Electrical Welfare Trust Fund v. United States

United States Court of Appeals
for the Federal Circuit
______________________
ELECTRICAL WELFARE TRUST FUND,
Plaintiff
OPERATING ENGINEERS TRUST FUND OF
WASHINGTON, D.C., STONE & MARBLE MASONS
OF METROPOLITAN WASHINGTON, D.C. HEALTH
AND WELFARE FUND,
Plaintiffs-Appellants
v.
UNITED STATES,
Defendant-Appellee
______________________
2024-1107
______________________
Appeal from the United States Court of Federal Claims
in No. 1:19-cv-00353-EMR, Judge Eleni M. Roumel.
______________________
Decided: October 2, 2025
______________________
JOSEPH H. M ELTZER, Kessler Topaz Meltzer & Check,
LLP, Radnor, PA, argued for plaintiffs-appellants. Also
represented by M ELISSA L. Y EATES .
BORISLAV K USHNIR, Commercial Litigation Branch,
Civil Division, United States Department of Justice, Wash-
ington, DC, argued for defendant-appellee. Also
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ELECTRICAL WELFARE TRUST FUND v. US 2
represented by BRIAN M. BOYNTON , E RIC P. BRUSKIN ,
PATRICIA M. M CCARTHY.
______________________
Before M OORE, Chief Judge, STOLL, Circuit Judge, and
BUMB, Chief District Judge.1
STOLL, Circuit Judge.
Plaintiffs-Appellants2 brought this action against the
United States seeking, among other things, compensation
for an alleged Fifth Amendment taking based on manda-
tory contributions they paid to the Transitional Reinsur-
ance Program as part of the implementation of the Patient
Protection and Affordable Care Act of 2010. The U.S. Court
of Federal Claims granted the Government’s motion for
partial summary judgment on the Fifth Amendment tak-
ings claim. For the following reasons, we affirm.
BACKGROUND
As part of the Patient Protection and Affordable Care
Act of 2010 (ACA), Congress established a risk mitigation
program called the Transitional Reinsurance Program
(TRP). See 42 U.S.C. § 18061. The TRP required certain
entities to pay reinsurance contributions to the Depart-
ment of Health and Human Services for the 2014, 2015,
and 2016 benefit years. This obligation applied to the
Plaintiffs-Appellants, who made the TRP contributions as
required, but later filed suit in the U.S. Court of Federal
Claims (“Claims Court”) to recover their contributions.
1 Honorable Renée Marie Bumb, Chief District
Judge, United States District Court for the District of New
Jersey, sitting by designation.
2 The Operating Engineers Trust Fund of Washing-
ton, D.C. and the Stone & Marble Masons of Metropolitan
Washington, D.C. Health and Welfare Fund.
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ELECTRICAL WELFARE TRUST FUND v. US 3
In their complaint, Plaintiffs-Appellants alleged the
TRP contributions they were required to make constituted
a taking under the Fifth Amendment. They contended that
they possessed “identifiable property interests in specific
funds of money protected by the Takings Clause of the
Fifth Amendment,” namely the “[f]unds held in [their] self-
insured health and welfare trust funds.” J.A. 120 ¶ 103
(operative complaint).
The Government sought partial summary judgment,
arguing that Plaintiffs-Appellants lacked a cognizable
property interest in the TRP payments because the pay-
ments were not the specifically identifiable funds required
for monetary takings liability. Rather, as asserted by the
Government, “the requirement to pay TRP contributions
imposed only an obligation to pay money.” Elec. Welfare
Tr. Fund v. United States, 166 Fed. Cl. 709, 713 (2023).
But Plaintiffs-Appellants pointed out that, as self-insured
group health plans, they are required to hold all assets in
trust3 for the sole purpose of providing health and welfare
benefits to covered individuals. Plaintiffs-Appellants con-
tended they possessed an identifiable property interest in
their payments because the TRP contributions were effec-
tively required to be paid from a specific account based on
the requirement to keep their assets in trust.
Addressing the Government’s motion, the Claims
Court first explained that, “[w]hile one cannot possess a
cognizable property interest in money generally, one’s
property interest in a specific fund of money—e.g., the in-
terest or principal of an identified account—is cognizable
3 29 U.S.C. § 1103(a) (ERISA) (“[A]ll assets of an em-
ployee benefit plan shall be held in trust . . . .”); 29 U.S.C.
§ 186(c)(5)(A) (Taft-Hartley) (assets “are held in trust for
the purpose of paying, either from principal or income or
both, for the benefit of employees, their families and de-
pendents, for medical or hospital care”).
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ELECTRICAL WELFARE TRUST FUND v. US 4
under the Takings Clause such that government depriva-
tion can amount to a taking.” Elec. Welfare, 166 Fed. Cl.
at 717. (citing Webb’s Fabulous Pharmacies., Inc. v. Beck-
with, 449 U.S. 155, 160–65 (1980)). The court recognized
that it “must therefore first identify what, if anything, was
the subject of the alleged taking to determine whether the
property at issue actually constituted specific funds of
money.” Id. (internal quotation marks and citations omit-
ted).
The Claims Court determined that “[b]ecause the prop-
erty Plaintiffs allege Defendant took was simply sums of
money, annually calculated, rather than specific funds,
Plaintiffs ha[d] not identified a property interest appropri-
ated by Defendant that is cognizable under the Takings
Clause.” Id. at 718. The Claims Court rejected both of
Plaintiffs-Appellants counterarguments. First, in re-
sponse to the argument that “each TRP contribution was a
specific fund of money in which Plaintiffs had a property
interest by virtue of the trust agreements establishing
their trust funds,” the Claims Court explained that the
trust agreements “do not resolve the clear conflict between
Plaintiffs’ argument that an entity may possess a property
interest in a sum of money held within a trust account and
binding precedent prohibiting a court from finding a cog-
nizable property interest in money alone.” Id. at 718–19.
The Claims Court also rejected Plaintiffs-Appellants’ sec-
ond argument—that the specific funds are actually Plain-
tiffs’ trust accounts, from which Plaintiffs argue they were
effectively required to pay their TRP contributions. Id.
at 721. First, the court held that this argument had been
waived. Id. It proceeded to address the merits anyway,
rejecting this second argument—for essentially the same
reason as the first. The Claims Court explained that the
“requirement to pay a sum of money cannot be transformed
into a taking of a specific fund merely because such pay-
ment may be made from a certain account, as one simply
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ELECTRICAL WELFARE TRUST FUND v. US 5
cannot have a cognizable property interest in money itself.”
Id. at 721–22.
As an alternative reason for ruling in favor of the Gov-
ernment, the Claims Court held that “a government actor
only implicates one’s property interest in a specific fund
when it appropriates the fund in toto.” Id. at 717 (citing
Adams v. United States, 391 F.3d 1212, 1224–25 (Fed. Cir.
2004)). The Claims Court thus reasoned that no taking oc-
curred because the ACA did not “effect de facto appropria-
tions of Plaintiffs’ funds in toto.” Id. at 718.
Plaintiffs-Appellants later sought reconsideration of
the Claims Court’s determination that they had waived the
argument that the trust funds themselves were the specific
funds at issue, which the Claims Court denied.
Plaintiffs-Appellants appeal. We have jurisdiction pur-
suant to 28 U.S.C. § 1295(a)(3).
D ISCUSSION
We review “both the [trial court’s] grant of summary
judgment and all questions of law de novo.” Nat’l Austl.
Bank v. United States, 452 F.3d 1321, 1325 (Fed. Cir.
2006). “The nature or scope of a compensable property in-
terest in a takings analysis is a question of law.” Casitas
Mun. Water Dist. v. United States, 708 F.3d 1340, 1351
(Fed. Cir. 2013).
Our court has “developed a two-part test to determine
whether a taking has in fact occurred.” Am. Pelagic Fish-
ing Co., L.P. v. United States, 379 F.3d 1363, 1372
(Fed. Cir. 2004). First, “the court must determine whether
the claimant has established a property interest for pur-
poses of the Fifth Amendment.” Id. Second, “after having
identified a valid property interest, the court must deter-
mine whether the governmental action at issue amounted
to a compensable taking of that property interest.” Id.
This appeal involves the first question: whether Plaintiffs-
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ELECTRICAL WELFARE TRUST FUND v. US 6
Appellants have a property interest in the funds used to
satisfy their TRP obligations.
As a general principle, in the Fifth Amendment takings
context, “[u]nlike real or personal property, money is fun-
gible.” United States v. Sperry Corp., 493 U.S. 52, 62 n.9
(1989). In certain limited circumstances, however, the ap-
propriation of money can give rise to takings liability—
such as in “interest follows principal” cases. Phillips
v. Wash. Legal Found., 524 U.S. 156, 165 (1998). One such
case is Webb’s Fabulous Pharmacies, where a county ap-
propriated “the interest accruing on an interpleader fund
deposited in the registry of the county court.” 449 U.S.
at 155. The Supreme Court explained that “[t]he usual and
general rule is that any interest on an interpleaded and de-
posited fund follows the principal and is to be allocated to
those who are ultimately to be the owners of that princi-
pal.” Id. at 162. Therefore, appropriating the interest gen-
erated by the funds was an “appropriation of the beneficial
use of the fund . . . analogous to the appropriation of the
use of private property.” Id. at 163–64. In short, the
county’s retention of the interest that would otherwise be-
long to the owner of the funds constituted a taking under
the Fifth Amendment.
Similarly, in Phillips, the Supreme Court explained
that the same principle governs when funds were tempo-
rarily deposited in an attorney trust account, holding that
“the interest income generated by funds held in [Interest
on Lawyers’ Trust Accounts (‘IOLTA’)] accounts is the ‘pri-
vate property’ of the owner of the principal.” 524 U.S.
at 172; see also Brown v. Legal Found. of Wash., 538 U.S.
216, 235 (2003) (holding that IOLTA account interest that
was transferred to a legal aid fund was taken for a public
use).
On the other hand, our precedent recognizes the gen-
eral principle that “the mere imposition of an obligation to
pay money . . . does not give rise to a claim under the
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ELECTRICAL WELFARE TRUST FUND v. US 7
Takings Clause of the Fifth Amendment.” Commonwealth
Edison Co. v. United States, 271 F.3d 1327, 1340 (Fed. Cir.
2001) (en banc). In Commonwealth Edison, we assessed
whether the congressional imposition of “special monetary
assessments on domestic utilities for the remediation of en-
vironmentally contaminated uranium processing facilities
owned by the United States” constituted a Fifth Amend-
ment taking. Id. at 1329. We held “that requiring plaintiff
Commonwealth Edison Company . . . to contribute to the
remediation costs does not constitute a Fifth Amendment
taking because the Takings Clause does not apply to legis-
lation requiring the payment of money.” Id. In so holding,
we followed the five justices’ view in Eastern Enterprises
that “regulatory actions requiring the payment of money
are not takings.” Id. at 1339 (citing E. Enters. v. Apfel,
524 U.S. 498 (1998)); see also United States v. Sperry Corp.,
493 U.S. 52 (1989); Atlas Corp. v. United States, 895 F.2d
745 (Fed. Cir. 1990).
As demonstrated by Sperry, this principle governs even
where the Government deducts money directly rather than
requiring it be paid separately. 493 U.S. at 62 n.9. Sperry
involved legislation to “reimburse[] . . . the United States
Government for expenses incurred in connection with the
arbitration of claims of United States claimants against
Iran . . . and the maintenance of the Security Account.” Id.
at 60. “When the Federal Reserve Bank of New York re-
ceived Sperry’s award [a specific sum of money], it de-
ducted the 2% charge over Sperry’s protest, deposited the
charge in the Treasury, and paid Sperry the balance of its
award.” Id. at 57. The Supreme Court reasoned that be-
cause “money is fungible,” “[n]o special constitutional im-
portance attache[d] to the fact that the Government
deducted its charge directly from the award rather than re-
quiring Sperry to pay it separately.” Id. at 62 n.9. Contin-
uing, the Court explained that “[i]t is artificial to view
deductions of a percentage of a monetary award as physical
appropriations of property.” Id.
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ELECTRICAL WELFARE TRUST FUND v. US 8
Here, we agree with the Claims Court that, under our
precedent, this case involves the mere obligation to pay
money. Plaintiffs-Appellants contend they were effectively
required to pay the TRP contributions from their trust ac-
counts because “[p]ursuant to federal law . . . self-insured
group health plans must hold 100% of their assets in trust;
and these assets are held in trust funds for a single pur-
pose—to provide health and welfare benefits to covered
workers and their families (e.g., medical, dental, and pre-
scription drug coverage).” Plaintiffs-Appellants’ Br. 2.
Plaintiffs-Appellants contend they “have a cognizable prop-
erty interest in their trust funds, which includes the corpus
of the trust (i.e., the money they hold).” Plaintiffs-Appel-
lants’ Br. 22. Continuing, they assert that because the
Government was aware of their obligation to hold assets in
trust, this case does not involve a mere obligation to pay
money. Plaintiffs-Appellants’ Br. 34. We conclude other-
wise.
The statutory text here states that Plaintiffs-Appel-
lants, among others, “are required to make payments to an
applicable reinsurance entity.” 42 U.S.C. § 18061(b)(1)(A).
“The statute is indifferent as to how the regulated entity
elects to comply or the property it uses to do so.” E. Enters.,
524 U.S. at 540 (Kennedy, J., concurring). The separate re-
quirement that Plaintiffs-Appellants must keep their as-
sets in trust does not transform this bare statutory
requirement to pay money into a taking because the char-
acter of the government action here “neither targets a spe-
cific property interest nor depends upon any particular
property for the operation of its statutory mechanisms.” Id.
at 543 (Kennedy, J., concurring); Atlas Corp., 895 F.2d at
756 (“Requiring money to be spent is not a taking of prop-
erty.”). For example, Congress is likely aware that many
taxpayers will pay their taxes out of their checking ac-
count, but that practical reality does not transform an ob-
ligation to pay into a taking. We are bound by our
unambiguous precedent: “[T]he mere imposition of an
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ELECTRICAL WELFARE TRUST FUND v. US 9
obligation to pay money . . . does not give rise to a claim
under the Takings Clause of the Fifth Amendment.” Com-
monwealth Edison, 271 F.3d at 1340.
Plaintiffs-Appellants argue the alleged taking here is
distinguishable from Commonwealth Edison because “the
TRP Contribution in no way represented a fee for service.”
Plaintiffs-Appellants’ Br. 28. But “[g]iven the propriety of
the governmental power to regulate, it cannot be said that
the Taking[s] Clause is violated whenever legislation re-
quires one person to use his or her assets for the benefit of
another.” Connolly v. Pension Ben. Guar. Corp., 475 U.S.
211, 223 (1986) (explaining that “[i]n Usery v. Turner
Elkhorn Mining Co., 428 U.S. 1 (1976), [the Court] sus-
tained a statute requiring coal mine operators to compen-
sate former employees disabled by pneumoconiosis, even
though the operators had never contracted for such liabil-
ity, and the employees involved had long since terminated
their connection with the industry” (cleaned up)); see also
E. Enters., 524 U.S. at 517 (explaining that Eastern was
assigned “the obligation for Combined Fund premiums re-
specting over 1,000 retired miners” (emphasis added)). We
are thus unpersuaded that the lack of a service provided in
exchange for the TRP contributions impacts our analysis.
We are convinced, however, that the Claims Court
erred in its alternative holding that “a government actor
only implicates one’s property interest in a specific fund
when it appropriates the fund in toto.” Elec. Welfare,
166 Fed. Cl. at 717 (citing Adams, 391 F.3d at 1225). The
Claims Court misread our precedent in Adams as holding
that a taking occurs only when a fund is appropriated in
toto. There, we held no taking had occurred simply because
the sum owed was a mere obligation to pay money, not be-
cause the property taken was less than in toto. Adams,
391 F.3d at 1224–25. The Claims Court’s reliance on the
“interest follows principal” cases is also misplaced. The
Claims Court reasoned that in Webb’s, Phillips, and Brown
“a government actor identif[ied] a specific type of fund—
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ELECTRICAL WELFARE TRUST FUND v. US 10
e.g., interest earned in IOLTAs—and then appropriate[d]
that fund in its entirety.” Elec. Welfare, 166 Fed. Cl.
at 720. But the Supreme Court’s reasoning in these cases
did not turn on a requirement that the property be taken
in its entirety. Indeed, in Brown, the Supreme Court ex-
plained that “the interest earned in the IOLTA accounts is
the private property of the owner of the principal . . . [so
the] transfer of the interest . . . here seems more akin to the
occupation of a small amount of rooftop space in Loretto
[v. Teleprompter Manhattan CATV Corp., 458 U.S. 419
(1982)].” Brown, 538 U.S. at 235 (internal quotation marks
and citation omitted).4 This reasoning would suggest that
appropriating even a portion of the interest can be a taking.
As we see no support for the requirement that property be
taken in toto, we conclude that the court erred in so hold-
ing. Such error is harmless, however, as the court properly
concluded that the property taken here was simply sums of
money.
Finally, we are unpersuaded by Plaintiffs-Appellants’
argument that the Claims Court erred in concluding that
they waived the argument that they have a property inter-
est in the trust funds, as opposed to the funds used to pay
the TRP contributions. Any error in the Claims Court’s
waiver determination is harmless because the court never-
theless addressed the argument. As the court correctly ex-
plained, “Plaintiffs’ second argument[] . . . fails” on the
merits because the “requirement to pay a sum of money
cannot be transformed into a taking of a specific fund
4 In Loretto, New York law required landlords to
“permit a cable television company to install its cable facil-
ities upon his property.” 458 U.S. at 421. The Supreme
Court held this was a taking because when “the govern-
ment permanently occupies physical property, it effectively
destroys” the owner’s “rights to possess, use and dispose of
it.” Id. at 435 (quotation marks and citation omitted).
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ELECTRICAL WELFARE TRUST FUND v. US 11
merely because such payment may be made from a certain
account, as one simply cannot have a cognizable property
interest in money itself.” Elec. Welfare, 166 Fed. Cl.
at 721–22.
CONCLUSION
We have considered Plaintiffs-Appellants’ remaining
arguments and find them unpersuasive. For the foregoing
reasons, we affirm.
AFFIRMED
COSTS
No costs.
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