Monday, January 23, 2023

Supreme Court Denies Cert in FBAR Willful Penalty Case With Justice Gorsuch Dissenting on Excessive Fines Issue (1/23/23)

I previously blogged about United States v. Toth, 33 F.4th 1 (1st Cir. 4/29./22), CA1 here and GS here, the Court affirmed the district court’s grant of summary judgment which had imposed a willful determination as a discovery sanction. See First Circuit Sustains Willful Penalty Where Willfulness Found as Discovery Sanction (Federal Tax Crimes Blog 5/2/22), here. Toth petitioned for writ of certiorari. Toth v. United States (Dkt No. 22-177), docket entries here.

The question presented in the petition was:

The question presented is whether civil penalties imposed under 31 U.S.C. § 5321(a)(5)(C)-(D)—penalties that are avowedly deterrent and noncompensatory—are subject to the Eighth Amendment’s Excessive Fines Clause.

Today, the Supreme Court denied a petition for writ of certiorari, with Justice Gorsuch issuing a three-page dissenting opinion, here. Justice Gorsuch sets up his argument with the 1st Circuit’s holding:

It [the 1st Circuit] held that the Constitution’s protection against excessive fines did not apply to Ms. Toth’s case because the IRS’s assessment against her was “not tied to any criminal sanction” and served a “remedial” purpose. 33 F. 4th 1, 16, 17–19 (2022).

Justice Gorsuch then states his case in three paragraphs spanning two pages. It is short, so I recommend readers read his version rather than an inadequate summary I might make.

JAT Comments:

1. In my prior discussion of oral argument in in In Re Grand Jury (Sup Ct. No. 21-1397), On Supreme Court Oral Argument in In Re Grand Jury On Issue of Principal or Significant Purpose for Attorney-Client Privilege (1/10/23; 1/11/23), here, I discussed amicus briefs. In that case, the oral arguments gave no hint that the amicus briefs made material arguments other than just giving a "me too" signal.  So, I questioned the usefulness of amicus briefs. In his Toth dissent, Justice Gorsuch gives two short of shout outs for amici briefs (p. 3, bold-face supplied by JAT):

Ms. Toth and her amici identify still more reasons to worry about the First Circuit’s decision. They say it clashes with the approach many other courts have taken in similar cases. Pet. for Cert. 18–25 (collecting cases). They observe that it incentivizes governments to impose exorbitant civil penalties as a means of raising revenue. Id., at 25–30. And they contend that it is difficult to square with the original understanding of the Eighth Amendment. Brief for Professor Beth A. Colgan as Amicus Curiae on Pet. for Cert. 4–13. For all these reasons, taking up this case would have been well worth our time. 

I infer that Justice Gorsuch found something particularly meaningful in Professor Colgan's brief, here.  Professor Colgan's bio is here. That is of course an anecdotal refutation of my presentation in the prior blog on amicus briefs.

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