The defendant a common shareholder in several corporations, some of which were losing money. So he began transferring money from one corporation to others. In the corporation with the money to spread around, he had at least one minority shareholder, a gentleman named Franks. Franks sued the defendant in state court. The state court issued a preliminary injunction to mitigate the losses in the interim. The preliminary injunction required the defendant to continue serving the corporation from which money was transferred but enjoined him from receiving pay from that corporation. On appeal of the preliminary injunction before he had done the service required, "The Ohio Court of Appeals held that requiring Rankin to serve as president without pay violated the Thirteenth Amendment's prohibition on involuntary servitude. Franks v. Rankin, Nos. 11AP-934, 11AP-962, 2012-Ohio-1920, 2012 WL 1531031, at *14-15 (Ohio Ct. App. May 1, 2012)."
Rankin was thereafter indicted for failure to withhold and pay over (§ 7202), tax perjury (§ 7206(1)) and tax obstruction (§ 7212(a)). Rankin moved to dismiss, arguing that the preliminary injunction requiring unpaid service (which he never served) was punishment making his prosecution for tax crimes unconstitutional double jeopardy. There are several obvious problems with that argument. The district court rejected it. Rankin appealed.
The majority handily affirmed in three short paragraphs:
Rankin argues that this federal tax prosecution violates the Double Jeopardy Clause because it involves the "same offense" as Franks, a state civil case; and, in Rankin's view, Franks already punished him criminally for that offense. The Double Jeopardy Clause prohibits the government from putting a person "in jeopardy of life or limb" twice for the "same offense." U.S. Const. amend. V. Offenses are not the same when, looking at their statutory elements, they each "require[] proof of a fact which the other does not." Jackson v. Smith, 745 F.3d 206, 211 (6th Cir. 2014) (quoting Blockburger v. United States, 284 U.S. 299, 304, 52 S. Ct. 180, 76 L. Ed. 306 (1932)); United States v. Evans, 951 F.2d 729, 732-33 (6th Cir. 1991). Although here we could affirm the district court on multiple grounds, the simplest is that the federal tax charges in this prosecution are not the "same" as the state fiduciary-duty claims in Franks.
In Ohio, a fiduciary-duty claim has three basic elements: the existence of a fiduciary duty, the breach of that duty, and harm to the plaintiff. Wells Fargo Bank, N.A. v. Sessley, 188 Ohio App. 3d 213, 2010 Ohio 2902, 935 N.E.2d 70, 83 (Ohio Ct. App. 2010). A minority shareholder in a closely held corporation, like the plaintiff in Franks, must show specifically that a controlling shareholder misused corporate power for personal benefit at the minority's expense. See Crosby v. Beam, 47 Ohio St. 3d 105, 548 N.E.2d 217, 220-21 (Ohio 1989).
The charges in this prosecution are completely different. The grand jury charged Rankin with tax crimes under three provisions of the Internal Revenue Code, and the government must prove each beyond a reasonable doubt. First, on the charge of failing to withhold taxes, the government must prove that Rankin willfully failed "to collect or truthfully account for and pay over" taxes imposed by the Internal Revenue Code. 26 U.S.C. § 7202. Second, on the charge of falsifying tax returns, the government must prove that Rankin willfully made false and material statements on federal income tax returns that he signed under penalty of perjury. 26 U.S.C. § 7206(1). Third, on the charge of obstructing the IRS, the government must prove that Rankin intimidated or impeded the IRS "corruptly or by force or threats of force." 26 U.S.C. § 7212(a). The plaintiff in Franks did not need to prove any of these elements. And the government here does not need to prove that Rankin was a majority shareholder of a closely held corporation or that he violated his fiduciary duties. The "offenses" in Franks and this prosecution are not the "same" because each has elements the other does not. See Jackson, 745 F.3d at 211. Thus, this prosecution does not violate the Double Jeopardy Clause. The district court properly denied Rankin's motion to dismiss.That's pretty short, so the concurring opinion found more to discuss, going beyond the majority opinion to reach issues that perhaps were not necessary (however interesting):
