FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C U IT
FANG LIN AI a

n d DOES 1-1000, Plaintiffs - Appe lla nts, C ONC ORDE GAR

M ENT M ANUFAC TUR ING C ORPOR ATION, Plaintiff-c o unte r-de fe n da nt - Appe lla nt,
v. UNITED STATES OF AM ER IC A, De fe nda

nt-c ounte r-c la im ant - Appe lle e . No. 13-17491 D.C . No. 1:11-c v-00014
OPINION

Appe a l from

the Unite d

Stat e s Distric t C ourt for the Distric t of the Northe rn M ariana Isla nds R a m ona V. M a nglona , C hie f Distric t

Judge , Pre siding Argue d a nd Subm itte d

June 10, 2015 Honolulu, Ha

wa ii B e fore : WARDLAW , B ER ZON, a nd OW ENS, C irc uit Judge s. Opinion by

Judge W ARDLAW , C irc uit Judge : C onc orde Ga

rm e nt M a nufa c turing C orporation, a nd m ore tha

n 4,000 te m pora ry , nonre side nt form e r e m ploy e e s of C onc orde , a

ppe a l from the distric t 

# FIL ED
DEC 17 2015 M OLLY C. DW Y ER, CLERK U

. S. CO URT O F APPEALSc ourt’ s e n try of judgm e nt on the ple a dings in fa vor of the Unite d State s. 1 The distric t c o urt he ld tha

t te m pora ry fore ign worke rs in the C om m onwe a lth of the Northe rn M ariana Isla

nds (“ C NM I” ) and the ir e m ploy e rs a re re quire d to pa

y Fe de ra l Insura

nc e C ontributions Ac t (“ FIC A” ) ta xe s, whic h fund Soc i a l Se c urity
and M e dic are . Se c tion 606(b) of the C ove na nt gove rning U.S.-C NM I re lat ions provide s tha

t U.S. la ws tha t im pose e xc ise ta xe s to support the Soc ia l Se c urity sy ste m a pply to the C NM I a s the y

a pply to Gua m . 2 B e c a use FIC A is a la

w tha t im pose s a n e xc ise ta x to support the Soc ia l Se c urity

sy ste m , it a

pplie s to the C NM I
a s it a pplie s to Gua

m . In turn, FIC A a

pplie s to a ll worke rs a

nd the ir e m

ploy e rs in Guam , re ga

rdle ss of the ir c itiz e nship. The re fore , FIC A a lso a pplie s to a ll worke rs
and the ir e m

p loy e rs in the C NM I, inc luding Appe l la nts, re ga rdle ss of the ir
c itiz e nship. W e the re fore a ffirm the distric t c ourt.

1 The distric t c ourt a lso e nte re d sum m ary judgm e nt in fa

vor of the Unite d Sta t e s on Appe lla

nts’ c la im for ille ga l le v y . Appe lla

nts do not a

ppe a l this de c ision.
2 The C ove na

nt to Esta blish a C om m onwe a lth of the Northe rn M ariana Isla nds in Politic a l Union with the Unite d Stat e s of Am e ric a (“ C ove na

nt” ) wa s e nte re d into U.S. la

w pursua nt to Pub. L. No. 94-241, 90 Sta t . 263 (1976), a

nd is c odifie d a s a note following 48 U.S.C . § 1801. Se v e ra l of our opinions ha ve de ta ile d the history

of the C ove na

nt a nd U.S.-C NM I re lations. S e e , e .g. , N

. Mariana Islands v

. Unite d State s , 399 F.3d 1057, 1058–60 (9th C ir. 2005); Saipan Ste v e doreC

o. v . Dir., Offic e of W

ork e rs’ C omp. Programs , 133 F.3d 717, 720–21 (9th C ir. 1998). 2I. B ac k gr o und

Appe lla nts C onc orde Ga

rm e nt M anufa c t

uring C orporation (“ C onc o rde ” )
and the C hine se nationa l , nonre side nt worke rs form e rly e m ploy e d at C onc orde ’ s fa c i litie s in the C NM I (“ Em ploy e e s” ) pa id FIC A taxe s from the y e ars 2004 to 2007. In 2008, Appe lla

nts file d re fund c la im s for those pa ym e nts. The Inte rna l R e ve nue Se rvic e (“ IR S” ) re funde d C onc orde ’ s 2006 FIC A taxe s but othe rwise took no a c tion on Appe lla nts’ c la im s. The re a fte r, Appe lla nts sue d the Unite d Sta t e s in the U.S. Distric t C o urt for the Northe rn M ariana Isla nds to re c ove r the
re m a inde r of the FIC A ta xe s the y ha d pa id. The Unite d

Stat e s c ounte r-c la im e d to
re c o ve r the re fund of C onc orde ’ s 2006 FIC A tax e s , whic h it a rgue d wa s
e rrone ously

issue d. The distric t c ourt rule d tha t a ll worke rs a

nd the ir e m

ploy e rs in the C NM I are subje c t to FIC A, re ga rdle ss of the c itiz e nship of e ithe r. Appe lla nts tim e l y file d this a

ppe a l, a rguing tha

t (1) the C ove na

nt wa s inte nde d to subje c t only C NM I c itiz e ns, not te m pora ry nonre side nt fore ign worke rs, to FIC A ta xe s; (2) e ve n if FIC A ge ne ra lly a pplie s to a ll worke rs a

n d the ir
e m ploy e rs in the C NM I, Em ploy e e s a re e ntitle d to the FIC A tax e xe m ption for te m pora ry nonre side nt Filipino worke rs in Gua m ; (3) e ve n if the first two
argum e nts a

re re je c te d, the e m

ploy e e portion of FIC A doe s not a p ply be c a use it is
an inc om e ta x, a

nd only e xc ise and se lf-e m

ploy m e nt ta xe s tha t support Soc ia l 3Se c urity

a pply to the C N M I; a

nd (4) the sta

tutory ba sis for a

pply ing FIC A to Appe l la n ts is unc onstitutiona

lly va gue . 3 II. Standar d of Re vie w W e re vie w de novo a

n orde r granting judgme n t

on the ple a dings, a c c e pting fa c t s a l le g e d by

the nonm oving pa

rty a s true an d dra

wing a ll infe re nc e s in its fa vor. Le Gras v . AETN

A LifeIns. C

o. , 786 F.3d 1233, 1236 (9th C ir. 2015). W e a lso
re vie w de novo unde rly ing issue s of sta tutory inte rpre tat ion a

nd c onstitutiona

lity
. Fournie r v . Se be lius , 718 F.3d 1110, 1117–18 (9th C ir. 2013), c e rt. de nie d , 134 S. C t. 1501 (2014). W e have he ld tha

t “ ta xing sta

tute [s] m ust be c onstrue d m ost strongly in fa vor of the ta xpa

y e r and a ga inst the gove rnm e n t .” Gre y hound C orp. v . Unite d State s , 495 F.2d 863, 869 (9th C ir. 1974). Howe ve r, “ [w] e are not im pre s se d by the a rgum e nt tha

t [a ny doubtful que stion] should bere s olve d in fa vor of the ta xpa y e r.” W hite v . Unite d State

s , 305 U.S. 281, 292 (1938). Thus, “ w he re the rights of suitors turn on the c o nstruc tion of a [ta x] sta tute . . . it is our duty

to de c ide what tha

t c onstruc tion fa irly

should be ,” and “ doubts whic h m ay arise upon

3 Appe l la nts a dopte d the argum e n t s m a de in Ame ric an Pac ificTe x tile , Inc . v . Unite d State s , No. 13-16348. W e the re fore a ddre s s those argum e nts he re and re solve issue s spe c ific to the Ame ric a n Pac ific a ppe a l in a c onc urre n tly

file d m e m o ra ndum d i sposition. 4a

c ursory e xam ination of [ta

x sta tute s m ay ] disa

ppe ar whe n the y

are re a d, a s the y
m ust be , with e ve ry

othe r m a te ria l pa

rt of the sta

tute , a n d in the light of the ir le gisla tive history .” Id. (c ita

tion om itte d); se e also Irw i n v . Gav it , 268 U.S. 161, 168 (1925) (“ It is sa id tha t the ta x la

ws should be

c onstrue d fav ora

bly for the ta xpa y e rs. B ut tha

t is not a re a son for c re a ting a doubt or for e xa gge ra t ing one whe n it is no gre a te r tha

n we c an bring ourse lve s to fe e l in this c a se .” ). The re fore , while ta x sta

tute s “ are not to bee xte nde d by im plic a tion be y ond the c le a r im port of the la

ngua ge use d,” Unite d State s v . Me r riam , 263 U.S. 179, 187–88 (1923), we

do not m e c ha

nic a lly re solve doubts in fa

vor of the ta xpa

y e r but inste a d re sort to theordina ry tools of sta

t utory inte rpre tation. Ultima te ly , “ the lite ra l m e aning of the words e m ploy e d is m ost im

porta nt.” 4 Id. ; se e also Unite d State s v . Fe i Ye

, 436 F.3d 1117, 1120 (9th C ir. 2006) (“ If the pla in la ngua ge of a sta tute re n de rs its m e a

ning re a sona

bly c le ar, [we ] will not inve stiga te furthe r unle ss

4 Appe l la nts vie w the C ove na

nt a s a sta tute
. At the sa

m e tim e , Appe lla

nts a dopt a rgum e nts m a de by the Ame ric an Pac ific a ppe lla n ts tha t de pe nd, som e what c ontra dic torily , on inte rpre ting the C ove na nt not a s a

sta tute but inste a d a s a

tre a ty like a gre e m e nt. Appe lla

nts the re fore urge us to look mo re libe ra lly to the C ove na nt’ s dra fting history

tha n we m ight in c onstruing a sta tute
. Se e Minne

sota v . Mille Lacs Band of C

hippe w a Indians , 526 U.S. 172, 202 (1999) (“ [R ] e vie w of the h istory

an d the ne gotia

tions of thea gre e m e nts is c e n tra l to the inte rpre t a tion of tre a tie s.” ). W e be lie v e tha t the C ove na

nt is be st vie we d a s “ a

c ongre ssiona lly a pprove d c om pa c t [tha t] is both a

c ontra c t a

n d a sta tute . . . . [suc h tha

t] re s ort to e xtrinsic e vide nc e of the [C o ve na nt’ s] ne gotia

tions . . . is e

ntire l y a ppropria t e .” Ok lahoma v . N

e w Me x ic o , 501 U.S. 221, 235 n.5 (1991).

5its a

p plic ation le a d s to unre a sona ble or im pra c tic a ble re sults.” ) (inte rna l quota tion
m arks a nd c ita tion om itte d); N

. Mariana Islands v

. Unite d State

s , 279 F.3d 1070, 1074 n.5 (9th C ir. 2002) (“ W e would be unde rm ining c ongre ssiona l inte nt if we
we re to de c line to give e ffe c t to wha t se c tion 502(a)(2) of the C ove na nt by its te rm s re quire s . . . .” ). W e note tha

t the Fe de ra l C irc uit ha s rule d in fa vor of the gove rnm e nt a

nd
a ga inst the ta xpa

y e rs in a m a te ria lly

indistinguisha

ble c a se , a

de c i sion whic h is pe rsua sive , though not dispositive
. Se e Zhang v

. Unite d State s , 640 F.3d 1358 (Fe d. C ir. 2011) ( Zhang II ), c e r t. de nie d , 132 S. C t. 2375 (2012). 5 W e hav e
re c o gniz e d, howe ve r, tha

t “ ‘ [u] niform ity

am ong C irc uits is e spe c ia lly im porta nt in ta x c a se s to e nsure e qua l a nd c e rta in a dm inistra

tion of theta x sy ste m .’ ” H ill v

. C omm’r , 204 F.3d 1214, 1217 (9th C ir. 2000) (quoting Pac . First Fe d. Sav

. Bank
v . C omm’r , 961 F.2d 800, 803 (9th C ir. 1992)). Tha t is pa rtic ula rly true whe re , a s he re , a c irc uit split would c

re a te two m

utua l ly e x c l usive rule s a

pplic a ble to the C NM I, le a ding to unc e rta i nty and obvious forum

shopping opportunitie s.

5 In Zhang II

, the Fe de ra l C irc uit re v ie we d and ultim a t e ly

a ffirm e d a thorough opinion by

the C ourt of Fe de ra l C l a im s a ddre s sing the sa m e issue
. Se e Zhang v . Unite d State

s , 89 Fe d. C l. 263 (2009) ( Zhang I ). 6III. Disc ussion

A. The C N MI Is “W ithin the Unite d State

s” for Purpose

s of FIC A. 1. C ove na

nt § 606(b) FIC A im p ose s a n e m ploy e r and a

n e m ploy e e ta x on wa ge s “ with re spe c t to
e m ploy m e nt.” Se e 26 U.S.C . §§ 3101(a ) (“ e m p loy e e ta x” ), 3111(a ) (“ e m ploy e r ta x” ). FIC A a

pplie s to wa ge s re late d to work pe rform e d “ within theUnite d Sta t e s,” “ irre spe c tive of the c itiz e nship or re side nc e of e ithe r” the e m ploy e e or
e m ploy e r, id. § 3121(b), a

nd to wa g e s re l a te d to work pe rform e d “ outside the Unite d State s” by

a U.S. c itiz e n

or re side nt “ a s a

n e m ploy e e for an Am e ric a

n
e m ploy e r,” id. Se c tion 3121(e )(2) de fine s the te rm “ Unite d State s” whe n

it is use d in a ge ogra

phic a l se nse to inc lude the C o m m onwe a lth of Pue rto R i c o, the Virgin Isla nds, Gua m , a nd Am e ric an Sam oa . 6 Thus, wa ge s for se rvic e s pe rform e d in Guam are subje c t to both the e m ploy e e and e m

ploy e r provisions of FIC A ,

“ irre spe c tive of the c itiz e nship or re side nc e of e ithe r” the e m ploy e e or the
e m ploy e r. Id. § 3121(b). Se c tion 606(b) of the

C ove na nt, in turn, provide s:

6 “ U nite d State s” is use d in a

ge ogra phic a l se nse in 26 U.S.C . § 3121(b). This is e vide nt from

the se c tion’ s juxta

position of “ w ithin the Unite d State s,” id. (e m pha sis a dde d ), and “ outside the Unite d State s,” i d. (e m p h a sis a dde d ). Ac c ordingly , it is undispute d tha t Gua m is “ w ithin theUnite d State s” for purpose s of FIC A. Se e Zhang II

, 640 F.3d a

t 1367. 7Those l aws of the U n i t ed Sta te s whic h im pose e x c ise and se lfe m ploy m e nt ta xe s to s upport or whic h p rovide be ne fits from the Unite d Sta te s Soc ia l Se c urity Sy ste m will upon te rm ination of t he Truste e ship Agre e m e nt or suc h e arlie r da te a s m ay be a gre e d to b y the Gove rnm e nt of the Northe rn M ariana Isla nds an d t he Gove rnm e nt of the Unite d Sta te s be c om e a

pplic a ble to the Northe rn M ariana Isla n ds a s t he y a pply to Gua m . Just a s in Gua

m , the n, wa ge s for se rvic e s pe rform e d in the C NM I are subje c t to FIC A ta xe s, irre spe c tive of c i tiz e nship or re side n c e . Se e id. ; 26 U.S.C . § 3121(b). W e hold tha

t the distric t c ourt c orre c tly he ld tha t Appe lla nts, who pa i d a

nd
re c e ive d wa ge s for se rvic e s pe rform e d in the C N M I, a re re quire d to pa

y FIC A ta xe s on thosewa g e s, e ve n though Em ploy e e s we re te m

pora ry nonre side n t C hine se n a tiona ls. 7 2. C ove na

nt § 606(b) is not lim

ite d to c itiz e ns or re side nts of Gua m or the C NM I. Appe lla nts a tte m pt to ste e r us a

way from this stra ightforwa

rd c onc lusion, whic h flows dire c tly

from the pla in la

ngua ge of C o ve n a

n t § 606(b), by a dvoc a ting
a c itiz e nship-ba se d a

pplic a tion of FIC A to the C NM I. The y argue tha t the phra se in C ove na

nt § 606(b) “ a s the y a

pply to Gua m ” is a m biguous, a

nd tha t the te rm

“ Guam ” doe s not m e an “ Guam , ” but a c tua lly m e ans “ the pe ople who re side in or

7 W e disc uss whe the r the FIC A tax on e m p loy e e wa ge s is “ a

la w[] of the Unite d State s whic h im

pose [s] e xc ise and se l f-e m ploy m e nt ta xe s to support . . . the Unite d State s Soc ia l Se c urity

Sy ste m ” in Se c tion III.C
.

8who a

re c itiz e ns of [tha

t] ge ogra phic are a [] .” 8 From

this m anufa c t

ure d am biguity , Appe l la n ts a sse rt tha

t § 606(b)’ s re fe re nc e to the C NM I is a lso a m biguous a nd
c ould re fe r to pe rsons in theC N M I, ra the r tha n to the ge ogra

phic are a itse lf. Appe l la n ts the n argue t ha t § 606(b) doe s not re fe r to a ll the pe o ple in the C NM I, but inste a d re fe rs only

to c itiz e n s of the C NM I. Unde r this torture d re a ding of the C ove na nt, Appe lla

nts c onc lude tha

t § 606(b) subje c ts only

C NM I c itiz e ns a

nd the ir
e m ploy e rs to FIC A ta xe s . The re is no pla

usible m e thod by

whic h to a

rrive a t Appe lla

nts’ c o n c lusion from the pla i n la

ngua ge of the C ove na

nt a nd, we re § 606(b) a

m e na ble to a
c itiz e nship-ba se d a

p p lic a tion, we would de c line to a dopt tha t c onstruc tion be c a

use FIC A is inc om

pa tible with suc h a

n a pplic a tion. To be gin with, § 606(b) doe s not m e ntion c itiz e nship or pe ople , a nd we se e
no re a son to re a d those words into the C ove na nt. M ore ove r, e ve n if we we re to
re a d re fe re nc e s to ge ogra

phic are a s a s re fe re n c e s to pe ople in those ge ogra p hic
are a s, our re a ding would not be lim ite d to c itize ns . The ve ry e xtrinsic dra fting
m a te ria l Appe l la

nts re ly upon a c tua lly

sugge s ts the c ontra

ry c onc lusion. It

8 Se e He aring Be

f oretheSubc omm. on Te rritorial and Insular Affairs of the H. C omm. on Inte r ior and Insular Affairs on H.J . Re s. 549, 550, and 547 to Approv e the“C

ov e nant to Establish a C

ommonw e a lth of the

N orthe rn Mariana Islands in Politic

al Union w ith the

Unite d State

s of Ame ric a ,” 94th C ong. 376 (1975). 9sugge s ts tha

t re fe re nc e s to Gua

m or to the C NM I c o uld re fe r e i the r to the ge ogra phic are a s or “ to thepe oplew ho re side in or who a

re c itiz e ns of” those ge ogra phic are a s. Se e 94th C ong. 376. (e m pha sis a dde d). Thus, the re is no pla u sible wa y to lim it the a

pplic a bility of § 606(b)’ s c ross-re fe re nc e e xc lusive ly to the c itiz e ns a s oppose d to the re side nts of the C NM I. 9 Furthe r, to the e xte nt tha

t a ny am biguity e xists a s to whe the r the c rossre fe re n c e to Gua

m re fe rs to pe ople a s oppose d to ge o gra phy , the pla in la

ngua ge of FIC A c o m

pe l s us to a dopt the ge ogra phic a pplic a tion. B y

its te rm s, FIC A n e v e r
a pplie s sole ly

ba se d upon a worke r’ s c itiz e nship. R a the r, FIC A a pplie s in two insta nc e s: (1) whe n work is pe rform e d within the Unite d State s, a nd (2) whe n work is pe rform e d by a

U.S. c i tiz e n for a

n Am e ric an e m

ploy e r. Se e 26 U.S.C
. § 3121(b). The re fore , unle ss we c onstrue § 606(b) to inc lude the C NM I within the Unite d State s ge o gra

p hic a lly , FIC A would not re quire C N M I c itiz e ns to pa y FIC A ta xe s unle ss the y

we re working for a

n Am e ric a

n e m ploy e r. Se e id . The re is no indic a tion tha

t FIC A wa s inte nde d to ha ve suc h a lim i te d e ffe c t within the

C NM I. Inde e d , be c a

u se C NM I c itiz e ns be c a m e U.S. c itiz e ns unde r the

9 And FIC A, in turn, a

pplie s to the C N M I a s it a p p lie s to Gua

m
— w he re nonre s ide nt worke rs a

re subje c t to the FIC A tax on e m ploy e e wa ge s be c a

use the y pe rform e d work “ within theUnite d Stat e s,” 26 U.S.C . § 3121(b), re ga rdle ss of whe the r the y

we re te m pora ry nonre side nt worke rs.

1 0C ove na

nt— m e aning the y

a lre a dy m ust pa y FIC A tax e s whe n

working for a

n Am e ric an e m

ploy e r
— suc h a n outc om e would re nde r § 606(b) m e aningle s s. Se e C ove na nt § 303; 26 U.S.C . § 3121(b). 1 0 W e avoid this re s ult a nd a fford § 606(b)
m e aning by

c onc luding tha

t, through ope ra tion of the c ross-re fe re n c e to Gua m , the C NM I is brought within the ge ogra phic a l te rritory

of the Unite d State s for purpose s of FIC A. 3. Inte rve ning le gisla

tion doe s not pre c lude § 606(b)’ s a pplic a bility
. Appe lla nts a sse rt tha

t e ve n if the y

we re subje c t to FIC A pursua n t to C ove na nt § 606(b) a s origina l ly

dra fte d, two sta

t ute s e na c te d a fte r the C ove na nt
wa s a pprove d, but be fore § 606(b) be c a m e e ffe c tive in 1986, pre c lude a pplic a tion of FIC A to Appe l la

nts. W e disa gre e . First, Appe lla

nts look to a

1981 a m e ndm e nt to 42 U.S.C . § 1301, whic h
a lte re d the de finition of the te rm “ Sta te ” in the Soc ia l Se c urity Ac t. In doing so, the a m e ndm e nt e xte nde d the a pplic a tion of c e rta in be ne fit provisions to the C NM I. C ritic a lly , from

Appe lla nts’ pe rspe c tive , a lthough the am e ndm e nt e xpre ssly

1 0 The re is a

third possibility

— that § 606(b) som e how e xpa nde d the de finition of “Am e ric an e m ploy e r.” Appe lla

n ts a c tua lly

ra ise this a

rgum e nt, c la im ing tha

t “ C NM I e m

ploy e rs— like those of Gua m
— would be c onside re d
‘ A m e ric an e m

ploy e rs’ ” for purpose s of a pply ing 26 U.S.C . § 3121(b). The notion that § 606(b)—

w hic h a pplie s FIC A to the C NM I a s it a pplie s to Gua

m
— is som e how inte nde d na

rrowly to e xpa nd the de finition of Am e ric an e m p loy e r is nonse n sic a l, a

nd we ne e d not e la

borate on this c onc l usion. 1 1m e ntione d both theC NM I and Gua m , a diffe re nt m e nu of be ne fits wa s e x te nde d to
e a c h. S e e 42 U.S.C . § 1301(a )(1) (1982). Appe lla nts a sse rt tha

t this a m e ndm e nt de m onstra

te s C o ngre ss’ s inte nt to tre a t Gua m and the C N M I diffe re ntly , a nd tha t it is the re fore im

prope r to m e c ha

nic a lly substitute

the C NM I for Guam

in C ove na

nt § 606(b). This a rgum e nt is without m

e rit, a nd like the Fe de ra l C irc uit, we re j e c t it. Se e Zhang II

, 640 F.3d a

t 1368 (“ C ontra

ry to Appe lla

n t s’ argum e nts, C ongre ss did not subse que n t ly

a ba n d on the substitution of Gua m for the C N M I by

e n a c t ing 42 U.S.C . § 1301.” ); se e also Zhang I , 89 Fe d. C l . a t 281–82. B e fore the am e ndm e nt to § 1301, Soc ia l Se c urity be ne fits in theC N M I we re linke d to be ne fits in Gua

m pursua nt to C ove na

nt § 606(b). Theam e ndm e nt ope ra te d to e lim inate the be ne fit pa rity be t we e n the two te rritorie s. B ut the re is no indic a tion tha t C ongre s s inte nde d its a

m e ndm e nt to Soc ia l Se c urity be ne fits to e xte n d to FIC A tax e s . Inde e d , far from

supporting Appe lla

nts’ c onc lusion, tha

t C o ngre ss did not a

m e nd
any ta xa tion provisions whe

n it a m e nde d the be n e fits provisions c onfirm s C ongre ss’ s inte nt tha

t FIC A ta x e s re m a in a

pplic a b le to the C NM I a s to Gua m . Thus, the C NM I’ s FIC A ta x tre a tm e nt re m a ins linke d to Gua m ’ s pursua

nt to C ove na nt § 606(b).

1 2Se c ond, Appe lla n ts dire c t us to Se c tion 19 of the Ac t of 1983, Pub. L. No. 98-213, 97 Sta

t. 1459. U.S.-CNM I re lations we re gove rne d by a Truste e ship Agre e m e nt following W orld W ar II. During the une xpe c te dly de la y e d tra nsition from the Truste e ship Agre e m e nt to theC ove n an t, C N M I c itiz e ns did not m e e t the U.S. c itiz e nship re quire m e nt inc lude d in m any sta tutory be ne fit provisions. 1 1 As the Fe de ra l C irc uit ha s e xpla ine d, § 19’ s purpose wa s “ t o a c c e l e ra te C N M I
c itiz e ns’ re c e ipt of c e rta in sta tutory be ne fits to whic h the y othe rwise would not have be e n e ntitle d until te rm ination of the Truste e ship Agre e m e nt.” Zhang II , 640 F.3d at 1368. TheAc t a c c om plishe d this purpose

by wa iving theU.S. c itiz e nship
re quire m e nt for c e rta i n be ne fits. Se c tion 19 of the Ac t provide s: (a ) The Pre side nt m ay . . . provide that the re quire m e nt o f Unite d Sta te s c itizen s h i p or na tiona lity provide d for in a n y of the sta

tute s l iste d on pa ge s 63–74 of the Inte rim R e port
. . . sha ll not be a pp li cab l e t o t he c itiz e ns of the Northe rn M ariana Isla nds. . . .

1 1 C ove na nt § 504 c re a t e d a

C om m ission on Fe de ra l La

ws. The C om

m ission wa s ta s ke d with m a k ing re c om m e ndations to C ongre ss a bout the a pplic a tion of c e rta in U.S. la

ws to the C NM I during the inte rim pe riod be fore te rm i na tion of the Truste e ship Agre e m e nt. In the C om m ission’ s First Inte rim

R e port, it obse rve d tha

t “ [m ] a ny fe de ra l la ws re quire Unite d State s c itiz e nship a s a pre re quisite to e njoy m e nt of rights a

nd privile ge s c onfe rre d by those la ws.” Inte rim

R e port of the N. M a riana Isla nds C o m m ’ n on Fe d. La

ws to the C ongre ss of the Unite d State s, 4–6 (1982) (“ Inte rim R e p ort” ). The C om m ission c o nc lude d

tha t C NM I c itiz e ns should e njoy

the se rights a

nd privile ge s during thepossibly prolonge d pe riod be fore the te rm ination of theTruste e ship Agre e m e nt, a nd it the re fore propose d le gisla tion tha t would tre a t C NM I c itiz e ns a s Unite d State s c itiz e ns for purpose s of c e rta in fe de ra l sta

t ute s a l re a dy a

pplic a ble to the C NM I. Id. a t 6. 1 3(b) A sta tute whic h de nie s a be ne fit o r im p ose s a burde n or a disa

bility on an a lie n , hi s d epe nde nts, or his s urvivors sha ll, for the purpose s of this Ac t, be c onsider ed t o im pose a re quire m e nt of Unite d Sta te s c itiz e nship or na

tiona lity

. R e a ding the two subse c tions toge the r, § 19(b) c l arifie s whic h of the sta tute s liste d in the Inte rim

R e port re fe re nc e d in § 19(a) c onta ins a “ re quire m e nt of Unite d Sta t e s c itiz e nship.” Thus, § 19(b) de fine s the ty pe of sta tutory provision for whic h the Pre side nt m ay

wa ive a re quire m e nt of Unite d State s c i tiz e n ship pursua nt to the
a uthority grante d in § 19(a). Appe lla nts re a d § 19(b) out of c onte x t whe n the y c onte n d tha t it a c tua lly
re a d s a U.S. c i tiz e nship re q

uire m e nt into a ll U.S. sta

tute s tha t “ de n [y ] a be ne fit or im pose [] a burde n or a

disa bility on a n a lie n.” It turns theAc t of 1983 on its he a d to c o nc lude tha

t § 19(b) e

x c lude s a lie ns from

both the be n e fits a

n d the burde ns of a wide range of la

ws. The ve ry

purpose of the 1983 Ac t wa s to inc lude C NM I
c itiz e ns, who re m a ine d “ a lie ns” until the offic ia l te rm i na tion of theTruste e ship Agre e m e nt in 1986, within be ne fits progra

m s tha t e xplic itly

re q uire d U.S.
c itiz e nship. W e the re fore join the Fe d e ra l C i rc u it in holding tha t § 19 of theAc t of 1983 ha s no e ffe c t on the a pplic a bility of FIC A to nonre side nt worke rs in the C NM I. Se e Zhang II

, 640 F.3d a

t 1368–70.

1 4B. The FIC

A Ex e m ption for N

onre side nt Filipino W

ork e rs in Guam Doe

s N ot Ex te nd to N

onre s ide nt C h ine s e W ork e rs in the C N M I. Appe lla nts ne xt a rgue t ha t e ve n if FIC A a

p plie s to nonre side nt worke rs a n d the i r e m ploy e rs in the C NM I ge ne ra l ly , Appe lla nts fit within a

n e xe m ption to FIC A ta xa tion tha

t C ongre ss c re a te d for c e rta in nonre s ide nt worke rs in Gua m . The
e xe m ption on whic h Appe lla

n ts re ly , howe ve r, is e xpre ssly lim ite d to Filipino
c itiz e ns a dm itte d to Gua

m unde r H-2 visa s. S

e e 26 U.S.C . § 3121(b)(18). 1 2 Pursua nt to C ove na

nt § 606(b), the n, Filipinos a dm itte d to the C NM I unde r H-2 visa s a rgua bly would be e x e m

pt from FIC A. Howe ve r, e ve n

if we ove rlooke d the fa c t tha t Em ploy e e s we re not a dm itte d to the C NM I pursua nt to H-2 visa s, the
e xe m ption re m a i ns pla i nly

ina pplic a ble be c a use Em p loy e e s a re C hine se
na tiona ls. 1 3

1 2 This se c tion of FIC A e xe m pts from the de finition of e m

p loy m e nt a ny “ se rvic e pe rform e d in Gua m by a re side nt of the R e public of the Philippine s while in Gua m on a te m pora ry ba sis a s a nonim m igra nt a lie n a dm itte d to Gua

m pursua nt to se c tion 101(a)(15)(H)(ii) of the Im m igration a

nd Na t iona lity Ac t.” 26 U.S.C
. § 3121(b)(18).

1 3 W e ne e d not de c ide whe the r the e xe m p tion would a

pply to Filipinos in the C NM I who we re not a dm itte d pursua nt to H-2 visa s but we re inste a d a dm itte d pursua nt to theC NM I’ s loc a l im m igration la

w. This is a c lose que stion. During the re le va nt tim e pe riod—2004 to 2007— the C N M I wa s not subje c t to the Im m i gra tion a

n d Na tura liz a t i on Ac t, a

n d inste a d m a inta ine d the a uthority to c re at e its own im

m i gra tion la

ws. Ac c ordingly , from

2004 to 2007, te

m pora ry worke rs e nte re d the C NM I pursua nt to theC NM I’ s Nonre s ide nt W orke rs Ac t. Se e 3 N. (c ontinue d...) 1 5M ore ove r, a s Appe lla nts c onc e de , Filipinos were not the only te m pora ry
nonre s ide nt worke rs in Gua m whe n the e xe m

ption wa s c re a te d
. Se e U.S. House of R e p., C om

m . on the Judic i ary , Subc om m . on Im m igration, C itiz e nship, a

n d Int’ l Law, TheUseof Te mporary Alie n Labor on Guam 3–4 (1975). In light of this de m ogra phic re a lity , C ongre ss’ s de c ision to e xpre s sly lim i t the e x e m

ption to Filipinos, in pa

rt be c a use of our na

tion’ s unique politic a l tie s with thePhilippine s, sugge s ts tha

t the e xe m

ption wa s not m e ant to c ove r a ll nonre s ide nt worke rs in Guam . In sum , C ongre ss single d out Filipinos for pre fe re ntia l tre a tm e nt. B e c a use it is undispute d tha

t Em ploy e e s a re not Filipinos, the

e xe m ption doe s not a

pply to the m . C . FIC A and SEC

A Apply in The ir Entire ty to the

C N MI as The y Apply to Guam. Se c tion 606(b) sta

te s tha t “ [t] hose la

ws of the Unite d Stat e s whic h im pose
e xc ise and se lf-e m

ploy m e nt ta xe s to support . . . the

Unite d State s Soc ia l Se c urity sy ste m will . . . be c om e a

pplic a ble to the [C NM I] a s the y a pply to Gua

m .” C ove na nt § 606(b). Appe lla

nts c onte nd tha

t e ve n if FIC A ge ne ra lly

a pplie s to the C NM I, the e m

p loy e e portion doe s not a pply be c a use it is a n inc om e ta x, not a

n

1 3 (...c ontinue d ) M ar. I. C ode § 4411, e t se q . Thus, a lthough te m pora ry nonre s ide nt Filipinos in the C NM I a re the e xa c t ty

pe of worke r C ongre ss sought to e xe m pt from FIC A, the se worke rs do not te c hnic a l ly satisfy a ll sta tutory e le m e nts of the e xe m

ption. 1 6e xc ise or se lf-e m ploy m e nt ta x. Se e 26 U.S.C . § 3101(a ) (im posing “ on the inc om e of e ve ry individua l a

ta x” ). In othe r words, Appe l la nts re a d § 606(b) a s if it
c onta ins a n a d ditiona l lim i tation: “ Those la ws of the Unite d State s whic h im pose only e xc ise ta xe s a

nd only se lf-e m ploy m e nt ta xe s to support . . . the

Unite d State s Soc ia l Se c urity

sy ste m will . . . be c om e a pplic a ble to the [C NM I] a s the y a pply to Guam .” Appe l la

nts m i sre a d t

he provision. Se c tion 606(b) doe s not c onta in the lim ita tion sugge ste d by

Appe l la nts, nor doe s it sta te tha t e x c isetax e s a pply in the C N M I a s in Gua

m . Inste a d, § 606(b) provide s tha

t those l aw s w hic h impose s uc h tax e s a p ply in the C N M I a s in Gua

m . The diffe re nc e is subtlebut c ruc ia l: La ws im posing e xc ise ta x e s, a

nd not sim

ply the e xc ise ta xe s the m s e lve s, a pply in the C NM I a s in Gua

m . In short, if a

la w im pose s a n e xc ise ta x to support Soc ia l Se c urity , the la w
— not just tha

t pa rt of the la w im posing a n e xc ise ta x— a

pplie s in the C NM I a s in Gua m . 1 4 B e c a

use FIC A im pose s a n e xc ise ta x, it a

pplie s in the C NM I a s in Gua m . And be c a

use FIC A

1 4 Although it m

ight be possibleto tre a t 26 U.S.C . § 3111, thee m ploy e r portion of FIC A , a s a

se p ara te la

w from § 3101, thee m

ploy e e portion, suc h tre a tm e n t is unte na

ble . B oth § 3101 a

nd § 3111 re ly

on § 3121, a

m ong othe r provisions. Thus, § 3111 is incom ple te without the

re m a inde r of FIC A. B e c a use § 3111 c annot be vie w e d a s a “ la w” in isola

tion from the ove ra rc h i ng sta

tute , the la w a t issue in C ove na

nt § 606(b) is not m

e re ly the e m ploy e r portion of FIC A. The la w is inste a d FIC A a s a

whole , whic h ne c e ssa

rily inc lude s the e m

ploy e e portion. 1 7subje c ts e m

ploy e e s in Gua

m to ta xa tion, it subje c t s e m

ploy e e s in the C NM I to FIC A ta xe s a s we ll. This pla i n re a ding of § 606(b) is re inforc e d by the se c tion’ s a d ditiona l
re fe re n c e to la

ws im p osing se lf-e m

ploy m e nt ta xe s . While the re fe re nc e to la ws im posing e xc ise ta xe s is suffic ie nt to c a pture FIC A in its e ntire ty , se lf-e m ploy m e nt ta xe s tha t support Soc ia l Se c urity

are not inc lude d in FIC A. Inste a d, the y are found in theSe lf-Em

ploy m e nt C ontributions Ac t (“ SEC A ” ). Se e 2 6 U.S.C
. §§ 1401–03. There fore , while the re are thre e ge n e ra l taxe s tha t support the

Soc ia l Se c urity sy ste m
— the e m ploy e e FIC A tax, the e m

ploy e r FIC A tax, a

n d SEC A ta xe s— the re are only

two law s imposing those ta xe s—

FIC A a nd SEC A. And C ove na nt § 606(b)’ s la

ngua ge is de signe d to re nde r both la ws a pplic a ble to the C NM I a s the y

a pply t o Gua

m . Any doubt tha t this re a ding is c orre c t is dispe lle d whe n § 606(b) is
c onside re d in the c onte xt of the C ove na nt a s a whole . Anothe r of the C ove n ant’ s provisions, Se c tion 601(a), provide s tha t “ [t] he i nc ome ta x la

ws in forc e in the Unite d State s” a p p ly in the C N M I “ in the sa

m e m anne r a s those la

ws a re in forc e in Gua m . ” C ove na

nt § 601(a ) (e m

pha sis a dde d). The re a son for the om ission of
any spe c ific re fe re nc e to inc om e ta xe s in § 606(b) is the re fore a ppa re nt: Se c tion 601(a ) a lre a dy m a k e s c le ar tha t suc h tax e s a

re a pplic a ble in the C NM I. Se c tion
1 8601(a ) thus c la rifie s tha t “ [t] hose la

ws of the Unite d State s whic h im pose e xc ise
and se l f-e m

ploy m e nt ta xe s to support . . . the

Unite d State s Soc ia l Se c urity Sy ste m ” do inde e d

inc lude the e m

p loy e e portion of FIC A. To the e xte nt tha

t the phra se “ those la

ws” is a m biguous, in tha

t the la ws
c ould be broke n down furthe r to inc l ude only 26 U.S.C . § 3111(a ) (the portion of FIC A im posing a n e xc i se ta x), ra the r tha

n a ll of FIC A, we m ay look to e xtrinsic dra fting sourc e s to re solve this a m biguity
. Se e Diamond v

. C hak rabarty , 447 U.S. 303, 315 (1980) (“ [O] ur obliga tion is to ta

k e sta tute s a s we find the m , guide d, if
a m biguity a ppe ars, by

the le gisla

tive history

and sta tutory purpose .” ). The
a va ila ble e x trinsic e vide nc e ove rwhe lm ingly sugge sts tha t the dra fte rs inte nde d that a ll FIC A ta xe s a

p p ly
. B oth the House and Se na te R e ports produc e d in c onne c tion with C ongre ss’ s
a pprova l of the C o v e na

nt provide : “ Subse c tion (b) [of C ove na nt § 606] a s sure s that the la ws of the Unite d State s whic h im pose ta xe s to support . . . the Unite d Sta t e s Soc ia l Se c urity

Sy ste m will be c om e a

pplic a ble to the Northe rn M ariana s a s the y are a pplic a ble to Gua

m upon te rm i na tion of theTruste e ship Agre e m e nt . . . .” H.R . R e p. No. 94–364, a

t 11 (1975); S. Re p. No. 94–433, a t 83 (1975). As the Fe de ra l C irc uit a

ptly obse rve d, “ [t] he re ports do not distinguish the e m p loy e r

1 9FIC A ta x from the e m ploy e e FIC A tax, nor do the y sugge st tha

t one ta x a pplie s but the o the r doe s not.” Zhang II , 640 F.3d a

t 1374. The Se c t ion–by

–Se c tion Ana ly sis of the C ove na nt— publishe d by

the M aria na s Politic a l Sta

tus C om m ission, whic h a ssiste d

in the C ove na

nt’ s dra fting— a lso doe s not distinguish be twe e n the e m ploy e r and e m

ploy e e FIC A ta xe s. Se e Zhang II

, 640 F.3d a

t 1375 (noting tha

t “ C ongre ss c o nside re d the Se c tion–by

–Se c tion Ana ly sis prior to a pproving theC ove na

nt” ) (c iting S. R e p. No. 94–433, a t 65–94); N

. Mariana Islands , 399 F.3d a t 1065 (“ W e have re lie d in pre v ious opinions on the

M ariana s Politic a l Sta

tus C om m ission’ s a

uthorita tive Se c tion–by

–Se c tion Ana ly sis of the C ove na nt to a ssist us in disc e rning the
m e aning of the C ove na

nt.” ) (inte rna l quota

tion m a rks om itte d ). De sc ribing C ove na nt § 606(b), the

Se c t ion–by

–Se c tion Ana ly sis sta

te s: Subse c tion (b) [of § 606] a ssure s that the la w s o f the Unite d Sta te s whic h im pose ta xe s to support or whic h provide b e ne fits from the U nite d Sta te s Soc ia l Se c urity Sy s te m will b e c om e a pplic a ble to t he N orthe rn M ariana s a s the y ar e ap plic a

ble to Guam upon te rm ination of the Truste e ship Agre e m e nt.
. . . A t this tim e as w el l, those law s o f the Unite d State

s w hic h impose t

ax e s to s upport theUnite d State s Soc ial Se c urity

Sy ste m w ill be c ome a

p plic able

. The re a son t

ha t the C ove na

n t is struc ture d in a way wh i ch d o es n ot m a ke the Unite d State s soc ia l se c urity la ws a pplic a ble im m e diate ly i s that the ta xe s w hic h a re im pose d to support the soc ia l se cu r i t y sy ste m are ve ry burde nsom e a s c om pa re d to the t a xe s which ar e pa id by the pe ople o f t he Northe rn M ariana s toda y . . . [T] he se la

ws will be c om e e ffe c tive in the Northe rn M arian a s no late r

2 0tha

n te rm i na tion of the Truste e ship, a t whic h tim e the e ntire Co v en ant will be e ffe c tive
. M aria na s Politic a l Sta

tus C om m ’ n, Se c tion–by

–Se c tion Analy

s is of the C ov e nant to Establish a C

ommonw e alth of the

N orthe rn Mariana Islands , 80–81 (1975) (e m pha sis a dde d ). Like wise , the C om

m ission on Fe de ra l La

ws, se e C ove n ant § 504, did not distinguish be

twe e n the two ta

x e s. In pe rtine nt pa

rt, the sum

m a ry se c tion of the C om m ission’ s Se c ond Inte rim R e port sta

te s : “ Em ploy e rs a nd e m p loy e e s in the Northe rn M ariana Isla

nds a re m a de subje c t to ta

xe s im pose d by [FIC A] to support the fe de ra l soc ia l se c urity sy ste m a t the tim e the soc ia l se c urity sy s te m s of the Northe rn M ariana Isla

nds a nd the Unite d State s a

re m e rge d . . . .” Se c ond Inte rim R e port of the N. M arian a

Isla nds C om m ’ n on Fe d . La

ws to the C ongre s s of the Unite d State s 415 (1985). M ore spe c ific a lly , the Se c ond Inte rim R e p o rt c onta ins a
se c t ion e n title d “ Em

ploy m e nt Taxe s,” whic h e xpla ins tha t unde r FIC A, “ [t] h e
e m ploy e r and e m

ploy e e are e a c h re quire d to pa y ta xe s .” Id. a t

465. In light of this le gisla

t ive history , we re solve any am biguity in § 606(b) by
c onc luding tha

t the word “ la

ws” re fe rs to the e ntire la w c onta ining theta x in que stion—i.e ., FIC A a

nd SEC A. Se e also Zhang I , 89 Fe d. C l. at 281 (“ T he [] le gisla tive doc um e nts a

re uniform

in the ir tre a tm e nt of se c tion 606(b),

2 1una

m biguously de m onstra

ting tha t a ll FIC A tax provisions were inte n de d to a pply to the C N M I.” ). M ore ove r, re a ding § 606(b) to a pply the e m p loy e r portion of FIC A without the e m ploy e e portion would m

e an subje c ting C NM I e m

ploy e rs but not C

NM I
e m ploy e e s to FIC A ta xa t ion, e ve n though m an y of the e x e m

p t C NM I e m

ploy e e s would be a

ble to re c e ive be ne fits unde r the sy ste m . Se e Zhang II , 640 F.3d a

t 1363 (disc ussing theC ourt of Fe de ra l C l a im s’ c onc lusion tha t C ongre ss c le arly

inte nde d to a v oid suc h an a bsurd re sult). Ultim a te ly , the te xt of § 606(b) provide s tha t FIC A— a

la w im posing a n
e xc ise ta x— a

pplie s to the C NM I a s it a pplie s to Gua

m . In Gua

m , e m ploy e e s a re subje c t to FIC A, a

nd thus the

sa m e is true in the C NM I, re g ardle ss of whe the r that ta x is a n e xc ise ta x or a

n inc om e ta x. It is thela

w c onta ining thee xc i se ta x tha t
a pplie s to the C NM I a s to Gua m , not m e re ly

the “ e xc ise ta x ” itse lf. Se e C o ve na nt § 606(b). 1 5

1 5 W e note tha

t the distric t c o urt a lso re l ie d on C ove n ant § 601(a ) an d (c ) in c onc luding tha

t FIC A a p plie s in its e ntire ty

to the C NM I. Howe ve r, we m ay a ffirm on a ny ground supporte d by

the re c ord. Se e C

olumbia Pic ture

s Indus., Inc

. v . Fung , 710 F.3d 1020, 1030 (9th C ir. 2013), c e rt. dismissed , 134 S. C t. 624 (2013). B e c a

use we hold tha

t C ove n ant § 606(b) re nde rs both e m ploy e e and e m ploy e r FIC A ta xe s a

pplic a ble to the C NM I, we do not re a c h the pa rtie s’ a lte rna tive c onte ntions c onc e rning the a pplic a bility of C ove na

nt § 601(a ) and (c ). 2 2D. The Applic a b ility of FIC A to Appe llants Through the C ov e nant Is N

ot Unc onstitutionally

Vague

. Appe lla nts a rgue tha t , be c a use the IR S ha s not e xpla ine d c onsiste ntly why FIC A ta xe s a

pply to the m , the sta

tutory sc he m e is unc onstitutiona lly va gue . Se e Vill. of Hoffman Estate

s v . Flipside

, Hoffman Estate

s, Inc

. , 455 U.S. 489, 497–99 (1982) (e xpla ining tha

t the void for va gue ne ss doc trine a p p lie s to c i vil sta

tute s). C ontra ry to Appe lla

nts’ sugge stion, howe ve r, the que stion is not whe the r the gove rnm e nt a

pplie d or inte rpre te d FIC A c onsiste ntly . Inste a d , the que stion is whe the r the sc he m e tha

t subje c ts Appe lla

nts to FIC A taxe s is “ so va g u e and inde finite a s re a lly

to be no rule or sta

nda rd a t a ll,” Boutilie r v . IN

S , 387 U.S. 118, 123 (1967), or whe the r a

pe rson of ordina

ry inte llige nc e c ould unde rsta nd tha t the
sc he m e re quire s pa

ym e nt of FIC A taxe s, se e Ass’n de s Ele v e u rs de C

anards e t d’Oie s du Que b e c v . Harris , 729 F.3d 937, 946 (9th C ir. 2013). FIC A’ s a pplic a bility to Appe lla

nts is not unc le ar, a s e vide nc e d m ost prom ine ntly

by Appe lla nts’ pa y m e nt of FIC A taxe s from 2004 through 2007. Se e , e .g. , Unite d State

s v . Moore , 109 F.3d 1456, 1467 (9th C ir. 1997) (finding Gun C ontrol Ac t wa s not unc onstitutiona lly va gue whe re “ [t] he re c ord show[e d] tha t both [de fe nda

n ts] unde rstood the ir re spe c tive le ga l obliga tions” ). M ore ove r, the C ourt of Fe de ra l C la im s, the Fe de ra l C i rc uit, a nd the Distric t C ourt for the

2 3Northe rn M ariana Isla nds ha ve e a c h re a c he d the sa

m e c o nc lusion—

that Appe lla

nts
are s ubje c t to FIC A ta xe s. If a n y thing, tha

t the se c ourts ha

ve arrive d at this
c onc lusion by

diffe re n t sta

tutory route s sugge sts tha

t the re l e va

nt sta tutory sc he m e
a dvise d Appe lla

nts in m ultiple wa y s tha t the y m u st pa y FIC A tax e s. Appe lla nts the m se lve s, a ll c ourts to c onside r the issue , a nd the IR S have
c onsiste n tly

re a d the sta

tutory sc he m e a s re quiring Appe lla n ts to pa y e m ploy e r and
e m ploy e e FIC A ta xe s. Appe lla nts’ position wa s not frivolous, a n d the y we re justifie d in re que sting a

re fund from

the IR S. B ut ha

ving a c olora ble argum e nt tha

t FIC A ta xe s do not a

pply doe s not re nde r the sta

tute unc onstitutiona

lly va gue . 1 6 IV . Conc lusion For the fore going re a sons, we AFFIRMthe distric t c ourt’ s e ntry of judgm e nt on the ple a dings in fa vor of the Unite d State s on Appe lla nts’ c la im s, a s

1 6 M o re ove r, it doe s not a ppe a r that Appe lla

n t s fa c e any

pe na l ty . The y sim ply m ust pa y the ta x. This is not a

situa tion whe re a

pa rty a c te d in re lia

nc e on the l aw (or in ignora

nc e of a la w due to la c k of c la

rity ) only to be subje c t to a pe na lty or, worse y e t, c rim ina l sa nc tions, be c a

u se it a c te d in a c c orda

nc e with a re a s ona ble unde rsta

n ding of the la

w. Thus, to the

e x te nt tha

t va gue ne ss c o nc e rns a pply a t a ll in this c a se , those c onc e rns a re de m inim is. Se e

, e . g. , Groome Re sourc e s Ltd., L.L.C

. v . Par. of J

e ffe rson , 234 F.3d 192 (5th C ir. 2000) (a ffirm ing e ntry of pe rm ane nt injunc tion a ga inst Pa rish, whic h de la

y e d gra nting a z oning a c c om m odation to the

de ve lope r of an Alz he im e r’ s c a re fa c ility , whe re the de la y would im pose fina nc ia l pe na l tie s upon the de ve lope r and the Parish a rgue d in pa

rt that sta tutory va g u e ne ss justifie d the de la y ). 2 4we ll a s the distric t c ourt’ s e ntry of judgm e nt on the ple a dings in fa vor of the Unite d State s on the Unite d State s’ c ounte rc la im
.

2 5CO UNSE L

C ra ig E. Ste wart (argue d), Ke lse y Isra e l-Trum

m e l, a nd Edwa rd Pa tric k Swa

n, Jr., Jone s Da y , San Fra n c isc o, C a lifornia ; Ste ve n P. Pixle y , Sa ipa n, Northe rn M ariana Isla nds, for Pla intiff-C ounte r-De fe nda nt-Appe lla

nt C onc orde Garm e nt M an ufa c turing. C olin M . Thom

pson, Thom

p s on La w Offic e , LLC , Sa ipa

n, Northe rn M ariana Isla nds, for Pla intiffs-Appe lla nts Fa ng Lin Ai, e t a l. B ridge t M . R owa

n (a rgue d), Ta

m ara W . Ashford, Te re sa

T. M ilton, Unite d

State s De pa rtm e nt of Justic e , Ta x Division, W a shington, District of C olum bia ; Alic ia A.G. Lim tia c o, Unite d State s Attorne y , Unite d State s Attorne y ’ s Offic e , Sa i pa n, Northe rn M ariana Isla

nds, for De fe nda

n t -C ounte r-C la im a

n t-Appe lle e .

2 6