Petition for Writ of Certiorari — Operating Engineers Trust Fund of Washington, D.C., et al., Petitioners v. United States

APPENDIX

TABLE OF CONTENTS

Appendix A Memorandum of the United States

Court of Appeals for the Federal

Circuit (October 2, 2025) .................. App. 1a

Appendix B Order of the United States Court of

Federal Claims Denying Plaintiffs’

Motion for Partial Reconsideration

(August 18, 2023) ............................. App. 13a

Appendix C Order of the United States Court

of Federal Claims Granting

Defendant United States’ Motion

for Partial Summary Judgment

(July 13, 2023) .................................. App. 26a

Appendix D Order of the United States Court of

Federal Claims Granting Defendant

United States’ Motion to Dismiss

(July 30, 2021) .................................. App. 59a

Appendix E Judgment of the United States

Court of Federal Claims Granting

Defendant United States’ Motion

for Partial Summary Judgment

(July 7, 2023) .................................. App. 109a

Appendix F Constitutional and Statutory

Provisions Involved ....................... App. 111a

-App. 1a-

APPENDIX A

UNITED STATES COURT OF APPEALS FOR THE

FEDERAL CIRCUIT

ELECTRICAL WELFARE TRUST

FUND,

Plaintiff

OPERATING ENGINEERS TRUST

FUND OF WASHINGTON, D.C.,

STONE & MARBLE MASONS OF

METROPOLITAN WASHINGTON, D.C.

HEALTH AND WELFARE FUND,

Plaintiffs-Appellants

v.

UNTED STATES,

Defendant-Appellee

2024-1107

Appeal from United States Court of

Federal Claims in No. 1:19-cv-00353-EMR,

Judge Eleni M. Roumel.

-App. 2aDecided: October 2, 2025

JOSEPH H. MELTZER, Kessler Topaz

Meltzer & Check, LLP, Radnor, PA,

argued for plaintiffs-appellants. Also

represented by MELISSA L. YEATES.

BORISLAV KUSHNER, Commercial

Litigation Branch, Civil Division, United

States Department of Justice, Washington,

DC, argued for defendant-appellee. Also

represented by BRIAN M. BOYNTON, ERIC

P. BRUSKIN, PATRICIA M. MCCARTHY.

Before MOORE, Chief Judge, STOLL, Circuit Judge, and

BUMB, Chief District Judge.1

STOLL, Circuit Judge.

Plaintiffs-Appellants2 brought this action against the

United States seeking, among other things, compensation

for an alleged Fifth Amendment taking based on

mandatory contributions they paid to the Transitional

Reinsurance Program as part of the implementation of the

Patient Protection and Affordable Care Act of 2010. The

1 Honorable Renée Marie Bumb, Chief District Judge, United

States District Court for the District of New Jersey, sitting by

designation.

2 The Operating Engineers Trust Fund of Washing-ton, D.C. and

the Stone & Marble Masons of Metropolitan Washington, D.C. Health

and Welfare Fund.

-App. 3aU.S. Court of Federal Claims granted the Government's

motion for partial summary judgment on the Fifth

Amendment takings claim. For the following reasons, we

affirm.

BACKGROUND

As part of the Patient Protection and Affordable Care

Act of 2010 (ACA), Congress established a risk mitigation

program called the Transitional Reinsurance Program

(TRP). See 42 U.S.C. § 18061. The TRP required certain

entities to pay reinsurance contributions to the

Department of Health and Human Services for the 2014,

2015, and 2016 benefit years. This obligation applied to the

Plaintiffs-Appellants, who made the TRP contributions as

required, but later filed suit in the U.S. Court of Federal

Claims (“Claims Court”) to recover their contributions.

In their complaint, Plaintiffs-Appellants alleged the

TRP contributions they were required to make

constituted a taking under the Fifth Amendment. They

contended that they possessed “identifiable property

interests in specific funds of money protected by the

Takings Clause of the Fifth Amendment,” namely the

“[f]unds held in [their] self-insured health and welfare

trust funds.” J.A. 120 ¶ 103 (operative complaint).

The Government sought partial summary judgment,

arguing that Plaintiffs-Appellants lacked a cognizable

property interest in the TRP payments because the

payments were not the specifically identifiable funds

required for monetary takings liability. Rather, as

asserted by the Government, “the requirement to pay

TRP contributions imposed only an obligation to pay

money.” Elec. Welfare Tr. Fund v. United States, 166 Fed.

Cl. 709, 713 (2023). But Plaintiffs-Appellants pointed out

that, as self-insured group health plans, they are required

-App. 4ato hold all assets in trust3 for the sole purpose of providing

health and welfare benefits to covered individuals.

Plaintiffs-Appellants contended they possessed an

identifiable property interest in their payments because

the TRP contributions were effectively required to be paid

from a specific account based on the requirement to keep

their assets in trust.

Addressing the Government’s motion, the Claims

Court first explained that, “[w]hile one cannot possess a

cognizable property interest in money generally, one’s

property interest in a specific fund of money—e.g., the

interest or principal of an identified account—is

cognizable under the Takings Clause such that

government deprivation can amount to a taking.” Elec.

Welfare, 166 Fed. Cl. at 717. (citing Webb’s Fabulous

Pharmacies., Inc. v. Beckwith, 449 U.S. 155, 160–65

(1980)). The court recognized that it “must therefore first

identify what, if anything, was the subject of the alleged

taking to determine whether the property at issue actually

constituted specific funds of money.” Id. (internal

quotation marks and citations omitted).

The Claims Court determined that “[b]ecause the

property Plaintiffs allege Defendant took was simply

sums of money, annually calculated, rather than specific

funds, Plaintiffs ha[d] not identified a property interest

appropriated by Defendant that is cognizable under the

Takings Clause.” Id. at 718. The Claims Court rejected

both of Plaintiffs-Appellants counterarguments. First, in

response to the argument that “each TRP contribution

3 29 U.S.C. § 1103(a) (ERISA) (“[A]ll assets of an em-ployee

benefit plan shall be held in trust . . . .”); 29 U.S.C. § 186(c)(5)(A) (TaftHartley) (assets “are held in trust for the purpose of paying, either

from principal or income or both, for the benefit of employees, their

families and de-pendents, for medical or hospital care”).

-App. 5awas a specific fund of money in which Plaintiffs had a

property interest by virtue of the trust agreements

establishing their trust funds,” the Claims Court

explained that the trust agreements “do not resolve the

clear conflict between Plaintiffs’ argument that an entity

may possess a property interest in a sum of money held

within a trust account and binding precedent prohibiting

a court from finding a cognizable property interest in

money alone.” Id. at 718–19. The Claims Court also

rejected Plaintiffs-Appellants’ second argument—that

the specific funds are actually Plaintiffs’ trust accounts,

from which Plaintiffs argue they were effectively required

to pay their TRP contributions. Id. at 721. First, the court

held that this argument had been waived. Id. It proceeded

to address the merits anyway, rejecting this second

argument—for essentially the same reason as the first.

The Claims Court explained that the “requirement to pay

a sum of money cannot be transformed into a taking of a

specific fund merely because such payment may be made

from a certain account, as one simply cannot have a

cognizable property interest in money itself.” Id. at 721–

22.

As an alternative reason for ruling in favor of the

Government, the Claims Court held that “a government

actor only implicates one’s property interest in a specific

fund when it appropriates the fund in toto.” Id. at 717

(citing Adams v. United States, 391 F.3d 1212, 1224–25

(Fed. Cir. 2004)). The Claims Court thus reasoned that no

taking occurred because the ACA did not “effect de facto

appropriations of Plaintiffs’ funds in toto.” Id. at 718.

Plaintiffs-Appellants later sought reconsideration of

the Claims Court’s determination that they had waived

the argument that the trust funds themselves were the

specific funds at issue, which the Claims Court denied.

-App. 6aPlaintiffs-Appellants appeal. We have jurisdiction

pursuant to 28 U.S.C. § 1295(a)(3).

DISCUSSION

We review “both the [trial court’s] grant of summary

judgment and all questions of law de novo.” Nat’l Austl.

Bank v. United States, 452 F.3d 1321, 1325 (Fed. Cir.

2006). “The nature or scope of a compensable property

interest in a takings analysis is a question of law.” Casitas

Mun. Water Dist. v. United States, 708 F.3d 1340, 1351

(Fed. Cir. 2013).

Our court has “developed a two-part test to determine

whether a taking has in fact occurred.” Am. Pelagic

Fishing Co., L.P. v. United States, 379 F.3d 1363, 1372

(Fed. Cir. 2004). First, “the court must determine whether

the claimant has established a property interest for

purposes of the Fifth Amendment.” Id. Second, “after

having identified a valid property interest, the court must

determine whether the governmental action at issue

amounted to a compensable taking of that property

interest.” Id. This appeal involves the first question:

whether Plaintiffs-Appellants have a property interest in

the funds used to satisfy their TRP obligations.

As a general principle, in the Fifth Amendment

takings context, “[u]nlike real or personal property,

money is fungible.” United States v. Sperry Corp., 493

U.S. 52, 62 n.9 (1989). In certain limited circumstances,

however, the appropriation of money can give rise to

takings liability—such as in “interest follows principal”

cases. Phillips v. Wash. Legal Found., 524 U.S. 156, 165

(1998). One such case is Webb’s Fabulous Pharmacies,

where a county appropriated “the interest accruing on an

interpleader fund deposited in the registry of the county

court.” 449 U.S. at 155. The Supreme Court explained that

“[t]he usual and general rule is that any interest on an

-App. 7ainterpleaded and deposited fund follows the principal and

is to be allocated to those who are ultimately to be the

owners of that principal.” Id. at 162. Therefore,

appropriating the interest generated by the funds was an

“appropriation of the beneficial use of the fund . . .

analogous to the appropriation of the use of private

property.” Id. at 163–64. In short, the county’s retention

of the interest that would otherwise belong to the owner

of the funds constituted a taking under the Fifth

Amendment.

Similarly, in Phillips, the Supreme Court explained

that the same principle governs when funds were

temporarily deposited in an attorney trust account,

holding that “the interest income generated by funds held

in [Interest on Lawyers’ Trust Accounts (‘IOLTA’)]

accounts is the ‘private property’ of the owner of the

principal.” 524 U.S. at 172; see also Brown v. Legal Found.

of Wash., 538 U.S. 216, 235 (2003) (holding that IOLTA

account interest that was transferred to a legal aid fund

was taken for a public use).

On the other hand, our precedent recognizes the

general principle that “the mere imposition of an

obligation to pay money . . . does not give rise to a claim

under the Takings Clause of the Fifth Amendment.”

Commonwealth Edison Co. v. United States, 271 F.3d

1327, 1340 (Fed. Cir. 2001) (en banc). In Commonwealth

Edison, we assessed whether the congressional

imposition of “special monetary assessments on domestic

utilities for the remediation of environmentally

contaminated uranium processing facilities owned by the

United States” constituted a Fifth Amendment taking. Id.

at 1329. We held “that requiring plaintiff Commonwealth

Edison Company . . . to contribute to the remediation costs

does not constitute a Fifth Amendment taking because the

-App. 8aTakings Clause does not apply to legislation requiring the

payment of money.” Id. In so holding, we followed the five

justices’ view in Eastern Enterprises that “regulatory

actions requiring the payment of money are not takings.”

Id. at 1339 (citing E. Enters. v. Apfel, 524 U.S. 498 (1998));

see also United States v. Sperry Corp., 493 U.S. 52 (1989);

Atlas Corp. v. United States, 895 F.2d 745 (Fed. Cir. 1990).

As demonstrated by Sperry, this principle governs

even where the Government deducts money directly

rather than requiring it be paid separately. 493 U.S. at 62

n.9. Sperry involved legislation to “reimburse[] . . . the

United States Government for expenses incurred in

connection with the arbitration of claims of United States

claimants against Iran . . . and the maintenance of the

Security Account.” Id. at 60. “When the Federal Reserve

Bank of New York received Sperry’s award [a specific sum

of money], it deducted the 2% charge over Sperry’s

protest, deposited the charge in the Treasury, and paid

Sperry the balance of its award.” Id. at 57. The Supreme

Court reasoned that because “money is fungible,” “[n]o

special constitutional importance attache[d] to the fact

that the Government deducted its charge directly from the

award rather than requiring Sperry to pay it separately.”

Id. at 62 n.9. Continuing, the Court explained that “[i]t is

artificial to view deductions of a percentage of a monetary

award as physical appropriations of property.” Id.

Here, we agree with the Claims Court that, under our

precedent, this case involves the mere obligation to pay

money. Plaintiffs-Appellants contend they were

effectively required to pay the TRP contributions from

their trust accounts because “[p]ursuant to federal law . .

. self-insured group health plans must hold 100% of their

assets in trust; and these assets are held in trust funds for

a single purpose—to provide health and welfare benefits

-App. 9ato covered workers and their families (e.g., medical,

dental, and prescription drug coverage).” PlaintiffsAppellants’ Br. 2. Plaintiffs-Appellants contend they

“have a cognizable property interest in their trust funds,

which includes the corpus of the trust (i.e., the money they

hold).” Plaintiffs-Appellants’ Br. 22. Continuing, they

assert that because the Government was aware of their

obligation to hold assets in trust, this case does not involve

a mere obligation to pay money. Plaintiffs-Appellants’ Br.

34. We conclude otherwise.

The statutory text here states that PlaintiffsAppellants, among others, “are required to make

payments to an applicable reinsurance entity.” 42 U.S.C.

§ 18061(b)(1)(A). “The statute is indifferent as to how the

regulated entity elects to comply or the property it uses to

do so.” E. Enters., 524 U.S. at 540 (Kennedy, J.,

concurring). The separate requirement that PlaintiffsAppellants must keep their assets in trust does not

transform this bare statutory requirement to pay money

into a taking because the character of the government

action here “neither targets a specific property interest

nor depends upon any particular property for the

operation of its statutory mechanisms.” Id. at 543

(Kennedy, J., concurring); Atlas Corp., 895 F.2d at 756

(“Requiring money to be spent is not a taking of

property.”). For example, Congress is likely aware that

many taxpayers will pay their taxes out of their checking

account, but that practical reality does not transform an

obligation to pay into a taking. We are bound by our

unambiguous precedent: “[T]he mere imposition of an

obligation to pay money . . . does not give rise to a claim

under the Takings Clause of the Fifth Amendment.”

Commonwealth Edison, 271 F.3d at 1340.

-App. 10aPlaintiffs-Appellants argue the alleged taking here is

distinguishable from Commonwealth Edison because

“the TRP Contribution in no way represented a fee for

service.” Plaintiffs-Appellants’ Br. 28. But “[g]iven the

propriety of the governmental power to regulate, it cannot

be said that the Taking[s] Clause is violated whenever

legislation requires one person to use his or her assets for

the benefit of another.” Connolly v. Pension Ben. Guar.

Corp., 475 U.S. 211, 223 (1986) (explaining that “[i]n Usery

v. Turner Elkhorn Mining Co., 428 U.S. 1 (1976), [the

Court] sustained a statute requiring coal mine operators

to compensate former employees disabled by

pneumoconiosis, even though the operators had never

contracted for such liability, and the employees involved

had long since terminated their connection with the

industry” (cleaned up)); see also E. Enters., 524 U.S. at 517

(explaining that Eastern was assigned “the obligation for

Combined Fund premiums respecting over 1,000 retired

miners” (emphasis added)). We are thus unpersuaded that

the lack of a service provided in exchange for the TRP

contributions impacts our analysis.

We are convinced, however, that the Claims Court

erred in its alternative holding that “a government actor

only implicates one’s property interest in a specific fund

when it appropriates the fund in toto.” Elec. Welfare, 166

Fed. Cl. at 717 (citing Adams, 391 F.3d at 1225). The

Claims Court misread our precedent in Adams as holding

that a taking occurs only when a fund is appropriated in

toto. There, we held no taking had occurred simply

because the sum owed was a mere obligation to pay

money, not because the property taken was less than in

toto. Adams, 391 F.3d at 1224–25. The Claims Court’s

reliance on the “interest follows principal” cases is also

misplaced. The Claims Court reasoned that in Webb’s,

Phillips, and Brown “a government actor identif[ied] a

-App. 11aspecific type of fund— e.g., interest earned in IOLTAs—

and then appropriate[d] that fund in its entirety.” Elec.

Welfare, 166 Fed. Cl. at 720. But the Supreme Court’s

reasoning in these cases did not turn on a requirement

that the property be taken in its entirety. Indeed, in

Brown, the Supreme Court explained that “the interest

earned in the IOLTA accounts is the private property of

the owner of the principal . . . [so the] transfer of the

interest . . . here seems more akin to the occupation of a

small amount of rooftop space in Loretto [v. Teleprompter

Manhattan CATV Corp., 458 U.S. 419 (1982)].” Brown,

538 U.S. at 235 (internal quotation marks and citation

omitted).4 This reasoning would suggest that

appropriating even a portion of the interest can be a

taking. As we see no support for the requirement that

property be taken in toto, we conclude that the court erred

in so holding. Such error is harmless, however, as the

court properly concluded that the property taken here

was simply sums of money.

Finally, we are unpersuaded by Plaintiffs-Appellants’

argument that the Claims Court erred in concluding that

they waived the argument that they have a property

interest in the trust funds, as opposed to the funds used to

pay the TRP contributions. Any error in the Claims

Court’s waiver determination is harmless because the

court nevertheless addressed the argument. As the court

correctly explained, “Plaintiffs’ second argument[] . . .

fails” on the merits because the “requirement to pay a sum

4 In Loretto, New York law required landlords to “permit a cable

television company to install its cable facilities upon his property.” 458

U.S. at 421. The Supreme Court held this was a taking because when

“the government permanently occupies physical property, it

effectively destroys” the owner’s “rights to possess, use and dispose

of it.” Id. at 435 (quotation marks and citation omitted).

-App. 12aof money cannot be transformed into a taking of a specific

fund merely because such payment may be made from a

certain account, as one simply cannot have a cognizable

property interest in money itself.” Elec. Welfare, 166 Fed.

Cl. at 721–22.

CONCLUSION

We have considered Plaintiffs-Appellants’ remaining

arguments and find them unpersuasive. For the foregoing

reasons, we affirm.

AFFIRMED

COSTS

No costs.

-App. 13a-

APPENDIX B

IN THE UNITED STATES COURT OF FEDERAL

CLAIMS

ELETRICAL WELFARE

TRUST FUND, et al.,

Plaintiffs,

v.

No. 19-cv-353

Filed: August 18,

2023

THE UNITED STATES,

Defendant.

MEMORANDUM AND ORDER

On July 7, 2023, this Court granted Defendant’s

Motion for Partial Summary Judgment concerning

Plaintiffs’ claims brought pursuant to the Takings Clause

of the Fifth Amendment. Elec. Welfare Trust Fund v.

United States, No. 19-cv-353, 2023 WL 4530118 (Fed. Cl.

July 7, 2023) (EWTF II).1 As described more fully below,

as part of that opinion this Court held that Plaintiffs had

waived a particular argument by initially raising it at oral

argument. Id. at *10. This Court also held that assuming

arguendo Plaintiffs’ argument was not waived, the

argument would also fail on the merits. Id. at *10–*11. On

August 7, 2023, Plaintiffs timely filed a Motion for Partial

1 On July 10, 2023, the Clerk of Court entered partial Judgment

for Defendant on Plaintiffs’ Takings claims. ECF No. 130.

-App. 14aReconsideration (Motion), requesting reconsideration of

this Court’s procedural holding of waiver; Plaintiffs do not

move for reconsideration of the Court’s alternative merits

holding. See Plaintiffs’ Motion for Partial Reconsideration

(ECF No. 133) (Mot.) at 4 (quoting EWTF II, 2023 WL

4530118, at *10); Mot. at 7 n.3.2 On August 7, 2023, this

Court ordered Defendant to respond to the Motion, and

on August 17, 2023, Defendant filed its response, urging

this Court to deny the Motion because this Court’s waiver

holding did not constitute clear error. Defendant’s

Response to Plaintiffs’ Motion for Partial Reconsideration

(ECF No. 135) (Def. Resp.). Having carefully considered

the parties’ arguments, Plaintiffs’ Motion is DENIED for

the reasons set forth below.

BACKGROUND

This action has a lengthy history, familiarity with

which is presumed. See EWTF II, 2023 WL 4530118; Elec.

Welfare Trust Fund v. United States, 155 Fed. Cl. 169

(2021) (EWTF I). In summary relevant to this Motion,

Plaintiffs Operating Engineers Trust Fund of

Washington, D.C. (OETF) and Stone & Marble Masons of

Metropolitan Washington, D.C. Health and Welfare Fund

(Stone Masons) (collectively, Plaintiffs) are self-insured

group health plans seeking just compensation under the

Takings Clause of the Fifth Amendment. See EWTF II,

2023 WL 4530118, at *1–*2; see also Plaintiffs’ Second

Amended Complaint (ECF No. 59) (2d Am. Compl.) ¶¶ 3,

23–31, 101–15. Specifically, Plaintiffs sought to recover

amounts paid under United States Department of Health

and Human Services’ (HHS’s) regulations implementing

2 Citations throughout this Memorandum and Order reference

the ECF-assigned page numbers, which do not always correspond to

the pagination within the document.

-App. 15athe Patient Protection and Affordable Care Act of 2010’s

(ACA’s) Transitional Reinsurance Program (TRP) for

benefit years 2014 through 2016. See EWTF II, 2023 WL

4530118, at *2–*4; 2d Am. Compl. ¶¶ 101–15. Plaintiffs

contend Defendant’s implementation of the TRP

amounted to a Taking under the Fifth Amendment such

that Plaintiffs are owed just compensation for their

mandatory, paid contributions into the program. EWTF

II, 2023 WL 4530118, at *1–*5; 2d Am. Compl. ¶¶ 13–14,

101–15.

As noted, this Court previously granted partial

summary judgment in favor of Defendant, holding

Plaintiffs’ Takings claims fail because “the requirement to

pay TRP contributions did not implicate a cognizable

property interest” under the Fifth Amendment. EWTF

II, 2023 WL 4530118, at *12.3 Plaintiffs ultimately

3 In addition to their Takings Claim, Plaintiffs’ original complaint

likewise raised an Illegal Exaction Claim. See EWTF II, 2023 WL

4530118, at *4; EWTF I, 155 Fed. Cl. at 174, 181–88; Complaint (ECF

No. 1) (Compl.) at ¶¶ 11–14. On May 7, 2019, Defendant moved to

dismiss Plaintiffs’ complaint for lack of jurisdiction and for failure to

state a claim, pursuant to Rules 12(b)(1) and 12(b)(6) of the Rules of

the United States Court of Federal Claims (Rules), and alternatively

moved for summary judgment. See Defendant’s Motion to Dismiss or,

in the Alternative, Motion for Summary Judgment (ECF No. 6). On

July 30, 2021, this Court granted in part and denied in part

Defendant's Motion to Dismiss, dismissing OETF's and Stone

Masons’ illegal exaction claims and holding the ACA empowered HHS

to collect TRP contributions from entities that used third-party

administrators. EWTF I, 155 Fed. Cl. at 184–88. However, the Court

denied the motion with regard to Plaintiff EWTF—a self-insured,

self-administered group health plan—as the plain text of the ACA did

not provide HHS the authority to collect TRP contributions from selfinsured group health plans that did not use a third-party

administrator. Id. at 181–84. On April 8, 2022, EWTF moved to certify

-App. 16aadvanced two arguments in favor of their claim for just

compensation under the Takings Clause. Id. at *8. First,

Plaintiffs argued “each TRP contribution was a specific

fund of money in which Plaintiffs had a property interest

by virtue of the trust agreements establishing their trust

funds.” Id.; see 2d Am. Compl. ¶ 103; Plaintiffs’ Opposition

to Defendant’s Motion for Partial Summary Judgment

(ECF No. 116) (Opp.) at 20. Plaintiffs directly addressed

this argument in summary judgment briefing, and the

Court ruled in favor of Defendant on the merits of this

argument. See EWTF II, 2023 WL 4530118, at *8–*12;

Opp. at 20–30. Second, Plaintiffs alleged their respective

trust accounts—rather than the assets within the trust

accounts—were the relevant “specific funds,” from which

Plaintiffs “were effectively required to pay their TRP

contributions.” Id. at *10 (citing Transcript of Oral

Argument, dated May 11, 2023 (ECF No. 126) (Trans.) at

21:25–22:3, 25:24–26:2, 30:2–10). Plaintiffs initially

presented this contention at oral argument; accordingly,

this Court held that Plaintiffs had waived this second

argument. Id. at *10 (citing CardSoft, LLC v. Verifone,

Inc., 769 F.3d 1114, 1119 (Fed. Cir. 2014), vacated on other

grounds, 576 U.S. 1049). Despite such waiver, as an

alternative ground this Court also thoroughly explained

why Plaintiffs’ second argument was incorrect on the

merits, see id. at *10–*12. Plaintiffs now move for

reconsideration of this Court’s “procedural finding”

regarding waiver. Mot. at 4.

a class of entities eligible to recover under Illegal Exaction claims

(Illegal Exaction Class). See Plaintiff EWTF’s Motion to Certify Class

(ECF No. 53). The Court granted EWTF’s motion on June 22, 2022.

See Memorandum and Order granting Motion to Certify Class (ECF

No. 70). The Court entered Judgment in favor of the Illegal Exaction

Class on May 12, 2023. See ECF Nos. 123, 124.

-App. 17aSTANDARD FOR RECONSIDERATION

A motion for reconsideration is governed by Rule

59(a)(1). Pursuant to Rule 59(a)(1), a court, in its

discretion, “may grant a motion for reconsideration when

there has been an intervening change in the controlling

law, newly discovered evidence, or a need to correct clear

factual or legal error or prevent manifest injustice.” Biery

v. United States, 818 F.3d 704, 711 (Fed. Cir. 2016)

(internal citation and quotation omitted). A motion for

reconsideration must also be supported “by a showing of

extraordinary circumstances which justify relief.” Id.

(quoting Caldwell v. United States, 391 F.3d 1226, 1235

(Fed. Cir. 2004)). Such a motion “may not be used to

relitigate old matters, or to raise arguments or present

evidence that could have been raised prior to the entry of

judgment.” Exxon Shipping Co. v. Baker, 554 U.S. 471,

485 n.5 (2008) (internal quotations omitted). “The decision

whether to grant reconsideration lies largely within the

discretion of the [trial] court.” Yuba Natural Res., Inc. v.

United States, 904 F.2d 1577, 1583 (Fed. Cir. 1990).

DISCUSSION

As Plaintiffs acknowledge, this is a “narrow motion.”

Mot. at 4. Plaintiffs “do not raise any issues” relating to

the merits of the Court’s decision granting partial

summary judgment. Id. at 7 n.3. Instead, Plaintiffs

request reconsideration of “a single procedural finding.”

Id. at 4. The sole question, therefore, is whether this Court

erred by holding Plaintiffs waived their second argument

relating to their Takings claim.

A review of the history of the underlying motion for

partial summary judgment and the parties’ arguments in

support of their positions is pertinent to the adjudication

of this Motion. According to Plaintiffs, “Defendant’s

implementation of the TRP amounted to a taking under

-App. 18athe Fifth Amendment such that Plaintiffs are owed just

compensation for their mandatory, paid contributions into

the program.” EWTF II, 2023 WL 4530118, at *1 (citing

2d Am. Compl. ¶¶ 13–14); see id. at *6 (citing 2d Am.

Compl. ¶¶ 108–09); 2d Am. Compl. ¶¶ 101–10. The Takings

Clause states “private property” shall not “be taken for

public use, without just compensation.” U.S. Const.

amend. V. As articulated in its decision, this Court must

analyze Takings claims via a two-step approach. See

Adams v. United States, 391 F.3d 1212, 1218 (Fed. Cir.

2004); Boise Cascade Corp. v. United States, 296 F.3d

1339, 1343 (Fed. Cir. 2002). First, the court must

“determine whether the claimant possessed a cognizable

property interest in the subject of the alleged taking for

purposes of the Fifth Amendment.” Adams, 391 F.3d at

1218. This first step necessarily includes identifying

“what, if anything, was the subject of the alleged taking.”

Acceptance Ins. Cos., Inc. v. United States, 583 F.3d 849,

855 (Fed. Cir. 2009).

Normally, “the mere imposition of an obligation to pay

money . . . does not give rise to a claim under the Takings

Clause of the Fifth Amendment.” Commonwealth Edison

Co. v. United States, 271 F.3d 1327, 1340 (Fed. Cir. 2001)

(en banc); see E. Enters. v. Apfel, 524 U.S. 498, 540 (1998)

(Kennedy, J., concurring); see also EWTF II, 2023 WL

4530118, at *7 n.9 (summarizing Eastern Enterprises).

However, “one’s property interest in a specific fund of

money—e.g., the interest or principal of an identified

account—is cognizable under the Takings Clause.” EWTF

II, 2023 WL 4530118, at *8 (emphasis in original) (citing

Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S.

155, 160–65 (1980), Phillips v. Wash Legal Found., 524

U.S. 156, 163–72 (1998), and Brown v. Legal Found. of

Wash., 538 U.S. 216, 231–41 (2003)); see also Adams, 391

F.3d at 1224 (characterizing “specific funds” as

-App. 19a“legitimate property interests” under the Takings

Clause). Therefore, in situations such as this one, where

the subject of the alleged taking is a sum of money, the

step one inquiry becomes whether the government

appropriated a “specific fund” in toto. See EWTF II, 2023

WL 4530118, at *8; 2d Am. Compl. ¶¶ 13–14, 103, 110. If

the government appropriated a specific fund in its

entirety, then a plaintiff’s interest in that specific fund

may be cognizable under the Takings Clause. EWTF II,

2023 WL 4530118, at *8.

Plaintiffs’ inconsistent articulation of the “specific

fund” at issue in this case underlies Plaintiffs’ Motion.

Plaintiffs now contest this Court’s holding that their

second argument—that the relevant “specific funds” were

their overall trust accounts from which they were

effectively required to pay their TRP contributions—was

waived. See Mot. at 8–10. Plaintiffs contend they “have

maintained during the entirety of this litigation that the

‘specific funds of money’ at issue here are Plaintiffs’ trust

accounts.” Mot. at 8. Plaintiffs allege this Court committed

clear error in holding otherwise. Id. at 4, 10.

This Court disagrees. Plaintiffs have consistently

argued the “specific funds” in which Plaintiffs have a

cognizable property interest were the assets contained in

Plaintiffs’ respective trust accounts, not the trust accounts

as a whole. Early in this litigation, this Court denied

Defendant’s motion to dismiss the complaint but

requested the parties provide more information

concerning “the nature of plaintiffs’ property interest.”

EWTF I, 155 Fed. Cl. at 193; see also EWTF II, 2023 WL

4530118, at *8 n.11. Plaintiffs subsequently amended their

complaint to clarify that the “[f]unds held in self-insured

health and welfare trust funds constitute identifiable

property interests in specific funds of money protected by

-App. 20athe Takings Clause of the Fifth Amendment.” 2d Am.

Compl. ¶ 103; see id. ¶¶ 104, 105 (“Plaintiffs . . . had

cognizable property interests in the funds held in the selfinsured multiemployer health and welfare trust funds at

issue . . . .”); id. ¶ 108 (“Defendant’s requirement that

administrators of SMPs relinquish funds held in selfinsured health and welfare trust funds to pay the

Contribution is akin to the government’s own invasion into

and taking of the funds and constitutes a per se taking.”).

Plaintiffs’ operative complaint consistently reflects that

the relevant “specific funds” in which Plaintiffs assert a

cognizable property interest are the assets or money “held

in” Plaintiffs’ respective trust accounts (i.e., their first

argument), not the trust accounts themselves (i.e., their

second argument). See 2d Am. Compl. ¶¶ 103–08.

Defendant’s Motion for Partial Summary Judgment

likewise defined Plaintiffs’ property interest as “tied to

the specific amount plaintiffs contributed into the TRP,”

rather than “a general right to the trust accounts”

themselves. Def. Resp. at 4; see Defendant’s Motion for

Partial Summary Judgment (ECF No. 105) at 31–32. If

Plaintiffs disputed Defendant’s characterization of the

relevant property interest, they had an obligation to make

a contrary argument in their briefing opposing partial

summary judgment. See Pandrol USA, LP v. Airboss Ry.

Prods., Inc., 320 F.3d 1354, 1366–67 (Fed. Cir. 2003)

(concluding argument “was waived when it was not raised

in response to the motion for summary judgment”). Yet,

Plaintiffs did not make a different argument. Instead,

Plaintiffs simply reiterated that the source of their

cognizable property interest was the assets within the

trust accounts, rather than the trust accounts themselves.

See Opp. at 11 (“Plaintiffs have an identifiable property

interest in funds held in trust . . . .”); id. at 21 (“Plaintiffs

have a property interest in the funds held in trust . . . .”);

-App. 21aid. (“Plaintiffs’ property interest in the ‘specific funds of

money’ held in trust . . . .”); id. at 23 (“As soon as funds

were transferred to the trusts, Plaintiffs[] had a ‘legal

interest in th[at] property’” and “[i]t is this property

interest that Plaintiffs assert here.”); id. at 24 (“Under the

Trust Agreements, as well as contract and trust law,

Plaintiffs have a cognizable property interest in the funds

held in trust, which the Government invaded when it

required those funds be taken for public use.”). These

statements clearly evince Plaintiffs’ assertion that the

relevant “specific funds” are the assets held within the

trust accounts, rather than the trust accounts themselves.

Curiously, Plaintiffs’ Motion cites these same statements

to now contend that Plaintiffs have always asserted their

second argument, i.e., that the relevant “specific funds”

are the respective trust accounts themselves. See Mot. at

8–9. However, these statements do not support Plaintiffs’

second argument, as each statement references the

interest Plaintiffs have in monetary assets held within

trust accounts, as opposed to the interest Plaintiffs have

in their respective trust accounts as a whole.

In support of their Motion, Plaintiffs cite a single

statement from their Opposition in which Plaintiffs

argued they “have a property interest in a specific fund of

money (i.e., the trusts created by their Trust

Agreements).” Mot. at 8 (quoting Opp. at 28) (emphasis

removed). While this statement may appear at first to

support Plaintiffs’ assertion that they advanced their

second argument prior to oral argument, this statement is

contradicted by numerous other statements and

conclusions in the Second Amended Complaint and the

Opposition, statements that clearly express a contrary

theory. See 2d Am. Compl. ¶¶ 103–05, 108–10; Opp. at 11,

21, 23, 24. This single statement in the Opposition, absent

from the Second Amended Complaint and at odds with

-App. 22aPlaintiffs’ “specific funds” theory presented elsewhere in

their Opposition, is therefore insufficient to avoid waiver.

See Pandrol, 320 F.3d at 1366–67 (concluding argument

“was waived when it was not raised in response to the

motion for summary judgment”); CardSoft, 769 F.3d at

1119 (“Arguments that are not appropriately developed in

a party’s briefing may be deemed waived.”); Kimble v.

United States, 991 F.3d 1238, 1244 (Fed. Cir. 2021)

(“[D]istinct claims are waived if not pled in a complaint.”);

Casa de Cambio Comdiv S.A., de C.V. v. United States,

291 F.3d 1356, 1366 (Fed. Cir. 2002) (“[W]e need not

address Casa's agency theory because . . . [n]o mention of

this theory appears in Casa's complaint. Under the

circumstances, we hold that [plaintiff] waived any claim it

may have against the government based on such a

theory.”).

Accordingly, Plaintiffs have consistently alleged the

“specific funds” relevant to the Takings Clause analysis

are the assets within Plaintiffs’ respective trust accounts.

See 2d Am. Compl. ¶¶ 103–05, 108; Opp. at 11, 21, 23, 24.

Plaintiffs did not raise their distinct second theory until

oral argument on Defendant’s Motion for Partial

Summary Judgment. See EWTF II, 2023 WL 4530118, at

*10–*11. Claims not presented in the complaint nor

developed during briefing are properly deemed waived.

Kimble, 991 F.3d at 1244; CardSoft, 769 F.3d at 1119.

Therefore, this Court did not clearly err in holding that

Plaintiffs’ second argument—that the “specific funds” in

which Plaintiffs have a cognizable property interest are

the respective trust accounts as a whole—was waived. See

Biery, 818 F.3d at 711 (stating a court, in its discretion,

may grant a motion for reconsideration when there is “a

need to correct clear factual or legal error”).

-App. 23aPlaintiffs separately argue “the specific points made

by counsel at oral argument . . . were made in direct

response to new arguments raised by the Government . . .

in its Reply.” Mot. at 10. In its Reply, Defendant argued

that the ACA did not identify “the particular fund of

money from which” Plaintiffs must pay the TRP

contributions. Defendant’s Reply in Support of its Motion

for Partial Summary Judgment (ECF No. 121) (Reply) at

12. Defendant thus argued Plaintiffs’ case was different

than prior “interest follows principal” cases—such as

Webb’s, Phillips, and Brown—where a statute expressly

identified a specific fund of money to appropriate. Id. At

oral argument, Plaintiffs countered that this case is no

different from the “interest follows principal” cases

because Plaintiffs were “effectively required to pay their

TRP contributions” from their trust accounts based on the

structure of the ACA and related federal laws. See EWTF

II, 2023 WL 4530118, at *10 (citing Trans. at 21:25–22:3,

25:24–26:2, 30:2–10); see also 2d Am. Compl. ¶ 36; Mot. at

4 (stating “federal law requires Plaintiffs to hold 100% of

their assets in [their] trust accounts”). In their Motion,

Plaintiffs now contend that their counterargument made

at oral argument was a proper rebuttal argument. Mot. at

12; see EWTF II, 2023 WL 4530118, at *10–*11. And

because Defendant posed a “new” argument in its Reply,

Plaintiffs say, oral argument was Plaintiffs’ only

opportunity to respond.4 Mot. at 13.

4

In the Motion, Plaintiffs argue that Defendant, “by not

presenting this argument until its Reply, . . . waived [the] argument.”

Mot. at 13. That is not correct. Defendant included this “new”

argument in its Reply only to rebut Plaintiffs’ argument that the

“interest follows principal” line of precedent controls this case. See

Reply at 11–13; see also Opp. at 24–26. Defendant’s argument in its

-App. 24aIt is correct that parties may respond to arguments

first raised in a reply brief during oral argument. See, e.g.,

Novosteel SA v. U.S., Bethlehem Steel Corp., 284 F.3d

1261, 1274 (Fed. Cir. 2002) (observing “the non-moving

party ordinarily has no right to respond to the reply brief,

at least not until oral argument”). In the limited context of

Defendant’s argument that the “interest follows principal”

cases are not analogous to this case, Plaintiffs’

counterargument—that federal laws effectively required

Plaintiffs to pay TRP contributions using assets from

their trust accounts—was a proper rebuttal argument.

In summary, Plaintiffs waived any argument that they

have a cognizable property interest in their respective

trust accounts as a whole. See EWTF II, 2023 WL

4530118, at *10–*11. Consequently, to the extent Plaintiffs

argue the structure of the ACA and other federal laws

effectively identified the trust accounts as a whole as the

relevant “specific funds” for purposes of the Takings

Clause, that argument is waived. However, the Court

clarifies that Plaintiffs’ argument that federal laws

effectively required Plaintiffs to pay TRP contributions

using assets from their trust accounts was a proper

rebuttal to an argument Defendant advanced in its Reply.

See Mot. at 10–13. Plaintiffs therefore did not waive their

rebuttal argument that the structure of the ACA and

other federal laws, including the Taft-Hartley Act and

ERISA, effectively required Plaintiffs to pay TRP

contributions using assets from their trust accounts. See

id. This accords with Plaintiffs’ long-held—though

incorrect—theory that the relevant “specific funds” are

the assets paid as TRP contributions, rather than the

Reply simply reflects the point-counterpoint nature of briefing. See

Novosteel, 284 F.3d at 1274 (observing “reply briefs reply to

arguments made in the response brief”) (emphasis in original).

-App. 25arespective trust accounts as a whole. See 2d Am. Compl.

¶¶ 103–05; EWTF II, 2023 WL 4530118, at *8.

CONCLUSION

For the reasons explained above, Plaintiffs’ Motion for

Reconsideration is DENIED.

IT IS SO ORDERED.

/s/ Eleni M. Roumel

ELENI M. ROUMEL

Judge

August 18, 2023

Washington, D.C.

-App. 26a-

APPENDIX C

IN THE UNITED STATES COURT OF FEDERAL

CLAIMS

ELETRICAL WELFARE

TRUST FUND, et al.,

Plaintiffs,

v.

THE UNITED STATES,

No. 19-cv-353

Filed: July 7, 2023

Published: July

13, 20231

Defendant.

Joseph Howard Meltzer, Kessler, Topaz, Meltzer &

Check, LLP, Radnor, Pennsylvania for Plaintiffs. With

him on the briefs were Melissa L. Troutner, Kessler,

Topaz, Meltzer & Check, LLP, Radnor, Pennsylvania;

Charles F. Fuller, McChesney & Dale, P.C., Bowie,

Maryland.

Borislav Kushnir, Trial Attorney, United States

Department of Justice, Commercial Litigation Branch,

1 This Memorandum and Order was filed under seal in accordance

with the Protective Order entered in this case (ECF No. 35) and was

publicly reissued after the parties indicated redactions were not

necessary. See Notice (ECF No. 131). The sealed and public versions

of this Memorandum and Order are otherwise substantively identical,

except for a minor typographical edit, the publication date, and this

footnote.

-App. 27aCivil Division, Washington, D.C. for Defendant. With him

on the briefs were Brian M. Boynton, Principal Deputy

Assistant Attorney General, Washington, D.C.; Patricia

M. McCarthy, Director, United States Department of

Justice, Civil Division, Washington, D.C.; Eric P.

Bruskin, Assistant Director, United States Department

of Justice, Civil Division, Washington, D.C.; Kenneth

Whitley, Attorney, United States Department of Health

and Human Services, Office of the General Counsel,

Washington, D.C.; Robert Balderson, Attorney, United

States Department of Health and Human Services, Office

of the General Counsel, Washington, D.C.

MEMORANDUM AND ORDER

Pending before this Court is Defendant United States’

Motion for Partial Summary Judgment (ECF No. 105),

urging this Court to dismiss the remaining claim in this

action seeking just compensation under the Takings

Clause of the Fifth Amendment. Specifically, Plaintiffs

Operating Engineers Trust Fund of Washington, D.C.

(OETF) and Stone & Marble Masons of Metropolitan

Washington, D.C. Health and Welfare Fund (Stone

Masons) (collectively, Plaintiffs) seek to recover amounts

paid under United States Department of Health and

Human Services’ (HHS’s) regulations implementing the

Patient Protection and Affordable Care Act of 2010’s

(ACA’s) Transitional Reinsurance Program (TRP) for

benefit years 2014 through 2016. Second Amended

Complaint (ECF No. 59) (2d Am. Compl.). Plaintiffs

contend Defendant’s implementation of the TRP

amounted to a taking under the Fifth Amendment such

that Plaintiffs are owed just compensation for their

mandatory, paid contributions into the program. Id. ¶¶

13–14. Plaintiffs primarily assert their respective

payment of TRP contributions, mandated by Defendant,

-App. 28aamounted to a per se taking. Id. ¶108. Plaintiffs further

contend Defendant’s actions would also satisfy the

requirements of either a categorical or non-categorical

regulatory taking. Id. ¶¶ 108–09; Plaintiffs’ Response to

Motion for Partial Summary Judgment (ECF No. 116)

(Resp.) at 30–44.

The issue presented by Defendant’s Motion for Partial

Summary Judgment (Motion) is a straightforward

question of law concerning whether a Fifth Amendment

taking occurred. See ECF No. 105 (Mot.). Indeed, the

parties agree that the facts necessary to rule on

Defendant’s Motion are undisputed.2 See generally Mot.;

see also Resp. at 11 (stating the “undisputed facts in this

case show that” Plaintiffs have a cognizable property

interest in assets held within their funds and that

Defendant “seized this identifiable property”). In its

Motion, Defendant contends Plaintiffs’ takings claims

must be dismissed because they suffer from three

“fundamental problems”; the claims (i) fail to identify a

2 While the parties do not dispute the facts relevant to step one of

the Federal Circuit’s two-step takings analysis, Plaintiffs attempt to

argue that genuine issues of material fact may remain related to step

two, specifically Defendant’s secondary argument that Plaintiffs’

claims are untimely under a regulatory takings analysis. Resp. at 8–9

(“[E]ven if a regulatory analysis is applied, the Government has not

carried its burden to show there are no genuine issues of material fact

as to whether a regulatory taking occurred . . . .”); Transcript of Oral

Argument, dated May 11, 2023 (ECF No. 126) (Trans.) at 37:4–15.

This Court expressed skepticism towards Plaintiffs’ characterization

during oral argument. See Trans. at 37:16–18 (noting, in response to

Plaintiffs’ counsel’s claim that they may need a more fulsome record,

that discovery had closed). Even accepting Plaintiffs’ view, however,

the existence of such purported issues of fact would be relevant only

if this Court were to reach step two of the takings analysis, which, it

does not. See infra Discussion Sections I and II.

-App. 29arelevant property interest cognizable under the Takings

Clause of the Fifth Amendment, (ii) are time-barred, and

(iii) do not address government action that amounts to a

taking of property. Mot. at 10. This Court conducted oral

argument on Defendant’s Motion on May 11, 2023, and the

Motion is ripe for adjudication. See Trans.

This Court has considered each of the parties’ filings

and arguments. For the reasons explained below,

Defendant’s Motion for Partial Summary Judgment is

GRANTED. Plaintiffs’ Motion for Leave to File to Amend

Takings Class Definition in the Second Amended Class

Action Complaint (ECF No. 83) and Motion to Certify

Takings Class (ECF No. 84) are accordingly DENIED AS

MOOT.

BACKGROUND

This action has a lengthy history, familiarity with

which is presumed. See, e.g., Elec. Welfare Trust Fund

(EWTF) v. United States, 155 Fed. Cl. 169 (2021) (ECF

No. 22). A background summary pertinent to Defendant’s

Motion follows.

I.

Plaintiffs’ Health Plans

Plaintiffs are group health plans3 created through

collective bargaining and regulated by the Labor

3 “[G]roup health plan” is defined by statute as,

an employee welfare benefit plan (as defined in [29 U.S.C.

§ 1002(1)]) to the extent that the plan provides medical

care (as defined in paragraph (2)) . . . to employees or

their dependents (as defined under the terms of the plan)

directly or through insurance, reimbursement, or

otherwise. Except for purposes of part C of title XI of the

Social Security Act (42 U.S.C. 1320d et seq.), such term

shall not include any qualified small employer health

-App. 30aManagement Relations Act of 1947 (Taft-Hartley) and the

Employee Retirement Income Security Act of 1974

(ERISA). 2d Am. Compl. ¶ 3. Plaintiffs’ group health plans

“are funded through employee contributions to a

multiemployer benefit trust, and benefits under the plans

are provided to covered workers and their families

pursuant to negotiated wages, hours, and terms of

employment through a collective bargaining agreement

between one or more unions and more than one

employer.” Id. Participation in these plans is limited to

employees who share “a common employer (or affiliated

employers), coverage under one or more collective

bargaining agreements, membership in a labor union, or

membership in one or more locals of a national or

international labor union.” 2d Am. Compl. ¶ 35. Pursuant

to 29 U.S.C. § 1103 (ERISA), these plans use funds which

are held in trust for the exclusive benefit of the plan

participant, and which cannot be used for any other

purpose. Id. ¶ 36.

Plaintiffs’ group health plans are self-insured. Id. ¶ 3.

Self-insured multiemployer plans may be administered in

one of three ways: (1) self-administered, (2) administered

by a third-party administrator that is not a health

insurance issuer, or (3) administered by a third-party

administrator that is a health insurance issuer through an

administrative services only (ASO) agreement. EWTF,

155 Fed. Cl. at 175 (2021); see 2d Am. Compl. ¶ 39.

reimbursement arrangement (as defined in section

9831(d)(2) of Title 26).

42 U.S.C. § 300gg-91(a)(1).

-App. 31aThe parties agree that OETF4 and Stone Masons5 are

each administered by a third-party administrator that is

not a health insurance issuer. EWTF, 155 Fed. Cl. at 175;

2d Am. Compl. ¶¶ 23–31; Mot. at 13. These third-party

administrators: (1) determine eligibility and control

enrollment for participants, (2) perform claims processing

and adjudication, and (3) directly pay the health care costs

incurred by the OETF and Stone Masons participants and

beneficiaries. EWTF, 155 Fed. Cl. at 175; 2d Am. Compl.

¶ 26.

II.

Transitional Reinsurance Program

The TRP was one of several programs established by

the ACA to distribute the financial risk carried by health

insurance issuers covering higher-risk populations. 42

U.S.C. § 18061 (codifying the TRP). To fund the program,

the ACA required “health insurance issuers, and third

party administrators on behalf of group health plans” pay

into the appropriate reinsurance pool, whether state or

federal, for a three-year period. 42 U.S.C.

§ 18061(b)(1)(A). The funds collected from the entities

described in section (a)(1) were used to reimburse “health

insurance issuers” for enrolling high-risk individuals in

the individual marketplace. 42 U.S.C. § 18061(b)(1)(B).

Congress delegated authority to HHS to implement

the TRP, requiring HHS—in consultation with the

National Association of Insurance Commissioners

(NAIC)—create federal standards for the program. 42

U.S.C. § 18061(b)(1). Between July 2011 and March 2014,

HHS published three sets of proposed and final rules

4

OETF’s

third-party

administrator

Administrators, LLC. Second Am. Compl. ¶ 26.

is

Associated

5 Stone Masons’ third-party administrator is Carday Associates,

LLC. Second Am. Compl. ¶ 30.

-App. 32adefining the group of entities that were required to

contribute to the TRP under 42 U.S.C. § 18061(b)(1) as

“contributing entities.” See Motion to Dismiss (MTD)

App. 3 (77 Fed. Reg. 17,220 (March 23, 2012)) (ECF No.

6-3) (2012 Final Rule); MTD App. 6 (78 Fed. Reg. 15,410

(March 11, 2013)) (ECF No. 6-6) (2013 Final Rule); MTD

App. 9 (79 Fed. Reg. 13,744 (March 11, 2014)) (ECF No.

6-9) (2014 Final Rule).

On March 11, 2014, HHS published its third final rule

defining “contributing entity.” See 2014 Final Rule. HHS’s

definition of “contributing entity” in its 2014 Final Rule

reads as follows:

Contributing entity means—

(1) a health insurance issuer; or

(2) For the 2014 benefit year, a self-insured group

health plan (including a group health plan that is

partially self-insured and partially insured, where the

health insurance coverage does not constitute major

medical coverage), whether or not it uses a third party

administrator; and for the 2015 and 2016 benefit years,

a self-insured group health plan (including a group

health plan that is partially self-insured and partially

insured, where the health insurance coverage does not

constitute major medical coverage) that uses a third

party administrator in connection with claims

processing or adjudication (including the management

of internal appeals) or plan enrollment for services

other than for pharmacy benefits or excepted benefits

within the meaning of section 2791(c) of the PHS Act.

Notwithstanding the foregoing, a self-insured group

health plan that uses an unrelated third party to obtain

provider network and related claim repricing services,

or uses an unrelated third party for up to 5 percent of

claims processing or adjudication or plan enrollment,

-App. 33awill not be deemed to use a third party administrator,

based on either the number of transactions processed

by the third party, or the volume of the claims

processing and adjudication and plan enrollment

services provided by the third party. A self-insured

group health plan that is a contributing entity is

responsible for the reinsurance contributions,

although it may elect to use a third party administrator

or administrative services-only contractor for transfer

of the reinsurance contributions.

Id. at 4763; 45 C.F.R. § 153.20 (2019) (codifying the

definition of “contributing entity” as announced in the

2014 Final Rule).

III. Plaintiffs’ Contributions to the TRP

For benefit year 2014, Defendant required Plaintiffs

OETF and Stone Masons—“contributing entities”—to

pay a contribution of $63 per covered life. 2d Am. Compl.

¶ 80; HHS Notice of Benefit and Payment Parameters for

2014, 78 Fed. Reg. at 15,460. For benefit years 2015 and

2016, Defendant required OETF and Stone Masons to pay

a contribution of $44 and $27 per covered life, respectively.

HHS Notice of Benefit and Payment Parameters for 2015,

79 Fed. Reg. at 13,775; HHS Notice of Benefit and

Payment Parameters for 2016, 80 Fed. Reg. at 10,775.

OETF remitted TRP contribution payments to

Defendant in the amount of $142,569 on January 12, 2015;

$107,712 on January 8, 2016; and $72,873 on January 10,

2017. Id. ¶ 83; Appendix to Defendant’s Motion for

Summary Judgment (ECF No. 105-1) (Mot. App.) at 197

(OETF 2014 Contribution); Mot. App. at 198 (OETF 2015

Contribution); Mot. App. at 199 (OETF 2016

Contribution). Collectively, OETF paid Defendant

$323,154 for benefit years 2014, 2015, and 2016. 2d Am.

Compl. ¶ 27. Stone Masons remitted TRP contribution

-App. 34apayments to Defendant in the amount of $20,664 on

January 14, 2015; $14,476 on January 14, 2016; and $11,637

on January 13, 2017. Id. ¶ 84; Mot. App. at 200 (Stone

Masons 2014 Contribution); Mot. App. at 201 (Stone

Masons 2015 Contribution); Mot. App. at 202 (Stone

Masons 2016 Contribution). Collectively, Stone Masons

paid Defendant $46,777 for benefit years 2014, 2015, and

2016. Id. ¶ 31. OETF and Stone Masons each paid their

TRP contributions with monies held in their respective

trust accounts. 2d Am. Compl. ¶ 85; see OETF 2014

Contribution; OETF 2015 Contribution; OETF 2016

Contribution; Stone Masons 2014 Contribution; Stone

Masons 2015 Contribution; Stone Masons 2016

Contribution.

IV.

Procedural Background and Motion to Dismiss

Plaintiffs EWTF, OETF, and Stone Masons filed their

Complaint in the present action on March 8, 2019, alleging

two sets of claims—illegal exaction claims and claims

brought pursuant to the Takings Clause of the Fifth

Amendment. Complaint (ECF No. 1) (Compl.).

On May 7, 2019, Defendant moved to dismiss Plaintiffs’

complaint for lack of jurisdiction6 and for failure to state a

claim, pursuant to Rules 12(b)(1) and 12(b)(6) of the Rules

of the United States Court of Federal Claims (Rules), and

alternatively moved for summary judgment. See MTD.

Defendant argued that requiring Plaintiffs to pay TRP

contributions did not amount to an illegal exaction because

HHS’s definition of “contributing entities” was in

accordance with statutory text and was owed deference

6 Defendant withdrew its Rule 12(b)(1) motion at oral argument.

Defendant’s Reply in Support of its Motion to Dismiss (ECF No. 8) at

25 n.8; Oral Argument Transcript, dated October 12, 2020 (ECF No.

21) at 5:13–19.

-App. 35aconsistent with Chevron, U.S.A., Inc. v. National

Resources Defense Council, Inc., 467 U.S. 837 (1984).

MTD at 26–28. Further, Defendant argued Plaintiffs

failed to state valid takings claims because the

requirement to pay TRP contributions imposed only an

obligation to pay money. Id. at 20–23.

On February 27, 2020, this case was reassigned to the

undersigned judge. See Order Reassigning Case (ECF

No. 15). On July 30, 2021, this Court subsequently granted

in part and denied in part Defendant’s Motion to Dismiss

and, relevant here, dismissed OETF’s and Stone Masons’

illegal exaction claims. EWTF, 155 Fed. Cl. at 184–88. In

doing so, this Court reasoned the ACA empowered HHS

to collect TRP contributions from entities that used thirdparty administrators, such as OETF and Stone Masons.

Id. The Court denied the motion with regard to EWTF—

a self-insured, self-administered group health plan—as

the plain text of the ACA did not provide HHS the

authority to collect TRP contributions from self-insured

group health plans that did not use a third-party

administrator. EWTF, 155 Fed. Cl. at 181–84 (“As EWTF

clearly alleged that it is a self-funded, self-administered

plan that does not use a third-party administrator,

Defendant’s [motion to dismiss] EWTF’s illegal exaction

claim must be denied.”).

With respect to Plaintiffs’ takings claims, this Court

identified the central inquiry as “whether Plaintiffs’

ERISA funds constitute a ‘specific fund of money’

protected by an ‘identified property interest.’” Id. at 189.

Though it rejected some of Plaintiffs’ arguments, this

Court ultimately denied Defendant’s Motion to Dismiss

without prejudice as it related to Plaintiffs’ takings claims.

EWTF, 155 Fed. Cl. at 193. While Plaintiff narrowly

survived dismissal at the 12(b)(6) stage, this Court

-App. 36anevertheless highlighted that the record lacked clarity

regarding the “specific property right that the TRP

operates to extract.” Id. at 191. In denying Defendant’s

Motion to Dismiss without prejudice, this Court

specifically previewed its concerns and warned that to

adjudicate the claim in the future (either via amended

complaint and a motion to dismiss or via a summary

judgment motion), it would need “further information

concerning: (1) the nature of plaintiffs’ property interest

in their respective group health care plans, and (2) the

effect, if any, the TRP had on those alleged property

interests.” Id. at 188–93.7

V.

Subsequent Filings & Motion for Partial

Summary Judgment

Plaintiffs EWTF, OETF, and Stone Masons filed an

Amended Complaint (ECF No. 28) on September 14, 2021,

and a Second Amended Complaint (ECF No. 59) on May

2, 2022. On October 28, 2022, Plaintiffs EWTF, OETF, and

Stone Masons filed two motions related to their takings

claims: (1) a Motion for Leave to File to Amend Takings

Class Definition in the Second Amended Class Action

Complaint (ECF No. 83) and (2) a Motion to Certify

Takings Class (ECF No. 84) (Class Certification Motions,

collectively) using Plaintiffs’ proposed amended class

definition.

Prior to these filings, this Court had certified an Illegal

Exaction Class, with EWTF serving as class

7 The Court similarly denied Defendant’s Motion to Dismiss

(ECF No. 6) without prejudice to the extent the parties urged the

Court to consider it as one for summary judgment, noting that

“genuine issues of material fact [were] in dispute concerning the

nature of the plaintiffs’ property interest and the effect the TRP had

on those alleged property interests.” EWTF, 155 Fed. Cl. at 193 n.13

Case 1:19-cv-00353-EMR Document 132 Filed 07/13/23 Page 9 of 27

-App. 37arepresentative, but had not yet granted summary

judgment to the Class on their illegal exaction claims.

Order Granting Motion to Certify Illegal Exaction Class

(ECF No. 70). EWTF was thus able to proceed on dual

claim tracks until December 21, 2022, when this Court

granted the Illegal Exaction Class’s unopposed Motion for

Summary Judgment (ECF No. 72). See Order Granting

EWTF’s Motion for Summary Judgment on the Illegal

Exaction Claims (ECF No. 97); Transcript, dated

December 21, 2022 (ECF No. 100) at 4:16–5:8. This Court

and the parties agreed that the granting of summary

judgment for EWTF’s illegal exaction claim barred it

from maintaining its Fifth Amendment taking claim. See

EWTF, 155 Fed. Cl. at 188 n.11 (“[I]f EWTF ultimately

succeeds on its illegal exaction claim, it cannot also

proceed under its Takings Claims.”); Plaintiffs’ Motion to

Certify Takings Class (ECF No. 84) at 1 n.1 (“Members of

the Exaction Class who obtain judgment in their favor

cannot be members of the Takings Class . . . .”); Trans. at

17:14–20 (Defendant’s counsel: “I do want to clarify, when

I say ‘plaintiffs,’ I’m talking about OETF, the [Stone

Masons], not about EWTF[,] . . . the takings plaintiffs.”);

see also Reid v. United States, 148 Fed. Cl. 503, 528 (2020)

(citing Orient Overseas Container Line (UK) Ltd. v.

United States, 48 Fed. Cl. 284, 289 (2000)) (“When the

government expropriates property, a plaintiff can obtain

relief under either a takings theory or an illegal-exaction

theory . . . but not both.”); Figueroa v. United States, 57

Fed. Cl. 488, 496 (2003), aff’d, 466 F.3d 1023 (Fed. Cir.

2006). Accordingly, on December 21, 2022, EWTF ceased

being a plaintiff related to the takings claims asserted in

the Second Amended Complaint.

On January 31, 2023, Defendant moved for partial

summary judgment on OETF’s and Stone Masons’

takings claims. See Mot. On agreement of the parties, this

-App. 38aCourt stayed consideration of the pending Class

Certification Motions related to Plaintiffs’ takings claims

until after this Court’s ruling on Defendant’s Motion.

Order Staying Consideration of Class Certification

Motions (ECF No. 115); see Defendant’s Response to

Motion to Certify Class (ECF No. 98) at 20 (“[T]he Court

should first decide whether OETF and Stone Masons can

maintain a takings claim against the United States, and

only then, in the event OETF and Stone Masons prevail,

decide whether a class of similarly-situated plans should

be certified.”); Plaintiffs’ Reply to Response to Motion to

Certify Class (ECF No. 102) at 17 (“Plaintiffs do not

oppose the Government’s request to have dispositive

motions adjudicated prior to class certification.”). This

Court subsequently conducted oral argument on

Defendant’s Motion on May 11, 2023. See Trans.

STANDARD OF REVIEW

A court may grant summary judgment if the

pleadings, affidavits, and evidentiary materials filed in a

case reveal that “there is no genuine dispute as to any

material fact and the movant is entitled to judgment as a

matter of law.” Rule 56(a). The moving party bears the

initial burden to demonstrate the absence of any genuine

issue of material fact. See Celotex Corp. v. Catrett, 477 U.S.

317, 323 (1986). A genuine factual dispute exists when “the

evidence is such that a reasonable jury could return a

verdict for the nonmoving party.” Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 248 (1986). The court may only

grant summary judgment when “the record taken as a

whole could not lead a rational trier of fact to find for the

non-moving party.” Matsushita, Elec. Indus. Co., Ltd. v.

United States, 475 U.S. 574, 587 (1986) (quoting First

Nat’l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 289

(1968)). Summary judgment is especially appropriate

-App. 39awhen “the only disputed issues [are] issues of law.” Dana

Corp. v. United States, 174 F.3d 1344, 1347 (Fed. Cir.

1999).

DISCUSSION

The Tucker Act provides this Court with jurisdiction

“to render judgment upon any claim against the United

States founded . . . upon the Constitution” as long as the

constitutional provision “can fairly be interpreted as

mandating compensation by the Federal Government for

the damages sustained.” 28 U.S.C. § 1491(a)(1); United

States v. Testan, 424 U.S. 392, 400 (1976) (quoting

Eastport S.S. Corp. v. United States, 178 Ct. Cl. 599, 607

(1967)). Such claims include those brought pursuant to the

Takings Clause of the Fifth Amendment, which provides

that private property shall not “be taken for public use,

without just compensation.” U.S. Const. amend. V; see

Jan’s Helicopter Serv., Inc. v. F.A.A., 525 F.3d 1299, 1309

(Fed. Cir. 2008) (“It is undisputed that the Takings Clause

of the Fifth Amendment is a money-mandating source for

purposes of Tucker Act jurisdiction.”). The Takings

Clause “was designed to bar Government from forcing

some people alone to bear public burdens which, in all

fairness and justice, should be borne by the public as a

whole.” Armstrong v. United States, 364 U.S. 40, 49

(1960).

This Court analyzes takings claims via a two-step

approach provided by the United States Court of Appeals

for the Federal Circuit (Federal Circuit). See Adams v.

United States, 391 F.3d 1212, 1218 (Fed. Cir. 2004); Boise

Cascade Corp. v. United States, 296 F.3d 1339, 1343 (Fed.

Cir. 2002). First, the court must identify the property

interest that was allegedly taken and determine whether

such a property interest is cognizable under the Takings

Clause of the Fifth Amendment. Adams, 391 F.3d at 1218;

-App. 40asee Tyler v. Hennepin Cnty., 143 S. Ct. 1369 (2023)

(analyzing a Fifth Amendment taking claim by first

identifying the plaintiff’s interest in the appropriated

property). Second, “[o]nce a property right has been

established, the court must then determine whether a part

or a whole of that interest has been appropriated by the

government for the benefit of the public.” Members of

Peanut Quota Holders Ass'n v. United States, 421 F.3d

1323, 1330 (Fed. Cir. 2005) (citing Conti v. United States,

291 F.3d 1334, 1339 (Fed. Cir. 2002)); see Karuk Tribe of

Cal. v. Ammon, 209 F.3d 1366, 1374 (Fed. Cir. 2000) (“If a

plaintiff possesses a compensable property right, . . . a

court determines whether the governmental action at

issue constituted a taking of that [right].”) (citing M & J

Coal Co. v. United States, 47 F.3d 1148, 1154 (Fed. Cir.

1995)). However, courts cannot reach this second step

without initially identifying a cognizable property

interest. Hearts Bluff Game Ranch, Inc. v. United States,

669 F.3d 1326, 1329 (Fed. Cir. 2012); Air Pegasus of D.C.,

Inc. v. United States, 424 F.3d 1206, 1213 (Fed. Cir. 2005).

Plaintiffs contend both steps of the takings analysis

are satisfied by Defendant’s “requirement that [Plaintiffs]

relinquish funds held in self-insured health and welfare

trust funds to pay the [TRP] Contribution,” which

“constitutes a . . . taking.” 2d Am. Compl. ¶¶ 108–09.

Specifically, Plaintiffs argue the first step of the analysis

is satisfied either because (i) “[f]unds held in self-insured

health and welfare trust funds constitute identifiable

property interests in specific funds of money,” or (ii)

Plaintiffs’ TRP contributions were effectively required to

be paid with moneys contained within their trust accounts

since ERISA required Plaintiffs to hold their monetary

assets in such trust accounts. Id. ¶ 103; Resp. at 20–27;

Trans. at 25:24–26:2, 31:9–15. Regarding the second step

of the takings analysis, Plaintiffs assert the forced

-App. 41apayment of TRP contributions satisfies the requirements

to be considered as either a per se or regulatory taking,

although they view a per se analysis as more appropriate.

2d. Am. Compl. ¶¶ 108–09; Resp. at 30–44.

Defendant disagrees, asserting as an initial matter

that a required TRP contribution is an ordinary obligation

to pay money rather than a taking. Accordingly,

Defendant contends that such an obligation “cannot itself

be a taking of property, as it does not implicate the type of

‘property’ protected by the Fifth Amendment.”

Defendant’s Reply in Support of its Motion for Partial

Summary Judgment (ECF No. 121) (Reply) at 9. Even if

this Court were to find Plaintiffs have a cognizable

property interest in the money paid as TRP contributions,

Defendant argues its actions cannot be considered to have

effected per se takings since Defendant did not physically

appropriate property. Id. at 13–25. Defendant also asserts

its actions cannot be considered to have effected a

regulatory taking, as the claims are untimely and fail

under the Penn Central factors. Id.; see Penn Cent.

Transp. Co. v. City of New York, 438 U.S. 104 (1978).

Since the relevant material facts necessary to resolve

this Motion are not in dispute,8 this Court now considers

Defendant’s Motion for Partial Summary Judgment and

whether Plaintiffs’ TRP contributions constitute takings

compensable under the Takings Clause. See EWTF, 155

Fed. Cl. at 184–88; see also Mot. at 13–17 (providing

“Undisputed Material Facts”); Resp. at 11 (stating the

“undisputed facts in this case show that” Plaintiffs have a

cognizable property interest in assets held within their

funds and that Defendant “seized this identifiable

8 See supra note 2 (noting the parties agree that the facts are not

in dispute related to step one of the takings analysis).

-App. 42aproperty”). As described below, this Court’s inquiry

begins and ends with the first prong of the Federal

Circuit’s two-step takings analysis, as Plaintiffs do not

possess a property interest in the money paid as TRP

contributions that is cognizable under the Takings Clause.

I.

Plaintiffs Do Not Possess a Property Interest

Cognizable Under the Takings Clause.

It is well-established that a property interest in money

alone is generally not cognizable under the Takings

Clause of the Fifth Amendment. See E. Enters. v. Apfel,

524 U.S. 498, 540 (1998) (Kennedy, J., concurring) (stating

in a controlling concurrence that although the statute at

issue “imposes a stagging financial burden on the

petitioner, . . . . [i]t does not operate upon or alter an

identified property interest, and it is not applicable to or

measured by a property interest”)9; id. at 554 (Breyer, J.,

9 Eastern Enterprises v. Apfel involved a challenge to the

retroactive liability provisions of the Coal Industry Retiree Health

Benefit Act of 1992, codified at 26 U.S.C. §§ 9701–9722 (the Coal Act)

which required a former mining company to pay a large sum of money

for the health benefits of retired employees. 524 U.S. at 504. Writing

for the plurality, Justice O'Connor, joined by three other justices

(Chief Justice Rehnquist, Justice Scalia, and Justice Thomas),

concluded the retroactive impact of the Coal Act as applied to Eastern

Enterprises resulted in an unconstitutional taking of property

because it placed a “severe, disproportionate, and extremely

retroactive burden on Eastern.” Id. at 538. As explained by the

Federal Circuit in Commonwealth Edison Co., a plurality of the

Supreme Court found the retroactive liability unconstitutional, but

five Justices concluded the law did not effect a taking, as the law did

not appropriate a specific property interest but rather imposed an

obligation to pay money. 271 F.3d at 1339 (citing E. Enters., 524 U.S.

at 540 (Kennedy, J., concurring)). Concurring, Justice Kennedy

acknowledged the statute “impose[d] a staggering financial burden,”

which factored into his conclusion that the statute violated Eastern’s

-App. 43adissenting) (agreeing with Justice Kennedy that “[t]he

Constitution’s Takings Clause does not apply” since

“[t]his case involves not an interest in physical or

intellectual property, but an ordinary liability to pay

money”); Commonwealth Edison Co. v. United States, 271

F.3d 1327, 1338–40 (Fed. Cir. 2001) (en banc) (“[T]he mere

imposition of an obligation to pay money . . . does not give

rise to a claim under the Takings Clause of the Fifth

Amendment.”). Such a rule comports with the longrecognized differentiation between real or personal

property and money, as the latter is fungible in ways the

former are not. See United States v. Sperry Corp., 493

U.S. 52, 62 n.9 (1989) (“It is artificial to view deductions of

a percentage of a monetary award as physical

appropriations of property. Unlike real or personal

property, money is fungible.”); E. Enters., 524 U.S. at 540

(Kennedy, J., concurring) (“The Coal Act does not

appropriate, transfer, or encumber an estate in land (e.g.,

due process rights. E. Enters., 524 U.S. at 540 (Kennedy, J.,

concurring). Nevertheless, Justice Kennedy explained, the law did not

effect a taking because it did not “operate upon or alter” a “specific

and identified propert[y] or property right,” such as “an estate in land

(e.g., a lien on a particular piece of property), a valuable interest in an

intangible (e.g., intellectual property), or even a bank account or

accrued interest.” Id. at 540–41. Instead, “[t]he law simply imposes an

obligation to perform an act, the payment of benefits. The statute is

indifferent as to how the regulated entity elects to comply or the

property it uses to do so.” Id. at 540. Justice Breyer, writing for three

other Justices (Justice Stevens, Justice Souter, and Justice

Ginsburg), agreed the Takings Clause was not implicated, viewing the

Takings Clause as applying only when the government appropriates

a “specific interest in physical or intellectual property” or “a specific,

separately identifiable fund of money.” Id. at 554–55 (Breyer, J.,

dissenting). By contrast, Justice Breyer noted the Takings Clause has

no bearing when the government imposes “an ordinary liability to pay

money.” Id. at 554 (citations omitted).

-App. 44aa lien on a particular piece of property), a valuable interest

in an intangible (e.g., intellectual property), or even a bank

account or accrued interest. The law simply imposes an

obligation to perform an act, the payment of benefits.”).

While one cannot possess a cognizable property

interest in money generally, one’s property interest in a

specific fund of money—e.g., the interest or principal of

an identified account—is cognizable under the Takings

Clause such that government deprivation can amount to a

taking. See Webb’s Fabulous Pharmacies, Inc. v.

Beckwith, 449 U.S. 155, 160–65 (1980) (finding a taking of

a specific fund of money where a court appropriated the

interest earned on principal held in an interpleaded

account); Phillips v. Wash. Legal Found., 524 U.S. 156,

163–72 (1998) (finding interest earned in an Interest on

Lawyer Trust Account (IOLTA) remained the private

property of the clients); Brown v. Legal Found. of Wash.,

538 U.S. 216, 231–41 (2003) (same); EWTF, 155 Fed. Cl. at

189–90 (“[W]hen a specific fund of money is protected by

an identifiable property interest, a Taking may occur.”). A

specific fund of money stands in contrast to an “abstract

sum of money capable of being calculated,” as one’s

property interest in a specific fund is in the fund itself

rather than in its monetary assets. Adams, 391 F.3d at

1225; see also id. at 1224 (distinguishing between “specific

funds” as “legitimate property interests” and mere

“statutory obligations to pay money”). As a result, a

government actor only implicates one’s property interest

in a specific fund when it appropriates the fund in toto. See

id. Finding a property interest in a specific fund to be

implicated when only a portion of that fund was

appropriated would require recognizing a property

interest in money alone, which no court may do. See E.

Enters., 524 U.S. at 540 (Kennedy, J., concurring);

Edison, 271 F.3d at 1340. Presented with Plaintiffs’ claims

-App. 45athat the required TRP contributions amounted to takings

of specific funds of money, this Court must therefore first

“identify what, if anything, was the subject of the alleged

taking” to determine whether the property at issue

actually constituted specific funds of money. Acceptance

Ins. Cos., Inc. v. United States, 583 F.3d 849, 855 (Fed.

Cir. 2009); King v. United States, 159 Fed. Cl. 450, 462

(2022).

The uncontested material facts—many of them

proffered by Plaintiffs—make this a straightforward

inquiry. Neither 42 U.S.C. § 18061 nor 45 C.F.R.

§ 153.20(2) identified specific funds to be appropriated in

their entirety. Rather, Defendant required Plaintiffs pay

sums of money as TRP contributions for three benefit

years, with the amount owed calculated annually. See 2d

Am. Compl. ¶ 80 (providing the TRP contribution rates

per covered life for 2014 ($63), 2015 ($44), and 2016 ($27));

HHS Notice of Benefit and Payment Parameters for 2014,

78 Fed. Reg. at 15,460; HHS Notice of Benefit and

Payment Parameters for 2015, 79 Fed. Reg. at 13,775;

HHS Notice of Benefit and Payment Parameters for 2016,

80 Fed. Reg. at 10,775. Neither 42 U.S.C. § 18061 nor 45

C.F.R. § 153.20(2) specified from whence these

contributions needed to be paid, nor did they effect de

facto appropriations of Plaintiffs’ funds in toto.10 Absent

10 Indeed, none of Plaintiffs’ three annual contributions

amounted to even 1% of their annual income for the same year. See 2d

Am. Compl. ¶¶ 83–84 (stating OETF paid Defendant a total of

$323,154 and Stone Masons paid Defendant a total of $46,777 for

benefit years 2014, 2015, and 2016). Compare OETF 2014

Contribution ($142,569), OETF 2015 Contribution ($107,712), and

OETF 2016 Contribution ($72,873), with Mot. App. 203–14 (ECF No.

105-1) (providing OETF’s total income for benefit years 2014

($16,766,937), 2015 ($11,269,649), and 2016 ($16,974,450)); compare

-App. 46aidentification of specific funds of money taken in toto, the

property targeted by Defendant were the sums of money

calculated for each Plaintiff annually and paid as TRP

contributions. Such “abstract sum[s] of money” cannot be

considered specific funds in which Plaintiffs have

compensable property interests under the Takings Clause

of the Fifth Amendment. See Adams, 391 F.3d at 1225.

Because the property Plaintiffs allege Defendant took was

simply sums of money, annually calculated, rather than

specific funds, Plaintiffs have not identified a property

interest appropriated by Defendant that is cognizable

under the Takings Clause. See E. Enters., 524 U.S. at 540

(Kennedy, J., concurring); Edison, 271 F.3d at 1338–40;

Adams, 391 F.3d at 1225.

Plaintiffs present two arguments11 against this

conclusion, one presented in their Second Amended

Stone Masons 2014 Contribution ($20,664), Stone Masons 2015

Contribution ($14,476), and Stone Masons 2016 Contribution

($11,637), with Mot. App. 215–26 (providing Stone Masons’ total

income for benefit years 2014 ($2,795,956), 2015 ($2,583,185), and 2016

($3,204,037)).

11 Despite this Court’s direction to clarify the source of any

asserted property interests, lack of clarity remained as to Plaintiffs’

theories even after the filing of their two amended complaints. See

EWTF, 155 Fed. Cl. at 193 (“To sufficiently assess Plaintiffs’ Takings

claim (either on a subsequently-filed motion to dismiss or a motion for

summary judgment) the parties must provide the Court with further

information concerning: (1) the nature of plaintiffs’ property interest

in their respective group health care plans, and (2) the effect, if any,

the TRP had on those alleged property interests.”). Defendant’s

Motion to Dismiss accordingly addressed a multitude of arguments

Defendant believed Plaintiffs to be making. See Mot. 28–40. In their

Response to Defendant’s Motion, Plaintiffs disclaimed several of the

arguments discussed by Defendant and clarified the sole purported

sources of cognizable property interests in this case are Plaintiffs’

-App. 47aComplaint and in subsequent filings, and the other

presented for the first time in full at oral argument.

Plaintiffs’ first argument contends each TRP contribution

was a specific fund of money in which Plaintiffs had a

property interest by virtue of the trust agreements

establishing their trust funds. See 2d Am. Compl. ¶ 103;

Resp. at 20 (“Plaintiffs clearly have an identifiable

property interest in [their trust accounts’ monetary

assets] pursuant to the Trust Agreements.”); see also Mot.

App. 15 (OETF Trust Agreement); Mot. App. 52 (Stone

Masons Trust Agreement). Plaintiffs’ argument looks first

to their trust agreements, which provide “[a]ll right, title

and interest in and to the assets of the Plan and of the

Fund shall at all times be vested in the Trustees.” Mot.

App. 15 (OETF Trust Agreement); Mot. App. 52 (Stone

Masons Trust Agreement). Plaintiffs contend this

language demonstrates they have a cognizable property

interest in their trust funds and, by extension, a property

interest in the monetary assets held within those trust

accounts. Resp. at 14, 20–22. This reasoning leads

Plaintiffs to engage in a semantic sleight of hand, using

the term “funds” to reference both their trust funds

themselves and those accounts’ monetary assets, such that

Plaintiffs’ asserted property interests in their overall

accounts—on Plaintiffs’ theory—would purportedly

extend to any sum of money contained within. See 2d Am.

Compl. ¶ 103 (“Funds held in self-insured health and

welfare trust funds constitute identifiable property

interests in specific funds of money protected by the

Takings Clause of the Fifth Amendment.”). Plaintiffs

point to “basic principles of contract and trust law,” citing

respective trust agreements. Resp. at 20. This Court accordingly

addresses only the argument evinced in Plaintiffs’ Response and the

waived argument raised by Plaintiffs’ counsel at oral argument.

-App. 48asources such as Restatement (Third) of Trusts (2003), to

assert their trust agreements create a cognizable

property interest in their trust accounts. Resp. at 20–24.

However, such citations do not resolve the clear conflict

between Plaintiffs’ argument that an entity may possess a

property interest in a sum of money held within a trust

account and binding precedent prohibiting a court from

finding a cognizable property interest in money alone. See

E. Enters., 524 U.S. at 540 (Kennedy, J., concurring);

Adams, 391 F.3d at 1224–25.

Defendant’s Motion and Reply focus on this tension,

noting the property allegedly appropriated via TRP

contributions was money alone rather than any specific

fund. Mot. at 23–24; Reply at 9. Defendant characterizes

Plaintiffs as effectively arguing for recognition of a

general property interest in their assets, which is

foreclosed by the Supreme Court’s reasoning in Eastern

Enterprises. Reply at 9; see E. Enters., 524 U.S. at 540

(Kennedy, J., concurring). Defendant is clear to

distinguish this rule from the so-called “interest follows

principal” cases, “in which the Supreme Court held that

states may not retain the interest earned on principal

placed in an interest-bearing account.” Mot. at 30 n.7.

Those cases, including Webb’s, Phillips, and Brown, are

exemplars of takings of specific funds of money, and

indeed the Federal Circuit cited to Webb’s and Phillips

when defining its use of the term “specific” in Adams. 391

F.3d at 1225 (“[T]he term ‘specific’ [means] an actual sum

of money representing interest derived from ownership of

particular deposits in an established account, as opposed

to some abstract sum of money capable of being

calculated . . . .”); see EWTF, 155 Fed. Cl. at 190–91

(discussing both Webb’s and Phillips). Plaintiffs, in

contrast, cite Webb’s, Phillips, and Brown to contend that

any money held in trust constitutes a “specific fund,”

-App. 49acategorizing the cases as “controlling precedent” here.

While Plaintiffs are correct in casting these cases as

central to this Court’s analysis of the taking claims, the

undisputed facts of the present case cause it to fall outside

the purview of Webb’s, Phillips, and Brown, such that

even a cursory examination of those Supreme Court cases

demonstrates they undermine rather than support

Plaintiffs’ position. Resp. at 24–27.

In Webb’s Fabulous Pharmacies, Inc. v. Beckwith, the

Supreme Court unanimously held an unconstitutional

taking had occurred under the Fifth Amendment when a

county court claimed as its own the interest accrued on an

interpleader fund deposited in the registry of the county

court after already assessing a fee for the service. 449 U.S.

155, 155–56 (1980). To reach its decision, the Supreme

Court first determined whether an entity possessed a

cognizable property interest in the accrued interest,

stating, “[p]roperty interests . . . are not created by the

Constitution. Rather, they are created and their

dimensions are defined by existing rules or

understandings that stem from an independent source

such as state law . . . .” Id. at 161 (alteration in original)

(quoting Board of Regents v. Roth, 408 U.S. 564, 577

(1972)). The Supreme Court further noted that under

common law the “general rule is . . . any interest on an

interpleaded and deposited fund follows the principal and

is to be allocated to those who are ultimately to be the

owners of that principal.” Id. at 162–63. The deposited

fund at issue in Webb’s “plainly was private property,”

which was “held only for the ultimate benefit of the

[receivers], not for the benefit of the court and not for the

benefit of the county.” Id. at 160–61. Since “interest

follows principal,” the fund’s receivers possessed property

interests in both the fund’s principal and accrued interest.

Id. at 160–64. As the government had identified a specific

-App. 50afund of money—interest on an interpleaded fund—for

appropriation in toto, and the appropriation of that

specific fund was “not reasonably related to the costs of

using the courts,” the Supreme Court held the retention

of the interest was “a forced contribution to general

government revenues” and thus amounted to a taking. Id.

at 163.

The Supreme Court again relied upon the “interest

follows principal” rule to identify a cognizable property

interest in Phillips v. Washington Legal Foundation. 524

U.S. 156, 172 (1998). There, the Supreme Court examined

the constitutionality of a Texas law mandating interest

earned on client funds deposited into IOLTAs be paid to

foundations financing legal services for low-income

populations. Id. at 159–60. Applying the “interest follows

principal” rule, id. at 165–68, the Supreme Court held

interest generated by client funds in IOLTA accounts

remained private property of those clients. Id. at 172. The

Supreme Court also noted that the interest income

transferred to Texas could not reasonably be viewed “as

payment for services rendered by the State.” Id. at 171

(internal quotation and citation omitted). Despite holding

“that the interest income generated by funds held in

IOLTA accounts is the ‘private property’ of the owner of

the principal,” the Supreme Court declined to opine on

whether the Texas law effected a taking demanding just

compensation. Id. at 172. In Brown v. Legal Foundation

of Washington, the Supreme Court reaffirmed that

directing interest from IOLTA accounts to certain

organizations implicates the Takings Clause of the Fifth

Amendment. 538 U.S. at 216, 235, 240–41.

Each of these three cases saw a government actor

identify a specific type of fund—e.g., interest earned in

IOLTAs—and then appropriate that fund in its entirety.

-App. 51aIn each case, the plaintiffs complained of the taking of

specific funds, rather than the imposition of obligations to

pay some amount of money to the government, making the

plaintiffs’ property interest in those specific funds the

relevant property interests for purposes of takings

analyses. Plaintiffs cite to these cases to argue that money

held in trust funds purportedly constitutes “specific funds

of money,” but Plaintiffs ignore that the plaintiffs in

Webb’s, Phillips, and Brown possessed property interests

in specific funds due to the common law rule that “interest

follows principal,” not because funds held in trust are

necessarily specific funds of money. Webb’s, 449 U.S. at

163–64; Phillips, 524 U.S. at 156–57; Brown, 538 U.S. at

217. Plaintiffs also ignore that such property interests

were only relevant because the property allegedly taken

in Webb’s, Phillips, and Brown was specific funds rather

than mere sums of money. See Webb’s, 449 U.S. at 158;

Phillips, 524 U.S. at 162; Brown, 538 U.S. at 228–29.

The “interest follows principal” cases are thus

controlling here, as Plaintiffs argue, but only insomuch as

those cases reflect the well-established predicate for

finding a property interest in a specific fund of money to

be relevant to a takings analysis: the property at issue

must be a fund in its entirety. See Adams, 391 F.3d at

1225. Whatever property interest Plaintiffs may have in

their overall trust funds is therefore immaterial here, as

Plaintiffs do not contend Defendant appropriated those

trust funds in their entirety. Id.; see 2d Am. Compl. at ¶¶

83–84; compare OETF 2014 Contribution ($142,569),

OETF 2015 Contribution ($107,712), and OETF 2016

Contribution ($72,873), with Mot. App. 203–14 (ECF No.

105-1) (providing OETF’s total income for benefit years

2014 ($16,766,937), 2015 ($11,269,649), and 2016

($16,974,450)); compare Stone Masons 2014 Contribution

($20,664), Stone Masons 2015 Contribution ($14,476), and

-App. 52aStone Masons 2016 Contribution ($11,637), with Mot. App.

215–26 (providing Stone Masons’ total income for benefit

years 2014 ($2,795,956), 2015 ($2,583,185), and 2016

($3,204,037)). Indeed, the contributions paid were

calculated annually and did not amount to even 1% of

Plaintiffs’ annual income for the same year. See supra note

9. That the scope of the “funds” appropriated by

Defendant can only be described in terms of a

mathematical formula rather than a descriptor—such as

“interest earned in IOLTAs”—further underscores how

far afield this case is from those where specific funds of

money were at issue. Given the contrast between these

precedential cases and the facts of the present case, this

Court finds unpersuasive Plaintiffs’ primary argument—

that a sum money paid from a trust account is itself a

specific fund.12

Plaintiffs’ second argument was first presented at oral

argument and was thus not briefed. As an initial matter,

this argument was waived. See CardSoft v. Verifone, Inc.,

769 F.3d 1114 (Fed. Cir. 2014) (“Arguments that are not

appropriately developed in a party’s briefing may be

deemed waived.”) (citing SmithKline Beecham Corp. v.

Apotex Corp., 439 F.3d 1312 (Fed. Cir. 2006) (collecting

cases standing for the same proposition)). However, even

considering the merits of Plaintiffs’ second argument, it

fails for much the same reason as their first. While

Plaintiff’s first argument urged this Court to view any

sums of money paid out of their trust accounts as “specific

funds,” their second argument asserts the relevant

“specific funds” are actually Plaintiffs’ trust accounts,

12

This Court previously denied Plaintiffs’ argument, not

reasserted in its summary judgment briefing, that ERISA’s

“exclusive benefits provision” alone created a cognizable property

interest. EWTF, 155 Fed. Cl. at 191.

-App. 53afrom which Plaintiffs argue they were effectively required

to pay their TRP contributions. See Trans. at 25:24–26:2

(Plaintiffs’ counsel: “But here, this statute or this

contribution is being required of group health plans. So by

its nature it’s targeting that specific fund of money.”); id.

at 21:25–22:3 (Plaintiffs’ counsel: “I’m saying the federal

law, which obviously the Government knows about,

requires all of their assets to be held in trust.”); id. at 30:2–

10 (the Court: “So you’re saying [the TRP contribution]

has to by law come from the trust?” Plaintiffs’ counsel: “I

think by operation of this statute, yes. . . . [T]he

hypothetical of a friend could pay it or a bank could pay

it . . . does not give enough deference to the way this

statute is written and applied . . . against a backdrop of

[ERISA] that requires this money to be held this way.”).

In detailing this position during oral argument,

Plaintiffs’ counsel attempted to distinguish Adams and

Eastern Enterprises from the facts of the present case

and offered as legal support only the Supreme Court’s

decision in Horne v. Department of Agriculture. 576 U.S.

350 (2015); see Trans. at 25:7–15. That case is inapposite

to the present case. The Supreme Court in Horne held “an

administrative reserve requirement compelling raisin

growers to physically set aside a percentage of their crop

for the government constituted a . . . taking.” Cedar Point

Nursery v. Hassid, 141 S. Ct. 2063, 2072 (2021)

(summarizing Horne); Horne, 576 U.S. at 354. Plaintiffs’

counsel analogized Horne to the circumstances in this

case, specifically Defendant’s requirement that Plaintiffs

pay TRP contributions while also having to hold all their

assets within their trust accounts. Trans. at 25:1–11

(Plaintiffs’ counsel: “What we have here is money that’s

already there, money that is sitting in this trust, required

by federal law to be there, the only assets of the . . . group

health plans who are defined as the contributing entity,

-App. 54aand they have to use that money. It’s . . . like [Horne

because] . . . . the growers of the raisins had a crop that

they were using obviously to satisfy this government

taking . . . .”). Since any payment of TRP contributions

would thus be paid out of their trust accounts, Plaintiffs

argue, those accounts are the relevant ones for the

purpose of determining whether Defendant’s actions

implicated a cognizable property interest. Id.

Plaintiffs’ argument is not persuasive. Horne is not

relevant here because it concerned a taking of physical,

personal property, which the Supreme Court in Sperry

confirmed is cognizable by the Takings Clause—in

contrast to alleged takings of money. 493 U.S. at 62 n.9 (“It

is artificial to view deductions of a percentage of a

monetary award as [per se takings]. Unlike real or

personal property, money is fungible.”). The paucity of

proffered legal support for Plaintiffs’ position—that one’s

property interest in a fund is implicated when paying the

government money out of said fund—underscores its lack

of viability. Accepting Plaintiffs’ argument would

effectively erase the Supreme Court and Federal Circuit’s

distinction between takings of specific funds and

obligations to pay money. A requirement to pay a sum of

money cannot be transformed into a taking of a specific

fund merely because such payment may be made from a

certain account, as one simply cannot have a cognizable

property interest in money itself. E. Enters., 524 U.S. at

540 (Kennedy, J., concurring); Edison, 271 F.3d at 1338–

40; Adams, 391 F.3d at 1225. Such a rule is practical and

necessary; as highlighted by Defendant, Plaintiffs’

alternative reasoning has the potential to turn all

government taxes and fees into takings of specific funds

whenever it is clear they will be paid out of an individual’s

bank account. Trans. at 20:18–25 (Defendant’s counsel:

“But in reality, when the Supreme Court talked about a

-App. 55aspecific fund of money, the focus [was] on how the statute

was structured[.] Because every assessment that is paid

from a bank account is paid from a specific fund of money.

Every tax that is paid from a bank account is paid from a

specific fund of money. A specific fund of money is always

involved or almost always.”).

That Plaintiffs’ two arguments concerning cognizable

property interests fail to persuade is not surprising given

that Defendant’s actions are textbook examples of the

government leveling an obligation to pay calculable sums

of money. The undisputed facts of this case demonstrate

the property appropriated was simply money, the amount

to be paid determined by annual calculation. See 2d Am.

Compl. ¶ 80; HHS Notice of Benefit and Payment

Parameters for 2014, 78 Fed. Reg. at 15,460; HHS Notice

of Benefit and Payment Parameters for 2015, 79 Fed. Reg.

at 13,775; HHS Notice of Benefit and Payment

Parameters for 2016, 80 Fed. Reg. at 10,775. Since there

is no dispute that Defendant did not appropriate specific

funds in toto, that Plaintiffs’ trust agreements may

provide them with property interests in the trust accounts

is unavailing; the accounts were not the property allegedly

taken by Defendant’s mandating of TRP contributions.

Plaintiffs’ arguments extending their interest in their

overall trust accounts to an annually-calculated portion of

the assets within those trust accounts contravene binding

Supreme Court and Federal Circuit precedent holding, in

the context of the Takings Clause, that individuals do not

have cognizable property interests in individual sums of

money. See E. Enters., 524 U.S. at 540 (Kennedy, J.,

concurring); Edison, 271 F.3d at 1340 (“[T]he mere

imposition of an obligation to pay money . . . does not give

rise to a claim under the Takings Clause of the Fifth

Amendment.”). This Court’s previous skepticism of

Plaintiffs’ takings claims was thus well-founded, as

-App. 56aPlaintiffs’ opportunity to amend their complaint to more

precisely articulate their theory for possessing a

cognizable property interest in the TRP contributions

simply confirms that Defendant’s mandating of

contributions represented only an obligation to pay

money. See EWTF, 155 Fed. Cl. at 169, 191–93.

Accordingly, Plaintiffs’ Takings claims fail the first

step of this Court’s takings analysis, as the requirement to

pay TRP contributions did not implicate a cognizable

property interest, but instead represented a “mere

imposition of an obligation to pay money” that is not

compensable under the Fifth Amendment. Edison, 271

F.3d at 1340.

II.

This Court Need Not Consider Defendant’s Step

Two Arguments.

Defendant argues in its Motion that, should this Court

find Plaintiffs have a cognizable property interest, this

Court should apply a regulatory takings analysis at the

second step of the two-step takings test. Mot. at 23–26

(arguing “[P]laintiffs do not allege a per se taking as a

matter of law”). Further, Defendant argues Plaintiffs’

claims of regulatory takings accrued when the ACA was

signed into law in 2010. Id. at 26–27. As Plaintiffs filed this

action some 9 years later, Defendants contend Plaintiffs’

regulatory takings claims are untimely under 28 U.S.C.

§ 2501. Id. Plaintiffs counter that a per se takings analysis

is more appropriate—although a taking also should be

found under a regulatory takings analysis—and that their

claims are timely, as the claims did not accrue until HHS’s

publication of its final rule defining “contributing entity”

in 2014. Resp. at 30–44.

Absent a constitutionally cognizable property interest

in the present case under step one of the takings analysis,

this Court need not proceed to step two and address the

-App. 57aparties’ disputes concerning timeliness and the type of

taking that would have been at issue. Hearts Bluff Game

Ranch, 669 F.3d at 1329 (“First, as a threshold matter, the

court determines whether the claimant has identified a

cognizable Fifth Amendment property interest that is

asserted to be the subject of the taking. . . . Second, if the

court concludes that a cognizable property interest exists,

it determines whether that property interest was

‘taken.’ . . . ‘We do not reach this second step without first

identifying a cognizable property interest.’”) (quoting Air

Pegasus, 424 F.3d at 1213); Am. Pelagic Fishing Co., L.P.

v. United States, 379 F.3d 1363, 1372 (Fed. Cir. 2004) (“If

the claimant fails to demonstrate the existence of a legally

cognizable property interest, the court’s task is at an

end.”). This Court accordingly finds Defendant’s

arguments on these issues to be moot in light of this

Court’s findings in Discussion Section I and declines the

invitation to clarify via dicta (i) the type of taking that

would have occurred had Plaintiffs possessed a cognizable

property interest in the money paid as TRP contributions,

or (ii) whether Plaintiffs’ claims under a regulatory

takings analysis would have been timely.

CONCLUSION

For the reasons explained above, Defendant’s Motion

for Partial Summary Judgment (ECF No. 105) is

GRANTED. Plaintiffs’ Motion for Leave to File to Amend

Takings Class Definition in the Second Amended

Complaint (ECF No. 83) and Motion to Certify Takings

Class (ECF No. 84) are accordingly DENIED AS MOOT.

The parties are directed to CONFER and FILE a

Notice within seven days, attaching a proposed public

version of this Memorandum and Order, with any

competition-sensitive or otherwise protected information

redacted.

-App. 58aThe Clerk of Court is DIRECTED to enter Judgment

accordingly.

IT IS SO ORDERED.

/s/ Eleni M. Roumel

ELENI M. ROUMEL

Judge

July 7, 2023

Washington, D.C.

-App. 59a-

APPENDIX D

IN THE UNITED STATES COURT OF FEDERAL

CLAIMS

ELETRICAL WELFARE

TRUST FUND, et al.,

Plaintiffs,

No. 19-cv-353

v.

Filed: July 30,

2021

THE UNITED STATES,

Defendant.

Joseph Howard Meltzer, Kessler, Topaz, Meltzer &

Check, LLP, Radnor, Pennsylvania for Plaintiffs. With

him on the briefs were Melissa L. Troutner, Kessler,

Topaz, Meltzer & Check, LLP, Radnor, Pennsylvania;

William P. Dale and Charles F. Fuller, McChesney &

Dale, P.C., Bowie, MD.

Eric P. Bruskin, United States Department of Justice,

Civil Division, Washington, D.C. for Defendant. With him

on the briefs are Joseph H. Hunt, Assistant Attorney

General, Robert E. Kirschman, Jr., Director, National

Courts Section, Commercial Litigation Branch, Civil

Division; and L. Misha Preheim, Assistant Director,

Commercial

Litigation

Branch,

Civil

Division,

Washington, D.C.

-App. 60aMEMORANDUM AND ORDER

This case arises out of the Department of Health and

Human Services’ (HHS’s) implementation of the Patient

Protection and Affordable Care Act of 2010 (ACA).

Plaintiffs, self-insured group health plans funded through

employee contributions to a multiemployer benefit trust,1

seek to recover amounts paid under HHS regulations

implementing the ACA’s Transitional Reinsurance

Program (TRP). The TRP mandated that all “health

insurance issuers, and third party administrators on

behalf of group health plans, [were] required to make

payments to an applicable reinsurance entity for any plan

beginning in the 3-year period beginning January 1, 2014.

. . .” 42 U.S.C. § 18061(b)(1)(A). HHS regulations

implementing the TRP defined the group of entities that

were required to contribute to the TRP as “contributing

entities.” See 45 C.F.R. § 153.20(2) (2019) (“[Contributing

entity means f]or the 2014 benefit year, a self-insured

group health plan . . . whether or not it uses a third party

administrator; and for the 2015 and 2016 benefit years, a

self-insured group health plan . . . that uses a third party

administrator . . . .”). HHS deemed Plaintiffs’ self-insured

group health plans as “contributing entities” and,

consequently, required Plaintiffs to contribute to the

TRP. Complaint (ECF No. 1) (Compl.) ¶¶ 57-58; Plaintiffs’

Response in Opposition to Defendant’s Motion to Dismiss

or, in the alternative, Motion for Summary Judgment

(ECF No. 7) (Pls.’ Resp.) at 9-10. Plaintiffs allege that

these contribution payments constitute an illegal exaction

1 Defendant’s motion addresses three Plaintiffs: (1) the Electrical

Welfare Trust Fund (EWTF); (2) the Operating Engineers Trust

Fund of Washington, D.C. (OETF); and (3) the Stone & Marble

Masons of Metropolitan Washington, D.C. Health and Welfare Fund

(Stone Masons).

-App. 61abecause HHS’s definition of “contributing entity”

exceeded its statutory authority and was an unreasonable

interpretation of 42 U.S.C. § 18061. Compl. ¶¶ 100-111;

Pls.’ Resp. at 2-3. Plaintiffs also allege that, even if HHS’s

interpretation of 42 U.S.C. § 18061 was permissible,

Plaintiffs are still entitled to recover the fees paid

pursuant into the TRP as just compensation under the

Fifth Amendment’s Takings Clause. Compl. ¶¶ 89-99; see

also Pls.’ Resp. at 12.

Pending before the Court is Defendant’s motion to

dismiss Plaintiffs’ complaint for failure to state a claim,

pursuant to Rule 12(b)(6) of the Rules of the United States

Court of Federal Claims (RCFC or Rule) or, in the

alternative, Defendant’s motion for summary judgment.

See generally Defendant’s Motion to Dismiss or, in the

alternative, Motion for Summary Judgment (Def.’s Mot.)

(ECF No. 6); see also Defendant’s Reply in Support of Its

Motion to Dismiss, or in the Alternative, Motion for

Summary Judgment (Def.’s Reply) (ECF No. 8).2 In its

motion, Defendant argues that Plaintiffs’ illegal exaction

claims must be dismissed because HHS reasonably

interpreted section 18061 to require reinsurance

contributions from Plaintiffs. Def.’s Mot. at 2, 34-35.

Defendant also argues that Plaintiffs fail to state a valid

Takings claim because ordinary obligations to pay money,

such as Plaintiffs’ contributions to the TRP, do not

constitute a Fifth Amendment Taking under controlling

precedent of the United States Court of Appeals for the

Federal Circuit (Federal Circuit). Def.’s Mot. at 2, 11-14.

2 Defendant originally moved to dismiss Plaintiffs’ illegal exaction

claims for lack of jurisdiction but withdrew this part of the motion at

oral argument. Def.’s Reply at 20 n.8; Oral Argument Transcript

(ECF No. 21) at 5:13-19.

-App. 62aThis Court has considered each of the parties’ filings

and arguments. For the reasons explained below,

Defendant’s motion to dismiss is GRANTED in part and

DENIED in part. With respect to EWTF, this Court

holds that HHS’s inclusion of self-administered accounts

within the definition of “contributing entity” is contrary to

section 18061(b)(1)(A)’s plain language; therefore,

Defendant’s motion is DENIED as to EWTF’s illegal

exaction claim. With respect to OETF and Stone Masons,

which use a third-party administrator, and are therefore

covered under section 18061(b)(1)(A)’s plain language,

this Court holds that those Plaintiffs’ illegal exaction

claims are without merit. Accordingly, Defendant’s

motion is GRANTED with respect to Stone Masons’ and

OETF’s illegal exaction claims. Finally, as explained

below, Defendant’s motion is DENIED with respect to

Stone Masons’, OETF’s, and EWTF’s Takings claims.

-App. 63aBACKGROUND

I. Plaintiffs’ Health Plans

Plaintiffs are group health plans3 created through

collective bargaining and regulated by the Labor

Management Relations Act of 1947 (Taft-Hartley) and the

Employee Retirement Income Security Act of 1974

(ERISA). Compl. ¶ 3. They are not health insurance

issuers.4 Compl. ¶ 30. Plaintiffs’ group health plans “are

funded through employee contributions to a

multiemployer benefit trust, and benefits under the plans

are provided to covered workers and their families

pursuant to negotiated wages, hours, and terms of

employment through a collective bargaining agreement

3 “[G]roup health plan” is defined by statute as,

An employee welfare benefit plan (as defined in [29 U.S.C.

§ 1002(1)]) to the extent that the plan provides medical care

(as defined in paragraph (2)) . . . to employees or their

dependents (as defined under the terms of the plan) directly

or through insurance, reimbursement, or otherwise. Except

for purposes of part C of title XI of the Social Security Act

(42 U.S.C. 1320d et seq.), such term shall not include any

qualified small employer health reimbursement arrangement

(as defined in section 9831(d)(2) of title 26).

42 U.S.C. § 300gg-91(a)(1).

4 “[H]ealth insurance issuer” is defined by statute as,

an insurance company, insurance service, or insurance

organization (including a health maintenance organization, as

defined in paragraph (3)) which is licensed to engage in the

business of insurance in a State and which is subject to State

law which regulates insurance (within the meaning of section

514(b)(2) of the Employee Retirement Income Security Act

of 1974 [29 U.S.C. 1144(b)(2)]). Such term does not include a

group health plan.

42 U.S.C. § 300gg-91(b)(2).

-App. 64abetween one or more unions and more than one

employer.” Id. Participation in these plans is limited to

employees who share “a common employer (or affiliated

employers), coverage under one or more collective

bargaining agreements, membership in a labor union, or

membership in one or more locals of a national or

international labor union.” Compl. ¶ 28. Pursuant to 29

U.S.C. § 1103, these plans use funds which are held in

trust for the exclusive benefit of the plan participant and

which cannot be used for any other purpose. Compl. ¶ 29.

Unlike Plaintiffs, commercial insurers write policies

for group and individual health plans. Pls.’ Resp. at 5.

Plaintiffs allege that, unlike commercial insurers,

Plaintiffs’ health plans are not commercial in nature and

are not sold on the individual market. Compl. ¶ 28.

Plaintiffs also note that even before enactment of the

Patient Protection and Affordable Care Act, Pub. L. No.

111-148, 124 Stat. 119 (2010) (the Act or ACA), Plaintiffs’

group health plans did not exclude participants on the

basis of pre-existing conditions. Compl. ¶¶ 28, 33; Pls.’

Resp. at 5. Thus, according to Plaintiffs, their group health

plans did not undertake any additional risk when

Congress abolished denials for pre-existing conditions—

unlike commercial insurers. Compl. ¶¶ 38, 50.

Plaintiffs’ group health plans are self-insured. Compl.

¶ 3. Self-insured multiemployer plans may be

administered in one of three ways: (1) self-administered,

(2) administered by a third-party administrator that is not

a health insurance issuer, or (3) administered by a thirdparty administrator that is a health insurance issuer

through an administrative services only (ASO) agreement.

Compl. ¶ 32; Pls.’ Resp. at 5-6.

EWTF is a self-administered group health plan.

Compl. ¶ 3; Pls.’ Resp. at 5. As a self-administered plan,

-App. 65aEWTF: (1) determines eligibility and controls enrollment

for its participants, (2) performs claims processing and

adjudication, and (3) directly pays the health care costs

incurred by its participants and beneficiaries. Compl. ¶¶

19-20. OETF5 and Stone Masons6 each are administered

by a third-party administrator that is not a health

insurance issuer. Compl. ¶¶ 21-24. These third-party

administrators: (1) determine eligibility and control

enrollment for its participants, (2) perform claims

processing and adjudication, and (3) directly pay the

health care costs incurred by the OETF and Stone Masons

participants and beneficiaries. Id. ¶¶ 22-24.

II. Transitional Reinsurance Program

In 2010, President Obama signed the ACA into law.

See Patient Protection and Affordable Care Act, Pub. L.

No. 111-148, 124 Stat. 119 (2010), as amended by Health

Care and Education Reconciliation Act of 2010, Pub. L.

No. 111-152, 124 Stat. 1029 (2010) (collectively the ACA).

Under the ACA, all individuals must maintain “minimum

essential” health insurance coverage, 26 U.S.C. § 5000A,

and health insurance providers cannot discriminate

against individuals with pre-existing medical conditions

by denying them coverage, 42 U.S.C. § 300gg-3. As a

result, Congress anticipated that the enrollment of a

disproportionate number of previously uninsured, highrisk individuals into the health insurance market could

cause premiums to rise for all insured individuals. See

King v. Burwell, 576 U.S. 473, 479-81 (2015). Among other

5

OETF’s

third-party

administrator

Administrators, LLC. Compl. ¶¶ 21-22.

is

Associated

6 Stone Masons’ third-party administrator is Carday Associates,

LLC. Compl. ¶¶ 23-24.

-App. 66aprovisions, the ACA established three programs to

attempt to more evenly distribute the financial risk

carried by health insurance issuers that cover higher-risk

populations: (1) the Transitional Reinsurance Program

(TRP), (2) the risk corridors program, and (3) the risk

adjustment program. 42 U.S.C. §§ 18061 (codifying the

transitional reinsurance program), 18062 (codifying the

risk corridors program), 18063 (codifying the risk

adjustment program).

At issue here is the TRP, a temporary program

intended to stabilize premiums for coverage in the

individual health insurance market during the early years

of the ACA’s implementation—2014, 2015, and 2016. See

42 U.S.C. § 18061(c)(1)(A). To fund the program, the ACA

required that “health insurance issuers, and third party

administrators on behalf of group health plans” pay into

the appropriate reinsurance pool, whether state or

federal, for the three-year period. 42 U.S.C.

§ 18061(b)(1)(A). The funds collected from the entities

described in section (a)(1) were used to reimburse “health

insurance issuers” for enrolling high-risk individuals in

the individual marketplace. 42 U.S.C. § 18061(b)(1)(B).

Congress delegated authority to HHS to implement

the TRP, requiring that HHS—in consultation with the

National Association of Insurance Commissioners

(NAIC)—create federal standards for the program. 42

U.S.C. § 18061(b)(1). Between July 2011 and March 2014,

HHS published three sets of proposed and final rules

defining the term “contributing entities,” found in 42

U.S.C. § 18061(b)(1).

A. Proposed and Final Rules Titled “Patient

Protection and Affordable Care Act; Standards

Related to Reinsurance, Risk Corridors and Risk

Adjustment”

-App. 67aOn July 15, 2011, HHS, for the first time, issued a

proposed rule interpreting the term “contributing entity”

as “any health insurance issuer and, in the case of a selfinsured group health plan, the third party administrator

of the group health plan.” Def.’s Mot. App. 1 (76 Fed. Reg.

41930 (July 15, 2011)) (ECF No. 6-1) at A237 (2011

Proposed Rule). HHS accepted public comments on the

2011 Proposed Rule until September 28, 2011. Id. at A2.

On March 23, 2012, HHS published a Final Rule based

on its July 2011 proposal. Def.’s Mot. App. 3 (77 Fed. Reg.

17220 (March 23, 2012)) (ECF No. 6-3) (2012 Final Rule).

In the 2012 Final Rule, HHS stated that it received

several comments requesting clarification of its proposed

definition of “contributing entity.” See id. at A1964, A1978.

In response, HHS explained that the ACA “directs a

broad cross-section of issuers and self-insured plans to

make reinsurance contributions, given the uncertainty of

the size and characteristics of the population that will

participate in the Exchanges.” Id. at A1978. While HHS

claimed that the definition of “contributing entities” is

broad, it failed to clarify the definition’s alleged breadth in

the final regulatory text. Despite the public comments and

noted confusion about the term, HHS instead simply

mirrored the ACA’s text, stating “[c]ontributing entity

means a health insurance issuer or a third party

administrator on behalf or [sic] a self-insured group plan.”

Id. at A1988.

7 The nine (9) appendices attached to Defendant’s motion are

sequentially paginated. See ECF Nos. 6-1 through 6-9. Throughout

this Memorandum and Order, the Court uses this sequential

numbering in its citations, preceding the page number with “A.”

-App. 68aB. Proposed and Final Rules Titled “Patient

Protection and Affordable Care Act; HHS Notice

of Benefit and Payment Parameters for 2014”

On December 7, 2012, HHS issued another proposed

rule to “provide[] further detail and parameters related

to” a host of ACA topics. Def.’s Mot. App. 4 (77 Fed. Reg.

73118 (December 7, 2012)) (ECF No. 6-4) (2012 Proposed

Rule) at A1996. In discussing the TRP contribution

calculation and collection process in the 2012 Proposed

Rule, HHS explained:

The Affordable Care Act directs that a transitional

reinsurance program be established in each State to

help stabilize premiums for coverage in the individual

market from 2014 through 2016. The reinsurance

program is designed to alleviate the need to build into

premiums the risk of enrolling individuals with

significant unmet medical needs. By stabilizing

premiums in the individual market equitably

throughout the United States, the reinsurance

program is intended to help millions of Americans

purchase affordable health insurance, reduce

unreimbursed usage of hospital and other medical

facilities by the uninsured, and thereby lower medical

expenses and premiums for all people with private

health insurance.

Id. at A2027. Purportedly with the goals of the TRP in

mind, HHS’s stated aim in administering the program was

“to provide reinsurance payments in an efficient, fair, and

accurate manner, where they are needed most, to

effectively stabilize premiums nationally.” Id. At the same

time, HHS claims that it sought to minimize the

administrative burden of collecting contributions and

making reinsurance payments. See id. HHS stated that

“[w]ith respect to self-insured group health plans, the plan

-App. 69ais liable, although a third-party administrator or

administrative-services-only contractor may be utilized to

transfer reinsurance contributions on behalf of a selfinsured group health plan, at that plan’s discretion.” Id. at

A2030. HHS added that “[a] self-insured, selfadministered group health plan without a third-party

administrator or administrative-services-only contractor

would make its reinsurance contributions directly.” Id.

Further,

HHS

stated

that

“[u]nder

section

1341(b)(3)(B)(i) of the Affordable Care Act, contribution

amounts for reinsurance are to reflect, in part, an issuer’s

fully insured commercial book of business for all major

medical products.” Id. (internal quotations omitted).

Accordingly, HHS interpreted section 1341(b)(3)(B)(i) to

mean that “an issuer will not be required to make

reinsurance contributions for coverage that is noncommercial.” Id. The public comment period on this 2012

Proposed Rule closed December 31, 2013. Id. at A1996.

On March 11, 2013, HHS published a final rule based

on its 2012 Proposed Rule. 78 Fed. Reg. 15410 (March 11,

2013). During the preceding comment period, several

commenters had requested that HHS amend the

definition of “contributing entity” to clarify the liability of

third-party administrators. Def.’s Mot. App. 6 (78 Fed.

Reg. 15410 (March 11, 2013)) (ECF No. 6-6) (2013 Final

Rule) at A3564. In response to the comments received,

HHS clarified that “a self-insured group health plan is

ultimately responsible for the reinsurance contributions,

even though it may elect to use a TPA or ASO contractor

to transfer the reinsurance contributions.” Id.

Several commenters had also requested that group

health plans regulated by Taft-Hartley and ERISA be

excluded from reinsurance contributions because “many

of these plans are self-insured and self-administered, and

-App. 70ainclude multiemployer plans.” Id. at A3568. HHS

responded that it “d[id] not have authority under the

statute to exclude [self-insured and self-administered

plans regulated by Taft-Hartley and ERISA] from

reinsurance contributions[,]” because these plans’

coverage was “employment-based.” Id. at A3568.

However, the 2013 Final Rule stops short of explicitly

stating whether HHS believed self-insured or selfadministered group health plans created through

collective bargaining and regulated by Taft-Hartley and

ERISA were considered “commercial.”

HHS’s 2013 Final Rule, thus clarified that all selfinsured group health plans (including plans that are selfadministered, and those regulated by Taft-Hartley and

ERISA) were included within its definition of

“contributing entity.” See id. at A3634.

HHS’s 2013 Final Rule defining “contributing entity”

reads as follows:

Contributing entity means a health insurance issuer

or self-insured group health plan. A self-insured group

health plan is responsible for the reinsurance

contributions, though it may elect to use a third party

administrator or administrative services only

contractor for transfer of the reinsurance

contributions.

Id. at A3634.

Thus, under HHS’s amended the definition of the term

“contributing entity” in the 2013 Final Rule, all selfinsured group health plans—including self-administered

plans—were required to make reinsurance contributions.

Id.

-App. 71aB. Proposed and Final Rules Titled “Patient

Protection and Affordable Care Act; HHS Notice

of Benefit and Payment Parameters for 2015”

In December 2013, HHS issued another proposed rule

seeking comment on, inter alia, the definition of

“contributing entity.” Def.’s Mot. App. 7 (78 Fed. Reg.

72322 (December 2, 2013)) (ECF No. 6-7) (2013 Proposed

Rule). HHS stated in its 2013 Proposed Rule that

“continued study of this issue,” had led it “to believe that

[section 1341] may reasonably be interpreted in one of two

ways.” Id. at A3670. Specifically, HHS explained its belief

that the ACA section 1341 (1) “may be interpreted to mean

that self-insured, self-administered plans must make

reinsurance contributions,” or, (2) alternatively, “may be

interpreted to mean that such plans are excluded from the

obligation to make reinsurance contributions.” Id.

Accordingly, HHS yet again proposed to modify the

definition of “contributing entity” for the 2015 and 2016

plan years, this time to exclude self-insured group health

plans that do not use the services of a third-party

administrator. See id. Consequently, HHS’s 2013

Proposed Rule amended the definition of “contributing

entity” to exclude self-insured group health plans that do

not use a third-party administer (TPA) in connection with

claims processing, adjudication, or enrollment. Id. at

A3670, A3714. However, HHS’s proposed definitional

exclusion for self-insured, self-administered plans from

the contributing entity definition did not apply to the 2014

benefit year. Id. As to why HHS did not apply this

exclusion to the 2014 benefit year, HHS cited “public

policy” explaining:

While, upon further consideration of the issue, we

believe the statutory language can reasonably be read

to support the proposition that self-insured group

-App. 72ahealth plans that do not use third party administrators

for the functions described above should not be

obligated to make reinsurance contributions, we also

recognize, as a public policy matter, that it would be

disruptive to plans and issuers to modify the definition

of “contributing entity” for the 2014 benefit year at

this late date. Health insurance issuers have already

set premiums and developed operational processes

based on the definition of ‘contributing entity’ for the

2014 benefit year at this late date. Health insurance

issuers have already set premiums and developed

operational processes based on the definition of

‘contributing entity’ that was previously finalized in

the 2014 Payment Notice. To prevent lower

reinsurance payments, the contribution rate would

have to be raised for other contributing entities, many

of whom have already set their 2014 premiums based

on the contribution rate finalized in March 2013.

Excluding self-insured, self-administered group

health plans from the set of entities that must provide

reinsurance contributions for the 2014 benefit year,

without raising the rate on other entities, would

decrease the funds available for reinsurance payments

for that benefit year, and thus upset settled estimates

with respect to expected reinsurance payments that

were used to establish premiums.

Therefore, we do not propose to change the

definition of “contributing entity” for the 2014 benefit

year.

Id. at A3671.

Additionally, in its 2013 Proposed Rule, HHS stated

that self-insured plans administered by a third-party

administrator would still be required to make reinsurance

contributions. Id. at A3670. HHS explained that “[a]n

-App. 73ainsured plan and a self-insured plan administered by a

third-party administrator are similar in that each

arrangement involves an employer and an outside

commercial entity—an issuer or a third-party

administrator (which is often an insurance company or an

affiliate)—for the administration of the core health

insurance functions of claims processing and plan

enrollment.” Id. Additionally, HHS noted that,

under section 1341(b)(3)(B) of the Affordable Care Act

and § 153.400(a)(1)(ii), reinsurance contribution

amounts are to reflect a “commercial book of

business.” Our consideration of these comments leads

us to believe that a group health plan administered by

a third party administrator would normally be viewed

as part of the third party administrator’s “commercial

book of business,” but that a self-insured, selfadministered plan would not normally be viewed as

part of an entity’s “commercial book of business.”

Id. As a result, HHS proposed that “contributing entity”

would mean: “(a) A health insurance issuer; or (b) a selfinsured group health plan (including a group health plan

that is partially self-insured and partially insured, where

the health insurance coverage does not constitute major

medical coverage) that uses a third-party administrator in

connection with claims processing or adjudication

(including the management of appeals) or plan

enrollment.” Id. at A3670.

The definition of “contributing entity” in the 2013

Proposed Rule reads as follows:

Contributing entity means—

(1) A health insurance issuer; or

(2) For the 2014 benefit year, a self-insured group

health plan (including a group health plan that is

-App. 74apartially self-insured and partially insured, where the

health insurance coverage does not constitute major

medical coverage), whether or not it uses a third party

administrator; and for the 2015 and 2016 benefit years,

a self-insured group health plan (including a group

health plan that is partially self-insured and partially

insured, where the health insurance coverage does not

constitute major medical coverage) that uses a third

party administrator in connection with claims

processing or adjudication (including the management

of appeals) or plan enrollment. A self-insured group

health plan that is a contributing entity is responsible

for the reinsurance contributions, although it may

elect to use a third party administrator or

administrative services-only contractor for transfer of

the reinsurance contributions.

Id. at A3714. The public comment period on the 2013

Proposed Rule closed on December 26, 2013. Id. at A3652.

On March 11, 2014, HHS published its third and final

rule defining “contributing entity.” See Def.’s Mot. App. 9

(79 Fed. Reg. 13744 (March 11, 2014)) (ECF No. 6-9) (2014

Final Rule). This time, HHS concluded that, although

ACA section 18061 “can reasonably be interpreted in more

than one way with respect to the applicability of

reinsurance contributions to self-insured, selfadministered plans[,] . . . the better reading of section 1341

is that a self-insured, self-administered plan should not be

a contributing entity. . . .” Id. at A4702. HHS explained

that excluding self-administered, self-funded group health

plans from the definition of “contributing entity” was the

better reading because both section 1341(b)(3)(B) of the

ACA and section 153.400(a)(1)(ii) of Title 45 of the United

States Code of Federal Regulations provide that

reinsurance contributions are to reflect a “commercial

-App. 75abook of business,” and a self-administered plan would not

normally be considered part of an entity’s commercial

book of business. See id.

As noted, HHS also advised that, “as a matter of public

policy,” the new definition of “contributing entity” would

only apply prospectively, for 2015 and 2016. 2013

Proposed Rule at A3671. HHS justified its definitional

distinguishment for the 2014 plan year by reasoning that

“making the proposed exemption effective for the 2014

benefit year at this late stage would be disruptive to plans

and issuers that have already set contribution rates and

premiums and could upset settled estimates with respect

to expected reinsurance payments and contribution

obligations.” 2014 Final Rule at A4703.

In response to the 2013 Proposed Rule, several public

commenters had argued that self-insured plans, which did

not use a health insurance issuer as TPAs, should be

exempt from the definition of contributing entity. Id. at

A4703. HHS rejected these arguments and explained its

view that there is no statutory support for this exemption

because “sections 1341(b)(1)(A) and (b)(3)(A) of the

Affordable Care Act only refer[] to issuers and TPAs, and

do[] not distinguish between issuer TPAs and non-issuer

TPAs.” Id. HHS further reasoned that, in contrast to selfadministered plans, plans that are administered by a

third-party administrator would normally be considered

part of a commercial book of business. Id. at A4702. Based

on the statutory language and the commercial nature of

TPAs, HHS concluded that it did not have “the authority

to differentiate between TPAs that are issuers or issuer

affiliates and non-issuer TPAs for purposes of the

exemption.” Id. at A4703.

HHS’s final definition of “contributing entity” in its

2014 Final Rule reads as follows:

-App. 76aContributing entity means—

(1) a health insurance issuer; or

(2) For the 2014 benefit year, a self-insured group

health plan (including a group health plan that is

partially self-insured and partially insured, where the

health insurance coverage does not constitute major

medical coverage), whether or not it uses a third party

administrator; and for the 2015 and 2016 benefit years,

a self-insured group health plan (including a group

health plan that is partially self-insured and partially

insured, where the health insurance coverage does not

constitute major medical coverage) that uses a third

party administrator in connection with claims

processing or adjudication (including the management

of internal appeals) or plan enrollment for services

other than for pharmacy benefits or excepted benefits

within the meaning of section 2791(c) of the PHS Act.

Notwithstanding the foregoing, a self-insured group

health plan that uses an unrelated third party to obtain

provider network and related claim repricing services,

or uses an unrelated third party for up to 5 percent of

claims processing or adjudication or plan enrollment,

will not be deemed to use a third party administrator,

based on either the number of transactions processed

by the third party, or the volume of the claims

processing and adjudication and plan enrollment

services provided by the third party. A self-insured

group health plan that is a contributing entity is

responsible for the reinsurance contributions,

although it may elect to use a third party administrator

or administrative services-only contractor for transfer

of the reinsurance contributions.

-App. 77aId. at 4763; 45 C.F.R. § 153.20 (codifying the definition of

“contributing entity” as announced in the 2014 Final

Rule).

III. Plaintiffs’ Contributions to the TRP

Pursuant to HHS Rules, “[e]ach contributing entity

must make reinsurance contributions annually: at the

national contribution rate for all reinsurance contribution

enrollees, in a manner specified by HHS[.]” 45 C.F.R.

§ 153.400(a). According to HHS, the reinsurance

contribution required from a “contributing entity” during

a benefit year is calculated by multiplying “[t]he number

of covered lives of reinsurance contribution enrollees

during the applicable benefit year for all plans and

coverage described in § 153.400(a)(1) of the contributing

entity” by “[t]he contribution rate for the applicable

benefit year.” 45 C.F.R. § 153.405. Defendant required

Plaintiffs to pay the reinsurance contribution in the

following manner: (1) the contributing entity had to

submit an annual enrollment count of the number of

covered lives of reinsurance contribution enrollees no

later than November 15 of the applicable benefit year; (2)

after submitting the annual enrollment count, HHS then

notified the contributing entity of the amount of the

reinsurance contribution allocated to reinsurance

payments, administrative expenses, and the United States

Treasury for the applicable benefit year; and (3) the

contributing entity remitted reinsurance contributions to

HHS. Compl. ¶ 65 (citing 45 C.F.R. § 153.405).8 For

8 Plaintiffs’ complaint appears to cite to the pre-2016 version of 45

C.F.R. § 153.405. Section 153.405 was amended in 2016, but that

amendment does not appear to have materially altered the TRP

contribution process.

-App. 78abenefit year 2014, Defendant required EWTF, OETF,

and the Stone Masons to pay a contribution of $63 per

covered life—an amount that encapsulated both plan

participants and their dependents. Compl. ¶ 70. For

benefit years 2015 and 2016, Defendant required OETF

and the Stone Masons to pay a contribution of $44 and $27

per covered life, respectively. Compl. ¶ 68. For benefit

years 2015 and 2016, EWTF did not make TRP

contributions. 45 C.F.R. § 153.20.

EWTF paid $865,357.50 to Defendant on January 9,

2015, reflecting its first payment for benefit year 2014.

Compl. ¶ 70. It paid an additional $173,071.50 to

Defendant on November 9, 2015, reflecting a total sum of

$1,038,429 paid for benefit year 2014. Id. OETF remitted

TRP contribution payments to Defendant in the amount

of $142,569 on January 12, 2015; $107,712 on January 8,

2016; and $72,873 on January 10, 2017. Compl. ¶ 71.

Collectively, OETF paid Defendant $323,154 for benefit

years 2014, 2015, and 2016. Compl. ¶ 22. The Stone Masons

remitted TRP contribution payments to Defendant in the

amount of $20,664 on January 14, 2015; $14,476 on

January 14, 2016; and $11,637 on January 13, 2017. Compl.

¶ 72. Collectively, the Stone Masons paid Defendant

$46,777 for benefit years 2014, 2015, and 2016. Compl. ¶

24.

IV. Subsequent Litigation

In June 2016, EWTF filed suit in federal district court

under 28 U.S.C. § 1346(a)(1), challenging HHS’s 2015

assessment of the ACA’s section 1341 on self-insured, selfadministered plans. See Electrical Welfare Trust Fund v.

United States, No. 16-2186, 2017 WL 3116693, *2 (D. Md.

Jul. 21, 2017). The district court dismissed the suit for lack

of jurisdiction and the United States Court of Appeals for

-App. 79athe Fourth Circuit affirmed. Electrical Welfare Trust

Fund v. United States, 907 F.3d 165, 168-70 (4th Cir.

2018).

In 2017, EWTF, Stone Masons, and OETF filed suit in

the United States Court of Federal Claims under alleging

the TRP constituted “an internal-revenue tax illegally

collected under 28 U.S.C. § 1346(a)(1)” and deprived

Plaintiffs of “of property without due process of law or

without just compensation in violation of the Due Process

and/or Takings clauses of the Fifth Amendment of the

United States Constitution.” Operating Engineers Trust

Fund of Washington, D.C., et al. v. United States, No. 17cv-1732, ECF No. 1. On March 6, 2019, the parties in that

case filed a stipulation of dismissal without prejudice

pursuant to Rule 41(a)(1)(A)(ii)—two days before

Plaintiffs filed their complaint in the present action. Id. at

ECF No. 29.

On May 7, 2019, Defendant moved to dismiss Plaintiffs’

complaint for lack of jurisdiction9 and for failure to state a

claim, pursuant to Rules 12(b)(1) and 12(b)(6) of the Rules

of the United States Court of Federal Claims (RCFC), and

alternatively moved for summary judgment. See generally

Def.’s Mot.; Def.’s Reply. On February 27, 2020, this case

was reassigned to the undersigned judge, and

subsequently this Court held oral argument on the

pending motions. See Order Reassigning Case (ECF No.

15).

STANDARD OF REVIEW

To survive a motion to dismiss pursuant to Rule

12(b)(6), “a complaint must contain sufficient factual

9 As noted, Defendant withdrew its Rule 12(b)(1) motion at oral

argument. Def. Reply at 20 n.8; Oral Argument Transcript (ECF No.

21) at 5:13-19.

-App. 80amatter, accepted as true, to ‘state a claim to relief that is

plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,

570 (2007)). The plaintiff also must establish “more than a

sheer possibility that a defendant has acted unlawfully.”

Ashcroft, 556 U.S. at 678. Thus, “[a] pleading that offers

‘labels and conclusions’ or ‘a formulaic recitation of the

elements of a cause of action will not do.’ Nor does a

complaint suffice if it tenders ‘naked assertion[s]’ devoid

of ‘further factual enhancement.”’ Id. (quoting Twombly,

550 U.S. at 555, 557) (citations omitted).

Pursuant to Rule 56, summary judgment is

appropriate only if “there is no genuine dispute as to any

material fact and the movant is entitled to judgment as a

matter of law.” Rule 56(a); see also Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 247-49 (1986). A “genuine”

dispute is one that “may reasonably be resolved in favor

of either party,” and a fact is “material” if it might

significantly alter the outcome of the case under the

governing law. Anderson, 477 U.S. at 248, 250. In

determining the propriety of summary judgment, a court

will not make credibility determinations and will draw all

inferences in favor of the non-moving party. See

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475

U.S. 574, 587-88 (1986).

DISCUSSION

Pursuant to the Tucker Act, this Court’s primary

jurisdictional statute, “[t]he United States Court of

Federal Claims shall have jurisdiction to render judgment

upon any claim against the United States founded . . . upon

the Constitution, . . . or for liquidated or unliquidated

damages in cases not sounding in tort.” 28 U.S.C.

§ 1491(a). “When the government expropriates property,

a plaintiff can obtain relief under either a Takings theory

-App. 81aor an illegal-exaction theory . . . but not both.” Reid v.

United States, 148 Fed. Cl. 503, 528 (2020) (citing Orient

Overseas Container Line (UK) Ltd. v. United States, 48

Fed. Cl. 284, 289 (2000); Figueroa v. United States, 57

Fed. Cl. 488, 496 (2003), aff’d, 466 F.3d 1023 (Fed. Cir.

2006)). The Tucker Act grants this Court jurisdiction over

an “illegal exaction” involving money “improperly paid,

exacted, or taken from the claimant in contravention of the

Constitution, a statute, or a regulation.” Eastport S.S.

Corp. v. United States, 372 F.2d 1002, 1007 (Ct. Cl. 1967);

see also Aerolineas Argentinas v. United States, 77 F.3d

1564, 1574 (Fed. Cir. 1996) (finding that an agency’s

imposition of fees was not authorized because it was based

on an interpretation of a regulation that was contrary to

the authorizing statute). Conversely, “Takings claims

arise because of a deprivation of property that is

authorized by law.” Orient Overseas Container Line (UK)

Ltd., 48, Fed. Cl. at 289 (citing Dureiko v. United States,

209 F.3d 1345, 1359 (Fed. Cir. 2000)); see also Tabb Lakes,

Ltd. v. United States, 10 F.3d 796, 802 (Fed. Cir. 1993)

(“[A] claimant must concede the validity of the

government action which is the basis of the taking claim to

bring suit under the Tucker Act[.]”).

Therefore, this Court must determine whether HHS’s

inclusion of Plaintiffs within the definition of “contributing

entity” is contrary to statute before it may reach Plaintiffs’

Takings claims.

I. EWTF’s Illegal Exaction Claim

The central question underlying Plaintiffs’ illegal

exaction claims is whether Congress intended for

Plaintiffs to make transitional reinsurance contributions

under 42 U.S.C. § 18061. To determine whether HHS’s

regulation was contrary to statute, the Court is required

-App. 82ato apply the familiar framework found in Chevron, U.S.A.,

Inc. v. Natural Resources Defense Council, Inc., 467 U.S.

837 (1984).

The first question under Chevron is “whether

Congress has directly spoken to the precise question at

issue.” Id. at 842. If, after the Court exhausts the

“traditional tools of statutory construction,” the intent of

Congress is clear, “that is the end of the matter.” Id. at

837, 842-43, 843 n.9. If, however, the statute “is silent or

ambiguous with respect to the specific issue,” id. at 843,

the Court must proceed to the second prong of Chevron,

under which the Court must “defer to the agency’s

interpretation if ‘the agency’s answer is based on a

permissible construction of the statute.’” Cathedral

Candle Co. v. U.S. Int’l Trade Commission, 400 F.3d 1352,

1362 (Fed. Cir. 2005) (quoting Chevron, 467 U.S. at 843).

In determining whether it was permissible for HHS to

include EWTF’s self-insured, self-administered ERISA

Fund within the definition of contributing entity, this

Court must begin with the text of the statute. See Jimenez

v. Quarterman, 555 U.S. 113, 118 (2009); Lamie v. U.S.

Trustee, 540 U.S. 526, 534, (2004); Greyhound Corp. v. Mt.

Hood Stages, Inc., 437 U.S. 322, 330 (1978); Strategic

Hous. Fin. Corp. of Travis Cty. v. United States, 608 F.3d

1317, 1323 (Fed. Cir. 2010). “If the statutory language is

plain, [the Court] must enforce it according to its terms.”

King v. Burwell, 576 U.S. at 474. “[W]hen deciding

whether the language is plain, [the Court] must read the

words in their context and with a view to their place in the

overall statutory scheme.” Id. (quotations omitted).

Moreover, the court ‘“must give effect, if possible, to every

clause and word of a statute.’” Parker Drilling Mgmt.

Servs., Ltd. v. Newton, 139 S. Ct. 1881, 1890 (2019)

(quoting Loughrin v. United States, 573 U.S. 351, 358

-App. 83a(2014)); see also Advocate Health Care Network v.

Stapleton, 137 S. Ct. 1652, 1659 (2017) (“each word

Congress uses is there for a reason”) (citing A. Scalia & B.

Garner, Reading Law: The Interpretation of Legal Texts

174–179 (2012)). “If Congress has expressed its intention

by clear statutory language, that intention controls and

must be given effect.” Rosete v. Office of Pers. Mgmt., 48

F.3d 514, 517 (Fed. Cir. 1995); accord Conn. Nat'l Bank v.

Germain, 503 U.S. 249, 253-54 (1992) (“[C]ourts must

presume that a legislature says in a statute what it means

and means in a statute what it says there.”).

Defendant argues that the term in section

18061(b)(1)(A), “third party administrators on behalf of

group health plans,” does not directly address the

contribution obligation of self-insured group health plans.

Def.’s Mot. at 21-22. Specifically, Defendant argues that

“on behalf of” could be reasonably interpreted to mean “a

self-insured group health plan is ultimately responsible

for the reinsurance contributions, even though it may elect

to use a TPA or ASO to transfer reinsurance

contributions.” See Def.’s Mot. at 21-22 (citing A3565,

A2027); see also Ohio v. United States, 154 F. Supp. 3d

621, 625 (S.D. Ohio 2016) (finding that “Congress intended

for all group health plans, including those operated by

state or local governments, to pay into the Transitional

Reinsurance Program.”) aff’d 849 F.3d 313, 318-322 (6th

Cir. 2017) (holding that the TRP applies to state-provided

group health insurance plans). In other words, according

to Defendant, the term “on behalf of” could purportedly

indicate that a third-party administrator was merely a

“conduit” and the statutory contribution obligations ran to

the group health plan regardless if the plan was selfadministered or used a third-party administrator. Def.’s

Mot at 22 (citing A3565 (“Although self-insured group

health plans are ultimately liable for reinsurance

-App. 84acontributions,

a

third-party

administrator

or

administrative-services only contractor may be utilized

for transfer of the reinsurance contributions.”)); see also

Def.’s Reply at 10-20. Defendant argues that HHS’s

interpretation of section 18061 requiring all group health

plans to contribute to the program, is therefore

permissible. Def.’s Reply at 10-20. This Court finds that

HHS has warped Congress’s plain language, likely as a

means to its own ends.

The plain language of section 18061(b)(1)(A) requires

“health insurance issuers, and third-party administrators

on behalf of group health plans . . . to make [reinsurance

contributions].” A presumption exists that each word

Congress uses in a statute is there for a reason. See

Advocate Health Care Network, 137 S. Ct. at 1659 (citing

A. Scalia & B. Garner, Reading Law: The Interpretation

of Legal Texts 174–179 (2012)). Defendant’s

interpretation is in complete contravention of that wellestablished tenet of statutory interpretation and

effectively reads “third party administrators” out of the

statute. If Congress meant that all group health plans

would pay the TRP, it could have easily omitted its thirdparty administrator qualifier. Indeed, when Congress has

meant to regulate self-administered group health plans, it

has done so specifically. For instance, 42 U.S.C.

§ 1395y(b)(7)(A) explicitly identified when statutory

duties applied to both an “entity serving as an insurer or

third party administrator for a group health plan” and “a

group health plan that is self-insured and selfadministered. . . .” “If Congress has expressed its

intention by clear statutory language, that intention

controls and must be given effect.” Rosete, 48 F.3d at 517;

accord Conn. Nat'l Bank, 503 U.S. at 253-54 (“[C]ourts

must presume that a legislature says in a statute what it

-App. 85ameans and means in a statute what it says there.” (cleaned

up)).

It is also telling that HHS itself ultimately concluded

“that the better reading of section 1341 is that a selffunded, self-administered plan should not be a

contributing entity.” 2014 Final Rule at A4702.

Notwithstanding its express acknowledgment, HHS

maintained “as a matter of public policy,” that the its

revised definition of “contributing entity” would only

apply prospectively, for the 2015 and 2016 plan years,

because “making the proposed exemption effective for the

2014 benefit year at this late stage would be disruptive to

plans and issuers that have already set contribution rates

and premiums, and could upset settled estimates with

respect to expected reinsurance payments and

contribution obligations.” Id. at A4703. Although HHS

acknowledged that its interpretation was not a natural

reading of the statute, HHS would not correct its previous

interpretation to apply to the 2014 plan year because it

had already relied on that erroneous interpretation and

reversing course to adhere to the plain language of the

statute would be administratively difficult. This Court is

not aware of an exception that would permit an agency to

rewrite the law for plan year 2014 based on such

purported administrative difficulties. HHS did not have

authority to ignore the plain language of the statute in the

name of public policy or administrative efficiency. See

Util. Air Regulatory Grp. v. E.P.A., 573 U.S. 302, 325

(2014) (“An agency has no power to ‘tailor’ legislation to

bureaucratic policy goals by rewriting unambiguous

statutory terms.”). This is especially true where, as here,

HHS itself caused the “public policy” (or administrative

difficulties) concern through its own admittedly erroneous

interpretation.

-App. 86aDefendant’s reliance on Ohio v. United States, a case

involving TRP fees, is not persuasive. In Ohio, the State

of Ohio challenged TRP fees as applied to include state

and local entities. 154 F. Supp. 3d at 627-28. The district

court held HHS did not err in requiring Ohio to pay a TRP

fee because states and localities were included in the

definition of “group health plans.” In rejecting Ohio’s

challenge, the court explained that “[p]ut simply,

Congress intended for all group health plans, including

those operated by state and local governments, to pay into

the Transitional Reinsurance Program.” Id. at 625

(emphasis omitted). In a footnote, the district court stated

Although § 18061(b)(1)(A) states that “third party

administrators[,] on behalf of group health plans, are

required to make payments,” HHS has interpreted

this provision to mean that group health plans

themselves are liable for the contributions, “although

[the plans] may elect to use a third-party

administrator . . . for transfer of the reinsurance

contributions.” 45 C.F.R. § 153.20. This interpretation

makes inherent sense given the simple fee-shifting

that would occur were the rule otherwise.

Id. at 635 n.5.

This Court is not bound by the dicta in a district court

decision. See Camreta v. Greene, 563 U.S. 692, 709 n.7

(2011). Indeed, the argument that self-administered plans

are not required to pay the TRP fee was not before the

district court in that case. In Ohio v. United States, the

United States District Court for the Southern District of

Ohio addressed, inter alia, “whether Congress intended

the Transitional Reinsurance Program to apply to state

and local governments that offer qualifying group health

plans . . . .” 154 F. Supp. 3d at 628. But to the extent the

Ohio district court held that section 1341 of the ACA

-App. 87aapplies to all group health plans such a holding effectively

reads “third party administrator on behalf of” out of the

statute. As noted, HHS’s purported “policy concerns,”

including concerns over “fee-shifting,” do not trump the

plain meaning of the statutory text. See Util. Air

Regulatory Grp., 573 U.S. at 325. Indeed, as HHS

expressly acknowledged in its 2014 Final Rule, it would

also make inherent sense for Congress to exclude group

health plans that did not use a third-party administrator

because these entities had little to no connection to the

commercial healthcare market. 2014 Final Rule at A4702

(“[T]he better reading of section 1341 is that a self-funded,

self-administered plan should not be a contributing

entity.”).

As EWTF clearly alleged that it is a self-funded, selfadministered plan that does not use a third-party

administrator, Defendant’s motion dismiss EWTF’s

illegal exaction claim must be denied.

II. OETF’s and Stone Masons’ Illegal Exaction Claims

OETF and Stone Masons allege that their TRP

contribution respective payments for benefit years 2014,

2015, and 2016 constituted an illegal exaction because

HHS’s definition of “contributing entity” exceeded its

statutory authority and was an unreasonable

interpretation of 42 U.S.C. § 18061. See generally Compl

¶¶ 105-111.

In analyzing OETF’s and Stone Masons’ illegal

exaction claims, the Court must again begin with the plain

language of the statute. Plaintiffs argue that section

18061(b)(1)(A) applies only to health insurance issuers and

commercial issuers acting as administrators and because

OETF and Stone Masons’ third-party administrators are

not also health insurers. Pls.’ Resp. at 27-28.

-App. 88aThis argument is unavailing. Nothing in the statute

precludes HHS from calculating fees for group health

plans administered by an ASO. The statute does not

differentiate between third-party administrators, which

are also health insurance issuers, and those third-party

administrators, which are not. Moreover, section

18061(b)(3)(A) explicitly grants authority to HHS to

establish a specific method to calculate the reinsurance

contribution fee for group health plans which use a thirdparty administrator. Section 18061(b)(3)(A) states that

“contribution amount[s] for any plan year may be based

on the percentage of revenue of each issuer and the total

costs of providing benefits to enrollees in self-insured

plans . . . .” 42 U.S.C. § 18061 (emphasis added). The

statute’s reference to “self-insured plans” in the context of

section 18061(b)(3)(A)’s general instruction for calculating

reinsurance contributions clearly indicates Congress’s

intention to subject self-insured plans that use a thirdparty administrator to reinsurance contributions.

Plaintiffs next contend that section 18061’s reference

to “commercial book of business” and NAIC indicates that

Congress intended TRP to apply to health insurance

issuers. Pls.’ Resp. at 7, 30-31. While section 18061

indicates that Congress placed emphasis on health

insurance issuers, section 18061’s reference to a

“commercial book of business” or to NAIC does not

prohibit HHS from defining “contributing entity” to

include self-insured group health plans. That Congress

mandated more detailed instructions for health insurance

issuers does not nullify section 18061(b)(1)(A)’s and

18061(b)(3)(A)’s references to group health plans that use

a third-party administrator.

Next, Plaintiffs contend that HHS’s interpretation was

unreasonable because, under 42 U.S.C. § 18061(b)(1)(B),

-App. 89aonly commercial health insurers could receive reinsurance

payments. Pls.’ Resp. at 1, 7-9, 18-19, 37-38. However, the

plain language of section 18061 clearly permitted HHS to

collect reinsurance contributions from self-insured group

health plans while providing for only health insurance

issuers to receive funds from the TRP. Section

18061(b)(1)(A) requires “health insurers issuers[] and

third party administrators on behalf of group health

plans” to contribute to the TRP. In the very next

subparagraph, section 18061(b)(1)(B), mandates that only

“health insurance issuers . . . that cover high risk

individuals in the individual market” are eligible to receive

payments out of the TRP fund. The proximity of these

provisions indicates that Congress intended to define

contributing entities differently than those entities that

were eligible to receive TRP funds. See Comm’r v. Lundy,

516 U.S. 235, 250 (1996) (“The interrelationship and close

proximity of these provisions of the statute presents a

classic case for application of the normal rule of statutory

construction that identical words used in different parts of

the same act are intended to have the same meaning.”

(internal quotations and citations omitted)). It is wellestablished, as the Supreme Court has observed, “[w]here

Congress includes particular language in one section of a

statute but omits it in another section of the same Act, it

is generally presumed that Congress acts intentionally

and purposely in the disparate inclusion or exclusion.”

Russello v. United States, 464 U.S. 16, 23 (1983) (citing

United States v. Wong Kim Bo, 472 F.2d 710, 722 (5th Cir.

1972)); see also Heino v. Shinseki, 683 F.3d 1372, 1379

(Fed. Cir. 2012) (endorsing the Russello principle). As the

statute at issue does not prohibit HHS from including

Stone Masons and OETF funds within the definition of

“contributing entity,” this Court cannot find that HHS

acted contrary to section 18061’s plain language when

-App. 90aHHS defined “contributing entity” to include health care

groups using ASO third-party administrators.

Nor is Plaintiffs’ reliance on legislative history

persuasive. In its opposition to Defendant’s motion,

Plaintiffs cite (1) the September 2009 Senate Finance

Committee Mark of the America’s Healthy Future Act of

2009, which Plaintiffs contend contained base text of what

would later become ACA section 1341, and (2) June 2014

testimony before the House of Representatives by Mandy

Cohen, Acting Deputy Administrator of HHS and

Director of the Center for Consumer Information and

Insurance Oversight. Pls.’ Resp. at 33.

In September 2009, the Senate Finance Committee

released the Chairman’s Mark of the America’s Healthy

Future Act of 2009. Compl. ¶ 46 (citing Legislation, H.R.

3590: Patient Protection and Affordable Care Act of 2009,

THE UNITED STATES SENATE COMMITTEE ON

FINANCE,

http://www.finance.senate.gov/legislation/

details/hr-3590; Chairman’s Mark, America’s Healthy

Future Act of 2009, THE UNITED STATES SENATE

COMMITTEE

ON

FINANCE

https://

www.finance.senate.gov/imo/media/doc/091609%20Ameri

cas_Healthy_Future_Act.pdf (last visited Mar. 5, 2019).

The Chairman’s Mark stated:

[a]s a condition of issuing commercial, major medical

health insurance policies or administering benefit

plans for major medical coverage in years 2013, 2014,

and 2015, all health insurance issuers would be

required to contribute to a reinsurance program for

individual policies that is [sic] administered by a nonprofit reinsurance entity that would function as

described below.

Pls.’ Resp. at 31 (emphasis omitted) (citing Compl. ¶ 46).

The Chairman’s Mark also stated that the “requirement

-App. 91awould be enforced at the state level” and the “National

Association of Insurance Commissioners (NAIC) would

be directed to develop a model for states to adopt.” Id

(citing Compl. ¶¶ 36 n.10, 47. The Chairman’s Mark

further provided “[t]he contribution amount must

proportionally reflect each entity’s fully insured

commercial book of business for all major medical

products and third-party administrators (TPA) fees (e.g.,

based on percentage of revenue or flat, per enrollee

amount).” Id. (citing Compl. ¶ 47). Plaintiffs note that

there is no discussion in the Chairman’s Mark of noncommercial employee benefits. Pls.’ Resp. at 32.

In June 2014, Mandy Cohen, Acting Deputy

Administrator of HHS, testified before the House

Committee on Oversight and Government Reform that

the intent of the TRP was “to help provide stability in the

health insurance market as the Affordable Care Act

extends new benefits to consumers” and “encouraging

issuers to participate in the Marketplace and compete on

price and quality.” Compl. ¶ 44.10

“[L]egislative history is not the law.” Epic Sys. Corp.

v. Lewis, 138 S. Ct. 1612, 1631 (2018). The Constitution

establishes specific procedures for the enactment of

statutes. See U.S. Const. Art. I, § 7, cls. 2, 3. Statements

10

Testimony by Mandy Cohen M.D., Acting Deputy

Administrator and Director Center for Consumer Information and

Insurance Oversight Centers for Medicare & Medicaid Services U.S.

Department of Health and Human Services (HHS) on The

Affordable Care Act’s Premium Stabilization Programs:

Reinsurance, Risk Corridors, and Risk Adjustment before

Committee on Oversight & Government Reform United States House

of Representatives (June 18, 2014), https://docs.house.gov/

meetings/GO/GO28/20140618/102420/HHRG-113-GO28-Transcript20140618.pdf.

-App. 92amade by legislators whether made on the floor or in a

committee report are not subject to bicameralism and

presentment. See INS v. Chadha, 462 U.S. 919, 946-52

(1983). The legislature acts as a collective and the

enactment of a law often represents a compromise

between individual legislators and between individual

legislators and the president. The Court’s reliance on

statements made by individual legislators and committees

“would demean the constitutionally prescribed method of

legislating to suppose that its elaborate apparatus for

deliberation on, amending, and approving a text is just a

way to create some evidence about the law, while the real

source of legal rules is the mental processes of

legislators.” Matter of Sinclair, 870 F.2d 1340, 1344 (7th

Cir. 1989) (Easterbrook, J.). This Court accordingly looks

to the plain language of the statute and not to legislative

history when conducting its interpretation.

Even if this Court were to consider the legislative

history cited by Plaintiffs, there is nothing in the

legislative history to suggest that Congress clearly

intended for section 18061 to only apply to those entities.

Azar v. Allina Health Svcs., 139 S. Ct. 1804, 1814 (2019)

(“And even those of us who believe that clear legislative

history can ‘illuminate ambiguous text” won’t allow

‘ambiguous legislative history to muddy clear statutory

language.’” (internal citation omitted)).

The Court’s analysis must, therefore, proceed to

Chevron step two, in which the Court should defer to

HHS’s interpretation of section 18061(b) as long as it

“represents a reasonable accommodation of conflicting

policies that were committed to the agency’s care by the

statute. . . .” Chevron, 467 U.S. at 845 (internal quotations

and citation omitted).

-App. 93aPlaintiffs argue that HHS’s interpretation of section

18061(b) is unreasonable because according to Plaintiffs,

Stone Masons and OETF were not part of the problem

Congress sought to fix through the TRP. Specifically,

Plaintiffs argue that the TRP was designed “to help

stabilize premiums for coverage in the individual market

during the first 3 years of operation of an Exchange . . .

when the risk of adverse selection related to new rating

rules and market changes [was] greatest.” Pls.’ Resp. at

30 (quoting 42 U.S.C. § 18061(c)(1)(A)); see also Compl. ¶¶

6, 38. Plaintiffs argue that “ERISA Funds do not collect

premiums, do not operate in the individual market, and

are not sold on the ACA’s exchanges, they neither affect

nor are affected by the problem the TRP was designed to

address.” Pls.’ Resp. at 30 (citing

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