[00:00:00] Speaker 03:
case is our first argument I should say is a consolidation of three different cases for purposes of argument.

[00:00:09] Speaker 03:
This is Avalos versus US, 21-2008.

[00:00:14] Speaker 03:
Abrantes versus US, 21-2021.

[00:00:19] Speaker 03:
And Martin versus US 21-2255.

[00:00:25] Speaker 03:
Mr. Stern, you have 20 minutes for argument.

[00:00:28] Speaker 03:
And I understand that you reserve five minutes of time for rebuttal.

[00:00:32] Speaker 03:
Is that correct?

[00:00:34] Speaker 03:
And Mr. Dayan, did I pronounce that correctly?

[00:00:37] Speaker 03:
Dayan.

[00:00:39] Speaker 03:
Mr. Dayan, I understand you're going to argue for 12 minutes.

[00:00:43] Speaker 03:
And then you're followed by Handy Baruchowitz, Heidi Baruchowitz, who will argue for six minutes.

[00:00:52] Speaker 03:
And then you reserve two minutes of that time for cross appeal.

[00:00:56] Speaker 04:
Right.

[00:00:57] Speaker 04:
And that's Ms.

[00:00:58] Speaker 04:
Baruchowitz's cross appeal.

[00:00:59] Speaker 03:
Okay.

[00:01:00] Speaker 03:
Tell me that again.

[00:01:01] Speaker 03:
That's who?

[00:01:01] Speaker 04:
I'm just saying the cross appeal will also be Heidi Baruchowitz because it relates to the Martin case.

[00:01:08] Speaker 03:
All right.

[00:01:12] Speaker 03:
So let's get going, Mr. Stern.

[00:01:15] Speaker 08:
I think that it's consistent with protocol for me.

[00:01:19] Speaker 03:
Yeah, you can take it off.

[00:01:23] Speaker 03:
All channels can remove their masks.

[00:01:25] Speaker 03:
Thank you, Your Honor.

[00:01:28] Speaker 08:
all agree that the Fair Labor Standards Act is properly interpreted to require prompt payment of wages, although the statute does not contain any explicit requirement.

[00:01:43] Speaker 08:
The issue here is whether that implicit directive is violated when payments are made by the federal government

[00:01:52] Speaker 08:
following an appropriations lapse in accordance with the express requirements of another federal statute.

[00:02:02] Speaker 08:
The Anti-Deficiency Act has always precluded provision payments during an appropriations lapse.

[00:02:09] Speaker 08:
And in 2019, during the last appropriations lapse, Congress added the explicit requirement that employees who are required to work during an appropriations lapse

[00:02:24] Speaker 08:
quote, shall be paid for such work at the employee's standard rate of pay at the earliest date possible after the appropriations lapse ends, regardless of scheduled pay dates and subject to the enactments of appropriations ending the lapse.

[00:02:41] Speaker 07:
Why shouldn't we presume, though, that when Congress extended the FLSA to federal employees, I think sometimes in the 70s, with full knowledge of

[00:02:51] Speaker 07:
the Anti-Deficiency Act prohibitions, which have been in place for probably 100 years, that they intended to allow for damages if that policy was violated.

[00:03:02] Speaker 08:
In some ways, when I think the question is sort of the reverse, whether there's any reason to think Congress, given that background, would have meant that.

[00:03:15] Speaker 08:
And again, we have an explicit requirement, and this is an implicit requirement.

[00:03:25] Speaker 08:
in any way cast doubt on that.

[00:03:28] Speaker 08:
But it's also, like even at the time that Congress was extending the FLSA, it was 1974, to federal and state governments, even at that time, what the Supreme Court had indicated was that there was going to be a flexibility in the statute.

[00:03:46] Speaker 08:
It had been applied in situations in which there had been a two-year delay, not suggesting that you need a two-year delay.

[00:03:55] Speaker 08:
just pointing out that there had been sort of a position of flexibility.

[00:04:00] Speaker 08:
Congress would have had no reason at that time to think that there was, that if the federal government agencies complied with the specific directive, that at that point they would be

[00:04:16] Speaker 08:
sort of willy-nilly going, violating the law.

[00:04:19] Speaker 08:
I mean, and it would be an odd situation to say that a statute with criminal penalties, which you better not violate, but by doing that, you violated a different statute.

[00:04:33] Speaker 08:
And then again, I'm sorry, Your Honor.

[00:04:34] Speaker 07:
No, I was just going to ask, because I think this is right, but I'm a little unclear what both sides' positions are.

[00:04:39] Speaker 07:
I'll ask your friends about this.

[00:04:41] Speaker 07:
I assume the government's position is that if the FLSA contains the prompt payment requirement as found by the trial court, that you have to be paid on your next regular payday or something like that,

[00:04:55] Speaker 07:
Your view is that that's just not capable of being complied with in the event of a lapse of appropriations because the Anti-Deficiency Act prohibits it.

[00:05:05] Speaker 07:
Is that correct?

[00:05:05] Speaker 07:
Or do you think if we affirm

[00:05:09] Speaker 07:
the trial court and say that despite the ADA, you still are obligated to pay under the FLSA prompt payment, that that would give government agencies permission to actually pay even in the event of an appropriations lapse.

[00:05:26] Speaker 08:
We certainly do not think the second.

[00:05:29] Speaker 07:
I assume that's the case.

[00:05:30] Speaker 07:
So if we affirm the trial court

[00:05:34] Speaker 07:
then what we're essentially going to be saying is that when Congress extended the FLSA with full knowledge of the Anti-Deficiency Act, it intended its subject itself to double damages, liquidated damages, every time there was a lapse in appropriations.

[00:05:51] Speaker 03:
That's absolutely correct.

[00:05:53] Speaker 03:
But that would not be automatic.

[00:05:55] Speaker 03:
It's still at the discretion of a court who will liquidate damages.

[00:05:59] Speaker 08:
That's true, Your Honor.

[00:06:02] Speaker 08:
Again, and we talk about that, of course, also, but the first question is, would Congress have ever meant this to happen?

[00:06:13] Speaker 08:
I don't think anybody really thinks Congress ever meant that, and it's almost impossible to square that with the 2019 legislation.

[00:06:23] Speaker 08:
Remember, it's the entire federal workforce

[00:06:27] Speaker 08:
that doesn't get paid.

[00:06:28] Speaker 08:
I mean, there's like a subset of people who are both covered by the FLSA and are sort of deemed to be, you know, quote, you know, essential workers.

[00:06:38] Speaker 08:
But everybody, including me,

[00:06:40] Speaker 08:
doesn't get paid in that period.

[00:06:44] Speaker 08:
So when Congress tried to provide a level of assurance to all employees, both the persons who did work and the employees who did not, and it said very specifically, when do you get paid?

[00:07:04] Speaker 08:
So we have an absolutely clear

[00:07:07] Speaker 08:
congressional directive saying, this is when you get paid and this is the rate at which you get paid.

[00:07:14] Speaker 08:
And then the assumption has to be that, well, Congress also understood

[00:07:20] Speaker 08:
that the people who performed work are going to get paid double the amount.

[00:07:27] Speaker 08:
Everybody else is just going to get their usual rate.

[00:07:30] Speaker 08:
I don't think that there's really any correct basis for coming to that conclusion.

[00:07:37] Speaker 07:
Let me ask you this, because there's two parts here.

[00:07:41] Speaker 07:
Even if the damages are discretionary, the violation would be automatic.

[00:07:46] Speaker 07:
Right, because if the government can't pay because of the Anti-Deficiency Act, they're violating under the trial court's understanding of the FLSA.

[00:07:55] Speaker 07:
I know what prompt payment means is another issue.

[00:07:57] Speaker 07:
I'm just assuming that the trial court's right here.

[00:07:59] Speaker 07:
That's right.

[00:08:00] Speaker 07:
The violation would be automatic.

[00:08:01] Speaker 07:
So we would at least be assuming Congress intended for an automatic FLSA violation when it extended it.

[00:08:08] Speaker 07:
And your only defense

[00:08:10] Speaker 07:
for liquidated damages under the subjective and objective prongs is the Anti-Deficiency Act itself, right?

[00:08:16] Speaker 07:
You don't have any other, well, we could have done this to pay them, we could have done this to pay them, we took steps to figure it out.

[00:08:23] Speaker 07:
We know what the Anti-Deficiency Act says.

[00:08:25] Speaker 07:
We've known what it said for over 100 years.

[00:08:29] Speaker 07:
The only argument you're ever going to put forth for good faith is the Anti-Deficiency Act itself.

[00:08:34] Speaker 08:
That's correct.

[00:08:34] Speaker 07:
So if that's the violation, then relying on that seems questionable as to whether it's good faith.

[00:08:42] Speaker 07:
I mean, obviously... Or it's just a big circular argument, is it's a violation, but it's also automatically good faith as a matter of law.

[00:08:51] Speaker 08:
I think that that's right, and I think it goes to underscore

[00:08:59] Speaker 08:
violation in the first place.

[00:09:01] Speaker 07:
Can I just ask you this?

[00:09:02] Speaker 07:
Because I looked and I didn't see anything.

[00:09:04] Speaker 07:
There are tons of OLC opinions and GAO opinions about the Anti-Deficiency Act.

[00:09:12] Speaker 07:
Has anybody ever asked them about this intersection between the FLSA and the Anti-Deficiency Act, to your knowledge?

[00:09:19] Speaker 08:
I don't know that question.

[00:09:21] Speaker 08:
I know

[00:09:22] Speaker 08:
that in past like shutdowns, the attorney general's office has sort of

[00:09:37] Speaker 08:
Efficiency Act and concluded there was not So I mean and again nobody I don't understand anybody and I don't think that the court of federal claims thought that Agencies could have paid.

[00:09:51] Speaker 07:
Oh, no, I don't think that I mean my reading of all the OLC opinions is is that they're consistently you cannot pay these people even if they're emergency workers and have to work I just wondered if there was anything affirmatively saying that

[00:10:06] Speaker 07:
That's true, even despite the FLSA prompt payment requirement.

[00:10:11] Speaker 08:
I'm not aware of any, and I personally didn't try to research that, but I know other people.

[00:10:16] Speaker 03:
So just to be clear, you're not arguing that the FLSA was not violated.

[00:10:27] Speaker 03:
You can see that there's been a violation of the FSLA here.

[00:10:31] Speaker 08:
No, Your Honor, we're not conceding that because while the general practice is certainly, and this is the practice that the government always adheres to normally, is to make payments on the usual payday.

[00:10:44] Speaker 08:
And I think that the Second Circuit's decision that we discussed in our briefs in the case of Rogers.

[00:10:52] Speaker 03:
But that didn't happen here.

[00:10:53] Speaker 03:
The employees were not paid on their payday.

[00:10:57] Speaker 08:
That's correct.

[00:10:58] Speaker 03:
But again, isn't that a violation right there?

[00:11:01] Speaker 08:
No, we don't think so, your honor, because the Supreme Court has also said that going back to like its first cases, it's like, it says, look, like if you had trouble, right, just, you know, for one reason or another in calculating it, like, okay,

[00:11:18] Speaker 08:
You still have to try to do that promptly.

[00:11:22] Speaker 08:
You're not off the hook.

[00:11:23] Speaker 08:
You can't say, well, I didn't make payments because it was hard.

[00:11:26] Speaker 08:
You've got to do stuff.

[00:11:28] Speaker 08:
But the court also said, but, you know, like, you know, and I quote it from this, like the FLSA does not require the impossible.

[00:11:36] Speaker 08:
And that's sort of a general precept.

[00:11:41] Speaker 08:
And when you bring it back to the specific context of two federal statutes, so again, what is it that Congress believed it was doing when it extended the FLSA?

[00:11:56] Speaker 08:
Clearly, it made the statute's requirements generally applicable.

[00:12:01] Speaker 08:
The federal government adheres to those requirements.

[00:12:04] Speaker 08:
We're not questioning their importance.

[00:12:06] Speaker 08:
There's a very narrow, specific question here about what happens in the event of an appropriations lapse, which is governed very specifically.

[00:12:19] Speaker 08:
It always has been.

[00:12:20] Speaker 08:
And now, on top of everything,

[00:12:22] Speaker 08:
we have Congress saying, this is when you make the payment.

[00:12:26] Speaker 08:
So one would have to conclude that Congress says, this is when you make the payment, parentheses.

[00:12:32] Speaker 08:
We know that that, of course, is going to be violating another federal statute.

[00:12:36] Speaker 08:
We don't think that there's any hint of that anywhere.

[00:12:41] Speaker 07:
So in your view, do you think there's some kind of impossibility doctrine or something like that for the prompt payment gloss on the FLSA?

[00:12:50] Speaker 08:
Yes and the Supreme Court going as I said the Supreme Court said that back in the 40s.

[00:12:56] Speaker 07:
Right so in that instance it's not that the violation is excused it's that there's no violation.

[00:13:01] Speaker 08:
That's right and whatever the bounds of like the impossibility requirement here you have the additional point that what we're looking at is

[00:13:11] Speaker 08:
like another federal statute.

[00:13:13] Speaker 08:
It's not just that it's some sort of impossible reason.

[00:13:17] Speaker 07:
It's not that the HR manager was out sick that week and didn't get the payroll done.

[00:13:21] Speaker 07:
That's right.

[00:13:22] Speaker 07:
It's not that people didn't sign the time cards.

[00:13:24] Speaker 07:
In this case, in fact, it's about as impossible as you can get because it's barred by a statute that has criminal penalties.

[00:13:30] Speaker 03:
Right.

[00:13:31] Speaker 03:
Why wouldn't we say that Congress recognized even that instance?

[00:13:35] Speaker 03:
That there'll be situations where there's a lapse in appropriations, and a certain period of time may go back.

[00:13:42] Speaker 03:
But then it recognizes, as the Supreme Court also recognized in the Brooklyn case, that time here is important too.

[00:13:51] Speaker 03:
And it's not enough for an employee to just to get paid in time.

[00:13:55] Speaker 03:
But if time lapses and they don't get paid in time, then they should get paid a little bit more in order to account for that lapse.

[00:14:05] Speaker 08:
I mean, there are a couple of things.

[00:14:11] Speaker 08:
No way most of that federal workforce, and this imposes, and we're not suggesting that this doesn't impose hardships on people, but imposes hardships on everybody, whether they're working or not.

[00:14:23] Speaker 08:
This is the issue that Congress was trying to get at.

[00:14:29] Speaker 03:
But obviously some people are not working, then they don't get paid.

[00:14:34] Speaker 03:
It's the people that have to show up to work or that are working that we're dealing with here.

[00:14:40] Speaker 03:
in this case.

[00:14:41] Speaker 08:
Right.

[00:14:41] Speaker 08:
But if we go back again to what would, like, we were talking about explicit statements and requirements in a statute, as opposed to a implicit requirement that has been understood to have great flexibility in it.

[00:14:57] Speaker 08:
And that really called the court's attention to Judge Calabresi's decision.

[00:15:02] Speaker 03:
Well, before we go, though, I, so yes, I agree with you.

[00:15:06] Speaker 03:
I just don't see in the statute this impossibility

[00:15:09] Speaker 03:
claws that you're hanging your head on.

[00:15:13] Speaker 08:
Well, we're not hanging our head on impossibility.

[00:15:17] Speaker 08:
alone, we're hanging our hat on the importance of reading these two federal statutes together in order to discern whether Congress, in these circumstances, exposed the federal government to double payments.

[00:15:33] Speaker 03:
And remember, this is... I think what you're saying, though, is that any time that there's a lapse of appropriations,

[00:15:41] Speaker 03:
that this clause of the FLSA does not come into play, because it's impossible for the government to have complied with the law.

[00:15:51] Speaker 08:
And it's not just that it's impossible for some.

[00:15:54] Speaker 08:
I mean, that's correct.

[00:15:55] Speaker 08:
But it's also important.

[00:15:56] Speaker 08:
Show me where that impossible clause is in the statute.

[00:16:00] Speaker 08:
There is no impossible clause.

[00:16:02] Speaker 07:
There's also not a prompt payment clause either.

[00:16:06] Speaker 07:
These are both court glosses on the statutory text.

[00:16:09] Speaker 08:
That's exactly right, Your Honor.

[00:16:11] Speaker 02:
And with respect to impossibility, isn't there also the opportunity on the government's part to seek a special appropriation?

[00:16:21] Speaker 08:
I mean, yeah.

[00:16:22] Speaker 08:
I mean, the government can

[00:16:25] Speaker 02:
But it's not necessarily impossible to pay these employees in a timely manner.

[00:16:31] Speaker 02:
An effort could be made to obtain a special appropriation to cover that.

[00:16:38] Speaker 08:
I mean, Your Honor, a government shutdown to suggest that you have a deadlock and the idea that in this deadlock, there was going to be an appropriation to pay people.

[00:16:51] Speaker 08:
The whole point of the lapse is that the government cans money and that affects the public and employees in all sorts of ways, puts enormous political pressure on the political branches to resolve their conflict.

[00:17:06] Speaker 07:
If they could get a special appropriations, they would just get a regular appropriation.

[00:17:10] Speaker 08:
Well, that's right, Your Honor.

[00:17:11] Speaker 08:
If the question was, can I pay employees, and all you needed to do was to say, how about exempting from the general appropriations lapse?

[00:17:20] Speaker 08:
Why don't you say we can, why don't you appropriate money?

[00:17:24] Speaker 08:
And the whole point is that they've got big appropriations bills covering all these different agencies that are sitting there.

[00:17:30] Speaker 08:
So I don't think that's a realistic sort of scenario.

[00:17:34] Speaker 02:
Not even for the

[00:17:36] Speaker 02:
the essential employees only.

[00:17:39] Speaker 02:
There's not an appropriation across the board.

[00:17:43] Speaker 02:
I certainly agree with you.

[00:17:45] Speaker 02:
That's a practical impossibility.

[00:17:50] Speaker 02:
But an appropriation for those essential workers that were required to work.

[00:17:55] Speaker 08:
Your Honor, the circumstances of the shutdowns, I think,

[00:18:02] Speaker 08:
I mean, first of all, I don't think that this is essential to the statutory interpretation question.

[00:18:07] Speaker 08:
But I also think that the circumstances of the government shutdowns have been such that the idea of Congress appropriating money on an agency-by-agency basis, which is how these things are usually done.

[00:18:25] Speaker 03:
Didn't Congress recognize that when you passed us these statutes that said, we recognize that in our own folly,

[00:18:32] Speaker 03:
us, Congress, there'll be times where we're going to shut down the government for whatever reason.

[00:18:38] Speaker 03:
And then what?

[00:18:39] Speaker 03:
It goes on and says, and if that happens and the employees don't get paid on time and that's okay?

[00:18:47] Speaker 08:
Basically, I mean, okay, no.

[00:18:50] Speaker 08:
Like does it subject the government to sort of liquidated damages when there's a shutdown and a shutdown of whatever length?

[00:18:59] Speaker 08:
I mean, you know, the theory here is not dependent.

[00:19:02] Speaker 08:
on sort of like longevity.

[00:19:05] Speaker 08:
And I think the answer to that is no, Congress didn't do that.

[00:19:08] Speaker 08:
Congress never thought it was doing that.

[00:19:11] Speaker 08:
And it's sort of a, look, it's a theory that sort of like finds no basis in what Congress has said.

[00:19:21] Speaker 08:
We have explicit limitations, explicit affirmative requirements.

[00:19:27] Speaker 03:
You're into your rebuttal.

[00:19:29] Speaker 03:
We're going to restore your rebuttal time to the full five minutes.

[00:19:32] Speaker 08:
Thank you so much.

[00:19:34] Speaker 03:
Let's hear Mr. Dan.

[00:19:37] Speaker 08:
Thank you.

[00:19:39] Speaker 05:
Good morning.

[00:19:40] Speaker 05:
I'm here on behalf of the plaintiffs in the Avalos case as well as the Abrantes case.

[00:19:45] Speaker 05:
I'd like to use my time

[00:19:47] Speaker 05:
to discuss the Avalos case.

[00:19:49] Speaker 05:
Ms.

[00:19:49] Speaker 05:
Barakowicz will address the Martin case.

[00:19:51] Speaker 07:
Can I just ask you this?

[00:19:53] Speaker 07:
Do you agree that there's no legal way to pay these people during elapsed appropriations?

[00:20:02] Speaker 07:
Yes, but... So if that's the case, then the crux of your argument is when the FLSA was extended to federal employees by Congress in the 70s,

[00:20:14] Speaker 07:
with a hundred years of the anti-deficiency act in existence.

[00:20:18] Speaker 07:
They intended to subject themselves to the possibility of liquidated damages when they themselves couldn't agree on an appropriations bill.

[00:20:26] Speaker 05:
I think that's right, and I want to be clear.

[00:20:29] Speaker 05:
What's impossible is once a shutdown begins, obviously, and there's not an appropriation, then no government agent can process the payments.

[00:20:37] Speaker 05:
They can't be paid.

[00:20:38] Speaker 05:
Right.

[00:20:38] Speaker 05:
That is true.

[00:20:41] Speaker 07:
Do you think that that's a logical

[00:20:44] Speaker 07:
inference that Congress intended every time it goes into a shutdown, which occurs frequently and it has occurred.

[00:20:51] Speaker 07:
I mean, they're horrible.

[00:20:52] Speaker 07:
I hate them.

[00:20:53] Speaker 07:
I mean, I've suffered through some of them myself and didn't get paid and had to work.

[00:20:57] Speaker 07:
But do you think that as a logical matter, when Congress extended the FLSA, knowing about the Anti-Deficiency Act, it said, well, despite the Anti-Deficiency Act knowing this, and we're going in a shutdown for various political reasons or sometimes debt reasons, we're still going to allow employees to seek liquidity damages as a matter of course?

[00:21:18] Speaker 05:
The short answer

[00:21:20] Speaker 05:
is yes, but the longer answer is that... There's nothing in the legislative history or anything suggesting that, right?

[00:21:27] Speaker 05:
The longer answer is that, as Your Honor has acknowledged, that Anti-Deficiency Act case law was crystal clear, as was the pre-1974 prompt payment by payday case law and administrative regulations, an unbroken line of cases.

[00:21:46] Speaker 05:
And I think the lesson of the Supreme Court's recent Bostock case is that if the statute's text compels a certain result, the fact that Congress may not have contemplated the particular fact pattern should not allow the court to impose a policy view on Congress.

[00:22:02] Speaker 07:
This isn't a policy view, though.

[00:22:04] Speaker 07:
This is the strictures of the Anti-Deficiency Act.

[00:22:07] Speaker 07:
So they're automatically rendering something a violation per se.

[00:22:12] Speaker 05:
But the policy, this is the critical point here, I think.

[00:22:14] Speaker 05:
I think this is where the rubber meets the rope.

[00:22:17] Speaker 05:
The policy of the Anti-Deficiency Act has never been to cancel or even modify.

[00:22:23] Speaker 07:
We're not talking about canceling the obligation.

[00:22:26] Speaker 07:
They get paid eventually.

[00:22:27] Speaker 07:
We're talking about whether they are also still reinforcing the prompt payment gloss on the statutory text in the same way it's applied

[00:22:37] Speaker 07:
in regular circumstances or whether the Anti-Deficiency Act provides a different gloss in the case of this shutdown.

[00:22:46] Speaker 05:
So I think the right way to analyze this is if you start with the Anti-Deficiency Act... Why do you start with the Anti-Deficiency Act?

[00:22:51] Speaker 07:
Sorry, go ahead.

[00:22:52] Speaker 05:
This is the government's... You start with the Anti-Deficiency Act.

[00:22:54] Speaker 05:
I'll tell you why I think you should start with the Anti-Deficiency Act.

[00:22:56] Speaker 07:
No, I agree.

[00:22:57] Speaker 07:
I thought you were going to say start with that full essay.

[00:23:00] Speaker 05:
No, no, I'm sorry.

[00:23:00] Speaker 05:
If you start with the Anti-Deficiency Act, once it's crystal clear now from the case law, this is where the case law could be clearer.

[00:23:08] Speaker 05:
It does not and should not be read to give the federal government a get out of jail free card for underlying statutory and contractual obligations of any kind.

[00:23:23] Speaker 07:
Right.

[00:23:23] Speaker 07:
So when an obligation has already been committed to and agreed to under some kind of statute, Congress cannot then say, in an appropriations writer,

[00:23:35] Speaker 07:
that you can't use appropriate funds to pay for that.

[00:23:38] Speaker 07:
That's main community health.

[00:23:40] Speaker 07:
That's all kinds of things.

[00:23:41] Speaker 07:
But that's not the situation we have here.

[00:23:43] Speaker 07:
They have not yet, at the appropriations lapse, these people have not yet accrued an obligation to be paid.

[00:23:51] Speaker 07:
They're being working during the appropriations lapse.

[00:23:57] Speaker 07:
And there's no rider saying that that obligation is being erased.

[00:24:02] Speaker 07:
It's just that the prompt payment portion is being

[00:24:05] Speaker 07:
interpret it differently.

[00:24:06] Speaker 05:
No, by working.

[00:24:09] Speaker 07:
By working during... But the government is not arguing that that debt is canceled, or that they can't be paid for that obligation.

[00:24:16] Speaker 07:
The government will concede to you, I'm sure, well maybe not, but I would assume they would concede that the underlying pay statutes, not the FLSA, require these people to be paid for work.

[00:24:27] Speaker 05:
There's no principle distinction for purposes of the Antideficiency Act and Appropriations Case Law.

[00:24:35] Speaker 05:
between the right to be paid the amount of their base wage and the right to be paid under the FLSA.

[00:24:44] Speaker 05:
Those are both statutory obligations that attach to work performed.

[00:24:49] Speaker 05:
So I don't hear the government making the argument you're articulating, and I think they don't make it for good reason, which is that it proves too much.

[00:24:56] Speaker 05:
It would suggest that no one had to be paid in any of the prior shutdowns.

[00:25:01] Speaker 07:
And by the way, I should say... I think that probably is an argument.

[00:25:03] Speaker 07:
If they didn't work, that they may not have to get paid.

[00:25:06] Speaker 05:
No, no, no.

[00:25:06] Speaker 05:
The people who worked in every shutdown.

[00:25:08] Speaker 07:
That's based on the underlying pay statute.

[00:25:11] Speaker 05:
But a PACE statute no different from the FLSA in principle for purposes of anti-deficiency act analysis.

[00:25:18] Speaker 07:
But we're not, again, we're not talking about the underlying obligation.

[00:25:21] Speaker 07:
We're talking about whether there's a violation of the prompt payment portion and what it means to be prompt payment.

[00:25:30] Speaker 07:
Sure.

[00:25:30] Speaker 07:
So those cases you cite me about Maine community and all those things, I don't think they say anything about how you read the court interpreted prompt payment portion.

[00:25:40] Speaker 07:
which if you're talking those cases are all about the underlying obligation.

[00:25:43] Speaker 05:
I think what you first need to do is figure out what the underlying obligation is.

[00:25:47] Speaker 07:
In Maine community health, the underlying obligation is you get paid in a timely manner.

[00:25:54] Speaker 07:
But what a timely manner is

[00:25:56] Speaker 07:
in the context of the government shutdown might be different than in the regular course of business let me suggest this is a no right you're saying congress automatically in this intended for there to be a f l s a violation in the event of a lapse of appropriations yet i would say that that's that i mean that's the logic of your argument in nineteen seventy four there have been any shutdowns can i get a yes or no on that if they extended f l s a under your interpretation of the prop payment uh... tax or not tax the prop payment interpretation

[00:26:26] Speaker 07:
that the courts have put on it, despite some of the other court cases that seem to go the other way, then Congress intended for there to be an FLSA violation every time there was a lapse in appropriations.

[00:26:39] Speaker 05:
Congress wrote a statute that would... No, no, no.

[00:26:43] Speaker 07:
Congress intended.

[00:26:44] Speaker 07:
This is what we're looking at.

[00:26:45] Speaker 07:
We're looking at when Congress writes a statute, we're looking at what their intent was.

[00:26:49] Speaker 05:
Yeah, and I think Congress... Let me try it this way.

[00:26:53] Speaker 05:
The answer is yes, that Congress intended that every bit as much as Congress intended in the Affordable Care Act to pay insurers

[00:27:02] Speaker 05:
And I would submit this case is stronger than Maine Community Health for this reason.

[00:27:07] Speaker 05:
In Maine Community Health, it could not have been clearer from the subsequent appropriations that that Congress didn't want those payments made.

[00:27:15] Speaker 05:
There's nothing like that here.

[00:27:18] Speaker 05:
The question, I think the question is, does the FLSA create an obligation by an employer?

[00:27:25] Speaker 05:
Let's take the government out of it for a second, then I'll bring them back in.

[00:27:28] Speaker 05:
If this is a private employer, does the FLSA say to that private employer, hey,

[00:27:35] Speaker 07:
If you're facing budgetary difficulties... I don't think this analogy is going to help me because the government is just different, right?

[00:27:43] Speaker 07:
The government has principles of sovereign immunity.

[00:27:45] Speaker 07:
It has the Anti-Deficiency Act.

[00:27:48] Speaker 07:
You can cite those private cases.

[00:27:49] Speaker 07:
You can even cite that Brooklyn case, which I think involves state employees all you want.

[00:27:54] Speaker 07:
The federal government is different, and this is interpreting two conflicting federal statutes.

[00:27:59] Speaker 07:
It's not interpreting one federal statute that overrides everything else.

[00:28:03] Speaker 05:
Right.

[00:28:04] Speaker 05:
And the reason I bring up the private example, I won't dwell on it, is that if the answer to that is yes, then the only reason the answer is different here is because of the Anti-Deficiency Act and nothing else.

[00:28:16] Speaker 05:
So now let's look at the Anti-Deficiency Act case law.

[00:28:21] Speaker 05:
That case law is prison.

[00:28:22] Speaker 03:
Let me ask you a threshold question then.

[00:28:25] Speaker 03:
Is there anything in the Anti-Deficiency Act that prohibits liquidated damages?

[00:28:30] Speaker 05:
No.

[00:28:32] Speaker 05:
There is nothing in the anti-deficiency act that would prohibit the payment of liquidated damages as soon as there are appropriations available, which happens when shutdowns end.

[00:28:42] Speaker 05:
So the way that you can make the policies of both statutes work, this case shouldn't be too complicated.

[00:28:48] Speaker 05:
It's an interesting case, but it shouldn't be too complicated because you can make the underlying policies of both statutes work by acknowledging that the government official or agent who is regulated by the ADA

[00:29:02] Speaker 05:
can't make that payment because he'd be violating the statute.

[00:29:07] Speaker 05:
But those same ADA cases, and this is another important concept in them that I think is crucial, those cases say that the ADA only regulates the agents of the United States and not the United States itself.

[00:29:19] Speaker 05:
That's why the United States' obligations survive.

[00:29:23] Speaker 07:
uh... even when there's no appropriations only if it's in the congress intended that though because the other way to make this make sense is to recognize that in the context of uh... uh... a lapse in appropriations that congress considers timely payment to be when the appropriations are restored in fact congress made that pretty clear when it amended the a d a in in twenty eighteen or twenty nineteen by specifically directing but i disagree i think in the depth of statute simply

[00:29:53] Speaker 07:
addresses of something it's it's it's an amendment to the a d itself it's not an amendment to any of that to that to the f l s a and um... yeah don't you think it's pretty telling that when congress amends the prohibition statute that it specifically instructs when it considers payment should be made

[00:30:12] Speaker 05:
And what's interesting is it makes perfect sense.

[00:30:18] Speaker 05:
It says, pay them as early as possible.

[00:30:20] Speaker 05:
It doesn't reference the FLSA at all.

[00:30:23] Speaker 05:
And this is crucial.

[00:30:25] Speaker 07:
Is that because I think they understand that the FLSA is not implicated in these cases?

[00:30:30] Speaker 05:
No, I don't think it's clear.

[00:30:31] Speaker 07:
This is a hard case, because obviously, if we actually asked

[00:30:36] Speaker 07:
the members of Congress, nobody is going to say that they understood this to be a question.

[00:30:41] Speaker 07:
So what we have to do is look at cannons of construction and see which one weighs in favor one way or another.

[00:30:48] Speaker 07:
And I also think we have two different competing cannons.

[00:30:51] Speaker 07:
And so it's very difficult to get at what you think Congress would have intended.

[00:30:56] Speaker 07:
But it seems unlikely to me that Congress, knowing why it uses government shutdowns and how they happen,

[00:31:05] Speaker 07:
that it would automatically intended for an FLSA violation to occur every time one happens.

[00:31:11] Speaker 07:
I understand you have the competing argument that your side has, which is, yes, they did, and they want to pay people that work during that damages.

[00:31:20] Speaker 05:
Yeah, and that, by the way, is, let me say, this is an important point about GEPTA.

[00:31:26] Speaker 05:
There is no indication from the legislative history, and it's sparse.

[00:31:29] Speaker 05:
But it's a number of floor speeches where member of Congress after member of Congress gets up and says, the least we can do for people is to get that checked to them as soon as the shutdown ends and not later.

[00:31:44] Speaker 05:
That, I would submit, is perfectly parallel to the lengths in case.

[00:31:47] Speaker 05:
It's an old case, but it's then cited and developed further by the Supreme Court in Maine Community Health.

[00:31:54] Speaker 05:
And in that case,

[00:31:55] Speaker 05:
The court held that when the government owes... I'm talking about Maine Community Health read together with Langston, which it cites and then explains.

[00:32:05] Speaker 05:
In Maine Community Health, the government argued, because that subsequent appropriation showed that Congress

[00:32:13] Speaker 05:
didn't want those insurers to be paid, that should be an excuse.

[00:32:17] Speaker 05:
And in Langston, Congress appropriated less than the amount of the person's original statutory salary.

[00:32:24] Speaker 05:
And the government argued in Langston, Congress said, pay him $5,000.

[00:32:29] Speaker 05:
What more is there to the case?

[00:32:30] Speaker 05:
That's what he's doing.

[00:32:32] Speaker 05:
That's what Congress said.

[00:32:33] Speaker 05:
That's Congress's intent.

[00:32:35] Speaker 05:
And the Supreme Court in Langston and Maine Community Health says, no, that's not how you look at it.

[00:32:39] Speaker 05:
Where there's an underlying substantive statute that confers rights on third parties, the failure of the government to appropriate the full amount

[00:32:47] Speaker 05:
is on the United States government eventually.

[00:32:50] Speaker 05:
The agents don't have to pay it during that lapse.

[00:32:53] Speaker 05:
But when that lapse ends, the United States, as the oblige or must make those payments.

[00:32:59] Speaker 03:
Okay.

[00:32:59] Speaker 03:
You're out of time.

[00:33:01] Speaker 03:
Okay.

[00:33:02] Speaker 03:
I call you if you have any questions.

[00:33:04] Speaker 05:
Appreciate it.

[00:33:04] Speaker 03:
Thank you, Your Honor.

[00:33:06] Speaker 03:
Councilor Brockwood.

[00:33:09] Speaker 03:
Yes, I'll wait for you.

[00:33:13] Speaker 03:
Your time allocation is six minutes, and you reserve two for your cross appeal, correct?

[00:33:17] Speaker 00:
Yes, your honor.

[00:33:18] Speaker 03:
OK, you may begin.

[00:33:20] Speaker 00:
May it please the court, I'm here on behalf of plaintiffs in Martin and Mars.

[00:33:25] Speaker 00:
I'd like to start by addressing the notion that this was an impossible situation.

[00:33:29] Speaker 07:
Are you here for the Border Patrol people?

[00:33:31] Speaker 00:
No, sir.

[00:33:32] Speaker 07:
Oh, that was them.

[00:33:33] Speaker 07:
OK, so I lost my questions on that.

[00:33:37] Speaker 07:
What are you here for that's different from what we just heard?

[00:33:40] Speaker 00:
Sure.

[00:33:40] Speaker 00:
I represent Plainus and Martin and Mars.

[00:33:43] Speaker 07:
The names don't help me.

[00:33:44] Speaker 07:
Give me the factual scenarios.

[00:33:46] Speaker 00:
Those are the cases arising out of the 2013 government shutdown.

[00:33:50] Speaker 00:
So in that case, the other cases are here on an interlocutory appeal in response to the government's motion to dismiss.

[00:33:56] Speaker 00:
In Martin, the court ruled both that the government violated the FLSA and its failure to do so was not in good faith.

[00:34:03] Speaker 00:
and then also address the willfulness issue in Mars.

[00:34:06] Speaker 07:
Okay, so we've already got a stipulated damages in your case because it went to final judgment?

[00:34:12] Speaker 00:
Correct.

[00:34:13] Speaker 07:
So the Anti-Deficiency Act arguments are raising are applicable, but you have a separate willfulness argument because some of your people missed the statute of limitations?

[00:34:25] Speaker 00:
So I'd like to address the impossibility discussion that you were having earlier this morning.

[00:34:32] Speaker 00:
I think it is incredibly important to understand that this was not a situation beyond the government's control.

[00:34:37] Speaker 00:
The government shutdown is something that the government itself caused to happen.

[00:34:42] Speaker 03:
And there are steps that the government... We can't get into those facts or those circumstances, right?

[00:34:50] Speaker 03:
We're not going to review why the shutdown happened.

[00:34:56] Speaker 03:
Correct.

[00:34:57] Speaker 03:
I mean, we're only reviewing here that the shutdown happened and we go forward.

[00:35:00] Speaker 00:
Yes, correct.

[00:35:01] Speaker 00:
But the government would have you believe that this was a situation beyond its control, that it was impossible, that its hands were tied because of the Anti-Deficiency Act.

[00:35:09] Speaker 00:
And that argument just completely ignores, over a century of precedent, that the ADA does not erase the government's obligations, such as those that were created when they... I don't think the government's arguing that it erases the obligation to pay these people.

[00:35:23] Speaker 07:
It's arguing that

[00:35:25] Speaker 07:
When the shutdown ends, its immediate compliance with the Anti-Deficiency Act and its requirement to pay as soon as it ends satisfies the prompt payment obligation of the FLSA.

[00:35:35] Speaker 07:
So these erasure of obligation cases don't really address what the government's arguing.

[00:35:41] Speaker 07:
They're not arguing that Congress can come in after a shutdown and say, oh, well, because we saved x amount of dollars during the shutdown, nobody gets paid even if they worked.

[00:35:53] Speaker 07:
Those cases would apply there, and they would lose on that.

[00:35:57] Speaker 07:
The question is, does the compliance with the Anti-Deficiency Act's requirements to pay as soon as the shutdown ends comply with the prom payment tax, not tax, loss on the FLSA?

[00:36:10] Speaker 00:
The two statutes can be read together.

[00:36:12] Speaker 07:
It can be read together both ways, right?

[00:36:16] Speaker 00:
In 1974, when the government extended the protections of the Appalachian federal workforce.

[00:36:22] Speaker 07:
You know you're going over the same ground we just went over with your opponent.

[00:36:26] Speaker 07:
If you have a separate argument of willfulness that you want to preserve and you're less than five minutes left, you might want to make that.

[00:36:32] Speaker 07:
I understand those arguments.

[00:36:33] Speaker 07:
We just went through them.

[00:36:35] Speaker 07:
Your argument is a plausible reading of how the two statutes work together.

[00:36:39] Speaker 07:
The government's argument, I think, is a plausible reading, too.

[00:36:43] Speaker 00:
Yes, I would like to address the good faith and willfulness inquiry.

[00:36:46] Speaker 00:
I would just like to leave you with the point that when Congress extended the protections of the FLSA in 1974, it also extended the liquidated damages provision to the federal government just as it applies as does any other employer in the country.

[00:37:00] Speaker 07:
I'm here the United States cannot overcome the presumption in favor of liquidated damages because it neither acted subjectively in good faith by making an adequate inquiry or objectively and reasonably adequate I mean it we all agree that the government could not have paid these people during the lapse in appropriations so what kind of inquiry would you have them make to comply with the subjective good faith thing I already knew they couldn't pay them so do you want them to submit some kind of

[00:37:28] Speaker 07:
What inquiry to whom and what does it ask that would fulfill that requirement?

[00:37:34] Speaker 00:
Yes.

[00:37:34] Speaker 00:
As a preliminary matter, I disagree with the suggestion of the government.

[00:37:41] Speaker 00:
The FLSA is a strict liability statute.

[00:37:43] Speaker 00:
And it's violating the FLSA.

[00:37:44] Speaker 00:
No, no, no, no.

[00:37:45] Speaker 07:
But we're not talking about that anymore.

[00:37:46] Speaker 07:
We're talking about the liquidated damages and the subjective and objective good faith provisions.

[00:37:51] Speaker 07:
And the trial court found that they didn't show subjective good faith.

[00:37:55] Speaker 07:
What do you foresee that they would have done

[00:37:58] Speaker 07:
to do that would have been found to be subjective good faith.

[00:38:03] Speaker 00:
So here the government should have conducted an inquiry and it should have taken three things into consideration.

[00:38:07] Speaker 00:
It should have taken into consideration the over century precedent interpreting the ADA is not canceling the government's debts.

[00:38:14] Speaker 07:
No, no, no, no, but not to comply, their inquiry is how do they comply with the prompt payment provision because that's the violation, right?

[00:38:24] Speaker 07:
Who would they have asked to say how do we comply with the prompt payment

[00:38:27] Speaker 07:
provision in light of the ADA.

[00:38:29] Speaker 07:
And the answer is going to be, in every single case, I think, unless you're arguing something different than your friend on the same side did, the government could not comply with that during the shutdown.

[00:38:40] Speaker 00:
The government had options.

[00:38:41] Speaker 00:
Had it conducted that inquiry and looked to its own Department of Justice, it could have either concluded that it was in violation of the FLSA or it was not in violation of the FLSA.

[00:38:52] Speaker 07:
If the government... Who cares if it considers it's in violation or not?

[00:38:56] Speaker 07:
Is it complying with it?

[00:38:59] Speaker 07:
And they know they can't do anything about it.

[00:39:03] Speaker 07:
So does it matter if they undertake an investigation that says, look, if somebody says, no, it's good faith to comply with the Anti-Deficiency Act?

[00:39:15] Speaker 07:
I mean, they have to comply with the Anti-Deficiency Act.

[00:39:18] Speaker 07:
There's no way that they can pay these people.

[00:39:21] Speaker 07:
That's the inquiry they have to take to show that they're complying with it is, have they undertaken steps to comply with it?

[00:39:29] Speaker 07:
Well, they can't comply with it.

[00:39:32] Speaker 07:
You agree that they can't comply with it, right?

[00:39:34] Speaker 00:
I agree that during the lapse in appropriations, individual government officials were precluded under the ADA from making wage payments to the employers.

[00:39:43] Speaker 07:
And those are the people that we look to to see whether they have subjective good faith.

[00:39:47] Speaker 00:
The FLSA was extended to the government as an entity.

[00:39:50] Speaker 00:
The United States government as an entity is defined as the employer under the FLSA.

[00:39:55] Speaker 07:
And here, in the 2013 cases, the government- Yeah, but in the FLSA cases, when you look to who had the subjective and good faith, you're looking to the intent of the government officials making the decisions about pay.

[00:40:08] Speaker 07:
I mean, that's the kind of evidence you put on in your run-of-the-mill cases.

[00:40:11] Speaker 07:
Did this person make this inquiry about whether overtime was due or whether they're getting the proper

[00:40:17] Speaker 07:
extra pay rates or stuff.

[00:40:19] Speaker 07:
You have to look to somebody.

[00:40:20] Speaker 07:
It's not just the amorphous government out there.

[00:40:22] Speaker 07:
It's who's implementing the pay decisions.

[00:40:24] Speaker 00:
Here the government stipulated that the entirety of the United States government, no one made an inquiry about whether it was in compliance with the EPLSA.

[00:40:33] Speaker 00:
And when you look at the test for whether liquidated damages... What difference would that inquiry have made?

[00:40:39] Speaker 00:
Because the government had options.

[00:40:41] Speaker 00:
Had they consulted with our experts at the Department of Labor and looked at the case law arising out of, for example, the state of California budget impasse, and had they done that equally and can come to the conclusion... Let's assume they did that and the Department of Labor said, you're subject to liquidated data damages.

[00:40:56] Speaker 07:
The response is going to be, okay, but we still can't pay these people.

[00:41:01] Speaker 01:
They had two options.

[00:41:02] Speaker 01:
Is that good faith?

[00:41:04] Speaker 01:
They had two options.

[00:41:05] Speaker 07:
No, no, no.

[00:41:05] Speaker 07:
So you're the one that started with the DOL suggestion.

[00:41:08] Speaker 07:
So let's stay with that.

[00:41:10] Speaker 07:
They go to DOL, and they get an opinion.

[00:41:13] Speaker 07:
I don't know whether DOL opinions are relevant to, frankly, the executive branch anyway, or whether you would go someplace else.

[00:41:19] Speaker 07:
Let's just assume they are.

[00:41:20] Speaker 07:
And DOL says, we've looked at this, and you have to pay these people.

[00:41:24] Speaker 07:
And you're going to violate the FLSA.

[00:41:26] Speaker 07:
And the response is, OK, thank you, but we still can't pay them.

[00:41:31] Speaker 07:
Is that good faith?

[00:41:34] Speaker 00:
I would argue no.

[00:41:35] Speaker 00:
They would be able to meet the subjective element of the test, that they made a good-faith inquiry, but they would not be able to show that they acted with a reasonable belief that they were in compliance with the FLSA.

[00:41:45] Speaker 07:
But have the CLL tool... Again, that's the problem, right?

[00:41:48] Speaker 07:
Whatever inquiry they undertake, in your view, if they comply with the Anti-Deficiency Act, they violate the FLA.

[00:41:55] Speaker 07:
And there's no way out for them under the good-faith problem.

[00:41:59] Speaker 00:
There are steps that the government could have taken.

[00:42:02] Speaker 00:
The executive branch could have asked Congress to pass legislation such as the Pay Our Military Act that was actually passed in 2013 to ensure that military personnel and the civilian federal employees who support them were paid during the budget impasse, or had the Department of Labor and the United States government as an entity determined that it was a violation of the FLSA.

[00:42:25] Speaker 00:
It could have determined that the FLSA requires part of the substantive provisions of the FLSA.

[00:42:31] Speaker 07:
Are you allowed to say that the government could have determined that despite the Anti-Deficiency Act, it was going to pay these people?

[00:42:36] Speaker 00:
Absolutely not, sir.

[00:42:38] Speaker 00:
After the lapse in appropriations ended, the government could have complied with the FLSA by paying the liquidated damages that are required under the Act in this situation because they were not acting in good faith.

[00:42:52] Speaker 00:
And they could not, if the Department of Labor had said to them.

[00:42:54] Speaker 07:
What makes the difference if they pay liquidated damages or not?

[00:42:56] Speaker 07:
That's what they have to pay if they didn't act in good faith.

[00:43:00] Speaker 00:
Well, certainly they would have, one, treated the federal workforce correctly.

[00:43:04] Speaker 00:
There were employees who were severely harmed by the government shutdown.

[00:43:07] Speaker 07:
Don't get me wrong.

[00:43:08] Speaker 07:
I know I'm being somewhat negative, not agreeing with your position.

[00:43:15] Speaker 07:
I was a government employee for nearly 20 years, and I lived through many of these shutdowns.

[00:43:19] Speaker 07:
It is an extreme burden on people who have to come to work and people who don't have to come to work.

[00:43:24] Speaker 07:
I have absolute sympathy for all of your clients.

[00:43:27] Speaker 07:
But the question is, I fail to see how we can think that Congress would have intended to subject itself to liquidated damages every time it had a shutdown.

[00:43:40] Speaker 07:
And there's nothing the government can do absent appropriating funds, which is the whole reason for the shutdown, that there's a dispute about that.

[00:43:48] Speaker 07:
Absent that, in your view, there's no way they could have complied with FLSA.

[00:43:53] Speaker 07:
So it is an automatic FLSA violation and an automatic award of liquidated damages every time the government shuts down to people who worked.

[00:44:03] Speaker 07:
That's the end result of your legal theory, isn't it?

[00:44:06] Speaker 07:
Because it sounded to me like you agreed that there's no steps they could take that would establish good faith if they didn't pay them.

[00:44:13] Speaker 00:
I do agree that it is a, that AFLSA is a strict liability statute and it's a per se violation.

[00:44:19] Speaker 00:
I think that in 2013, there's steps that the government could have taken.

[00:44:23] Speaker 03:
It's strict liability, but it's still up to the discretion of the court, is it not, to award liquidated damages?

[00:44:27] Speaker 00:
It is only up to the discretion of the court to reduce or eliminate liquidated damages if the government can meet its burden with regard to both prongs of the test for liquidated damages, whether it's objectively and objectively active in good faith.

[00:44:42] Speaker 07:
And in your view, compliance with the ADA is legally insufficient as a matter of law, for objective good faith, at least.

[00:44:51] Speaker 00:
Yes.

[00:44:53] Speaker 03:
OK.

[00:44:54] Speaker 03:
You're out of time.

[00:44:55] Speaker 03:
Have you addressed your counterclaim arguments in that period of time?

[00:45:04] Speaker 03:
Yes, sir.

[00:45:05] Speaker 03:
All right.

[00:45:05] Speaker 03:
So let's hear from the other side.

[00:45:10] Speaker 03:
Mr. Stern, you have about five minutes.

[00:45:12] Speaker 08:
Thank you very much, Your Honor.

[00:45:16] Speaker 08:
I'll just try to be brief.

[00:45:19] Speaker 08:
My friend, I began by referring to the commands of the inability of the court to disregard express statutory language.

[00:45:30] Speaker 08:
There is no express statutory language.

[00:45:33] Speaker 07:
What's your best case for the notion that the regular understanding of prompt payment

[00:45:40] Speaker 07:
doesn't always have to be in a regular payday.

[00:45:44] Speaker 07:
There are cases, I know you cited them, I don't recall them, but what's the best case for that?

[00:45:52] Speaker 08:
Well, I think that the, I mean, what I would refer the court to in particular is the Second Circuit's review of the case law in its Rogers case, in which it goes back over both the Supreme Court decisions and other court of appeals decisions, and sort of to make the point that there is no,

[00:46:15] Speaker 08:
This really is the case.

[00:46:16] Speaker 08:
I mean, the Supreme Court had made that clear back in Walling in 1945.

[00:46:21] Speaker 08:
There is no absolute strict liability if you miss a payday.

[00:46:27] Speaker 08:
I mean, again, what the court there

[00:46:30] Speaker 08:
You know, it was sort of a case in which, like, the court ruled, you know, ultimately, you know, for the plaintiffs.

[00:46:35] Speaker 03:
The court did recognize that in the event of a shutdown or something, that the failure to pay the statutory minimum on time was, that that can be the reason for double payments to be made, because of the delay that's caused.

[00:46:52] Speaker 08:
Excuse me, I'm not sure which case.

[00:46:54] Speaker 03:
Listen, Brooklyn.

[00:46:56] Speaker 03:
Brooklyn Savings Bank versus O'Neill.

[00:46:59] Speaker 08:
Well, there we had, first of all, there wasn't a federal LIC statute, and it was a two-year delay.

[00:47:08] Speaker 03:
But they interpret the FLSA in the same context we're looking at.

[00:47:14] Speaker 08:
With respect, Your Honor, it's not the same context.

[00:47:17] Speaker 07:
It's a federal statute and a state statute, not two competing federal statutes.

[00:47:21] Speaker 08:
That's correct, Your Honor, and that makes a big difference in how one would interpret this.

[00:47:27] Speaker 08:
What we know is Congress has

[00:47:32] Speaker 08:
when payments should be made in after a shutdown concludes.

[00:47:38] Speaker 08:
And that is a statement.

[00:47:40] Speaker 08:
And yes, like the legislative history shows that Congress was concerned like about the impact on federal workers, but the legislation like addressed and the statements address all

[00:47:53] Speaker 08:
federal workers.

[00:47:54] Speaker 08:
I mean, it's an enormous workforce.

[00:47:57] Speaker 08:
And again, there's only a subset where both the central and FLSA covered, but the impact is felt by everybody.

[00:48:05] Speaker 08:
And that's what Congress was recognizing.

[00:48:07] Speaker 08:
But it also, to like any doubt, it explicitly said the people who are required to work.

[00:48:14] Speaker 03:
What is it that they

[00:48:16] Speaker 08:
saw congress recognizing the impact on the government or the impact on the work the impact on the workers your honor i mean it everybody you know understands you know including us federal workers that missing a paycheck is no joke and that's you know which and the government

[00:48:36] Speaker 08:
the sort of like pay on regular payday sort of like, you know, in normal circumstances.

[00:48:43] Speaker 08:
It's a narrow question of what happens when the federal government agencies

[00:48:50] Speaker 08:
follow an express congressional directive, make the payment in accordance with that express congressional directive.

[00:48:58] Speaker 08:
And then somebody says, well, that's fine, but it's not consistent with an implicit requirement in another statute.

[00:49:05] Speaker 08:
So notwithstanding statements about paying at the base rate, you have to pay twice.

[00:49:11] Speaker 08:
And also giving federal workers sort of a huge incentive to agree, I'm the one who has to come here because none of us is getting paid, but I'm going to get paid twice at the end of this.

[00:49:21] Speaker 08:
I'm not suggesting any bad motives and that, but Congress is looking at the entire spectrum.

[00:49:27] Speaker 08:
And there's, but the real question is just going back to the very beginning, like end walling, which specifically

[00:49:33] Speaker 08:
specifically said that where there was the question, one of the many questions was a three-year delay.

[00:49:40] Speaker 08:
And one of the many questions had to do with like the ability to calculate.

[00:49:47] Speaker 08:
And the employer says, well, you know, we should be off the hook because of those difficulties.

[00:49:52] Speaker 08:
And the court says, no, like Section 7A requires only that the employees get the required premium as soon as convenient or

[00:50:01] Speaker 08:
practicable under the circumstances.

[00:50:04] Speaker 08:
And the court says specifically that the FLSA does not require the impossible.

[00:50:11] Speaker 08:
And of course, as Your Honor says, there's no impossibility clause.

[00:50:15] Speaker 08:
But the same judge-made doctrine about prompt payment also includes recognition of that kind.

[00:50:23] Speaker 08:
The most important, that's the Supreme Court.

[00:50:25] Speaker 08:
And that was the understanding of the law.

[00:50:28] Speaker 03:
Why would the payment of

[00:50:30] Speaker 03:
of liquid data damages in recognition of the delay that the Supreme Court spoke about in the case that I mentioned to you.

[00:50:44] Speaker 03:
Why would that not be applicable here?

[00:50:49] Speaker 08:
Well, I think for two reasons.

[00:50:54] Speaker 03:
But more important is the fact that it's a federal statute.

[00:50:59] Speaker 03:
We have a lapse.

[00:51:00] Speaker 03:
And now the employee has been made whole.

[00:51:03] Speaker 03:
They received their pay at the time, once Congress was able to pay or appropriate, and then the payments could be made.

[00:51:13] Speaker 03:
And now the employee has been made whole, except for the fact that they have suffered a delay.

[00:51:20] Speaker 03:
And why is it at that point in time

[00:51:25] Speaker 03:
Why is it an impossibility for the employee to get liquidated damages at that time?

[00:51:32] Speaker 08:
Well, the question isn't whether it's impossible to get liquidated damages later.

[00:51:37] Speaker 08:
The question is whether it was impossible to make the payment promptly.

[00:51:41] Speaker 08:
Those are two different inquiries.

[00:51:43] Speaker 08:
So of course, it's possible for the federal government to do things later.

[00:51:47] Speaker 03:
Liquidated damages assumes that there's been a violation.

[00:51:51] Speaker 08:
That's right, but nobody's saying that it's impossible for the government to later make a payment.

[00:51:58] Speaker 03:
There's a shutdown.

[00:51:59] Speaker 03:
There's a violation.

[00:52:00] Speaker 03:
If the employees don't get their paycheck on time, it's a violation, albeit it's impossible for them to have prevented that from happening.

[00:52:12] Speaker 03:
But now I'm talking to a different time period here.

[00:52:15] Speaker 03:
The employee has been receiving their pay.

[00:52:19] Speaker 03:
And they've been made whole in that regard.

[00:52:21] Speaker 03:
Why is it impossible at that point in time for the employee to get paid the liquidated damages in view of a delay?

[00:52:30] Speaker 03:
Not what was actually owed to them.

[00:52:33] Speaker 03:
For the delay that was caused to them.

[00:52:36] Speaker 08:
Right.

[00:52:36] Speaker 08:
I mean, we're not saying that that would be impossible to do.

[00:52:39] Speaker 08:
The question is whether that is in fact.

[00:52:41] Speaker 07:
That's not what you're saying is impossible.

[00:52:43] Speaker 07:
What you're saying is there is no violation for not paying on time.

[00:52:47] Speaker 07:
because they paid as soon as possible.

[00:52:51] Speaker 08:
Exactly.

[00:52:52] Speaker 07:
So there's no violation that would allow for the grant of liquidated damages.

[00:52:56] Speaker 08:
That's right.

[00:52:58] Speaker 07:
We can disagree with that, of course.

[00:52:59] Speaker 08:
Oh, absolutely.

[00:53:00] Speaker 08:
I just want to make sure.

[00:53:03] Speaker 07:
You're not saying the liquidated damages are impossible.

[00:53:06] Speaker 07:
In fact, if we find a violation,

[00:53:08] Speaker 07:
it's likely we're going to award liquidated damages.

[00:53:13] Speaker 03:
Setting aside this date, it's the violation.

[00:53:15] Speaker 03:
This is where I was trying to get to the point to understand whether liquidated damages were impossible.

[00:53:21] Speaker 03:
And so the answer is no.

[00:53:23] Speaker 03:
That's correct.

[00:53:24] Speaker 03:
That's correct.

[00:53:25] Speaker 03:
So there are instances where liquidated damages are appropriate.

[00:53:31] Speaker 03:
Yes.

[00:53:31] Speaker 03:
And there's instances where they're appropriate when there's been a government shutdown.

[00:53:35] Speaker 08:
And not when there's been a federal government shutdown.

[00:53:38] Speaker 03:
I'm not talking about in this particular case.

[00:53:41] Speaker 03:
There are instances where liquidated damages are appropriate where there's been a government shutdown or a lack of appropriation.

[00:53:50] Speaker 08:
Not in the case of the federal government, no.

[00:53:53] Speaker 08:
I want to make that clear.

[00:53:55] Speaker 08:
It would not be the case.

[00:53:58] Speaker 03:
So you're saying there's no scenario that you can think of where liquidated damages would be appropriate.

[00:54:04] Speaker 03:
Well, that scenario includes a shutdown or lack of appropriation.

[00:54:10] Speaker 08:
That's correct, Your Honor.

[00:54:12] Speaker 08:
What the federal government's obligation, and hence, I think, what the prompt payment requirement is.

[00:54:20] Speaker 03:
It's a similar scenario for liquidated damages would be appropriate.

[00:54:24] Speaker 08:
I mean, I can imagine, you know, I don't want to concede anything, but like say we could have the very different case of, I think Judge Hughes was, you know, offering some examples of just, you know, sheer carelessness or, you know, worse yet, some sort of willful design not to make payments on time.

[00:54:45] Speaker 08:
I mean, that's a very different question.

[00:54:47] Speaker 08:
And, you know, but what we have here is when nobody can make the payments, Congress has said, this is when you make the payment.

[00:54:56] Speaker 08:
If we want to look at the specific language, that's the specific language that governs this case.

[00:55:03] Speaker 08:
And to say that the implicit requirement of a prompt payment should be interpreted to say that the federal government pays twice in these circumstances, we think is simply wrong.

[00:55:17] Speaker 03:
OK.

[00:55:18] Speaker 03:
I believe we've had your argument.

[00:55:21] Speaker 03:
Thank you very much.

[00:55:22] Speaker 03:
You thank all the parties for their argument.

[00:55:25] Speaker 08:
I think they've resorted to some time.

[00:55:27] Speaker 03:
Yes.

[00:55:27] Speaker 03:
Two minutes.

[00:55:30] Speaker 06:
He didn't really address the willfulness.

[00:55:33] Speaker 06:
Her cross-appeal is on willfulness.

[00:55:34] Speaker 06:
He didn't really address it.

[00:55:37] Speaker 03:
Well, let's do what Jesse told us.

[00:55:39] Speaker 06:
On willfulness.

[00:55:43] Speaker 07:
So why on willfulness, which is your cross-appeal, is

[00:55:48] Speaker 07:
acknowledging that there might not be good faith, but everybody knew that they couldn't do that.

[00:55:52] Speaker 07:
Why is it willful to comply with the Anti-Deficiency Act?

[00:55:56] Speaker 00:
So the test for whether or not the government's violation was willful was whether they showed reckless disregard for the matter in which its conduct was prohibited by the FLSA, prohibited by the FLSA, not the ADA or any other statute.

[00:56:10] Speaker 07:
How can it be reckless disregard when the government officials are complying with a statute that has criminal penalties?

[00:56:19] Speaker 00:
So the criminal penalties... What would they have had to do to not be willful?

[00:56:25] Speaker 07:
We're getting back into the same thing as the good faith stuff.

[00:56:28] Speaker 07:
There is nothing they could have done differently, is there?

[00:56:32] Speaker 07:
Absent paying them, which we all agree that they couldn't have done.

[00:56:37] Speaker 00:
Again, I agree that it was a person violation of that.

[00:56:40] Speaker 07:
You're basically arguing that every time there's a lapse in appropriations, there is a violation.

[00:56:46] Speaker 07:
You're entitled to liquidated damages.

[00:56:48] Speaker 07:
And it's going to be willful because there's nothing the government would have done differently.

[00:56:52] Speaker 07:
And there's nothing the government will ever do differently in the future because of the Anti-Deficiency Act.

[00:56:56] Speaker 00:
Well, certainly, I agree.

[00:56:58] Speaker 00:
That's my position.

[00:56:59] Speaker 00:
But even if you were to disagree with it, but even- You think Congress intended that?

[00:57:05] Speaker 07:
I mean, that sounds

[00:57:06] Speaker 07:
Congress knows of lapses of appropriations that have occurred throughout the entire history of this country.

[00:57:14] Speaker 07:
And they know that they're going to happen again.

[00:57:17] Speaker 07:
Do you think they ever intended any of this to happen when they extended the FLSA?

[00:57:23] Speaker 07:
I mean, the lapses in appropriations often occur because of budget showdowns.

[00:57:28] Speaker 07:
And so you have to assume that despite the fact that they occur over budget showdowns, they intended to add more money to the deficit and require more expenditures from the government.

[00:57:42] Speaker 00:
When Congress extended the protections of the Appalachia in 1974, it was very clear the case law was longstanding that they

[00:57:51] Speaker 00:
Anti-Deficiency Act did not erase the government's obligations.

[00:57:55] Speaker 07:
I would just like to get you back to the willfulness thing, though.

[00:57:57] Speaker 07:
In your view, is there anything that they could have done to show no willfulness?

[00:58:03] Speaker 00:
In this situation, I don't believe so.

[00:58:05] Speaker 00:
But especially in 2013, the government stipulated that it made no inquiry.

[00:58:10] Speaker 00:
So even if you disagree with me on that point, in 2013.

[00:58:13] Speaker 07:
Yeah, I know you're hanging your hat on that inquiry.

[00:58:16] Speaker 07:
But we all know that the inquiry would have been fruitless because they're not going to do anything different than they've done.

[00:58:23] Speaker 07:
I mean, we all know this.

[00:58:24] Speaker 07:
This is an established fact of shutdowns going back, at least in my memory, to the early 90s and going back many years before that, before my memory.

[00:58:33] Speaker 07:
And I mean, there's plenty of LLC opinions out there on this.

[00:58:36] Speaker 07:
You can't pay these people.

[00:58:38] Speaker 07:
So no inquiry they make is going to turn out differently, right?

[00:58:43] Speaker 07:
But it's fruitless.

[00:58:44] Speaker 00:
This is no different than a private employer.

[00:58:47] Speaker 07:
Oh, I think it is.

[00:58:48] Speaker 07:
A private employer does not have another federal statute prohibiting them from paying stuff.

[00:58:57] Speaker 00:
If a private employer were to hide funds so that it couldn't pay wages on time,

[00:59:01] Speaker 00:
the government would not accept that as acceptable.

[00:59:04] Speaker 00:
And here, this was a situation of the government's own creation.

[00:59:08] Speaker 00:
There didn't need to be a budget impasse.

[00:59:10] Speaker 00:
There didn't need to be a political dispute.

[00:59:12] Speaker 00:
And even if there was, had they done the inquiry, there's at least two steps that they could have taken.

[00:59:18] Speaker 00:
They could have passed legislation such as the Pay Our Military Act that they passed in 2013, or as we discussed earlier, they could have determined to pay the liquidated damage provision and make the employees whole.

[00:59:29] Speaker 03:
Thank you.