Well, This Changes Things: King v. Burwell and the New(?) Chevron Doctrine

I first flagged this all the way back in 2013. As everyone reading this probably knows, the Supreme Court had its final say on the matter earlier today. Long story short: The administration won. Insurance exchange subsidies under the Affordable Care Act are available on state and federal exchanges.

My colleague Knicole Emanuel has a piece up about the decision here. I’m a little less skeptical of the majority opinion in general. I think it’s pretty clear that the subsidies were intended by Congress to be available on the federal exchange, and while we should be wary about reading unambiguous laws as we think they were intended to function, and not as their wording indicates they should function, I think Chief Justice Roberts has a fair-enough point that the seemingly unambiguous language in question isn’t so clear cut when one reads it in the context of the law as a whole.

But that’s not the most interesting part to me. The most interesting part is what this decision may well do to the Chevron doctrine. Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., for those who don’t know, is perhaps the most cited Supreme Court case in history (hat tip to my former admin law professor, Cass Sunstein). The Chevron opinion basically says that when a federal agency is confronted with a potentially ambiguous statute, and that agency promulgates formal rules or regulations interpreting the statute, the agency’s interpretation will be upheld provided that (1) the intent of Congress on the issue in question is not clear (i.e., the statute is silent or ambiguous), and (2) the agency’s interpretation is “permissible.”

Law professors and courts have debated what this means and how it should be applied literally for decades. (For example, what does “permissible” even mean?) But those days may be over due to King. From the outset of the case – or, at least, the certiorari grant – there was a good deal of speculation that the Supreme Court would endorse the administration’s interpretation of the subsidy issue on Chevron grounds. This would be important because it would mean that the next Republican administration could reverse that interpretation just as easily. (That’s the whole point of Chevron!)

Uh, not so fast. In his King majority opinion, Chief Justice Roberts expressly decided not to go this route. He explained:

When analyzing an agency’s interpretation of a statute, we often apply the two-step framework announced in Chevron, 467 U. S. 837. Under that framework, we ask whether the statute is ambiguous and, if so, whether the agency’s interpretation is reasonable. Id., at 842–843. This approach “is premised on the theory that a statute’s ambiguity constitutes an implicit delegation from Congress to the agency to fill in the statutory gaps.” FDA v. Brown & Williamson Tobacco Corp., 529 U. S. 120, 159 (2000). “In extraordinary cases, however, there may be reason to hesitate before concluding that Congress has intended such an implicit delegation.” Ibid.

This is one of those cases. The tax credits are among the Act’s key reforms, involving billions of dollars in spending each year and affecting the price of health insurance for millions of people. Whether those credits are available on Federal Exchanges is thus a question of deep “economic and political significance” that is central to this statutory scheme; had Congress wished to assign that question to an agency, it surely would have done so expressly. Utility Air Regulatory Group v. EPA, 573 U. S. ___, ___ (2014) (slip op., at 19) (quoting Brown & Williamson, 529 U. S., at 160). It is especially unlikely that Congress would have delegated this decision to the IRS, which has no expertise in crafting health insurance policy of this sort. See Gonzales v. Oregon, 546 U.S. 243, 266–267 (2006). This is not a case for the IRS.

In other words, Chief Justice Roberts just added some teeth to the previously vague – and essentially inapplicable – language from Brown & Williamson. Now, Chevron will not apply to an agency’s interpretation of “question[s] of deep ‘economic and political significance.’” And what’s more, King seems to have given us some indication of what this might mean – if the issue in question is “central” to the legislation at issue, then Chevron appears to be inapplicable.

On the one hand, this may seem somewhat limited at first blush. After all, how many questions put in front of an agency involve those sorts of deeply significant issues? On the other hand, that kind of misses the point. A litigant can always argue that the agency interpretation at issue involves such a question. And a court inclined to disagree with a particular agency interpretation now has an out – it can always classify the statutory language being interpreted as involving a question of deep economic and/or political significance.

All of this is deeply problematic for one simple reason – under an expansive reading of King, the state of the Chevron doctrine is now up in the air. Heck, it’s unclear to me that the question at issue in Chevron itself – the definition of a “pollution source” under the Clean Air Act – would have been sufficiently unimportant or insignificant to invoke Chevron deference. In other words, it’s not settled to me that under the exception announced in King that the Chevron doctrine would have been appropriate to apply in the Chevron case itself. At the very least, this is going to spark a lot of litigation.