No. 99-1978 

In the Supreme Court of the United States 

UNITED STATES OF AMERICA, PETITIONER 

v. 

JUDGE TERRY J. HATTER, JR., ET AL. 

ON WRIT OF CERTIORARI 
TO THE UNITED STATES COURT OF APPEALS 
FOR THE FEDERAL CIRCUIT 

BRIEF FOR THE UNITED STATES 

SETH P. WAXMAN 

Solicitor General 

Counsel of Record 

DAVID W. OGDEN 

Assistant Attorney General 

EDWIN S. KNEEDLER 

Deputy Solicitor General 

PAUL R.Q. WOLFSON 

Assistant to the Solicitor 

General 

DAVID M. COHEN 
DOUGLAS N. LETTER 
JEANNE E. DAVIDSON 
ANNE MURPHY 

Attorneys 

Department of Justice 
Washington, D.C. 20530-0001 
(202) 514-2217 

QUESTIONS PRESENTED 

This case concerns Congress’s actions to bring federal 
judges within the Medicare hospital insurance (HI) pro- 
gram and Social Security old-age, survivors, and disability 
insurance (OASDI) program by extending coverage under 
those programs, as well as the taxes financing those pro- 
grams, to the employment of Article III judges. The 
questions presented are: 

1. Whether Congress violated the Compensation Clause, 
U.S. Const. Art. III, § 1, when it extended the taxes 
financing the HI and OASDI programs to the judicial 
salaries of respondents, who were sitting Article III judges 
at the time those taxes were first applied to judicial salaries. 

2. Whether any constitutional violation ended when 
Congress increased the statutory salaries of federal judges 
by an amount greater than the amount of HI and OASDI 
taxes deducted from respondents’ judicial salaries. 

(I) 

TABLE OF CONTENTS 

Page 

Opinions below ............................................................................... 
1 

Jurisdiction ...................................................................................... 2 

Constitutional and statutory provisions involved ................... 
2 

Statement ........................................................................................ 2 

Summary of argument .................................................................. 
14 

Argument: 

I. Congress did not violate the Compensation 

Clause when it extended social security taxes 

to judicial salaries ........................................................... 

17 

A. The application of a nondiscriminatory tax 

to judicial salaries does not violate the 

Compensation Clause ............................................. 

17 

1. Evans v. Gore, on which the court of 

appeals relied, should be overruled .............. 

17 

2. The diminution of judicial compensation 

prohibited by Article III is a reduction 

in judges’ salary stated in law, not a 

decrease in their effective take-home 

pay net of taxes ................................................ 

28 

B. Congress’s extension of social security taxes 

to judicial salaries did not impermissibly 

discriminate against Article III judges .............. 

37 

II. Any constitutional violation terminated when 

Congress increased the statutory salaries of 

federal judges in an amount greater than the 

OASDI and HI taxes deducted from those 

salaries .............................................................................. 40 

Conclusion ....................................................................................... 44 

(III) 

IV 

TABLE OF AUTHORITIES 

Cases: Page 

Atkins v. United States, 556 F.2d 1028 (Ct. Cl. 

1977), cert. denied, 434 U.S. 1009 (1978) ....................... 

30, 36 

Bowen v. Public Agencies Opposed to Soc. Sec. 

Entrapment, 477 U.S. 41 (1986) ......................................... 

37 

Collector v. Day, 78 U.S. (11 Wall.) 113 

(1871) ............................................................................. 

15, 18, 22 

Commssioners of Northlumberland County v. 

Chapman, 2 Rawle 73 (Pa. 1829) ..................................... 

23-24 

Commonwealth ex rel. Hepburn v. Mann, 5 Watts 

& Serg. 403 (1843) .................................................................. 

25 

Cooper v. Commissioner of Income Tax for 

Queensland, (1907) 4 C.L.R. 1304 (Austl.) ................... 

26, 27 

Davis v. Michigan Dep’t of the Treasury, 489 U.S. 

803 (1989) ................................................................................. 

22 

Dobbins v. Commissioners of Erie County, 41 U.S. 

(16 Pet.) 435 (1842) ............................................................ 

18, 28 

du Pont v. Green, 195 A. 273 (Del. 1937) ........................... 

24 

Evans v. Gore, 253 U.S. 245 (1920) .......................... 

passim 

Gordy v. Dennis, 5 A.2d 69 (Md. 1939) .............................. 

25 

Graves v. New York ex rel. O’Keefe, 306 U.S. 466 

(1939) ...................................................................................... 22-23 

Jefferson County v. Acker: 

527 U.S. 423 (1999) ................................................................ 

22 

210 F.3d 1317 (11th Cir. 2000), petition for cert. 

pending, No. 00-455 .......................................................... 

33 

Krause v. Commissioner of Inland Revenue, 

1929 A. D. 286 (S. Afr.) ..................................................... 

26-27 

Long v. Watts, 110 S.E. 765 (N.C. 1922) ............................ 

25 

Martin v. Wofford, 107 S.W.2d 267 (Ky. 1937) ................. 

25 

McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316 

(1819) ........................................................................................ 22 

Miles v. Graham, 268 U.S. 501 (1925) .............................. 19-20 

V 

Cases—Continued: Page 

New Orleans v. Lea, 14 La. Ann. 197 (1859) ...................... 

25 

O’Malley v. Woodrough, 307 U.S. 277 (1939) ................ 

9, 14, 

20, 21, 26, 27, 43 

Opinions of the Justices, In re, 144 So. 111 (Ala. 
1932) ......................................................................................... 25 

Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 

429 (1895) ............................................................................. 

18, 22 

Poorman v. State Bd. of Equalization, 45 P.2d 307 

(Mont. 1935) ............................................................................ 

25 

South Carolina v. Baker, 485 U.S. 505 (1988) .................. 

22 

State ex rel. Wickham v. Nygaard, 150 N.W. 513 

(Wis. 1915) ............................................................................... 

24 

Taylor v. Gehner, 45 S.W.2d 59 (Mo. 1931) ....................... 

24 

The Judges v. Attorney-General for Saskatchewan, 

53 Times L.R. 464 (P.C. 1937) ............................................. 

26 

United States v. Hatter, 519 U.S. 801 (1996) .................... 

10 

United States v. Will, 449 U.S. 200 (1980) .................... 

14, 21 

22, 30, 33, 41, 42 

Constitutions, statutes and executive orders: 

U.S. Const.: 

Art. II, § 1, Cl. 7 ................................................................. 

28, 29 

Art. III ............................................................................. 

passim 

§ 1 (Compensation Clause) ...................................... 

passim 

Amend. XXVII ...................................................................... 

31 

Md. Const. Art. 3, § 35A .......................................................... 

25 

Pa. Const. Art. 5: 

§ 2 (1790) .................................................................................. 

24 

§ 16 (1873) ................................................................................ 

25 

§ 18 (1873) ................................................................................ 

25 

Act of Apr. 10, 1869, ch. 22, § 5, 16 Stat. 45 .......................... 

3 

Act of May 22, 1920, ch. 195, 41 Stat. 614 ............................. 

3 

Consolidated Omnibus Budget Reconciliation Act of 

1985, Pub. L. No. 99-272, § 13205, 100 Stat. 313 ............... 37 

VI 

Statutes and executive orders—Continued: 
Page 

Omnibus Budget Reconciliation Act of 1990, Pub. L. 

No. 101-508, § 11331(b), 104 Stat. 1388 .............................. 

38 

Revenue Act of 1918, ch. 18, § 211, 40 Stat. 1062 ................ 

33 

Revenue Act of 1942, ch. 619, § 172(a), 56 Stat. 

884 ......................................................................................... 33 

Revenue Act of 1951, ch. 521, § 101, 65 Stat. 459 ................ 

33 

Revenue and Expenditure Control Act of 1968, 

Pub. L. No. 364, § 102, 82 Stat. 251 .................................... 

33 

Social Security Act Amendents of 1950, ch. 809, 

§ 106, 64 Stat. 514 .................................................................. 

37 

Social Security Amendments of 1983, Pub. L. No. 

98-21, 97 Stat. 65: 

§ 101(b)(1): 

97 Stat. 69 ..................................................................... 

4-5 

97 Stat. 70 ..................................................................... 

5 

§ 101(b)(2), 97 Stat. 70 ...................................................... 

5 

Tax Equity and Fiscal Responsibility Act of 1982, 

Pub. L. No. 97-248, Tit. II, Subtit. E, Pt. III, § 278, 

96 Stat. 559 .............................................................................. 

4 

Tucker Act, 28 U.S.C. 1491(a) ................................................ 

8 

War Revenue Act, ch. 63, 40 Stat. 300: 

§ 1, 40 Stat. 300 ..................................................................... 

33 

§ 2, 40 Stat. 301 ..................................................................... 

33 

5 U.S.C. 719 (1925) .................................................................... 

3 

5 U.S.C. 8331 et seq. .................................................................. 

3 

26 U.S.C. 3101 ........................................................................... 

2, 5 

26 U.S.C. 3101(a) ................................................................ 

3, 4, 33 

26 U.S.C. 3101(b) ................................................................ 

3, 4, 33 

26 U.S.C. 3121 (1994 & Supp. IV 1998) ................................ 

2, 5 

26 U.S.C. 3121(b) (1994 & Supp. IV 1998) ................... 

4, 5, 37 

26 U.S.C. 3121(b)(5) (1994 & Supp. IV 1998) ...................... 

5 

26 U.S.C. 3121(b)(6)(A) (1982) ............................................... 

4 

26 U.S.C. 3121(b)(7)(F) ........................................................... 

38 

26 U.S.C. 3121(u) ...................................................................... 

4, 5 

26 U.S.C. 3121(u)(1)(A) (1982) ............................................... 

4 

26 U.S.C. 3121(u)(2)(A) ........................................................... 38 

VII 

Statutes and executive orders—Continued: 
Page 

28 U.S.C. 44 (1994 & Supp. IV 1998) .................................... 

8 

28 U.S.C. 135 ............................................................................. 

8 

28 U.S.C. 371 (1994 & Supp. IV 1998) ............................ 

4, 7, 39 

28 U.S.C. 371(a) ........................................................................ 

3 

28 U.S.C. 2109 ........................................................................... 

10 

28 U.S.C. 2401(a) ...................................................................... 

10 

28 U.S.C. 2501 ........................................................................... 

10 

42 U.S.C. 402(a) ........................................................................ 

3 

42 U.S.C. 409(a) (1994 & Supp. IV 1998) ............................. 

3 

42 U.S.C. 413(a)(2)(A) ............................................................. 

3 

42 U.S.C. 414(a)(2) ................................................................... 

3 

42 U.S.C. 418 ......................................................................... 

37, 38 

42 U.S.C. 426(a)(2)(A) ............................................................. 

3 

Exec. Order No. 12,387, 47 Fed. Reg. 44,981 (1982) ........... 
8 

Exec. Order No. 12,456, 49 Fed. Reg. 347 (1983) ................ 
8 

Exec. Order No. 12,477, 49 Fed. Reg. 22,041 (1984) ........... 
8 

Exec. Order No. 12,487, 49 Fed. Reg. 36,493 (1984) ........... 
8 

Exec. Order No. 13,144, 64 Fed. Reg. 72,242 (1999) ........... 
8 

Miscellaneous: 

Comment, Further Limitations upon Federal 

Income Taxation, 30 Yale L.J. 75 (1920) .......................... 

20 

Corwin, Edward S., Constitutional Law in 1919-1920. I, 
14 Am. Pol. Sci. Rev. 635 (1920) .......................................... 
20 

1 Debates and Proceedings in the Congress of the 

United States (Joseph Gales comp. 1789) .......................... 

31 

The Federalist (Clinton Rossister ed. 1961): 

No. 73 (Alexander Hamilton) .............................................. 

30 

No. 79 (Alexander Hamilton) .............................................. 
30 

Fellman, David, The Diminution of Judicial Salaries, 
24 Iowa L. Rev. 89 (1938) ..................................................... 
20 

Hall, James Parker, Comment on Recent Cases, 20 Ill. 

L. Rev. 376 (1925) .................................................................. 

20 

Letter of Chief Justice Taney to Mr. Chase, 157 U.S. 
701 (1863) ................................................................................. 
27 

Lowndes, Charles L.B., Taxing Income of the Federal 

Judiciary, 19 Va. L. Rev. 153 (1932) .................................. 20 

VIII 

Miscellaneous—Continued: Page 

H.R. Rep. No. 25, 98th Cong., 1st Sess. (1983) .................. 
6, 38 

H.R. Rep. No. 241, 99th Cong., 1st Sess., Pt. 1 (1986) ....... 
38 

13 Op. Att’y Gen. 161 (1869) .................................................... 
28 

31 Op. Att’y Gen. 475 (1919) .......................................... 
28, 30, 31 

Recent Case, 3 U. Chi. L. Rev. 141 (1935) ......................... 
20 

Recent Case, 43 Harv. L. Rev. 318 (1929) ............................ 
20 

Recent Case, Federal Taxation of Judicial Com- 
pensation, 7 Va. L. Rev. 69 (1920) ...................................... 
20 

Recent Important Decision, 18 Mich. L. Rev. 697 
(1920) ........................................................................................ 20 

S. Rep. No. 146, 99th Cong., 1st Sess. (1985) ....................... 

38 

S. Rep. No. 494, 97th Cong., 2d Sess., Vol. 1 (1982) ............ 5-6 

In the Supreme Court of the United States 

No. 99-1978 

UNITED STATES OF AMERICA, PETITIONER 

v. 

JUDGE TERRY J. HATTER, JR., ET AL. 

ON WRIT OF CERTIORARI 
TO THE UNITED STATES COURT OF APPEALS 
FOR THE FEDERAL CIRCUIT 

BRIEF FOR THE UNITED STATES 

OPINIONS BELOW 

The initial decision of the United States Claims Court, 
dismissing this case for lack of jurisdiction (Pet. App. 12a- 
18a), is reported at 21 Cl. Ct. 786. The decision of the court 
of appeals reversing that dismissal (Pet. App. 19a-29a) is 
reported at 953 F.2d 626. The decision of the Court of 
Federal Claims on remand, dismissing respondents’ claims 
on the merits (Pet. App. 30a-53a), is reported at 31 Fed. Cl. 
436. The decision of the court of appeals reversing that 
dismissal (Pet. App. 54a-66a) is reported at 64 F.3d 647. The 
decision of this Court, affirming that decision of the court of 
appeals under 28 U.S.C. 2109 because of the lack of a quorum 
(Pet. App. 69a), is reported at 519 U.S. 801. 

The further decision of the Court of Federal Claims on 
remand, ruling in favor of the government on the issues of 
damages and the statute of limitations and awarding some 
respondents limited damages (Pet. App. 70a-111a), is re- 

(1) 

2 

ported at 38 Fed. Cl. 166. The opinion of the panel of the 
court of appeals reversing the Court of Federal Claims as to 
damages (Pet. App. 112a-127a) is reported at 185 F.3d 1356. 
The order of the court of appeals vacating the panel’s judg- 
ment and ordering rehearing en banc on the issue of the 
statute of limitations (Pet. App. 128a-129a) is reported at 199 
F.3d 1316. The opinion of the en banc court of appeals, 
reversing the Court of Federal Claims on both damages and 
statute of limitations (Pet. App. 1a-11a), is reported at 203 
F.3d 795. 

JURISDICTION 

The judgment of the en banc court of appeals was entered 
on February 9, 2000. On May 2, 2000, the Chief Justice 
extended the time for filing a petition for a writ of certiorari 
to and including June 8, 2000. The petition for a writ of 
certiorari was filed on June 8, 2000, and was granted on 
October 16, 2000 (J.A. 143). This Court’s jurisdiction rests 
on 28 U.S.C. 1254(1). 

CONSTITUTIONAL AND STATUTORY 
PROVISIONS INVOLVED 

The Compensation Clause, U.S. Const. Art. III, § 1, and 
pertinent provisions of 26 U.S.C. 3101 and 3121 (1994 & 
Supp. IV 1998) are set forth in the appendix to the petition 
for a writ of certiorari (Pet. App. 130a-132a). 

STATEMENT 

1. More than 90% of the paid civilian labor force in the 
United States is engaged in employment covered by the 
Social Security old-age, survivors, and disability insurance 
(OASDI) program and the Medicare hospital insurance (HI) 
program. J.A. 41. Employees earn credits towards 
eligibility for OASDI and HI benefits based on their 

3 

employment.1 Both programs are financed in part out of 
taxes imposed “on the income of every individual,” in 
amounts equal to certain percentages of an employee’s 
wages. See 26 U.S.C. 3101(a) and (b). 

Before 1983, the employment of Article III judges, as well 
as almost all other federal employees, was excluded from 
both taxes and benefits under the HI and OASDI programs. 
Federal judges and other federal employees were covered 
by separate retirement systems. Since 1869, Article III 
judges have been entitled to retire after meeting certain age 
and service requirements and to receive lifetime annuities 
equal to their salary at their retirement. Those annuities are 
financed entirely from general tax revenues. See 28 U.S.C. 
371(a); Act of Apr. 10, 1869, ch. 22, § 5, 16 Stat. 45. Begin- 
ning in 1920, most other federal employees were eligible to 
receive retirement annuities under the Civil Service Retire- 
ment System (CSRS) upon meeting certain service require- 
ments, and were also required to contribute part of their 
salary to finance the CSRS program. See 5 U.S.C. 8331 
et seq.; 5 U.S.C. 719 (1925) (mandatory deduction from 
federal employees’ salary to finance retirement system); Act 
of May 22, 1920, ch. 195, 41 Stat. 614. Federal judges and 
employees could, however, receive OASDI and HI benefits 
based on their non-federal employment if they had accrued 
sufficient credits in such employment (and in some cases 
based on their spouses’ coverage). 

On January 1, 1983, employees in all three Branches of the 
federal government, including judges, first began to earn 

1 Eligibility for HI benefits, in general, is tied to eligibility for Social 
Security old-age benefits. See 42 U.S.C. 426(a)(2)(A). Eligibility for old- 
age benefits is based on an individual’s having paid OASDI taxes for 40 
“quarters of coverage.” See 42 U.S.C. 402(a), 414(a)(2). “[Q]uarters of 
coverage” is tied to payment of “wages,” which is defined in terms of 
remuneration for “employment.” See 42 U.S.C. 409(a) (1994 & Supp. IV 
1998), 42 U.S.C. 413(a)(2)(A). 

4 

credits for HI coverage on the basis of their federal employ- 
ment, and also first became subject to the HI tax on their 
salaries. One year later, on January 1, 1984, newly hired 
federal employees and judges began to earn credits for 
Social Security old-age benefits on the basis of their federal 
service, and also became subject to the OASDI tax on their 
salaries.2 The 1983 and 1984 amendments also imposed HI 

2 The taxes on employees’ wages that finance in part the OASDI and 
HI programs are imposed by 26 U.S.C. 3101(a) and (b). Both Sections 
impose a tax on income equal to a percentage of the employee’s wages 
with respect to “employment,” as defined in 26 U.S.C. 3121(b) (1994 & 
Supp. IV 1998). Section 3121(b) and a companion provision, Section 
3121(u), have undergone several changes relevant to this case. Before 
September 3, 1982, Section 3121(b) excluded from the definition of 
“employment” “service performed in the employ of the United States 

* * * if such service is covered by a retirement system established by a 
law of the United States.” 26 U.S.C. 3121(b)(6)(A) (1982). That provision 
exempted Article III judges from the HI and OASDI taxes, because those 
judges were (and are) covered by another retirement system established 
by 28 U.S.C. 371 (1994 & Supp. IV 1998). That system permits a judge to 
retire from service on an annuity equal to the judge’s salary at the time of 
retirement. 

Congress extended the HI tax to federal judges’ salaries in the Tax 
Equity and Fiscal Responsibility Act of 1982 (TEFRA), Pub. L. No. 97- 
248, Tit. II, Subtit. E, Pt. III, § 278, 96 Stat. 559-563. TEFRA added a 
new Section 3121(u)(1)(A), which provided that, “[f]or purposes of the 
[Medicare hospital insurance tax] imposed by section 3101(b) * * * 
paragraph (6) of [26 U.S.C. 3121(b)] shall be applied without regard to 
subparagraph[] (A) * * * thereof.” 26 U.S.C. 3121(u)(1)(A) (1982); see 
Pub. L. No. 97-249, § 278, 96 Stat. 559. That provision of TEFRA, in 
effect, instructed that the exclusion of federal judges’ salaries from the 
definition of “employment” should be disregarded for purposes of the HI 
tax, and thus extended that tax (but not the OASDI tax) to judges’ 
salaries. That provision of TEFRA also effectively extended the HI tax, 
but not the OASDI tax, to the salaries of federal employees who were 
covered by the CSRS. 

Congress extended the OASDI tax to federal judges’ (and other federal 
employees’) salaries in the Social Security Amendments of 1983, Pub. L. 

5 

and OASDI taxes for the first time on the salaries of the 
President, Vice President, cabinet members, political ap- 
pointees in the Senior Executive Service, and Members of 
Congress. Those employees and officials remain subject to 
HI and OASDI taxes today. See 26 U.S.C. 3121(b)(5) (1994 
& Supp. IV 1998). 

Congress brought federal employees, including federal 
judges, within the HI and OASDI systems in part out of 
concern that those employees were not paying a fair share of 
the cost of financing benefits under those programs, which 
are funded out of current HI and OASDI taxes. When 
Congress in 1982 enacted legislation to bring federal em- 
ployees within the HI system, the Senate Finance Com- 
mittee noted as follows: 

Many active Federal civilian employees have worked 
long enough (or their spouses have) in employment 
covered by social security to become insured under the 
Hospital Insurance program. However, while most 
workers in covered social security employment are 

No. 98-21, § 101(b)(1), 97 Stat. 69, which again amended 26 U.S.C. 3121. 
The Social Security Amendments of 1983 redefined “employment” in 
Section 3121(b)(5) generally to exclude “service performed in the employ 
of the United States,” but also excluded from that exclusion service per- 
formed by federal judges, among others. See Pub. L. No. 98-21, 
§ 101(b)(1), 97 Stat. 70. In addition, the Social Security Amendments of 
1983 amended Section 3121(u) to provide that, for the purpose of the 
Medicare tax, Section 3121(b) “shall be applied without regard to 
paragraph (5) thereof.” See Pub. L. No. 98-21, § 101(b)(2), 97 Stat. 70. 
Because the Social Security Amendments of 1983 excluded service by 
federal judges from the federal-employment exclusion from the general 
definition of “employment,” it subjected federal judges to the HI and 
OASDI taxes of Section 3101, which falls on the income of all wage- 
earners in respect of their employment, unless excluded. Because the 
same Act directed that the exclusion of federal employees in Section 
3121(b)(5) be disregarded for HI tax purposes, it again brought federal 
employees, including judges, within the coverage of the HI tax. 

6 

subject to the Hospital Insurance tax throughout their 
entire working careers, Federal employees may earn the 
same coverage with relatively fewer years of work sub- 
ject to the tax. The committee believes that Federal 
workers should bear a more equitable share of the costs 
of financing the benefits to which many of them 
eventually become entitled. 

The bill, therefore, extends Medicare coverage to all 
members of the Federal workforce in the same way 
coverage is provided to most other workers. 

S. Rep. No. 494, 97th Cong., 2d Sess. Vol. 1, at 378 (1982). 
Similarly, when Congress in 1983 enacted legislation to bring 
many federal employees (including federal judges) within the 
Social Security old-age benefit system, the House Ways and 
Means Committee observed that the expansion of coverage 
to include “several groups of workers previously excluded 
from participation in the program” was intended to “main- 
tain the social security program on a sound financial basis” 
and to “assur[e] both the short-term and long-term financial 
stability of the program.” H.R. Rep. No. 25, 98th Cong., 1st 
Sess. 3 (1983). 

When Congress considered extending OASDI benefits 
and taxes to federal employment in 1983, it recognized that 
doing so could subject federal employees under the CSRS 
program to a double imposition—the mandatory contribution 
to CSRS and the OASDI tax. Congress also recognized that 
many federal employees had long relied on the CSRS to 
make retirement and estate plans. Thus, to treat incumbent 
federal workers as equally as possible to other wage earners, 
Congress allowed them to continue to participate in CSRS 
rather than the OASDI program. See H.R. Rep. No. 25, 
supra, at 14; J.A. 112-113. Federal judges, however, were 
not subject to any similar mandatory civil-service retirement 
contribution, as they are entitled to retire on an annuity 

7 

financed out of general tax revenues. Thus, Congress had no 
occasion to permit judges to “opt out” of the OASDI pro- 
gram to avoid a double imposition.3 Moreover, after 1984, 
federal judges earned coverage for OASDI benefits (in 
addition to the lifetime annuity provided under 28 U.S.C. 371 
(1994 & Supp. IV 1998)) based on their judicial employment, 
whereas other incumbent federal employees who continued 
to participate in the CSRS program remained ineligible for 
OASDI benefits based on their federal employment. 

2. On December 29, 1989, eight federal judges4 (the 
“early-filing judges”) filed suit against the United States in 
the United States Claims Court (the predecessor to the 
Court of Federal Claims). They contended that Congress 
had unconstitutionally diminished their compensation, in 
violation of the Compensation Clause, U.S. Const. Art. III, 
§ 1, when, on January 1, 1984, it made their judicial salaries 
subject to the OASDI tax.5 J.A. 23-27. Those eight judges 

3 Congress also permitted a small number of high-level federal 
officials subject to the OASDI tax to opt out of CSRS. That option was 
afforded because, otherwise, those officials would have been subject to a 
mandatory double contribution for retirement income security purposes. 
Congress did not permit those officials to opt out of Social Security taxes; 
it instead required them, like judges, to pay OASDI taxes but made the 
contribution to CSRS optional for those officials. See J.A. 64-65. 

4 Those eight judges were District Judges Hatter, Arceneaux, Beer, 
Burciaga, McNamara, Ramirez, and Wiseman, and Circuit Judge Pre- 
gerson. District Judges Bowen and Roettger were also plaintiffs in the 
original suit, but did not appeal from the adverse decision of the Claims 
Court dismissing the case on jurisdictional grounds. J.A. 24-25; Pet. App. 
19a. After the court of appeals reversed that dismissal and remanded, 
Judges Bowen and Roettger rejoined the lawsuit, when several other 
judges also became plaintiffs. See id. at 75a n.5. For statute of limitations 
purposes, Judges Bowen and Roettger were grouped with the “later-filing 
judges.” See pp. 9-10, infra. 

5 The Compensation Clause provides: “The Judges, both of the su- 
preme and inferior Courts, * * * shall, at stated Times, receive for their 

8 

were all sitting judges as of January 1, 1984, when the 
OASDI tax first became applicable to judicial salaries. The 
judges did not contend that Congress had diminished their 
prescribed statutory salary. Rather, they contended that 
the incidence of the OASDI tax on their salary on January 1, 
1984, effectively and unconstitutionally diminished that 
salary, and that the unconstitutional diminution continued to 
the present day, despite substantial salary increases re- 
ceived by those judges after January 1, 1984.6 

The Claims Court initially dismissed the suit on juris- 
dictional grounds, but the court of appeals reversed and 
remanded, ruling that the lower court had jurisdiction under 
the Tucker Act, 28 U.S.C. 1491(a). Pet. App. 19a-29a.7 On 

Services, a Compensation, which shall not be diminished during their Con- 
tinuance in Office.” 

6 From December 17, 1982, to December 31, 1983, just before Con- 
gress extended the OASDI tax to federal judges, circuit judges were paid 
an annual salary of $77,300, and district judges were paid an annual salary 
of $73,100. See Exec. Order No. 12,387, 47 Fed. Reg. 44,981, 44,988 (1982). 
In 1984, after OASDI taxes were first imposed upon judges, the annual 
salaries of circuit judges were raised to $80,400, and those of district 
judges were raised to $76,000. Exec. Order No. 12,456, 49 Fed. Reg. 347, 
360 (1983), as amended by Exec. Order No. 12,477, 49 Fed. Reg. 22,041, 
22,052 (1984), and Exec. Order No. 12,487, 49 Fed. Reg. 36,493 (1984). 
Although the Executive Order increasing judges’ salaries in 1984 was 
promulgated on September 1, 1984, the increase in judges’ salaries was 
made retroactive to the first date of the first applicable pay period 
commencing on January 1, 1984. Ibid.; see Pet. App. 86a. 

Since that time, federal judges have received additional salary in- 
creases. Circuit judges currently receive $149,900 annually, and district 
judges receive $141,300. See Exec. Order No. 13,144, 64 Fed. Reg. 72,242 
(1999); see generally 28 U.S.C. 44 and 135 (1994 & Supp. IV 1998), 
Historical Notes (describing salary increases from 1919 for circuit judges 
and district judges, respectively). 

7 The Claims Court dismissed the suit on the ground that respondents 
had not filed administrative tax-refund claims. Pet. App. 12a-18a. The 
court of appeals ruled, however, that respondents were not required to file 

9 

remand, respondents filed a second amended complaint on 
January 11, 1993. That amended complaint added eight more 
judges (the “later-filing judges”) as new plaintiffs.8 The new 
complaint also challenged for the first time (on behalf of all 
respondents) the constitutionality of the HI tax, which had 
first been imposed on judicial salaries on January 1, 1983. 
J.A. 34. The parties cross-moved for summary judgment, 
and the court granted summary judgment for the United 
States, concluding that the application of the OASDI and HI 
taxes to respondents’ judicial salaries was constitutional. 
Pet. App. 30a-53a. 

3. The court of appeals reversed, and held that Con- 
gress’s extension of the HI and OASDI taxes to the salaries 
of already-commissioned federal judges violated the Com- 
pensation Clause. Pet. App. 54a-66a. The court found this 
case controlled by Evans v. Gore, 253 U.S. 245 (1920), which 
held that the Compensation Clause prohibited the imposition 
of the federal income tax on the salary of a federal judge who 
had been appointed before Congress brought judicial salaries 
within the income subject to federal income tax. Pet. App. 
59a. The court acknowledged (id. at 59a-60a) that this 
Court’s subsequent decision in O’Malley v. Woodrough, 307 
U.S. 277 (1939), upheld the application of the income tax 
to the salaries of federal judges who took office after the 
income tax was enacted. Nonetheless, the court concluded 
that it was required to follow Evans rather than O’Malley 
because this Court had not expressly overruled Evans. See 
Pet. App. 60a-61a. It therefore remanded the case for a 

refund claims because one of the counts of their complaint “did not pursue 
a tax refund. Instead they sought damages for violation of Article III, 
§ 1—an action which is within the Tucker Act jurisdiction of the Claims 
Court.” Id. at 26a. 

8 The eight new plaintiffs were, in addition to District Judges Bowen 
and Roettger (who rejoined the case after the remand, see p. 7 n.4, supra), 
District Judges Evans, Mentz, Owens, Wilhoit, Baker, and Mihm. J.A. 31. 

10 

determination of the amount to which the HI and OASDI 
taxes had diminished respondents’ compensation. Id. at 65a- 
66a. 

4. The United States filed a petition for a writ of 
certiorari. Four Justices recused themselves from con- 
sideration of the petition. Because of those recusals, the 
Court lacked a quorum of six Justices to consider the peti- 
tion. The Court therefore entered an order under 28 U.S.C. 
2109, which provides that, when a quorum of the Court is 
absent, the judgment of the court of appeals shall be 
affirmed with the same effect as an affirmance by an equally 
divided Court. See United States v. Hatter, 519 U.S. 801 
(1996); Pet. App. 69a. 

5. On remand from the court of appeals, the Court of 
Federal Claims ruled that all the claims of the later-filing 
judges (see p. 9, supra) and all the respondents’ claims based 
on the HI tax were barred by the six-year statute of 
limitations for actions against the United States (see 28 
U.S.C. 2401(a), 2501). Pet. App. 90a-105a.9 The court also 
ruled, as to the early-filing judges’ claims based on the 
OASDI tax, that any constitutional violation had come to an 
end in 1984 when Congress granted judges a salary increase 
that exceeded the amount of the OASDI tax applied to their 
salaries on January 1, 1984. Id. at 78a-89a. 

9 With respect to the statute of limitations, the court held that the HI 
claims and all the claims of the later-filing judges were filed more than six 
years after those claims had accrued, and rejected respondents’ argu- 
ments that those claims were timely filed under the “continuing claim” 
doctrine. Pet. App. 101a-105a. The court questioned whether the con- 
tinuing claim doctrine still exists at all, see id. at 103a, but it also 
concluded that that doctrine does not apply to this case, where “the 
unlawful diminution consisted of imposition of two new taxes on specific 
effective dates,” id. at 105a. Those dates (January 1, 1983 and January 1, 
1984), the court held, were the dates on which respondents’ claims 
accrued. 

11 

On the latter point, the court observed that, “if, simultane- 
ously with the imposition of a new tax, Congress granted an 
increase in salary which equaled or exceeded the tax, no 
diminution in the level of compensation just prior to 
imposition of the tax would have occurred.” Pet. App. 79a. 
If that is so, the court reasoned, then any constitutional 
violation caused by the imposition of a new tax must also 
terminate when Congress raises judges’ salaries “in an 
amount equal to or greater than the amount of the tax[.] 

* * * [I]f an increase in nominal salary occurred 
simultaneously with or subsequent to * * * a diminution, 
the simultaneous or subsequent increase accomplishes a cure 
to the extent of such increase.” Id. at 82a. Otherwise, the 
court noted, Congress could never bring to an end a violation 
of the Compensation Clause caused by the initial application 
of a new tax except by repealing the tax (or by specifically 
granting the affected judges compensation for the tax). 
Indeed, the court observed that, in respondents’ view, even 
“if Congress awarded all judges a pay raise of $1,000,000 per 
year retroactive to January 1, 1983 but not specifically or 
expressly related to the Social Security taxes imposed in 
1983 or 1984, it would not cure the diminution resulting from 
imposition of the taxes,” and “all Social Security taxes with- 
held must be refunded to plaintiffs and there can absolutely 
be no cure by subsequent increases in salary” granted to all 
federal judges. Id. at 83a-84a. 

The court also found that Congress had in fact raised 
judges’ salaries in an amount greater than the OASDI tax 
imposed on those salaries on January 1, 1984. Pet. App. 86a- 
87a. It also calculated that judges’ salary increases over the 
pre-1984 compensation base exceeded in each year the total 
amount that judges paid in HI and OASDI taxes in that 
year, until by 1993, the annual sums represented by the 
successive pay increases “are more than ten times higher 
than the total of Social Security taxes withheld during any 

12 

calendar year.” See id. at 89a-90a. Based on those facts, the 
court concluded that “no unlawful diminution in judicial com- 
pensation occurred” after respondents’ salary increase in 
1984 took effect. See id. at 89a. 

The court therefore limited damages to the single deduc- 
tion of OASDI taxes that occurred before the 1984 salary 
increase took effect. Because judges are paid on the first 
day of each calendar month for services rendered during the 
previous month, the court concluded that the OASDI tax 
deducted from the judges’ salary payment on January 1, 
1984 was in fact a tax on their salary earned during 
December 1983. Pet. App. 77a. The court accordingly 
entered judgment for respondents in the amount of the 
OASDI tax deducted from judges’ salaries on January 1, 
1984—$328.95 for the seven early-filing district judges and 
$347.85 for the early-filing circuit judge—with compound 
interest. Id. at 77a, 110a-111a. 

6. A panel of the court of appeals reversed the Court of 
Federal Claims’ holding that the constitutional violation ter- 
minated upon the judges’ first salary increase following the 
initial incidence of the OASDI tax, Pet. App. 116a-125a, but 
affirmed the dismissal of the HI tax claims and all the later- 
filing judges’ claims as time-barred, id. at 125a-127a. 

On the former point, the court of appeals rejected the trial 
court’s conclusion that any unconstitutional diminution in 
judicial compensation caused by application of the OASDI 
tax to judicial salaries terminated when Congress enacted a 
general increase in judicial salaries that exceeded the 
amount of the new tax. In the court of appeals’ view, the 
trial court’s approach was deficient because it “would create, 
with regard to judicial compensation, two different classes of 
judges.” Pet. App. 122a. As the court of appeals put the 
matter, if the trial court’s conclusion were upheld, then those 
judges who took office after Congress extended OASDI 
taxes to sitting judges could enjoy “the full benefit of 

13 

congressionally-granted salary increases” subsequent to 
those dates. Ibid. On the other hand, those judges who took 
office before OASDI taxes were applied to judicial salaries 
“would not receive the Congressionally-granted salary 
increases which became effective after 1983, because a 
significant portion of the increases would be allocated to pay 
the damage award to which they are entitled as a result of 
the earlier unconstitutional imposition.” Ibid. The court also 
remarked that Congress had granted federal judges salary 
increases to adjust for inflation, and that “[t]o deprive the 
pre-1983 judges of the benefit of those increases by using 
them to offset the losses they incurred from the Govern- 
ment’s earlier wrongful act would not only be unfair, but 
would be contrary to Congress’s purpose in granting the 
increases.” Id. at 125a. Thus, it held, any determination of 
the duration of a violation of the Compensation Clause and 
any calculation of damages must be “independent of any 
generally awarded adjustment to judicial salaries.” Ibid. 

7. Both the United States and respondents sought re- 
hearing and rehearing en banc. The court of appeals denied 
the United States’ petition but granted respondents’ peti- 
tion, which contested the panel’s decision that the later-filing 
judges’ claims and all claims based on the HI tax were time- 
barred. Pet. App. 128a-129a. On rehearing en banc, the 
court held that respondents’ claims challenging both the 
OASDI and the HI taxes were timely, insofar as they chal- 
lenged the taxes deducted from their salaries within six 
years before the claim was filed. Id. at 2a-11a. 

10 The en banc 

10 The en banc court relied for that conclusion on the “continuing claim” 
doctrine, under which a claim accrues anew each time the government 
incurs an alleged obligation to make a payment to the claimant. The court 
reasoned that, because (in its view) each deduction of OASDI tax from a 
judge’s salary payment continued the Compensation Clause violation, a 
new claim based on the Clause accrued each time such a deduction was 
made. See Pet. App. 4a-8a. 

14 

court at that time also reinstated the judgment of the panel, 
insofar as it had reversed the trial court’s determination that 
the Compensation Clause violation came to an end when 
Congress granted judges a general salary increase. See id. 
at 1a-2a. 

SUMMARY OF ARGUMENT 

Congress’s extension of the Social Security old-age, sur- 
vivors and disability insurance (OASDI) and Medicare 
hospital insurance (HI) taxes to the salaries of sitting federal 
judges did not unconstitutionally diminish the compensation 
of those judges within the meaning of the Compensation 
Clause, U.S. Const. Art. III, § 1. The application and exten- 
sion of a generally applicable, non-discriminatory tax to the 
salaries of federal judges does not implicate the Com- 
pensation Clause. Nor did Congress impermissibly discrimi- 
nate against federal judges when it extended the OASDI and 
HI taxes to their salaries. Furthermore, even if there had 
been any unconstitutional diminution when those taxes were 
first deducted from sitting judges’ salaries, any such consti- 
tutional violation would have terminated when Congress 
increased statutory judicial salaries in an amount that 
exceeded the amount of the OASDI and HI taxes. 

I. A. The court of appeals relied on Evans v. Gore, 253 
U.S. 245 (1920), to conclude that the application of the 
OASDI and HI taxes to sitting judges’ salaries violated the 
Compensation Clause. This Court should now definitively 
overrule Evans v. Gore. In Evans, the Court concluded that 
the Compensation Clause barred the application of the 
federal income tax to the salary of an Article III judge; that 
judge happened to have been appointed to his judicial office 
before the tax was enacted, but that fact was not part of the 
Court’s rationale in Evans. The Court’s subsequent cases 
have repudiated Evans. In O’Malley v. Woodrough, 307 
U.S. 277 (1939), and United States v. Will, 449 U.S. 200 
(1980), the Court made clear that the application of a gen- 

15 

erally applicable, nondiscriminatory tax to the salary of a 
federal judge is not an impermissible diminution of his 
compensation within the prohibition of the Compensation 
Clause. 

The doctrinal basis of the Court’s decision in Evans has 
long been demonstrated to be unsound. Evans relied heavily 
on the Court’s intergovernmental tax immunity cases pro- 
hibiting the federal government and the States from apply- 
ing their income taxes to the salaries of each other’s em- 
ployees, such as Collector v. Day, 78 U.S. (11 Wall.) 113 
(1871), but the Court has since overruled that entire line of 
decisions. Evans also claimed support in state-court 
decisions construing similar provisions under state consti- 
tutions, but in fact the weight of state authority is to the 
contrary, as are decisions of courts in other English-speaking 
countries. Evans also cited a private 1862 letter of Chief 
Justice Taney and an 1869 opinion of Attorney General Hoar, 
but they also lend the decision in Evans little support. In 
sum, Evans has not withstood closer examination and the 
test of time and should be disapproved. 

Respondents have argued that Congress’s extension of 
OASDI and HI taxes to their salaries nonetheless consti- 
tuted a diminution of their compensation because, after the 
taxes took effect, they were left with less “effective” com- 
pensation in the form of take-home pay than they had before 
the taxes were extended to their salaries. The “Compen- 
sation” that is protected from diminution by the Consti- 
tution, however, is the judges’ statutory salary, not their 
“effective” salary or take-home pay after taxes are deducted. 
Respondents’ construction, if accepted, might well lead to 
the conclusion that Congress is constitutionally prohibited 
from granting the President tax relief that is made available 
to the general population (since the President’s “Compensa- 
tion” may not be increased or diminished during his term of 
office) or extending generally applicable taxes to their own 

16 

salaries (since no law may vary the “Compensation” of 
Members until an election of Representatives has inter- 
vened). Respondents’ construction would also suggest that 
Congress may not adjust even the rates of income tax 
applicable to the salaries of sitting federal judges, the Pre- 
sident, or Members of Congress. These implausible conse- 
quences show that respondents’ construction should be 
rejected. 

Respondents’ theory also has no basis in the policies of the 
Compensation Clause. The Clause is intended to protect 
judicial independence and to attract persons of high caliber 
to judicial service. A nondiscriminatory tax poses no threat 
to judicial independence. Similarly, while federal judges 
might well be concerned that Congress could use its power 
over their statutory salary to deprive them of adequate 
support, any concern that Congress would manipulate taxes 
of general applicability for such a purpose is without sub- 
stance, because federal judges, like all members of the 
public, have the protection of the political process against 
excessively burdensome taxes that are generally applicable. 
Moreover, in bringing judges within the OASDI and HI 
programs, Congress also gave judges significant benefits, 
and respondents have pointed to nothing suggesting that 
OASDI and HI taxes have driven federal judges out of 
service. 

B. Congress’s extension of OASDI and HI taxes to 
judges did not impermissibly discriminate against respon- 
dents. In 1983 and 1984, Congress simply brought federal 
judges within a program that covers 90% of the civilian labor 
force. Congress therefore did at that time what it could have 
unquestionably done in 1935 when it first established the 
Social Security program, namely, subject judicial salaries to 
a generally applicable tax. Although Congress in 1984 al- 
lowed other incumbent federal employees to remain ex- 
cluded from the OASDI program, it did so only because it 

17 

recognized that subjecting those employees to OASDI taxes 
as well as mandatory contributions for the existing Civil 
Service Retirement System (CSRS) would have made those 
employees subject to a double imposition for retirement 
income security. Federal judges were not similarly situated, 
because they were and are entitled to receive a lifetime 
annuity equal to the full salary received at the time of retire- 
ment, entirely at taxpayer expense, and so their salaries 
were not subject to deduction for CSRS or other retirement 
contributions. 

II. Even if Congress did impermissibly diminish the com- 
pensation of sitting judges when it brought them within the 
HI and OASDI programs, that diminution terminated in 
1984 when Congress increased judicial salaries in an amount 
greater than the amount of the new HI and OASDI taxes. 
After that increase, each judge received greater compen- 
sation, even net of the HI and OASDI taxes, than the judge 
had received before those taxes were first imposed. Con- 
gress therefore cannot be charged with any “diminution” in 
judicial compensation for periods after the enactment of the 
salary increases for federal judges. 

ARGUMENT 

I. CONGRESS DID NOT VIOLATE THE COMPEN- 
SATION CLAUSE WHEN IT EXTENDED SOCIAL 
SECURITY TAXES TO JUDICIAL SALARIES 

A. The Application Of A Nondiscriminatory Tax To 

Judicial Salaries Does Not Violate The Compensation 

Clause 

1. Evans v. Gore, On Which The Court Of Appeals 
Relied, Should Be Overruled 

In holding that the application of OASDI and HI taxes to 
sitting judges violated the Compensation Clause, the court of 
appeals believed itself bound by this Court’s decision in 
Evans v. Gore, 253 U.S. 245 (1920), which held that the Com- 

18 

pensation Clause barred the application of the federal in- 
come tax to federal judges’ salaries. Evans should now be 
definitively overruled. Not only have this Court’s own sub- 
sequent decisions expressly undermined the reasoning of 
Evans, but that decision rests on a serious misunderstanding 
of the Compensation Clause. 

a. This Court’s subsequent decisions have thoroughly 
disapproved the reasoning of Evans. Evans involved a fed- 
eral income tax levied under a 1919 statute on the salary of a 
federal judge appointed in 1899 (see 253 U.S. at 246), but the 
Court’s opinion did not limit its holding to situations in which 
the judge’s appointment predated the imposition of the tax. 
Nor did the decision in Evans rely on a perception that the 
unconstitutional diminution was the effective reduction in 
judicial pay from the gross amount before the taxing act was 
passed to the amount net of taxes after the tax became 
effective. Rather, the rationale of Evans was that, under the 
Compensation Clause, Congress must not interfere with the 
ability of Article III judges to retain the full amount stated 
in law to be their salary, and may not indirectly diminish 
that amount by subjecting it to any tax at all. As the Court 
stated, “all which by their necessary operation and effect 
withhold or take from the judge a part of that which has 
been promised by law for his services must be regarded as 
within the prohibition.” Id. at 254. 

In reaching that conclusion, the Court in Evans relied (253 
U.S. at 255) on intergovernmental tax immunity cases such 
as Dobbins v. Commissioners of Erie County, 41 U.S. (16 
Pet.) 435 (1842), Collector v. Day, 78 U.S. (11 Wall.) 113 
(1871), and Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 
429 (1895), for the broad proposition that the Framers “were 
so sedulously bent on securing the independence of the judi- 
ciary [that they] intended to protect the compensation of the 
judges from assault and diminution in the name and form of a 
tax[.]” Evans, 253 U.S. at 256. The Court likened judicial 

19 

immunity from income taxes to the intergovernmental tax 
immunity cases because, it perceived, both principles of im- 
munity were necessary to preserve “independence” (id. at 
255) in the face of the power to tax, which “carries with it the 
power to embarrass and destroy” (id. at 256) (internal quota- 
tion marks omitted). On that premise, the Court concluded 
that a judge’s “compensation is protected from diminution in 
any form, whether by a tax or otherwise, and is assured to 
him in its entirety for his support.” Id. at 263. 

Justice Holmes, joined by Justice Brandeis, dissented. 
They maintained that the inclusion of judicial salaries in the 
incidence of an income tax is constitutional as long as that 
tax does not single out judicial compensation but, rather, 
applies with like force to all citizens. Justice Holmes argued 
that the constitutional imperative of protecting judicial inde- 
pendence “is a very good reason for preventing attempts to 
deal with a judge’s salary as such, but seems to me no reason 
for exonerating him from the ordinary duties of a citizen, 
which he shares with all others.” 253 U.S. at 265. “To 
require a man to pay the taxes that all other men have to 
pay,” he continued, “cannot possibly be made an instrument 
to attack his independence as a judge. I see nothing in the 
purpose of this clause of the Constitution to indicate that the 
judges were to be a privileged class, free from bearing their 
share of the cost of the institutions upon which their well- 
being if not their life depends.” Ibid. 

The Court’s reasoning and holding in Evans were reaf- 
firmed in Miles v. Graham, 268 U.S. 501 (1925). In Miles, 
the Court held that “the plain rule of Evans v. Gore” re- 
quired invalidation of the income tax as applied to the salary 
of a judge who took office after the income tax was extended 
to judicial salaries. Id. at 509. The Court stated in Miles 
that the Compensation Clause “impose[s] upon Congress the 
duty definitely to declare what sum shall be received by each 
judge out of the public funds and the times for payment. 

20 

When this duty has been complied with, the amount speci- 
fied becomes the compensation which is protected against 
diminution during his continuance in office.” Id. at 508-509. 
The Court therefore found no distinction between judges 
who took office before the taxing act was enacted and those 
who took office after that date. 

b. The Court’s decisions in Evans and Miles exempting 
judges from income taxes were immediately and forcefully 
criticized by state courts, courts in other English-speaking 
countries interpreting similar provisions, and academic 
commentary. 

11 In O’Malley v. Woodrough, 307 U.S. 277 
(1939), the Court, acknowledging much of that criticism (see 
id. at 281 nn. 6-8), reconsidered its view of the limitations im- 
posed by the Compensation Clause upon Congress’s power 
to tax, and adopted Justice Holmes’s understanding that 
judicial salaries are as much subject to taxation as the 
salaries of other citizens. The Court held in O’Malley that “a 
non-discriminatory tax laid generally on net income is not, 
when applied to the income of a federal judge, a diminution 
of his salary within the prohibition” of the Constitution. Id. 
at 282. 

O’Malley expressly overruled Miles. 307 U.S. at 282-283. 
O’Malley did not expressly overrule Evans, for Congress 
had structured the income tax act under review in O’Malley 

11 See pp. 24-28, infra (discussing state and foreign courts applying 
similar provisions); see also Edward S. Corwin, Constitutional Law in 
1919-1920. I, 14 Am. Pol. Sci. Rev. 635, 642-643 (1920); David Fellman, The 
Diminution of Judicial Salaries, 24 Iowa L. Rev. 89, 99-101 (1938); James 
Parker Hall, Comment on Recent Cases, 20 Ill. L. Rev. 376, 377 (1925); 
Charles L.B. Lowndes, Taxing Income of the Federal Judiciary, 19 Va. L. 
Rev. 153, 159-160 (1932); Comment, Further Limitations Upon Federal 
Income Taxation, 30 Yale L.J. 75, 78-80 (1920); Recent Case, 3 U. Chi. L. 
Rev. 141, 142-143 (1935); Recent Case, 43 Harv. L. Rev. 318 (1929); Recent 
Case, Federal Taxation of Judicial Compensation, 7 Va. L. Rev. 69, 72 
(1920); see also Recent Important Decision, 18 Mich. L. Rev. 697, 698 
(1920) (agreeing with lower court’s decision in Evans). 

21 

“to avoid, at least in part, the consequences of ” Evans by 
making the tax applicable only to the salaries of judges 
appointed after its effective date. See id. at 280. But the 
Court plainly adopted the understanding of the Compen- 
sation Clause set forth in Justice Holmes’s dissent in Evans, 
that the Clause does not insulate judges from sharing with 
others the ordinary burdens of citizenship. “[J]udges are 
also citizens,” the Court explained, and “their particular 
function in government does not generate an immunity from 
sharing with their fellow citizens the material burden of the 
government whose Constitution and laws they are charged 
with administering.” Id. at 282. 

The Court reexamined O’Malley, Miles, and Evans in 
United States v. Will, 449 U.S. 200 (1980). In Will, the Court 
held that Congress may not withdraw an increase in statu- 
tory judicial salaries once it has gone into effect, but that 
Congress may cancel a prospective statutory salary increase 
before it takes effect. The Court held that even a nondis- 
criminatory diminution of statutory judicial salaries (along 
with other government employees’ salaries) violates the 
Compensation Clause. Id. at 226. In so holding, however, it 
distinguished the case of taxation of judicial salaries, and re- 
affirmed its holding in O’Malley that nondiscriminatory 
taxation of judicial salaries does not violate the Clause be- 
cause “[f]ederal judges, like all citizens, must share the 
material burden of the government.” Ibid. (internal quota- 
tion marks omitted). The Court in Will also disapproved the 
district court’s reliance on Evans as a basis for holding that 
the rescission of a salary increase before its effective date 

22 

reduces the amount of compensation that a judge has been 
promised. See id. at 227. Rather, the Court stated: 

In O’Malley v. Woodrough, 307 U.S. 277 (1939), this 
Court held that the immunity in the Compensation 
Clause would not extend to exempting judges from 
paying taxes, a duty shared by all citizens. The Court 
thus recognized that the Compensation Clause does not 
forbid everything that might adversely affect judges. 
The opinion concluded by saying that to the extent Miles 

v. Graham, 268 U.S. 501 (1925), was inconsistent, it “can- 
not survive.” 307 U.S. at 282-283. Because Miles relied 
on Evans v. Gore, O’Malley must also be read to under- 
mine the reasoning of Evans. 

Id. at 227 n.31. 

c. Not only has the Court adopted the position of Justice 
Holmes’s dissent in Evans, that federal judges are not con- 
stitutionally immune from paying “the taxes that all other 
men have to pay,” 253 U.S. at 265, but it has expressly 
repudiated the intergovernmental tax immunity decisions on 
which Evans heavily relied (see p. 19, supra). See South 
Carolina v. Baker, 485 U.S. 505, 520, 524 (1988) (overruling 
Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429 (1895)); 
Graves v. New York ex rel. O’Keefe, 306 U.S. 466, 486 (1939) 
(overruling Collector v. Day, 78 U.S. (11 Wall.) 113 (1871)); 
see also Jefferson County v. Acker, 527 U.S. 423, 436-437 
(1999); Davis v. Michigan Dep’t of the Treasury, 489 U.S. 
803, 811 (1989) (noting overruling of “Dobbins-Day” line of 
cases). 

In particular, in Graves, decided the same Term as 
O’Malley, the Court emphasized that the proper purpose of a 
limited intergovernmental tax immunity—such as that 
recognized in McCulloch v. Maryland, 17 U.S. (4 Wheat.) 
316 (1819)—is “not to confer benefits on [government] em- 
ployees by relieving them from contributing their share of 

23 

the financial support of the other government, whose 
benefits they enjoy, * * * but to prevent undue inter- 
ference with one government by imposing on it the tax 
burdens of the other.” 306 U.S. at 483-484. The Court held 
in Graves that a nondiscriminatory state income tax that 
falls on federal employees as well as others does not “impose 
a burden on the national government tantamount to an inter- 
ference by one government with the other in the per- 
formance of its functions.” Id. at 480-481. And as Justice 
Frankfurter stressed in his concurring opinion in Graves, 
subjecting individual government officials to nondiscrimina- 
tory income taxation does not imperil the independence of 
the institutions for which those officials work; the flaw of the 
broader intergovernmental tax immunity doctrine recog- 
nized in cases such as Collector v. Day was that “[f]ailure to 
exempt public functionaries from the universal duties of 
citizenship to pay for the costs of government was hypo- 
thetically transmuted into hostile action of one government 
against the other.” Id. at 490. Evans suffered from the 
same flaw in reasoning: it erroneously transmuted Con- 
gress’s failure to exempt federal judges from the general 
income tax into a danger to the independence of the insti- 
tution of the federal judiciary. 

d. Evans also claimed support in state court decisions 
interpreting similar state constitutional provisions (253 U.S. 
at 256), a private letter from Chief Justice Taney to Trea- 
sury Secretary Salmon Chase (id. at 257), and an opinion of 
Attorney General Hoar (id. at 258). Closer examination 
reveals that those sources lend Evans little support. 
(i) The weight of state court cases supports Justice 
Holmes’s position that a constitutional prohibition against di- 
minution of judicial salaries does not grant judges immunity 
from generally applicable, nondiscriminatory taxes. In the 
first such state case of which we are aware, Commissioners 
of Northumberland County v. Chapman, 2 Rawle 73 (Pa. 

24 

1829), the Pennsylvania Supreme Court ruled that that 
State’s 1790 constitution, which provided that the compen- 
sation of the judges of the courts of common pleas “shall not 
be diminished during their continuance in office,” Pa. Const. 
of 1790, Art. 5, § 2, was not violated by the application to a 
judge of a tax on “all offices and posts of profit.” Chapman, 
2 Rawle at 73, 77. The court explained that “there is no 
reason to exempt a judge from contribution,” and that, 
although the legislature “could not constitutionally retrench 
a part of a judge’s salary under the pretext of assessing a tax 
on it,” for the “bona fide purpose of contribution, a reason- 
able portion of it, like any other part of his property, may be 
applied to the public exigencies.” Id. at 77. At least five 
other state supreme courts subsequently upheld the appli- 
cation of income taxes to state judges’ salaries against 
similar constitutional objection. While the reasoning of the 
decisions varies somewhat, all of them rejected or expressed 
strong doubt about the proposition that a protection against 
diminution of salary grants judges an immunity from the 
duty to pay taxes that are imposed on other citizens 
generally. 

12 

12 See du Pont v. Green, 195 A. 273, 276 (Del. 1937) (noting that “we 
express a preference for the dissenting views in Evans v. Gore, as 
delivered by Mr. Justice Holmes and concurred in by Justice Brandeis,” 
that there is “no attack on the independence of a Judge by requiring him 
to pay a tax that all other men had to pay, regardless of their rank or 
station”); Taylor v. Gehner, 45 S.W.2d 59, 60 (Mo. 1931) (observing that 
the State’s equivalent to the Compensation Clause “is one of the checks 
and restraints imposed to secure the independence of the judiciary. It is 
not a tax exemption provision.”); see also State ex rel. Wickham v. 
Nygaard, 150 N.W. 513, 515 (Wis. 1915) (remarking that the proposition 
“[t]hat the framers of our Constitution intended to exempt public officers 
from any part of the burden of taxation which might be imposed generally 
on the body of the taxpayers of the state for the support of the govern- 
ment and the benefit of the public, including the office holders, may well 
be doubted”); Poorman v. State Bd. of Equalization, 45 P.2d 307, 312-315 

25 

A few state court decisions did invalidate certain taxes as 
applied to judicial salaries, but those decisions are of uncer- 
tain weight at best. 

13 Only the North Carolina Supreme 
Court, in Long v. Watts, 110 S.E. 765 (1922), definitively 
invalidated the application of a general state income tax to 
judicial salaries, but that decision has little persuasive force 
in interpreting the federal Constitution because the court 
expressly stated that its reasoning exempted from taxation 

(Mont. 1935) (“[I]t is idle to say that because of this prohibition [against 
diminution of salaries] an official can refuse to pay any species of tax 
whatever from his acquisitions by way of salary”; expressing preference 
for dissent in Evans and reasoning of Taylor and Wickham, supra); 
Martin v. Wofford, 107 S.W. 2d 267, 271 (Ky. 1937) (observing that “[t]he 
Constitution deals with [public officials’] compensation as compensations 
and not as exemptions of public officials from any tax that is levied on any 
other citizen”). 

13 In Commonwealth ex rel. Hepburn v. Mann, 5 Watts & Serg. 403 
(1843), a decision noted in Evans (253 U.S. at 256), the Supreme Court of 
Pennsylvania invalidated under that State’s 1838 constitution an income 
tax imposed solely on salaries of state officials (see 5 Watts & Serg. at 
405), not a generally applicable income tax. The effect of that decision 
was, moreover, repudiated when Pennsylvania amended its constitution in 
1873 to delete the prohibition against diminution of judicial salaries. See 
Pa. Const. of 1873, Art. 5, § 18; see also Pa. Const. Art. 5, § 16 (currently 
permitting nondiscriminatory diminution of judicial salaries). Similarly, 
the Maryland Court of Appeals, relying on Evans and Miles, invalidated 
the application of the state income tax to judicial salaries, see Gordy v. 
Dennis, 5 A.2d 69 (Md. 1939), but that decision was repudiated the very 
next year, when Maryland amended its constitution expressly to permit 
the imposition of a nondiscriminatory income tax on judicial salaries, see 
Md. Const. Art. 3, § 35A. The Louisiana Supreme Court invalidated the 
City of New Orleans’ attempt to tax the salary of a state supreme court 
justice, see New Orleans v. Lea, 14 La. Ann. 197 (1859), but the nature of 
the tax in that case is not clear from the court’s summary decision. The 
Alabama Supreme Court, in an advisory opinion, stated that a state occu- 
pation tax levied on the salaries of state and county officers (not a 
generally applicable tax) would be invalid as applied to judicial salaries. 
See In re Opinions of the Justices, 144 So. 111 (Ala. 1932). 

26 

judges who took office after the tax statute was enacted (id. 
at 771)—precisely the holding of Miles that this Court 
overruled in O’Malley. 
(ii) The Court observed in O’Malley (307 U.S. at 281 & nn. 
6, 8) that “English-speaking courts” abroad interpreting 
similar prohibitions against diminution of judicial salaries 
rejected the reasoning of Evans as authority for construing 
those restrictions to prohibit the application of income taxes 
on judicial pay. See Krause v. Commissioner for Inland Re- 
venue, 1929 A.D. 286 (S. Afr.); The Judges v. Attorney- 
General for Saskatchewan, 53 Times L.R. 464 (P.C. 1937); 
see also Cooper v. Commissioner of Income Tax for Queens- 
land, (1907) 4 C.L.R. 1304 (Austl.). Those tribunals rejected 
the view taken in Evans that the application of a general tax 
to judicial salaries threatens judicial independence. As 
Justice Barton of the High Court of Australia observed in 
Cooper, “[o]ne does not think of a Colonial Treasurer trying 
to levy a tax on the whole people, yielding many hundreds of 
thousands of pounds, for the mere purpose of vindictively 
obtaining a few pounds from one or half a dozen Judges.” Id. 
at 1319-1320. Similarly, Justice Stratford of the South 
African Appellate Division observed in Krause that “[i]t is 
indeed difficult to appreciate in what manner a judge’s inde- 
pendence of action is attacked by having to contribute, with 
all other citizens * * * , towards the maintenance of good 
order and government of the State in which he lives.” 1929 
A.D. at 295. 

Justice Stratford also forcefully rejected Evans’ assump- 
tion “that income tax has the ‘effect’ of diminishing the 
salary.” Krause, 1929 A.D. at 295-296. 

14 Similarly, in 

14 Indeed, Justice Stratford remarked that, “[b]ut for a decision of the 
Supreme Court of the United States in Evans v. Gore I venture to think 
that the idea would not readily occur to any judge.” Krause, 1929 A.D. at 
294-295 (citation omitted). Justice Stratford also observed that judges’ 
salaries had been “very much lessened in value by the [British] Imperial 

27 

Cooper, Justice O’Connor concluded that the “ordinary 
sense” of the prohibition against diminution of judicial com- 
pensation did not prohibit the application of income taxes to 
such salaries as long as “the full amount of statutory salary 
has been paid [to the judge] by the Government,” and he 
rejected the argument that under the prohibition a judge “is 
entitled to have his salary exempted from any general 
scheme of taxation of incomes.” 4 C.L.R. at 1323. 
(iii) In Evans, the Court noted that, after passage of the 
income tax act of 1862, Chief Justice Taney wrote to Secre- 
tary Chase, objecting on constitutional grounds to the 
application of the tax to judicial salaries. 253 U.S. at 257-258; 
see 157 U.S. 701-703 (reprinting Taney letter). As the Court 
subsequently observed in O’Malley, however, in doing so 
Chief Justice Taney “merely gave his extra-judicial opinion, 
asserting at the same time that the question could not be 
adjudicated.” 307 U.S. at 280. Chief Justice Taney, more- 
over, simply asserted that the tax act “diminishes the com- 
pensation of every judge three per cent, and if it can be 
diminished to that extent by the name of a tax, it may in the 
same way be reduced from time to time at the pleasure of 
the legislature.” 157 U.S. at 701. He did not consider the 
forceful point that a legislature is unlikely to enact a 
generally applicable tax for the purpose of threatening 
judicial independence. 

Government’s action in departing from the gold standard,” and that the 
British Government’s actions had therefore, “in effect, diminished” judges’ 
salaries, but he rejected the notion that the indirect effect of the departure 
from the gold standard upon judicial pay amounted to an improper diminu- 
tion in judicial compensation; “the judges suffered with the rest of the 
community and it would be fantastic to think that their independence was 
affected by the general financial policy of the Imperial Government.” Id. 
at 296. Justice Wessels, although not reaching the question, stated that he 
“very much doubt[ed]” the proposition that “the income tax payable on a 
judge’s salary is a diminution of his remuneration.” Id. at 290. 

28 

Evans also stated (253 U.S. at 258) that in 1869, Attorney 
General Hoar adopted Chief Justice Taney’s position that 
the income tax could not be constitutionally applied to the 
salaries of Article III judges or the President. 

15 See 13 Op. 
Att’y Gen. 161, 161-164 (1869). But that opinion, like Evans, 
relied squarely (id. at 162) on this Court’s intergovernmental 
tax immunity decision in Dobbins v. Commissioners of Erie 
County, 41 U.S. (16 Pet.) 435 (1842) which has since been 
overruled. See pp. 19, 22-23. A more sound approach to the 
question is set forth in a 1919 opinion of Attorney General 
Palmer, see 31 Op. Att’y Gen. 475, 475-489 (not cited in 
Evans), which concluded that the Compensation Clause 
“protect[s] the salaries which [judges] shall receive, but 
[does] not, in any way, limit the power of Congress to create 
tax burdens to be borne by all citizens alike.” Id. at 484. 

e. In sum, Evans has not withstood closer examination 
and the test of time. Accordingly, that decision, and its 
reasoning which construes the application of a nondiscri- 
minatory income tax to judicial pay as an impermissible 
diminution of the compensation that judges are due under 
Article III, should be disapproved. 

2. The Diminution Of Judicial Compensation Pro- 
hibited By Article III Is A Reduction In Judges’ 
Salary Stated In Law, Not A Decrease In Their 
Effective Take-Home Pay Net Of Taxes 

The court of appeals in this case attempted to reconcile 
Evans and O’Malley by reading Evans to hold that Congress 
may not impose new taxes on the salaries of already sitting 
federal judges (even if those taxes do not discriminate 
against judges), even though under O’Malley, “nondiscri- 
minatory taxation of a judge who took office after the tax 

15 As discussed at pp. 30-31, infra, the Constitution prohibits any 
increase or decrease in the compensation of the President during his term 
of office. See U.S. Const. Art. II, § 1, Cl. 7. 

29 

went into effect does not violate the Compensation Clause.” 
Pet. App. 64a (emphasis omitted). The court’s reasoning was 
that, in the former case, the already sitting judge’s compen- 
sation is “diminish[ed]” by the effect of the new tax, while in 
the latter case, “the taxation formed part of that judge’s 
compensation scheme from the outset of his tenure.” Ibid. 
Respondents have advanced the same interpretation of the 
Compensation Clause. See Br. in Opp. 17-20. 

As we have explained (pp. 18-19, supra), this focus on 
taxation of the compensation of sitting judges, as opposed to 
those appointed after the taxing statute was enacted, was 
not part of the Court’s rationale in Evans. In any event, the 
interpretation of the Compensation Clause advanced by re- 
spondents and reflected in the court of appeals’ opinion is 
erroneous: the Clause does not bar Congress from applying 
nondiscriminatory taxes to the salaries of already sitting 
federal judges. Respondents do not argue that Congress has 
ever literally diminished their stated salary. 

16 Respondents 
argue, rather, that the undiminished “Compensation” that is 
guaranteed to Article III judges is their take-home pay net 
of taxes, and so an increase in taxes applicable to their 
salaries equals an “effective” diminution of their compen- 
sation. The text of the Constitution and practicalities of tax 
administration refute that contention, and the policies of the 
Clause offer it no support. 

a. First, respondents’ construction suffers from serious 
textual flaws. A major problem in respondents’ argument is 
the relation between the Judges’ Compensation Clause and 
the President’s Compensation Clause, Art. II, § 1, Cl. 7, 
which provides that the President shall “receive for his Serv- 
ices, a Compensation, which shall neither be encreased nor 
diminished during the Period for which he shall have been 

16 To the contrary, since 1984, Congress has enacted substantial salary 
increases for federal judges. See p. 8 n.6, supra. 

30 

17 (Emphasis added.) Under respondents’ theory, 
Congress could not eliminate any tax on the President’s 
salary while he was in office, even if that elimination were 
applicable to all citizens, because such an action would 
“encrease[]” the President’s effective compensation net of 
taxes. We see no reason, however, why the Constitution 
would require Congress to discriminate against the 
President by denying him tax relief that it provides to all 
other individuals. 

elected.” 

18 

17 The background to the adoption of the Constitution confirms the 
similar purpose of the two Clauses. Both were intended to ensure inde- 
pendence from Congress. Compare The Federalist No. 73, at 441-442 
(Alexander Hamilton) (Clinton Rossiter ed., 1961) (because of the Pre- 
sident’s Compensation Clause, the legislature “can neither weaken his 
fortitude by operating upon his necessities, nor corrupt his integrity by 
appealing to his avarice”) with The Federalist No. 79, at 472 (Alexander 
Hamilton) (“The remark made in relation to the President is equally 
applicable here. In the general course of human nature, a power over a 
man’s subsistence amounts to a power over his will.”). The principal 
difference is that the Constitution permits increases in judicial salaries but 
not in the salary of the President during his term of office. The Framers 
permitted increases in judicial compensation in the discretion of Congress 
in part because of the possibility that inflation might lessen the value of a 
judge’s salary during his life tenure. The President’s compensation, by 
contrast, did not present that problem, because the President is elected 
for only a four-year term. See id. at 473; Will, 449 U.S. at 219-220. It is 
notable, however, that the Framers did not require Congress to raise 
judicial salaries to keep pace with inflation, even though they plainly 
understood that a decline in the value of money could effectively diminish 
the buying power of a judge’s salary. See Atkins v. United States, 556 
F.2d 1028, 1047-1051 (Ct. Cl. 1977), cert. denied, 434 U.S. 1009 (1978). 
That point casts significant doubt on respondents’ theory that the “Com- 
pensation” protected from diminution by Article III is a judge’s “effec- 
tive” compensation rather than the statutory salary payable to judges. 

18 Attorney General Palmer noted this very point in his 1919 opinion, 
observing that “[i]f to impose an income tax is to diminish [the Pre- 
sident’s] salary, to repeal a tax in force at the beginning of his term would 
equally be to increase it.” 31 Op. Att’y Gen. at 488. He further observed 

31 

Similarly, the Twenty-seventh Amendment provides that 
“[n]o law, varying the compensation for the services of the 
Senators and Representatives, shall take effect, until an 
election of Representatives shall have intervened.” U.S. 
Const. Amend. XXVII. 

19 Under respondents’ construction 
of “Compensation” as “compensation net of income taxes,” 
Congress could not impose new (or repeal old) taxes on its 
own Members’ salaries until an election of Representatives 
had intervened, even if it did so with respect to the general 
population, because such an action would “vary[] the com- 
pensation” of Senators and Representatives. Respondents’ 
textual analysis therefore leads to the conclusion that, when 
Congress imposes new income taxes on the general popu- 
lation, it is constitutionally required to discriminate in favor 
of itself by exempting its Members from those taxes. This 
implausible result demonstrates that respondents’ reading of 
the Compensation Clause cannot be sustained. 

b. Respondents’ construction of Article III would also 
lead to serious practical difficulties in tax administration. If 

that, if the Constitution indeed prohibited the imposition or repeal of 
generally applicable taxes on the President’s salary during his term of 
office, then President Wilson was constitutionally required to continue to 
pay the tax levied by the 1916 income tax act, even though “that Act has 
since been repealed and no one else in the country now pays the tax.” 
Ibid. The “extreme improbability” of such a result, he reasoned, sup- 
ported the conclusion that “it was never intended that the amount which 
[the President and Article III judges] should receive as compensation 
should be regarded as affected in any way by the amount of income taxes 
imposed upon them, in common with other citizens, either before or during 
their terms of office.” Ibid. 

19 The Twenty-seventh Amendment, which became effective in 1992, 
was proposed to the States by the First Congress and was first introduced 
in the House of Representatives by James Madison, who obviously was 
familiar with the Framers’ understanding of the term “Compensation” as 
used in the Constitution. See 1 Debates and Proceedings in the Congress 
of the United States 448, 450, 452, 457, 756-757 (Joseph Gales comp., 1789). 

32 

respondents were correct that “Compensation” in Article III 
means the effective take-home pay net of income taxes, then 
it is difficult to understand why Congress would not also be 
prohibited from raising the rates of income taxes on the 
salaries of sitting judges. 

20 If the application of a new income 
tax to judicial salaries would “diminish” a judge’s compensa- 
tion, so, it would seem, would an increase in the rate of such 
an income tax. Either action reduces the amount that the 
judge takes home in pay, even when the judge’s statutory 
salary remains unchanged. But that construction, if 
accepted, would require Congress to apply differing income 
tax rates (and perhaps differing deductions, exemptions, and 
credits) to judges, depending on the date of their appoint- 
ment. The application of such a system of income tax to 
judicial salaries would be extraordinarily unwieldy. 

21 

Respondents have maintained (Br. in Opp. 29) that there 
is a difference of constitutional significance between a new 

20 Because Congress is also prohibited from adjusting the compen- 
sation of the President and Members of Congress during the terms of 
office of the President or of Representatives, respectively (see pp. 29-31, 
supra), Congress might also be prohibited from raising or lowering the 
rates of income taxes on the salaries of the President and all Members of 
Congress, even as part of a general increase or decrease in tax rates. 

21 Under such a rule, Congress would essentially be required (a) to 
freeze the effective rate of any tax applicable to judicial salaries to the 
effective rate in force when each judge received the judicial commission, 
(b) to subject all federal judicial salaries only to the lowest effective 
income tax rate that was applicable when any sitting member of the judi- 
ciary first took office, or (c) to exempt federal judges from income taxes 
altogether (and to do so permanently, since any new application of an 
income tax to judicial salaries would violate the Compensation Clause as 
to sitting judges and would create the problems just discussed for judges 
appointed in the future). In addition, no change in tax rates could be 
applied to the salaries of the President and Members of Congress until a 
new election for President or for Representatives, respectively. Nothing 
in the text or background of the Compensation Clause remotely suggests 
that the Framers intended to relegate Congress to such a welter. 

33 

income tax and an increased income tax rate, but they do not 
explain why or how the Constitution could distinguish be- 
tween the two, if they are correct in their initial premise 
that the imposition of a generally applicable tax constitutes a 
diminution in a judge’s compensation. 

22 Indeed, it is not 
clear that respondents can distinguish Social Security taxes 
from the income tax on that basis, for Social Security taxes 
on employees are merely a kind of income tax. See 26 U.S.C. 
3101(a) and (b) (imposing OASDI and HI taxes “on the in- 
come of every individual”). Moreover, Congress has fre- 
quently imposed surtaxes on income that might be charac- 
terized either as a new income tax or an increase in the rate 
of income taxes. 

23 Respondents’ construction of the Com- 
pensation Clause offers no guidance about the proper treat- 
ment of such taxes. 

c. Respondents’ submission also finds little support in 
the underlying policies of the Compensation Clause. This 
Court has remarked that the Clause has two objectives: to 
preserve the independence of the judiciary from “potential 
domination by other branches of government,” Will, 449 U.S. 
at 218, and to “attract able lawyers to the bench” by assuring 
them certain support, id. at 221. It is difficult to conceive, 

22 Respondents may suggest that a judge who takes office after an 
income tax has been enacted is effectively on notice that Congress may 
subsequently increase the rate of that tax. But it is also true that judges, 
like all citizens, are on notice that Congress may impose new forms of 
taxes on income, given that such taxes are specifically authorized by the 
Sixteenth Amendment. That point distinguishes this case from Evans, 
because Judge Evans took office during a period in which the income tax 
was deemed unconstitutional. See Jefferson County v. Acker, 210 F.3d 
1317, 1321 (11th Cir. 2000), petition for cert. pending, No. 00-455. 

23 See, e.g., War Revenue Act, ch. 63, §§ 1, 2, 40 Stat. 300-301; Revenue 
Act of 1918, ch. 18, § 211, 40 Stat. 1062-1064 (1919); Revenue Act of 1942, 
ch. 619, § 172(a), 56 Stat. 884; Revenue Act of 1951, ch. 521, 65 Stat. 459- 
461; Revenue and Expenditure Control Act of 1968, Pub. L. No. 90-364, 
§ 102, 82 Stat. 251-254. 

34 

however, how Congress’s extension of the generally appli- 
cable, nondiscriminatory OASDI and HI taxes to judicial 
salaries—along with the salaries of numerous federal 
officials and employees—could have posed any threat to 
judicial independence. Certainly Congress is unlikely to 
establish a new, generally applicable tax on incomes for the 
purpose (or with the likely effect) of endangering the 
independence of the judiciary. See pp. 26-28, supra. Thus, if 
Congress had brought judges within the Social Security 
system at the same time that it extended that system to 
most wage-earners, there could have been no serious conten- 
tion that Congress was threatening judicial independence. 

24 

That is particularly true since Congress also extended to 
federal judges the opportunity to earn credits for OASDI 
and HI benefits based on their judicial service, an opportu- 
nity they had not previously had. 

Respondents’ argument, therefore, is that Congress could 
not do in two steps what it could have done at one 
time—enact the Social Security system first for private- 
sector employees, and then extend it to federal employees 
as well. Thus, they contend, because Congress initially 
exempted judges from OASDI and HI taxes, it was required 
to maintain that exemption permanently for judges who 
were in office before the taxes were further extended. But, 
as the Court of Federal Claims observed, there is “no good 

24 It is likely that political constraints on the imposition of taxes on the 
population at large effectively prevent Congress from using generally 
applicable, nondiscriminatory taxes to impair the independence of the 
judiciary. Any generally applicable income tax affects a very large 
number of people, and so the general public is likely to object to an oner- 
ous tax imposed for the purpose of punishing a small number of judges. 
The same political constraints, however, might not constrain Congress’s 
power to fix the statutory salary of judges, in the absence of the Com- 
pensation Clause, since that power affects only a small number of indi- 
viduals and not the general public. Indeed, reductions in judges’ statutory 
salary might well escape general public notice. 

35 

reason why Congress in taxing judges has the power to 
accomplish wholesale what it cannot do piecemeal.” Pet. 
App. 45a. Indeed, “the purpose of the Compensation Clause 
is not to make irrevocable every momentary tax exemption 
enjoyed by sitting judges relative to the public; its purpose is 
rather to protect the independence of the judicial branch by 
insuring that judges are shielded from attempts by the 
political branches to impose economic duress.” Ibid. 

Respondents argue, however (Br. in Opp. 20), that the 
extension of OASDI and HI taxes to their judicial salaries 
made their judicial positions relatively less attractive be- 
cause, when they left the private sector, they expected that 
their judicial salaries (unlike their private-sector salaries) 
would be free of Social Security taxes. They maintain that 
the application of new taxes in such a manner deters quali- 
fied persons from assuming judicial positions. But respon- 
dents overlook the significant benefit that many sitting 
and future judges obtained in 1983 and 1984 by becoming 
eligible for OASDI and HI coverage based on their judicial 
service. 

25 Indeed, although respondents have objected to the 
imposition of OASDI and HI taxes on their salaries, they 
have never suggested that they would waive the right to 
receive OASDI and HI benefits based on their coverage in 
judicial service in return for exemption from OASDI and HI 
taxes. Moreover, respondents have pointed to no evidence 
suggesting that the OASDI and HI taxes caused federal 
judges to leave judicial service; indeed, they have not even 

25 The eligibility for HI coverage is particularly significant, because, 
unlike OASDI benefits, HI benefits do not depend on the amount that an 
employee has earned or the length of time he or she has worked, as long as 
the employee has accrued sufficient quarters of coverage. Any employee 
has sufficient quarters of coverage is entitled to the full range of HI 
benefits available under the law. 

36 

alleged that any of them left the bench because of those 
taxes. 

26 

More fundamentally, whereas a prohibition against dimi- 
nution in judges’ statutory salary may be necessary to as- 
sure them a reasonable certainty of support, a prohibition 
against taxation is not. If the Constitution did not prohibit 
Congress from reducing judges’ statutory salaries, judges 
might well fear that Congress would exercise its discretion 
over their salary to reduce them to penury, without political 
objection from the general public. But a judge who is 
assured of a certain statutory salary, as respondents are, 
also knows that his rate of taxation will be no greater than 
that of similarly situated members of the general public, and 
that the general public will object to onerous income tax 
rates. Thus, while judges, like all members of the public, are 
subject to income taxes, they also have, like all members of 
the public, protection in the political system against 
excessively burdensome income taxes. 

26 Cf. Atkins, 556 F.2d at 1055 (rejecting argument that Congress’s 
failure to increase judicial salaries to match inflation violated Compen- 
sation Clause, absent a “demonstration of massive resignation for financial 
reasons”). 

37 

B. Congress’s Extension Of Social Security Taxes To 

Judicial Salaries Did Not Impermissibly Discriminate 

Against Article III Judges 

Respondents have argued (Br. in Opp. 22-24) that Con- 
gress unconstitutionally discriminated against federal judges 
when it extended Social Security taxes to their salaries. 

27 

That contention is without merit. When Congress extended 
HI and OASDI taxes to the salaries of Article III judges and 
federal employees, it merely brought taxation of those 
salaries in line with the treatment of the vast majority of 
other wage-earners in this country. 

28 

27 Although we have argued that the application of nondiscriminatory 
income taxes to judicial salaries does not violate the Compensation Clause 
because the Constitution’s reference to “Compensation” is only to judges’ 
stated salary, we assume that discriminatory taxation of judges would 
contravene fundamental principles underlying Article III, if not the 
Clause itself. 

28 Respondents have noted (Br. in Opp. 22) that a small minority of 
wage-earners still remain outside the Social Security system. See 
generally 26 U.S.C. 3121(b) (1994 & Supp. IV 1998) (setting forth various 
exceptions to coverage, including such persons as Bahamian temporary 
agricultural workers, student nurses, and teenagers delivering news- 
papers). In addition, Congress originally did not compel the participation 
of employees of state and local governments in the OASDI program, out of 
concern about the intergovernmental tax immunity doctrine and recogni- 
tion that some state and local governments operate retirement programs 
similar to CSRS. In 1950, Congress established a system whereby state 
and local governments could elect to have certain of their employees 
covered by the OASDI program under agreements with the federal 
government. See Bowen v. Public Agencies Opposed to Social Security 
Entrapment, 477 U.S. 41, 44-46 (1986); 42 U.S.C. 418; Social Security Act 
Amendments of 1950, ch. 809, § 106, 64 Stat. 514. In 1986, Congress 
required HI coverage of almost all new employees of state and local 
governments. See Consolidated Omnibus Budget Reconciliation Act of 
1985, Pub. L. No. 99-272, § 13205, 100 Stat. 313-318 (1986). And in 1990, 
Congress required OASDI coverage of essentially all employees of state 
and local governments who are not covered by a state retirement system 

38 

Respondents object (Br. in Opp. 23), however, that Con- 
gress did not also require all federal employees who were 
already then in service to pay the OASDI tax. 

29 Congress 
was aware, however, that most incumbent federal employees 
were already required to make salary contributions to a 
separate retirement system, the CSRS, which had been in 
place since 1920. See pp. 3, 6-7, supra. Terminating CSRS 
immediately would have been extremely disruptive of 
federal employees’ retirement plans. On the other hand, re- 
quiring federal employees to contribute to both Social Secur- 
ity and CSRS would have subjected those employees to a 
mandatory double deduction under federal law. Congress 
therefore allowed incumbent federal employees to remain 
in CSRS rather than the OASDI program and to receive a 
CSRS annuity (but not OASDI benefits) based on their 
federal employment. In doing so, Congress treated incum- 
bent federal employees as equally as possible to all other 
wage earners, who are also subject to only one imposition 
under federal law for retirement income security, the 

similar to CSRS or who are not covered by OASDI pursuant to an agree- 
ment under 42 U.S.C. 418. See Omnibus Budget Reconciliation Act of 
1990, Pub. L. No. 101-508, § 11332(b), 104 Stat. 1388-469; 26 U.S.C. 
3121(b)(7)(F). The great majority of state and local employees are now 
covered by the OASDI and HI programs. See H.R. Rep. No. 25, 98th 
Cong., 1st Sess. 17-19 (1983). 

Although about 10% of the civilian labor force remains outside the 
OASDI system, that hardly establishes that the imposition of Social 
Security taxes on judges’ salaries is discriminatory. The taxes are surely 
generally applicable to most citizens, even if they are not universally 
applicable to all persons employed in the United States. 

29 Respondents’ discrimination argument does not apply to the HI tax, 
because all federal civilian employees were required to pay that tax after 
January 1, 1983. J.A. 61. Most employees of state and local governments 
have also been required to pay HI taxes since 1986. See 26 U.S.C. 
3121(u)(2)(A); S. Rep. No. 146, 99th Cong. 1st Sess. 389-391 (1985); H.R. 
Rep. No. 241, 99th Cong., 1st Sess. Pt. 1, at 25-27 (1985). 

39 

OASDI tax. Federal judges, however, were not subject to 
any similar civil-service retirement contribution, because 
judges are guaranteed a lifetime annuity after retirement at 
taxpayer expense. See 28 U.S.C. 371 (1994 & Supp. IV 
1998). Congress therefore had no occasion to permit judges 
to “opt out” of the OASDI program. 

Respondents also point out (Br. in Opp. 5-7) that, when 
Congress extended OASDI taxes to judicial salaries, it 
allowed a small number of high-level federal officials and 
employees to opt out of CSRS, thereby (respondents con- 
tend) permitting those persons effectively to offset the inci- 
dence of the new OASDI taxes on their salaries. But if 
Congress had required those federal officials to continue 
contributing to both CSRS and the OASDI program, they 
would have been subject to a double imposition. Moreover, 
Congress did not allow those high-level officials and em- 
ployees to opt out of OASDI; it required them (like Article 
III judges) to pay OASDI taxes, and made the second pay- 
ment (the CSRS contribution) optional. Judges were not 
covered by CSRS, and thus had no cause to complain of 
paying double retirement contributions. 

There is therefore no basis for a conclusion that Congress 
impermissibly discriminated against federal judges by bring- 
ing them within the coverage of the OASDI program and 
requiring them to pay OASDI taxes. While it is true that 
Congress in 1984 allowed other incumbent federal employees 
to alleviate the effect of the extension of the OASDI tax to 
government employees’ salaries, that is only because those 
other employees were already required under federal law to 
contribute to a program that, like OASDI, financed a retire- 
ment income security program. Federal judges had not 
previously been required to make contributions to such a 
program through salary contributions. By declining to grant 
federal judges an exemption or setoff from OASDI taxes, 
Congress did not discriminate against them; rather, it 

40 

equalized, as nearly as possible, the treatment of contri- 
butions from their salaries for retirement income security 
purposes with that of all other employees, federal and 
otherwise. 

II. ANY CONSTITUTIONAL VIOLATION TERMI- 
NATED WHEN CONGRESS INCREASED THE 
STATUTORY SALARIES OF FEDERAL JUDGES 
IN AN AMOUNT GREATER THAN THE OASDI 

AND HI TAXES DEDUCTED FROM THOSE 
SALARIES. 

In 1984, after Congress extended OASDI taxes to judicial 
salaries, Congress also granted federal judges an increase in 
salary that exceeded the amount of those taxes. See Pet. 
App. 86a-87a; pp. 8, 11-12, supra. The Court of Federal 
Claims concluded that that increase in judicial salaries 
terminated any Compensation Clause violation caused by the 
taxes’ diminution of judges’ take-home pay. Pet. App. 78a- 
89a. The court of appeals, however, held that the unconstitu- 
tional diminution in judicial compensation continued even 
after Congress elevated judges’ effective take-home pay 
above its level before the extension of Social Security taxes 
to judges’ salaries. The court of appeals analyzed the issue 
in terms of whether the salary increase was sufficient to pay 
the “damages” caused by what it believed to be an ongoing 
violation of the Compensation Clause resulting from the 
assessment of OASDI and HI taxes each month, rather than 
whether the increase in salary terminated the violation 
altogether. Viewing the matter from that perspective, the 
court reasoned that the measure of damages for a Compen- 
sation Clause violation is “independent of any generally 
awarded adjustment to judicial salaries.” Pet. App. 125a. 
That ruling cannot be reconciled with the text or policies of 
the Clause. 

41 

The Compensation Clause provides that federal judges 
shall “receive for their Services, a Compensation, which shall 
not be diminished during their Continuance in Office.” Even 
if Congress had “diminished” the compensation of sitting 
judges when it imposed HI and OASDI taxes on their pre- 
existing salaries, that “diminution” would have come to an 
end when Congress raised those judges’ salaries in an 
amount greater than the amount of the taxes imposed on 
their pre-tax salaries. Congress could be said to have 
“diminished” a judge’s compensation only if it left the judge 
with less compensation than he received before the tax took 
effect. Cf. Will, 449 U.S. at 226-229 (holding that Congress 
did not unconstitutionally diminish judges’ salaries when it 
canceled salary adjustments before their effective date). To 
be sure, the increase in the respondents’ net pay was smaller 
than it would have been if the HI and OASDI taxes had 
not been withheld. But the Compensation Clause prohibits 
Congress only from decreasing judicial compensation; Con- 
gress has discretion to decide what increases in compensa- 
tion should be given. See id. at 227. 

The facts of this case are similar to the termination of the 
Compensation Clause violation in “Year 1” of the facts of 
Will. In Year 1, judges initially were granted a 4.8% annual 
salary increase for the fiscal year, pursuant to a recom- 
mendation of the Advisory Committee on Federal Pay and 
an Executive Order. Congress, however, enacted a statute 
rescinding that increase, which the President signed on the 
first day of the fiscal year, after the increase had taken 
effect. See 449 U.S. at 204-206, 224-225. Although the Court 
found a Compensation Clause violation in that rescission of 
the 4.8% salary increase, it also noted that Congress, later 
in that fiscal year, enacted a statutory increase in judges’ 
salaries that exceeded the salaries that judges would have 
received had Congress left in effect the initial 4.8% increase. 
Id. at 206 n.3, 209 n.6. It was unquestioned in Will that 

42 

Congress’s subsequent increase in judicial salaries termi- 
nated the violation caused by the rescission of the 4.8% 
increase. Ibid. The Court did not suggest that Congress 
was obligated to continue to pay to the judges who held 
office at the beginning of Year 1 the rescinded 4.8% increase 
in addition to the subsequently enacted statutory increase— 
yet that is essentially respondents’ position here. 

The court of appeals believed that the Compensation 
Clause violation in this case continued independent of any 
general judicial salary increases because, in its view, a 
different rule would create two classes of judges: those 
appointed after the taxes were extended to judicial salaries, 
who would enjoy the full extent of the general salary in- 
creases, and those appointed before application of the taxes, 
who would be required to pay “out of their own salaries, 
including generally-granted increases, the damages owed to 
them by the Government.” Pet. App. 122a. 

30 But once 
Congress increased judicial salaries above the level that 
existed before the incidence of the tax, there was no more 
diminution and hence no more violation of the Compensation 
Clause for which damages might be owed. Moreover, the 
court of appeals’ ruling itself created two classes of judges 
with different compensation packages: federal judges ap- 
pointed after the OASDI taxes took effect in 1984 must pay 
HI and OASDI taxes on their current annual salaries, 
whereas judges appointed before that date receive a perma- 
nent immunity from paying those taxes—even though they 
are eligible for HI and OASDI benefits based on their judi- 

30 The same, of course, could have been said of Year 1 in Will. Judges 
who were appointed in the six months between the date on which Con- 
gress rescinded the 4.8% increase and that on which it enacted the statu- 
tory increase would have received the “full benefit” of the statutory 
increase, whereas judges who were in office before the 4.8% increase was 
rescinded would not. Yet the Court did not doubt that the constitutional 
violation terminated when the statutory increase was enacted. 

43 

cial service. The court of appeals’ decision therefore creates 
inequities in judicial compensation. 

The effect of the court of appeals’ ruling on this point is 
that Congress may never bring to an end a Compensation 
Clause violation caused by taxation of judicial salaries except 
by repealing the offending tax (or, perhaps, by granting the 
affected judges a special salary increase, thereby compen- 
sating them differently from all other federal judges). That 
ruling casts a serious cloud over Congress’s authority to 
extend nondiscriminatory taxes paid by the general popu- 
lation to judicial salaries; if Congress wished to do so, it 
would have to grant sitting judges a permanent exemption 
from the tax. That requirement would create inequities 
among Article III judges and would embed those inequities 
in the judicial compensation system for long periods of time, 
in view of the life tenure of Article III judges. Congress 
could, of course, exempt all judges from new taxes, but that 
approach would create inequity between Article III judges 
and all other citizens, as this Court recognized in O’Malley, 
when it said that “judges are also citizens” and do not have 
“an immunity from sharing with their fellow citizens the 
material burden of the government whose Constitution and 
laws they are charged with administering.” 307 U.S. at 282. 
Accordingly, should the Court conclude that the Compensa- 
tion Clause was violated by Congress’s extension of OASDI 
and HI taxes to judicial salaries, it should also hold that the 
violation was terminated when Congress subsequently in- 
creased judicial salaries in an amount greater than the 
amount of the tax. 

44 

CONCLUSION 

The judgment of the court of appeals should be reversed. 

Respectfully submitted. 

SETH P. WAXMAN 

Solicitor General 

DAVID W. OGDEN 

Assistant Attorney General 

EDWIN S. KNEEDLER 

Deputy Solicitor General 

PAUL R.Q. WOLFSON 

Assistant to the Solicitor 

General 

DAVID M. COHEN 
DOUGLAS N. LETTER 
JEANNE E. DAVIDSON 
ANNE MURPHY 

Attorneys 

NOVEMBER 2000