Justice Scalia Brought the Funny, Even to Tax Litigation

Even the late Justice Antonin Scalia’s harshest critics often admire his wit and biting sarcasm, albeit sometimes grudgingly. Justice Scalia seemed to display this temperament at every turn: while giving speeches, participating in interviews and even while commuting to the Supreme Court:

“A snowstorm hit D.C. and [Chief Justice] Rehnquist had declared that the elements would not stop the proceedings of the court. He arranged for jeeps to be sent to the homes of the justices, but Scalia still had to walk half a mile through waist deep snow to reach the jeep. He shared a ride with [Justice] Anthony Kennedy and one of the attorneys to argue before the court that day. At one point the group became worried that they would be late to court, so Scalia leaned forward and told the driver ‘by the power vested in me, I command you to run these red lights!’” – “The Nine,” by Jeffrey Toobin

Yet at no time was this personality more on display to the public than when Justice Scalia wrote a dissenting or concurring opinion. It was while writing outside of the Court’s majority opinion that Justice Scalia seemed to feel the most freedom (a freedom he implied was unique to dissenting and concurring opinion writers when he stated in his Obergefell v. Hodges dissent that, “It is one thing for separate concurring or dissenting opinions to contain extravagances, even silly extravagances, of thought and expression; it is something else for the official opinion of the Court to do so.”)

And it was while displaying this freedom that Justice Scalia managed even to bring color to opinions on issues affecting federal taxation. Some of these opinions concerned critical issues, such as whether the constitution guarantees a right to same-sex marriage or the validity of the Affordable Care Act. Others concerned more mundane tax issues, such as the deductibility of an estate’s administrative expenses. Below are some excerpts from these opinions (internal citations are omitted).

Obergefell v. Hodges , 135 S.Ct. 2584, 2015 BL 204916 (2015): “Ask the nearest hippie”

Dissenting from the majority’s holding that the Fourteenth Amendment requires a state to license same-sex marriages, and to recognize those marriages lawfully licensed and performed out-of-state, Justice Scalia pointed out what he believed were the “silly extravagances” of Justice Kennedy’s majority opinion. Providing a gloss on the opinion’s assertion that, “The nature of marriage is that, through its enduring bond, two persons together can find other freedoms, such as expression, intimacy, and spirituality,” Justice Scalia said, parenthetically:

“Really? Who ever thought that intimacy and spirituality [whatever that means] were freedoms? And if intimacy is, one would think Freedom of Intimacy is abridged rather than expanded by marriage. Ask the nearest hippie. Expression, sure enough, is a freedom, but anyone in a long-lasting marriage will attest that that happy state constricts, rather than expands, what one can prudently say.”

King v. Burwell , 135 S. Ct. 2480, 2015 BL 202885 (2015): “Pure applesauce”

Justice Scalia took particular exception to the Court’s recent holding that the phrase “an Exchange established by the State” in a key provision of the Affordable Care Act (codified at §36B of the Internal Revenue Code) refers not only to those insurance exchanges established by a state, but also to those established by the federal government. Summarizing what he believed to be the intellectual gymnastics that it took for the majority to reach its conclusion, Justice Scalia stated:

“Roaming even farther afield from §36B, the Court turns to the Act's provisions about ‘qualified individuals.’ Qualified individuals receive favored treatment on Exchanges, although customers who are not qualified individuals may also shop there. The Court claims that the Act must equate federal and state establishment of Exchanges when it defines a qualified individual as someone who (among other things) lives in the ‘State that established the Exchange,’ Otherwise, the Court says, there would be no qualified individuals on federal Exchanges, contradicting (for example) the provision requiring every Exchange to take the ‘interests of qualified individuals’ into account when selecting health plans. Pure applesauce. Imagine that a university sends around a bulletin reminding every professor to take the ‘interests of graduate students’ into account when setting office hours, but that some professors teach only undergraduates. Would anybody reason that the bulletin implicitly presupposes that every professor has ‘graduate students,’ so that ‘graduate students’ must really mean ‘graduate or undergraduate students’? Surely not.”

United States v. Windsor , 133 S.Ct. 2675, 2013 BL 169620 (2013): “this loaf could have used a while longer in the oven”

Justice Scalia began his dissent from the Court’s opinion invalidating the federal Defense of Marriage Act by asserting that the Court did not even have the power to consider the case:

“The Court is eager—hungry—to tell everyone its view of the legal question at the heart of this case. Standing in the way is an obstacle, a technicality of little interest to anyone but the people of We the People, who created it as a barrier against judges’ intrusion into their lives. They gave judges, in Article III, only the ‘judicial Power,’ a power to decide not abstract questions but real, concrete ‘Cases’ and ‘Controversies.’ Yet the plaintiff and the Government agree entirely on what should happen in this lawsuit. They agree that the court below got it right; and they agreed in the court below that the court below that one got it right as well. What, then, are we doing here?”

Justice Scalia was similarly colorful later in the opinion when taking exception to the Court’s reasoning—or, as he contended, apparent lack thereof:

“Some might conclude that this loaf could have used a while longer in the oven. But that would be wrong; it is already overcooked. The most expert care in preparation cannot redeem a bad recipe.’”

National Federation of Independent Business v. Sebelius , 132 S. Ct. 2566, 2012 BL 160004 (2012): “Commerce becomes everything”

Dissenting from the Court’s conclusion that the Affordable Care Act’s requirement that individuals purchase health insurance was a valid exercise of the federal government’s taxing power, Justice Scalia also provided “a few respectful responses to Justice Ginsberg’s dissent,” in which she argued that Congress could enact this requirement pursuant to its constitutional commerce power because the failure to buy health insurance was an economic activity. Justice Scalia stated:

“If all inactivity affecting commerce is commerce, commerce is everything. Ultimately the dissent is driven to saying that there is really no difference between action and inaction, a proposition that has never recommended itself, neither to the law nor to common sense. To say, for example, that the inaction here consists of activity in ‘the self-insurance market,’ seems to us wordplay. By parity of reasoning the failure to buy a car can be called participation in the non-private-car-transportation market. Commerce becomes everything.”

Raymond B. Yates, M.D., Profit Sharing Plan et al. v. Hendon, Trustee , 124 S. Ct. 1330 (2004): “a sledgehammer to kill a gnat”

Though ultimately concurring with the Court’s conclusion that a working business owner’s pension rights in that business’s pension plan are protected by the Employee Retirement Income Security Act of 1974, Justice Scalia argued that the majority should have reached this conclusion by simply following an existing U.S. Department of Labor advisory opinion. Justice Scalia described the majority’s methods as follows:

“The Court uses a sledgehammer to kill a gnat—though it may be a sledgehammer prescribed by United States v. Mead Corp., 533 U.S. 218 (2001). I dissented from that case, and remain of the view that authoritative interpretations of law by the implementing agency, if reasonable, are entitled to respect.”

Romani, Francis J., Estate of, et al., U.S. v. United States Supreme Court , 118 S. Ct. 1478 (1998): “history of legislation-that-never-was”

Concurring with the Court’s holding that the federal insolvency statute does not require that a federal tax claim be given preference over a judgment creditor's perfected lien on real property, Justice Scalia nonetheless took issue with the extent to which the majority relied on sources beyond the text of the federal statute at issue:

“I have in the past been critical of the Court's using the so-called legislative history of an enactment (hearings, committee reports, and floor debates) to determine its meaning. Today, however, the Court's fascination with the files of Congress (we must consult them, because they are there) is carried to a new silly extreme. Today's opinion ever-so-carefully analyzes, not legislative history, but the history of legislation-that-never-was. If we take this sort of material seriously, we require conscientious counsel to investigate (at clients' expense) not only the hearings, committee reports, and floor debates pertaining to the history of the law at issue (which is bad enough), but to find, and then investigate the hearings, committee reports, and floor debates pertaining to, later bills on the same subject that were never enacted. This is beyond all reason, and we should say so.”

Hubert Est., et al., Commissioner v. United States Supreme Court , 117 S. Ct. 1124 (1997): “a tax boondoggle”

Dissenting from the Court’s holding in a dispute over the deductibility of administration expenses associated with marital or charitable bequests, Justice Scalia criticized the majority opinion not just for going beyond the applicable statute and IRS guidance, but for creating, in his view, an unwieldly deductibility test:

“The statute and regulation most applicable to the question presented in this case are discussed in today's opinion almost as an afterthought. Instead of relying on the text of [§]2056(b)(4)(B) and its interpretive regulation . . . the plurality hinges its analysis on general principles of valuation which it mistakenly believes to inhere in the estate tax. It thereby creates a tax boondoggle never contemplated by Congress, and announces a test of deductibility virtually impossible for taxpayers and the IRS to apply.”

O'Gilvie, Kevin M., et al. v. United States , 117 S. Ct. 452 (1996)

The Court in O’Gilvie concluded that punitive damages received in a personal injury lawsuit are taxable. It is hard to imagine a passage that captures Justice Scalia’s loathing for reasoning outside of the text of a statute than this one from his dissent:

“So, to trace the Court's reasoning: The statute must exclude punitive damages because the Committee Report must have had in mind a 1918 Treasury Decision, whose text no more supports exclusion of punitive damages than does the text of the statute itself, but which must have MEANT to exclude punitive damages since it was based on the ‘return-of-capital’ theory, though, inconsistently with that theory, it did NOT exclude the much more common category of compensation for lost income. Congress supposedly knew all of this, and a reasonably diligent lawyer could figure it out by mistrusting the inclusive language of the statute, consulting the Committee Report, surmising that the Treasury Decision of 1918 underlay that Report, mistrusting the inclusive language of the Treasury Decision, and discerning that Treasury COULD have overlooked lost-income compensatories, but could NOT have overlooked punitives. I think not. The sure and proper guide, it seems to me, is the language of the statute, inclusive by nature and doubly inclusive by contrast with surrounding provisions.”