The U.S. Supreme Court this week confronts partisan politics and history in a way that will profoundly impact the court as an institution and largely determine the fate of the controversial Affordable Care Act (ACA) – Obamacare.
In the curious way that American political history has of not exactly repeating itself, but of regularly returning to the same themes, it is fascinating to consider how the Supreme Court handled a similarly contentious issue 78 years ago. The issue then was different – state minimum wage laws in 1937 versus health insurance today – but the impact on the court as an institution and on American politics is still instructive. Some of the parallels are striking.
If Chief Justice John Roberts hasn’t done so he might want to read up on the back story in the case of West Coast Hotels Co. v. Parrish. The leadership exercised by one of his illustrious predecessors, Charles Evans Hughes, just might be useful for Roberts this week, since how the Chief handles the Obamacare case – King v. Burwell – may determine not only his own legacy but also the court’s standing among American voters.
The Supreme Court became the most controversial issue in American politics in 1937. Re-elected in a landslide in 1936, early the next year Franklin Roosevelt took dead aim at the Supreme Court that had dismantled key 
parts of his New Deal economic recovery program. In one of the most audacious proposals ever suggested by an American president, Roosevelt sent legislation to Congress – a Congress overwhelmingly populated with his fellow Democrats – that would have added six new justices to the Supreme Court. In one sweeping legislative action Roosevelt proposed to both liberalize the Court and at the same time neuter a co-equal branch of the federal government.
Through the long, hot and politically disagreeable spring and summer of 1937, Democrats fought with each, with their president and with Republicans over whether to give FDR what he dearly wanted – a very conservative Supreme Court remade overnight into a liberal supporter of his program. The American Bar Association, the nation’s major newspapers, organized labor and farm groups chose up sides and by the time the fight finally ended Roosevelt had suffered the biggest political defeat of his presidency. The Democratic Party that should have been at the zenith of its power was ripped apart and Roosevelt would never again command a working majority in Congress for his domestic agenda, but the Supreme Court as an institution remained unchanged.
The West Coast Hotels case was part of the reason. The Parrish in the case was Elsie Parrish, a 
chambermaid at the Cascadian Hotel in Wenatchee, Washington, a hotel owned by the West Coast Hotels Company. Elsie, joined by her husband, filed suit contending that she received sub-minimum wage compensation for the work she performed and she sought to recover the difference between what she was paid and the minimum wage established under Washington state law.
The question presented to the court when the case was heard late in 1936 was whether Washington’s state minimum wage law “violated the liberty of contract as construed under the Fifth Amendment as applied by the Fourteenth Amendment.” In 1923, in a similar case, the Supreme Court had overturned a District of Columbia minimum wage statute on grounds that it violated the Fifth Amendment’s due process clause. Early in 1936, the Court struck down a New York minimum wage law in a case that was almost exactly on point with the issues in the West Coast Hotels litigation. The New York decision was widely seen as a blow to New Deal-era reforms – FDR was incensed by the Court’s ruling – and the case seemed to offer further proof that the Supreme Court was hostile to nearly any type of regulation of business.
When the Washington State case came before the Court in December 1936 it wouldn’t have taken a clairvoyant to predict the outcome. But in the interval between the two nearly identical 1936 cases, something changed. What changed had been entirely political. Roosevelt was overwhelmingly re-elected by American voters who were clearly showing their support for his policies. In simple political language the conservative majority on the Supreme Court suddenly found itself dramatically at odds with widespread public sentiment.
A Switch in Time…
When the West Coast Hotels case came before the court in December 1936 – remember this was after FDR’s big re-election win – Chief Justice Hughes, who had been in the minority in the New York case,
prevailed upon Associate Justice Owen Roberts – no relation to the current Chief, but like him a Republican appointee to the Court – to change his mind and wipe out the precedent that the Court had re-affirmed just ten months earlier. With the Chief Justice writing the majority opinion, the court upheld the Washington state law – the vote was 5-4 – and Elsie Parrish, the Wenatchee chambermaid, found that the state minimum wage law really did apply to her.
Next comes one of the best examples I know of how timing impacts politics. While the West Coast Hotels case was heard just before Christmas 1936, and Justice Roberts indicated in a conference with fellow justices two days later that he would change his mind, the decision in the case wasn’t made public until the following March, weeks after Roosevelt proposed his sweeping and controversial plan to reshape the Supreme Court.
To the public and press it looked like the Court was knuckling under to political pressure from a hugely popular president, when in fact the Court, under Hughes’ skillful leadership, had already made up its mind to directly reverse its earlier precedent in minimum wage cases. Still it was widely said that Robert’s switch helped save the Supreme Court with one wag saying, “a switch in time saved nine.” The great historian William Leuchtenburg called it the “greatest constitutional somersault in history.”
In reality, Hughes was a shrewd student of politics and had correctly read the election returns as a strong indication that public opinion was moving in the direction of a more activist role for the government in regulating the economy and American business. Hughes, very much a Republican and conservative, even admitted that the Court could no longer serve as “a fortress” against public opinion. In order to head-off the kind of sweeping political change that Roosevelt and others had in mind for the Court, Hughes knew his beloved Court had to change and lobbying Justice Roberts gave him his fifth vote. Hughes put his considerable muscle as a great Chief Justice behind his belief that the Court had to change in order to sustain its integrity and independence. Subsequent decisions by the Court in 1937 to uphold the Social Security Act and the National Labor Relations Act further helped doom Roosevelt’s court packing plan and at the same time helped maintain public confidence that the Court was able to respond to national problems during the greatest economic crisis the country has ever faced.
King v. Burwell…
The case at question before the Supreme Court this week – King v. Burwell – turns on just four words buried deep in the controversial 955 page legislation passed by Congress in 2010. The challenge to the ACA centers not on questions of constitutionality or the application of Congressional or Executive authority, but whether every qualified American is entitled to an insurance subsidy whether they enrolled for health insurance through a state or a federal insurance exchange seems certain to thrust the court into the middle of the most contentious political issue in recent history.
In taking this case the court has decided it must rule on what Congress meant when it wrote those four words – “established by the state” – into the law.
As David Cole wrote recently in The New York Review of Books: “The challengers’ statutory argument is deceptively simple. A subclause of the tax code setting forth a formula for calculating federal income tax credits provides that the amount of the credit depends on the number of months the taxpayer has been enrolled in a health insurance plan purchased on an insurance exchange ‘established by the State.’ Since an exchange established by the federal HHS is not an exchange ‘established by the State,’ they maintain, the law precludes subsidies for all residents of the thirty-four states that have exchanges created by HHS. The government counters that exchanges ‘established by the State’ is a legal term of art, and when read in conjunction with other parts of the ACA, it encompasses both exchanges that states themselves established, as well as exchanges that the states chose to have HHS create for them in their respective states.”
As a practical matter the health insurance exchanges in 34 states operate on the platform established by the federal government. If the court decides those exchanges are not subject to the subsidies – boom. Consider it the nuclear option. An estimated 7.5 million people in those 34 states will lose their subsidies, not be able to afford insurance and the great Obamacare experiment will tip over like Humpty Dumpty falling off that famous wall.
The committed opponents of the health insurance law will, of course, celebrate the death of the act they have tried to destroy once before in front of the Roberts’ court and more than 50 times on the floor of the U.S. House of Representatives. Should those challenging the law prevail it will be seen correctly as a huge victory for conservatives who hate Obamacare and a crushing defeat for President Obama’s signature legislative accomplishment. The impacts on the Supreme Court could be even more earth shaking.
Roberts is the man in the hot seat, just as Charles Evans Hughes was in 1937 and we already know he did some personal legal jujitsu to accommodate his own very conservative views to the political will behind the ACA when he cast the deciding vote to uphold the Act when it first came before his Court. In fact, there is one school of thought that Roberts has already found a way to uphold Obamacare from the latest challenge by invoking a very conservative legal principle – standing. It may well be that the plaintiffs in the King case don’t have the legal standing to even bring the case. We’ll see.
Hughes’ task in the New Deal-era was to save the Court from the kind of political interference Franklin Roosevelt had in mind. Roberts’ task today is to keep the Supreme Court, with its conservative majority, from using an extraordinarily narrow issue to kick the increasingly popular health care law in the ditch. Such a ruling would certainly please the legion of Obamacare haters, but at the cost of denying health insurance to several million Americans who now have coverage.
Conservatives who hope the Court will kick things in the ditch decry what they call “executive lawmaking” that “poses a severe threat to the separation-of-powers principles enumerated in the Constitution.” And they contend the president “has acted on the belief that legislative gridlock allows him to transcend his constitutional limits. A ruling that upholds this behavior would set a dangerous precedent for the nascent health-care law, which will be implemented for years to come by administrations with different views. More troubling, such a precedent could license virtually any executive action that modifies, amends or suspends any duly enacted law.”
But in the King case the dangerous behavior – you might read judicial activism – would be for a Supreme Court to impose its own notion of how an IRS rule ought to be applied; replacing its judgement for that of the branch of government changed with actually carrying out the terms of the law.
Long-time Supreme Court watcher and New York Times columnist Linda Greenhouse argues that nothing less than “the honor of the Supreme Court” is at stake in the King v. Burwell decision. “To reject the government’s defense of the law,” Greenhouse wrote recently, “the justices would have to suspend their own settled approach to statutory interpretation as well as their often-stated view of how Congress should act toward the states.”
At pivotal moments in American history various Chief Justices have guided the Supreme Court through some very hard cases. Hughes did it in the 1930’s. Earl Warren did it in the 1950’s with the Brown v. Board of Education ruling that separate but equal simply could not be Constitutional. Warren Berger did it in the 1970’s when he lead a unanimous Court that required Richard Nixon to turn over his White House tape recordings. In each case the integrity of the Court, as well as its ability to transcend, while at the same time respond to politics, was at stake. It’s also worth noting that in these historic cases a Republican chief justice appointed by a Republican president moved the Court in a new and important direction, while also keeping the Court out of the intense crossfire of partisan politics.
The same issues are at stake this week. Ironically, in reading the old West Coast Hotels decision, I noticed that one of the attorneys of record was named – John Roberts. For the Chief Justice history really is calling.