morning in may have police the court my name is david axelrod i'm appearing on behalf of more than a dozen corporate employers in that in the commonwealth of the northern mariana islands and thousands of their employees none of whom have ever been into the united states or or received any immigration status under any us immigration laws this is not a tax case this is a political case it turns on determination of what agreement was struck between the two sovereign representatives for the united states on the one hand and for the citizens of the northern mariana islands on the other hand in early  seventy five with respect to which groups would participate in the relatively lucrative benefits of the us title to social security programs and who would bear the burdens of the taxes supporting those programs the key document is the covenant it title to benefits and supporting taxes don't apply geographically by reason of the force of the covenant alone then it is clear that no other law provides for a geographic application it's not disputed but the congress passed no law after its one nine hundred seventy six approval of the covenant in which it applied fica taxes or social benefits under title two geographically to the northern mariana islands we submit the properly construed against the parties negotiating history and the key events that congress implemented in undertook in implementing section six of six of the covenant it is clear that the parties intended and congress implemented the citizenship based application of section six of six within the covenant itself only section six of six addresses title two benefits and supporting taxes as described by the department of the interior to congress section six zero six is a technical provision that is concerned with segregating the retirement accounts belonging to the citizens of the northern mariana islands transferring them out of the trust territory system holding them in abeyance and administered by the us until the trust we have six one see some lies in that six the one see is a provision that addresses section sixty one which is concerned exclusively as this court determined in the armstrong decision with the application and development of a local territorial income tax modeled as a miracle and after the us that it applies only in the c n n my he says generally references in the internal clear conclusion that one comes through walking through the legislative history and the drafting changes that were made with respect to section six zero six the between the fifth which was intended to be a final  draft of the covenant and the last minute changes that were made at the behest of congress which dramatically changed the application of section six of the then why did we why don't we go behind the plain language qualified by the fact that the joint drafting commission the representatives of both of the parties that were at the table expressly issued the qualifying clause at the time that it inserted the as they apply to guam clause in the six zero six b that says we are using these clauses in different ways in context sometimes to refer to the citizens and residents of the entity in this context the northern mariana islands in other contexts it can apply geographically to the territory thus as they apply to guam which is used only in those sections that are addressing the application of benefits to the islands who is going to be able to participate in the us benefits programs that clause as a term of art and the term of art is inherently ambiguous because it provides for alternative applications it's either citizens and residents or it's geographic and you have to look at the context and the party's actions to determine which it is and when you do that you can see very clearly both from the dramatic differences between the situation in the long and the c and i with respect to the treatment of aliens as to whether or not they are within the geographic united states in guam they clearly are because congress legislated that the i and they would apply congress took over immigration authority congress expressively added them to the fica geographic scope and congress expressly added glaum to the geographic scope for title two benefits in contrast with the sienna my over a period of more than twenty years congress did exactly the opposite that's one promise home here aren't we ought but even going back guam is a shows up into context six o six b where it was added along with that the same time that they issued this qualifying statement and five zero one a one that's not people who reside in our citizens or the geographic and there is the geography or people but it doesn't say that the citizens only in context it can be citizens only and in context it can apply more broadly to residents because in five zero to a one they were dealing with s s i which applies to residents who have been in a territory covered by the law for more than five years in six o six the fica has two jurisdictions that are outside united states is only going to apply and be payable to citizens of that jurisdiction and that we submit is clearly what the focus of the drafting parties was a second response to your question as to why we can look indeed we submit  are compelled to look at the detail of this is this is not a statute that was inactive by congress as legislative authority or that much is clear this agreement the covenant originates in a sovereign  ation some degrees seems to be your right but i don't understand that the law relating to treaties means that you ignore the language as opposed to eliminate it it doesn't say that you ignore the language and we are not ignoring the language we are looking at the language in the context of what the joint drafting committee said that it wants that language to apply to which said it can alternately apply to citizens and or residents or the broader geographically you have to determine what was intended but the key part of the fact that the zen court in the lower court both applied a restrictive statutory limitation on what they were going to look at is a clear error in both of those cases because under the supreme court decision cited in our brief and in the supplemental briefing to this court it's very clear that when you have a political agreement a contract between the two sovereigns and clearly that is what you have in this case the court's inquiry is much broader it is just it is a determination to figure out what the intent of those political parties was and implemented looking at the context of the agreement what the parties did after the agreement was entered into what they said what the legislative history is and what the negotiating history was when you apply those factors here and one of the important things that they iterate which i think has significance in this case is that when you have a comprehensive agreement or a comprehensive resolution where you have omissions those commissions have great significance you can't ignore them or assume it was an  you have very very material omissions in this case with respect to the fight the geographic tax provision of twenty six u s c thirty one twenty one he congress very carefully did not that's why you have this language about as it applies to law because guam is i disagree your honor obviously in every case where congress has taken in a because the left maybe argue with you if i may you are begging the question to be decided which is did congress intend a citizenship application or a territorial application if congress intended as we believe th record clearly shows in the negotiating history and congressional actions a citizenship based application then the fact that congress did not go back as it did in every other case and had the insular territory into thirty one as a term of art to restrict or define sub sub groups depending on the context the two sections that it is apply to are those which provides us benefits to the northern mar islands they were deliberately restricting those benefits to the do the citizens of the northern mariana islands it is difficult for i think anyone objectively to conclude that the negotiators for the united states and the based solely on decisions of the local marianas government who was granted control over immigration to the exclusion of the united states and the immigration and naturalization their it creates a circumstance which is highly implausible on its face i would submit and if you look at the end walk through that negotiating history you will see from the changes that start with the fifth round draft which in its language invited a geographic application but was rejected by the u s representatives and modified into something that no longer really represents or resembles in any way geographic application they took that potential geographic application then in section six zero five of the fifth round draft and they in essence of this aerated and then added a qualifying clause that said the new language reading as they apply to wrong can apply alternatively only to citizens and residents or citizens or residents or geographically depending on context and that became the issue and that's how they settled the case and there was no further a lumination or step taken by the united states or congress after adoption of the covenant to apply a geographic coverage for fica or social security benefits and i think that is most clear when you go back and you look at the only time that congress revisited this subject i read i mean if you want me yes it's all this is it still does you no good at all because it says in six zero six d it means citizens because fica taxes and the social security benefits when you're outside the united states are only available to suit if that's what residents are not alien cause means citizens or residents  it's really extremely difficult if i can jump in it seems to me how i would judge a person's question it seems to me there isn't an easy way to converse and make the point you want to make and they didn't make it that way and to get to get the directionless to go we have to do all these gymnastics to get there can you explain why congress simply didn't just say what you want us to infer that it said as opposed to having us infer what it said based on th type machinery that we have to deal with here i would submit to you the congress did say what we say it said when it failed to take action to add the c in the my in to thirty one twenty one the when they failed to take action to have a title to language in the covenant left it open the language in the covenant says this can apply in either of alternate ways so the language of the covenant itself is ambiguous if you coverage of the immigration the natural zation act aliens are as a matter of law outside the united states congress then did nothing to bring them within the united states when you get to public law ninety eight to thirteen which specifically addresses this issue in context congress took steps to relieve the delay that the citizens of the northern mariana islands were experiencing by waving the citizenship condition under the fica law as it applies outside the united states so they could get benefits before the effective date and they took no steps to apply that geographically then it had it on its own initiative wholly apart from the petition of the commission section one thousand b and section one thousand be addressed as aliens aliens are a separate category from residents they are people who are admitted with no residence or potential immigration status into the commonwealth of the northern mariana islands for work purposes it referred to aliens in there and said as to aliens and used key language indicating that it was a reference in the title to benefits because it spoke to aliens their dependents and their survivors any law that applies the burden which is obviously a tax or a benefit which is participating in the programs shall be deemed to require citizenship for participation that is an express exclusion for those aliens in the northern mariana islands so section one thousand b is where congress came back years before the effective date and expressly addressed that issue i would like to reserve some of my  good morning your honour's bridget rowland from the department of justice representing the united states is the apple e in these cases may please the court this is in fact a tax case the plaintiffs here than the manufacturers and casinos are seeking millions of dollars in tax refunds based on the series that fica taxes are not applicable in the commonwealth of the northern mariana islands because it is outside of the united states in fact employers and workers regardless of their citizenship are subject to fi taxes because the commonwealth is in the united states and you get to that point first by looking at the language of the covenant sixth of six b which refers to we see the provision of course somewhat differently from the appellant's here six zero six b says those laws of the united states that impose taxes to support the social security system those laws are the laws of the internal revenue code dealing with fica taxes they become applicable to the northern mariana islands on the conclusion of the trusteeship arrangement as they applied to guam from that point you go to the internal revenue code sections thirty one twenty one b a one and thirty one twenty one b under thirty one twenty one b a one regardless of the citizenship of the workers or the employers fica taxes will be imposed if the service is performed if the employment is being performed in the united states so from that point you go and look at the definition of the united states in the internal revenue code under thirty one twenty one needs and under that definition guam is included in that definition so the fact that six  the internal revenue code fica provisions as they buy in long leads to once you look at the internal road revenue code provisions and see how they are applied in guam leads you to the conclusion that in fact the workers regardless of their citizenship were subject in fact to to fica taxes that dichotomy that the appellants are are trying to create between geography and citizenship it is to some extent something of a false dichotomy we submit because when you go to the laws of the united states the internal revenue code the fica provisions to some extent those provisions are address geography so if you're within the united states no matter what your citizenship your subject and your employed and your earning wages you are subject to fica taxes however the exception that's addressed in the second  case before you when which council here alluded to the exception to the definition of employment for workers from the philippines temporary workers from the philippines who are in guam that's that's a citizen ship based exception so that ca to me between geography and citizenship is really kind of an artificial distinction that that the parents are making what matters is that the specific provisions of the laws the united states that are being applied that are being accepted in the northern mariana islands as they apply in guam and i think as your honor also alluded to there are numerous p supposed to be interpreted as a act of congress or as a treaty doesn't make any difference i don't think it really makes any difference here quite honestly your honor because the legislative history seems very clear including the section covenant and then congress and gauged in examination of that explanation and then they had some debates and various committee reports and there were some amendments i believe but  legislative history when you look at the house reports you look at this statement of the grafters of their intent it's it seems quite clear that the laws of the united states that impose social security taxes are intended to be applied according to their terms in the northern mariana islands once the northern mariana islands  but i guess our position on that is there was no difference with respect to taxes that i recall but the question of benefits i think is sort of a red herring the  covenant itself is phrased in the disjunctive i mean the tax laws and the benefits laws under title two forty two rather are separate and distinct and the obligation to pay fica taxes is in no way means to your ultimate eligibility or non eligibility for fica benefits programs to the extent that congress or the drafters were changing their minds about which benefits should apply to citizens of the northern marianas or to foreign workers that's a wholly separate question and we submit it has absolutely nothing to do with this case the tax statutes are clear they're simple they are broadly applicable the whole point of these taxes is to support the ongoing social security system they create in themselves they create no one title meant benefits on the part of an individual which is a principle that was quite well as had been established for years by the supreme court so to answer your question your honor i specifically i don't recall the precise changes from one one version of another i think they're not particularly relevant i guess it's to the extent to the extent they deal with benefits they're not relevant at all i don't recall that anything addressed a difference in in taxation all of the legislative history that we've cited in that we found rather sweepingly refers to those laws of the united states that impose fica taxes and there's no  qualification based on citizenship of the individual workers so it would be quite quite remarkable to think that the congress would endorse this provision of the covenant and refer you back to the internal revenue code but then have created this huge exception for non citizens which doesn't appear in the internal revenue code the internal revenue code is is very clear united states and your employed and your earning wages your wages are going to be subject to fica tax regardless of your of your citizenship and regardless of what might happen down the road thirty or forty years from now when you might become eligible for for social security on the subject of treaty versus statute we submit that is this is more like a statute than a tre application to submerged lands around the northern marianas this court applied a classic statutory interpretation analysis it did not treat the  presented to congress congress both houses of congress considered it it was then submitted as a joint was voted upon as a joint resolution and submitted to the president and signed by the president and by president and then the president proclaimed to be it's a it's a public law and it can be found in forty eight u s c eighteen zero one so we would say that that that's a statute  but but circling back to your question around right i don't think in this particular case it matters a great deal i guess counsel also touched on this  it of course completely differently we think that a and b are interconnected the purpose of that law was to ease the transition of the not yet citizens of the northern mariana islands and so it was kind of accelerating the benefits of citizenship before article three really kicked in and the residents of domicile people domiciled in northern marianas became full citizens of the united states and the idea was to relieve them of some of the disability of not being full for the sins and we read section subsection be the reference to aliens as referring to those persons in the mariana islands who are not yet citizens of the united states and that's the way the junk court interpreted that provision and i think the federal circuit's view is that is is pulling you into the internal revenue code it either pulls you into the internal revenue code or into title forty two when you talk about benefits and there plaque a plaque ability and under certain one twenty one b a one service of whatever nature performed by an employee for person employed irrespective of the citizenship or residence of either within but within the united states and then you go to the united states thirty one twenty one the united states defined term united states when used in a geographical sense which is certainly the case and that's where geography comes in and is is is relevant it takes you back to thirty one twenty when the a one is the district court benefits and taxes are tied in extra complete and six of sixty which makes no express reference to the irish sea whatever application you make for taxes you must make for the benefits programs or council the see in the my was intended to be considered in the united states a glance at the two thousand a consolidated natural resources that provision where the us applied the immigration and naturalization laws prospectively to the c n n my sort of rebuts pretty clearly that provision by stating that nothing in that act nothing in  jurisdiction over immigration in the sea in the my should be construed to make any presence by an alien prior to the effective date of that act a presence in the united states congress was meticulous when it granted that the c n n my exclusive control over its own immigration and did not apply the i a e a to keep the c m i out of any provision that defined the geographic united states or to give aliens in the n my any rights or foothold in under u s immigration laws judge brazil we didn't quite get to the end of the question on six zero one six zero one has an express provision that says it doesn't apply if manifestly incompatible even if you could do that in some circumstances it's hard to be manifestly incompatible with a non existent profession i was referring to your reference to sixty one i write i want him saying is that well six zero six d has a treaty as a compact includes the information in the wisdom of the underlined legislative history in the negotiations and therefore has to include the definition of the joint drafting commission that was explicitly rendered in the context of six of sixty and it's new as they apply to guam clause six one is the clause that has the provision that it does not apply if that's manifestly incompatible and if you were to say that six to one were a substitute for going back and applying the fica laws then you have a direct conflict with the provisions of the covenant under section seven zero three because all of the taxes under six to one are covered back over to the sienna my treasury whereas under seven zero three it specifically provides that fica taxes are to be paid to the federal government to the extent that they apply and therefore relying upon six to one would create a direct conflict with the covenant to say nothing of the fact that they had very different implementation dates one went into effect or was intended to go into effect ultimately almost eight years before the