Amicus Curiae Brief — United States Shoe Corp. v. United States

a - ais epee

en ee A RE

Suprome Court, US.

LC i

No. 02-1221 APR 23 2003

IN THE CLERK

Supreme Court of the United States

UNITED STATES SHOE CORP.,

Petitioner,

v,

UNITED STATES OF AMERICA,

Respondent.

On PETITION FOR A WRIT OF CERTIORARI TO THE

Unitep STATES Court OF APPEALS

FOR THE FEDERAL CIRCUIT

BRIEF OF AMICUS CURIAE AMERICAN ASSOCIATION

OF EXPORTERS AND IMPORTERS

IN SUPPORT OF THE PETITIONER

STEVEN H. BECKER

Counsel of Record

PauL A. Horowitz

CoubDerT BrotHers LLP

1114 Avenue of the Americas

New York, NY 10036-7703

(212) 626-4400

Counsel for Amicus Curiae _

180402 ce

COUNSEL PRESS

(800) 274-3321 * (800) 359-6859

i

TABLE OF CONTENTS

Page

TABLE OF CITED AUTHORITIES ............ lil

INTEREST OF AMICUS CURIAE .............. 1

SUMMARY OF THE ARGUMENT ............ 2

Pt ee eee ee rer rere ere roe 4

I. The Government’s Immunity From The

Payment Of Interest Is Inapplicable When

Interest Is Required Under The Constitution.

PPE eT Ter ee ee ee ere ee ae 4

II. Interest On Refunds Of Unconstitutionally

Exacted Harbor Maintenance Taxes Is

Required To Fulfill The “Letter and Spirit”

COP EMS BRONTE CAINE, 6. obese eseccsess 5

A. This Court Has Made Clear That The

Export Clause Should Be Construed

Broadly To Ensure That Congress

Neither Burdens Exports Nor Benefits

Financially By Taxing Them. ........ 5

B. The Federal Circuit’s Denial Of Interest

Based Upon A Narrow Reading Of The

Export Clause Is Contrary To This

Court’s Construction Of The Clause And

Enables Congress To Thwart The

ge eee ee 7

it

Contents

Page

C. The Federal Circuit’s Narrow Reading

Of The Export Clause Cannot Be

Reconciled With This Court’s Broad

Reading Of The Clause In Its 1996 JBM

Decision Or Its Decision In U.S. Shoe I.

See OTF HHEKRERSEDC SECA CEOS 22 OT Se 28 re ee

11

D. A Lower Court’s Award Of Interest To

Federal Judges Under The Compensation

Clause Persuasively Illustrates That The

Rationale For Interest May Be Extended

To Certain Constitutional Provisions

Other Than The Takings Clause. ..... 12

CUNCLAIGIRN 0 055+4deceeeres tae eee ss 15

TABLE OF CITED AUTHORITIES

Page

Cases:

Boston Sand & Gravel Co. v. United States,

8k A So.) Se ee eee 4,5

Brown vy. United States, 105 F.3d 621 (Fed. Cir. 1997)

ig at ce pu a eee Rw Kee 10

Fairbank v. United States, 181 U.S. 283 (1901) ...

Eee anes ss ohh weeny 2, 3, 6, 7, 8, 9, 10

Harvey v. United States, 113 U.S. 243 (1885) ..... 4

Hatter y. United States, 38 Fed. Cl. 166 (1997) ...13, 14

Jacobs v. United States, 290 U.S. 13 (1933) ...... 5

LeBlanc v. United States, 50 F.3d 1025

oe) ee ee 10

Library of Congress v. Shaw, 478 U.S. 310 (1986)

BPS aS Sos EER ENT MO ERRSE EH F408 ENO 4,5

Michelin Tire Corp. v. Wages, 423 U.S. 276 (1976)

hey bb kone s 4S tRN Se Wak 48> 12

Monongahela Navigation Co. v. United States,

SE PEE COED 55 coer ec ewadevebedevers 2, 8,9

Seaboard Air Line Ry. Co. v. United States,

Re. 5 ss) eee ee 8,9

iv

Cited Authorities

Page

Smyth v. United States, 302 U.S. 329 (1937) ...... 4

Terran v. Secretary of Health and Human Serv.,

195 F.3d 1302 (Fed. Cir. 1999) .............. 10

United States v. Alcea Band of Tillamooks,

ee Sec EE. 665 450s Sn ee eee 4,5

United States v. Connolly, 716 F.2d 882

err Pere ree er 10

United States v. Hatter, 532 U.S. 557 (2001) ..... 13

United States v. International Bus. Mach. Corp.,

eg Ss ee. ere ee rere rer 11, 12

United States v. Louisiana, 446 U.S. 253 (1980) .. 4

United States v. North American Transp. & Trading

CAs Bae a SERED 2 0 oe oe penne wcnnans 4

United States v. Sherman, 98 U.S. 565 (1878) .... 4

United States v. United States Shoe Corp.,

ee et) Pere eee ere e ere 2, 5, 11, 12

'Inited States ex. rel. Angarica v. Bayard,

reese Me) ere rere rrr. a 4

United States Shoe Corp. v. United States,

296 F.3d 1378 (Fed. Cir. 2002) ...... 2, 7, 11, 13, 14

Vv

Cited Authorities

Page

United States Constitution:

Commerce Clause

U.S. Const. art. I, § 8, cl. 3.6... eee eee eres 12

Compensation Clause

U.S. Const. art. IT, §,1 ....--- eee eee 12, 13, 14

Export Clause

U.S. Const. art. 1, §9, cl. 5 0.2 eee eee reece passim

Import-Export Clause

U.S. Const. art. I, § 10, cl.2 ...---- eee reese 11, 12

Takings Clause

U.S. Const. amend. V .....---- see e eer tecee passim

Miscellaneous:

Max Farrand, The Records of the Federal Convention

of 1787 (rev. ed. 1966) ....-+---sseeerereee: 6

Joseph Story, Commentaries on the Constitution of

the United States (1833) ....---+-+eeeeereees 6, 10

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INTEREST OF AMICUS CURIAE

The American Association of Exporters and Importers

(“AAEI”), by its filing of this brief as amicus curiae,

respectfully urges this Court to grant the petition for a writ

of certiorari.’

Founded in 1921, AAEI is a national association of

over 1,000 U.S. firms that are involved in exporting

products from, and importing products into, the United States.

AAEI’s member companies export, import, distribute and

manufacture a broad range of products, including chemicals,

electronics, machinery, footwear, automobiles and parts,

food, household consumer goods, toys, specialty items,

textiles and apparel. In addition, many organizations serving

the international trade community, including customs

brokers, freight forwarders, banks, attorneys, insurance firms

and carriers, are active members of AAEI.

AAEI is often called upon by Congressional committees

to offer its technical expertise on policy and regulatory

matters impacting global commerce. The Association and

its member companies have an abiding interest in U.S.

laws affecting international trade and their adherence to

the Constitution. This case is significant for AAEI because

many of its exporter members have obtained refunds of

unconstitutionally exacted Harbor Maintenance Taxes

1. Petitioner has filed a global consent to the submission of

amicus curiae briefs in support of either party, which is on file with

the Clerk. Respondent’s letter consenting to the filing of this brief

accompanies this filing. No counsel for a party authored this brief in

whole or in part, and no person or entity, other than the amicus curiae,

its members, or its counsel, made a monetary contribution to the

preparation or submission of this brief.

2

(“HMT”) under this Court’s decision in United States v.

United States Shoe Corp., 523 U.S. 360 (1998), but have

been denied interest on those refunds based on the decision

of the United States Court of Appeals for the Federal Circuit

below, in United States Shoe Corp. v. United States, 296 F.3d

1378 (Fed. Cir. 2002).

While AAEI endorses all of the arguments raised by U.S.

Shoe in its petition, it confines its discussion in this brief to

the Export Clause of the Constitution as a basis for interest

on HMT refunds.

SUMMARY OF THE ARGUMENT

The United States’ general immunity from the payment

of interest absent a waiver of sovereign immunity to such an

award does not apply when the Government is required to

pay interest under the Constitution.

This Court has consistently held that the Takings Clause

of the Fifth Amendment requires the payment of interest, a

result grounded in this Court’s underlying determination that

“just compensation” for a governmental taking of private

property must be the “full and perfect equivalent for the

property taken.” Monongahela Navigation Co. v. United

States, 148 U.S. 312, 326 (1893). That determination is itself

a reflection of the fact that the restriction on Congress’ power

contained in the Takings Clause “must be enforced according

to its letter and spirit and to the full extent.” Fairbank v.

United States, 181 U.S. 283, 301 (1901).

This Court has similarly emphasized that the restriction

in the Export Clause — “No Tax or Duty shall be laid on

Articles exported from any State” — “should be enforced in

3

accordance with its letter and spirit,” Fairbank, 181 U.S. at

290, with the “aim[] ever to show fidelity to the * * *

purpose” of this provision. /d. at 289. A Government response

to a violation of the Export Clause that consists of a refund

of tax principal as required under the Clause, but without

interest, violates the letter and spirit of the Export Clause no

less than a Government payment without interest violates

the letter and spiiit of the Takings Clause.

The Export Clause was intended to ensure (1) “that

exports should not be made a source of revenue to the

National Government,” and (2) “that the National

Government should put nothing in the way of burden upon

such exports.” Fairbank, 181 U.S. at 292-93. Application of

the no-interest presumption violates both purposes, as this

case profoundly illustrates. Although refunds of the HMT

principal were issued following this Court’s unanimous

decision, earlier in this case, that the tax violated the Export

Clause, exporters have borne the burden of $700 million in

lost interest on sums that should never have been taxed in

the first place, while the Government has retained millions

of dollars in interest that it earned on the HMT. Thus, the

Federal Circuit’s decision allows the Government to extract

what amounts to interest-free loans from exporters — a clear

subversion of the letter and spirit of the Export Clause.

Accordingly, review by this Court of the Federal Circuit’s

decision is necessary.

|

4

ARGUMENT

I. The Government’s Immunity From The Payment Of

Interest Is Inapplicable When Interest Is Required

Under The Constitution.

Generally speaking, the United States is immune from a

requirement to pay interest unless Congress has waived its

sovereign immunity to such an award separate from a general

waiver of immunity to suit. See, e.g., library of Congress v.

Shaw, 478 U.S. 310, 314 (1986). However, as this Court has

observed, the “no-interest” rule does not apply when the

Government is required to pay interest under the Constitution.

E.g., id. at 317 (“Apart from constitutional requirements, in

the absence of specific provision by contract or statute, or

‘express consent * * * by Congress,’ interest does not run on

a claim against the United States.”) (emphasis added)

(quoting United States v. Louisiana, 446 U.S. 253, 264-65

(1980), quoting Smyth v. United States, 302 U.S. 329, 353

(1937)). Indeed, although this Court has previously denied

requests for interest on the ground that the Government did

not waive its immunity,’ none of those cases involved a

violation by the Government of a constitutional provision.

No provision of the Constitution expressly requires the

payment of interest. This Court, nonetheless, has consistently

held that a waiver of immunity from interest is unnecessary

2. E.g., Shaw, 478 U.S. at 323; United States v. Louisiana, 446

U.S. at 264-65; United States v. Alcea Band of Tillamooks, 341 U.S.

48, 49 (1951); Boston Sand & Gravel Co. v. United States, 278 U.S.

41, 47 (1928); United States v. North American Transp. & Trading

Co., 253 U.S. 330, 335-36 (1920); United States ex rel. Angarica v.

Bayard, 127 U.S. 251, 260 (1888); Harvey v. United States, 113 U.S.

243, 249 (1885); United States v. Sherman, 98 U.S. 565, 568 (1878).

$

under the Takings Clause of the Fifth Amendment, which

provides, “nor shall private property be taken for public use,

without just compensation.” U.S. Const. amend. V. See, é.g.,

Jacobs v. United States, 290 U.S. 13, 16-17 (1933) (citing

cases). Despite dicta in a few cases that the Takings Clause

is the only constitutional provision whose violation gives

rise to interest,? this Court has never held that the

Government’s immunity from interest extends to other

provisions of the Constitution, let alone a violation of

the Export Clause, whose “simple, direct, unqualified

prohibition on any taxes or duties distinguishes it from other.

constitutional limitations on governmental taxing authority.”

United States v. United States Shoe Corp., 523 U.S. 360, 368

(1998) (“U.S. Shoe I’’). The Federal Circuit’s decision, which

extends the Government’s immunity from interest to the

Export Clause, radically undercuts the unqualified protection

that the Framers afforded exports by virtue of this Clause,

and it should therefore be reviewed by this Court.

II. Interest On Refunds Of Unconstitutionally Exacted

Harbor Maintenance Taxes Is Required To Fulfill The

“etter and Spirit” Of The Export Clause.

A. This Court Has Made Clear That The Export

Clause Should Be Construed Broadly To Ensure

That Congress Neither Burdens Exports Nor

Benefits Financially By Taxing Them.

The Export Clause states: “No Tax or Duty shall be laid

on Articles exported from any State.” U.S. Const. art. I, § 9,

cl. 5. The inclusion of the Export Clause in the Constitution

was one of the most important and actively debated issues

3. See Shaw, 478 U.S. at 317 & n.5; Tillamooks, 341 U.S. at

49; Boston Sand, 278 U.S. at 47.

6

at the Constitutional Convention of 1787. “We know

historically that it was one of the compromises which entered

into and made possible the adoption of the Constitution.”

Fairbank y. United States, 181 U.S. 283, 290 (1901).

Several delegates refused to vote in favor of the

Constitution if the Clause was not included. See Madison’s

Notes of Debates in the Federal Convention, reproduced in

2 Max Farrand, The Records of the Federal Convention of

1787, at 95, 360 (rev. ed. 1966). Others declared that they

would vote to grant Congress the power to tax only if exports

were exempted entirely. See id. at 305-06. Despite opposition,

id. at 223, and attempts to limit the exemption, id. at 359-

63, the Export Clause was adopted as an absolute prohibition

against any tax or duty on exports. See id. at 220 (“the hands

of the Legislature were absolutely tied * * * — exports could

not be taxed”’) (statement of Rufus King of Massachusetts);

2 Joseph Story, Commentaries on the Constitution of the

United States § 1011, at 470 (1833) (“Story Commentaries’’)

(“The power is, therefore, wholly taken away to intermeddle

with the subject of exports.”’).

Thus, over a century ago, this Court observed that

the purpose of the restriction is that exportation,

all exportation, shall be free from national burden.

* * * [I]t is clear that the framers of the

Constitution intended not merely that exports

should not be made a source of revenue to the

National Government, but that the National

Government should put nothing in the way of

burden upon such exports.

Fairbank, 181 U.S. at 292-93. The Fairbank Court

emphasized that this “restriction on the power uf Congress

TT a

7

* * * should be enforced in accordance with its letter and spirit,

and no legislation can be tolerated which, although it may not

conflict with the letter, destroys the spirit and purpose of the

restriction imposed.” Jd. at 290.

B. The Federal Circuit’s Denial Of Interest Based

Upon A Narrow Reading Of The Export Clause Is

Contrary To This Court’s Construction Of The

Clause And Enables Congress To Thwart The

Framers’ Intent.

Ignoring this Court’s admonition that the Export Clause

should be enforced with its purpose kept squarely in mind, the

Federal Circuit interpreted the Export Clause narrowly and held

that, even though “a violation of the Export Clause requires a

return of the money excised,” it does not require the payment

of interest. United States Shoe Corp. v. United States, 296 F.3d

1378, 1385 (Fed. Cir. 2002) (“U.S. Shoe IT’’). The court endorsed

an incomplete monetary remedy and distinguished the Export

Clause from the Takings Clause on the ground that the

prohibition in the Takings Clause “is coupled with the restorative

clause, ‘without just compensation,’” whereas the Export

Clause’s prohibition “lacks similar remedial language.” Jd.

(citation omitted). The Federal Circuit was “unwilling” to infer

a requirement to pay interest under the Export Clause, “where

the word ‘compensation’ does not appear.” Jd.

The Federal Circuit’s denial of interest based on its narrow,

mechanical reading of the Export Clause is at odds with this

Court’s recognition that the Export Clause is to be given a broad

construct on in order to fulfill its purpose:

[I]f the Constitution in its grant of powers is to be

so construed that Congress shall be able to carry

into full effect the powers granted, it is equally

8

imperative that where prohibition or limitation

is placed upon the power of Congress that

prohibition or limitation should be enforced in its

spirit and to its entirety. It would be a strange rule

of construction that language granting powers is

to be liberally construed and that language of

restriction is to be narrowly and technically

construed. * * * The true spirit of constitutional

interpretation in both directions is to give full,

liberal construction of the language, aiming ever

to show fidelity to the spirit and purpose.

Fairbank, 181 U.S. at 289.

Far from being distinguishable from the Export Clause,

the Takings Clause requires the payment of interest based on

this same principle. In Monongahela Navigation Co. v. United

States, 148 U.S. 312 (1893), this Court recognized that “just

compensation” required under the Fifth Amendment in the

event of a governmental taking must be the “full and perfect

equivalent for the property taken.” Jd. at 326.4 Applying

Monongahela, this Court subsequently determined that “the

full equivalent of that value paid contemporaneously with

the taking” must include interest. Seaboard Air Line Ry. Co.

v. United States, 261 U.S. 299, 306 (1923). As the Fairbank

Court noted, Monongahela simply recognized in the context

of the Takings Clause what Fairbank recognized in the

context of the Export Clause: “In short, the court held in

[Monongahela] that Congress could not by any declaration

4. The Court noted that even “if the adjective ‘just’ had been

omitted, and the provision was simply that property should not be

taken without compensation, the natural import of the language would

be that the compensation should be the equivalent of the property.”

148 U.S. at 326.

9

in its statute avoid, qualify or limit the special restriction

placed upon its power, but that it must be enforced according

to its letter and spirit and to the full extent.” 181 U.S. at 301.

Thus, when this Court held in Seaboard Air Line that

“just compensation” must include interest, it, like the

Monongahela Court before it, was simply enforcing the

Takings Clause “according to its letter and spirit and to the

full extent.” Fairbank, 181 U.S. at 301.

Interest is required to fulfill the letter and spirit of the

Export Clause no less than it is required to fulfill the letter

and spirit of the Takings Clause, even though the Export

Clause does not, as the Federal Circuit noted, contain the

word “compensation.” By levying an unconstitutional tax on

exports and then refusing to pay interest on refunds of the

money unlawfully exacted — refunds that even the Federal

Circuit agrees are required notwithstanding the absence of

express remedial language in the Export Clause — the

Government has, contrary to the clear intent of the Framers,

made exports “a source of revenue to the National

Government” and put a “burden upon such exports.”

Fairbank, 181 U.S. at 292-93. Far from a hypothetical

concern, this is precisely what unfolded in this very case.

Even after the refund of the HMT principal,’ the withholding

of interest has resulted in the loss of some $700 million from

the pockets of exporters, while at the same time the

Government has retained millions of dollars in interest that

it earned on the HMT principal prior to its refund. Consistent

with “the great principle that what cannot be done directly

because of constitutional restriction cannot be accomplished

indirectly by legislation which accomplishes the same result,”

5. Thousands of HMT claimants are, in fact, still awaiting a

full refund, much less interest.

a iain

10

Fairbank, 181 U.S. at 294, just as the Government may not

burden exports or benefit financially by imposing the HMT itself,

it may not do so by refusing to pay interest on HMT refunds.°

The Federal Circuit’s decision enables the Government

to easily circumvent the purpose of the Export Clause, secure

in the knowledge that it may enact a tax on exports, enjoy

the fruits of its ill-gotten gains for many years, and, at the

end of the day, have to refund the principal alone. The Federal

Circuit thus approved the Government’s extraction of

interest-free loans from exporters and, in the process, created

a most bizarre constitutional s. 1eme: When the Government

takes private property for pubiic use — conduct that is not

prohibited under the Constitution — it must pay interest as

part of the compensation required to be paid, but when it

taxes exports — conduct that is categorically barred under

the Constitution — the Government need not pay interest

when it issues the constitutionally required refund of taxes.

Surely the Framers, who understood that they had “wholly

taken away [Congress’ power] to intermeddle with the subject

of exports,” Story Commentaries § 1011, at 470, would not

have countenanced such a scenario.

6. By contrast, the Government presumably could maintain

immunity from interest in cases arising under other constitutional

provisions which, unlike the Export Clause, do not, by their own

terms, explicitly or implicitly include a monetary remedy. The Federal

Circuit has held that numerous constitutional provisions are not

money-mandating. E.g., Brown v. United States, 105 F.3d 621, 623

(Fed. Cir. 1997) (Fourth Amendment); LeBlanc v. United States, 50

F.3d 1025, 1028 (Fed. Cir. 1995) (Due Process Clauses of Fifth and

Fourteenth Amendments, Equal Protection Clause of Fourteenth

Amendment, and separation of powers doctrine); United States v.

Connolly, 716 F.2d 882, 887 (Fed. Cir. 1983) (First Amendment);

Terran v. Secretary of Health and Human Serv., 195 F.3d 1302, 1310

(Fed. Cir. 1999) (Presentment Clause).

11

C. The Federal Circuit’s Narrow Reading Of The

Export Clause Cannot Be Reconciled With This

Court’s Broad Reading Of The Clause In Its 1996

IBM Decision Or Its Decision In U.S. Shoe If.

The Federal Circuit mistakenly concluded that its

treatment of the Export Clause is supported by this Court’s

decision in United States v. International Bus. Mach. Corp.,

517 U.S. 843 (1996). Citing the absence of the word

“compensation” from the Export Clause, the Federal Circuit

denied interest on HMT refunds on the ground that it was

“follow[ing] the express textual! command of the Export

Clause.” U.S. Shoe IT, 296 F.3d at 1385 (quoting JBM, 517

U.S. at 862). The court’s assumption that the “express textual

command” of the Export Clause should be read narrowly is

incorrect, see discussion supra, and, in fact, JBM itself

confirms just the opposite. See 517 U.S. at 859-60 (“While

the original impetus may have had a narrow focus, the

remedial provision that ultimately became the Export Clause

does not, and there is substantial evidence from the Debates

[in the Constitutional Convention] that proponents of the

Clause fully intended the breadth of scope that is evident in

the language.”) (Emphasis added).

Nor is the Federal Circuit’s narrow reading of the Export

Clause supported by its reliance on the JBM Court’s

observation that there is “good reason to hesitate before

adopting the analysis of our recent Import-Export Clause

cases into our Export Clause jurisprudence” because

“{mJjeaningful textual differences exist [which] should not

be overlooked.” U.S. Shoe IT, 296 F.3d at 1385-86 (quoting

IBM, 517 U.S. at 857). As the JBM Court noted, those textual

differences were meaningful because they confirmed that the

Export Clause affords broader protection to exports than does

12

the Import-Export Clause. See 517 U.S. at 857 (noting that “the

Import-Export Clause is ‘not written in terms of a broad

prohibition of every ‘tax,”” but merely prohibits State “imposts”

and “‘duties” on exports, which “are narrower terms than tax’’)

(quoting Michelin Tire Corp. v. Wages, 423 U.S. 276, 290

(1976)). Thus, in its earlier decision in this case, this Court

quoted the very language from JBM upon which the Federal

Circuit relied, but for a contrary proposition: to illustrate that

the breadth of the Export Clause prohibition “distinguishes it

from other constitutional limitations on governmental taxing

authority,” U.S. Shoe I, 523 U.S. at 368, and thus renders it a

more stringent limitation on governmental exactions than

either the Takings Clause or the Dormant Commerce Clause.

Id. at 368-69. The Federal Circuit violated that decree by

depriving the Export Clause of the power imbued in the Takings

Clause to negate the presumption of immunity from interest.

The result created by the Federal Circuit’s decision is therefore

plainly anomalous: How can the Export Clause constitute a more

stringent limitation on governmental exactions than the Takings

Clause if only the Takings Clause prevents the Government from

depriving people of the interest on such exactions?

D. A Lower Court’s Award Of Interest To Federal

Judges Under The Compensation Clause

Persuasively Illustrates That The Rationale For

Interest May Be Extended To Certain

Constitutional Provisions Other Than The

Takings Clause.

The reasoning of a decision by the United States Court

of Federal Claims supports U.S. Shoe’s argument that the

rationale for interest under the Takings Clause applies with

equal force under certain other provisions in the Constitution.

13

In 1997, that court held that the United States owed interest

on a tax refund to federal judges under the Compensation

Clause, U.S. Const. art. III, § 1, when their salaries were

unconstitutionally diminished by social security taxes in

violation of that Clause. See Hatter v. United States, 38 Fed.

Cl. 166, 181-83 (1997). After observing that both the Takings

Clause and the Compensation Clause are constitutional

provisions requiring the payment of compensation, the court

concluded: “If recompense for delay in compensation is

required for takings claimants despite the general rule, surely

the federal judge whose constitutionally protected

compensation is delayed is at least equally entitled to such

recompense.” Jd. at 182.’

The Federal Circuit assumed arguendo that Hatter was

correctly decided, but it distinguished that case on the ground

that “[t]he construction of the Export Clause differs from

the Compensation Clause. The Export Clause is prohibitive,

‘No Tax or Duty shall be laid on Articles exported from any

State,’ while the Compensation Clause requires that judges

shall receive ‘Compensation.’” U.S. Shoe IT, 296 F.3d at 1385.

This reasoning is unsustainable. Even the Federal Circuit has

had no difficulty acknowledging that the Export Clause

restriction on taxing power requires Congress to refund

money obtained in violation of the Clause, and a refund of

export taxes without interest is no more an adequate response

to a violation of the Export Clause than the payment of

7. As the Federal Circuit noted in this case, the Government

did not appeal the Court of Federal Claims’ award of interest in Hatter.

Upon the Government’s appeal of a subsequent decision on the merits

of the judges’ action under the Compensation Clause, this Court struck

down the 1983 imposition of social security taxes on the judges’

salaries, ensuring that the judges will receive refunds of those taxes

plus interest. United States v. Hatter, 532 U.S. 557 (2001).

14

compensation without interest is an adequate response to a

governmental diminution of judicial salaries. Only the

payment of interest will ensure that the Government cannot

circumvent the mandatory and unconditional prohibition

contained in each Clause.

The Federal Circuit also distinguished Hatter on the

ground that the Court of Federal Claims’ rationale, that

interest is required under the Compensation Clause to

maintain the separation of powers, “does not apply to the

Export Clause.” U.S. Shoe II, 296 F.3d at 1385. The Federal

Circuit made the wrong inquiry. It is not whether interest

under the Export Clause would fulfill the same purpose that

it fulfills under the Compensation Clause; clearly, the two

Clauses were adopted for different reasons. Rather, the

pertinent question is whether the purpose of the Export

Clause would be defeated if the no-interest presumption were

applied to that Clause. The Federal Circuit’s denial of full

monetary redress, i.e., tax principal plus interest, for the

Government’s violation of the Export Clause substantially

impairs the capacity of the Export Clause to achieve its

purpose. In this sense, the Export Clause parallels both the

Takings Clause and the Compensation Clause.

15

CONCLUSION

For the foregoing reasons, amicus curiae American

Association of Exporters and Importers respectfully urges

this Court to grant the petition for a writ of certiorari.

Respectfully submitted,

STEVEN H. BECKER

Counsel of Record

PauL A. Horow!tz

CouDERT BROTHERS LLP

1114 Avenue of the Americas

New York, NY 10036-7703

(212) 626-4400

Counsel for Amicus Curiae