(Repeats with no changes to text, headline)
By David Ingram
NEW YORK, July 22 U.S. judges have their work
cut out for them untangling a legal knot created on Tuesday when
two federal appeals courts released conflicting rulings hours
apart going to the heart of the role the federal government will
play in Obamacare.
The latest conservative challenge to President Barack
Obama's healthcare overhaul will not necessarily land in the
U.S. Supreme Court, although it could end up there as soon as
this year if the two lower courts go on disagreeing.
At stake is how millions of Americans pay for private health
insurance, or if they can afford it at all.
The 2010 Affordable Care Act authorized tax credits to
subsidize private health insurance. Seeking to upend the law as
it was going into effect, businesses and individuals filed
lawsuits asking that the subsidies be declared unlawful except
in states that established their own online insurance
Analysts estimate that as many as five million people could
be affected if subsidies disappear from the federally created
marketplaces. The federal government set up insurance
marketplaces in 36 states that did not themselves establish
Tuesday's conflicting rulings created what lawyers call a
A three-judge panel in Washington, D.C., voted 2-1 to
invalidate subsidies in the 36 states. Hours later, a
three-judge panel in Richmond, Virginia, unanimously ruled the
opposite, upholding the subsidies nationwide.
The courts divided on the meaning behind the law's words.
The law says subsidies may be given "through an exchange
established by the state," a phrase that conservative lawyers
argue excludes the federal marketplace. The Obama administration
counters that the exchanges were meant to be uniform.
Both cases had been pending for months, and both courts are
on an equal level in the U.S. judicial system, just below the
Their divide might not last, though. Some lawyers following
the litigation said they expected the full U.S. Court of Appeals
for the District of Columbia Circuit to vote to rehear the case
and reverse its panel.
Since taking office in 2009, Obama has used his appointment
power to reshape the D.C. Circuit and the Richmond-based 4th
Circuit. Judges appointed by Democratic presidents were a
minority on both courts, but they now have majorities.
"If the D.C. Circuit does away with the panel ruling that we
saw from that court this morning, then every court will have
ruled in favor of the government," Elizabeth Wydra, chief
counsel of the Constitutional Accountability Center, a liberal
legal group, told reporters on a conference call.
The suits were brought by a mix of individuals and
businesses from Texas, Kansas, Missouri, Tennessee, West
Virginia and Virginia.
In the Richmond case, the plaintiffs could ask for a
rehearing before the full 4th Circuit, despite its
Democratic-appointee majority, or they could petition directly
to the Supreme Court.
The latter option would put the question quickly before the
closely divided high court, where in 2012 conservative Chief
Justice John Roberts joined the four most liberal justices to
turn aside a challenge to Obamacare. The court has no obligation
to hear the case.
"We just haven't made a decision yet on what we will be
doing," said Sam Kazman, general counsel for the Competitive
Enterprise Institute, a conservative group that helped to
organize the suits.
Two lawsuits challenging the tax credits are pending in
federal courts in Indiana and Oklahoma. They are at an earlier
stage than the ones in Virginia and Washington, D.C.
Nicholas Bagley, a University of Michigan law professor,
said that it was difficult to predict what judges would do but
that a reversal of Tuesday's D.C. Circuit ruling appeared
After that, "it's just too early to know what the Supreme
Court in that context would choose to do," Bagley said on a
conference call organized by the Federalist Society, a
conservative legal group.
(Additional reporting by Aruna Viswanatha; Editing by Howard