I’ve often said that any lawyer who can’t find an ambiguity should find another way to make a living. Judge Travis A. (“Tag”) Greaves provides even more proof, if any were required, that he is abundantly qualified as a lawyer, in Amgen Inc. & Subsidiaries, Docket No. 16017-21, filed 7/31/24. The issue is whether various offshore subsidiaries generated income for parent when they reimbursed parent for Healthcare Reform Fees (HCRs), another offspring of the much-contemned Patient Protection and Affordable Care Act of 2010. HCRs are fees paid by manufacturers and sellers of certain prescription drugs. No doubt Amgen Inc. is one such.

Amgen’s trusty attorneys, all 24 (count ’em, 24) of them, want summary J that reimbursement is not income. But Judge Tag Greaves finds them a wee bit light on specifics. Paying another’s debt is income to the other when the other is relieved of the obligation to pay. But the payor does not receive income when it is reimbursed for the payment of the other’s debt. However, when one pays a deductible expense and receives (or has the right to receive, even if conditional) reimbursement, one has no deduction.

Mere legal liability is insufficient to establish who is responsible for the debt and who can deduct payment thereof. Judge Tag Greaves says this is often Tax Court’s job, but Amgen hasn’t given him enough information. It’s all ambiguous.

“Petitioner failed to show as a matter of law that the HCR Fees are expenses of the reimbursing parties. Petitioner asserts that the HCR Fees are ‘indelibly tied to the revenue’ that [subs] received. Other than this conclusory statement, petitioner failed to set forth any specific information related to the income [subs] generated in relation to the licensed drugs or how the reimbursement amount was calculated. Petitioner also failed to provide what effect, if any, the sale of the licensed drugs to Amgen USA had on the ability to connect [sub]’s income to the branded drug sales. The same factual footfalls [sic] prevent our ruling related to the allocation between Amgen Inc. and Pfizer. Petitioner fails to offer specific evidentiary support tying Pfizer’s income to the HCR Fees. In fact, petitioner fails to set forth any drug sales resulting from the joint venture. Therefore, we are unable to determine as a matter of law whether at least a portion of the HCR Fees properly belonged to Pfizer.

“The same uncertainty exists regarding Amgen Inc.’s right to reimbursement. First, we reject petitioner’s argument that the HCR Fees statutory scheme required the parties to reimburse Amgen Inc. The statute does not require repayment from a subsidiary or unrelated party. Rather, the statute only specifies that the designated entity, in this case Amgen Inc., is responsible for paying the government.

“Petitioner has further failed to show that any of the commercial exploitation agreements established a right to reimbursement.” Order, at p. 9. (I think you meant “footfaults,” Judge, not “footfalls.”).

While there was perhaps an oral agreement that was memorialized ten (count ’em, ten) years after it was made, various written agreements covering HCR activities made during that time all contained the usual boilerplate merger and integration clauses (“entire agreement of parties and supersedes all prior understandings”), and none of them mentions reimbursement.

No summary J on income, and no summary J on chops.