DC Circuit Reinstates Conservative Groups’ Lawsuits against IRS Targeting

 

shutterstock_178019846Remember the claims from Obama administration fans that the scandal of the Internal Revenue Service targeting Tea Party and conservative groups wasn’t really much of a scandal after all; that it was the result of inadvertence or incompetence and, in any event, has been fully addressed so that it won’t happen again?

A unanimous panel of the DC Circuit Court of Appeals isn’t buying it. Today the circuit’s three-judge panel unanimously reinstated lawsuits against the IRS over the targeting program (PDF). With scathing language, it ruled that a lower court had improperly credited the IRS’s promises that it had ended its abusive targeting and sought to rectify the harms being sued over. In fact, the court said, evidence indicates that the IRS has not only failed to provide adequate guarantees of future good behavior, but continues even now to hassle some of the groups it harassed.

Today’s ruling finds “little factual dispute” about the targeting and resulting “unequal treatment.” In fact, it is “plain … that the IRS cannot defend its discriminatory conduct on the merits.” Significantly, the service “has, obviously, taken no action to disavow or discredit” the Inspector General report from the Treasury, its own parent department, with its damning evidence of wrongdoing. So – contrary to what one set of IRS defenders has said – there is no real question whether there was wrongdoing, only what the remedies should be.

The court today did give the IRS a win on two issues that had been part of the litigation. First, it said, there is clear precedent that individual IRS employees cannot be made subject to liability. Second, while it is a legally closer question whether the agency violated rules on the disclosure of taxpayer information, under the circumstances, including the principle of sovereign immunity that insulates the government from many damage suits, a lower court did not act improperly in disallowing that claim too. So it upheld the lower court’s dismissal of those two claims.

At the same time, it gave the conservative groups what may be their most significant demand: a day in court on the consequences of the Service’s illegality. It ruled that they were entitled to seek injunctive (forward-looking) relief, namely a court order forbidding the IRS from doing the same thing in the future. And its logic in analyzing this point was devastating to the Service’s defenders.

The Service had sought to get the injunctive claims dismissed as moot on the grounds that it had stopped the targeting and put the episode behind it. It was the lawyerly equivalent of what the scandal-minimizing pundits have said: Let’s put this behind us and move on. But the court wasn’t buying it.

As the court notes, getting a claim dismissed as moot on grounds of “voluntary cessation” of wrongful practices is a tough standard to meet where a defendant claiming reformed character, as here, is in practical fact “free to return to [its] old ways.” The defendant must meet a “heavy burden” of proof on two points, it said, citing a 1998 DC Circuit case: “(1) there is no reasonable expectation that the conduct will recur and (2) interim relief or events have completely and irrevocably eradicated the effects of the alleged violation.” The IRS had met neither of these marks, it said.

With that, the court turns to a discussion of the Service’s current posture and policies – and it isn’t pretty. The IRS has “suspended” the targeting program for now, which is very different from ending it or adopting permanent reforms. The wrongdoing itself was no passing aberration: the Inspector General report, the court notes, is “replete with details of discriminatory processing and delay” not briefly but over multiple years and election cycles. Nor was it merely a matter of pulling the files of disliked groups for otherwise-normal review: the targeted groups were put through the wringer with extraordinarily intense and intrusive information demands of a sort well calculated to chill association with dissident views perceived as anti-Administration.

Not only has the IRS not truly forsworn targeting, the court said: it’s even continuing to hassle some of the same conservative plaintiffs! It took particular cheek for IRS lawyers to stand up and argue that the case was moot when they were still carrying on the challenged policies.

A final note on the court and on the composition of today’s panel. The DC Circuit is often seen as second in influence only to the US Supreme Court, and because of its jurisdiction sees far more than its share of cases seeking to hold the federal government accountable for unlawful behavior. Lately, with a majority of Democratic appointees, it has become more deferential to the federal government on many regulatory issues. But note that the particular panel in today’s case consists of three Republican appointees who were part of the previous conservative majority from the Circuit’s Reagan-Bush era: Senior Judge David Sentelle, who wrote the opinion, Senior Judge Douglas Ginsburg, and Judge Karen LeCraft Henderson. So caution is in order in guessing whether the full circuit would have reached the same conclusions and, if so, whether it would have done so in the same outspoken way.

There are 33 comments.

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  1. Coolidge

    Eight years.

    This has been waiting for EIGHT years. And it’s not a decision, it’s just another opportunity for the lower court to make this go away.

    There is absolutely NOTHING to be happy about. This is a nothing. EIGHT years of suppressing political opposition with a promise of being able to continue for a few more at the very least, and most likely indefinitely once the lower courts squelch logic again.

    I’m about done with any semblance of hope for the rule of law or anything remotely like what I thought our country was when I was younger.

    • #1
    • August 5, 2016 at 4:05 pm
    • Like
  2. Thatcher

    I am just finishing The Intimidation Game, and the word that keeps coming to mind is “unbelievable”. The I realize sadly that it is believable, when you understand that the Obama administration has no scruples, or fear of ever getting punished for anything, even when caught red-handed.

    • #2
    • August 5, 2016 at 4:36 pm
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  3. Reagan

    Skyler:Eight years.

    This has been waiting for EIGHT years. And it’s not a decision, it’s just another opportunity for the lower court to make this go away.

    There is absolutely NOTHING to be happy about. This is a nothing. EIGHT years of suppressing political opposition with a promise of being able to continue for a few more at the very least, and most likely indefinitely once the lower courts squelch logic again.

    I’m about done with any semblance of hope for the rule of law or anything remotely like what I thought our country was when I was younger.

    I certainly acknowledge that the legal process is endlessly frustrating and that often “the process is the punishment” but short of a massive alteration of our entire legal system, this is the best, and only thing, we could have hoped for from this court at this point.

    • #3
    • August 5, 2016 at 4:46 pm
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  4. Member

    The same principle applies to these executive agencies as applies to the president himself. A verbal reprimand and minor reparations are a small price to pay for years of illegal actions. Without truly frightening consequences, the only constraint on abuse is time.

    • #4
    • August 5, 2016 at 6:14 pm
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  5. Member

    A permanent reform would be to remove from the IRS the job of determining who is eligible for non-profit status. There is no reason the IRS should be the agency to decide. For that matter, there is no reason that such status should require prior approval, though maybe not everyone would want to take it that far.

    I expect the GOP Establishment will continue to be opposed to governmental reform, though.

    • #5
    • August 5, 2016 at 6:19 pm
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  6. Member

    At some point the people are going to decide what’s good for the goose is good for the gander and start ignoring Federal Law. When that happens, welcome to the Thunderdome.

    Seawriter

    • #6
    • August 5, 2016 at 6:46 pm
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  7. Member

    Seawriter:At some point the people are going to decide what’s good for the goose is good for the gander and start ignoring Federal Law. When that happens, welcome to the Thunderdome.

    Seawriter

    What is the Thunderdome?

    • #7
    • August 5, 2016 at 6:47 pm
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  8. Member

    The Reticulator:

    Seawriter:At some point the people are going to decide what’s good for the goose is good for the gander and start ignoring Federal Law. When that happens, welcome to the Thunderdome.

    Seawriter

    What is the Thunderdome?

    No rules, no holds barred, devil take the hindmost. Here.

    Seawriter

    • #8
    • August 5, 2016 at 7:22 pm
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  9. Member

    Seawriter:

    The Reticulator:

    Seawriter:At some point the people are going to decide what’s good for the goose is good for the gander and start ignoring Federal Law. When that happens, welcome to the Thunderdome.

    Seawriter

    What is the Thunderdome?

    No rules, no holds barred, devil take the hindmost. Here.

    Seawriter

    I think it will be more like CalvinBall, except that only the news media get to make up the rules.

    • #9
    • August 5, 2016 at 7:27 pm
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  10. Member

    The Reticulator: I think it will be more like CalvinBall, except that only the news media get to make up the rules.

    Will the news media be armed?

    Seawriter

    • #10
    • August 5, 2016 at 7:57 pm
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  11. Member

    Seawriter:

    The Reticulator: I think it will be more like CalvinBall, except that only the news media get to make up the rules.

    Will the news media be armed?

    Seawriter

    Good question. Probably only through their proxies.

    • #11
    • August 5, 2016 at 8:12 pm
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  12. Inactive

    So, the lesson is that we need a change of Administration if we are ever to get the IRS’s boot off of the necks of Tea Party groups.

    Vote for Trump. It is the only way to stop Crooked Hillary, who will inherit Team Obama, which now has eight years of on-the-job training in how to crush individual liberties such as speech, association, and religion.

    • #12
    • August 5, 2016 at 8:18 pm
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  13. Member

    To restate my earlier point more clearly:

    Any official not restrained by morals now knows that he or she can enact unlawful regulations or unConstitutional orders with impunity. The offensive law will remain in effect for years, harming citizens and/or distorting the balance of powers, until a court fonally strikes it down.

    The official risks nothing for this violation. So he or she is encouraged by those years of unilateral effect to proceed to other violations which will similarly achieve corrupt ends for a limited time.

    This situation did not begin with this incident or even this administration. It is the general trajectory of corruption in American government. Presidents and their co-conspirators can break restraints repeatedly and achieve temporary unlawful powers with no worry of punitive justice.

    • #13
    • August 5, 2016 at 8:50 pm
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  14. Member

    Aaron Miller:To restate my earlier point more clearly:

    Any official not restrained by morals now knows that he or she can enact unlawful regulations or unConstitutional orders with impunity. The offensive law will remain in effect for years, harming citizens and/or distorting the balance of powers, until a court fonally strikes it down.

    The official risks nothing for this violation. So he or she is encouraged by those years of unilateral effect to proceed to other violations which will similarly achieve corrupt ends for a limited time.

    This situation did not begin with this incident or even this administration. It is the general trajectory of corruption in American government. Presidents and their co-conspirators can break restraints repeatedly and achieve temporary unlawful powers with no worry of punitive justice.

    That is the reality. It’s similar to the way the media work. You can’t fool all of the people all of the time, but if you can fool some of the people some of the time, that might be enough to put your people in power.

    • #14
    • August 5, 2016 at 8:53 pm
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  15. Coolidge

    Cato Rand: I certainly acknowledge that the legal process is endlessly frustrating and that often “the process is the punishment” but short of a massive alteration of our entire legal system, this is the best, and only thing, we could have hoped for from this court at this point.

    No. No. NO. NO!!

    When someone is trying to drive a knife into your face you don’t reason with him, you don’t call time out and dial 911, you don’t explain to him that the law does not allow him to drive a knife into your face.

    Where have the voices of protest been? Our elected representatives have been mute. They have been worthless. Oh, Trey Gowdy has a few catchy interrogations, and that’s about it. No one has ever been driving this or any other issue in the realm of public awareness. Yet if one conservative is accused of talking about a pubic hair on a can of cocoa cola all hell breaks loose.

    Our freedoms are being sold out without even a whimper of protest. That knife is going to cut our faces off while we philosophize in our heads about the injustice.

    • #15
    • August 5, 2016 at 9:07 pm
    • Like
  16. Member

    Skyler:

    Cato Rand: I certainly acknowledge that the legal process is endlessly frustrating and that often “the process is the punishment” but short of a massive alteration of our entire legal system, this is the best, and only thing, we could have hoped for from this court at this point.

    No. No. NO. NO!!

    When someone is trying to drive a knife into your face you don’t reason with him, you don’t call time out and dial 911, you don’t explain to him that the law does not allow him to drive a knife into your face.

    Where have the voices of protest been? Our elected representatives have been mute. They have been worthless. Oh, Trey Gowdy has a few catchy interrogations, and that’s about it. No one has ever been driving this or any other issue in the realm of public awareness. Yet if one conservative is accused of talking about a pubic hair on a can of cocoa cola all hell breaks loose.

    Our freedoms are being sold out without even a whimper of protest. That knife is going to cut our faces off while we philosophize in our heads about the injustice.

    I like the spirit of your remarks, but Cato Rand said it’s the best we could have expected from that court. That doesn’t mean it’s the best we could have expected.

    • #16
    • August 5, 2016 at 9:12 pm
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  17. Member

    Aaron Miller: It is the general trajectory of corruption in American government.

    The panel, somewhat slyly, acknowledges this point when they state

    There is no controlling appellate decision concerning the application
    of § 6103 to a comparable situation, perhaps in part because
    there is no factual history of such discriminatory acquisition of
    taxpayer information prior to the events giving rise to these
    cases
    It’s legalese, but this is as strong a rebuke as any in the opinion. Essentially, “We’ve never seen corruption to this degree.”
    • #17
    • August 5, 2016 at 11:45 pm
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  18. Inactive
    BR

    Skyler: Our freedoms are being sold out without even a whimper of protest. That knife is going to cut our faces off while we philosophize in our heads about the injustice.

    Obama simply won. He weaponized the IRS to silence his opponents and won the 2012 election that way (by “outsmarting” folks he figured wouldn’t want to break the law). I can’t remember why everyone thought impeachment was such a terrible idea a few years ago. I certainly didn’t. I contact my congressmen frequently; I’m sure you do, too.

    At the trial, the Obama lawyers, entitled and aloof to logic, didn’t win and that is a great thing. Thanks for telling a compelling story, Mr. Olson.

    Best way forward: after Koskinen is impeached, the IRS and the SEC, FBI, DOJ and others which worked in secret and in tandem with Obama should be greatly reduced, so that each agency executes only very basic and mundane tasks. Private chit-chats between the President and the IRS executives cannot be allowed. And, lastly, the number of days spent stonewalling of documents should be equal to days spent in jail by the highest executive in each agency.

    • #18
    • August 6, 2016 at 1:13 am
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  19. Reagan

    BR:

    Skyler: Our freedoms are being sold out without even a whimper of protest. That knife is going to cut our faces off while we philosophize in our heads about the injustice.

    Obama simply won. He weaponized the IRS to silence his opponents and won the 2012 election that way (by “outsmarting” folks he figured wouldn’t want to break the law). I can’t remember why everyone thought impeachment was such a terrible idea a few years ago. I certainly didn’t. I contact my congressmen frequently; I’m sure you do, too.

    At the trial, the Obama lawyers, entitled and aloof to logic, didn’t win and that is a great thing. Thanks for telling a compelling story, Mr. Olson.

    Best way forward: after Koskinen is impeached, the IRS and the SEC, FBI, DOJ and others which worked in secret and in tandem with Obama should be greatly reduced, so that each agency executes only very basic and mundane tasks. Private chit-chats between the President and the IRS executives cannot be allowed. And, lastly, the number of days spent stonewalling of documents should be equal to days spent in jail by the highest executive in each agency.

    Love that last idea.

    • #19
    • August 6, 2016 at 2:23 am
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  20. Reagan

    At the end of the day, the problem here is the size and scope of government, not the corruption of Obama, or Lois Lerner, or that IRS hocho who looks like Montgomery Burns (forget his name). People in charge of government functions are going to abuse their power in order to stay in power and frustrate their political opponents. Often. That’s just baked into the cake. It’s where the incentives run. It’s human nature. It’s happened before (anybody else old enough to remember Nixon?) and it will happen again. If you want less of it (and of course I do too) only having less such people and less such functions is going to get you there.

    • #20
    • August 6, 2016 at 2:28 am
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  21. Member

    The Reticulator:

    Seawriter:

    The Reticulator:

    Seawriter:At some point the people are going to decide what’s good for the goose is good for the gander and start ignoring Federal Law. When that happens, welcome to the Thunderdome.

    Seawriter

    What is the Thunderdome?

    No rules, no holds barred, devil take the hindmost. Here.

    Seawriter

    I think it will be more like CalvinBall, except that only the news media get to make up the rules.

    Sounds plausible, since the media has been making up the news for a long time.

    • #21
    • August 6, 2016 at 6:02 am
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  22. Coolidge

    Cato Rand: At the end of the day, the problem here is the size and scope of government

    Absolutely true.

    • #22
    • August 6, 2016 at 6:51 am
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  23. Member

    In no case during the Obama administration has a government employee guilty of corruption, incompetence, or malfeasance been fired. There is no threat to job security so long as illegal or immoral acts are performed to favor the current administration. There is no disincentive to corruption nor does the press demand it. Where will it all end?

    • #23
    • August 6, 2016 at 9:13 am
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  24. Contributor
    Walter Olson Post author

    Via Sen. John Cornyn, Kim Strassel passes the following along in her much-talked-about new book, The Intimidation Game:

    “So, yes, the president was saying—two months after the news broke—that the whole IRS thing was just a “phony scandal.””

    • #24
    • August 6, 2016 at 9:18 am
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  25. Member

    Skyler: Where have the voices of protest been? Our elected representatives have been mute. They have been worthless. Oh, Trey Gowdy has a few catchy interrogations, and that’s about it. No one has ever been driving this or any other issue in the realm of public awareness.

    This is a good question. Why didn’t Republicans in congress make a stink about this? Could they do it now? Hearings? Subpoenas?

    • #25
    • August 6, 2016 at 9:32 am
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  26. Inactive

    This seem like generally good news, but now that they’ve determined that no single person can be charged, can Lerner be forced to testify. Isn’t the 5th just intended for self-protection.

    Cato, can you shed some light here?

    • #26
    • August 6, 2016 at 2:14 pm
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  27. Reagan

    Severely Ltd.:This seem like generally good news, but now that they’ve determined that no single person can be charged, can Lerner be forced to testify. Isn’t the 5th just intended for self-protection.

    Cato, can you shed some light here?

    This is a civil case. They made no determination about whether criminal prosecution was available. So this case just doesn’t change the status quo ante with respect to her Fifth Amendment rights.

    • #27
    • August 6, 2016 at 2:51 pm
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  28. Coolidge

    Kate Braestrup: Could they do it now? Hearings? Subpoenas?

    Oh, they’ve had hearings. They were as boring as you can imagine. We need a little more flash to match the level of the crime.

    • #28
    • August 6, 2016 at 3:06 pm
    • Like
  29. Member

    As a former federal employee, I think it’d be a can of worms for citizens to be able to sue individual federal employees. When employees have violated the rules, as in this targeting case, they should be punished via the means available to the government, including counseling, fines, suspension or firing. Of course, government rarely does this, but this is how individual employees who violate the rules should get handled. Like @katebraestrup, I’d also like to see the executive branch get more heat from Congress for this, so that they understand that they have to follow the rule of law.

    Having said this, I’d applaud if Lerner lost her pension and last few years of pay over what she did. O.k., I’m dreaming.

    • #29
    • August 8, 2016 at 9:13 am
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  30. Member

    Tedley:As a former federal employee, I think it’d be a can of worms for citizens to be able to sue individual federal employees. When employees have violated the rules, as in this targeting case, they should be punished via the means available to the government, including counseling, fines, suspension or firing. Of course, government rarely does this, but this is how individual employees who violate the rules should get handled. Like @katebraestrup, I’d also like to see the executive branch get more heat from Congress for this, so that they understand that they have to follow the rule of law.

    Having said this, I’d applaud if Lerner lost her pension and last few years of pay over what she did. O.k., I’m dreaming.

    Bring back the Hatch Act.

    • #30
    • August 8, 2016 at 9:43 am
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