Brief of respondents Janet L. Yellen, Secretary of the Treasury, et al. in opposition, Missouri v. Yellen, No. 22-352 (U.S.) (December 14, 2022)

Summary

A Brief for the Respondents in Opposition in State of Missouri v. Janet L. Yellen, Secretary of the Treasury, et al., No. 22-352, on petition for a writ of certiorari to the United States Court of Appeals for the Eighth Circuit, dated December 2022. The Question Presented asks whether federal courts have Article III jurisdiction over Missouri's suit seeking to enjoin the Secretary of the Treasury from enforcing a hypothetical interpretation of the offset provision of the American Rescue Plan Act of 2021 that the Treasury Department has disavowed. The brief states that the district court and court of appeals concluded that Missouri lacks Article III standing. It argues that review of the merits would be premature given the lack of percolation, and concludes that the petition should be denied.

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“Brief of respondents Janet L. Yellen, Secretary of the Treasury, et al. in opposition, Missouri v. Yellen, No. 22-352 (U.S.) (December 14, 2022).” Original at www.supremecourt.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/brief-of-respondents-janet-l-yellen-secretary-of-the-treasury-et-al-in-44167acb3e/, SHA-256 fafc89a315af71fd98555d23e4e118091f9452c1586c5cb77277327a62d96570.

Full text

No. 22-352

In the Supreme Court of the United States
STATE OF MISSOURI, PETITIONER
v.
JANET L. YELLEN, SECRETARY OF THE TREASURY, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE EIGHTH CIRCUIT

BRIEF FOR THE RESPONDENTS IN OPPOSITION

ELIZABETH B. PRELOGAR
Solicitor General
Counsel of Record
BRIAN M. BOYNTON
Principal Deputy Assistant
Attorney General
ALISA B. KLEIN
DANIEL WINIK
Attorneys
Department of Justice
Washington, D.C. 20530-0001
SupremeCtBriefs@usdoj.gov
(202) 514-2217
QUESTION PRESENTED
The American Rescue Plan Act of 2021, Pub. L. No.
117-2, Tit. IX, Subtit. M, 135 Stat. 223 (42 U.S.C. 801 et
seq.) provided nearly $200 billion in new federal grants
to help States mitigate the fiscal effects of the COVID-
19 pandemic. 42 U.S.C. 802(a)(1) and (b)(3)(A). The Act
gives States considerable flexibility in using the funds
but specifies that a State “shall not use the funds * * *
to either directly or indirectly offset a reduction in the
net tax revenue of such State” resulting from changes
in state tax law during the covered period. 42 U.S.C.
802(c)(2)(A) (the offset provision). Shortly after the
Act’s passage, petitioner Missouri sued the Secretary of
the Treasury, seeking to enjoin the Secretary from en-
forcing a “ ‘broad’ interpretation” of the offset provision,
under which a State could not “ ‘enact[] any tax-reduc-
tion policy that would result in a net reduction of reve-
nue through 2024’ ” without risk of “ ‘forfeiting its
COVID-19 relief funds.’ ” Pet. App. 5a. The district
court and court of appeals held that Missouri lacks Ar-
ticle III standing because “there is no threatened appli-
cation of the broad interpretation,” which the Treasury
Department “has never endorsed or adopted.” Id. at
10a; see id. at 24a. The question presented is:
Whether federal courts have Article III jurisdiction
over Missouri’s suit seeking to enjoin the Secretary of
the Treasury from enforcing a hypothetical interpreta-
tion of the offset provision that the Treasury Depart-
ment has disavowed.

(I)
TABLE OF CONTENTS
Page
Opinions below .............................................................................. 1
Jurisdiction .................................................................................... 1
Statement ...................................................................................... 1
Argument....................................................................................... 7
Conclusion ................................................................................... 15

TABLE OF AUTHORITIES

Cases:

Arizona v. Yellen, 34 F.4th 841 (9th Cir. 2022) .......... 6, 7, 11
Kentucky v. Yellen,
No. 21-6108, 2022 WL 17076099
(6th Cir. Nov. 18, 2022)........................................... 12, 13, 15
Ohio v. Yellen:
539 F. Supp. 3d 802 (S.D. Ohio 2021) ............................ 14
547 F. Supp. 3d 713 (S.D. Ohio 2021), rev’d
in part and vacated in part, No. 21-3787,
2022 WL 17076102 (6th Cir. Nov. 18, 2022) ............ 14
No. 21-3787, 2022 WL 17076102
(6th Cir. Nov. 18, 2022) ............................................. 12
Steel Co. v. Citizens for a Better Env’t,
523 U.S. 83 (1998) ............................................................... 13
Susan B. Anthony List v. Driehaus,
573 U.S. 149 (2014).................................................... 8, 10, 11
TransUnion LLC v. Ramirez,
141 S. Ct. 2190 (2021) ..................................................... 8, 10
United States v. Williams, 504 U.S. 36 (1992) ................... 11
West Virginia v. United States Dep’t of Treas.:
571 F. Supp. 3d 1229 (N.D. Ala. 2021), appeal
pending, No. 22-10168 (11th Cir. argued
Sept. 13, 2022) ............................................................ 14

(III)
IV

Cases—Continued: Page
No. 21-cv-465, 2021 WL 2952863
(N.D. Ala. July 14, 2021) ........................................... 14
Zivotofsky v. Clinton, 566 U.S. 189 (2012) .......................... 14

Constitution, statutes, and regulations:

U.S. Const.:
Art. I, § 8, Cl. 1 (Spending Clause) ................................ 11
Art. III ..................................................................... passim
Amend. X .......................................................................... 11
American Rescue Plan Act of 2021,
Pub. L. No. 117-2, Tit. IX, Subtit. M,
135 Stat. 223 (42 U.S.C. 801 et seq.) .................................... 1
42 U.S.C. 802 .............................................................. 1, 3, 9
42 U.S.C. 802(a)(1)............................................................. 2
42 U.S.C. 802(b)(3)(A) ....................................................... 2
42 U.S.C. 802(c) ............................................................. 2, 3
42 U.S.C. 802(c)(1) ......................................................... 2, 9
42 U.S.C. 802(c)(2) ......................................................... 2, 9
42 U.S.C. 802(c)(2)(A) ................................................... 2, 9
42 U.S.C. 802(c)(2)(B) ....................................................... 2
42 U.S.C. 802(d)(1) ............................................................ 3
42 U.S.C. 802(e) ................................................................. 3
42 U.S.C. 802(e)(1)............................................................. 3
42 U.S.C. 802(e)(2)............................................................. 3
42 U.S.C. 802(f ).................................................................. 3
42 U.S.C. 802(g)(1) ............................................................ 3
31 C.F.R.:
Section 35.8(b).................................................................... 4
Section 35.8(b)(4) ......................................................... 4, 10
Section 35.8(b)(4)(i) ........................................................... 4
Section 35.8(b)(4)(ii)(A) ..................................................... 4
V

Miscellaneous: Page
Coronavirus State and Local Fiscal
Recovery Funds:
86 Fed. Reg. 26,786 (May 17, 2021) ................................. 3
87 Fed. Reg. 4338 (Jan. 27, 2022)........................... 3, 4, 10
In the Supreme Court of the United States
No. 22-352
STATE OF MISSOURI, PETITIONER
v.
JANET L. YELLEN, SECRETARY OF THE TREASURY, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE EIGHTH CIRCUIT

BRIEF FOR THE RESPONDENTS IN OPPOSITION

OPINIONS BELOW
The opinion of the court of appeals (Pet. App. 1a-13a)
is reported at 39 F.4th 1063. The opinion, memoran-
dum, and order of the district court (Pet. App. 14a-27a)
is reported at 538 F. Supp. 3d 906.
JURISDICTION
The judgment of the court of appeals was entered on
July 14, 2022. The petition for a writ of certiorari was
filed on October 12, 2022. The jurisdiction of this Court
is invoked under 28 U.S.C. 1254(1).
STATEMENT
1. In the American Rescue Plan Act of 2021 (ARPA),
Pub. L. No. 117-2, Tit. IX, Subtit. M, 135 Stat. 223 (42
U.S.C. 801 et seq.), Congress established a Coronavirus
State Fiscal Recovery Fund. 42 U.S.C. 802. The Fund
provided nearly $200 billion in new federal grants to

(1)
2

help States and the District of Columbia “mitigate the
fiscal effects” of the COVID-19 pandemic. 42 U.S.C.
802(a)(1); see 42 U.S.C. 802(b)(3)(A).
Section 802(c) establishes parameters for States’
“Use of funds.” 42 U.S.C. 802(c)(1) (emphasis omitted).
Section 802(c)(1) provides that States may use fiscal re-
covery funds to cover broadly defined categories of
costs incurred through December 31, 2024, including:
providing assistance to households, businesses, and in-
dustries affected by the pandemic; providing premium
pay to workers performing essential work during the
pandemic; paying for state government services to the
extent of revenue losses due to the pandemic; and mak-
ing necessary investments in water, sewer, or broad-
band infrastructure. Ibid.
In turn, Section 802(c)(2) establishes two “restric-
tion[s] on [the] use” of fiscal recovery funds. 42 U.S.C.
802(c)(2) (emphasis omitted). One is that a State may
not deposit the fiscal recovery funds “into any pension
fund.” 42 U.S.C. 802(c)(2)(B). The other, the offset pro-
vision at issue here, provides that:
A State or territory shall not use the funds provided
under this section * * * to either directly or indi-
rectly offset a reduction in the net tax revenue of
such State or territory resulting from a change in
law, regulation, or administrative interpretation dur-
ing the covered period that reduces any tax (by
providing for a reduction in a rate, a rebate, a deduc-
tion, a credit, or otherwise) or delays the imposition
of any tax or tax increase.
42 U.S.C. 802(c)(2)(A). The “covered period” began on
March 3, 2021, and ends on the last day of the state fis-
cal year “in which all funds received by the State * * *
3

have been expended or returned to, or recovered by”
the Treasury Department. 42 U.S.C. 802(g)(1).
A State can receive its grant of fiscal recovery funds
after certifying to the Treasury Department that it “re-
quires the payment * * * to carry out the activities
specified in” Section 802(c) and “will use any payment
* * * in compliance with” that provision. 42 U.S.C.
802(d)(1). If a State does not use its fiscal recovery
funds in compliance with Section 802(c), the Treasury
Department may require the State to repay “an amount
equal to the amount of funds used in violation of’ Section
802(c). 42 U.S.C. 802(e). “[I]n the case of a violation of”
the offset provision, the Treasury Department may re-
quire a State to repay the lesser of “the amount of the
applicable reduction to net tax revenue attributable to
such violation” and the total amount of fiscal recovery
funds the State received. 42 U.S.C. 802(e)(1); see 42
U.S.C. 802(e)(2).
2. Congress authorized the Treasury Department
“to issue such regulations as may be necessary or ap-
propriate to carry out” Section 802. 42 U.S.C. 802(f).
On May 10, 2021, the Department published on its web-
site an interim final rule implementing Section 802, in-
cluding the offset provision. Coronavirus State and Lo-
cal Fiscal Recovery Funds, 86 Fed. Reg. 26,786 (May
17, 2021); see id. at 26,807-26,811, 26,823. In January
2022, the Department issued a final rule. Coronavirus
State and Local Fiscal Recovery Funds, 87 Fed. Reg.
4338 (Jan. 27, 2022); see id. at 4423-4429, 4452-4453.
The interim final rule and final rule “are substantially
the same” in their implementation of the offset provi-
sion. Pet. App. 4a n.3.
The regulations describe the circumstances in which
the Treasury Department will consider a State “to have
4

used funds to offset a reduction in net tax revenue.” 31
C.F.R. 35.8(b). Specifically, the regulations explain that
a State would violate the offset provision if: (1) the
State implements a change in law that it either assesses
has had or predicts will have the effect of reducing net
tax revenue; (2) the reduction caused by the change is
more than de minimis, meaning it exceeds one percent
of the State’s 2019 net tax revenue, adjusted for infla-
tion; (3) the State reports a reduction in its net tax rev-
enue relative to its inflation-adjusted 2019 net tax reve-
nue; and (4) that reduction is greater than the sum of
other changes to the State’s net tax revenue. Ibid.
Those “other changes” to net tax revenue that can
permissibly offset tax cuts include changes resulting
from “the effects of macroeconomic growth” and certain
“[r]eductions in spending.” 31 C.F.R. 35.8(b)(4) (em-
phasis omitted). First, a State does not violate the off-
set provision if it cuts taxes but maintains its prior level
of net tax revenue due to macroeconomic growth. 31
C.F.R. 35.8(b)(4)(i); see 87 Fed. Reg. at 4427 (“Safe har-
bor”) (emphasis omitted). Second, a State does not vio-
late the offset provision if it cuts taxes but maintains its
prior level of net tax revenue by reducing expenditures
of state funds in a “[d]epartment[], agenc[y], or au-
thorit[y]” where it is not spending fiscal recovery funds.
31 C.F.R. 35.8(b)(4)(ii)(A); see 87 Fed. Reg. at 4427
(“Covered spending cuts”). In short, the regulations
make clear that a State is free to cut taxes, so long as it
can afford to offset the tax cut with its own funds, rather
than with the fiscal recovery funds.
3. Missouri filed this suit on March 29, 2021, soon af-
ter Congress enacted the ARPA but before the Treas-
ury Department had issued its interim final rule. Pet.
App. 5a. Missouri’s complaint “describe[d] two
5

potential interpretations of the” offset provision. Ibid.
Under Missouri’s preferred interpretation, the offset
provision “merely prohibits the States from taking
COVID-19 relief funds and deliberately applying them
to offset a specific tax reduction of a similar amount.”
Ibid. By contrast, “[u]nder a second, ‘broad’ interpre-
tation” Missouri posited, the offset provision “ ‘would
prohibit a State from enacting any tax-reduction policy
that would result in a net reduction of revenue through
2024 or risk forfeiting its COVID-19 relief funds.’ ”
Ibid.; see D. Ct. Doc. 1, at 3 (Mar. 29, 2021). Missouri
sought a preliminary injunction against the Secretary
of the Treasury’s enforcement of the broad interpreta-
tion. Pet. App. 5a-6a; D. Ct. Doc. 1, at 18.
The district court dismissed Missouri’s suit, holding
that Missouri lacked Article III standing and that the
suit was unripe. Pet. App. 14a-27a. The court explained
that the offset provision “does not prohibit States from
proposing, enacting, or implementing legislation that
cuts taxes for [their] citizens and businesses,” but ra-
ther “ ‘merely restricts a State’s ability to use federal
funds distributed under the [ARPA] to offset a reduc-
tion in net tax revenue.’ ” Id. at 22a-23a (second set of
brackets in original). And “[b]ecause the ARPA does
not prohibit a State from implementing its own tax pol-
icy,” the court reasoned, “Missouri does not face a cred-
ible threat” that the Treasury Department would seek
to recoup funds “if [Missouri] decides to pass tax cutting
measures.” Id. at 23a. Accordingly, the court concluded
that Missouri’s claims rest “upon contingent future
events that may not occur,” and emphasized that con-
struing the offset provision “well in advance of any ad-
verse effect and in a wholly[ ] non-actionable hypothet-
ical context” would be “ ‘too remote and abstract an
6

inquiry for the proper exercise of the judicial function.’ ”
Id. at 25a-26a.
4. The court of appeals affirmed. Pet. App. 1a-13a.
The court explained that “Missouri’s complaint and ap-
peal make clear * * * that the State is not challenging”
the offset provision (which the court called the “Offset
Restriction”) “as written, but rather a specific potential
interpretation of the provision”—“the ‘broad interpre-
tation’ ” noted above. Id. at 9a. The court observed that
Missouri had “develop[ed] no argument as to how it has
suffered a concrete injury under” any other theory, in-
cluding a theory that the offset provision “is unconsti-
tutionally vague.” Id. at 9a n.5. For that reason, the
court deemed inapposite the Ninth Circuit’s decision in
Arizona v. Yellen, 34 F.4th 841 (2022), where that court
concluded that Arizona had standing to raise constitu-
tional challenges to the offset provision “as written,” as
opposed to “challeng[ing] a hypothetical ‘broad inter-
pretation.’ ” Pet. App. 9a n.5 (citation omitted).
The court of appeals then held that Missouri lacked
Article III standing to seek to enjoin the Secretary of
the Treasury from applying the “broad interpretation.”
Pet. App. 10a. “The problem for Missouri,” the court
reasoned, “is that there is no threatened application of
the broad interpretation,” because the Treasury De-
partment “has never endorsed or adopted [that] inter-
pretation.” Ibid. To the contrary, “throughout this lit-
igation, the Secretary has been clear that a recipient of
ARPA funds will be deemed to have violated the Offset
Restriction only if it cannot account for net revenue
losses through non-ARPA sources.” Ibid.
The court of appeals further explained that “Mis-
souri has not alleged any intent to engage in conduct
that is proscribed by the Offset Restriction on its face
7

or the Secretary’s interpretation of it.” Pet. App. 11a.
“While Missouri’s complaint alleges that its legislature
was then considering tax-reduction policies,” the court
observed, “such policies alone do not violate ARPA or
any interpretation of ARPA embraced by the Secre-
tary.” Ibid. Instead, the court emphasized, the offset
provision “simply prohibits states from cutting taxes in
a way that reduces net revenue more than a de minimis
amount and then failing to” offset that reduction by
means other than the use of fiscal recovery funds, “such
as through organic economic growth, increases in reve-
nue from other sources, or spending cuts in sectors”
where the State is not spending fiscal recovery funds.
Ibid.
“Simply put,” the court of appeals explained, Mis-
souri has asked the federal courts “to declare, in the ab-
stract, what a statute does not mean” and “to enjoin a
hypothetical interpretation of the Offset Restriction
that the Secretary has explicitly disclaimed, without al-
leging any concrete, imminent injury from the Secre-
tary’s actual interpretation.” Pet. App. 12a. “That,” the
court concluded, “would be a quintessential advisory
opinion.” Ibid.
ARGUMENT
Missouri contends (Pet. 21) that it has Article III
standing to seek to enjoin the Secretary of the Treasury
from enforcing a “broad reading” of the offset provision.
But as the court of appeals correctly held, Article III
does not permit Missouri to challenge a hypothetical in-
terpretation of the offset provision that the Treasury
Department has disavowed. Pet. App. 12a-13a. Con-
trary to petitioner’s submission (Pet. 14-21), the court’s
decision is consistent with the Ninth Circuit’s decision
in Arizona v. Yellen, 34 F.4th 841 (2022). And this case
8

would be an exceedingly poor vehicle for addressing
“the meaning and constitutionality” of the offset provi-
sion, Pet. 27, because Missouri lacks standing and the
lower courts never reached the merits. This Court’s re-
view is unwarranted.
1. The court of appeals properly held that no Article
III jurisdiction exists over Missouri’s suit. See Pet.
App. 12a-13a.
a. “Under Article III, federal courts do not adjudi-
cate hypothetical or abstract disputes” and “do not is-
sue advisory opinions.” TransUnion LLC v. Ramirez,
141 S. Ct. 2190, 2203 (2021). Thus, to establish Article
III standing, “a plaintiff must show (i) that [it] suffered
an injury in fact that is concrete, particularized, and ac-
tual or imminent; (ii) that the injury was likely caused
by the defendant; and (iii) that the injury would likely
be redressed by judicial relief.” Ibid. And when, as
here, a plaintiff seeks to challenge the “threatened en-
forcement of a law,” it must allege “ ‘an intention to en-
gage in a course of conduct arguably affected with a con-
stitutional interest, but proscribed by a statute,’ ” and
“ ‘a credible threat’ ” that the statute will be enforced
against the plaintiff. Susan B. Anthony List v.
Driehaus, 573 U.S. 149, 158-159 (2014) (citation omit-
ted).
The court of appeals correctly held that Missouri
lacks Article III standing under those principles. As
the court explained, Missouri does not challenge the off-
set provision “as written, but rather a specific potential
interpretation of the provision—the ‘broad interpreta-
tion.’ ” Pet. App. 9a. Under that interpretation, the off-
set provision “would prohibit a State from enacting any
tax-reduction policy that would result in a net reduction
of revenue through 2024” without risk of “forfeiting its
9

COVID-19 relief funds.” Id. at 5a. But “[t]he problem
for Missouri * * * is that there is no threatened appli-
cation of the broad interpretation.” Id. at 10a.
To begin with, the offset provision’s plain terms fore-
close such an interpretation. Section 802(c)(1) first sets
out in broad terms the permissible uses of fiscal recov-
ery funds by States. 42 U.S.C. 802(c)(1). Missouri does
not challenge Congress’s identification of those uses.
The offset provision, in turn, simply provides a “re-
striction” on the “use of funds” under Section 802. 42
U.S.C. 802(c)(2) (emphasis added). And it does not say
that a State that accepts fiscal recovery funds cannot
cut taxes. It says only that such a State “shall not use”
the fiscal recovery funds “to either directly or indirectly
offset a reduction in the net tax revenue of such State
* * * resulting from a change in law” that reduces
taxes. 42 U.S.C. 802(c)(2)(A). Under the provision,
then, a State receiving fiscal recovery funds that “antic-
ipates revenue decreases” from a tax cut may not use
the fiscal recovery funds “to offset those decreases” ra-
ther than for the purposes identified in Section
802(c)(1). Pet. App. 11a n.6. Instead, the State “must
find a way within its own budget to offset those de-
creases,” ibid.—for instance, through increased state
revenues (due to economic growth or tax increases) or
through reducing certain expenditures. The offset pro-
vision thereby only prevents a State from using fiscal
recovery funds “as part of that balancing process,” by
enacting tax cuts that it could not afford but for the in-
flux of fiscal recovery funds. Ibid.
The Treasury Department’s regulations implement
the offset provision’s plain terms and thus “explicitly
disclaim[]” the broad interpretation that Missouri alleg-
edly feared. Pet. App. 12a. As discussed above, the
10

Department’s regulations make clear that the offset
provision allows States that accept fiscal recovery funds
to also cut taxes, so long as they can afford to pay for
those tax cuts using other funds, such as revenue from
economic growth or reductions in spending outside ar-
eas where they spend fiscal recovery funds. See 87 Fed.
Reg. at 4423-4429; 31 C.F.R. 35.8(b)(4).
Accordingly, “there is no threatened application of
the broad interpretation” upon which Missouri’s suit is
premised. Pet. App. 10a. The court of appeals thus cor-
rectly concluded that Missouri alleges “a ‘conjectural or
hypothetical’ injury” and seeks “a quintessential advi-
sory opinion.” Id. at 12a (citation omitted). Federal
courts lack Article III jurisdiction to resolve claims of
that nature. See TransUnion, 141 S. Ct. at 2203.
b. Missouri’s contrary arguments lack merit. Mis-
souri contends (Pet. 22) that because it has now cut
taxes, it faces a risk of recoupment under the offset pro-
vision. But as already explained, tax cuts simpliciter do
not violate the offset provision, and Missouri has “not
alleged that” any tax cuts it has enacted “would reduce
net [tax] revenue and that it would fail to offset the re-
duction through permissible means.” Pet. App. 11a.
Missouri errs in asserting that the court of appeals
“demanded” that Missouri “ ‘confess that [it] will in fact
violate the law.’ ” Pet. 23 (citation omitted; brackets in
original). The court expressly recognized that “a plain-
tiff generally need not ‘confess that he will in fact violate
[a] law’ in order to challenge it.” Pet. App. 11a (quoting
Susan B. Anthony List, 573 U.S. at 163) (brackets in
original). It simply asked whether Missouri had alleged
“an intention to engage in a course of conduct” that it
plausibly feared the Treasury Department would re-
gard as violating the offset provision, finding that
11

Missouri had failed to do so. Ibid. (quoting Susan B.
Anthony List, 573 U.S. at 159).
Missouri also seeks (Pet. 24, 26) to assert harms un-
related to the broad interpretation of the offset provi-
sion, such as “sovereign interests” in receiving an
unambiguous offer of federal funds and “costs” in com-
plying with the Treasury Department’s regulations.
But Missouri failed to “develop[]” those theories below,
instead solely contending that it was “injured by a
‘threatened’ ‘broad interpretation’ that has never been
adopted.” Pet. App. 9a n.5. The court of appeals ac-
cordingly declined to address those other theories.
Ibid. And this Court’s “traditional rule * * * precludes
a grant of certiorari” on issues that were “not pressed
or passed upon below.” United States v. Williams, 504
U.S. 36, 41 (1992) (citation omitted).
2. a. Petitioner errs (Pet. 14-21) in contending that
the decision below conflicts with the Ninth Circuit’s de-
cision in Arizona v. Yellen, supra. There, Arizona main-
tained that the offset provision is “ambiguous and coer-
cive,” in violation of the Spending Clause and Tenth
Amendment. 34 F.4th at 853. The court held that Ari-
zona had standing to raise those constitutional claims,
based “on its theory of realistic danger of enforcement,
and alternatively, on its theory of injury to sovereign
rights.” Ibid.1
Here, the court of appeals expressed no disagree-
ment with the Ninth Circuit’s decision in Arizona. Ra-
ther, it distinguished Arizona because, “unlike Missouri,

1
In finding standing, the Ninth Circuit emphasized that it ac-
cepted Arizona’s “allegations” about “what the Offset Provision
means and how it may be enforced” solely for jurisdictional pur-
poses and was not passing on “the merits of Arizona’s claims.” Ar-
izona, 34 F.4th at 853.
12

Arizona did not challenge a hypothetical ‘broad inter-
pretation’ of the Offset Restriction but instead argued
that, as written, the Offset Restriction is unconstitu-
tionally ambiguous and unduly coercive.” Pet. App. 9a
n.5 (citation omitted). To the extent Missouri sought to
raise any comparable theory here, the court explained,
it “develop[ed] no argument as to how it has suffered a
concrete injury” under that theory. Id. at 9a-10a n.5.
b. After Missouri filed its petition, the Sixth Circuit
issued two decisions that are consistent with the court
of appeals’ holding here. First, in Ohio v. Yellen, No.
21-3787, 2022 WL 17076102 (Nov. 18, 2022), the Sixth
Circuit held that Ohio’s constitutional challenge to the
offset provision was moot. Id. at *6.2 The court ob-
served that Ohio’s challenge (like Missouri’s) rested
principally on the proposition that the Treasury De-
partment “could read the Offset Provision in a broad
way—as barring any tax cut during ARPA’s covered
period—and thus that [a State] risked recoupment
should it exercise its sovereign prerogative to cut
taxes.” Ibid. “Yet,” the court emphasized, the Depart-
ment has “repeatedly disavowed” that “reading of the
statute.” Ibid. Favorably citing the court of appeals’
decision in this case, the Sixth Circuit found no “reason-
able possibility of a recoupment action predicated on
that broad reading.” Id. at *7.
Second, in Kentucky v. Yellen, No. 21-6108, 2022 WL
17076099 (Nov. 18, 2022), the Sixth Circuit considered a
suit by Kentucky and Tennessee contending that the
offset provision “is an ambiguous, coercive, and

2
Although the court framed its holding in terms of mootness ra-
ther than standing, its basic determination was that it lacked Article
III jurisdiction due to the lack of a “live case[] or controvers[y].”
Ohio, 2022 WL 17076102, at *5.
13

commandeering condition attached to [the ARPA]
funds.” Id. at *1. The court determined “that Ken-
tucky’s challenge is nonjusticiable” because it turned on
the broad interpretation of the offset provision that the
Treasury Department had “disavowed.” Id. at *2; see
id. at *12. But the court found Tennessee’s challenge
justiciable because the court believed that Tennessee
had “adduce[d] additional evidence of a distinct theory
of injury: that Treasury’s Rule (and the underlying Off-
set Provision it implements) burden the State with com-
pliance costs,” such as “additional labor and other ex-
penses that Tennessee must incur to ensure that its re-
cent and proposed tax cuts do not violate the Offset Pro-
vision.” Id. at *2; see id. at *13.
Even accepting the Sixth Circuit’s jurisdictional
analysis in Kentucky, Missouri is in the position of Ohio
and Kentucky, not Tennessee. Like Ohio’s and Ken-
tucky’s claims, Missouri’s claim rests on the broad in-
terpretation of the offset provision that the Treasury
Department has disavowed. Pet. App. 9a-10a. And un-
like Tennessee, Missouri neither alleged a compliance-
cost theory of injury in its complaint nor adduced any
evidence to support such a theory. See id. at 9a-10a n.5.
3. Finally, Missouri contends (Pet. 27-31) that the
Court should grant the petition in order to address the
merits of its challenge to the offset provision. But there
is no basis in this case for evaluating any merits issues
concerning the offset provision. For the reasons al-
ready discussed, there is no Article III case or contro-
versy, so this Court would lack jurisdiction to even
reach the merits. See Steel Co. v. Citizens for a Better
Env’t, 523 U.S. 83, 94 (1998). Even if the Court believed
it had jurisdiction, the Court ordinarily does not decide
merits questions “in the first instance” where, as here,
14

both lower courts resolved the case on threshold
grounds. Zivotofsky v. Clinton, 566 U.S. 189, 201 (2012)
(citation omitted). And Missouri’s framing of its claim
as a statutory challenge to a hypothetical broad inter-
pretation of the offset provision—as opposed to a con-
stitutional challenge to the provision as written—makes
this case an especially undesirable candidate for resolv-
ing any constitutional issues.
Moreover, the fact that this case has not proceeded
past the threshold preliminary-injunction stage further
counsels against review. To the extent the Court were
inclined to consider “the meaning and constitutionality
of the” offset provision, Pet. 27, it should await a case
arising from a decision on a permanent injunction. In-
deed, two district courts that ultimately ruled in favor
of other challenges to the offset provision at the perma-
nent-injunction stage had previously denied prelimi-
nary injunctions to the plaintiff States. Compare Ohio
v. Yellen, 539 F. Supp. 3d 802, 821-822 (S.D. Ohio 2021)
(denying preliminary injunction), and West Virginia v.
United States Dep’t of Treas., No. 21-cv-465, 2021 WL
2952863, at *10 (N.D. Ala. July 14, 2021) (same), with
Ohio v. Yellen, 547 F. Supp. 3d 713, 740-741 (S.D. Ohio
2021) (granting permanent injunction), rev’d in part and
vacated in part, No. 21-3787, 2022 WL 17076102 (6th
Cir. Nov. 18, 2022), and West Virginia v. United States
Dep’t of Treas., 571 F. Supp. 3d 1229, 1255 (N.D. Ala.
2021) (same), appeal pending, No. 22-10168 (11th Cir.
argued Sept. 13, 2022).
More broadly, reviewing the merits of Missouri’s
challenge to the offset provision would be premature at
this juncture given the lack of percolation in the courts
of appeals. Only a single court of appeals panel—the
Sixth Circuit panel in Kentucky—has addressed the
15

merits of a State’s challenge to the offset provision,
holding that the provision cannot be enforced against
Tennessee because the court believed the provision
“does not clearly explain” certain aspects of its opera-
tion. See 2022 WL 17076099, at *17. The Sixth Circuit
has extended the deadline for filing a petition for re-
hearing en banc in that case to January 18, 2023. See
Letter, Kentucky, supra, No. 21-6108 (Nov. 30, 2022).
And additional cases presenting challenges to the offset
provision are pending before the Fifth Circuit, Texas v.
Yellen, No. 22-10560 (docketed June 7, 2022), and the
Eleventh Circuit, West Virginia, supra, No. 22-10168.
Any consideration of the offset provision by this Court
would benefit from further percolation.
CONCLUSION
The petition for a writ of certiorari should be denied.
Respectfully submitted.
ELIZABETH B. PRELOGAR
Solicitor General
BRIAN M. BOYNTON
Principal Deputy Assistant
Attorney General
ALISA B. KLEIN
DANIEL WINIK
Attorneys
DECEMBER 2022

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