[00:00:01] Speaker 02:
Case number 14-5316, True the Vote, Inc.

[00:00:05] Speaker 02:
Appellate versus Internal Revenue Service at Elle.

[00:00:07] Speaker 02:
Mr. Eastman for the Appellant, Ms.

[00:00:09] Speaker 02:
Hagley for the Appellee IRS, and Ms.

[00:00:11] Speaker 02:
Nitz for Individual Defendant Appellee.

[00:00:32] Speaker 05:
When you said it for a little while, it's high time for the next person.

[00:01:03] Speaker 06:
Mr. Eastman.

[00:01:16] Speaker 07:
Good morning, Judge Giesemann.

[00:01:17] Speaker 07:
May it please the Court?

[00:01:19] Speaker 07:
I want to step back from the last argument just a bit and kind of remind us where we are.

[00:01:24] Speaker 07:
The government has admitted that the delays that we're dealing with here were part of a program that targeted groups.

[00:01:30] Speaker 07:
I like the phrase, rounded them up and branded them, that prior counsel used, because of their political views, because of their group names, because of their opposition to government policies.

[00:01:41] Speaker 07:
It has admitted that its voluminous request for information were unnecessary, or to quote one of the defendants, Lois Lerner, wrong, absolutely incorrect, insensitive, and inappropriate.

[00:01:50] Speaker 07:
It is acknowledged that the illegal conduct has exposed sensitive information about True the Vote and its founders and supporters, information otherwise protected by law, to public disclosure.

[00:02:01] Speaker 07:
All of this is part of a scheme that is quite arguably the biggest domestic scandal of government abuse since Richard Nixon attempted to use the IRS for partisan purposes.

[00:02:10] Speaker 07:
And yet the government contends now, and the district court below accepted, that the mere expedient of granting true-to-votes tax exempt status 1,408 days after the application was filed shields all of that illegal conduct from review and accountability, prevents anyone in the IRS itself, the individuals who concocted this scheme and perpetrated it, from any accountability whatsoever.

[00:02:33] Speaker 07:
I don't think the movement gets us there, and we can go through each of those steps.

[00:02:38] Speaker 07:
So on mootness, it's not moot for a couple of reasons.

[00:02:42] Speaker 07:
One, we've been branded, uh, because of our name, because of our prior of our political, uh, viewpoints.

[00:02:50] Speaker 07:
Um, and that branding is ongoing, uh, as as the courts do about that.

[00:02:56] Speaker 07:
Well, your honor, if we give us a bit of his claim and we hold people accountable, the second thing is a declaratory judgment that what they did violated the Constitution and an injunction to prevent further violations of it.

[00:03:14] Speaker 07:
They continue to persist in the view that well, yeah, it was kind of

[00:03:17] Speaker 07:
unnecessary, but it really wasn't that unconstitutional.

[00:03:20] Speaker 07:
I think a declaratory judgment from this court that it was unconstitutional.

[00:03:24] Speaker 04:
Uh and to remove what's happening is a very narrow and rare sort of thing.

[00:03:31] Speaker 04:
It is normally you're gonna have to have something else to tie it to keep yourself from making non justiciable country.

[00:03:37] Speaker 07:
Well, the GAO report, which was referenced in the last argument, specifically says that anybody that was targeted and put on those lists before is continuing to be subject to heightened scrutiny in the ongoing enforcement.

[00:03:51] Speaker 04:
So an injunction to get you off of that list.

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It is an injunction.

[00:03:55] Speaker 04:
An injunction.

[00:03:55] Speaker 04:
And we come back to the question of whether it has actually had a cessation, and if so, is it capable of repetition yet again?

[00:04:04] Speaker 04:
Right.

[00:04:04] Speaker 07:
But I don't think you even have to get there because we've got ongoing harm that hasn't been addressed at all.

[00:04:10] Speaker 07:
The collection of our documents that they admit were unnecessary are now part of our publicly available file.

[00:04:16] Speaker 07:
What are we supposed to do about that?

[00:04:18] Speaker 07:
Well, they could expunge the documents that they collected and return them to us or destroy them so that the government doesn't have them and that they're not publicly available.

[00:04:27] Speaker 07:
And that would be an easy matter.

[00:04:28] Speaker 07:
So that takes it out of movement.

[00:04:30] Speaker 07:
It's just on that alone.

[00:04:31] Speaker 07:
But then an injunction to say, get these groups that you targeted initially, that you identified for heightened scrutiny at the application stage, and that because of the additional media focus, you now have a special multi-layer committee devoted to giving them special review.

[00:04:46] Speaker 07:
get them off of that list, put them back in the random generator for who gets audited and who gets further inspection.

[00:04:52] Speaker 07:
In conjunction to that effect would be narrow and that would be tremendously helpful.

[00:04:57] Speaker 07:
And that goes to the ongoing harm, not just the voluntary cessation piece.

[00:05:02] Speaker 07:
The voluntary cessation, I don't think they get close to meeting the standard that it's been irrevocable.

[00:05:07] Speaker 07:
Your Honor, Judge Santel, you pointed out in the last argument what part of suspending Bolo until further notice meets the irrevocable and irretrievable of we're not doing this anymore.

[00:05:20] Speaker 07:
We're not doing it until the public attentions moved on.

[00:05:23] Speaker 07:
And then we'll start it again.

[00:05:25] Speaker 07:
And the whole notion that their guidance, that Congress has stepped in, they were trying to codify some of the very unconstitutional things they were doing here, which is why Congress sought to stop that guidance from going forward.

[00:05:37] Speaker 07:
And this is all public knowledge.

[00:05:40] Speaker 07:
If we want to take judicial notice of something, it would be that kind of thing, it seems to me.

[00:05:45] Speaker 07:
If I may, let me turn to the Bivens claim briefly.

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Because the litany of circuits that the government claims have rejected Bivens claims against the IRS all have one thing in common.

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They are all for violations of the Internal Revenue Code, which is what the statutory remedy is designed to achieve.

[00:06:04] Speaker 07:
I think, yes, it's part of the legislative history, but it's a statement from the IRS commissioner himself.

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A statement, by the way, that the current IRS commissioner has repeated in our case.

[00:06:15] Speaker 07:
in their motion to dismiss our APA claim, one of the things for APA, I think wrongly they've alleged, is that if we had any other remedy, and they said we do have another remedy, it's in Bivens, and that we've actually alleged that remedy.

[00:06:28] Speaker 07:
The IRS commissioner in this case, in the pleadings below, said that.

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And so that confirms what the IRS Commission are testifying in Congress, that the statutory scheme supplements Bivens.

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Those Bivens remedies are available for the kind of egregious conduct we've seen here.

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And all of the cases, including Kim, dealt with violations of the Internal Revenue Code that were tried to be piggybacked onto a due process claim.

[00:06:53] Speaker 07:
The two cases that got closest to this were the Second Circuit case in Hudson Valley and the Fourth Circuit case in Judicial Watch that dealt with First Amendment challenges for retaliatory audits.

[00:07:06] Speaker 07:
But that, too, was in conjunction with an audit for which there is a specific damages remedy under the Internal Revenue Code, not the kind of First Amendment violations we've alleged here.

[00:07:18] Speaker 07:
And we want to get kind of that fine distinction between those kind of cases on the one side and this case on the other.

[00:07:24] Speaker 07:
The 10th Circuit offers a very good parallel.

[00:07:27] Speaker 07:
It's got a case, the Don case, that deals with the kind of due process issues that Kim dealt with.

[00:07:35] Speaker 07:
But it also has two cases, Gibbs and Archer, which this court cited in Kim that were First Amendment claims, and it specifically allowed the First Amendment claims to go forward under Bivens.

[00:07:46] Speaker 07:
And I think that's the distinction that the Supreme Court has asked this court to make in assessing whether to allow for a Bivens remedy.

[00:07:54] Speaker 07:
And I think the things that went on in Congress demonstrating they adopted this scheme dealing with only violations of the eternal revenue code because they knew the other kind of violations would be available to be remedied and addressed under Bivens.

[00:08:07] Speaker 07:
Let me then turn to our 6103 claim.

[00:08:12] Speaker 07:
Because I think there's been some confusion in the district court below.

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This was not a claim brought because of the illegal collection of the information.

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We think that violates our First Amendment rights, and that's part of the relief we sought under our account too.

[00:08:29] Speaker 07:
But once they collected, illegally collected that information, that they had no business to have,

[00:08:35] Speaker 07:
And then by their own admission, they inspected it before they reviewed it as part of our application file.

[00:08:41] Speaker 07:
They're not inspecting that information, quote, for tax administration purposes, as the statute requires.

[00:08:48] Speaker 06:
Why isn't that just double counting the collection?

[00:08:51] Speaker 06:
I mean, it's inherent in the collection that they're going to collect it to see it.

[00:08:55] Speaker 07:
Well, that means any information they want that they are not legally entitled to, if they just ask for an incident to an application for a nonprofit status, they're going to get to review.

[00:09:07] Speaker 07:
That means the entire purpose of 6103 is defeated.

[00:09:11] Speaker 07:
And worse, now that they've given us our taxes instead.

[00:09:16] Speaker 06:
I fail to see how they could collect it

[00:09:18] Speaker 06:
They shouldn't have collected it in the first place.

[00:09:20] Speaker 06:
They've collected it improperly, how they could at that point fail to inspect it.

[00:09:25] Speaker 06:
They wouldn't even know it was improper if they hadn't inspected it.

[00:09:28] Speaker 07:
Well, see, our allegation is that they knew it was improper, and therefore they collected it and inspected it.

[00:09:34] Speaker 07:
for not for a tax administration purpose.

[00:09:38] Speaker 06:
So it would be inspection only of information that was knowingly unlawfully collected.

[00:09:44] Speaker 07:
Or grossly negligent.

[00:09:46] Speaker 07:
You know, the standard in the Internal Revenue Code under 6103, if it's grossly negligent, it subjects them to punitive damages.

[00:09:54] Speaker 07:
If it's merely negligent, it's still an unlawful inspection.

[00:09:57] Speaker 07:
And we have at least that here.

[00:10:00] Speaker 07:
And now that because this is part of our nonprofit application file, which, as I said earlier, could be remedied by an injunction to expunge that unlawfully collected information, it's now available for public disclosure as well.

[00:10:14] Speaker 07:
So you've got both just the inspection and the disclosure.

[00:10:16] Speaker 07:
Now, we've not alleged disclosure in our complaint because

[00:10:20] Speaker 07:
It wouldn't have been right at the time.

[00:10:22] Speaker 07:
That claim didn't become right until they granted our application status.

[00:10:26] Speaker 07:
But shortly after they granted our application status, we moved to prevent the disclosure of that information.

[00:10:35] Speaker 07:
So again, I'll close with this.

[00:10:38] Speaker 07:
We've been branded.

[00:10:39] Speaker 07:
The brand affects the ongoing heightened level of scrutiny that applies to our organization, as well as all of the other organizations in the prior case.

[00:10:48] Speaker 07:
And the notion that we're to trust the IRS's own self-serving reports, and we've solved all of the problems.

[00:10:56] Speaker 07:
When TIGDA itself, when GAO, when the House Oversight Committees have all recognized they haven't, by a group of people that have lied to Congress,

[00:11:04] Speaker 07:
that have destroyed evidence, that the Department of Justice itself has been excoriated for mischaracterizing what's going on here.

[00:11:13] Speaker 07:
You can't trust that this thing has ended, and I think it's extremely important that we get back and actually have a full round of discovery and adversarial process to get to the bottom of this egregious scandal.

[00:11:27] Speaker 06:
Mr. Eastman, before I lose you,

[00:11:29] Speaker 06:
At 6103A, the provision

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Well, returns and return information shall be confidential and accept as authorized by this title.

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No officer or employee shall disclose.

[00:11:49] Speaker 06:
There's nothing there about inspect.

[00:11:51] Speaker 06:
Well, the next section involves inspect.

[00:11:53] Speaker 06:
Right.

[00:11:53] Speaker 06:
So then the next one is, shall without written request be open to answer by or disclosure to officers and employees whose official duties require such inspection or disclosure.

[00:12:06] Speaker 06:
What do we make of the fact that disclosure, disclose only is covered in A and it's down in H1 where there's this disclose or inspect.

[00:12:18] Speaker 07:
problem.

[00:12:22] Speaker 07:
Beyond the fact that the disclose was added later and they didn't clean up all of the statutory provisions.

[00:12:26] Speaker 07:
So you're saying it's just sloppy?

[00:12:28] Speaker 07:
No, I'm not prepared to say that.

[00:12:31] Speaker 07:
But I need to focus on a specific language.

[00:12:33] Speaker 07:
I think the point here is the inspection and the disclosure both.

[00:12:37] Speaker 07:
The inspection can only occur for tax administration purposes.

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And our contention here, and this is the heart of the dispute between us, they claim that we voluntarily gave this information to be considered as part of our application.

[00:12:51] Speaker 07:
That's patently false.

[00:12:52] Speaker 07:
They say in their cover letter for these additional demands of information, if you don't give it to us, it's not that we deny your application, that would give you the ability to bring a court action to challenge our decision.

[00:13:04] Speaker 07:
We dismiss your application and we start treating you as a taxable entity.

[00:13:08] Speaker 07:
We had no ability to object and still proceed with our application.

[00:13:13] Speaker 07:
And because that wrongfully collected information is now in the application file, inspecting it is not for tax administration purposes, but it's part of the continuing scheme to harass us because of our political views.

[00:13:26] Speaker 07:
And I don't think that's authorized under 6103, under the subparagraph that includes inspection as well as disclosure.

[00:13:41] Speaker 06:
Got it.

[00:13:42] Speaker 06:
Thank you.

[00:13:42] Speaker 06:
Thank you.

[00:14:00] Speaker 05:
Sorry about that.

[00:14:02] Speaker 03:
I'm going to please the court again.

[00:14:05] Speaker 03:
The procedures are, with regard to the mootness determination, the procedures are no longer impacting through the vote because, the simple reason, the application has been granted.

[00:14:16] Speaker 03:
They had alleged a functional denial in their complaint and the complaint was solely focused on the application process and now there's been an actual grant so they no longer have a personal stake in the outcome of this lawsuit.

[00:14:29] Speaker 03:
They have cited an acting that contradicts the path forward report, the monthly updates, or the 2015 take-door report confirming that the procedures have been changed and reforms have been put into place.

[00:14:44] Speaker 03:
The GAO report that they cite doesn't refute the court's misdetermination, first for the simple reason that it expressly did not address the application process, which is what the suit was about, only exam selection.

[00:14:58] Speaker 03:
And it doesn't demonstrate, if you read the report, any existing viewpoint discrimination.

[00:15:03] Speaker 03:
There's no finding in the GAO report

[00:15:05] Speaker 03:
of any targeting.

[00:15:07] Speaker 03:
What GAO found is that some of the internal controls that the IRS had helped the IRS apply the law fairly, but other controls were deficient.

[00:15:17] Speaker 03:
There's a summary at page 33 of the GAO report of certain steps

[00:15:20] Speaker 03:
the IRS should take to reform those controls, which could increase, quote, the risk that the IRS could select an organization for examining unfair manner based on religious or educational or political or other views.

[00:15:35] Speaker 03:
And so this is a potential risk that's too generalized or speculative to provide a live controversy in this case, aside from the fact that the complaint was not addressed to that.

[00:15:50] Speaker 03:
Senate Finance Committee report, the one that was issued last fall.

[00:15:55] Speaker 03:
The bipartisan portion of the report on page five indicates that the problems at the IRS were confined to the 2010-2013 period.

[00:16:03] Speaker 03:
The separate majority report on page 231, I'm giving you the page numbers because it's such a lengthy report, provides that

[00:16:13] Speaker 03:
The path forward report and monthly updates indicated that all of TIGDA's recommendations had been implemented by January of 2014 and that TIGDA confirmed that those reforms had been implemented.

[00:16:28] Speaker 03:
The report goes on to say that certain structural reforms should take place at the IRS and this includes

[00:16:35] Speaker 03:
but includes removing the IRS from Treasury, it includes eliminating bargaining rights for IRS employees, but those are legislative proposals that the district court would not be able to implement.

[00:16:47] Speaker 03:
The district court would only be able to analyze the procedures that were in place in 2020-2013, and since they're no longer in place, it would only be hypothetical exercise for the court.

[00:16:59] Speaker 03:
I would like to just say one thing.

[00:17:01] Speaker 06:
If there are deficient procedures in place when the case was filed, and those procedures have since been altered, and then the GAO comes along as recently as July of 2015,

[00:17:14] Speaker 06:
and says that there are still ongoing problems with, it's a public document, the court notices it, there's still ongoing problems with the, not the application process, but with this process of selection for review.

[00:17:28] Speaker 06:
I think that's what I was put.

[00:17:32] Speaker 06:
You're saying, well, that's just, that's too speculative?

[00:17:35] Speaker 03:
Well, except for the GEO did not, well it's outside the complaint, but even if it had been within the complaint, complaints about the examination process, GEO did not identify any problems or instances, but just did an audit on controls and found that some controls were good and were helping the IRS.

[00:17:54] Speaker 03:
And the IRS is subject to oversight, so the GO will ensure that those recommendations get put into place.

[00:18:10] Speaker 03:
It's such things as updating the IRM.

[00:18:13] Speaker 03:
or documenting procedures better, and didn't find any specific risk with regard to political viewpoint, but just said, you know, religious or educational, something could happen in the future, but didn't identify any specific problems going on.

[00:18:30] Speaker 06:
Okay.

[00:18:31] Speaker 06:
I mean, it doesn't say you're going to select this particular taxpayer or applicant for tax exempt status.

[00:18:41] Speaker 06:
Here's a typical selection.

[00:18:44] Speaker 06:
The control deficiencies GA have found increase the risk that EEO could select organizations for examination in an unfair manner, for example, based on an organization's religious, educational, political, or other views.

[00:19:01] Speaker 06:
Doesn't seem like there's a complete evisceration of the problems that gave rise to the complaint.

[00:19:12] Speaker 03:
But it also doesn't demonstrate an actual threatened harm that would satisfy the test for a future harm that could provide that a case is no longer moot.

[00:19:23] Speaker 03:
The processes that were complained about.

[00:19:25] Speaker 06:
Well, this is a little bit tougher standard, and it's the defendant's burden, right, in a voluntary cessation case, to show that there's been a complete eradication of the problem so that it cannot recur.

[00:19:39] Speaker 03:
But there has been a complete eradication of the problems that were complained about, which related to the application process, the problems of inappropriate criteria being used.

[00:19:50] Speaker 03:
TIGTA, GEO, did not talk about inappropriate criteria being used in the application process or even in the examination process, didn't talk about substantial delays, didn't talk about the overbroad information request, which is what TIGTA had identified

[00:20:05] Speaker 03:
and when the complaint had complained about an alleged that was based on viewpoint discrimination, those had been changed.

[00:20:11] Speaker 04:
What Judge Ginsburg just read to you seemed to speak to selection criteria, which is part of what really is the beginning of what plaintiffs are complaining about, isn't it?

[00:20:23] Speaker 03:
I'm sorry?

[00:20:23] Speaker 04:
What Judge Ginsburg just read to you

[00:20:26] Speaker 04:
seem to say that there was still a problem with the selection process.

[00:20:31] Speaker 04:
That's the beginning of what complainant is complaining about is the selection process.

[00:20:36] Speaker 03:
potential problem, but also found that other procedures at the IRS ensured that that did not happen, that the employees were aware that they needed to focus on the activities of organizations and whether they complied with the law.

[00:20:50] Speaker 04:
And what you understand to be the thrust of what, again, were just read to you insofar as it concerns selection processes.

[00:21:01] Speaker 03:
The Gio identified steps that the Irish should take, and the Irish has agreed to take them.

[00:21:07] Speaker 03:
And based on the public record, there's no reason to think that the Irish is not taking this.

[00:21:11] Speaker 04:
At the time of that report, they apparently had not taken such steps, right?

[00:21:16] Speaker 04:
At the time of one?

[00:21:17] Speaker 04:
At the time of one, Judge Ginsburg just read to you.

[00:21:20] Speaker 00:
That's correct.

[00:21:20] Speaker 00:
At the time of the report.

[00:21:22] Speaker 00:
Okay, thank you.

[00:21:24] Speaker 06:
I think I got the point you were making, which was that this report from which I read dealt with post-application procedures for approved organizations being selected for audit.

[00:21:36] Speaker 06:
For any reason, right.

[00:21:38] Speaker 06:
Whereas the complaint in this case, as opposed to the prior case, is that what you would say?

[00:21:42] Speaker 03:
The complaint in this case focused on the application process.

[00:21:45] Speaker 06:
As opposed to the complaint in the prior case.

[00:21:48] Speaker 06:
We just did a lot of discussion of the prior case about ongoing effects, right?

[00:21:55] Speaker 06:
You're saying that's not part of this case.

[00:21:57] Speaker 06:
This is just about applications.

[00:21:59] Speaker 03:
This is about exactly.

[00:22:00] Speaker 03:
It's just about the applications.

[00:22:02] Speaker 03:
I would like to just say one thing quickly, just on the Bivens, even though we don't represent the Bivens defendants based on some of the statements that opposing counsel said, I just want to make clear that it is the government's position that the Bivens counsel have accurately described the law and that the district court's decision with regard to Bivens was correct.

[00:22:20] Speaker 06:
Let me go back to just focusing on the application.

[00:22:25] Speaker 06:
I'm looking at J53 and complain to Paracaps 151-53.

[00:22:34] Speaker 06:
The IRS targeting scheme

[00:22:40] Speaker 06:
etc.

[00:22:41] Speaker 06:
infringes upon the freedom of speech and association rights of True the Vote and the persons who operate, support, and associate with it in violation of the First Amendment.

[00:22:49] Speaker 06:
The application, this is 153, the application of the targeting scheme to True the Vote has impaired the expressive associational effectiveness of True the Vote and its members.

[00:22:59] Speaker 06:
That's an allegation

[00:23:00] Speaker 06:
of a continuing nature, as I understand it.

[00:23:05] Speaker 06:
And in 154, has had a chilling effect on the willingness and ability of potential donors.

[00:23:17] Speaker 06:
That's not booted by changes in the procedures, right?

[00:23:20] Speaker 03:
I think that it is muted by the change in procedures because the TICTA found in the IRS concurs that the use of the inappropriate criteria on the bill list was inappropriate.

[00:23:33] Speaker 03:
It made it appear that the IRS was not being impartial, and the IRS has changed that and made clear, as I read before, the internal revenue manual that

[00:23:45] Speaker 03:
name should not be the criteria, but the activities of the entity should be the criteria for determining tax exempt review.

[00:23:55] Speaker 06:
Right, but meanwhile, or in the past, with the outset, the plaintiffs here were caught up in this scandal, if you will, and there was a great deal of publicity about it.

[00:24:09] Speaker 06:
They've said that that inhibited donations and continues to inhibit donations.

[00:24:13] Speaker 06:
Why wouldn't a declaration to the effect that their rights were violated and perhaps an injunction, as Mr. Eastman suggested, with regard to expungement or return of information, why wouldn't that be effective relief for an ongoing harm?

[00:24:29] Speaker 03:
He has two things.

[00:24:32] Speaker 03:
Number one, with regard to whether the court can make a declaration about a procedure that is no longer in place.

[00:24:39] Speaker 03:
And now that their application has been granted, they don't have the harms of donors not being willing to give them donations.

[00:24:50] Speaker 03:
With regard to the information that they provided to the IRS during the application process,

[00:24:55] Speaker 03:
That was also not part of the complaint.

[00:24:59] Speaker 03:
But in addition, they knew when they gave the information to the IRS that any papers that were submitted, and this is on 115 of the Joint Appendix and 126, would be available for public inspection.

[00:25:18] Speaker 03:
And they were told not to include any information that would have adverse consequences if publicly disclosed.

[00:25:25] Speaker 03:
And at that time, they didn't indicate to the IRS that any information would have an adverse consequence.

[00:25:31] Speaker 03:
They didn't have to give the information to the IRS.

[00:25:34] Speaker 03:
If they thought it was inappropriate, they could have said so.

[00:25:37] Speaker 03:
If the IRS had insisted on the information being provided, they could have litigated that issue with the IRS in a 7428 proceeding, as we gave an example in our brief, and they've not addressed the exploratory research case.

[00:25:57] Speaker 06:
So if they didn't want to provide the information, or they didn't want to publicly disclose, their choice was to not provide it.

[00:26:06] Speaker 06:
have that impairment to whatever degree of their chances of being approved, was there an opportunity provided under some protective provisions?

[00:26:16] Speaker 03:
Well, if it was information, 6104 provides that any information provided to support the application must be disclosed, except for when it has a few sort of carve outs, like if it had been a trade secret or a password.

[00:26:32] Speaker 03:
It was something proprietary.

[00:26:33] Speaker 03:
like that.

[00:26:35] Speaker 03:
They don't allege that anything that they provided the IRS would have fit into one of those categories.

[00:26:41] Speaker 03:
If they had, there's a procedure set up in IRS regulations where they could have that be something that would not be subject to public disclosure.

[00:26:49] Speaker 03:
In fact, the information that they allege would cause harm if subject to public disclosure in the briefs, I think it's board minutes, the relationship they have with another organization, training materials.

[00:27:01] Speaker 03:
Those three items are not even on the list of seven questions that TIGTA found to be unnecessary.

[00:27:08] Speaker 03:
So the predicate for their claim is not there.

[00:27:12] Speaker 03:
But 6104 is a law that requires any information submitted in the application to be subject to public disclosure, and the district court would not be able to get around that law.

[00:27:28] Speaker 05:
Any questions?

[00:27:52] Speaker 01:
Thank you.

[00:27:53] Speaker 01:
May it please the court?

[00:27:54] Speaker 01:
The Bivens analysis embodies a fundamental question.

[00:27:58] Speaker 01:
Who is best positioned to decide whether to create a damages cause of action against individual officers in a particular context?

[00:28:07] Speaker 01:
Congress or the court?

[00:28:11] Speaker 01:
As Ms.

[00:28:12] Speaker 01:
Benitez pointed out, the Internal Revenue Code is such a special factor here.

[00:28:17] Speaker 01:
It's a comprehensive remedial scheme that provides an elaborate set of remedies for a range of IRS actions, including no fewer than six causes of action for civil damages.

[00:28:29] Speaker 01:
Now, True the Vote invoked the 10th Circuit's decision in Gibbs, and it distinguished the host of other circuit decisions refusing to extend Bivens to the tax code context by saying that they involved violations of the tax code.

[00:28:43] Speaker 01:
But the claims in all of those cases were premised on constitutional violations.

[00:28:48] Speaker 01:
And that's exactly what True to Vote alleges here.

[00:28:51] Speaker 01:
Even in the 10th Circuit's decision in Gibbs, the follow-on case to that, Archer refused to extend a First Amendment claim, just like we have here, to the context of tax assessment, tax determinations, like, say, a determination on tax-exempt status.

[00:29:10] Speaker 01:
But critically, the question isn't whether or not the constitutional violation or the alleged constitutional violation involves some violation of the comprehensive remedial scheme.

[00:29:23] Speaker 01:
Rather, it's whether or not Congress considered the harm when it enacted the remedial scheme, opted to provide a set of remedies for the administration of that scheme, and did not inadvertently exclude the damages remedy.

[00:29:38] Speaker 01:
And here, Congress, with knowledge of the allegations of this particular targeting scheme, considered amendments to the tax code.

[00:29:48] Speaker 01:
As Ms.

[00:29:48] Speaker 01:
Benitez explained, in December 2015 of this year, it amended the tax code and it expanded the declaratory judgment action in 7428 to all 501C applicants.

[00:30:01] Speaker 01:
It did not create a damages remedy.

[00:30:05] Speaker 01:
It simply cannot be said.

[00:30:06] Speaker 06:
And that was as of when?

[00:30:08] Speaker 01:
December 2015.

[00:30:08] Speaker 01:
It was the Protecting America from Tax Hikes Act of 2015.

[00:30:14] Speaker 01:
It was passed as part of the Consolidated Appropriations Act.

[00:30:18] Speaker 01:
It's public law number 114-113 and the PATH Act, the specific section of emergency.

[00:30:25] Speaker 06:
Give this to me again.

[00:30:26] Speaker 06:
What would they do to 7428 in December?

[00:30:29] Speaker 01:
Before this statute, the declaratory judgment relief in Section 7428 was available only to applicants under 501C3.

[00:30:38] Speaker 01:
What this statute does is it makes that remedy available to all applicants for tax exemption under 501C.

[00:30:44] Speaker 01:
So it is most relevant to the state.

[00:30:46] Speaker 06:
So as far as this case is concerned, it extends it to C4?

[00:30:49] Speaker 01:
Yeah, it extends it to C4 organizations as well.

[00:30:52] Speaker 06:
So what does that tell us except that before December they didn't have a remedy?

[00:30:56] Speaker 01:
What it tells us is that Congress was aware of allegations that the tax code was being used this way.

[00:31:03] Speaker 01:
It considered the types of remedies that ought to apply in that circumstance.

[00:31:09] Speaker 01:
And it did not pass a damages action.

[00:31:14] Speaker 06:
You're also at the same time telling us this is a comprehensive remedial scheme, except it wasn't made comprehensive until after this case was filed.

[00:31:22] Speaker 01:
No, it was comprehensive before then, Your Honor.

[00:31:25] Speaker 01:
All that the December 2015 Act shows us is that Congress considered this particular targeting, and it did not see fit to include a damages remedy.

[00:31:35] Speaker 01:
Under those circumstances, it can't be said that Congress inadvertently omitted a damages remedy.

[00:31:41] Speaker 01:
In any event, twice back in the 1980s, Congress considered damages remedies that would have addressed

[00:31:47] Speaker 01:
the precise allegations here, one of them in 1987, would have created a damages action for constitutional violations by IRS officers.

[00:31:58] Speaker 01:
And in 1988, it would have created a damages action against the United States for violations related to tax collection or tax determination.

[00:32:08] Speaker 06:
The utility of legislative history is

[00:32:11] Speaker 06:
even further diminished when you talk about legislative non-history, things that were not passed in the distant past.

[00:32:20] Speaker 06:
I'm sure there were lots of other things that were not passed as well.

[00:32:24] Speaker 01:
What's important is that Congress considered this type of damages action

[00:32:29] Speaker 01:
And it considered it with knowledge of allegations that the tax code could be used in this way.

[00:32:34] Speaker 01:
In December 2015, these precise allegations.

[00:32:37] Speaker 01:
In the 1980s, as Mr. Eastman pointed out, there were allegations going back to the 1970s.

[00:32:42] Speaker 01:
So Congress was aware that the tax code could be used in this manner, and it did not provide a damages action.

[00:32:49] Speaker 01:
And where Congress has made that decision, this court should defer.

[00:32:54] Speaker 01:
If I could just speak, see I'm run over a little bit, if I could just speak to egregiousness very quickly.

[00:33:01] Speaker 01:
You noted that these were potentially egregious violations of the Constitution.

[00:33:07] Speaker 04:
Council, these were egregious violations of the Constitution, if what's alleged is true.

[00:33:13] Speaker 04:
And it looks like they're a pretty good case from what we see so far.

[00:33:17] Speaker 00:
If they're true, they could be... Don't tell me they could be egregious violations.

[00:33:22] Speaker 04:
You can't stand that.

[00:33:23] Speaker 04:
You're not able to keep

[00:33:26] Speaker 04:
If you can't stand it with a straight face, I just wouldn't cut a few degrees just to validate.

[00:33:31] Speaker 01:
No one is arguing that what happened is how this should be done, Your Honor.

[00:33:38] Speaker 01:
What's important is that, as this Court pointed out, the existence of previous wrongs does not free the judiciary to authorize any and all suits that might seem just.

[00:33:48] Speaker 01:
And that was Clay v. Panetta.

[00:33:50] Speaker 01:
If individual damages actions are to be the remedy for this type of alleged harm, that has to be a decision that Congress ought to make, not this Court.

[00:34:00] Speaker 06:
Thank you, Mr. Mittes.

[00:34:10] Speaker 07:
I want to start with that our complaint failed to allege these things.

[00:34:14] Speaker 07:
I mean, it's throughout the complaint.

[00:34:16] Speaker 07:
It's both the application process and prospective problems that result from the targeting scheme itself.

[00:34:23] Speaker 07:
Paragraph five, both current and prospective harm, First Amendment harms to our members, our officers, and our donors.

[00:34:29] Speaker 07:
Paragraph six, the chilling effect, which is ongoing, as Judge Ginsburg pointed out.

[00:34:34] Speaker 07:
Paragraph 73, in targeted applicants,

[00:34:37] Speaker 07:
And then as we learned in the GAO report, anybody that was targeted as an applicant is now subject to ongoing heightened scrutiny.

[00:34:45] Speaker 07:
Page 21 of the GAO report talks about any referrals coming in from exempt organizations that have attracted media attention, I think we fit that category, get subjected to a multilayer high profile committee review in addition to the normal reviews.

[00:35:00] Speaker 07:
That's ongoing, it's not limited to the application process.

[00:35:03] Speaker 07:
Second, I want to take up this 6103 issue.

[00:35:07] Speaker 07:
It's just patently false that we could have litigated the documents issue.

[00:35:11] Speaker 07:
If we had refused to provide the documents, we could not litigate that in a 7428 proceeding because the internal revenue regulations prohibited and their cover letter requesting those additional arguments says, if you do not respond,

[00:35:26] Speaker 07:
We will conclude that you have not taken all reasonable steps to complete your application.

[00:35:31] Speaker 07:
And under code section 7428B, that means you're not eligible to bring that action because it's not right.

[00:35:37] Speaker 07:
You've not taken all administrative steps.

[00:35:39] Speaker 07:
So, you know, just the utter false claim there.

[00:35:43] Speaker 07:
And then the third thing, that the IRS itself agrees with the Bivens claim.

[00:35:50] Speaker 07:
Here's what they said in document 54 in the trial court.

[00:35:54] Speaker 07:
To the extent plaintiff seeks review to vindicate any alleged violations of its constitutional rights, plaintiff has available and again has raised claims under Bivens, count three of the amended complaint.

[00:36:06] Speaker 07:
That's in the record.

[00:36:08] Speaker 07:
I don't know what to do with that.

[00:36:12] Speaker 06:
What was the document number?

[00:36:13] Speaker 07:
Document 54, it was filed on September 20th, 2013.

[00:36:19] Speaker 07:
in the trial court below.

[00:36:20] Speaker 07:
It's their motion to dismiss.

[00:36:25] Speaker 07:
And then let me address the speculative nature of the ongoing harm.

[00:36:29] Speaker 07:
They gave us our determination letter, they claimed, in September of 2013.

[00:36:36] Speaker 07:
We learned eight months later from a prospective donor

[00:36:40] Speaker 07:
that we were still not on the publicly available list of approved charities.

[00:36:47] Speaker 07:
So it's not speculative.

[00:36:48] Speaker 07:
That happened and it continued on for at least eight months after they claimed they took action that mooted this case.

[00:36:56] Speaker 07:
And then finally, the notion that we can take judicial review of the defendant's own positions that they stopped misbehaving, despite all the other evidence we have to the contrary, is not any notion of judicial review that I've ever dealt with before.

[00:37:13] Speaker 07:
You mean judicial notice?

[00:37:14] Speaker 07:
Judicial notice.

[00:37:14] Speaker 07:
I'm sorry.

[00:37:15] Speaker 07:
I'm sorry.

[00:37:16] Speaker 07:
Yeah.

[00:37:17] Speaker 07:
The notion that it's just because they posted on their website, it now becomes a subject of judicial notice on hotly contested issues of fact, on a motion to dismiss where you're supposed to give our view of the facts every reasonable inference and presumption.

[00:37:33] Speaker 07:
On all of those grounds, I think this has to be sent back to the district court and at least an injunction to expunge the unlawfully collected information from our publicly available record.

[00:37:45] Speaker 07:
Any further questions?

[00:37:47] Speaker 07:
Thank you, Mr. Chairman.

[00:37:47] Speaker 07:
Thank you.

[00:37:48] Speaker 07:
Thank you all.

[00:37:49] Speaker 07:
Case is submitted.