Amicus Curiae Brief — Maine Community Health Options, Petitioner v. United States

Nos. 18-1023, 18-1028 and 18-1038

In the

Supreme Court of the United States

MAINE COMMUNITY HEALTH OPTIONS,

v.

Petitioner,

UNITED STATES,

Respondent.

(Caption continued on inside cover)

____________________

On Writ of Certiorari to the United States Court

of Appeals for the Federal Circuit

BRIEF FOR HIGHMARK INC., BLUE CROSS

AND BLUE SHIELD OF KANSAS CITY, BLUE

CROSS AND BLUE SHIELD OF VERMONT,

BLUE CROSS OF IDAHO HEALTH SERVICE,

INC., MOLINA HEALTHCARE OF CALIFORNIA,

INC., AND L.A. CARE HEALTH PLAN AS AMICI

CURIAE SUPPORTING PETITIONERS

COLIN E. WRABLEY

REED SMITH LLP

225 Fifth Avenue

Pittsburgh, PA 15222

(412) 288-3131

September 6, 2019

LAWRENCE S. SHER

Counsel of Record

REED SMITH LLP

1301 K Street, NW

Suite 1000 - East Tower

Washington, DC 20005

(202) 414-9200

lsher@reedsmith.com

_______________

MODA HEALTH PLAN, INC.,

v.

Petitioner,

UNITED STATES,

Respondent.

_______________

BLUE CROSS AND BLUE SHIELD OF NORTH CAROLINA,

v.

Petitioner,

UNITED STATES,

Respondent.

_______________

LAND OF LINCOLN MUTUAL HEALTH INSURANCE

COMPANY,

v.

Petitioner,

UNITED STATES,

Respondent.

_______________

i

TABLE OF CONTENTS

Page

INTEREST OF AMICI CURIAE ............................ 1

SUMMARY OF ARGUMENT ................................. 4

ARGUMENT ........................................................... 6

I.

Insurers Relied On The Government’s

Explicit Promise To Make the Full

Amount Of Payments Required By

§1342 In Agreeing To Participate In

The Risk-Corridors Program .......................... 6

II. The Strong Presumptions Against

Implied Repeals And Statutory

Retroactivity Serve Critical Due

Process Interests In Ensuring Fair

Notice Of The Law And Protecting

Investment-Backed Reliance ........................ 14

III. Given The Vital Constitutional

Interests At Stake, No Legislative

History—And Certainly Not The

Kind Relied On By The Court

Below—Can Overcome The Bedrock

Presumptions That Control Here ................. 20

IV. The Federal Circuit’s Decision

Eviscerates The Fair-Notice And

Investment-Backed Reliance

Interests Of The Insurers

Guaranteed By Due Process. ........................ 29

CONCLUSION ...................................................... 31

ii

TABLE OF AUTHORITIES

Page

Cases

Astoria Fed. Sav. & Loan Ass’n v.

Solimino,

501 U.S. 104 (1991) .............................................. 15

Atascadero State Hosp. v. Scanlon,

473 U.S. 234 (1985) .............................................. 17

Azar v. Allina Health Servs.,

139 S. Ct. 1804 (2019) .................................... 11, 21

Bldg. & Constr. Trades Dep’t, AFL-CIO

v. Martin,

961 F.2d 269 (D.C. Cir. 1992) .............................. 25

Bond v. United States,

572 U.S. 844 (2014) .............................................. 16

Dahda v. United States,

138 S. Ct. 1491 (2018) ............................................ 8

De Niz Robles v. Lynch,

803 F.3d 1165 (10th Cir. 2015) ............................ 19

Dellmuth v. Muth,

491 U.S. 223 (1989) .............................................. 24

E. Enters. v. Apfel,

524 U.S. 498 (1998) .............................................. 19

Epic Sys. Corp. v. Lewis,

138 S. Ct. 1612 (2018) ........................ 18, 21, 25, 27

iii

FAA v. Cooper,

566 U.S. 284 (2012) .............................................. 23

Fernandez-Vargas v. Gonzales,

548 U.S. 30 (2006) ................................................ 15

FMC v. S.C. State Ports Auth.,

535 U.S. 743 (2002) .............................................. 20

Fourth Estate Pub. Benefit Corp. v.

Wall-Street.com, LLC,

139 S. Ct. 881 (2019) ...................................... 28–29

Franklin v. Mass.,

505 U.S. 788 (1992) .............................................. 17

Gonzalez v. Thaler,

565 U.S. 134 (2012) .............................................. 23

Gregory v. Ashcroft,

501 U.S. 452 (1991) ........................................ 15, 16

Hagen v. Utah,

510 U.S. 399 (1994) .............................................. 28

INS v. St. Cyr,

533 U.S. 289 (2001) .............................................. 23

King v. Burwell,

135 S. Ct. 2480 (2015) .............................. 1, 2, 6, 28

Kucana v. Holder,

558 U.S. 233 (2010) .............................................. 17

Landgraf v. USI Film Prods.,

511 U.S. 244 (1994) .................................. 18, 19, 24

iv

Lindh v. Murphy,

521 U.S. 320 (1997) .............................................. 23

Lopez v. Davis,

531 U.S. 230 (2001) ................................................ 8

M’Culloch v. Maryland,

17 U.S. 316 (1819) ................................................ 31

McCoy v. Gilbert,

270 F.3d 503 (7th Cir. 2001) ................................ 23

Moda Health Plan, Inc. v. United

States, 130 Fed. Cl. 436 (2017), rev’d,

892 F.3d 1311 (Fed. Cir. 2018) ............................ 10

Molina Healthcare of Cal., Inc. v.

United States,

133 Fed. Cl. 14 (2017) .......................................... 10

NLRB v. SW Gen., Inc.,

137 S. Ct. 929 (2017) ............................................ 26

Prairie Cty. v. United States,

782 F.3d 685 (Fed. Cir. 2015) .............................. 27

Raygor v. Regents of Univ. of Minn.,

534 U.S. 533 (2002) ........................................ 16, 17

Salazar v. Ramah Navajo Chapter,

567 U.S. 182 (2012) ........................................ 22, 26

SAS Inst., Inc. v. Iancu,

138 S. Ct. 1348 (2018) ...................................... 8, 27

Spector v. Norwegian Cruise Line Ltd.,

545 U.S. 119 (2005) .............................................. 16

v

Tin Cup, LLC v. U.S. Army Corps of

Eng’rs, 904 F.3d 1068 (9th Cir.

2018), cert. denied, 139 S. Ct. 1619

(2019) .................................................................... 24

Tenn. Valley Auth. v. Hill,

437 U.S. 153 (1978) .................................. 23, 24, 25

United States v. Davis,

139 S. Ct. 2319 (2019) .......................................... 18

United States v. Kwai Fun Wong,

135 S. Ct. 1625 (2015) .......................................... 21

United States v. Langston,

118 U.S. 389 (1886) .............................................. 26

United States v. McIntosh,

833 F.3d 1163 (9th Cir. 2016) .............................. 22

United States v. Nordic Village Inc.,

503 U.S. 30 (1992) ................................................ 24

United States v. R.L.C.,

503 U.S. 291 (1992) .............................................. 22

United States v. Will,

449 U.S. 200 (1980) .............................................. 22

United States v. Winstar,

518 U.S. 839 (1996) ................................................ 5

Wisc. Cent. Ltd. v. United States,

138 S. Ct. 2067 (2018) .......................................... 26

vi

Statutes and Legislative Materials

42 U.S.C. §280k(a) ..................................................... 27

42 U.S.C. §300hh-31(a) ............................................. 27

42 U.S.C. §18062, §1342 ....... 6, 8, 9, 10, 27, 28, 29, 30

42 U.S.C. §18062(b)(1) ................................................ 8

42 U.S.C. §18062(b)(1)(A)............................................ 8

42 U.S.C. §18062(b)(2 .................................................. 8

H.R. Rep. No. 111-299 (2009)...................................... 6

Pub. L. No. 111-148, 124 Stat. 119

(2010) ...................................................................... 8

Pub. L. No. 113-235, 128 Stat. 2130

(2014) .................................................................... 28

Regulations

45 C.F.R. §147.104 .................................................... 10

45 C.F.R. §153.230(d) ................................................ 10

45 C.F.R. §153.510 ...................................................... 9

45 C.F.R. §153.510(a) .................................................. 9

45 C.F.R. §156.290(a)(2) ............................................ 10

76 Fed. Reg. 41,929 (July 15, 2011) ........................ 6–7

77 Fed. Reg. 17,220 (Mar. 23, 2012) ........................... 7

vii

77 Fed. Reg. 73,118 (Dec. 7, 2012) .............................. 7

78 Fed. Reg. 15,410 (Mar. 11, 2013) ........................... 9

78 Fed. Reg. 72,322 (Dec. 2, 2013) .............................. 7

79 Fed. Reg. 13,743 (Mar. 11, 2014) ............... 7, 11–12

79 Fed. Reg. 30,240 (May 27, 2014) .......................... 12

79 Fed. Reg. 70,673 (Nov. 26, 2014) ......................... 12

80 Fed. Reg. 10,750 (Feb. 27, 2015) .......................... 13

Other Authorities

Bulletin, CMS, Risk Corridors

Payments for the 2014 Benefit Year

(Nov. 19, 2015) ..................................................... 13

Bulletin, CMS, Risk Corridors

Payments for 2015” (Sept. 9, 2016)...................... 13

Carissa Byrne Hessick, Corpus

Linguistics and the Criminal Law,

2017 B.Y.U. L. Rev. 1503 (2017) ......................... 17

Center for Consumer Information and

Insurance Oversight, CMS, Letter to

Issuers on Federally-Facilitated and

State Partnership Exchanges (Apr.

5, 2013). ................................................................ 10

Zachary D. Clopton, Replacing the

Presumption Against

Extraterritoriality, 94 B.U. L. Rev. 1

(2014) .................................................................... 18

viii

William N. Eskridge, Jr., Book Review:

The New Textualism and Normative

Canons. The Interpretation of Legal

Texts by Antonin Scalia and Bryan

A. Garner, 113 Colum. L. Rev. 531

(2013) .................................................................... 19

Henry M. Hart, Jr., The Power of

Congress to Limit the Jurisdiction of

Federal Courts: An Exercise in

Dialectic, 66 Harv. L. Rev. 1362

(1953) .................................................................... 16

Jacques B. LeBoeuf, Limitations on the

Use of Appropriations Riders by

Congress to Effectuate Substantive

Policy Changes, 19 Hastings Const.

L.Q. 457 (1992) ............................................... 22–23

Letter from Kevin J. Counihan, CMS, to

Insurance Commissioners (July 21,

2015) (available at

https://www.cms.gov/CCIIO/Resourc

es/Letters/Downloads/DOICommissioner-Letter-7-20-15.pdf.) ..................... 13

David L. Shapiro, Continuity and

Change in Statutory Interpretation,

67 N.Y.U. L. Rev. 92 (1992) ................................. 19

Matthew C. Stephenson, The Price of

Public Action: Constitutional

Doctrine and the Judicial

Manipulation of Legislative

Enactment Costs, 118 Yale L.J. 2

(2008) .................................................................... 16

ix

Cass R. Sunstein, Interpreting Statutes

in the Regulatory State, 103 Harv. L.

Rev. 405 (1989) ..................................................... 18

1



INTEREST OF AMICI CURIAE

Amici curiae Highmark Inc., Blue Cross and Blue

Shield of Kansas City, Blue Cross and Blue Shield of

Vermont, Blue Cross of Idaho Health Service, Inc.,

Molina Healthcare of California, Inc., and L.A. Care

Health Plan, respectfully submit this brief in support

of Petitioners Maine Community Health Options,

Moda Health Plan, Inc., Blue Cross and Blue Shield

of North Carolina, and Land of Lincoln Mutual Health

Insurance Company. Amici provide health care insurance to more than 11.5 million customers throughout

the United States, including over 700,000 on various

Patient Protection and Affordable Care Act (ACA)

health insurance exchanges. Like Petitioners, amici

are health insurers that participated in the ACA’s

“risk-corridors” program, but were paid only a small

fraction of the hundreds of millions of dollars they

were undisputedly owed by the federal government

under the statute.1

The ACA consists of a “series of interlocking reforms designed to expand coverage in the individual

health insurance market.” King v. Burwell, 135 S. Ct.

2480, 2485 (2015). Congress structured the ACA to

prevent an economic “death spiral” from the expansion of coverage to a new group of insureds, in which

“premiums rose higher and higher, [ ] the number of

people buying insurance sank lower and lower[,] [and]

1

No counsel for a party authored this brief in whole or in

part, and no person other than amici or their counsel made a

monetary contribution intended to fund the preparation or submission of this brief. Petitioners have filed blanket consents to

the filing of amicus briefs, and Respondent has consented to the

filing of this brief.

2



insurers began to leave the market entirely.” Id. at

2486.

A critical component of the ACA was its risk-corridors program, one of the statute’s three risk-stabilization programs. It was created to mitigate the enormous and unquantifiable risk that health insurance

providers, such as amici, shouldered in providing expanded coverage to a new population of policyholders—many of whom previously were uninsured and

had unknown healthcare needs. Through this program, the federal government promised to share in

the risk by paying insurers that experienced losses determined by a statutorily prescribed formula a portion

of their higher-than-expected costs. Likewise, insurers with gains as determined by that statutory formula were required to remit a portion of those gains

to the government.

The government’s promise was explicitly reinforced by both the Department of Health & Human

Services (HHS)—the agency responsible for administering the risk-corridors program—and the Centers

for Medicare & Medicaid Services (CMS). Both agencies repeatedly and unequivocally assured amici and

other risk-corridors insurers that the government

owed and would pay them the full amount of risk-corridors payments as determined under the ACA’s formula. Relying on these explicit assurances, amici entered into agreements with the government to become

“Qualified Health Plans” on the new ACA exchanges

and issue insurance policies to consumers, many of

whom had never been insured before. Due in part to

last-minute changes to policies implementing the

3



ACA, however, amici and many other participating insurers sustained significant losses over the course of

the three-year risk-corridors program.

As explained in Petitioners’ brief, the government

nevertheless has refused to honor its promise to pay

the required risk-corridors amounts that it acknowledges are owed. The government’s justification? Congress impliedly repealed the government’s mandatory

payment obligation under the risk-corridors statute

when, at the end of the first year of the risk-corridors

program, it passed a massive budget appropriation

rider that, in just a few unnoticed sentences, restricted HHS’s use of one source of funds to make the

required payments. And when amici, Petitioners, and

other insurers sued to recover the risk-corridors

amounts they are lawfully owed, a divided panel of the

Federal Circuit endorsed the government’s alarming—and patently unjust—avoidance strategy.

Amici have a direct and substantial interest in the

cases before the Court. The government owes amici

alone more than $900 million in risk-corridors payment, prompting amici to assert in the Court of Federal Claims the same statutory and contractual claims

for risk-corridors payments against the government

that are at issue in these cases. See Blue Cross of

Idaho Health Serv., Inc. v. United States, No. 161384C; Blue Cross and Blue Shield of K.C. v. United

States, No. 17-95; Blue Cross and Blue Shield of Vt. v.

United States, No. 18-241C; First Priority Life Ins.

Co., Inc. v. United States, No. 18-96; First Priority Life

Ins. Co., Inc. v. United States, No. 16-587; Local Initiative Health Auth. for L.A. County, d/b/a L.A. Care

Health Plan v. United States, No. 17-1432C; Molina

4



Healthcare v. United States, No. 17-97C; Molina

Healthcare v. United States, No. 18-333C.

Amici urge the Court to reverse the decision below. That divided ruling impermissibly freed the government from its express promise to risk-corridors insurers based on supposed legislative history relating

to Congress’s after-the-fact limitation on the use of

one source of funds for mandatory payments owed to

insurers—like amici—that suffered losses during the

course of the risk-corridors program. That decision

unfairly—and unlawfully—upends the insurers’ investment-backed reliance on the government’s express promise to pay. It also contravenes bedrock constitutional principles designed to protect those reliance interests and ensure fair notice of the governing

law. Even if Congress does have the power to retroactively impair those constitutional interests, it must

exercise it clearly and expressly so that it remains accountable for its actions, and that those subject to the

law have fair notice of what Congress forbids or requires. These fundamental principles and interests

must be protected—or elected politicians and unelected bureaucrats will be permitted to run roughshod

over those who, like amici, justifiably rely on the government to honor its promises.

SUMMARY OF ARGUMENT

This is a case about a bait-and-switch by the government that left dozens of health insurance companies with billions of dollars in unrecouped losses. The

government wanted insurers to participate in risky

new insurance marketplaces created to expand access

to affordable healthcare, without charging consumers

the premiums necessary to mitigate that risk. To induce insurer participation, the government promised

5



in an Act of Congress to share the risk. But now, despite insurers’ reasonable and substantial investment-backed reliance on that promise, the government claims the “absurd[]” “right to deny or change

the effect of [its express] promise” after the fact.

United States v. Winstar, 518 U.S. 839, 913 (1996)

(Breyer, J., concurring). Worse, the government

claims authority to stretch the plain meaning of the

appropriations riders far beyond what their actual

text can bear based on a few scraps of purported legislative history—the same history on which the divided panel relied below.

As Petitioners’ briefs make crystal clear, the governing law—namely, the proper application of the

controlling presumptions against implied statutory

repeals and the retroactivity of statutes—is decidedly

on the insurers’ side. These presumptions require, at

minimum, a clear statement by Congress that it really

meant to go back on its word. The absence of any such

statement is enough to rule for Petitioners and reverse the decision below.

It is important to emphasize, though, that the interpretive presumptions that are dispositive here are

designed to serve first-order constitutional concerns of

fair notice and the protection of investment-backed reliance interests. Those concerns are at their zenith in

these cases given the extent of the insurers’ reliance

on the government’s promises, the lengths to which

the government went to induce that reliance, and the

fair notice-defeating and reliance-upsetting effect of

the divided ruling below—which found an implied repeal of the government’s mandatory-payment obligation under the risk-corridors statute by one sentence

in appropriations riders based not on the text of the

6



riders, but instead on vanishingly thin and ambiguous

purported legislative history. Amici focus this brief on

those critical due process concerns and how the controlling presumptions, properly applied, shield them

from government overreach.

ARGUMENT

I. Insurers Relied On The Government’s Explicit Promise To Make the Full Amount Of

Payments Required By §1342 In Agreeing To

Participate In The Risk-Corridors Program.

From the time Congress codified the risk-corridors program in §1342 of the ACA, until long after

amici, Petitioners, and other insurers began to perform their duties under the program, the government

repeatedly and explicitly assured the insurers that it

would honor the full-payment promise made in §1342

and HHS’s implementing regulations. Naturally,

amici, the Petitioners, and other insurers relied heavily—and, as it turned out, to their great detriment—

on these explicit assurances in agreeing to participate

in the risk-corridors program.

The central mission of the ACA was to expand affordable health insurance coverage to more Americans. See King, 135 S. Ct. at 2485–87. The new exchanges the statute created were designed to “facilitate access of individuals and employers . . . to a variety of choices of affordable, quality health insurance

coverage. . . .” H.R. Rep. No. 111-299, at 202 (2009).

The robust participation of health insurers thus was

critical to the ACA’s success.

But the government understood the reality that

“[i]nsurers charge premiums for expected costs plus a

risk premium, in order to build up reserve funds in

case medical costs are higher than expected.” 76 Fed.

7



Reg. 41,929, 41,948 (July 15, 2011). And because of

the uncertainty about the new (but previously uninsured) population entering the ACA exchanges, the

government knew that health insurers likely would

not be able to predict their risk accurately, and they

would need to price their premiums accordingly. See,

e.g., 77 Fed. Reg. 17,220, 17,221 (Mar. 23, 2012) (“To

protect themselves from adverse selection, issuers

may include a margin in their pricing (that is, set premiums higher than necessary) in order to offset the

potential expense of high-cost enrollees.”); 76 Fed.

Reg. 41,929, 41,935 (July 15, 2011) (“[T]here is significant uncertainty about Exchange enrollment, the

overall health of the enrolled population, and the cost

of care for new enrollees”).

Congress therefore needed to include in its design

of the ACA features that would induce insurers to participate, while at the same time curb the rise of premiums by reducing risk to the insurers. Enter the

ACA’s three risk-stabilization programs—“reinsurance,” “risk adjustment,” and “risk corridors.” The

government believed that together, the three programs would “reduce the risk to the issuer and the issuer can pass on a reduced risk premium to beneficiaries.” 76 Fed. Reg. 41,929, 41,948 (July 15, 2011);

see also 77 Fed. Reg. 73,118, 73,119 (Dec. 7, 2012)

(“The risk corridors program … will protect against

uncertainty in rates for qualified health plans by limiting the extent of issuer losses and gains.”); 78 Fed.

Reg. 72,322, 72,379 (Dec. 2, 2013) (same); 79 Fed. Reg.

13,743, 13,829 (Mar. 11, 2014) (same).

Indeed, the government sold the risk-corridors

program—from the way the ACA laid out the program, to government agencies’ repeated and public

8



statements about how it would operate—as a reliable

safeguard against the risks and potential losses the

program was designed to forestall. The statute itself,

as the Federal Circuit correctly found below

(Pet.App.16), is unambiguously mandatory in its directive—when participating insurers suffer a certain

level of losses, the government “shall pay” them the

amount determined by the formula set forth in the

statute. 42 U.S.C. §18062(b)(1)(A); SAS Inst., Inc. v.

Iancu, 138 S. Ct. 1348, 1354 (2018) (“The word ‘shall’

generally imposes a nondiscretionary duty.”) (citation

omitted). By contrast, the ACA elsewhere used the

discretion-conferring term “may.” See, e.g., ACA, Pub.

L. 111-148, §1001, 124 Stat. 119, 135; id. §1104(h),

124 Stat. at 149; Lopez v. Davis, 531 U.S. 230, 241

(2001) (noting significance of statute’s “contrast[ing]”

uses of “shall” and “may”).

At the same time, Congress notably did not grant

the Secretary of HHS any discretion to pay insurers

that qualified for risk-corridors payments anything

less than the full amount prescribed in §1342(b)(1)

and (2). Nor did it limit in any way the Secretary’s

obligation to make full risk-corridors payments owed

to insurers based on congressional appropriations (or

the lack thereof) or any restriction on the use of funds.

Congress also did not establish in the ACA any particular fund for making risk-corridors payments; direct

that “payments in” from profitable insurers were to be

the source for making “payments out” to insurers

owed those payments; or indicate in any way that the

program was intended to be “budget neutral.” So

“[t]he statute means what it says[,]” Dahda v. United

States, 138 S. Ct. 1491, 1498 (2018)—the government

“shall pay” amounts owed as determined under §1342:

no exceptions.

9



For years following the ACA’s enactment—and

long after the risk-corridors program began operating—the government did nothing but reinforce this

clear statutory meaning. In particular, HHS and

CMS, the agencies responsible for administering the

risk-corridors program, repeatedly conveyed to insurers the agencies’ understanding that the government

would owe, and did owe, the full amount of risk-corridors payments to insurers prescribed under the ACA’s

statutory formula. The agencies unequivocally confirmed the government’s obligation to make full payments not limited by “payments in” when, in final

rulemaking (following a notice-and-comment period),

they stated in the Federal Register that “[t]he risk corridors program is not statutorily required to be budget

neutral. Regardless of the balance of payments and

receipts, HHS will remit payments as required under

section 1342 of the Affordable Care Act.” 78 Fed. Reg.

15,410, 15,473 (Mar. 11, 2013).

CMS’s implementing regulations mirrored this

understanding. CMS adopted a risk-corridors calculation “for calendar years 2014, 2015, and 2016,” 45

C.F.R. §153.510(a), that is mathematically identical to

the statutory formulation in §1342 of the ACA, using

the identical thresholds and risk-sharing levels specified in the statute. Id. §153.510. These implementing

regulations, just like §1342, do not limit the amount

of the government’s required risk-corridors payments

to insurers by the amounts the government collects

from insurers; do not require the risk-corridors program to be “budget neutral”; and do not prescribe the

use of “user fees” or “payments in” to make “payments

out.” By contrast, however, HHS’s implementing regulations for the other two “3Rs” programs explicitly

provide that those other programs are budget-neutral.

10



See 45 C.F.R. §153.230(d) (reinsurance); 77 Fed. Reg.

73,118, 73,139 (Dec. 7, 2012) (risk adjustment); 78

Fed. Reg. 15,410, 15,441 (Mar. 11, 2013) (risk adjustment). This difference only amplified the government’s message to the insurers that it would honor its

promises set forth in the risk-corridors statute.

Indeed, all of “[t]hese statements” by the government, “made before … insurers agreed to offer plans

on the Exchanges, were designed to instill confidence

in the Government’s promise to actually share the

risks of the ACA and actually protect against potential losses.” Molina Healthcare of Cal., Inc. v. United

States, 133 Fed. Cl. 14, 45 (2017); see also Moda

Health Plan, Inc. v. United States, 130 Fed. Cl. 436,

457 (2017) (finding that HHS “has consistently recognized that Section 1342 is not budget neutral” and

that HHS “has never conflated its inability to pay with

the lack of an obligation to pay”), rev’d, 892 F.3d 1311

(Fed. Cir. 2018). The government’s strategy worked.

In 2013, amici and other insurers signed on, developing and establishing approved ACA premiums,2

executing agreements with CMS,3 and making unalterable commitments to various ACA exchanges for

2014.4 They did so despite the significant financial

risks posed by the uncertainty in the new healthcare

markets, in reliance on the financial protections that

Congress promised, backed by the full faith and credit

of the government. See, e.g., Molina Healthcare of

2

See Center for Consumer Information and Insurance

Oversight, CMS, Letter to Issuers on Federally-Facilitated and

State Partnership Exchanges, at 20 (Apr. 5, 2013).

3

See id.

4

See, e.g., 45 C.F.R. §§147.104, 156.290(a)(2).

11



Cal., Inc. v. United States, Case No. 17-cv-97, ECF No.

1, ¶150 (Jan. 23, 2017) (Fed. Cl.) (“In July 2013 and

September 2013, in reliance on the Government’s

statutory, regulatory and contractual obligations and

inducements described above, Plaintiffs executed

their respective CY 2014 QHP Agreements and, upon

approval and certification … became QHPs”).

It was not until after amici and other insurers had

firmly committed to participating in the ACA exchanges that the government took a series of steps

that would fundamentally transform the risk-corridors program and inflict severe financial harm on the

insurers. It began in November 2013 with CMS’s announcement of a “transitional policy” that permitted

individuals to keep their existing health plans even if

those plans did not meet the ACA’s requirements.

Pet.App.8. The result of this change was to suppress

enrollment on the exchanges—particularly by healthier people—which, in turn, exposed insurers to a

larger pool of less healthy, higher risk, consumers. Id.

HHS nonetheless assured insurers that the risk-corridors program would help “ameliorate” any adverse effects of the transitional policy. Pet.App.9.

Then the Government “‘pull[ed] a[nother] surprise switcheroo’ by doing the opposite of what it had”

originally promised and repeatedly assured about the

risk-corridors program. Azar v. Allina Health Servs.,

139 S. Ct. 1804, 1810 (2019) (citation and internal

quotation marks omitted). In the preamble to a final

rule issued on March 11, 2014, months into the first

year of the program, HHS stated for the first time—

and directly contrary to its prior public statements—

that it “intend[ed] to implement th[e] [risk-corridors]

program in a budget neutral manner.” 79 Fed. Reg.

12



13,743, 13,829 (Mar. 11, 2014). The next month, in a

question-and-answer bulletin, CMS made the same

budget-neutrality pivot, stating that if risk-corridors

payments were to exceed collections “for a year, all

risk corridors payments for that year will be reduced

pro rata to the extent of any shortfall[,]” and the next

year’s collections would be used toward the previous

year’s shortfall. BCBSNC C.A.App. 250.

While laying the groundwork for the shift toward

budget neutrality that would eventually form the government’s litigating position in these and the other

risk-corridors cases, however, the government remained attuned to the need to keep insurers in the

risk-corridors program. So it continued to speak out

of the other side of its mouth, repeatedly and publicly

assuring insurers that the government would make

risk-corridors payments in full to those insurers entitled to them—until September 2016, when the threeyear program was only months away from ending.

A month after CMS’s April 2014 bulletin, for example, HHS maintained that the government had a

statutory obligation “to make full payments to issuers.” 79 Fed. Reg. 30,240, 30,260 (May 27, 2014). It

also stated that it “anticipate[d] that risk corridors

collections will be sufficient to pay for all risk corridors payments.” Id. It reiterated the same assurance

in November 2014, “recogniz[ing that] … the Affordable Care Act requires the Secretary to make full payments to issuers.” 79 Fed. Reg. 70,673, 70,700 (Nov.

26, 2014).

This pattern continued over the next two years,

long after Congress passed the first appropriations

rider (in December 2014) that the government later

claimed impliedly repealed its risk-corridors payment

13



obligations. In February 2015, HHS repeated its oftstated position that §1342 “require[d] [HHS] to make

full payments to issuers.” 80 Fed. Reg. 10,750, 10,779

(Feb. 27, 2015). Then, in an October 2015 letter to

Moda, HHS affirmed that “[HHS] recognizes that the

[ACA] requires the Secretary to make full payments

to issuers, and ... HHS is recording those amounts

that remain unpaid ... as fiscal year 2015 obligations

of the United States Government for which full payment is required.” Pet.App.106.

There was more. In July 2015, Kevin Counihan,

CEO of the Health Insurance Marketplaces for CMS,

sent a letter to state insurance commissioners instructing them that, in assessing proposed rates for

the upcoming year, they should assume insurers

would receive full risk-corridors payments from HHS.

Letter from Kevin J. Counihan, CMS, to Insurance

Commissioners, at 2 (July 21, 2015) (available at

https://www.cms.gov/CCIIO/Resources/Letters/Downloads/DOI-Commissioner-Letter-7-20-15.pdf.). Then,

in November 2015, not long before Congress enacted

the second appropriations rider at issue in these

cases, Mr. Counihan sent another letter—this one to

insurers—which again “reiterate[d] to [them] that

[HHS] recognizes that the Affordable Care Act requires the Secretary to make full payments to issuers[.]” BCBSNC C.A.App. 11. CMS repeated the

same statement two weeks later in a public bulletin,

and then again in 2016. See Bulletin, CMS, “Risk Corridors Payments for the 2014 Benefit Year” (Nov. 19,

2015); Bulletin, CMS, “Risk Corridors Payments for

2015” (Sept. 9, 2016) (“HHS will record risk corridors

payments due as an obligation of the United States

Government for which full payment is required.”).

14



Meanwhile, all along, amici continued to uphold

their end of the bargain—writing affordable policies

for consumers on the ACA exchanges and, where required, making their own “full” risk-corridors payments to the government. It wasn’t until the Fall of

2016—when the government began asserting in briefs

filed in the Court of Federal Claims that the appropriations riders impliedly repealed the government’s obligation to make full risk-corridors payments, and

that no such obligation would be restored in the future

absent new funding from Congress—that it became

clear the government would take the position it continues to assert in this Court. See, e.g., BCBSNC

Fed.Cl.Dkt. 10, at 26–30 (Sept. 30, 2016). This eventual position, as Petitioners amply demonstrate, can

find nothing to support it—whether as a matter of law

law or policy. It also raises serious constitutional concerns of fair notice of the law and protection of investment-backed reliance interests—concerns that animate the governing principles of statutory construction in these cases. It is these concerns to which amici

now turn.

II. The Strong Presumptions Against Implied

Repeals And Statutory Retroactivity Serve

Critical Due Process Interests In Ensuring

Fair Notice Of The Law And Protecting Investment-Backed Reliance.

As Petitioners convincingly demonstrate, the

powerful interpretive presumptions against implied

repeals and retroactive application of statutes dictate

reversal of the Federal Circuit’s divided ruling below.

Congress never suggested, let alone clearly indicated,

that it was repealing the statutory promises on which

Petitioners and amici relied.

15



Amici here focus on the critical interests these two

“clear-statement” rules of statutory construction serve

in these cases, where the government’s conduct defies

the foundational rule-of-law requirement that one

must have fair notice of the law that governs him, and

severely impairs the investment-backed reliance interests of the insurers the government lured into the

risk-corridors program. Amici also will explain why,

as a result, strict application of these clear-statement

rules is compelled here, where the purported repealing legislation consists of budget appropriation bill

riders, and the case for using those riders to erase a

critical feature of landmark substantive legislation—

as well as substantial, investment-backed reliance interests—is built on the quicksand of snippets of purported legislative history.

The presumptions against implied repeals and

statutory retroactivity are long-pedigreed clear-statement principles. See Astoria Fed. Sav. & Loan Ass’n

v. Solimino, 501 U.S. 104, 108–09 (1991) (describing

presumption against implied repeals as a “kindred

rule” to other clear-statement principles); FernandezVargas v. Gonzales, 548 U.S. 30, 41 (2006) (stating

that presumption against retroactivity can only be

overcome by a “clear statement”). The Court ordinarily adopts clear-statement rules to protect “weighty

and constant values[,]” Astoria Fed. Sav. & Loan

Ass’n, 501 U.S. at 108; foster “superior values” such as

“harmonizing different statutes and constraining judicial discretion in the interpretation of the laws[,]”—

values that inspire the presumption against implied

repeals itself, id. at 108–09; or “avoid a potential constitutional problem[,]” Gregory v. Ashcroft, 501 U.S.

452, 464 (1991).

16



Clear-statement rules ensure that Congress really meant in a particular statute to accomplish an objective that has significant implications in “traditionally sensitive areas.” Id. at 461. Requiring a clear

statement in a statute “assures that the legislature

has in fact faced, and intended to bring into issue, the

critical matters involved in the judicial decision.”

Bond v. United States, 572 U.S. 844, 858 (2014); see

also Spector v. Norwegian Cruise Line Ltd., 545 U.S.

119, 139 (2005) (“[C]lear statement rules ensure Congress does not, by broad or general language, legislate

on a sensitive topic inadvertently or without due deliberation”). “This is obviously important when the

underlying issue raises a serious constitutional doubt

or problem.” Raygor v. Regents of Univ. of Minn., 534

U.S. 533, 544 (2002) (citation omitted).

Clear-statement rules also enhance political accountability by forcing Congress to act transparently

when it seeks to legislate significant change with serious consequences. Faced with the high bar of a

clear-statement rule, “[s]ophisticated legislators or interest groups will not be able to sneak something by a

majority of the enacting coalition, nor will the legislature itself be able to sneak something by the voters.”

Matthew C. Stephenson, The Price of Public Action:

Constitutional Doctrine and the Judicial Manipulation of Legislative Enactment Costs, 118 Yale L.J. 2,

38–39 (2008); see also Henry M. Hart, Jr., The Power

of Congress to Limit the Jurisdiction of Federal

Courts: An Exercise in Dialectic, 66 Harv. L. Rev.

1362, 1399 (1953) (“The primary check on Congress is

the political check—the votes of the people. If Congress wants to frustrate the judicial check, our constitutional tradition requires that it be made to say so

unmistakably, so that the people will understand and

17



the political check can operate.”). Clear-statement

rules thus “promote democratic accountability because … [w]hen legislatures are forced to better articulate their policies, voters are better able to understand the content of those policies and to hold their

representatives accountable for those decisions.”

Carissa Byrne Hessick, Corpus Linguistics and the

Criminal Law, 2017 B.Y.U. L. Rev. 1503, 1528 (2017).

The Court has seen fit to demand clear textual

statements in a variety of contexts. Textual clarity is

required, for example, before statutes will be read to

create tension with constitutional separation-of-powers and federalism principles. See, e.g., Franklin v.

Mass., 505 U.S. 788, 800–801 (1992) (requiring clear

statement before “subject[ing] … the President’s performance of his statutory duties to … abuse of discretion” review by courts); Atascadero State Hosp. v.

Scanlon, 473 U.S. 234, 238-239, 242–243 (1985) (requiring clear statement before finding a statute abrogates a State’s Eleventh Amendment sovereign immunity). Clear textual expressions also are necessary

to protect constitutional rights and ensure judicial review. See, e.g., Raygor, 534 U.S. at 544 (clear statement required where application of statute “raises a

serious constitutional doubt or problem”); Kucana v.

Holder, 558 U.S. 233, 237 (2010) (applying “‘presumption favoring interpretations of statutes [to] allow judicial review of administrative action”).

Pertinent here, textual clarity is required to satisfy the two clear-statement rules that dictate the disposition here—the presumptions against implied repeals and the retroactive applications of statutes. As

with other clear-statement rules, these presumptions

carry out the missions ordinarily assigned to such

18



rules. See, e.g., Epic Sys. Corp. v. Lewis, 138 S. Ct.

1612, 1624 (2018) (implied-repeal canon reflects “respect for the separation of powers” and “grow[s] from

an appreciation that it’s the job of Congress by legislation, not this Court by supposition, both to write the

laws and to repeal them”); Landgraf v. USI Film

Prods., 511 U.S. 244, 267, 272–73 (1994) (rule against

retroactivity “assures that Congress itself has affirmatively considered the potential unfairness of retroactive application and determined that it is an acceptable price to pay for the countervailing benefits”). This

is especially so where appropriations bills are concerned. See Cass R. Sunstein, Interpreting Statutes in

the Regulatory State, 103 Harv. L. Rev. 405, 458

(1989) (“The principle that appropriations measures

should not be construed to amend substantive statutes … is designed in part to promote responsible lawmaking by ensuring that casual, ill-considered, or interest-driven measures do not overcome ordinary statutes”).

Of particular relevance, the implied-repeal and

non-retroactivity clear-statement rules also protect

the due process values of fair notice and protection of

investment-backed reliance interests. The implied-repeal presumption is a “constitutionally inspired

canon” that “reflect[s] the courts’ important role in

safeguarding constitutional values. . . .” Zachary D.

Clopton, Replacing the Presumption Against Extraterritoriality, 94 B.U. L. Rev. 1, 43 (2014); see United

States v. Davis, 139 S. Ct. 2319, 2325 (2019) (the “‘first

essential of due process of law’ [is] that statutes must

give people ‘of common intelligence’ fair notice of what

the law demands of them”) (citation omitted). “Americans rely on longstanding legal rules, plan their lives

19



around them, and assume that most of the really important rules will continue to be in place. … These values of continuity undergird … the presumption

against implied repeals.” William N. Eskridge, Jr.,

Book Review: The New Textualism and Normative

Canons. The Interpretation of Legal Texts by Antonin

Scalia and Bryan A. Garner, 113 Colum. L. Rev. 531,

555 (2013).

The presumption against giving even “substantive statutory changes retroactive effect may be the

clearest instance of a canon of construction that protects interests of reliance and fair warning.” David L.

Shapiro, Continuity and Change in Statutory Interpretation, 67 N.Y.U. L. Rev. 921, 944 (1992). “‘Retroactive legislation presents problems of unfairness that

are more serious than those posed by prospective legislation, because it can deprive citizens of legitimate

expectations and upset settled transactions.’” E. Enters. v. Apfel, 524 U.S. 498, 533 (1998) (citation omitted). The rule against retroactivity thus ensures “that

individuals should have an opportunity to know what

the law is and to conform their conduct accordingly;

settled expectations should not be lightly disrupted.”

Landgraf, 511 U.S. at 265; see also De Niz Robles v.

Lynch, 803 F.3d 1165, 1169–70 (10th Cir. 2015) (Gorsuch, J.) (presumption against retroactivity operates

“in service of the due process interests of ‘fair notice,

reasonable reliance, and settled expectations’”) (citation omitted).

Protecting fair-notice and reliance interests is a

constitutional imperative of the first order. As the

regulatory state expands, and statutes and regulations proliferate, it is hard enough for individuals and

businesses to even begin to know the law that governs

20



them. See FMC v. S.C. State Ports Auth., 535 U.S.

743, 755 (2002) (“‘The proliferation of Government,

State and Federal, would amaze the Framers, and the

administrative state with its reams of regulations

would leave them rubbing their eyes’”) (citation omitted). The Federal Circuit’s freewheeling approach

only exacerbates the challenge. If even unenacted and

barely visible legislative history can support a finding

of implied repeal, predicting what a court later might

determine the law to be and conforming one’s conduct

to all the possibilities becomes virtually impossible.

And when the consequence of such a decision is the

upheaval of settled, investment-backed reliance interests, the result is manifestly unfair—and deeply damaging. Accordingly, this Court’s careful application of

the presumptions against implied repeals and statutory retroactivity cases is especially warranted in

these cases.

III.Given The Vital Constitutional Interests At

Stake, No Legislative History—And Certainly Not The Kind Relied On By The Court

Below—Can Overcome The Bedrock Presumptions That Control Here.

Petitioners persuasively demonstrate that the

purported legislative history upon which the Federal

Circuit relied does not come close to the heightened

level required to show Congress impliedly altered one

of its signature legislative achievements of the

twenty-first century. See, e.g., Brief for Petitioners

Moda Health Plan, Inc. and Blue Cross and Blue

Shield of N.C. 35–38.5

The Federal Circuit did not even address the presumption against retroactivity, and there is nothing in the legislative

5

21



But even if the government had uncovered actual

and more relevant legislative history, that would not

change the proper outcome here. This Court recently

expressed its “doubt” that any “legislative history

alone”—no matter how express—could provide “a

clear statement” sufficient to overcome a clear-statement rule like those that control here. United States

v. Kwai Fun Wong, 135 S. Ct. 1625, 1633 (2015). In

fact, this Court’s clear-statement jurisprudence has

repeatedly—and rightly—rejected arguments that

legislative history could do so.

Even before one gets to that body of precedent,

however, first principles of construction are instructive. Most fundamentally, “‘legislative history is not

the law.’” Allina Health Servs., 139 S. Ct. at 1814

(2019) (quoting Epic Sys. Corp., 138 S. Ct. at 1631).

“‘It is the business of Congress to sum up its own debates in its legislation,’ and once it enacts a statute

‘[w]e do not inquire what the legislature meant; we

ask only what the statute means.’” Epic Sys. Corp.,

138 S. Ct. at 1631 (citations omitted). These rules naturally apply with all the more force to “ambiguous legislative history[.]’” Allina Health Servs., 139 S. Ct. at

1814 (citation omitted).

They also apply a fortiori to the interpretation of

appropriations bills such as those at issue in this case.

Indeed, this Court has made clear that garden-variety

construction of appropriations legislation—that is, in

cases that do not, like this one, involve claims that

such legislation repeals existing substantive enact-

history—or anywhere else to amici’s knowledge—indicating that

the riders were intended to have a retroactive effect.

22



ments—must focus strictly on “the ‘text of the appropriation,’ not [on] Congress’ expectations of how the

funds will be spent, as might be reflected by legislative

history.” Salazar v. Ramah Navajo Chapter, 567 U.S.

182, 200 (2012) (citation omitted); see also United

States v. McIntosh, 833 F.3d 1163, 1178–79 (9th Cir.

2016) (“It is a fundamental principle of appropriations

law that we may only consider the text of an appropriations rider, not expressions of intent in legislative

history.”). This must necessarily be the case when, as

here, the legislative history of an appropriations bill

is said to impliedly repeal an essential feature of a

substantive piece of legislation. See United States v.

Will, 449 U.S. 200, 221–22 (1980) (holding that the

strong presumption against implied repeals “applies

with especial force when the provision advanced as

the repealing measure was enacted in an appropriations bill”).

Such a heightened application of the strong presumption against implied repeals makes abundant

good sense. Even when it comes to substantive legislation, “no matter how ‘authoritative’ the [legislative]

history may be—even if it is that veritable Rosetta

Stone of legislative archaeology, a crystal clear Committee Report—one can never be sure that the legislators who voted for the text of the bill were aware of it.”

United States v. R.L.C., 503 U.S. 291, 309 (1992)

(Scalia, J., concurring). This is especially true when

interpreting appropriation bills, which themselves

“often do not receive adequate consideration” and “are

usually … voted on at a time when few if any [legislators] have given them the attention appropriate to

questions of policy.” Jacques B. LeBoeuf, Limitations

on the Use of Appropriations Riders by Congress to Effectuate Substantive Policy Changes, 19 Hastings

23



Const. L.Q. 457, 474 n.124 (1992); see also McCoy v.

Gilbert, 270 F.3d 503, 510 n.4 (7th Cir. 2001) (rejecting reliance on legislative history of appropriations

bill where “[i]ts provisions were never seriously debated, were never the subject of a Senate Judiciary

Committee mark-up, and were never explained in any

committee report”). It is for this reason that legislators are entitled to assume that appropriations are not

“altering substantive legislation” without having to

“review exhaustively the background of every authorization before voting on an appropriation.” Tenn. Valley Auth. v. Hill, 437 U.S. 153, 190 (1978).

Given all these settled and fundamental principles, by the time one considers specifically whether

the legislative history of a rider to an appropriations

bill can overcome very strong clear-statement rules

like the presumptions against implied repeals and retroactivity, the suspense is over. Indeed, not long ago,

Justice Scalia observed that he “kn[e]w of no precedent for the proposition that legislative history can

satisfy a clear-statement requirement imposed by this

Court’s opinions.” Gonzalez v. Thaler, 565 U.S. 134,

164–65 (2012) (Scalia, J., dissenting). He was right—

and nothing has changed since. See, e.g., FAA v.

Cooper, 566 U.S. 284, 290 (2012) (“Legislative history

cannot supply” the required clear statutory waiver of

sovereign immunity “that is not clearly evident from

the language of the statute.”) (citations omitted); INS

v. St. Cyr, 533 U.S. 289, 299 (2001) (“Implications

from statutory text or legislative history are not sufficient to repeal habeas jurisdiction; instead, Congress

must articulate specific and unambiguous statutory

directives to effect a repeal.”) (citation omitted); Lindh

v. Murphy, 521 U.S. 320, 328 n.4 (1997) (“[C]ases

where this Court has found truly ‘retroactive’ effect

24



adequately authorized by a statute have involved statutory language that was so clear that it could sustain

only one interpretation.”); Landgraf, 511 U.S. at 281

(stating that only an “explicit command” in the statutory text can overcome presumption against retroactivity).6

Nor should it, because “[i]f Congress’ intention is

‘unmistakably clear in the language of the statute,’ recourse to legislative history will be unnecessary; [and]

if Congress’ intention is not unmistakably clear, recourse to legislative history will be futile, because by

definition” a clear-statement rule thereby “will not be

met.” Dellmuth, 491 U.S. at 230. It should come as

no surprise, then, that this Court has specifically rejected the use of legislative history to overcome the

presumption against implied repeals. See, e.g., Epic

Sys. Corp., 138 S. Ct. at 1631 (rejecting reliance on

legislative history to support claimed implied repeal

of the Federal Arbitration Act by the National Labor

Relations Act); Hill, 437 U.S. at 190 (rejecting reliance

6

See also United States v. Nordic Village Inc., 503 U.S. 30,

37 (1992) (emphasizing that “legislative history has no bearing

on the ambiguity point” in applying a clear-statement rule);

Dellmuth v. Muth, 491 U.S. 223, 230 (1989) (“Legislative history

generally will be irrelevant to a judicial inquiry into whether

Congress” made a clear statement); Tin Cup, LLC v. U.S. Army

Corps of Eng’rs, 904 F.3d 1068, 1075 (9th Cir. 2018), cert. denied,

139 S. Ct. 1619 (2019) (refusing to “delve into legislative history”

to determine whether appropriations bill contained the requisite

“clear statement of futurity in order to give permanent effect to”

its provisions) (citation omitted); Bldg. & Constr. Trades Dep’t,

AFL-CIO v. Martin, 961 F.2d 269, 273 (D.C. Cir. 1992) (rejecting

legislative history as basis to overcome “very strong presumption” that appropriations act does not “substantively change existing law”).

25



on committee reports to support claimed implied repeal).

This Court’s decision in Hill illustrates the proper

approach to legislative history in a clear-statement/implied-repeal case. There, the Court concluded

that an appropriations bill did not impliedly repeal

the Endangered Species Act and authorize construction of a dam (the “Tellico Project”). The Court relied

heavily on the fact that there was “nothing in the appropriations measures, as passed, which states that

the Tellico Project was to be completed irrespective of

the requirements of the Endangered Species Act.” 437

U.S. at 189. To be sure, there were numerous statements scattered throughout the House and Senate

Appropriations Committees’ Reports on the Tellico

Project expressing the position that the Endangered

Species Act would not apply to the Project. Id. at 191.

But the Court concluded that even those express

statements in the legislative history simply “cannot be

equated with statutes enacted by Congress” for purposes of the implied-repeal analysis. Id. at 191.

Accordingly, under this Court’s precedents, even

the most crystalline legislative history could not establish an implied repeal where the text of the statute

itself does not. That goes double for the obscure, tangential snippets of purported legislative history the

Federal Circuit relied on here. The letter from the

General Accounting Office’s general counsel to two

Members of Congress is not even in the legislative record, nor is there any evidence Congress considered it

in enacting the riders. Pet.App.48. Courts cannot

“‘rewrite a constitutionally valid statutory text under

the banner of speculation about what Congress might

have’ intended” based on a document Congress may or

26



may not have even considered. Wisc. Cent. Ltd. v.

United States, 138 S. Ct. 2067, 2073 (2018).

The two sentences buried in a 700-page “explanatory statement” of the appropriations rider that were

written by one congressman—addressing HHS’s regulatory guidance—are no more illuminating. For one

thing, they do not actually reflect any individual legislator’s view of the meaning of the riders at all. Rather, they refer only to HHS’s guidance, not the riders,

and state only that making the risk-corridors program

budget-neutral “was the goal” of HHS’s regulation.

Pet.App.80. If one legislator’s views of a statute cannot override the statute’s text, see NLRB v. SW Gen.,

Inc., 137 S. Ct. 929, 943 (2017) (noting that “floor

statements by individual legislators rank among the

least illuminating forms of legislative history”), surely

his views of an agency’s non-binding guidance—issued to accomplish what no statute itself had done—

cannot do so.

Not only are these slivers of “legislative history”

far from clear indicators of Congressional intent, but

for any insurer who might even have learned about

that buried history, there was every reason for it to

believe that the appropriation riders did not impliedly

repeal the ACA’s risk-corridors provision. For one

thing, while the lack of appropriated funds constrains

government agencies, it does not eliminate an incurred statutory obligation or impair the courts from

enforcing it. See Ramah Navajo Chapter, 567 U.S. at

191 (explaining that a government “agency itself cannot disburse funds beyond those appropriated to it,

[but] the Government’s ‘valid obligations will remain

enforceable in the courts’”) (citation omitted); see also

United States v. Langston, 118 U.S. 389, 394 (1886)

27



(holding that statute fixing government official’s salary could not be “abrogated or suspended by subsequent enactments which merely appropriated a less

amount”). For another, Congress uses very specific

language when it intends to condition the government’s liability on the funds appropriated—language

noticeably absent from the riders here. See, e.g., Prairie Cty. v. United States, 782 F.3d 685, 690 (Fed. Cir.

2015) (involving statute imposing payment obligation

on government, but stating that payment “[a]mounts

are available only as provided in appropriation

laws”).7

Still further, the purported legislative history the

Federal Circuit relied upon did not even exist at the

time insurers decided to participate in early-to-mid

2013. So even if that history shed any light on the

proper interpretation of §1342 or the appropriation

riders—and it does not—it obviously could not have

alerted insurers to the future prospect of billions of

dollars of government non-payments at the time they

agreed to participate. This is, to put it mildly, the antithesis of “fair notice.”

Ultimately, “Congress ‘does not alter the fundamental details of a regulatory scheme in vague terms

or ancillary provisions—it does not, one might say,

hide elephants in mouseholes.’” Epic Sys. Corp., 138

S. Ct. at 1626–27 (citation omitted). Here, it is “more

than a little doubtful that Congress would have

7

Congress did use such language in various provisions of

the ACA itself in 2010, see, e.g., 42 U.S.C. §280k(a); 42 U.S.C.

§300hh-31(a), so it “knew exactly how to” limit ACA-mandated

payments to available appropriations in the riders several years

later had it wished to do so. SAS Inst., 138 S. Ct. at 1356.

28



tucked into the mousehole of” the appropriations riders “an elephant that tramples the work done by”

§1342 of the ACA and the risk-corridors provisions

and “flattens the parties’ ” freely accepted obligations,

id. at 1627—all directly contrary to the ACA’s central

purpose of expanding affordable healthcare by inducing the necessary participation of health insurance

companies such as Petitioners and amici. See King,

135 S. Ct. at 2493 (“‘We cannot interpret federal statutes to negate their own stated purposes.’”) (citation

omitted).

It’s all the more doubtful still that Congress intended the riders to repeal §1342 for at least two additional reasons. First, unlike the risk-corridors provision in the appropriation riders, various other provisions in the same riders did explicitly repeal existing statutes. See, e.g., Consolidated and Further Continuing Appropriations Act, 2015, Pub. L. No. 113235, 128 Stat. 2130, 2492 (2014) (“Section 414 of the

Social Security Act (42 U.S.C. 614) is repealed.”); 128

Stat. at 2525 (“Sections 65, 66, 67, and 68 of the Revised Statutes (2 U.S.C. 6569, 6570, 6571) are repealed.”); 128 Stat. at 2774 (“Subtitle C of title II of

the Pension Protection Act of 2006 (26 U.S.C. 412

note) is repealed.”). Because the appropriations riders

thus specifically repealed other statutes, “the general

rule that repeals by implication are disfavored is especially strong in this case.” Hagen v. Utah, 510 U.S.

399, 416 (1994).

Second, Congress’s repeated and explicit efforts to

repeal §1342 through substantive legislation—both

before and after it passed the appropriations riders at

issue—further reveals the absence of an implied repeal here. See Fourth Estate Pub. Benefit Corp. v.

29



Wall-Street.com, LLC, 139 S. Ct. 881, 891 (2019) (finding it “[n]oteworthy” in construing Copyright Act’s

registration requirement for bringing suit that “[t]ime

and again, … Congress has maintained registration

as prerequisite to suit, and rejected proposals that

would have eliminated registration”).

For all these reasons, a clearer case for rejecting

the use of (purported) legislative history to support an

implied repeal of a statute by an appropriations bill

that results in severe retroactive effect is hard to imagine.

IV. The Federal Circuit’s Decision Eviscerates

The Fair-Notice And Investment-Backed Reliance Interests Of The Insurers Guaranteed

By Due Process.

As shown above and in Petitioners’ briefs, the divided panel’s ruling below is plainly wrong because it

misapplied the controlling principles of construction

and erroneously relied on purported legislative history in finding that the appropriations riders impliedly repealed §1342’s mandatory-payment provision. Legislative history—especially of the variety relied upon here—cannot support an implied repeal of

one statute by another that retroactively impairs

one’s settled rights and interests, and that finds no

grounding in the would-be repealing statute’s text.

Any other conclusion would be a gross departure from

established rules of construction—and, indeed, from

foundational separation-of-powers principles.

Beyond this, the divided panel’s ruling strikes a

damaging blow to core due process principles of fair

notice and protection of investment-backed reliance

interests—harm this Court can, and should, undo by

30



reversing the decision below. The record is undisputed that the government made an explicit promise

to participating insurers to make the full payments

due under §1342, and repeatedly and publicly reassured the insurers that it would honor its end of the

bargain. The record also is undisputed that Petitioners—like amici—relied on the government’s promise

in undertaking the risky burden of providing health

insurance to numerous, previously uninsured Americans, whose health could not accurately be gauged.

And the record is undisputed that, after Petitioners

and the amici undertook this obligation, upheld their

end of the bargain, and fulfilled the conditions necessary to trigger the right to full risk-corridors payments, the government reneged on its promise.

In this light, it is clear that when Petitioners and

amici decided to participate in the risk-corridors program, they reasonably concluded that the governing

law—the ACA’s risk-corridors provision that Congress enacted—meant what it said: that if an insurer

sustained a certain level of losses during its participation in the program, the government would make the

full payments required under the statute. No other

conclusion about the meaning of the governing law is,

or would have been, plausible. Petitioners and amici

justifiably relied on the government’s unmistakable

promise—decidedly to their detriment. The record

thus makes clear not only that the government reneged on its binding promise—it ignored the insurers’

due process right to fair notice of the governing law

and eviscerated their substantial, investment-backed

reliance interests after the fact.

The government should keep its promises, especially when failing to do so has serious constitutional

31



repercussions. When it doesn’t, the Court should ensure that those harmed by the government’s breach

are made whole. At a bare minimum, the Court

should ensure that the government honor its statutory promises unless and until Congress repeals them

clearly and unequivocally. Only through such transparency will there be true accountability, and will the

people be afforded the opportunity to decide whether

or not they can abide their government’s conduct. It

is, after all, their government. See M’Culloch v. Maryland, 17 U.S. 316, 404–05 (1819) (“The government

of the Union … is, emphatically and truly, a government of the people[,]” and all power “emanates from

them”).

CONCLUSION

For the foregoing reasons and those set forth in

Petitioners’ briefs, the Court should reverse the decision below.

Respectfully submitted.

LAWRENCE S. SHER

Counsel of Record

REED SMITH LLP

1301 K Street, NW

Suite 1000 - East Tower

Washington, DC 20005

(202) 414-9200

lsher@reedsmith.com

 SEPTEMBER 6, 2019

COLIN E. WRABLEY

REED SMITH LLP

225 Fifth Avenue

Pittsburgh, PA 15222

(412) 288-3131