`
`
`
`
`
`Plaintiff-Appellant,
`
`
` No. 21-55197
`
`D.C. No.
`3:15-cv-02057-
`AJB-NLS
`
`
`OPINION
`
`FOR PUBLICATION
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`UNITED STATES OF AMERICA,
`
`
`
` v.
`
`
`JAMES D. PAULSON, individually;
`and as statutory executor of the Estate
`of Allen E. Paulson; VIKKI E.
`PAULSON, individually; and as
`statutory executor of the Estate of
`Allen E. Paulson; and as Co-Trustee of
`the Allen E. Paulson Living Trust;
`CRYSTAL CHRISTENSEN,
`individually; and as statutory executor
`of the Estate of Allen E. Paulson; and
`as Co-Trustee of the Allen E. Paulson
`Living Trust; MADELEINE
`PICKENS, individually; and as
`statutory executor of the Estate of
`Allen E. Paulson; and as Trustee of the
`Marital Trust created under the Allen
`E. Paulson Living Trust; and as
`Trustee of the Madeleine Anne
`Paulson Separate Property Trust,
`
`
`
`
`
`
`
` Defendants-Appellees.
`
`
`
`
`
`
`
`

`

`2
`
`UNITED STATES V. PAULSON
`
`
`
`Plaintiff-Appellee,
`
`
`
`
`
` Defendants,
`
`
`
`
`
`
` No. 21-55230
`
`D.C. No.
`3:15-cv-02057-
`AJB-NLS
`
`
`
`
`
`UNITED STATES OF AMERICA,
`
`
`
` v.
`
`
`JOHN MICHAEL PAULSON,
`individually; and as Executor of the
`Estate of Allen E. Paulson; JAMES D.
`PAULSON, individually; and as
`statutory executor of the Estate of
`Allen E. Paulson, MADELEINE
`PICKENS, individually; and as
`statutory executor of the Estate of
`Allen E. Paulson; and as Trustee of the
`Marital Trust created under the Allen
`E. Paulson Living Trust; and as
`Trustee of the Madeleine Anne
`Paulson Separate Property Trust,
`
`
`
` and
`
`
`VIKKI E. PAULSON, individually;
`and as statutory executor of the Estate
`of Allen E. Paulson; and as Co-Trustee
`of the Allen E. Paulson Living Trust;
`CRYSTAL CHRISTENSEN,
`individually; and as statutory executor
`of the Estate of Allen E. Paulson; and
`as Co-Trustee of the Allen E. Paulson
`
`

`

`
`
`UNITED STATES V. PAULSON
`
`
`
`3
`
`Living Trust,
`
`
`
`
`
`
`
`
` Defendants-Appellants.
`
`Appeal from the United States District Court
`for the Southern District of California
`Anthony J. Battaglia, District Judge, Presiding
`
`Argued and Submitted February 11, 2022
`San Francisco, California
`
`Filed May 17, 2023
`
`Before: Kim McLane Wardlaw, Sandra S. Ikuta, and
`Bridget S. Bade, Circuit Judges.
`
`Opinion by Judge Bade;
`Dissent by Judge Ikuta
`
`
`
`
`
`
`
`
`SUMMARY*
`
`Tax
`
`The panel reversed the district court’s judgment in favor
`of defendants, and remanded with instructions to enter
`judgment in favor of the government on its claims for estate
`taxes, and to conduct any further proceedings necessary to
`
`
`* This summary constitutes no part of the opinion of the court. It has
`been prepared by court staff for the convenience of the reader.
`
`
`
`

`

`4
`
`UNITED STATES V. PAULSON
`
`determine the amount of each defendant’s liability for
`unpaid taxes.
`The United States sued several heirs of Allen Paulson,
`alleging that they were trustees of Paulson’s trust or received
`estate property as transferees or beneficiaries, and were thus
`personally
`liable
`for estate
`taxes under 26 U.S.C.
`§ 6324(a)(2). The United States also alleged that two of the
`heirs, Vikki Paulson and Crystal Christensen, were liable for
`estate taxes under California state law. The district court
`ruled in favor of defendants on the Tax Code claims, and in
`favor of the United States on the state law claims.
`Allen Paulson died with an estate valued at nearly $200
`million, most of which was placed in a living trust. The
`estate was distributed among Paulson’s heirs over the years.
`When the estate filed its tax return, it also paid a portion of
`its tax liability, and elected to pay the remaining balance in
`installments with a fifteen-year plan under 26 U.S.C. § 6166.
`After the estate missed some payments, the Internal Revenue
`Service terminated the § 6166 election and issued a notice of
`final determination under 26 U.S.C. § 7479. The IRS then
`recorded notices of federal tax liens against the estate. In the
`meantime, the various beneficiaries of the living trust settled
`their disputes, after which they claimed that the living trust
`had been “completely depleted.”
`the
`The United States
`filed an action against
`beneficiaries, seeking a judgment against the estate and
`living trust for the outstanding balance of the estate’s tax
`liability. The United States also sought judgment against the
`individual defendants under 26 U.S.C. § 6324(a)(2),
`31 U.S.C. § 3713, and state law. The district court concluded
`that defendant Madeleine Pickens was not liable for the
`unpaid estate taxes as a beneficiary of the living trust, and
`
`

`

`
`
`UNITED STATES V. PAULSON
`
`
`
`5
`
`that the remaining defendants were not liable for estate taxes
`as transferees or trustees because they were not in possession
`of estate property at the time of Allen Paulson’s death.
`The panel held that § 6324(a)(2) imposes personal
`liability for unpaid estate taxes on the categories of persons
`listed in the statute who have or receive estate property,
`either on the date of the decedent’s death or at any time
`thereafter (as opposed to only on the date of death), subject
`to the applicable statute of limitations. The panel next held
`that the defendants were within the categories of persons
`listed in § 6324(a) when they had or received estate property,
`and are thus liable for the unpaid estate taxes as trustees and
`beneficiaries. The panel further held that each defendant’s
`liability cannot exceed the value of the estate property at the
`time of decedent’s death, or the value of that property at the
`time they received or had it as trustees and beneficiaries. The
`panel did not reach the state law claims, because its
`conclusion on the federal tax claims resolved the matter.
`Judge Ikuta dissented. Disagreeing with the majority’s
`statutory interpretation, she explained that the taxpayers’
`reading of the statute is more plausible, avoids an illogical
`result (namely, that a person who receives estate property
`years after the estate is settled could be held personally liable
`for estate taxes that potentially exceed the current value of
`the property received), and is a better indication of
`Congress’s intent to impose such personal liability only on
`the date of the decedent’s death.
`
`
`
`
`
`

`

`6
`
`UNITED STATES V. PAULSON
`
`COUNSEL
`
`Lauren E. Hume (argued), Joan I. Oppenheimer, and Ivan C.
`Dale, Attorneys; David A. Hubbert, Acting Assistant
`Attorney General; Tax Division, United States Department
`of Justice; Washington, D.C.; Randy S. Grossman, Acting
`United States Attorney; Office of the United States Attorney;
`Washington, D.C.; for Plaintiff-Appellant/Cross-Appellee.
`
`Glen A. Stankee (argued), Akerman LLP, Fort Lauderdale,
`Florida; Katherine E. Giddings, Akerman LLP, Tallahassee,
`Florida; Donald N. David, Akerman LLP, New York, New
`York; Joshua R. Mandell, Akerman LLP, Los Angeles,
`California; Lisa M. Coyle, Blank Rome LLP, New York,
`New York; for Defendant-Appellee Madeleine Pickens.
`
`John C. Maloney Jr. (argued), Zuber Lawler LLP, New
`York, New York,
`for Defendants-Appellees/Cross-
`Appellants Vikki E. Paulson and Crystal Christensen.
`
`James D. Paulson, Woodland Hills, California, pro se
`Defendant-Appellant.
`
`
`
`
`

`

`
`
`UNITED STATES V. PAULSON
`
`
`
`7
`
`OPINION
`
`
`BADE, Circuit Judge:
`
`Allen Paulson died with an estate valued at nearly $200
`million, with most of his assets placed in a living trust. But
`years later more than $10 million in estate taxes, interest, and
`penalties remained unpaid. The United States of America
`(the United States or the government) sued several of
`Paulson’s heirs—John Michael Paulson, James D. Paulson,
`Vikki E. Paulson, Crystal Christensen, and Madeleine
`Pickens—alleging that they controlled the trust, as trustees,
`or received estate property, as transferees or beneficiaries,
`and thus are personally liable for the estate taxes under
`§ 6324(a)(2) of the Internal Revenue Code, 26 U.S.C.
`§ 6324(a)(2). The United States also alleged that Vikki
`Paulson and Crystal Christensen, as co-trustees of the living
`trust, were liable for unpaid estate taxes under section 19001
`of the California Probate Code.
`As relevant to this appeal, the district court granted in
`part Vikki Paulson’s Crystal Christensen’s, and Madeleine
`Pickens’s motions to dismiss, concluding that they were not
`liable for the estate taxes under § 6324(a)(2) as trustees,
`transferees, or beneficiaries, and later ruled on several
`motions for summary judgment. Based on the reasoning in
`its order granting the motions to dismiss in part, the court
`ruled in favor of Madeleine Pickens and James Paulson on
`the United States’ remaining claims under § 6324(a)(2),
`concluding that they were not personally liable for the estate
`taxes. The court entered summary judgment in favor of the
`United States on its claims under the California Probate
`Code. The United States appeals the rulings in favor of the
`defendants on the § 6324(a)(2) claims, and Vikki Paulson
`
`
`
`

`

`8
`
`UNITED STATES V. PAULSON
`
`and Crystal Christensen cross-appeal the judgment holding
`them liable for the unpaid estate taxes under section 19001.1
`We have jurisdiction over these appeals under 28 U.S.C. §
`1291.
`We hold that § 6324(a)(2) imposes personal liability for
`unpaid estate taxes on the categories of persons listed in the
`statute who have or receive estate property, either on the date
`of the decedent’s death or at any time thereafter, subject to
`the applicable statute of limitations. We further hold that the
`defendants were within the categories of persons listed in
`§ 6324(a) when they had or received estate property, and
`thus are liable for the unpaid estate taxes as trustees and
`beneficiaries. Therefore, we reverse the district court’s
`judgment in favor of the defendants on the United States’
`claims under § 6324(a)(2), and remand to the district court
`with instructions to enter judgment in favor of the
`government on these claims with any further proceedings
`necessary to determine the amount of each defendant’s
`liability for the unpaid taxes. Because our conclusion on the
`federal tax claims arising from the Internal Revenue Code
`resolves this matter, we do not reach the parties’ dispute over
`the interpretation of the California Probate Code.
`I
`A
`Allen Paulson died on July 19, 2000. He was survived
`by his third wife Madeleine Pickens, three sons from a prior
`
`1 The district court concluded that John Michael Paulson was liable for
`the unpaid estate taxes as executor and trustee of the living trust, but
`concluded that he had successfully discharged his liability for the estate
`taxes under 26 U.S.C. § 2204. The United States does not dispute that
`finding on appeal. Therefore, only its claims against James Paulson,
`Vikki Paulson, Crystal Christensen, and Madeleine Pickens are at issue.
`
`

`

`
`
`UNITED STATES V. PAULSON
`
`
`
`9
`
`marriage—Richard Paulson, James Paulson, and John
`Michael Paulson—and several grandchildren, including
`Crystal Christensen. Richard Paulson died after his father,
`and Vikki Paulson is Richard Paulson’s widow. At the time
`of Allen Paulson’s death, his gross estate was valued at
`$193,434,344 for federal estate tax purposes. Nearly all his
`assets, which included real estate, stocks, bonds, cash, and
`receivables, were held in a living trust.2 The living trust was
`revocable during Allen Paulson’s lifetime and, according to
`its terms, the trust was to pay any estate taxes.
`When Allen Paulson died, his son John Michael Paulson
`became a co-trustee of the living trust and was appointed co-
`executor by the probate court. In October 2001, John
`Michael Paulson became the sole executor of the estate, with
`a different co-trustee. That same month, he filed an estate
`tax return, or Form 706, with the Internal Revenue Service
`(IRS). On October 23, 2001, the IRS received the estate’s
`Form 706 estate tax return, which reported a total gross
`estate of $187,729,626, a net taxable estate of $9,234,172,
`and an estate tax liability of $4,459,051. The estate paid
`$706,296 with the return and elected to defer the remaining
`balance of $3,752,755 to be paid in installments with a
`fifteen-year plan under 26 U.S.C. § 6166.3 In November
`
`2 The only asset that was not held by the living trust was an ownership
`interest in a hotel and casino corporation, which is not relevant to these
`appeals.
`3 Under § 6166, an executor may pay a portion of the estate taxes in
`installments when more than 35% of the estate’s value consists of
`interest in a closely held business. 26 U.S.C. § 6166(a)(1), (3). This
`election is limited to the portion of the estate taxes attributable to the
`interest in a closely held business. Id. § 6166(a)(2). Section 6166 allows
`the executor to make interest payments for five years and then pay the
`taxes over ten years. Id. § 6166(a)(3), (f).
`
`
`
`

`

`10
`
`UNITED STATES V. PAULSON
`
`2001, the IRS assessed the reported estate tax liability of
`$4,459,051.
`The IRS audited the estate tax return and asserted a
`deficiency in the estate tax reported on the return, which the
`estate challenged in Tax Court. In December 2005, the Tax
`Court entered a stipulated decision and determined that the
`estate owed an additional $6,669,477 in estate taxes. The
`IRS assessed the additional liability in January 2006, and the
`estate elected to pay this amount through the remaining §
`6166 installments. John Michael Paulson, as executor, made
`interest installment payments until his removal as Trustee in
`2009, and he timely made the first estate tax and interest
`payment in April 2007. He obtained a one-year extension,
`until April 2009, to make the 2008 tax and interest payment.
`But neither he nor anyone else made that payment or any of
`the subsequent installment payments.4
`Meanwhile, various disputes arose between Madeleine
`Pickens and Allen Paulson’s other heirs. In settlement of
`those disputes, Madeleine Pickens received assets that the
`government asserts were worth approximately $19 million,
`including $750,000 in cash, two residences and the personal
`property located at those residences, and an ownership
`interest in the Del Mar Country Club.5 Vikki Paulson and
`Crystal Christensen assert that the assets Madeleine Pickens
`received were worth over $42 million. Madeleine Pickens
`does not state a value for the assets she received. In February
`
`4 After the estate’s default in 2009, the successor co-trustees of the living
`trust submitted two offers in compromise to the IRS, accompanied by
`non-refundable partial payments that the IRS applied to the estate taxes.
`5 Allen Paulson’s living trust included provisions listing these two
`residences as gifts to Madeleine (Paulson) Pickens, which she would
`receive if, among other conditions, she survived him by six months.
`
`

`

`
`
`UNITED STATES V. PAULSON
`
`
`
`11
`
`2003, John Michael Paulson and the co-trustee transferred
`these assets from the living trust to Madeleine Pickens, as
`trustee of her personal living trust. Between 2003 and 2006,
`John Michael Paulson distributed at least $7,261,887 in cash
`from the living trust to other trust beneficiaries, including
`$990,125 to Crystal Christensen.6
`In March 2009, the probate court removed John Michael
`Paulson as trustee of the living trust for misconduct and
`appointed Vikki Paulson and James Paulson as co-trustees.
`The government asserts that, at that time, the trust contained
`assets worth more than $13.7 million, which exceeded the
`estate tax liability. Vikki Paulson and Crystal Christensen
`claim that by this time the living trust was insolvent, with
`$10.8 million in assets, but $28.3 million in liabilities,
`including $9.6 million in federal tax liability.
`In May 2010, because of the missed installment
`payments, the IRS terminated the § 6166 election and issued
`a notice of final determination under 26 U.S.C. § 7479. The
`probate court removed James Paulson as co-trustee, and
`Vikki Paulson, as sole trustee of the living trust, challenged
`the IRS’s termination of the § 6166 election in the Tax Court.
`In May 2011, the Tax Court sustained the IRS’s termination
`of the estate’s installment payment election.
`In February 2011, the probate court appointed Crystal
`Christensen co-trustee of the living trust with Vikki Paulson.
`At that time, according to the government, the living trust
`
`6 In his living trust, Allen Paulson bequeathed $1.4 million to Crystal
`(Paulson) Christensen to be held in trust until she reached the age of 18,
`with provisions that allowed for the trustee’s discretionary distributions
`of principal and set specific times (when Crystal Christensen turned 25,
`30, and 35 years old) for mandatory disbursements and the termination
`of the trust.
`
`
`
`

`

`12
`
`UNITED STATES V. PAULSON
`
`held assets worth at least $8.8 million. In June and July
`2011, the IRS recorded notices of federal tax liens against
`the estate under 26 U.S.C. §§ 6321, 6322, and 6323. In the
`meantime, between 2007 and 2013, various disputes arose
`between John Michael Paulson, Vikki Paulson, Crystal
`Christensen, James Paulson, and others with interests in the
`living trust. In January 2013, they settled their disputes
`through an agreement in which John Michael Paulson
`received the living trust’s ownership interest in a jet project,
`the estate’s casino ownership interest, and certain tax losses
`in exchange for resigning as executor. Vikki Paulson and
`Crystal Christensen assert that, by the time of this
`agreement, the living trust was “completely depleted.” The
`probate court adopted the settlement agreement.
`B
`In September 2015, the United States filed this action
`against John Michael Paulson, Madeleine Pickens, James
`Paulson, Vikki Paulson, and Crystal Christensen in their
`individual and representative capacities. The complaint
`sought a judgment against the estate and the living trust for
`the outstanding balance of the 2006 estate tax liability, which
`then exceeded $10 million, as well as judgments against the
`individual defendants under § 6324(a)(2), 31 U.S.C. § 3713,
`and California law.
`James Paulson, Vikki Paulson, Crystal Christensen, and
`Madeleine Pickens filed motions to dismiss and argued that
`they were not personally liable for the estate taxes under §
`6324(a)(2) as trustees, beneficiaries, or transferees of the
`living trust. The district court denied James Paulson’s
`motion to dismiss, and partially granted and partially denied
`Madeleine Pickens’s, Vikki Paulson’s, and Crystal
` The district court
`Christensen’s motions to dismiss.
`
`

`

`
`
`UNITED STATES V. PAULSON
`
`
`
`13
`
`concluded that Madeleine Pickens was not liable for the
`unpaid estate taxes as a beneficiary of the living trust
`because she did not receive life insurance benefits.7 The
`district court further concluded that James Paulson,8 Vikki
`Paulson, and Crystal Christensen were not liable for the
`unpaid estate taxes as transferees or trustees because they
`were not in possession of estate property at the time of Allen
`Paulson’s death.9
`
`II
`These appeals raise questions of statutory interpretation,
`which we review de novo. Mada-Luna v. Fitzpatrick, 813
`F.2d 1006, 1011 (9th Cir. 1987).
`III
`Section 2001 of the Internal Revenue Code imposes a tax
`on a decedent’s taxable estate, which the executor is required
`to pay. 26 U.S.C. §§ 2001(a), 2002. Section 6324, in turn,
`
`7 Madeleine Pickens also argued that she was not liable as trustee of her
`personal trust, and the district court granted summary judgment to her on
`this issue because she did not receive estate property until three years
`after Allen Paulson’s death. The district court, however, did not
`determine whether Madeleine Pickens could be a “trustee,” under §
`6324(a)(2), based on her role as a trustee of her separate personal trust.
`The government does not argue on appeal that Madeleine Pickens is
`liable for the estate taxes in her role as trustee of her separate personal
`trust. Therefore, we do not address this issue.
`8 James Paulson did not appeal the district court’s orders.
`9 Vikki Paulson and Crystal Christensen also argued that they were not
`liable under California law. After discovery, the district court granted
`summary judgment to the United States on its claims that Vikki Paulson
`and Crystal Christensen, as successor trustees of the living trust, were
`liable for the unpaid estate taxes under the California Probate Code. As
`previously stated, we do not address this issue of California law.
`
`
`
`

`

`14
`
`UNITED STATES V. PAULSON
`
`operates to protect the government’s ability to collect estate
`and gift taxes. See 26 U.S.C. § 6324(a); see also United
`States v. Vohland, 675 F.2d 1071, 1076 (9th Cir. 1982)
`(“[Section] 6324 is structured to assure collection of the
`estate tax.”). To this end, the statute imposes a lien on the
`decedent’s gross estate for the unpaid estate taxes in
`§ 6324(a)(1) and imposes personal liability for such taxes on
`those who receive or have estate property in § 6324(a)(2).10
`26 U.S.C. § 6324(a)(1) and (2); see also United States v.
`Geniviva, 16 F.3d 522, 524 (3d Cir. 1994) (explaining that §
`6324(a)(2) “affords the Government a separate remedy
`against the beneficiaries of an estate when the estate divests
`itself of the assets necessary to satisfy its tax obligations”).
`The statutory provision at issue here, § 6324(a)(2), as
`stated in its title, imposes personal liability on “transferees
`and others” who receive or have property from an estate.
`The statute provides that:
`
`If the estate tax imposed by chapter 11 is not
`paid when due, then the spouse, transferee,
`trustee (except the trustee of an employees’
`
`10 These statutory tools to guard against the risk of non-payment, while
`complementary, have some important differences. Section 6324(a)(1)
`imposes “a lien upon the gross estate of the decedent for 10 years from
`the date of death,” in the amount of the unpaid estate tax. 26 U.S.C. §
`6324(a)(1). Unlike the general tax lien of §§ 6322 and 6323, the estate
`tax lien arises before the tax is assessed and is valid against most third
`parties even if notice of the lien is not recorded. See Detroit Bank v.
`United States, 317 U.S. 329, 336–37 (1943); Vohland, 675 F.2d at 1074–
`76. In contrast, § 6324(a)(2) imposes personal liability for unpaid estate
`taxes, on those listed in the statute, for ten years after assessment, 26
`U.S.C. § 6502(a)(1), and that collection period is tolled by a § 6166
`election and other events. See 26 U.S.C. § 6503(a)(1), (d); see also id.
`§§ 6213(a), 6331(k)(1).
`
`

`

`
`
`UNITED STATES V. PAULSON
`
`
`
`15
`
`trust which meets the requirements of section
`401(a)),
`surviving
`tenant, person
`in
`possession of the property by reason of the
`exercise, nonexercise, or release of a power
`of appointment, or beneficiary, who receives,
`or has on the date of the decedent’s death,
`property included in the gross estate under
`sections 2034 to 2042, inclusive, to the extent
`of the value, at the time of decedent’s death,
`of such property, shall be personally liable
`for such tax.
`
`26 U.S.C. § 6324(a)(2) (emphasis added). The question
`before us is whether the phrase “on the date of the decedent’s
`death” modifies only the immediately preceding verb “has,”
`or if it also modifies the more remote verb, “receives.”
`The United States argues the limiting phrase “on the date
`of decedent’s death” modifies only the immediately
`preceding verb “has,” and not the more remote verb
`“receives.” Therefore, in its view, the statute imposes
`personal liability on those listed in the statute who (1)
`receive estate property at any time on or after the date of the
`decedent’s death, or (2) have estate property on the date of
`the decedent’s death. Thus, it contends, § 6324(a)(2)
`imposes personal liability for the unpaid estate taxes in this
`case on successor trustees and beneficiaries of the living
`trust, including those who have or received estate property
`after the date of decedent Allen Paulson’s death.
`The defendants, in contrast, argue that the limiting
`phrase “on the date of the decedent’s death” modifies both
`the immediately preceding verb “has,” and the more remote
`verb “receives.” Thus, under their interpretation, the statute
`imposes personal liability for the unpaid estate taxes only on
`
`
`
`

`

`16
`
`UNITED STATES V. PAULSON
`
`those who receive or have property included in the gross
`estate on the date of the decedent’s death. But those who
`receive property from the estate at any point after the date of
`the decedent’s death have no personal liability for the unpaid
`estate taxes.
`We conclude that the most natural reading of the
`statutory text, and other indicia of its meaning, supports the
`United States’ interpretation. Therefore, we hold that §
`6324(a)(2) imposes personal liability for unpaid estate taxes
`on the categories of persons listed in the statute who have or
`receive estate property, either on the date of the decedent’s
`death or at any time thereafter, subject to the applicable
`statute of limitations.
`
`A
`“Statutory construction must begin with the language
`employed by Congress and the assumption that the ordinary
`meaning of that language accurately expresses the legislative
`purpose.” Engine Mfrs. Ass’n v. S. Coast Air Quality Mgmt.
`Dist., 541 U.S. 246, 252 (2004) (internal quotation marks
`omitted) (quoting Park ‘N Fly, Inc., v. Dollar Park & Fly,
`Inc., 469 U.S. 189, 194 (1985)); see also, e.g., Facebook,
`Inc. v. Duguid, 141 S. Ct. 1163, 1169 (2021) (explaining that
`when interpreting a statute, “[w]e begin with the text.”);
`United States v. Ron Pair Enters., Inc., 489 U.S. 235, 241
`(1989) (“The task of resolving the dispute over the meaning
`of [a statute] begins where all such inquiries must begin:
`with the language of the statute itself.”).
`Here, the statutory text at issue states that a person (who
`fits within a category listed in the statute) “who receives, or
`has on the date of the decedent’s death, property included in
`the gross estate . . . shall be personally liable” for the unpaid
`estate tax. 26 U.S.C. § 6324(a)(2) (emphasis added). Thus,
`
`

`

`
`
`UNITED STATES V. PAULSON
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`17
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`in the disputed text the statute lists two verbs: “receives” and
`“has.” Id. These two verbs are in separate independent
`clauses, set off from each other by a comma and the
`conjunction “or.” See id. In addition, the first verb
`“receives” is set off from the limiting phrase (“on the date of
`the decedent’s death”) by a comma. A term or phrase “set
`aside by commas” and “separated . . . by [a] conjunctive
`word[]” from a limiting clause “stands independent of the
`language that follows.” Ron Pair Enters., 489 U.S. at 241.11
`Thus, the structure of § 6324(a)(2) supports the conclusion
`that “receives” stands independent of the language that
`follows, “on the date of the decedent’s death.” Therefore,
`this limiting phrase does not modify the remote verb
`“receives.” See id.
`This reading of the statute is supported by the canon of
`statutory construction known as “the rule of the last
`antecedent.” The Supreme Court has long applied this
`“timeworn textual canon” to interpret “statutes that include
`a list of terms or phrases followed by a limiting clause,”
`
`11 In Ron Pair Enterprises, the Court considered whether § 506(b) of the
`Bankruptcy Code, 11 U.S.C. § 506(b), allowed the holder of an over-
`secured claim to recover, in addition to “interest on such claim,” fees,
`costs, or other charges. 489 U.S. at 241. The statute provided that
`“[t]here shall be allowed to the holder of such claim, interest on such
`claim, and any reasonable fees, costs or charges provided for under the
`agreement under which such claim arose.” Id. (quoting 11 U.S.C.
`§ 506(b)). The Court explained that “[t]he phrase ‘interest on such
`claim’ is set aside by commas, and . . . stands independent of the
`language that follows.” Id. Therefore, it is not “joined to the following
`clause so that the final ‘provided for under the agreement’ modifies it as
`well.” Id. at 242. The Court therefore concluded that “[b]y the plain
`language of the statute, the two types of recovery [(1) “interest on such
`claim,” and (2) “reasonable fees, costs or charges provided for under the
`agreement”] are distinct.” Id.
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`UNITED STATES V. PAULSON
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`Lockhart v. United States, 577 U.S. 347, 351 (2016). 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.”12 Id. (alteration
`in original) (quoting Barnhart v. Thomas, 540 U.S. 20, 26
`(2003)); see also id. (“[Q]ualifying words or phrases modify
`the words or phrases immediately preceding them and not
`words or phrases more remote, unless the extension is
`necessary from the context or the spirit of the entire writing.”
`(alteration in original) (quoting BLACK’S LAW DICTIONARY
`1532–33 (10th ed. 2014))). The rule of the last antecedent
`supports the conclusion that the limiting phrase “on the date
`of the decedent’s death” modifies only the immediately
`preceding antecedent “has,” and not the more remote
`antecedent “receives.”
`Vikki Paulson and Crystal Christensen, however, argue
`that we should apply the series-qualifier canon and conclude
`that the limiting phrase “on the date of the decedent’s death”
`modifies both the immediately preceding verb “has,” and the
`more remote verb, “receives.” The series-qualifier canon
`provides that “‘[w]hen there is a straight-forward, parallel
`construction that involves all nouns or verbs in a series,’ a
`modifier at the end of the list ‘normally applies to the entire
`
`
`12 In Lockhart, the Court applied the rule of the last antecedent to
`interpret 18 U.S.C. § 2252(b)(2), which increases the sentences of
`defendants if they have “a prior conviction . . . under the laws of any
`State relating to aggravated sexual abuse, sexual abuse, or abusive sexual
`conduct involving a minor or ward.” 577 U.S. at 350–52 (quoting 18
`U.S.C. § 2252(b)(2)). The Court concluded that the limiting phrase
`“involving a minor or ward” modified only the immediately preceding
`crime in the list of offenses, “abusive sexual conduct,” and did not
`modify the other listed crimes, “aggravated sexual abuse,” or “abusive
`sexual conduct.” Id. at 349.
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`UNITED STATES V. PAULSON
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`19
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`series.’” Facebook, 141 S. Ct. at 1169 (alteration in original)
`(quoting ANTONIN SCALIA & BRYAN A. GARNER, READING
`LAW: THE INTERPRETATION OF LEGAL TEXTS 147 (2012)).
`In Facebook, the Court interpreted the Telephone
`Consumer Protection Act of 1991, 47 U.S.C. § 227(a)(1),
`and concluded that the series-qualifier canon suggested the
`most natural reading of the statute.13 141 S. Ct. at 1169–70
`& n.5. The Court focused on the statute’s syntax and
`punctuation, explaining that because the limiting phrase at
`issue (“using a random or sequential number generator”)
`immediately followed an integrated clause that contained the
`antecedents (“store or produce telephone numbers to be
`called”), and the limiting phrase was separated from the
`antecedents by a comma, the limiting phrase applied to all
`the antecedents, not just the immediately preceding one. Id.
`at 1170; cf. United States v. Pritchett, 470 F.2d 455, 459
`(D.C. Cir. 1972) (applying rule of the last antecedent and
`explaining that if the limiting phrase were intended to apply
`to all categories of persons listed in the statute, the drafters
`would have included a comma “so as to separate it from the
`clause immediately preceding”). The Court also explained
`that applying the series-qualifier canon did not conflict with
`“the rule of the last antecedent,” which does not apply when
`a limiting phrase follows an integrated clause. Facebook,
`141 S. Ct. at 1170.
`Here, however, the limiting phrase in § 6324(a)(2), “on
`the date of the decedent’s death,” is not separated from both
`antecedents by a comma, and it does not follow an integrated
`
`13 The statute at issue in Facebook, § 227(a)(1), defined an “automatic
`telephone dialing system” as “equipment with the capacity both to store
`or produce telephone numbers to be called, using a random or sequential
`number generator.” 141 S. Ct. at 1167 (quoting 47 U.S.C. § 227(a)(1)).
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`clause that contains both antecedents. Instead, the limiting
`phrase is set off by commas with the immediate antecede