Democracy Alliance Bankrolled Court-Packing Scheme

Influx of progressive judges to D.C. Court of Appeals could lead to en banc reversal of Halbig decision

Supreme Court / AP
August 25, 2014

A shadowy network of wealthy liberal donors bankrolled an operation to pack one of America’s most powerful courts with progressive judges, according to documents reviewed by the Washington Free Beacon.

Now the effort could prevent an Obamacare challenge from reaching the Supreme Court, legal experts say.

The strategy to fill the D.C. Court of Appeals with left-leaning judges was aided by the American Constitution Society, a non-profit group that "promotes a progressive vision of the law." The ACS is funded in part by the Democracy Alliance, a liberal donor network that funnels millions to a web of dark-money member groups.

During a fundraising presentation at the Democracy Alliance’s meeting in Chicago this spring, the American Constitution Society boasted about meeting its "performance goals," which included helping to secure the Senate filibuster reform that paved the way for reshaping the D.C. circuit court.

The group said it "advanced filibuster reform" by "highlighting [the] issue in national media" and "successfully leveraging attention to create outcry for confirmation of long-stalled D.C. circuit nominees," according to its presentation.

The ACS also said it drafted and supplied materials that were used by Senate Democrats to advance the rule change.

Experts argued these activities appeared to cross the line from education to lobbying.

"It bills itself as a tax-exempt educational organization, but obviously the American Constitution Society is engaging in policy-making activities," said Daniel Epstein, the executive director of Cause of Action and an expert at the conservative Federalist Society. "They created the intellectual arsenal behind filibuster reform."

"[The Democracy Alliance is] investing a lot of money to get the American Constitution Society to do things that are going to benefit the Democratic Party politically," he said.

In an historic move, Senate Democrats used the "nuclear option" last year to eliminate filibuster rules that allowed the Republican minority to hold up executive and judicial nominees.

Republicans had been blocking several nominees to the D.C. Court of Appeals who they argued were radical judicial activists. The D.C. circuit court hears some of the most consequential appeals cases on issues ranging from health care reform to federal agency regulations.

Prior to the filibuster reform, the court was evenly divided between liberal-leaning and conservative-leaning judges. After the nuclear option, additional progressive judges were added to the D.C. circuit.

Three of the judges were ACS members, the group noted in its Democracy Alliance presentation.

The organization said it "met [its] goal to deepen ACS’ influence within the legal community" by getting "five members of ACS network confirmed to federal bench, including three of four new D.C. Circuit members."

In the case Halbig v. Burwell, the D.C. circuit court rejected an Obamacare provision that provided taxpayer-funded subsidies to individuals in states that had set up state health care exchanges. Residents of states that declined to establish exchanges were not eligible for the tax credits.

The D.C. circuit’s decision in Halbig put it at odds with the U.S. Court of Appeals for the Fourth Circuit, which had ruled in favor of the federal government. The conflicting rulings made it more likely that the U.S. Supreme Court would take up the case.

However, the Obama administration is now pushing for the D.C. circuit to rehear the case en banc—meaning that it would go before a panel of all of the court’s active judges. Legal experts predict that such a hearing would favor the Obama administration, because a greater number of progressive judges sit on the bench.

If the D.C. circuit sides with the 4th circuit during a rehearing, it would be less likely the case would make it to the Supreme Court.

"You'd no longer have a circuit split, and therefore you’d have a less of a chance the Supreme Court will review," said Epstein.