Case: 24-1107 Document: 53 Page: 1 Filed: 10/02/2025

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. MELTZER, Kessler Topaz Meltzer & Check, LLP, Radnor, PA, argued for plaintiffs-appellants. Also represented by MELISSA L. YEATES.

BORISLAV KUSHNIR, Commercial Litigation Branch, Civil Division, United States Department of Justice, Wash- ington, DC, argued for defendant-appellee. Also Case: 24-1107 Document: 53 Page: 2 Filed: 10/02/2025

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represented by BRIAN M. BOYNTON, ERIC P. BRUSKIN, PATRICIA M. MCCARTHY. ______________________ Before MOORE, Chief Judge, STOLL, Circuit Judge, and BUMB, Chief District Judge. 1 STOLL, Circuit Judge.

Plaintiffs-Appellants 2 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.

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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 trust 3 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

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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 Case: 24-1107 Document: 53 Page: 5 Filed: 10/02/2025

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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).

DISCUSSION 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- Case: 24-1107 Document: 53 Page: 6 Filed: 10/02/2025

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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 Case: 24-1107 Document: 53 Page: 7 Filed: 10/02/2025

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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. Case: 24-1107 Document: 53 Page: 8 Filed: 10/02/2025

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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., 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 Case: 24-1107 Document: 53 Page: 9 Filed: 10/02/2025

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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, 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, 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— Case: 24-1107 Document: 53 Page: 10 Filed: 10/02/2025

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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

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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.