Moorhead v. U.S.

• Decision Date: 18 October 1985
• Docket Number: No. 84-1949,84-1949
• Parties: -588, 54 USLW 2240, Unempl.Ins.Rep. CCH 16,403 Donald Joe MOORHEAD, dba Don Moorhead Harvesting Company, Plaintiff/Appellant, v. UNITED STATES of America, Defendant/Appellee. Clifton GATTIS, dba Packing Company, Plaintiff/Appellant, v. UNITED STATES of America, Defendant/Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 936

774 F.2d 936

57 A.F.T.R.2d 86-588, 54 USLW 2240,

Unempl.Ins.Rep. CCH 16,403

Donald Joe MOORHEAD, dba Don Moorhead Harvesting Company, Plaintiff/Appellant, v. UNITED STATES of America, Defendant/Appellee.

Clifton GATTIS, dba Packing Company, Plaintiff/Appellant, v. UNITED STATES of America, Defendant/Appellee.

No. 84-1949.

United States Court of Appeals Ninth Circuit.

Argued and Submitted March 13, 1985.

Decided Oct. 18, 1985.

Robbins & Green, Wayne A. Smith, Janet B. Hutchison, Phoenix, Ariz., for plaintiff-appellant.

Richard Farber, Laurie A. Snyder, Dept. of Justice, Washington, D.C., for defendant-appellee.

Appeal from the United States District Court for the District of Arizona.

Before WALLACE and POOLE, Circuit Judges, and BREWSTER ^*, District Judge.

BREWSTER, District Judge:

BACKGROUND FACTS AND PROCEEDINGS

In this case we are called upon to decide whether an alien "commuter" commuting daily or seasonally to the United States to perform agricultural labor in the United States is exempt from the Federal Insurance Contributions Act ("FICA"), 26 U.S.C. Secs. 3101-3126, under the foreign-agricultural-worker exemption of Section 3121 of the Internal Revenue Code. ¹ The appellant-employers brought suit against the United States of America (the "Government") claiming that the wages they had paid to their alien "commuter" employees were exempt from FICA taxation. The district court granted the Government's motion for summary judgment and dismissed the plaintiffs' complaints, holding that the wages appellants had paid to their alien "commuter" employees are not exempt from FICA taxes under 26 U.S.C. Sec. 3121(b)(1) because that section exempts only agricultural workers admitted under the H-2 program. We affirm because the employees' status as "commuter" aliens precludes their "employment" from being exempted under section 3121(b)(1).

Plaintiff-appellant Don Moorhead ("Moorhead") operated an agricultural harvesting business during the years 1977, 1978, and 1979, in which he employed hundreds of agricultural workers during the harvesting season to work in the Imperial Valley of California and elsewhere. Moorhead would contract with a grower to harvest a crop, usually lettuce crop, the grower paying a fixed rate per pound or crate of produce harvested. A majority of these workers were aliens, ² mostly Mexican citizens or residents of Mexico. ³ Each alien worker held a valid Alien Registration Receipt Card or "green card," ⁴ permitting In the years 1977, 1978, and 1979, Moorhead withheld and collected FICA taxes from the alien workers and paid the employer and employee portions of the tax. Thereafter Moorhead filed a claim for refund of the employer portions of the tax he had paid for those three years. He claimed the workers were lawfully admitted to the United States on a temporary basis to perform agricultural services and, therefore, their wages were exempt from FICA taxation under the foreign-agricultural-worker exemption of 26 U.S.C. section 3121(b)(1). The IRS disallowed the claims and Moorhead filed this suit in the district court in November 1980, seeking, inter alia, a refund of the employer portion of FICA taxes paid during those years, approximately $100,000.

him to commute to the United States, daily or seasonally, from Mexico. During the harvesting season, Moorhead's foremen would transport Mexican workers from California border towns to the fields in the morning and return them to the border towns in the evening, when the workers would presumably return to their residences in Mexico.

During 1972, plaintiff-appellant Clifton Gattis ("Gattis") provided similar agricultural harvesting services in Arizona, New Mexico, and Michigan, employing hundreds of alien agricultural workers. Like Moorhead's employees, most of Gattis' workers were "green card" holders who resided in Mexico and commuted daily or seasonally to the United States. Unlike Moorhead, Gattis did not pay any FICA taxes on the wages he had paid to such alien workers in 1972. After an audit, the IRS determined FICA taxes were due, Gattis paid the tax, and he filed a claim for a refund. The basis for Gattis' initial failure to pay as well as the basis for his refund claim was the foreign-agricultural-worker exemption of section 3121(b)(1). The IRS disallowed the claim and in November 1981, Gattis filed this suit claiming damages in the amount of his claimed refund, approximately $11,500.

The district court consolidated the two suits for discovery and pretrial motions. In February 1984, the district court granted the Government's summary judgment motion and dismissed appellants' complaints. In an unpublished memorandum decision, the district court held that only agricultural workers admitted under the H-2 program, 8 U.S.C. Sec. 1101(a)(15)(H)(ii), are admitted to the United States for the purpose of performing agricultural work on a temporary basis; since appellants' alien workers are not H-2 workers, the section 3121(b)(1)(B) exemption is inapplicable.

Appellants bring this consolidated appeal claiming the district court erred in not holding that section 3121(b)(1) exempts from FICA taxes the wages paid to their alien agricultural workers, who were lawfully admitted to the United States on a temporary basis as "commuter" aliens.

STANDARD OF REVIEW

Both parties agree that there are no genuine issues of material fact to preclude the entry of summary judgment. See, e.g., Prestin v. Mobil Oil Corp. 741 F.2d 268 (9th Cir.1984). In fact, before the Government had moved for summary judgment, the parties had entered into an extensive stipulation of facts, which was the foundation of the district court's findings of fact. ⁵ A grant of summary judgment is

                reviewed de novo.   Lane v. Goren, 743 F.2d 1337 (9th Cir.1984);  Lojek v. Thomas, 716 F.2d 675, 677 (9th Cir.1983).  Where, as here, there are no contested issues of fact, we need only decide whether the district court correctly applied the substantive law, Lane 743 F.2d at 1339;  Amaro v. Continental Can Co., 724 F.2d 747, 749 (9th Cir.1984), that is, did the district court correctly interpret and apply the statutes in issue.   See, e.g., United States v. Roberts, 747 F.2d 537, 546 (9th Cir.1984)
                

DISCUSSION

We begin with FICA and the particular language of section 3121(b)(1). FICA imposes on every employee, 26 U.S.C. Sec. 3101, and employer, id. Sec. 3111, a tax with respect to the "wages" ⁶ paid in "employment." ⁷ The employee's FICA tax is a fixed percentage of the wages he is paid, id. Sec. 3101, and the employer portion is a fixed percentage of the wages he pays to each employee. Id. Sec. 3111. It is undisputed that the remuneration appellants paid their alien workers during the years in question is "wages," the dispute concerns whether the workers were engaged in "employment," as FICA defines that term.

FICA excludes twenty enumerated categories of employment from its general definition of "employment" One of the excluded categories is defined as:

Service performed by foreign agricultural workers lawfully admitted to the United States ... from any other foreign country ... on a temporary basis to perform agricultural labor.

26 U.S.C. Sec. 3121(b)(1). The Social Security Act of 1954 sets forth a parallel exclusion, which uses verbatim language to preclude temporary foreign agricultural workers from obtaining social security benefits. ⁸

The Government argues that the plain language of section 3121(b)(1) exempts the wages only of those agricultural workers: (1) lawfully admitted to the United States on a temporary basis; and (2) lawfully admitted to the United States for the purpose of performing agricultural labor. The Government concludes that since the status of an alien "commuter" is that of a permanent resident, the exemption is inapplicable to appellants' workers. Only H-2 program workers are admitted to the United States on a temporary basis for the purpose of performing agricultural work, and, as a result, only H-2 workers can be exempt.

Appellants argue that section 3121(b)(1)'s temporariness requirement should not be defined by reference to immigration laws, but rather determined as a matter of fact on a case-by-case basis. They claim section 3121(b)(1)'s legislative history "clearly indicates" that Congress intended to eliminate the migrant farm worker or "commuter" segment of employees from FICA tax withholding and the corresponding benefits.

When interpreting a statute, the court's objective is to ascertain the intent of Congress and to give effect to legislative will. E.g., Philbrook v. Glodgett, 421 U.S. 707, 713, 95 S.Ct. 1893, 1898, 44 L.Ed.2d 525 (1975); United States v. American Trucking Associations, 310 U.S. 534, 542, 60 S.Ct. 1059, 1063, 84 L.Ed. 1345 (1940); Trailer Train Co. v. State Board of Equalization, 697 F.2d 860, 865 (9th Cir.), cert. denied, --- U.S. ----, 104 S.Ct. 149, 78 L.Ed.2d 139 (1983). It is assumed that the legislative purpose is expressed by the ordinary meaning of the words used, Richards v. United States, 369 U.S. 1, 9, 82 S.Ct. 585, 590, 7 L.Ed.2d 492 (1962); Hughes Air Corp. v. Public Utilities Commission, 644 F.2d 1334, 1337 (9th Cir.1981), and absent a clearly expressed legislative intention to the contrary, the language must ordinarily be regarded as conclusive. American Tobacco Co. v. Patterson, 456 U.S. 63, 68, 102 S.Ct. 1534, 1537, 71 L.Ed.2d 748 (1982); Consumer Products Safety Commission v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980).

We read the language of the statute according to its plain meaning and agree with the Government's construction of section 3121(b)(1); i.e., that the statute imposes two requirements. The foreign agricultural worker must be: (1) lawfully admitted to the United States on a temporary basis (temporariness requirement); and (2) lawfully admitted to the United States ... to perform agricultural labor (purpose-of-admission requirement). See 26...