At first, I imagine, you would attempt to make sense of it by seeing what Rule 6(a)(6) "provided" on the subject of legal holidays and counting time. When you realized that Rule 6(a)(6) says nothing whatsoever about counting time, I think you would understand the sentence as a bit of sub-literate gibberish, albeit gibberish obviously intended to convey the information that one should include the last day of the period if it falls on a weekday, except for legal holidays as defined in Rule 6(a)(6). Likewise, suppose someone wanted to explain Jewish dietary law's prohibition on eating dairy with meat to you, and wanted to enlist the help of a particular dictionary's definition of meat in clarifying the definition. (Poultry counts; fish doesn't.) If that person said, "Jewish people can eat anything with dairy, except as provided in Webster's Third with respect to meat," you would probably think he didn't know English very well. You would understand, though, that he meant Jewish people can eat anything with dairy, except for meat as defined in Webster's Third.
What sentences like that actually mean, though, is something quite different. The trouble isn't that "provided" can only refer to substantive rules, as opposed to definitions; for example, "all terms in this statute have their ordinary meanings except as provided in definitional section q" is perfectly good English. Likewise, Rule 6(a)(6) certainly "provides" something with respect to legal holidays (and so does Webster's Third with respect to meat). But what it provides with respect to legal holidays is only the phrase's definition, such that to say "include the last day of the period if it falls on a weekday, except as provided with respect to legal holidays in 6(a)(6)" is to say "include the last day of the period if it falls on a weekday, except that 'legal holiday' means New Year's Day, Thanksgiving, Christmas, Independence Day . . . ."
That is nonsense, so so too is the rule it glosses. The problem with drafting the rule that way is what can only be described as a functionally illiterate misuse of "except as provided with respect to." The drafter of the rule would seem to think that "except as provided with respect to legal holidays in 6(a)(6)" means "except for the set of days described by 6(a)(6) with respect to legal holidays." But "except as provided with respect to legal holidays in 6(a)(6)" actually means, in any literal or colloquial sense, "except for what 6(a)(6) says about legal holidays." And what 6(a)(6) says about legal holidays—just what "legal holiday" means—is not a comprehensible exception to the rule that when counting a period, you include its last day if it falls on a weekday. Precisely, however, because the rule as hypothetically drafted is nonsense, we would have to read it as if its drafter had written what it definitely doesn't mean—"except for legal holidays, as defined in 6(a)(6)"—because that's the only thing its drafter could have had in mind in drafting an exception to a time-counting rule that cross-referenced the definition of legal holidays.
We should be careful about imputing subliterate gibberish to Congress, though if Congress undeniably writes a bit of subliterate gibberish, we must try to make sense of what it meant, or as a textualist would say, what Congress appears to have meant (the whole aim of textualism being, as I've repetitively argued here, determining Congress's apparent intent from what it wrote). After all, it's unlikely that Congress is that bad at English. So if we encounter a statute that appears to say, "the following is a [non-definitional] rule, except as provided in this [definitional] section with respect to a phrase/word not in the rule," we should make certain that the cross-referenced section isn't doing something non-definitional that could provide a sensible exception to Congress's non-definitional rule, thereby allowing us to read "except as provided" in a normal way. Otherwise, Congress will have said that such and such is a non-definitional rule, except that a term not even in the rule means such and such—which, as I say, is gibberish, albeit gibberish whose intended meaning can be deciphered.
It is this precise sort of gibberish that the petitioners in Cyan, Inc. v. Beaver County Employees Retirement Fund (a case to be argued this morning) impute to Congress. 15 U.S.C. 77v(a) provides that federal and state courts shall have concurrent jurisdiction over lawsuits under the Securities Act of 1933, subject to one exception, the scope of which is the subject of Cyan. The exception, along with the provision it's contained in, reads as follows:
The district courts of the United States and the United States courts of any Territory shall have jurisdiction of offenses and violations under this subchapter and under the rules and regulations promulgated by the Commission in respect thereto, and, concurrent with State and Territorial courts, except as provided in section 77p of this title with respect to covered class actions, of all suits in equity and actions at law brought to enforce any liability or duty created by this subchapter.Section 77p of Title 15 provides three things with respect to "covered class actions," in the following order:
First, subsection 77p(b) provides that no "covered class action" based on state law can "be maintained in any State or Federal Court" if it alleges a material misstatement, material omission, manipulative or deceptive device, or contrivance, in connection with the sale of certain securities. The Supreme Court has described this as a "preclusion provision" rather than a preemption provision because it does not preempt state law regarding these sorts of allegations outside the "covered class action" context.
Second, subsection 77p(c) provides that "[a]ny covered class action brought in any State court involving a covered security, as set forth in subsection (b)," may be removed to federal court. (How far that grant of removal jurisdiction goes is also disputed by the parties, as well as the government, whose interpretation I defend briefly at the end of the post.)
Third, paragraph 77p(f)(2) provides a complicated definition of "covered class actions," which includes, in part, any class action involving 50 or more members in which common questions of law or fact predominate over individual ones.
Cyan Fund argues that it's this last provision of section 77p about "covered class actions," their definition, that "except as provided in section 77p . . . with respect to covered class actions" invokes, not any of the substantive provisions of 77p regarding covered class actions that might be thought to provide actual exceptions to state courts' concurrent jurisdiction over Securities Act claims. That is, they read "jurisdiction . . . concurrent with State and Territorial courts, except as provided in section 77p . . . with respect to covered class actions" to mean "jurisdiction . . . concurrent with State and Territorial courts, except with respect to covered class actions as defined in section 77p(f)(2)."
Cyan Fund makes this surprising move, in short, because all the other candidates for cross-reference are off the table, or so they say. First, the "preclusion" provision has nothing to do with jurisdiction, but rather commands merits dismissals of certain covered class actions. And even if it did concern jurisdiction, it applies equally to state and federal courts. It therefore can't be the exception to state courts' concurrent jurisdiction in section 77p that Congress meant to cross-reference.**
** This last point seems a red herring to me. The "except as provided" clause can easily be read as an exception to both state and federal courts' jurisdiction; the statute says that federal courts shall have jurisdiction, concurrent with state and territorial courts, except as provided with respect to covered class actions in section 77p, over actions brought to enforce liabilities or duties created by the Securities Act. Why can't, given its placement, the except clause be read as an exception to both sets of courts' jurisdiction just as easily as an exception to state courts' concurrent jurisdiction alone?
As for the removal provision, they say it too has nothing to do with state courts having concurrent jurisdiction in the first place. Besides, they add that even if removal jurisdiction might be seen as an exception to full-throated concurrent jurisdiction, it turns out that section 77v also has an anti-removal provision which cross-references the exception to that provision in 77p(c) ("[e]xcept as provided in section 77p(c)"). That cross-reference would seem to make a cross-reference to 77p(c) in the concurrent-jurisdiction provision unnecessary, as well as misplaced.
Thus, by process of elimination, what section 77v must be talking about when it provides for concurrent jurisdiction except as provided in section 77p with respect to covered class actions is just the definition of covered class actions. And what Congress must have really meant is to provide for concurrent jurisdiction except over covered class actions, as defined in the definition that section 77p "provides." That's the argument.
Cyan's insistence that Congress would never mix concurrent jurisdiction with removal jurisdiction, or rules of "preclusion" that forbid certain suits from being "maintained" in state court at all, or engage in surplusage, speaks well for its respect for Congress's legal acumen. But in its zeal to portray Congress as a perfect student of the Court's current narrow understanding of jurisdictionality (an understanding that only fully emerged a decade after Congress enacted the statute in question), it seems to me that Cyan's made out Congress to have made a much more fundamental error than the faux pas of thinking of removal jurisdiction, or unusually peremptory bars to actionability, as exceptions to concurrent jurisdiction.
That fundamental error, of course, is the error of speaking in subliterate gibberish. For it isn't, as I've explained above, good English to say that state courts shall have concurrent jurisdiction except as provided with respect to covered class actions in section 77p, if what one means is that state courts shall have concurrent jurisdiction except over covered class actions as defined in section 77p. If 77p's definition of covered class actions is what 77v is talking about when it carves out an exception for what 77p "provided" about covered class actions, what Congress literally said was that state courts shall have concurrent jurisdiction, except that a covered class action is defined as a class action involving 50 members, that etc.
That is nonsense; the mere definition of covered class actions is in no way an exception to concurrent jurisdiction. It certainly is something that 77p "provides" with respect to covered class actions, and to the extent Cyan suggests the textual objection to its argument is that it's not, it's kicking at a straw man. The problem, rather, is that the definition has nothing to do with concurrent jurisdiction. Whereas removal jurisdiction or a merits bar to certain covered class actions are not exceptions to concurrent jurisdiction in a strict legal sense, the definition is simply a nonsensical exception to concurrent jurisdiction in any sense, like saying "we sell cars in every major color, except that purple is the color made by combining red and blue" when what one means is that one sells cars in every major color except for purple, which is the color, in case one didn't know, made by combining red and blue.
In order to understand Congress to have actually excepted covered class actions from concurrent jurisdiction, rather than nonsensically providing that their definition is an exception to concurrent jurisdiction, we have to read "except as provided with respect to covered class actions in section 77p" to mean "except for the thing, covered class actions, with respect to which something (a definition) is provided in section 77p." But that is not, as any literate English speaker knows, what "except as provided" means; it is only, at best, an illiterate yet comprehensible misuse of "except as provided." Because we should assume that Congress is not functionally illiterate, we should assume that Congress was referring to the substantive provisions in 77p regarding covered class actions, which reasonable people, if not a certain elite subset of lawyers, can understand as exceptions to concurrent jurisdiction over Securities Act suits.
Cyan's response to this is to claim that Congress actually uses "except as provided in" in this way all the time, which is supposed to show that it's perfectly good English. (Even if it didn't, it could tend to show that Congress really is confused about what "except as provided in" means; either works.) Cyan says that while respondents and the government claim that "except as provided in Statute X" must refer to some "self-operative limit" in Statute X, sometimes it "borrow[s] a term or concept from another provision, which requires some translation to be incorporated into the relevant statute."
Cyan primarily leans on the example of a clean-hull statute that regulates "persons" in various ways. The definition of "person" includes any "instrumentality of the United States, except as provided in 3802(b)(2) of this title," but when we arrive at 3802(b)(2) we don't find a definitional provision, but instead are told that the EPA "may" apply the requirements of the clean-hull statute to federal vessels if the agency operating the vessels agrees. From this, they say, we can infer that government vessels aren't regulated "persons" unless the EPA says so. Doesn't this show that "except as provided" is sometimes used non-literally to refer to some recapitulated version of what a cross-referenced section actually "provides"?
Not at all. Read literally, the definition of persons says that a regulated person includes any instrumentality of the United States, except that the EPA may or may not, in consultation with agencies, apply the requirements of the statute (which apply to "persons") to government vessels. Now, if government vessels were persons, the statute's requirements would apply to government vessels whether or not the EPA said so, so it must follow that government vessels aren't persons unless so designated. That necessarily follows, however, from the literal and not-at-all nonsensical meaning of what Congress said; 3802(b)(2) wasn't "translated" into a definitional exception in order to make sense of "except as provided," but logically entailed a definitional exception. Nothing, on the other hand, follows at all from saying that state courts have concurrent jurisdiction over Securities Act suits, except that a covered class action is a class action with predominant questions and 50 members. It especially does not follow from saying so that state courts have no concurrent jurisdiction over actions so defined.
Cyan's other examples of unconventional uses of "except as provided" are similar flops. A statute provides that inactive-duty training is defined not to include correspondence-course study, "except as provided in 206(d)(2) of this title." 206(d)(2), however, allows for compensation for certain correspondence courses under the auspices of compensation for inactive-duty training. Read literally, the statute means that inactive-duty training, which is compensable, doesn't include correspondence-course study, except that you can get paid for taking certain correspondence courses. Because those correspondence courses are only compensable by virtue of compensation for inactive-duty training, it necessarily follows that they are inactive-duty training. 206(d)(2) is not "translated" by the magic of cross-reference into a definitional exception; it entails one given the literal meaning of the cross-reference.
Even, though, if you see that as translation of a sort, it's a translation fueled by logical entailment, not a grasping for what Congress must have meant but didn't say. Certain substantive provisions being logically incompatible with a definition that cross-references those provisions as exceptions, the substantive provisions must be "translated," if you like, into exceptions to the definition. What Cyan fails to find in the entire U.S. Code is a single other statute in which Congress does the reverse: say "the following rule obtains, except as provided with respect to x in section y, a definition of x," and mean "except for x as defined in section y." That would require "translating" the cross-referenced definition into the defined term itself. In fact, Cyan doesn't offer an example of anyone ever using "except as provided with respect to x" in this bizarre way, probably because it's never been done; people who are sufficiently ignorant of English to be this confused about what "except as provided" can mean don't use legal jargon like "except as provided," and people who do use legal jargon are all sufficiently conversant in English not to make the mistake.
Cyan's only good example of this sort of usage is a sentence that no one ever wrote before Cyan invented it: a parking sign that reads "No parking, except as provided in 5 U.S.C. 6103 with respect to legal holidays," a statute that merely provides a list of legal holidays and says nothing about parking. Wouldn't one have to read that to mean no parking, except on legal holidays as defined in section 6103?
Of course, once one realized to one's bewilderment that 6103 said nothing about parking. But that only shows that we would try to make some sense out of a nonsensical sign, not that the sign makes sense. What the sign means, like the hypothetical at the beginning of this post, is no parking, except that legal holidays include Christmas, New Year's, Thanksgiving, etc. That can't be what was meant, so we assume the writer of the sign can't write and thinks that "except as provided with respect to legal holidays in 6103" is an acceptable way to say "except for legal holidays, as defined in 6103." It's not, though, and if 6103 said anything at all about parking on legal holidays, or could even merely be arguably read to, we would read the sign to refer to whatever 6103 said about parking because we assume basic literacy on the part of sign-writers. All the more so of Congress.
Finally, one word on a much closer dispute between the parties and the government, namely the scope of 77p's removal provision. 77p(c) says that "[a]ny covered class action brought in any State court involving a covered security, as set forth in subsection (b), shall be removable." 77p(b), the preclusion provision, bars covered class actions under state law asserting misstatements, omissions, contrivances or manipulative devices in the sale of covered securities. The government argues that 77p(c) provides for the removal of any covered class action involving those sorts of claims about the sale of covered securities, whether or not the claims are made under state or federal law.
Respondents, in response, say that 77p(c) defines removable actions as those "set forth in subsection (b)," and subsection (b) only talks about and bars state-law actions; thus, 77p(c) only permits removal for purposes of enforcing that bar, in cases that at least present a mix of state- and federal-law claims. To adopt the government's reading (which includes subsection (b)'s subject-matter limitations to claims about deceit in the sale of covered securities), they argue, is to arbitrarily apply only half of what's "set forth" in subsection (b).
I think that is wrong. The phrase preceding the cross-reference to subsection (b) is "involving a covered security"; what is "set forth in subsection (b)" is what it means for a covered class action to involve one. The government accepts that actions are only removable under 77p(c) if they involve covered securities in the fashion subsection (b) talks about. The requirement, for preclusion purposes, that claims be brought under state law is not a part of what subsection (b) "sets forth" on what it means for a covered class action to "involve" a covered security; it's what it "sets forth" on another subject (the state-law-specific scope of the preclusion bar). A covered class action brought under federal law can involve a covered security just as much as one brought under state law, and is just as much a covered class action. I am inclined, then, to think the government is right; any covered class action that involves the sorts of allegations about covered securities sales that 77p(b) describes is removable from state court, largely obviating Cyan's policy concerns about runaway state-court class actions on a much sounder textual ground.
Great blog. However, I think your analysis here is flawed.
ReplyDeleteYour hypothetical differs in two important way from the statute that Cyan seeks to construe. First, to be a faithfully analogous provision with respect to the order of its own text, your hypothetical provision should not read "include the last day of the period if it falls on a weekday, except as provided with respect to legal holidays in subparagraph (a)(6)," but instead should read "include the last day of the period if it falls on a weekday, except as provided in subparagraph (a)(6) with respect to legal holidays." With that change, the easiest interpretation of your hypothetical provision is simply a matter of implicit commas. Add two such commas, and the provision becomes "include the last day of the period if it falls on a weekday, except, as provided in subparagraph (a)(6), with respect to legal holidays." that is not gibberish, it is just bad writing and word choice. Rearrange it to be less awkwardly ordered and we get "include the last day of the period if it falls on a weekday, except with respect to legal holidays as provided in subparagraph (a)(6)." And then we're just left with dismal word choice, namely the almost criminal use of "as provided" when the better way to say it is "as defined."
Second, to be faithfully analogous to the actual cross-referenced statute, your hypothetical subparagraph (a)(6) would have to include both a definition of "holiday" and an exception of some kind. I know you already point out this second issue, but I think you can't omit it in your hypothetical without to some extent invalidating the hypothetical. It looks to me as if the whole reason the drafter of the actual statute chose this bad English is because the cross-referenced provision had both a definition and an exception or exceptions, and the drafter wanted the cross-reference to encompass both of them.
If you apply the implicit-comma analysis above to Cyan's statute, then the statute resolves to "shall have jurisdiction of offenses and violations under this subchapter and under the rules and regulations promulgated by the Commission in respect thereto, and, concurrent with State and Territorial courts, except[,] with respect to covered class actions[,] as provided in section 77p of this title, of all suits in equity and actions at law brought to enforce any liability or duty created by this subchapter." That's arguably passable English, at least as long as you interpret "jurisdiction" the looser way that prevailed at the time in Supreme Court decisions. Or arguably you don't even need that fact: it's plausible that the drafter wanted to capture both of the rather differing exceptions that are also listed in the statute. And an additional problem is that this wording at least arguably fails to make clear that one is supposed to interpret "covered class action" to mean what it is defined to mean in section 77p.
It seems plausible, in other words, that the drafter was simply trying to make it clear, in a lazy manner, that the cross-reference to section 77p is intended to encompass everything 77p "provides," including 77p's definition of covered class action and its two rather dissimilar exceptions. That sounds a lot more plausible to me than the other possibilities. It's corrosively bad, and probably genuinely ambiguous writing. But that's hardly unusual in our subliterate congressional age, and I don't think it's literally gibberish.
All in all, bad[ly drafted] laws make hard cases.
I intend to reply to this thoughtful comment over the weekend.
DeleteMy reply to you was apparently too long for publication. Let me see if I can reduce it.
DeleteI am not sure if interpolated commas would be enough to make the cross-reference to 77p a non-operative parenthetical; if so, "except with respect to covered class actions" is perfectly sensible. But the commas aren't there so I can't exactly be accused of mistakenly leaving them out of my hypothetical. The other differences you raise don't, I think, matter.
My hypothetical intentionally deviates from the statute in Cyan in that there is no non-definitional referent, forcing us to look to that definition. Even in that case, I claim that the rule wouldn't mean "except for legal holidays as defined in (a)(6)," and that we only arrive at that interpretation by error-correction. I claim that where non-definitional referents are available, we look to them to avoid imputing gibberish to Congress.
You call this sort of gibberish mere dismal word choice; I don't agree. It is only dismal in the sense that it's nonsensical, like saying "don't cook me any seafood dishes, except as provided in the dictionary with respect to bouillabaisse," which implies that the dictionary says something about whether I eat bouillabaisse and literally means, once one finds that the dictionary only provides a definition of bouillabaisse, "don't cook me any seafood dishes, but bouillabaisse is a traditional fish stew."
Saying that the reference to 77p is intended to encompass all that 77p provides about covered class actions, including the definition, won't work because excepting a definition is just excepting a definition, not excepting the term as defined. 77p doesn't provide covered class actions themselves; it provides a definition of them. "Here's some jurisdiction, but a covered class action means x" makes no sense. For the cross-reference to cross-reference the definition in a sensible way, it would have to say "except with respect to covered class actions as defined in 77p."
Also, the cross-reference to 77p's substantive provisions about covered class actions would be redundant if all covered class actions as defined in 77p were excepted from concurrent jurisdiction; cross-referencing a provision "precluding" a subset of them from state-court jurisdiction in a loose sense wouldn't do any work. Nor would cross-referencing the removal provision; how do you remove a covered class action from state court if they can never be filed in state court in the first place?