Saturday, August 13, 2022

An Interpretive Battle Among Textualists Judges Over Statute Criminalizing False Liens Against U.S. Officers or Employees (8/13/22)

In United States v. Pate, ___ F.4th ___, 2022 U.S. App. LEXIS 22174  (11th Cir. 8/10/22), CA11 here and GS here [to come], the majority opinion sets up the issue decided in the opening paragraph:

            Title 18 U.S.C. § 1521 prohibits the filing of a false lien or encumbrance against the property of any officer or employee of the United States “on account of the performance of official duties.” In 2018, Timothy Jermaine Pate filed various false liens against John Koskinen, the former Commissioner of the Internal Revenue Service, and Jacob Lew, the former Secretary of the Treasury. There is no dispute that Pate filed the false liens to retaliate against Lew and Koskinen for acts they performed as part of their official duties. The twist here, and what makes this a case of first impression for this Court, is that Pate filed the false liens after Lew and Koskinen had left their positions with the federal government. We therefore are presented with the following question: Does § 1521 apply to false liens filed against former federal officers and employees for official actions they performed while in service with the federal government? We conclude that the answer to this question is yes—the plain language of § 1521 covers both current and former federal officers and employees. Thus, for the reasons discussed below, and with the benefit of oral argument, we affirm Pate’s convictions predicated on violations of § 1521.

The majority (Judge Lagoa with Judge Branch joining) and dissenting (Judge Newsom) opinions engage over interpretation of a criminal statute.  The three judges are Trump appointees and, not surprisingly, members of the Federalist Society, which permits an inference that they are textualists, an inference confirmed by the opinions.  The majority opinion claims that its decision is based on the plain language of the statute, reasonably interpreted of course.  The dissent claims that the plain language, as it reads the text, does not support the majority.  Both sides rely on parts of the work of the master textualist and sloganeer, Justice Scalia.  Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts (2012).  Both sides deploy dictionaries, judicial sound bites, and slogans to justify the differing conclusions, with each side accusing the other of not being good textualists.  Of course, we should not expect a uniform meaning of textualism, so I suppose this type of difference is not surprising. And we should recognize that there is sufficient play in the joints of textualism to permit judges to reach their preferred conclusions.  

I think the majority has the better side of the engagement of giving a reasonable interpretation to the text.

Wednesday, August 10, 2022

Government Motion in Kepke Case to Exclude Expert Testimony About the Law (8/10/22)

I picked up an argument in a Government Motion to Exclude Defendant’s Proffered Expert Witness in the Kepke prosecution, United States v. Kepke (N.D. Cal. Criminal No. 3:21-CR-00155-JD), Motion dated 8/5/22, here. In general, the Government claims that Kepke’s expert witness disclosures were too cryptic to understand the expert witness’s proffered testimony, but the Government inferred that the expert witness would improperly testify about the law. Here are the three key paragraphs I focus on (Motion pp, 7-9):

             Expert witnesses are not permitted to offer opinions consisting of their interpretation of the law. See Hangarter v. Provident Life and Acc. Ins. Co., 373 F.3d 998, 1018 (9th Cir. 2004) (quoting Mukhtar v. Cal. State Univ., Hayward, 299 F.3d 1053, 1066 n. 10 (9th Cir. 2002), overruled on other grounds by Barabin v. AstenJohnson, Inc., 740 F.3d 457, 467 (9th Cir. 2014)); see also Snap-Drape, Inc. v. Comm’r, 98 F.3d 194, 198 (5th Cir. 1996). “[I]instructing the jury as to the applicable law is the distinct and exclusive province of the court.” Nationwide Transp. Fin. V. Cass Info. Sys., Inc., 523, F.3d 1051, 1058-59 (9th Cir. 2008); see also United States v. Caputo, 517 F.3d 935, 942 (7th Cir. 2008) (“The only legal expert in a federal courtroom is the judge.”); United States v. Weitzenhoff, 35 F.3d 1275, 1287 (9th Cir. 1993); CZ Services, Inc. v. Express Scripts Holding Co., 3:18-cv-04217-JD, 2020 WL 4518978, at * 2 (N.D. Cal. Aug. 5, 2020) (“[L]egal opinions are not the proper subject of expert testimony. Reed v. Lieurance, 863 F.3d 1196, 1209 (9th Cir. 2017). An expert may not give opinions that are legal conclusions, United States v. Tamman, 782 F.3d 543, 552-53 (9th Cir. 2015), or attempt to advise the jury on the law, Strong v. Valdez Fine Foods, 724 F.3d 1042, 1046-47 (9th Cir. 2013).”).

            In at least one criminal tax case, the Ninth Circuit approved expert testimony about the law where “the theory of the defense [was] that there [was] a good faith dispute as to the interpretation of the tax laws.” See United States v. Clardy, 612 F.2d 1139, 1153 (9th Cir. 1980) (citing United States v. Garber, 607 F.2d 92 (5th Cir. 1979) (distinguished by United States v. Burton, 737 F.2d 439, 444 (5th Cir. 1984)). But that does not mean that legal evidence is automatically admissible in all criminal tax trials. To the contrary, courts regularly exclude legal experts in criminal tax cases. See, e.g., United States v. Boulware, 558 F.3d 971, 974-75 (9th Cir. 2009) (affirming exclusion of expert testimony that specific “corporate distributions were legally non-taxable” as an impermissible legal opinion); see also United States v. Curtis, 782 F.2d 593, 598-600 (6th Cir. 1996) (affirming exclusion of expert testimony and distinguishing Garber); United States v. Harris, 942 F.2d 1125, 1132 n.6 (7th Cir. 1991) (evidence “may include expert testimony about case law, to the extent that the defendant claims actual reliance on that case law. Case law on which the defendant did not in fact rely is irrelevant because only the defendant’s subjective belief is at issue.”); United States v. Ingredient Tech. Corp., 698 F.2d 88, 96-97 (2d Cir. 1983) (affirming exclusion of expert testimony and distinguishing Garber); United States v. Alessa, 3:19-cr-00010, 2021 WL 4498638, at *4 (D. Nev. Sept. 30, 2021) (evidence of a conflict in the law is irrelevant if Defendant was not aware of the conflict).

            Here, Mr. Read’s proposed testimony must be excluded because, reading between the lines (as we must because the disclosures do not reveal Mr. Read’s actual opinions), it seems likely that Mr. Read plans to testify about his understanding of the law. At best, Mr. Read’s opinion that certain offshore structures are permissible or even common is tantamount to testimony that, in his opinion, Defendant’s actions were legal. This is exactly the type of opinion that is prohibited under Ninth Circuit law because “‘[w]hen an expert undertakes to tell the jury what result to reach, this does not aid the jury in making a  decision, but rather attempts to substitute the expert’s judgment for the jury’s.’” United States v. Diaz, 876 F.3d 1194, 1197 (9th Cir. 2017) (quoting United States v. Duncan, 42 F.3d 97, 101 (2d Cir. 1994)). And any minor probative value the proffered testimony might have would be substantially outweighed by a danger of unfair prejudice, confusing the issues, and misleading the jury.

Saturday, August 6, 2022

Brockman, Defendant in Pending Major Tax Crimes Case, Dies (8/6/22)

As readers of this blog and other blogs and news in general know, the Government has been pursuing a major tax crimes case against Robert Brockman.  See One Big Fish Indicted and Lesser Big Fish Achieves NPA for Cooperation (Federal Tax Crimes Blog 10/16/20), here; and Brockman Found Competent to Stand Trial (Federal Tax Crimes Blog 5/24/22), here.  

Brockman died late yesterday, Friday, June 5.  See David Voreacos and Neil Weinberg, Robert Brockman, Software Developer Who Fought IRS, Dies at 81 (Bloomberg 8/6/22), here (highly recommended).   This moots the criminal case, but the civil side (involving both administrative investigations and civil cases) will continue.

One of the IRS civil initiatives that continues is a jeopardy assessment (meaning an assessment made for a tax normally requiring a notice of deficiency and opportunity to litigate in the Tax Court before assessment).  I discuss jeopardy assessments in my Federal Tax Procedure Book (2022 Practitioner Edition) beginning at p. 503. (The book may be downloaded at the links provided here.)  A jeopardy assessment permits a taxpayer assessed to bring an expedited proceeding in the district court, and Brockman has done so.  Brockman v. United States (S.D. Tex. Case No. 4:22-cv-00202), Courtlistener docket entries here.  According to the docket entries, oral argument was held on 8/3/22 (Dkt. #56 & 57) and the Court notified of the death on 8/6/22 (Dkt. #59).  (I could not find on PACER a similar notice to the Court, but the same Judge is assigned to both cases; the CourtListener docket entries for the criminal case are here.)

Brockman also has a case pending in the Tax Court.  Brockman v. Commissioner (T.C. Docket #764-22), here.  The documents in the case are not available on the U.S. Tax Court DAWSON web site.  All that has happened in that case is Brockman’s filing of the Petition, the IRS’ Answer, and Brockman’s Reply to Answer.

Wednesday, August 3, 2022

2022 Editions of Federal Tax Procedure Book Online at SSRN (8/3/22)

The Federal Tax Procedure Book Editions (Student and Practitioner) are available on SSRN for viewing or downloading.  The links for the editions are on the FTP Blog page in the right-hand column titled "Federal Tax Procedure Book (2022 Editions)," here,

Please note that related items are available on the pages linked in the right-hand column of this Blog.