Judge Thomas Griffith's majority opinion ruled that Obamacare -- the Patient Protection and Affordable Care Act -- means what it says. Obamacare subsidies are available to consumers in states that set up state health care exchanges, just as the statute specifically authorizes. But they are not available to consumers in states -- 36 of them -- which did not set up state health care exchanges but allowed federal exchanges there instead, in accordance with the Act. Nowhere does the Act authorize subsidies in such states.
As Judge A. Raymond Randolph wrote, concurring fully in the judgment, “to hold otherwise would be to engage in distortion, not interpretation.” Judge Randolph quotes the words of Justice Louis Brandeis, long a hero in the liberal pantheon, in the 1926 case of Iselin v. U.S.: "What the government asks is not a construction of a statute, but, in effect, an enlargement of it by the court, so that what was omitted, presumably by inadvertence, may be included within its scope. To supply omissions transcends the judicial function."
In this case, however, what the government wanted the court to supply was not omitted through inadvertence, but on purpose. Congress wanted to give the states an incentive to set up their own health care exchanges, and so provided that consumers only in states with state health care exchanges would be eligible for subsidies. But this attempt to bludgeon the states into setting up their own exchanges -- to absolve the federal government of the responsibility for doing so, at which it subsequently showed itself to be incompetent -- but some 36 states declined the invitation (or, if you like, resisted the bribe).
So what did the Obama administration do? Something typical: it acted lawlessly. Subsidies would be paid that were never authorized by Congress. The instrumentality would be the Internal Revenue Service, which in this administration has shown itself entirely capable of politically motivated lawless behavior. But lawlessness may not be the worst of it. This was also a reckless action.
The fact that the statute did not authorize subsidies in states with federal exchanges made the administration’s action vulnerable in court. When it became clear that many states would not set up their own exchanges, the administration could have asked Congress to rewrite the statute.
Undoubtedly this would have required major changes beyond the addition of a clause authorizing the subsidies, since by that time Republicans had a majority in the House of Representatives. But the Constitution's provisions requiring that laws be made by Congress and be faithfully executed by the president were not designed to make lawmaking easy or pleasant.
The administration chose to bet that courts would not read the statute as saying what in fact it says. At the D.C. Circuit, at least, it lost that bet.
The D.C. Circuit's decision is not final; the government may seek an en banc hearing by the entire appeals court or review in the Supreme Court. But some 5 million people are said to be directly and adversely affected if the D.C. Circuit's ruling is upheld. That's the kind of thing that happens when you have a lawless and reckless administration.