than six million Americans could lose health care coverage and insurance markets could collapse, imperiling the health care law itself.

Mr. Carvin’s argument is built on a phrase in the law that seems to say the subsidies are only available to people living where an exchange had been “established by the state.” The purpose of the provision, he told the justices in his briefs, was to encourage states to set up exchanges.

In issuing a regulation allowing subsidies nationwide, Mr. Carvin wrote, the Internal Revenue Service violated the plain, unambiguous text of the law.

In response, Mr. Verrilli wrote that other provisions in the law, along with its structure and purpose, made clear that subsidies were meant to be available in all 50 states. He said the states could not very well have been encouraged to set up exchanges by means of a provision hidden deep in the sprawling law.

Mr. Verrilli added that a tie goes to the government. If a statute is ambiguous, he wrote, citing a foundational 1984 Supreme Court decision, courts must defer to the interpretation of the government agency charged with enforcing it. Here that means deferring to the I.R.S.’s interpretation, he wrote.

That is the ground on which the administration won last July in the United States Court of Appeals for the Fourth Circuit, in Richmond, Va.

Judge Roger L. Gregory, writing for a three-judge panel of the court, said the law was “ambiguous and subject to multiple interpretations.” That meant, he said, that the I.R.S.’s interpretation was entitled to deference.

The same day, a divided three-judge panel of the United States Court of Appeals for the District of Columbia Circuit ruled the other way, agreeing with the challengers that only people in states that run their own exchanges are eligible for subsidies.

“We reach this conclusion, frankly, with reluctance,” Judge Thomas B. Griffith wrote for the majority. “Our ruling will likely have significant consequences both for the millions of individuals receiving tax credits through federal exchanges and for health insurance markets more broadly. But, high as those stakes are, the principle of legislative supremacy that guides us is higher still.”

In dissent, Judge Harry T. Edwards said the case was a “not-so-veiled attempt to gut” the health care law.

The Supreme Court often steps in when federal appeals courts have disagreed. But the split between the two courts was wiped out last September when the full District of Columbia Circuit vacated the July ruling.

Mr. Carvin urged the Supreme Court to intercede anyway, saying that the sums involved were huge and that individuals, employers, insurers and states need a prompt and definitive resolution.

His petition was widely viewed as a long shot, and the court’s decision to grant it was a surprise. It was bad news for the administration, which had urged the court to deny review.

The court’s decision will probably arrive in late June, three years to the month after the last health care decision. Mr. Verrilli is hoping for another victory, and Mr. Carvin is doing what he can to deny it to him.