Amicus Curiae Brief — Common Ground Healthcare Cooperative, On Behalf of Itself and All Others Similarly Situated, Petitioner v. United States

No. 20-1200

In the Supreme Court of the United States

COMMON GROUND HEALTHCARE COOPERATIVE,

ON BEHALF OF ITSELF AND ALL OTHERS

SIMILARLY SITUATED,

Petitioners,

v.

UNITED STATES,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

BRIEF FOR ANTHEM, INC., BLUE CROSS OF

IDAHO HEALTH SERVICE, INC., HIGHMARK

INC., L.A. CARE HEALTH PLAN, AND MOLINA

HEALTHCARE OF CALIFORNIA, INC. AS

AMICI CURIAE SUPPORTING PETITIONERS

COLIN E. WRABLEY

REED SMITH LLP

255 Fifth Avenue

Pittsburgh, PA 15222

(412) 288-3131

April 1, 2021

LAWRENCE S. SHER

Counsel of Record

REED SMITH LLP

1301 K Street, NW

Suite 1000 - East Tower

Washington, DC 20005

(202) 414-9200

lsher@reedsmith.com

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TABLE OF CONTENTS

Page

INTEREST OF AMICI CURIAE ............................. 1

SUMMARY OF ARGUMENT .................................. 3

REASONS FOR GRANTING THE PETITION ...... 5

I.

REVIEW IS NECESSARY TO REINFORCE THE

CENTRAL TEACHING OF MAINE COMMUNITY

—THE GOVERNMENT MUST HONOR ITS

PROMISES. .......................................................... 6

II. THE FEDERAL CIRCUIT’S DECISION BELOW IS

WRONG .............................................................. 8

A. The Federal Circuit’s Statutory

Construction Was Plainly Flawed ............ 8

B. The Federal Circuit Misread and

Misapplied This Court’s Precedents ....... 15

III. THE FEDERAL CIRCUIT’S DECISION IMPERILS

PUBLIC-PRIVATE PARTNERSHIPS AND INFLICTS

SEVERE HARM ON THE SEPARATION OF

POWERS. .......................................................... 20

CONCLUSION ....................................................... 22

ii

TABLE OF AUTHORITIES

Cases

Page

Armstrong v. Exceptional Child Ctr.,

Inc.,

575 U.S. 320 (2015) .............................................. 19

Azar v. Allina Health Servs.,

139 S. Ct. 1804 (2019) .......................................... 10

Barnes v. Gorman,

536 U.S. 181 (2002) ...................... 16, 17, 18, 19, 20

Barr v. Am. Ass’n of Political

Consultants,

140 S. Ct. 2335 (2020) ............................................ 9

Bowen v. Massachusetts,

487 U.S. 879 (1988) .................................. 13, 16, 17

Brazos Elec. Power Coop. v. United

States,

144 F.3d 784 (Fed. Cir. 1998) .............................. 17

Burwell v. Hobby Lobby Stores, Inc.,

573 U.S. 682 (2014) .............................................. 12

Caetano v. Massachusetts,

136 S. Ct. 1027 (2016) ............................................ 7

Comcast Corp. v. Nat’l Ass’n of African

American-Owned Media,

140 S. Ct. 1009 (2020) ............................................ 6

Czyzewski v. Jevic Holding Corp.,

137 S. Ct. 973 (2017) .......................................12-13

iii

EEOC v. Abercrombie & Fitch Stores,

Inc.,

135 S. Ct. 2028 (2015) ............................................ 9

Food Mktg. Inst. v. Argus Leader Media,

139 S. Ct. 2356 (2019) .......................................... 15

FTC v. Credit Bureau Ctr., LLC,

937 F.3d 764 (7th Cir. 2019) ................................ 19

Gebser v. Lago Vista Independent

School District,

524 U.S. 274 (1998) ........................................ 17, 18

Guerrero-Lasprilla v. Barr,

140 S. Ct. 1062 (2020) .......................................... 13

Gundy v. United States,

139 S. Ct. 2116 (2019) .......................................... 11

Gunn v. Minton,

568 U.S. 251 (2013) .............................................. 20

Henry Schein, Inc. v. Archer & White

Sales, Inc.,

139 S. Ct. 524 (2019) ............................................ 10

Miss. ex rel. Hood v. AU Optronics

Corp.,

571 U.S. 161 (2014) .............................................. 13

Karasek v. Regents of the Univ. of Cal.,

956 F.3d 1093 (9th Cir. 2020) .............................. 18

Lewis v. Chicago,

560 U. S. 205 (2010) ........................................... 4, 9

iv

Little Sisters of the Poor Saints Peter &

Paul Home v. Pennsylvania,

140 S. Ct. 2367 (2020) ........................................ 3, 9

Mass. Mut. Life Ins. Co. v. Russell,

473 U.S. 134 (1985) .............................................. 10

Me. Cmty. Health Options v. United

States,

140 S. Ct. 1308 (2020) .................................. passim

Mobil Oil Expl. & Producing Se., Inc. v.

United States,

530 U.S. 604 (2000) .............................................. 13

Montana Health Co-Op v. United States,

139 Fed. Cl. 213 (2018) ........................................ 11

Nat’l Broiler Mktg. Ass’n v. United

States,

436 U.S. 816 (1978) .............................................. 15

Pereida v. Wilkinson,

141 S. Ct. 754, 2021 WL 816351

(U.S. March 4, 2021) .............................................. 4

Puerto Rico v. Franklin Cal. Tax-Free

Trust,

136 S. Ct. 1938 (2016) .......................................... 10

Return Mail, Inc. v. United States

Postal Serv.,

139 S. Ct. 1853 (2019) .......................................... 10

Rotkiske v. Klemm,

140 S. Ct. 355 (2019) ............................................ 14

v

Rubin v. Islamic Republic of Iran,

138 S. Ct. 816 (2018) ............................................ 14

Salazar v. Ramah Navajo Chapter,

567 U.S. 182 (2012) ................................................ 8

Sandoz Inc. v. Amgen Inc.,

137 S. Ct. 1664 (2017) .......................................... 19

Sossamon v. Texas.,

563 U.S. 277 (2011) ........................................ 18, 20

Stoneridge Inv. Partners, LLC v.

Scientific-Atlanta, Inc.,

552 U.S. 148 (2008) .............................................. 19

Suburban Mortg. Assocs. v. U.S. Dep’t of

Hous. & Urban Dev.,

480 F.3d 1116 (Fed. Cir. 2007) ............................ 17

Univ. of Tex. Southwestern Med. Ctr. v.

Nassar,

570 U.S. 338 (2013) .............................................. 11

Va. Uranium, Inc. v. Warren,

139 S. Ct. 1894 (2019) .................... 9, 10, 12, 14, 15

Whitfield v. United States,

543 U.S. 209 (2005) .............................................. 12

Statutes

5 U.S.C. § 5596(b)(1)(A)(i) ......................................... 14

26 U.S.C. § 36B.................................................. passim

42 U.S.C. § 300gg-18 ................................................. 14

vi

42 U.S.C. § 2000e-5(g)(1)........................................... 14

42 U.S.C. § 18071 .............................................. passim

42 U.S.C. § 18082 ...................................................... 12

Regulations

45 C.F.R. § 158.210 ................................................... 14

Rules

S. Ct. R. 10(c) ............................................................... 6

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INTEREST OF AMICI CURIAE

Amici curiae Anthem, Inc., Blue Cross of Idaho

Health Service, Inc., Highmark Inc., L.A. Care Health

Plan, and Molina Healthcare of California, Inc., respectfully submit this brief in support of Petitioners

Common Ground Healthcare Cooperative, on behalf of

itself and all others similarly situated. Amici provide

health care insurance to more than 12 million customers throughout the United States, including over

800,000 on various Patient Protect and Affordable

Care Act (ACA) health insurance exchanges.1

In 2010, Congress passed the ACA, “seeking to

improve national health-insurance markets and extend coverage to millions of people without adequate

(or any) health insurance.” Me. Cmty. Health Options

v. United States, 140 S. Ct. 1308, 1315 (2020). “[T]he

Act ‘ensure[s] that anyone can buy insurance.” Id. (citation omitted). It also includes features designed to

contain healthcare costs. One such feature is the “costsharing reduction” (CSR) provision, ACA § 1402, 42

U.S.C. § 18071, which targets insureds’ “cost-sharing”

payments such as deductibles and copayments. Id.

§ 18022(c)(3)(A). Section 1402 requires insurers such

as amici to reduce those cost-sharing payments for eligible insureds who have so-called “silver” health-insurance plans under the ACA. Id. § 18071(b). At the

1 No counsel for a party authored this brief in whole or in

part, and no person other than amici or their counsel made a

monetary contribution intended to fund the preparation or submission of this brief. Petitioners have filed a blanket consent to

the filing of amicus briefs, and respondent has consented to the

filing of this brief. Counsel of record for petitioners and respondent received notice of amici’s intent to file this brief more than

ten days before the brief’s due date.

2

same time, § 1402 requires the government to pay

those insurers “equal to the value of the reductions”

provided to eligible insureds. Id. § 18071(c)(3)(A). Separately, under ACA § 1401, 26 U.S.C. § 36B, eligible

taxpayers can obtain tax credits for premiums paid,

and not just for silver plans, but for bronze, gold, and

platinum plans as well.

Despite § 1402(c)’s clear text, beginning in October 2017, the government—just as it did to petitioners—refused to make CSR payments to amici as required by the statute. Petitioners, amici, and other insurers sued to recover those payments in the Court of

Federal Claims, and a number of those cases made

their way to the Federal Circuit. As petitioners outline, the court of appeals agreed with the insurers that

§ 1402 imposes a money-mandating obligation on the

government to make the requisite CSR payments. But

the court of appeals agreed with the government that,

if and to the extent insurers receive additional premium tax credits under § 1401 as a result of the government’s failure to pay CSRs, the insurers are required to offset—under contract-mitigation principles—those tax credits from the CSR payments to

which they are entitled under § 1402. This is the ruling petitioners challenge.

Amici have a substantial interest in this case because, like petitioners and other insurers, amici have

been denied substantial CSR payments by the government under ACA § 1402, are owed over one-half-billion dollars, and have sued for recovery.2 But now, as

2 See Anthem, Inc. v. United States, No. 20-606 (Fed. Cl.);

Blue Cross of Idaho Health Serv., Inc. v. United States, No. 211033 (Fed. Cl.); Highmark Inc. v. United States, No. 20-1686

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a result of the Federal Circuit’s novel and erroneous

ruling below that CSR payments the government

owes under the statute are subject to contract-mitigation principles and must be reduced by “additional

premium tax credits” insurers received for selling certain health-insurance plans, amici may recover only a

fraction of what they are owed. Amici thus have a direct and substantial interest in these appeals and

urge the Court to grant the petition.

Amici agree with petitioners that the Federal

Circuit’s decision departs from this Court’s controlling

precedents—in particular, its ruling last term in

Maine Community. Amici also echo petitioners’ showing that this case raises, again, exceptionally important questions regarding the government’s obligation to keep its promises to its private-sector partners.

Amici focus here on the importance of enforcing that

obligation. We also discuss the foundational errors in

the Federal Circuit’s decision—its failure to adhere to

controlling precedent; its abandonment of controlling

principles of statutory construction; and its misreading of inapposite authorities—and the serious consequences, practical and legal, that will follow if the

court of appeals’ ruling is left intact.

SUMMARY OF ARGUMENT

The Court consistently holds that where statutory text is unambiguous, the interpretative “‘analysis

begins and ends with the text.’” Little Sisters of the

Poor Saints Peter & Paul Home v. Pennsylvania, 140

S. Ct. 2367, 2380 (2020) (citation omitted). The Court’s

(Fed. Cl.); Local Initiative Health Auth. for L.A. Cty., d/b/a L.A.

Care Health Plan v. United States, No. 17-1542 (Fed. Cl.); Molina

Healthcare v. United States, No. 18-333 (Fed. Cl.).

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“license to interpret statutes does not include the

power to engage in [ ] freewheeling judicial policymaking.” Pereida v. Wilkinson, 141 S. Ct. 754, 2021 WL

816351, at *9 (U.S. March 4, 2021). And it also does

not include the power to “rewrite the statute so that it

covers only what [the Court] think[s] is necessary to

achieve what [the Court] think[s] Congress really intended.” Lewis v. Chicago, 560 U. S. 205, 215 (2010).

In this case, the Federal Circuit threw these

foundational principles to the wind, speeding past

what the text of the relevant statutory provisions actually says—and doesn’t say—and engaging in the

very “freewheeling judicial policymaking” this Court

has long and roundly condemned. To make matters

worse, the court of appeals cherry-picked the policy

considerations it seemingly cared most about—such

as preventing supposed windfall recoveries—while ignoring the many others that run directly counter to its

ruling—including the paramount interest in holding

the government to its unambiguous legal obligations.

Along the way, the Federal Circuit summarily cast

aside binding precedents, as if this Court’s clear holdings were nothing more than optional suggestions.

Equally disconcerting are the dangerous consequences of the Federal Circuit’s decision. By any

measure, the most obvious repercussions are profound—billions of dollars in these CSR cases, and the

government’s reputation as an honest broker and

partner, hang in the balance. But the Pandora’s Box

the Federal Circuit has opened in this case presages

much more. There is little doubt the government will

see a broad new mandate to scour the U.S. Code and

the acts of unrelated third parties for a way to mitigate its liability under a wide range of statutes—and

5

deny recovery to those Congress specifically intended

to protect. And courts, in the Federal Circuit and elsewhere, will flex a newfound judicial muscle, infusing

contract principles into statutes without any evidence,

textual or otherwise, that this was even a glimmer in

Congress’s eye—and indeed, even where all the textual evidence proves that it wasn’t.

The Court therefore should grant certiorari and

intervene to avert these grave consequences and reinforce what should have been clear from its nearlyunanimous reversal of the Federal Circuit in the riskcorridors cases last term—that controlling precedent

must be strictly followed; statutory text is preeminent; and the “Government should honor its obligations.” Maine Community, 140 S. Ct. at 1331.

REASONS FOR GRANTING THE PETITION

As the petition amply demonstrates, prior to the

Federal Circuit’s decision here, neither this Court, nor

any other federal court, had ever concluded that contract mitigation-of-damage principles apply to a claim

for specific monetary relief mandated by a federal

statute where the statutory text makes no mention of

such principles. The reason is clear: courts must enforce statutes as written. The same result must follow

here, and compellingly so, because neither the remedy-creating statutory provision at issue—ACA

§ 1402, 42 U.S.C. § 18071—nor the ACA’s separate

premium-tax-credit provision, § 1401, 26 U.S.C.

§ 36B—makes any mention of contract-mitigation

principles, or even alludes to each other at all.

Unable to deny this textual silence, the Federal

Circuit below instead seized upon the purported ab-

6

sence of a “remedy” provision in § 1402—and then arrogated to itself the unprecedented power to infuse

§ 1402 with contract-mitigation principles taken from

two decisions of this Court involving statutes that provided no remedy, or even an express private right of

action. And the court based this newly minted mitigation imperative on a separate ACA provision Congress

passed—§ 1401—that says nothing about the scope of

remedies recoverable under § 1402.

Section 1402’s “shall pay” language is anything but

silent when it comes to a remedy. Nor is there any justification—in precedent or elsewhere—for the Federal

Circuit’s failure to apply bedrock principles of statutory construction. Those principles foreclose the Federal Circuit’s unprecedented conclusion and the severe consequences for petitioners, amici, and society

more broadly that inevitably will follow. To borrow an

observation this Court recently made, the Federal Circuit’s decision to “tinker with, and then engraft a” contract-law principle onto a statute—without any textual basis for doing so—would “require more than a

little judicial adventurism, and look a good deal more

like amending a law than interpreting one.” Comcast

Corp. v. Nat’l Ass’n of African American-Owned Media, 140 S. Ct. 1009, 1017 (2020). That, of course, is

not what courts should or can do. The Court should

say so—again.

I.

REVIEW IS NECESSARY TO REINFORCE THE CENTRAL TEACHING OF MAINE COMMUNITY—THE

GOVERNMENT MUST HONOR ITS PROMISES.

As the petition aptly demonstrates, the Federal

Circuit’s decision is squarely at odds with this Court’s

recent decision in Maine Community. That is reason

alone for this Court to grant review. S. Ct. R. 10(c);

7

Caetano v. Massachusetts, 136 S. Ct. 1027, 1028

(2016) (per curiam) (granting certiorari and vacating

decision below because it “contradicts this Court’s

precedent”). Another is the particular way the decision below breaks from Maine Community—by ignoring the statutory text and allowing the government,

once again, to renege on its promises. Certiorari is

necessary to end the Federal Circuit’s habit of devising novel ways for the government to skirt binding legal obligations imposed on it by Congress.

On its own, the court of appeals’ cursory treatment of Maine Community is difficult to fathom—and

wrong. The court opened a wide lane for its flawed

conclusion early on, opining without elaboration that

“the Supreme Court in Maine Community” did not resolve the question whether CSR payments could be recovered where premium tax credits were received.

App.58a. That framed the scope of this Court’s holding

and rationale in Maine Community far too granularly.

True, the Court there did not decide the precise question presented in this case. But Maine Community’s

core reasoning and holding plainly resolve that question, Pet. 10-16, 19-20, and the Federal Circuit

wrongly concluded otherwise. And there is no warrant

to be chary in interpreting the binding force and scope

of Maine Community.

Maine Community’s central command that the

government “honor its obligations” is clear and “as old

as the Nation itself[.]” 140 S.Ct. at 1331. It is not just

a matter of fair play—it is enormously consequential

for the health and future of our Nation and its economy. If the COVID-19 pandemic experience has

taught us nothing else, it has demonstrated the great

potential of public-private partnerships to solve some

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of the most pressing and unpredictable of our Nation’s

problems. But those partnerships depend critically on

the assurance that all will be held to the same standard of honoring the promises they make—and be subjected to all the law’s remedies if they don’t.

This is why the Court repeatedly has emphasized

that the law must “safeguard[] both the expectations

of Government contractors and the long-term fiscal interests of the United States.” Salazar v. Ramah Navajo Chapter, 567 U.S. 182, 191 (2012). Maine Community emphatically revitalized the primacy of this principle. But the Federal Circuit’s decision ignores it, and

its departure from Maine Community is an affront to

fairness and justice—and to this Court’s established

jurisprudence. The Court cannot allow any erosion of

the basic requirement that all parties—including the

government—must honor their obligations, lest the

large loophole the Federal Circuit opened in this case

becomes a gaping one.

II.

THE FEDERAL CIRCUIT’S DECISION BELOW IS

WRONG

As the petition correctly explains, the Federal

Circuit’s ruling followed from a fundamental breakdown in applying settled principles of statutory construction and an erroneous interpretation of this

Court’s precedents. Amici will further elaborate on

these points.

A. The Federal Circuit’s Statutory Construction Was Plainly Flawed

The dispositive question in this case is whether

ACA § 1402 can be read to contain an unwritten “contract-mitigation” limitation on any recovery of statutory CSR payments the government is obligated to

9

make. In resolving this question, the Federal Circuit

undeniably should have started where all statutory

construction must—the statutory text—and determined whether the text includes the limitation the

court of appeals ultimately adopted. See Little Sisters

of the Poor, 140 S. Ct. at 2380 (where the statutory

language is unambiguous, the court’s “‘analysis begins and ends with the text’”) (citation omitted). After

all, it is the statutory text that has the force of law—

not perceived lacunae in it. See Barr v. Am. Ass’n of

Political Consultants, 140 S. Ct. 2335, 2349 (2020) (rejecting “argument [that] may have carried some force

back when courts paid less attention to statutory text

as the definitive expression of Congress’s will[, b]ut

courts today zero in on the precise statutory text”).

Courts therefore don’t work backwards from gaps

in a text or preconceived notions of what Congress

“must have meant” to the text itself. Lewis, 560 U.S.

at 215, 217 (stressing that courts may “not rewrite [a]

statute so that it covers only what we think is necessary to achieve what we think Congress really intended. … If [an] effect was unintended, it is a problem for Congress, not one that federal courts can fix”).

And they “construe [a statute’s] silence as exactly

that: silence.” EEOC v. Abercrombie & Fitch Stores,

Inc., 135 S. Ct. 2028, 2033 (2015); see also Va. Uranium, Inc. v. Warren, 139 S. Ct. 1894, 1900 (2019) (explaining that “in any field of statutory interpretation,

it is our duty to respect not only what Congress wrote

but, as importantly, what it didn’t write”).

Thus, as the Court repeatedly has reminded, conjuring up extra-textual mandates or limits in statutes

is verboten, and that is true no matter the policy concerns a court may perceive or wish were addressed in

10

the statute. See Azar v. Allina Health Servs., 139 S.

Ct. 1804, 1815 (2019) (“courts aren’t free to rewrite

clear statutes under the banner of our own policy concerns”). Particularly pertinent here, courts may not

“engraft on a statute additions which [they] think the

legislature logically might or should have made[.]” Return Mail, Inc. v. United States Postal Serv., 139 S. Ct.

1853, 1867 n.11 (2019) (citation omitted) (cleaned up).

Nor will “[t]he federal judiciary [] engraft a remedy on

a statute”—or a limit on a remedy—“no matter how

salutary, that Congress did not intend to provide.”

Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 145

(1985) (citation omitted). These are not mere recommendations—they follow from “our constitutional

structure” itself, which “does not permit” judicial rewriting of statutes. Puerto Rico v. Franklin Cal. TaxFree Trust, 136 S. Ct. 1938, 1949 (2016) (citation omitted); see also Henry Schein, Inc. v. Archer & White

Sales, Inc., 139 S. Ct. 524, 528 (2019) (“we are not at

liberty to rewrite the statute passed by Congress and

signed by the President”).

The court of appeals clearly failed to honor these

foundational precepts of construction. To begin with,

it pointed to no textual basis for imposing its contractmitigation limitation on the remedy § 1402 creates—

and there is none. Section 1402(c)(3)(A) states that

where an insurer makes CSR payments, “the Secretary shall make periodic and timely payments to the

issuer equal to the value of the” CSRs. Section 1402

does not mention offsets or mitigation—explicitly or

otherwise—nor does it allude to § 1401 or the premium tax credits available thereunder. Given the

“clear language” in § 1402, it was “improper to conclude that what Congress omitted from the statute is

11

nevertheless within its scope.” Univ. of Tex. Southwestern Med. Ctr. v. Nassar, 570 U.S. 338, 353 (2013)

(citations omitted); see also Montana Health Co-Op v.

United States, 139 Fed. Cl. 213, 221 (2018) (finding

“no evidence in either the language of the ACA or its

legislative history that Congress intended that the

statutory obligation to make CSR payments should or

would be subject to an offset based on an insurer’s premium rates”).

The Federal Circuit’s interpretative errors did

not end there. As noted, it found that an insurer must

deduct from the CSR payments owed under § 1402 the

amount of additional premium tax credits received

under § 1401 as a result of the government’s violation

of § 1402. Yet the court of appeals never actually considered § 1401’s text or how it should be read together

with § 1402. See Gundy v. United States, 139 S. Ct.

2116, 2126 (2019) (“‘It is a fundamental canon of statutory construction that the words of a statute must be

read in their context and with a view to their place in

the overall statutory scheme’”) (citation omitted). In

fact, § 1401 reinforces the plain meaning of § 1402,

and precludes the court of appeals’ invention of its

novel “contract-mitigation” rule.

Section 1401 provides that taxpayers are entitled

to a “[r]efundable [tax] credit for coverage under a

qualified health plan.” 26 U.S.C. § 36B. Had Congress

intended § 1401 tax credits to affect, much less offset,

the insurers’ recovery of § 1402 CSR payments, Congress would have said so given that the provisions follow one another in the ACA, were enacted at the same

time, and relate to one degree or another to silver

health-insurance plans. But § 1401 does not even reference its next-door neighbor, § 1402, or hint that a

12

credit received by taxpayers under § 1401 might result in an offset or mitigation of CSRs owed to insurers

under § 1402. And, as the court of appeals acknowledged, while ACA § 1412, 42 U.S.C. § 18082, references both the premium tax credits and CSRs,

App.69a-70a, that provision does not tie §§ 1401 and

1402 together in any way.

All of this is further, formidable evidence that

§ 1402 does not mean what it does not say. Just as

Congress knows how “to link the meaning of a statutory provision to a body of [the Supreme] Court’s case

law” when it “wants to,” Burwell v. Hobby Lobby

Stores, Inc., 573 U.S. 682, 714 (2014) (citation omitted), the same is true—a fortiori—when Congress

wants to link together sections of the same statutory

enactment. Yet as illustrated, the “text of § [1402] fails

to provide any cross-reference to § [1401]” or vice

versa, and “if Congress had intended to create the

scheme [the court of appeals] envision[s], it would

have done so in clearer terms.” Whitfield v. United

States, 543 U.S. 209, 215 (2005) (rejecting purported

“link between [] two separate statutes” based on one

commonality between the statutes’ terms). “Talk

about” trying to “squeez[e] elephants into mouseholes.” Va. Uranium, 139 S. Ct. at 1903 (citation omitted).

That Congress would have spoken much more

clearly and explicitly had it intended to codify the Federal Circuit’s interpretation further follows from the

fact that its new contract-mitigation principle is in

fact so novel and unprecedented. Courts “expect more

than simple statutory silence if, and when, Congress

were to intend [such] a major departure” from existing

law. Czyzewski v. Jevic Holding Corp., 137 S. Ct. 973,

13

984 (2017) (citation omitted). Unsurprisingly, the

court of appeals strained to find any applicable precedent for its reading precisely because its extraordinary rewriting of a clear money-mandating statutory

provision that gives rise to Tucker-Act jurisdiction

stands alone in the Federal Reporters. In such instances, this Court properly refuses to infer that Congress would provide for such a path-breaking outcome

without saying so.

And that is not all. Longstanding precedent

treats statutes structured like § 1402 as providing not

compensatory damages, but a specific-relief, liquidated-damage-type remedy not subject to mitigation

under black-letter law. Pet. 12-17; see also Bowen v.

Massachusetts, 487 U.S. 879, 900 (1988); Mobil Oil

Expl. & Producing Se., Inc. v. United States, 530 U.S.

604, 623-24 (2000). This Court “presume[s] that ‘Congress is aware of existing law when it passes legislation.’” Miss. ex rel. Hood v. AU Optronics Corp., 571

U.S. 161, 169 (2014) (citation omitted) (cleaned up).

Accordingly, the Federal Circuit should have “assume[d] that Congress—aware of th[e] precedent”

deeming similar “shall pay” statutes to provide for the

remedy of the specific amount of sums due, immune

to offsets or mitigation—“would have intended”

§ 1402 to provide for just that (Guerrero-Lasprilla v.

Barr, 140 S. Ct. 1062, 1072 (2020)): payment by the

government of CSR amounts as required under the

statute, without any offsets or mitigation.

Congress certainly knows how to impose an offset

or mitigation limitation on a statutory remedy when

it wishes to do so. This is evidenced by the Back Pay

Act, which, as the court of appeals itself acknowledged

(App.63a.n.8), explicitly provides for such an offset.

14

See 5 U.S.C. § 5596(b)(1)(A)(i). Other statutes predating the ACA do the same. See, e.g., 42 U.S.C. § 2000e5(g)(1) (directing courts to deduct “interim earnings or

amounts earnable with reasonable diligence by the

person or person discriminated against” from any

back-pay damages awarded under Title VII of the

Civil Rights Act).3 Thus, it is clear that, “[h]ad Congress” meant to impose a similar mitigation or offset

limitation on the statutory amounts owed under

§ 1402’s specific payment mandate, “it knew how to

say so.” Rubin v. Islamic Republic of Iran, 138 S. Ct.

816, 826 (2018) (citation omitted); see also Rotkiske v.

Klemm, 140 S. Ct. 355, 361 (2019) (“A textual judicial

supplementation is particularly inappropriate when,

as here, Congress has shown that it knows how to

adopt the omitted language or provision.”).

So “[r]eally, to accomplish all it wants,” the government “would have to persuade” this Court to “add”

23 words to the provision of § 1402(c)(3)(A) at issue,

as follows (Va. Uranium, 139 S. Ct. at 1903):

[T]he Secretary shall make periodic and

timely payments to the issuer equal to the

value of the reductions, less additional

premium tax credits the issuer receives from the sale of silver plans resulting from the Secretary’s failure to

make such payments.

3 Moreover, as evidenced by 42 U.S.C. § 300gg-18 and 45

C.F.R. § 158.210—both

ACA-related

provisions—Congress

knows how to prevent supposed “windfalls” from the operation of

the statutes it enacts. But it enacted no text designed to do so

when it comes to CSR payments under § 1402.

15

“That may be a statute some would prefer”—and the

statute the government claims Congress intended—

“but it is not the statute we have.” Id.

As the discussion above makes clear, the Federal

Circuit again has adopted an approach to reading

statutes that “is a relic from a ‘bygone era of statutory

construction[,]’” Food Mktg. Inst. v. Argus Leader Media, 139 S. Ct. 2356, 2364 (2019) (citation omitted),

where statutes were treated as “empty vessel[s]” into

which courts could “pour” their preferred “vintage” of

policies, Nat’l Broiler Mktg. Ass’n v. United States, 436

U.S. 816, 827 (1978), and where textual silence was

not the end of the analysis, but an open invitation to

mold the statute into a court’s desired fit and shape.

That era is long gone.

Here, a proper contextual reading of § 1402, applying settled principles of statutory construction,

should have led the Federal Circuit to affirm the judgment below and require the government to pay the full

amount of the statutory CSR payments owed—just as

§ 1402 provides.

B. The Federal Circuit Misread and Misapplied This Court’s Precedents

Rather than looking for statutory text supporting

the mitigation limitation it ultimately applied, and

following settled principles of construction, the Federal Circuit took a very different approach, one that

ignored the plain statutory text—and the absence of

text—and hinged on a plain misunderstanding of this

Court’s precedents.

As an initial matter, while it overlooked the principal holding of this Court’s decision in Maine Community, the court of appeals purported to rely on that

16

ruling for its pivotal finding that the ACA does not

create a “remedial scheme[,]” opening the door to import contract principles in determining “the scope of

the insurers’ damages remedy.” App.63a-64a. But

that finding is contrary to the Court’s decision in

Maine Community. The Court actually said the ACA

“did not establish a comparable remedial scheme” to

other statutes deemed to displace Tucker-Act jurisdiction and remedies. Maine Community, 140 S. Ct. at

1330 (emphasis added). And the Court did so in reaching its jurisdictional determination that the ACA did

not create “a separate remedial scheme supplanting

the Court of Federal Claims’ power to adjudicate petitioners’ claims” under the Tucker Act. Id. at 1329. The

Court did not even remotely suggest that there is a

“contract-law analogy” applied to § 1402 or provisions

like it, as the court of appeals wrongly deduced here.

That threshold error triggered a cascade of others. The court of appeals proceeded to proclaim that

§ 1402 “‘contains no express remedies’ at all with respect to the government’s obligation” to make CSR

payments. App.63a (quoting Barnes v. Gorman, 536

U.S. 181, 187 (2002)). And with that proclamation in

hand, the court then claimed it had the authority to

treat § 1402 like a contract and engraft contract-mitigation principles onto that provision that are nowhere

mentioned in its text. The court’s conclusions were

wrong—and demonstrably so.

First, as noted, § 1402 explicitly does provide a

remedy—CSR “payments … equal to the value of reductions” made. That type of remedy, as this Court explained in Bowen, is one for “specific relief” in the form

of the “payment of money” required by “the statutory

mandate itself[.]” 487 U.S. at 900 (describing similar

17

statute imposing “shall pay” obligation). The Court reiterated that precise view in Maine Community,

where it held that the remedy in the ACA’s risk-corridors provision—which, like § 1402, imposes a “shall

pay” obligation—was one for “specific sums, already

calculated, past due, and designed to compensate for

completed labors.” 140 S. Ct. at 1330-31. The necessary predicate for the Federal Circuit’s novel invocation of Barnes’ “contract-law analogy” principle—the

supposed absence of any “express remedies” in

§ 1402—therefore was simply incorrect.

Rather than acknowledging the holdings in

Bowen and Maine Community, however, the Federal

Circuit inexplicably quoted Bowen’s observation that

“the Court of Claims has no [general] power to grant

equitable relief.” App.62a.n.6. That is true, but irrelevant, because the CSR payments are not equitable relief, but rather the payment of specific sums mandated under a statute, which falls comfortably within

the jurisdiction of the Court of Federal Claims to

award. See Suburban Mortg. Assocs. v. U.S. Dep’t of

Hous. & Urban Dev., 480 F.3d 1116, 1126 (Fed. Cir.

2007). Indeed, such relief against the government can

only be pursued in the Court of Federal Claims. See

Brazos Elec. Power Coop. v. United States, 144 F.3d

784, 787 (Fed. Cir. 1998).

Second, the broad authority to effectively rewrite § 1402 the court of appeals claimed to derive

from Barnes and Gebser v. Lago Vista Independent

School District, 524 U.S. 274 (1998), has no application to § 1402. Unlike here, the statutes at issue in

those cases “mention[ed] no remedies” at all. Barnes,

536 U.S. at 187 (discussing Title VI of the Civil Rights

18

Act of 1964 and Title IX of the Education Amendments of 1972) (emphasis added); Sossamon v. Texas.,

563 U.S. 277, 288 (2011) (pointing out that in Barnes,

the Court had “no statutory text to interpret”) (citation omitted).

In fact, unlike § 1402—which, as the court of appeals correctly noted, creates a money-mandating obligation enforceable through a cause of action authorized under the Tucker Act (App.57a)—Title VI and Title IX “fail[ ] to mention even a private right of action”

and have been found privately enforceable only

through an implied right of action not explicitly provided in the statutory text. Karasek v. Regents of the

Univ. of Cal., 956 F.3d 1093, 1107-1108 (9th Cir. 2020)

(noting that a “damages remedy for Title IX violations

is judicially implied, not statutorily created”) (citation

omitted). Thus, § 1402 plainly is distinct from those

statutes and their implied rights and remedies.

This distinction, moreover, contemplates a very

different and far more expansive judicial function

than is warranted in this case. Unlike § 1402, because

the cases relied upon by the Federal Circuit involved

“judicially implied” rights of action, the Court there

reasoned that any question of remedy “inherently entails a degree of speculation, since it addresses an issue on which Congress has not specifically spoken.”

Gebser, 524 U.S. at 284 (citations omitted). Even in

that setting, however, the Court in Gebser was careful

to note that “[t]o guide the analysis, we generally examine the relevant statute to ensure that we do not

fashion the parameters of an implied right in a manner at odds with the statutory structure and purpose.”

Id. (citations omitted) (emphasis added). In other

words, even in circumstances—unlike here—where a

19

court has some “measure of latitude to shape a sensible remedial scheme” in a statute that is silent on the

question, it still must hew closely to the statute’s text,

structure, and purpose.

In contrast, where, as here, Congress created

both a statutory right of action and an accompanying

remedy in § 1402, the Court does not have such latitude because that impermissibly would intrude on the

legislative function. That “‘Congress rather than the

courts controls the availability of remedies for violations of statutes’” is firmly “‘grounded in separation of

powers[.]’” Stoneridge Inv. Partners, LLC v. ScientificAtlanta, Inc., 552 U.S. 148, 165 (2008) (citation omitted); see also FTC v. Credit Bureau Ctr., LLC, 937 F.3d

764, 782 (7th Cir. 2019) (“Congress, not the judiciary,

controls the scope of remedial relief when a statute

provides a cause of action.”) (citing Armstrong v. Exceptional Child Ctr., Inc., 575 U.S. 320, 328 (2015)).

For these reasons, just as “courts must be especially

reluctant to provide additional remedies[]” where “a

statute expressly provides a remedy,” Sandoz Inc. v.

Amgen Inc., 137 S. Ct. 1664, 1675 (2017) (citation

omitted) (cleaned up), they must be even more reluctant to impose extra-textual contract-law limits on a

remedy that “a statute expressly provides[.]”

Further, the Federal Circuit’s broad application

of Barnes ignores its limited holding. The Court there

stressed that it had “been careful not to imply that all

contract-law rules apply to Spending Clause legislation[.]” Barnes, 536 U.S. at 186 (citation omitted) (emphasis added). And it in no way meant to imply “that

suits under Spending Clause legislation are suits in

contract, or that contract-law principles apply to all

20

issues that they raise.” Id. at 189 n.2; see also Sossamon, 563 U.S. at 290 (same) (citing Barnes, 536 U.S.

at 189 n.2). The Federal Circuit did not mention any

of these crucial admonitions and limitations, however,

selectively focusing instead on Barnes’ isolated “contract-law analogy” language—which, as shown, cannot be applied to § 1402.

The wholesale conversion of so-called “SpendingClause statutes” into contracts contemplated by the

Federal Circuit is a bridge too far. As noted, the Supreme Court in Barnes did not adopt such an expansive rule, nor has any other decision of this Court—

before Barnes or since. That is for good reason, since

that rule would authorize federal courts to exercise

common law-like power to revise a broad spectrum of

Congressional enactments, past and future, in the

name of the law of contracts. But as this Court often

has reminded, “‘[f]ederal courts are courts of limited

jurisdiction,’ possessing ‘only that power authorized

by Constitution and statute.’” Gunn v. Minton, 568

U.S. 251, 256 (2013) (citation omitted). And neither

the Constitution nor any statute confers anything like

the power of judicial revisionism the Federal Circuit

exercised here.

III. THE FEDERAL CIRCUIT’S DECISION IMPERILS

PUBLIC-PRIVATE PARTNERSHIPS AND INFLICTS

SEVERE HARM ON THE SEPARATION OF POWERS.

If left standing, the grave consequences of the

Federal Circuit’s decision cannot be overstated. To be

sure, when the Maine Community risk-corridors case

arrived at this Court from the Federal Circuit a few

years ago, serious ramifications were in play that resemble those here.

21

But the effects of the Federal Circuit decision

now before the Court are even more dangerous—and

destructive—and threaten a far more damaging blow

to separation of powers. The ruling actively encourages the government to: (i) shirk its “shall pay” statutory obligations, which arise under “many other federal statutes” besides the ACA (Maine Community,

140 S. Ct. at 1333 (Alito, J., dissenting)); (ii) shift the

onus to its private-sector partners to sue and pay for

costly and protracted litigation;4 and, in the meantime, (iii) conceive mitigation arguments limited only

by the government’s imagination—and as to which

plaintiffs seeking to recover statutory payments to

which they are entitled will bear the burden of proof.

App.76a-78a.

There is no downside for the government in

adopting this strategy to avoid its statutory liability.

The government can deploy its vast taxpayer-funded

resources to litigate any and all of its mitigation theories. Even if the government ultimately is required to

honor its statutory obligations, it need only pay out

what was owed in the first place—and many years

later, after all appeals have been exhausted.

Thus, we should expect the government to be emboldened to extend the Federal Circuit’s inventive

4

And make no mistake, litigation in a world where government mitigation arguments are commonplace following the

Federal Circuit’s ruling will be protracted and complex. The

court of appeals acknowledged as much, noting that on remand

the Court of Federal Claims will need to undertake the “necessarily fact-intensive task” of determining whether and how an

insurer mitigated the effects of the government’s statutory violation in the hypothetical, but-for world where the government

honored its obligations. App.74a-78a.

22

new interpretative principle to the full spectrum of

contract law by infusing contract-law rules upon statutes that invite no such infusion, thereby restricting

the remedies and recoveries available for statutory violations. Courts, not Congress, will be able to employ

this new mitigation tool to correct judicially perceived

inequities in statutory programs. There is no apparent substantive or jurisdictional limitation on how far

this new principle could extend or to what statutes

and disputes it could be applied. If history is any

guide—and it should be—we should fully expect that

many judges and courts will exercise this new power

in the supposed interests of fairness and equity, and

do precisely what this Court repeatedly has admonished against: inserting unwritten terms into plain

statutory text. And this will not be without widespread repercussions, for it will severely disrupt and

destabilize the business and expectations of the government’s private-sector partners.

In the end, the Federal Circuit’s interpretative

adventurism is no trivial concern—it strikes at the

heart of our separation of powers and is an unconstitutional invasion of Congress’s established power to

make law. If Congress had been concerned about the

interplay of §§ 1401 and 1402 when it came to the

ACA’s silver health plans—and it surely understood

that interplay—it could and would have enacted specific measures to address it. It did not, and that should

have been both the beginning and the end of this case.

CONCLUSION

For the foregoing reasons and those set forth in the

petition for writ of certiorari, the petition should be

granted.

23

Respectfully submitted.

LAWRENCE S. SHER

Counsel of Record

REED SMITH LLP

1301 K Street, NW

Suite 1000 - East Tower

Washington, DC 20005

(202) 414-9200

lsher@reedsmith.com

APRIL 1, 2021

COLIN E. WRABLEY

REED SMITH LLP

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Pittsburgh, PA 15222

(412) 288-3131