Ny and Presbyterian Hospital v. United States

United States Court of Appeals
for the Federal Circuit
______________________
NEW YORK AND PRESBYTERIAN HOSPITAL,
Plaintiff-Appellant
v.
UNITED STATES,
Defendant-Appellee
______________________
2017-1180
______________________
Appeal from the United States Court of Federal
Claims in No. 1:16-cv-00496-NBF, Senior Judge Nancy B.
Firestone.
______________________
Decided: January 31, 2018
______________________
MAURA BARRY GRINALDS, Skadden, Arps, Slate,
Meagher & Flom LLP, New York, NY, argued for plain-
tiff-appellant. Also represented by JONATHAN LERNER;
BERNARD JOHN WILLIAMS, JR., Washington, DC.
JACOB EARL CHRISTENSEN, Tax Division, United
States Department of Justice, Washington, DC, for de-
fendant-appellee. Also represented by TERESA E.
MCLAUGHLIN, DAVID A. HUBBERT.
______________________
2 N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES
Before NEWMAN, O’MALLEY, and WALLACH, Circuit Judg-
es.
Opinion for the court filed by Circuit Judge WALLACH.
Dissenting opinion filed by Circuit Judge O’MALLEY.
WALLACH, Circuit Judge.
Appellant New York and Presbyterian Hospital (“the
Hospital”) 1 sued Appellee the United States (“the Gov-
ernment”) in the U.S. Court of Federal Claims, alleging
that Internal Revenue Code § 3102(b) (2012) entitled the
Hospital to recover money paid to its medical residents to
settle related litigation in the U.S. District Court for the
Southern District of New York (“the District Court”). The
Government filed a motion to dismiss for lack of subject
matter jurisdiction pursuant to Rule 12(b)(1) of the Rules
of the Court of Federal Claims. The Court of Federal
Claims granted the Government’s Motion to Dismiss,
holding that § 3102(b) is not a money-mandating source of
substantive law, as required for the Court of Federal
Claims to have jurisdiction pursuant to 28 U.S.C.
§ 1491(a)(1) (2012) (“the Tucker Act”). See N.Y. & Presby-
terian Hosp. v. United States, 128 Fed. Cl. 363, 364–65
(2016); see also J.A. 1 (Final Judgment).
The Hospital appeals. We have jurisdiction pursuant
to 28 U.S.C. § 1295(a)(3). We reverse and remand.
1 The Hospital is the successor of two entities that
merged in 1998: The Society of The New York Hospital
and The Presbyterian Hospital. J.A. 30. For ease of
reference, we refer to all three entities, individually and
collectively, as the Hospital.
N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES 3
BACKGROUND 2
I. The Relevant Statutory and Regulatory Framework
Pursuant to the Federal Insurance Contributions Act
(“FICA”), I.R.C. §§ 3101–3128, employees and employers
each pay taxes based on wages paid to employees. See id.
§§ 3101 (Tax on Employees), 3111 (Tax on Employers).
Generally, the employee’s FICA taxes are “collected by the
employer of the taxpayer[] by deducting the amount of the
tax from the wages as and when paid.” Id. § 3102(a). The
subsection at issue on appeal, § 3102(b), further provides
that “[e]very employer required so to deduct the tax shall
be liable for the payment of such tax, and shall be indem-
nified against the claims and demands of any person for
the amount of any such payment made by such employer.”
There are certain exceptions to the FICA tax. Rele-
vant here, under the student exception, FICA taxes do not
apply to wages for “service performed in the employ
of . . . a school, college, or university . . . if such service is
performed by a student who is enrolled and regularly
attending classes at such school, college, or university.”
Id. § 3121(b)(10). Although the Internal Revenue Service
(“IRS”) determined that “medical residents were not
eligible for the student exception and required hospitals
employing medical residents to withhold the employee
2 The parties do not contest the Court of Federal
Claims’ recitation of the relevant facts, see Appellant’s Br.
3–17; Appellee’s Br. 3–17, which it properly derived from
the Hospital’s complaint, see N.Y. & Presbyterian Hosp.,
128 Fed. Cl. at 365–67; see also Hymas v. United States,
810 F.3d 1312, 1317 (Fed. Cir. 2016) (explaining that the
court accepts as true uncontroverted factual allegations in
a complaint when the parties dispute jurisdiction). Ac-
cordingly, we cite to the Court of Federal Claims’ recita-
tion of the facts.
4 N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES
share of FICA taxes from residents’ paychecks and pay
the withheld amounts and the employer share to the
[G]overnment,” the scope of the student exception became
subject to litigation. N.Y. & Presbyterian Hosp., 128 Fed.
Cl. at 365 (citations omitted). During the pendency of
that litigation, the IRS allowed either employers or medi-
cal residents to file protective refund claims to preserve
their claims for refunds of the FICA taxes. Id.; see Treas.
Reg. § 31.6402(a)-2(a), (b) (1960).
In 2004, the IRS implemented a regulation excluding
medical residents from the student exception for services
provided after April 1, 2005. N.Y. & Presbyterian Hosp.,
128 Fed. Cl. at 365; see Student FICA Exception, 69 Fed.
Reg. 76,404, 76,408–10 (Dec. 21, 2004); see also Mayo
Found. for Med. Educ. & Research v. United States, 562
U.S. 44, 60 (2011) (holding that the “rule is a reasonable
construction of what Congress has said”). However, in
2010, “the IRS decided that . . . medical residents could
qualify for the student exception for tax periods ending
before April 1, 2005,” such that “hospitals and [medical]
residents who had filed protective refund claims for tax
periods before April 1, 2005[,] would be able to obtain
refunds of the FICA taxes withheld from residents’ wag-
es.” N.Y. & Presbyterian Hosp., 128 Fed. Cl. at 365 (cita-
tions omitted); see J.A. 37 (IRS News Release).
II. The District Court Litigation
In August 2013, former medical residents (“the Dis-
trict Court Plaintiffs”) sued the Hospital in the District
Court, alleging that the Hospital had not filed protective
refund claims between January 1995 and June 2001, and
asserting claims of fraud, constructive fraud, breach of
fiduciary duty, negligent misrepresentation, negligence,
breach of contract, and unjust enrichment. See Childers
v. N.Y. & Presbyterian Hosp., 36 F. Supp. 3d 292, 298, 300
(S.D.N.Y. 2014); see J.A. 38–74. The Hospital filed a
motion to dismiss, see J.A. 75–102, arguing that, inter
N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES 5
alia, the District Court Plaintiffs’ claims were “disguised
tax refund suits,” Childers, 36 F. Supp. 3d at 303, and
Internal Revenue Code § 7422 “bars any suit to recover a
tax unless a timely refund claim has been made,” id. at
302; see I.R.C. § 7422(a) (providing, in relevant part, that
“[n]o suit or proceeding shall be maintained in any court
for the recovery of any internal revenue tax alleged to
have been erroneously or illegally assessed or collect-
ed . . . until a claim for refund or credit has been duly
filed” with the IRS). The District Court denied the Hospi-
tal’s Motion to Dismiss, holding that the District Court
Plaintiffs’ claims “do not arise out of the Hospital’s collec-
tion of taxes[] and therefore do not implicate the rationale
for excusing the employer as tax collector from liability for
tax refunds” but rather out of “independent actions and
omissions” like failing “to file protective refund claims.”
Childers, 36 F. Supp. 3d at 303.
After the District Court declined the Hospital’s re-
quest to certify its denial of the Hospital’s Motion to
Dismiss for immediate appeal, see id. at 315, the Hospital
petitioned for writs of mandamus, e.g., J.A. 117, each of
which the U.S. Court of Appeals for the Second Circuit
denied, J.A. 157. The Hospital decided to pursue settle-
ment and, in November 2015, the Hospital and the Dis-
trict Court Plaintiffs entered into a settlement agreement,
whereby the Hospital agreed to pay the District Court
Plaintiffs $6,632,000. See J.A. 346, 348; see also J.A. 261.
Relevant here, the Settlement Agreement provides that
the settlement award “can be appropriately characterized
as a refund for the amount of FICA taxes previously
withheld by the Hospital.” J.A. 275. Upon approving the
the Settlement Agreement, the District Court dismissed
the District Court Plaintiffs’ claims. See J.A. 358.
6 N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES
III. The Court of Federal Claims Litigation
In April 2016, the Hospital filed its Complaint in the
Court of Federal Claims, 3 arguing that § 3102(b) indemni-
fied the Hospital from the District Court Plaintiffs’ claims
and seeking, inter alia, reimbursement of the $6,632,000
paid to the District Court Plaintiffs under the Settlement
Agreement. J.A. 34–35. The Government filed its Motion
to Dismiss, arguing that “the phrase ‘shall be indemnified’
in [§] 3102(b) is not properly read to require the
[G]overment to reimburse an employer that is sued in
connection with the collection of FICA taxes.” N.Y. &
Presbyterian Hosp., 128 Fed. Cl. at 369. The Court of
Federal Claims analyzed FICA’s statutory framework and
agreed with the Government, holding that “[§] 3102(b)
is . . . an immunity provision and that a contrary reading
would undermine the statutory refund scheme contrary to
Congress’ intent.” Id. at 373.
3 Following the denial of certification for immediate
appeal, the Hospital filed a third-party complaint in the
District Court that listed the Government as a third-party
defendant, J.A. 158–67; however, the District Court later
dismissed the Third-Party Complaint without prejudice at
the Hospital’s request, N.Y. & Presbyterian Hosp., 128
Fed. Cl. at 366. When the Hospital originally sued in the
Court of Federal Claims in June 2015, the Court of Fed-
eral Claims dismissed that case without prejudice because
it was filed while the Hospital’s Third-Party Complaint
was pending in the District Court, such that the Court of
Federal Claims did not have jurisdiction over the case
pursuant to 28 U.S.C. § 1500. Id. at 367; see 28 U.S.C.
§ 1500 (“The . . . Court of Federal Claims shall not have
jurisdiction of any claim for or in respect to which the
plaintiff . . . has pending in any other court any suit or
process against the United States . . . .”).
N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES 7
DISCUSSION
I. Standard of Review and Legal Standard
We review the Court of Federal Claims’ dismissal of
an action for lack of subject matter jurisdiction de novo,
Coast Prof’l, Inc. v. United States, 828 F.3d 1349, 1354
(Fed. Cir. 2016), and its attendant factual findings for
clear error, see Hymas, 810 F.3d at 1317.
Pursuant to the Tucker Act, the Court of Federal
Claims has jurisdiction
to render judgment upon any claim against the
United States founded either upon the Constitu-
tion, or any Act of Congress or any regulation of
an executive department, or upon any express or
implied contract with the United States, or for
liquidated or unliquidated damages in cases not
sounding in tort.
28 U.S.C. § 1491(a)(1). The Tucker Act is “only a jurisdic-
tional statute; it does not create any substantive right
enforceable against the United States for money damag-
es. . . . [T]he Act merely confers jurisdiction upon [the
Court of Federal Claims] whenever the substantive right
exists.” United States v. Testan, 424 U.S. 392, 398 (1976)
(emphasis added) (citation omitted). Therefore, “a plain-
tiff must identify a separate source of substantive law
that creates the right to money damages. . . . [T]hat
source must be ‘money-mandating.’” Fisher v. United
States, 402 F.3d 1167, 1172 (Fed. Cir. 2005) (en banc in
relevant part) (citations omitted).
Although the waiver of sovereign immunity must be
unequivocal, see United States v. White Mountain Apache
Tribe, 537 U.S. 465, 472 (2003), the money-mandating
source of substantive law may be express or implied, see
United States v. Mitchell, 463 U.S. 206, 217 n.16 (1983).
In Mitchell, the Supreme Court reaffirmed that a plaintiff
“must demonstrate that the source of substantive
8 N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES
law . . . relie[d] upon can fairly be interpreted as mandat-
ing compensation by the Federal Government for the
damages sustained.” Id. at 216–17 (emphasis added)
(internal quotation marks, citation, and footnote omitted).
Subsequently, the Supreme Court clarified the “fairly be
interpreted” standard:
This fair interpretation rule demands a showing
demonstrably lower than the standard for the ini-
tial waiver of sovereign immunity. . . . It is
enough, then, that a statute creating a Tucker Act
right be reasonably amenable to the reading that it
mandates a right of recovery in damages. While
the premise to a Tucker Act claim will not be
lightly inferred, a fair inference will do.
White Mountain, 537 U.S. at 472–73 (emphases added)
(internal quotation marks and citations omitted). The
Supreme Court also explained that “explicit authorization
of a damages remedy” may be required when there are
“strong indications that Congress did not intend to man-
date money damages,” such that “a fair inference will
require an express provision[] when the legal current is
otherwise against the existence of a cognizable claim.” Id.
at 478. 4
4 While the Court of Federal Claims articulated the
fair interpretation standard, N.Y. & Presbyterian Hosp.,
128 Fed. Cl. at 367, it may have applied a more demand-
ing standard, see id. at 370 (stating that “‘indemnified’
does not necessarily mean a right to ‘reimbursement’” and
that “the better reading of the word comes from the pri-
mary definitions” (emphases added)); see also Int’l Custom
Prods., Inc. v. United States, 843 F.3d 1355, 1359–60
(Fed. Cir. 2016) (assessing for error based on the lower
court’s application of the law rather than the recited
standard). Noting that the Supreme Court rejected a
N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES 9
II. The Court of Federal Claims Erred in Concluding that
It Lacked Subject Matter Jurisdiction over the Hospital’s
Complaint
The sole issue on appeal is whether § 3102(b)’s “shall
be indemnified” language is a money-mandating source of
substantive law. 5 See Appellant’s Br. 2; Appellee’s Br. 3.
The Hospital argues that § 3102(b) is money-mandating
because “the words ‘shall be indemnified’ can be fairly
interpreted to require the Government to pay monetary
compensation,” Appellant’s Br. 27 (capitalization modi-
fied), whereas the Government argues Ҥ 3102(b) cannot
‘fairly be interpreted’ to mandate compensation by the
[F]ederal [G]overnment for damages sustained” because
Ҥ 3102(b) is an immunity provision, not a reimbursement
provision,” Appellee’s Br. 24. Because § 3102(b) is rea-
sonably amenable to an interpretation that it mandates
the Government to reimburse FICA taxes paid by an
employer, we hold that § 3102(b) is money-mandating and
that the Court of Federal Claims erred in concluding that
heightened standard in White Mountain, we reiterate that
there is no requirement of a “plain and explicit statement”
that money damages are due. 537 U.S. at 477. To the
extent the Court of Federal Claims believes there are
“strong indications that Congress did not intend to man-
date money damages,” such that an “express provision” is
necessary, id. at 478, it should have articulated such a
conclusion rather than expected this court to divine its
rationale.
5 Section 3102(b) provides, in its entirety, that
“[e]very employer required so to deduct the tax shall be
liable for the payment of such tax, and shall be indemni-
fied against the claims and demands of any person for the
amount of any such payment made by such employer.”
10 N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES
it lacked subject matter jurisdiction over the Hospital’s
Complaint. 6
A. The Plain Language of § 3102(b)
We begin with the plain language of § 3102(b). See
BedRoc Ltd. v. United States, 541 U.S. 176, 183 (2004)
(“[O]ur inquiry begins with the statutory text[] and ends
there as well if the text is unambiguous.” (citations omit-
ted)). “It is a fundamental canon of statutory construction
that . . . words will be interpreted as taking their ordi-
nary, contemporary, common meaning,” which may be
derived from “[d]ictionaries from the era of [the statutory
provision]’s enactment.” Sandifer v. U.S. Steel Corp., 134
S. Ct. 870, 876 (2014) (internal quotation marks and
citation omitted). Because the common meaning of “in-
demnified” 7 at the time of § 3102(b)’s enactment contem-
6 Although we hold that § 3102(b) is “reasonably
amenable” to this interpretation in accordance with the
Supreme Court’s standard, White Mountain, 537 U.S. at472–73, we believe the only reasonable interpretation of
§ 3102(b) is that it mandates the Government to reim-
burse FICA taxes paid to an employer.
7 Of the phrase “shall be indemnified,” only the
term “indemnified” requires interpretation. It is undis-
puted that § 3102(b)’s use of “shall” mandates indemnific-
tion. See Appellant’s Br. 27–40; Appellee’s Br. 24–44; see
also Kingdomware Techs., Inc. v. United States, 136 S. Ct.
1969, 1977 (2016) (“[T]he word ‘shall’ usually connotes a
requirement.”); Lexecon Inc. v. Milberg Weiss Bershad
Hynes & Lerach, 523 U.S. 26, 35 (1998) (explaining that
the use of “the mandatory ‘shall,’ . . . normally creates an
obligation impervious to judicial discretion” (citation
omitted)). There is no meaningful dispute that, if
§ 3102(b) mandates monetary compensation, then the
Government is the indemnitor under the statute. See
N.Y. & Presbyterian Hosp., 128 Fed. Cl. at 373 n.10
N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES 11
plated reimbursement, § 3102(b) is “reasonably amenable
to the reading that it mandates a right of recovery in
damages.” White Mountain, 537 U.S. at 473.
Three contemporaneous dictionaries support the con-
clusion that the plain meaning of “indemnified” includes
monetary compensation. 8 First, the 1933 Oxford English
Dictionary defined “indemnify” to mean, inter alia:
“1. . . . To preserve, protect, or keep free from, secure
against (any hurt, harm, or loss); to secure against legal
(stating that, although the Government argued that
§ 3102(b) is not money-mandating because it does not
“identify the [G]overnment as the liable entity,” the Court
of Federal Claims’ “reasoning rest[ed] on its construction
of the word ‘indemnified’”); see also Oral Arg. 16:43–18:14,
http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20
17-1180.mp3 (arguing, by the Government, that no in-
demnitor exists under the Government’s interpretation
but failing to identify another possible indemnitor under
the Hospital’s interpretation); Appellant’s Br. 47–48
(arguing that the Government is the only possible indem-
nitor). See generally Appellee’s Br. (failing to argue that
the Government would not be the indemnitor under the
Hospital’s interpretation). Therefore, the dispute turns
on the meaning of “indemnified.”
8 Section 3102(b) originally was enacted in 1935 as
§ 802(a) of the Social Security Act. See Social Security
Act, ch. 531, tit. VIII, § 802(a), 49 Stat. 620, 636 (1935)
(stating, in relevant part, that “[e]very employer . . . is
hereby indemnified”); see also Internal Revenue Code, ch.
9A, § 1401(b), 53 Stat. 1, 175 (1939) (codifying the current
“shall be indemnified” language). We focus our analysis
on the dictionaries contemporaneous to § 3102(b)’s enact-
ment in 1935, see Sandifer, 134 S. Ct. at 876, and note
that neither party contends that the amendments to the
language affect our analysis.
12 N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES
responsibility for past or future actions or events; to give
an indemnity to. . . . 2. To compensate (a person, etc.) for
loss suffered, expenses incurred, etc.” Indemnify, The
Oxford English Dictionary (1st ed. 1933) (italics omitted);
see Indemnification, The Oxford English Dictionary (1st
ed. 1933) (defining “indemnification” to mean, inter alia,
“[t]he action of compensating for actual loss or damage
sustained; also the fact of being compensated”); Indemni-
ty, The Oxford English Dictionary (1st ed. 1933) (defining
“indemnity” to mean, inter alia, “[a] legal exemption from
the penalties or liabilities incurred by any course of
action” and “[c]ompensation for loss or damage incurred,”
i.e., “[a] sum paid by way of compensation”).
Second, both the 1917 and 1942 editions of Webster’s
New International Dictionary of the English Language
defined “indemnify” similarly, with the 1917 version
definining the term to mean: “1. To save harmless; to
secure against loss or damage. . . . 2. To make restitution
or compensation to, as for a loss, damage, etc.; to make
whole; to reimburse; to compensate; also, to make good (a
loss).” Indemnify, Webster’s New Int’l Dictionary of the
English Language (1st ed. 1917); see Indemnify, Webster’s
New Int’l Dictionary of the English Language (2d ed.
1942) (similar); see also Indemnification, Webster’s New
Int’l Dictionary of the English Language (1st ed. 1917)
(defining “indemnification” to mean, inter alia, a “process
of indemnifying, preserving, or securing against loss,
damage, or penalty; reimbursement of loss, damage, or
penalty; the state of being indemnified” and defining
“indemnity” to mean, inter alia, “[i]ndemnification, com-
pensation, or remuneration for loss, damage, or injury
sustained”); Indemnification, Webster’s New Int’l Diction-
ary of the English Language (2d ed. 1942) (similar).
Third, and finally, the 1933 version of Black’s Law
Dictionary defined “indemnify” to mean: “To save harm-
less; to secure against loss or damage; to give security for
the reimbursement of a person in case of an anticipated
N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES 13
loss falling upon him. . . . Also to make good; to compen-
sate; to make reimbursement to one of a loss already
incurred by him.” Indemnify, Black’s Law Dictionary (3d
ed. 1933); see Indemnity, Black’s Law Dictionary (3d ed.
1933) (stating that “indemnity” “is also used to denote a
compensation given to make the person whole from a loss
already sustained”).
Based on a review of these three contemporaneous
dictionaries, the plain meaning of “indemnify” included
monetary compensation at the time of § 3102(b)’s enact-
ment. Not only do all three dictionaries include “to com-
pensate” in their definitions, Indemnify, Webster’s New
Int’l Dictionary of the English Language (1st ed. 1917);
see also Indemnify, Webster’s New Int’l Dictionary of the
English Language (2d ed. 1942); Indemnify, The Oxford
English Dictionary (1st ed. 1933); Indemnify, Black’s Law
Dictionary (3d ed. 1933), two discuss reimbursement,
Indemnify, Webster’s New Int’l Dictionary of the English
Language (1st ed. 1917); see also Indemnify, Webster’s
New Int’l Dictionary of the English Language (2d ed.
1942); Indemnify, Black’s Law Dictionary (3d ed. 1933),
the very relief that the Hospital seeks here. 9 Section
3102(b) thus is “reasonably amenable to the reading that
it mandates a right of recovery in damages.” White Moun-
tain, 537 U.S. at 473. 10
9 This definition also comports with the common
law definition of “indemnify” contemporaneous with
§ 3102(b)’s enactment. See Restatement (First) of Resti-
tution § 80 (Am. Law Inst. 1937) (“A person who . . . is
entitled to indemnity . . . is entitled to reimburse-
ment . . . .”).
10 Indeed, in an opinion issued by the Department of
Justice’s Office of Legal Counsel, the Government has
acknowledged that Ҥ 3102(b) might be read as a promise
to compensate employers for their liability arising out of
14 N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES
The Government’s counterarguments are unpersua-
sive. Echoing the Court of Federal Claims’ erroneous
reasoning, the Government argues that “dictionaries
during the time of enactment of . . . § 3102(b) consistently
defined the terms ‘indemnify’ and ‘indemnity,’ in the first
definition or sense of the word, to mean immunity from
liability.” Appellee’s Br. 30 (emphasis added); see N.Y. &
Presbyterian Hosp., 128 Fed. Cl. at 370 (“[T]he court finds
that the better reading of the word comes from the prima-
ry definitions in the above-cited dictionaries, which nearly
consistently defined ‘indemnify’ first to mean an exemp-
tion from liability.”). This argument fails for at least
three reasons. First, the fair interpretation standard
used to determine whether a statute is money-mandating
does not require courts to evaluate whether the “first” or
“primary” meaning of the statute mandates compensa-
the FICA tax collection process rather than as a legal
exemption from liability in the first instance.” Prejudg-
ment Interest Under the Back Pay Act for Refunds of Fed.
Ins. Contributions Act Overpayments, 18 Op. O.L.C. 127,
134 n.7 (1994) (“FICA Mem.”). The Government then
stated that, “if two readings are plausible, the one that
does not waive sovereign immunity must be adopted” and,
thus, it “read § 3102(b) as conferring a legal exemption.”
Id. The Government erred in its offhand dismissal of this
reading on sovereign immunity grounds. See White
Mountain, 537 U.S. at 472 (“This fair interpretation rule
demands a showing demonstrably lower than the stand-
ard for the initial waiver of sovereign immunity.” (empha-
sis added) (internal quotation marks omitted)).
Therefore, the Government’s acknowledgement that
reading § 3102(b) “as a promise to compensate employers”
is “plausible,” FICA Mem. 18 Op. O.L.C. at 134 n.7,
strongly supports the conclusion that the statute is rea-
sonably amenable to an interpretation that it mandates
monetary compensation.
N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES 15
tion. 11 Instead, it requires courts to evaluate whether the
statute is “reasonably amenable to the reading that it
mandates a right of recovery in damages.” White Moun-
tain, 537 U.S. at 473 (emphasis added). Second, the first
definition in each of the three dictionaries uses terms like
“protect,” “save harmless,” and “secure against,” but the
dictionaries themselves indicate that the order of the
definitions does not reflect the plain or most widely ac-
cepted meaning of the terms as understood at the time.
For instance, the 1933 version of the Oxford English
Dictionary states “that sense is placed first which was
actually the earliest in the language: the others follow in
the order in which they appear to have arisen.” Preface to
Oxford English Dictionary, at xxxi (1st ed. 1933) (reprint-
ed in 1961); cf. Explanatory Notes to Webster’s Third New
Int’l Dictionary, at 17a (1986) (stating that the ordering of
senses “does not evaluate senses or establish an enduring
hierarchy of importance among them”). Third, even if the
meaning of indemnify were limited to the first definitions,
those definitions still contemplate monetary compensa-
tion. See, e.g., Secure, Webster’s New Int’l Dictionary (2d
ed. 1942) (defining “secure” to mean “[t]o give adequate
pledge of payment”); Secure, Black’s Law Dictionary (3d
ed. 1933) (defining “secure” to mean, inter alia, “to assure
of payment” and “make certain the payment of a debt or
discharge of an obligation”). The order of the definitions
neither matters under the relevant legal standard nor
11 To support this erroneous analysis, the Govern-
ment cites Muscarello v. United States, 524 U.S. 125, 128
(1998), see Appellee’s Br. 30, and the Court of Federal
Claims cited Schindler Elevator Corp. v. United States ex
rel. Kirk, 563 U.S. 401, 410 (2011), see N.Y. & Presbyteri-
an Hosp., 128 Fed. Cl. at 370. However, neither case
applies the fair interpretation standard to determine
whether a statute is money-mandating and, thus, both
cases are inapposite.
16 N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES
indicates whether the common understanding of “indem-
nify” included monetary compensation at the time
§ 3102(b) was enacted.
The Government also avers that “the Hospital’s read-
ing of § 3102(b) as a reimbursement provision cannot be
squared with the first clause of the statute” because
it would make little sense to read the very next
clause of the statute as authorizing employers
who have so collected and paid FICA taxes to the
IRS to turn around and, at their own whim, pay
the “claims” and “demands” of their employ-
ees . . . , and then be entitled to full reimburse-
ment from the United States for doing so.
Appellee’s Br. 32–33. Although it is true that “[s]tatutes
should be interpreted to avoid . . . unreasonable results
whenever possible,” Am. Tobacco Co. v. Patterson, 456
U.S. 63, 71 (1982), it also is true that “[t]he preeminent
canon of statutory construction requires us to presume
that the legislature says in a statute what it means and
means in a statute what it says there,” BedRoc, 541 U.S.
at 183 (internal quotation marks, brackets, and citation
omitted). As we explained above, the plain language of
§ 3102(b) is reasonably amenable to an interpretation
that it mandates reimbursement. Therefore, even if we
were to agree that the Hospital’s interpretation leads to
unreasonable results, “it is for Congress, not this [c]ourt,
to rewrite the statute.” Blount v. Rizzi, 400 U.S. 410, 419
(1971). 12
12The Government further contends that “[t]he
Hospital’s position that § 3102(b) provides for reimburse-
ment also cannot be reconciled with the numerous cases
holding that FICA does not create a private cause of
action for employees to sue their employers over the
withholding and payment of FICA taxes.” Appellee’s Br.
N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES 17
In sum, we conclude that, at the time of § 3102(b)’s
enactment, “indemnify” was commonly understood to
mean “to compensate” and “to reimburse,” thereby sup-
porting the conclusion that § 3102(b) is reasonably ame-
nable to an interpretation that it is money-mandating.
B. Section 3102(b)’s Relationship to Other Provisions of
the Internal Revenue Code
Other provisions of the Internal Revenue Code also
may inform our interpretation of § 3102(b). See Davis v.
Mich. Dep’t of the Treasury, 489 U.S. 803, 809 (1989) (“It
is a fundamental canon of statutory construction that the
words of a statute must be read in their context and with
a view to their place in the overall statutory scheme.”).
Three sections of the Internal Revenue Code, specifically
§§ 3202(b), 3403, and 7422, further support our conclusion
that § 3102(b) is reasonably amenable to an interpreta-
tion that it is money-mandating.
First, both § 3202(b), which is the counterpart to
§ 3102 for railroad employers and employees, 13 and
41; see id. at 41–44 (discussing, inter alia, Umland v.
PLANCO Fin. Servs., Inc., 542 F.3d 59, 67–68 (3d Cir.
2008) and McDonald v. S. Farm Bureau Life Ins. Co., 291
F.3d 718, 724–25 (11th Cir. 2002)). However, these cases
neither are binding precedent, see Int’l Custom Prods.,
843 F.3d at 1360 (“[D]ecisions from other circuits are not
binding on this court.” (internal quotation marks and
citation omitted)), nor decide whether § 3102(b) is money-
mandating. Therefore, we ground our analysis in the text
of § 3102(b), as we must.
13 Section 3202(b) is entitled “Indemnification of
employer,” and the Court of Federal Claims held that
“[§] 3202(b) uses both ‘indemnified’ and ‘not . . . liable’ in
the same provision to mean the same thing.” N.Y. &
Presbyterian Hosp., 128 Fed. Cl. at 372. For the reasons
18 N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES
§ 3403, which concerns the withholding of taxes by an
employer, provide that the “employer . . . shall not be
liable to any person for the amount of any such payment”
for taxes deducted, I.R.C. §§ 3202(b), 3403 (emphasis
added), 14 such that employers are immunized from em-
outlined herein, we hold that the Court of Federal Claims
erroneously equated “indemnified” and “not . . . liable.”
Moreover, as the Government concedes, see Appellee’s Br.
49, the Internal Revenue Code explicitly provides that its
titles have no legal effect, see I.R.C. § 7806(b) (“No infer-
ence, implication, or presumption of legislative construc-
tion shall be drawn or made by reason of the location or
grouping of any particular section or provision or portion
of this title . . . .”); see also United States v. Reorganized
CF & I Fabricators of Utah, Inc., 518 U.S. 213, 222–24
(1996) (accepting the Government’s disavowal of reliance
upon a title pursuant to § 7806(b)). The Court of Federal
Claims thus erred by relying on the use of “indemnifica-
tion” in § 3202(b)’s title.
14 When originally enacted, both §§ 3202(b) and
3403 provided that the employer is “hereby indemnified,”
Carriers and Employees Tax Act of 1935, Pub. L. No. 74-
400, ch. 813, § 3(a), 49 Stat. 974, 975 (predecessor to
§ 3202(b)); Revenue Act of 1916, ch. 463, § 9(b), 39 Stat.
756, 764 (predecessor to § 3403), but Congress later
replaced that language with the current “shall not be
liable” language, Revenue Act of 1942, ch. 619, § 467(b),
56 Stat. 798, 891 (predecessor to § 3403); Internal Reve-
nue Code of 1939, ch. 9B, § 1501(b), 53 Stat. 1, 179 (pre-
decessor to § 3202(b)). To the extent these subsequent
amendments may inform Congressional intent, we find
instructive Congress’s decision not to amend § 802(a) of
the Social Security Act, § 3102(b)’s predecessor, despite
the statutes’ similar wordings and purposes. See Haig v.
Agee, 453 U.S. 280, 301 (1981) (referring to a subsequent
Congress’s amendments to a statute as “weighty evidence
N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES 19
ployee suits for reimbursement of taxes deducted by the
employer. Because §§ 3202(b) and 3403 are structured
similarly to § 3102(b) but provide that the employer “shall
not be liable” rather than that the employer “shall be
indemnified,” we may presume that Congress intended
these phrases to have different meanings. See Sebelius v.
Cloer, 569 U.S. 369, 378 (2013) (“We have long held that
where Congress includes particular language in one
section of a statute but omits it in another section of the
same Act, it is generally presumed that Congress acts
intentionally and purposely in the disparate inclusion or
exclusion.” (internal quotation marks, brackets, and
citation omitted)).
Second, § 7422 provides that taxpayers “may bring
‘[n]o suit’ in ‘any court’ to recover ‘any internal revenue
tax’ or ‘any sum’ alleged to have been wrongfully collected
‘in any manner,’” United States v. Clintwood Elkhorn
Mining Co., 553 U.S. 1, 7 (2008) (quoting I.R.C. § 7422(a)),
and that “[a] suit or proceeding . . . may be maintained
only against the United States,” I.R.C. § 7422(f)(1). The
Supreme Court explained that § 7422 “clearly state[s]
that taxpayers seeking refunds of unlawfully assessed
taxes must comply with the [Internal Revenue] Code’s
refund scheme before bringing suit.” Clintwood Elkhorn,
553 U.S. at 8. As the Government conceded, see J.A. 399
of [C]ongressional approval” because, “though [Congress]
once again enacted legislation relating to [the subject
matter of the statute], [it] left completely untouched the
broad rule-making authority granted in the earlier [a]ct”
(internal quotation marks and citation omitted)). But see
Mackey v. Lanier Collection Agency & Serv., Inc., 486 U.S.
825, 840 (1988) (“The views of a subsequent Congress
form a hazardous basis for inferring the intent of an
earlier one.” (internal quotation marks, brackets, and
citation omitted)),
20 N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES
(Q: “In a real—in a perfect world, would this District
Court have dismissed this case under [§] 7422?” A: “I
think that’s—I think that was the proper thing to do.”),
the District Court should have interpreted § 7422 so that
the Hospital was immunized from the District Court
Plaintiffs’ Complaint and dismissed their claims, see
Clintwood Elkhorn, 553 U.S. at 9 (stating that the nature
of the claims “does not matter” because, “[i]f the [taxpay-
ers]’ claims are subject to the [Internal Revenue] Code
provisions, those claims are barred whatever the source of
the cause of action”). Because § 7422 plainly immunizes
employers from claims by employees for the recovery of
any internal revenue tax alleged to have been wrongfully
collected, see Clintwood Elkhorn, 553 U.S. at 7–8, we
conclude that § 7422 demonstrates that Congress knew
how to craft an immunity provision when it so desired, see
Cloer, 569 U.S. at 378. 15
15 The Government argues that, “if the Hospital’s
reading of § 3102(b) as a reimbursement provision were
correct, then there would be no need for employees to file
refund claims with the IRS, so long as their employers
were willing to pay their claims and obtain reimburse-
ment from the United States,” Appellee’s Br. 37, which
would render § 7422 “virtually a dead letter,” id. (internal
quotation marks and citation omitted), and allow “em-
ployees and employers [to] easily circumvent” the Internal
Revenue Code’s refund scheme, id. at 38; see id. at 35–41.
We need not decide whether § 3102(b) is inconsistent with
§ 7422’s refund scheme because “[t]he role of this [c]ourt
is to apply the statute as it is written—even if we think
some other approach might accord with good policy.”
Sandifer, 134 S. Ct. at 878 (internal quotation marks and
citation omitted).
N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES 21
C. Legislative History
Courts also may rely on legislative history to inform
their interpretation of statutes. See Thunder Basin Coal
Co. v. Reich, 510 U.S. 200, 207 (1994). The legislative
history of § 3102(b) further supports our conclusion that
§ 3102(b) is reasonably amenable to an interpretation
that it is money-mandating.
The only relevant legislative history identified by ei-
ther the parties or this court is the House Report on
§ 802(a) of the Social Security Act, § 3102(b)’s predecessor.
See Appellant’s Br. 29–30; Appellee’s Br. 33–34. The
House Report states that, “[t]o protect the employer, he is
indemnified against any claims and demands with respect
to that part of the wages of the employee which he with-
held, up to the correct amount withheld and paid to the
United States.” H.R. Rep. No. 74-615, at 30 (1935). By
providing for indemnification up to the “correct amount,”
the House Report indicates that Congress understood
“indemnification” to contemplate the payment of money.
If read otherwise, it would allow an employer to sue for
more than the correct amount. Thus, we hold that
§ 3102(b) is a money-mandating provision, in light of the
statute’s text, structure, and legislative history.
CONCLUSION
We have considered the parties’ remaining arguments
and find them unpersuasive. Accordingly, the Final
Judgment of the Court of Federal Claims is
REVERSED AND REMANDED
COSTS
Costs to the Hospital.
United States Court of Appeals
for the Federal Circuit
______________________
NEW YORK AND PRESBYTERIAN HOSPITAL,
Plaintiff-Appellant
v.
UNITED STATES,
Defendant-Appellee
______________________
2017-1180
______________________
Appeal from the United States Court of Federal
Claims in No. 1:16-cv-00496-NBF, Senior Judge Nancy B.
Firestone.
______________________
Decided:
______________________
O’MALLEY, Circuit Judge, dissenting.
I agree with the majority that a statute is money-
mandating for the purposes of Tucker Act jurisdiction if it
“can fairly be interpreted as mandating compensation by
the Federal Government for the damage sustained.”
United States v. White Mountain Apache Tribe, 537 U.S.
465, 472 (2003) (quoting United States v. Mitchell, 463
U.S. 206, 216–17 (1983)). I disagree, however, with the
majority’s application of this standard. I believe that the
en banc portion of our decision in Fisher v. United States,
402 F.3d 1167, 1171–73 (Fed. Cir. 2005) (en banc in
2 N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES
relevant part), compels a more searching analysis than
the majority conducts. Under the correct analytical
approach, I would find that 26 U.S.C. § 3102(b) must be
interpreted as an immunity provision, not a reimburse-
ment provision, and that § 3102(b) is not money-
mandating. I therefore respectfully dissent from today’s
judgment.
I.
The threshold question in this case is how we are to
determine whether a statute is money-mandating. The
governing test originates in United States v. Testan, 424
U.S. 392 (1976). The Supreme Court held in Testan that
a federal statute is money-mandating only if it “can fairly
be interpreted as mandating compensation by the Federal
Government for the damage sustained.” Id. at 400 (quot-
ing Eastport S.S. Corp. v. United States, 372 F.2d 1002,
1009 (Ct. Cl. 1967)). The Court repeated the “fairly be
interpreted” language in United States v. Mitchell, 463
U.S. at 216–17 (quoting Testan, 424 U.S. at 400). The
Court explained that “the substantive source of law may
grant the claimant a right to recover damages either
‘expressly or by implication.’” Id. at 217 n.16 (quoting
Eastport, 372 F.2d at 1009).
The Court returned to this question in White Moun-
tain. In a 5–4 decision, the Court held again that “a
statute creates a right capable of grounding a claim
within the waiver of sovereign immunity if, but only if, it
‘can fairly be interpreted as mandating compensation by
the Federal Government for the damage sustained.’” 537
U.S. at 472 (quoting Mitchell, 463 U.S. at 217). The Court
elaborated on that holding, however, stating that “[i]t is
enough . . . that a statute creating a Tucker Act right be
reasonably amenable to the reading that it mandates a
right of recovery in damages.” Id. at 473. “While the
premise to a Tucker Act claim will not be ‘lightly inferred,’
N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES 3
a fair inference will do.” Id. (quoting Mitchell, 463 U.S. at
218).
Four justices dissented, suggesting that the Court had
loosened the relevant test and “engage[d] in a new in-
quiry, asking whether common-law trust principles per-
mit a ‘fair inference’ that money damages are available,
that finds no support in existing law.” Id. at 482 (Thom-
as, J., dissenting). They believed that the Court had
“fashion[ed] a new test to determine whether Congress
has conferred a substantive right enforceable against the
United States in a suit for money damages.” Id. at 487.
Two justices who joined the White Mountain majority—
and whose votes were necessary to form that majority—
issued a separate concurrence, however. The concurrence
emphasized that they believed that the majority opinion
was “guided by” Mitchell, and did not change the law,
despite the language employed. Id. at 479–80 (Ginsburg,
J., concurring).
Before White Mountain, our precedent suggested a
two-step inquiry where, “for purposes of satisfying the
jurisdictional requirement that a money-mandating
statute or regulation is before the court, the plaintiff need
only make a non-frivolous allegation that the statute or
regulation may be interpreted as money-mandating.”
Fisher, 402 F.3d at 1172 (citing Gollehon Farming v.
United States, 1373, 1378–80 (Fed. Cir. 2000)). “If, as a
second step, the issue of jurisdiction is later pressed and it
is subsequently decided that the statute or regulation is
not money-mandating, then the case is dismissed for
failure to state a claim upon which relief can be granted.”
Id. (citing Gollehon, 207 F.3d at 1379).
In Fisher, we overruled this line of cases. Id. at 1172–
73. We held instead that:
When a complaint is filed alleging a Tucker Act
claim based on a Constitutional provision, statute,
or regulation, the trial court at the outset shall
4 N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES
determine, either in response to a motion by the
Government or sua sponte (the court is always re-
sponsible for its own jurisdiction), whether the
Constitutional provision, statute, or regulation is
one that is money-mandating. . . . For purposes
of the case before the trial court, the determina-
tion that the source is money-mandating shall be
determinative both as to the question of the
court’s jurisdiction and thereafter as to the ques-
tion of whether, on the merits, plaintiff has a
money-mandating source on which to base his
cause of action.
Id. at 1173.
It is not readily apparent how we are to reconcile the
“reasonably amenable” language in White Mountain with
our discussion in Fisher, which postdated White Moun-
tain. The majority concludes that White Mountain set
forth an apparently permissive test, where, if a statute is
“reasonably amenable” to a money-mandating reading,
the jurisdictional requirement is satisfied, even if, upon
further inquiry, a thorough review of the statutory
scheme at issue would lead to a contrary conclusion. 537
U.S. at 473. In Fisher, however, we held that the same
“single test” is the sole determinant of whether a statute
is money-mandating. 402 F.3d at 1173. This creates a
conundrum. There may be multiple reasonable ways to
read a statute, but whether a statute is money-mandating
is ultimately a yes-or-no question, presumably governed
by the more reasonable and fair reading of the statute.
Soon after we issued our opinion in Fisher, the Court
of Federal Claims grappled with this problem in Contre-
ras v. United States, 64 Fed. Cl. 583 (2005). The plaintiffs
in Contreras argued that White Mountain “establish[ed] a
new test for determining whether a statute is money-
mandating” that “replaces a normal ‘fairly interpreted’
test with a less-demanding test of ‘reasonable amenabil-
N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES 5
ity’ based on fair inferences.” Id. at 588 (alteration in
original). The court rejected this contention, finding
instead “that the Supreme Court could not have intended
to change the legal test for determining whether a statute
is money-mandating.” Id. at 590. Analyzing the language
of White Mountain at length, the Contreras court ulti-
mately concluded that “[t]he test for whether a statute is
money-mandating has not changed—our Court must still
determine whether the statute, correctly interpreted,
would require a money damages remedy.” Id. at 590–92.
The Contreras court said:
To read “fair inference” to mean anything less
than the normal inference used in interpreting a
statute . . . would make little sense, particularly
in light of [Fisher’s] elimination of the “two-step
process.” The meaning of a statute when this
Court determines if a case is within its jurisdic-
tion is the same as its meaning when the Court
determines the merits of the case. How could it be
that a statute would require the government to
pay money damages merely because it arguably
can be read to require the government to pay
money damages? To be close to something is not
the same as being it. Surely, “good enough for
government liability” is not the measure of our
Court’s jurisdiction.
Id. at 592 (citing Fisher, 402 F.3d at 1172–73).
In short, Contreras held—and the government argues
here—that the test is not whether a money-mandating
interpretation of a statute is reasonable, but whether it is
correct. The government argues that a statute can only be
“fairly interpreted” via application of all traditional
principles of statutory interpretation, leading to the
single, most correct, reading. That is, admittedly, a
somewhat strained reading of the Supreme Court’s phras-
ing in White Mountain; a statute may well be “amenable”
6 N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES
to multiple reasonable interpretations. See White Moun-
tain, 537 U.S. at 473. As the majority does, that follow-on
language in White Mountain could be read to require at
this stage that we determine only whether the Hospital’s
money-mandating interpretation of the statute is “rea-
sonabl[e]” or “fair[],” id. at 472–73, analogous to the
familiar Chevron analysis of whether an agency’s inter-
pretation “is based on a permissible construction of the
statute,” Chevron, U.S.A. Inc. v. Nat. Res. Def. Council,
467 U.S. 837, 843 (1984).
But that approach is not compatible with Fisher. And
I do not believe it is compelled by White Mountain. The
majority’s conclusion would mean that the Supreme Court
did intend to change the law in White Mountain. But, if
we are to determine in a single step and for all purposes
whether a statute is money-mandating, we have no choice
but to decide the most correct interpretation of the pur-
portedly money-mandating statute in that one step—i.e.,
the truly “fair” interpretation of it. It cannot be that a
statute mandates that the government must pay mone-
tary compensation on a set of claims merely if the statute
could be read to permit it. At most, I read Testan, Mitch-
ell, White Mountain, and Fisher to instruct courts to
construe statutes liberally in determining whether they
are money-mandating. 1 These cases do not stand for the
proposition, however, that courts may avoid determining
what the most reasonable interpretation of a statute is.
We therefore must decide here not only whether a money-
mandating interpretation of the statute is plausible, but
1 It is unclear how the liberal construction mandate
relating to remedial statutes applies in these circum-
stances. See ANTONIN SCALIA & BRYAN A. GARNER,
READING LAW: THE INTERPRETATION OF LEGAL TEXTS 364–
66 (2012) (discussing, and criticizing, the rule that reme-
dial statutes should be liberally construed).
N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES 7
also the ultimate question of whether the statute is or is
not money-mandating.
II.
The majority holds repeatedly that Ҥ 3102(b) is rea-
sonably amenable to an interpretation that it is money-
mandating.” Maj. Op. at 17, 21. It does not, however,
engage with what the words “reasonably amenable” mean
in light of Fisher. This oversight leads the majority to the
wrong result.
A.
The majority starts, as it must, with the plain lan-
guage of § 3102(b). Id. at 10. In relevant part, § 3102(b)
provides that every employer required to deduct FICA
taxes “shall be liable for the payment of such tax, and
shall be indemnified against the claims and demands of
any person for the amount of any such payment made by
such employer.”
The majority finds, understandably, that the plain
meaning of the word “indemnified” encompasses mone-
tary compensation. Maj. Op. at 10–13. But the majority
errs in its response to the government’s argument that, at
the time the statutory language was drafted, the word
“indemnified” primarily referred to immunity from liabil-
ity. The majority contends that “the fair interpretation
standard used to determine whether a statute is money-
mandating does not require courts to evaluate whether
the ‘first’ or ‘primary’ meaning of the statute mandates
compensation.” Id. at 14–15. “Instead,” the majority
holds, the standard “requires courts to evaluate whether
the statute is ‘reasonably amenable to the reading that it
mandates a right of recovery in damages.’” Id. (alteration
in original) (quoting White Mountain, 537 U.S. at 473).
The majority then rejects the government’s contention
that this reading of the statute would have absurd re-
sults, finding it sufficient that “the plain language of
8 N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES
§ 3102(b) is reasonably amenable to an interpretation
that it mandates reimbursement.” Id. at 16.
The majority asks whether the word “indemnified”
can mean a right to reimbursement. White Mountain and
Fisher, however, require us to decide whether “indemni-
fied” does confer a right to reimbursement, or at least can
fairly be interpreted that way. In effect, the majority
determines whether a money-mandating interpretation of
§ 3102(b) is permissible under Chevron, not whether it is
fair under White Mountain and Fisher. In the context of
the statutory scheme, I would find that it is not. 2
When the similarly phrased predecessor to § 3102(b)
was enacted, 3 dictionaries defined the terms “indemnify”
and “indemnity” to mean immunity from liability. The
1933 edition of the Oxford English Dictionary defined
“indemnify” as, among other things, “[t]o preserve, pro-
tect, or keep free from, secure against (any hurt, harm, or
loss); to secure against legal responsibility for past or
future actions or events.” THE OXFORD ENGLISH
DICTIONARY 194–95 (1933). The 1917 and 1942 editions of
Webster’s New International Dictionary similarly defined
2 The majority indicates in a footnote that it also
“believe[s]” that the money-mandating interpretation of
§ 3102(b) is “the only reasonable” one. Op. at 10 n.6.
Obviously, I disagree with that proposition. I note, more-
over, that the majority’s analysis focuses solely on wheth-
er its interpretation is reasonable and not, as Fisher
requires, on whether the money-mandating interpretation
is better than the alternative.
3 As the majority notes, § 3102(b) “originally was
enacted in 1935 as § 802(a) of the Social Security Act,”
and “neither party contends that [any subsequent]
amendments to the language affect our analysis.” Maj.
Op. at 11 n.8 (citing Social Security Act, ch. 531, tit. VIII,
§ 802(a), 49 Stat. 620, 636 (1935)).
N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES 9
“indemnify” to mean “[t]o save harmless; to secure against
loss or damage,” and they defined “indemnity” to include
“immunity from penalty, or the punishment of past of-
fenses.” WEBSTER’S NEW INTERNATIONAL DICTIONARY OF
THE ENGLISH LANGUAGE 1093 (W.T. Harris ed., 1917);
WEBSTER’S NEW INTERNATIONAL DICTIONARY OF THE
ENGLISH LANGUAGE 1262 (William Allan Neilson ed., 2d
ed. 1942). And, in the 1933 edition of Black’s Law Dic-
tionary, one definition of “indemnity” was “[a] legislative
act, assuring a general dispensation from punishment or
exemption from prosecution.” Indemnity, BLACK’S LAW
DICTIONARY (3d ed. 1933). 4
The majority is correct that the “plain meaning of ‘in-
demnify’ included monetary compensation.” Maj. Op. at
12 (emphasis added). As the majority notes, several
contemporaneous dictionaries also defined the word to
refer to a right to reimbursement. Id. at 11–13. At the
very least, however, the term is ambiguous. And, because
we must determine whether the statute is money-
mandating, we are obligated to resolve the ambiguity,
even if, in doing so, we are to construe the statute liberal-
ly.
“[T]he words of a statute must be read in their context
and with a view to their place in the overall statutory
scheme.” Davis v. Mich. Dep’t of Treasury, 489 U.S. 803,
809 (1989). The first clause of § 3102 requires employers
to collect and pay FICA taxes to the IRS. Taxpayers who
seek a credit or refund for any overpayment of FICA taxes
must file a claim with the IRS within a specified time
period. 26 U.S.C. § 6511. Section 7422(a) then precludes
any court from considering an employee’s claim for the
recovery of any FICA taxes paid until the employee files a
4 Like the majority, I do not find the ordering of the
definitions in these dictionaries particularly significant.
10 N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES
claim with the IRS. Such a suit “may be maintained only
against the United States.” Id. § 7422(f)(1).
The “expansive reach” of § 7422 ensures “that taxpay-
ers seeking refunds of unlawfully assessed taxes must
comply with the Code’s refund scheme before bringing
suit, including the requirement to file a timely adminis-
trative claim.” United States v. Clintwood Elkhorn Min.
Co., 553 U.S. 1, 7–8 (2008). In sum, any taxpayer seeking
a refund of taxes collected erroneously or unlawfully must
comply first with the administrative claim process. Id. at
4. Only then may the taxpayer file suit against the gov-
ernment—and only the government—either in federal
district court or in the Court of Federal Claims. Id.Given this framework, it would make no sense for
§ 3102(b) to give the employer a right of reimbursement
against “claims or demands . . . for the amount of” FICA
taxes paid. The statutory scheme directs taxpayers’
refund claims first towards the administrative process
and then to suits against the government. No part of this
process involves the employer. It is implausible that
Congress created a reimbursement provision applicable
solely to a procedural avenue that it explicitly precluded.
And it hardly seems “fair” to interpret the statutory
scheme as one which permits the employer, at its whim,
to pay tax refunds to its own employees and then turn
around and demand reimbursement from the govern-
ment. 5
5 The majority appears to recognize that its inter-
pretation of § 3102(b) would lead to unreasonable results,
but it holds nevertheless that § 3102(b) is money-
mandating because “the plain language of § 3102(b) is
reasonably amenable to an interpretation that it man-
dates reimbursement.” Maj. Op. at 16.
N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES 11
B.
The majority also points to other provisions of the tax
code that eschew the “shall be indemnified” language of
§ 3102(b) in favor of the clearer statement that the “em-
ployer . . . shall not be liable” for the amount of taxes
deducted. 26 U.S.C. §§ 3202(b), 3403. The former should
be interpreted differently from the latter, the majority
posits, in light of the canon of construction that Congress
intends different phrases in the same law to have differ-
ent meanings. Maj. Op. at 17–19 (citing Sebelius v. Cloer,
569 U.S. 369, 378 (2013)).
That principle applies with substantially less force to
legislative activity like this, where the statutes in ques-
tion were enacted piecemeal over the course of decades.
Indeed, as the majority observes, the predecessor statutes
to §§ 3202(b) and 3403 originally provided that the em-
ployer was “hereby indemnified” against demands for
taxes paid. Carriers and Employees Tax Act of 1935, Pub.
L. No. 74-400, § 3(a), 49 Stat. 974, 975 (predecessor to
§ 3202(b)); Revenue Act of 1916, Pub. L. No. 64-271,
§ 9(b), 39 Stat. 756, 764 (predecessor to § 3403). These
statutes were later amended to say that the employer
“shall not be liable” for such demands. Internal Revenue
Code of 1939, Pub. L. No. 76-1, § 1501(b), 53 Stat. 1, 179
(1939) (predecessor to § 3202(b)); Revenue Act of 1942,
Pub. L. No. 77-753, § 467(b), 56 Stat. 798, 891 (predeces-
sor to § 3403). 6 Section 3102(b), on the other hand, re-
tained the word “indemnified,” and the majority finds this
6 In fact, when Congress amended the predecessor
to § 3202(b) in 1939 to include the “shall not be liable”
language, it also inserted the heading “[i]ndemnification
of employer.” § 1501(b), 53 Stat. at 179. Although the
majority is correct that the heading itself has no legal
effect, Maj. Op. at 17 n.13, it does shed light on how
Congress may have understood the word “indemnify.”
12 N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES
fact “instructive.” Maj. Op. at 18 n.14. But the legislative
history accompanying the amendments to §§ 3202(b) and
3403 did not give any reason for the change in language.
Congress presumably would not transform a reimburse-
ment provision into an immunity provision sub silentio.
These statutes therefore do not require us to read
§ 3102(b) differently. To the contrary, the legislative
history suggests we should read all three statutes to mean
the same thing—that is, as immunity provisions.
The majority also finds that Ҥ 7422 demonstrates
that Congress knew how to craft an immunity provision
when it so desired.” Maj. Op. at 20. But § 7422, unlike
§§ 3202(b) and 3403, is not primarily an immunity provi-
sion for employers. Section 7422(f) provides that a tax
refund suit “may be maintained only against the United
States and not against any officer or employee of the
United States (or former officer or employee) or his per-
sonal representative.” Although the first clause of
§ 7422(f) implicitly confers immunity on employers by
requiring claimants to bring suit against the United
States instead, the remainder of the provision makes
clear that its principal goal is to immunize officers or
employees of the United States from suit. And, to the
extent § 7422 renders § 3102(b) redundant if the latter is
read as an immunity provision, the same is true with
regard to §§ 3202(b) and 3403. Faced with the choice to
read a statute as either redundant or nonsensical, we
have no choice but to take the former route. Cf. Chicka-
saw Nation v. United States, 534 U.S. 84, 94–95 (2001)
(“The canon requiring a court to give effect to each word ‘if
possible’ is sometimes offset by the canon that permits a
court to reject words ‘as surplusage’ if ‘inadvertently
inserted or if repugnant to the rest of the statute.’” (quot-
ing Karl N. Llewellyn, THE COMMON LAW TRADITION 525
(1960)).
N.Y. & PRESBYTERIAN HOSP. v. UNITED STATES 13
C.
The majority finally notes that the legislative history
of § 3102(b) indicates that the provision indemnifies
employers “against any claims and demands with respect
to that part of the wages of the employee which he with-
held, up to the correct amount withheld and paid to the
United States.” H.R. REP. NO. 74-615, at 30 (1935) (em-
phasis added). The emphasized language, the majority
contends, “indicates that Congress understood ‘indemnifi-
cation’ to contemplate the payment of money.” Maj. Op.
at 21.
The reference to the “amount” paid does not imply
that § 3102(b) contemplates reimbursement. As enacted,
§ 3102(b) provides that the employer “shall be indemni-
fied . . . for the amount of” taxes paid. Sections 3202(b)
and 3403, which are undoubtedly immunity provisions,
similarly specify that the employer “shall not be liable . . .
for the amount of” taxes paid. Section 3102(b) should be
read the same way.
III.
For the reasons above, I would affirm the thoughtful
decision of the Court of Federal Claims. I respectfully
dissent.