The interconnected economy and the broken leg
Two propositions complete the proof. First, an order that closed a hotel, capped a funeral, confined a customer, closed a school or placed a bus under the conveyance order is an order "limiting commerce, travel, or group meetings," and an operation of this industry suspended in part because of it is suspended "due to" it; the statute says nothing of the source or addressee of the order, the Notice's own supplier rule applies the same logic, and the United States has admitted that a third-party order suffices. Second, a suspension is "[t]he act of temporarily delaying, interrupting, or terminating something," and the delay an order compelled does not end on the day the order expires; the clause asks whether the operation "is fully or partially suspended during the calendar quarter," and "during the calendar quarter" modifies "suspended," not "orders." The orders' own reopening steps fix the length of the restoration for this industry; in the twenty-two jurisdictions that still carried capacity, appointment, mask-off-service or general face-covering conditions on the premises on April 1, 2021, the last step fell between April 1 and July 1, 2021, inside or within thirteen weeks of the third quarter of 2021, except in Hawaii, where it never fell, and in every State the instruments listed in subpart B of the third quarter of 2021 in the quarters section were in force in that quarter.
The mechanisms
Supply chains and borders
Every reopening order required a salon, laundry, funeral home or grooming shop to stock masks, gloves and disinfectants for its operators and its customers; from March 25, 2020 to November 15, 2021 those articles were federally designated scarce materials subject to allocation and hoarding-prevention orders under the Defense Production Act.197 The professional-beauty, casket, vault and laundry-chemical plants of Michigan, Pennsylvania, New York and New Jersey were closed by the stay-home orders of March through May 2020, and the land-border notices and entry proclamations governed imported goods and their carriers through the third quarter of 2021.198 The Federal Reserve's July 2021 Monetary Policy Report and the Census Bureau's Small Business Pulse Survey record the supplier delays of the summer of 2021 in the federal government's own words.199
The workforce, its schools and its child care
The 8121 workforce is predominantly women with school-age children; every school in the United States closed in March 2020, the largest districts opened remote in the fall of 2020, and the 2021-22 year opened under face-covering and quarantine orders that sent exposed children home for ten to fourteen days.200 The leave mandate of the Families First Coronavirus Response Act bound every employer in this industry from April 1 to December 31, 2020.201 The quarantine and isolation standing orders of Rhode Island, San Diego County, Los Angeles County, King County, Indiana, Kansas and Arkansas removed every exposed worker from every premises for the stated period throughout the six quarters, in the successive versions the exhibits record (King County from March 28, 2020, Arkansas from May 22, 2020, San Diego County from December 24, 2020, and Rhode Island, Los Angeles County, Indiana and Kansas in the versions of 2021).202
Travel, tourism and gatherings
The resort spa, the hotel laundry and the airport barber depend on the traveler; Hawaii's Safe Travels regime, the traveler quarantines of Chicago, San Francisco, Kauai, Pennsylvania and Maryland, the entry proclamations, the land-border notices and the pre-departure test order fixed who could travel and on what terms.203 The wedding and the funeral are the salon's and the funeral home's largest bookings, and the gathering caps of every State and metro fixed their size from March 2020 through the winter of 2020-21 and, in Hawaii and the Virgin Islands, through the third quarter of 2021.204 The industry's own gatherings, from the national beauty, funeral and pet-industry shows to the franchise conventions, distributor classes and licensing examinations, that those caps and closures cancelled, converted or governed are held in the Library with the venue jurisdictions' instruments and the organizers' notices.
Courts and public offices
The estate matters of the funeral home, the collection and landlord matters of every shop and the licensing matters of every operator were heard in courthouses that closed in March 2020, suspended jury trials for a year and, in the third quarter of 2021, re-imposed face-covering requirements and postponed again in Texas, Virginia, Maryland, Kentucky, Hawaii, Utah, South Dakota, Idaho, Rhode Island, Tennessee, Vermont, Iowa, Minnesota and the District.205 The licensing boards' own offices closed and their examinations stopped.206
Transit
Every worker who rode a bus or a train rode under the transit agencies' rules from May 2020 and under federal law from February 1, 2021 through the period.207
Health care as counterparty
The commercial laundry's hospital and nursing-home accounts, the funeral home's source of decedents and the contract barber's place of work were governed by visitation bans, vendor exclusions, testing orders, the CMS memorandum, the OSHA Healthcare Emergency Temporary Standard and, in the third quarter of 2021, the health-care-worker vaccination orders of fourteen jurisdictions.208
The counterparty orders as orders
The clause asks whether the operation was suspended "due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings." An order closing a hotel limits commerce; an order confining a resident limits travel; an order capping a funeral limits group meetings. Each is an order within the clause's words regardless of its addressee, and an operation of this industry suspended in part because of it is suspended "due to" it on the but-for test the United States agreed to and Tri-State applied.209
The Notice's own logic
Q&A-12 provides that an employer "may be considered to have a full or partial suspension of operations due to a governmental order if ... the business's suppliers are unable to make deliveries of critical goods or materials due to a governmental order that causes the supplier to suspend its operations." The order in that rule is addressed to the supplier, not the employer, and the Service treats the employer's suspension as one "due to the governmental order that suspended operations of its supplier." The logic is the statute's causation logic, and it does not stop at suppliers: the hotel that stopped sending linen, the school that sent the stylist's children home, the nursing home that barred the barber and the courthouse that closed its clerk's office are each a counterparty whose order-compelled suspension suspended a portion of this industry's operation.210 The United States told the Ninth Circuit that a third-party order suffices.
"a business may be suspended 'due to' a government order addressing a third party."
Br. for Appellees at 41
The Notice's Q&A-10 lists the shelter-in-place proclamation, addressed to residents, among the orders that count.211
The restoration analysis
What the orders compelled employers of this class to dismantle
The closure orders of March 2020 emptied every chair, table and grooming room in forty-six States and the District for four to fourteen weeks; the reopening orders then compelled the operator to remove or space chairs, close the waiting room, convert the walk-in book to appointments, cap the room at a quarter to a half of its stations, cover the face of every operator and customer under the exposure-control requirements, and stop performing the services that required an uncovered face. Booth renters left; stylists left the trade; personal-care employment fell 21.6 percent in 2020, non-coin dry cleaning employment 25.2 percent, with 2,076 dry-cleaning establishments gone by 2021, and the cosmetology schools and board examinations that replace the licensed workforce stopped.212 The funeral home dismantled the viewing, the service and the repast; the commercial laundry lost the hotel, restaurant, office and event volume that its plants, routes and shifts were built to carry; the grooming shop lost its boarding season with the travel orders.
How long the orders' own reopening steps took
The restoration was not a date but a schedule written into the orders. New Jersey: closed March 21, 2020; reopened June 22 on two agencies' standards; twenty-five percent November 12; thirty-five percent February 5, 2021; fifty percent March 19, 2021; released May 28 to June 4, 2021.213 Illinois: closed March 21, 2020; masks and no mask-off services from May 29 (Phase 3); fifty percent with mask-off services only under eye protection from June 26 (Phase 4); twenty-five percent with no mask-off services November 20; out of Tier 3 January 15 to 22 and back to Phase 4 by February 4, 2021; Bridge May 14; Phase 5 June 11, 2021; under the indoor face-covering order again August 30.214 California: closed March 19, 2020; hair May 26; closed indoors July 13; hair August 31; personal care September 22; closed December 6 and 17 to January 25, 2021; tiers to June 15, 2021; under the indoor face-covering orders again from July 17 (Los Angeles County), July 30 (Sacramento) and August 3 (the Bay Area).215 Washington: closed March 16, 2020; Phase 2 requirements from June 19 in King County; twenty-five percent November 17; fifty percent March 22, 2021; released June 30, 2021; under the indoor face-covering order again August 23.216 Michigan: closed March 22, 2020; reopened June 15 under binding guidelines; MIOSHA rules October 14; appointment-only with no mask-off services November 15; released June 1 and June 22, 2021.217 New Mexico: reduced to zero March 24, 2020; twenty-five percent June 1; closed November 16 to 30; twenty-five percent in red counties; released July 1, 2021; under the indoor face-covering order again August 20.218 Kentucky: closed March 18, 2020; thirty-three and then fifty percent (June 25) by appointment with no waiting room from May 25; released June 11, 2021.219 Texas: closed by county order March 23-25 and statewide April 2, 2020; reopened May 8 under the six-foot station rule and the Department's protocols; under the statewide face-covering order from July 3, 2020 to March 10, 2021; cut to fifty percent in the metros in December 2020; released March 10, 2021; the counties re-imposed health-and-safety-policy mandates August 11-16, 2021.220 Pennsylvania: closed March 19, 2020; fifty percent by appointment from May 29 in green counties; telework mandatory July 16, 2020 ("Unless not possible," Ex. PA-016) and November 27, 2020 ("Unless impossible," Ex. PA-022) to April 4, 2021; seventy-five percent April 4; released May 31, 2021; the Department of State's waivers to September 30, 2021.221 Massachusetts: closed March 24, 2020; hair May 25; close-contact services June 22; forty percent December 13; twenty-five percent December 26; released May 29, 2021; Boston, Somerville, Cambridge and Brookline imposed indoor face-covering orders again between August 20 and September 15, 2021.222 The District: closed March 25, 2020; appointment-only with one customer per stylist from May 29, 2020 to May 21, 2021; under the indoor face-covering order again July 31, 2021.223 Hawaii: closed March 22-25, 2020; Honolulu closed again August 27 to September 23, 2020; tiers from September 24, 2020; never released in the period.224 In every one of those jurisdictions the last capacity or appointment step fell between March 10 and July 1, 2021, and in eight of them (Illinois, California, Washington, New Mexico, Texas, Pennsylvania, Massachusetts and the District) a new face-covering order on the premises, with its duties on the operator, statewide or in the largest metropolitan areas, followed within the third quarter of 2021, while Hawaii's never lapsed.
What was still in force when the general restrictions ended
When the last capacity conditions fell, the conveyance order, the OSHA instruments, the entry and border orders, the CMS memorandum, the State workplace standards of California, Virginia and Oregon, the licensing waivers of California and Pennsylvania, the quarantine standing orders, the court orders and the emergency declarations of more than thirty States were in force, and Hawaii's tier and face-covering orders had never lifted; within the quarter the indoor face-covering orders of seven States, the District, the Navajo Nation and more than twenty metropolitan areas and Puerto Rico's vaccination-or-testing order on every salon worker were added.225
The textual point
In the clause, "during the calendar quarter" modifies "suspended." The clause reads: "the operation of the trade or business ... is fully or partially suspended during the calendar quarter due to orders from an appropriate governmental authority." The adverbial phrase attaches to the verb it follows; Congress placed "during the calendar quarter" after "suspended" and before "due to orders," and did not write "due to orders in effect during the calendar quarter."226 The question the clause asks about the third quarter of 2021 is whether the operation was suspended, in whole or in part, during those ninety-two days because of orders; it does not ask whether the order that caused the suspension bore a date inside the quarter. On the United States' own agreed definition a suspension is "[t]he act of temporarily delaying, interrupting, or terminating something," and a delay caused by an order continues, because of the order, for the period the order's compelled dismantling took to reverse.227 Tri-State held that "the required protocols and procedures to comply with the Proclamation" were suspensions the order caused; the protocols a salon adopted to reopen under Kentucky's or Illinois' requirements, and the chairs it removed, the waiting room it closed and the staff it lost, were suspensions the orders caused, and they did not vanish at midnight on June 11 or June 30, 2021.228 The Notice reads the clause the same way: an employer suspended "during a portion of a calendar quarter is an eligible employer for the entire calendar quarter," and where an order compels a change, "some adjustment period is expected" and a delay in the transition "may be deemed subject to a partial suspension during that transition period."229 Chief Counsel's memorandum of June 30, 2023 asks a different question, whether a lifted order "constitute[s] a governmental order in subsequent calendar quarters"; the statute does not ask it, and that memorandum "may not be used or cited as precedent" by its own legend.230
The four pathways, stated once for the industry
For every quarter after the first, and for the third quarter of 2021 in particular, the suspension of this industry's operations is proved by (1) the orders in force on every day of the quarter, (2) the orders issued inside the quarter, (3) the regulatory and license conditions the sector regulators kept in force after the general restrictions ended, and (4) the restoration period the orders' own phase steps compelled. Each pathway is sufficient on its own; the findings below rest on all four.