Tuesday, June 02, 2015

Correct Outcome In Headscarf Case (EEOC v Abercrombie & Fitch) May Be Bad News For ACA Case (King V Burwell)

The Supreme Court decision in the headscarf case yesterday, EEOC v Abercrombie & Fitch, was a legally correct and very good outcome. The court held that an applicant alleging employment discrimination based on the religion need show only that his need for an accommodation was a motivating factor in the employer’s decision not to hire him, not that the employer had knowledge of his need. (As an aside it seems pretty clear that in this case the employer in fact did have knowledge of the applicants need, but that is a separate question.)

But there is language in it which may suggest a really bad outcome in the pending Affordable Care Act case, King v Burwell.

EEOC v Abercrombie & Fitch, was a straightforward case involving an interpretation of title VII of the Civil Rights Act of 1964. In an 8-1 opinion written by Justice Scalia the Court strictly interpreted the statute to hold that an employee did not have to show that an employer knew that the employee required a religious, accommodation. Rather, a case could be made simply if the employer's unwillingness to provide an accommodation for an employee's religious practice was a motivating factor in the employer's decision.

That ruling is totally consistent with the specific language and the spirit and intent of the law. However, in his opinion, Scalia inserted some language which strongly signals how he will rule in King v Burwell and may signal how other justices will rule. Scalia's opinion says,

Abercrombie urges this Court to adopt the Tenth Circuit’s rule “allocat[ing] the burden of raising a religious conflict.” Brief for Respondent 46. This would require the employer to have actual knowledge of a conflict between an applicant’s religious practice and a work rule. The problem with this approach is the one that inheres in most incorrect interpretations of statutes: It asks us to add words to the law to produce what is thought to be a desir- able result. That is Congress’s province. We construe Title VII’s silence as exactly that: silence.

That language sounds tailor-made for the pending challenge to the ACA in King the Burwell.

To refresh people's memory, King v Burwell also involves a question of statutory interpretation. As explained in this article,
The challengers sole argument is that one section of the law that refers to subsidies says that they are available on "an Exchange established by a State" and that these were established by the Federal Government not by States. The DOJ points out the same law imposes a mandatory requirement for each to set up an exchange, but provides that for any state that elects not to establish an exchange that Federal Government must establish one in its stead, and that for all purpose of the law each of those Federally Facilitated Exchanges is "an exchange established by a State." Here is the summary from the Solicitor General's brief, which eviscerates the challengers' arguments.

The Act provides that each State “shall * * * establish an American Health Benefits Exchange.” 42 U.S.C. 18031(b)(1). But, in a provision expressly designed to respect the sovereign dignity of each State by affording “State flexibility,” 42 U.S.C. 18041, the Act provides two ways for that requirement to be satisfied. First, a State may elect to create the Exchange on its own. 42 U.S.C. 18041(b). Alternatively, if a State does not elect to establish the “required Exchange” itself, then HHS will “establish and operate such Exchange within the State.” 42 U.S.C. 18041(c)(1). Either choice satisfies Section 18031(b)(1)’s requirement that each State “shall * * * establish an [Exchange].” The text of the Act thus makes clear that an Exchange established by HHS in a State’s stead is, as a matter of law, “an Exchange established by the State.”

That interpretation harmonizes the Act’s text, structure, and purpose. Petitioners’ reading, in contrast, would transform the Act into a hash of superfluities, absurdities, and internal contradictions. It would obstruct the Act’s express purpose by denying affordable insurance to millions of Americans. It would thwart the operation of the Act’s interdependent reforms and gut the Exchanges through which those reforms are implemented. And it would destroy the Act’s model of cooperative federalism by trans- forming the Act’s promise of “State flexibility” into a threat that a State may forgo establishing an Exchange for itself only at the price of crippling its insurance market and depriving its citizens of the tax credits at the heart of the Act. The Act unambiguously forecloses that construction. At a minimum, the IRS’s interpretation is a permissible one meriting deference under Chevron.

While it is clear that these cases are entirely different that doesn't mean that those differences will affect Scalia. in the EEOC case, the court was only interpreting a single section of the law which stood by itself without reference to other sections of the law. In King v Burwell, the ACA case, there are many provisions of the law that are totally intertwined and interdependent. Moreover, the traditional rules of statutory interpretation require courts to interpret provisions in a way that is consistent with the overall intent of the law, which in the case of the ACA case requires that the law be upheld. That was not the situation in the EEOC case, which merely involved deciding the appropriate standard of proof in one section of the law.

However I continue to be optimistic about King v Burwell. I find it difficult to believe that Chief Justice Roberts will essentially invalidate the law on this second go-round, which requires him to accept a truly ludicrous theory of statutory construction when he has already cast the deciding vote to uphold the ACA earlier. Similarly I think that Anthony Kennedy will uphold the ACA because even he will ignore knowledge how truly ridiculous the plaintiffs claims are. Thus, with my rose-colored glasses firmly in place, I hope that it will be at least a 6 to 3 decision. But with this Court, anything can happen.