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

PETITION FOR A WRIT OF CERTIORARI 

SETH P. WAXMAN 

Solicitor General 

Counsel of Record 

DAVID W. OGDEN 

Acting 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 
KATHLEEN MORIARTY MUELLER 
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) program 
and Social Security old-age, survivors, and disability in- 
surance (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 financ- 
ing 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 Con- 
gress increased the statutory salaries of federal judges in an 
amount greater than the amount of HI and OASDI taxes 
deducted from respondents’ judicial salaries. 

(I) 

II 

PARTIES TO THE PROCEEDINGS 

Petitioner United States was the defendant in the Court 
of Federal Claims and the appellee in the court of appeals. 

Respondents, who were plaintiffs in the Court of Federal 
Claims and appellants in the court of appeals, are Judges 
Terry J. Hatter, Jr., Peter H. Beer, Dudley H. Bowen, Jr., 
A.J. McNamara, Harry Pregerson, Raul A. Ramirez, 
Norman C. Roettger, Jr., Thomas A. Wiseman, Jr., Terence 
T. Evans, Henry A. Mentz, Jr., Wilbur D. Owens, Jr., Henry 
R. Wilholt, Jr., Harold A. Baker, and Michael M. Mihm, as 
well as Dolores Lee Burciaga as executrix of the estate of 
the late Judge Juan G. Burciaga, and Mary Martin 
Arceneaux on behalf of the late George Arceneaux, Jr. 

TABLE OF CONTENTS 

Page 

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

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

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

2 

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

Reasons for granting the petition ............................................... 
13 

Conclusion ....................................................................................... 30 

TABLE OF AUTHORITIES 

Cases: 

Agostini v. Felton, 521 U.S. 203 (1997) .............................. 
20 

Arizona v. California, 460 U.S. 605 (1983) ....................... 
20 

Christianson v. Colt Indus. Operating Corp., 
486 U.S. 800 (1988) ................................................................ 
20 

Collector v. Day, 78 U.S. (11 Wall.) 113 (1871) ................. 
21, 25 

Durant v. Essex Co., 74 U.S. (7 Wall.) 107 (1868) ........... 
19 

Evans v. Gore, 253 U.S. 245 (1920) ...................... 
8, 14, 17, 18, 

21, 22, 23, 25 
Friedman v. United States, 159 Ct. Cl. 1 (1962) .............. 

12 

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

(1939) ........................................................................................ 25 

Jefferson County v. Acker: 

527 U.S. 423 (1999) ................................................................ 
25 

210 F.3d 1317 (11th Cir. 2000) ..................................... 
15, 23, 24 

Messenger v. Anderson, 225 U.S. 436 (1912) .................... 
20 

Miles v. Graham, 268 U.S. 501 (1925) ........................ 
17, 22, 23 

Neil v. Biggers, 409 U.S. 188 (1972) ................................... 
19 

O’Malley v. Woodrough, 307 U.S. 277 (1939) ............ 
8, 17, 22, 

23, 26, 29 

Pollock v. Farmers’ Loan & Trust Co., 
157 U.S. 429 (1895) ................................................................ 
21, 25 
Quern v. Jordan, 440 U.S. 332 (1979) ................................. 
20 

Rodriquez de Quijas v. Shearson/American Express, 

Inc., 490 U.S. 477 (1989) ...................................................... 8 

(III) 

IV 

Cases—Continued: Page 

South Carolina v. Baker, 485 U.S. 505 (1988) .................. 
25 

United States v. Pink, 315 U.S. 203 (1942) ....................... 
20 

United States v. Will, 449 U.S. 200 (1980) .................. 
8, 17, 18, 

23, 24, 25, 26, 27 

Constitution and statutes: 

U.S. Const.: 

Art. III, § 1 (Compensation Clause) ............................ 

passim 

Social Security Amendments of 1983, Pub. L. No. 
98-21, 97 Stat. 65 .................................................................... 
4 

§ 101(b)(1), 97 Stat. 70 ..................................................... 
4 

§ 101(b)(2), 97 Stat. 70 ..................................................... 
4 

Tax Equity and Fiscal Responsibility Act of 1982, 

Pub. L. No. 97-248, Tit. II, Subtit. E, Pt. III, 
§ 278, 96 Stat. 559-563 ........................................................... 

4 
Tucker Act, 28 U.S.C. 1491(a)(1) ............................................ 
7 

5 U.S.C. 8331 et seq. .................................................................. 
3 

5 U.S.C. 8334(a)(1) (1994 & Supp. IV 1998) ......................... 
26 

26 U.S.C. 3101 (1994 & Supp. IV 1998) ................................. 
2, 4 

26 U.S.C. 3101(a) (1994 & Supp. IV 1998) ............................. 
3 

26 U.S.C. 3101(b) (1994 & Supp. IV 1998)............................. 
3 

26 U.S.C. 3121 ............................................................................ 
2, 4 

26 U.S.C. 3121(b) ....................................................................... 
3, 4 

26 U.S.C. 3121(b)(5) (1994 & Supp. IV 1998) ....................... 
4, 5 

26 U.S.C. 3121(b)(6)(A) (1976) ................................................ 
4 

26 U.S.C. 3121(u) ....................................................................... 
3, 4 

26 U.S.C. 3121(u)(1)(A) (1982) ................................................ 
4 

26 U.S.C. 6103 ............................................................................ 
18 

26 U.S.C. 6311(a) ....................................................................... 
19 

26 U.S.C. 6313(c) ....................................................................... 
19 

28 U.S.C. 1 .................................................................................. 
8, 16 

28 U.S.C. 44 ................................................................................ 
7 

28 U.S.C. 135 .............................................................................. 
7 

28 U.S.C. 371 .............................................................................. 
4 

28 U.S.C. 371(a) ......................................................................... 
3, 26 

28 U.S.C. 455(b)(4) ............................................................ 16, 17, 19 

V 

Statutes—Continued: Page 

28 U.S.C. 2109 ...................................................................... 
8, 16, 19 

28 U.S.C. 2401(a) ................................................................. 
9, 15, 16 

28 U.S.C. 2501 ............................................................................ 
9 

42 U.S.C. 402(a) ......................................................................... 
3 

42 U.S.C. 409(a) (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. 426(a)(2)(A) .............................................................. 
3 

Miscellaneous: 

Exec. Order No. 12,387, 47 Fed. Reg. 44,981 
(1982) ........................................................................................ 6 

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

7 

Exec. Order No. 12,477, 49 Fed. Reg. 22,041 (1984) ........... 
7 

Exec. Order No. 12,487, 49 Fed. Reg. 36,493 (1984) ........... 
7 

Exec. Order No. 13,144, 64 Fed. Reg. 72,242 (1999) ........... 
7 

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

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

The Oxford Companion to the Supreme Court 
(Kermit L. Hall ed., 1992) .................................................... 17 

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

PETITION FOR A WRIT OF CERTIORARI 

The Solicitor General, on behalf of the United States of 
America, respectfully petitions for a writ of certiorari to 
review the judgment of the United States Court of Appeals 
for the Federal Circuit in this case. 

OPINIONS BELOW 

The initial decision of the United States Claims Court 
(predecessor to the Court of Federal Claims), dismissing this 
case for lack of jurisdiction (App. 12a-18a),1 is reported at 21 
Cl. Ct. 786. The decision of the court of appeals reversing 
that dismissal (App. 19a-29a) is reported at 953 F.2d 626. 
The decision of the Court of Federal Claims on remand, dis- 
missing respondents’ constitutional claims on the merits 
(App. 30a-53a), is reported at 31 Fed. Cl. 436. The decision of 
the court of appeals reversing that dismissal and ruling in 
favor of respondents on the merits (App. 54a-66a) is reported 
at 64 F.3d 647. The decision of this Court, affirming the 
decision of the court of appeals under 28 U.S.C. 2109 because 

1 “App.” refers to the separately bound appendix to this petition. 

(1) 

2 

of the lack of a quorum (App. 69a), is reported at 519 U.S. 
801. 

The further decision of the Court of Federal Claims on re- 
mand, ruling in favor of the United States on the issues of 
damages and the statute of limitations but awarding some 
respondents limited relief (App. 70a-111a), is reported at 38 
Fed. Cl. 166. The opinion of the panel of the court of appeals 
reversing the Court of Federal Claims insofar as it ruled in 
favor of the United States on damages (App. 112a-127a) is 
reported at 185 F.3d 1356. The order of the court of appeals 
vacating the panel’s judgment and ordering rehearing en 
banc on the issue of the statute of limitations (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 the statute of limitations (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 jurisdiction of this Court 
is invoked under 28 U.S.C. 1254(1). 

CONSTITUTIONAL AND STATUTORY 
PROVISIONS INVOLVED 

Reprinted in an appendix to this petition (App. 130a-132a) 
are the Compensation Clause, U.S. Const. Art. III, § 1, and 
pertinent provisions of 26 U.S.C. 3101 and 3121. 

STATEMENT 

1. More than 90% of the paid civilian labor force is 
engaged in employment covered by the Social Security old- 
age, survivors, and disability insurance (OASDI) program 
and the Medicare hospital insurance (HI) program. Employ- 
ees earn credits based on their employment towards eligibil- 
ity for OASDI and HI benefits and pay taxes on their wages 

3 

or salaries to finance those programs.2 Before 1983, 
however, the employment of Article III judges, as well as 
almost all other federal employees, was excluded from the 
HI and OASDI programs. Instead, most employees of the 
Legislative and Executive Branches were required to 
contribute to the Civil Service Retirement System (CSRS) 
to obtain a retirement immunity. See 5 U.S.C. 8331 et seq. 
Article III judges were (and are) entitled to retire after 
meeting certain age and service requirements, and to receive 
lifetime annuities equal to their salary at the time of 
retirement. See 28 U.S.C. 371(a). Article III judges (like 
other federal employees) could qualify for OASDI and HI 
benefits on the basis of their prior employment outside the 
federal system, but they could not receive credits for either 
program based on their federal employment, nor were they 
subject to OASDI or HI taxes on their federal judicial 
salaries. 

On January 1, 1983, employees in all three Branches of 
government first began to earn credits for Medicare HI 
coverage on the basis of their federal employment, and also 
first became subject to the HI tax on their salaries. One 
year later, on January 1, 1984, federal employees 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.3 The 1983 and 1984 amend- 

2 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). “Quarters of 
coverage” is tied to payment of “wages,” which is defined in terms of 
remuneration for “employment.” See 42 U.S.C. 409(a) (Supp. IV 1998), 
413(a)(2)(A). 

3 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) (1994 & Supp. IV 
1998). Both Sections impose a tax on wages with respect to 
“employment,” as defined in 26 U.S.C. 3121(b). Section 3121(b) and a 
companion provision, Section 3121(u), have undergone several changes 

4 

ments also imposed HI and OASDI taxes for the first time 
on the salaries of the President, Vice President, cabinet 
members, political appointees in the Senior Executive Ser- 
vice, Members of Congress, and all new Executive and 
Legislative Branch employees, as well as any then-current 

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) (1976). 
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, which permits judges to retire from 
active service on annuity or full salary. 

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) * * * para- 
graph (6) of [26 U.S.C. 3121(b)] shall be applied without regard to subpara- 
graph[] (A) * * * thereof.” 26 U.S.C. 3121(u)(1)(A) (1982); see 96 Stat. 
559. 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. 

Congress extended the OASDI tax to judges’ salaries in the Social 
Security Amendments of 1983, Pub. L. No. 98-21, 97 Stat. 65, which again 
amended 26 U.S.C. 3121. The Social Security Amendments redefined 
“employment” in Section 3121(b)(5) generally to exclude “service per- 
formed in the employ of the United States,” but also excluded from that 
exclusion service performed by federal judges, among others. See Pub. L. 
No. 98-21, § 101(b)(1), 97 Stat. 70. In addition, the Social Security 
Amendments 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. 71. 
Because the Social Security Amendments 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 fall on all wages in respect of 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. 

5 

federal civil service employees not participating in the 
CSRS. Those employees 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 con- 
cern that those employees were not paying their fair share of 
the cost of financing those benefit programs. When 
Congress in 1982 enacted legislation to bring federal 
employees within the HI system, the Senate Finance 
Committee 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 
subject to the Hospital Insurance tax throughout their 
entire working careers, Federal employees may earn the 
same coverage with relatively fewer years of work 
subject 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. 

Vol. I, S. Rep. No. 494, 97th Cong., 2d Sess. 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” 

6 

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). 

2. On December 29, 1989, eight federal judges4 (the 
“early-filing judges”) filed suit against the United States in 
the United States Claims Court (predecessor to the Court of 
Federal Claims), contending that Congress had unconsti- 
tutionally 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 
Those eight judges were all sitting judges as 

of January 1, 1984, when the OASDI tax first became appli- 
cable 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 unconsti- 
tutionally diminished that salary, and that the unconsti- 
tutional diminution continued to the present day, despite 
substantial salary increases received by those judges after 
January 1, 1984.6 

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 United 
States Claims Court. After the court of appeals reversed and remanded, 
however, Judges Bowen and Roettger rejoined the lawsuit, when several 
other judges also became plaintiffs. For statute of limitations purposes, 
Judges Bowen and Roettger are grouped with the “later-filing judges.” 
See p. 7, infra. 

5 The Compensation Clause provides: 

The Judges, both of the supreme and inferior Courts, * * * shall, at 
stated Times, receive for their Services, a Compensation, which shall 
not be diminished during their Continuance 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 (1982). In 
1984, after OASDI taxes were first imposed upon judicial salaries, the 

7 

The Claims Court initially dismissed the suit for lack of 
jurisdiction on the ground that the judges had not filed 
administrative tax refund claims. App. 12a-18a. The court of 
appeals reversed, and ruled that the Claims Court had 
jurisdiction under the Tucker Act, 28 U.S.C. 1491(a)(1), not- 
withstanding the judges’ failure to file tax refund claims. 
App. 19a-29a. The court of appeals reasoned that the judges 
“did not pursue a tax refund. Instead they sought damages 
for a violation of Article III, § 1–-an action which is within 
the Tucker Act jurisdiction of the Claims Court.” App. 26a. 
The court of appeals remanded the case for further proceed- 
ings. 

3. On remand, the plaintiffs filed two amended com- 
plaints, which added eight judges (the “later-filing judges”) 
as new plaintiffs.7 The second amended complaint, filed on 
January 11, 1993, also challenged for the first time (on behalf 
of all respondents) the constitutionality of the HI tax, which 
was first imposed on judicial salaries on January 1, 1983. 
The parties cross-moved for summary judgment, and the 
Court of Federal Claims granted summary judgment for the 
United States, concluding that the application of the OASDI 

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 (1983), as amended by Exec. Order No. 12,477, 49 Fed. Reg. 
22,041 (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 App. 86a. 

Since that time, federal judges have received additional salary 
increases. 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, Historical Notes (describing 
salary increases from 1919 for circuit judges and district judges, 
respectively). 

7 The eight new plaintiffs were, in addition to District Judges Bowen 
and Roettger (who rejoined the case after the remand, see p. 6, n.4, 

supra), District Judges Evans, Mentz, Owens, Wilhoit, Baker, and Mihm. 

8 

and HI taxes to respondents’ judicial salaries was consti- 
tutional. App. 30a-53a. 

4. The court of appeals reversed, and held that Con- 
gress’s extension of the HI and OASDI taxes to the salaries 
of already-sitting federal judges violated the Compensation 
Clause. App. 54a-66a. The court found this case controlled 
by Evans v. Gore, 253 U.S. 245 (1920), which held that the 
Clause prohibited the imposition of the federal income tax on 
the salaries of sitting federal judges. App. 59a. The court 
acknowledged (App. 59a-60a) that this Court’s subsequent 
decision in O’Malley v. Woodrough, 307 U.S. 277 (1939), had 
upheld the application of the income tax to the salaries of 
federal judges who took office after the income tax was 
enacted. It also noted (App. 60a) that this Court stated in 
United States v. Will, 449 U.S. 200, 227 n.31 (1980), that 
O’Malley had “undermine[d] the reasoning of Evans.” 
Nonetheless, the court of appeals concluded that this Court 
had never directly overruled Evans. Following the Court’s 
admonitions that, “[i]f a precedent of this Court has direct 
application in a case, yet appears to rest on reasons rejected 
in some other line of decisions, the Court of Appeals should 
follow the case which directly controls,” and that the lower 
courts must “leav[e] to this Court the prerogative of 
overruling its own decisions,” the court of appeals concluded 
that “Evans governs this case more directly than O’Malley.” 
App. 60a-61a (quoting Rodriguez de Quijas v. 
Shearson/American Express, Inc., 490 U.S. 477, 484 (1989)). 
It therefore remanded the case for a determination of the 
amount in which the HI and OASDI taxes had diminished 
respondents’ compensation. App. 65a-66a. 

5. 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 the necessary quorum of six Justices. See 28 
U.S.C. 1. The Court therefore entered an order under 28 
U.S.C. 2109, which provides that, when a quorum of the 

9 

Court is absent and a majority of the qualified Justices are of 
the opinion that the case cannot be heard at the next ensuing 
Term, the judgment of the court of appeals shall be affirmed 
with the same effect as an affirmance by an equally divided 
Court. See App. 69a. 

6. On remand from the Federal Circuit, the Court of 
Federal Claims ruled that all the claims of the later-filing 
judges (see p. 7, 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) and 2501). App. 90a-105a. 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 when Congress granted judges a salary increase that 
offset the OASDI tax applied to their salaries on January 1, 
1984. App. 82a-89a. The court found a violation of the Com- 
pensation Clause only in the amount of OASDI tax imposed 
on the early-filing judges’ salaries in their January 1984 
salary payment. App. 77a.8 

a. 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’ arguments that those 
claims were timely filed under the “continuing claim” doc- 
trine. App. 101a-105a. The court questioned whether the 
continuing claim doctrine still exists at all, see App. 103a, but 
it did not resolve that question, for it concluded that doctrine 
would not govern the claims in this case in any event. The 

8 Judges are paid on the first day of each calendar month for services 
rendered during the previous month, and so the OASDI tax deducted 
from the judges’ salary payments on January 1, 1984, was in fact a tax on 
their salaries earned during December 1983. App. 77a. The court ordered 
judgment 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. App. 
77a, 110a-111a. 

10 

court noted that the continuing claim doctrine “provides that 
when the government owes a plaintiff a continuing, recur- 
ring duty to make payments of money, a new cause of action 
arises with each breach of that duty.” App. 101a. But, the 
court stated, that doctrine does not apply here, where “the 
unlawful diminution consisted of imposition of two new taxes 
on specific effective dates.” App. 105a. Those dates (Janu- 
ary 1, 1983 and January 1, 1984), the court held, were the 
dates on which respondents’ claims accrued. 

b. The court also agreed with the government that statu- 
tory increases in judges’ nominal annual salaries9 in 1984 and 
thereafter had terminated the constitutional violation caused 
by the initial incidence of the OASDI tax on respondents’ 
salaries. App. 78a-89a. The court began by observing that, 
“if, simultaneously with the imposition of a new tax, Con- 
gress granted an increase in salary which equaled or ex- 
ceeded the tax, no diminution in the level of compensation 
just prior to imposition of the tax would have occurred.” 
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 simul- 
taneously with or subsequent to * * * a diminution, the 
simultaneous or subsequent increase accomplishes a cure to 
the extent of such increase.” App. 82a. 

10 

9 The court defined “nominal annual salary” as “the stated lawful sal- 
ary before deduction of federal and state income taxes, Social Security 
taxes and voluntary items.” App. 86a & n.10. 

10 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 specifically granting the affected 
judges a salary increase to compensate for the tax). The court observed 
that respondents had effectively argued that 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 

11 

The court 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. 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 calendar year.” 
See App. 89a. Based on those facts, the court concluded that 
“no unlawful diminution in judicial compensation occurred” 
after respondents’ salary increase in 1984 took effect. See 
App. 89a. 

7. A panel of the court of appeals reversed the trial 
court’s conclusion that the constitutional violation termi- 
nated upon the judges’ first salary increase following the 
initial incidence of the OASDI tax, App. 116a-125a, but af- 
firmed the dismissal of the HI tax and later-filing judges’ 
claims as time-barred, App. 125a-127a. 

On the former point, the court of appeals rejected the trial 
court’s conclusion that no unconstitutional diminution in 
judicial compensation continues once Congress offsets a 
newly-levied tax by a general increase in judicial salaries 
that equals or exceeds the amount of the new tax. The court 
of appeals explained that it rejected the trial court’s ap- 
proach because, in the court’s view, it “would create, with re- 
gard to judicial compensation, two different classes of 
judges.” 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 HI and OASDI 
taxes to sitting judges could enjoy “the full benefit of con- 

imposition of the taxes. Under [respondents’] theory, all Social Security 
taxes withheld must be refunded to [respondents] and there can abso- 
lutely be no cure by subsequent increases in salary” granted to all federal 
judges. App. 83a-84a. 

12 

gressionally-granted salary increases” subsequent to those 
dates. Ibid. On the other hand, those judges who took office 
before HI and 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 
Government’s earlier wrongful act would not only be unfair, 
but would be contrary to Congress’s purpose in granting the 
increases.” App. 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. 

8. Both the United States and respondents sought re- 
hearing and rehearing en banc. The court denied the United 
States’ petition. It granted respondents’ petition, which 
sought rehearing en banc of the panel’s decision affirming 
the dismissal of the HI tax clams and later-filing judges’ 
claims as time-barred, and vacated the judgment of the 
panel. App. 128a-129a. 

On rehearing en banc, the court held that, under the 
continuing claim doctrine, all of respondents’ OASDI and HI 
claims were timely filed. App. 2a-11a. The court relied on 
Friedman v. United States, 159 Ct. Cl. 1 (1962), in which its 
predecessor, the Court of Claims, had sought to summarize 
the rules governing the accrual of claims in situations involv- 
ing a series of periodic payments from the government. 
Under Friedman, the court stated, the continuing claim 
doctrine governs accrual of claims for payment that (a) need 
not be determined in the first instance by a federal agency, 
and (b) turn either on pure issues of law or on “sharp and 

13 

narrow” factual issues. App. 4a-6a. In such cases, the court 
held, a claim accrues anew each time the government incurs 
an alleged obligation to make a payment to the claimant. 
The court found respondents’ claims in this case to fall within 
that category because “[n]o administrative officer or tribunal 
was given discretion to decide whether the judges were 
entitled not to pay” HI and OASDI taxes, and because the 
constitutionality of the application of HI and OASDI taxes to 
sitting judges’ salaries involves a pure question of law. App. 
7a. 

11 The en banc court at that time also reinstated the 
judgment of the panel, which had reversed the Court of 
Federal Claims, and reinstated the panel’s decision 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 
App. 1a-2a. 

REASONS FOR GRANTING THE PETITION 

The court of appeals has held unconstitutional, as applied 
to federal judges appointed before January 1, 1983 and 1984, 
Acts of Congress that extended to federal employees the 
taxes financing the Medicare hospital insurance (HI) and 

11 The court rejected the view that the continuing claim doctrine does 
not apply to this case because it involves a claim based on a “single distinct 
event, which may have ill effects later on.” 
App. 9a. The court stated 

that that language (which was drawn from one of its earlier decisions) was 
“simply descriptive of the type of case that falls outside the continuing 
claim doctrine,” and did not purport to fix the distinguishing line between 
cases that call for application of the continuing claim doctrine and those 
that do not. Ibid. The court also disclaimed reliance on other statements 
in its earlier decisions that had found the continuing claim doctrine not to 
apply when “all necessary events had occurred” at an earlier time, or 
unless the claim was “inherently susceptible of independent and distinct 
events or wrongs.” App. 11a. Such statements, the court concluded, “may 
be accurate ways of describing the events after-the-fact, but they do not 
contribute to the analysis” of the applicability of the continuing claim 
doctrine, which is henceforth to be governed exclusively by the Friedman 
factors. Ibid.. 

14 

Social Security old-age, survivors, and disability insurance 
(OASDI) programs. Almost every other wage and salary 
earner in this country is also required to pay those taxes, 
and they are tied to credits for coverage under the HI and 
OASDI programs, which Congress extended to judges when 
it also extended the taxes to their salaries. The court of 
appeals believed itself bound by this Court’s decision in 
Evans v. Gore, 253 U.S. 245 (1920), to conclude that the 
extension of a tax to the salaries of federal judges is a 
diminution of those judges’ compensation in violation of the 
Compensation Clause, even though it recognized that subse- 
quent decisions of this Court have severely undermined 
Evans. That decision warrants review by this Court 
because it holds two Acts of Congress unconstitutional based 
on discredited authority that is inconsistent with the pur- 
poses of the Compensation Clause and should be definitively 
overruled. 

The adverse effects of the court of appeals’ ruling on the 
merits are exacerbated by its further decision rejecting the 
government’s argument that any Compensation Clause vio- 
lation has come to an end. The court of appeals held that the 
unconstitutional diminution of the judges’ salaries caused by 
the taxation of those salaries continued even after Congress 
raised those salaries above the level at which they had been 
before the taxes were first applied to judges. In effect, the 
court has held that Congress can never terminate an 
unconstitutional diminution of judges’ salaries caused by 
taxation, except by repealing the taxation of the judges’ sala- 
ries entirely, or by granting a special salary increase only to 
the class of judges who were appointed before the tax took 
effect (thereby creating two classes of judges compensated 
differently). The court’s decisions seriously impair Con- 
gress’ ability to subject judges’ salaries to nondiscriminatory 
forms of income tax. 

Although no other circuit has considered the precise 
issues presented in this case, the Federal Circuit and the 

15 

Court of Federal Claims are courts of nationwide juris- 
diction. 

12 Further, the court of appeals has effectively held 
that the constitutional violation caused by extension of the 
HI and OASDI taxes to a sitting judge’s salary continues as 
long the judge continues to draw a salary that was once 
supposedly diminished by those taxes. Any federal judge, 
therefore, who held a judicial position before January 1, 
1984, and still held the same position as of six years ago may 
now challenge the HI and OASDI taxes by filing suit in the 
Court of Federal Claims to gain the benefit of the court of 
appeals’ decision in this case. 

13 Several other federal judges 
have, in fact, filed such lawsuits. 

14 

This Court should grant review to resolve definitively a 
matter of considerable importance touching on the relations 
between the Legislative and Judicial Branches. This Court’s 
review is particularly important because the court of appeals 
believed that it had no authority to depart from this Court’s 
decision in Evans v. Gore. Thus, absent review by this 
Court, Evans v. Gore will become fixed as the law of the land 

12 A related issue, which has arisen in the Eleventh Circuit, concerns 
whether the Compensation Clause bars the application of a county 
occupation tax to the salaries of federal judges who were appointed before 
the tax was enacted (but after state law authorized the county to impose 
such a tax). The Eleventh Circuit recently held that tax valid. Jefferson 
County v. Acker, 210 F.3d 1317, 1321-1322 (2000). The Eleventh Circuit 
noted that it was “unpersuaded” by the reasoning of the Federal Circuit in 
this case. Id. at 1321 n.5. 

13 The limitation period for civil actions against the United States is six 
years after the accrual of the claim. See 28 U.S.C. 2401(a). Thus, any 
judge who either retired or was appointed to a new judicial position at 
least six years ago would no longer have a cause of action to recover the 
taxes that had been deducted from that judge’s old salary. Federal judges 
who were appointed to a new judicial position after the 1984 salary 
increase took effect would not have a claim based on the taxes deducted 
from their new salaries, because the salaries would already have been 
subject to HI and OASDI tax at the time of the new appointment. 

14 In appendix to this petition (App. 133a-136a) we have attached a list 
of the other pending lawsuits and our most current information regarding 
the federal judges who have joined those lawsuits. 

16 

on the permissibility of taxation of federal judges’ salaries, 
even though this Court long ago disapproved the reasoning 
of that decision. 

1. a. 

There is a threshold question whether a quorum of 

the Court is available to hear and decide this case. When the 
government filed its previous certiorari petition in this case, 
four Justices recused themselves, and so the Court did not 
have the necessary quorum of six Justices. See 28 U.S.C. 1. 
Because of the lack of a quorum, the Court entered an order 
under 28 U.S.C. 2109, affirming the decision of the court of 
appeals. 

The Justices who recused themselves from considering 
our prior petition did not state reasons for their recusals. It 
appears, however, that the recusing Justices already held a 
judicial position on the dates that Congress extended the HI 
and OASDI taxes to judges’ salaries, and either (a) retained 
that same judicial position when our prior certiorari petition 
was before the Court, or (b) had been appointed to a new 
judicial position after the taxes were extended to judicial 
salaries, but less than six years before our petition was 
before the Court. 

15 The recusing Justices, therefore, may 
have perceived that they still potentially had a cause of 
action to challenge the HI and OASDI taxes that was not 
barred by the six-year statute of limitations for civil claims 
against the United States, see 28 U.S.C. 2401(a), and that 
that potential claim required their recusal under 28 U.S.C. 
455(b)(4). 

16 

15 Conversely, the Justices who did not recuse themselves either (a) 
were not federal judges when Congress extended the HI and OASDI 
taxes to judges’ salaries, or (b) had been appointed to a new judicial posi- 
tion more than six years before our prior petition was before the Court. 

16 Section 455(b)(4) provides that a judge or Justice shall disqualify 
himself when he knows that he “has a financial interest in the subject 
matter in controversy * * * or any other interest that could be 
substantially affected by the outcome of the proceeding.” 

17 

As an initial matter, we note that the Rule of Necessity 
may permit all of the Justices to hear and decide this case, 
even if some Justices might have a potential claim that 
would otherwise suggest recusal under Section 455(b)(4). 
See generally United States v. Will, 449 U.S. 200, 213-216 
(1981). This case involves fundamental matters touching on 
the relation between the Legislative and Judicial Branches, 
and in that sense it potentially affects all federal judges. 

17 

Moreover, the financial interest that a Justice might have in 
this case arises solely out of the emoluments of the judicial 
office, rather than out of matters that are personal to the 
individual Justice. It is therefore noteworthy that in the 
Court’s three previous cases concerning the constitutionality 
of the application of the income tax to judicial salaries, the 
entire Court heard and decided those cases. See O’Malley v. 
Woodrough, 307 U.S. 277 (1939); Miles v. Graham, 268 U.S. 
501 (1925); Evans v. Gore, 253 U.S. 245 (1920); see also Will, 
449 U.S. at 215 & n.18. O’Malley is particularly instructive 
in this regard, because the salaries of four of the Justices 
were subject to the income tax statute under review in that 
case, and the Court therefore would have been denied a 
quorum if they had recused themselves, and yet all the 
Justices participated. 

18 

Moreover, if the Court cannot decide this case because of 
the lack of a quorum, the public will be denied the opportun- 
ity for an authoritative disposition on important questions 
concerning the constitutionality of two Acts of Congress. 
That point is particularly crucial here since the Federal 

17 That is especially true since the reasoning of the court of appeals’ 
decision might suggest that Congress could not even raise the rate of 
existing income taxes on the salaries of sitting federal judges. See p. 28 

n.26, infra. 

18 See O’Malley, 307 U.S. at 279 (noting that the tax applied only to 
salaries of judges taking office after June 6, 1932). Justices Black, Reed, 
Frankfurter, and Douglas took office after June 6, 1932. See The Oxford 

Companion to the Supreme Court 969 (Kermit L. Hall ed., 1992). 

18 

Circuit, a court of nationwide jurisdiction, believed itself 
bound to follow a decision of this Court (Evans v. Gore) that, 
it stated, remains controlling on lower courts unless and 
until it is definitively overruled by this Court, even though 
the court also acknowledged that that decision has been 
seriously undermined. Absent review by this Court, there- 
fore, the Federal Circuit’s decision following Evans will be 
the law of the land, even though (as we explain below) it is 
quite likely that Evans does not reflect this Court’s current 
Compensation Clause jurisprudence. The Court has also 
explained that it is important that the federal courts be 
available to decide claims involving judicial compensation 
because “the Compensation Clause is designed to benefit, 
not the judges as individuals, but the public interest in a 
competent and independent judiciary.” Will, 449 U.S. at 217. 
The public interest therefore strongly favors this Court’s 
review of the Compensation Clause issues in this case. 

In any event, it appears that, even if the Rule of Necessity 
is not applicable here, the necessary quorum may now be 
available. Since the time that our previous certiorari peti- 
tion was before the Court, almost three years have passed. 
The six-year statute of limitations for actions against the 
United States may now bar any Compensation Clause claim 
based on the HI and OASDI taxes by some of the Justices 
who previously recused themselves, if they have not already 
joined one of the pending lawsuits challenging the HI and 
OASDI taxes (see p. 15, n.14, supra) or filed an administra- 
tive tax-refund claim with the Internal Revenue Service. 

19 

19 We are not aware that any Justice has joined one of the pending 
lawsuits. The court of appeals noted, however, that judges seeking to 
challenge the HI and OASDI taxes also had the option of pursuing 
administrative tax refund claims (although they were not required to do 
so). App. 26a. Because of statutes protecting the confidentiality of tax 
return information, see 26 U.S.C. 6103, we may not inquire of the IRS 
whether any judge or Justice has filed a tax refund claim. We note, 
however, that any administrative tax refund claim must be filed within 
two years after the tax is paid or three years after the tax return is filed, a 

19 

Because of the six-year statute of limitations, a Justice 
would not have a claim, and therefore would not have a 
potential financial interest suggesting recusal under Section 
455(b)(4), if that Justice was appointed to his or her current 
judicial position between January 1, 1984 (the date on which 
Congress extended OASDI taxes to judicial salaries) and a 
date more than six years before the date on which the Court 
acts on this certiorari petition. Accordingly, circumstances 
that previously indicated recusal may no longer be present. 

20 

b. If a quorum of the Court is present, another threshold 
issue is whether the “law of the case” doctrine prevents the 
Court from examining in plenary fashion the merits of the 
Compensation Clause issue that was presented to the Court 
in our prior certiorari petition. 

21 We submit it does not. The 
order entered by the Court on our prior petition under 28 
U.S.C. 2109 was an order affirming the judgment below 
“with the same effect as upon an affirmance by equally 
divided Court.” App. 69a. But although such an order is 
denominated an affirmance, “this is only the most convenient 
mode of an expressing the fact that the cause is finally 
disposed of in conformity with the action of the court below, 
and that that court can proceed to enforce its judgment.” 
Durant v. Essex Co., 74 U.S. (7 Wall.) 107, 112 (1868); see 
Neil v. Biggers, 409 U.S. 188, 190-192 (1972) (holding that, 
for purposes of the federal habeas corpus statute, an 
affirmance by a tie vote is not an “actual adjudication” by 
this Court). Such an order does not establish precedent 

period less generous than the six-year limitation period that has been 
applied in this case by the lower courts. See 26 U.S.C. 6511(a), 6513(c). 

20 When this case was before the Court on our prior petition, 
respondents acknowledged (95-1733 Br. in Opp. 25, 27, 29) that any Justice 
who was appointed after January 1, 1984, but more than six years before 
the Court’s consideration of the case was not disqualified from partici- 
pating in the case. 

21 The issue of the date of the termination of the constitutional violation 
(pp. 26-29, infra), which was not before the Court in our prior petition, 
does not implicate the law of the case doctrine. 

20 

binding on this Court. See United States v. Pink, 315 U.S. 
203, 216 (1942). 

Nor does such an order prevent this Court from examin- 
ing the issue in plenary fashion in the same case. The doc- 
trine of law of the case generally provides that “a court 
should not reopen issues decided in earlier stages of the 
same litigation.” Agostini v. Felton, 521 U.S. 203, 236 (1997). 
The law of the case doctrine thus promotes judicial effi- 
ciency, stability of the law, and respect for the courts’ 
decisionmaking authority by discouraging parties from re- 
peatedly challenging decisions that a court has already made. 
But a basic premise of the doctrine is that it prevents a court 
from reopening an issue only if the court actually decided 
that issue at an earlier stage of the litigation. See Quern v. 
Jordan, 440 U.S. 332, 347 n.18 (1979) (“The doctrine of law of 
the case comes into play only with respect to issues pre- 
viously determined.”). In this case, the Court did not 
actually decide the merits of the Compensation Clause issue 
when our prior petition was before it. Indeed, the Court as a 
Court did not even examine the merits of that issue, because 
a quorum was not present; the Court’s judgment affirming 
the decision of the Federal Circuit was entered solely by 
operation of law. The policies supporting the law of the case 
doctrine, discouraging wasteful and pertinacious relitigation 
of issues that a court has thoroughly considered, do not apply 
in a situation like this. 

The law of the case doctrine, moreover, “directs a court’s 
discretion, it does not limit the tribunal’s power.” Arizona v. 
California, 460 U.S. 605, 618 (1983); see Messenger v. 
Anderson, 225 U.S. 436, 444 (1912). Rather, “[a] court has 
the power to revisit prior decisions of its own or of a coordi- 
nate court in any circumstance.” Christianson v. Colt Indus. 
Operating Corp., 486 U.S. 800, 817 (1988). Law of the case 
does not prevent courts from reexamining earlier decisions 
that are “clearly erroneous and would work a manifest 
injustice.” Agostini, 521 U.S. at 236. This is such a situation. 

21 

As we now explain, the court of appeals’ invalidation of the 
extension of HI and OASDI taxes to judicial salaries rests 
entirely on a decision that interpreted the Compensation 
Clause in a manner that has been thoroughly discredited. 
That decision should now be definitively repudiated. 

2. a. Congress did not violate the Compensation Clause 
when it extended HI and OASDI taxes to judicial salaries. 
In finding a constitutional violation, the court of appeals be- 
lieved itself bound by this Court’s decision in Evans v. Gore. 
In Evans, the Court held that the Compensation Clause 
barred the application of the income tax to federal judges’ 
salaries. That decision should now be overruled. 

Evans involved an 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 opinion did not limit the holding to 
situations in which the judge’s appointment predated the 
imposition of the tax. Rather, the majority relied (id. at 255) 
on intergovernmental tax immunity cases such as 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 pro- 
position that the Framers “were so sedulously bent on secur- 
ing the independence of the judiciary [that they] intended to 
protect the compensation of the judges from assault and 
diminution in the name and form of a tax[.]” 253 U.S. at 256. 
On that premise, the Court concluded that a judge’s “com- 
pensation 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. 

22 

22 Justice Holmes, joined by Justice Brandeis, dissented, stating that 
the imposition of an income tax upon judges is constitutional as long as it 
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 independence “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 

22 

In Miles v. Graham, 268 U.S. 501 (1925), the Court relied 
on Evans to hold that the Compensation Clause barred the 
imposition of an income tax on the salary of a judge 
appointed after the enactment of the tax (see id. at 505). The 
Court concluded that the compensation was fixed by statute, 
“and to exact a tax in respect of this would diminish it within 
the plain rule of Evans v. Gore.” Id. at 509. 

Fourteen years later, however, the Court abandoned “the 
plain rule of Evans v. Gore” and embraced the view that 
judicial salaries are as subject to taxation in the same 
manner as the salaries of other citizens. In O’Malley v. 
Woodrough, 307 U.S. 277 (1939), the Court, considering 
another attempt by Congress to require judges to pay 
income tax, held 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. To subject 
judges to a general tax “is merely to recognize that judges 
are also citizens, and that their particular function in 
government does not generate an immunity from sharing 
with their fellow citizens the material burden of the govern- 
ment whose Constitution and laws they are charged with 
administering.” Ibid. 

O’Malley expressly overruled Miles. 307 U.S. at 282-283. 
It did not expressly overrule Evans, for Congress had 
structured the income tax act under review in O’Malley “to 
avoid, at least in part, the consequences of ” Evans by mak- 
ing the tax applicable only to the salaries of judges appointed 
after its effective date. See id. at 280. The Court did, 
however, strongly disapprove the reasoning of Evans: 

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. 

23 

[T]he meaning which Evans v. Gore imputed to the 
history which explains Article III, § 1, was contrary to 
the way in which it was read by other English-speaking 
courts. The decision met wide and steadily growing 
disfavor from legal scholarship and professional opinion. 
Evans v. Gore itself was rejected by most of the courts 
before whom the matter came after that decision. 

307 U.S. at 281 (footnotes omitted). 

23 

The Court reexamined O’Malley, Miles, and Evans in 
United States v. Will, supra. In Will, the Court held that 
Congress may not withdraw an increase in a statutorily 
prescribed judicial salary once it has gone into effect, but 
that Congress may cancel a prospective statutory salary 
increase before it takes effect. The Court disapproved the 
district court’s reliance on Evans as a basis for holding that 
the rescission of a salary increase before its effective date 
reduces the amount of compensation that a judge has been 
promised. 449 U.S. at 200. 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 
“cannot survive.” 307 U.S. at 282-283. Because Miles 

23 Justice Butler’s dissent in O’Malley also noted that, “[e]vidently, the 
Court intends to destroy the decision in Evans v. Gore. Without suggest- 
ing that there is any distinction between that case and Miles v. Graham, it 
declares that the latter ‘cannot survive.’ ” 307 U.S. at 297. The Eleventh 
Circuit also recently observed that this Court “had much to say in its 
O’Malley opinion about the Evans decision, and none of it was flattering.” 

Jefferson County, 210 F.3d at 1319. 

24 

relied on Evans v. Gore, O’Malley must also be read to 
undermine the reasoning of Evans. 

449 U.S. at 227 n.31. 

24 

b. The court of appeals 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, “nondiscriminatory 
taxation of a judge who took office after the tax went into 
effect does not violate the Compensation Clause.” App. 64a. 
The court’s reasoning was that, in the former case, the al- 
ready sitting judge’s compensation is “diminished” 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. That interpretation of the 
Compensation Clause reflected in the court of appeals’ opin- 
ion is erroneous: the Clause does not bar Congress from ap- 
plying nondiscriminatory taxes to the salaries of already 
sitting federal judges. Because the court of appeals believed 
that its decision was compelled by the lingering precedential 
force of Evans, this Court should grant review to overrule 
Evans definitively, and make clear that the imposition of a 
nondiscriminatory tax on the salary of a federal judge does 
not unconstitutionally “diminish” that judge’s compensation, 
whether the tax was enacted before or after the judge took 
office. 

The Court in Evans relied on its earlier intergovern- 
mental tax immunity decisions, as well the observation that 
“the power to tax carries with it the power to embarrass and 
destroy,” to conclude that the Framers must have intended 

24 See also Jefferson County, 210 F.3d at 1320 (observing that “in Will 
the Supreme Court itself read O’Malley as undermining the reasoning in 
Evans, and it characterized the holding of O’Malley broadly, saying that 
the Compensation Clause did not exempt judges from paying the same 
taxes that other citizens paid”). 

25 

“to protect the compensation of the judges from assault and 
diminution in the name or form of a tax[.]” 253 U.S. at 256 
(internal quotation marks omitted). Those rationales have 
not survived closer scrutiny over time. The intergovern- 
mental immunity cases on which the Court relied by analogy 
have been thoroughly repudiated. 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 (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). In 
particular, in Graves, decided the same Term as O’Malley, 
the Court noted that the purpose of intergovernmental tax 
immunity is “not to confer benefits on [governmental] em- 
ployees by relieving them from contributing their share of 
the financial support of the other government, whose 
benefits they enjoy * * * [,] but to prevent undue 
interference with one government by imposing on it the tax 
burdens of the other.” 306 U.S. at 483-484. The Court held 
there 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. 

The Court’s decisions since Evans also disavow the notion 
that the application of nondiscriminatory federal taxes to the 
salaries of federal judges implicates “the power to destroy” 
the federal judiciary, such that the Compensation Clause is 
violated. As the Court explained in Will, the purpose of the 
Clause is to secure “a truly independent judiciary, free of 
improper influence from other forces within government.” 
449 U.S. at 218. But the application of nondiscriminatory 
taxes to judicial salaries poses no threat to the constitutional 
value of judicial independence protected by the Clause. 
Rather, such nondiscriminatory taxation merely reflects the 
view, endorsed by this Court, that “judges are also citizens, 

26 

and that 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.” O’Malley, 
307 U.S. at 282; see also Will, 449 U.S. at 226 (“Federal 
judges, like all citizens, must share the material burden of 
the government.”). That is true whether Congress imposes 
an entirely new tax on the income of all citizens, including 
federal judges, or (as in this case) brings federal judges’ 
salaries within the coverage of a tax that has long been 
applied to the vast majority of the paid labor force (and made 
judges eligible for the HI and OASDI programs based on 
their judicial service). 

25 

3. The court of appeals also held that the measure of 
damages in a case brought under the Compensation Clause is 
“independent of any generally awarded adjustment to 
judicial salaries.” App. 125a. Thus, under the court of 
appeals’ decision, a violation of the Clause caused by the 
application of a tax to judicial salaries continues as long as 

25 Nothing in the circumstances surrounding Congress’s extension of 
the HI and OASDI taxes to judicial salaries suggests that Congress 
intended to undermine the independence of federal judges. Indeed, 
Congress has almost doubled federal judicial salaries since 1983. See pp. 
6-7, n.6, supra. Rather, Congress ensured that judges are treated, for 
purposes of the Social Security and Medicare programs, in the same way 
as the 90% of the paid civilian labor force that pays Social Security taxes 
and accrues eligibility for Social Security and Medicare benefits after 
retirement. Nor do the HI and OASDI taxes discriminate against federal 
judges. It is true that, when Congress extended the OASDI tax to all 
federal employees, it allowed federal employees who were already covered 
by the CSRS retirement system (see p. 3, supra) to choose between 
coverage under CSRS and Social Security, whereas it did not afford 
judges that election. Those federal employees, however, were required by 
law to contribute to the CSRS system, see 5 U.S.C. 8334(a)(1) (1994 & 
Supp. IV 1998), and so Congress allowed them to “opt out” of Social 
Security in order to avoid a double deduction. Congress had no occasion to 
give federal judges a similar election, because federal judges’ full-salary 
retirement annuity, 28 U.S.C. 371(a), requires no salary contribution from 
judges, but rather is financed out of general tax revenues. 

27 

that tax remains in effect, even if Congress subsequently (or 
perhaps even simultaneously) increases judicial salaries in an 
amount far greater than the amount of the tax deduction. 
That ruling cannot be reconciled with the text or policies of 
the Clause. 

The Clause provides that federal judges shall “receive for 
their Services, a Compensation, which shall not be dimin- 
ished during their Continuance in Office.” Even if Congress 
“diminished” the compensation of sitting judges when it 
imposed HI and OASDI taxes on their preexisting salaries, 
that “diminution” surely came to an end when, in 1984, 
Congress raised those judges’ salaries in an amount greater 
than the incidence of the taxes on their pre-tax salaries. A 
new tax can only be said to “diminish” a judge’s compen- 
sation to the extent that it leaves the judge with less com- 
pensation than the judge 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 respondents’ net compensation was not so 
large as 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 court of appeals believed that the Compensation 
Clause violation continued independent of any general judi- 
cial 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 increases, 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.” App. 122a. But once Congress increased 
judicial salaries above the level that existed before the 

28 

incidence of the tax, there was no more diminution that 
required payment of damages. Moreover, the court of 
appeals’ ruling itself creates two classes of judges with 
different compensation packages: federal judges appointed 
after the 1984 salary increase took effect must pay HI and 
OASDI taxes on their current annual salaries, whereas 
judges appointed before that date receive a permanent 
immunity from paying those taxes (even though they are 
eligible for HI and OASDI benefits based on their judicial 
service). The court of appeals’ decision therefore creates 
serious inequities in judicial compensation. 

The effect of the court of appeals’ ruling on damages 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 
compensating them differently from all other federal 
judges). As a practical matter, that ruling casts a serious 
cloud on Congress’s authority to extend nondiscriminatory 
taxes, paid by the general population, to judicial salaries. If 
Congress wants to apply such a tax to judicial salaries, it 
must grant sitting judges a permanent exemption from the 
tax. 

26 That requirement creates inequities among Article III 

26 The reasoning of the court of appeals’ decisions might well prevent 
Congress from subjecting sitting federal judges to nondiscriminatory 
increases in the rate of taxes such as the income tax and the OASDI tax 
(and from decreasing deductions and credits applicable to such taxes). If, 
as the court of appeals concluded, the incidence of a new tax on a pre- 
existing salary of a federal judge unconstitutionally “diminishes” the 
amount of a pre-tax salary, then increases in the tax rate might also be 
said to diminish the amount of the judge’s compensation before that 
increase took effect. But if that is so, then the court of appeals’ decision, 
especially as compounded by its ruling on damages, creates extraordinary 
difficulties in tax administration. Congress would effectively be required 
either (a) to freeze the rate of any tax applicable to judicial salaries to the 
rate in effect when each judge was appointed, or (b) to subject federal 
judicial salaries only to the lowest income tax rate that was applicable 
when any sitting member of the judiciary first took office. Nothing in the 

29 

judges. Congress could, of course, exempt all judges from 
new taxes, but that approach creates inequity between 
Article III judges and all other citizens, as this Court re- 
cognized in O’Malley, when it made clear that “judges are 
also citizens” who 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. 

27 

text or background of the Compensation Clause suggests that the 
Framers intended to relegate Congress to such a welter. 

27 We have not presented as a separate question for review the 
application of the continuing claim doctrine to the statute of limitations 
issue in this case; the court of appeals’ resolution of that issue will lose its 
binding and precedential force if this Court reverses the judgment of the 
court of appeals on either of the questions that we have presented. The 
court of appeals vacated the initial judgment of the panel when it granted 
rehearing en banc, App. 129a, and subsequently reinstated a single 
judgment, reversing the Court of Federal Claims, which resolved all 
issues before the court on that appeal, App. 1a-2a. It is that judgment that 
is now presented to this Court for review. Furthermore, the court of 
appeals decided that respondents could invoke the continuing claim 
doctrine on the premises that a constitutional violation had been 
established and that that violation had not terminated when Congress 
increased judges’ salaries after first applying HI and OASDI taxes to 
those salaries. See App. 7a (“[T]here is merit to the argument of the 
judges that these periodic deductions, which have been ruled to be 
unlawful, should be treated as a continuing claim.”). But if this Court 
concludes that either of those premises is incorrect, then there would be 
no basis for the court of appeals’ conclusion that the claimed Compensation 
Clause violation was the kind that may be asserted as a continuing claim. 
If this Court reverses the court of appeals on either ground, then the 
violation (if any) for any respondent would not have continued past 1984, 
and no respondent could rely on the continuing claim doctrine, whether or 
not that doctrine might have force in any other setting. See App. 90a 
(Court of Federal Claims notes that “application of the concept of cure 

* * * has potential application to a complete resolution” of claims based 
on the HI tax or brought by later-filing judges), 105a (also noting that, 
even if the continuing claim doctrine is applicable, those claims “would not 
result in recovery of damages even if they could be addressed as 
continuing claims”). 

30 

CONCLUSION 

The petition for a writ of certiorari should be granted. 

Respectfully submitted. 

SETH P. WAXMAN 

Solicitor General 

DAVID W. OGDEN 

Acting 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 
KATHLEEN MORIARTY MUELLER 
ANNE MURPHY 

Attorneys 

JUNE 2000