United States v. Paulson

The “rule of the last antecedent” provides that “a limiting clause or phrase . . . should ordinarily be read as modifying only the noun or phrase that it immediately follows.” Lockhart v. United States, 577 U.S. 347, 351 (2016) (alteration in original) (quoting Barnhart v. Thomas, 540 U.S. 20, 26 (2003)).

Heirs, in both their beneficiary and trustee capacity, were sued by the United States government for unpaid taxes by the trust containing the estate of the decedent. 26 U.S.C. §§ 2001(a), 2002, 6324(a). Section 6234(a)(2) imposes personal liability for unpaid taxes on beneficiaries “who receives, or has on the date of the decedent’s death, property included in the gross estate under sections 2034 to 2042.” The U.S. argued section 6234(a)(2) applies to anyone receiving estate property anytime on or after the decedent’s death, and Heirs argued the statute could only impose liability on those who have or receive estate property on the date of the decedent’s death, but not after. The “rule of the last antecedent” provides that “a limiting clause or phrase . . . should ordinarily be read as modifying only the noun or phrase that it immediately follows.” Lockhart v. United States, 577 U.S. 347, 351 (2016) (alteration in original) (quoting Barnhart v. Thomas, 540 U.S. 20, 26 (2003)). On appeal, reviewing de novo, the Court held that “on the date of the defendant’s death” does not modify “receives,” meaning the personally liability applies any time after upon receipt of said property, not just at the decedent’s death. 26 U.S.C. §6324(a)(2). Reading the language in its “ordinary meaning,” applying the statutory construction rule of the last antecedent, the Court found the inclusion of commas around the second clause indicated Congress intended the two clauses to be separate commands. Engine Mfrs. Ass’n v. S. Coast Air Quality Mgmt. Dist., 541 U.S. 246, 252 (2004); Lockhart, 577 U.S. at 351. Declining to rewrite the statute, the Court further supported their conclusion with contextual evidence, given the relative purpose of the referenced sections 2034 and 2042. To read section 6234(a) otherwise would not give effect to section 2034 and 2042’s attachment of liability on “receivable interest[s].” See R.J. Reynolds Tobacco Co. v. County of Los Angeles, 29 F.4th 542, 553 (9th Cir. 2022) (The court must attempt to not “render[] other provisions of the same statute inconsistent, meaningless of superfluous.”). REVERSED and REMANDED.