The U.S. Court of Appeals for two circuits recently published opinions where grammar—not precedent or policy—determined whether money had to be paid into congressionally mandated funds.
Past participles turn verbs into adjectives, and courts take notice
The dispute in EB5 Holdings Inc v. Edlow centered on the word “designated.” Congress established the EB-5 visa program in 1990, permitting foreign investors to obtain green cards by financing job-creating projects. Two years later, lawmakers formalized the system by approving certain economic units as Regional Centers.
Fraud became widespread in the program. In 2022, Congress reauthorized it and introduced annual fees on Regional Centers to support oversight. The statute required payment from “each regional center designated under” the new law. EB5 Holdings claimed it had been approved under the 1992 statute, not the 2022 version, so it owed no fees.
The court rejected this argument, pointing to a basic grammar principle: past participles frequently describe a current condition rather than the timing of an action. “Designated” in the 2022 law referred to any Regional Center’s existing status, not when it was originally approved. The court ruled that only the center’s present designation mattered.
The opinion also examined the preposition “under.” EB5 Holdings argued it hadn’t been appointed under the 2022 statute because it predated the law. The court dismissed this reasoning but acknowledged Congress could have prevented the dispute with clearer language. A simple phrase like “any Regional Center” would have eliminated ambiguity.
Related: Counsel Cast Rises to Authority
Past participles begin as verbs but often change function. They form the passive voice (“had been designated”) or combine with auxiliary verbs for past perfect tense (“had designated”). Native speakers use them without thought—until a lawsuit demands close examination.
The last antecedent rule divides a $653 million penalty
In Englehardt v. Blanche, the D.C. Circuit used the last antecedent rule to determine how much of a $653 million penalty should fund terrorism victims. The fund’s language listed two types of offenses:
- Violations of the International Emergency Economic Powers Act (IEEPA) or the Trading with the Enemy Act (TWEA).
- “Any related criminal conspiracy, scheme, or other Federal offense arising from the actions of, or doing business with or acting on behalf of, a state sponsor of terrorism.”
The case involved British American Tobacco (BAT), which paid penalties for illegal transactions linked to its North Korea operations. North Korea lost its “state sponsor of terrorism” designation in 2008, but the conspiracy began in 2009. Most of BAT’s penalty resulted from IEEPA violations and bank fraud, not terrorism connections.
The court decided the “state sponsor of terrorism” qualifier applied only to the second category—conspiracies or schemes—because it appeared at the end of the list. The modifier didn’t extend to the first category, meaning most of the penalty should have gone to the victims’ fund. The Department of Justice had deposited only a small portion.
The last antecedent rule isn’t always followed. Courts apply it when it suits their reasoning and ignore it when it doesn’t. The opinion didn’t reference legal grammarians like Antonin Scalia or Bryan Garner, but its logic aligned with their explanations. A modifier at the end of a list usually applies only to the last item—unless the court chooses differently.
Related: How to assess legal MSOs effectively
The rule has appeared in other cases. The Supreme Court used it in Barnhart v. Thomas to interpret a Social Security statute. Lower courts have relied on it for disputes involving tax codes and environmental regulations. Outcomes vary so much that lawyers often find precedents supporting either side.
Grammar disputes expose broader legal unpredictability
Both cases follow a familiar pattern: statutes written in complex, technical language, dissected word by word. Congress rarely drafts laws with litigation in mind. Attorneys exploit ambiguities, and courts select grammatical rules to support their decisions.
The practice isn’t recent. Courts have long used canons of construction—such as the last antecedent rule or the plain meaning doctrine—to resolve disputes. But results depend more on judicial preference than the rules themselves. A past participle can shift meaning; a prepositional phrase can expand or limit a statute’s scope. The same text may produce opposite rulings in different circuits.
Most cases settle before reaching this point. The unpredictability of grammar-based arguments makes litigation costly. Both sides research treatises, cite scattered precedents, and hope for a favorable ruling. When preparation is thorough, settlements often follow.
Attorneys handling these disputes should explore all options. A single case from another jurisdiction could provide the right grammatical argument. The real lesson isn’t about participles or antecedents—it’s how easily language adapts to legal demands. New litigation strategies often emerge from such disputes.
Leave a Reply