As the United States approaches the debt ceiling and risks defaulting on its obligations, one solution that has been offered is for the US Treasury to mint a one trillion dollar platinum coin (the "Coin") and deposit it at the Federal Reserve.1 There are many arguments as to whether this is legal, but there is one in particular that deserves special attention. Perhaps the most common criticism of the legality of the Coin is that, despite the language of 31 USC § 5112(k) being unambiguous, we should ignore the plain text of the statute if following its language would produce an "absurd result."2 This argument seems reasonable at first, but the commentators who advance this argument never engage with the jurisprudence discussing what an absurd result actually is. There are several sub-rules within the absurdity doctrine, but the ones advanced by opponents of the Coin have no basis in case law. In this short article, I will explain what the absurdity doctrine actually stands for and why it is inapplicable to the platinum coin.
The Big Number Rule
There are two main versions of the absurdity objection that opponents of the Coin present. The first, and cruder of the two arguments, is that the number is simply too large (I refer to this proposed sub-rule as the "Big Number Rule"). According to Preston Byrne, interpreting the statute literally would allow the Treasury to mint not just a trillion dollar coin but perhaps a "quadrillion dollar coin, quintillion dollar coin" or "sextillion dollar coin", meaning the Treasury could generate "infinite money," which would "shock the conscience" and thus be an absurd result. Byrne is technically correct in pointing out that one of the standards for judging whether a result is absurd is if it "shock[s] the general moral or common sense"3, but he makes no effort to apply the analysis from the case law to bolster his argument that a court to use this standard to strike down the Coin. Byrne appears to simply be stating that the consequences of such an interpretation that allows the Coin are surprising and unintended, but that is not enough to invoke the absurdity doctrine. The Supreme Court stated in Crooks v. Harrelson (the same case he cites!) that it is "not merely enough" that the interpretation causes "hard and objectionable or absurd consequences" which were "not within the contemplation of the framers"; in such case "the remedy lies with the law making authority, and not with the courts."4 As the Fourth Circuit Court of Appeals has explained in Lara-Aguilar v. Sessions, "a statutory interpretation that produces surprising or anomalous results is not the same as one producing absurd results," and as the Third Circuit Court of Appeals has explained in United States v. Selmer, "undesirable results are not enough to invoke the canon against absurdity. As long as Congress could have any conceivable justification for a result--even if the result carries negative consequences--that result cannot be absurd."6
More specifically, Byrne fails to cite any case which has invoked the absurdity doctrine on the basis of the alleged Big Number Rule. This is a problem for his argument because the most relevant case on point seems to explicitly reject the Big Number Rule. In Chapman v. United States, the defendant Richard Chapman was convicted of selling 10 sheets of blotter paper containing LSD, in violation of 21 USC § 841(a).7 Section 841(b)(1) of that same statute imposed a mandatory minimum sentence of five years for selling "1 gram or more of a mixture or substance containing a detectable amount of lysergic acid diethylamide (LSD)." The actual weight of the LSD sold by Chapman "weighed only 50 milligrams, not even close to the one gram necessary to trigger the 5-year mandatory minimum," but the blotter paper holding the LSD weighed 5.7 grams.8 Chapman was convicted and sentenced to the 5 year minimum, and on appeal, the defendant argued that the "mixture or substance" referred to in the statute should be interpreted to refer only to the LSD itself, because interpreting the statute literally and including the weight of the blotter paper that the LSD was mixed into would produce an illogical result9 and an absurd result.10 Additionally, Justice Stevens, writing for the dissent, urged the majority to invoke the absurdity doctrine.11 In essence, the defendant and the dissent both attempted to advance a version of the Big Number Rule; either 5.7 grams was too large of a number to impute onto 50 milligrams of LSD or 5 years was too long of a sentence to give someone for selling only 50 milligrams LSD.12 The majority declined this opportunity to invoke the absurdity doctrine or usher in the Big Number Rule and affirmed Chapman's sentence.13
In other words, there is no Big Number Rule. This is made clear by the reasoning in Chapman, especially once considered alongside Crooks, which held that consequences not considered by Congress are not necessarily absurd, Lara-Aguilar's holding that surprising and anomalous results are not necessarily absurd, and Selmer's holding that if Congress merely has a "conceivable justification for a result" it cannot be absurd.14 To escape the absurdity doctrine, the Coin only needs to have conceivable justification. The conceivable justification is found within the context of the statutory scheme. 31 USC § 5111 states that "the Secretary of the Treasury shall mint and issue coins ... in amounts the Secretary decides are necessary to meet the needs of the United States" and describes the process of seigniorage, where the Treasury credits the coinage profit fund with the nominal value of coins minus the cost of their metal. Courts have held that "[t]he administration of the fiscal needs of the United States is undoubtedly a monumental task and is of vital importance to the nation"15, therefore, it is conceivable that Congress could have wanted to give the Secretary of the Treasury the power to the mint the Coin to generate seigniorage to meet the fiscal needs of the United States. This might not necessarily justify a sextillion dollar coin, as Byrne fears, but it clearly justifies minting any combination of coins whose face value plugs the fiscal deficit. Since the fiscal deficit is expected to be $1.5 trillion for the year 2023,16 we should start by assuming that the Treasury at the very least has the power to generate $1.5 trillion in seigniorage revenue.
The No Loopholes Rule
The second argument for invoking the absurdity doctrine is that doing so would constitute a loophole or workaround that would allow the Treasury to ignore the debt ceiling. According to Neil Buchanan and Michael Dorf, minting the Coin would be an "absurd result" because it would result in a "loophole" that would allow the Treasury to bypass "the entire apparatus of public finance." The implicit legal claim here is that any interpretation of any law that creates a means of avoiding any effect of any other law is automatically absurd and illegal (I refer to this proposed sub-rule as the "No Loopholes Rule"). However, there is no case law directly supports the No Loopholes Rule and several cases that explicitly reject it. For example, in Heppner v. Alyeska Pipeline Service Co., the Ninth Circuit held that when a proposed absurd result "arises out of a failure to trace through the effects of the legislation in which the statute was intended by Congress to apply," Congress, not the courts, must correct the error.17 The courts' refusal to invalidate an interpretation based on its unintended downstream effects is inconsistent with the No Loopholes Rule. As it applies here, 31 USC 5112(k) was intended to allow the Treasury to generate seigniorage revenue, but if you trace this effect, it ultimately has consequences on whether the Treasury encounters the debt ceiling. However, the effect of coinage on the debt ceiling is not the type of absurd result that the courts have the power to fix because at best, it is simply a failure to trace. Additionally, Federal courts on multiple occasions have found that statutes contain workarounds that frustrate their purposes despite being legal; in other words, there are loopholes all over the U.S. Code.18
Instead of banning loopholes and striking down interpretations that affect other statutes, the absurd result doctrine is used by courts to defeat interpretations of statutes when such an interpretation "would lead to the absurd result that the statute would defeat itself"19 or "would defeat the plain purpose of the statute," not some other statute (I refer to this sub-rule as the "Self-Defeating Rule").20 For example, in United States v. Zolin, the Supreme Court considered an interpretation of the Federal Rules of Evidence.21 In that case, the IRS was investigating the tax returns of L. Ron Hubbard, founder of the Church of Scientology. The IRS requested production of tapes that contained evidence relevant to their investigation, and the Church of Scientology intervened to prevent the production of the tapes, arguing that they were subject to the attorney-client privilege. The IRS argued that the tapes were exempt from the protection of the attorney-client privilege because of the crime-fraud exception, which states that communications are not privileged if they are done for the purpose of facilitating future illegal conduct. The IRS asked the judge to listen to the tapes without the parties present (an "in camera" review) to determine if they fell under the crime-fraud exception and were therefore not subject to the attorney-client privilege. The Church of Scientology objected to the in camera review, arguing that according to Federal Rule of Evidence 104(a), a court is bound by the rules of evidence with respect to privileges when determining the existence of a privilege. In other words, the Church of Scientology argued that a judge cannot listen to allegedly privileged tapes to determine if the tapes were subject to a privilege. The Supreme Court disagreed with the Church of Scientology, arguing that their interpretation would lead to an "absurd result" because it would mean that there would be "virtually no way the [crime-fraud] exception can ever be proved."22 To put this holding in terms of the Self-Defeating Rule, a statutory scheme which contained an attorney-client privilege and a crime-fraud exception would be self-defeating if courts interpreted the attorney-client privilege to apply to in camera review to determine the existence of that privilege because the crime-fraud exception could never be used.
The Coin does not suffer from this problem. First, the debt ceiling and the statutes granting the Treasury the ability to generate seigniorage are not part of the same statutory scheme, so no interpretation of one could ever be self-defeating solely due to its effect on the other. Second, the ability to generate seigniorage does not actually make the debt ceiling irrelevant on its face. The principal amount of all U.S. debt would still be limited to the prescribed amount, which has several important consequences related to the national and international economy, even if it the debt ceiling lacks the power to force a default. Even countries with persistent fiscal surpluses issue debt instruments, and they might have very good reasons to limit how many of those instruments they issue, even if doing so has no effect on those governments' ability to spend. But it is not the place of the courts to decide that the possible consequence of one statute (the debt ceiling: preventing spending) takes precedence over the immediate consequence of another statute (Section 5112(k): generating revenue).
Legislative interpretations are not absurd until proven otherwise, nor are they absurd because they have strange or unexpected consequences, because they affect other statutes or have consequences for other agencies, or because they result in large numbers. There are several specific rules in the jurisprudence that can be used to argue that an interpretation is absurd, the primary one being that it would mean that the statute is self-defeating. However, to my knowledge none of these rules has been convincingly used to argue against the Coin, and certainly not while comparing the facts of the case giving rise to that rule with the Coin. Additionally, none of the opponents of the Coin who have advanced the absurdity argument have sufficiently analyzed the cases dealing with the absurdity doctrine that weigh against a court holding that the Coin is absurd. In particular, there is no Big Number Rule, nor is there a No Loopholes Rule. There are several interesting legal questions raised by the prospect of the Coin, and I hope to address those in later writings, but the Coin is almost certainly outside the scope of the absurdity doctrine.