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View Diary: Split federal appeals judges hear arguments on Obamacare subsidies (64 comments)

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  •  Problem is the text of ACA multiple times provides (3+ / 0-)
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    coffeetalk, Hesiod, VClib

    for subsidies explicitly through state run exchanges, but not through the Federal exchange.  

    This case has the potential to be far, far, far more important ACA case than Hobby Lobby.

    From my initial readings on this topic:

    Some parts of the history of the law's passage suggests this was done to pressure states to form their own exchanges.  But conflicting versions of history is the norm.

    What is also important about these subsidies through exchanges is their tie to employer mandate penalties.  Without subsidies through the federal exchanges, employers may not be subject to employer mandate penalties in the same states.  This gives employers in Federal exchange states standing to sue against the IRS and HHS regulations that have been written that assume subsidies also apply to Federal exchanges.

    If opponents of ACA win on this case, it could mean that states without state exchanges would have no subsidies for private insurance, and no employer mandate.

    I am still looking into this, so I do not have an opinion as the the validity of either sides arguments.

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Wed Mar 26, 2014 at 01:10:46 PM PDT

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    •  I agree that it is a significant issue. (2+ / 0-)
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      VClib, nextstep

      I tend to think that the challengers may even be technically legally correct.   It really looks like the way Congress wrote the law, subsidies only applied to exchanges established by the states, not to any federal exchanges.  

      However, as any lawyer will tell you, being technically legally correct does not always mean you win.  And in this case, a SCOTUS faced with a situation where applying the law as written means that you essentially gut the whole thing may choose practicality over being legally correct.  

      We shall see.  

      •  That goes double when you are trying (0+ / 0-)

        to use a number of laws and precedents to create a synergistic effect that nobody had anticipated.  Here is an example I found of how such a thing could be done.  This involves copyright on music, specifically "subconscious copying" and "substantial similarity" but the idea is that what if by using precedent and simple math you can prove well beyond a reasonable doubt that any independent musician is guilty of copyright infringement even if they picked the notes completely at random?

        LEGAL DISCLAIMER: I MAKE NO WARRANTY that my statistical measure of "substantial similarity" will in any way predict how a judge will rule. I CANNOT BE HELD LIABLE for damages resulting from any defect in the model.

        This writeup is about to be rewritten using a further refinement of the assumptions.

        Abstract: The standard for what constitutes copying or creating a derivative work under American copyright law is so broad that songwriters run a significant risk of accidentally infringing a copyright. An approximate mathematical model of the legal standard is presented, which results in fewer than 50,000 possible melodies given a few assumptions.
        Yes! We have a chilling effect on songwriting!

        The song "Yes! We have no bananas!", first published on March 23, 1923 (putting it under perpetual copyright on the installment plan), has a quite interesting legal history. As soon as it was published, George Frideric Handel's American publisher filed a copyright infringement lawsuit against songwriters Frank Silver et al. for copying four notes from the "Hallelujah Chorus" of Messiah and won, taking some of the profits. (At least it wasn't as bad as the "Bitter Sweet Symphony" case, where the Rolling Stones' music publisher assumed full control of the Verve's derivative work.)

        The important part about that case is that it set a legal precedent that matching even four notes can easily be enough to establish that two songs are substantially similar. Such music copyright infringement cases raise some interesting questions about copyrights and combinatorics, challenging the notion that it is still possible to compose a song that is considered original under copyright law.
        Counting melodies

        A fellow may wonder, how many melodies are there in the universe? A melody is determined by the distances from each note to the next in frequency (intervals) and in time (note duration). A melody of n notes will have n - 1 distance vectors, which can be expressed as an ordered pair (interval, duration). (The last note doesn't count because there is no "next note".)

        Because most judges are not musicians, and because they are looking for substantial similarity rather than exact identity between melodies, they will probably ignore some of the "embellishments" that belong to a particular performance rather than to the underlying musical work. In general, a typical melody will make the most use of three note lengths (such as half, quarter, eighth or quarter, eighth, sixteenth); a judge may ignore slight variations of duration such as triplets or change a dotted quarter note into a half note. To a judge, eighth note + eighth rest + rest of melody equals quarter note + rest of melody because staccato is an aspect of the performance and does not diminish similarity of the underlying songs. Most judges will not be familiar with the Eastern scales used in some later Beatles music, and a judge has the right to round each note to the closest note in a Western scale because just the fact that two melodies belong to different keys or scales doesn't diminish their similarity. Thus, I feel justified in using a simplified model for discussion.

        Assume that all songs use a Western musical scale and that such a scale contains twelve distinct intervals. Assume that a judge (not a musician but a judge) will distinguish three distinct note durations (which roughly correspond to eighth, quarter, and half notes, or through a trivial change in time signature, to quarter, half, and whole notes, or to sixteenth, eighth, and quarter notes). Thus, there are 36 possible distance vectors from one note to the next, and 36(n - 1) melodies of n notes.

        Now, 36 to the third power equals 46,656 distinct melodies. No other melodies are possible in the Western musical scale.

        How many is 46,656? If only one hundred songwriters in the world were to write one song each week with a unique melodic hook, they would run out of new melodies within nine years. Information theory states that using the preceding model, a melodic hook can be encoded in a number from 1 to 46,656, and that number can be encoded within 16 bits. Applying an estimate of the entropy of English (about 8 bits per 3 letters) gives six letters. Trademarkable? Yes. Copyrightable? Only if entrenched songwriters can buy the judge.

        On the other hand, the four notes threshold is from a quite old case. More recent cases may have expanded this threshold. Allen v. Walt Disney (1941) shows an analysis typical of more recent analyses, finding for the defendant even in the face of several chance resemblances. Campbell v. Acuff-Rose (1993) stated that a small appropriation from "Oh, Pretty Woman" was fair because it was used in a parody of the copyrighted work itself. However, we still have Bright Tunes v. Harrisongs (1976), which shows that chance similarities to a published song may be assumed to be "unconscious copying", but here, at least eight notes (367 = 78,364,164,096 possibilities by the model presented above) were involved.
        There is no originality

        From an amicus curiae brief in support of the Sonny Bono Copyright Extension Act (

            The fact that creators of new works cannot merely re-use the expression contained in copyrighted work of others without permission forces them to be creative. Composers cannot rehash the melodies created by earlier composers, they must create their own new original melodies.

        How is this possible? As noted above, case law states that copying four notes of another song's "hook" is enough to get a songwriter in trouble with copyright law, and that the standard for copying is not an exact match but merely substantial similarity. Another case (citation omitted) seems to state that there is no unprotected "idea" in music, only "expression".

        Applying such a low standard of originality to melodies can in theory create a situation where nobody can create a new song without using a copyrighted melody because previous songwriters have exhausted the space of melodies. It almost looks as bad as the situation with software patents, which have such a high probability of reinventing a patented invention so as to create a chilling effect on "the progress of science and useful arts" (U.S. Const., Art. 1, Sect. 8, Cl. 8).

        I suggest that the U.S. Congress set down some more reasonable guidelines as to how much of a melody a songwriter can reuse without accidentally creating a derivative work and stepping on some government-granted monopoly. Will future lawmakers use algorithmic information theory to construct an even more precise model?

        You have watched Faux News, now lose 2d10 SAN.

        by Throw The Bums Out on Wed Mar 26, 2014 at 05:30:42 PM PDT

        [ Parent ]

    •  Really? I thought it was the opposite (1+ / 0-)
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      That other parts of the law make it clear that subsidies were also for the federal exchange.

      I get encouraging states to build their own exchanges, but it would seriously undermine the law to not also allow subsidies to those in a federal exchange.

      I mean, if lawmakers really wanted subsidies in only state exchanges, why even have a federal exchange.

    •  The good news is that the full DC Circuit (1+ / 0-)
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      has 7 judges appointed by Democrats and 4 appointed by Republicans and thus if it went in front of the full DC Circuit then it will most likely be fine.

      President Obama, January 9, 2012: "Change is hard, but it is possible. I've Seen it. I've Lived it."

      by Drdemocrat on Wed Mar 26, 2014 at 02:59:18 PM PDT

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      •  Even judges appointed by Democrats (1+ / 0-)
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        have to follow the law, not what they would prefer from a political perspective. It will start with a smaller panel which could include judges like Janice Rogers Brown. I can imagine her taking the administration to task ruling on this topic.

        This is actually a very troublesome lawsuit.

        "let's talk about that"

        by VClib on Wed Mar 26, 2014 at 03:27:51 PM PDT

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        •  It's already been argued. (1+ / 0-)
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          Griffith, Randolph, Edwards.

          •  Do you have a link to the ruling? (0+ / 0-)

            "let's talk about that"

            by VClib on Wed Mar 26, 2014 at 05:24:14 PM PDT

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            •  No. It was just argued yesterday. (1+ / 0-)
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              Here's a Legal Times article on it.

              •  Thanks, that makes me feel better (1+ / 0-)
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                Villanova Rhodes

                I thought for a while that I was completely out of touch. Thanks for the link to the Legal Times.

                I bet I could outline what JRB will write.

                "let's talk about that"

                by VClib on Wed Mar 26, 2014 at 06:19:22 PM PDT

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              •  Misread your coment, no JRB on the case (1+ / 0-)
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                Villanova Rhodes

                Looks like this may not win at the DC Circuit, at least at the three judge panel. Might pass en banc, but the SCOTUS could topple the apple cart on this one. It could be a chance for Roberts to split the baby.  

                "let's talk about that"

                by VClib on Wed Mar 26, 2014 at 06:25:06 PM PDT

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                •  Agreed, but unless something (1+ / 0-)
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                  procedurally odd occurs, it'll be a while before it gets there and decided. Probably no earlier than June 2015 for a SCOTUS ruling, I would think, though shortcuts are possible.

                  Meanwhile, facts on the ground start stacking up. Depending on the ruling, either everyone's getting subsidies or only the people with state-based exchanges get subsidies. So the (for convenience) red-state citizens eligible for subsidies either stand to have them taken away after getting them for more than a year, or never get them but see their blue-state brethren doing nicely. Either way, I'm not sure I'd want to be a red-state politician, and having Roberts split the baby by saying blue-state folks get their subsidies sure isn't going to help me. At that point, obviously depending on midterm results, there may well be critical mass to fix the law. If nothing else, the insurance companies will be pressuring them to do so.

                  All of this assumes the DC Circuit decision doesn't invalidate the whole law because of the differential treatment of the states, and I haven't read anywhere near enough to have an opinion on the likelihood of that. And it assumes the death spiral doesn't kick in, but I think the law's other provisions are sufficient to stave that off for a while longer. Anyway, that's how I see it without benefit of reading the briefs.

                  •  I haven't done any reading on this case yet (1+ / 0-)
                    Recommended by:
                    Villanova Rhodes

                    but it has the possibility of being very significant. The black letter language in the ACA is an easy place for any Justice to hang their hat.

                    "let's talk about that"

                    by VClib on Wed Mar 26, 2014 at 09:00:59 PM PDT

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