The secret principle behind all statutory and constitutional interpretation

We haven't yet discussed the latest legal challenge to Obamacare, which is now in the news thanks to conflicting decisions issued by the DC Circuit and the 4th Circuit on the same day last week.

The issue is that the Obamacare statute says that certain tax credits are available to people who enroll for health insurance on exchanges "established by the State." The act defines "State" to mean a state or territory of the United States, so this raises the question of whether the tax credits are available to people who enrolled on an exchange established not by a state but by the federal government. This is a live issue because many states have not established exchanges, so the federal government has stepped in as a backstop, and the IRS has issued regulations permitting the tax credits for people who enrolled on those federal exchanges.

The court decisions have mostly fallen down along party lines, as has the underlying commentary. Republican judges have found the language of the statute to be unambiguous: the tax credits are authorized only for people who enrolled in exchanges "established by the State" and not by the federal government. Whether or not this was what was "intended" by Congress, there's no real ambiguity in the statute, so it must be applied as written. Besides, this kind of carrot-and-stick federalism is not unheard of—the federal government often puts conditions on its statutes to encourage states to act—so the result is not absurd.

Democratic judges have found plenty of ambiguity in the statute when viewed as a whole, and believe the result—denying affordable health insurance to millions based on a poorly drafted statute—is absurd and clearly contravenes the intent of Congress and the purpose of the Act.

This suspiciously partisan split over the meaning of words has led to some consternation and cynicism. For example, liberal blogger Matt Yglesias:

The deep nature of the division is illustrated by the suspicious way in which legal opinions and policy preferences are lining up on this issue. Essentially everyone who believes the Affordable Care Act was an important step toward securing social justice also agrees that it would be absurd to construe the statute in a manner that’s plainly inconsistent with congress’ goals. And essentially everyone who believes it’s crucially important to give the crucial sentence the most straightforward possible reading rather than defer to the IRS’ efforts to make sense of the law as a whole, also believes that the law is a scandalous boondoggle.

Libertarianish economist Scott Sumner agrees, and goes further:

It’s an embarrassment that the two sides of the debate line up so predictably on a narrow technical issue. It says that intellectuals cannot be trusted to argue in good faith.

That's a bold statement. Can the principles of the Enlightenment be saved from this pit of cynicism and contempt?

I think so. Here's the secret principle behind all good faith legal decision making, including all statutory and constitutional interpretation—a principle that is deeply held by all public intellectuals and by all honest legal scholars, judges and justices of left, right, and center:

Do justice.

Well, okay, you say, but that's a pointless abstraction. Not so. It is the saving grace girding our legal system. Once you realize that people of good faith have profoundly held but deeply opposed conceptions of how to do justice, most of the world's seeming hypocrisy melts away.

Let's take Matt Yglesias, for example. In his post on the new Obamacare challenges, he starts out by stating how frivolous he thinks this legal challenge is:

I'm no lawyer, but from the first time I heard it the theory advanced by the plaintiffs in the Halbig case has struck me as laughably far-fetched and as best I can tell most objective legal observers agree that they are unlikely to prevail.

Reader(s)™ may remember, however, that Yglesias was one of the major proponents of the Trillion Dollar Platinum Coin. In that case, he applied a hyper-textualist reading to the coinage statute to find that it allowed minting of platinum coins of any denomination whatsoever. Now, however, he finds the same analysis (hypertextualism) to be laughably far-fetched. How can these positions possibly be reconciled? Isn't Yglesias just a hypocrite?

Not at all. The cases can easily be reconciled as long as you treat hyper-textualism as a tool to do justice rather than something to be achieved for its own case. In the Platinum Coin case, Yglesias was seduced by hyper-textualism because it provided an opportunity to do what he thought was just: to fund the federal government over what he thought was an insane and probably unconstitutional obstructionism by Republicans. In the new Obamacare case, however, hyper-textualism does a terrible injustice by undoing Obamacare.

There's a common principle here, that everyone can agree with: it is right, proper, and moral to use every tool at one's disposal to do justice. And this makes perfect sense of the partisan judicial split. Republicans are happy to apply a hyper-textualist interpretation of the Obamacare act because they don't think it's a just law—or at least, they don't think undoing it would lead to any profound injustice. Indeed, they probably see it as poetic justice that the law would be undone on a technicality, given the unusual and rushed procedures used to get it passed. Democrats, on the other hand, see the hyper-textualist interpretation as leading to so much injustice as to be practically absurd.

Descriptively speaking, I think there's really an underlying ur-canon of statutory interpretation: apply the plain text unless it seems really unfair or unjust. That's what both the Republican and Democratic judges are actually doing in this Obamacare case, and that's what most judges do most of the time. I don't have a problem with that, and you shouldn't either.

Greenhouse Gases and the Platinum Coin

The Supreme Court issued another statutory interpretation opinion today in UARG v. EPA. Justice Scalia took the opportunity to torpedo the ridiculous argument that the U.S. Treasury has authority to mint a one-trillion dollar platinum coin. Well, not in so many words, but for all practical purposes he did.

The background is pretty interesting. In 2007, the Court ratified the EPA's power under the Clean Air Act to regulate greenhouse gases as an "air pollutant" in the context of motor vehicles. But this created a bit of problem in another section of the Clean Air Act, which requires the EPA to regulate, by issuing permits, for major "stationary" emitters of "any air pollutant." The statute defines major permitters as those emitting more than 250 tons of an air pollutant in a year.

The problem is that tens of thousands of buildings, schools, malls, etc, emit that much in greenhouse gases, and thus would need to be permitted if that section applied. Everyone agreed that was not intended. To avoid that absurd result, the EPA issued a regulation setting a different, much higher, threshold for the emission of greenhouse gases (between 50,000 and 100,000 tons, depending on the circumstances).

Today, the Court struck down those regulations, finding that "air pollutant" in the context of the stationary emitters means something different than what it meant in the context of the Act-wide definition applicable in the motor vehicle case. Based on context, and prior regulations, the Court held that "air pollutant" means something much narrower in the relevant section of the act, since the broader definition would render it ridiculous. Justice Scalia had no problem finding the same term to mean different things in different parts of the same statute: "the presumption of consistent usage readily yields to context, and a statutory term—even one defined in the statute—may take on distinct characters from association with distinct statutory objects calling for different implementation strategies."

So the Court found that nothing in the statute compelled the EPA to treat greenhouse gases as "air pollutants" in this context. Next, it considered whether the EPA's interpretation that it was even allowed to regulate the stationary emitters because of their greenhouse gas emissions. Justice Scalia said no, for a variety of reasons. Most interesting me, though, was this:

EPA's interpretation is also unreasonable because it would bring about an enormous and transformative expansion in EPA's regulatory authority without clear congressional authorization. When an agency claims to discover in a long-extant statute an unheralded power to regulate "a significant portion of the American economy," we typically greet its announcement with a measure of skepticism. We expect Congress to speak clearly if it wishes to assign to an agency decisions of vast 'economic and political significance."... [I]t would be patently unreasonable—not to say outrageous—for EPA to insist on seizing expansive power that it admits the statute is not designed to to grant.

Now, maybe it's just me, but I think Justice Scalia actually might have been thinking of the ridiculous argument for the trillion-dollar platinum coin here. Substitute "Treasury" for "EPA" and that is exactly what you'd see in any opinion considering the minting of a trillion-dollar platinum coin. There is no credible argument that Congress intended for the platinum coin statute to grant Treasury the last say on the nation's fiscal and monetary policies. It would be absolutely outrageous if Treasury pretended that it had such power.

Overall, this is another lesson in the vagaries of statutory interpretation.  Just like "air pollutant" doesn't always means "air pollutant," the phrase "such denominations as the Secretary may prescribe" doesn't actually include a denomination with 12 zeros before the decimal point.

(By the way, this decision is not the end of the world. The Court held that the EPA had discretion to regulation the greenhouse gas emissions of those stationary emitters who were otherwise under the EPA's thumb based on their emissions of the narrower kind of "air pollutants." This gave the EPA pretty much every thing it wanted—despite the tweets of certain hacks to the contrary.)

This is Part 9 in The Gillette-Torvik Blog's 94-Part Series on the Trillion Dollar Platinum Coin idea

Chemical Weapons and the Platinum Coin

Reader(s)™ have lodged many complaints against the blog over the years, but the most recent complaints have been:

• Mr. Torvik seems to have gone AWOL; and
• Specifically, Mr. Torvik appears to have abandoned his promised 94-part series on the Trillion Dollar Platinum Coin.

All I can say, dear Reader(s)™, is that I hear you, and I am doing my best. To wit, today I give you Part 8 in the platinum coin series.

The impetus for today's post is the Supreme Court's decision in Bond v. United States. The facts are simple: British secret agent James Bond went rogue and stole a large cache of chemical weapons from Saddam Hussein in 2002 (yes, that's where they went). Over the next several years, he sold the chemicals to terrorists on the black market, eventually amassing enough money to purchase nearly 60% of all platinum known to exist. Then he attempted to use that platinum to create a one-trillion-dollar coin, which he intended to gift to the United States treasury, thus solving all our fiscal problems. It was kind of a Robin Hood thing. Yesterday, the Supreme Court put the kibosh on the whole scheme.

Some things never die.

Although the current heat wave in Minnesota is evidence to the contrary, summer is turning to fall. Among other things, this means a return to politics as usual in Washington. One of the first things we can expect is another batch of stories about the need to raise the debt ceiling. Matthew Ygelsias at Slate has a preview here.

A Triumph of Reason

With news that House Republicans have decided to cave on the "debt ceiling" brinkmanship (at least for now—but in reality forever), the Gillette-Torvik Blog's position on the Trillion-Dollar Platinum Coin has been utterly vindicated in every particular.

You may remember that in Part One of the 94-Part Series I contended that the Platinum Coin was both "illegal and ill-advised." The "illegal" part was vindicated a week ago when the Treasury Department and the Federal Reserve went public with a statement that neither believes "the law can or should be used" to produce the Trillion Dollar Coin.

And now the "ill-advised" part of my post is vindicated as well. As Reader(s)™ will recall, I argued that if Obama used the Trillion Dollar Coin option, it would destroy his own very strong position against the debt-ceiling brinkmanship. Instead, I advised Obama to "fight this battle from the high ground and on the merits"—where it could not be lost.

Sure enough, this was the winning strategy, as should have been obvious to anyone with a brain. And yet many smart people—including Paul Krugman, Josh Barro, and Matt Yglesias—essentially freaked out and made fools of themselves in this affair. Krugman infamously accused the Obama people of being "hopeless negotiators" when they ruled out the Platinum Coin.

Thank goodness these people aren't actually in charge of anything. But when that glorious day comes and the Gillette-Torvik Blog is in charge, you all can rest easy.

This is Part 7 in The Gillette-Torvik Blog's 94-Part Series on the Trillion Dollar Platinum Coin idea. 

Paul Krugman versus Jon Stewart on the Platinum Coin

New York Times columnist Paul Krugman recently went after satirist Jon Stewart for what he called a "lazy" bit on the frivolity of the Trillion Dollar Platinum Coin idea:

[W]hat went wrong here is a lack of professionalism on the part of Stewart and his staff. Yes, it’s a comedy show — but the jokes are supposed to be (and usually are) knowing jokes, which are funny and powerful precisely because the Daily Show people have done their homework and understand the real issues better than the alleged leaders spouting nonsense. In this case, however, it’s obvious that nobody at TDS spent even a few minutes researching the topic. It was just yuk-yuk-yuk they’re talking about a trillion-dollar con hahaha.

 Having been attacked by one of his own, Stewart had no choice but to respond:

The Daily Show with Jon Stewart

Get More: Daily Show Full Episodes,Political Humor & Satire Blog,The Daily Show on Facebook

Now, part of Stewart's response is his standard, somewhat weaselly excuse of, "I'm just a joke man!" But another part of his response is more substantive—his point that there are always counterarguments on the topics that he chooses to lampoon, but it is simply not funny to acknowledge them. It's probably not an overstatement to say that exaggeration is the essence of comedy. What matters here is that Stewart has considered the counterarguments and (correctly) decided that, nonetheless, the platinum coin is a "stupid fucking idea." So it's open season.

This is something to keep in mind when watching "The Daily Show": it doesn't present a fair or nuanced view of the issues of the day. It picks out the worst arguments being made to support a particular position and it shreds them, to great comic—and rhetorical—effect. It takes a certain sort of humorlessness to notice this unfairness only when it's your own position being shredded.

This is Part 6 in The Gillette-Torvik Blog's 94-Part Series on the Trillion Dollar Platinum Coin idea.

Dancing on the Platinum Coin's Grave

With the trillion-dollar coin's abortion blessedly assured, Tom Maguire at the Just One Minute blog says "I told ya so." His analysis focuses on the fact that the relevant statute permits only "bullion" and "proof" platinum coins. Both these terms have a specific and well-understood meaning that Congress reasonably relied on in drafting the statute. In sum, the coin envisioned by trillion-dollar coin advocates would be neither a bullion nor a proof coin, as those terms are commonly understood, so it is not authorized by the plain text of the statue.

His analysis is pretty convincing. One could poke some holes in it, but it's enough that it gets us to ambiguity. From there, we can use other interpretative tools to determine the actual intent of the statute, which, after all, it utterly obvious.

This is Part 5 in The Gillette-Torvik Blog's 94-Part Series on the Trillion Dollar Platinum Coin idea.

White House Rules Out Platinum Coin

According to Ezra Klein:

The Treasury Department will not mint a trillion-dollar platinum coin to get around the debt ceiling. If they did, the Federal Reserve would not accept it.

That’s the bottom line of the statement that Anthony Coley, a spokesman for the Treasury Department, gave me today. “Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit,” he said.

Absolutely the correct judgment.

The lesson? Always trust content from the Gillette-Torvik Blog.

Have no fear, however—my 94-part series on the platinum coin will continue.

The Importance of Interpretation

This is part three in my planned 94-part series on the $1 Trillion Platinum Coin, which clever people continue to peddle feverishly and foolishly.

The basic argument in favor of the legality of the Platinum Coin is, "Hey, the statute says what it says. Sure, it's a stupid loophole, but we take the law as we find it." In other words, it's hyper-technical literalism—strict constructionism—a way of interpreting texts that even Justice Scalia denounces.

But it's also self-defeating because if you give a hyper-literal reading to the relevant statute (31 U.S.C. 5112) you'll see that it is self-contradictory. That is, it contains irreconcilable provisions.

Section 5112(a) says: "The Secretary of the Treasury may mint and issue only the following coins" and then goes on to specify just twelve specific coins of specific denomination. By its terms, § 5112(a) prohibits the minting of any other coins. Since the trillion dollar platinum coin is not among the enumerated coins, the Secretary of the Treasury may not mint or issue it. "Hey, just read the statute, idiot!"

But wait! Section 5112(k) says "The Secretary may mint and issue platinum bullion coins and proof platinum coins." So, under subsection (k), the Secretary can mint a coin that subsection (a) clearly prohibits. DOES NOT COMPUTE!

Even worse, there is the embarrassment of § 5112(e), which authorizes the minting of silver dollars. That provision, however, is reconcilable with subsection (a) because it explicitly begins with a magical phrase: "Notwithstanding any other provision of law, the Secretary shall mint and issue . . . [silver dollars]." Subsection (k), the platinum-coin section, lacks the magic words. It just contradicts without excuse.

The provisions are irreconcilable—what Congress literally gives with subsection (k), it literally takes away with subsection (a). What can we do???

Well, we interpret the statute as a whole, of course. Turns out, there's a basic canon of interpretation that governs when two parts of statute are irreconcilable: the general/specific canon. This is the interpretive rule that, if two provisions are irreconcilable, the specific provision wins out over the more general provision. So if the question is whether the Secretary of Treasury may mint a platinum coin, you have two applicable provisions: (1) the general provision that the Secretary may mint only 12 kinds of coins, none of which are platinum; and (2) the specific provision that says the Secretary may indeed mint a platinum coin. The rule is that the specific provision wins. THE PLATINUM COIN LIVES!

Now, this may seem like common sense. And it is. But remember: people are talking about the minting of a trillion dollar coin. So I am going back to first principles. Today's lesson: to give a statute its fair meaning, you have to read all of it, and you almost always have to interpret it. If you read just ten or twenty words and apply no judgment, you'll almost never actually know what the law is.

Keeping those basic concepts in mind, ask yourself a question: given that the specified denominations in § 5112 range from one cent to $50, does a fair reading of subsection (k) give the Secretary of Treasury "discretion" to mint and issue $1 trillion coins? Or would that be an abuse of the discretion delegated by Congress?

"A clever little scheme having only the color of legality..."

"...cannot be upheld." 

Anyone who thinks the "platinum coin" solution to the Debt Ceiling is obviously legal needs to read Bloomington Nat'l Bank v. Telfer, 916 F.2d 1305 (7th Cir. 1990), in which a court bench-slapped the Comptroller of the Currency for abusing his discretion under the National Banking Act. Chevron deference goes only so far.

The Platinum Coin is a Terrible Idea

Now that we've averted the Fiscal Cliff, the country's next looming catastrophe is the "Debt Ceiling." This is the law that limits the amount the federal government can borrow. In about two months, we will hit the ceiling unless Congress acts to raise it, in which case the President will have to stop paying people the government owes money to. This would be calamitous. Republicans says they will demand spending cuts in exchange for any rise in the Debt Ceiling; Obama says he won't negotiate on this issue, because Congress needs simply to grant him the ministerial authority to create the debt necessary to pay for the spending that Congress has already appropriated.

One clever idea that's been going around is that the President can short-circuit this whole crisis by having the Secretary of the Treasury order the minting a platinum coin with a $1 trillion face value. That coin could then be deposited with the Federal Reserve, which would credit the Treasury's account with the $1 trillion, which the President could use to pay the country's creditors.

This method of using coinage to raise revenue is called coin seigniorage. The Treasury's ability to mint coins is generally circumscribed by the fact that only certain denominations and types of coin are allowed. Specifically, 31 U.S.C. 5112 states: