In response to the government’s merits brief in the case of King v. Burwell, King et al., the petitioners, filed their Reply Brief (PRB.) on Wednesday of this past week, February 18th. In their brief, the petitioners declare,
A “failure” to establish the Exchange obviously does
not “fulfil[l]” the “requirement” to establish it; and
an “Exchange established by the State” does not
paradoxically result even when a state exercises its
“flexibility” not to establish it. If anything, § 1321
therefore refutes the claim that an HHS Exchange is
“established by the State.”
[PRB., page 3].
As Maurice F. Baggiano, Esq., founder/owner of lawBookEditors, uniquely pointed out in his amicus brief, filed on January 28th, the word “establish,” in addition to meaning “to make or create,” also means to “bring about,” i.e., to effect. Accordingly, a state can “establish” an Exchange by making or creating it or by bringing it about as a result of the state’s own actions, inactions, or inadequate actions. The petitioners cannot conveniently rely on one meaning of the word “establish” and ignore another meaning of the word “establish,” when it is favorable for them to do so.
All of the states know that they are going to end up with an Exchange one way or another. The Act requires this result. Under the Act, the states were not given the option to prohibit Exchanges in their states. The only option available to the states is to decide how to establish Exchanges in their states: on their own or with the help of the Secretary of HHS. This is up to the states to decide, and only the states. The federal government was not given the authority to make this decision for them, consistent with the doctrine of cooperative federalism.
If a state does not “establish” (make or create) the required Exchange on its own, it nonetheless “establishes” (brings about) the required Exchange with the help of the Secretary of HHS. In either case, the state “establishes” an Exchange, by definition(s). Sure, an Exchange created by the Secretary of HHS is not an Exchange created by a state, but an Exchange created by the Secretary of HHS is nonetheless “established by the state” because the state knowingly brought this inevitable result about, as a consequence of its own conduct.
While on its face this reading of the tax-credit statute may seem paradoxical, as the petitioners claim (PRB., page 3), it is not, because the word “establish” has multiple, relevant meanings, and just seems paradoxical as applied in this case. Both the wording of the Act and its implementation substantiate not contradict this interpretation of the tax-credit statute.