[00:00:00] Speaker 03: Good morning. [00:00:00] Speaker 03: Our first case for argument today is 24-1107, Electric Welfare Trust Fund versus United States. [00:00:09] Speaker 03: Mr. Meltzer, please proceed. [00:00:12] Speaker 00: Thank you, Your Honor. [00:00:13] Speaker 00: Good morning. [00:00:15] Speaker 00: May it please the Court. [00:00:17] Speaker 00: Respectfully, this is not a general obligation to pay a case. [00:00:21] Speaker 00: The government passed a statute, the Affordable Care Act, that forced the plaintiff's appellants to contribute to an involuntary reinsurance pool. [00:00:29] Speaker 00: a poll that they could never recover from. [00:00:31] Speaker 00: The statute was not indifferent, and I'll use the language from Eastern Enterprises. [00:00:37] Speaker 00: The statute was not indifferent as to how a regulated entity elects to comply or the property it uses to do so. [00:00:44] Speaker 00: It was very specific. [00:00:45] Speaker 00: The government made group health plans as part of the definition of contributing entity. [00:00:53] Speaker 00: And as a result, it targeted these trust funds to pay into this insurance. [00:00:59] Speaker 03: We say targeted these trust funds. [00:01:02] Speaker 03: How exactly did it do that? [00:01:05] Speaker 03: Because obviously the statute doesn't call them out by name or anything like that. [00:01:09] Speaker 03: So how is it that it targeted them? [00:01:12] Speaker 03: And how does that compare to what you think the targeting was in some of the other cases? [00:01:18] Speaker 03: We discuss them. [00:01:19] Speaker 00: Sure, so your honor and the briefs make this pretty clear that we're the parties are talking past each other in a certain respects We're in the webs Phillips Brown camp. [00:01:28] Speaker 00: The government is an eastern enterprise, commonwealth medicine camp. [00:01:31] Speaker 03: I know there's three cases on each side. [00:01:33] Speaker 03: It's nice and even that way. [00:01:34] Speaker 00: Right, so the reason that and our position is based on this your honor [00:01:39] Speaker 00: The statute says group health plans is the contributing entity is defined as its commercial insurers and then third party administrators on behalf of group health plans. [00:01:49] Speaker 00: Group health plans are employee welfare benefit plans that pursuant to two federal statutes have 100% of their assets in trust. [00:01:58] Speaker 03: So while it doesn't, if the standard, and frankly, it can't be... Just to be clear, so the statute identifies them as group health plans. [00:02:07] Speaker 03: And you're saying 100% of the statutorily defined group health plans are trust funds. [00:02:13] Speaker 00: Let me walk that back. [00:02:15] Speaker 00: Yes, yeah, that's what I thought. [00:02:17] Speaker 03: I want to make sure I really understand this. [00:02:19] Speaker 00: Yes, I want to make sure that that's clear. [00:02:21] Speaker 00: This is in the summary judgment record. [00:02:22] Speaker 00: It wasn't decided below by the claims court, but it's in the record. [00:02:26] Speaker 00: So under ERISA and the Taft-Hartley Act, [00:02:32] Speaker 00: It's not 100 percent of all group health plans impacted by this particular provision, but it's most of them, and it's a high percentage of them. [00:02:40] Speaker 00: And for those, under ERISA, for example, 100 percent of assets are held in trust. [00:02:46] Speaker 00: Under the Taff-Hartley Act, same thing, 100 percent of assets are held in trust. [00:02:51] Speaker 00: There are 990 IRS filings, there are 455 hundred Department of Labor filings that indicate all of this. [00:02:58] Speaker 00: The government knows and the government and HHS when they interpret these statutes and the drafters of the divisions knew that group health plans [00:03:08] Speaker 00: For the most part, and we wouldn't proceed on behalf of anybody who did not have all of their assets and trust, but for the most part, they are trusts. [00:03:17] Speaker 00: So when you say the stonemasons are operating engineers' group health plan, you are identifying the trust. [00:03:25] Speaker 00: They are synonymous. [00:03:26] Speaker 00: They're essentially interchangeable. [00:03:28] Speaker 02: But the status is required to make payments. [00:03:30] Speaker 02: It doesn't say anything about a specific fund. [00:03:33] Speaker 00: That's true, Your Honor. [00:03:34] Speaker 02: So how do you get around that? [00:03:35] Speaker 00: Well, because, and I'll use Justice Kennedy's words from Eastern Enterprise, if the statute neither targets a specific property interest nor depends upon any particular property for the operation of its statutory mechanisms. [00:03:48] Speaker 00: So you're correct, Your Honor. [00:03:50] Speaker 00: It doesn't say, pay it out of those trusts. [00:03:53] Speaker 00: But there is no other money for them to pay it. [00:03:55] Speaker 02: But there is other ways. [00:03:56] Speaker 02: What about the argument that you could lend? [00:03:58] Speaker 02: You could go get a loan. [00:04:01] Speaker 02: It's an argument that I didn't see a response to, but I mean, it doesn't say right out of the fund. [00:04:09] Speaker 00: Other than, I guess, other than to leverage their assets from a trust would nevertheless be implicating part of the property of that trust, if you did do a loan, it's notwithstanding that it's still part and still taking private property held in those trusts. [00:04:28] Speaker 00: I don't, other than to borrow the money from someone else, as your honor is suggesting, that nevertheless encroaches and leverages money that is in the trust and is held as private property. [00:04:40] Speaker 03: Does money have to be held in a single trust or in theory could it be distributed in multiple trusts so it's not a specific fund? [00:04:48] Speaker 03: I'm not asking you what your clients do. [00:04:51] Speaker 03: I'm asking what could be possible. [00:04:54] Speaker 00: The way these are set up traditionally is they are set up under trust agreements, custodial agreements. [00:05:01] Speaker 00: They are not spread out over. [00:05:04] Speaker 00: So in other words, Your Honor, I'm not sure if this is where your question is going, but they don't pay plan expenses, stop loss payments. [00:05:12] Speaker 00: They don't pay administrative expenses out of one trust and then claim more. [00:05:16] Speaker 03: That's exactly where my question was going. [00:05:18] Speaker 00: Out of another trust. [00:05:19] Speaker 00: They pay everything out of. [00:05:21] Speaker 03: I know, but they could. [00:05:23] Speaker 03: I gotta figure out, is this a specific, like, identifiable fund, or is this, you know, money? [00:05:31] Speaker 00: So let me respond to that point, Your Honor. [00:05:36] Speaker 00: If we're dealing with theoreticals, I don't even want to concede that they could, because I'm not sure that administratively they could do that, but even if they could, [00:05:49] Speaker 00: They never have. [00:05:50] Speaker 00: And the government has always known that they never have. [00:05:53] Speaker 00: The tax filings alone would tell them, the 5,500 alone, the filings alone from the Department of Labor would tell them that that's not how they're set up. [00:06:02] Speaker 00: So it's a question of did they target a specific fund? [00:06:06] Speaker 00: Yes, that fund was identifiable and known to the government in advance of passing the statute. [00:06:11] Speaker 02: Well, it was known to the government, but there's nothing in the statute that says that the [00:06:14] Speaker 02: The plaintiffs were required to use those assets to satisfy the contributions, though. [00:06:20] Speaker 02: So it sounds like you're making much about the fact that it was known when the statute was passed that this might be the result. [00:06:27] Speaker 02: But there still seems to me that there were other alternatives. [00:06:30] Speaker 00: Again, Your Honor, where I keep coming back to is that, [00:06:37] Speaker 00: There are no other assets to use to pay. [00:06:40] Speaker 00: So if the standard is that the government has to specifically name a particular trust in order for there to be a taking, I don't think that's the standard, by the way. [00:06:52] Speaker 00: I think that is way too easy to work around. [00:06:55] Speaker 00: I think that is way too broad and way too, I'm sorry, way too exacting. [00:06:59] Speaker 00: But if that's the standard, we probably don't need it in this case. [00:07:05] Speaker 00: giving away all these things have been set up for decades and years and the government pursuant to federal law I don't think it's a fair outcome to say well they have money and they I guess they could have used their money from there actually I take that back there is no money in in any other [00:07:25] Speaker 00: part of these plans, all of their assets are in one place. [00:07:29] Speaker 00: So other than to, and that's not what Justice Kennedy says, he doesn't say mean, he says targets for operation of its statutory mechanisms. [00:07:40] Speaker 00: So that's Eastern Enterprise [00:07:42] Speaker 00: That's exactly what he says. [00:07:44] Speaker 00: That's exact. [00:07:45] Speaker 00: And then he says, and I apologize for skipping back, but he says, if the statute isn't different as to how a regulated entity elects to comply or the property uses to do so, well, I guess your argument, Your Honor, is, well, it doesn't say you have to use it. [00:08:00] Speaker 02: Just a question. [00:08:02] Speaker 00: I apologize. [00:08:03] Speaker 00: Your question is, it doesn't say, so why couldn't they use money from anywhere else? [00:08:08] Speaker 00: And I guess my response is, [00:08:10] Speaker 00: If it's defined in a certain way, the government knows all of these assets are held in trust. [00:08:16] Speaker 00: They know that it's been that way for decades and decades. [00:08:20] Speaker 00: That's not indifference in our view. [00:08:23] Speaker 05: And I think I know what the answer to this question is, but I take it there's no cases that have facts. [00:08:30] Speaker 05: like this case, where you're relying on one statute to say, this is the statute that's, you know, the regulatory taking, combined with another statute that says, you know, identifies where the funds are going to come from. [00:08:44] Speaker 05: There's nothing like that, right? [00:08:46] Speaker 05: I mean, this is a pretty unique set of facts, right? [00:08:49] Speaker 00: Yes. [00:08:49] Speaker 00: We actually talked about that about 12 minutes ago. [00:08:52] Speaker 00: No, I don't think there's another case that's quite on all fours in terms of [00:09:00] Speaker 00: that type of drawing that line between those two. [00:09:04] Speaker 00: I haven't found one case like that. [00:09:07] Speaker 03: How much money is at issue in this case? [00:09:10] Speaker 00: I don't know the precise amount. [00:09:13] Speaker 00: The sums raised by the TRP were in the billions. [00:09:20] Speaker 00: And I don't know exactly how much money. [00:09:23] Speaker 03: But I guess what I'm wondering is, is this case [00:09:27] Speaker 03: simply about the particular named trusts here, such that we're talking about tens or hundreds of thousands of dollars, which I think is actually the amount we're probably talking about is hundreds of thousands of dollars. [00:09:40] Speaker 03: Or once we decide this case, is it a floodgate for the billions? [00:09:48] Speaker 00: It is well this particular these particular plaintiffs are about three hundred and seventy thousand. [00:09:53] Speaker 00: Yeah, that's what I thought hundreds of thousands Yeah, and so what I don't have is information from in the below proceedings because we didn't get to that point But we don't have information about how many Trusts on behalf of group health plans paid into plans so commercial issuers were part of [00:10:14] Speaker 03: Is there a statute of limitations problem, though? [00:10:16] Speaker 03: But for anyone, I'm wondering what the impact of what we do here is, right? [00:10:21] Speaker 03: And so, is there a statute of limitations problem? [00:10:24] Speaker 03: I mean, you all brought this to – we're talking about what tax years? [00:10:27] Speaker 03: 2014 to 2016? [00:10:28] Speaker 03: Right. [00:10:29] Speaker 03: Right? [00:10:30] Speaker 03: And there's a seven-year statute of limitations. [00:10:32] Speaker 03: Isn't there? [00:10:32] Speaker 03: Six or seven – six years? [00:10:34] Speaker 03: Maybe six years? [00:10:35] Speaker 00: Six. [00:10:35] Speaker 00: Six years, right? [00:10:37] Speaker 03: I'm wondering what's in the pipeline, i.e., how many cases will be affected by this? [00:10:42] Speaker 03: Is this a small decision that affects $370,000, or is this decision swing a billion? [00:10:51] Speaker 00: I don't think it's a small decision in the sense that because of the way we brought the proceedings below, we brought them on behalf of a punitive class, [00:11:01] Speaker 00: I don't know that an individual lawsuit would be foreclosed under statute of limitations. [00:11:07] Speaker 00: That being said, the government did move. [00:11:10] Speaker 03: Was it certified as a class? [00:11:11] Speaker 00: It was denied as a move. [00:11:13] Speaker 00: It was not certified as a class. [00:11:15] Speaker 03: Okay, so this is not currently a class action. [00:11:18] Speaker 03: No, it's not a class action. [00:11:21] Speaker 03: This is a case that we're deciding with regard to these trustees at the present time. [00:11:25] Speaker 00: Yes, Your Honor. [00:11:26] Speaker 03: And there may remain open a question as to whether the statute of limitation bars expanding this decision to cover other potential trusts in the time frame of 2014 to 2016. [00:11:37] Speaker 03: Because it seems to me that we're beyond the six-year period for people who didn't file. [00:11:42] Speaker 00: That's correct. [00:11:42] Speaker 00: But just to answer your question, Your Honor, as to tolling, that can have an impact. [00:11:49] Speaker 00: So the way that we brought the claims below in the claims court. [00:11:54] Speaker 00: Now, if our case wasn't timely from the outside, it doesn't matter. [00:11:59] Speaker 00: None of these cases are timely. [00:12:00] Speaker 00: But if that case was timely, then it's a possibility. [00:12:04] Speaker 00: So I don't want to [00:12:06] Speaker 00: I don't want to tell you that no one would have a claim for that, and it's only these two, because I don't think that's correct. [00:12:12] Speaker 00: But that issue has also not been decided. [00:12:16] Speaker 02: OK. [00:12:16] Speaker 02: Can I ask a hypothetical? [00:12:17] Speaker 02: Because this is how I hear it. [00:12:21] Speaker 02: Congress knows that the minority of Americans pay their taxes out of their checking accounts. [00:12:26] Speaker 02: So when they pay their taxes, it comes out of the checking account. [00:12:30] Speaker 02: Is the obligation to pay taxes a taking because the money then comes from a checking account? [00:12:35] Speaker 02: Because it sounds like what you're saying is, and this is how I understand the argument, is that when the statute was passed, they knew that the only funds available to the plans would come out of the assets of the plan. [00:12:50] Speaker 02: So it seems to me that's a similar analogy. [00:12:53] Speaker 02: And what do you say? [00:12:54] Speaker 00: So my response to that, Your Honor, is no, that's not. [00:13:00] Speaker 00: Well, this is not a tax. [00:13:01] Speaker 00: We went down the tax refund statute road in this case. [00:13:03] Speaker 00: But the ordinary taxpayer can pay money out of savings account and checkings account. [00:13:10] Speaker 00: bonds cash security they can liquidate any of their holdings. [00:13:14] Speaker 02: You still haven't said that you couldn't go get a loan. [00:13:16] Speaker 02: So what's the difference? [00:13:17] Speaker 00: Well, because the loan scenario in this case, again, no one's going to give you a loan without collateralizing it based on some amount of property. [00:13:32] Speaker 00: And the property that you would have to use, again, that just goes back to [00:13:36] Speaker 00: That's just sort of a one step beyond around directly from this private property. [00:13:43] Speaker 02: I have a question about your plan. [00:13:45] Speaker 02: And I didn't see a response to it that the government raised. [00:13:49] Speaker 02: When you look at Article 2, Section 3 of your plan, it says that it's accepted specifically permitted by ERISA, the Eternal Revenue Code, and other applicable law, the assets of the fund, [00:14:02] Speaker 02: and the plan shall never enter to the benefit of the employer, et cetera, et cetera. [00:14:06] Speaker 02: The government says this means that plan assets can be used to satisfy the TRP contributions. [00:14:11] Speaker 02: And I didn't see a response to that. [00:14:14] Speaker 00: I think the response, Your Honor, is just this sort of general boilerplate language that's in every trust agreement of other applicable law. [00:14:23] Speaker 00: It's not a window that the government can walk through and then compel this type of contribution, which was not small, even to these two plaintiff appellants, and say, well, there is this stock language in your trust agreement. [00:14:39] Speaker 03: Therefore you're not allowed to challenge this as a I have another question for you if how in Eastern Enterprise or Commonwealth Edison that how in the interest cases How was that interest obtained by the government was it? [00:14:58] Speaker 03: seized directly by the government or was it paid out of the fund that it was in to the government and [00:15:08] Speaker 03: I'm asking a procedural question. [00:15:11] Speaker 03: How did the government obtain that money? [00:15:13] Speaker 00: Oh, I think the government, in the interest follows principal cases, I think the government sees that money as opposed to had them pay that money. [00:15:24] Speaker 00: And here, candidly, they had them pay. [00:15:27] Speaker 03: But that's what I'm trying to figure out. [00:15:28] Speaker 03: Because in any of the cases that you like, Commonwealth, not Commonwealth, you're the web. [00:15:35] Speaker 00: We're the others. [00:15:36] Speaker 03: Yeah, you're web Brown Phillips. [00:15:37] Speaker 03: In any of those cases, [00:15:39] Speaker 03: Did the person whose money was being taken have to pay the money the way you have to pay the money? [00:15:49] Speaker 03: Or in each of those cases, how did [00:15:55] Speaker 03: You understand what I'm getting at, right? [00:15:57] Speaker 03: Judge Bum was asking you questions about, well, you could have taken a loan to pay the money. [00:16:03] Speaker 03: And you're like, well, we have no other assets. [00:16:05] Speaker 03: It's all the same thing. [00:16:05] Speaker 03: The trust is the trust. [00:16:07] Speaker 03: And so what I'm trying to figure out is, is there anything in any of these cases that you could analogize to that would help me get past the issues that she's raised by saying, well, in these other cases, it was deemed a government taking, but they had to write a check. [00:16:27] Speaker 00: I think, I'll check for a reply, but I think the only case that comes to mind is maybe Brown where it was paid over to a third party and then paid over. [00:16:40] Speaker 03: You see there's a difference between the government coming in and seizing a portion of your land like actually physically taking it and The government ordering you to pay something as a result of their desires to basically have a portion of your land Like and I'm trying to figure out what which of those actions is implicated here So I understand your question. [00:17:04] Speaker 00: I will look I would my response would be I [00:17:07] Speaker 00: The only difference in a practical sense is that we didn't move for injunctive relief for it, that we paid it first instead. [00:17:15] Speaker 00: So if we brought this in an injunctive capacity, we would be having a different conversation because that money wouldn't have been paid yet. [00:17:23] Speaker 00: we would have been trying to stop the government from actually coming in. [00:17:27] Speaker 00: Because even though we had the right check, the government was forcing us to write this check. [00:17:32] Speaker 00: And if we didn't write this check, there wouldn't have been an enforcement action followed by the government with penalties, et cetera. [00:17:38] Speaker 00: So only because we're being- Well, but that kind of parallels taxes, right? [00:17:42] Speaker 03: If I don't pay my taxes, the government could put a tax lien on my house. [00:17:45] Speaker 03: You know, I mean, that's- [00:17:50] Speaker 00: Yeah, yeah. [00:17:51] Speaker 00: But again, if we're in the posture where we paid over, and yes, we had to pay it over, although Horn is a case, the raisins case, where the government came in and actually tried to physically paint the actual raisins. [00:18:08] Speaker 03: What are you talking about? [00:18:09] Speaker 03: What's Horn? [00:18:10] Speaker 00: Oh, I'm sorry. [00:18:12] Speaker 03: Gosh, I'm blanking on the last name so Thank you, yep, let's move over Mr.. Kushner, please [00:18:34] Speaker 01: Thank you. [00:18:35] Speaker 01: Good morning, Your Honor, and may it please the Court. [00:18:37] Speaker 01: In Commonwealth Edison, this Court, sitting on bank, held, and I quote, the Takings Clause does not apply to the legislation requiring the payment of money. [00:18:46] Speaker 01: That holding should resolve this appeal. [00:18:48] Speaker 01: Just like in the statutory schemes that were applicable in Eastern Enterprises and Commonwealth Edison, [00:18:55] Speaker 01: The Affordable Care Act, and in particular the TRP provision within the Affordable Care Act, required certain contributing entities to make periodic payments of a calculable sum of money into a program created by Congress. [00:19:08] Speaker 01: That type of scheme is nothing more than a legislation requiring the payment of money, just like in Eastern Enterprises and just like in Commonwealth Edison. [00:19:16] Speaker 01: It does not implicate the kind of property interest that's protected under the Fifth Amendment. [00:19:20] Speaker 05: Do you see a difference between requiring periodic payments versus seizing property, like seizing interest or seizing the account, as we were just discussing? [00:19:33] Speaker 05: Does the government see a difference there? [00:19:34] Speaker 01: There may be a difference in the mechanism in which the government takes the property. [00:19:39] Speaker 05: Should it matter for purposes of taking? [00:19:41] Speaker 01: That's not something the parties briefed. [00:19:44] Speaker 01: I do think, Your Honor, to answer your question, I think in both Phillips and Brown, it was a direct seizure in the sense that the entities, the financial institutions that held the IOLTA accounts were required to pay the money to the states [00:20:02] Speaker 01: that had those rules. [00:20:04] Speaker 01: I'm not sure that was the case in Webb's Fabulous Pharmacies, but I think it was a direct seizure in both... When you say direct seizure, let me just... You say they were required to pay those monies. [00:20:16] Speaker 03: I guess what I'm getting at mentally is, did they write a check to pay them, or did the government go in and take it? [00:20:23] Speaker 03: And there's a difference, right? [00:20:24] Speaker 03: The government infiltrates your physical property. [00:20:27] Speaker 03: They are present on it. [00:20:29] Speaker 03: That, to me, is a [00:20:33] Speaker 03: very manifest act of taking, as opposed to, I mean, if in Phillips and in Brown, the government said, well, you got to write me a check for the amount of the interest. [00:20:41] Speaker 01: So that's true. [00:20:42] Speaker 01: I think in all three cases, someone did have to write a check, because we are talking about money. [00:20:47] Speaker 01: It's not land where the government can send agents to take hold of a piece of property. [00:20:53] Speaker 01: I think in both Phillips and Brown, the entity that had to write the checks is not the holder of the AOLTA account, but it's the financial institution where the AOLTA account was. [00:21:03] Speaker 01: Again, I believe that's the case. [00:21:07] Speaker 01: But someone did have to write a check in all three of those cases. [00:21:09] Speaker 03: That's weird. [00:21:10] Speaker 03: The financial institution, so the interest [00:21:11] Speaker 03: Didn't go into the account and the government took it once it was in the account You're saying the government sees the interest before it even was placed into the account like you have a bank account I have a bank account right interest it just goes in at the end of each month or whatever day of the month Automatically into my account. [00:21:26] Speaker 03: I'm just trying to understand that the government Stop the bank from providing the interest to the account so that the account didn't get the interest or the government Demand payment of the interest once it hit the accounts [00:21:39] Speaker 01: To be honest with you, I'm not sure what the facts of those cases were. [00:21:43] Speaker 02: I mean, just the reason I want to know, to Judge Moore's question, wouldn't that be a distinction that matters? [00:21:49] Speaker 01: How much of a distinction? [00:21:50] Speaker 01: It might be in some circumstances, but I don't think it mattered for the Supreme Court in either Phillips or Brown or even Webb's Fabulous Pharmacies. [00:22:00] Speaker 01: Those three cases stand for the proposition that when a government, those cases were about states, this is about the federal government, but when a government [00:22:08] Speaker 01: identifies a particular category of assets, and then proceeds to take that category in its entirety, that is a taking. [00:22:18] Speaker 01: That's what happened in those three cases, right? [00:22:20] Speaker 01: The government identified a category of assets, interests earned on... I truly don't understand the in its entirety thing. [00:22:27] Speaker 03: It makes no logical sense to me. [00:22:29] Speaker 03: If the government said, I'm going to seize half of your interest, [00:22:34] Speaker 03: It's not a taking, only if I take all of your interests as a taking. [00:22:37] Speaker 03: I mean, I'm going to take half your property. [00:22:40] Speaker 03: We all know that's a taking, right? [00:22:41] Speaker 03: We know from Loretto, you know, a cable box is a taking. [00:22:44] Speaker 03: We know it doesn't have to be all of your property in order to be a taking. [00:22:49] Speaker 03: Surely, if the government decided it was taking 50% of my bank account randomly for no reason, I would feel like it was taken, right? [00:22:56] Speaker 03: Wouldn't you? [00:22:57] Speaker 03: I mean, wouldn't you be like, that's a taking? [00:22:59] Speaker 01: I probably would feel the same way, Chief Judge Moore, but let me respond to that question. [00:23:06] Speaker 01: First of all, money is treated differently than other kinds of property, like personal property and land. [00:23:12] Speaker 03: This court said so in the very first... So you're telling me... Wait, wait, wait. [00:23:15] Speaker 03: I have $100,000 in the bank, and the government takes $999,099 of my money. [00:23:19] Speaker 03: They leave me with a penny. [00:23:23] Speaker 03: And that's not a taking. [00:23:24] Speaker 03: But if they had not taken that last penny, I now have a cause of action against the government for taking my property. [00:23:30] Speaker 03: Do you not see the absurdity of that position? [00:23:32] Speaker 01: I do see it, Your Honor, and I think... Can I just clarify, is that your position? [00:23:37] Speaker 01: No. [00:23:38] Speaker 01: No, it is not my position. [00:23:39] Speaker 01: When we are talking about legislation that requires the payment of a percentage of an identified category of assets, the analysis would be different. [00:23:50] Speaker 01: There are situations where a percentage does not implicate the 50. [00:23:53] Speaker 05: So let's take one of the, say, web, for example. [00:23:56] Speaker 05: Say it was we're not going to take all the interest, we're going to take 50%. [00:23:59] Speaker 05: Explain how that would change things. [00:24:04] Speaker 01: your honor, to be honest with you, I don't know if it would. [00:24:07] Speaker 05: But this is your position, so you need to be able to defend it, so go ahead. [00:24:12] Speaker 01: Well, our position is that this case is not like Webb's, because there was no appropriation of a [00:24:20] Speaker 01: Entire category of assets or even a percentage of a category of assets or we have here Just like we had in Eastern Enterprises and just like we had in Commonwealth Edison is an obligation to pay a hypothetical though, so let's say it's 50% and 50% of the interest same faxes web except half [00:24:42] Speaker 05: of the interest. [00:24:43] Speaker 05: Because we are not just thinking about this case today. [00:24:46] Speaker 05: We have to think about all cases. [00:24:48] Speaker 05: And part of your argument in the holding below is that the entirety versus the portion makes a difference. [00:24:53] Speaker 05: So you need to deal with this. [00:24:54] Speaker 02: And I still want to know. [00:24:55] Speaker 02: Judge Moore has a penny left. [00:24:57] Speaker 02: And I don't know. [00:24:58] Speaker 02: You've taken all of her asset, and she has a penny left. [00:25:02] Speaker 02: And I too struggle with this in total argument. [00:25:07] Speaker 01: So, Your Honors, when it comes to this hypothetical, I think it would depend on the particular statute that we're talking about. [00:25:14] Speaker 01: In at least one case that I'm aware of, Sperry Corporation, the Supreme Court said that an obligation to pay a percentage of a category of assets that was identified by Congress did not implicate the Fifth Amendment. [00:25:26] Speaker 01: Now, it was not 99%. [00:25:27] Speaker 01: It was a low percentage. [00:25:29] Speaker 03: It was, I think, about 2%. [00:25:31] Speaker 03: I don't know. [00:25:31] Speaker 03: I guess I'm wondering. [00:25:32] Speaker 03: I'm thinking this is parallel regulatory takings, right? [00:25:35] Speaker 03: In the regulatory takings case, as opposed to physical property regulatory, completely different universes, right? [00:25:40] Speaker 03: Penn Central on the one hand, you know, Loretto, Lucas on the other. [00:25:45] Speaker 03: And so a physical taking, if they take even an inch of your mile, you get compensated. [00:25:51] Speaker 03: In the regulatory taking, it has to be substantial. [00:25:54] Speaker 03: It has to be a substantial taking, right? [00:25:56] Speaker 03: It isn't enough in the regulatory sense if they impose a regulation on you that diminishes a tiny bit of your otherwise right to enjoy your land, for example. [00:26:10] Speaker 03: So is that sort of the analogy you're trying? [00:26:11] Speaker 03: The in-toto thing makes no sense to me. [00:26:14] Speaker 03: I can't even wrap my head around it. [00:26:16] Speaker 03: And I don't see it in any case. [00:26:19] Speaker 03: So I'm just trying to figure out is there some other justification for it like maybe this is more in line with Penn Central and maybe it doesn't have to be in Toto but has to be a Substantial amount or something like the way the regulatory takings law works or does that even make sense here? [00:26:34] Speaker 03: I don't [00:26:35] Speaker 01: So I think the trial court's justification for the Intoto requirements is really the fact of the three interest-follows-principle cases, where in each one of those cases... Well, the government got green and just took it all there. [00:26:46] Speaker 03: That doesn't mean that the government can only take it all. [00:26:49] Speaker 03: The government could come in and say, you know what, I'm taking half your interest. [00:26:53] Speaker 03: I still think that the Supreme Court would have said, that is a taking. [00:26:56] Speaker 03: I don't see anything in the language of the Supreme Court case [00:27:00] Speaker 03: that is more than just acknowledging you took all of it. [00:27:04] Speaker 03: I don't see anything in the case that indicates this will be taken because you took all of it as opposed to part of it. [00:27:10] Speaker 03: Is that a fair? [00:27:11] Speaker 03: Do you think that might be a fair reading of those cases? [00:27:13] Speaker 01: I think it's a fair reading in the sense that the Supreme Court did not say in any of those cases that it has to be taking in total. [00:27:20] Speaker 01: I agree with that. [00:27:22] Speaker 01: And again, I also would agree with you that if Congress has taken a percentage of a category of assets, let's say they identified- But do you realize, I mean, you know how math works, right? [00:27:33] Speaker 03: Yes. [00:27:33] Speaker 03: You do understand that any dollar amount is a percentage of the- Well, that's always true. [00:27:38] Speaker 01: But that's what makes money different than other types of property. [00:27:44] Speaker 01: That's why. [00:27:45] Speaker 03: But Congress can't get around a taking by saying, I want 50% of all your interest or I want $50,000. [00:27:52] Speaker 03: I mean, you really think that that is a distinction that legitimizes action on the one hand and makes it a taking on the other if they say, I want a percentage of everything you've got as opposed to a raw dollar amount? [00:28:04] Speaker 03: Probably not, Your Honor. [00:28:06] Speaker 03: I can't imagine this particular Supreme Court going in on that argument. [00:28:09] Speaker 01: But at the same time, if there is a statutory provision that requires someone to pay $50 and that someone has a single bank account with $50 in it, they cannot come in and say it's a taking just because the government happened to take 100% of their property. [00:28:26] Speaker 03: I completely agree with that. [00:28:29] Speaker 03: And that sort of analogizes to tax law, right? [00:28:32] Speaker 03: In the tax law area, the government can be taking your money. [00:28:35] Speaker 03: And I don't even have kids in public school. [00:28:39] Speaker 03: But boy, I think a lot of my tax dollars are going to the public schools, which, by the way, I'm happy to have happen. [00:28:44] Speaker 03: Education is important. [00:28:45] Speaker 03: But I don't know. [00:28:49] Speaker 03: I just don't know what this case is. [00:28:50] Speaker 03: It seems to me a bit of a hybrid. [00:28:53] Speaker 03: I certainly understand your arguments. [00:28:57] Speaker 03: I'm just trying, I'm struggling a little bit with some of the opinion that was written below. [00:29:01] Speaker 03: But I certainly understand your arguments. [00:29:03] Speaker 03: Let me just let you keep going. [00:29:04] Speaker 01: And I understand that, Your Honor, what I just. [00:29:07] Speaker 02: Jessica, if the internal requirement is wrong, does the plaintiff's prevail? [00:29:11] Speaker 01: They do not. [00:29:12] Speaker 01: And that's, thank you. [00:29:13] Speaker 01: That's where I was going. [00:29:15] Speaker 01: I don't think the court needs to necessarily adopt the trial court's framework in order to affirm the judgment below. [00:29:22] Speaker 01: All the court has to say is that this case is like Eastern Enterprises and Commonwealth Edison. [00:29:28] Speaker 01: in the sense that Congress simply imposed an obligation to pay a calculable sum of money. [00:29:34] Speaker 03: And as long as that's true, just like those cases, the ACA does not implicate... Does it matter in trying to figure out whether this is a specific fund of money, that this is a trust whose assets cannot be used for any... Money's fungible. [00:29:49] Speaker 03: Like, I can use my money to pay my gas and electric bill, my heating bill, my government tax, you know what I'm saying. [00:29:54] Speaker 03: Yes. [00:29:55] Speaker 03: But with the trust, [00:29:56] Speaker 03: There's no other use of this money. [00:29:57] Speaker 03: It is only for the health care needs of the workers who are, you know, supported by that particular fund. [00:30:07] Speaker 03: Does that matter? [00:30:08] Speaker 01: So it's not just for that purpose. [00:30:10] Speaker 01: I think Judge Baum correctly pointed out that the trust agreements in these cases specifically say [00:30:16] Speaker 01: that trust assets can be used for obligations under ERISA, under the IRS, and other applicable law. [00:30:23] Speaker 01: And there is no argument from the other side that the Affordable Care Act is not the type of other applicable law to which trustees could legally apply trust assets. [00:30:34] Speaker 03: So there's no... Help me understand that. [00:30:37] Speaker 03: I don't... [00:30:39] Speaker 03: I don't have a trust, so I don't really understand the trust law part. [00:30:43] Speaker 03: But I would assume that if someone had a trust, that every trust would be set up. [00:30:47] Speaker 03: to say a portion of the trust can be used to pay, for example, the administrative overhead of executing the trust. [00:30:53] Speaker 03: I would likewise assume that taxes, right? [00:30:56] Speaker 03: Any trust that exists, how could you have a trust if that trust earns interest, for example? [00:31:01] Speaker 03: They're going to have to file a tax return. [00:31:03] Speaker 03: So the ERISA or the tax piece, isn't that sort of an automatic with trusts that you have to? [00:31:09] Speaker 03: And who else is going to pay the taxes on the trust? [00:31:11] Speaker 03: I don't know. [00:31:13] Speaker 03: I don't know trust law. [00:31:14] Speaker 03: But I'm not sure I understand [00:31:17] Speaker 03: But tell me how you think those provisions of the money could also be used to pay the taxes if the trust has taxes necessarily changes the nature of the trust being a specific fund of money that is really directed to just one purpose. [00:31:32] Speaker 01: It changes it in the sense that the trust agreements, these agreements that govern the way these test Hartley plans operate, it did not forbid trustees from paying into the TRP. [00:31:46] Speaker 01: That is something that it provided for, this trust agreement. [00:31:51] Speaker 01: So it was a permissible use under the trust agreement. [00:31:55] Speaker 05: But how does that impact whether it's a taking or the identification of taking because it's an identified fund versus just requesting a sum of money? [00:32:07] Speaker 05: I'm having a hard time understanding. [00:32:09] Speaker 05: It's a slippery slope. [00:32:11] Speaker 05: It's really hard, obviously, to tell the difference between these two. [00:32:15] Speaker 05: But how do you think that argument that you just made helps you? [00:32:20] Speaker 01: So I think it undercuts the argument from the other side, where they're arguing that these funds, these assets, can only be used for one purpose. [00:32:29] Speaker 01: And here the government comes in and requires us to use them for a different purpose. [00:32:34] Speaker 05: What I see them saying more is that this is an identifiable fund. [00:32:38] Speaker 05: And that's what distinguishes it from commonwealth and makes it more like web. [00:32:44] Speaker 01: Except, Judge, though, Congress never identified any particular fund. [00:32:49] Speaker 01: Congress simply identified a set of contributing entities that have to contribute into the TRP. [00:32:56] Speaker 05: Nowhere did it say- Their argument is that Congress legislates against a background understanding of the law, and that the other law requires there to be an identifiable fund. [00:33:05] Speaker 01: Sure. [00:33:05] Speaker 01: But Your Honor, but what they're really saying is that whenever Congress imposes any sort of financial obligation on Taft-Hartley funds, it necessarily implicates the Fifth Amendment because their funds have to be in trust. [00:33:19] Speaker 01: It essentially precludes Congress from imposing economic legislation on Taft-Hartley funds without also incurring takings liability. [00:33:28] Speaker 01: And that cannot be right. [00:33:29] Speaker 01: Because Congress should be able to impose economic legislation on Taft-Hartley funds, just like it can impose it on coal operators in Eastern enterprises or on domestic utilities, as in Commonwealth Edison. [00:33:40] Speaker 02: So if the statute had said that the payments were to be required to be paid out of their specific Arista Taft-Hartley funds, would that be a proper answer? [00:33:51] Speaker 01: I think it would be a closer call in that case. [00:33:55] Speaker 01: But I still think you have the other part. [00:33:57] Speaker 01: And you know. [00:33:58] Speaker 02: What's the other part? [00:33:59] Speaker 02: Because that's their argument. [00:34:00] Speaker 02: Their argument is, well, they said it, but they didn't say it, but they really said it. [00:34:04] Speaker 02: Because everybody knows what's coming out of their funds. [00:34:06] Speaker 02: And so that really is a property interest. [00:34:08] Speaker 02: And so yes, they left off the magic words out of the statute. [00:34:12] Speaker 02: But we all know what's going on. [00:34:14] Speaker 02: And so if you are going to concede that if they said what everybody knew they wanted to say, then, hmm, [00:34:23] Speaker 01: So the other part your honor is that it still has to be an appropriation as opposed to the imposition of a monetary assessment. [00:34:32] Speaker 01: And I know the court is skeptical of the in total requirement but it has to be something beyond simply requiring them to pay a calculable sum. [00:34:40] Speaker 01: If we take for instance the web fabulous pharmacy case. [00:34:44] Speaker 01: where there was a state that imposed an obligation to transfer the interest that was earned on interpreter funds to the clerk of the court. [00:34:55] Speaker 01: The Supreme Court said that was a taking of property. [00:34:58] Speaker 01: But in addition to that obligation, there was also an obligation to take a part of that interest and pay from that the clerk's fee, which I think was a few thousand dollars. [00:35:08] Speaker 01: And everyone agreed that that was not a taking. [00:35:11] Speaker 01: even though the state specifically identified the category of assets from which this fee would come. [00:35:17] Speaker 01: So it's not enough to simply identify. [00:35:20] Speaker 03: But the problem with that is that's a fee for services rendered. [00:35:24] Speaker 03: And here, I think one of the arguments the funds have made is that we can't actually apply or receive any of the benefits of this [00:35:36] Speaker 03: program. [00:35:37] Speaker 03: I don't remember what the benefits are, but you understand what I'm saying? [00:35:40] Speaker 03: Yes. [00:35:41] Speaker 03: Okay. [00:35:41] Speaker 03: So is that a difference, though, between in the web scenario, the money to pay for the clerk was actually like a fee that was owed for services rendered? [00:35:51] Speaker 01: We don't think that's relevant at all, Your Honor, because in Connolly, and here's why. [00:35:55] Speaker 01: In Connolly, the Supreme Court expressly said that by taking money from someone for the benefit of someone else, that does not turn the legislation into a taking of property. [00:36:07] Speaker 03: And then if you think about Eastern Enterprises... By taking money from one person for the benefit of someone else? [00:36:14] Speaker 01: That does not necessarily make it into a taking. [00:36:16] Speaker 01: There is a passage from Connolly that we cited in our brief. [00:36:20] Speaker 01: And if you think about Eastern Enterprises itself, right, Eastern was a former coal operator that had to pay the health benefits of retired coal miners. [00:36:29] Speaker 03: Yeah, they weren't getting any benefit from them. [00:36:32] Speaker 03: They were retired. [00:36:32] Speaker 01: That's right. [00:36:33] Speaker 01: People have not worked for Eastern for many, many years. [00:36:35] Speaker 01: It had absolutely no direct benefit from this provision of the Cole Act. [00:36:39] Speaker 01: And yet, it still did not implicate the Fifth Amendment. [00:36:42] Speaker 03: What do we do with the fact that Eastern isn't a majority? [00:36:44] Speaker 03: It's a plurality. [00:36:46] Speaker 01: So that's been accepted by, I believe, every circuit in the country to mean what Justice Kennedy in the concurrence and Justice Breyer in the dissent said that it means. [00:36:58] Speaker 01: And then on top of that, you have this court's precedents. [00:37:01] Speaker 01: You have Commonwealth Edison. [00:37:02] Speaker 01: You have Adams. [00:37:03] Speaker 01: You have cases interpreting and explaining what that majority means. [00:37:07] Speaker 01: So it's it's not a it's not a traditional majority But there is still five justices of the Supreme Court that held it was not Taking a property because the obligation to pay in the coal act simply did not implicate the kind of property interest protected by the Fifth Amendment Thank You counsel thank you your argument was actually very helpful Mr.. Meltzer give you your three minutes of all time, please [00:37:36] Speaker 00: Thank you, Your Honor. [00:37:37] Speaker 00: First, in Webbs and in Brown, but I do not believe in Phillips, money was required to be paid over. [00:37:48] Speaker 00: In Webbs, it was from an interpreter account that I believe the receiver received not only the fees and the interest [00:37:55] Speaker 00: But I believe the receiver was then required to pay over the interest pursuant to a Florida state statute. [00:38:03] Speaker 00: So it was, in that sense, similar, a forced exaction, I believe the court called it. [00:38:09] Speaker 00: Not an exaction claim, but it was a forced exaction. [00:38:12] Speaker 00: And it's more analogous to what we have here. [00:38:16] Speaker 00: In Brown, in a similar way, I believe there was a directive for the financial institution to pay over the interest into a legal foundation fund. [00:38:32] Speaker 00: The financial institution, which was holding the IELTS accounts. [00:38:36] Speaker 00: So not in Phillips. [00:38:38] Speaker 00: I believe in Phillips, it was a slightly different scenario. [00:38:41] Speaker 00: But I think, to your question, Judge Moore, [00:38:44] Speaker 00: It was a pay over in Webbs and Brown, which provides more support for our arguments here. [00:38:53] Speaker 00: Judge Baum, the question about the [00:38:56] Speaker 00: And also, Judge Dole, for your question. [00:38:59] Speaker 00: The question about the checking account, these are trusts. [00:39:02] Speaker 00: When you create a trust, you create a contract. [00:39:06] Speaker 00: You have a set of rules. [00:39:07] Speaker 00: You have to follow them. [00:39:08] Speaker 00: They're very specific. [00:39:10] Speaker 00: They can only be used for specific purposes. [00:39:12] Speaker 00: That's why it's a specific fund. [00:39:14] Speaker 00: That's what this Court has said over and over again. [00:39:16] Speaker 00: It's said it in Adams. [00:39:18] Speaker 00: It's said it many, many times. [00:39:20] Speaker 00: But trusts are specific funds. [00:39:22] Speaker 00: They are. [00:39:23] Speaker 00: And does the other applicable law language in the trust document change whether it's a taking? [00:39:31] Speaker 00: No, of course not. [00:39:32] Speaker 00: It means that the trust is permitted to make that payment. [00:39:35] Speaker 00: It doesn't foreclose them or stop them from them challenging the constitutionality of being required to make those payments. [00:39:44] Speaker 00: And as to one of the last points you made with my colleague, there was no benefit here. [00:39:49] Speaker 00: And as to one of the earlier points, Judge Moore, and we talk about the floodgates, and I understand a little bit of the hesitation in wanting to have a bigger picture sense of it, but... [00:40:00] Speaker 00: uh... this were being these songs were paid by groups health plans just for market stabilization for a market that they don't participate in so while the government says... I pay taxes and I don't feel like I'm getting my better value out of all of that money I understand but the you know the government says that's irrelevant to the inquiry here and I guess in one sense because we're only dealing with the property right question it is but [00:40:25] Speaker 00: it's not relevant in the bigger picture of this case, where the government. [00:40:30] Speaker 03: What is your best argument for how you distinguish your case from Commonwealth Edison? [00:40:34] Speaker 03: Because that is, to me, your hardest obstacle. [00:40:37] Speaker 03: So tell me the best way in which you can distinguish your case. [00:40:40] Speaker 00: Well, there's two distinctions, I would say. [00:40:43] Speaker 00: Number one, again, Commonwealth Edison did not include, it was, [00:40:51] Speaker 00: payments required to be made by utilities for uranium processing. [00:40:56] Speaker 00: Number one, uranium processing issues were created in part by those utilities. [00:41:02] Speaker 00: And number two, that was more of a general obligation to pay case. [00:41:07] Speaker 00: It was not directed out of any particular account or trust. [00:41:10] Speaker 00: And I think that's what this Court, and I believe Judge Dyke, was saying. [00:41:14] Speaker 00: In that unbound decision that this is not this is more kin to Eastern enterprises Where you can't point to where the statute wasn't different where you can't point to any in particular fund That has to be used to pay this money, and I think those are the two biggest Distinguishing facts between this case and Commonwealth Edison. [00:41:38] Speaker 00: I am my last plan. [00:41:39] Speaker 00: I'm I know I'm out of time, but [00:41:41] Speaker 00: I don't think you can just overlook the fact that these are, by necessity, being paid out of trusts and then take us out of all the case law that, for decades, has talked about what the government is allowed to and not allowed to do when it comes to the private property that's held in trust. [00:42:02] Speaker 03: OK. [00:42:02] Speaker 03: I want to thank both counsels' cases on taking their submission. [00:42:05] Speaker 03: I think you both did a really excellent job with your arguments. [00:42:07] Speaker 00: So thank you.