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En Banc Petition Filed in Obamacare Subsidy Case

By Gabriella Khorasanee, JD on August 07, 2014 | Last updated on March 21, 2019

While much ado was being made of the Supreme Court's Hobby Lobby decision, another case that could be the death knell for Obamacare flew below the radar -- that is, until the D.C. Circuit ruled against the Obama administration. Then, everyone was all ears. That's because the court's decision -- if adopted by other circuits -- could mean the end of the Affordable Care Act as we know it.

But you didn't think the Obama administration would stop there, did you? Last Friday, the administration filed a petition for rehearing en banc. Let's explore whether the D.C. Circuit will grant the petition.

Halbig Background

Last month, in a 2-1 decision, the D.C. Circuit "held that the Internal Revenue Service regulation authorizing tax credits in federal exchanges was invalid," according to The Volokh Conspiracy.

Relying on the plain text of the statute, Judge Thomas Griffith concluded that "the ACA unambiguously restricts the section 36B subsidy to insurance purchased on Exchanges 'established by the State.'" Why is that ruling a big deal? Because, as Jonathan Adler explains for Volokh, the Affordable Care Act "is a complicated and poorly drafted statute and, because over 30 states refused to set up their own exchanges, invalidation of the IRS rule could have a significant effect on its implementation."

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Petition for Rehearing

As we noted in an earlier post, the Fourth Circuit's decision to the contrary delivered an "instant circuit split" that may be enough to get before the Supreme Court. But, it looks the Obama administration is not skipping any steps, and instead of petitioning for certiorari, filed a petition for a hearing en banc.

The administration argues, "The disruption threatened by the panel majority's erroneous interpretation and the direct conflict with King [the Fourth Circuit decision] present a question of 'exceptional importance' warranting en banc consideration."

Will the Petition Be Granted?

Good question. The answer depends on whom you ask. Clearly if you ask the Obama administration, the answer should be yes. But just because you don't like a decision doesn't mean a rehearing should be granted.

Adam J. White of The Wall Street Journal argues that thinking the D.C. Circuit will grant rehearing "do[es] no service to the court's judges, who know the threat that overtly politicized en banc rehearings pose to the court's collegiality."

On the other hand, if you ask Emily Bazelon of Slate, she thinks the political affiliations of the judges, based on who appointed them, will mean victory for the Obama administration. Noting that the full D.C. Circuit bench consists of seven Democratic appointees and four Republican appointees, she states, "Presto: Harry Edwards' dissent today can be a winner tomorrow."

Whether she is right, we'll have to wait and see. Regardless, this is not the last we've heard of this case. Even if rehearing en banc is denied, the administration may roll the dice with the Supreme Court.

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