Friday, October 11, 2019

On Statutory Interpretation - Textualism / Originalism (10/11/19; 10/16/19)

Just this week, I was working on the issue of “original public meaning” to update my Federal Tax Procedure Book and earlier article that needs refreshing (soon) for posting on SSRN.  Original public meaning is a strategy for interpreting text – constitutional and statutory.  (I suppose, also, since it is text interpretation, we might apply it to religious texts, like the Bible, but that is a related but different subject.)

Just this week, the Supreme Court held oral arguments in Bostock v. Clayton County and Harris Funeral Homes v. EEOC (see SCOTUSBlog summary here).  The issue is whether Title VII of the Civil Rights Act of 1964, which bars employment discrimination “against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin,” bars sex discrimination based on sexual orientation (Bostock), or on transgender status (Harris).  The issue is one of statutory interpretation of the word sex in the statute.  What does sex mean?  (I suppose it is not like pornography, difficult to define but we know it when we see it.)  Does the statutory text mean what sex meant in the statutory context in 1964 or can its meaning evolve as the context for its application changes?  (One variant of the question involving textual interpretation, although not a Constitution or statute, is the Declaration of Independence declaring that "all men are created equal"; do we interpret that as the signers of the declaration or the public at the time would have interpreted it (it does not include blacks whether free or slave and likely not women as well) or in light of developed reason (really, all men and women are created equal).)

The general category of statutory interpretation that looks to the text and context as interpreted upon enactment (1964) for meaning is called “originalism.”  Originalism itself can break down into categories, including original public meaning.

So, I thought I would offer first my revisions to the Federal Tax Procedure discussion (keep in mind that these revisions will appear in the 2020 edition, and are likely to be further revised before formal publication).  In the text of this blog I offer just the text without the footnotes.  The text with the footnotes can be downloaded here (note I have revised this offering as of 10/16/19 to correct a reference in one of the footnotes from Judge Higginbotham to Judge Ho; note also that I have made some small changes since originally posted on 10/11/19).  I discuss originalism under the heading textualism (which I generally contrast to purposivism) because conservative textualists tend to fall in the originalist camp; I offer the whole section on statutory interpretation (which is an 10/16/19 expansion of the text originally covered on 10/11/19).
(2) Approaches to Statutory Interpretation. 
(a) Introduction. 
There are two broad categories of statutory interpretation encountered frequently in tax practice (as well as other areas of law).  They are: (i) textualism and (ii) purposivism.  I only introduce the general concepts and note their outer parameters.  These approaches play out in constitutional interpretation and in statutory interpretation. 
Before moving to these categories of statutory interpretation, I want just to offer a broad high level view of the process.  All theories of statutory interpretation, I think, are based on the notion that courts, in interpreting the statutes, are the faithful agents of Congress which enacted the statutes.  Although some view the faithful agent of Congress claim as facile in the hard context of statutory interpretation, it is still, I think, fair to say that, since Congress rather than the courts legislate, Congress is the one through the statutory text that says what the law is despite Justice Marshall’s famous sound bite in Marbury v. Madison, 5 U.S. 137 (1803) that the courts “say what the law is.”  Congress says what the law is, and Courts are supposed to say what Congress legislated.  So I think that faithful agency to the law Congress enacted is the heart of statutory interpretation.  The “faithful agency” claim may be more persistent with textualists, but in my view the claim is not more persuasive with textualism.  Perhaps a subtle nuance on the faithful agency is that, it is at least the strong starting point, although it must be filtered through controlling or persuasive interpretations after enactment. 
(b) Textualism. 
Textualism is an interpretive strategy that focuses principally or even exclusively on the statutory text enacted by Congress.  Justice Scalia was perhaps the most vocal advocate.  Focusing on the statutory text, the goal for textualists is to determine and apply the “original meaning” (sometimes called the “original public meaning”) at the time of adoption or enactment. subject perhaps only to the use of linguistic canons of interpretation.  With the rising prominence of Justice Scalia’s proclaimed textual brand of textualism, even Justice Kagan has proclaimed that “we’re all textualists now.” 
Of course, for statutes–and for the Constitution– allegiance to the text is required, so in that sense no reasonable judge could claim not to be a textualist.  The question is how much freedom for interpretation does the text reasonably allow?  Is the text so crystal clear that it allows only one meaning with no interpretation required?  Currently, those, like Justice Scalia, branding themselves true textualists (true textualists would not include Justice Kagan among their ranks) will focus on the meaning at the time the statute was enacted (or for constitutional interpretation, when the constitution or amendment was ratified).  This falls under the broad umbrella of “originalism” both in statutory and constitutional interpretation.  But, even with that focus, problems of interpretation inhere.  Back in grade school, our teachers taught that an utterance can have at least three meanings:  the meaning that the person speaking intended, the meaning that the words by themselves would convey, and the meaning the person hearing the words ascribed to the words.  So, in statutory interpretation, does the textualist judge try to determine (i) what the legislature “intended” the words to mean, (ii) what the words say without consideration of what the legislature intended or even what a reasonable reader might thought the words to mean at the time, or (iii) what a reasonable person at the time would have interpreted the text to mean (and further who exactly is the mythical reasonable person, because it will matter whether it is a legislator, a lawyer trained in reading statutes, a pastor or seminarian (trained in interpreting text), a person of average education (say, high school) in the United States, a lexicographer (or just a dictionary), or the result of algorithms searching big data from the time)?  The latter textualist interpretive strategy (iii) now goes by the rubric “original public meaning,” which seems to have some currency today among the true textualists.  These seem different “meanings,” depending upon focus, but the commuicative aspect of it occurs when at least (i) and (iii) are conflated so that the text be what the speaker intended and the hearer heard they mean the same.
Since all interpretive strategies must all focus on the text, that really does not help us understand what the strategy currently called textualism really means.  I think it means that textualist judges will more readily find that texts have some plain or ordinary meaning, with minimum interpretation (other than the focus on originalism discussed above).  As Justice Scalia noted in the Chevron deference context which arises only if the statutory language is ambiguous, the textualist is much more likely to find statutory text plain and unambiguous. 
Moreover, even textualists reject textualism in some cases.  The plain text in statutes that are unconstitutional cannot govern.  Similarly, the absurdity canon (also called anti-absurdity canon) avoids a plain text meaning  if it produces an absurd result.  So we know there are limits to the textualist interpretive strategy.  And perhaps in recognition now, although there are some claims the judges are all textualists now, a recent survey of forty-two federal appellate judges found few of the judges that were full bore textualists. 
The role, if any, of legislative history has been a particular flashpoint for textualists.  The textualist concept is that only the text of the statute was enacted by Congress.  The legislative history was not enacted by Congress and thus, at most, represents only the views of the subset of members of Congress who produced the legislative history.  For textualists, materials extraneous to the statutory text (including, most prominently, legislative history) “greatly increases the scope of manipulated interpretation, making possible some interpretations that the traditional rules of constructions could never possibly support.”  However, even textualists sometimes cite legislative history but claim to avoid the use of legislative history to “muddy the meaning of the clear statutory language.”  In other words, textualists–at least true textualists–may use legislative history when it confirms their determination of the text’s plain or ordinary meaning but claim not to use legislative history when the legislative history is inconsistent with their determination of the plain or ordinary meaning. 
Some have noted that the textualists’ claims about legislative history are at some tension with their claims about the “originalism” interpretive strategies noted above.  Legislative history would at least be some evidence as to what the legislature thought the enacted text meant.  And legislative history would be some evidence even of what the original public meaning was.  
(c) Purposivism. 
Other jurists find that broader legislative context, including legislative history, assists in interpreting text and are willing to look to that broader context to determine how the enacted text should be interpreted to honor and apply the meaning Congress had or should be deemed to have had for the text.  This is not the same as a search for Congress’ collective “intent,” but, in order to honor the primacy of Congress’ role, it considers all factors even if beyond the statutory text  that bear on Congress’ will in enacting the statute.  This approach to interpretation has different iterations that go by terms such as purposivism, intentionalism, and the practical reason (or dynamic) method.  I use the term purposivism because it appears to be the broad umbrella term to contrast with the rival statutory theory of textualism.  
(d) Common Goal; Different Approaches; Different Outcomes. 
The proponents of each of these two rival broad categories of statutory interpretation claim that they are faithful agents of Congress. They just approach the goal in different ways that they, respectively, feel better assures that Congress and not the courts make the law.  In many, I suspect most, cases, the two inquiries reach the same results in resolving the cases at hand.  But, the two approaches–depending upon how they are applied–could reach different outcomes. 
(e) On Legislative History. 
I noted above that, in the chasm between textualists and purposivists, the role in interpretation that legislative history should play is a flashpoint.  The legislative history is the course of congressional consideration in identifying the need for legislation, drafting or revising the bills, expressions by persons involved in the process as to how they understood the text of the bills, and the final statutory legislative text. The principal sources of legislative history are the committee reports which I discuss below.  Other sources include committee hearings, statements made on the floor of Congress in debating the legislation, and submissions to Congress by the executive branch. There is a long and substantial history of judicial use of legislative history in statutory interpretation, particularly in the tax area, however much the textualists may decry it.  
Legislative history is a broad term, with some legislative history more persuasive than others (at least for those willing to consider legislative history).  In terms of the legislative process and reliable indicators of the meaning of statutory text, the committee reports accompanying legislation are generally viewed as a reliable form of legislative history (eclipsed only by conference committee reports discussed below).  In both houses, proposed legislation is first considered substantively in committees which generally give the most detailed consideration of proposed statutory text; those committees often offer reports explaining the proposed statutory text that they send to the floors of their respective Houses.  (I discuss Congressional Committees and their legislative history below beginning at p.___.)  
For tax legislation, because of the historic influence of the tax writing committees and their staffs and the assistance of the Joint Committee on Taxation (“JCT”), the committee reports of the House Ways and Means Committee and the Senate Finance Committee have been the most frequently used legislative history guide to interpreting the statutory text.  Often said to rank even higher than committee reports in authoritativeness is the particular form of legislative history accompanying and explaining statutory text produced in a Conference Committee to work out differences in legislation between the two Houses of Congress.  (I discuss Conference Committees and their legislative history below beginning at p. ___.)  In considering legislative history in a particular case, it is important to understand the legislative processes that produced the legislative history and whether those processes make the legislative history a reliable indicator of the actual or deemed meaning of the statutory text. 
(3) Canons of Statutory Construction. 
Canons of statutory construction  are “rules of thumb that help courts determine the meaning of legislation.”  They are said to “limit judicial discretion and render statutory meaning more predictable.”  On the other hand, they are said to be “readily manipulable and [frustrate] the policy preferences of Congress.”  Karl Llewellyn famously observed that “there are two opposing canons on almost every point.”  A variation on the theme is that maxims might be viewed as minims because, as courts have said, they reveal so little and are “singularly unhelpful when it comes to deciding cases.”   
This is not great praise for canons. So, how seriously should the canons be taken in statutory interpretation?  I cannot answer that question other than to say that they are used–and used often enough to be fairly certain that they often contribute to the outcome of opinions rather than being mere sound-bites deployed to justify conclusions already reached.  The canons thus serve as “America’s common law of statutory interpretation” that “reflect centuries of judicial practice * * * and reflect norms of continuity and incrementalism.”  And, importantly, because of that, congressional legislation is crafted with these canons in mind.
Since this is not a book on statutory interpretation, I just want to focus on two issues related to canons that are appropriate to tax law and procedure.

First, particularly in the tax shelter context, many expressions are bandied about as if they are guiding precepts in discerning the meaning of the statutory text.  Students of tax law will already have heard precepts, often called tax common law doctrines, such as the business purpose doctrine, substance over form, and economic substance, which inform the application of the statute even when the statutory text says nothing about those precepts.  These precepts function like canons.

Second, later in this text, I will discuss the concept of deference to agency interpretations of statutory text.  For the present, basically the concept of deference is that a court in its interpretation and application of a statute will defer to an agency reasonable interpretation of ambiguous statutory text even if the court believes there is a more reasonable interpretation.  Deference, where applicable, is based on a presumption that, in using ambiguous statutory text, Congress intended the agency to resolve the ambiguity by reasonable interpretations.  Deference functions like canons in the sense that, when applicable, deference provides a default rule for decision.

Now, for some good discussions of the issue of originalism in the context of the Title VII sex discrimination cases, I recommend a blog and a WAPO column, because they frame the issue (even when I do not personally agree with the resoluitions):
  • Dale Carpenter, Of loose cannons and loose canons in Title VII (The Volokh Conspiracy 10/9/19), here.
  • George Will, It’s not the Supreme Court’s job to say whether ‘sex’ includes sexual orientation (WAPO 10/4/19), here.

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