This case, with Kagan recused, will likely be close, with a slight edge towards the Mayo Foundation, based solely on the astounding oral arguments of Ted Olson for the Petitioners. However, if it is 4-4, it will be an affirm.
The crux of the argument hinged on whether a medical resident constitutes a worker who incidentally studies, or a student who incidentally works.
Olson argued that that using a predominancy required , medical residents who are enrolled in class and engaged in studies should be considered students. In a funny reply to Justice Sotomayor about social security exemptions, Olson quipped that the Justices of the Supreme Court are exempt from social security taxes (I did not know that).
Olson also made reference to Humpty Dumpty from Lewis Carroll’s Through the Looking Glass, with the quote “A word is what I say it is.”
Justice Ginsburg inquired if Olson prevails, would students be exempt from Title VII, NRLA, FLSA, and other employment standards. Olson replied that they are still employees for purposes of these statutes, as well as the IRS tax code. However, they are exempted if they are in fact also students.
Olson concluded that this IRS interpretation is “arbitrary, capricious, and irrational.”
The United States argued that the Court should show deference to the IRS’s interpretation, simply put.
Chief Justice Roberts seemed to focus on deference to the IRS–which argued that medical residents should not be considered students, and thus not be exempt. He asked Ted Olson about Chevron, and Olson indicated that even under Chevron, the National Muffler factors should apply.