Notice & Comment

A Stay in King v. Burwell and the “Flowing Dollars” Theory

During oral arguments in King v. Burwell, Justice Alito referred to a few issues that have been covered on this blog. For now, I’d like to focus on his question regarding a potential stay of any government-adverse decision.

Regarding the stay, Justice Alito asked Solicitor General Verrilli whether a holding for the petitioner would wreak immediate havoc in the marketplace, as Verrilli suggested. Justice Alito posited that Northern Pipeline allowed the Court to stay its mandate, and Verrilli agreed that that case established a precedent. However, Verrilli expressed concern that in this case, money would be flowing out of the Treasury during the pendency of the stay, an issue not present in Northern Pipeline, which involved the structure of the bankruptcy courts.

It’s not obvious to me why the “flowing dollars” theory carries any relevance. Yes, there would be a cloud over Obamacare advance payments during the pendency of the stay. But there’s been a cloud over ever since this litigation first started.

Maybe the concern relates to allowing unlawful actions to go forward. But that also can’t prohibit a stay. A stay generally allows something that would otherwise be prohibited to go forward. And although the government can’t spend money as authorized by law, the law would not prohibit the payment of Obamacare tax credits until the decision becomes final.

So will the Court issue a stay? Well, a stay would be needed only if the challengers were successful, which seems uncertain after oral arguments. Even if the Court issues a stay, that would lead to a possibly weird result — the winners in the litigation will continue to accrue monthly penalties until the stay is lifted, even though they won the case. And the Treasury’s authority to fix everything for everyone is also uncertain, as I’ve explained here. But a stay, while offering an imperfect solution, would give Congress an opportunity to fix the mess, which might be its ultimate purpose.

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