NICK EICHER, HOST: It’s Monday morning and a fresh start to the work week for The World and Everything in It. Today is the 6th of January, 2020. Good morning to you, I’m Nick Eicher.
MARY REICHARD, HOST: And I’m Mary Reichard. Well, it’s time for Legal Docket. Every year, the nation’s top jurist submits an annual report. And on December 31st, Chief Justice John Roberts did just that.
It’s just seven pages long and—dare I say?—fun to read.
Part of it is statistics about the workload in the court system.
I’ll mention just a few numbers from the three levels of courts in the federal system.
For the 12-month period ending in September, the total number of cases filed at the Supreme Court was close to 6,500, and the number represents about a 2 percent increase over the prior term.
The federal courts of appeals saw a 2 percent decrease in filings, at just shy of 50,000. And at the federal district court level—the lowest court level in the federal system where the vast majority of disputes are handled—the number of civil cases went up 5 percent, and landed just shy of 300,000 filings.
Criminal cases also went up 6 percent, ending up just under 100,000.
Lots of other numbers to consider in the report.
But the chief justice as per usual focused on a broader topic of concern to all of us.
He starts out with a rollicking tale from three of the Founders who wrote the Federalist Papers.
You’ve heard of one of them a lot in contemporary culture, thanks to Lin-Manuel Miranda’s stage production.
MIRANDA: Put a pencil to his temple, connected it to his brain and he wrote his first refrain, a testament to his pain. Well, the word got around. They said this kid is insane, man! Took up a collection just to send him to the mainland. Get your education, don’t forget from whence you came and the world is gonna know your name. What’s your name, man?
That was Miranda back in 2009 at the White House Evening of Poetry, Music, and the Spoken Word.
EICHER: So, Hamilton was one who helped write the Federalist Papers. James Madison and John Jay were the others.
Chief Justice Roberts pointed out that of the 85 essays in the Federalist Papers, Jay penned only 5. Madison and Hamilton wrote the rest. The chief called these writings “America’s greatest civics lesson.”
I think we should stress that Jay wasn’t lazy. Far from it.
The reason he wrote relatively few may have been related to the rumor published in the local papers. Apparently, the papers reported, medical students were robbing graves for cadavers to practice operating on and dissect. A furious mob stormed the hospital and Jay, who lived nearby, went to help put down the riot. In all the tumult, someone threw a rock and injured Jay. It took him a while to recover.
REICHARD: The chief quipped that perhaps if Jay could’ve been more productive he might’ve gotten his own Broadway musical!
Humor aside, Roberts connected the newspaper rumor to the mob and our modern-day social media that spreads rumors faster than ever. What we need now to counter that, he wrote, is vigorous civics education. We need to once again, like the authors of the Federalist Papers, teach the virtues of the Constitution. A document that leaves no place for mob violence. And the chief justice lauded efforts against taking democracy for granted.
EICHER: If you want to read the year-end report by Chief Justice Roberts, we’ll put a link in the transcript, and that’s available at worldandeverything.org.
Well, on to an oral argument heard last month at the Supreme Court. It’s a familiar topic at the court: the Affordable Care Act, or Obamacare.
This time, though, it’s not a direct challenge to undo Obamacare. This case has to do with government promises to insurance companies.
The stated aim of Obamacare was to insure people who weren’t insured. But insurance companies were reluctant to do that, and for rational economic reasons: insurers set premiums based on data. They predict future outlays and then set premiums to cover those accidents and injuries and illnesses for which people buy insurance.
But there is no such dataset for people who never bothered to buy insurance or were deemed uninsurable, for whatever reason.
REICHARD: So the government set about to entice insurers to cover these people anyway. The government would offset losses to insurers for plans sold on the individual insurance exchanges.
So for three years, this deal would protect insurers from catastrophic loss until they had enough data to set reasonable premiums.
It worked like this: If insurers set premiums too high, the insurers then fork over a portion of the profits to the government. And if insurers set premiums too low relative to the losses actually incurred, the government would reimburse.
Problem is, the government didn’t hold up its end of the deal.
So the insurance companies sued.
They hired former Solicitor General Paul Clement to argue their case. He starts with his typical catchy phrasing:
CLEMENT: This case involves a massive government bait-and-switch and the fundamental question of whether the government has to keep its word after its money-mandating promises have induced reliance.
Clement highlighted the plain text of Obamacare: it says the government “shall pay” part of the costs that insurers lost. Nothing equivocal about it; not “might pay” or “subject to something else.”
But the government argues that it can’t pay what it doesn’t have. Its argument is that Congress has to appropriate funds, and it didn’t. During the 2014 budget negotiations, lawmakers included a provision (called a “rider”) that prevented the government from making the payouts. (That whole process of course infused with lots of partisan politics.)
Lawyer for the government, Deputy Solicitor General Edwin Kneedler, argued everybody knows government payments depend on government appropriating the money.
KNEEDLER: … the Appropriations Clause of the Constitution is central to this case. This court has described it as a straightforward and explicit command …That command is a central feature of the separation of powers under the Constitution, and it’s reinforced by the requirement that appropriations bills originate in the House of Representatives, which was designed to ensure that the representatives of the people would have and would jealously guard the power of the purse.
Besides, Kneedler argued insurers were pursuing a new market and using incentives to do it for their own business advantage.
But Kneedler got swift pushback from opposite ideological sides of the bench. Justice Stephen Breyer, a liberal, hearkened right back to year one of studying contracts in law school.
BREYER: Day one of contracts. Jack Dawson. I say to you: My hat’s on the flagpole. If you bring it down, I’ll pay you $10. You bring it down. I owe you $10. Now how does this differ? And why does the government not have to pay its contracts, just like anybody else? And that’s—is there some language? I guess they could pass a statute and say we won’t pay our contract. Okay? Then you have to follow the statute, until—unless the court sets it aside. They didn’t say that.
Then Justice Brett Kavanaugh, a conservative, got down to brass tacks.
Lots of federal laws say the government “shall pay” subject to something else, but the ACA didn’t say it that way. So he wanted to get Kneedler’s understanding of how all this works:
KAVANAUGH: So is every congressional promise to pay therefore subject to an implicit appropriation, subject to an appropriations caveat?
KNEEDLER: I believe that by and large that is correct, yes.
Justice Elena Kagan noted the lopsided nature of this “deal.”
KAGAN: Are insurers obligated to pay in if they have excess profits?
KNEEDLER: Yes, it is a user fee.
KAGAN: So this is one where the “shall pay in” is obligatory, but the “shall pay out” on the part of the government is not obligatory?
KNEEDLER: The pay in is not an appropriations question. It is an obligation. And the reciprocity in the program still exists, the payments in and payments out, which is how I think most—
KAGAN: I mean, you pay in, that’s obligatory. We commit ourselves to paying out, it turns out, if we feel like it. What kind of a statute is that?
KNEEDLER: I don’t think that’s a fair characterization…
Still the insurance companies’ lawyer Clement got some hard questions, too. Listen to this from Chief Justice Roberts:
ROBERTS: You make a case at some length about the reliance of the insurance companies. They were basically seduced into this program. But they have good lawyers and the Constitution says no money shall come out of the treasury except pursuant to an appropriations clause. And I would have thought at some point they would have sat down and said well why don’t we insist upon an appropriations provision before we put ourselves on the hook for $12 billion?
Clement agreed the insurance companies’ lawyers are very good, and they’d found plenty of Supreme Court precedent to form a conclusion. And that is, that Congress can open the purse in many ways other than by specific appropriation.
But Kneedler argued that to obligate the federal government like this goes too far.
KNEEDLER: And that would impose unprecedented liability on the United States of billions of dollars. Nothing in Section 1342 requires that extraordinary result.
Confession: I laughed out loud at the prospect of the federal government worrying about spending too much money, given that Washington adds a trillion dollars of debt per year on top of the 20-trillion-plus we’ve already racked up. Money, money, money … but I digress.
I think this one leans heavily in favor of the insurance companies, based on questions asked, which I know is a risky proposition upon which to conjecture.
But for the Supreme Court to have taken the case in the first place also leans in favor of the insurers. After all, the court could have just let the lower court rulings against the insurers stand and left it alone.
Options for the justices include somehow limiting how much money the insurers get reimbursed, such as only for certain years.
That, based on the theory that as the program aged, the insurers could gather solid data on how to set premiums and not lose money.
And that’s this week’s Legal Docket.