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

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_1169%3A08

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2003
- **Citation:** 538 U.S. 1056

## Text

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

|

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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_1169%3A08. Public record. Not legal advice.