[00:00:00] Speaker 01:
Mr. Is it Attig?

[00:00:05] Speaker 01:
Please proceed.

[00:00:07] Speaker 03:
My name is Chris Attig, representing the Appellant Robert Cooper.

[00:00:09] Speaker 03:
I'm joined today by co-counsel Haley Smith, who's appearing for the first time before the Federal Circuit.

[00:00:15] Speaker 03:
May it please the Court?

[00:00:16] Speaker 03:
This case presents a question of pure statutory interpretation.

[00:00:21] Speaker 03:
Does the phrase donation from a public relief organization in 38 USC 1503 A1

[00:00:28] Speaker 03:
include state unemployment payments.

[00:00:32] Speaker 03:
Mr. Cooper argues that it does and that the Veterans Court erred in finding otherwise for three reasons.

[00:00:38] Speaker 03:
First, the Veterans Court relied on a principle unique to tax law to narrowly construe the meaning of the word relief.

[00:00:47] Speaker 03:
The Veterans Court used a canon that's designed to protect Congress's broad taxing power to narrowly construe Congress's spending power, resulting in a holding

[00:00:58] Speaker 03:
that unemployment payments are not relief because they're provided, quote, as a matter of right based on employment status.

[00:01:05] Speaker 01:
And you seem to make an argument with respect to Wisconsin payments that it's somehow, I guess this is a question, is it your argument that these payments should count because they're different, because there's no employee contribution?

[00:01:20] Speaker 03:
That's a part of the reason that we believe that they're not donations, Your Honor.

[00:01:24] Speaker 03:
They're not donations because they're non-contributory.

[00:01:26] Speaker 01:
And I do know there are... Your view would be that if they were contribute, anything that's contributory would not be considered a donation.

[00:01:33] Speaker 03:
I would argue that here.

[00:01:34] Speaker 03:
It's not specifically at issue.

[00:01:35] Speaker 03:
I would agree with that.

[00:01:36] Speaker 03:
I think an argument could be made in the case of the three states where it's contributory, that those are de minimis charges meant for a specific purpose, to maintain the solvency of the fund.

[00:01:46] Speaker 03:
But that's beyond, I think,

[00:01:47] Speaker 03:
the scope of the case, and we didn't brief that.

[00:01:50] Speaker 03:
But in terms of this case, because it's non-contributory, we would say that it... But aren't they still earned?

[00:01:56] Speaker 01:
I mean, unemployment payments to the employee still earned by virtue of his prior employment?

[00:02:02] Speaker 03:
In a social context, yes, Your Honor.

[00:02:05] Speaker 03:
In a legal context, no.

[00:02:08] Speaker 03:
Because when we start talking about earned rights or accrued property interest or contractual rights, we're going to start pulling in these constitutional protections

[00:02:17] Speaker 03:
that the Supreme Court has viewed with disfavor.

[00:02:20] Speaker 01:
Well, except we're picking between choices here.

[00:02:24] Speaker 01:
That makes it at least not a gift because it's earned.

[00:02:29] Speaker 01:
I mean, I take your point that maybe certain earnings in certain contexts, but in this context, it's something that's earned.

[00:02:37] Speaker 03:
In a sense, yes.

[00:02:38] Speaker 03:
I don't agree in the legal sense that it is earned.

[00:02:41] Speaker 03:
And I like the Veterans Court's definition of donation as a charitable transfer of money.

[00:02:46] Speaker 03:
Because it doesn't speak to gifts.

[00:02:47] Speaker 03:
I think it would be a hard press to find any American on the street that would think of unemployment as a gift from the government.

[00:02:53] Speaker 00:
Do you agree that unemployment payments are properly characterized as unemployment insurance by the court?

[00:03:00] Speaker 03:
I do not, Your Honor.

[00:03:01] Speaker 03:
I do not.

[00:03:01] Speaker 03:
And I think we have support for that going all the way back to the House committee reports in 1935 that made that point.

[00:03:08] Speaker 00:
What about the fact that at JA123, you have the Wisconsin benefits, it's a paid summary, and it refers to it very clearly.

[00:03:18] Speaker 00:
It says Wisconsin unemployment insurance, right in it, and Wisconsin unemployment insurance benefits paid summary.

[00:03:28] Speaker 03:
The House Committee in 1935 pointed out that even back then there was references that it's unemployment insurance.

[00:03:35] Speaker 03:
And they described that as an inaccurate description, that it's unemployment compensation.

[00:03:40] Speaker 00:
But what about on the face of the payments made to your client?

[00:03:43] Speaker 00:
It's referred to as insurance, right on there.

[00:03:47] Speaker 03:
And that's our point, Your Honor, is that when we're talking about unemployment insurance in the social context, in the daily conversation about these benefits, that's become the

[00:03:57] Speaker 03:
an accepted way of talking about it, but it is not insurance.

[00:03:59] Speaker 03:
It's not traditional insurance where an employee, except in those three states, pays 60 cents per thousand dollars in Pennsylvania as their unemployment tax.

[00:04:08] Speaker 00:
The employer pays it.

[00:04:10] Speaker 03:
In all but Pennsylvania, Alaska, and New Jersey are the three states where the employee pays, but the employer pays that premium

[00:04:16] Speaker 03:
uh... that does not make it necessary insurance such that it would make it not a donation uh... for purposes of fifteen oh three because the employee themselves are not paying uh... that tax and i think there's a i guess why shouldn't we consider these donations or at least unemployment compensation as uh...

[00:04:35] Speaker 05:
as income based on prior compensation in the sense that the government necessarily received some prior compensation in taxes that were connected to Mr. Cooper's employment time.

[00:04:51] Speaker 03:
I think there's a policy issue or question at issue, Your Honor, and if I could,

[00:04:57] Speaker 03:
one of the underlying tenants of this idea of the non-service-connected pension.

[00:05:02] Speaker 05:
I mean, if Mr. Cooper had not been previously employed, the government never would have collected those taxes that were based on his time of employment, right?

[00:05:15] Speaker 03:
If Mr. Cooper had not been previously employed and he would not, if he lived in one of the states, they would not have collected a tax from him?

[00:05:20] Speaker 05:
Well, if he just hadn't been working, then those taxes that the federal government received

[00:05:28] Speaker 05:
uh... that were connected to mister coopers employment the government would never see those taxes right that is that and the whole point of this program is the government vacuum backing up taxes based on employees employment

[00:05:44] Speaker 05:
And then whenever anybody becomes unemployed through no fault of their own, then the government redistributes those collected taxes to unemployed people from the collected taxes.

[00:05:58] Speaker 05:
So in that sense, that's why the analogy to insurance makes sense.

[00:06:05] Speaker 05:
Because people are paying in on the front end.

[00:06:08] Speaker 05:
And then when something happens, i.e.

[00:06:10] Speaker 05:
in this instance, unemployment through no fault of the persons, they are able to collect something called unemployment compensation, which is akin to insurance payments.

[00:06:23] Speaker 03:
I think in terms of when we talk about unemployment compensation, it is income in some context.

[00:06:29] Speaker 03:
It is the federal government taxes unemployment compensation.

[00:06:34] Speaker 05:
What I'm trying to explore is it feels

[00:06:37] Speaker 05:
qualitatively something different than pure welfare.

[00:06:41] Speaker 05:
Somebody's in need, and they establish that they are in some sort of economic duress, and then they're able to receive something called welfare.

[00:06:52] Speaker 05:
And those payments are not in any way connected to anything else, like what we have here with unemployment compensation, where somebody was working, and during the time of employment, the government was collecting taxes on that employment.

[00:07:08] Speaker 03:
One of the things that I can understand that position or I can understand seeing unemployment compensation as being different than temporary assistance to needy families welfare type because there is this kind of component of there is a contribution into the system.

[00:07:24] Speaker 03:
I think in terms of 10 benefits or welfare, however you want to refer to it,

[00:07:28] Speaker 03:
There's a contribution somewhere along the system.

[00:07:31] Speaker 03:
That money just doesn't come out of thin air.

[00:07:33] Speaker 03:
It comes from somebody's taxes.

[00:07:35] Speaker 03:
There's always a contribution somewhere.

[00:07:37] Speaker 03:
And I think for purposes of the non-service connected pension, what we're looking at is, is this allowable or excludable income?

[00:07:44] Speaker 03:
And the question becomes, is it the actual recipient of the non-service connected pension who's contributing?

[00:07:51] Speaker 03:
And in that case, it probably is not welfare, if there is, or public relief.

[00:07:56] Speaker 03:
if there's a matching contribution from the recipient.

[00:07:59] Speaker 03:
When there's a third party contribution or somebody else making that contribution, it does have more of that sense from our perspective, from Mr. Cooper's perspective, of being relief or being welfare because that money is coming from somewhere other than the intended beneficiary.

[00:08:14] Speaker 03:
And that's one of the distinctions

[00:08:16] Speaker 05:
that I think is important to make, is that even where unemployment... So then your case does rest on the idea that it's Mr. Cooper's employer that was paying those taxes to the federal government and not Mr. Cooper himself?

[00:08:29] Speaker 05:
That's what I'm hearing now.

[00:08:30] Speaker 05:
One component, yes, that whether or not it is a donation, whether or not unemployment compensation is legally... So then would we have to think of Mr. Cooper's employer as having donated money to the federal government, and then ultimately on the back end when Mr. Cooper becomes employed, the federal government is donating money to Mr. Cooper?

[00:08:51] Speaker 03:
I don't know that you would have to think of it like that, Your Honor.

[00:08:55] Speaker 03:
I think that there wouldn't be a framework for

[00:08:57] Speaker 05:
thinking of it like that down the road in other words what we're trying to do is characterize this payments well i have to characterize both payments to get to where you want to i also have to think about the money the taxes the federal government is collecting on the front end and what is the nature of those payments i can't just push that to the side and ignore it pretend it didn't happen and then just focus

[00:09:24] Speaker 05:
very narrowly on the payments of unemployment compensation that Mr. Cooper is receiving.

[00:09:31] Speaker 05:
I have to think of a whole basket together and try to figure out what is the nature of all of these transactions together and understand whether or not this is just something that can be purely recognized as a gift as you want unemployment comp to mean or is it part of some larger set of transactions that's really more like an insurance pooling scheme.

[00:09:53] Speaker 03:
and understand and and with respect and i disagree i don't know that that the court doesn't need to think about employers role in that contribution necessarily in determining whether or not the veteran can count or excluded as income i don't know that it adds

[00:10:09] Speaker 03:
or changes any value to think of where the money came to pay for the 10th benefits or where the money came from to pay for Social Security supplemental income.

[00:10:18] Speaker 03:
Can I ask you a question?

[00:10:18] Speaker 03:
I just don't know the answer to this question when I should.

[00:10:21] Speaker 01:
Does the amount of unemployment that the recipient gets, is that predicated either on how long he'd work for the employer or the amount of salary?

[00:10:32] Speaker 01:
Do those two factors factor into the actual amount that you get in unemployment insurance?

[00:10:38] Speaker 03:
Every state is different, Your Honor.

[00:10:39] Speaker 03:
And I confess to not knowing the ins and outs of Wisconsin.

[00:10:43] Speaker 03:
But my understanding is that most states do factor in the period of employment, the length of employment, the salary as a factor, the wages that were received all as factors in computing the amount of the benefit.

[00:10:56] Speaker 03:
And it is not a full replacement of the salary.

[00:10:58] Speaker 01:
Which would also, in a little way, push towards this not being a donation.

[00:11:07] Speaker 01:
Can I think about that for a minute, Your Honor?

[00:11:10] Speaker 01:
Well, make it more of an insurance program, which you're resisting here, this conversation with Judge Stowe.

[00:11:17] Speaker 03:
I think in my mind, Your Honor, that feels more like an actuarial computation.

[00:11:22] Speaker 03:
And I hate to use that word, because that does evoke the idea of insurance.

[00:11:26] Speaker 03:
And so I regret my own choice of words.

[00:11:29] Speaker 03:
But it does seem more like a mathematical computation.

[00:11:31] Speaker 03:
There's a limited pool of money available, an unemployment compensation recipient.

[00:11:36] Speaker 03:
does not get 100% wage replacement.

[00:11:39] Speaker 03:
They get a portion because there's not enough to pay everybody everything that they've earned.

[00:11:44] Speaker 03:
And so that is, in my mind, a way to kind of fairly break down how that money is going to be apportioned between a large pool of unemployment applicants.

[00:11:52] Speaker 03:
And that, to me, doesn't feel as much about insurance as it is guarding the public fisc and making sure that that money is available for other people, too.

[00:11:59] Speaker 01:
Can I just ask you, before your time runs out, just a technical question.

[00:12:03] Speaker 01:
I recall that there was some request for relief pending, a waiver, I guess you call it.

[00:12:10] Speaker 01:
Has that been adjudicated yet?

[00:12:11] Speaker 03:
I don't know, Your Honor.

[00:12:12] Speaker 03:
I don't have access to the VA benefits management system below the Veterans Court, so I can't see what's going on in that case.

[00:12:22] Speaker 03:
My belief is that it is not being adjudicated.

[00:12:26] Speaker 03:
All likelihood until this case is resolved, if this court was to find that it's not a valid act to include that income, that would change the nature of the waiver.

[00:12:36] Speaker 03:
Obviously, there wouldn't be a waiver request anymore.

[00:12:40] Speaker 03:
reserve the rest of my time for a while unless there's any further questions.

[00:12:47] Speaker 02:
Thank you, Your Honors.

[00:12:49] Speaker 02:
Good morning, Your Honors, and may it please the Court.

[00:12:53] Speaker 02:
This Court should affirm the decision of the Veterans Court because unemployment insurance does not constitute a donation by a relief or welfare organization under the limited statutory exception in Section 1503.

[00:13:09] Speaker 02:
A donation is a gift, and we've cited pretty extensive scholarly work, the Supreme Court's decision in Java, as well as the legislative history of the Social Security Act.

[00:13:22] Speaker 02:
to demonstrate that the touchstone for unemployment insurance is the notion that it's earned as a matter of right.

[00:13:31] Speaker 01:
Well, you spent some time in your brief talking about this being a contractual right.

[00:13:35] Speaker 01:
And I'm not sure why you went down that rabbit hole necessarily, particularly because there seems to be Supreme Court precedent that cuts against you in that area.

[00:13:44] Speaker 02:
Right.

[00:13:44] Speaker 02:
I mean, I think we may have given a stronger impression than we intended there.

[00:13:49] Speaker 02:
I think it's the earned

[00:13:51] Speaker 02:
is the key aspect of it.

[00:13:53] Speaker 02:
Supreme Court in Java did quote the legislative history that discussed this being a contractual right.

[00:14:00] Speaker 02:
I think the sense we were trying to convey was that that was the ethos that the Joint Committee on Economic Security was conveying.

[00:14:07] Speaker 02:
But we're not literally saying it's a contract.

[00:14:10] Speaker 01:
It is.

[00:14:11] Speaker 01:
And you don't think that we would need that to find or to conclude there was a contractual right in order to affirm

[00:14:16] Speaker 02:
No, not at all.

[00:14:17] Speaker 02:
But if one reads the Supreme Court's decision in Java, and I think the other best place is the Yale Law Journal article we cited, the charity versus social insurance.

[00:14:28] Speaker 02:
Java talks about it being as a matter of right, talks about it in opposition

[00:14:38] Speaker 02:
The legislative history cited in Java, and it's at pages 131, 132, 133, all of them talk about this in opposition to the idea of relief for welfare.

[00:14:47] Speaker 02:
So it was a dichotomy.

[00:14:49] Speaker 02:
This is so that people don't have to use relief for welfare.

[00:14:52] Speaker 02:
Similarly, in the Yale Law Journal article, it talks about how the notion of this being earned as a matter of right was, the word I think the author uses is ubiquitous.

[00:15:02] Speaker 02:
in the legislative history.

[00:15:03] Speaker 02:
So that's the idea.

[00:15:05] Speaker 02:
And it shouldn't be lost in this discussion that the Wisconsin statute itself that we cited in our brief, section 1801, period one, subsection one, uses that exact terminology.

[00:15:25] Speaker 02:
It says the benefits are given as a matter of right.

[00:15:28] Speaker 02:
So even in Wisconsin systems, it's understood that way.

[00:15:31] Speaker 02:
And based on the colloquy in the opening remarks with Appellant, I look back at the statutory section.

[00:15:38] Speaker 02:
And indeed, it's in the Wisconsin statutes, if you print them out on websites, chapter 108.1, unemployment insurance and reserves.

[00:15:51] Speaker 02:
And that is consistent with the way this works, that it's paid into the system.

[00:15:58] Speaker 02:
unemployment compensation taxable income yes so we cited this in our brief this is an IRS publication 4912 at page d1 under the tax system unemployment income unemployment insurance income is taxable welfare is not

[00:16:23] Speaker 02:
We said there's a footnote on this.

[00:16:26] Speaker 02:
There was a brief change during the pandemic for that.

[00:16:28] Speaker 02:
But that's the general baseline.

[00:16:30] Speaker 01:
Let me ask you about the word relief.

[00:16:32] Speaker 01:
Because I think your discussion of relief suggests that it's paid only to its financial relief to indigence.

[00:16:41] Speaker 01:
And the government, I mean, relief, there's a lot of money that the government pays out.

[00:16:45] Speaker 01:
And there's types of relief that it pays out.

[00:16:47] Speaker 01:
But there are certainly contexts in which we'd call, everyone calls it relief.

[00:16:52] Speaker 01:
And it's not paid to indigents.

[00:16:54] Speaker 01:
I mean, it's paid after a hurricane.

[00:16:56] Speaker 01:
There's a relief fund that goes to the victims of the hurricane.

[00:17:01] Speaker 01:
But those aren't necessarily indigents.

[00:17:03] Speaker 01:
And in fact, there's no means testing as to who needs the relief or to what extent people actually need the relief.

[00:17:13] Speaker 01:
But it's still called relief.

[00:17:16] Speaker 02:
I'm not sure.

[00:17:19] Speaker 02:
I'm not familiar with that scheme, but I suspect that when a hurricane-type relief is doled out, that there would be some requirement that one would have to be, and it might not be a means testing need, but I suspect they're not giving it to someone who hasn't

[00:17:34] Speaker 02:
it suffered some kind of damage as a result of the hurricane.

[00:17:38] Speaker 01:
It suffered some damage, but suffering damage is different than relief to indigents who need it, which is more like the means testing, like we're giving it to people who need it.

[00:17:47] Speaker 01:
And there is no need testing for, as far as I know, for a hurricane, no means testing for hurricane relief and so forth.

[00:17:56] Speaker 01:
They could be a gazillion years and have 14 homes.

[00:17:59] Speaker 01:
But if you lose one, you're going to get whatever payments everybody else who lost one is going to get, right?

[00:18:05] Speaker 02:
Fair enough.

[00:18:06] Speaker 02:
I think to answer maybe the underlying question here, we discussed this in our brief.

[00:18:10] Speaker 02:
In the legislative history context of the Social Security Act of 1935, welfare and relief organization had a specific meaning, and at least in this legal sense, and we even cited the Black's Law Dictionary definition here.

[00:18:26] Speaker 02:
This is thinking of charitable type

[00:18:29] Speaker 02:
And the difference here is that unemployment insurance is earned.

[00:18:33] Speaker 02:
And in fact, one doesn't get unemployment.

[00:18:36] Speaker 02:
It's not just that it typically depends on the nature and salary and length of one's employment.

[00:18:42] Speaker 02:
One doesn't get it at all if one hasn't worked.

[00:18:47] Speaker 02:
You know, one actually provides one's work.

[00:18:49] Speaker 02:
As someone who's, I'm not 100% sure this is accurate.

[00:18:52] Speaker 01:
There's a few requirements that you have worked for a certain amount of time in many states, right?

[00:18:56] Speaker 01:
You can't get it if you started one day and then you get

[00:18:59] Speaker 01:
laid off, I think there's probably a requirement, or maybe it's tested to how much you get based on the longevity of your... Yeah, I don't know if one day would earn you like one penny of unemployment insurance, but I think that's basically correct.

[00:19:11] Speaker 02:
When I think of this, I always think of myself as like an 18-year-old coming out of high school, and if I were like unemployed and not going to college and hadn't worked a day in my life, I'm not sure that

[00:19:21] Speaker 02:
I don't think you would get unemployment insurance.

[00:19:23] Speaker 02:
You have to earn it through working.

[00:19:26] Speaker 02:
And we cited, I think you could look at a lot of sources on this, but we cited the UCLA article at page 379 to explain that the economic theory behind

[00:19:37] Speaker 02:
unemployment insurance is that it is a compensatory system in that the employer's contributions are on behalf of the employee.

[00:19:49] Speaker 02:
As Appellants Council points out, there are even three states where the employee pays it directly.

[00:19:54] Speaker 02:
And as we pointed out in our brief, it would be a pretty absurd result if only the people in those three states, I think Alaska, New Jersey, and Pennsylvania, I may be getting Pennsylvania wrong, if those were the only folks for whom this was income.

[00:20:10] Speaker 02:
The other half of this is that fast forwarding to 1978, Congress in 1978 when it created the current Section 1503 was very clear

[00:20:22] Speaker 02:
both in the statutory language and the relevant legislative history that the Veterans Court discussed and that we discussed, that they were trying to use very broad language to limit the number of exceptions.

[00:20:32] Speaker 02:
It's all income from any source of any kind, including, by the way, salary and unemployment insurance is supposed to be essentially salary replacement, is counted for income.

[00:20:46] Speaker 02:
The idea here is that

[00:20:48] Speaker 02:
These pensions, this isn't like the normal veteran's benefits that are based on disability or service.

[00:20:53] Speaker 02:
This is a special needs-based pension.

[00:20:56] Speaker 02:
And Congress only wanted people who didn't have income from another source, who truly needed it, to get these pensions and made clear that there used to be a lot of loopholes, and they wanted to reduce those.

[00:21:07] Speaker 02:
They have a limited number of exceptions.

[00:21:09] Speaker 02:
They've enacted a few more, not including unemployment insurance, by the way.

[00:21:13] Speaker 02:
We've discussed this in our brief.

[00:21:16] Speaker 02:
So that's very broad language.

[00:21:17] Speaker 02:
all payments from any source of any kind.

[00:21:21] Speaker 02:
And again, as we pointed out in our brief, the concept that the exceptions when Congress uses such broad language should be construed narrowly is not a concept that's limited to the tax arena.

[00:21:37] Speaker 02:
We cited the H. Phillips case, the TRW case, but it's a common principle and certainly applies here.

[00:21:47] Speaker 02:
Again, unemployment insurance are not a donation.

[00:21:50] Speaker 02:
They're not a gift from a relief or welfare organization.

[00:21:53] Speaker 02:
And we got off Wisconsin before I got to make my last point on that issue.

[00:21:59] Speaker 02:
Even the Wisconsin of Workforce Development itself, and again, we cited this in our brief, page 20 to 21, it says that it's not part of any federal or state welfare program.

[00:22:11] Speaker 02:
That's in the introduction to their handbook.

[00:22:14] Speaker 02:
So it's just kind of a square peg, round hole issue.

[00:22:17] Speaker 02:
You know, I understand your honor's point about colloquially, you could potentially look at this as relief, but that's not what this exception is about.

[00:22:27] Speaker 02:
Unemployment insurance is not the type of charity that Congress was looking at when it made this exception.

[00:22:39] Speaker 02:
Congress has, over the years, had innumerable opportunities to add this as a specific exception.

[00:22:45] Speaker 02:
if it wanted to, as it did the compensated work therapy programs, which I don't think we need to go into detail on that, but we explained and the Veterans Court explained how Congress viewed those kind of differently than actual work, but it hasn't made an exception.

[00:23:00] Speaker 02:
It hasn't included this as an exception.

[00:23:02] Speaker 02:
That's why this court should affirm the decision.

[00:23:05] Speaker 01:
So in your view, the way we're supposed to construe the statutes, Congress has these explicit exceptions.

[00:23:10] Speaker 01:
Does that mean that it should cut against your friend because this isn't on the list?

[00:23:15] Speaker 01:
Or does that mean that we look at the nature of the exceptions, like the CWT, and see whether that globally can encompass how that relates to the unemployed?

[00:23:25] Speaker 02:
It only helps us, Your Honor.

[00:23:27] Speaker 02:
When Congress has used extremely broad language and made it clear, it really wants to pull in everything other than these enumerated exceptions.

[00:23:38] Speaker 02:
The Supreme Court and other courts have recognized that it's not a good idea to be reading those exceptions broadly.

[00:23:44] Speaker 02:
And in particular, in the context here, where social unemployment insurance has existed since 1935 and Congress has made various amendments to pull in specific things.

[00:23:54] Speaker 02:
And it's worth noting that it did not, CWT, for example, is not under the exception we're looking at.

[00:24:00] Speaker 02:
Congress enacted a separate statute, 38 USC 1718, to specifically name that as an exception.

[00:24:07] Speaker 02:
And it's a separate thing.

[00:24:08] Speaker 02:
I mean, to get a little bit into the details, as the Veterans Court explained, it's kind of a rehabilitative, therapeutic program.

[00:24:16] Speaker 02:
And Congress can make a policy decision that says, we want to promote these programs.

[00:24:21] Speaker 02:
We don't consider them quite the same as work, even though you're working as part of the program.

[00:24:26] Speaker 02:
And so we're going to exempt

[00:24:28] Speaker 02:
that specific thing.

[00:24:30] Speaker 02:
But that doesn't bring unemployment insurance into Section 1503A, which is a donation from a public or private relief or welfare organization.

[00:24:43] Speaker 02:
And just to put a fine point on that, Congress amended the statute, I think it's in 2004, 2010, and 2012, to add specific things to be exempted.

[00:24:54] Speaker 02:
None of them were unemployment insurance.

[00:24:57] Speaker 04:
What do you think is the Veterans Court point by bringing up the tax law statutory construction principle in the context of a Veterans benefits regime?

[00:25:09] Speaker 02:
Well, the Veterans Court brought it up in what I loosely describe as the background section of their analysis.

[00:25:16] Speaker 02:
essentially eight pages of additional analysis actually reading the statute directly.

[00:25:22] Speaker 02:
So I'm not sure that the Veterans Court was looking at this as a tax-specific point as much as the broader point that I think we made in our brief, that this kind of thing, when there's broad language, you can do it narrowly.

[00:25:36] Speaker 02:
But also, I think, because the argument seems fairly tax-adjacent.

[00:25:42] Speaker 05:
You agree that that principle that was

[00:25:45] Speaker 05:
from tax law doesn't really apply here to this Veterans Benefits Regime.

[00:25:48] Speaker 05:
Do you agree with that?

[00:25:51] Speaker 02:
Yes.

[00:25:52] Speaker 02:
But I would suggest that the principle from the tax case that the Veterans Court was citing is a principle that is contrary to appellant's claims, not at all exclusive to tax.

[00:26:03] Speaker 02:
It may come up in a specific variety in tax.

[00:26:06] Speaker 05:
But, I mean, we cited... So did the Veterans Court rely on it, or was it just a mere throat clearing exercise?

[00:26:14] Speaker 02:
It seemed like a throat clearing exercise to us, and that's what we said in our brief, because it's in the background section and it doesn't come up again.

[00:26:20] Speaker 05:
But then you just said that whatever that tax law principle is, it's entirely consistent with how to read the statute here, which makes it sound like you're saying it is relevant to how we should think about the statute.

[00:26:35] Speaker 02:
I think it is consistent, but one doesn't need to rely on that tax law principle.

[00:26:40] Speaker 02:
in order to sustain the veterans court.

[00:26:44] Speaker 05:
Is it consistent because we need to think about that same principle in the context of veterans benefits?

[00:26:50] Speaker 02:
I think that one does not need to reach that principle to sustain the decision in this case.

[00:26:57] Speaker 02:
But it is perfectly consistent.

[00:26:59] Speaker 02:
And certainly, it would not be out of place for this court to cite, for example, the Supreme Court's decision in TRW that says,

[00:27:07] Speaker 02:
where Congress explicitly enumerates certain exceptions to a general prohibition, additional exceptions are not to be implied in the absence of evidence of a contrary legislative intent.

[00:27:20] Speaker 02:
Here, the legislative intent, I think, is on our side.

[00:27:23] Speaker 02:
So I don't think that type of citation would be out of place in the analysis here, but I'm not sure when needs it, because I think the Veterans Court's analysis of the statute for the eight pages of its opinion where it was

[00:27:35] Speaker 02:
specifically talking about the statute is more than adequate.

[00:27:38] Speaker 02:
But as Your Honors well know, this Court has said time and again, I think we cited a wave tronics case on this, that we review judgments, not the language of opinions.

[00:27:48] Speaker 02:
And that principle would certainly apply in connection with this issue.

[00:27:51] Speaker 01:
Thank you.

[00:27:52] Speaker 02:
Thank you, Your Honors.

[00:27:54] Speaker 01:
We have some time for rebuttal.

[00:27:55] Speaker 01:
Please proceed.

[00:27:55] Speaker 03:
Thank you, Your Honor.

[00:27:56] Speaker 03:
There's three reasons, Your Honor, why unemployment payments are not insurance.

[00:28:02] Speaker 03:
First, I would ask the Court to look at

[00:28:04] Speaker 03:
HR 74-615 from 1935 which explains that unemployment to the extent it is characterized as insurance if that's not an accurate characterization from Congress's perspective.

[00:28:14] Speaker 03:
But more importantly, insurance is a contract.

[00:28:17] Speaker 03:
Insurance is a contract between the insured and the insurer.

[00:28:21] Speaker 03:
Somebody pays a premium and in exchange there's a benefit that's paid to that individual.

[00:28:25] Speaker 03:
That is not the case here because the benefit paid

[00:28:29] Speaker 03:
is not in any proportion related to the premiums made.

[00:28:33] Speaker 03:
If I buy life insurance for one of my employees as a business owner and that employee dies and I give half of that to the spouse of my employee, that would never be considered insurance for the spouse that I'm giving.

[00:28:46] Speaker 03:
It would be considered a gift or a donation.

[00:28:48] Speaker 03:
There is no contract here.

[00:28:50] Speaker 03:
There's no written contract.

[00:28:51] Speaker 03:
And to find that there is insurance, that unemployment is insurance, would be to kind of pull in those

[00:28:59] Speaker 03:
protections, those constitutional protections under the contract clause and possibly equal protection under social welfare.

[00:29:06] Speaker 03:
I wanted to talk about the compensated work therapy for just a second.

[00:29:10] Speaker 03:
The non-service-connected pension, the basic underlying principle is that it provides a basic level of income for permanently and totally disabled wartime veterans, and that all taxpayers share in that burden, because we all pay and contribute to that.

[00:29:25] Speaker 03:
Put that premise on hold for just a second.

[00:29:28] Speaker 03:
The Congress created this compensated work therapy program where they said, we want to give the VA the opportunity to assess if people can come back to work, employers can pay, and we're not going to count it as income.

[00:29:38] Speaker 03:
We're going to incentivize this program.

[00:29:40] Speaker 03:
But underlying that program is a policy choice.

[00:29:44] Speaker 03:
And Congress's policy choice was, we have the opportunity here today in 1986 to say, we're going to make those CWT payments

[00:29:54] Speaker 03:
we're going to go ahead and include them as income, and that's going to transfer the burden of caring for these indigent veterans, these wartime, permanently and total disabled veterans, to CWT employers.

[00:30:04] Speaker 03:
And Congress said no.

[00:30:05] Speaker 03:
They didn't explicitly say that, but they did that.

[00:30:08] Speaker 03:
They refused to transfer.

[00:30:10] Speaker 01:
But how does that help you here?

[00:30:11] Speaker 01:
If Congress recognizes that there ought to be exceptions, and it, in fact, enacts exceptions, and you're not one of them.

[00:30:18] Speaker 03:
It shows that what the Veterans Court has done is make a very different policy choice that's not in their bailiwick to make.

[00:30:25] Speaker 01:
But you're right.

[00:30:26] Speaker 01:
Doesn't that cut against you?

[00:30:27] Speaker 01:
The answer is this demonstrates that if Congress wants to create an exception, it's up to Congress, not to us, not to the Veterans Court.

[00:30:35] Speaker 01:
And if it agrees with you, then it might prospectively do that.

[00:30:40] Speaker 01:
But it hasn't done that here.

[00:30:41] Speaker 01:
And it's clearly demonstrated that it's ready, willing, and able to list those exceptions out.

[00:30:48] Speaker 03:
that that's i think it kind of gets back to our core point which is that the the meaning of unemployment compensation is wrapped in fifteen oh three a one and so congress wouldn't see a need to modify the statute if they believe that the underlying policy supports allowing veterans to exclude that those payments from income in the calculation of the non-service connected pension uh... and and i would agree with with my my colleague on what's at the court is going to affirm the veterans court uh... and and find our arguments are not persuasive we would ask

[00:31:18] Speaker 03:
that the court, as the Veterans Court, or suggest that they not use a tax principle to adjudicate veterans benefits.

[00:31:25] Speaker 01:
It has no place... Well, you would agree, however, that they didn't actually use it.

[00:31:29] Speaker 01:
They referred to it, but don't you agree with your friend that in their analysis of their deciding this issue, they did not apply it as a result here?

[00:31:38] Speaker 03:
Respectfully, I don't, Judge Prosthod.

[00:31:40] Speaker 03:
They said at Appendix 6 that this case is relevant, which means it tends to prove a point.

[00:31:45] Speaker 03:
They then use that narrow

[00:31:48] Speaker 03:
tax principle to narrowly construe very broad language in a statute.

[00:31:53] Speaker 03:
And a statute meant that's spending for the beneficence of indigent veterans.

[00:31:58] Speaker 03:
So I think that there's a significant reliance on that case.

[00:32:02] Speaker 03:
It wasn't just throat clearing.

[00:32:03] Speaker 03:
They were saying it was relevant.

[00:32:05] Speaker 03:
They used it to set up a narrow construction of 1503A1.

[00:32:08] Speaker 03:
If the court's going to affirm the Veterans Court, we ask that they

[00:32:13] Speaker 03:
revise the decision in some way to remove that tax principle from it, but we do ask that the Court reverse the Veterans Court and find that state unemployment payments are excludable from income for nonservice-connected pension purposes.

[00:32:27] Speaker 01:
Thank you.