Oklahoma Wins Victory Over IRS Obamacare Rule - American Commitment

Judge Ronald A. White, district judge in the Eastern District of Oklahoma, issued a sharp rebuke to the Obama administration today over the same regulation purporting to authorize federal subsidies through federal exchanges on which appeals court panels recently split in the DC and Fourth Circuits.
At issue was whether the words “established by the state” in the section of Obamacare that authorizes exchange subsidies means what it says, or whether the Federal Secretary of Health and Human Services can be a “state,” as the IRS and the Obama administration have claimed, in order to allow subsidies to flow in states that chose not to cooperate.
The State of Okahoma, led by Attorney General Scott Pruitt, filed suit to protect the state’s statutory right to opt out of Obamacare subsidies and the employer taxes that come with them.
Judge White ruled:
The animating principles of this court’s decision have been articulated by the Tenth Circuit: “[C]ourts, out of respect for their limited role in tripartite government, should not try to rewrite legislative compromises to create a more coherent, more rational statute. A statute is not ‘absurd’ if it could reflect the sort of compromise that attends legislative endeavor.” Robbins v. Chronister, 435 F.3d 1238, 1243 (10th Cir.2006).24 “An agency’s rulemaking power is not ‘the power to make law,’ it is only the ‘power to adopt regulations to carry into effect the will of Congress as expressed by the statute.’” Sundance Associates, 139 F3d at 808 (citation omitted) “In reviewing statutes, courts do not assume the language is imprecise … Rather, we assume that in drafting legislation, Congress says what it means.” Id at 809.
The court holds that the IRS Rule is arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law, pursuant to 5 U.S.C. §706(2)(A), in excess of statutory jurisdiction, authority, or limitations, or short of statutory right, pursuant to 5 U.S.C. §706(2)(C), or otherwise is an invalid implementation of the ACA, and is hereby vacated. The court’s order of vacatur is stayed, however, pending resolution of any appeal from this order.
In other words, he rejected the government’s argument that the federal Secretary of Health and Human Services can be a “state” when establishing an exchange.
This decision agrees with a recent panel of the DC Circuit Court of Appeals in Halbig v. Burwell and disagrees with a conflicting opinion from the Fourth Circuit Court of Appeals in King v. Burwell. The federal government will appeal today’s decision to the Tenth Circuit Court of Appeals.
There is a pending petition for certiorari before the Supreme Court in the King case. Today’s decision makes clear that this issue can only be resolved by that court.
For more on the issue, read our previous analysis.
Here is today’s full decision from Judge White:
Pruitt v. Burwell District Court Order