The first Justice John Marshall Harlan is probably best remembered for being the sole dissenter in Plessy v. Ferguson, the notorious 1896 Supreme Court decision that found Louisiana’s policy of “separate but equal” accommodations for blacks and whites to satisfy the equal protection requirements of the 14th Amendment. Harlan, a strict textualist, saw no color distinctions in the plain language of the 14th Amendment or anywhere else in what he described as a color-blind Constitution. Harlan’s textualism did not end there, however. It was also evident fifteen years later in one of the most famous and impactful antitrust cases in Supreme Court history, Standard Oil Co. of New Jersey v. U.S. The majority opinion in that case, in important respects, mirrored Chief Justice John Roberts’ reasoning in King v. Burwell. Like King, the majority opinion in Standard Oil was written by the Chief Justice, Edward White in this instance, and in both cases, the majority reasoned that Congress did not actually mean what the clear and plain words of the statute at issue said. Although concurring in the narrow holding of liability, Justice Harlan in Standard Oil, as Justice Antonin Scalia in his dissent in King, criticized forcefully what he believed to be the majority’s rank display of judicial legislation and usurpation of Congress’s function to fix statutes that may otherwise have harsh policy consequences. Indeed, Standard Oil demonstrates that both Chief Justice Roberts and Justice Scalia had ample precedent in Supreme Court history.
The Standard Oil case was about whether John D. Rockefeller’s corporate empire violated the Sherman Antitrust Act, enacted 21 years earlier in 1890 and which prohibited monopolization, attempted monopolization, and “every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce .” Harlan believed that under the facts of the case, liability could be found within the plain language of the statute. The majority likewise found that Standard Oil violated the Act, but did so by dint of construing the Act in a way that the Court had previously rejected on several occasions. Specifically, Chief Justice White used the opportunity to read into the Sherman Act the common law principle of “reasonableness” such that only “unreasonable” restraints of trade would be illegal. That is, the Court rewrote the statute to say in effect, “every unreasonable contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade” is prohibited. In so doing, the Court, by judicial fiat, discarded the plain language of the statute and injected the so-called “rule of reason” into antitrust doctrine.
Notwithstanding that the Court had previously found otherwise, Chief Justice White found that the 51rst Congress must have had in mind the common law focus on unreasonable restraints in trade when it drafted the Sherman Act. Otherwise, he believed, the operation of the statute could give discordant results. The fact that the Congress did not make this qualification explicit was of no matter; White’s clairvoyance was sufficient to discern and correct the textual oversight and Congress’s true intent. Harlan, however, saw this as unwarranted judicial activism and harmful appropriation of the “constitutional functions of the legislative branches of government.” Echoing today’s concerns about judicial overreach, Harlan worried that this constitutionally unauthorized usurpation of legislative power “may well cause some alarm for the integrity of our institutions.”
Moreover, in his long and detailed concurrence, Harlan forcefully argued that it is not the Court’s function to change the plain meaning of statutes, whether or not that meaning reflects actual legislative intent. That is, a judge’s role is to look only at the four corners of a statute, and no more. It is up to the legislature to fix a statute, if necessary, not the judge. This principle was even more applicable in the case at hand. Here, Harlan believed, the plain language of the Act did in fact reflect the actual legislative intent. Thus, the majority’s contrary position was even more egregious. That is, the majority simply substituted its preferred reading of the statute 21 years after the fact, notwithstanding contrary contemporaneous evidence.
In this regard, Harlan pointed out that in 1890 the Congress was especially alarmed about growing concentrations of wealth, aggregation of capital among a few individuals, and economic power, all arising from the rapid industrialization that the United States had been experiencing over the previous decades. Congress, in keeping with the spirit of the age, saw this changing economic climate as requiring bold new law focused on checking the power of trusts. Specifically, the new climate “must be met firmly and by such statutory regulations as would adequately protect the people against oppression and wrong.” For this reason, the 1890 Congress, in drafting the Sherman Act, intentionally abandoned common law principles as being too weak to deal with the economic circumstances of the day. In addition, the Congress wrote criminal sanctions and third-party rights of action into the Act, none of which were a part of the common law.
Finally, Harlan pointedly explained that the Court had itself previously found in a well-known 1896 decision, U.S. v. Trans-Missouri Freight Assn., and reaffirmed in several later decisions that the Act’s prohibitions were not limited only to unreasonable restraints of trade, as that term is understood in the common law. The first of these decisions, moreover, was based on far greater proximity to the time of the Act than the current case, and if the Congress thought the Court to be wrong, it had at least 15 years to correct the Court on this issue, but failed to do so, indicating that it approved of the Court’s construction. Harlan thus saw White’s reversal of these holdings as no more than “an invasion by the judiciary of the constitutional domain of Congress — an attempt by interpretation to soften or modify what some regard as a harsh public policy.”
The activism of Chief Justice White in Standard Oil and nearly all of Justice Harlan’s concerns re-emerge in King v. Burwell. In King, the principal issue was whether, under the Affordable Care and Patient Protection Act, an “Exchange” (an insurance marketplace) established by the federal government through the Secretary of Health and Human Services should be treated as an “Exchange” established by a state. The question is important because under the ACAPA, an insurance exchange must be established in each state. The statute provides, however, that if a state fails to establish such an exchange, the Secretary of H.H.S. will step in and establish a federally run exchange in that state. The statute further provides that premium assistance will be available to lower income individuals to subsidize their purchase of health insurance when such insurance is purchased through an “Exchange established by the State.” The Act defines “State” to mean each of the 50 United States plus the District of Columbia. The plain language of the statute therefore precludes premium assistance to individuals purchasing health insurance on a federally run exchange.
Notwithstanding the plain language of the Act, however, Chief Justice Roberts, writing for the majority, held that premium assistance is available irrespective of whether the relevant exchange was established by a state or the Secretary. In effect, the Chief Justice rewrote the pertinent clause, “Exchange established by the State,” to read instead “Exchange established by the State or the Federal Government.”
Much like Chief Justice White more than a century earlier, Chief Justice Roberts reasoned that the Congress could not have actually meant what the plain text of the Act said and that if this drafting oversight were not corrected by the Court, serious discordant consequences would result. Also, like his predecessor, Chief Justice Roberts came to this conclusion despite evidence suggesting that the plain language is exactly what Congress intended. According to the now public remarks of Jonathan Gruber, a chief architect of the Act, by limiting premium assistance only to purchases made on state-established exchanges, the Congress intended to create an incentive for each state to establish an exchange. Even so, the Chief Justice discerned otherwise (perhaps because in hindsight the incentive did not work and, as a result, the consequences to the operation of the Act will be severe) and held that Congress must have intended “Exchange” for purposes of premium assistance to encompass both state and federal-established exchanges. That is, just as Chief Justice White found, 21 years after its passage, that the plain text of the Sherman Act did not contain the full intended meaning of the words in the Act, Chief Justice Roberts similarly found the plain text of the ACAPA to fall short of its true meaning, notwithstanding that Congress did nothing to change the text since its 2010 enactment.
The parallel between the two cases does not stop with the majority opinions. In King, Justice Scalia, a textualist like Justice Harlan, echoed the same concerns that Harlan had in Standard Oil. In his dissent, Scalia states, for example, that [t]he Court’s decision reflects the philosophy that judges should endure whatever interpretive distortions it takes in order to correct a supposed flaw in the statutory machinery. That philosophy ignores the American people’s decision to give Congress all legislative Powers enumerated in the Constitution. … We lack the prerogative to repair laws that do not work out in practice. … ‘If Congress enacted into law something different from what it intended, then it should amend the statute to conform to its intent.’” That is, it is not up to the Court to usurp the legislative functions of Congress in order to fix the unintended consequences of a statute. Scalia goes on, “‘this Court has no roving license to disregard clear language simply on the view that Congress must have intended something broader.’” Scalia concludes by suggesting that, to the detriment of “honest jurisprudence,” the majority “is prepared to do whatever it takes to uphold and assist [the laws it favors].”
So we can only conclude that the controversy surrounding Chief Justice Robert’s reasoning in King is anything but new. Textualists have been sounding alarms about judicial overreach for decades. Whether or not one believes that Chief Justice Roberts assumed a proper judicial role, it is undeniable that he had precedent for doing what he did. Similarly, it is undeniable that Justice Scalia’s concerns are well grounded in Court history. One other certainty is that just as the judicial creation of the “rule of reason” has had a significant impact on the administration of antitrust law in the last 100-plus years, Chief Justice Robert’s rewrite of the ACAPA will have a lasting impact, not only on the U.S. health insurance system, but in sustaining the self-authorized prerogatives of judges.
Theodore A. Gebhard is a law & economics consultant. He advises attorneys on the effective use and rebuttal of economic and econometric evidence in advocacy proceedings. He is a former Justice Department economist, Federal Trade Commission attorney, private practitioner, and economics professor. He holds an economics Ph.D. as well as a J.D. Nothing in this article is purported to be legal advice. You can contact the author via email at firstname.lastname@example.org.