February 23, 2015 | Commentary on Legal Issues, Health Care Reform, Obamacare

Alexander Hamilton, Statutory Construction, and King v. Burwell

These days, every week seems to bring forth another new article by a liberal commentator expressing a powerful combination of fear and outrage that the Supreme Court might “gut” the Affordable Care Act in King v. Burwell. This case, as regular readers of Bench Memos know, holds out the possibility that the Court will find that the law does not authorize federal subsidies for consumers participating in health care exchanges created by the Department of Health and Human Services. This possibility arises because a key passage in the law suggests that subsidies are to be paid only to consumers in exchanges created by the “state.” Since a lot of people are participating in the federally created exchanges, such a ruling would go a long way toward rendering the law unworkable and burdensome for a significant number of Americans.

Liberal opinion writers are doing all they can to discredit such a ruling before it can happen, apparently with a view toward preventing it from happening at all. They tend to make two kinds of arguments, one more technical than the other. The more technical argument goes into the details of the statutory language, and the Court’s established canons of statutory construction, and tries to make the case that the law should not be read to mean what it seems to say in the passage in question. The less technical argument simply observes that the law was intended to provide affordable health care to a lot of people, and that the interpretation that would “gut” it cannot be correct because it would effectively destroy the law.

I want to deal here with this less technical argument. I’ll leave the more technical one to actual lawyers (I am not one) who have read the whole statute (which I am not going to do). But the less technical argument is still worth our attention, because it has a certain surface plausibility that will probably deceive many people.

Again, this argument suggests that the Court must be engaged in illicit judicial activism if it accepts a reading of some part of the law that disables the whole. This is a mistaken view. If the words of the law really support such a destructive reading, then the Court will be obliged to give force to that reading, regardless of the consequences. In other words, if the Court chooses to go this route, and if the words really support their interpretation, they will not be engaging in judicial activism but will be doing American law as it is supposed to be done.

For evidence of this I would turn to one of the greatest of the American founders, and one of the greatest lawyers of that generation: Alexander Hamilton. In 1791, while Hamilton was serving as secretary of the treasury, some public creditors wrote to him to complain about the treasury’s interpretation of a law under which they were to receive payments from the government. Hamilton explained to them why he thought their reading of the law was incorrect, and then he added this remark, which is very relevant to our own dispute over the Affordable Care Act.

Admitting, as you contend, that the construction insisted upon by me is not conformable to the main or general intent of the Act, it will not follow that it is erroneous. It is no uncommon case for the general design of a law to fail of its full effect by some particular provisions in it. The inference would only be in the present case that there has been an omission in regard to the Species of public debt in which you are interested. This inference will I apprehend be far more agreeable to rules of legal interpretation, than a construction, which would annul the effect of so important a directory clause, as that which declares that the “new certificates shall specify the specie amount of those in exchange for which they are given and shall be otherwise of the like tenor with those theretofore issued by the Register of the Treasury for the Registered Debt.

Let’s leave aside Hamilton’s remarks about the specifics — the question of what kinds of certificates are to be treated in which way — and focus on his general principles. He instructs the creditors — and today’s liberals agitated over the possibility of an unfavorable ruling in King v. Burwell — that an interpretation is not necessarily wrong just because it goes against the general intent of the law. This kind of thing can happen, because legislators make mistakes, and the law as they have written it may not properly give effect to their intentions. This is, as Hamilton says, not uncommon. He admits that such an interpretation might involve some important inconveniences for those people whose interests are touched by the law. He adds, however, that when we are observing the “rules of legal interpretation” those inconveniences cannot override the plain language of an “important directory clause” in the law. Today, then, the Supreme Court might be obliged to hold that subsidies are authorized only for participants in “state” exchanges, even if that ruling defeats the general operation of the law to a considerable extent.

Hamilton does not go into the reasons for this method of interpretation, but they are pretty clear if we take a moment to reflect. In order for the rule of law to function, the decisions of courts have to be derived by clear rules of reasoning from data that has a discernible meaning. The words of a statute ordinarily are data with a discernible meaning, and thus are a safe basis for legal reasoning, even if it turns out that the law is incompetently drafted. Suppositions about the general intentions of the law, apart from the operative words in it, can never be a safe basis for interpreting it, because they cannot be known with certainty. Besides, having judges correct errors in statutory language effectively makes them legislators, which is certainly not what they are supposed to be.

We can’t know whether Hamilton would say the Court should read the ACA in such a way as to gut the law. That would depend on his reading of all the relevant provisions. But we can know, based on what he said in the letter above, that a reading that guts the law is not necessarily for that reason an illegitimate reading.

 - Carson Holloway is currently a visiting fellow in American political thought in the B. Kenneth Simon Center for Principles and Politics at the Heritage Foundation.

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Originally appeared in National Review Online