Late last month, the Supreme Court heard oral argument in Soto v. United States, a case originally decided by the Federal Circuit. The Court granted review to consider whether a statutory provision governing Combat-Related Special Compensation, 10 U.S.C. § 1413a, provides a settlement mechanism that displaces the default procedures and limitations set forth in the Barring Act. According to the Federal Circuit, “the Barring Act applies to settlement claims” regarding Combat-Related Special Compensation. As for why, it indicated “the CRSC statute does not explicitly provide its own settlement mechanism.” It then held that “the six-year statute of limitations contained in the Barring Act applies to CRSC settlement claims.” Soto challenges these findings by arguing that the Barring Act does not apply to CRSC settlement claims. This is our argument recap.
Tacy F. Flint argued on behalf of Soto. According to Flint, the CRSC statute “grants the secretary concerned all authority needed” to settle claims, thus “the Barring Act does not apply.” Justice Thomas highlighted how “the government argues that if we agree with you, there would be a considerable number of other statutes that would confer . . . settlement authority.” Flint rejected this argument, indicating “those statutes don’t say anything about a specific government official determining validity and amount due.” Flint conceded that some of those statutes authorize an official “to determine a fact . . . that may be relevant to whether a claim is valid and the amount due,” but, she said, “that is not complete authority to determine validity and amount due on a claim.” Furthermore, Flint disagreed that a decision in Soto’s favor would “create destabilization in . . . terms of military pay.”
Justice Alito asked “what might have motivated Congress to think” that “in this particular situation” it would not want a statute of limitation. In response, Flint said “they might not have wanted” one here because “CRSC and one other form of benefit . . . are the two benefits that are exceptions from what’s called the ban on concurrent receipt.”
In response to a question posed by Justice Kavanaugh, Flint “respectfully disagree[d] with the suggestion that express displacement isn’t . . . satisfied by the text of 1413a.” Flint argued that, even though the statute “does not use the word ‘settle,'” the word “settle” is not required for a statute to displace the Barring Act.
Flint concluded by arguing that “it is not the case that every single statute that has ever displaced the Barring Act has its own separate statute of limitations.” According to Flint, “CRSC might be the only military disability compensation statute that has been found to apply in that way, but it’s not the only statute that applies in that way.”
Caroline A. Flynn, Assistant to the Solicitor General in the Department of Justice, argued on behalf of the United States.
According to Flynn, the text of the the Barring Act, and particularly 31 U.S.C. § 3702(a)(1)A), “expressly provides that claims of military service members for various forms of unpaid compensation are to be settled under [§] 3702 and its six-year limitations period.” Furthermore, in the CRSC statute, she said, “Congress did not use any of the clear hallmark language that had been recognized to displace [§] 3702, including by simply using the word ‘settle’ or simply providing a different timing rule.” Thus, she said, “the CRSC statute should be read harmoniously with [§] 3702 and that statute’s limitation period, which the Secretary of Defense may waive.”
Justice Thomas asked, “[o]ther than using the word ‘settle,’ how would you draft this statute . . . to confer settlement authority?” Flynn responded by arguing “there are hallmark-like formulations that Congress has used.” She said Congress “often just” uses “the word ‘settle,’” but, she said, “there are other examples, like speaking of claims being allowed or disallowed or referring to a finding being final and conclusive.” Flynn said the government “reject[s] the idea that there is function-based test where you sort of look to whether . . . the details of program administration provided in a statute add up to . . . something that looks like making determinations relevant to eligibility or determinations relevant to how much will ultimately be paid out.”
Justice Kagan asked Flynn “[w]hy isn’t this clear enough,” with regard to whether the CRSC statute has “everything that’s necessary to convey settlement authority here.” In response, Flynn argued that the Court has been clear “that payment authority is different from settlement authority.” Next, Flynn argued, it is not unusual to have an application process, and “it’s a little odd for Congress to say we’re displacing the Barring Act by . . . naming a particular Department of Defense official to be making these determinations when, before” § 3702 authority “was transferred to the Secretary of Defense . . . GAO was the one who had the [§] 3702 authority.” Furthermore, Flynn argued, “there was no finding that any other form of military pay or compensation was not subject to the six-year time bar.”
Flynn argued the primary concern of the government is adoption of a “function-based test,” which the government fears would create “a world where we just really can’t predict what kind of open-ended retroactive liability the Department of Defense is facing.”
Justice Jackson challenged the government’s argument by asking “exactly what it is you think we need to be looking for in order to say the Barring Act applies or it doesn’t.” Flynn responded by reiterating that “you need to look for the word ‘settle’ or other hallmark formulations that otherwise get across Congress’s intent to convey this kind of specialized accounting authority.” Flynn also argued the function-based test “can’t be the right standard because Congress assigned, under the Barring Act, the authority to settle claims under all of these military pay and compensation statutes.”
In her rebuttal, Flint asserted that, while “hallmark formulations, ‘settlement’ or otherwise, would be the most obvious, most straightforward way to write the CRSC statute,” she said “that sure doesn’t mean it’s the only way.” Flint suggested “[t]he way to interpret section 1413a is to read its text to determine whether it authorizes an official to determine the validity of CRSC claims and the amount due, and all of that is there in the statute.” She said “it is proper to conclude that the Barring Act is displaced, because section 3702(a) says: If another statute provides for settlement of claims, this law doesn’t apply.” According to Flint, a “statute that authorizes an official to determine the validity and amount due on claims is a statute that authorizes settlement.”
We’ll report more when the Court decides the case.