Book Review: Solan’s The Language of Statutes
Lawrence M. Solan, The Language of Statutes: Laws and Their Interpretation (University of Chicago Press, 2010) 288 pp.
Historically, mutual funds have invested principally in stocks and bonds. But in the mid-2000s, mutual funds that focused on commodities began to proliferate; today, mutual funds have more than $50 billion invested in commodities. There is only one problem with these commodity funds: in order to qualify for their tax-favored status, mutual funds derive the vast majority of their income from stock, securities, or foreign currencies. Commodities are not stock, securities, or foreign currencies so, in order to meet this requirement, commodity funds invested in commodity-linked derivatives (which tracked the return on the underlying commodities). Still, the question remained: under the Internal Revenue Code, did these derivatives qualify as securities? The viability of the multibillion-dollar commodity fund industry hinged on a question of statutory interpretation.
In The Language of Statutes, Professor Solan looks at the tools we use in order to understand and interpret statutes. He argues that the current methods of statutory interpretation work well, at least most of the time. If arguing on behalf of the status quo seems uninteresting and perhaps unnecessary, the book is neither. Instead, Professor Solan provides a compelling and far-reaching account of the processes that go into interpreting statutes, the competing theories of statutory interpretation, and the roles of various players. And, although his book focuses largely on the interpretation of criminal statutes, his conclusions are equally valuable for those of us dealing with other statutory regimes.
Although the way we interpret statutes works well most of the time, it does run into problems at the margins. Professor Solan highlights several of the causes of these marginal problems, including the problem of definitions, of applying the definitions to the facts on the ground, of ambiguity (including semantic ambiguity), and of applying the intent of the legislature.
Where the language of the statute is easy to understand and unambiguous, most people agree that there is no need to look beyond the four corners of the statute to understand what it says. Where, though, there is ambiguity, theorists tend to fall into one of two interpretive camps: textualists, who profess an unwillingness to look beyond the language of the law itself in their interpretation, and people (contextualists?) who are willing to look beyond the four corners of the law to, for example, the legislative history in order to understand how to apply the law.
Professor Solan points out that textualists and others share a commitment to legislative primacy; their main point of departure is over what data we can appropriately look at in order to determine the statute’s purpose. The divisive question, then, is twofold: first, can a body of legislators have an intent? Second, even if we decide that legislative intent exists, the “greatest controversy over statutory interpretation over the past two decades” remains: can courts look to a statute’s legislative history in divining the intent of the legislature? (p. 82)
To the first question, Professor Solan responds that a collective body can have an intent. Not only that, though: he argues that because “we regard groups as units in everyday life,” it is unnecessary for all members of a group to share the intent to attribute that intent to the group. (p. 89) He proposes as an example a couple that goes on vacations. Even if one person does all of the planning, even if the other person “does not have a clue about this year’s vacation,” we can say that the couple made the plans. (Id.) This even if we could not legitimately say that the non-planner made the plans.
He then expands our recognition of collective intent to larger bodies, such as neighborhoods, where some members of the body dissent. Still, he argues, we can address the group’s intent. So it is with legislative bodies: by agreeing to the ultimate statute, the body accedes to the intent of those actually charged with drafting the law. As such, it is perfectly coherent to think of a legislative intent, even where some of the legislators did nothing more than vote on the ultimate law.
If the legislature can have a collective intent, moreover, it must be possible to discern. Often, Professor Solan concedes, that intent can and should be discerned from the plain language of the statute. But sometimes the statute is ambiguous, or its literal application would lead to an absurd result. In these situations, can we look to legislative history to divine the legislature’s intent? Texutalists, led by Justice Scalia, argue that using legislative history is undemocratic, unreliable, and incoherent, while the other considers legislative history evidence of what the legislature intended when it drafted the ambiguous statute. And here, the book begins to read like an extended response to Justice Scalia.
Not all legislative history expresses legislative intent, according to Professor Solan. “[S]tray remarks from individual legislators most likely do not reflect even the intent of the subgroup,” and floor debates are similarly unhelpful. (p. 97) But committee reports reflect the intentions of the subset of legislators who actually drafted the bill and, “[w]hen disputes arise, it would be odd for a member who voted for the bill without knowing what was in it to complain that the court was looking at the details of the planning processes.” (Id.)
The Language of Statutes is not meant to be purely a normative work, however. It also attempts to describe the way judges interpret the law. To that end, Professor Solan returns repeatedly to a handful of cases, analyzing how the courts found statutory meaning. Not surprisingly, even self-professed textualists sometimes look beyond the four corners of the law.
Although we generally think of statutory interpretation as a judicial responsibility, Professor Solan points out that interpreting statutes is not limited to the judiciary, and he spends a large portion of the book looking at when and how non-judicial actors interpret statutory language. Executive administrative agencies write regulations in which they interpret and apply laws, and courts generally defer broadly to such interpretations. Legislatures attempt to control the interpretation of their statutes, including definitions and sometimes rules of interpretation. Even jurors, though formally fact-finders, are sometimes required to read and interpret statutory language. Professor Solan discusses these various players’ tools and practices as they read and interpret statutes.
The experience of commodity funds illustrates the importance of non-judicial statutory interpretation: the questions surrounding commodity funds never went to the courts. Instead, in 2006, the IRS released a ruling in which it determined that there was no conclusive authority on whether these derivatives qualified as securities. So the IRS looked to Congress’s stated objectives in inserting the “securities” language; it largely relied on floor statements upon the introduction of the bill and a letter from the Treasury department. It concluded that Congress did not intend to include commodity derivatives within the scope of “securities.”
Professor Solan, however, argued that an individual legislator’s floor statements do not constitute compelling evidence of the legislature’s intent. And, in fact, the IRS subsequently walked back from its position: although commodity funds still cannot use commodity index-linked swaps, the IRS has subsequently released more than 70 private rulings holding that other types of commodity-linked derivatives qualify as “securities” for these purposes.
And now, Congress has decided to step in and try to control the interpretation of its legislation. Recently, Senator Levin held a hearing in which he called these IRS rulings a “blatant end-run around the legal restrictions” imposed by Congress.
All of this has played out in the Executive and Legislative branches; in many cases, the courts will never be involved. Nonetheless, as Professor Solan points out, statutes exist and must be interpreted. And The Language of Statutes is an excellent entry point into how we should interpret them.
Samuel D. Brunson is an assistant professor of law at Loyola University Chicago School of Law.