Opposition Brief — Maine Community Health Options, et al., Petitioners v. United States
Supreme Court briefApr 9, 2021
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No. 20-1162
In the Supreme Court of the United States
MAINE COMMUNITY HEALTH OPTIONS, ET AL.,
PETITIONERS
v.
UNITED STATES OF AMERICA
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
BRIEF FOR THE UNITED STATES IN OPPOSITION
ELIZABETH B. PRELOGAR
Acting Solicitor General
Counsel of Record
BRIAN M. BOYNTON
Acting Assistant Attorney
General
MARK B. STERN
ALISA B. KLEIN
Attorneys
Department of Justice
Washington, D.C. 20530-0001
SupremeCtBriefs@usdoj.gov
(202) 514-2217
QUESTION PRESENTED
Section 1402 of the Patient Protection and Affordable
Care Act (ACA), Pub. L. No. 111-148, 124 Stat. 220, requires insurers to reduce cost sharing (such as deductibles
and copayments) for certain individuals who purchase “silver” plans through an ACA Exchange. 42 U.S.C. 18071.
“[I]n order to reduce the premiums,” 42 U.S.C.
18082(a)(3), the ACA also directs the government to make
advance payments to insurers equal to the value of such
cost-sharing reductions (CSR payments), 42 U.S.C.
18082(c)(3). In October 2017, the government ceased
making CSR payments to insurers after determining that
it lacked any appropriation to pay them. For 2018 and subsequent years, many insurers—including petitioners—
offset the absence of CSR payments by increasing their
silver-plan premiums. By operation of the ACA’s formula,
increasing silver-plan premiums also resulted in a substantial increase in premium tax credits that the government pays to insurers on behalf of lower-income individuals. 26 U.S.C. 36B(b)(2)(B). Petitioners brought these actions seeking money damages for unpaid CSR payments.
The court of appeals held that the government was liable
to insurers for unpaid CSR payments but that an insurer’s
damages must be offset to account for the additional premium tax credits that the insurer received. The question
presented is as follows:
Whether the court of appeals correctly determined
that, in calculating the damages that the cessation of
CSR payments caused an insurer, the trial court must
deduct the additional premium tax credits that the insurer received as the result of the termination of CSR
payments.
(I)
TABLE OF CONTENTS
Page
Opinions below .............................................................................. 1
Jurisdiction .................................................................................... 1
Statement ...................................................................................... 2
Argument..................................................................................... 15
Conclusion ................................................................................... 29
TABLE OF AUTHORITIES
Cases:
Barnes v. Gorman, 536 U.S. 181 (2002) ............ 12, 13, 17, 24
California v. Trump,
267 F. Supp. 3d 1119 (N.D. Cal. 2017) ............................ 3, 5
Craft v. United States, 589 F.2d 1057 (Ct. Cl. 1978) .... 12, 18
King v. Burwell, 576 U.S. 473 (2015) ..................................... 2
Maine Cmty. Health Options v. United States,
140 S. Ct. 1308 (2020) ..................................10, 16, 21, 22, 23
Miller v. Robertson, 266 U.S. 243 (1924) ............................. 13
Sanford Health Plan v. United States,
969 F.3d 1370 (Fed. Cir. 2020) ........................... 9, 10, 11, 16
United States House of Representatives v.
Burwell, 185 F. Supp. 3d 165 (D.D.C. 2016),
appeal dismissed, No. 16-5202
(D.C. Cir. May 16, 2018) ....................................................... 3
Constitution and statutes:
U.S. Const. Spending Clause ........................11, 12, 17, 18, 21
Back Pay Act of 1966, 5 U.S.C. 5596.................................... 18
Further Consolidated Appropriations Act,
2020, Pub. L. No. 116-94, Div. N, § 609,
133 Stat. 3130 ........................................................................ 7
Patient Protection and Affordable Care Act,
Pub. L. No. 111-148, 124 Stat. 119 ...................................... 2
(III)
IV
Statutes—Continued:
Page
§ 1401, 124 Stat. 213 ...................................................... 2, 4
§ 1401(a), 124 Stat. 213-214 .............................................. 4
§ 1402, 124 Stat. 220 .................................2, 3, 7, 16, 18, 25
§ 1402(c)(3), 124 Stat. 222 ................................................. 3
§ 1412, 124 Stat. 231 .................................................... 2, 14
§ 1412(a)(3), 124 Stat. 232 ................................................. 3
§ 1412(c)(2), 124 Stat. 232 ................................................. 3
§ 1412(c)(3), 124 Stat. 233 ................................................. 3
26 U.S.C. 36B ..................................................................... 2
26 U.S.C. 36B(b)(2)............................................................ 4
42 U.S.C. 18022(d)(1) ........................................................ 2
42 U.S.C. 18022(d)(1)(B) ................................................... 2
42 U.S.C. 18062(b)(1) ...................................................... 22
42 U.S.C. 18071 ............................................................ 2, 16
42 U.S.C. 18071(a)(2) ....................................................... 25
42 U.S.C. 18071(c)(3) ......................................................... 3
42 U.S.C. 18071(c)(3)(A) ................................................. 24
42 U.S.C. 18082 ............................................................ 2, 14
42 U.S.C. 18082(a)(3) ................................................... 3, 26
42 U.S.C. 18082(c)(2) ......................................................... 3
42 U.S.C. 18082(c)(3) ......................................................... 3
Tucker Act, 28 U.S.C. 1491 .................................................... 8
Miscellaneous:
Congressional Budget Office:
Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2018 to 2028
(May 2018), https://go.usa.gov/xdBQa ............... 5, 6, 7
Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2019 to 2029
(May 2019), https://go.usa.gov/xdB82...................... 6
V
Miscellaneous—Continued:
Page
The Effects of Terminating Payments for
Cost-Sharing Reductions (Aug. 2017),
https://go.usa.gov/xdZQ8 ....................................... 5, 6
Dep’t of Health and Human Servs.:
Memorandum from Samara Lorenz, Director,
Oversight Group, Center for Consumer Info.
& Ins. Oversight, Centers for Medicare &
Medicaid Servs., Insurance Standards
Bulletin Series—INFORMATION:
Offering of plans that are not QHPs
without CSR “loading” (Aug. 3, 2018),
https://go.usa.gov/xdDH3 ....................................... 6, 7
Office of the Assistant Secretary for Planning
and Evaluation, ASPE Issue Brief:
Potential Fiscal Consequences of Not
Providing CSR Reimbursements
(Dec. 2015), https://go.usa.gov/xyjS2 .................. 4, 27
Milliman:
Part III Actuarial Memorandum: Community
Health Choice Individual Rate Filing
Effective January 1, 2018 (Sept. 18, 2017) ................ 8
Part III Actuarial Memorandum: Maine
Community Health Options (d/b/a/
Community Health Options) Individual
Rate Filing Effective January 1, 2018
(Sept. 5, 2017) ............................................................... 8
Preethi Rao & Sarah Nowak, Effects of Alternative
Insurer Responses to Discontinued Federal
Cost-Sharing Reduction Payments: Broad
Loading as an Alternative to Silver Loading
(2019), https://www.rand.org/pubs/research_reports/
RR2963.html .................................................................................. 6
In the Supreme Court of the United States
No. 20-1162
MAINE COMMUNITY HEALTH OPTIONS, ET AL.,
PETITIONERS
v.
UNITED STATES OF AMERICA
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
BRIEF FOR THE UNITED STATES IN OPPOSITION
OPINIONS BELOW
The opinion of the court of appeals (Pet. App. 1-34)
is reported at 970 F.3d 1364. The opinion of the Court
of Federal Claims in the action brought by petitioner
Maine Community Health Options (Pet. App. 95-148) is
reported at 143 Fed. Cl. 381. The opinion of the Court
of Federal Claims in the action brought by petitioner
Community Health Choice, Inc. (Pet. App. 39-94) is reported at 141 Fed. Cl. 744.
JURISDICTION
The judgments of the court of appeals were entered on
August 14, 2020. Petitions for rehearing were denied on
November 10, 2020 (Pet. App. 35-36, 37-38). On March 19,
2020, the Court extended the time within which to file any
petition for a writ of certiorari due on or after that date to
150 days from the date of the lower-court judgment, order
(1)
2
denying discretionary review, or order denying a timely
petition for rehearing. The effect of that order was to extend the deadline for filing a petition for a writ of certiorari in these cases to April 9, 2021. The petition for a writ
of certiorari was filed on February 19, 2021. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1).
STATEMENT
1. a. These cases concern the relationship between
two mechanisms that Congress enacted in the Patient
Protection and Affordable Care Act (ACA), Pub. L. No.
111-148, 124 Stat. 119, to “make [health] insurance more
affordable.” King v. Burwell, 576 U.S. 473, 482 (2015).
First, in Section 1401 of the ACA, 124 Stat. 213
(26 U.S.C. 36B), Congress provided for “refundable tax
credits to individuals with household incomes between 100
percent and 400 percent of the federal poverty line.”
King, 576 U.S. at 482. “Individuals who meet the Act’s
requirements may purchase insurance with the tax credits, which are provided in advance directly to the individual’s insurer.” Ibid.; see ACA § 1412, 124 Stat. 231
(42 U.S.C. 18082). The vast majority of individuals who
purchase coverage through an Exchange receive premium tax credits. See King, 576 U.S. at 494 (87% in 2014).
Second, Section 1402 of the ACA, 124 Stat. 220
(42 U.S.C. 18071), requires insurers to reduce the costsharing obligations (such as deductibles and copayments)
of certain lower-income individuals who enroll in “silver”
plans through an Exchange. 1 Congress recognized, however, that requiring insurers to reduce cost-sharing would
The ACA classifies most plans offered on the Exchanges into one
of four metal levels based on their cost-sharing requirements.
42 U.S.C. 18022(d)(1). A “silver” plan is a plan structured so that the
insurer pays on average 70% of an enrollee’s health-care costs, leaving
the enrollee responsible for the remainder. 42 U.S.C. 18022(d)(1)(B).
1
3
prompt insurers to raise their premiums to cover the increased costs. Accordingly, “in order to reduce the premiums,” ACA § 1412(a)(3), 124 Stat. 232 (42 U.S.C.
18082(a)(3)), Congress directed the government to make
advance payments to insurers equal to the amount of
those mandated cost-sharing reductions (CSR payments),
ACA §§ 1402(c)(3), 1412(c)(3), 124 Stat. 222, 233 (42 U.S.C.
18071(c)(3), 18082(c)(3)), just as premium tax credits are
paid to insurers in advance, see ACA § 1412(c)(2),
124 Stat. 232 (42 U.S.C. 18082(c)(2)).
b. For several years, the government made direct
CSR payments to insurers from the same permanent
appropriation that it used to pay premium tax credits
to insurers. Pet. App. 49-50. In 2016, however, the
United States District Court for the District of Columbia concluded that CSR payments could not be made
from that permanent appropriation. See id. at 50-51
(discussing United States House of Representatives v.
Burwell, 185 F. Supp. 3d 165 (D.D.C. 2016), appeal dismissed, No. 16-5202 (D.C. Cir. May 16, 2018) (per curiam)). In October 2017, the Attorney General made the
same determination, and the government accordingly
announced that it would cease making direct CSR payments to insurers. Id. at 51-52. The appropriation question is not at issue here.
The cessation of direct CSR payments to insurers did
not relieve insurers of their obligation under Section
1402 of the ACA to reduce cost sharing for eligible individuals enrolled in silver plans. Pet. App. 6. States accordingly “began working with the insurance companies
to develop a plan for how to respond,” but “in a fashion
that would avoid harm to consumers” caused by increased out-of-pocket costs. Ibid. (quoting California v.
Trump, 267 F. Supp. 3d 1119, 1134 (N.D. Cal. 2017)).
4
The solution that most insurers (including petitioners)
and States adopted—and which the Department of Health
and Human Services (HHS) had anticipated several years
earlier—was for insurers to increase their premiums for silver plans (to which the cost-sharing-reduction requirement
is applicable), a practice known as “silver loading.” Pet. App.
8 (citation omitted); see id. at 6-8; Pet. 9; see also Office of
the Assistant Secretary for Planning and Evaluation
(ASPE), HHS, ASPE Issue Brief: Potential Fiscal Consequences of Not Providing CSR Reimbursements (Dec.
2015) (2015 ASPE Issue Brief), https://go.usa.gov/xyjS2.
The amount of the premium tax credits provided for under
Section 1401 of the ACA is calculated based on the premium
for the second-lowest-cost silver plan in a rating area. See
ACA § 1401(a), 124 Stat. 213-214 (26 U.S.C. 36B(b)(2)); Pet.
App. 6-7. As the court of appeals observed, “[i]n effect, if the
insurers increased the monthly premium for their benchmark silver plans,” then “each insurer would receive” a corresponding “increase in the amount of the premium tax
credit for each applicable taxpayer under its silver plans, all
while keeping the out-of-pocket premiums paid by each applicable taxpayer the same.” Pet. App. 7; see 2015 ASPE
Issue Brief 2.
Silver loading not only enabled insurers to offset the
CSR payments they did not receive for their silver
plans, but it also “ha[d] an effect on other plans as well.”
Pet. App. 7. As the court of appeals explained, because
premium tax credits may be used for any metal-level
plan (not just silver plans), and because the amount of
those credits is keyed to benchmark silver-plan premiums, “premium increases for silver-level plans” meant
that insurers “would also receive additional tax credits
for applicable taxpayers that were enrolled in bronze,
gold, and platinum plans, whether or not the premiums
5
for those plans were increased.” Ibid. Thus, “[e]ven if
the insurers kept premiums the same for those other
plans, they would receive additional tax credits.” Ibid.
“As a result,” in States that allowed insurers to raise
silver-plan premiums (as nearly all did), “for everyone
between 100% and 400% of the federal poverty level
who wished to purchase insurance on the [E]xchanges,
the available tax credits rose substantially”—and “[n]ot
just for people who purchased the silver plans, but for
people who purchased other plans too.” Id. at 7-8
(brackets and citations omitted); see Congressional
Budget Office (CBO), Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2018 to 2028,
at 8-9 & n.2 (May 2018) (May 2018 CBO Report),
https://go.usa.gov/xdBQa; 2019-1633 Gov’t C.A. Br. 12 n.7.
The CBO has explained that the across-the-board increase in premium tax credits caused by silver loading resulted in a substantial net increase in the government’s
aggregate payments to insurers and made plans on the
Exchanges more affordable for millions of individuals.
See May 2018 CBO Report 9. The CBO projected that,
due to silver loading, federal payments to insurers would
increase by $194 billion over a decade. See CBO, The Effects of Terminating Payments for Cost-Sharing Reductions 2, 7 (Aug. 2017) (August 2017 CBO Report),
https://go.usa.gov/xdZQ8. And the CBO observed that
silver loading enabled “more people * * * to use their
higher premium tax credits to obtain bronze plans * * *
for free or for very low out-of-pocket payments for premiums,” or to “purchase gold plans, which cover a greater
share of benefits than do silver plans, with similar or lower
premiums after tax credits.” May 2018 CBO Report 9; see
California, 267 F. Supp. 3d at 1135 (providing illustrative
examples, such as a 50-year-old single person at 300% of
6
the federal poverty level living in San Jose, for whom the
area’s most popular bronze plan would have cost her $134
per month in 2017, but for whom the same bronze plan
would cost her only $53 per month in 2018).
The CBO estimated that, “in most years, between 2
million and 3 million more people” would “purchase subsidized plans in the marketplaces than would have if the
federal government had directly reimbursed insurers for
the costs of ” reducing cost sharing for insureds. May 2018
CBO Report 9; see August 2017 CBO Report 2; CBO, Federal Subsidies for Health Insurance Coverage for People
Under Age 65: 2019 to 2029, at 31-34 (May 2019) (May
2019 CBO Report), https://go.usa.gov/xdB82. Conversely,
a private study by the RAND Corporation in 2019 projected that a return to direct CSR payments would “decrease both federal spending and health insurance enrollment,” and that “those who purchase bronze, gold, or platinum plans would face higher premiums and lower subsidies simultaneously and would need to spend more to
maintain enrollment in those plans.” Preethi Rao & Sarah
Nowak, Effects of Alternative Insurer Responses to Discontinued Federal Cost-Sharing Reduction Payments:
Broad Loading as an Alternative to Silver Loading
13-14 (2019) (RAND Report), https://www.rand.org/pubs/
research_reports/RR2963.html.
HHS recognized that silver loading would not benefit
the small percentage of silver-plan enrollees who were not
eligible for premium tax credits (typically because their
incomes exceed the statutory threshold). Memorandum
from Samara Lorenz, Director, Oversight Group, Center
for Consumer Info. & Ins. Oversight, Centers for Medicare & Medicaid Servs., HHS, Insurance Standards Bulletin Series—Information: Offering of Plans that are not
QHPs without CSR “loading” 1 (Aug. 3, 2018) (August
7
2018 HHS Memorandum), https://go.usa.gov/xdDH3; see
May 2018 CBO Report 9; Pet. App. 8. To assist such consumers, HHS “encourag[ed] states to allow Exchange issuers to offer individual market plans * * * outside the
Exchange[s]” that “do not include this [silver] load,” i.e.,
for which the premiums were not increased. August 2018
HHS Memorandum 1; see id. at 1-2. The CBO found that
“many people who are not eligible for subsidies are able
to select a plan besides a silver one or a silver plan sold
outside the marketplaces and avoid paying the premium
increases stemming from the lack of a direct appropriation for” CSR payments. May 2018 CBO Report 9.
Congress has since enacted legislation that protects
the practice of silver loading through 2021. In December
2019, it enacted a provision, captioned “Protection of silver loading practice,” which states that, “[w]ith respect to
plan year 2021, the Secretary of [HHS] may not take any
action to prohibit or otherwise restrict the practice commonly known as ‘silver loading’ ” as defined in HHS’s pertinent regulations. Further Consolidated Appropriations
Act, 2020, Pub. L. No. 116-94, Div. N, § 609, 133 Stat. 3130
(capitalization altered; emphasis omitted).
2. Petitioners Maine Community Health Options and
Community Health Choice, Inc., are health insurers that
sell plans on the Exchanges in Maine and Texas, respectively. Pet. App. 8. As required by Section 1402 of the
ACA, both reduced the cost sharing for eligible insured individuals who enrolled in silver plans. Id. at 9. Beginning
in October 2017, like other insurers, petitioners no longer
received direct CSR payments. Ibid. And like other insurers, petitioners engaged in silver loading—i.e., raised their
8
silver-plan premiums—to offset the absence of CSR payments. Pet. App. 23. 2
Petitioners nevertheless filed separate actions
against the United States in the Court of Federal Claims
under the Tucker Act, 28 U.S.C. 1491, alleging that the
government is liable on an ongoing basis for the full
value of CSR payments not made and seeking money
damages for the years 2017 and 2018. Pet. App. 9. As
relevant here, petitioners claimed both that the government’s failure to make direct CSR payments violated
the ACA and that it “constituted a ‘breach of an impliedin-fact contract.’ ” Id. at 10 (brackets and citation omitted).
The Court of Federal Claims granted summary judgment for petitioners in separate (but materially identical) decisions on both their statutory and contractual
theories. Pet. App. 39-94, 95-148. The court acknowledged that silver loading “would help mitigate the loss
of the cost-sharing reduction payments” and that “the
increased federal expenditure for tax credits will be far
more significant than the decreased federal expenditure for [CSR] payments.” Id. at 53-54. But it concluded that “allowing insurers to both obtain greater
premium tax credits and obtain a judgment for their
lost cost-sharing reduction payments” is not “an unwarranted windfall for insurers.” Id. at 77-78.
Petitioners raised their rates before the October 2017 announcement that HHS would cease making direct CSR payments, but they
did so on the explicit assumption that such payments would no longer
be made. See Milliman, Part III Actuarial Memorandum, Maine
Community Health Options (d/b/a Community Health Options) Individual Rate Filing Effective January 1, 2018, at 2-3 (Sept. 5, 2017);
Milliman, Part III Actuarial Memorandum: Community Health
Choice Individual Rate Filing Effective January 1, 2018, at 3 (Sept.
18, 2017).
2
9
3. The court of appeals affirmed in part, reversed in
part, and remanded in a single decision. Pet. App. 1-34.
a. The court of appeals affirmed the Court of Federal Claims’ holding that the government is liable under
the ACA for outstanding CSR payments. 3 Pet. App.
11-12. The court of appeals reached that conclusion
based on its opinion in Sanford Health Plan v. United
States, 969 F.3d 1370 (Fed. Cir. 2020), issued the same
day by the same panel, in which the court had
h[e]ld that the government violated its obligation to
make cost-sharing reduction payments under section
1402; “that the cost-sharing-reduction reimbursement provision imposes an unambiguous obligation
on the government to pay money; and that the obligation is enforceable through a damages action in the
[Court of Federal Claims] under the Tucker Act.”
Pet. App. 11 (brackets and citation omitted). Like these
cases, Sanford involved actions by insurers claiming unpaid CSR payments. 969 F.3d at 1372. Unlike these
cases, however, the plaintiffs in Sanford sought to recover damages for missed CSR payments only for the
final months of 2017, ibid.—i.e., after the government
ceased making direct CSR payments, but before insurers were able to offset the value of such payments by
engaging in silver loading, which was not possible in
2017 because premiums for that year had already been
set, see id. at 1376. Sanford accordingly presented only
the question of the government’s liability, and not the
effect of insurers’ receipt of increased premium tax
credits on the computation of their asserted damages.
The court of appeals did not reach petitioners’ contract-based
claim. Pet. App. 12, 33-34.
3
10
The Sanford panel concluded that its liability ruling
was dictated by this Court’s decision in Maine Community Health Options v. United States, 140 S. Ct. 1308
(2020). 969 F.3d at 1378-1382. In Maine Community,
the Court held that the government was liable to insurers in suits for money damages for having failed to make
payments to insurers that were required by a different
ACA provision (establishing the risk-corridors program) despite Congress’s failure to appropriate funds
to make payments in the amounts prescribed. 140 S. Ct.
at 1319-1331. The court of appeals in Sanford found “no
sufficient basis for reaching a different conclusion” with
respect to CSR payments not made due to the lack of
available appropriations. 969 F.3d at 1381; see id. at
1380-1383.
The court of appeals in Sanford rejected the government’s argument that a damages remedy for outstanding CSR payments should not be inferred from the
ACA’s structure, which allows insurers to offset such
losses by increasing premium tax credits through silver
loading. 969 F.3d at 1382-1383. The court acknowledged the “premise of the government’s argument”:
that “the premium tax credit provision can indeed lead
to partial or complete offsetting of losses from nonreimbursement of cost-sharing reductions and that the
government should not in effect be charged twice” for
terminating CSR payments, “once through raised premium tax credits and again through a damages award
under the Tucker Act.” Id. at 1383. The court concluded, however, that “a categorical displacement of the
availability of Tucker Act damages actions is not necessary to avoid such overpayment.” Ibid. It reasoned that
“there is a separate body of law that more precisely addresses the problem the government identifie[d]”: the
11
law of damages. Ibid. The Sanford panel explained that
“[d]amages law deals in a more targeted way with matters such as appropriate accounting for offsets and
avoidance of double recoveries” and “accommodates the
practical interaction of the two subsidy mechanisms.”
Ibid. In support, the Sanford panel pointed to the decision below in these cases issued the same day. Ibid.
b. In the decision below in these cases, the same
panel that decided Sanford directly addressed “the appropriate measure of damages,” which was “not presented in Sanford.” Pet. App. 2. These cases, unlike
Sanford, include not only claims for CSR payments not
made in the last several months of 2017, but also claims
for missed CSR payments in 2018—after most insurers
were able to increase silver-plan premiums, as petitioners did. Ibid. Applying its holding in Sanford, the court
of appeals in these cases “conclude[d] that the government is not entitled to a reduction in damages with respect to cost-sharing reductions not paid in 2017.” Ibid.;
see id. at 12. But with respect to 2018, the court “h[e]ld
that the [Court of Federal Claims] must reduce the insurers’ damages by the amount of additional premium
tax credit payments that each insurer received as a result of the government’s termination of cost-sharing reduction payments.” Id. at 2; see id. at 12-29.
The court of appeals observed that, in addressing other
Spending Clause statutes that “impose an affirmative obligation or condition in exchange for federal funding,” Pet.
App. 13 (brackets, citation, and internal quotation marks
omitted), and “where the statute itself does not provide a
remedial framework,” this Court has held that “a contractlaw ‘analogy applies . . . in determining the scope of damages remedies’ in a suit by the government against the
recipient of federal funds,” id. at 14-15 (quoting
12
Barnes v. Gorman, 536 U.S. 181, 187 (2002)) (emphasis
omitted). The panel noted that in Gorman, for example,
the Court had explained that, where a Spending Clause
statute “ ‘contain[ed] no express remedies,’ ” a funding recipient was “ ‘subject to suit for compensatory damages,’ ”
which are “ ‘traditionally available in suits for breach of
contract,’ ” but not for “punitive damages,” which are
“ ‘generally not available for breach of contract.’ ” Id. at 15
(quoting Gorman, 536 U.S. at 187). The court of appeals
reasoned that “[t]he same * * * is true when an action for
damages is brought against the government, under this
type of Spending Clause legislation,” and that “[t]he available remedy is defined by analogy to contract law where
the statute does not provide its own remedies.” Id. at 16.
The court of appeals explained that its “predecessor
court” (the Court of Claims) had “previously applied
th[at] contract-law analogy to limit damages in suits
against the government under the Back Pay Act,
5 U.S.C. § 5596,” which does not provide an express
cause of action. Pet. App. 16-17; see id. at 17 n.7. The
court explained that its predecessor had applied damagesmitigation principles to determine that, “in suits
brought for improper discharge f [rom] federal employment, damages had to be reduced by the amount earned
by the federal employee in the private sector under a
mitigation theory.” Id. at 17 (citing Craft v. United
States, 589 F.2d 1057, 1068 (Ct. Cl. 1978) (per curiam)).
The court of appeals reasoned that the same “contractlaw analogy applies” to petitioners’ suits to recover
damages for CSR payments not made, “because the
statute ‘contains no express remedies’ at all with respect to the government’s obligation” to make those
payments. Pet. App. 18 (quoting Gorman, 536 U.S. at
187). The court noted that, although “the ACA provides
13
specific remedies for failure of the insurers or insured[s]
to comply with their obligations, ‘[it] did not establish a
statutory remedial scheme’ for the government’s noncompliance.” Ibid. (brackets and citation omitted). The
court determined that, in light of “Section 1402’s silence
as to remedies,” redress is properly limited to “ ‘forms of
relief traditionally available in suits for breach of contract.’ ” Ibid. (quoting Gorman, 536 U.S. at 187).
The court of appeals further observed that “[t]he traditional damages remedy under contract law is compensatory in nature.” Pet. App. 18. The court noted that
this Court and others have “uniformly held—as a matter of both state and federal law—that a plaintiff suing
for breach of contract is not entitled to a windfall, i.e.,
the non-breaching party ‘is not entitled to be put in a
better position by the recovery than if the breaching
party had fully performed the contract.’ ” Id. at 18-19
(quoting Miller v. Robertson, 266 U.S. 243, 260 (1924))
(brackets omitted). The court of appeals explained that
contract-law principles address that “concern to limit
contract damages to compensatory amounts” through
(inter alia) “the doctrine of mitigation.” Id. at 20. It
observed that one “aspect of the mitigation doctrine” is
the rule that “there must be a reduction in damages
equal to the amount of benefit that resulted from the
mitigation efforts that the non-breaching party in fact
undertook.” Id. at 21; see id. at 21-23 & n.10.
Applying that principle in these cases, the court of
appeals determined that petitioners’ “damages were
correctly reduced ‘by the amount of the benefit received
in mitigating the government’s partial breach of the . . .
contract.’ ” Pet. App. 23 (brackets and citation omitted).
The court found that “each insurer mitigated the effects
of the government’s breach by applying for increased
14
premiums and, as a result, received additional premium
tax credits in 2018 as a direct result of the government’s
nonpayment of cost-sharing reduction reimbursements.” Ibid. The court observed that, under “[t]he
text of the ACA,” “a direct relationship” exists “between cost-sharing reductions and premiums, and between premiums and tax credits.” Id. at 24. It explained that Section 1412 provides for “advance determination and payment of premium tax credits and costsharing reductions * * * in order to reduce the premiums payable by individuals eligible for such credit.”
Ibid. (quoting 42 U.S.C. 18082) (brackets omitted).
The court of appeals additionally observed that the
trial court’s own “findings show[ed] that the premium
tax credits flowed directly from the insurers’ mitigation
efforts.” Pet. App. 24. The panel noted the Court of
Federal Claims’ finding that petitioners “themselves
[had] recognized th[at] connection” and had “negotiated
for increased premiums (leading to the increased tax
credits) in direct response to the cessation of [CSR]
payments.” Id. at 25. The court of appeals concluded
that “[t]he government’s payment of the premium tax
credits is directly traceable to the premium increase,
and the premium increase is directly traceable to the
government’s breach,” and petitioners thus had “ ‘received a benefit as a direct result of their mitigation activity.’ ” Id. at 25-26 (citation omitted). The court noted
that “[t]he argument for an offset is particularly strong
here because [petitioners] received direct payments
(rather than indirect benefits, such as efficiency gains)
from the government due to their mitigation efforts.”
Id. at 26. The panel rejected petitioners’ contentions
that it should apply an exception to general mitigation
15
principles, finding that neither of the exceptions petitioner invoked was applicable in these circumstances. Id.
at 26-29.
The court of appeals remanded the cases to the
Court of Federal Claims “for a determination of the
amount of premium increases (and resultant premium
tax credits) attributable to the government’s failure to
make [CSR] payments.” Pet. App. 30. The panel observed that, in accordance with the “clear” rule in federal contract law, petitioners “will bear the burden of
persuasion with respect to the amount of the tax-credit
increase attributable to the loss of cost-sharing reduction reimbursements.” Id. at 31. The court noted that
applying that settled rule is “particularly appropriate
here” because petitioners were independently required
by the ACA to provide justifications for their premium
increases. Id. at 32.
4. Petitioners filed petitions for rehearing en banc
with respect to the court of appeals’ damages holding.
The government opposed rehearing but filed a conditional
cross-petition for rehearing arguing that, if the court
granted rehearing as to damages, it should also grant rehearing as to liability. 2019-1633 C.A. Doc. 86, at 1-22 (Oct.
23, 2020). The court denied rehearing. Pet. App. 35-38.
ARGUMENT
Applying this Court’s precedents, the court of appeals
correctly determined that, in calculating the damages
that petitioners may recover in their Tucker Act suits
predicated on the cessation of CSR payments, the trial
court must deduct the increased premium tax credits
that petitioners received “as a direct result of the government’s nonpayment of [CSR payments].” Pet. App.
23. Petitioners resist that conclusion, contending (Pet.
21-34) that they should be allowed to recover the full
16
amount of CSR payments not made, without taking into
account their undisputed receipt of the increased premium tax credits. The court of appeals correctly rejected
that contention, and its decision does not conflict with
any decision of this Court or any other court of appeals.
Further review is not warranted. 4
1. Petitioners’ suits under the Tucker Act seek
money damages for the amount of CSR payments that
they contend Section 1402 of the ACA, 42 U.S.C. 18071,
required the government to make but that petitioners
did not receive. Pet. App. 2, 9-10. The government
ceased making such payments to insurers in October
2017, following the Attorney General’s determination
that no applicable appropriation existed from which
those payments could be made. Id. at 6, 51-52. Petitioners have not contested that determination in this
Court.
Although petitioners’ claims for damages are premised on asserted violations of an obligation imposed by
Section 1402 to make CSR payments, the ACA itself
“does not provide a remedial framework.” Pet. App.
14-15. As the court of appeals noted, “[w]hile the ACA
provides specific remedies for failure of the insurers or
insured to comply with their obligations, ‘the ACA did
not establish a statutory remedial scheme’ for the government’s noncompliance.” Id. at 18 (quoting Maine
As explained in our conditional cross-petition for a writ of certiorari filed today, if the Court grants petitioners’ petition presenting
the damages issue, it should also grant review of the court of appeals’
ruling that the government can be liable for CSR payments not made
in a Tucker Act suit seeking money damages. The court’s liability
ruling in Sanford Health Plan v. United States, 969 F.3d 1370 (Fed.
Cir. 2020), which the decision below deemed controlling as to liability
here, Pet. App. 12, expressly relied on the damages holding in the decision below. See 969 F.3d at 1383.
4
17
Cmty. Health Options v. United States, 140 S. Ct. 1308,
1330 (2020) (brackets and citation omitted). The ACA
does not establish any express cause of action at all, let
alone prescribe the parameters of specific remedies.
In light of “Section 1402’s silence as to remedies,”
the court of appeals looked to this Court’s and its own
precedent addressing the proper “scope of [a] damages
remedy” in the absence of congressional direction. Pet.
App. 18. As the court of appeals explained, in addressing other, analogous Spending Clause legislation where
“the statute itself does not provide a remedial framework,” this Court has held that “a contract-law ‘analogy
applies . . . in determining the scope of damages remedies’ ” in a suit against the funding recipient brought by
the government or a third-party beneficiary. Id. at
14-15 (quoting Barnes v. Gorman, 536 U.S. 181, 187
(2002)) (emphasis omitted). Writing for the Court in
Gorman, Justice Scalia explained that the Court had
previously “applied the contract-law analogy in cases defining the scope of conduct for which funding recipients
may be held liable for money damages,” and “[t]he same
analogy applies * * * in determining the scope of damages remedies.” 536 U.S. at 186-187. Applying that
principle in Gorman to another Spending Clause statute that “contain[ed] no express remedies,” the Court
explained that, whereas an implied compensatory-damages remedy against a funding recipient is available—
because that is a “form[ ] of relief traditionally available
in suits for breach of contract”—punitive damages are
not because, “unlike compensatory damages,” punitive
damages “are generally not available for breach of contract.” Id. at 187.
The court of appeals properly applied the same approach here to these suits by funding recipients against
18
the government for alleged violations of a Spending
Clause statute that similarly does not address available
remedies. Pet. App. 16-18. As the court explained, it
has long “applied the contract-law analogy to limit damages” in suits brought by a federal employee under the
Back Pay Act of 1966, 5 U.S.C. 5596. Pet. App. 17. In
particular, the court noted, its predecessor (the Court
of Claims) held more than four decades ago “that in
suits brought for improper discharge f [rom] federal employment” under the Back Pay Act, damages were subject to the contract-law limitation of “mitigation,” under
which “damages had to be reduced by the amount
earned by the federal employee in the private sector.”
Pet. App. 17 (citing, inter alia, Craft v. United States,
589 F.2d 1057, 1068 (Ct. Cl. 1978) (per curiam)).
The court of appeals applied that same settled approach in these cases. Pet. App. 18-21. Although petitioners’ Section 1402 claim—like a suit under the Back
Pay Act—is not predicated on any asserted contractual
relationship, the court of appeals properly “look[ed] to”
contract-law principles, including the “doctrine of mitigation,” in order “to determine the scope of [petitioners’]
damages remedy.” Id. at 18, 20; see id. at 19-22. The
court explained that one way in which contract law implements the “uniformly” recognized principle “that a plaintiff suing for breach of contract is not entitled to a windfall” is the mitigation doctrine’s requirement that “there
must be a reduction in damages equal to the amount of
benefit that resulted from the mitigation efforts that the
non-breaching party in fact undertook.” Id. at 19, 21.
19
That limitation (among others) “ensures that the nonbreaching party will not benefit from a breach.” Id. at 20. 5
The court of appeals noted that, in these cases, “each
[petitioner] mitigated the effects of the government’s
breach by applying for increased premiums and, as a
result, received additional premium tax credits in 2018
as a direct result of the government’s nonpayment of
[CSR payments].” Pet. App. 23. The court accordingly
determined that, under settled mitigation principles,
any money-damages award must be offset to account for
such increased premium tax credits. See id. at 23-29.
Indeed, as the court of appeals explained, petitioners
“appear[ed] not to dispute that if the elimination of
[CSR] payments directly triggered increased premium
tax credits, an offset would be appropriate.” Pet. App.
23. They argued instead that the increased premium tax
credits did not directly result from the cessation of CSR
payments because they “depend[ed] on actions by” petitioners themselves—“the decision to pursue increased
premiums.” Id. at 23-24. The court rejected that argument, explaining that “a direct relationship” exists “between cost-sharing reductions and premiums, and between premiums and tax credits,” and “the relationship
is no less direct because [petitioners’] tax credits did not
The court of appeals reserved judgment on the application in
this context of a second aspect of the mitigation doctrine: the requirement that “the non-breaching party is expected to take reasonable steps to mitigate his or her damages” and “may not recover
damages for any ‘loss that the injured party could have avoided
without undue risk, burden or humiliation.’ ” Pet. App. 20 (citation
omitted); see id. at 21. The court had no need to address that issue
in these cases by determining whether petitioners “were obligated
to increase premiums to secure increased premium [tax] credits”
because petitioners had in fact done so. Id. at 21; see id. at 23.
5
20
automatically flow from the elimination of [CSR] payments” and also involved steps taken by petitioners. Id.
at 24. It further noted that the trial court’s findings
showed that “the premium tax credits flowed directly
from the [petitioners’] mitigation efforts,” ibid., because
petitioners had sought and obtained increased premiums
“in direct response to the cessation of [CSR] payments,”
id. at 25.
Given its findings that “[t]he government’s payment
of the premium tax credits is directly traceable to the
premium increase, and the premium increase is directly
traceable to the government’s breach,” the court of appeals properly determined that petitioners “ ‘received a
benefit as a direct result of their mitigation activity’ ”
that must be offset in calculating any damages award.
Pet. App. 25-26 (citation omitted). As the court noted, an
offset is especially appropriate here because petitioners
“received direct payments (rather than indirect benefits,
such as efficiency gains) from the government” itself. Id.
at 26. That determination does not warrant further review.
2. Petitioners identify no error in the court of appeals’
application of damages principles. They do not address
the court of appeals’ premise that, in the absence of any
statutory direction concerning remedies, contract-law
principles govern the scope of damages in a case such as
this. Indeed, petitioners do not mention this Court’s decision in Gorman or the longstanding Federal Circuit precedent that applies the same approach reflected in Gorman
to suits against the government under the Back Pay Act.
Cf. Pet. App. 14-18. Nor do petitioners dispute that mitigation is among the contract-law tenets that courts following Gorman’s approach to determine the scope of an implied damages remedy for an alleged violation of a duty
21
imposed by Spending Clause legislation should apply. Cf.
id. at 18-23.
Apart from a conclusory assertion in a footnote (Pet.
32 n.1), petitioners also do not attempt to refute the
court of appeals’ finding that the increased premium tax
credits they received were the “direct result” of their
mitigation efforts of increasing their premiums, which
in turn were in “direct response” to the government’s
cessation of CSR payments. Pet. App. 23, 25. And petitioners do not reprise the arguments they made unsuccessfully in the court of appeals, that either of two
“exceptions to the mitigation principle” applies here.
Id. at 26; see id. at 26-29 (rejecting petitioners’ contentions that no offset should apply here based on “the prohibition on so-called ‘pass-through’ defenses” and the
“collateral source rule”).
Instead, petitioners contend (Pet. 21-34) that the court
of appeals’ damages ruling contradicts this Court’s decision in Maine Community, supra, and that the mitigation
doctrine does not apply because petitioners fully performed their obligations to the government. Neither of
those contentions has merit.
a. As the court of appeals correctly recognized, this
Court’s decision in Maine Community does not speak to
the damages question presented in these cases. Pet.
App. 12. Maine Community involved the ACA’s temporary risk-corridors program, which was designed “to
compensate insurers for unexpectedly unprofitable plans
during the marketplaces’ first three years.” 140 S. Ct. at
1315. The government acknowledged that funding restrictions enacted by Congress had left insurers with
more than $12 billion in unreimbursed losses. Id. at 1318.
Insurers brought suit, and this Court concluded that the
insurers “may sue the Government for damages” for
22
risk-corridors payments that were directed by the statute but not made. Id. at 1315; see id. at 1319-1331. The
Court held that the language of the relevant statute directing that the government “shall pay” risk-corridors
payments, 42 U.S.C. 18062(b)(1), imposed an obligation
that was not contingent on the availability of appropriations, and that the insurers could seek money damages
to recover those payments in the Court of Federal
Claims under the Tucker Act. 140 S. Ct. at 1319-1331.
Maine Community did not present, and this Court’s
decision did not address, any question concerning the
offsetting of the plaintiffs’ damages to reflect benefits
they secured through mitigation efforts. The government did not contend that the plaintiffs in that litigation
had (or should have) mitigated those losses by raising
premiums. And the plaintiffs—which included one of
the petitioners here, Maine Community—asserted that
they could not have done so because the funding restrictions at issue were not enacted until after their premiums had been fixed for the relevant year. For example, Maine Community represented that it and other insurers had “set premiums, offered and sold coverage on
the exchanges * * * and suffered the resulting injury
in the form of out-of-pocket costs, all before Congress
enacted the riders for each year.” Pet. Br. at 47, Maine
Cmty. Health Options v. United States, 140 S. Ct. 1308
(2020) (No. 18-1023); see also, e.g., Pet. Br. at 1, 32,
Moda Health Plan, Inc. v. United States, No. 18-1028
(Aug. 30, 2019) (Moda Br.) (consolidated and decided together with Maine Community, see 140 S. Ct. at 1308
n.*).
Here, in contrast, the opposite occurred. The government announced in October 2017 that CSR payments would cease. Insurers (including petitioners)
23
then provided coverage on the Exchanges in 2018 (and
subsequent years) while raising silver-plan premiums
to offset the forgone CSR payments. Those premium
increases substantially increased the government’s aggregate payments to insurers, in the form of higher premium tax credits, see pp. 4-6, supra—a result that flows
from the ACA’s interlocking provisions, as the petitioners in Maine Community recognized, see Moda Br. at
4 (“[H]igher premiums on the exchanges would make
the promised tax subsidies far more expensive for the
government.”). Nothing resembling the “bait-andswitch” that the plaintiffs alleged in Maine Community, Moda Br. at 1, took place here; to the contrary,
petitioners and other insurers could and did mitigate
their losses (and more). And the decision below limits
petitioners’ damages only to the extent that they actually received an offsetting increase in premium tax
credits. See Pet. App. 23-33.
Petitioners err in contending (Pet. 3, 24) that this
Court’s statement in Maine Community that the statute at issue “created a Government obligation to pay insurers the full amount set out” in that provision,
140 S. Ct. at 1319, forecloses application of mitigation
principles here. The Court was addressing the duty imposed by the statute on the government in the first
instance—and rejected the government’s contention
that the government’s statutory obligation was contingent on and limited to available appropriations—not the
separate question of the computation of damages owed
to a plaintiff that had mitigated its losses. See id. at
1319-1323. The court of appeals correctly recognized
that Maine Community does not “resolve[] th[e] question” presented here concerning such damages offsets.
Pet. App. 12.
24
For similar reasons, petitioners err in asserting (Pet.
26-29) that the statutory text directing that the government “shall make periodic and timely payment[ ],”
42 U.S.C. 18071(c)(3)(A) precludes any offset. That language (like the similar language at issue in Maine Community) speaks to the government’s underlying obligation to make CSR payments. It does not address the calculation of damages generally or the consequences that
follow if a plaintiff’s damages are reduced through mitigation. And because the statute is “silen[t]” on that
question, and indeed “ ‘contains no express remedies’ ” at
all, the court of appeals—following this Court’s precedent applying a “contract-law analogy” in similar
contexts—“look[ed] to government contract law to determine the scope of [petitioners’] damages remedy.”
Pet. App. 18 (quoting Gorman, 536 U.S. at 187).
b. Petitioners alternatively contend (Pet. 29-34) that
mitigation principles would not support offsetting their
damages to reflect the increased premium tax credits
they received. That contention also lacks merit.
In the court of appeals, petitioners contended that
the mitigation doctrine did not call for offsetting their
damages here on the ground that their receipt of increased premium tax credits was too far removed from
the government’s cessation of CSR payments and because either of two exceptions to the mitigation doctrine
applied. Pet. App. 23-29. The court of appeals rejected
those contentions, finding that the increased premium
tax credits were the “direct result” of petitioners’ mitigation efforts made in “direct response” to the government’s action, id. at 23, 25; see id. at 23-26, and that neither of the exceptions petitioners invoked was applicable here, see id. at 26-29. As noted above, petitioners
25
do not seek this Court’s review of the court of appeals’
rejection of those arguments. See p. 21, supra.
Instead, petitioners now contend (Pet. 29) more
broadly that “[t]he doctrine of mitigation has no application” here at all on the theory that petitioners “performed [their] contractual obligations in full” and the
government has “simply refused to pay the agreed-upon
amount.” See Pet. 29-34. Petitioners made that contention below as a part of their argument that damages are
determined at what they termed “the first step,” and
that mitigation “do[es] not go beyond the first step to
encompass pass-on and similar indirect recoveries.”
2019-1633 C.A. Doc. 63, at 15 (Mar. 13, 2020); see id. at 25.
The court of appeals rejected that “first step” argument
in the circumstances of these cases, Pet. App. 23-24, and
did not separately address the argument petitioners now
press that offsets for a non-breaching party’s actual mitigation efforts never apply where the non-breaching party
has fully performed.
In any event, petitioners’ argument (Pet. 3, 31) that
mitigation principles are inapplicable because they
“fully performed” fails for at least two reasons. First,
petitioners’ contention mischaracterizes the nature of
the statutory bargain. Section 1402 did not offer CSR
payments as an incentive to encourage insurers to reduce consumers’ cost-sharing obligations. As petitioners elsewhere acknowledge (Pet. 2), Section 1402 imposes a freestanding obligation on an insurer to reduce
cost sharing for eligible insureds if the insurer elects to
sell plans on an Exchange. 42 U.S.C. 18071(a)(2) (“In
the case of an eligible insured enrolled in a qualified
health plan * * * the issuer shall reduce the cost-sharing
under the plan at the level and in the manner specified
26
in subsection (c).”). An insurer’s obligation to reduce
cost sharing for eligible insureds is not contingent on
CSR payments by the government.
Instead, the ACA provided for CSR payments so
that insurers would not increase their premiums to
cover the expense of those statutorily mandated costsharing reductions. As the court of appeals correctly
noted, the “text of the ACA” reflects this purpose by
providing that the government “ ‘makes advance payments of [premium tax] credits or [cost-sharing] reductions to the [insurers] . . . in order to reduce the
premiums payable by individuals eligible for such
credit.’ ” Pet. App. 24 (quoting 42 U.S.C. 18082(a)(3))
(emphasis added; brackets in original). Thus, when petitioners increased their premiums for 2018 based on
the cessation of CSR payments from the government,
they engaged in what they have previously described
as a quintessential mitigation step: “stopping performance to avoid costs.” 2019-1633 C.A. Doc. 63, at 23.
Second, petitioners’ contention (Pet. 3, 31) that they
had already “fully performed” before taking steps to
mitigate their damages distorts the sequence of the relevant events. In these cases, the damages issue that the
court of appeals addressed pertains only to 2018—the
year following the government’s October 2017 announcement that it would no longer make CSR payments. See Pet. App. 2, 12. At the time of that announcement, petitioners had not yet provided coverage
for 2018; open enrollment for 2018 would not begin until
November 2017. See id. at 52. And by the time of the
October 2017 announcement, petitioners had already
anticipated that the government would cease the payments, and they set their premiums for 2018 expressly
27
assuming that payments would not be made. See pp. 7-8
& n.2, supra.
Petitioners’ situation thus is far removed from that of
an employee who enters a contract to work for one year
and to be paid at year’s end, and who works for 365 days
but then is not paid. Cf. Pet. 30. Petitioners knew before
the 2018 plan year began that the government would not
make CSR payments going forward. They then provided
coverage on the Exchanges and offset those lost payments by increasing their silver-plan premiums in a manner designed to secure a corresponding “increase in the
amount of the premium tax credit[s]” they received from
the government for silver-plan enrollees. Pet. App. 7;
see 2015 ASPE Issue Brief 2 (“Because of th[e] structure” of premium tax credits calculated based on benchmark silver-plan premiums, “increases in benchmark
premiums generally translate” into corresponding “increases in eligible individuals’ [premium tax credits]”).
Those increased silver-plan premiums also made increased premium tax credits available to enrollees in
other, non-silver plans. See ibid. Petitioners’ situation
is thus more analogous to an employee who agrees to
work for a year for a certain salary; who is told before
the year begins that the employer will pay the employee
partly in cash and partly in time-limited stock options
that (if exercised) will yield shares worth at least as much
as the remainder of the agreed-upon salary; and who
proceeds to work for the employer, accepts the cash portion of the salary, and exercises the stock options constituting the remainder. Contract-law principles would not
permit the employee in those circumstances, who has
thus realized the full value of or more than the agreedupon salary, to sue for damages for the portion of the
original salary that was paid in stock rather than in cash.
28
Petitioners’ assertion (Pet. 32) that the court of appeals departed from traditional mitigation principles by
“refus[ing] to accept the logical consequences of its theory” lacks merit. As petitioners note, and as the court
of appeals recognized, “when common-law mitigation
does apply, ‘the non-breaching party is expected to take
reasonable steps to mitigate his or her damages,’ ” ibid.
(quoting Pet. App. 20 (emphasis omitted)), and a nonbreaching party that fails to take such reasonable mitigation measures cannot recover damages for injuries
that such steps would have avoided, see Pet. App. 20-21.
Petitioners’ assertion (Pet. 33) that the court was “unwilling[ ] to embrace” that conclusion is inaccurate.
As the court of appeals explained, it did not decide
how that principle would apply in this context because
there was no need. Pet. App. 21 (“We need not determine whether this first aspect of the mitigation doctrine
applies here—such that the insurers were obligated to
increase premiums to secure increased premium credits.”); see p. 19 n.5, supra. Regardless of whether petitioners were required by mitigation principles to avoid
lost revenue by raising their premiums to secure increased tax credits—such that their damages would have
been offset by the amount they could have saved—petitioners actually did so. Pet. App. 23. Whether a nonbreaching party must undertake a particular mitigation
measure is academic when the party “in fact undertook”
that very measure. Id. at 21.
It is thus petitioners who seek an unprecedented departure from traditional principles of remedies. Having
already taken steps to offset lost revenue from direct CSR
payments by securing an increase in other subsidies from
the government, petitioners brought suit to recover those
same sums again as money damages. Petitioners point to
29
no decision of this Court or any other court that supports
that incongruous result, and they identify no reason why
Congress would have intended to allow that duplicative
recovery. The court of appeals correctly rejected that
contention. Further review is not warranted.
CONCLUSION
The petition for a writ of certiorari should be denied.
Respectfully submitted.
ELIZABETH B. PRELOGAR
Acting Solicitor General
BRIAN M. BOYNTON
Acting Assistant Attorney
General
MARK B. STERN
ALISA B. KLEIN
Attorneys
APRIL 2021
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.