The interconnected economy and the broken leg
The Suspension Clause names the order's subject (commerce, travel or group meetings) and its cause (COVID-19), and says nothing of its addressee. An order that closed a school, barred a hospital's visitors, shut a venue, imposed airborne-transmission controls on a bus or halted a landlord's evictions limited the commerce, travel and group meetings on which a congregation's or a nonprofit's operation depends, and where the order compelled a change in that operation, the operation was partially suspended due to the order. The United States has told the Ninth Circuit that "a business may be suspended 'due to' a government order addressing a third party," and Tri-State fixed the causal test at but-for.213 The second proposition follows from the first and from the statute's grammar: an operation an order dismantled remains "suspended during the calendar quarter" for as long as the compelled delay in restoring it continues, and the orders in force in each later quarter, inventoried in the quarters section, independently suffice. This section states the mechanisms of the first proposition and the analysis of the second.
The interconnected economy
The mechanism stated
A typical employer in this industry sells nothing and buys little; its operation is the assembly of people in a building for worship, instruction, service and celebration, and the deployment of people from that building into schools, hospitals, prisons, homes and streets. Every one of those people arrived by a road or a bus governed by an order, from a household governed by an order, from a school or a job governed by an order, and entered a building governed by an order; every place the congregation sent its clergy and volunteers was governed by an order addressed to that place. The Notice's own Q&A-12 treats an order on a supplier as a suspension of the employer where the supplier cannot deliver; the United States told the Ninth Circuit the rule "never even mentions a 'physical[ ] clos[ure]' order against the supplier"; and the Notice's Q&A-10 lists the shelter-in-place proclamation, an order addressed to the public, first among qualifying orders.214 The mechanisms below are the ones the orders themselves document.
Schools and the workforce
Every State closed every school in March 2020; Kentucky closed them again from November 23, 2020, with middle and high schools remote to January 4, 2021; Los Angeles, Dallas, Tarrant and Harris Counties and Dane County kept them closed into the fall of 2020; New York's cluster zones and New York City's non-public-school order closed them by zone; and in the third quarter of 2021 thirteen States and the metros named in the quarters section opened them under face-covering, quarantine and staff-vaccination orders that by their terms reached every "public, private, and parochial" school. An employer in this industry with sixty-five participants and a staff of clergy, educators, cooks, case managers and administrators had, on the orders' own dates, staff at home with children whose school an order closed, staff on leave that a federal mandate funded because a school an order closed, and staff quarantined because a school an order governed sent a child home. The order was addressed to the school; the suspension it caused was the congregation's.215
Hospitals, nursing homes, hospices and prisons
CMS's memorandum of March 13, 2020 restricted every nursing-home visit; the Bureau of Prisons suspended every visit the same day; every State corrections department followed within the month; the Department of Veterans Affairs closed its facilities to visitors; and every hospital in the country operated under State visitation orders. Chaplaincy, hospital and nursing-home visitation and prison ministry are functions of this industry (CR), staffed by clergy and volunteers, that exist only inside those facilities. The orders were addressed to the facilities; the function they suspended was the congregation's, and it remained conditioned in every quarter through the third quarter of 2021 by CMS's memorandum of April 27, 2021, the OSHA Healthcare Emergency Temporary Standard, the corrections conditions of California, Colorado and Texas, and the facility-workforce mandates of fourteen jurisdictions.216
Venues, hotels, caterers and the event calendar
A gala is held in a hotel ballroom; a convention in a convention center; a festival on a public square under a permit; a wedding reception in a rented hall. The orders that closed hotels' ballrooms and convention centers, capped venues, revoked every permit (New York City from July 7, 2020; Savannah through September 30, 2021) and conditioned entry to every event space on proof of vaccination or a negative test (New Orleans from August 16, 2021; San Francisco from August 20, 2021) were addressed to venue operators and permit holders; the event they suspended was the nonprofit's, and with it the revenue line that funds its year.217
Transit and the volunteer corps
The transit agencies of every large metro suspended service, ran rear-door boarding, capped riders and required face coverings, an airborne-transmission control on every rider, from March 2020; from February 1, 2021 the CDC's conveyance order and the TSA's directives made a face covering, with the operators' duty to refuse boarding to and disembark non-compliant persons, a federal condition of every ride and every flight through the end of the period. The volunteer corps of this industry, several times larger than its paid staff and concentrated among older adults, rides those conveyances. The orders were addressed to the operators; the volunteers whose trips they conditioned were the congregation's.218
Food suppliers, allocation orders and the pantry
The Defense Production Act orders, FEMA's allocation rule and the Health Resources Priorities and Allocations System governed the supply of the masks, gloves and sanitizer every reopening order required a pantry or kitchen to hold; the USDA's waivers governed every school and summer meal site; the State and CDC eviction moratoria governed every housing provider's tenancies and every shelter's exit pathways. The orders were addressed to manufacturers, distributors, schools and landlords; the operations they conditioned were the nonprofit's.219
Courts, agencies and the legal-aid and benefits docket
Legal-aid societies, immigrant-service agencies and guardianship programs operate in courthouses and agency offices. The Supreme Court of Texas's emergency orders, Georgia's Statewide Judicial Emergency, the federal district courts' orders and the county courts' face-covering and docket orders governed every hearing; the consular suspension and the entry proclamations governed every immigration matter. The orders were addressed to courts and agencies; the dockets they delayed were the nonprofit's.220
Donors, tenants and the collection plate
The stay-at-home orders confined the member base; the gathering caps limited how many could attend; the eviction moratoria governed tenant-members' households; the entry proclamations governed traveling members. In-person giving is collected from people in a room, and the orders fixed how many people could be in the room. The orders were addressed to the public; the collections they reduced were the congregation's.221
The aggregation the Notice requires
Q&A-20 provides that an employer operating in multiple locations and subject to orders suspending its operations in some jurisdictions but not others "is considered to have a partial suspension of operations" and is "an eligible employer with respect to all of its operations in all locations," "whether or not the employer voluntarily adopts consistent measures for its business operations in other jurisdictions"; Q&A-21 extends the suspension of one member of an aggregated group to every member "even if another member of the group is in a jurisdiction that is not subject to a governmental order"; and, answering the plaintiff's objection in Stenson Tamaddon that the Notice failed to address "the cumulative impact of multiple, smaller disruptions on an employer," the United States told the District Court that such an employer is eligible, "as explained in the Notice, if under the facts and circumstances, the employer also can show a partial suspension." The eleven functions of the operations section are the operations of one employer; the suspension of each is aggregated to the whole.222
The broken leg
The clause asks whether "the operation of the trade or business ... is fully or partially suspended during the calendar quarter due to orders." The phrase "during the calendar quarter" modifies "suspended": it fixes when the operation must be suspended, not when the order must be in force. Congress wrote "orders" without a temporal limit; it did not write "orders in effect during the calendar quarter," and it did not write "orders issued during the calendar quarter." An operation that is suspended in part on a day within the quarter because of an order satisfies the clause whether the order issued on that day, in the preceding quarter or fifteen months earlier. The Service's form sentence ("no government orders related to COVID-19 in effect during the quarter") relocates the temporal phrase from the suspension to the order. The statute does not permit the move.223
The Tri-State definition
The United States agreed that a suspension is "[t]he act of temporarily delaying, interrupting, or terminating something," and the court held that a partial suspension is "a temporary delay, interruption, or termination of a portion an employer's business."224 A delay is a suspension. The delay in restoring an operation that an order dismantled is a suspension of that operation, and on the but-for test the court adopted it is a suspension due to the order: but for the order, the operation would not have been dismantled, and no delay in restoring it would have occurred. The United States argued in Tri-State that the hospital would have taken the same steps regardless of the order; the court answered that "[s]ick patients and employees alone did not require additional protocols" and that on the United States' theory "there are not many businesses or any business that would be eligible under the ERC at all."225
The Notice's own words
Q&A-22 provides that an employer suspended "during a portion of a calendar quarter is an eligible employer for the entire calendar quarter." Q&A-16, treating an employer ordered to close its workplace and move its operations, recognizes that "some adjustment period is expected" and treats a "significant delay (for example, beyond 2 weeks)" in the transition as itself a partial suspension during the transition period. The two-week figure is offered "for example"; it is an illustration, and the Service, which is bound by the Notice "to the same extent as a revenue ruling," is bound to the principle it illustrates: an order's suspension of an operation persists after the order operates, for the period the compelled transition takes. What the Notice illustrates with a two-week office move, the orders in this record illustrate with a fifteen-month sequence of closures and caps whose reversal was itself ordered in steps.226
What the orders compelled this industry to dismantle
Between March 2020 and June 2021 the orders compelled congregations and nonprofits to cancel or cap every service; to close every school and classroom and reopen them, where at all, in hybrid and cohort form; to cancel every gala, festival and convention for at least one full season and in most places two; to convert every kitchen to take-away and every pantry to drive-through; to end every hospital, nursing-home and prison visit; to cancel every rental; to send every office worker home; to release or furlough staff (288,700 jobs in NAICS 813 between February and April 2020; 1.6 million nonprofit jobs by May 2020; 960,000 still below the February 2020 level in January 2021); and to disperse a volunteer corps that exceeds paid staff several times over. Rehiring, re-enrolling students for a school year that begins once a year, rebooking events and rentals that are contracted a year or more ahead, reassembling choirs and volunteer rosters, and rebuilding in-person collections are operations measured in seasons.227
The restoration arithmetic from the orders' own steps
The orders that governed worship did not end on a single day; they ended by steps whose dates the orders themselves fix, and the last step in every one of the thirteen jurisdictions that kept caps into the second quarter of 2021 took effect between April 12 and June 30, 2021. New Jersey's sequence was: every gathering cancelled (March 21, 2020); indoor gatherings at 25 percent or fifty (June 9, 2020); religious gatherings at one hundred (August 4) and 25 percent or one hundred fifty (September 4, 2020); the same through the winter while every other indoor gathering fell to ten (November 17, 2020); 35 percent (February 5, 2021); 50 percent (March 1, 2021); no percentage cap (May 28, 2021) and no indoor gathering limit (June 4, 2021): fourteen months from the first order to the last step, and thirty-four days (twenty-seven days from the last step) to the quarter's first day.228 New York's sequence was: every gathering of any size cancelled (March 23, 2020); ten (May 21); 25 percent (June 6); 33 percent; the cluster zones' 25 percent or ten and 33 percent or twenty-five (October 6, 2020); the fixed numbers enjoined (November 25 and December 28, 2020) with the percentage caps remaining; 50 percent under mandatory guidance into 2021; limits lifted June 15, 2021 and the emergency ended June 24, 2021: fifteen months of caps, and sixteen days from the last step to the quarter's first day, and seven days from the end of the emergency.229 California's sequence was: every gathering prohibited (March 19, 2020); 25 percent or one hundred (May 25, 2020); indoor worship closed in the monitored counties (July 13, 2020); Tier 1 prohibition and Tier 2 to 4 caps of 25 and 50 percent (August 31, 2020); the Regional Stay at Home Order (December 6, 2020 to January 25, 2021); the Tier 1 prohibition enjoined (February 5, 2021); the caps made recommendations (April 12, 2021); the Blueprint ended (June 15, 2021): fifteen months, sixteen days before the quarter opened, and thirty-two days before Los Angeles County reinstated universal indoor face coverings.230 Connecticut's sequence was: fifty (March 16, 2020); five (March 26); 25 percent or one hundred (May 29); 50 percent or two hundred (October 8); 50 percent or one hundred (November 6, 2020); extended through February 9 and April 19, 2021; worship caps lifted (March 19, 2021); event caps and 7TT § 2 repealed (May 20, 2021): twelve months of worship caps, one hundred four days from their lifting to the quarter's first day, and forty-two days from the end of the event caps.231 Kentucky's sequence was: every mass gathering prohibited (March 19, 2020); 33 percent (May 20); gatherings of ten (July 20, 2020); schools closed (November 23, 2020 to January 4, 2021); capacity rules lifted (June 11, 2021): fifteen months, and twenty days before the quarter opened, with a school and child-care face-covering order issued forty days into it.232 Washington's and Oregon's caps ended June 30, 2021, one day before the quarter opened, and both States reinstated indoor face-covering orders within the quarter; Minnesota's ended May 28, Massachusetts's May 29, Nevada's June 1, Michigan's June 22, Delaware's and the District's May 21, and Maryland's March 12, 2021.233 In every one of these jurisdictions the operation of worship, education, events and rentals had been under a cap for twelve to fifteen months and had been free of it for between one and one hundred eleven days when the third quarter of 2021 opened.
Why restoration is measured in seasons and not in days
The Pew Research Center found on March 22, 2021, three months before the last caps ended, that 12 percent of regular attenders' congregations were "open and operating normally"; the Johns Hopkins series found the nonprofit workforce still 30 percent short of its lost jobs in October 2021; the Bureau of Labor Statistics found NAICS 813 employment in September 2021 at 2,780,500, or 226,100 below February 2020. A parochial school enrolls once a year; a gala is booked a year ahead; a choir is rebuilt over a season; a volunteer roster is re-onboarded one orientation at a time; a prison ministry re-enters one institution at a time as each institution's conditions permit. The regulators themselves expected restoration in steps: every reopening order cited in the layers section was written as a phase plan, and every phase plan fixed weeks or months between steps. The delay those plans built in is the "temporary delay" Tri-State names, and it was caused by the orders that built it.234
The instruments in force in each later quarter
The continuing suspension is one of four independent grounds for the third quarter of 2021, each sufficient by itself; the quarters section rests the quarter first on the orders in force within it because the Service's letter says there were none. That section inventories, for each quarter, the orders in force on days within it, and for the third quarter of 2021 it names the federal conveyance, eviction, visitation, health-care, prison, entry, border and contracting orders in force on July 1, the indoor face-covering orders of seven States and the District of Columbia and of more than a dozen metros, Hawaii's gathering caps, the school and child-care orders of thirteen States and the health-care-worker orders of fourteen jurisdictions. Each of those is an order in force in the quarter that itself compelled a modification of a function of this industry; the continuing suspension is the fourth pathway, and it is sufficient by itself.
The Service's contrary position
The Service's memoranda and letters treat the last day of an order as the last day of the suspension it caused. That position is not in the statute, which fixes the quarter by the suspension and not by the order; it is not in the agreed definition, under which a delay is a suspension; and it is not in the Notice, whose Q&A-16 treats the compelled transition after an order operates as a partial suspension and whose Q&A-22 makes a suspension in any part of a quarter a suspension for the whole. A Chief Counsel memorandum that "may not be used or cited as precedent" cannot supply what the statute, the agreed definition and the Notice withhold; the Tri-State court gave one such memorandum no weight for that reason.235
For each of the six quarters, the operation of employers in this industry was partially suspended due to orders from appropriate governmental authorities on two independent grounds: the orders in force on days within the quarter, addressed to the employer, to its members, to its counterparties and to the public, each of which compelled a modification of one or more of the eleven functions; and, for every quarter after the second quarter of 2020, the compelled delay in restoring the operations that the orders of the preceding quarters had dismantled, a delay that the orders' own stepped structure fixed and that continued through the third quarter of 2021.