Findings
On the statute's text, on Tri-State's holdings, on the United States' representations to two federal courts and on the instruments in the Library, the operation of a typical employer in passenger transportation and travel services was partially suspended in each of the six calendar quarters from April 1, 2020 through September 30, 2021 due to orders from appropriate governmental authorities limiting commerce, travel and group meetings due to COVID-19. The Service's account of these six quarters, in which no order reached this industry, describes a period that did not occur; the findings below describe the one that did. The findings are stated in the statutory words, quarter by quarter; the standards the claims satisfy follow; and the records on which every finding rests are described.
The second quarter of 2020
During the calendar quarter beginning April 1, 2020 and ending June 30, 2020, orders from appropriate governmental authorities limiting commerce, travel and group meetings due to COVID-19, namely the school closure orders of every State and the District (the fifty States, above), the stay-at-home orders of forty-two States and territories, the District among them (Ex. CA-007; Ex. NY-002; Ex. IL-005; Ex. NJ-004 and the other stay-at-home instruments set out State by State above), the traveler-quarantine orders of at least twenty-one States (Ex. HI-003; Ex. AK-012; Ex. RI-009; Ex. FL-012; Ex. TX-006; Ex. TX-007; Ex. SC-007; Ex. DE-010; Ex. VT-012; Ex. ME-013; Ex. MT-010; Ex. KY-011; Ex. WV-012; Ex. OK-010; Ex. AZ-012; Ex. UT-007; Ex. ID-004; Ex. AR-039; Ex. AR-047; Ex. WY-010; Ex. ND-014; Ex. KS-053; Ex. NE-013), the gathering bans and caps of forty-nine States and the District, the venue and casino closures, the No Sail Order (Ex. FED-027; Ex. FED-028), the entry proclamations (Ex. FED-200; Ex. FED-201; Ex. FED-202; Ex. FED-203), the land-border notifications (Ex. FED-216; Ex. FED-239), the visa suspension (Ex. FED-327), the FFCRA mandate (Ex. FED-170; Ex. FED-171), the DOT minimum-service order (Ex. AGY-AVIATION-SURFACE-028), SFAR 118 (Ex. AGY-AVIATION-SURFACE-001), the for-hire and transit orders of New York, New Jersey, Connecticut and the District (Ex. MET-NYC-004; Ex. NY-018; Ex. NJ-013; Ex. CT-016; Ex. DC-007), the orders closing or restricting the motor-vehicle offices of at least twenty States and the District and the school-transportation payment instruments of New Jersey, Pennsylvania and Connecticut (Ex. SEC-21-010; Ex. SEC-21-012; Ex. SEC-21-011), caused a temporary delay, interruption or termination of a more than nominal portion of the operations of employers in this industry throughout the United States. They did so by idling every home-to-school route, cancelling every charter and tour, removing every cruise and foreign product, confining every passenger, banning the shared ride, capping and masking the ride that remained, fixing the airline network, closing the offices that issue the industry's credentials and mandating leave for the workforce's quarantines and school closures.
The third quarter of 2020
During the calendar quarter beginning July 1, 2020 and ending September 30, 2020, orders from appropriate governmental authorities limiting commerce, travel and group meetings due to COVID-19, namely the gathering caps of forty-six States, the traveler-quarantine regimes of New York, Connecticut, New Mexico, Massachusetts, Hawaii, Alaska, Vermont, Maine, Kansas, Chicago and the District (Ex. NY-006; Ex. CT-023; Ex. NM-024; Ex. MA-025; Ex. SEC-06-017; Ex. HI-003; Ex. AK-012; Ex. VT-024; Ex. ME-026; Ex. KS-054; Ex. MET-CHI-019; Ex. DC-081), the remote and hybrid school orders of the largest States and the bus capacity and face-covering rules of seven States (Ex. LA-072; Ex. IN-035; Ex. UT-019; Ex. SC-057; Ex. DE-029; Ex. MN-027; Ex. NV-033 chain), the conveyance face-covering orders of thirty States, exposure controls placed on the ride and its operator (Ex. CO-031; Ex. IN-035; Ex. MN-027; Ex. WI-009; Ex. OH-030; Ex. CA-016), the No Sail extensions (Ex. FED-029; Ex. FED-030), the proclamations and border renewals (Ex. FED-220; Ex. FED-221; Ex. FED-222), the DOT order to September 30 (Ex. AGY-AVIATION-SURFACE-028), SFAR 118-1 (Ex. AGY-AVIATION-SURFACE-002) and the FFCRA mandate (Ex. FED-170), caused a temporary delay, interruption or termination of a more than nominal portion of the operations of employers in this industry throughout the United States. They did so by capping the group the charter could carry, quarantining the passenger on arrival in eleven jurisdictions, opening the school year remote or hybrid, capping and masking the bus and the taxi, keeping the cruise product closed and the border closed to tourism, and fixing the airline network.
The fourth quarter of 2020
During the calendar quarter beginning October 1, 2020 and ending December 31, 2020, orders from appropriate governmental authorities limiting commerce, travel and group meetings due to COVID-19, namely the Conditional Sailing Order (Ex. FED-031), SFAR 118-2 (Ex. AGY-AVIATION-SURFACE-004), the proclamations and border renewals (Ex. FED-223; Ex. FED-224; Ex. FED-225; Ex. FED-213), the quarantine regimes of fourteen jurisdictions including the new orders of Pennsylvania, New Hampshire, Vermont, Connecticut, Maryland and Washington (Ex. PA-021; Ex. NH-059; Ex. VT-080; Ex. CT-034; Ex. MD-023; Ex. WA-054), the re-tightened gathering caps of thirty States, the curfews of Ohio, North Carolina and Virginia (Ex. OH-039; Ex. NC-023; Ex. VA-016), the winter remote-school orders (Ex. MI-060; Ex. MI-062; Ex. KY-034), the conveyance face-covering orders of thirty-three States (exposure controls on the ride and its operator) and the FFCRA mandate through December 31 (Ex. FED-170), caused a temporary delay, interruption or termination of a more than nominal portion of the operations of employers in this industry throughout the United States. They did so by keeping the cruise product closed under conditions, quarantining the holiday traveler in the Northeast, removing the evening fare by curfew, stopping the routes of remote schools, re-capping the venue and extending, under 46 U.S.C. § 7507, the mariner credentials that closed examination centers could not renew (recorded in Ex. AGY-USCG-PORTS-028).
The first quarter of 2021
During the calendar quarter beginning January 1, 2021 and ending March 31, 2021, orders from appropriate governmental authorities limiting commerce, travel and group meetings due to COVID-19, namely the CDC conveyance order and the TSA security directives from February 1, 2021 (Ex. FED-020; Ex. FED-050; Ex. FED-053; Ex. FED-054), the pre-departure testing order (Ex. FED-042), Proclamation 10143 (Ex. FED-207), the Conditional Sailing Order (Ex. FED-031), the border renewals (Ex. FED-227; Ex. FED-228; Ex. FED-229), DOT Order 2021-1-5 (Ex. AGY-AVIATION-SURFACE-033), FRA Emergency Order No. 32 (Ex. AGY-AVIATION-SURFACE-014), the conveyance order as enforced at every port and on every commercial vessel under Captain of the Port authority (recorded in Ex. AGY-USCG-PORTS-031; Ex. AGY-USCG-PORTS-033), SFAR 118-2 (Ex. AGY-AVIATION-SURFACE-004), the quarantine regimes of fourteen jurisdictions to their repeal dates, the gathering caps of thirty States and the school face-covering orders of most States (infection-prevention conditions of in-person instruction), caused a temporary delay, interruption or termination of a more than nominal portion of the operations of employers in this industry throughout the United States. They did so by making a face covering a federal condition of carriage on every conveyance and making every operator its enforcer, testing every inbound passenger, continuing every entry suspension, keeping the cruise product closed, fixing the airline network and running the school routes on hybrid rosters.
The second quarter of 2021
During the calendar quarter beginning April 1, 2021 and ending June 30, 2021, orders from appropriate governmental authorities limiting commerce, travel and group meetings due to COVID-19, namely the conveyance order as renewed May 12, 2021 (Ex. FED-020; Ex. FED-051; Ex. FED-056), the testing order (Ex. FED-042), Proclamations 10143 and 10199 (Ex. FED-207; Ex. FED-208), the Conditional Sailing Order and its technical instructions (Ex. FED-031; Ex. FED-032), the border renewals (Ex. FED-229; Ex. FED-230; Ex. FED-231; Ex. FED-232), DOT Order 2021-4-13 from May 14 (Ex. AGY-AVIATION-SURFACE-035), FRA Emergency Order No. 32, the conveyance order as enforced at every port under Captain of the Port authority (recorded in Ex. AGY-USCG-PORTS-037; the Coast Guard's vessel and TWIC bulletins, Ex. AGY-USCG-PORTS-035 and Ex. AGY-USCG-PORTS-034, as the record), SFAR 118-2 to April 30, Hawaii's Safe Travels and Kansas's mandate (Ex. HI-021; Ex. HI-023; Ex. KS-057), the gathering caps and school face-covering orders of most States to their end dates, and the State transit and for-hire face-covering retentions (the exposure controls kept on the ride after the general orders fell) (Ex. CA-029; Ex. KY-049; Ex. NJ-050; Ex. IL-037), caused a temporary delay, interruption or termination of a more than nominal portion of the operations of employers in this industry throughout the United States. They did so by governing every ride, every vessel and every flight by federal order, keeping the cruise product closed until the test voyages of June, adding India to the entry suspensions, fixing the airline network and running the school year to its end under the States' bus-capacity and face-covering rules, the infection-prevention conditions of every route.
The third quarter of 2021
During the calendar quarter beginning July 1, 2021 and ending September 30, 2021, orders from appropriate governmental authorities limiting commerce, travel and group meetings due to COVID-19, namely the CDC conveyance order and TSA Security Directives SD 1582/84-21-01A and -01B with their aviation counterparts (Ex. FED-020; Ex. FED-051; Ex. FED-052; the aviation counterparts SD 1544-21-02A and -02B, SD 1542-21-01A and -01B and EA 1546-21-01A and -01B, described by category from B-2, whose February 1, 2021 texts are Ex. FED-053, Ex. FED-054 and Ex. FED-055; the successors are not held in the Library), the Conditional Sailing Order (Ex. FED-031; Ex. FED-032; in force to November 1, 2021 by its terms; the October 25, 2021 extension, Ex. FED-033, is post-period and is cited in the third quarter of 2021 only for the scheduled expiry it recites), the entry proclamations and the testing order (Ex. FED-200; Ex. FED-201; Ex. FED-207; Ex. FED-208; Ex. FED-042), the land-border notifications (Ex. FED-232; Ex. FED-233; Ex. FED-234; Ex. FED-235; Ex. FED-255), DOT Order 2021-4-13 (Ex. AGY-AVIATION-SURFACE-035), FRA Emergency Order No. 32 (Ex. AGY-AVIATION-SURFACE-014; Ex. AGY-AVIATION-SURFACE-075), the conveyance order as implemented at every port and on every commercial vessel by the Coast Guard (Ex. FED-020; records at Ex. AGY-USCG-PORTS-037; Ex. AGY-USCG-PORTS-038) and the mariner-credential extensions under 46 U.S.C. § 7507 (record at Ex. AGY-USCG-PORTS-028), Hawaii's proclamations, Safe Travels and executive orders (Ex. HI-023; Ex. HI-024; Ex. HI-025; Ex. HI-027; Ex. HI-031), Kansas's KDHE mandate (Ex. KS-057), Rhode Island's Student Transportation Order and quarantine orders (Ex. RI-057; Ex. RI-064; Ex. RI-036), New York's school regulations reaching bus drivers and contractors (Ex. NY-072; Ex. NY-075; Ex. NY-071; Ex. NY-073), the school-worker vaccination-or-testing orders of California, Washington, Oregon, Illinois, New Mexico, New Jersey and Connecticut (Ex. CA-033; Ex. WA-079; Ex. OR-052; Ex. IL-042; Ex. NM-068; Ex. NJ-057; Ex. CT-054), the 2021-22 school face-covering and quarantine orders (Ex. IL-040; Ex. OR-045; Ex. WA-075; Ex. CA-034; Ex. NJ-055; Ex. KY-052; Ex. LA-036; Ex. AGY-ST-EDUCATION-HIGHER-ED-029; Ex. DE-044; Ex. MA-071; Ex. PA-042), the State transit and for-hire face-covering retentions (Ex. CA-029; Ex. KY-049; Ex. NJ-050; Ex. IL-037; Ex. WA-070; Ex. NC-030; Ex. LA-034; Ex. RI-044) and the reinstated indoor face-covering, facility and vaccination-proof orders of twenty-nine jurisdictions (Ex. LA-036; Ex. OR-048; Ex. OR-049; Ex. WA-078; Ex. IL-042; Ex. NV-041; Ex. NV-042; Ex. NM-067; Ex. DC-057; Ex. MET-NYC-017; Ex. MET-SFO-011; Ex. MET-MSY-029; Ex. MET-HNL-035; Ex. MET-CHI-026; Ex. MET-BAL-017; Ex. MET-CLE-009; Ex. MET-CMH-050; Ex. MET-STL-021; Ex. MET-STL-069; Ex. MET-KC-002; Ex. MET-KC-045; Ex. MET-DFW-028; Ex. MET-HOU-039; Ex. MET-SAT-068; Ex. MET-ATL-016; Ex. MET-DEN-033; Ex. MET-SLC-029; Ex. MET-LA-056; Ex. MET-PDX-017), caused a temporary delay, interruption or termination of a more than nominal portion of the operations of employers in this industry throughout the United States. They did so by governing every vehicle, vessel, aircraft and terminal in the industry by federal order enforced by refusal of carriage, keeping the cruise product under conditions and the borders closed to tourism, fixing the airline network to the last day of the quarter, quarantining every traveler to Hawaii and every listed traveler to Kansas, and opening the industry's largest contract season, the 2021-22 school year, under face-covering, quarantine, exclusion and driver-testing orders in the largest States.
The standards satisfied
Each claim of an employer in this class under the Suspension Clause satisfies every standard the Code applies to a return position, a refund claim and a claim for credit. The employer's burden in a refund suit is a preponderance of the evidence, the court redetermines the entire liability de novo, and governmental orders are public records subject to judicial notice; on this record the preponderance is satisfied by the orders themselves for every quarter.136 The position has substantial authority: the statutory text, Tri-State, Burrage, Gross, Nassar, Bostock and Abercrombie, the Notice's own favorable Q&As published in the Internal Revenue Bulletin, the United States' representations in Doc. 44 and the Brief for Appellees, and the Library are authorities of the first rank, and the contrary authorities, the Notice's narrowing glosses that the United States has represented have no force of law and two Chief Counsel memoranda that "may not be used or cited as precedent," carry no substantial weight in relation to them.137 The position has, a fortiori, a reasonable basis, which is "significantly higher than not frivolous" and is satisfied by a position "reasonably based on one or more of the authorities."138 The employer has reasonable cause and acted in good faith within section 6664(c)(1) and section 6676(a) as amended: it relied on the statute as written, on the Service's own FAQs as posted when the 2020 determinations were made, which contained no nominal test and no percentage, and on the public orders that governed its operation.139 No position in this analysis is frivolous within section 6702 or Notice 2010-33, which lists no position concerning the ERC or the meaning of a governmental order.140 Fraud is the Government's burden by clear and convincing evidence, and nothing in the record of an employer that claimed a suspension caused by the orders inventoried here supports it.141
The records
Every exhibit cited in this analysis is held in the Library, organized by layer: Federal (FED-), Agencies (AGY-, by cluster), States (two-letter prefixes for the fifty States and the District), Metros (MET-, by metropolitan code), Sector (SEC-, by industry number), Ecosystem (ECO-A, ECO-B, ECO-C) and Foreign (FOR-), with the legal and governmental-position exhibits (LAW-, GOV-). Each exhibit's record carries its issuer, title, issue date, effective date, end date, the quarters it reached, its verification grade and whether its file is held. Every exhibit cited as an order in this analysis is graded "Primary source read" unless the text says otherwise. Exhibits graded "Confirmed from a secondary source" (press reports, agency releases, district and university announcements and reproductions of orders) are cited for the existence and dates of the instruments they record, and where such an exhibit is the only source for an instrument the text says so. Where an instrument's text is not held, this analysis says so at the point of citation and describes the category rather than citing an exhibit. Every citation follows the form "[Issuer], [Instrument] § pin ([date]) (Ex. ID)" at first use and "Ex. ID" thereafter. Agencies' service announcements are cited as the record of the orders they implemented and are never cited as orders.
The pins to Doc. 44 and Doc. 49 are ECF header pages; the pins to the Opening Brief and the Brief for Appellees are the briefs' own pages; the pins to the preliminary-injunction transcript are page and line of the reporter's transcript (Ex. GOV-008); the pins to Tri-State are the order's own pages, which equal the ECF pages. The United States' positions are collected, pinned, at The Government's Own Words.