Is there a booby trap in Roberts’s ObamaCare decision?

Supporters of the Obama administration and the Affordable Care Act (ACA) are rightly thrilled by the 6-3 decision reaffirming the subsidies essential to the functioning of the statute. The decision likely cements the statute in place as part of the U.S. healthcare system. However, the way that Chief Justice John Roberts reached that decision may provide the seeds for judicial curbing of regulation in other areas, and could very easily come up in future court cases regarding Environmental Protection Agency (EPA) regulations on climate change.

{mosads}Some background is necessary. A 1984 Supreme Court case, Chevron U.S.A. v. Natural Resources Defense Council, established a two-step procedure for deciding when courts should yield to executive branch agencies in interpreting regulatory statutes. First, the court should decide whether the statute is clear. If it is, then the agency has no room for interpretation. If it is not clear, then the court should to defer to the agency as long as the “the agency’s answer is based on a permissible construction of the statute.”

Many people expected King v. Burwell to be decided on Chevron grounds. Either the court would decide that the statute was clear and would invalidate the Internal Revenue Service (IRS) interpretation of the statute as allowing subsidies for people getting health insurance from the federal exchange. Or it would say the statute was not clear and that the IRS had a permissible (or non-permissible) construction of the statute. Roberts took neither of these approaches. Instead, he wrote that Chevron did not apply because the issue was of “deep economic and political significance.” Such issues are not to be decided by agencies such as the IRS; instead, they were the purview of the courts.

Why does this matter? Several noted scholars of administrative law (see here and here) have noted that Roberts has signaled a general movement away from Chevron and judicial deference to regulatory agencies. If courts do not defer to agencies, then it will be easier for those looking to overturn agency regulations to find a receptive ear in court. Industries looking to overturn future regulations will be sure to cite King v. Burwell in their briefs and argue that the issue they are contesting is of deep significance.

Whether this approach will be successful hinges on how many issues the courts decide are of “deep economic and political significance.” Administrative law experts say that Roberts breathed life into the “major questions” doctrine previously used by the Supreme Court to deny Food and Drug Administration (FDA) authority to regulate tobacco. Clearly, many regulatory questions are not major and do not rise to this level of significance and so the long-term impact may be limited to a small number of cases. But some regulations do rise to this level.

The most obvious regulations coming down the road that have economy-wide significance are the pending EPA regulations regarding climate change. These regulations will also inevitably end up before the Supreme Court sometime around 2018. The major questions doctrine may very well be used as the Supreme Court evaluates the EPA’s final regulations on climate change.

Make no mistake about it, King v. Burwell was a major win for the administration and Democrats. But even major wins have unintended consequences. It will be years before we know whether Chief Justice Roberts planted a seed in his decision that will have ramifications on significant issues that have nothing to do with the Affordable Care Act.

Shapiro is an associate professor and director of the Public Policy Program at Rutgers University and a member of the Scholars Strategy Network.