In the Supreme Court of the United States
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Nos. 19-1279 and 19-1285 In the Supreme Court of the United States JAKE LATURNER, KANSAS STATE TREASURER, PETITIONER v. UNITED STATES OF AMERICA, ET AL. ANDREA LEA, ARKANSAS STATE AUDITOR, PETITIONER v. UNITED STATES OF AMERICA, ET AL. ON PETITIONS FOR WRITS OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT BRIEF FOR THE UNITED STATES IN OPPOSITION JEFFREY B. WALL Acting Solicitor General Counsel of Record MARK B. STERN ALISA B. KLEIN Attorneys Department of Justice Washington, D.C. 20530-0001 [email protected] (202) 514-2217 QUESTIONS PRESENTED Congress authorized the U.S. Department of the Treasury (Treasury) to establish the terms and condi- tions of the U.S. savings-bond program, under which Treasury sells savings bonds to raise revenue for the federal government. 31 U.S.C. 3105(c). Treasury’s reg- ulations do not impose any time limit for bond owners to redeem their bonds, which never expire. The owners may redeem the bonds at any time by presenting the physical bonds for payment. Kansas and Arkansas enacted state laws deeming a U.S. savings bond to be abandoned property if the owner does not redeem the bond within five years after it matures. Those States also enacted laws providing that such a bond shall escheat to the State two or three years after becoming abandoned property. Based on those laws, the States claimed title to an unknown num- ber of absent bonds—i.e., bonds not in their possession. After Treasury denied their requests to redeem those bonds, the States brought these actions, alleging that they are the rightful owners of the bonds and are enti- tled to payment. The questions presented are as fol- lows: 1. Whether federal law preempts the state laws on which Kansas and Arkansas relied in claiming owner- ship of the absent bonds. 2. Whether, if the States are the rightful owners of the absent bonds, they can redeem the bonds without the physical bonds or the bonds’ serial numbers. 3. Whether, if the States are the rightful owners of the absent bonds, Treasury’s regulations effect a Fifth Amendment taking. (I) ADDITIONAL RELATED PROCEEDINGS United States Court of Federal Claims: LaTurner v. United States, No. 13-cv-1011 (Dec. 1, 2017) Lea v. United States, No. 16-cv-43 (Dec. 1, 2017) United States Court of Appeals (Fed. Cir.): LaTurner v. United States, No. 18-1509 (Aug. 13, 2019), petition for reh’g denied (Dec. 11, 2019) Lea v. United States, No. 18-1510 (Aug. 13, 2019), petition for reh’g denied (Dec. 11, 2019) (II) TABLE OF CONTENTS Page Opinions below .............................................................................. 1 Jurisdiction .................................................................................... 2 Statement ...................................................................................... 2 Argument ....................................................................................... 9 Conclusion ................................................................................... 24 TABLE OF AUTHORITIES Cases: Arizona v. Bowsher, 935 F.2d 332 (D.C. Cir.), cert. denied, 502 U.S. 981 (1991) ................................. 15, 17 City of New York v. FCC, 486 U.S. 57 (1988) ...................... 10 Director of the Dep’t of Revenue v. Department of the Treasury, 569 U.S. 1004 (2013) ............................... 14 Estes v. U.S. Dep’t of the Treasury, 219 F. Supp. 3d 17 (D.D.C. 2016) .............................. 8, 9, 13 Free v. Bland, 369 U.S. 663 (1962) ....................2, 9, 10, 11, 15 Murphy v. National Collegiate Athletic Ass’n, 138 S. Ct. 1461 (2018) ......................................................... 11 Rice v. Santa Fe Elevator Corp., 331 U.S. 218 (1947) ....... 11 Treasurer of New Jersey v. United States Dep’t of the Treasury, 684 F.3d 382 (3d Cir. 2012), cert. denied sub nom. Director of the Dep’t of Revenue v. Department of the Treasury, 569 U.S. 1004 (2013) ...................................................... 15, 16 Constitution, statutes, and regulations: U.S. Const.: Art. I, § 8, Cl. 2 .................................................................. 2 Art. VI, Cl. 2 ..................................................................... 10 (III) IV Constitution, statutes, and regulations—Continued: Page Amend. V .............................................................. 6, 8, 9, 21 Administrative Procedure Act, 5 U.S.C. 701 et seq. ............. 8 Tucker Act, 28 U.S.C. 1491 ..................................................... 6 28 U.S.C. 1292(d)(2) ................................................................. 7 31 U.S.C. 1322 ........................................................................ 17 31 U.S.C. 3105 .......................................................................... 2 31 U.S.C. 3105(a) ................................................................... 15 31 U.S.C. 3105(b)(2)(A) ............................................... 3, 10, 11 31 U.S.C. 3105(c) ...................................................................... 3 Ark. Code Ann. (2015): § 18-28-231 .......................................................................... 5 § 18-28-231(a) ..................................................................... 4 § 18-28-231(a)-(b) ............................................................. 10 § 18-28-231(b) ..................................................................... 5 Kan. Stat. Ann. (2013): § 58-3935 ....................................................................... 5, 10 § 58-3935(a)(16) .................................................................. 4 § 58-3979 ........................................................................... 10 § 58-3979(a) ........................................................................ 4 31 C.F.R.: Pt. 315 ............................................................................... 12 Subpt. B: Section 315.5(a) (2014) ........................................... 3 Subpt. D: Section 315.15 (2014) ............................................. 3 Subpt. E ...................................................................... 12 Section 315.20(b) (2014) ........................... 12, 13, 20 Section 315.20(b) (2019) ................................... 8, 23 Section 315.21-315.22 (2014) ............................... 12 Subpt. F: Section 315.25 (2014) ................................. 3, 18, 21 V Regulations—Continued: Page Section 315.26(b) (2014) ......................................... 3 Section 315.29(c) (2014) ............ 3, 10, 18, 19, 20, 22 Subpt. H: Section 315.35(c) (2014) ............................. 3, 10, 12 Section 315.39(a) (2014) ............................. 3, 18, 21 Subpt. O: Section 315.88(a) (2019) ............................. 8, 14, 23 Section 315.90 (2014) ........................................... 14 Miscellaneous: 80 Fed. Reg. 80,258 (Dec. 24, 2015) ................ 8, 13, 14, 22, 23 U.S. Gen. Accounting Office, GAO/AFMD-89-44, Unclaimed Money: Proposals for Transferring Unclaimed Funds to States (1989) ..................................... 4 In the Supreme Court of the United States No. 19-1279 JAKE LATURNER, KANSAS STATE TREASURER, PETITIONER v. UNITED STATES OF AMERICA, ET AL. No. 19-1285 ANDREA LEA, ARKANSAS STATE AUDITOR, PETITIONER v. UNITED STATES OF AMERICA, ET AL. ON PETITIONS FOR WRITS OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT BRIEF FOR THE UNITED STATES IN OPPOSITION OPINIONS BELOW The opinion of the court of appeals (LaTurner Pet. App. 1a-23a; Lea Pet. App. 1a-22a1) is reported at 933 1 References to “LaTurner Pet.” and “LaTurner Pet. App.” are to the petition for a writ of certiorari and the appendix to the peti- tion in No. 19-1279. References to “Lea Pet.” and “Lea Pet. App.” (1) 2 F.3d 1354. The opinions of the Court of Federal Claims (LaTurner Pet. App. 34a-100a; Lea Pet. App. 23a-57a) are reported at 133 Fed. Cl. 47 and 132 Fed. Cl. 705. JURISDICTION The judgment of the court of appeals was entered on August 13, 2019. Petitions for rehearing were denied on December 11, 2019 (LaTurner Pet. App. 141a-142a; Lea Pet. App. 87a-88a). On February 26, 2020, the Chief Justice extended the time within which to file a petition for a writ of certiorari in No. 19-1279 to and including May 8, 2020, and the petition was filed on that date. On March 2, 2020, the Chief Justice extended the time within which to file a petition for a writ of certiorari in No. 19-1285 to and including May 8, 2020, and the peti- tion was filed on that date. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). STATEMENT 1. The Constitution empowers Congress “[t]o bor- row Money on the credit of the United States.” U.S. Const. Art. I, § 8, Cl. 2. Exercising that power, Con- gress has “authorized the Secretary of the Treasury, with the approval of the President, to issue savings bonds in such form and under such conditions as he may from time to time prescribe.” Free v. Bland, 369 U.S. 663, 667 (1962); see 31 U.S.C. 3105. Pursuant to that authority, the U.S. Department of the Treasury (Treas- ury) has issued several series of savings bonds (e.g., Se- ries E). A U.S. savings bond is a contract between the United States and the bond owner, and regulations promulgated by Treasury are incorporated by reference into the bond are to the petition for a writ of certiorari and the appendix to the petition in No. 19-1285. 3 contract. LaTurner Pet. App. 2a-3a; see 31 U.S.C. 3105(c) (authorizing Treasury to establish the terms and condi- tions that govern the