[00:00:00] Speaker 02: Face number 24-5076. [00:00:03] Speaker 02: Adam Steele and Crystal Comer at Balance versus United States of America. [00:00:08] Speaker 02: Mr. Buckley for the at Balance, Mr. Brandman for the Epoly. [00:00:14] Speaker 01: Good morning. [00:00:15] Speaker 02: Morning. [00:00:17] Speaker 01: Appreciate the opportunity to be here today. [00:00:20] Speaker 01: I'd like to say a few things. [00:00:25] Speaker 01: start everything I say here. [00:00:27] Speaker 01: We have my thoughts and my opinion. [00:00:31] Speaker 01: My opinions. [00:00:33] Speaker 01: Um, I know you're gonna have questions and uh, but I would like to point out advocating for your clients here. [00:00:40] Speaker 01: Excuse me. [00:00:41] Speaker 02: Just trying to clarify here. [00:00:42] Speaker 02: When you say your opinions, you are here making arguments on behalf of your clients, correct? [00:00:46] Speaker 01: Yes, but you may get into tangent and tangential matters that um, [00:00:53] Speaker 01: would be my call for me to give my opinion on something. [00:00:58] Speaker 01: Matter is complex. [00:00:59] Speaker 01: I'm dealing with various adverse parties at the same time. [00:01:03] Speaker 01: I hope that's apparent for my briefs. [00:01:05] Speaker 01: I think in my briefs, I've made clear where I stand on the issues. [00:01:10] Speaker 01: And I know you have questions. [00:01:12] Speaker 01: But I would like to point out several months ago, a Pennsylvania CPA contacted me [00:01:20] Speaker 01: told me he's been penalized $2900 by the IRS for not placing a renewed pizza on his returns that he's prepared for clients. [00:01:30] Speaker 01: He put his pizza on the returns and your pizza does not change and the statute does not allow the IRS to demand [00:01:38] Speaker 01: annual filings for pizza and I've been fighting this for going on 14 years and I will continue to fight it as long as I can because it's an injustice that is sickening that the IRS won't back down in the Department of Justice won't get them to stand down because there is no statutory basis whatsoever for what is going on here. [00:01:59] Speaker 02: Turning to the claim splitting issue, um, what facts in your amended complaint that is before us, the one that the district court dismissed. [00:02:11] Speaker 02: Are the facts in that materially different than the facts in the steal one complaint? [00:02:17] Speaker 02: No, they the same, the same. [00:02:27] Speaker 01: Could I read from one page of the Smith opinion by Judge Lamberth to go through why claim splitting does not apply here? [00:02:37] Speaker 01: First of all, I'd like to say the Hellersted case, in my opinion, is the law that overrides all of this. [00:02:44] Speaker 01: And if you've read my briefs, there were two claims in there. [00:02:50] Speaker 02: Under two different statutory provisions. [00:02:52] Speaker 02: Right, but drawn from the same... Are you relying... I understand that, but the different statutory provisions and implications of different stages of the litigation, do your arguments come from two different statutory provisions? [00:03:05] Speaker 01: Not my arguments. [00:03:07] Speaker 02: In this case, the... Your claims come from two different statutory... From three. [00:03:11] Speaker 01: From three. [00:03:11] Speaker 02: Different statutory. [00:03:12] Speaker 01: Yes. [00:03:13] Speaker 02: And this... Different ones than the claims and still one are drawn from. [00:03:19] Speaker 01: No, not. [00:03:20] Speaker 01: Well, let me specify. [00:03:24] Speaker 01: Steel one is solely related to fees at this point. [00:03:27] Speaker 01: So that's under a section. [00:03:29] Speaker 02: Let's go back to when steel one started. [00:03:31] Speaker 02: I'm going to ask my question. [00:03:34] Speaker 02: Do the statutory provisions that are issued in that steel one that have been through the course of the case, some have come in, some have gone out. [00:03:42] Speaker 02: Are they different statutory provisions than are being presented in your complaint here? [00:03:51] Speaker 02: Okay, I'm sorry. [00:03:52] Speaker 02: You want to read something. [00:03:53] Speaker 01: Can I say in steel one, the only issue falls under 31 USC section 9701. [00:03:59] Speaker 01: What fees are lawful? [00:04:02] Speaker 01: Now, there were two other claims in the original complaint. [00:04:04] Speaker 01: As I said, it said stop renewals and stop asking more questions than that permitted by statute. [00:04:11] Speaker 01: As I pointed out in my original complaint after loving was successful and I helped with that case on a pro bono basis. [00:04:20] Speaker 01: Minnesota CPA came to me and said he wanted to challenge the fees. [00:04:23] Speaker 01: So I filed a complaint September 2014 with the help of another lawyer. [00:04:30] Speaker 01: And we challenged the whole licensing system, not specifically struck down in loving. [00:04:35] Speaker 01: Okay. [00:04:37] Speaker 01: Well, it seemed that I needed to bring in some class action lawyers to help with the case. [00:04:43] Speaker 01: And I did, I did some research and either I had to hire somebody. [00:04:47] Speaker 01: I brought in a firm and they [00:04:50] Speaker 01: Although they didn't say to me initially, they apparently only wanted to challenge fees. [00:04:55] Speaker 01: And as I laid out in my brief what happened, it resulted in these claims being taken out. [00:05:02] Speaker 01: And to me, that was wrong. [00:05:07] Speaker 01: But what was I to do at that point in time? [00:05:09] Speaker 01: At that point, they still put in the no excess information request [00:05:17] Speaker 01: claim. [00:05:18] Speaker 01: So I thought to myself, although the renewal's out, and that's a bad thing, if all they can ask are the questions to identify a person, which on the form W7P, which when they previously issued one PTIN, there was no renewal, they asked your name, your social, your date of birth, and your address. [00:05:38] Speaker 01: And on a prepared return, and I do returns for part of my living, the IRS gets a lot more information than that stuff. [00:05:47] Speaker 01: So if that claim had been successful, I'm pretty certain the renewals would have stopped because they don't need to get your name, date of birth, social, and address when they get more than that from what you put on the return. [00:06:00] Speaker 01: You put on your name, your PTIN, your address, your firm name, et cetera. [00:06:04] Speaker 01: I've got it all in my briefs. [00:06:06] Speaker 01: So I think Hellerstedt is the law. [00:06:10] Speaker 01: And I think under Hellerstedt, these claims, which are distinct from the fees, these claims fall under [00:06:17] Speaker 01: 6109 of the Internal Revenue Code and or 31 USC 330, they're not fee claims. [00:06:24] Speaker 01: But let's say claim splitting still applies. [00:06:28] Speaker 01: This is Judge Lambert's 2019 opinion and he goes through the various, I'll just do this briefly, the various preceding cases and he says, he announces the Clayton case would be precluded under res judicata analysis if the first suit was already final. [00:06:45] Speaker 01: Well, if the class action was final, these claims will not be resolved because they are not covered in that case. [00:06:50] Speaker 01: All that's in that case are fees. [00:06:53] Speaker 02: Class acting case is not final. [00:06:54] Speaker 01: I know, but the only issue remaining is the amount of fees. [00:06:57] Speaker 02: But the class action is not final. [00:06:59] Speaker 01: But if it was final, these issues would not be resolved. [00:07:03] Speaker 01: They would not be res judicata. [00:07:05] Speaker 01: That's the point from this Clayton case. [00:07:07] Speaker 03: But why couldn't the claims have been brought in that first action? [00:07:12] Speaker 03: It sounds like it was a strategic decision not to bring them. [00:07:15] Speaker 01: In this case, the decision was to put them in. [00:07:18] Speaker 01: I explained in my break. [00:07:21] Speaker 01: They were in the original complaint. [00:07:25] Speaker 01: They were. [00:07:25] Speaker 01: Okay. [00:07:27] Speaker 01: I brought in this class action for them to help me. [00:07:30] Speaker 01: They wanted to just challenge fees. [00:07:31] Speaker 02: I understand, but when that case becomes final, [00:07:35] Speaker 02: It will be raised judicata as to all claims. [00:07:38] Speaker 01: No, it will not. [00:07:39] Speaker 01: It will be raised judicata as to fees only. [00:07:41] Speaker 02: No, that's not how raised judicata works. [00:07:43] Speaker 02: It's claims that were or could have been raised in the initial litigation. [00:07:47] Speaker 02: And that one certainly could have been raised there because, in fact, they originally were raised there. [00:07:50] Speaker 02: So that's just how raised judicata. [00:07:53] Speaker 01: That's not how I read Hellerstedt. [00:07:55] Speaker 02: Otherwise, raised judicata is no protection against people serial litigating. [00:07:59] Speaker 01: But I think the whole point of Hellerstedt was if you have [00:08:03] Speaker 01: statutes coming out of an originating act that have different provisions in them, you don't have to challenge all at once. [00:08:10] Speaker 01: And you wouldn't have standing in a lot of cases to challenge things that you're not negatively impacted by. [00:08:15] Speaker 02: And so there's no standing question here. [00:08:19] Speaker 01: No, there's no standing question here. [00:08:21] Speaker 01: But so I disagree on res judicata respectfully. [00:08:27] Speaker 01: I think that this Hellerstedt case says, and unlike Hellerstedt, [00:08:33] Speaker 01: where the statutes were drawn from the same act. [00:08:36] Speaker 01: These were drawn by the IRS in publication 4832 from three separate statutes. [00:08:43] Speaker 01: The fee statute is 31 USC 9701. [00:08:46] Speaker 01: The licensing statute was 31 USC 330. [00:08:50] Speaker 01: And the ID requirement was 26 USC section 6109. [00:08:55] Speaker 01: So I have a stronger case than Hellerstedt, which I believe is the law. [00:08:59] Speaker 01: And going on to Judge Lambert's opinion, he says, [00:09:03] Speaker 01: But still, other courts in this district have declined to dismiss a second action under claim splitting where the court previously precluded the plaintiff from adding the claims and defendants in the prior suit. [00:09:15] Speaker 01: Well, I tried to add these claims back in 2020, as I pointed out in my briefs after this court ruled that there could be charges for PTEN issuance and renewal. [00:09:27] Speaker 01: And thus, I said to my co-counsel, [00:09:30] Speaker 01: If there's no renewal and the statute doesn't provide for renewal, they can't charge renewal fees. [00:09:34] Speaker 01: So let's challenge this renewal aspect. [00:09:37] Speaker 01: They didn't want to. [00:09:38] Speaker 01: They didn't want to. [00:09:39] Speaker 01: So I had to go, as the district court will say, I had to go rogue and do it on my own because I've got to represent these people who've hired me. [00:09:46] Speaker 01: They hired me individually and I was, for my contract with them, I had the right to bring in other firms to help me. [00:09:53] Speaker 01: So I brought in this firm to help me not to take control [00:09:56] Speaker 01: not to take claims out of the original complaint. [00:09:59] Speaker 01: And they never said at the beginning, we want to take out these claims that are in this original complaint. [00:10:05] Speaker 01: And my contracts with them don't say anything about that. [00:10:08] Speaker 01: So when I went through this process of when we had to amend the complaint in 2015, I said, keep this stuff in. [00:10:14] Speaker 01: I explained exactly what happened. [00:10:17] Speaker 01: And I've got the written proof right here of what I said to them. [00:10:22] Speaker 01: So anyways, but in any event, if the district court had handled the excess questioning claim, [00:10:26] Speaker 01: which the government never questioned, was still in the complaint, because we argued it in 2022 in summary judgment briefs, because everyone understood that that issue was ongoing. [00:10:37] Speaker 01: And the judge, or whoever's behind the curtain there at the district court, I don't know who's deciding these cases, calling me class counsel in exile, but I don't think it's an 80-year-old district court. [00:10:47] Speaker 01: I'm sorry, judge. [00:10:49] Speaker 02: I don't think we're going to go there. [00:10:51] Speaker 02: I think your time now is up, and we will give you a couple minutes for rebuttal. [00:10:55] Speaker 01: Thank you. [00:10:55] Speaker 01: Appreciate it. [00:11:05] Speaker 00: You please the court, Robert Brannman for the United States. [00:11:08] Speaker 00: I'm not sure I have a whole lot to add. [00:11:11] Speaker 00: Mr. Buckley has made the government's case pretty well. [00:11:13] Speaker 02: You've made a jurisdictional bar argument about the content of the questioning under 44 USC 35071. [00:11:26] Speaker 02: As I read that, that only precludes actions against the director or the OMB. [00:11:31] Speaker 02: It does not preclude actions against [00:11:34] Speaker 02: the originating agency. [00:11:36] Speaker 02: That's just textually what it says. [00:11:38] Speaker 02: So what's your best authority that in this provision that bars review of the director's decision, director of OMB's decision, that Congress meant it barred review of every agency's, any challenge to any agency's decision to include informational content in a regulation? [00:12:00] Speaker 00: I don't know. [00:12:01] Speaker 00: I interpreted that as, [00:12:04] Speaker 00: being, you know, barring any challenge to the form, or I guess the substance of the... That's actually what it says though. [00:12:11] Speaker 00: Okay. [00:12:12] Speaker 00: I didn't find a case just like this, so I may not be able to have anything to add to that. [00:12:17] Speaker 02: Okay. [00:12:20] Speaker 02: Because what is not subject to review is the decision by the director to approve or not act. [00:12:26] Speaker 02: That's all the provision says. [00:12:30] Speaker 00: What would be the point of [00:12:32] Speaker 00: barring suit against the director if it. [00:12:39] Speaker 00: Why would anyone want to sue the director if they could sue the agency that is putting out the form and obtain the same relief that. [00:12:47] Speaker 02: Well, I'm not in the habit of answering counsel's questions, but I will tell you that, in fact, Congress created a whole special scheme here for review and actions by an agency, the OMB, and it may have wanted to say that this thing is meant to have a particular role, internal to the government, of internal policing about agency regulations, and we don't want it to launch its own avenue of litigation, because as soon as something can be sued about it, will be sued about it. [00:13:13] Speaker 02: But we also, that's pretty well established, [00:13:15] Speaker 02: construe bars on judicial review narrowly. [00:13:18] Speaker 02: And this one, just by his plain text, doesn't apply to every agency. [00:13:27] Speaker 02: And so I would have, I'm just a little surprised that the government, aware of that precedent, is reading this statute, the bar, such as, impose such a sweeping bar on judicial review. [00:13:42] Speaker 00: Then maybe you are. [00:13:43] Speaker 00: I don't have an answer for that. [00:13:46] Speaker 00: as to claim a splitting. [00:13:48] Speaker 03: But isn't the PRA really looking at barring judicial review from the decision-making process of OMB? [00:13:58] Speaker 03: Is that what you're looking at this case as, the decision-making process as opposed to the overreach of the statute with regarding its authority? [00:14:09] Speaker 03: In other words, I'm trying to get a sense more of why you believe that the PRA precludes judicial review based on what? [00:14:17] Speaker 03: Is it the decision-making process of OMB? [00:14:20] Speaker 00: It's the fact that, yes, the OMB goes through the process of, or the agency goes through the process of publishing those rules-making systems and comments and submitting the forms to OMB and OMB approval. [00:14:36] Speaker 03: But wouldn't that be a different question on decision-making process as opposed to OMB exceeding its authority, like a challenge to the authority as opposed to just the decision-making process? [00:14:51] Speaker 00: I have not thought deeply enough about this process, generally due to tax litigation. [00:15:01] Speaker 00: As for claim splitting, [00:15:03] Speaker 00: We have established that we have the same claims, the same parties, the same court, claims that were actually brought in the steel one, and an additional factor under weighing in favor of Judge Lampert's exercise, the fact that the steel plaintiffs moved to amend their complaint in the main case, [00:15:31] Speaker 00: Judge Lambert denied the request. [00:15:34] Speaker 02: What standard of review should we apply to the district court's decision on claim spitting? [00:15:38] Speaker 02: De novo or abuser discretion? [00:15:41] Speaker 00: All the other circuit courts I could find that had dealt with it used abuser discretion. [00:15:46] Speaker 02: It seems a little odd because the claim splitting is essentially a race judicata claim minus finality step. [00:15:56] Speaker 02: And race judicata [00:15:57] Speaker 02: applications of race judicata are reviewed de novo. [00:16:00] Speaker 02: So what's the rationale for applying abusive discretion when it's making the exact, what we're reviewing are the exact same questions we would review de novo if this were a race judicata case? [00:16:14] Speaker 00: I think the, many of the cases speak of the doctrine in terms of case management. [00:16:21] Speaker 02: Well, that's not the only thing that it's in charge of. [00:16:22] Speaker 02: It also prevents, I would have thought the government would have been of the view that it protects the government from having to fight on multiple fronts simultaneously when something could be consolidated in a single case. [00:16:33] Speaker 02: So it also protects interests of the parties in consolidated and efficient litigation and not being spread too thin by somebody who chooses to litigate multiple cases and sometimes multiple fora. [00:16:47] Speaker 02: Is that not an interest of the government? [00:16:49] Speaker 00: No, it is. [00:16:49] Speaker 02: Yes. [00:16:50] Speaker 02: Well, then that wouldn't be protected by a docket management analysis. [00:16:54] Speaker 00: No, no. [00:16:56] Speaker 00: I was just giving the court what other appellate courts said. [00:16:59] Speaker 02: So the government doesn't have a position on what the standard review is? [00:17:07] Speaker 00: No. [00:17:13] Speaker 00: But I did want to finish my last point was that Judge Lamberth [00:17:18] Speaker 00: denied a motion to amend the complaint, presumably explaining that there had been prejudice to the United States through a new delay causing prejudice and futility. [00:17:33] Speaker 00: And the new complaint is a sort of end run around Judge Lambert's denial of that motion. [00:17:43] Speaker 00: If we have no more questions, [00:17:45] Speaker 00: I'll close. [00:17:46] Speaker 02: Thank you very much, Councilman. [00:17:47] Speaker 00: Thank you. [00:17:48] Speaker 02: Mr. Buckley will give you two minutes. [00:17:53] Speaker 02: I just would like to say that I... Sorry, just wait until you're at the podium to start speaking, please. [00:17:58] Speaker 01: I don't agree that these are the same claims that exist in Steal One, the class action. [00:18:05] Speaker 01: The only claim that exists there now are whether the fees are excessive. [00:18:10] Speaker 01: That's the only remaining issue because the judge decided [00:18:16] Speaker 01: said that we did not bring the excess questioning claim in steal one. [00:18:22] Speaker 01: But I firmly disagree with that. [00:18:25] Speaker 01: I think the Department of Justice's lawyers would disagree if asked because they briefed the entire issue and never raised that claim. [00:18:33] Speaker 01: They never said this wasn't in the complaint because everybody knew it was. [00:18:37] Speaker 01: And so that shocked everybody in early 2023 when the district court said the issue is not in this case. [00:18:46] Speaker 01: So at that point, I decided, what else can you do if the court won't rule on it when you need it ruled upon? [00:18:56] Speaker 01: And I also wanted to get the renewal issue handled. [00:18:58] Speaker 01: Although, if that issue alone is handled, like I said earlier, I think renewal stops because they get a lot more information on unprepared returns than they do from a form that provides your name, your social, your date of birth, and your address. [00:19:13] Speaker 01: So as I read the Smith case, [00:19:15] Speaker 01: The judge Lamberth issued the opinion on. [00:19:22] Speaker 01: He gave cited three different cases. [00:19:25] Speaker 01: Can I finish real quick with that? [00:19:28] Speaker 02: You got 28 seconds. [00:19:29] Speaker 01: Okay. [00:19:31] Speaker 01: So as again, you know, he said that the issue would have to be registered judicata when the other case is finished. [00:19:38] Speaker 01: I don't think it will be because all that's being handled there is fees, not these other two issues. [00:19:43] Speaker 01: He said, yet, regardless of whether they apply the rule in a given case, all seem to agree that courts can discretionally dismiss claims for subsequent actions for claim splitting if the claims may still be advanced in the first action. [00:19:56] Speaker 01: They may not be because the court will not allow it. [00:19:58] Speaker 01: Thank you. [00:19:58] Speaker 02: Thank you very much to both counsel. [00:20:00] Speaker 02: The case is submitted.