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The ACA, Intrade, and other tea leaves

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Tyler Cowen notes that Intrade prices the probability of the ACA mandate being struck down at 71%, up substantially over the last few months, and suspects a leak.

I don't suspect a leak. Supreme Court clerks don't leak. But there's a rational reason for the Intrade price to increase. The Supreme Court issues all of its opinions by the end of June. Historically, the most contentious decisions are released in the very last days of the term. If, as several law professors sneered, the case against the ACA mandate was frivolous, it would be upheld by a wide or unanimous margin and the opinion likely would have already issued. As we get closer to the end of June, it becomes more and more apparent that the Supreme Court is not treating this as an easy case, it becomes more and more likely that there will be a 5-4 decision, and the more likely there is a 5-4 decision, the more likely the mandate is overturned. An intelligent Bayesian infers increased odds of reversal from the delay in releasing the opinion. (That said, that 71% figure seems high. There are four votes to uphold the mandate, which means that five justices with varying views on the Commerce Clause have to all break the same way.) George Will protests the campaign to demonize the justices who might strike down the law.

Daniel Fisher finds some other tea leaves that cut the other way. In Armour v. Indianapolis, the local government permitted homeowners to pay an assessment for a sewer system in a lump sum in advance, or with a smaller monthly fee over several years. Several homeowners paid in advance; then Indianapolis repealed the requirement for the monthly fee—but refused to refund the homeowners that had already paid. In a 6-3 opinion, the Supreme Court rejected an Equal Protection challenge to this remarkable ripoff on the grounds that the city's proffered rationale that it would be too much of a bother to provide the refund satisfied "rational basis review." Chief Justice Roberts's dissent was in stronger language than is normal for the reserved jurist. Fisher speculates: does this indirectly reflect upset about another pending decision where a majority might rely upon the highly deferential rational basis review? (Meanwhile, another moral is: never pay the government in advance, because you can't expect them to treat you fairly.)

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Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.