Publications

Greetings, Court Fans!

We’re now at the business end of the Supreme Court’s term, with 23 decisions (and the majority of the most-watched cases) to be decided likely by next Friday. The Court made some headway on that today, issuing four opinions:

• In Moore v. United States (No. 22-800), a 7-2 Court held that a one-time repatriation tax imposed on American shareholders of American-controlled foreign corporations was constitutional because it was an indirect tax on income, not a direct tax that had to be apportioned among the states based on population.
• Chiaverini v. City of Napoleon (No. 23-50), a short 6-3 decision holding that the existence of probable cause for one charge does not categorically defeat a Fourth Amendment malicious-prosecution claim over another (baseless) charge.
• Diaz v. United States (No. 23-14), a 6-3 decision holding that a federal agent’s testimony that most drug traffickers know they are trafficking drugs (introduced to defeat the defendant’s argument she didn’t know what she was transporting into the United States) did not run afoul of Federal Rule of Evidence 704(b) because it was not expert testimony about the mental state of the defendant specifically.
• And Gonzales v. Trevino (No. 22-1025), where an 8-1 Court (through an unsigned per curiam opinion) concluded that the Fifth Circuit applied too narrow of an approach to the Court’s Nieves v. Bartlett (2019) exception, an exception that permits a retaliatory-arrest claim if a plaintiff shows that officers typically don’t arrest people similarly situated to the plaintiff, even if probable cause exists for the arrest.

If that’s not enough for you, the Court has also announced that it will be issuing more opinions tomorrow. We’ll be back then to give you a quick summary of those decisions, but in the meantime, we have recaps of two important decisions from last week:

• Garland v. Cargill (No. 22-976), in which the 6-3 conservative majority held that the Trump-administration ATF exceeded its statutory authority by banning bumpstocks, concluding that such devices do not meet the statutory definition of a “machinegun.”
• And Becerra v. San Carlos Apache Tribe (No. 23-250), where a 5-4 Court held that the Indian Health Service must pay contract support costs to tribes for the tribes’ administration of healthcare programs funded with third-party payments (e.g., Medicaid and Medicare).

We’ll start with Cargill. The National Firearms Act of 1934 has for decades (since 1934, in fact) restricted access to “machineguns.” Relying on that statutory authority, the Bureau of Alcohol, Tobacco and Firearms (ATF) banned “bump stocks”: devices attached to the stock of a semiautomatic rifle that make it behave much like an automatic rifle. But the six conservative justices concluded that no matter how similar a bump-stock equipped rifle may behave to a “machinegun,” it doesn’t meet the statutory definition of the term, so the ATF had exceeded its statutory authority.

The case grows out of the 2017 mass shooting in Las Vegas, where a gunman killed 58 people and wounded hundreds more. By adding bump stocks to his semiautomatic rifles, the shooter was able to fire hundreds of rounds in just a few minutes. In the wake of that event, the Trump-era ATF amended its regulations to provide that the term “machinegun” includes bump stocks for the purposes of the National Firearms Act. A bump stock owner soon sued, challenging the regulations as inconsistent with the Act. An en banc Fifth Circuit agreed, and the Supreme Court then granted certiorari.

In a 6-3 decision by Justice Thomas, the Court affirmed the Fifth Circuit, concluding that a bump stock doesn’t convert a semiautomatic weapon into a machinegun. If you weren’t closely following the case, you might think it turned on the Second Amendment. But it’s actually a rather technical statutory-interpretation case about what “machinegun” means. On that score, the Act defines “machinegun” as “any weapon which shoots, is designed to shoot, or can be readily restored to shoot, automatically more than one shot, without manual reloading, by a single function of the trigger.” In the majority’s view, that last bit—“a single function of the trigger”—was the critical one: No matter how much a semiautomatic rifle equipped with a bump stock might behave like an automatic rifle, it isn’t a machinegun because it doesn’t enable a shooter to automatically shoot more than one shot “by a single function of the trigger.”

Much of the majority’s analysis relied on a detailed discussion of how a bump stock interacts with a semiautomatic rifle’s trigger mechanism. An automatic rifle can fire multiple shots if the shooter simply pulls the trigger and holds it down—i.e., by a single function of the trigger. By contrast, to fire a semiautomatic rifle, the shooter must release and reset the trigger between each shot, i.e., it cannot fire more than one shot “by a single function of the trigger.” In the majority’s view, a bump stock doesn’t not change this firing cycle; it allows the gun to slide back and forth freely and rapidly, using the recoil of the weapon after each shot to enable rapid, continuous firing. As long as the shooter keeps his trigger finger stationary and maintains constant forward pressure on the front grip of the weapon, the trigger will repeatedly “bump” the shooter’s finger with each recoil, causing the trigger to reactivate and the gun to continue firing. For the majority, the bottom line was that however rapidly a semiautomatic weapon equipped with a bump stock can fire, each shot still involves the release and engagement of the trigger, i.e., each shot involves a separate “function of the trigger.” A bump stock, therefore, “does not convert a semiautomatic rifle into a machinegun any more than a shooter with a lightning-fast trigger finger does.”

Justice Sotomayor, joined by Justices Kagan and Jackson, dissented. In their view, the basic problem with the majority’s analysis was that it focused on the internal mechanics of the gun rather than the shooter’s action. From the shooter’s perspective, a bump stock enables a semi-automatic rifle to fire multiple shots “automatically” because it “automates the process of firing more than one shot.” It “controls the direction and distance of the recoil, and the finger rest obviates the need to maintain a stationary finger position. All the shooter must do is rest his finger and press forward on the front grip or barrel for the rifle to fire continuously.” “Just as the shooter of an M16 need only pull the trigger and maintain backward pressure (on the trigger), the shooter of a bump-stocked-equipped AR-15 need only pull the trigger and maintain forward pressure (on the gun). “Automatic,” in the dissenters’ view, “does not mean zero human input.”

The majority’s narrow focus, by contrast, violates the “presumption against effectiveness” by evading the statute’s purpose. Congress defined “machinegun” broadly to encompass various methods of achieving rapid and continuous firing of a firearm. It intended to restrict civilian access to machineguns because they eliminated the need to rapidly pull the trigger in order to fire continuously. An ordinary person can fire an AR-15 at a rate of 60 rounds per minute, while the same weapon equipped with a bump stock can fire 400–800 rounds per minute. That is exactly what a machine gun is: As Sotomayor put it, when “I see a bird that walks like a duck, swims like a duck, and quacks like a duck, I call that bird a duck.”

Justice Alito briefly concurred to observe that there “can be little doubt” that, when Congress wrote the statute, it “would not have seen any material difference between a machinegun and a semiautomatic rifle equipped with a bump stock.” But “the simple remedy for the disparate treatment of bump stocks and machine guns” is for Congress to amend the law.

This takes us to Becerra v. San Carlos Apache Tribe (No. 23-250), in which the Court held the Indian Self Determination and Education Assistance Act (ISDA) requires the Indian Health Service (IHS) to pay Indian tribes contract support costs to aide tribal healthcare programs funded by third-party payments. While this issue may seem both dry and arcane, it produced a 5-4 split, with the Chief Justice writing an opinion joined by the liberals and Justice Gorsuch, and each side insisting their reading of ISDA was the “straightforward” one. We’ll let you be the judge.

In 1975, Congress enacted ISDA, which aimed to promote the participation of Indian tribes in administering federal healthcare programs. Under ISDA, a tribe can elect to receive healthcare services directly from IHS, as they did before ISDA’s enactment. But ISDA also authorized tribes to administer those services themselves pursuant to “self-determination contracts” with IHS, which then provides funds for the tribe to administer the healthcare programs previously operated by IHS. IHS-operated programs are funded through congressional appropriations and (thanks to a separate statute, the Indian Health Care Improvement Act, or IHCIA) third-party insurance payments. Tribe-operated programs under self-determination contracts are funded similarly, as IHS provides tribes the appropriated funds IHS would have used to operate such programs (which is called the “Secretarial Amount”) and tribes can collect revenue from third-party payers like Medicare, Medicaid, and private insurers (which is called “program income”).

The Secretarial Amount and program income do not, though, place tribes and IHS on equal footing, as tribes incur overhead and administrative expenses IHS does not. For example, while IHS can rely on other federal agencies, like the Office of Personnel Management, for general administrative tasks, tribes have to manage the insurance, financial, personnel, and auditing systems associated with providing healthcare themselves, and on their own dime.

Enter “contract support costs.” To address the systematic shortfall in programs operated by tribes, Congress amended ISDA by adding Section 5325, which requires IHS to cover the “reasonable costs for activities which must be carried on by a [tribe] as a contractor to ensure compliance with the terms of the [self-determination] contract.” These costs consist of direct contract support costs—“direct program expenses for the operation of the Federal program”—and indirect contract support costs—“any additional administrative or . . . overhead expense incurred by the [tribe] in connection with the operation of the Federal program, function, service, or activity pursuant to the contract.” But another provision (Section 5326) provides that these contract support costs cannot include costs that are not “directly attributable to” self-determination contracts and “costs associated with any contract . . . entered into between [a tribe] and any entity other than [IHS].”

In 2011, IHS entered into a self-determination contract with the Arizona-based San Carlos Apache Tribe. The contract, in accordance with ISDA’s “model agreement,” incorporated ISDA’s provisions applicable to self-determination contracts. Five years later, IHS entered into a similar self-determination contract with the Wyoming-based Northern Arapaho Tribe. Both tribes sued for breach of contract, alleging that IHS failed to pay contract support costs related to their healthcare services funded by program income. Both District Courts where these suits were filed dismissed them, but both decisions were then reversed on appeal. In the case of the San Carlos Apache Tribe, the Ninth Circuit unanimously concluded the relevant ISDA provisions are ambiguous and construed them in the tribe’s favor under the Indian canon of statutory interpretation, which acts as “tiebreaker” in favor of tribes. In the Northern Arapaho Tribe’s case, a divided Tenth Circuit also construed ISDA in the Tribe’s favor, but each of the three judges wrote separately, with one judge arguing ISDA unambiguously supports the Tribe’s position, another arguing the relevant ISDA provisions were ambiguous and applying the Indian canon, and a third dissenting based on Section 5326. The Supreme Court granted certiorari and consolidated the cases.

In an opinion joined by the Court’s three liberals and Justice Gorsuch, Chief Justice Roberts concluded that ISDA requires IHS to provide contract support costs in aid of healthcare services funded by program income, that is, with revenue from third-party payers like Medicare, Medicaid, and private insurers. Cutting through the statutory thicket, Roberts explained that Section 5325 links the amount of contract support costs IHS must pay to the requirements of self-determination contracts, and since a self-determination contract requires a tribe to spend program income to support the programs IHS transferred to it, Section 5325 requires IHS to pay contract support costs when a tribe does so. Section 5326, by contrast, is of no moment.

Let’s, as Chief Justice Roberts did, break down these sections one by one. First, Section 5325(a)(2) defines contract support costs as “the reasonable costs for activities which must be carried on by a tribal organization as a contractor to ensure compliance with the terms of the contract.” Because the “terms of the contract” are key to determining which “activities” must receive contract support costs, if a tribe must collect and spend program income to fulfill its contractual duties, any reasonable administrative costs incurred in the process are “contract support costs.” And the tribes must do that here, as their self-determination contracts incorporate an ISDA provision that requires tribes to use program income earned to “further the general purposes of the contract.”

Next, Section 5325(a)(3) references “eligible costs for the purposes of receiving funding” and specifies two types of “reasonable and allowable costs” that may be reimbursed by IHS: direct contract support costs (“direct program expenses for the operation of the Federal program that is subject to the contract”) and “indirect contract support costs.” Both types apply when tribes spend program income because the programs tribes administer under self-determination contracts are the programs contemplated by the contracts.

But what about Section 5326, which says IHS need only pay contract support costs for costs “directly attributable to contracts” pursuant to ISDA and no funds “shall be available for any contract support costs or indirect costs associated with any contract” between a tribe “and any entity other than” IHS? Nothing to see there: When tribes spend program income to further the healthcare programs they assumed from IHS, the costs incurred are “directly attributable” to their self-determination contracts because the contracts themselves required the collection and expenditure of program income. And the costs incurred are not “associated with” contracts between the tribes and third parties because the only contracts they were “associated with” were the contracts that required the work that generated the costs, that is, the self-determination contracts.

Chief Justice Roberts then quickly dispensed with IHS’s and the dissent’s arguments. First, he rejected the IHS’s argument that Section 5325’s contract support costs requirement is “tied to” the Secretarial Amount, explaining that the section says nothing of the sort. Second, he rejected IHS’s complaint that giving tribes contract support costs for spending program income would allow them to spend income on a broader range of programs than IHS can, as there are only “minor differences” between what IHS and tribes can do with program income and that in any event, ISDA was designed to give tribes great flexibility to implement healthcare services concerning their specific community needs. Finally, he blew past the dissent, largely referring back to his reasoning on Section 5325 and criticizing the dissent for focusing on “the costliness of ISDA’s mandates.” Such complaints, Roberts explained, “are the domain of Congress, not this Court.” Roberts also observed that failing to cover contract support costs for healthcare services funded by program income would inflict a “self-determination penalty” on tribes that opt for greater self-determination. ISDA’s basic purpose was to place contracting tribes in the same financial position as IHS when they enter self-determination contracts. Since tribes need to collect and spend program income to maintain the services they received from IHS, they need to receive contract support costs to avoid a “systemic funding shortfall relative to IHS.”

Justice Kavanaugh, joined by Justices Thomas, Alito, and Barrett, dissented. While the dissenters raised some non-textualist concerns—the majority’s view would upend the Executive Branch’s decades-old understanding of ISDA and would result in funds disproportionately flowing from poorer to richer tribes—he primarily objected to the majority’s textual analysis of ISDA. Most importantly, Section 5325 does not mention third-party income. But Section 5326, by contrast, forecloses covering contract support costs connected to third-party income: Self-determination contracts do not mention “how the tribes must spend their third-party income,” so such income cannot be “directly attributable to the contracts.” And tribes obtain third-party income by entering into contracts with third parties, like Medicare, making contract support costs related to such income “associated with any contract” other than self-determination contracts. Contrary to the majority, the dissenters saw no “self-determination penalty,” as tribes can spend third-party income with more flexibility than IHS can.