[00:00:13] Speaker 02:
You can proceed, counsel.

[00:00:24] Speaker 01:
May it please the court.

[00:00:31] Speaker 01:
This court acts for itself in conducting a complete and independent review of the record below in a summary judgment case involving a confidential informant.

[00:00:40] Speaker 01:
That confidential informant operates under a longstanding original agreement.

[00:00:44] Speaker 01:
That's a reward agreement under the IRS special agreement program.

[00:00:47] Speaker 01:
That's not well known.

[00:00:49] Speaker 01:
And then that morphs into a services agreement that's mutually amended three years later.

[00:00:54] Speaker 02:
I have a number of clarification questions, Your Honor.

[00:00:59] Speaker 02:
On page 19 of the blue brief, you say that Judge Kaplan, from the court of federal claim,

[00:01:05] Speaker 02:
quote, did not extend the same courtesy to then permit confidential informant to come forward and directly refute the content.

[00:01:13] Speaker 02:
What does that mean?

[00:01:15] Speaker 01:
Yes, Your Honor.

[00:01:17] Speaker 01:
In that part of the brief, the briefing was completed in summary judgment.

[00:01:23] Speaker 01:
The court then issued orders asking the parties counsel to appear at the August 24, 2017 hearing on summary judgment.

[00:01:33] Speaker 01:
Prior to that, there were a number of preliminary orders to that hearing requesting that counsel for the respondent address issues that were not addressed on brief by counsel for the government.

[00:01:45] Speaker 01:
So we, at that point, are in the hearing explaining these various questions for the court and going through that.

[00:01:54] Speaker 01:
The hearing leaves with the opportunity to produce some records.

[00:02:01] Speaker 01:
and to work together in a way, and then to also address issues.

[00:02:06] Speaker 01:
We attempted to file a proffer, a motion for leave to respond to the things that were stated at the hearing, and to respond to the things that they were asked to discuss.

[00:02:17] Speaker 02:
Well, that's a question of the rules, is it not?

[00:02:19] Speaker 01:
Your Honor.

[00:02:20] Speaker 02:
Isn't that a question of the rules governing the procedures of the court?

[00:02:25] Speaker 01:
Your Honor, it would be the rules, but we

[00:02:28] Speaker 01:
sought leave to address the matter after the hearing, and that was denied on the record.

[00:02:34] Speaker 02:
So you seem to be implying that you're entitled to certain, quote, courtesies.

[00:02:42] Speaker 01:
The lower court opinion does state that we were given, and the order issue does say that we had the opportunity to be heard at or argument.

[00:02:52] Speaker 01:
So I don't wish to misstate that in any way.

[00:02:54] Speaker 01:
It is just that specific to the issue of

[00:02:57] Speaker 01:
whether or not there were a recovery of taxes and whether or not we could rebut those declarations that are in the record, we sought to do that, but it was after the hearing and that opportunity was denied.

[00:03:07] Speaker 02:
Here's another housekeeping question.

[00:03:10] Speaker 02:
At 38 of the blue brief, you say inherent in any C-IRA or M-I-R-A is the further requirement that the IRS actually communicate with the informant based on what?

[00:03:23] Speaker 02:
The communication requirement.

[00:03:28] Speaker 02:
The way I take it, certainly the informant is entitled to confidentiality.

[00:03:35] Speaker 02:
And if there's a recovery, they're certainly entitled to some recovery.

[00:03:43] Speaker 02:
Where's that communication requirement?

[00:03:46] Speaker 01:
If the confidential informant worried about their safety, that is assigned a special agent, in these facts there's an agreement, there's a services agreement.

[00:03:55] Speaker 01:
There's the interest in moving forward with that confidential informant under those contexts.

[00:04:00] Speaker 01:
There's also the case law we talk about where in those cases, they talk about the procedures the IRS has to acknowledge a informant, go through suitability reviews, conduct debriefings, and then at the end, issue a termination notice or a deactivation notice.

[00:04:19] Speaker 01:
In this case, the facts also show in the record where the special agent actually sent the Internal Revenue Manual guidelines

[00:04:25] Speaker 01:
to the confidential informant, informing of the procedures that govern a whistleblower.

[00:04:32] Speaker 01:
And in those procedures, the exhibits to that manual that describes all of these things actually include sample letters of notifications of acknowledging a claim and the end of the process.

[00:04:44] Speaker 01:
So?

[00:04:45] Speaker 01:
So, when Judge Kaplan, in the ruling below, rules that there's abandonment.

[00:04:52] Speaker 01:
that there's undisputed evidence that the agent ceased in the actions that the agent was, the special agent was taking and moved forward to investigate, even though my client did not know about it, that is not a communication because my client does not know about it.

[00:05:08] Speaker 01:
The requirement is, and it's in the record, that the special agent acknowledged that from the superiors that a letter of deactivation was to go out.

[00:05:18] Speaker 01:
It did not.

[00:05:20] Speaker 01:
The record does not show that there was also an indication that the agents would do that in person and notify them.

[00:05:27] Speaker 01:
Deactivation is critical, because if you're not under the care of an agent, you worry about your safety, right?

[00:05:34] Speaker 01:
Because you don't know what's going on.

[00:05:36] Speaker 01:
You're assigned.

[00:05:37] Speaker 01:
Safety can't be guaranteed, of course.

[00:05:40] Speaker 01:
But in the agreement, it's a critical part.

[00:05:42] Speaker 02:
So rather than an obligation to communicate with the informant what you're saying,

[00:05:49] Speaker 02:
is an obligation to notify of deactivation.

[00:05:53] Speaker 01:
Yes.

[00:05:54] Speaker 01:
And in the context of the facts of this case, there were communications ongoing.

[00:05:58] Speaker 01:
In the record, it's clear that from the moment of contact regarding the amendment to the agreement under the services agreement, there is a good six months of communication, track phones, communications going on between and an email.

[00:06:14] Speaker 01:
They have emails to exchange.

[00:06:16] Speaker 02:
They certainly have the opportunity to do that.

[00:06:19] Speaker 01:
Right?

[00:06:19] Speaker 01:
So my only point was that in the facts here, there's active communication, and then it stops.

[00:06:26] Speaker 01:
It's kind of what the younger generations speak to of ghosting.

[00:06:29] Speaker 01:
It's kind of like everything just goes away, okay, with no explanation.

[00:06:34] Speaker 01:
I don't mean to insult the court, but I'm talking about a term that says no explanation, poof, just go away, and the relationship's over.

[00:06:44] Speaker 01:
But there's no explanation, no courtesy, no discussion.

[00:06:48] Speaker 01:
The DeAndrea Brothers case that's cited by opposing counsel in the briefs talks about the implied breach of good faith and fair dealing extending to a duty to cooperate.

[00:06:59] Speaker 01:
The duty to cooperate extends to this idea of communication in the DeAndrea Brothers case.

[00:07:05] Speaker 01:
Opposing counsel says, but that doesn't apply here because that only applies to a special kind of contract that is cooperative.

[00:07:12] Speaker 01:
We respectfully suggest that this is also a special kind of contract that requires

[00:07:18] Speaker 01:
communication because of the health, the safety, the risk that a confidential informant acts under.

[00:07:24] Speaker 01:
Again, we're talking about whistleblowers who are anxious to know what's going on.

[00:07:28] Speaker 01:
They are entitled to worry about what's at issue.

[00:07:32] Speaker 02:
And it is our contention that this agreement... Well, what concerns me about that is in effect what it's saying is it puts an investigative entity in the position of having to inform someone outside

[00:07:48] Speaker 02:
law enforcement circles of the process of their investigation, which has the potential to compromise an awful lot of what they do.

[00:08:01] Speaker 02:
If we were to hold that, don't you see the problem?

[00:08:03] Speaker 01:
Absolutely.

[00:08:04] Speaker 01:
Worry about the sovereign doctrine.

[00:08:06] Speaker 01:
Worry about going too far and immersing an informant in the manner in which an investigation is conducted.

[00:08:14] Speaker 01:
But the whistleblower program requires some communication.

[00:08:17] Speaker 01:
It has to

[00:08:18] Speaker 01:
Be courteous the manual cited in the thing speaks about being truthful and being Cooperative and have a professional relationship.

[00:08:28] Speaker 01:
There's nothing professional about ignoring someone Dropping them off and and saying they're not entitled to anything no communication nothing now with the agreement itself It's our contention that because it was specially drafted to deviate from a model informant reward agreement

[00:08:46] Speaker 01:
that it was actually drafted with great extent for two years, it drafted into an exception under the normal clause that some of the cases discuss that says you're not allowed to discuss matters with the informant.

[00:08:59] Speaker 01:
A special exception was added in this agreement, like the 92-932 confidential informant case, to accept out 6103 taxpayer protections and federal law.

[00:09:13] Speaker 01:
Why that was done is to permit communications, and we contend

[00:09:16] Speaker 01:
to permit the accountings.

[00:09:18] Speaker 01:
So that opens the door to that.

[00:09:20] Speaker 01:
So that's a very important drafting idea that was put in to address it.

[00:09:24] Speaker 03:
If you have a breach of the duty of good faith, which is what you're talking about now, I believe.

[00:09:29] Speaker 03:
It's what we've been talking about.

[00:09:32] Speaker 03:
What I'm curious to know is what are the damages?

[00:09:37] Speaker 03:
What's the harm from the breach of the duty of good faith?

[00:09:41] Speaker 03:
Hypothetically, in a case where no money was ever recovered by the IRS,

[00:09:46] Speaker 03:
We have a value of the contract.

[00:09:48] Speaker 03:
Pain and suffering, or what are the elements of the damages?

[00:09:52] Speaker 01:
We understand that there is, in a simple context, a presumption of damages.

[00:09:56] Speaker 01:
There's a liability phase and a damages phase.

[00:09:59] Speaker 01:
We never got to that phase.

[00:10:00] Speaker 01:
But to answer your question, we believe the value of the contract recognized by the party entering into this very unique agreement back in 2000, went about it treating it as its value of $35 million services agreement in the

[00:10:15] Speaker 01:
as mutually amended, or the original information was valued at $35 million.

[00:10:22] Speaker 01:
I was asked in the court below.

[00:10:24] Speaker 03:
OK, I don't want to use up your time.

[00:10:25] Speaker 03:
I'm just curious.

[00:10:26] Speaker 03:
I now understand.

[00:10:27] Speaker 01:
Thank you.

[00:10:29] Speaker 02:
And one of the things that happened in the court below was that there were statements made, for example, that... You say on page 50 of the Blue Breed, Judge Kaplan decided to make use of special agent tiscas?

[00:10:45] Speaker 02:
workload logs to assist in establishing a recitation of the facts to form the basis of her decision.

[00:10:54] Speaker 02:
Quote, and she all but admits to the merits of the same.

[00:10:58] Speaker 02:
Where does a sitting judge all but admit to anything?

[00:11:03] Speaker 01:
Apologize for the tone, Your Honor.

[00:11:05] Speaker 01:
You should.

[00:11:08] Speaker 01:
I thought about that and what was meant was that there was a good dialogue in the court below at that hearing on August 24th about the struggle, how to get this case right.

[00:11:20] Speaker 01:
For example, one quote from the judge was, I don't think we would be here frankly if they just picked up the phone and answered the letter, the letter being the request from the informant, you know, are you going to pursue the case?

[00:11:31] Speaker 01:
Please return the depositions, whatnot.

[00:11:33] Speaker 01:
But that's a lesson to be learned.

[00:11:35] Speaker 01:
Another dialogue that went on was a question about, well, these were the facts where the dialogue went like this.

[00:11:44] Speaker 01:
CI provides really useful information to the IRS.

[00:11:47] Speaker 01:
IRS takes that information, does an investigation, and says, wow, we probably could collect a lot of money on this.

[00:11:54] Speaker 01:
But we're not happy.

[00:11:55] Speaker 01:
That's too much money.

[00:11:57] Speaker 01:
So we're going to go back.

[00:12:01] Speaker 01:
tell the employment, we're not going to go bring about an enforcement action unless they agree to take less.

[00:12:07] Speaker 01:
The government in that dialogue admitted that that would be a case of breach of good faith and fair dealing.

[00:12:13] Speaker 01:
Now, I'm not trying to... Those things happen.

[00:12:15] Speaker 01:
They're hypotheticals in this setting.

[00:12:18] Speaker 01:
But this was in real form on August 24th going back and forth where I think the judge is trying to get it right with the presumption of good faith issue with the lower court

[00:12:28] Speaker 01:
discussing how do you interwork good faith by government officials with, at the same time, working on the idea of this subdiff... You're into your rebuttal time.

[00:12:38] Speaker 01:
Just so you know, I... I will conclude for one minute and save two minutes for rebuttal.

[00:12:42] Speaker 01:
So the subdiffusions and evasions that can go on this court has a chance to expand that or to address that in a way that matches up with Metcalfe, the reasonable expectations of an informant in this kind of situation, and ensure that

[00:12:58] Speaker 01:
The benefits for a confidential informant under a service agreement are not appropriated in an improper manner in breach.

[00:13:06] Speaker 01:
I go back to everything else on brief, and I appreciate the time, and I reserve two minutes for rebuttal.

[00:13:14] Speaker 02:
Thank you.

[00:13:29] Speaker 00:
Thank you, Your Honor.

[00:13:35] Speaker 00:
May it please the Court.

[00:13:38] Speaker 00:
The issues on appeal were whether the trial court correctly applied the law of the case doctrine, whether the trial court correctly applied the summary judgment standard, and thirdly, whether the trial court

[00:13:57] Speaker 00:
correctly granted the government's motion to dismiss.

[00:14:01] Speaker 00:
I'm happy to proceed on those issues, but to direct the arguments that have been presented so far, the issue is, what is the reward agreement?

[00:14:13] Speaker 00:
What are the terms of the reward agreement?

[00:14:14] Speaker 00:
What were the obligations of the government under the reward agreement?

[00:14:18] Speaker 00:
They were to not disclose the identity of the informant, Mr. Doe.

[00:14:28] Speaker 00:
and not to threaten to divulge.

[00:14:30] Speaker 02:
Did you misspeak when you said that the court granted the government's motion to dismiss?

[00:14:37] Speaker 00:
Yes.

[00:14:38] Speaker 02:
I thought the court granted a motion for summary judgment.

[00:14:42] Speaker 00:
On the third issue, and that is the issue of whether that is valid or not.

[00:14:51] Speaker 00:
So on the first two issues is the government's motion for summary judgment.

[00:14:57] Speaker 03:
So you were talking about what you believe the contract obligated the government to do?

[00:15:02] Speaker 00:
That's correct, Your Honor.

[00:15:03] Speaker 03:
Not to disclose the identity, protect the identity.

[00:15:05] Speaker 00:
That's right, Your Honor.

[00:15:06] Speaker 00:
And also not to pay Doe in the event of recovery.

[00:15:13] Speaker 00:
There was no recovery in this case.

[00:15:15] Speaker 00:
So there was no breach of that obligation to pay Mr. Doe.

[00:15:19] Speaker 03:
What about the obligation of the government to protect the identity of the confidential informant?

[00:15:27] Speaker 03:
That starts from the time that the contract is signed, right?

[00:15:34] Speaker 03:
That's correct.

[00:15:34] Speaker 03:
And when does that obligation cease?

[00:15:40] Speaker 00:
The terms of the agreement are not, it doesn't have an end point.

[00:15:44] Speaker 00:
So in this instance, we have protected, we've continued to protect the identity of Doe by not disclosing, by having all documents under seal.

[00:15:55] Speaker 00:
but not disclosing the identity of Doe.

[00:15:59] Speaker 03:
Does the government's treatment of the confidential informant change depending on whether or not the government is still pursuing the matter or whether it decides to walk away entirely?

[00:16:11] Speaker 03:
For example, the counsel for the confidential informant suggests that there's some level of protection that's provided by the government for the confidential employee starting at day one.

[00:16:23] Speaker 00:
There's no protection other than protecting the identity of Doe.

[00:16:28] Speaker 00:
That is, there's no individual assigned to protect Doe.

[00:16:33] Speaker 03:
I'm glad you did, because I drew an inference the other way from what counsel was saying.

[00:16:38] Speaker 00:
No, Your Honor.

[00:16:39] Speaker 00:
The only obligation is to protect the identity of Doe.

[00:16:43] Speaker 00:
And that doesn't include a requirement to communicate, and it doesn't include a requirement to investigate.

[00:16:50] Speaker 02:
Does it continue at infinitum?

[00:16:53] Speaker 00:
As far as I know, Your Honor, everything is going to remain under seal, and we have no intent to open it.

[00:17:00] Speaker 03:
Well, five years from now, the attorney general made a speech and said, we've had a lot of confidential informants have helped us out over the years, and including them are, and he names this person.

[00:17:12] Speaker 00:
Your Honor, my understanding is that the agreement is in perpetuity, and that is why this matter has remained under seal.

[00:17:20] Speaker 03:
Continue to come back you say under the umbrella of this obligation to to protect the Identity of this person not to disclose identity.

[00:17:31] Speaker 03:
There aren't any collateral promises like keep you updated about what's going on Give you a notice when we finally shut the whole thing down That's correct.

[00:17:43] Speaker 03:
Your honor.

[00:17:43] Speaker 02:
There is no there's there is an obligation to notify if you have some

[00:17:47] Speaker 00:
something to pay if there's money to be paid.

[00:17:50] Speaker 00:
Yes.

[00:17:51] Speaker 00:
And, and that's the circumstances under which, uh, dough would be.

[00:17:55] Speaker 03:
So the, the confidential department never, the government never has to tell them that we have, this is a, we've shut this whole thing down.

[00:18:04] Speaker 03:
We're not ever going to do anything more about your information.

[00:18:07] Speaker 00:
Uh, there is nothing in the agreement itself.

[00:18:10] Speaker 00:
There is nothing in the manual, although the manual does have certain

[00:18:15] Speaker 00:
rules of practice for the Internal Revenue Service, it does not thereby confer upon the plaintiff or the claimant in this case, the right to be notified of the close down.

[00:18:28] Speaker 02:
Speaking hypothetically, five years from now, the government decides to relook at the sector in which information is provided by the confidential informant and they say,

[00:18:45] Speaker 02:
Gee, that information, turns out, was useful.

[00:18:50] Speaker 02:
And they pursue that sector, and they collect money.

[00:18:53] Speaker 02:
At that point, do they then notify the CI, here's some money for you?

[00:18:58] Speaker 02:
If there is a... I'm assuming, in my hypothetical, that there's a correlation.

[00:19:04] Speaker 00:
Yes, yes, yes.

[00:19:05] Speaker 00:
It doesn't stop simply because it's been deactivated.

[00:19:08] Speaker 03:
They're supposed to, but of course the competition department never knows.

[00:19:12] Speaker 00:
That's right, your honor, unless there is a collection.

[00:19:14] Speaker 03:
It's kind of a catch-22 in a way, because the government can do some investigating and say, hmm, there's a pot of gold here, but it's not going anywhere.

[00:19:25] Speaker 03:
We'll wait another four or five or six years and just never answer this person again, give them the impression that we've shut the whole thing down.

[00:19:33] Speaker 03:
Then we'll go collect the money five or seven years later and never bother to tell the confidential that we did it.

[00:19:39] Speaker 02:
But one presumes that

[00:19:40] Speaker 02:
The trials involving that sector and the collection would be public, so that the CIA would be aware that that was taking place, and could come back and say, hey.

[00:19:55] Speaker 00:
There is an endpoint to the agreement.

[00:19:57] Speaker 00:
It was 1996 to 2005, and that was one of the purposes of the amendment to the agreement.

[00:20:04] Speaker 02:
But the reason for the shutdown was- What was one of the purposes?

[00:20:10] Speaker 00:
One of the purposes of the supplemental, the amendment to the original reward agreement was to extend the years from 2000 to 2005.

[00:20:23] Speaker 02:
Another purpose was to... So when you say extend the years, the government comes back in 2020 and goes back, can it go back before 2005 in its investigation?

[00:20:37] Speaker 00:
It can go from 1996 to 2005, but there's a statute of limitations issue here.

[00:20:44] Speaker 00:
So the question is, you know, is it, and the reason why the shutdown, the deactivation and the decision to close the proceedings was the information was stale.

[00:20:56] Speaker 00:
It was deemed to be too old to be of value.

[00:20:59] Speaker 00:
And so there was a decision no longer to pursue the information.

[00:21:02] Speaker 03:
And was the confidential informant notified that it was deactivated, that they stopped?

[00:21:08] Speaker 00:
Eventually, yes, but it was only as a result of DOE's inquiry as to whether there was money recovered.

[00:21:19] Speaker 00:
So there was an intent on the part of the agent to send a letter to notify that DOE was deactivated, but that letter was never sent.

[00:21:30] Speaker 00:
So it was for management on the part of the Internal Revenue Service.

[00:21:37] Speaker 00:
But in any event, there has been no recovery in this case.

[00:21:39] Speaker 00:
So there is no breach on the part of the government.

[00:21:43] Speaker 03:
And there's been no- I'm still going back to the duty of good faith.

[00:21:46] Speaker 03:
If the agency straps on itself the obligation to notify a confidential informant when the case is deactivated, which sounds like what was going on here, an agent works up a deactivation letter, but it never gets sent.

[00:22:08] Speaker 03:
then is there any basis for thinking that there was an obligation to send that letter?

[00:22:14] Speaker 00:
No, Your Honor.

[00:22:14] Speaker 00:
The manual, the Internal Revenue Manual, which does set aside certain standards of practice, doesn't have an effective law.

[00:22:26] Speaker 00:
And moreover, even if it did have an effective law, it was not incorporated by reference into the reward agreement.

[00:22:33] Speaker 00:
So the DOE or any other informant doesn't have

[00:22:38] Speaker 00:
That is a leverage to file a claim against the Internal Revenue Service because of failure to comply with the Internal Revenue Manual.

[00:22:51] Speaker 00:
So in this case, there was no breach of the reward agreement.

[00:22:57] Speaker 00:
There was no divulging of the identity of the informant.

[00:23:04] Speaker 00:
And there has been no recovery.

[00:23:06] Speaker 00:
So there has been no refusal or decision not to pay the informant.

[00:23:12] Speaker 03:
And for these reasons, the case law suggests that the duty to behave in good faith isn't necessarily strictly bound to the exact terms of the contract, right?

[00:23:25] Speaker 00:
The obligations, however, stem from the contract.

[00:23:28] Speaker 00:
And the only obligations

[00:23:31] Speaker 00:
involve the disclosure of identity and the refusal or not paying the informant.

[00:23:40] Speaker 00:
And the fallout from those particular duties do not include the duty to communicate and they do not include the duty to investigate.

[00:23:52] Speaker 00:
So the agency has the discretion and it

[00:23:56] Speaker 03:
must maintain the discretion to decide whether to... I'm concerned or troubled by the failure of the agent here who was trying, felt obligated, obviously, to notify the confidential informant there was deactivation, otherwise the agent wouldn't have written the letter.

[00:24:13] Speaker 03:
Obviously felt this is something I'm supposed to do.

[00:24:16] Speaker 03:
And it seems to me, at least hypothetically possible, that a confidential informant's behavior may change

[00:24:24] Speaker 03:
depending on whether or not the case is under active pursuit by the federal government, and then when it's totally deactivated, when you call the dogs off, no, no majority of intent, when you call the police investigators off the case, then the confidential informant knows that the IRS isn't out there asking a whole lot of questions anymore that potentially exposes him to at risk in a greater way than when the investigation is quieted down.

[00:24:55] Speaker 03:
So I think there's a reason in the mind of a confidential informant why you'd like to know that the investigation has stopped.

[00:25:04] Speaker 00:
I understand that, Your Honor, and I agree with you that it should have been disclosed to Doe, but it was a clerical error on the part of the investigation.

[00:25:16] Speaker 03:
I don't know that we have in the record, but I can't believe that the agent wrote that letter other than pursuant to some

[00:25:26] Speaker 03:
an internal document that told him, this is what you're supposed to do.

[00:25:32] Speaker 03:
Probably even the text of the letter is in a form somewhere.

[00:25:37] Speaker 00:
I don't doubt that, Your Honor, but assuming it is.

[00:25:40] Speaker 03:
Agencies can burden themselves with requirements that aren't written in the book.

[00:25:44] Speaker 03:
I mean, written in the statute.

[00:25:46] Speaker 00:
Assuming it was a manual, in the manual, that still doesn't give the plaintiff, in this case,

[00:25:56] Speaker 00:
a right of action or any basis for recovery under the reward agreement.

[00:26:01] Speaker 00:
The manual itself was not incorporated by reference in the reward agreement.

[00:26:07] Speaker 00:
Moreover, at the internal revenue manual... Well, you see where I'm coming from.

[00:26:11] Speaker 03:
There's an argument to be made that the confidential informant says, with regard to your obligation to treat me confidentially, with regard to your treatment of me as a confidential informant.

[00:26:23] Speaker 03:
It's important to me to know whether your investigation is active or inactive, or active or stopped.

[00:26:33] Speaker 00:
Well, in fact, Doe did pursue this in an effort to find out whether he or she was entitled to recovery.

[00:26:41] Speaker 00:
And it was determined that there had been no recovery.

[00:26:45] Speaker 00:
But there's a gap.

[00:26:47] Speaker 03:
There's a gap between the time when the agent wrote the letter but forgot to mail it or whatever, and then later on when the confidential informant, by his own efforts, learns that he no longer is at least possibly subject to exposure because of a great big act of investigation.

[00:27:06] Speaker 00:
As a matter of coincidence, it should have been done, and it wasn't done, unfortunately.

[00:27:10] Speaker 00:
Thank you.

[00:27:11] Speaker 00:
But that's not a basis for a claim in this case.

[00:27:14] Speaker 00:
Thank you.

[00:27:28] Speaker 01:
Your honor, material factual dispute in the record.

[00:27:32] Speaker 01:
The discussions went on at 6-4-5-7, 6-4-5-4, 6-4-5-5, interchanges with the court.

[00:27:42] Speaker 01:
I don't know why they didn't pursue the civil government.

[00:27:45] Speaker 01:
It didn't, it never got transferred to civil, the court, Judge Kaplan.

[00:27:49] Speaker 01:
How do I know that?

[00:27:51] Speaker 01:
Government, because Mr. Courtier says so in his declaration.

[00:27:54] Speaker 01:
That comes up again at the... I don't understand what happened after the criminal investigation closed.

[00:27:59] Speaker 01:
We have to understand what happens here.

[00:28:01] Speaker 01:
This reward agreement was based... What are you citing on the record?

[00:28:05] Speaker 01:
I'm sorry.

[00:28:06] Speaker 01:
6457, 6454, 6455.

[00:28:07] Speaker 01:
Transcripts from the August 24, 2017 hearing on summary judgment.

[00:28:13] Speaker 01:
It was stated that Mr. Quartier's declaration says that they did not pursue it.

[00:28:20] Speaker 01:
In fact, in the record is Form 13308.

[00:28:23] Speaker 01:
And that is establishing that there was a civil referral.

[00:28:27] Speaker 01:
The declaration, let me just give this to you so that you can see it on review.

[00:28:32] Speaker 01:
Mr. Quartier's declaration 2790 to 2793 in volume three of the appendix.

[00:28:39] Speaker 01:
He is asked in paragraph eight, he states, at the time this criminal investigation was discontinued, I completed a copy of the form 13308, referring the matter to the IRS's civil division.

[00:28:52] Speaker 01:
We wanted the logs, because it's actually contained in very private, seamless records of the criminal investigation that uploads all of the agents who worked on the matter into the logs so that you can chronologically track what happened.

[00:29:07] Speaker 01:
We wanted to see what was happening when they decided to shut this investigation down criminally and refer it civilly.

[00:29:14] Speaker 01:
It is a material, factual dispute of critical importance.

[00:29:18] Speaker 01:
We do not know that they did not collect taxes.

[00:29:21] Speaker 01:
Judge, you mentioned to me that you can see press reports and so forth.

[00:29:24] Speaker 01:
Yes, if there's criminal convictions.

[00:29:26] Speaker 01:
In this industry, they were all over the place since 2000, working with ICE.

[00:29:32] Speaker 01:
We have brought that up in the fact pattern to discuss what happened from the beginning and going forward.

[00:29:40] Speaker 01:
With the Nexus, we identified an insider.

[00:29:43] Speaker 02:
We're trying to be careful to state no facts.

[00:29:45] Speaker 01:
Oh, I'm sorry.

[00:29:46] Speaker 01:
But anyway, the point is we believe it's a material factual dispute, and we ask that the decision

[00:29:51] Speaker 01:
above be vacated and remanded for further factual findings consistent with the decisions of this court.

[00:29:58] Speaker 01:
Thank you, Your Honor.