Twisted Tax Logic: Whatever the Government Doesn’t Tax, It “Spends”

Pete Kasperowicz of the Washington Examiner has an illuminating article that highlights the Newspeak that surrounds the taxation and spending policy among the Democrats in Washington. In “Dems cave, agree to massive federal spending cuts”, Kasperowicz reports on Rep. Gwen Moore (D, Wisconsin) at a House Budget Committee hearing, in which she spoke of a need to cut spending in the form of tax hikes.

Yes, really. Here’s how the skewed logic works:

The root of the argument is the feudal Democratic theory that says all things belong to the upper government nobility, and these things only reach the hands of the vassals when the ruling class wants that to happen. It the modern world, it means any money the government never bothered to take before was a gift, one that can be reclaimed at any time.

In their view, tax policy is viewed not in terms of how much the government should take from the earnings of its populace. Instead, it’s how much the government decides not to collect out of the population’s earnings. As Rep. Moore was quoted in the article:

“The tax breaks that we all voted for on Nov. 15 is spending, people,” she told the hearing. “It’s spending. You can say we’re putting monies back into our constituents pockets, whatever you want to say. It’s spending.”

Having established that a forbearance to take by taxation equals “spending”, a “spending cut” takes place when less amount is allowed to leak from the government to the population, I.e., tax hikes:

“Where is the greatest opportunity to cut spending?” she asked at the hearing, chastising Republicans for daring to cut things like the federal Women, Infants and Children program. “I mean, is there more money in, like, Head Start, WIC, than there is in these tax expenditures?”

For Moore, “tax expenditures” is precisely the federal program to cut.

Here is a bare bones explanation of how the income tax portion of the federal tax code works: gross income minus deductions equals taxable income; tax equals the rates imposed on taxable income, minus credits. To put it in concrete terms: if you earn $100 of income, it is subject to a possible tax. However, if you give $30 to a charity, the Internal Revenue Code allows a deduction, such that only $70 would be subject to the income tax. You still have to earn the $100 and give the $30 to charity in order to get the discount on tax. The statement by Rep. Moore would have it that the government had a right to confiscate all $100, and that by relenting and issuing a tax on $70, allowing you to keep the $70 (minus the tax) is as if the government earned all of the money and was gracious enough to give some of it back to you.

This logic imputes a government confiscation of earnings that were we ever required to be confronted with the full ramifications of it, would be highly unconstitutional. As it is, it’s just cheap rhetoric to get to an end result of justifying higher taxes.

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“White Privilege” Nonsense, Squared

Oh, good grief:

On the Internet, white people have taken to acknowledging their own white privilege, and thus their own complicity in white supremacy. This behavior is undertaken, with eminent sincerity, in an effort to confront the abundant racial inequality in contemporary America. But like so much else in our society, the practice has ultimately worked not to undermine structural racism — the putative aim — but merely to deepen the self-regard of the educated white elite.

In other words, not only can a white person deny that his or her whiteness gives them an advantage in America, they can’t even affirm it either. This Washington Post column by Fredrik deBoer cites examples of guilty white people publicly confessing to having a “white privilege” not afforded to members of other ethnicities. For example:

Take a prototypical example of the genre. After describing himself as “white, male, heterosexual, Christian, able-bodied, tall, thin, blue-eyed, blonde of hair,” someone who “would blend in well in any country club or upscale private school,” Mic’s Charles Clymer claims that “acknowledging my privilege has been liberating for me; it has made me a better person and better equipped to stand beside those who suffer prejudice, often in silence.”…

This self-confession leaves deBoer unimpressed:

…Strange that self-criticism seems so similar to self-improvement, and is expressed in such terms of self-congratulation.

This “white privilege” fantasy is ridiculous by itself, as if 60 years after the Civil Rights movement had done nothing to change perceptions of race. (If you’re being watched a little more closely at the convenience store than someone else, it’s not because of your racial makeup.) But this just builds on the ridiculousness: white people’s only role in this drama is to be told they are part of a racist system. They cannot say themselves that they are part of a racist system, because it acknowledges the system’s advantage to the speaker. Or, for noun declension fans, this deprives the white speaker of speaking on race in the nominative case. Others can speak to the white person, about the white person, or of qualities of the white person, but thee white person is deprives of any agency to make self-declarations on race.

This depravation of agency s the very thing the culture warriors on the left accuse our society of inflicting on them. It’s no innocent coincidence that this is what they seek deprive of the enemy. Perhaps it’s because the traditional tools of persuasion would do their movement too much damage.

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A Bad Week at the Office for the Supreme Court, Part 3

Case name: James Obergefell, et al., v. Richard Hodges, Director, Ohio Department of Health, et al.

Case number: 14-556, etc. (link to decision) [1]

Date decided: June 26, 2015

Issue: Constitutionality – does the 14th Amendment require states to recognize same-sex marriages?

Background: The petitioners are sixteen individuals (seven same-sex couples and two other individuals whose partners had died) who are involved in various situations in which their same-sex relationship has been denied a government benefit. Some were denied marriage licenses, and at least one filed suit to be allowed to be listed as “spouse” on the partner’s death certificate. The question is whether the states’ refusal to confer these benefits is a violation of the Fourteenth Amendment of the Constitution.

Summary: The topics discussed among the opinions include: a) what is the essential nature of marriage, b) what, if any, is the harm identified when states deny same-sex couples the right to participate in marriage, c) does this harm violate the Due Process or Equal Protection Clause, or both, and d) what are the collateral effects of the Court’s decision?

In finding that the state laws prohibiting same-sex marriage are unconstitutional, the Court identifies four fundamental rights that are associated with marriage, none of which are exclusive to marriage being defined as a union of one man and one woman. Thus, denying these fundamental to same-sex couples violates the Due Process Clause. The Court also held that the prohibition against same-sex marriage violates the Equal Protection Clause, finding a synergy between the Due Process Clause (“liberty“) and the Equal Protection Clause (“equality“).

Chief Justice Roberts’ dissent focuses on the danger that the Court’s decision, in deviating so far from the traditional analysis and substituting an unusual definition of marriage, conducted an unwarranted “substantive due process” analysis, a long-abandoned doctrine in which the Court had substituted its public policy preferences over sound constitutional analysis.

Justice Scalia laments the effect the Court’s decision has on halting the public debate over same-sex marriage, and the legitimacy of the Court.

Justice Thomas outlines the history behind the Due Process Clause’s concept of “liberty”, and finds that the rights claimed in this case – a right to public affirmation and benefits – does not fit the concept of “liberty” as conceived in the Fifth and Fourteenth Amendment Due Process Clauses, and historical precedent.

Justice Alito writes to detail the purpose of marriage and the reason the states had enacted laws to preserve it.


A History of Marriage, and of its Changes

The Court’s opinion (written by Justice Kennedy and joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan) opens its discussion lauding the institution of marriage over human history:

From their beginning to their most recent page, the annals of human history reveal the transcendent importance of marriage. The lifelong union of a man and a woman always has promised nobility and dignity to all persons, without regard to their station in life. Marriage is sacred to those who live by their religions and offers unique fulfillment to those who find meaning in the secular realm. Its dynamic allows two people to find a life that could not be found alone, for a marriage becomes greater than just the two persons. Rising from the most basic human needs, marriage is essential to our most profound hopes and aspirations. [Page 3.]

Upon the contention that the “marriage” being exalted inextricably involves a union of a man and a woman, and that extending the concept to include same-sex couples would “demean a timeless institution”, the Court dismisses this concern:

Far from seeking to devalue marriage, the petitioners seek it for themselves because of their respect—and need—for its privileges and responsibilities. And their immutable nature dictates that same-sex marriage is their only real path to this profound commitment. [Page 4.]

The Court then chronicles how the history of marriage has changed over time, in particular the role of the woman in the relationship and her increase in power. The Court finds that these changes are also good:

These new insights have strengthened, not weakened, the institution of marriage. Indeed, changed understandings of marriage are characteristic of a Nation where new dimensions of freedom become apparent to new generations, often through perspectives that begin in pleas or protests and then are considered in the political sphere and the judicial process. [Page 7.]

The Court applies this rule to the history of gays and lesbians and the change in the treatment of them in the law. From homosexuality being treated as a crime and a mental illness, to political and moral acceptance, the Court views this development in light of the push for same-sex marriage recognition. The Court cited the push the states to obtain the constitutional right to same-sex marriage, as well as the federal and state versions of the Defense of Marriage Act that defined marriage by statute to be a union of a man and a woman, and the recent decisions from the lower courts.

Fourteenth Amendment, Due Process Clause

In 1868, the U.S. Constitution was amended to include (with other provisions) this language:

Section 1. All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws. [Emphasis added.]

After briefly reciting the history of cases involving the “fundamental liberties” of marriage and of privacy that had upheld protections under the Due Process Clause, the Court begins its opinion by acknowledging the limitations of the lawmakers of the past:

The nature of injustice is that we may not always see it in our own times. The generations that wrote and ratified the Bill of Rights and the Fourteenth Amendment did not presume to know the extent of freedom in all of its dimensions, and so they entrusted to future generations a charter protecting the right of all persons to enjoy liberty as we learn its meaning. When new insight reveals discord between the Constitution’s central protections and a received legal stricture, a claim to liberty must be addressed. [Page 11.]

The Court points to Loving v. Virginia and other cases that struck down state restrictions on marriage. These courts held that marriage was a fundamental right (“one of the vital personal rights essential to the orderly pursuit of happiness by free men”, quoting Loving).

Addressing the contention that all of the cases involving marriage assumed a union of one man and one woman, the Court dismisses that interpretation and outlines four “essential attributes” that these cases really tell us what are the fundamental rights associated with marriage:

1. The right to personal choice regarding marriage is inherent to individual autonomy:

The nature of marriage is that, through its enduring bond, two persons together can find other freedoms, such as expression, intimacy, and spirituality. This is true for all persons, whatever their sexual orientation. . . . There is dignity in the bond between two men or two women who seek to marry and in their autonomy to make such profound choices.

2. The right to marry supports a two-person union unlike any other in its importance to the committed individuals:

The right to marry thus dignifies couples who “wish to define themselves by their commitment to each other.” Windsor, supra, at ___ (slip op., at 14). Marriage responds to the universal fear that a lonely person might call out only to find no one there. It offers the hope of companionship and understanding and assurance that while both still live there will be someone to care for the other.

3. Marriage safeguards children and families, and draws meaning from related rights from related rights of childrearing, procreation, and education:

Excluding same-sex couples from marriage thus conflicts with a central premise of the right to marry. Without the recognition, stability, and predictability marriage offers, their children suffer the stigma of knowing their families are somehow lesser. They also suffer the significant material costs of being raised by unmarried parents, relegated through no fault of their own to a more difficult and uncertain family life. The marriage laws at issue here thus harm and humiliate the children of same-sex couples.

4. Marriage is a keystone of our social order:

For that reason, just as a couple vows to support each other, so does society pledge to support the couple, offering symbolic recognition and material benefits to protect and nourish the union. Indeed, while the States are in general free to vary the benefits they confer on all married couples, they have throughout our history made marriage the basis for an expanding list of governmental rights, benefits, and responsibilities. . . . [Court, Pages 12-17.]

Having cited these as the fundamental rights associated with marriage, the Court states that “[t]here is no difference between same- and opposite-sex couples with respect to this principle. Yet by virtue of their exclusion from that institution, same-sex couples are denied the constellation of benefits that the States have linked to marriage“. This exclusion, the Court says, imposes “stigma and injury” of the kind prohibited by the Due Process Clause.

Turning to the objection that the liberty sought in this case was not a right to marriage, but a “right to same-sex marriage”, the Court dismisses this by saying that the previous marriage cases never defined marriage by who exercised it. Loving, the Court said, did not discuss a “right to interracial marriage”. Turner v. Safley, a case involving a ban on prison inmates from marrying, did not involve “a right of inmates to marry”. And so forth:

If rights were defined by who exercised them in the past, then received practices could serve as their own continued justification and new groups could not invoke rights once denied. This Court has rejected that approach, both with respect to the right to marry and the rights of gays and lesbians.

Fourteenth Amendment, Equal Protection Clause

Turning again to the Fourteenth Amendment:

Section 1. All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

Under the tests previously established by the Supreme Court, an Equal Protection claim would, in most cases, be viewed in one of two standards of review. If the state action interferes with a fundamental right or discriminates using a “suspect classification” of citizens, then it is viewed with strict scrutiny, and the state must prove that its action furthers a necessary interest and that there are no other options that are less intrusive to carry out that interest. If the state action does not interfere in this way, then the action is viewed under a “rational basis” standard, meaning that if the state had a rational motive for its action, then the courts would defer to their judgment in carrying out the action.

In this case, Court doesn’t conduct a traditional Equal Protection analysis, favoring instead a convergence of liberty (from Due Process) and equality (from Equal Protection) in the identification of the right being infringed:

Here the marriage laws enforced by the respondents are in essence unequal: same-sex couples are denied all the benefits afforded to opposite-sex couples and are barred from exercising a fundamental right. Especially against a long history of disapproval of their relationships, this denial to same-sex couples of the right to marry works a grave and continuing harm. The imposition of this disability on gays and lesbians serves to disrespect and subordinate them. And the Equal Protection Clause, like the Due Process Clause, prohibits this unjustified infringement of the fundamental right to marry. [Page 22.]

On this basis, the Court holds that the state laws restricting marriage to a union of a man and a woman are overruled.

Miscellaneous issues

Having finished with the core of its analysis, the Court next addresses collateral issues raised in the proceeding:

The Court’s decision prematurely removes same-sex marriage from the public debate. After noting that the public has engaged in such deliberation that there is an “enhanced understanding” of the issue, the Court notes that the democratic process is the appropriate process, unless the process abridges fundamental rights. Specifically, the Court says that the issue here is a legal one, not a political one, of whether same-sex couples have the right to marry, which the Court says that the delay in recognizing this right caused harm to men and women in the interim [Page 25].

Allowing same-sex couples to wed will lead to fewer opposite-sex marriages. The logic here is that by severing the procreation element to marriage, fewer opposite-sex couples will bother with entering a marital relationship. The Court responds saying that this is too narrow of an objection:

Decisions about whether to marry and raise children are based on many personal, romantic, and practical considerations; and it is unrealistic to conclude that an opposite-sex couple would choose not to marry simply because same-sex couples may do so. . . . The respondents have not shown a foundation for the conclusion that allowing same-sex marriage will cause the harmful outcomes they describe. Indeed, with respect to this asserted basis for excluding same-sex couples from the right to marry, it is appropriate to observe these cases involve only the rights of two consenting adults whose marriages would pose no risk of harm to themselves or third parties.

If you have a religious objection to same-sex marriage, you can still “advocate with the utmost, sincere conviction” that same-sex marriage should not be condoned. This is the bread crumb the Court grants, while stating that:

The Constitution, however, does not permit the State to bar same-sex couples from marriage on the same terms as accorded to couples of the opposite sex.

There will be more on this in the dissents.


To open his dissent, Chief Justice Roberts suggests that the dual-gender element to marriage is more than incidental:

This universal definition of marriage as the union of a man and a woman is no historical coincidence. Marriage did not come about as a result of a political movement, discovery, disease, war, religious doctrine, or any other moving force of world history—and certainly not as a result of a prehistoric decision to exclude gays and lesbians. It arose in the nature of things to meet a vital need: ensuring that children are conceived by a mother and father committed to raising them in the stable conditions of a lifelong relationship. [Pages 4-5.]

Roberts acknowledges the changes in marriage over time, but he ascribes less meaning to the institution. State laws repealing coverture (the legal status of husband and wife as one legal entity) and court cases overturning racial restrictions on marriage, however “transformational” one believes them to be, do not support abandoning the “core structure” of marriage as the union of one man and one woman. [Page 8.]

This concept of marriage is contrasted with the Court’s “four principles and traditions” it purports to have found in the previous Due Process cases. Roberts disagrees, and indicates that the Court’s opinion is an example of “substantive due process”:

[T]he majority’s approach has no basis in principle or tradition, except for the unprincipled tradition of judicial policymaking that characterized discredited decisions such as Lochner v. New York, 198 U. S. 45. Stripped of its shiny rhetorical gloss, the majority’s argument is that the Due Process Clause gives same-sex couples a fundamental right to marry because it will be good for them and for society. If I were a legislator, I would certainly consider that view as a matter of social policy. But as a judge, I find the majority’s position indefensible as a matter of constitutional law. [Page 10.]

Justice Roberts focuses on Lochner v. New York as the grim precedent for the Court’s opinion. In that case, the Court struck down a state law limiting bakers to working 40 hours a week based on views less from the Constitution and more from the public policy preferences of the Court’s majority:

The question whether this act is valid as a labor law, pure and simple, may be dismissed in a few words. There is no reasonable ground for interfering with the liberty of person or the right of free contract, by determining the hours of labor, in the occupation of a baker. There is no contention that bakers as a class are not equal in intelligence and capacity to men in other trades or manual occupations, or that they are not able to assert their rights and care for themselves without the protecting arm of the state, interfering with their independence of judgment and of action. They are in no sense wards of the state. [2]

Justice Roberts describes a similar lack of constitutional analysis in the Court’s opinion:

The majority’s driving themes are that marriage is desirable and petitioners desire it. The opinion describes the “transcendent importance” of marriage and repeatedly insists that petitioners do not seek to “demean,” “devalue,” “denigrate,” or “disrespect” the institution. . . . . Nobody disputes those points. Indeed, the compelling personal accounts of petitioners and others like them are likely a primary reason why many Americans have changed their minds about whether same-sex couples should be allowed to marry. As a matter of constitutional law, however, the sincerity of petitioners’ wishes is not relevant.

The Court did cite some precedent, which Justice Roberts finds lacking:

  • The “marriage” cases (Turner, Zablocki, and Loving): in these cases, the state restrictions on the right to marry (status as a prisoner, owing child support, race) were struck down. However, none of these cases disputed the core definition of marriage: “Removing racial barriers to marriage therefore did not change what a marriage was any more than integrating schools changed what a school was.” [Page 16.]
  • The “privacy” cases (Griswold, Lawrence): these cases involved criminal prohibitions, which necessarily involve government intrusion to enforce. This case does not share that similarity:

Neither Lawrence nor any other precedent in the privacy line of cases supports the right that petitioners assert here. Unlike criminal laws banning contraceptives and sodomy, the marriage laws at issue here involve no government intrusion. They create
no crime and impose no punishment. Same-sex couples remain free to live together, to engage in intimate conduct, and to raise their families as they see fit. No one is “condemned to live in loneliness” by the laws challenged in these cases—no one. . . . . At the same time, the laws in no way interfere with the “right to be let alone.” [Pages 17-18.]

Other Concerns Beyond the Due Process Clause

What is to stop the fundamental right to marry from including unions of more than two people? Justice Roberts notes that the Court’s use of the term “two” to describe the number in a marriage is arbitrary. Furthermore, marriages of more than two have more history than the Court’s new definition of marriage. [Page 20.]

The argument that “expanding marriage will not harm anybody” is not a constitutional principle:

Then and now, this assertion of the “harm principle” sounds more in philosophy than law. The elevation of the fullest individual self-realization over the constraints that society has expressed in law may or may not be attractive moral philosophy. But a Justice’s commission does not confer any special moral, philosophical, or social insight sufficient to justify imposing those perceptions on fellow citizens under the pretense of “due process.” [Page 22.]

The Court’s feeble attempt at a separate Equal Protection Clause analysis: After noting that the Court failed to provide “even a single sentence” to support an Equal Protection Clause argument, Justice Roberts obliges by holding that “the marriage laws at issue here do not violate the Equal Protection Clause, because distinguishing between opposite-sex and same-sex couples is rationally related to the States’ legitimate state interest in preserving the traditional institution of marriage.” [Page 24.]

How will the democratic process work in the future? The excesses of the Court’s opinion leave Chief Justice Roberts worried about the effect of the balance of powers between the three branches of government:

When decisions are reached through democratic means, some people will inevitably be disappointed with the results. But those whose views do not prevail at least know that they have had their say, and accordingly are—in the tradition of our political culture—reconciled to the result of a fair and honest debate. In addition, they can gear up to raise the issue later, hoping to persuade enough on the winning side to think again. That is exactly how our system of government is supposed to work.

But today the Court puts a stop to all that. By deciding this question under the Constitution, the Court removes it from the realm of democratic decision. There will be consequences to shutting down the political process on an issue of such profound public significance. Closing debate tends to close minds. People denied a voice are less likely to accept the ruling of a court on an issue that does not seem to be the sort of thing courts usually decide. [Pages 26-27.]

How will those people of faith who disagree with same-sex marriage be able to engage in public society? Justice Roberts points out that the right granted in the First Amendment is the “free exercise” of religion, not just the right to “advocate” and “teach” one’s religion. Justice Roberts is pessimistic about how the Court will handle future cases regarding the accommodations for the practice of religion:

Hard questions arise when people of faith exercise religion in ways that may be seen to conflict with the new right to same-sex marriage—when, for example, a religious college provides married student housing only to opposite-sex married couples, or a religious adoption agency declines to place children with same-sex married couples. Indeed, the Solicitor General candidly acknowledged that the tax exemptions of some religious institutions would be in question if they opposed same-sex marriage. . . . . There is little doubt that these and similar questions will soon be before this Court. Unfortunately, people of faith can take no comfort in the treatment they receive from the majority today.


Justice Scalia writes briefly to voice his concerns about the effect of the Court’s decision:

  • The vigorous debate over same-sex marriage that had engaged the public was put to a stop, and done so with an opinion “lacking even a thin veneer of law”. The Court’s declaration of the limitations of the Constitution’s drafters and ratifiers should have led to a conclusion that this is what the amendment process is for. Instead, the Court engages in a “superlegislative” power that is alien to the democratic process.
  • The decision itself lacks seriousness. It holds that for the first 135 years following the Fourteenth Amendment’s ratification (from 1868 to 2003’s Massachusetts’ state court permitting same-sex marriage), all of the states overlooked the Fourteenth Amendment’s connection to same-sex marriage. The writing style is “pretentious” and the content “egotistic”. Justice Scalia cites an example:

If, even as the price to be paid for a fifth vote, I ever joined an opinion for the Court that began: “The Constitution promises liberty to all within its reach, a liberty that includes certain specific rights that allow persons, within a lawful realm, to define and express their identity,” I would hide my head in a bag. The Supreme Court of the United States has descended from the disciplined legal reasoning of John Marshall and Joseph Story to the mystical aphorisms of the fortune cookie. [Pages 8-9, Footnote 22.]

Justice Scalia closes his dissent lamenting the possibility of the Court losing its legitimacy and power:

With each decision of ours that takes from the People a question properly left to them—with each decision that is unabashedly based not on law, but on the “reasoned judgment” of a bare majority of this Court—we move one step closer to being reminded of our impotence.


“Liberty”, as Understood in the Due Process Clauses of the Fifth and Fourteenth Amendments

The primary focus of Justice Thomas’ dissent is to counter the Court’s description of “liberty” with one that is consistent with the principle envisioned by those who first invoked the principle.

Justice Thomas’ discourse on “liberty” is a structured argument deconstructing the Court’s vision of “liberty”:

1. The Court’s opinion relies on “substantive due process”, which is not a valid constitutional doctrine. The idea behind “substantive due process” is that the mechanisms of representative democracy – majority vote by officials elected by the people, signed into law by the executive – isn’t enough. The thing itself being voted on and signed into law must be just.

Justice Thomas expresses a strong disagreement with this doctrine, and cites the Court opinion as an example of why:

It distorts the constitutional text, which guarantees only whatever “process” is “due” before a person is deprived of life, liberty, and property. . . . Worse, it invites judges to do exactly what the majority has done here—roam at large in the constitutional field guided only by their personal views as to the “fundamental rights” protected by that document. [Page 2.]

2. Even if substantive due process were legitimate, this case would not be one in which any “liberty” has been abridged. Justice Thomas then engages in a history lesson on “liberty”:

a. In its original version, “liberty” referred to one of a minimal type. The story of the Due Process Clause begins with the Magna Carta, which imposed these restrictions on the English monarchy:

No freeman shall be taken, or imprisoned, or be disseised of his freehold, or liberties, or free customs, or be outlawed, or exiled, or any otherwise destroyed; nor will we not pass upon him, nor condemn him, but by lawful judgment of his peers or by the law of the land.

This list was later condensed to three rights: “the right of personal security”, “the right to life”, and “the right of private property”. [Page 5.] This was the inspiration for the rights the Framers described as the rights to “life, liberty, or property” in the Fifth Amendment. Justice Thomas contends that this understanding of due process should govern the Fourteenth Amendment‘s Due Process Clause as well:

If the Fifth Amendment uses “liberty” in this narrow sense, then the Fourteenth Amendment likely does as well. . . . Indeed, this Court has previously commented, “The conclusion is . . . irresistible, that when the same phrase was employed in the Fourteenth Amendment [as was used in the Fifth Amendment], it was used in the same sense and with no greater extent.” . . . And this Court’s earliest Fourteenth Amendment decisions appear to interpret the Clause as using “liberty” to mean freedom from physical restraint.

b. Even if “liberty” refers to something more than the minimal set of freedoms as originally understood, the concept does not include those freedoms claimed here. Justice Thomas next turns to contemporaries to the Framers, whose view of “liberty” was one of a “negative liberty”:

The founding-era idea of civil liberty as natural liberty constrained by human law necessarily involved only those freedoms that existed outside of government. . . . As one later commentator observed, “[L]iberty in the eighteenth century was thought of much more in relation to ‘negative liberty’; that is, freedom from, not freedom to, freedom from a number of social and political evils, including arbitrary government power.” . . . . Or as one scholar put it in 1776, “[T]he common idea of liberty is merely negative, and is only the absence of restraint.  [Emphasis in the original.]

3. Regardless of the definition of “liberty”, the case fails because there has been no depravation of it. This focuses on the types of harms that invoke this due process right, which Thomas does not find under the original definition, nor under the later definitions. The depravations cited by the petitioners are directed at the states not granting “governmental entitlements”, including monetary benefits. This, according to Justice Thomas, is not what the Due Process Clause was intended to uphold:

They want, for example, to receive the State’s imprimatur on their marriages—on state issued marriage licenses, death certificates, or other official forms. And they want to receive various monetary benefits, including reduced inheritance taxes upon the death of a spouse, compensation if a spouse dies as a result of a work-related injury, or loss of consortium damages in tort suits. But receiving governmental recognition and benefits has nothing to do with any understanding of “liberty” that the Framers would have recognized. [Page 10.]

Justice Thomas applies this difference in the idea of “liberty” to distinguish between the previous marriage cases and the claim made by the petitioners. The previous statutes — prohibiting interracial marriage, prohibiting marriage because of child-support arrears, and prohibiting marriage among inmates — either involved criminal prosecution or, in the last instance, express permission from the prison administrator. They carried more prohibitions than merely receiving public recognition and government benefits.

Collateral Damage

Justice Thomas then turns to the effects of the Court’s decision, first to the political debate that has now been halted:

The definition of marriage has been the subject of heated debate in the States. Legislatures have repeatedly taken up the matter on behalf of the People, and 35 States have put the question to the People themselves. In 32 of those 35 States, the People have opted to retain the traditional definition of marriage. . . . . That petitioners disagree with the result of that process does not make it any less legitimate. Their civil liberty has been vindicated.

The second effect is the threat to religious liberty, which Justice Thomas states means more than the Court’s depiction of a right to “advocate” a religious belief:

And even that gesture indicates a misunderstanding of religious liberty in our Nation’s tradition. Religious liberty is about more than just the protection for “religious organizations and persons . . . as they seek to teach the principles that are so fulfilling and so central to their lives and faiths.” . . . . Religious liberty is about freedom of action in matters of religion generally, and the scope of that liberty is directly correlated to the civil restraints placed upon religious practice.

The final note in this dissent notes the Court’s ubiquitous statements that the decision will advance the “dignity” of same-sex couples. Consistent with his description of liberty as something inherently retained by the citizen and not something to be dispensed by the government, Justice Thomas states that:

Human dignity has long been understood in this country to be innate. When the Framers proclaimed in the Declaration of Independence that “all men are created equal” and “endowed by their Creator with certain unalienable Rights,” they referred to a vision of mankind in which all humans are created in the image of God and therefore of inherent worth. That vision is the foundation upon which this Nation was built.

The corollary of that principle is that human dignity cannot be taken away by the government. Slaves did not lose their dignity (any more than they lost their humanity) because the government allowed them to be enslaved. Those held in internment camps did not lose their dignity because the government confined them. And those denied governmental benefits certainly do not lose their dignity because the government denies them those benefits. The government cannot bestow dignity, and it cannot take it away.


Justice Alito begins his short dissent by citing the same objection as the other dissenters: by judicially expanding the right to liberty beyond those rights “deeply rooted in this Nation’s history and tradition”, the Court has substituted the judgment of a majority of nine lawyers for the public at large. The Court’s decision “confer constitutional protection upon that right simply because they believe that it is fundamental”. [Page 3.]

The primary focus of Justice Alito’s dissent is to contrast the petitioners’ understanding of marriage – “the happiness of the persons who choose to marry” – with the traditional understanding of marriage, one that most of the states had fought to preserve:

If this traditional understanding of the purpose of marriage does not ring true to all ears today, that is probably because the tie between marriage and procreation has frayed. Today, for instance, more than 40% of all children in this country are born to unmarried women. This development undoubtedly is both a cause and a result ofchanges in our society’s understanding of marriage.

While, for many, the attributes of marriage in 21stcentury America have changed, those States that do not want to recognize same-sex marriage have not yet given up on the traditional understanding. They worry that by officially abandoning the older understanding, they may contribute to marriage’s further decay. It is far beyond the outer reaches of this Court’s authority to say that a State may not adhere to the understanding of marriage that has long prevailed, not just in this country and others with similar cultural roots, but also in a great variety of countries and cultures all around the globe.


When law students are taught to brief a case, the traditional format to use is signified by the acronym FIRAC:

Facts: Determine the relevant facts of the case. This requires some advance knowledge of the issues in order to sort out which facts are relevant.

Issue: The issue presents itself when two or more parties have a conflict over the interpretation of a specific law.

Rule: A statute, case, or constitutional provision, is cited, as well as any applicable doctrine previous courts have used to interpret the applicable piece of law.

Application: Having cited the rule, the task is to apply the rule to the facts at hand, to determine whether the general rule does or does not apply. This involves reasoning by analogy – do the past rulings apply in the same way when presented with the current facts?

Conclusion: This brings the analysis back to where it began. Either one group or the other will prevail, and the procedural consequences will be set forth.

This method was developed assuming that the parts connected with each other, to create a logical flow that from specific facts a general rule could be invoked, and then an exercise in analogy-making would determine whether the general rule would apply to the case at hand.

However, in this case, the Court’s four-point redefinition of the fundamental liberties of marriage breaks this chain of logic, changing the rule to become something completely different from preceding opinions. The application and conclusion may logically follow, but they follow from this radical redefinition of due process law.

This kind of redefinition is strikingly out of place in a Supreme Court decision. It’s hard to overstate, especially to those not versed in the language of legal decisions, how off-key the Court’s language is here. Points of law are not normally decided over whether the denial of a government benefit “demeans” someone or deprives them of “dignity”. Hurt feelings are not the basis of a constitutional claim. Parts of the Court’s decision sound like a proclamation from a medieval king from a bad children’s book.

Some deeper concerns remain with the decision that go beyond what the dissents covered, and go to how we view ourselves. In order for the proponents of same-sex marriage to sustain their claim of lack of due process, they had to portray the individuals not as individuals who engage in a classification of sexual behavior, but as sexual classifications of “gay”, “lesbian”, or “bisexual”. individuals, as if they possessed a “sexuality” that was in their essential being. Otherwise, they wouldn’t get their case past the obvious point that these individuals already have the right to marry; they’re just not doing it right.

This classification of individuals rather than behavior makes a huge assumption about people these activists don’t even know. Most of those among us don‘t view themselves as sexually active with a category of people. To the contrary, they view themselves sexually as their husband’s wife and their wife’s husband, or choose to temporarily or permanently abstain from sexual activity. To put these life choices into clumsy categories, just for the sake of creating an illusory class of people claiming disenfranchisement, is insulting, dare I say, “demeaning”. Not only that, it’s baseless. In the 1990s, gay activists attempted to push the message that “being gay” was the same as “being black”, and therefore conflating “sexual orientation” denial of marriage with racial discrimination. Some studies attempted to make this scientific fact, but all that really resulted from it was fiat declarations by politicized academic and medical associations. [3]

It’s also dangerous, because it removes the moral component behind sexual activity. After all, if sex is who you are instead of what you do, who can judge? If a husband serially cheats on his wife with blonde-haired, big-bosomed women, does he confess and say,
“Sorry, honey, I can’t help it. I have the blonde-hair, big-bosom sexual attraction gene”?

Does “intergenerational love” get public affirmation under the guise that the 15-year old girl has an attraction to 40-year old men, and the 40-year old man has an attraction to 15-year old girls?

Does a man get a pass for serially sabotaging his sexual relationships because he’s only attracted to 28-year old women, even though he’s passed the age of 50?

Of course not. Yet this a reasonable application of the principle assumed in order to come up with a right to same-sex marriage. For all of the bluster thinking that this is a moral equivalence between homosexual conduct and underage sexual activity, the only equivalence here is that they are both properly viewed as sexual activity, not sexual identity. The fact that gay activists staked their flag on “sexual identity” for one and vociferously deny the other reveals how intellectually feeble this movement has been. [4]

This may be the reason Justice Kennedy wrote the Court’s decision the way he did. Instead of applying a straightforward ruling that homosexuals are a protected class like racial groups, the opinion instead expresses a grab bag of euphoric slogans disguised as constitutional law. It would prevent other groups from using this as precedent, and would grant this weirdly-expressed fundamental right to same-sex marriage applicants on a one-time basis.

This tactic has been utilized by the Court in the recent past. When the Amish community filed suit to challenge a state law requiring children to attend school beyond the age of 14, the Supreme Court, in Wisconsin v. Yoder [5], held that Wisconsin’s compulsory attendance law interfered with the rights of parents in the religious upbringing of their children, and thus was held in violation of the right to Free Exercise of Religion under the First Amendment. While the Yoder Court held in favor of the Amish parents, subsequent courts have not applied this rule to other groups making similar claims. I’m not 100 percent wedded to this possibility, but it’s a plausible theory behind Justice Kennedy’s sideways turn, not only in this case, but in previous cases involving homosexual conduct. [6]

There are other angles to this decision that could be the subject of future writings, but that will be reserved for another day.


[1] This is a consolidation of four cases brought before the Court. The other three cases were Nos. 14-562, 14-571, and 14-574.

[2] 198 U.S. 45,57 (1905). A link to the decision is here.

[3] For a resource on these and other studies in the homosexual rights movement, see Getting It Straight: What the Research Shows About Homosexuality, Peter Sprigg and Timothy Dailey, eds. (Family Research Council).

[4] For those not old enough to remember, the ascension of the gay rights movement has been accomplished more with brawn than with brain, insisting on invading America’s institutions (the church, public schools, corporate boardrooms, the media and entertainment), while freezing out any opposing points of view. A good recap of these tactics in the 1990s and early 2000s can be found in The Homosexual Agenda: Exposing the Principal Threat to Religious Freedom Today, by Alan Sears and Craig Osten (Broadman and Holman). Sears and Osten are with the Alliance Defense Fund, who has been on the litigation front lines in this conflict (and others involving religious liberty).

[5] 406 U.S. 205 (1972).

[6] Romer v. Evans, 517 U.S. 620 (1996); Lawrence v. Texas, 539 U.S. 558 (2003).

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A Bad Week at the Office For the Supreme Court – Part 2

Case name: David King, et al, v. Sylvia Burwell, Secretary of Health and Human Services, et al.

Case number: 14-114 (link to decision)

Date decided: June 25, 2015

Issue: Interpretation of statute – Section 36B of the Internal Revenue Code [1]

Background: The Patient Protection and Affordable Care Act (ACA) introduced a set of rules to provide health insurance. Among them were these:

Health insurance providers must accept every individual who applies for coverage.Individuals are required to maintain health insurance; failure to do so will cause a penalty to be imposed. This requirement does not apply if the cost of insurance exceeds eight percent of income.

States are required to establish exchanges, so that their citizens can choose among alternative health plans. If a state does not establish an exchange, the Department of Health and Human Services (HHS) will set one up in its place.

A credit is available in the form of subsidies to assist in paying the premiums for taxpayers who have enrolled in an insurance plan through “an Exchange established by the State under [42 U.S.C. Section 18031]”. [2]

[Pages 4-5 of the Court’s opinion.]

In 2012, the Internal Revenue Service (IRS) published a rule that interpreted the ACA to allow tax credits to individuals enrolled through both the state and the federal exchanges. [Page 6.]

David King and the other petitioners are residents of Virginia who claim that the cost of buying health insurance exceeded eight percent of their income, and thus were not required to purchase it. HHS contended that with the tax credits, their cost of health insurance was below the eight percent threshold, and thus the requirement applied. Virginia was not a state that established its own exchange, and the petitioners contended that the credits were not available to them because the ACA limited the credit to individuals paying premiums through an “exchange established by the state”.

The question before the Court was whether the ACA provided credits to individuals enrolled through only the state exchanges, or whether the ACA provided credits to individuals enrolled through either a state exchange or the federal exchange.


Chief Justice Roberts (joined by Justices Kennedy, Ginsburg, Breyer, Sotomayor, and Kagan) opens the Court’s opinion with a description of previous attempts at health insurance reform, and the “death spiral”. States would require insurers to accept anyone who applied, but without a requirement that citizens purchase insurance, “they encouraged people to wait until they got sick to buy insurance.” [Page 2.] If individuals aren’t paying premiums until they are sick, and if the insurer is required to accept their application for insurance, costs will go up. As the Court put it on page 2 of its opinion:

Insurers were forced to increase premiums to account for the fact that, more and more, it was the sick rather than the healthy who were buying insurance. And that consequence fed back into the first: As the cost of insurance rose, even more people waited until they became ill to buy it.[Page 2.]

The Court points out that it wasn’t until states (in particular, Massachusetts) began requiring individuals to buy health insurance that the death spiral was prevented.

All of this may not seem crucial to the statutory interpretation, but the Court invokes this as foreshadowing to make its bases for upholding the tax credits.

Before turning to the statutory analysis, the Court discusses the standard of review it is going to engage in. Under the “Chevron” rule, the Court normally conducts a two-step inquiry when interpreting statutes: 1) Is the statute ambiguous? If so, then 2) the agency (in this case, the IRS) will be given deference. The theory behind this is that the ambiguity is an implicit delegation to the government agency to fill in the holes. However, as the Court notes, “[i]n extraordinary cases, however, there may be reason to hesitate before concluding Congress has intended such an implicit delegation”. [Page 8.] The Court then declares that this is one of those extraordinary cases, and proceeds to deliver its own interpretation of the statute. [3]

Here is the relevant text of the premium tax credit in the Internal Revenue Code:

26 U.S. Code § 36B – Refundable credit for coverage under a qualified health plan(a) In general. In the case of an applicable taxpayer, there shall be allowed as a credit against the tax imposed by this subtitle for any taxable year an amount equal to the premium assistance credit amount of the taxpayer for the taxable year.

(b) Premium assistance credit amount. For purposes of this section—

(1) In general. The term “premium assistance credit amount” means, with respect to any taxable year, the sum of the premium assistance amounts determined under paragraph (2) with respect to all coverage months of the taxpayer occurring during the taxable year.(2) Premium assistance amount. The premium assistance amount determined under this subsection with respect to any coverage month is the amount equal to the lesser of—

(A) the monthly premiums for such month for 1 or more qualified health plans offered in the individual market within a State which cover the taxpayer, the taxpayer’s spouse, or any dependent (as defined in section 152) of the taxpayer and which were enrolled in through an Exchange established by the State under [42 U.S.C. Section 18031], or(B) the excess (if any) of—

(i) the adjusted monthly premium for such month for the applicable second lowest cost silver plan with respect to the taxpayer, over

(ii) an amount equal to 1/12 of the product of the applicable percentage and the taxpayer’s household income for the taxable year. [4]

How the Court interprets Section 36B

Starting on Page 9, the Court breaks down the statute into three elements to receive the credit: the individual must enroll in an insurance plan through “an Exchange”; the Exchange must be one that is “established by the State”; finally, the Exchange must be one that is established “under [42 U.S.C. Section 18031]”. Here is the Court’s analysis of each of the elements:

1. The individual must enroll in an insurance plan through “an Exchange”. The Court begins by comparing two statutory provisions:

42 U.S.C. Section 18031(b)(1):

(1) In general. Each State shall . . . establish an American Health Benefit Exchange . . . for the State. . . .

42 U.S.C. Section 18041(c)(1):

(1) In general.  If—

(A) a State is not an electing State under subsection (b); or(B) the Secretary determines, on or before January 1, 2013, that an electing State—

(i) will not have any required Exchange operational by January 1, 2014 . . .the Secretary shall . . . establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements.

[Emphasis added.]

The Court interprets these two statutes together to mean the Federal Exchange is, for all intents and purposes, equivalent to the State Exchange:

By using the phrase “such exchange“, Section 18041 instructs the Secretary to establish and operate the same Exchange that the State was directed to establish under Section 18031. . . . In other words, State Exchanges and Federal Exchanges are equivalent — they must meet the same requirements, perform the same functions, and serve the same purposes. Although State and Federal Exchanges are established by different sovereigns, Sections 18031 and 18041 do not suggest that they differ in any meaningful way. A Federal Exchange therefore counts as “an Exchange” under Section 36B.[Page 10. Emphasis in the original.]

2. The Exchange must be “established by the State”.  To address this requirement, the Court then looked to two more statutes from the ACA:

42 U.S.C. Section 18031(d)(2)(A):

(A) In general.  An Exchange shall make available qualified health plans to qualified individuals and qualified employers.42 U.S.C. Section 18032(f)(1)(A):

(1) Qualified individuals.  In this title:(A) In generalThe term “qualified individual” means, with respect to an Exchange, an individual who—

(i) is seeking to enroll in a qualified health plan in the individual market offered through the Exchange; and

(ii) resides in the State that established the Exchange.

The Court examines a chain of logic in interpreting these statutes and finds a problem:

The requirement in Section 18031(d)(2)(A) to make insurance plans available to qualified individuals applies to all exchanges, both state and federal.“Qualified individual” means only individuals residing in States that establish an Exchange.

Unless a State establishes an Exchange, there are no “qualified individuals” for which the Federal exchange to provide its Exchange of insurance plans.

Faced with this apparent absurdity, the Court cites this as evidence that the phrase “established by the State” may not always be used in its natural meaning. [Pages 10-11.]

3. The Exchange must be one that is established “under [42 U.S.C. Section 18031]”.

Continuing with the statutory dissection:

42 U.S.C. Section 300gg-91(d)(21):

(d) Other definitions

(21) Exchange. The term “Exchange” means an American Health Benefit Exchange established under section 18031 of this title.

The Court then substituted this definition for the use of the term at the end of the 18041 excerpt above:

the Secretary shall . . . establish and operate such [American Health Benefit Exchange established under section 18031 of this title] within the State and the Secretary shall take such actions as are necessary to implement such other requirements

The Court viewed this as an anomaly, appearing to allow Federal Exchanges to be established under not only the conditions of Section 18041 (when States do not set up an exchange), but also under Section 18031 itself. Otherwise, the Court said, “the Federal Exchange, by definition, would not be an ‘Exchange’ at all”.

What does this analysis prove to the Court? Ambiguity as to the meaning of the term “an Exchange established by the State under [42 U.S.C. 18031]. The Court cites other requirements of both State and Federal Exchanges (advertising the credits to the community, setting up a calculator to determine the true cost to the customer, reporting requirements to the Treasury Secretary). The Court reasons that if the credits weren’t available to the Federal Exchanges, why were they required to engage in all of this activity related to the credits? [Pages 13-14.]

The Purpose Of the ACA

Having freed itself from the shackles of the text, the Court bases its decision by determining the “broader structure” of the Act to interpret the tax credits under Section 36B, and recites a list of reasons why the credits should be available in the Federal Exchanges:

  • If the credits aren’t available, it would destabilize the individual insurance market.If the credits aren’t available, the result would negate its own stated purpose.
  • If the credits aren’t available, only a small segment of individuals would be able to afford to purchase the insurance. This would drive up the costs, resulting in higher prices, fewer and more expensive customers, and another increase in costs. The death spiral would return.
  • It would be “implausible” that Congress intended to impose a coverage requirement without making the credits available.

The Court holds that the credits described in Section 36B apply to all health insurance Exchanges, State and Federal.


Justice Scalia, joined by Justices Thomas and Alito, opens the dissent by stating what to the non-lawyer public would appear to be obvious:

The Court holds that when the Patient Protection and Affordable Care Act says “Exchange established by the State” it means “Exchange established by the State or the Federal Government.” That is of course quite absurd, and the Court’s 21 pages of explanation makes it no less so.The dissent agrees with the Court on the principle that a statute must be interpreted in its context, but it accuses the Court of using rules of context not to understand the ACA, but rewrite it.

[Page 3.]

It then points out a series of specific reasons why the statutes for the State Exchange and for the Federal Exchange should be interpreted as separate creations:

“State”, for purposes of these statutes, has an explicit definition: “each of the 50 states and the District of Columbia.” The Secretary of Health and Human Services is not one of these.

The State Exchange and the Federal Exchange have distinct statutory origins. The creation, the funding, and the scope of their authority for each comes from different statutory provisions. The dissent then says “[p]rovisions such as these destroy any pretense that a Federal Exchange is in some sense also established by a State.” [Page 4.]

In addition to the tax credit provisions here, the dissent points out other examples where the tax credits are connected to an “Exchange established by the State”. (The statutes cited are in Appendix A.) These references, the dissent says, are not empty citations, and Congress made distinctions between this term and the more generic term “Exchange”. To interpret these terms interchangeably removes the limitation that the words “by the State” was intended to provide.

Apart from the linguistic problems of the Court’s interpretation, the dissent states that the practical effects of the Court’s interpretation make “nonsense“ of the statute. When the ACA instructs the states to use a secure user interface to calculate the customer’s credits, or to control contracting decisions in setting up the Exchanges, the dissent asks “[w]hy would a State get to control the contracting decisions of a Federal Exchange?” [Page 7.] The Court attempted to limit the applicability of this switch in definition to only the tax credits, which highlights the oddity of its rules of interpretation on the eligibility of the credit..

The ACA says that if a territory (i.e., Guam, Puerto Rico, etc.) creates an Exchange, it will be treated as a State for certain purposes, which indicates that Congress knew how to write legislation treating other Exchanges as equivalent to State Exchanges. The ACA does not make any similar allowance for the Federal government.

The dissent next addresses the Court’s bases for its decision:

“Such Exchange”

Section 36B states that if a State did not set up an Exchange, the federal government was required to establish “such Exchange” in its place. The Court interpreted this to mean that the Federal and State Exchanges are the same. The dissent points out that this runs counter to proper interpretation rules:

The Court’s argument also overlooks the rudimentary principle that a specific provision governs a general one. Even if it were true that the term “such Exchange” in §18041(c) implies that federal and state Exchanges are the same in general, the term “established by the State” in §36B makes plain that they differ when it comes to tax credits in particular.The Advertising Campaign, the Benefits Calculator, and the Reporting Requirement

In the ACA, both State and Federal Exchanges were instructed to advertise the tax credits, provide a calculator to determine the credit amount, and to report on how much of credit was authorized. The Court cited this as evidence that Congress intended individuals to receive tax credits through the Federal Exchanges. Why else would they be required to do these things otherwise? The dissent states that the Court is making too much of these distinctions:

Even if that observation were true, it would show only oddity, not ambiguity. Laws often include unusual or mismatched provisions. The Affordable Care Act spans 900 pages; it would be amazingif its provisions all lined up perfectly with each other.This Court “does not revise legislation . . . just because the text as written creates an apparent anomaly.”

[Page 9.]

“Qualified Individuals”

The ACA defined a “qualified individual” as someone living in the “State that established the Exchange”. The Court says that, given its most natural interpretation, this would exclude anyone from “qualified individual” status in a Federal Exchange, and would thus make null the mandate to establish the Federal Exchange.

The dissent uses an analogy to point out the problem with this interpretation:

Imagine that a university sends around a bulletin reminding every professor to take the “interests of graduate students” into account when setting office hours, but that some professors teach only undergraduates. Would anybody reason that the bulletin implicitly presupposes that every professor has “graduate students,” so that “graduate students” must really mean “graduate or undergraduate students”? Surely not. Just as one naturally reads instructions about graduate students to be inapplicable to the extent a particular professor has no such students, so too would one naturally read instructions about qualified individuals to be inapplicable to the extent a particular Exchange has no such individuals.

[Page 10.]

In Subsection 36B(a), the credit does not have anything limiting the range of taxpayers eligible for the credit. Subsection (b) gives a formula for the amount of the credit, which is the lesser of the amount of premiums paid through an “Exchange established by the State” or the difference between the cost of a certain government plan and the taxpayer’s required contribution. There’s more on how this credit works in Appendix B, but the point here is that the Court found it strange that in a natural reading of the statute would make those in the Federal Exchange eligible for the credit, but the only amount their credit could be would be zero. The dissent points out that this type of legislating is common in the tax code, and should not be used as a basis for redefining how the credit works.

(My two cents: from my background in tax law, I can provide an important distinction that the Internal Revenue Code does not directly tax individuals. It can’t, without great difficulty, do that. Instead, the Code imposes a tax on the income of individuals, which includes mechanisms to reduce a tax credit or deduction, sometimes to zero.)

The Design and Purpose of the ACA

The Court had cited three major health reforms: insurers must accept requests for individual coverage, individuals must maintain coverage, and tax credits are made available to assist in the cost. The Court reasoned that because the first two reforms applied nationally, the third must do so as well. The dissent addresses this accordingly:

Section 36B has no ambiguity to justify this analysis, reciting a summary of the previous analysis.The analysis itself is faulty: if Congress wrote that the express terms of the ACA make only two of the three reforms, that is perfectly reasonable for them to do so. What about the danger of the destabilization and death spirals in the insurance market? The dissent says that all this proves is that the statute has a flaw, not that it justifies rewriting it to mean the opposite of its clear meaning.

[Page 14.]

This section is not the only place where Congress experimented with mixing combinations of reforms. Citing a proposed-but-rejected plan to require insurers to accept long-term care coverage requests, but with no mandate for individuals to maintain it, the dissent asks this question:

How could the Court say that Congress would never dream of combining guaranteed-issue and community-rating requirements with a narrow individual mandate, when it combined those requirements with no individual mandate in the context of long-term care insurance?Like the analysis of the wording, the purpose of the statute cannot be taken in isolation. One of the purposes of the ACA was to encourage state participation, for which the offering of tax credits for a state setting up its own exchange was an incentive. By interpreting the credit to apply to all exchanges, the Court’s opinion runs against that purpose.

The dissent closes with a discussion over the power of the Supreme Court to correct “in artful drafting”, and when correcting a “patently obvious” drafting mistake crosses over to rewriting the substance of the law:

Rather than rewriting the law under the pretense of interpreting it, the Court should have left it to Congress to decide what to do about the Act’s limitation of tax credits to state Exchanges. If Congress values above everything else the Act’s applicability across the country, it could make tax credits available in every Exchange. If it prizes state involvement in the Act’s implementation, it could continue to limit tax credits to state Exchanges while taking other steps to mitigate the economic consequences predicted by the Court. If Congress wants to accommodate both goals, it could make tax credits available everywhere while offering new incentives for States to set up their own Exchanges. And if Congress thinks that the present design of the Act works well enough, it could do nothing. Congress could also do something else altogether, entirely abandoning the structure of the Affordable Care Act. The Court’s insistence on making a choice that should be made by Congress both aggrandizes judicial power and encourages congressional lassitude.

[Page 19.]

Finally, the dissent laments the legacy of this decision and the Court’s previous decision holding that the penalty for not purchasing life insurance was a tax, not a penalty:

Perhaps the Patient Protection and Affordable Care Actwill attain the enduring status of the Social Security Act or the Taft-Hartley Act; perhaps not. But this Court’s two decisions on the Act will surely be remembered through the years. The somersaults of statutory interpretation they have performed (“penalty” means tax, “further [Medicaid] payments to the State” means only incremental Medicaid payments to the State, “established by the State”means not established by the State) will be cited by litigants endlessly, to the confusion of honest jurisprudence.And the cases will publish forever the discouraging truth that the Supreme Court of the United States favors some laws over others, and is prepared to do whatever it takesto uphold and assist its favorites.


[1] Title 26, Section 36B of the United States Code (U.S.C.)

[2] Section 1311 of the ACA was codified as 42 U.S.C. Section 18031.

[3] In the Texas Department of Housing and Community Affairs decision, also issued this day, the Court similarly declined to give the federal agency’s regulation any weight in its decision, even though both decisions were consistent with the position expressed in the regulations.

[4] There’s more to this statute (link here). However, this remaining portion of the statute involves the mechanics of how the credit is calculated and the definitions of who is eligible. It doesn’t involve the questions before the Court in this decision.


These statutes are from Pages 5-6 of the dissent. The bold italicized emphasis is mine.

42 U.S.C. Section 1396w-3(b):

(b) Enrollment simplification and coordination with State health insurance exchanges and CHIP

(1) In general A State shall establish procedures for—[ . . . ]

(B) enrolling, without any further determination by the State and through such website, individuals who are identified by an Exchange established by the State under section 18031 of this title as being eligible for—

(i) medical assistance under the State plan or under a waiver of the plan; or

(ii) child health assistance under the State child health plan under subchapter XXI;

(C) ensuring that individuals who apply for but are determined to be ineligible for medical assistance under the State plan or a waiver or ineligible for child health assistance under the State child health plan under subchapter XXI, are screened for eligibility for enrollment in qualified health plans offered through such an Exchange and, if applicable, premium assistance for the purchase of a qualified health plan under section 36B of the Internal Revenue Code of 1986 (and, if applicable, advance payment of such assistance under section 18082 of this title), and, if eligible, enrolled in such a plan without having to submit an additional or separate application, and that such individuals receive information regarding reduced cost-sharing for eligible individuals under section 18071 of this title, and any other assistance or subsidies available for coverage obtained through the Exchange;

(D) ensuring that the State agency responsible for administering the State plan under this subchapter (in this section referred to as the “State Medicaid agency”), the State agency responsible for administering the State child health plan under subchapter XXI (in this section referred to as the “State CHIP agency”) and an Exchange established by the State under section 18031 of this title utilize a secure electronic interface sufficient to allow for a determination of an individual’s eligibility for such medical assistance, child health assistance, or premium assistance, and enrollment in the State plan under this subchapter, subchapter XXI, or a qualified health plan, as appropriate;

[ . . . ]

(2) Agreements with State health insurance exchanges. The State Medicaid agency and the State CHIP agency may enter into an agreement with an Exchange established by the State under section 18031 of this title under which the State Medicaid agency or State CHIP agency may determine whether a State resident is eligible for premium assistance for the purchase of a qualified health plan under section 36B of the Internal Revenue Code of 1986 (and, if applicable, advance payment of such assistance under section 18082 of this title), so long as the agreement meets such conditions and requirements as the Secretary of the Treasury may prescribe to reduce administrative costs and the likelihood of eligibility errors and disruptions in coverage.

[ . . . ]

(4) Enrollment website requirements. The procedures established by State under paragraph (1) shall include establishing and having in operation, not later than January 1, 2014, an Internet website that is linked to any website of an Exchange established by the State under section 18031 of this title and to the State CHIP agency (if different from the State Medicaid agency) and allows an individual who is eligible for medical assistance under the State plan or under a waiver of the plan and who is eligible to receive premium credit assistance for the purchase of a qualified health plan under section 36B of the Internal Revenue Code of 1986 to compare the benefits, premiums, and cost-sharing applicable to the individual under the State plan or waiver with the benefits, premiums, and cost-sharing available to the individual under a qualified health plan offered through such an Exchange, including, in the case of a child, the coverage that would be provided for the child through the State plan or waiver with the coverage that would be provided to the child through enrollment in family coverage under that plan and as supplemental coverage by the State under the State plan or waiver.

42 U.S.C. Section 1397ee(d)(3)(B):

(d) Maintenance of effort

(3) Continuation of eligibility standards for children until October 1, 2019(B) Assurance of exchange coverage for targeted low-income children unable to be provided child health assistance as a result of funding shortfallsIn the event that allotments provided under section 1397dd of this title are insufficient to provide coverage to all children who are eligible to be targeted low-income children under the State child health plan under this subchapter, a State shall establish procedures to ensure that such children are screened for eligibility for medical assistance under the State plan under subchapter XIX or a waiver of that plan and, if found eligible, enrolled in such plan or a waiver. In the case of such children who, as a result of such screening, are determined to not be eligible for medical assistance under the State plan or a waiver under subchapter XIX, the State shall establish procedures to ensure that the children are enrolled in a qualified health plan that has been certified by the Secretary under subparagraph (C) and is offered through an Exchange established by the State under section 18031 of this title. For purposes of eligibility for premium assistance for the purchase of a qualified health plan under section 36B of the Internal Revenue Code of 1986 and reduced cost-sharing under section 18071 of this title, children described in the preceding sentence shall be deemed to be ineligible for coverage under the State child health plan.


The 2014 tax year was the first one in which the Federal tax credits went into effect. The process goes like this:

As a part of signing up for a health insurance plan, the customer provides estimated income information for the year. Based on this information, and by a formula set up in the ACA, part of the monthly premiums will be a credit paid by the government.At the end of the year, a Form 1095-A is sent to the customer.

Form 1095-A (apologies for the graininess)


This is issued by the Federal Exchange to report the activity during the year. For these purposes, the important part is in Part III:

For each month in which the customer was covered under the Exchange-provided plan, the amount paid out of pocket is entered in Column A. Column B is a fixed amount – the monthly cost of one of the plans offered by the government (the “second lowest cost silver plan“). Column C – the Monthly Advance Payment – is the monthly amount paid on the customer’s behalf, which is computed based on the income information provided. Whether or not the advance payment was too much or too little will be determined when the federal tax return is prepared after the end of the year.The information from the Form 1095-A is used by the individual to complete a Form 8962, which determines whether the monthly credits during the year were too much or too little, based on the actual income during the year.

Form 8962, Part 1


Part 1 computes the portion of the health insurance premium that is deemed to be the individual’s required contribution to the monthly health insurance premiums. To use an  example, assume there are three members of the family (a married couple with one child) and $50,000 of income earned during the year. The Federal Poverty Line is from a table in the instructions, and $50,000 is 256% of the applicable poverty line. The .0822 is also from a table in the instructions, based on the amount of income over the poverty line. The .0822 is multiplied by the income to determine how much the taxpayers are deemed to have contributed toward the health insurance. Another way of putting it is that for a household of three exemptions and income of $50,000, they are supposed to be contributing 8.22% of their income toward health insurance.The amount of the Premium Tax Credit (or, for those who were credited too much during the year, the Excess Premiums Paid Tax) is determined in Part 2:


Under most circumstances, the premium rate will change at some time during the year and Lines 12 through 23 would be used instead of Line 11, but for simplicity’s sake, this example assumes 12 monthly payments of $400 (Column A), a $1,000 per month cost of the second-lowest cost silver plan (SLCSP) from the 1095-A (Column B), and $343 per month of deemed contributions from the taxpayers (Column C). The maximum credit is the $7,890 difference between the deemed taxpayer contribution and the SLCSP (Column D). In this case, the annual premium credit (Column E) is at the maximum of the $4,800 paid. (For this credit, you don’t get a credit for more than what you paid.)

Once the annual premium tax credit is computed, this amount is compared to the assistance received during the year. In this example, the taxpayers paid were entitled to $4,800 of credit ($400 per month), and received $4,320 ($360 per month). The difference of $480 is entered as a credit on the Federal Income Tax Return.

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A Bad Week at the Office For the Supreme Court – Part 1

Case name: Texas Department of Housing and Community Affairs, et al v. The Inclusive Communities Project, Inc., et al.

Case number: 13-1371 (link to decision)

Date decided: June 25, 2015

Issue: Interpretation of statute – the Fair Housing Act of 1968 (FHA) [1]


The Texas Department of Housing and Community Affairs (Department)

The Inclusive Communities Project (ICP)

Background: Federal tax law makes low-income housing credits available for designated state agencies to distribute to selected developers. Texas (through the Department) awards credits under a scoring system based on criteria such as whether the neighborhood has good schools, whether the developer has a good credit history, and other factors that do not involve the race of the community’s inhabitants.

The ICP is a nonprofit corporation that assists low-income families in obtaining affordable housing. It brought a lawsuit alleging that the Department’s system, while not intentionally race-conscious, had a “disparate impact” on communities with racial minorities. As the Court summarized ICP’s position:

The ICP alleged the Department has caused continued segregated housing patterns by its disproportionate allocation of the tax credits, granting too many credits for housing in predominantly black inner-city areas and too few in predominantly white suburban neighborhoods. The ICP contended that the Department must modify its selection criteria in order to encourage the construction of low-income housing in suburban communities.

[Pages 2-3 of the Court’s opinion.] If it seems counterintuitive that minority neighborhoods are negatively impacted by too many federal benefits, you’re not alone. However, there is more on this that will be addressed later.

Before diving into the opinion, two concepts need to be defined, because they are the heart of the discussion throughout the opinions:

Disparate treatment. This is the type of racism people are most familiar with in the history of the civil rights movement. It involves a conscious attempt by individuals or businesses to actively discriminate based on race (or any other protected class). Nothing in this case involves a charge that the Department was engaging in this form of discrimination.

Disparate impact. This theory of discrimination is more controversial. It says that even if there’s no intent to discriminate, if the end result is that a racial group is disproportionately disadvantaged, and if there are less divisive ways to carry out a policy or practice, the theory says that the policy is nonetheless discrimination that is prohibited.

This case arose out of a question over the rules on how to proceed with a dispute between the Department and the ICP. Under the normal procedures in making a discrimination claim under the FHA, one party has to first establish an appearance on its face (“prima facie case”) that the policy is discriminatory. If that case is made, then the Department would have the burden to prove that less discriminatory alternatives weren’t possible. ICP provided some statistical evidence that the tax credits were awarded disproportionately more in minority communities than in Caucasian areas, and asserted that this makes a prima facie case of a disparate-impact claim. The Department took the position that no such claim is available under the FHA. After a series of procedural rulings among the District and Circuit Court, the Department filed a petition for a writ of certiorari on the question of whether the FHA allows for disparate impact discrimination claims. Whatever the result of this decision, the case will continue under the ruling.

One other note: after this litigation began, the federal Department of Housing and Urban Development (HUD) weighed in on this issue. In 2013, HUD issued a regulation on the procedures “for adjudicating disparate-impact claims”[3], under the assumption that the FHA already allowed such claims.

THE COURT’S OPINION (Kennedy, Ginsburg, Breyer, Sotomayor, and Kagan)

This discussion is going to involve a lot of word-parsing of some statutory language, so it should be helpful to bring in the text at issue. Here is the text of the relevant portions of the Fair Housing Act[4]:

Section 804(a):

[I]t shall be unlawful—

(a) To refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin.

Section 805(a):

It shall be unlawful for any person or other entity whose business includes engaging in residential real estate-related transactions to discriminate against any person in making available such a transaction, or in the terms or conditions of such a transaction, because of race, color, religion, sex, handicap, familial status, or national origin.

[Page 11 of the Court’s opinion.]

Before discussing this statute, the Court addressed the Court’s handling of similar statutes as background to its interpretation of the FHA.

The Civil Rights Act of 1964 and Griggs

Here is section 703(a)) of the Civil Rights Act of 1964:

It shall be an unlawful employer practice for an employer—

(1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin; or

(2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s race, color, religion, sex, or national origin.” [5]

In Griggs[6], an employer was sued for imposing a requirement upon employees, manual laborers, to obtain a high school diploma and to score high enough on two intelligence tests to qualify for the job. The Griggs Court held that the employment discrimination prohibition should include disparate-impact claims because it “furthered the purpose of the statute”. Also, the “adversely affect” language expanded the scope of discrimination to include the consequences of employment practices, not just the intent , if the employer’s discrimination was not because of a “business necessity”. [Page 8.]

The Age Discrimination in Employment Act (ADEA) and Smith

In Smith[7], a group of older employees filed suit based on the employer’s decision to give higher raises to employees with less than five years of experience. The employees filed suit, citing a violation of the Age Discrimination in Employment Act (ADEA), section 4(a) [8]:

It shall be unlawful for an employer—

(1) to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s age;

(2) to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age; or

(3) to reduce the wage rate of any employee in order to comply with this chapter.”

The Smith Court relied on Griggs in holding that these two statutes “contain language ‘prohibit[ing] such actions that deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s race or age”. [Italics in the original.]

The Federal Housing Act itself – background and 1988 amendments

With Griggs and Smith as background, the Court states a rule that “antidiscrimination laws must be construed to encompass disparate-impact claims when their text refers to the consequences of actions and not just to the mindset of actors, and where that interpretation is consistent with statutory purpose”. [Page 10.]

Does the FHA meet this rule? In the FHA statute cited above, the Court says that when the statute says it is unlawful to “refuse to sell or rent . . . or otherwise make unavailable” a dwelling, the term “otherwise make unavailable” refers to consequences, not just intent, and therefore allows for disparate-impact discrimination claims. [Page 11.]

The Court gave four bases for its finding:

1. The “otherwise make unavailable” language is similar to that in the statutes in Griggs and Smith. Here is a comparison of the relevant portions of each statute:

Section 703(a):

It shall be an unlawful employer practice for an employer—

[ . . . ]

(2) to limit, segregate, or classify his employees . . . or otherwise adversely affect his status as an employee, because of such individual’s age;

Section 4(a):

It shall be unlawful for an employer—

[ . . . ]

(2) to limit, segregate, or classify his employees . . . or otherwise adversely affect his status as an employee, because of such individual’s age

Section 804(a):

[I]t shall be unlawful—

(a) To refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin.

The Court observed that the phrasing of the “otherwise” language in the three statutes introduced a “results-oriented phrase”, a “catchall” that expanded the category of prohibitions to include not only bad intent, but bad consequences as well. Because the first two statutes had been interpreted to include disparate-impact discrimination claims, the Court looked to the FHA and held that disparate-impact discrimination was forbidden under the FHA as well.

2. Congress implicitly ratified disparate-impact liability when the FHA was amended in 1988. By 1988, all nine Circuit Courts had issued decisions holding that the FHA included disparate-impact claims. The Court said that “[w]hen it amended the FHA, Congress was aware of this unanimous precedent. And with that understanding, it made a considered judgment to retain the relevant statutory text”. [Page 13.]

3. The FHA amendments themselves assume the existence of disparate-impact claims. The relevant 1988 amendments were all specific situations – real estate appraisal, action adverse to someone with a drug-related conviction, and rules on limiting the number of occupants in a dwelling – in which the FHA would not allow a claim. The Court said that these amendments were necessary “because Congress presupposed disparate impact under the FHA as it had been enacted in 1968”. [Page 14.]

4. Recognizing disparate-impact claims is consistent with the FHA’s “central purpose”. Here the Court steps back from the statutory analysis and cited positive benefits that the disparate-impact analysis provide to further the FHA’s goal, things that disparate-treatment litigation alone cannot do. For example, discriminatory zoning laws became easier to prove, and disparate-impact claims made it easier to discover underlying discriminatory intent.

Apparently to calm against the fears that the disparate-impact discrimination becomes a weapon in litigation, the Court declares limits to the use of the disparate-impact claim: by itself, statistical disparity is not enough to make a prima facie case; the causation required to make a prima facie case must be high, and so on.

Ultimately, the Court affirmed the Fifth Circuit opinion stating that disparate-impact claims can be pursued under the FHA, and the case is sent back to continue.


There are two dissents, one by Justice Thomas. His dissent has three elements:

Griggs was wrongly decided in the employment statute, and that it should not be applied to the housing statute. Thomas contends that the language of the statute in Griggs prohibited a more limited scope of unlawful employment actions:

Each paragraph in §2000e–2(a) is limited to actions taken “because of ” a protected trait, and “the ordinary meaning of ‘because of’ is ‘by reason of’ or ‘on account of,’” . . . . Section 2000e–2(a) thus applies only when a protected characteristic “was the ‘reason’ that the employer decided to act.” . . . . In other words, “to take action against an individual because of ” a protected trait “plainly requires discriminatory intent.”

[Page 2 of Thomas’ dissent.]

This interpretation, had it been applied to any of the two preceding cases or to this case, would invalidate disparate-impact claims from any of these statutes.

Justice Thomas also points out the sketchy history of the disparate-impact theory of discrimination. It began as a position authored by the Equal Employment Opportunity Commission (EEOC) “to defy Title VII’s restrictions and attempt to build a body of case law that would justify [their] focus on effects and [their] disregard of intent.” [Page 5.] The Griggs decision in favor of disparate impact was looked on unfavorably by Justice Thomas as replacing statutory provisions – which is what are passed by legislatures and signed by the executive branch – with “statutory purposes”.

Justice Thomas addresses the practical effects of this theory and a fundamental assumption that the plagues disparate-impact discrimination theory:

Griggs’ disparate-impact doctrine defies not only the statutory text, but reality itself. In their quest to eradicate what they view as institutionalized discrimination, disparate-impact proponents doggedly assume that agiven racial disparity at an institution is a product of that institution rather than a reflection of disparities that exist outside of it.

Moreover, Thomas states, why assume that a disparity is always a bad thing?

The ultimate effect in reality is that this has been counterproductive to its stated mission:

The recent experience of the Houston Housing Authority (HHA) illustrates some of the many costs of disparate-impact liability. HHA, which provides affordable housing developments to low-income residents of Houston, has over 43,000 families on its waiting lists. The overwhelming majority of those families are black. Because Houston is a majority-minority city with minority concentrations in all but the more affluent areas, any HHA developments built outside of those areas will increase the concentration of racial minorities. Unsurprisingly, the threat of disparate-impact suits based on those concentrations has hindered HHA’s efforts to provide affordable housing. State and federal housing agencies have refused to approve all but two of HHA’s eight proposed development projects over the past two years out of fears of disparate-impact liability.

[Pages 11-12.]


Justice Alito’s dissent, joined by Justices Roberts, Scalia, and Thomas, addresses the bulk of the Court’s opinion. Here are the relevant portions of the FHA again:

Section 804(a):

[I]t shall be unlawful—

(a) To refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin.

Section 805(a):

It shall be unlawful for any person or other entity whose business includes engaging in residential real estate-related transactions to discriminate against any person in making available such a transaction, or in the terms or conditions of such a transaction, because of race, color, religion, sex, handicap, familial status, or national origin.

[Emphasis added.]

“Because of”

Alito pointed out that the language of the FHA only prohibited those that were done “because of” race, national origin, etc. “Because of”, both in ordinary language and in precedent, the examination of the term linked an action with a reason for an action. [Page 4 of Alito‘s dissent.] This limits, if not contradicts, the Court’s expansive interpretation of “otherwise make unavailable” among the activities that were prohibited.

“Make unavailable”

The Court held that the use of the term “make unavailable” in the FHA involves actions that have the result of making housing or transactions unavailable. Alito, however, states that this term has to be viewed in the context of the entire section:

“Make unavailable” must be viewed together with the rest of the actions covered by §804(a), which applies when a party “refuse[s] to sell or rent” a dwelling, “refuse[s] to negotiate for the sale or rental” of a dwelling, “den[ies] a dwelling to any person,” “or otherwise make[s] unavailable” a dwelling.

[Page 7.]

To summarize, the expansive definition the Court has of “make unavailable” has to be contained by the restrictive interpretation of the words “because of”.

The circumstances of the FHA and the 1988 amendments

When the FHA was enacted in 1968, disparate-impact liability was not an existing legal policy that lawmakers were discussing. This was admitted as such by Justice Ginsburg, as quoted in the dissent.

The 1988 amendments introduced three “safe harbor” provisions (circumstances which, if met, would not violate the statute: real estate appraisers can take into consideration factors other than race, religion, and the other specified groups in the statute; action can be done to take into account an individual’s drug convictions; action can be taken to put a reasonable limit on the number of people who can live in a dwelling. These specific exceptions were the product of a series of Circuit Court decisions that had allowed disparate-impact liability under the statute. The Court interpreted this to mean that by introducing these safe harbor provisions, Congress had assumed that the FHA allowed disparate-impact claims, even if it wasn’t written into the statute.

Alito argues that even though all nine Circuit Courts had interpreted disparate-impact liability into the FHA, the Supreme Court had not yet addressed the question. Also, shortly before the 1988 amendments were enacted, the United States had argued before the Supreme Court that the FHA only applied to intentional discrimination. [Page 12.] The point Alito makes is that the consensus regarding the FHA that the Court invokes, one so strong that the text of the FHA didn’t even have to be rewritten, did not exist, and there was no right to assume disparate-impact liability into the law.

One other point that I would offer: if Congress passed these amendments as a specific reaction to protect against the Circuit Courts’ findings of disparate-impact liability, it would seem to be perverse logic to find that these amendments were somehow proof of implicit affirmation of said disparate-impact liability.

The HUD regulations

The dissent, starting on page 20, describes some unusually aggressive action by HUD regarding the implementation of rules on disparate-impact liability. In 2011, the Court agreed to take up a case involving disparate-impact liability under the FHA:

Here, 43 years after the FHA was enacted and nine days after the Court granted certiorari in Magner (the “rodent infestation” case), HUD proposed “to prohibit housing practices with a discriminatory effect, even where there has been no intent to discriminate.” After Magner settled, the Court called for the views of the Solicitor General in Township of Mount Holly v. Mt. Holly Gardens Citizens in Action, Inc., another case raising the same question. Before the Solicitor General filed his brief, however, HUD adopted disparate-impact regulations. The Solicitor General then urged HUD’s rule as a reason to deny certiorari. We granted certiorari anyway, and shortly thereafter Mount Holly also unexpectedly settled. Given this unusual pattern, there is an argument that deference may be unwarranted.

[Citations omitted.]

When interpreting a statute, and where an implementing agency has published an interpretation, the Court will defer to the agency’s interpretation if there is ambiguity in the statute. (This is the Chevron rule.)

(My two cents on the political angle to this: when the Obama administration is accused of being overly aggressive in pushing an agenda, this is one of the ways it does it. Under the Chevron rule, all that’s needed is a finding of ambiguity, whether honestly interpreted or not, and the agency’s version will prevail. While the Court’s decision did not rely on HUD’s regulation, ICP and the Solicitor General did invoke it in their arguments.)

Alito states that discussion of the regulations is unnecessary, because there is no ambiguity in interpreting the FHA.

The Griggs decision

The employer in the Griggs decision required manual laborers to perform at a certain level on academic tests, the effect of which was to cause disproportionately fewer minorities from being hired. The Court interpreted the Griggs decision against the employer as precedent for a disparate-impact claim under the employment anti-discrimination statute.

Alito writes that the Court reads too much into the holding, saying that there were special facts behind the decision. In particular, this employer had engaged in intentional racial discrimination prior to the Civil Rights Act, and it would have been reasonable to infer that these additional requirements were a pretext for disparate treatment . However, when the case was presented before the Supreme Court, the lower court findings of fact in Griggs declined to find any intent to racially discriminate. This left the Griggs Court with a bad set of choices. It could overturn the finding of fact to say that the employer acted with intent, a finding something Alito says the Court does not normally override. The Griggs court could have held in favor of the employer under the statute; or the court could have held against the employer, but without a lower court finding of intentional discrimination.

The Griggs court did the last of the three options, and Alito points out the oddness of how it did so:

Although Griggs involved a question of statutory interpretation, the body of the Court’s opinion—quite remarkably—does not even cite the provision of Title VII on which the plaintiffs’ claims were based. The only reference to§703(a)(2) of the 1964 Civil Rights Act appears in a single footnote that reproduces the statutory text but makes no effort to explain how it encompasses a disparate-impact claim. Instead, the Court based its decision on the “objective” of Title VII, which the Court described as “achiev[ing] equality of employment opportunities and remov[ing] barriers that have operated in the past to favor an identifiable group of white employees over other employees.”

Although lower courts have ruled consistently with Griggs, Alito says that the Supreme Court has never applied Griggs to antidiscrimination statutes.

The Smith decision

Alito’s discussion of Smith requires a section-by-section breakdown of the relevant portion of the ADEA. [Emphasis is mine.]

Subsection 4(a)(1):

It shall be unlawful for an employer

“(1) to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s age;

The Smith court unanimously agreed that this did not authorize disparate-impact claims. [Page 24.]

Subsection 4(a)(2)

It shall be unlawful for an employer

[ . . . ]

(2) to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age

On this, the Smith Court split. The majority saw that this language was substantially similar to the statute in Griggs, and thus should be interpreted to allow disparate-impact claims in the same way Griggs does.

The reason for the split is a swing vote by Justice Scalia, who interpreted Subsection (a)(1) as requiring intent, while Subsection (a)(2) prohibited the actions of an employer that adversely affected the employee, or at least was ambiguous enough that he believed that the Court should defer to the Equal Employment Opportunity Commission’s interpretation.

The Smith decision also rested on other language (not cited in the statues cited in this decision) that made it unlawful for to take any action “otherwise prohibited”

Because none of these language distinctions are found in the FHA statute at issue, Alito believes that Smith should not apply in this case.


Alito opens his dissent mentioning summarizing one of the disparate-impact cases, in which a landlord, who had made efforts to rid the dwellings of rats and to comply with other housing regulations, was sued under a disparate-impact claim. The theory was that the expenses used to comply would drive up rent, and because minorities were disproportionately low-income earning, the efforts disproportionately impacted based on race.

It’s this kind of flexibility to a fault that makes the disparate-impact liability so dangerous. Alito pointed out that while this case involved a claim of too few credits in higher income areas. A disparate-impact claim could just as easily be filed for too many credits awarded in higher income areas to the detriment of low-income areas. [Page 30.]

The suggested solution to this doesn’t sound comforting, if we are to believe the Solicitor General when asked during the hearing:

The Solicitor General’s answer to such problems is that HUD will come to the rescue. In particular, HUD regulations provide a defense against disparate-impact liability if a defendant can show that its actions serve “substantial, legitimate, nondiscriminatory interests” that “necessar[ily]” cannot be met by “another practice that has a less discriminatory effect.

So the end-result of this appears to be to render the letter of the law unworkable, and leave discretion to the executive branch.


This has been a marathon of a post, so I’ll try to keep this short.

I was impressed by Alito’s dissent. The more I got into the weeds of how the Court was engaging in a sleight-of-hand in wording, expanding the meanings of single words beyond their context, the more I was compelled to break down how the swindle and examine it. I fear, though, that the legacy of the dissent will be limited to Court historians and language enthusiasts.

One other part of this decision struck my attention. There are only a finite number of low-income housing credits for a state agency to give, so any credit allocated to a suburban community is one less credit allocated to the low-income community. This appears to be counterintuitive on the surface. Why export low-income housing to the suburbs, to the detriment of the inner city communities? One answer might be found in a larger plan to bring the suburbs under the control of the urban governments. In 2012, Stanley Kurtz wrote Spreading the Wealth: How Obama is Robbing the Suburbs to Pay for the Cities, an excerpt of which was published at National Review with the title Burn Down the Suburbs?. The end goal is to create a redistribution of income system that takes from the suburban wealthy and gives to the inner city. Kurtz described the plan as three steps:

One approach is to force suburban residents into densely packed cities by blocking development on the outskirts of metropolitan areas, and by discouraging driving with a blizzard of taxes, fees, and regulations. Step two is to move the poor out of cities by imposing low-income-housing quotas on development in middle-class suburbs. Step three is to export the controversial “regional tax-base sharing” scheme currently in place in the Minneapolis–St. Paul area to the rest of the country. Under this program, a portion of suburban tax money flows into a common regional pot, which is then effectively redistributed to urban, and a few less well-off “inner-ring” suburban, municipalities.

By destroying any standard for discrimination in housing and relying on HUD to interpret the FHA, this decision appears to be an effective tool in accomplishing step two. I’d love to be wrong on this, but my bets on cynicism have only paid off in recent years.

ADDENDUM:  I wasn’t wrong on this, unfortunately.  Last week, HUD released its Affirmatively Furthering Fair Housing (AFFH) rule.  Stanley Kurtz at National Review describes its goal:

Obama has downplayed his policy goals in this area and delayed the finalization of AFFH for years, because he understands how politically explosive this rule is. Once the true implications of AFFH are understood, Americans will rebel. The only prospect for successful imposition is a frog-boiling strategy of gradual intensification. The last day the frog will be able to jump is Tuesday, November 8, 2016.

Fundamentally, AFFH is an attempt to achieve economic integration. Race and ethnicity are being used as proxies for class, since these are the only hooks for social engineering provided by the Fair Housing Act of 1968. Like AFFH itself, today’s Washington Post piece blurs the distinction between race and class, conflating the persistence of “concentrated poverty” with housing discrimination by race. Not being able to afford a freestanding house in a bedroom suburb is no proof of racial discrimination. Erstwhile urbanites have been moving to rustic and spacious suburbs since Cicero built his villa outside Rome. Even in a monoracial and mono-ethnic world, suburbanites would zone to set limits on dense development.

And that is why you make a claim for racial discrimination based on too many benefits to minority communities.  To these social engineers, impoverished minorities are just pawns to be manipulated, not individuals in need of opportunity.


[1] The Act was codified as Title 42, Sections 3601 and following in the United States Code (U.S.C.). A free link to the Act is here.

[2] There are other participants involved on each side of the case, each similarly situated as the title parties, but for purposes of brevity, these will be the participants of the case.

[3] 78 Fed. Reg. 11460. A link to the regulation is here.

[4] 42 U.S.C. Sections 3604(a), 3605(a).

[5] 42 U. S. C. Section 2000e–2(a).

[6] Griggs v. Duke Power Co., 401 U.S. 424 (1971).

[7] Smith v. City of Jackson, 544 U.S. 228 (2005).

[8] 29 U. S. C. §623(a).

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A Bad Week at the Office For the Supreme Court – Preview

Toward the end of its 2014-2015 session in late June, the U.S. Supreme Court issued three decisions which, for those who are fans of the rule of law and reasoned analysis, made for painful reading:

Texas Department of Housing and Community Affairs v. the Inclusive Communities Project, a case involving the state of Texas’ distribution of low-income housing tax credits, and whether the choice of distributions of these credits violate the Fair Housing Act.

King v. Burwell, which involves an interpretation of a portion of the Affordable Care Act (aka, “Obamacare”) that authorizes tax credits that assist in paying health insurance premiums.

Obergefell v. Hodges, on whether the state laws defining “marriage” as exclusively a union between a man and a woman are in violation of the Constitution.

People more well-versed than I in the underlying litigation can give a more detailed commentary about the effect these cases will have once the government acts in accordance with these decisions. At the other end of the spectrum, the conservative commentary in broadcast and print have (in my opinion) correctly called these majority decisions wrong and dangerous, but the format of these outlets doesn‘t allow for an extended exercise in word-parsing.

My hope here, over the next few weeks, is to provide something in between, so that people who want to understand the decisions, but who aren’t familiar with the language and format of Supreme Court decisions, can read a summary in a more familiar writing format, in order to see the sleight-of-hand going on with the Court’s opinions.

Which brings me to some disclosure: I am not in any position of authority.  I have no pretense that by itself, my name would cause anybody to step back and reconsider their worldview. I’ll also admit up front that I’m not a fan of the Court’s opinions in any of these decisions.  But it doesn’t help me in the least if I try to swindle you with misinterpretations of text.

Just consider the posts to come to be messages translated from the original tongues. Do with it what you may.

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King v. Burwell and the Meaning of Words in the Law

Later on this month, the United States Supreme Court will rule on a case involving a subsidy that, if ruled to be unlawful, will cause a further disruption to the market for health insurance.

The case, King v. Burwell, involves an interpretation of a portion of the Patient Protection and Affordable Care Act, a.k.a. “Obamacare”. A little background is in order here. The law(1), signed in March of 2010, imposed an enhanced set of requirements for health insurance providers to operate their business. A sampling of such requirements, codified in 42 U.S.C. Section 300gg-11 through 330gg-19a (2), is paraphrased by me below as the Eight Commandments from the Secretary to the Health Insurance Provider community:

1. Health insurance providers cannot establish lifetime or annual limits on coverage.

2. Once coverage is provided, health insurers cannot rescind coverage.

3. Health insurers must provide coverage, at a minimum, a specified group of services.

4. Health insurers must offer coverage for the dependent of a customer until the child turns 26 years old.

5. Health insurers must present their plan explanations using a format determined by the Secretary of Health and Human Services.

6. Group health plans cannot unduly discriminate in favor of highly compensated individuals.

7. Health insurers must periodically report to the Secretary on the quality of their coverage, and this information must also be made available to an enrolee upon request.

8. Health insurers must use a minimum percentage of the revenue from premiums on the costs of coverage. If the minimum percentage is not met, the difference must be refunded to the customers.

Another major piece of the Act is that the state governments were exhorted to create their own exchanges (i.e., marketplaces where customers can compare plans), and in those states that refuse to set up these exchanges, the federal government was to set up the exchanges in their absence. (3) Under the Act, customers obtaining their plan through the government exchange can be eligible for pay-as-you-go subsidies to offset the cost of the premiums.

I’ll be up front about this – I’m not a fan of this type of government interference. If a a customer has the choice to purchase one of two identical vases. One vase is priced at $50, and the other is priced at $60, and then the law changes to require all vases to have gold stenciling. The private merchant, having to account for the additional cost, can only sell the revised vase for $65, while the government-subsidized vase provider can keep the selling price at $60 because it isn’t accountable for market costs (at least not in the short term).

But aside from the philosophical objection to this program, there’s a more concrete obstacle to the government‘s actions. The subsidies that accompanied the federal exchanges, which were set up in the 37 states that didn’t set up their own, may not be authorized under the law. This brings us to Section 1401 of the Act, which amends the Internal Revenue Code to add the health insurance premium credit. There’s a lot of material here establishing the credit, measuring how much and to whom the credit applies, but the disputed section is found in paragraph (B)(2)(A) of the new statute, which defines the premium assistance amount.

(2) Premium assistance amount.–The premium assistance amount determined under this subsection with respect to any coverage month is the amount equal to the lesser of–

(A) the monthly premiums for such month for 1 or more qualified health plans offered in the individual market within a State which cover the taxpayer, the taxpayer’s spouse, or any dependent (as defined in section 152) of the taxpayer and which were enrolled in through an Exchange established by the State under 1311 of the Patient Protection and Affordable Care Act, or

(B) the excess (if any) of–

(i) the adjusted monthly premium for such month for the applicable second lowest cost silver plan with respect to the taxpayer, over

(ii) an amount equal to 1/12 of the product of the applicable percentage and the taxpayer’s household income for the taxable year.

The emphasized language would appear, on its face, to limit the subsidies to the exchanges set up by the states. The states weren’t required to follow the Act’s exhortation to set their own health insurance exchanges, so the subsidy was added as leverage to force the states into setting them up. Rush Limbaugh concisely summarized the situation at hand:

So there are a lot of states that do not have exchanges and a lot of people that do not legally qualify for Obamacare subsidies. So what the Regime did was set up a subsidy program for the federal exchange, That is against the law, if that matters anymore. It is not permitted under the actual law of Obamacare. It’s not permitted. You can only get a subsidy via state exchange. Well, the Fed said, “We can’t have this. This is unfair, it’s unequal, it defeats the whole purpose.” The subsidies is the trick. The subsidies is how everybody thinks they can afford this. Getting a government handout, getting a government gift, why, that’s key to making this work.

So they started offering subsidies at, and now there’s a lawsuit on this and oral arguments are coming up. And these people are getting subsidies. There are people currently receiving subsidies when they buy health insurance, they’re getting it illegally.

There’s also some circumstantial evidence on how the IRS viewed this as an obstacle to implementing the credits. That hasn’t stopped proponents of the federal subsidy from running all kinds of interference to say that the plain text reading can’t possibly have been what the lawmakers intended. It was all a mistake, the New York Times reported, saying that this language was “inadvertent,” “inartful” or “a drafting error. That runs counter to the explicit message from Jonathan Gruber, who was instrumental in designing the Act:

What’s important to remember politically about this is if you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits – but your citizens still pay the taxes that support this bill. So you’re essentially saying [to] your citizens you’re going to pay all the taxes to help all the other states in the country. I hope that that’s a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these exchanges. But, you know, once again the politics can get ugly around this.

This makes attempts to make words mean other than their true meaning look absurd:

The government argues in response that other provisions of the statute make clear that the phrase “an Exchange established by the State” is a term of art. It means an exchange either established by a state or established by the federal government on behalf of a state.

This argument treats the phrase“an Exchange established by the State” as if to read “an Exchange establishedbytheState”, with the last term becoming an irreducible from which ambiguity can be invented.

If the court were to rule that the subsidies in states without health insurance exchanges were invalid, bad things are predicted. Health insurance costs to the customer are anticipated to rise by as much as 650 percent in places where the subsidies would be invalidated. Inexplicably, the media is attempting to make this a problem for the congressional Republicans, who had no part in passing this law or in illegally (should the Court so rule) dishing out these subsidies. If the Court follows the law as written and intended, this would be Obamacare, uncovered. Without the fig leaf of government subsidies driving down the cost to customers at the expense of taxpayers, the program fails on its promises.

It would be one matter if this case were an anomaly. We’ve come a long way from the core legal principle of the rule of law. The Environmental Protection Agency has recently expanded its jurisdiction over coal production and water regulation not by any enactment of new legislation, but by rule-making based on divinations of existing legislation. At least in those power grabs, I would imagine the statutory language cited allowed for room in ambiguity. The federal health insurance subsidies don‘t even have that crutch to rely on: the federal government implemented them in contradiction to explicit language denying it the right to do so.

Why express the law in words at all, if they don’t even matter?

What’s worse is that this overreach of the right to give subsidies may have been baked into the cake of implementing the federal subsidies. Instapundit has a collection of articles stating that the pressure to “fix” the subsidies is on the congressional Republicans, and summarizes why it shouldn’t be so:

Yep, intelligent individuals know who is to blame for Obamacare and all its warts. But the problems is that low information voters have swallowed the progressive/liberal mainstream media’s storyline, which of course blames the Republicans for the harsh, natural consequences of an ill-considered bill they never supported in the first place.



(1) Public Law 111-148. Link to the Act is here: However, see the next footnote for the utility in viewing this law through the unfiltered public law.

(2) To be the most precise, Public Law 111-148 is the legal authority for these requirements. However, the legislation that became this public law is cluttered: the last part of one legislative bill made changes to the preceding portions, and a second bill made further changes on top of that. The publication of the United States Code is designed to address situations like this. It’s a government publication designed to represent the most current statutory law that citizens would need to be made available. Not everything that’s enacted as a public law makes it into the Code.

(3) Sections 1321 and 1331 of the Act.

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