[00:00:00] Speaker 06:
604 company versus United States

[00:00:33] Speaker 04:
Ms.

[00:00:33] Speaker 04:
Ellsworth, please proceed.

[00:00:43] Speaker 01:
Good morning, Your Honor, and may it please the court.

[00:00:45] Speaker 01:
Jessica Ellsworth on behalf of Ford Motor Company.

[00:00:49] Speaker 01:
There are four keys to understanding and resolving this appeal.

[00:00:53] Speaker 01:
First, a foreign sales corporation, or FISC, was a congressionally prescribed tax device to incentivize exports.

[00:01:02] Speaker 06:
Let me ask you a general question.

[00:01:04] Speaker 06:
Did Ford ever take any positions in litigation before the WTO arguing that FSC should be considered separate entities from their U.S.

[00:01:14] Speaker 06:
companies for purposes of calculating tax liabilities?

[00:01:18] Speaker 01:
I am not aware of any participation by Ford in the WTO proceedings.

[00:01:23] Speaker 01:
But as you note, Your Honor, the WTO did conclude that the Fisk statute was a prohibited export subsidy.

[00:01:29] Speaker 01:
And on that basis, Congress repealed it.

[00:01:32] Speaker 01:
Ford's Fisk export was, at all times, it's undisputed, operated consistent with the statute and consistent with the regulations.

[00:01:43] Speaker 01:
That means that it was operated as a bookkeeping exercise in offsetting accounting entries.

[00:01:48] Speaker 06:
Well, there was a little more to it than that.

[00:01:52] Speaker 01:
There was little more to it than that.

[00:01:54] Speaker 01:
There was a separate incorporation, which is something that the government has focused on.

[00:02:00] Speaker 01:
And there was two contracts, in one of which the Fisk export agreed to undertake certain activities to receive a commission.

[00:02:11] Speaker 01:
In the other, Ford agreed to undertake those activities on export's behalf.

[00:02:16] Speaker 06:
Did any of the FSCs

[00:02:20] Speaker 06:
ever appear before the WTO?

[00:02:23] Speaker 06:
I'm not aware of any participation before the WTO.

[00:02:34] Speaker 02:
What was the government's position before the WTO as to whether these were separate or the same entities?

[00:02:41] Speaker 01:
Well, I want to be clear, they are separate entities.

[00:02:45] Speaker 01:
I don't think that's the question here.

[00:02:47] Speaker 01:
The starting point, I think, for the 6621 analysis in Wells Fargo is that you have two separate entities and the question is whether they should be deemed the same taxpayer within the meaning of that term in 6621D.

[00:03:01] Speaker 01:
So I assume that the government took the position that they were separate entities because

[00:03:05] Speaker 01:
that is the only position that's consistent with the way the statute and the regulations are set out.

[00:03:10] Speaker 02:
Sure, but if we're just looking at Wells Fargo, I forget which of the scenarios it's described, but it's undisputed on the facts of this case that Export and Ford merged back together after this period of liability.

[00:03:26] Speaker 02:
So under the plane holding a Wells Fargo, it's not entitled to this netting.

[00:03:34] Speaker 01:
Your honor is correct that under merger law, it wouldn't be entitled to this holding.

[00:03:38] Speaker 01:
And the specific scenarios that were identified and discussed in Wells Fargo were merger scenarios.

[00:03:44] Speaker 01:
But I think the framework that the court adopted where it looked to the background legal principles to guide its determination about what same taxpayer meant is what's relevant here.

[00:03:56] Speaker 02:
But isn't that why, frankly, you lose?

[00:04:00] Speaker 02:
The basic legal framework is Congress set up this statutory scheme that was intended to provide sufficient separation between the two entities so that it wouldn't be violating international treaties and wouldn't be subject to a WTO claim.

[00:04:17] Speaker 02:
It failed, but that was the whole point of the statute, to create sufficient separation between the two of you.

[00:04:23] Speaker 01:
Well, I think what Wells Fargo says is you look a little more deeply than that.

[00:04:27] Speaker 01:
What Congress intended was to create

[00:04:30] Speaker 01:
really sort of an incremental step from the disc regime that had preceded it.

[00:04:34] Speaker 01:
And it sought to put in place a foreign requirement, because discs had been domestic, and it sought to put in place some caps on the amount of income that could be exempted from tax through using this kind of tax device.

[00:04:49] Speaker 05:
Well, it sought to satisfy get.

[00:04:52] Speaker 05:
requirements as interpreted by the WTO.

[00:04:56] Speaker 01:
It did, but it did that in a very minimal way.

[00:04:59] Speaker 01:
And I think if you look at the legislative history of the FISC, which we cite in our brief, it sought to be... Just a harmless little sham.

[00:05:07] Speaker 01:
It's something that Congress thought would be sufficient to pass muster.

[00:05:11] Speaker 01:
And to be clear, Congress was trying to do this to give

[00:05:14] Speaker 01:
American exporters the same leg up that it felt that European companies were getting from their own governments.

[00:05:22] Speaker 01:
And so it sought to impose minimal burdens.

[00:05:26] Speaker 01:
And that's exactly what the United States told this court when it came in 2009 in the Abbott Labs case describing fists.

[00:05:35] Speaker 01:
It told the court over and over in its brief that fists were

[00:05:40] Speaker 01:
artificial constructs that were just about a tax benefit.

[00:05:44] Speaker 01:
They were not ordinary subsidiaries.

[00:05:46] Speaker 01:
They should not be treated as ordinary subsidiaries.

[00:05:48] Speaker 01:
They were quite different from ordinary subsidiaries.

[00:05:51] Speaker 01:
And I think when this court issued its opinion, it specifically focused on that.

[00:05:56] Speaker 01:
You can see that at page 1331 of the court's opinion, where it recites the government's position that despite technically having separate incorporation,

[00:06:05] Speaker 01:
A FISC is an artificial construct that exists solely to facilitate the tax benefit afforded by Congress.

[00:06:13] Speaker 06:
On page 11 of the blue brief, you say that Ford paid the IRS $336 million in tax overpayment during the relevant time period.

[00:06:25] Speaker 06:
Did Ford make those overpayments with intent of asking later for global netting?

[00:06:33] Speaker 01:
As to export, do you mean?

[00:06:35] Speaker 01:
There's nothing in the record that indicates anything about how that overpayment was calculated.

[00:06:40] Speaker 01:
And I'm not aware of anything that describes it.

[00:06:43] Speaker 01:
I think as the case came to the Court of Federal Claims, the parties entered into a stipulation on the relevant facts that identified the 1992 overpayment, the underpayments that occurred throughout the 1990s made by export.

[00:06:59] Speaker 01:
And so the question, as it became relevant when the case was filed, is whether

[00:07:04] Speaker 01:
export and Ford should be deemed the same taxpayer within the construct of 6621D.

[00:07:11] Speaker 02:
And I think in Wells Fargo, one of the key things that the Congress... So the gist of your argument is that Congress intended these statutes to basically say they're separate enough for the WTO, but they're same enough for netting.

[00:07:27] Speaker 01:
Well, at the time that the fifth statute was put in place in 1984, there was

[00:07:31] Speaker 01:
effectively interest netting because there were no different interest rates for overpayments and underpayments.

[00:07:37] Speaker 01:
So at some point, the government suggests Ford is trying to get a double benefit here by being able to get the tax benefits of a FISC and being able to get the tax benefits from interest netting.

[00:07:49] Speaker 01:
But when the FISC statute was put in place and when Congress calibrated what the benefit was going to look like, interest netting was effectively the norm because there were no different interest rates.

[00:08:00] Speaker 01:
So there's no kind of secondary attempt to get an extra benefit at play here.

[00:08:04] Speaker 01:
This is really an attempt to return to the status quo of what the situation was in 1984 when the fifth statute was put in place.

[00:08:14] Speaker 01:
And that is relevant under Wells Fargo because this court looked to the background legal principles of what Congress would have known when it legislated, when it added the term 6621D in 1998.

[00:08:27] Speaker 01:
So 14 years after the Fisk statute has been put in place, Congress uses the term same task here.

[00:08:33] Speaker 02:
So we know Congress, in enacting the Fisk statute, was attempting to create some kind of separate structure that wouldn't violate WTO or wouldn't be subject to a WTO proceeding.

[00:08:46] Speaker 02:
And if they weren't worried about that, then Ford could have just exported directly and Congress could have given them subsidies directly.

[00:08:57] Speaker 02:
But they're going through some kind of legal structure so that under the GATT, it's a separate entity.

[00:09:05] Speaker 01:
They are going through some kind of legal structure.

[00:09:07] Speaker 01:
That's right.

[00:09:08] Speaker 01:
But as the United States told this court in its Abbots brief, that's structure.

[00:09:12] Speaker 02:
It has a different corporate structure.

[00:09:14] Speaker 02:
It has a different board.

[00:09:15] Speaker 02:
It has a different employer identification number.

[00:09:18] Speaker 02:
All of that stuff, right?

[00:09:20] Speaker 01:
Yes.

[00:09:20] Speaker 01:
It had a different incorporation.

[00:09:23] Speaker 01:
It had a different taxpayer identification number.

[00:09:25] Speaker 01:
It didn't have any employees.

[00:09:27] Speaker 01:
So I don't know that it had an employer identification number, but it did have...it filed different tax returns.

[00:09:32] Speaker 02:
Well, it had to have some kind of number if it was filing tax returns.

[00:09:35] Speaker 01:
Sure.

[00:09:36] Speaker 02:
And it had... So it wasn't using Ford's.

[00:09:38] Speaker 01:
It wasn't...it couldn't use Ford's because it was a foreign entity.

[00:09:41] Speaker 01:
So it couldn't, under the consolidated return rule, file as part of Ford's return.

[00:09:47] Speaker 01:
But when the United States came to this court previously... Let me ask you this.

[00:09:51] Speaker 02:
If you have a parent company

[00:09:56] Speaker 02:
and it files a consolidated return, and it has a separate subsidiary that is included on that return.

[00:10:02] Speaker 02:
But the separate subsidiary has a different board, a different corporate structure, a different EIN.

[00:10:09] Speaker 02:
Can you net between that subsidiary and the parent?

[00:10:14] Speaker 01:
My understanding is that netting occurs on the basis of the consolidated return.

[00:10:17] Speaker 01:
So all of the entities that are filing the consolidated return together.

[00:10:22] Speaker 02:
Even with different EINs?

[00:10:23] Speaker 01:
That's my understanding of the way that it works.

[00:10:26] Speaker 01:
I think there's a bit of an open question that came about because of the position the government took in the magma power case.

[00:10:34] Speaker 01:
But this issue, as I understand it, is that there is netting across consolidated returns.

[00:10:41] Speaker 01:
And the question here, though, is whether this fisc that Congress authorized is sufficiently close to Ford to be deemed a same taxpayer.

[00:10:51] Speaker 01:
under a broad reading of the term same taxpayer to effectuate the remedial purpose.

[00:10:57] Speaker 01:
And in Wells Fargo, by my count, the court said more than six times that this term should be broadly construed to effectuate its remedial purpose.

[00:11:06] Speaker 01:
That remedial purpose was to remedy unfairnesses that resulted after Congress decided to allow

[00:11:13] Speaker 01:
different interest rates.

[00:11:15] Speaker 01:
And to be clear, the court looked not only at the legislative history of 6621D, but at the history of the decade it took to get to 6621D.

[00:11:27] Speaker 01:
And the Treasury Department's sort of stubbornness about implementing broad interest netting

[00:11:34] Speaker 01:
remedies for large corporations.

[00:11:37] Speaker 02:
But the impairments is all based upon the notion that it's the same taxpayer, and they shouldn't essentially be paying over money to the IRS when their underpayments and overpayments net out.

[00:11:51] Speaker 02:
In other words, they pay the precise amount of tax.

[00:11:54] Speaker 02:
But that doesn't have anything to do with whether the same taxpayer or not.

[00:12:00] Speaker 01:
Well, I think it does, Your Honor, for the same reason that in looking at Wells Fargo in the third situation the court addressed, where at the time the initial overpayment was made, you had two entirely separate corporations.

[00:12:12] Speaker 01:
They had no relationship at all.

[00:12:13] Speaker 02:
Yes, but at the time the, and I don't know which it was under or over.

[00:12:18] Speaker 02:
It really doesn't matter.

[00:12:18] Speaker 02:
But at the time the other payment was made, they had merged into the same entity.

[00:12:23] Speaker 02:
And we looked at merger law to conclude that they were the same entity all the time.

[00:12:28] Speaker 02:
That scenario doesn't help you at all.

[00:12:30] Speaker 02:
You agree, right?

[00:12:31] Speaker 01:
I don't agree with you.

[00:12:32] Speaker 02:
How does it help you?

[00:12:32] Speaker 02:
You agreed that your merger occurred after both the overpayment and underpayment was made, which in Wells Fargo we said didn't qualify for netting.

[00:12:43] Speaker 01:
So it has to do.

[00:12:44] Speaker 01:
It helps us for reasons unrelated to merger law.

[00:12:46] Speaker 01:
It helps us because what the court clarified in Wells Fargo is that the key time under the earlier East Energy case is that they have to be the same taxpayer

[00:12:56] Speaker 01:
at the time an overpayment is made and at the time an underpayment is made.

[00:13:01] Speaker 01:
And at the time one of those two payments was made, they were completely separate organizations.

[00:13:06] Speaker 01:
So then the question was, did background legal principles justify treating them as the same, even though at the time one of those payments were made, they were separate?

[00:13:14] Speaker 01:
In this case, we're relying on different background legal principles.

[00:13:17] Speaker 01:
I grant you that.

[00:13:18] Speaker 01:
It's not merger law.

[00:13:19] Speaker 01:
It's the FIST statute.

[00:13:21] Speaker 01:
It's the implementing regulations.

[00:13:22] Speaker 01:
It's the same sorts of treatises and commentators that this court looked to in Wells Fargo to set the background legal principles.

[00:13:30] Speaker 06:
Were there any tax statutes enacted after the FSC scheme was created that mentions the interplay and relationship with FSCs?

[00:13:45] Speaker 01:
There were a series of export-related tax statutes that were passed, but I don't know what Congress put in place after the Fisk regime specifically referred to the Fisk regime.

[00:13:56] Speaker 01:
It was a separate statute.

[00:13:59] Speaker 01:
If I may reserve the remainder of my time for my role.

[00:14:01] Speaker 01:
Yes.

[00:14:01] Speaker 01:
Thank you.

[00:14:04] Speaker 04:
Mr. Calderon, please proceed.

[00:14:09] Speaker 03:
Good morning, Your Honors.

[00:14:10] Speaker 03:
My name is Richard Calderon, and I represent the United States in this appeal.

[00:14:13] Speaker 03:
May it please the Court?

[00:14:15] Speaker 03:
At all times relevant to this case, Export was a separately incorporated subsidiary of Ford.

[00:14:22] Speaker 03:
And no court has ever held that a subsidiary and its parent corporation are entitled to global interest netting under Section 6621D.

[00:14:30] Speaker 03:
There's a very good reason for that, which is that it's been settled for three quarters of a century since the Supreme Court's decision in the Moline Properties case that corporate subsidiaries are separate taxpayers from their parents

[00:14:44] Speaker 03:
that is consistent with and underscored by the definition of taxpayer in Section 7701 of the Internal Revenue Code, as any person, including any corporation, subject to tax, that rule holds even if a parent corporation not only wholly owns its subsidiary, but wholly controls its subsidiary so that the two are substantially identical in practice.

[00:15:08] Speaker 03:
And export's separate nature is underscored here by the fact that it not only had its own taxpayer identification number, but consistently filed its own tax returns at all times at issue in this appeal.

[00:15:19] Speaker 06:
Well, and that it's designed to be separate in order to satisfy the WTO.

[00:15:24] Speaker 06:
That's the whole point.

[00:15:25] Speaker 03:
Yes, Your Honor, that is entirely the point of the FISC statute, and Ford's attempt to rely on the FISC statute

[00:15:31] Speaker 03:
should also be rejected for a second separate reason.

[00:15:34] Speaker 03:
As the Supreme Court recognized in the Boeing case, and as this court recognized in Abbott Laboratories, FISCs are not a free-floating license for a corporation to claim whatever tax benefits it decides it wants to claim.

[00:15:47] Speaker 03:
Rather, the FISC statute provides for carefully limited benefits, and it's undisputed here that Ford claimed and received all of those benefits.

[00:15:58] Speaker 03:
Now, of course, there are

[00:16:00] Speaker 03:
other narrow situations in which a corporation's separate existence may be disregarded for federal taxation purposes?

[00:16:07] Speaker 02:
Let me just ask you a hypothetical.

[00:16:09] Speaker 02:
What if instead of the Fist Statute, Congress had a statute that accorded special tax treatment to a division within Ford as opposed to a separate entity within Ford?

[00:16:25] Speaker 02:
And so the statute said,

[00:16:27] Speaker 02:
If you create a separate functioning statute and you create different books and the like to handle only exports.

[00:16:36] Speaker 02:
So we know we're only giving you a subsidy for your exports.

[00:16:40] Speaker 02:
But nevertheless, you pay all your taxes under your parent company.

[00:16:47] Speaker 02:
Would those be the same taxpayer for purposes of netting, even the ones the domestic

[00:16:53] Speaker 02:
division and one's the export division.

[00:16:55] Speaker 03:
Your Honor, if they're simply separate divisions of the same corporations, it has one taxpayer identification number files, one tax return.

[00:17:01] Speaker 02:
So they could probably get it netting there.

[00:17:03] Speaker 02:
That would probably violate the gap, which is why they didn't do it like that.

[00:17:07] Speaker 02:
But they could have.

[00:17:08] Speaker 03:
They could have in that circumstance, yes, Your Honor.

[00:17:13] Speaker 02:
But I take it your friend's argument is that,

[00:17:19] Speaker 02:
This is essentially what they've done, but they've twisted it a little bit to make it acceptable under the GATT.

[00:17:26] Speaker 02:
But it's still really just incentivizing and giving tax breaks to Ford for its exports.

[00:17:32] Speaker 02:
And so it's not really anything different than that division scenario.

[00:17:36] Speaker 03:
But it is different, Your Honor, because Congress could have passed the statute you suggested.

[00:17:41] Speaker 03:
Congress could have created a regime in which a corporation is treated as having four separate export corporations without actually doing so.

[00:17:51] Speaker 03:
In fact, my understanding is that the current extraterritorial income exclusion in section 114 proceeds along those lines.

[00:17:58] Speaker 03:
But in the FISC statute,

[00:17:59] Speaker 03:
Congress required corporations to form subsidiaries.

[00:18:03] Speaker 03:
And Congress expressly stated, when it did this, that those subsidiaries were to have economic substance and stand apart from their parents.

[00:18:11] Speaker 06:
And so in this regard, Congress in particular... I was carefully crafted in order to satisfy the WTO requirements.

[00:18:19] Speaker 03:
There's no question about that.

[00:18:20] Speaker 03:
Certainly, Your Honor, it was carefully crafted.

[00:18:22] Speaker 03:
But in the regard of standing apart from their corporate parents, FISCs were intended to be no different from any other corporate subsidiary.

[00:18:30] Speaker 03:
And that was exactly the position that the government took in the Abbott Laboratories case.

[00:18:34] Speaker 03:
It was common ground there that FISCs were both separate entities and separate taxpayers.

[00:18:39] Speaker 03:
That's at page 1329 of your opinion, page 100 of the Court of Federal Claims opinion.

[00:18:43] Speaker 03:
In fact, as we point out in our brief, if the government believed that FISCs were not separate taxpayers from their parent corporations, the dispute in Abbott never would have occurred.

[00:18:53] Speaker 03:
The question there involved Abbott's attempt

[00:18:56] Speaker 03:
to retroactively change the transfer pricing method and allocate additional income to its Fisk subsidiary.

[00:19:03] Speaker 03:
The government objected because the statute of limitations on assessing additional tax against the Fisk had expired.

[00:19:11] Speaker 03:
Had the Fisk and its parent corporation been the same taxpayer, the government simply could have assessed the tax against Abbott.

[00:19:18] Speaker 03:
There would be no need to try to assess the tax.

[00:19:20] Speaker 04:
Is Ford arguing at all that the separate corporate status was, in fact, a sham and they were a taxable unit?

[00:19:26] Speaker 03:
Your honor, Ford expressly argued that in the Court of Federal Plans, but on page two of its reply brief on appeal, it has expressly disclaimed any reliance on a sham corporation or lack of economic substance theory on appeal.

[00:19:38] Speaker 03:
So Ford is no longer arguing that.

[00:19:40] Speaker 04:
And so the government's position, as I understand it, boils down to if you have

[00:19:44] Speaker 04:
Separate corporations, you just don't get to take advantage of 6621 de-netting absent sham or some other unique situation like that.

[00:19:54] Speaker 04:
But separate corporations just ends it, right?

[00:19:56] Speaker 04:
Yes, that's correct, Your Honor.

[00:19:58] Speaker 04:
It's a very simple position.

[00:19:59] Speaker 06:
The WTO didn't hold that the FSCs were shams.

[00:20:03] Speaker 06:
It just held that they were unsatisfactory.

[00:20:05] Speaker 06:
Isn't that right?

[00:20:06] Speaker 03:
That's my understanding.

[00:20:07] Speaker 03:
I have not seen the relevant WTO opinion, Your Honor.

[00:20:09] Speaker 03:
But even if the WTO had held that corporations were shams,

[00:20:13] Speaker 03:
that fiscs were sham, it would make no difference because WTO standards and US law standards are different.

[00:20:19] Speaker 04:
Yes, but to make sure I understand the tax law correctly, which I do not proclaim to necessarily do, if we were to find, or if the court of federal claims were to have found that the separate corporate structure was in fact a sham, they could conclude it was a taxable unit, and then netting would apply, right?

[00:20:35] Speaker 03:
Yes, Your Honor.

[00:20:36] Speaker 03:
If a fisc were a sham corporation, netting would apply.

[00:20:38] Speaker 04:
That's the reason I asked.

[00:20:40] Speaker 03:
Yeah, thank you.

[00:20:42] Speaker 03:
Finally, Your Honors, I would note that Ford itself consistently treated its fisc as a separate corporation over the course of two decades.

[00:20:50] Speaker 03:
Ford prepared export separate tax returns.

[00:20:54] Speaker 03:
Ford claimed to the benefits that came with having a separate fisc.

[00:20:59] Speaker 03:
Ford engaged in that complicated series of mergers intended to erase the distinction between export and itself.

[00:21:06] Speaker 03:
And even Ford's claim in this case could not

[00:21:10] Speaker 03:
have been brought if export had not been a separate corporation.

[00:21:14] Speaker 03:
To have an interest net in claim, you need to have a separate underpayment and overpayment.

[00:21:17] Speaker 03:
And the only reason there's a separate underpayment and overpayment on this record is that export was a separate taxpayer that filed a separate tax return.

[00:21:25] Speaker 03:
If the court has no further questions, we affirm the judgment of the Court of Federal Appointments.

[00:21:30] Speaker 04:
Thank you, Mr. Calderone.

[00:21:38] Speaker 06:
What about that last argument?

[00:21:39] Speaker 06:
I like that last argument by your opposing counsel.

[00:21:45] Speaker 06:
That is that unless they were separate, you couldn't have even brought them.

[00:21:50] Speaker 01:
There's no question that they were separate.

[00:21:52] Speaker 01:
That's the starting point for the analysis.

[00:21:54] Speaker 01:
6621D, as this court said in Wells Fargo, is about determining when, despite the separateness, two entities are entitled to be treated

[00:22:04] Speaker 01:
under the broad remedial meaning of the statutory term, same taxpayer.

[00:22:09] Speaker 01:
So there's never been a question that these are two separate entities.

[00:22:12] Speaker 02:
But there's also never been a question.

[00:22:14] Speaker 02:
The problem with your argument is, in Wells Fargo, we relied on merger principles, which treated those entities as the same.

[00:22:22] Speaker 02:
You're relying on a statute that specifically treats them differently.

[00:22:27] Speaker 01:
Your Honor, I disagree with that, and here's why.

[00:22:30] Speaker 01:
The place the court looked in Wells Fargo was to the code.

[00:22:34] Speaker 01:
was to Treasury regulations and was to principles of merger law, founding commentary.

[00:22:39] Speaker 01:
All of those things.

[00:22:40] Speaker 02:
What principle of law are you relying on to suggest that Expo and Ford are the same?

[00:22:46] Speaker 01:
We are relying on this.

[00:22:47] Speaker 02:
It's not the Fisk statute, right?

[00:22:49] Speaker 02:
Because the Fisk statute intentionally treats them differently.

[00:22:53] Speaker 01:
Actually, Your Honor, the Fisk statute treats them differently only in a technical, formal sense.

[00:22:58] Speaker 01:
The Fisk statute, and we are relying on the statute and the regulations.

[00:23:02] Speaker 01:
They set up a form-only regime.

[00:23:04] Speaker 01:
Congress intended it to be just separate enough to maybe survive GATT review.

[00:23:09] Speaker 01:
It didn't.

[00:23:10] Speaker 01:
It was a form-only regime.

[00:23:12] Speaker 01:
The WTO called it on being a form-only regime.

[00:23:15] Speaker 01:
The government itself told this court that it was nothing more than an accounting and record-keeping exercise and that it was more nominal than substantive.

[00:23:24] Speaker 01:
Although the Court of Federal Claims found it had economic substance, neither the court

[00:23:29] Speaker 01:
nor the government has pointed to any economic substance.

[00:23:32] Speaker 01:
There isn't any.

[00:23:34] Speaker 01:
It was set up to have commissions flow to export, and those commissions then were returned as a dividend to Ford.

[00:23:40] Speaker 01:
There was no economic substance by congressional design, and that merits the broad remedial use of the same taxpayer that this court endorsed in Wells Fargo.

[00:23:50] Speaker 01:
Thank you.

[00:23:51] Speaker 04:
I thank both counsel.

[00:23:52] Speaker 04:
The case is taken under submission.

[00:23:53] Speaker 02:
All rise.

[00:24:08] Speaker 02:
The honor record is adjourned until tomorrow morning at 10am.