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Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Monday, May 18, 2009

Brudney & Ditslear: Statutory Interpretation in Tax Cases

James J. Brudney (Ohio State) & Corey Ditslear (University of North Texas, Political Science Department) have published The Warp and Woof of Statutory Interpretation: Comparing Supreme Court Approaches in Tax Law and Workplace Law, 58 Duke L.J. 1231 (2009).  Here is the abstract:

Debates about statutory interpretation—and especially about the role of the canons of construction and legislative history—are generally framed in one-size-fits-all terms. Yet federal judges— including most Supreme Court Justices—have not approached statutory interpretation from a methodologically uniform perspective. This Article presents the first in-depth examination of interpretive approaches taken in two distinct subject areas over an extended period of time. Professors Brudney and Ditslear compare how the Supreme Court has relied on legislative history and the canons of construction when construing tax statutes and workplace statutes from 1969 to 2008.

The authors conclude that the Justices tend to rely on legislative history for importantly different reasons in these two fields. The Court regularly invokes committee reports and floor statements in the workplace law area for the traditional role of identifying and elaborating on the legislative bargain that Congress reached. By contrast, the Justices often rely on the legislative history accompanying tax statutes to borrow expertise from key committee actors. The Court’s use of tax legislative history for expertise borrowing purposes relates to the distinctive nature of how tax legislative history is produced, featuring regular cross-party and interbranch cooperation that is virtually unimaginable in the workplace law setting. Although most Justices have appreciated the special character of tax legislative history, Justice Scalia remains steadfast in his unwillingness to do so.

With respect to the use of canons, Brudney and Ditslear find that the Court makes comparatively heavier use of the whole act rule and related structural canons in its tax majorities. The authors suggest that the Justices may recognize the Internal Revenue Code to be more of a coherent and self-contained regulatory scheme than the series of workplace law statutes scattered across multiple titles of the U.S. Code. As for substantive canons, the Justices are much more likely to invoke tax-based judicial policy norms than to rely on canons grounded in the specifics of workplace law. The authors contend that the Court’s use of these tax law canons should be viewed as a derivative form of expertise borrowing.

Finally, Brudney and Ditslear explore the special role played by Justice Blackmun in the tax area. They demonstrate how Blackmun’s expertise in tax law and his attentiveness to its legislative history anchored the Court’s performance for twenty-four years. Since Blackmun’s retirement, the other Justices have been less interested in reviewing tax cases and far less willing to use legislative history when they choose to decide such cases.

The evidence that familiar interpretive resources play distinctive roles in the area of tax law contributes to a subtler and richer texture for statutory interpretation than is often captured in scholarly debates. At the same time, the authors’ results also indicate that the Court since the late 1980s has exhibited greater uniformity in its reasoning in tax law and workplace law cases. Brudney and Ditslear wonder whether the philosophical arguments favoring a more inflexible approach to statutory interpretation are beginning to trump a pragmatic orientation that is more sensitive to differences among particular subject matter areas of federal law.

For a response, see Lawrence Zelenak (Duke), The Court and the Code: A Response to The Warp and Woof of Statutory Interpretation, 58 Duke L.J. 1783 (2009):

Most tax lawyers (myself included) believe there are features of the Internal Revenue Code that distinguish the art of interpreting the code from the interpretation of most other statutes. It is gratifying that the thoughtful and thorough work of Professors James J. Brudney and Corey Ditslear tends to support that belief, both descriptively and normatively. Strictly speaking, Professors Brudney and Ditslear establish only that interpreting the code is a different exercise from interpreting federal workplace statutes, but most tax lawyers would be willing to assume (on perhaps too little evidence) that the interpretation of workplace statutes is in the interpretive mainstream and that code interpretation is the outlier. In this brief Response, I offer a few observations—admittedly, somewhat scattershot—on some of the questions considered by Professors Brudney and Ditslear. My comments focus on the role of tax legislative history in the interpretive process, the usefulness (or lack thereof) of tax-specific canons of statutory interpretation, the ability of Supreme Court Justices without extensive pre-judicial tax backgrounds to write high-quality opinions in tax cases, and the limitations of quantitative analysis of judicial opinions.

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