Say Whaaat? The Sixth Circuit Debates “Corpus Linguistics” as a Tool for Statutory InterpretationA seemingly routine Sixth Circuit appeal involving the interpretation of the federal Employee Retirement Income Security Act statute (ERISA) recently sparked an interesting debate between two Circuit Judges — Amul Thapar and Jane Stranch — on the use of “corpus linguistics” in statutory interpretation. In Wilson v. Safelite Group, Inc., the court affirmed summary judgment for the defendant employer on federal preemption grounds. But, as explained below, the decision is noteworthy less for the result and Judge Stranch’s majority opinion than for the two separate concurrences from Judges Thapar and Stranch. In those concurrences, Judges Thapar and Stranch explore the use of “corpus linguistics” as an interpretive tool and perhaps have begun a jurisprudential discussion that will spread throughout the federal courts.

What is “corpus linguistics”?

Before discussing the three separate writings in Wilson, here’s a brief introduction to “corpus linguistics.” To paraphrase the description in Judge Thapar’s concurrence, the process begins with searchable online databases that contain millions of examples of word usage from a variety of “ordinary” sources — e.g., spoken words, works of fiction, magazines, newspapers, and academic works. Lawyers and judges can search these databases to find specific examples of how a given word or phrase was used at a given period in time. Lawyers and judges then can apply those examples of word usage to interpret the statutory text at issue.

For instance (as described by Judge Thapar), the U.S. Supreme Court’s decision in Smith v. United States, 508 U.S. 223 (1993), turned on the interpretative question whether exchanging a firearm for drugs qualified as “use” of that firearm for purposes of a certain statute criminalizing the “use” of a firearm “during and in relation to a … drug trafficking crime.” A search of one of the currently available databases — conducted many years after the decision — demonstrated that there were 159 instances in which the verb “use” was followed by a noun indicating a weapon (such as “gun”), and that there was not a single instance in which the word “use” meant exchange or barter in that context. Applying corpus linguistics, a lawyer would argue (and a judge would rule) that the statute should be interpreted consistent with those search results.

So, what role did the corpus-linguistics analysis play in Wilson?

Judge Stranch’s majority opinion

In Wilson, the plaintiff sued his former employer in federal court, asserting state law claims for breach of contract and negligent misrepresentation in connection with the defendant employer’s deferred compensation plan. The district court granted the defendant employer’s summary judgment motion, ruling that those state law claims were preempted by ERISA because in relevant part the deferred compensation plan met the statutory definition of an “employee pension benefit plan” under 29 U.S.C. § 1002(2).

According to Judge Stranch’s majority opinion, the “starting point is the language of the statute,” although the opinion added that the statutory language must be interpreted in light of the “structure, history, and purpose” of the statutory scheme — not in a “vacuum.”

The key was the interpretation of the word “results” and the phrase “for periods extending to the termination of covered employment or beyond” in ERISA’s § 1002(2). That section defines an “employee pension plan” as any “plan, fund, or program” that “results in a deferral of income by employees for periods extending to the termination of covered employment or beyond.”

Based on the “ordinary” dictionary definition of “results” and the text of other ERISA sections, the court rejected the plaintiff’s argument that, for purposes of § 1002(2), “results in a deferral of income” means the plan “[must require] a deferral of income.” The court reasoned that “results in” and “requires” are not synonymous.

Likewise, the court rejected the plaintiff’s argument that the phrase “for periods extending to the termination of covered employment or beyond” means an employee must defer income until termination. Based on the statutory language, the court ruled that the plaintiff’s reading would not give effect to the word “periods.” Instead, the court concluded that deferrals can occur for various “periods,” both before and after termination.

Judge Thapar’s concurrence

Concurring in part and in the judgment, Judge Thapar wrote that he agreed with the majority’s textual analysis, and that the text of ERISA’s § 1002(2) is clear, as many “tried-and-true tools of interpretation confirm.” Judge Thapar continued that corpus linguistics also confirms the result, and urged that courts should “consider adding this tool to their belts.”

Judge Thapar reasoned that words in a statute often have many “permissible” meanings, and it is the role of the courts to construe those words according to their “ordinary” meaning at the time Congress enacted the statute. According to Judge Thapar, corpus linguistics is “one tool” of statutory interpretation, but not the “whole toolbox.” For example, he noted that the majority opinion relied on a dictionary definition of “results,” and stated that corpus linguistics may be most valuable as a “cross-check” on other interpretative tools, particularly in those “difficult cases where statutes split and dictionaries diverge.”

With respect to the interpretive question at issue in Wilson, Judge Thapar wrote that corpus linguistics “confirms” the majority’s textual analysis. Database searching for the time period immediately before and during ERISA’s enactment overwhelmingly refuted the plaintiff’s suggested reading of § 1002(2); there was not a single database result that supported the plaintiff’s interpretation of “results,” and only one example that arguably could have been read to support his interpretation of “extending to.”

Otherwise, much of Judge Thapar’s concurrence addressed the “concerns” raised by Judge Stranch in her separate concurrence, discussed below.

Judge Thapar concluded that, in Wilson, corpus linguistics served as a “method to check” the panel’s “work,” but that in a case where the “ordinary” meaning of the words in a statute is “debatable” the analysis could be dispositive — corpus linguistics “can help courts as they roll up their sleeves and grapple with a term’s ordinary meaning.”

Judge Stranch’s concurrence (and Judge Thapar’s “rebuttal”)

As noted above, Judge Stranch wrote separately to “express some concerns” about Judge Thapar’s “endorsement” of corpus linguistics. The first concern was a “practical problem”: How is a judge to “make sense” of dozens, hundreds, or thousands of database examples of a term’s usage? How should a judge determine which results are relevant and which are irrelevant? Should a judge simply take the most frequently used meaning as the “ordinary” meaning? Illustratively, Judge Stranch asked whether it matters — for purposes of interpreting the word “results” in ERISA’s § 1002(2) — how that term was used in a “book about farm animal management in 1976,” or in an “article from Sports Illustrated about New York’s cool spring weather in 1964.”

Next, Judge Stranch reasoned that the use of corpus linguistics is a “difficult and complex exercise” that should be left to “trained lexicographers” — i.e., those who author dictionaries, which already serve as a frequent interpretative tool — or to “qualified experts” such as professors of applied linguistics.

Judge Thapar’s concurrence included his “rebuttal” to Judge Stranch’s concerns. Briefly, on the question of determining relevant results, Judge Thapar responded that the “entire practice of law” and “certainly the practice of interpretation” involve “judgment calls about whether a particular source is relevant.” Similarly, on the question whether the most frequently used meaning should be considered the “ordinary” meaning, Judge Thapar said that judges “still will need to exercise judgment” — “sometimes the most frequent use of a word will line up with its ordinary meaning,” but “sometimes it will not.” And, with regard to dictionaries, Judge Thapar argued that the usage examples in a dictionary often come from a time before the dictionary is published, and that corpus linguistics offers a “broader picture” of how words were used at the time Congress passed a given statute.

Ultimately, Judge Stranch conceded that she was not suggesting corpus linguistics never could assist judges in the “difficult project” of statutory interpretation. But, she warned, corpus linguistics “brings us no closer to an objective method” of statutory interpretation. Instead, Judge Stranch would continue to focus statutory interpretation on “historic and common-sense considerations,” including the “text, structure, history, and purpose” of the statute at issue.

The implications of Wilson — the genesis of corpus linguistics in federal court?

At this point, the debate summarized above gives us more questions — and discussion topics — than answers. For starters, one only can guess at what role corpus linguistics will come to play in federal court. As of this writing, a Westlaw search demonstrates that, since the Wilson decision issued two months ago, not a single federal court decision even has cited Wilson. Likewise, before Wilson, it appears that no federal court had used corpus linguistics in statutory interpretation, at least in a published opinion. And in state courts nationwide, both before and after Wilson, corpus linguistics has seen only limited action and application (mostly in Utah, where at least one of the databases is compiled).

However, Wilson already has been cited in at least three amicus briefs, including in the high-profile case New York State Rifle & Pistol Association, Inc. v. The City of New York that currently is pending in the Supreme Court. In addition, a recent Third Circuit opinion — written by Circuit Judge Thomas Hardiman — included a brief corpus-linguistics analysis (see Caesars Entm’t Corp. v. International Union of Operating Engineers Local 68 Pension Fund, 932 F.3d 91 (3d Cir. 2019)). And if, as Supreme Court Justice Elena Kagan remarked in a 2015 lecture, “we’re all textualists now,” then it may be that this interpretative “tool” will become a fixture in our “toolbox.”

As a technical matter, is corpus linguistics simply a tool to discern the “ordinary” meaning of plain and unambiguous language in a statute, as the panel in Wilson analyzed ERISA’s § 1002(2)? Or, is the corpus-linguistics analysis better suited to resolving ambiguity where statutory terms are reasonably susceptible to more than one meaning? That distinction may not matter; the analysis of a given statutory term based on the results in a corpus-linguistics database presumably wouldn’t differ based on a threshold determination regarding the term’s clarity or ambiguity. That said, an additional interpretive tool may be useful more when a court is faced with an ambiguous statute or statutory term than as a “cross-check” to confirm the meaning of plain language.

Regardless, practically speaking, the real question is whether the use of corpus linguistics in statutory interpretation will increase over time — in the Sixth Circuit and other federal courts. Going forward, only time will tell how prominent a role the corpus-linguistics analysis will have generally or in any given case.

The Sixth Circuit Strikes Down Tennessee’s Cap on Punitive DamagesThe Sixth Circuit recently issued a divided opinion holding that Tennessee’s statutory cap on punitive damages, Tenn. Code Ann. § 29-39-104, is unconstitutional.  What makes the case interesting is that the court decided the issue solely under the Tennessee Constitution.  The majority opinion, authored by Judge Clay and joined by Judge Stranch, held that the cap violates the right to a trial by jury as provided in Article I, Section 6 of the Tennessee Constitution.  The dissenting opinion by Judge Larsen argued that, for purposes of the appeal, the issue should have been certified to the Tennessee Supreme Court.  Judge Larsen also disagreed with the majority’s conclusion on the merits.

The case, Lindenberg v. Jackson National Life Insurance Company, arose out of a dispute over life insurance proceeds and presented only state-law causes of action.  Because the parties were not citizens of the same state, the case was heard by the federal court sitting in diversity jurisdiction in the Western District of Tennessee.  At trial, the jury returned verdicts in favor of the plaintiff for $350,000 in compensatory damages and $3 million in punitive damages.  As provided under Tennessee’s punitive damages statute, the jury is not informed of the statutory cap on punitive damages, and it is the role of the trial court to apply the cap and reduce the punitive damages verdict to either twice the total amount of compensatory damages awarded or $500,000, whichever is greater.  Tenn. Code Ann. § 29-39-104(5).  Accordingly, the district court reduced the jury’s punitive damages award to $700,000 and entered judgment for that amount.  On appeal, the plaintiff argued that the cap was unconstitutional, and the majority agreed.  It held that the cap unconstitutionally violates the Tennessee Constitution’s guarantee that “the right of trial by jury shall remain inviolate.”  Articulating an originalist approach to constitutional interpretation, the majority reasoned that at the time the Tennessee Constitution was adopted, the proper amount of punitive damages was a determination delegated to the jury.  For the Tennessee Legislature to impose a statutory cap on the amount of punitive damages that may be awarded would thus unconstitutionally infringe on the jury’s “inviolate” fact-finding ability.

The constitutionality of Tennessee’s punitive damages cap has not yet been decided by the Tennessee Supreme Court.  In her dissent, Judge Larsen argued that the panel should have certified the question to the court.  Notably, the district court attempted to certify the issue to the Supreme Court, but it declined to issue an opinion.  The court indicated that its reason for doing so was because the district court had failed to certify the separate question of whether the plaintiff could actually recover punitive damages in the first place, since the plaintiff had already recovered bad-faith statutory damages.  The Supreme Court stated that it remained open to certification of both the statutory and constitutional questions by the Sixth Circuit.  In her dissent, Judge Larsen argued that the panel should have taken the Supreme Court up on its invitation.  Judge Larsen also disagreed with the majority’s conclusion that the cap is unconstitutional.  Although the majority recognized that Tennessee statutes are afforded a strong presumption of constitutionality, Judge Larsen argued that it did not actually apply that presumption to the statutory cap and failed to prove beyond a reasonable doubt that the cap is unconstitutional.

The Sixth Circuit can agree to rehear cases en banc, meaning that the original decision will be vacated and the case will be reheard before all active judges on the court.  The State of Tennessee, which intervened in the lawsuit to defend the cap’s constitutionality, has filed a petition for rehearing en banc.  The petition echoes Judge Larsen’s dissent and also highlights the policy rationale behind the Tennessee Legislature’s decision to impose the statutory cap on punitive damages—before the cap’s enactment, surrounding states that already possessed a damages cap had an advantage in attracting business.  Concern for the Legislature’s authority to make policy judgments and set the parameters of damage awards was also raised in the amicus brief filed in support of the statute’s constitutionality by the Beacon Center, the National Federation of Independent Business Small Business Legal Center, and “concerned Tennessee legislators” Randy McNally, Beth Harwell, Gerald McCormick, Bill Ketron, Glen Casada, Jack Johnson, and Pat Marsh.

Unless Lindenberg is reheard and reversed, it remains binding authority on federal courts within the Sixth Circuit.  It is not binding precedent on Tennessee state courts, however, since they are not required to adopt a federal court’s decision on a purely state-law issue.  Nevertheless, the decision is important persuasive authority.  Under the panel’s decision in Lindenberg, federal courts within the Sixth Circuit may not impose Tennessee’s statutory cap on punitive damages, but Tennessee state courts may still lawfully apply the cap.  This distinction could be an important consideration in deciding whether to file or remove a case involving punitive damages under Tennessee law to federal court.  Of course, when the Tennessee Supreme Court takes up the issue, its decision will be binding on both state and federal courts.

Tennessee Diversifies Its Valuation-Method Portfolio for Closely Held CorporationsThe Tennessee Supreme Court overruled three decades of precedent in Athlon Sports Communications, Inc. v. Duggan, giving trial courts broad discretion in the method used to determine the “fair value” of shares in “dissenters’ rights” actions.

When a closely held Tennessee corporation seeks to undergo a structural change such as a merger, dissenting minority shareholders are afforded a statutory “appraisal remedy” pursuant to Tennessee Code Annotated § 48-23-101, et seq.  This “dissenters’ rights” statute allows dissenting shareholders to escape the involuntarily altered investment with the “fair value” of their shares, plus accrued interest.  But “fair value” means “the value of the shares immediately before the effectuation of the corporate action to which the dissenter objects” under Tennessee Code Annotated § 48-23-101(4).  This is not the “fair market value” of a bargained-for exchange between motivated buyers and sellers.  If the corporation and dissenting shareholders cannot agree on the shares’ “fair value,” the corporation can commence a proceeding under Section 48-23-301, petitioning the court to determine the “fair value.”  As expected, the abstract notion of “fair value” has proven elusive to courts, corporations, and shareholders alike.

Though the statute is silent as to which methods courts should use to determine “fair value,” the Tennessee Supreme Court implicitly mandated the “Delaware Block Method” in 1983. Through Blasingame v. American Materials, Inc., Tennessee “adopt[ed] the Delaware rule requiring the use of [asset value, market value, and earnings value] in determining the fair value of a dissenting minority stockholder’s shares.”  However, that same year, the Delaware Supreme Court in Weinberger v. UOP, Inc. abandoned exclusive application of the Delaware Block Method in favor of a liberal approach aligned with generally acceptable methods in the financial community.  Although Tennessee courts generally look to Delaware law in unsettled matters of corporate law, Tennessee did not divest itself of exclusive use of the Delaware Block Method for over three decades.

The court in Athlon Sports elected to overrule Blasingame and allow trial courts to consider alternative valuation methods, although the courts may still apply the Delaware Block Method when appropriate.  Specifically, the court adopted the Weinberger approach, allowing “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court.”

Moving forward, corporations, dissenting shareholders, and courts may now consider other valuation methods for “fair value” that include projections of future value, provided that they are provable and not speculative.  Likewise, Tennessee trial and appellate courts may find themselves determining the “strike price” of speculation when it comes to weighing elements of future value now that Athlon Sports has “rung the opening bell” for a new dissenters’ rights regime.