Opposition — Hall v. United States

No. 83-514

In the Supreme Court of the Hnited States

OCTOBER TERM, 1983

ELIZABETH JANE HALL, PETITIONER

Vv.

UNITED STATES OF AMERICA, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE SIXTH CIRCUIT

MEMORANDUM FOR THE FEDERAL RESPONDENTS

IN OPPOSITION

Rex E, Lee

Solicitor General

Department of Justice

Washington, D.C. 20530

(202) 633-2217

TABLE OF AUTHORITIES

Page

Cases:

Ware ¥. Matteo, GO UB. SEA oo ccccccicccceces 3

Bivens v, Six Unknown Federal Narcotics

Fe a ey nnn 3

Butz v. Economou, 438 U.S. 478 .......ceeecs 4

Hall v. United States, 704 F.2d 246 .......00005.

Harlow v. Fitzgerald, 457 U.S. 800 .......... 4, 6

Irving v. Gray, 344 F. Supp. 567,

ry PS as nb hnccé secede badecesses 5

Laing v. United States, 364 F. Supp. 469,

aff'd, 496 F.2d 853, rev'd, 423 U.S. 161 ... 1, 3,5

Phillips v. Commissioner, 283 U.S. 589 ......... 5

Rambo v. United States, 353 F. Supp. 1021,

aff'd, 492 F.2d 1060, cert. denied, 423 U.S.

PEE Cus phgths xavatieghn cess letbecdab'vcic ce 5

Rutherford v. United States, 702 F.2d 580 ...... 6

Schreck v. United States, 301 F. Supp.

RMP Wide Codd ORME URS pUbN on veces 6'é's creced 5

Williamson v. United States,

31 A.F.T.R.2d(P-H) para. 73-800 ............ 5

Wood v. Strickland, 420 U.S. 308 .........005. 6

(I)

»

ww? A oe

Constitution and statutes:

U.S. Const. Amend. V (Due Process

Oe OO Pe ae ee 4,5

Internal Revenue Code of 1954 (26 U.S.C.)

Ee: Bh cne cUibc 0 eth neaken cers odtas teen l

PGS os D5 As bn cdv'e cleined oc ccemhe 2, 5

NTE: (awh a0 5 oGueddieo we ane 6 kenieend oon 3

In the Supreme Court of the Hnited States

OCTOBER TERM, 1983

No. 83-514

ELIZABETH JANE HALL, PETITIONER

Vv.

UNITED STATES OF AMERICA, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE SIXTH CIRCUIT

MEMORANDUM FOR THE FEDERAL RESPONDENTS

IN OPPOSITION

Petitioner brought this action for damages and injunctive

relief against the United States, two officials of the Internal

Revenue Service, and a Kentucky police officer.' The court

of appeals affirmed an award of summary judgment in

'The injunctive aspect of this case was considered by this Court in

Laing v. United States, 423 U.S. 161 (1976), which involved both

petitioner and an unrelated taxpayer. After noting that it had “granted

certiorari to resolve [a] conflict” among the circuits on the question (423

U.S. at 167, 169), the Court held that a taxpayer is entitled to receive a

notice of deficiency when his taxable year is terminated under Section

6851 of the Internal Revenue Code of 1954 (26 U.S.C.) (hereinafter “the

Code” or “I.R.C.”), and that, because such a notice had not been sent to

petitioner, she: was entitled to enjoin the government from selling her

property (423 U.S. at 168-171, 184-186 n.27). The substantive issues

decided in Laing are not involved here. Rather, that decision is relevant

primarily because it sheds light on the unsettled state of the law at the

time of the official actions upon which petitioner's damages claim is

based.

(1)

2

favor of respondent McHugh, an I.R.S. official, holding

that he was entitled to a defense of qualified immunity; and

it affirmed an award of summary judgment in favor of

respondent Snider, the other I.R.S. official, holding that

petitioner had not stated a claim against him on which relief

could be granted. Petitioner seeks review? of these holdings.’

1. The pertinent facts may be summarized as follows: On

January 31, 1973, after petitioner’s husband had been

arrested on drug-related charges, Kentucky state troopers

searched her home pursuant to a valid warrant (Pet. App.

18a). They found controlled substances there (ibid.). The

next day, respondent McHugh, as Acting District Director

of Internal Revenue in Louisville, Kentucky, determined

that petitioner’s involvement in drug activities “tend[ed] to

prejudice or to render * * * ineffectual proceedings to col-

lect [her] income tax for the current * * * taxable year,”

within the meaning of Section 6851(a)(1) of the Code. In

accordance with that Section, McHugh terminated peti-

tioner’s 1973 taxable year and declared her income tax for

the first 30 days of the year “immediately due and payable.”

He assessed a tax of $52,680 for that period (Pet. App. 18a).

When petitioner failed to pay the tax thus assessed, I.R.S.

collection officers levied on her property, including her

bank account and a 1970 Volkswagen automobile (id. at la,

?The court of appeals entered judgment on March 25, 1983, and

denied rehearing on April 29, 1983. See 704 F.2d 246 (6th Cir.). Peti-

tioner's motion for an extension of time to file a petition for a writ of

certiorari, which was filed on or before July 25, 1983, was thus timely.

On July 25, 1983, the Chief Justice extended the time for filing a petition

to September 26, 1983. The petition was filed on that date.

3

18a). Shortly thereafter, petitioner brought this action in

the United States District Court for the Western District of

Kentucky, seeking injunctive relief and damages. As noted

above (p. | n.1, supra), petitioner’s claim for injunctive

relief was ultimately upheld by this Court in Laing v.

United States, 423 U.S. 161 (1976). The Court there inter-

preted Section 6861 of the Code to require that the I.R.S.

send a deficiency notice to a taxpayer within 60 days of

making a termination assessment and before selling the

taxpayer's property.

Following this Court's decision, the district court consid-

ered petitioner's claims for damages, which had been held in

abeyance. It found that respondent McHugh was not “in

direct contact with the officer who seized [petitioner’s]

automobile” and that McHugh’s role was limited to “approv-

ing, upon recommendation, the termination of [petition-

er’s] taxable year and in levying the tax assessment” (Pet.

App. 2a). Petitioner admitted that she did not know

McHugh and had never spoken to him (id. at 2a). The court

found that respondent Snider, a group manager in the

Louisville District Director’s Office, was “one of many

persons who ‘signed off’ on the paperwork as it crept toward

final approval” by McHugh (id. at 9a), and that Snider's

only other involvement consisted of appearance at a single

meeting, in McHugh’s absence, with petitioner's lawyers

(id. at 10a). Petitioner conceded that she had never seen

Snider or spoken with him (id. at 9a-10a). Based on these

findings, the trial judge, assuming arguendo that the doc-

trine of Bivens v. Six Unknown Federal Narcotics Agents,

403 U.S. 388 (1971), extended to this case, awarded sum-

mary judgment to both respondents. He held that McHugh's

acts were “protected under the doctrine of official immuni-

ty” outlined in Barr v. Matteo, 360 U.S. 564 (1959) (Pet.

App. 5a), and that petitioner had failed to state a claim

against Snider on which relief could be granted (id. at

10a-1 la).

4

2. The court of appeals unanimously affirmed. It dis-

agreed with the district court’s conclusion that McHugh

was entitled to absolute immunity, noting that petitioner

had alleged a due process violation, not a common law tort.

Pet. App. 20a-2la, citing Butz v. Economou, 438 U.S. 478,

507 (1978). But it held that McHugh was entitled to quali-

fied immunity under Harlow v. Fitzgerald, 457 U.S. 800

(1982), reasoning that approval of termination assessments

was a discretionary function within the scope of his office

(Pet. App. 22a) and that, in failing to send petitioner a

deficiency notice, McHugh “did not violate clearly estab-

lished statutory or constitutional rights of which a reasona-

ble person would have known at the time the action

occurred” (id. at 23a). The court likewise upheld the dismis-

sal of petitioner’s claim against respondent Snider, noting

that his “only connection to the present action [was] his

mere approval of a routine field audit” and that petitioner

had pointed to no evidence, apart from “bare conclusive

allegations,” that Snider had “personally deprived her of

any statutory or constitutional rights” (id. at 24a).

3. The court of appeals correctly applied the principles of

qualified immunity to the facts of this case. In Harlow, this

Court held that “government officials performing discre-

tionary functions generally are shielded from liability for.

civil damages insofar as their conduct does not violate

clearly established statutory or constitutional rights of

which a reasonable person would have known.” 457 U.S. at

818. In February 1973, when the actions of which petitioner

complains occurred, a taxpayer had no “clearly established

right,” under either the Code or the Due Process Clause, to

receive a notice of deficiency when a termination assess-

ment was made. The only court of appeals that had consid-

ered the statutory question had held that the Code

5

afforded no such right,‘ and the district courts in the other

circuits were divided.’ Indeed, when this Court (by a 5 to 3

vote and after reargument of the case) settled the statutory

question in 1976, it noted that it had “granted certiorari to

resolve [a] conflict” among the circuits. Laing, 423 U.S. at

167, 169. A taxpayer’s right under the Due Process Clause

to receive a notice of deficiency in these circumstances,

furthermore, was even more speculative. No court had

decided that question as of February 1973;¢ the only courts

that have decided it subsequently have held that no such

right exists;’ and this Court specifically reserved the ques-

tion in Laing.* Because neither the statutory nor the consti-

tutional law on the subject was “clearly established” in

February 1973, respondent McHugh, in approving the

‘Williamson v. United States, 31 A.F.T.R.2d(P-H) para. 73-456 (7th

Cir. 1971). :

‘Compare, e.g., Irving v. Gray, 344 F. Supp. 567, 571-572(S.D. N.Y.

1972), aff'd, 479 F.2d 20 (2d Cir. 1973) (holding that a deficiency notice

was not required), with Rambo v. United States, 353 F. Supp. 1021

(W.D. Ky. 1972), aff'd, 492 F.2d 1060 (6th Cir. 1974), cert. denied, 423

U.S. 1091 (1976) (holding that a deficiency notice was required), and

Schreck v. United States, 301 F. Supp. 1265, 1267-1268, 1284 (D. Md.

1969) (same).

*But cf. Schreck, 301 F. Supp. at 1281 (suggesting, without deciding,

that failure to send a deficiency notice in termination situations “raises

constitutional questions of equal protection and due process”).

‘Laing v. United States, 364 F. Supp. 469, 471 (D. Vt. 1973), aff'd,

496 F.2d 853, 854 (2d Cir. 1974), rev'd on other grounds, 423 U.S. 161

(1976). But cf. Rambo, 492 F.2d at 1065 (suggesting that failure to send

a deficiency notice in termination situations “could very well raise” due

process questions).

8423 U.S. at 183-184 n.26. Compare id. at 187 (Brennan, J., concur-

ring) (suggesting that Section 6851(a)(1) “falls short * * * of meeting

due process requirements”) with id. at 206 (Blackmun, J., dissenting)

(concluding that due process does not require a deficiency notice in

termination situations because “the taxpayer has a variety of remedies

to test the validity of the Commissioner's action”). See Phillips v.

Commissioner, 283 U.S. 589, 595-596 (1931) (holding that the Constitu-

tion does not require a prepayment forum to adjudicate tax disputes).

6

termination assessment, “could not reasonably be expected

to anticipate subsequent legal developments, nor could he

fairly be said to ‘know’ that the law forbade conduct not

previously identified as unlawful.” Harlow, 457 U.S. at 818.

The court of appeals thus correctly determined that McHugh

was entitled to qualified immunity.°

There is no merit to petitioner's contention (Pet. 6) that

the decision below conflicts with Rutherford v. United

States, 702 F.2d 580 (Sth Cir. 1983). That case involved a

Bivens claim for damages against an allegedly abusive

I.R.S. agent. The Fifth Circuit held that plaintiffs’ com-

plaint stated a cause of action for violation of protected

“liberty interests” (702 F.2d at 583-584), and remanded for

consideration of several “questions [that] remain[ed] unre-

soived,” including the agent’s possible “claim of qualified

immunity” (id. at 584). For the guidance of the trial judge

on remand, the Fifth Circuit quoted relevant passages from

Harlow and urged the district court “to give special atten-

tion * * * to deciding whether the [plaintiffs] have shown

that [the agent’s] actions violated a constitutional right so

clearly established that immunity would not attach” (id. at

585).

4. Finally, the court of appeals properly held (Pet. App.

24a) that petitioner’s failure “to come forward to show

genuine issues of material fact warrant[ed] summary judg-

ment for [respondent] Snider.” The latter’s involvement

*Under Harlow, the “subjective element of the good-faith defense”

—whether the official “ ‘took the action with the malicious intention to

cause a deprivation of constitutional rights or other injury’” — is

generally immaterial. See 457 U.S. at 815-818 (emphasis added), quot-

ing Wood vy. Strickland, 420 U.S. 308, 322 (1975). Even if McHugh's

subjective intent were relevant, petitioner offered no proof of malice on

his part; indeed, she admitted (see p. 3, supra) that she did not know

McHugh and had never spoken with him.

4

was minimal and there was no evidence that he had person-

ally deprived petitioner of any rights. This factual determi-

nation, in any event, does not merit this Court's review.

It is therefore respectfully submitted that the petition for

a writ of certiorari should be denied.

Rex E, Lee

Solicitor General

NOVEMBER 1983

DOJ-1983-11