Opposition Brief — S&P Co. v. Yorkshire

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No. 94-611

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IN THE

Supreme Court of the United States

OCTOBER TERM, 1994

S&P COMPANY,

Petitioner,

VS.

ANALEE YORKSHIRE and

INTERNAL REVENUE SERVICE,

Respondents.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

MARVIN G. BURNS

Counsel of Record

MICHAEL C. COHEN

DE CASTRO, WEST, CHODOROW & BURNS, INC.

Eighteenth Floor

10960 Wilshire Boulevard

Los Angeles, California 90024-3881

(310) 478-2541

Attorneys for Respondent

ANALEE YORKSHIRE

Lawyers Brief Service * Appellate Brief Printers * (213) 613-1013 + (714) 720-1510

No. 94-611

IN THE

Supreme Court of the United States

OCTOBER TERM, 1994

S&P COMPANY,

Petitioner,

VS.

ANALEE YORKSHIRE and

INTERNAL REVENUE SERVICE,

Respondents.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

MARVIN G. BURNS

Counsel of Record

MICHAEL C. COHEN

DE CASTRO, WEST, CHODOROW & BURNS, INC.

Eighteenth Floor

10960 Wilshire Boulevard

Los Angeles, California 90024-3881

(310) 478-2541

Attorneys for Respondent

ANALEE YORKSHIRE

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TABLE OF CONTENTS

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PRELIMINARY STATEMENT ........... |

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TABLE OF AUTHORITIES

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Cases

Church of Scientology of California v.

Internal Revenue Service,

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No. 94-611

In The

SUPREME COURT OF THE UNITED STATES

October Term, 1994

S&P COMPANY,

Petitioner,

VS.

ANALEE YORKSHIRE and

INTERNAL REVENUE SERVICE,

Respondents.

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

PRELIMINARY STATEMENT

On June 14, 1993, District Judge Mariana Pfaelzer

ordered the Internal Revenue Service (“IRS”) to produce

to Analee Yorkshire the consolidated tax returns and tax

return information of S&P Company, the parent corpora-

tion of Keller Street Development Company, in which

Ms. Yorkshire is a minority shareholder. Ms. Yorkshire

had requested these materials under the Freedom of

Information Act, 5 U.S.C. § 552 (“FOIA”). The District

Court’s ruling was affirmed by the Ninth Circuit on June

8, 1994. S&P now petitions this Court for a writ of

y 2

certiorari. Ms. Yorkshire objects.!

ARGUMENT”

There is no reason to grant certiorari in this case. The

case does not present any issues of constitutional law

and is not in conflict with the opinions of the Supreme

Court or any Circuit Court. This case involves the inter-

play of 26 U.S.C. § 6103(e)(1)(D)(iii), which grants a

1% shareholder of a corporation access to the corporate

tax return, with the consolidated return provisions of the

Internal Revenue Code, 26 U.S.C. § 1501, et seq., and it

is the only reported case ever to consider this issue.

S&P claims that the Ninth Circuit’s opinion conflicts

with Church of Scientology of California v. Internal

Revenue Service, 482 U.S. 9 (1987), and various Circuit

Court opinions. There is no such conflict. All of the

cases cited by S&P stand for the proposition that tax

returns are confidential unless there is an applicable

exception. There is nothing in that proposition which

conflicts with an opinion, such as the Ninth Circuit’s

opinion herein, that interprets the scope of one of the

statutorily created exceptions.

! The arguments set forth herein are substantially identical to the

arguments made by Ms. Yorkshire in response to S&P’s application

to Justice O’Connor for a stay pending disposition of the petition for

a writ of certiorari. Justice O’Connor denied the application for stay

on October 24, 1994.

2 Ms. Yorkshire has no objection to the portions of S&P’s petition

entitled “Questions Presented,” “Opinions Below,” “Jurisdiction,”

“Constitutional and Statutory Provisions Involved,” and “Statement

of the Case.”

a oF

S&P also errs in its contention that the Ninth Circuit’s

opinion conflicts with the language in Section 6103(e)

(1)(D)(iii) authorizing shareholders of a parent corpora-

tion to obtain access to a subsidiary’s tax return. There

is nothing inconsistent between (A) the statutory provi-

sion allowing “downward” access for shareholders re-

gardless of whether a consolidated return is filed and (B)

the Ninth Circuit’s holding allowing “upward” access for

shareholders only when a consolidated return is filed.

S&P also errs in arguing that the Ninth Circuit is

mistaken in its reasoning. As recognized by the Ninth

Circuit and the District Court, the key analytical point in

harmonizing Section 6103(e)(1)(D)(ili) with Section

1501, et seq., is that the filing of a consolidated return is

elective. A parent corporation that wishes to prevent a

minority shareholder of a subsidiary from having access

to the parent’s tax information can simply elect not to

file a consolidated return. While this may cause the

parent corporation not to elect a legal tax minimization

strategy, the Internal Revenue Code is replete with elec-

tions for which a taxpayer has to take into account

countervailing considerations. For example, a corpora-

tion considering the election of “Subchapter S” status

has to weigh the legal avoidance of corporate tax against

various restrictions on the ownership of stock. 26

U.S.C. §§ 1361(b) and 1363(a). Acceptance of S&P’s

analysis of Section 6103 would eviscerate Ms.

Yorkshire’s statutory right of access to Keller Street's

tax return solely because S&P elected to file a con-

solidated return.

x”

CONCLUSION

For the reasons set forth above, this Court should

deny S&P’s petition for a writ of certiorari.

DATED: October 28, 1994.

MARVIN G. BURNS

Counsel of Record

MICHAEL C. COHEN

DE CASTRO, WEST,

CHODOROW & BURNS, INC.

Attorneys for Respondent

ANALEE YORKSHIRE

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