The Problem with 'Coercion Aversion': Novel Questions and the Avoidance Canon

Much of the recent hubbub over King v. Burwell has concerned Justice Kennedy’s questions to counsel at oral argument. Kennedy posited that if the challengers’ reading of the ACA were correct, the statute would amount to a forbidden attempt by Congress to “coerce” the states under the Tenth Amendment: “the states are being told either create your own exchange, or we’ll send your insurance market into a death spiral.” His evident inclination was to use the canon of constitutional avoidance — a doctrine that allows the court to read a statute to avoid reaching a difficult constitutional question — to resolve the case in the government’s favor. Neither party had raised this “coercion aversion” argument, but from the moment Justice Kennedy floated it, it was clear that coercion aversion could pave the way to five votes for the government. But there’s a problem with coercion aversion. Whether the ACA poses an unconstitutionally coercive “regulatory threat” to the states is a truly novel question of first impression, and the justifications for modern avoidance do not apply to truly novel questions. Modern avoidance has two rationales: honoring Congress’s presumed intent not to legislate unintentionally close to a constitutional line and preventing courts from unnecessarily addressing constitutional issues. The logic of these rationales disintegrates when the putative constitutional problem is a novel question of first impression that crystallized only after Congress legislated. Congress can’t be presumed to have the capacity to divine new constitutional problems that were not evident at the time of lawmaking, and the Court can’t claim to be leaving constitutional law undisturbed when its avoidance holding itself manufactures novel constitutional doubts. As a result, the Court should apply the canon to avoid truly novel constitutional problems only if it has exhausted other available tools of statutory interpretation, and even then only in preference to actual constitutional invalidation. For King, this boils down to a simple syllogism. Because (1) the constitutional problem of coercion by regulatory threat is truly novel; and because (2) the justifications for the modern avoidance canon disintegrate where the problem being avoided is truly novel; therefore (3) the Court should not use coercion aversion to resolve King. Some might worry (or hope) that the upshot of this argument will be a defeat for the government, and death spirals in 34 states. But this overlooks an odd but important aspect of King. To avoid the coercive reading of the statute, a justice must conclude that an alternative, non-coercive construction of the statute is “fairly possible” or “reasonable.” And if there’s a “reasonable” reading of the ACA whereby tax credits are not linked to the creation of state exchanges, then the ACA must fail to state unambiguously the conditions on the availability of tax credits — which would run afoul of the federalism clear-statement cases that require Congress to impose such conditions in unmistakable terms. Consequently, a justice inclined towards coercion aversion need not rely on it to resolve the case — even if that justice would rule that a clearly worded regulatory threat of this kind was unconstitutional if she were unavoidably confronted with that novel question on the merits. In sum, the justices can — and therefore should — resolve King without raising new constitutional doubts about our federalist system.