WILLIAM THOMAS, et al., Plaintiffs, v. NETWORK SOLUTIONS, INC.and CIVIL ACTION NO NATIONAL SCIENCE FOUNDATION 1:97CV02412 (TFH) Defendants.
Ralph C. Nash, Jr. (000023249)
1140 23rd Street, N.W.
Washington, D.C. 20037-1439
Dated: July 10, 1998
|SUPPLEMENTAL FACTUAL BACKGROUND||3|
|I.||SECTION 8003, BY ITS CLEAR LANGUAGE, RATIFIES A USER FEE, NOT A TAX||6|
|A.||Section 8003 Ratifies What It Specifies: A User Fee||7|
|B.||The Term "Tax" May Not Be Read Into Section 8003 Where The Drafters Themselves Were So Careful TO Omit It||10|
|C.||Because It Omits Any Mention Of The Tax That This Court Held Unconstitutional On Separation Of Powers Grounds, Section 8003 Cannot Be Read To Provide The Unequivocal Ratification Required In The Constitutional Context||12|
|II.||NSF'S ENACTMENT OF THIS TAX WAS AN UNCONSTITUTIONAL VIOLATION OF SEPARATION-OF-POWERS THAT WAS NOT CURED BY SECTION 8003||16|
|A.||Congress Could Not, And Did Not, Bless NSF's Enactment Of A Tax||17|
|1.||Section 8003, Which Does Not Purport To Address Anything Beyond The Collection Of The Preservation Assessment, Cannot And Does Not Ratify NSF's Enactment Of A Tax||19|
|2.||The Hampton Decision, Like Clinton, Confirms That Section 8003 Did Not, And Cannot, Ratify Any Tax||20|
|B.||Intelligible Guidelines For Agency Action Cannot Be Imparted Retroactively||22|
|III.||CONSTRUING SECTION 8003 AS A TAX-RATIFICATION MEASURE IS IRRECONCILABLE WITH THE ORIGINATION CLAUSE||23|
|62 Cases, More Or Less, Each Containing Six Jars Of Jam v. United States, 340 U.S. 593 (1951)||8,11|
|A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935)||21|
|Bates v. United States, 118 S. Ct. 285 (1997)||11|
|Blackwell v. Virginia Dep't of Taxation, 115 B.R. 86 (Bankr. W.D. Va. 1990)||11|
|Carter v. Carter Coal Co., 298 U.S. 238 (1936)||21|
|Catholic Social Services, Inc. v. Meese, 664 F. Supp. 1378 (E.D. Cal. 1987)||10|
|City of New York v. Clinton, 985 F. Supp. 168, 179 (D.D.C.)||17,18|
|Clinton v. City of New York, No. 97-1374, 1998 WL 333013, *11 (U.S. June 25, 1998)||4,9,20,21,22|
|Demby v. Schweiker, 671 F.2d 507 (D.C. Cir. 1981)||15|
|EEOC v. CBS' Inc., 743 F.2d 969 (2d Cir. 1984)||14|
|EEOC v. Martin Indus., Inc., 581 F. Supp. 1029 (N.D. Ala.), appeal dismissed, 469 U.S. 806 (1984)||15|
|Ex Parte Endo, 323 U.S. 283 (1944)||13,14,15|
|Fidelity & Deposit Co. v. Pennsylvania, 240 U.S. 319 (1916)||7|
|F.G. Vogt & Sons v. Rothensies, 11 F. Supp. 255 (E.D. Pa. 1935)||22|
|Field v. Clark, 143 U.S. 649 (1892)||17|
|Field v. Mans, 516 U.S. 59 (1995)||7|
|Greene v. McElroy, 360 U.S. 474 (1959)||13,14,15|
|Hartman v. Lubar, 133 F.2d 44 (D.C. Cir. 1942)||7|
|Heppner v. Alyeska Pipeline Service Co., 665 F.2d 868 (9th Cir. 1981)||10|
|Husten v. United States, 95 F.2d 168 (8th Cir. 1938)||7|
|Industrial Union Dep't. AFL-CIO v. American Petroleum Inst., 448 U.S. 607 (1980)||17,23|
|J.W. Hampton Jr. & Co. v. United States, 276 U.S. 394 (1928)||20,21|
|Larabee Flour Mills Co. v. Nee, 12 F. Supp. 395 W.D. Ho. 1935)||21,22|
|Lewis v. Grinker, 660 F. Supp. 169 (E.D.N.Y. 1987)||14|
|Lincoln v. United States, 202 U.S. 484 (1906)||9|
|Loving v. United States, 517 U.S. 748 (1996), aff'd, 1998 WL 333013 (U.S.)||17|
|Midlantic Nat'l Bank v. New Jersey Dep't of Envtl. Protection, 474 U.S. 494 (1986)||8|
|National Cable Television Ass'n Inc. v. United States, 415 U.S. 336 (1974)||21|
|Pace v. Burgess, 92 U.S. 372 (1875)||6|
|Panama Ref. Co. v. Ryan, 293 U.S. 388 (1935)||21|
|Reves v. Ernst & Young, 494 U.S. 56 (1990)||9|
|Skinner v. Mid-America Pipeline Co., 490 U.S. 212 (1989)||8,20,21|
|St. Martin Evangelical Lutheran Church v. South Dakota, 451 U.S. 772 (1981)||15|
|Story v. Snyder, 184 F.2d 454 (D.C. Cir.), cert. denied, 340 U.S. 866 (1950)||11|
|Timberland Paving & Constr. Co. v. United States, 8 Cl. Ct. 653 (1985)||22|
|Trevan v. Office Of Personnel Management, 69 F.3d 520 (Fed. Cir. 1995)||11|
|Truax v. Raich, 239 U.S. 33 (1915)||7|
|United States v. Butler, 297 U.S. 1 (1936)||16|
|United States v. Hagen, 711 F. Supp. 879 (S.D. Tex. 1989)||24|
|United States v. Munoz-Flores, 495 U.S. 385 (1990)||24,25|
|United States v. Ron Pair Enterprises. Inc.. 489 U.S. 235 (1989)||12|
|United States v. Shabani, 513 U.S. 10 (1994)||7|
|United States v. United States Shoe Corp., 118 S. Ct. 1290 (1998)||6|
|U.S. Term Limits Inc. v. Thornton, 514 U.S. 779 (1995), aff'd, 1998 WL 333013||18|
|West Virginia Univ. Hospitals, Inc. v. Casey, 499 U.S. 83 (1991) (Scalia, J.), superseded by statute (42 U.S.C. § 2000a et seq., (Civil Rights Act of 1991))||11,12|
|Civil Rights Act of 1991, 42 U.S.C. § 2000a||11|
|A. Schick, The Federal Budget: Polities Policy Process (Brookings Inst., 1995)||4|
|Some Reflections On The Reading Of Statutes, 47 Colum. L. Rev. 527 (1947)||11|
The Defendant National Science Foundation's ("NSF's") motion to dismiss is the culmination of a two-step strategy. The first step was to obtain passage of Section 8003, "Ratification Of Internet Intellectual Infrastructure Fee" in H.R. 3579, "Making Emergency Supplemental Appropriations For The Fiscal Year Ending September 30, 1998, And For Other Purposes" (Section 8003 hereinafter), by drafting it as a fee-ratifying provision making no mention of the word "tax" - because the obvious, particular and substantive meaning and import of that word would doom the provision. The second step is an about-face: with Section 8003 now on the books, to try to persuade this Court that the tax/fee distinction is of no real significance (just a matter of "quibbling") in construing what Congress did. Thus, after being so careful to omit the word "tax" from Section 8003, Defendants come before the Court to contend that the tax/fee distinction is somehow not meaningful, that the terms are equivocal and blurry substitutes for one another. In short, this Court is supposed to do what the drafters of Section 8003 themselves lacked the will and forthrightness to do (for obvious reasons): to put the word "tax" into Section 8003.
This sleight of hand is more than a little disingenuous, particularly in light of NSF's continued emphasis on the "exquisite precision" and "painstaking precision" of the language in Section 8003. See NSF Br. at 1-2. NSF is correct on that point; when Congress used the word "fee" in Section 8003 it was a meaningful choice of words. In short, the legislators paid attention to the language they were using. This Court should, and must, do the same. The Defendants' "now-you-see-it-now-you-don't" approach to statutory construction - by which one word of well-settled meaning and significance is simply to be inserted, after the fact, for a word meaning something entirely different - is based on nothing more than Defendants' vague, unsubstantiated
speculations about what Congress "intended" to address in Section 8003. But the statutory language addressing a "fee," not the Defendants' assumptions that Congress intended to address a "tax," must control. Indeed, Defendants' approach here is just what the rule requiring unequivocal ratification in matters of constitutional significance is designed to protect against. Particularly where issues of constitutional import are concerned, courts simply refuse to be placed in the position of having to guess about, change, or expand legislative language set forth in black and white - and for good reason.
NSF and Network Solutions, Inc. ("NSI") also fail to come to grips with the two substantive constitutional defects undermining any effort to construe Section 8003 as a tax-ratification measure. First, neither NSF nor NSI even tries to address the fundamental separation-of-powers violation inherent in NSF's unfettered enactment of the tax. NSF did not have that power, and Congress is not permitted by the Constitution to give NSF that power- any more than Congress is permitted to confer the line-item veto on the President. Because Congress cannot cede to NSF the power to legislate a tax in the first instance, the Constitution also prohibits Congress' ratification of NSF's enactment of the tax here. Nor can this inherent constitutional defect be cured by (as NSF argues) construing Section 8003 to provide retroactively the intelligible congressional guidelines that were required to be in place at the time NSF devised this tax. Indeed, the mere fact that NSF advances this desperate argument speaks volumes about the uncorrectable nature of the separation-of-powers violation embedded in the Preservation Assessment.
Second, even if Section 8003 were construed as ratifying what this Court found to be a tax -and it does not - it would be nullified for failing to originate in the House of Representatives. It is undisputed that Section 8003 originated in conference, thus bypassing all
of the constitutional protections that the Origination Clause was expressly designed to provide. In their briefs, NSF and NSI offer no rebuttal for the critical facts that the tax at issue did not create the program it funds (the Internet), and that it was funneled into the General Treasury which distinguished it from those assessments held not to be revenue-raising measures for Origination Clause purposes. This constitutional precept is not so easily evaded; nor should it be. If the constitutional power and responsibility of the House of Representatives to devise and propose taxes is to have any meaning at all, new taxes like this one must not be permitted to issue covertly, under the guise of "fees," out of conference.
For these fundamental reasons, Section 8003 has no effect whatsoever on the unconstitutional tax in question. NSF's motion to dismiss, premised as it is entirely on Section 8003, must therefore be denied. Conversely, because there is no genuine issue of material fact raised by or in connection with Section 8003, summary judgment invalidating the Preservation Assessment should be entered forthwith on behalf of the Registrants.
The words "tax" and "fee" inhabit entirely different Congressional universes in terms of everything ranging from politics and policy to budgetary processes. To the entities responsible for accounting and budgeting monies received by the Government -- the Office of Management and Budget, the Joint Tax Committee and the Congressional Budget Office ("CBO") -- the distinction between fees and taxes is tightly drawn, and each is subject to markedly different treatment. The CBO has expressly classified and treated Section 8003 as a "fee," not a "tax, " for Congressional budget purposes.
The General Accounting Office "A Glossary of Terms Used in the Federal Budget Process" (Ex. 1 hereto) provides that "Collections [by the federal government] are classified into
two major categories: (1) governmental receipts (also called budget receipts) and (2) offsetting collections." Taxes are classified under the former; fees (including user fees) are classified under the latter. Id. Before a Bill providing for a "collections" may be voted on Congress, it must be classified as either a "tax" or "fee," and "scored" accordingly. Taxes are scored under the so- called "pay-as-you-go" (or "PAYGO") requirements of the Budget Enforcement Act, which provides that any tax legislation causing an increase (or decrease) in the deficit must be offset by other legislation or by a sequester. See A. Schick, The Federal Budget: Politics Policy, Process (Brookings Inst., 1995) (excerpt attached as Ex 2 hereto). The PAYGO requirements act as a self-imposed limitation on Congress' ability to increase spending and/or reduce revenue: if spending increases are not offset by revenue increases (or if revenue reductions are not offset by spending reductions), then a "sequester" of the excess budgeted funds is required. See Clinton v. City of New York, No. 97-1374, 1998 WL 333013, at *11 n.31 (U.S. June 25, 1998).
Fees, in contrast - as "offsetting collections" - are treated as "certain receipts that are not counted as revenues but are deducted from budget authority and outlays ...." Federal Budget Policy, supra (Ex. 2). Offsetting collections thus, by definition, are not subject to the scoring requirements of PAYGO. In essence, they are scored as a "wash." By scoring offsetting collections in this manner, legislators are relieved of any obligation to enact legislation offsetting the revenue increase they bring about.
In "scoring" Section 8003, the CBO (based on input from Congress) determined that it was an "offsetting collection" -- a fee -- pursuant to this process. In a Memorandum to the Office of Congressman Christensen from the CBO attached here as Exhibit 3, this treatment of Section 8003 is set forth. Attached further as Exhibit 4 is the actual "scoring" documents for H.R. 3579, which includes the treatment of Section 8003 (the NSF appropriations) as a fee ("offsetting 4
collection"). In light of the funds' status as a fee, Congress was relieved of its obligation under PAYGO.
Finally, the treatment of Section 8003 by Congress as authorizing a fee and not a tax pursuant to the mandatory Congressional budgetary process is consistent with subsequent legislation on the Internet. Since the Registrants' prior briefs were filed, the Cox bill (H.R. 4105), which imposes a moratorium on all taxation of the Internet for three years, passed the House by nearly-unanimous vote on June 23, 1998. 1/ See Ex. 5 ("H.R. 4105 Summary").
1/ Congressional intent not to tax the Internet was specifically echoed by Representative Chip Pickering - who, as acting Chairman of the House Subcommittee on Basic Research, conducted a series of hearings specifically addressing the Internet domain name system - in his June 10, 1998 Letter to House Appropriations Committee Chairman Bob Livingston (Ex. 6 hereto):
It is my belief that Section 8003 of H.R. 3579 does not in any way ratify taxes on registration of domain names. This section, instead, addresses only "fees" which are properly distinguished from "taxes" in the Court's decision. I assume that the Committee on Way[s] and Means did not consider this section because the provision concerned the authorization of "user fees" and not taxes. However, I am concerned with the precedent that this has set in regards to taxing the Internet. The Committee on Ways and Means has exclusive House jurisdiction over any measure in a bill that would impose such taxes.
For the record, I am opposed to taxing the Internet. Furthermore, I am opposed to the retroactive imposition of a tax on the Internet. It is my understanding that several Federal agencies are in the process of imposing similar "fees" that at first glance appear to be new taxes. The recent action by the House, in regards to Section 8003, can only encourage their actions.
I. SECTION 8003, BY ITS CLEAR LANGUAGE,
RATIFIES A USER FEE, NOT A TAX
NSF's reliance on the "exquisite precision" of Section 8003 destroys its position. See NSF Opt. at 1-2. The exquisitely-precise language of Section 8003 addresses a "fee," not a "tax." NSF thus runs head-on into a long and consistent line of Supreme Court and other court cases establishing and maintaining a bright-line distinction between these two terms, which have become terms of art. See United States v. United States Shoe Corp., 118 S. Ct. 1290, 1295-96 (1998) ("we are 'to guard against . . . the imposition of a [tax] under the pretext of fixing a fee"' (quoting Pace v. Burgess, 92 U.S. 372, 376 (1875)); National Cable Television Ass'n Inc. v. United States, 415 U.S. 336, 341 (1974) ("It would be such a sharp break with our traditions to conclude that Congress had bestowed on a federal agency the taxing power that we read [IOAA] narrowly as authorizing not a 'tax' but a 'fee.' A 'fee' connotes a 'benefit' . . ."). 2/
NSF's insistence that Section 8003's calculated omission of the word "tax" somehow does not matter also ignores the legislative reality that Section 8003 never would have passed had that critical word been included. It is undeniable that this Congress is not prepared to enact the first- ever tax on the Internet. To the contrary, the House of Representatives has just passed by near- unanimous vote a Bill imposing a moratorium on all taxation of the Internet. See Ex. 5 (Summary of History of Cox Bill (H.R. 4105)). Indeed, the tax/fee distinction is the basis for this Court's invalidating of the Preservation Assessment in the first place. Thus Section 8003 is, as NSF contends, "crystal-clear." See NSF Opp. at 4. It is so clear, in fact, that it cannot be read
2/ Tellingly enough, Defendants fail to confront, much less attempt to distinguish these authorities cited in Plaintiffs' opening memorandum.
to ratify anything other than the "fee" that it specifies. 3/ By the same token, any contention that it ratifies a "tax" omitted from the provision's text necessarily requires the Court write-in that critical term. This runs afoul of, inter alia, the fundamental principle that a statute's unambiguous language is to be given its plain meaning.
A. Section 8003 Ratifies What It Specifies: A User Fee
NSF's insistence that the language of Section 8003 is "crystal clear" serves merely to undermine its position. The legislation which NSF advanced states, "Sec. 8003: RATIFICATION OF INTERNET INTELLECTUAL INFRASTRUCTURE FEE." As a straightforward matter of statutory construction, Congress' use of the term "fee" in Section 8003 means what it says -- it ratifies a fee. 4/ Conversely, because Section 8003 does not address a tax, it does not ratify a tax. See Field v. Mans, 516 U.S. 59, 69 (1995) (Where Congress uses terms that have settled meaning under common law, court must infer, unless statute otherwise dictates, that Congress means to incorporate settled meaning of such terms); United States v. Shabani, 513 U.S. 10, 13 (1994) (Absent contrary indications, Congress intends to adopt common-law definition of statutory terms.). Indeed, if Congress meant to abandon the tax/fee
3/ Strangely, NSF claims that the Registrants regard Section 8003 as "ambiguous." See NSF Opp. at 11. But the Registrants claim no such thing. The word "fee" is not an ambiguous expression of the word "tax;" as the Supreme Court has consistently shown, the two words are distinct and clear terms of art, with their own well-settled meanings in the law.
4/ Indeed, the title of 8003 makes it crystal clear that its sole purpose is to ratify a "FEE. " The Supreme Court has long ruled that such unambiguous titles are extremely probative, if not decisive, in ascertaining Congress' purpose: "[T]he purpose of this act is not only shown by its provisions, but is frankly revealed in its title." Truax v. Raich, 239 U.S. 33, 40 (1915); Fidelity & Deposit Co. v. Pennsylvania, 240 U.S. 319, 323 (1916) ("As revealed by its title, the purpose of the act of 1894 is 'to allow certain corporations to be accepted as surety, etc."'); accord Hartman v. Lubar, 133 F.2d 44, 46 (D.C. Cir. 1942) ("This purpose, and the purpose of the 1913 Act, are further revealed by its title ...."), cert. denied, 319 U.S. 767 (1943); Husten v. United States, 95 F.2d 168, 170 (8th Cir. 1938) ("The scope and purpose of the act under which this prosecution is brought is revealed by its title.").
distinction that is well-settled in the common law, it would have to do so explicitly, which it obviously did not do in Section 8003. See Midlantic Nat'l Bank v. New Jersey Dep't of Envtl. Protection, 474 U.S. 494, 501 (1986) (normal rule of statutory construction is that if Congress intends for legislation to change interpretation of judicially-created concept, it makes that intent specific).
In arguing that Section 8003 ratifies a tax without mentioning it, NSF tries to suggest that the well-settled distinction between fee and tax is merely a matter of "labeling" that does not matter. See NSF Opp. at 9 n.4. Curiously, NSF reasons in this extended footnote - which sets forth the core of its argument on statutory construction of the tax/fee distinction -- that "neither the courts nor Congress have lent dispositive significance to the label used in designating payments to the government for purposes of determining the purpose or effect of a statute." 5/ Id. This sweeping generality simply dismisses out of hand entire canons and doctrines of statutory construction, which make clear that an unambiguous word of well-settled meaning is to be accorded its plain meaning, not used as an invitation to engage in philosophical inquiries into Congressional intent to the contrary. See, e.g., 62 Cases. More Or Less, Each Containing Six Jars Of Jam v. United States, 340 U.S. 593, 596 (1951) ("[A]fter all, Congress expresses its
5/ The authorities NSF cites for the proposition that the tax/fee distinction is merely a trivial matter of labeling -- the Skinner and Florida Power & Light decisions, along with the "National Tobacco Policy and Youth Smoking Reduction Act" -- have nothing to do with the general issue of statutory construction, much less whether a particular statute can properly be read to enact or ratify a tax when it straightforwardly addresses only a "fee." Skinner and Florida Power & Light are both delegation cases, in which Congress' delegation of authority to impose either fees or taxes was upheld, not because fees or taxes are the same thing, but because the intelligible guidelines provided by Congress in each case (quite unlike here) supplied the requisite authority to impose either one. Moreover, the National Tobacco statute NSF relies on, far from supporting NSF's contention that the tax/fee distinction does not matter, flatly undermines it; the Joint Committee on Taxation determines that the payment in question is a "tax," and not a "user fee." See Ex. B to NSF Opp., at 9.
purpose by words. It is for us to ascertain - neither to add nor to subtract, neither to delete nor to distort.").
NSF strains to argue that this Court is compelled to construe Section 8003 as ratifying a tax, purportedly because any other construction would nullify Section 8003 or render it meaningless. This argument is both inaccurate and misplaced as a matter of law. It is inaccurate because the proper construction of Section 8003 - as ratifying the user fee it specifies - gives it the effect of disposing of the fee-based issues in the Registrants' pending appeal of this Court's April 6 Opinion and Order (these claims challenging the validity of the Preservation Assessment in its capacity as a user fee are set forth as Counts III and IV of the First Amended Complaint). It is misplaced as a matter of law because, even if Section 8003 were rendered meaningless by construing it to address something other than a tax, that fact alone could not be used to force this Court to rewrite the provision to ratify a tax it does not address. As the Supreme Court itself stated in rejecting an argument closely analogous to NSF's here:
It is not a sufficient answer to say that the ratification was meaningless unless it embraced duties collected on imports from the United States after April 11, 1899, because the exactions before were legal. The instances are many where Congress, out of abundant caution, has ratified what it did not need, or was afterwards found not to have needed, ratification. [Citation omitted.]
It would be inadmissible to lay down as a general rule that a particular ratification covered what was not, in the judgment of the courts, included or intended to be, simply because it might be thought to have been otherwise unnecessary.
Lincoln v. United States, 202 U.S. 484, 499 (1906).
Moreover, even if Congress were found to have made a mistake in ratifying a fee unnecessarily, the Supreme Court has established that it is for Congress, not the courts, to correct its mistake if it chooses to. See Reves v. Ernst & Young, 494 U.S. 56, 63 n.2 (1990) ("[I]f Congress erred, however, it is for that body, and not this Court, to correct its mistake"). See also
Heppner v. Alyeska Pipeline Service Co., 665 F.2d 868, 872 (9th Cir. 1981) (Because "Congress has a right to be wrong," Congressional mistakes that are "substantive matters of policy" as opposed to drafting errors can only be corrected by Congress, not courts); Catholic Social Services Inc. v. Meese, 664 F. Supp. 1378, 1387 (E.D. Cal. 1987) (applying Heppner test, holding that (as here) Congress' deliberate "inclusion of narrower, limiting language" leading to absurd result is a policy matter, not a drafting error, and thus not subject to court's correction).
In the final analysis, NSF's insistence on reading "fee" to mean "tax" in Section 8003 disregards the fact that this Court has already found, quite decisively, that the tax/fee distinction is not a mere formalism; the Preservation Assessment in Amendment 4 to the Cooperative Agreement between NSF and NSI was struck down as unconstitutional not for what it was called (a fee), but for what it is - a tax. Ultimately, the Defendants' position is as cynical as it is inconsistent, suggesting that Congress' passage of legislation ratifying a "fee" should be read by this Court, based on the legislation's "exquisitely precise" language, to ratify a "tax" that the drafters themselves were too afraid, for obvious reasons, to openly identify.
B. The Term "Tax" May Not Be Read Into Section 8003 Where The Drafters Themselves Were So Careful To Omit It
As noted above, the first step of NSF's two-step strategy was to obtain passage of Section 8003, which could only be accomplished by omitting the word "tax" from the provision. The second step is to try to persuade this Court to supply that term, to read into Section 8003 the tax that it was so carefully drafted to omit. This Court should decline to do so. Out of deference to Congress' legislative role, courts have consistently refused to supply, rewrite, or "read in" terms that have been omitted from particular statutes.
The Supreme Court recently reiterated that it "resist[s] reading words or elements into a statute that do not appear on its face." Bates v. United States, 118 S. Ct. 285, 290 (1997). This echoes the longstanding principle stated by Justice Frankfurter decades earlier: "A judge must not rewrite a statute, neither to enlarge nor contract it." Some Reflections On The Reading Of Statutes, 47 Colum. L. Rev. 527 (1947); see also Six Jars Of Jam, 340 U.S. at 596 ("It is for us to ascertain -neither to add nor to subtract, neither to delete nor to distort [Congress' words]"); Story v. Snyder, 184 F.2d 454, 459 (D.C. Cir.) ("It is not within the judicial function to rewrite a statute so that it will authorize what the court thinks should be authorized"), cert. denied, 340 U.S. 866 (1950); Trevan v. Office Of Personnel Management, 69 F.3d 520, 525 (Fed. Cir. 1995)
("[W]e must enforce the statute as written and are not free to ignore what appears to have been a conscious choice by Congress" to omit particular language); Blackwell v. Virginia Dep't of Taxation, 115 B.R. 86, 88 (Bankr. W.D. Va. 1990) ("[C]ourts are not permitted to add words to a statute or to accomplish the same result by judicial interpretation").
Thus, in construing legislation, the Supreme Court has chastened that the courts are to divine intent from what statutes say. The Court has likewise admonished that the courts are to pay as much attention to the words that legislators omit as to the words that they include, particularly where the terms in question are terms of art with settled meaning. See e.g., West Virginia Univ. Hospitals, Inc. v. Casey, 499 U.S. 83 (1991) (Scalia, J), superseded by statute (42 U.S.C. § 2000a et seq. (Civil Rights Act of 1991)). In Casey, the Supreme Court addressed the contention that the Civil Rights Act of 1964 provided for the award of expert fees to the prevailing party in litigation brought under the Act, even though the Act provided only for the award of attorney's fees. The Court rejected this contention, observing that Congress had historically distinguished between the two different kinds of fees: "[t]he record of statutory usage
demonstrates convincingly that attorney's fees and expert fees are regarded as separate elements of litigation costs." Id. at 87. 6/ Further, in rejecting the contention that the congressional purpose in enacting § 1988 must prevail over the ordinary meaning of the statutory terms used, Justice Scalia concluded, in terms profoundly apropos here:
[W]here, as here, the statute's language is plain, 'the sole function of the court is to enforce it according to its terms"' [Citation omitted.] Congress could easily have shifted "attorney's fees and expert witness fees," or "reasonable litigation expenses," as it did in contemporaneous statutes; it chose instead to enact more restrictive language and we are bound by that restriction.
Casey, 499 U.S. at 98-99 (emphasis added) (quoting See United States v. Ron Pair Enterprises Inc., 489 U.S. 235, 241 . . . (1989). Here Congress has enacted language approving only a user fee, and this Court should and must give effect to that "restriction." Id.
C. Because It Omits Any Mention Of The Tax That This Court
Held Unconstitutional On Separation Of Powers Grounds,
Section 8003 Cannot Be Read To Provide The Unequivocal
Ratification Required In The Constitutional Context
As NSF's Brief concedes, "The only grounds on which the payment was held [by this Court] to be unauthorized - and thus in need of ratification - was that it was a tax." NSF Br. at 10. Put more accurately, the only ground on which the payment was held to be unconstitutional was that it was a tax. If it were merely a "fee" -- which NSF and NSI vigorously contended it was - it would not have raised the same separation-of-powers concerns that drove this Court's April 6, 1998 decision. See April 6 Mem. and Order, at 16. The tax/fee distinction was thus the very linchpin of this Court's holding that the Preservation Assessment was unconstitutional.
6/ Just as consistently as the courts (and Congress) have drawn a bright line between fees and taxes, the Court elucidated the distinction between attorney's and expert fees: "[t]he judicial background against which Congress enacted § 1988 mirrored the statutory background: expert fees were regarded not as a subset of attorney's fees, but as a distinct category of litigation expense." Id. at 92.
Nonetheless, NSF and NSI continue to insist that ratification of a "fee" constitutes ratification of a "tax." See NSI Br. at 2 (tax/fee distinction is "quibbl[ing] with Congress' choice of words").
Here Defendants run head-on into the axiom that ratification of conduct of doubtful constitutionality must be unequivocal. Greene v. McElroy, 360 U.S. 474, 507 (1959). Defendants' arguments on this point must be viewed against the backdrop of their two-step strategy - first, to obtain passage of Section 8003, which can only be secured by omitting the critical word "tax" from it; and second, to turn around and argue to this Court that the terms "tax" and "fee" are really just interchangeable labels, so that ratification of "fee" is the same as ratification of "tax."
Whatever NSF and NSI want to say about Section 8003, there are certain things one cannot say. One cannot say that the words "tax" and "fee" do not have their own distinct, well- settled meanings in the law. One cannot say that in Section 8003, or in its conference report for that matter, the word "tax" is included anywhere. One cannot say that Section 8003 expressly ratifies anything other than the "fee" it specifies. Accordingly, the only manner in which Section 8003 could be construed to ratify a tax it does not mention is by implication or inference. This Court made clear in its April 6 Order, however, that any such implied ratification must fail: "Legislation can effect a ratification only if Congress clearly recognizes the unauthorized tax and specifically states that the tax is ratified." April 6 Order at 17 (emphasis added).
This Court's April 6 Order thus aligns with the precept that ratification in the constitutional context must be explicit and unequivocal. See, e.g., Greene, 360 U.S. at 507. NSF's cavalier dismissal of Greene and other authorities previously cited by the Registrants on this issue succeeds only in illuminating their significance. NSF argues that Greene and Ex Parte Endo, 323 U.S. 283 (1944), are inapplicable because Congress could not ratify or authorize the
specific conduct at issue in those cases, while Congress can "authorize the imposition of taxes, and so . . . can also ratify the payment held by this Court to be a tax." NSF Br. at 17. First of all, if Greene and Endo actually did involve "unratifiable" unconstitutional conduct as NSF claims Br. at 16-17), what would be the conceivable purpose in their requiring that any such ratification be unequivocal? NSF's analysis is nonsensical. 7/
Putting aside the issue of whether NSF's enactment of the tax at issue could be ratified at all (and it cannot, as addressed in the ensuing section of this brief), NSF misapprehends the nature and purpose of the requirement that ratification in areas of doubtful constitutionality be unequivocal -which is as applicable here as it is in Greene. See also EEOC v. CBS. Inc., 743 F.2d 969, 974-75 (2d Cir. 1984) (ratification where constitutional issues involved must be unequivocal "because explicit action, especially in areas of doubtful constitutionality, requires careful and purposeful consideration by those responsible for enacting and implementing our laws." (quoting Greene, 360 U.S. at 507)); Lewis v. Grinker, 660 F. Supp. 169, 173-74 (E.D.N.Y. 1987) (rejecting, for lack of "clear and unequivocal language," contention that Congress ratified by amendments to OBRA legislation prior use of alien restrictions by Health and Human Services, even though '[I]t is clear that Congress passed the OBRA amendments in response to this Court's ruling that the Secretary's regulation had no proper basis."). The heightened explicitness required by the Supreme Court for ratification in areas of doubtful constitutionality is not for purposes of window dressing. Rather, only by requiring Congress to express openly and unequivocally its intent to address and ratify an issue of constitutional import can courts be assured that Congress has engaged in the "careful and purposeful consideration"
7/ Compounding the illogic of NSF's presentation is its devoting six pages of its brief to the "rebuttal" of a due process argument that the Registrants never made and which is not
that constitutional issues require. See Greene, 360 U.S. at 507; Demby v. Schweiker, 671 F.2d 507, 511 (D.C. Cir. 1981) (" [i]t is difficult to imagine that any member of Congress . . . would consider that he was voting for the repeal . . . in assenting to the reduction as it was presented in the conference report").
This does not call on Courts to investigate or second-guess the legislative process. It merely requires that the Court look closely at the legislation's language, to ensure that it is unequivocal on the constitutional matter in question, so as to ensure both legislative certainty and accountability in areas of doubtful constitutionality. Here, the question is whether Congress ratified a tax. "Tax" is not mentioned by Congress in Section 8003; the provision was not considered or passed by either of the Congressional Committees charged with specific jurisdiction over tax legislation; and the funds addressed by the provision were "scored" by the CBO as an "offsetting collection" (fee) instead of a "governmental receipt" (tax), see Exs. 1-4. The language of the statute, in other words, reflects precisely what Congress did, and did not, do in enacting Section 8003 - and it plainly did not ratify the first-ever tax on the Internet in contravention of its own policy that just received near unanimous passage in the House. See Ex. 5. Any contention that Section 8003 meets the test of unequivocal ratification of a tax this Court struck down on constitutional grounds is therefore, to put it bluntly, absurd on its face. 8/
7/cont. on point. See NSF Opp. at 17-23.
8 / See St. Martin Evangelical Lutheran Church v. South Dakota, 451 U.S. 772, 788 (1981) ("long-established canon of construction [that indefinite congressional expressions cannot negate plain statutory language] carries special weight when . . . constitutional questions" are raised); Ex Parte Endo, 323 U.S. 283, 299 (1944) (where constitutional issues implicated, "[w]e must assume, when asked to find implied powers in a grant of legislative or executive authority, that the law makers intended to place no greater restraint on the citizen than was clearly and unmistakably indicated by the language they used"); EEOC v. Martin Indus.. Inc., 581 F. Supp. 1029, 1035-36 (N.D. Ala.) (distinguishing between "improper and unauthorized" acts, which could be ratified by implication under certain circumstances, and acts implicating constitutional
Here too NSF misstates the issue: "Plaintiffs assert that Section 8003 unconstitutionally delegates to NSF and NSI the power to enact tax legislation." NSF Opp./Reply at 25. The Registrants claim no such thing. Section 8003 is manifestly a ratification measure, and thus does not purport to delegate anything. The real question is whether Section 8003 can or does correct what this Court found to have been an unconstitutional exercise of the taxing power. And the Registrants ask: How can NSF's enactment of a tax be blessed by ratification, if the enactment of the tax was an unconstitutional usurpation of Congressional power in the first place? That is, if NSF did something that the Constitution itself permits only Congress to do, what difference does it make if Congress (contrary to the Constitution) purportedly ratifies it? 9/
NSF and NSI offer no effective answer to this question. There is none. Instead, the Defendants' elect to proceed as if it had not been raised. They refuse to acknowledge that there is a delegation issue at all here, clearly because they are well aware that the kind of separation-of-powers violation identified by this Court in its April 6 Opinion cannot be ratified. See NSF Opp. at 28; NSI Br. at 5. Not even Congress itself can ratify an agency's exercise of unfettered legislative power -- any more than Congress can decide to confer on the President the line-item veto.
8/cont. concerns, which could only be ratified by unequivocal Congressional action), appeal dismissed, 469 U.S. 806 (1984).
9/ See United States v. Butler, 297 U.S. 1, 62 (1936) ("When an act of Congress is appropriately challenged in the courts as not conforming to the constitutional mandate, the judicial branch of government has only one duty: to lay the article of the Constitution which is invoked beside the statute which is challenged and to decide whether the latter squares with the former.").
NSF cannot bring itself to acknowledge that this very Court has recently reaffirmed the vitality of the non-delegation doctrine in City of New York v. Clinton, 985 F. Supp. 168, 181 (D.D.C.): "Congress can delegate authority only if that authority is in fact delegable . . ." This Court also confirmed the fundamental principle that "Congress may not . . . delegate its inherent lawmaking authority" to either of the other two branches of government. Id. at 179 (citing Loving v. United States, 517 U.S. 748 (1996) ("[t]he lawmaking function belongs to Congress . . . and may not be conveyed to another branch or entity"), aff'd, 1998 WL 333013 (U.S.), and Field v. Clark, 143 U.S. 649, 692 (1892) ("That Congress cannot delegate legislative power to the president is a principle universally recognized as vital to the integrity and maintenance of the system of government ordained by the Constitution.") (emphasis added)). As now-Chief Justice Rehnquist emphasized in his concurring opinion in Industrial Union Dep't. AFL-CIO v. American Petroleum Inst., 448 U.S. 607, 685 (1980):
As formulated and enforced by this Court, the nondelegation doctrine serves three important functions. First, and most abstractly, it ensures to the extent consistent with orderly governmental administration that important choices of social policy are made by Congress, the branch of our Government most responsive to the popular will. [Citations omitted.] Second, the doctrine guarantees that, to the extent Congress finds it necessary to delegate authority, it provides the recipient of that authority with an "intelligible principle" to guide the exercise of the delegated discretion. [Citations omitted.] Third, and derivative of the second, the doctrine ensures that courts charged with reviewing the exercise of delegated legislative discretion will be able to test that exercise against ascertainable standards. [Citations omitted.]
(Emphasis added). NSF's unfettered, unguided and unapproved "legislation" of the tax in question violates every one of the three purposes of the nondelegation doctrine that the Chief Justice articulated.
Now that the Supreme Court has affirmed this Court's ruling in Clinton, NSF's characterization of the non-delegation doctrine as a dead letter from the "New Deal-era" simply collapses. See NSF Br. at 26. In a concurring opinion particularly destructive to NSF's claim that the non-delegation doctrine is dead, Justice Kennedy stated:
Liberty is always at stake when one or more of the branches seek to transgress the separation of powers.*** It follows that if a citizen who is taxed has the measure of the tax or the decision to spend determined by the executive alone, without adequate control by the citizen's Representatives in Congress, liberty is threatened. Money is the instrument of policy and policy affects the lives of citizens. The individual loses real liberty in a real sense if that instrument is not subject to traditional constitutional constraints.
Clinton, 1998 WL 333013 at *15. Justice Kennedy's words presciently apply to the circumstance at hand, in which a renegade executive agency and a government contractor have secretly conspired to pass, collect and spend millions of tax dollars on their own privately-conceived block grant slush fund. The Defendants' construction of Section 8003 as a tax-ratification measure fails on separation-of-powers grounds because Congress may not place its imprimatur on NSF's exercise of Congressional power. As Justice Kennedy reasoned:
It is no answer, of course, to say that Congress surrendered its authority by its own hand; nor does it suffice to point out that a new statute, signed by the President or enacted over his veto, could restore to Congress the power it now seeks to relinquish. That a congressional cession of power is voluntary does not make it innocuous. The Constitution is a compact enduring for more than our time, and one Congress cannot yield up its own powers, much less those of other Congresses yet to follow.*** Abdication of responsibility is not part of the constitutional design.
Id. at * 16. So it is here -- Congress cannot now ratify NSF's usurpation of the taxing power any more than Congress could rubber stamp the President's use of the line item veto after he used it. Congress, in other words, cannot be deemed to have done indirectly that which it was not permitted to do directly. City of New York v. Clinton, 985 F. Supp. 168, 179 (D.D.C.) (quoting U.S. Term Limits, Inc. v. Thornton, 514 U.S. 779, 829 (1995) ("Congress' 'indirect attempt to
accomplish what the Constitution prohibits . . . accomplishing directly cannot stand"'), aff'd, 1998 WL 333013.
A hypothetical example may serve to illuminate the invalidity of NSF's contention that Section 8003 cures any and all problems inherent in the Preservation Assessment. Assume that NSF concluded that its budget was insufficient to support all of the worthwhile research activities on its agenda. To make up for this shortfall, NSF decides to impose on every family with a student in college or graduate school a $1,000 "higher-education" tax. (NSF's rationale is that the students of these families will benefit indirectly from the funded activities.) This tax is charged during calendar year 1997, after which it is terminated (when a suit is filed against NSF, and the tax struck down as an unconstitutional exercise of the taxing power). Congress then tucks into an appropriations bill the following "ratifying" language:
The $1,000 fee charged by NSF during calendar year 1997 on all taxpayers with dependents enrolled in colleges and universities, which was to be expended for research activities conducted by such colleges and universities for the development of the social and physical sciences, and which was held by Judge Thomas F. Hogan to have been collected without authority in Aggrieved Parents v. NSF, is hereby legalized and ratified and confirmed as fully to all intents and purposes as if the same had, by prior Act of Congress, been specifically authorized and directed.
By NSF's reasoning, this language (based on Section 8003) would be effective to place Congress' imprimatur on NSF's enactment of the education tax. But this is clearly wrong. While Congress may ratify an agency's collection of a tax that Congress itself has enacted, it may not ratify an agency's collection of a tax that the agency itself devised and imposed on its own. See Clinton, 1998 WL 333013 at *16 (Kennedy, J., concurring) ("[i]t is no answer, of course, to say that Congress surrendered its authority by its own hand . . . Abdication of responsibility [by
Congress] is not part of the constitutional design"). In short, NSF's enactment of this tax is an underlying, uncorrectable separation-of-powers violation that Section 8003 - a ratification measure which speaks merely to collection - does not even purport to address.
Nor does it make the slightest difference, notwithstanding NSF's protestations to the contrary, that Section 8003 is specific in describing the funds collected, from whom, for what purpose, and so on. See NSF Opp. at 2 (emphasizing "the painstaking precision with which the language of Section 8003 ratifies the collection of the subject monies, and in what amount, from what source, in what circumstances, for what time period, and for what carefully delineated purpose . . ."). This is all completely beside the point. Because Congress could never have directly delegated to NSF the raw power to devise, enact and impose taxes in the first instance, it cannot (and did not) legitimate such a usurpation of power after the fact, no matter how specifically the monies in question are described or earmarked. 10/
2. The Hampton and Skinner Decisions, Like Clinton, Confirm
That Section 8003 Did Not, And Cannot, Ratify Any Tax
NSF's discussion of J.W. Hampton Jr. & Co. v. United States, 276 U.S. 394 (1928) and Skinner v. Mid-America Pipeline Co., 490 U.S. 212 (1989), serve only to show why NSF's enactment of the tax in question is a fundamental violation of separation-of-powers that was not, and could not be, ratified by Section 8003. See NSF Opp. at 29-33. Hampton addressed the issue of whether Congress, in providing guidelines for the collection of taxes by the Customs
10/ Equally unavailing is NSF's brushing aside the Registrants' delegation challenge as constituting merely "plaintiffs' views on the defendants' pest conduct." See NSF Br. at 28. NSF seems to be saying that because Section 8003 does not address NSF's authority to enact the tax in the first instance, it does not raise any delegation concerns. See id. NSI takes the same position. See NSI Br. at 5 ("Section 8003 is a narrow ratification of a specific payment, and it delegates nothing to NSF"). By taking this head-in-the-sand approach to the delegation issue
Service, had unconstitutionally delegated the taxing power. The Court held that it did not, precisely because Congress was delegating to the Customers Service only the discretion to raise or lower duties that Congress itself had enacted and authorized in the first instance. Hampton, 276 U.S. at 408-09. The Customs Service, in other words, was acting only as the executor of Congress' own will, which was clearly set forth in the "intelligible principle" Congress provided to the Service "to guide the exercise of the delegated discretion." Id. at 409. Here, by obvious contrast, it was NSF and NISI, not Congress, that took it upon themselves to devise and impose -to legislate - the tax at issue, without the slightest guidance or approval from Congress. Thus, to the extent Section 8003 is claimed to be a tax-ratification measure, it flatly fails the Hampton test. See also Clinton, 1998 WL 333013, *15 (Kennedy, J., concurring) (Congress cannot "abdicate" legislative role via improper delegation). 11/
Indeed, the Supreme Court's recent affirmance of this Court's decision in Clinton puts to rest NSF's attempt to dismiss as outdated the decisions cited by the Registrants on the delegation issue, Panama Ref. Co. v. Ryan, 293 U.S. 388, 430 (1935); A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935); and Larabee Flour Mills Co. v. Nee, 12 F. Supp. 395 (W.D. Mo. 1935). See NSF Br. at 26 ("three New-Deal-era decisions (one out of the Western District
10/cont. i.e., 'if Section 8003 does not address it, it must not exist'- NSF and NSI demonstrate only that this is an issue that they do not even want to begin to address.
11/ Skinner is to the same effect. Although NSF tries to make much of Skinner's upholding of Congress' express delegation of the power "to establish a system of user fees to cover costs of administering federal pipeline safety programs" (NSF Br. at 31), Congress never delegated the taxing power to NSF. Moreover, in Skinner, quite unlike here, the delegation in question was cabined by (to use NSF's words) "multiple restrictions on the Secretary's discretion to assess pipeline user fees." NSF Br. at 31. It is indisputable that NSF, when it decided to enact and impose the tax in question, acted without benefit of any Congressional guidelines or restrictions. Thus Skinner too fails to provide any support for construing Section 8003 as a "cure" for what was clearly an unconstitutional usurpation of legislative power by NSF.
of Missouri")). NSF simply refuses to acknowledge Larabee, the impeccably- reasoned case "on all fours" with the circumstances at hand, in which the court held that if Congress cannot constitutionally delegate to an agency the unbridled power to impose taxes in the first instance, Congress clearly has no separately endowed power to ratify such taxes after the fact. 12/ As Justice Kennedy made clear in Clinton, the "problem" of Congress' abdication of power is not merely an abstraction from the past; it is "here, " and "now".
B. Intelligible Guidelines For Agency Action Cannot Be Imparted Retroactively
NSF's further argument - that Section 8003 succeeds in providing retroactively to NSF "intelligible guidelines" for its enactment of this tax - is simply absurd. See NSF Br. at 37 ("Because Section 8003 sets forth clear, intelligible guidelines in directing that the 30 percent portion of the fee be collected, that statute does not violate the nondelegation doctrine."). addition to its patent incoherence, it concedes that the requisite intelligible guidelines were not in place at the time NSF took it upon itself to impose the tax. As the Court of Claims was quick to recognize in Timberland Paving & Constr. Co. v. United States, 8 Cl. Ct. 653, 660 (1985), it makes no sense to suggest, as NSF does here, that the legislature can provide "guidance" to an agency backward through time. ("The notion is unsound . . . The court cannot accept the government's retroactive delegation (or designation) argument.").
Indeed, it would not be too much to say that NSF's interpretation effectively does away with the longstanding constitutional requirement that intelligible guidelines be in place at the
12/ See also Carter v. Carter Coal Co., 298 U.S. 238 (1936) (striking down on non-delegation grounds statute allowing a majority of miners and ore producers to establish a minimum wage that would be binding on the entire group); F.G. Vogt & Sons v. Rothensies, 11 F. Supp. 225, 226 (E.D. Pa. 1935) ("the sections of the [Agricultural Adjustment] act under which the processing tax is levied contain an invalid and unconstitutional delegation of power to the Secretary of Agriculture, thus rendering the tax void.").
time the agency acts. See Industrial Union v. American Petroleum Institute, 448 U.S. 607, 685 (1980) (Rehnquist, J., concurring) ("the [nondelegation] doctrine guarantees that, to the extent Congress finds it necessary to delegate authority, it provides the recipient of that authority with an 'intelligible principle' to guide the exercise of the delegated discretion." (citations omitted)). By NSF's analysis, agencies can take whatever actions they choose, and Congress can pick and choose among their unfettered actions (after the fact) and deem those that it likes to have coincided with Congress' own will. Needless to say, the whole purpose of the intelligible- guidelines requirement is to prevent agencies from taking such renegade actions, and to require Congress to set boundaries for such actions in the first instance, so that both Congress and the agency will know ab initio the boundaries, and the direction, of the delegated authority.
Indisputably, that did not happen here. This is an indelible Constitutional principle that Congress cannot disregard even if it wants to.
III. CONSTRUING SECTION 8003 AS A TAX-RATIFICATION MEASURE
IS IRRECONCILABLE WITH THE ORIGINATION CLAUSE
The history of Section 8003 is short but telling. Unlike tax legislation, Section 8003 originated not in the House of Representatives, but in Conference Committee. Also unlike tax legislation, it bypassed the House Ways & Means and Senate Finance Committees, which have exclusive jurisdiction over tax legislation in their respective bodies. Finally, its funds were budgeted as "offsetting collections," consistent with their character as user fees, rather than as "government receipts" or taxes. Section 8003 thus ratified at most a user fee, and only a user fee, as the language of the provision plainly states, and as the submissions of Congressional leaders confirm.
Besides being far-fetched, the Defendants' assumption that Section 8003 functions as a tax-ratification measure simply cannot be squared with the Origination Clause of the Constitution. The Defendants cannot change the history of Section 8003. Nor can they change the founding fathers' stated purpose underlying the Origination Clause, which was to guard against taxation without representation by prohibiting tax legislation from originating anywhere other than the House of Representatives. See United States v. Hagen, 711 F. Supp. 879, 881 (S.D. Tex. 1989) ("'[t]axation and representation are strongly associated in the minds of the people . . .' Madison's Notes (Aug. 13, 1787). The House appeared to be more directly and immediately representative of the people."). Construing 8003 to ratify a tax simply defies that requirement.
In the hope of evading the Origination Clause's clear terms, NSF and NSI place their reliance on United States v. Munoz-Flores, 495 U.S. 385 (1990). See NSF Br. at 38-39; NSI Br. at 6-7. That decision does not support the weight that Defendants would place upon it, however. In holding that the particular legislation in Munoz-Flores was not a "Bill for Raising Revenue" for purposes of the Clause, the Supreme Court made clear that, quite unlike here, the provision in that case raised revenue to support the very program that it created. 495 U.S. at 398 ("a statute that creates a particular governmental program and that raises revenue to support that program ... is not a 'Bill for raising Revenue' within the meaning of the Origination Clause." (emphasis added)). Accordingly, there was no concern that the monies at issue in Munoz-Flores were, or could be, used for broader, "general revenue" purposes. Id. Here, by obvious contrast, the Preservation Assessment is not raised to support a program that Section 8003 creates (which does not create any program); instead, it is broadly earmarked for further development of the Internet - whose existence predated Section 8003 by some thirty years.
While Defendants would argue that this generalized reference to "a program" (if the Internet can be called that) suffices to immunize Section 8003 from the Origination Clause, such an analysis takes Munoz-Flores far beyond what it says or stands for. Moreover, it would make a mockery of the Clause's underlying purposes; tax legislation generally earmarking funds for "Higher Education," "The War on Hunger," or any other politically-attractive cause or subject would be safe from construction as a "Bill for Raising Revenue" -and thus could be added at the eleventh-hour, in Conference, to any appropriations bill. Such an analysis is ultimately an exploitation of the very "program" (here, the Internet) that the legislation in question is purportedly drafted to support. By the Defendants' reasoning, "the Internet" becomes an expedient, nothing more, whose invocation would allow taxes to be passed as if the Origination Clause did not exist. In Munoz-Flores, the Supreme Court apparently foresaw the potential for such abuses, and thus refused to define a "revenue-raising" bill so narrowly, within the meaning of the Clause, so as to eviscerate its meaning and importance. Thus, to the extent Section 8003 were construed as a tax measure - and it cannot be - its passing reference to "the Internet" does not provide a constitutional escape hatch, and it could not survive the Origination Clause.
Because Section 8003 of H.R. 3579 has no effect on what this Court previously ruled to be an unconstitutional tax, NSF's motion to dismiss predicated on Section 8003 should be denied, and the Registrants' motion for summary judgment should be granted, for the reasons set forth herein and in the Registrants prior briefs on these motions.
Dated: July 10, 1998
I hereby certify that on this 10th day of July 1998, I have served upon the party listed below, the foregoing Plaintiffs' Reply To Defendants NSF's And NSI's Oppositions To Plaintiffs' Summary Judgment/Declaratory Judgment And Surreply To NSF's Reply In NSF's Motions To Vacate Preliminary Injunction And To Dismiss As Moot and accompanying documents upon counsel of record in this case by telecopier and first-class mail, postage prepaid, addressed as follows:
Wilma A. Lewis, United States Attorney
Lisa S. Goldfluss, Assistant United States Attorney
Department of Justice
United States Attorney's Office
District of Columbia
555 Fourth Street, N.W.
Washington, DC 20001
Counsel for Defendant NSF
Gary D. Wilson
Wilmer, Cutler & Pickering
2445 M Street, N.W.
Washington, DC 20037
Counsel for Defendant NSI, Inc.