parallel case in the court of federal claims there were were at least some settlement discussions regarding the claim that is going forward in that court  and i don't believe if i understand our docket correctly that there have been efforts made to mediate this case answer rap rap a settlement around everything that's pending and i just ask  you whether you think it would be helpful or potentially helpful to refer this case to mediation if if the government thought it was helpful we would consider mediation your honor i thought that in this case it was routinely sent to the mediation apartment and that a determination was made that it would not be helpful but we are prepared to mediate the discovery has been basically completed and the fact discovery that is we are expecting that the government will renew its attempt to throw the case out of court by filing a summary judgment  seems on workable to judge great respondent that perhaps roping everything together to try to resolve the actual dispute would be we are certainly willing to consider mediation and settlement of the entire dispute if the government in good faith wishes to do that we do agree that there are since there are it's unfortunate in the sense that congress is set up to have frank tracks that we must go down for to rise to take care of claims arising out of the same situation but it's not the first time that's happened and it's not the first time we've suggested that perhaps rather than keeping a lot of lawyers busy working feast me on the same problem that they sit down to try to come up with a more holistic approach this is true unfortunately my concern in this case like we had in the angel case and cited in the in the brief is that the government doesn't have much of an interest in settling and that and that's why we haven't made a lot of progress in that direction well we haven't heard from the government yet on that point that is true and in this case the government clearly exceeded those limits i'd like to address that briefly and then i'll touch briefly on the law enforcement privy to and then i'll touch briefly on the remaining arguments that the government has by the court should not be lower court should not be reversed i hope to reserve a couple of minutes for rebuttal in this if you if one looks at the totality of the cases construing section twenty six eighty see the exclusion of jurisdiction relating to claims that rising out of the assessment in collection of taxes we see that they invariably arise under basically the cot basically the context of taxpayers they're seeking to recover money that taxes that they paid to the collection of taxes from them through the taxpayers making those claims or they are people that stand in the shoes of taxpayers or people that whose tax people who had an interest in tax property was collected or they are the actual tax collector themselves that was involved in that case in our situation we have a case that's completely unique and distinct we have someone that is more in the nature of a commercial vendor that was dealing with the i r s in the course of its criminal investigation and let the government borrow money so that the government could conduct its criminal investigation and then there was report that occurred when the government refused and failed to repay that money and retaliated against the businesses for asking that it be repaid so this situation has nothing to do with the assessment section or collection of the tax because nothing none of the outcome of this case will not effect in any way the government's ability to collect a tax the amount of attacks to do whether a refund is do or anything else you know i think that is at stake in this case is whether it's someone who based who lent the government money who provided funds to the government for its investigation is entitle to be repaid now in we know that there is no prohibition in the federal tort claims act against claims against the government arising out of a criminal build your case than others and the government allowed injured citizens the courts allowed innocent citizens to pursue port claims arising out of those probably best a geisha and this is basically the same situation we have here am i correct in they're having a hard time hearing forgive me i don't know why the criminal nature matters as long as they meet me in the language of twenty six a t c speaks to whether or not it's an effort to assess or collect the tax and so some of those that work is done on the civil side and some of it's done on the criminal side but it seems to me that if it's fairly described as an effort to assess or collect that it's within the scope of the the exception to the waiver isn't it i don't i think there is no i agree there's no specific civil criminal distinction in twenty six a t c but the conduct here of the government is not a visa v our client the plaintiff does not relate to the assessment or collection of attacks are not seeking it's seems to me it the conduct of the government here arguably doesn't relate to assessment or collection of attacks as to anybody but certainly not as to your client that is correct here every day you use the word loan i think you said they lent the money but your client's money was used as bait yes that the fifth circuit has applied this and we have said in in our right case that the scope of twenty six a t c is not unlimited but has the ninth circuit ever applied in the way you suggest or have we ever found a  risk conduct to be beyond the scope i don't think the court has ever considered a situation like this right and i'm try if they would if we haven't found one but i also have a kind of a situation where we have a found that conduct  by by the i r s has has exceeded the scope of twenty six a t c have i'm not aware of that your honor ok and the fifth circuit has yes has anybody else well yes in well into her retaliation going on against the plaintiff for activities that the plaintiff a done in connection with that defending assessment action of tax cases and this was out of the this is a district court case out of the fourth circuit johnson case the fifth circuit took this on and i thought the johnson case was interesting because you don't usually get a rise out of an effort to assess or collect taxes there was an allegation there of tax evasion right i think originally yes but the that is it just seems to me that comes closer to the line because at least it least started in the context of assessing or or or collecting in that case saying they were looking into whether or not at the docks and had been claimed correctly  investigation it was basically severed just like you know it was the end of an investigation as far as we were concerned our clients just wanted to be repaid back the money and then the governor italia did said no we're not going to write but what failed you but what the government's argument here is that this is part of assessing  collecting because there were there were refunds that were claimed on the other side of the court not visa be your client but what's your response to that well i don't think we interpret section twenty six a t c that way because the intent of congress as far as we know in passing that particular section was to say that the government congress has set up other avenues of relief for taxpayers for people those taxes risks that mistakenly assessed and collected and so we're not going to give those taxpayers those people already have an avenue of relief yet another way we're not going to duplicate that machinery and so the taxpayers can you know a pursue their other course of action we're not of to our clients aren't taxpayers here so there is no other mechanism relief for them and so the scope of twenty six eighty c shouldn't be  know there was no intent to apply twenty six a t p city here to taxpayers in our situation because they don't have that remedy that congress assumed was in place when they adopted twenty six and he says there any case law whether it's in the court of federal claims in contract or for sting operation for the import ation of customs importation of paintings in the united states and there the government spends asked the bank a bank to advance money to the sting victim ok the collect money from a taxpayer am those that may involve third parties and your thirty your third party to an effort let's opposed to suppose that i thought that they were that this was an effort to collect taxes from the people who were defrauding the government your  client is not one of those people that is going after thirty third party totally independent third party and there's never been to see my mike my question is are there any cases out there involving twenty six eighty see that involved third parties where the court said it applies no i would say no the government will say perkins is such a case but perkins is not a true third party perkins t elector died and right so so collecting the mining equipment right yes but that it cost a wrongful death and it's but that's still an effort to to basically to collect that's why i say it doesn't i don't think it's it's truly a third party case but the plaintiff there was not the party against whom the assessment had been made is that correct that is correct but the plaintiff was the tax collector so the plaintiff was the person working on behalf of the government to go and collect the tax we're not in that situation that he was there because now it's my contractor i guess but he was an outside contractor tax collector and going out to collect that particular tax and i want you to prevail we wouldn't have to make such a broad statement that all third parties aren't covered by this section because i connect envision for example the someone their records are sought in order to help assess a tax on someone else and there's a problem with that but that's clearly arising out of efforts to assess tax and what i guess i'm struggling to figure out if it isn't just a line at the third party how we would define or limit the line you're seeking us to to draw i think if you go back what the court can go back and look and see what was twenty six eighty s he intended to do it was intended to avoid duplicating relief for tax payers whose taxes had been wrongfully taken by the government and i already tensional a broader than that to me because to me looking just looking at the words of it it would cover the the hypothetical what i've just raised i'm trying to find you know the is trying to figure out judged by b s taxes and they say the judge kristen has records that are relevant to that and they issue a subpoena and there are problems over on this i'm not sure why that wouldn't be covered even though it isn't the taxpayer who would be involved directly because that person has no congress didn't intended to exclude that second person from a remedy there and they only intended to protect and preserve spare mechanisms and avoid duplicating those and so there was no intent to congress passed the the congress passed a federal port claims act to grant relief to two tax compensation that were then being submitted to congress so there wasn't any particular need to grant taxpayers that relief because they already had a mechanism for it ok but in our situation there isn't a mechanism for for me you have handling the case in the court of federal claims but i have spoken with her as opposing counsel said discovery has concluded and it's expected that the government will file a summary judgment motion by february twenty eighth i believe honor for two reasons were in the procedural posture and it's really worry of seeing the panel to decide legal issues if in fact the result is adverse to the government it would go back to the district court for factual development and it might at that time be a better time to address settlement depending on what the facts are these the claim under the federal tort claims act also it does sound in the presentation made by opposing counsel to the court it does really sound when he referred to his client as a commercial vendor it does sound much more like a contract claim that belongs in the court of federal claims and that may be the best place to work out this issue if need be collection process presupposes that there's a tax to do and these are folks that didn't this had nothing to do with them paying income taxes right they were ripping off the government they're filing for false refunds but i don't know the nature of the false refund first in order to get a refund tax has to be collected generally the government has money that it's collected that it needs to refund because everything isn't due and owing we don't know any of that in this case right you haven't taken a position here you're taking a position here that you're just immune period so we haven't gotten to any of that yet what we know is visa v at least in the allegations in the in the briefs that this third party is i think it's entirely innocent the government's not claiming that he did anything wrong i think it was yesterday as far as i know we haven't taken a position in this case certainly because as i noted we haven't gotten the factual development i don't believe that is the position in the court of federal interfering with attack we're basically you have a sitting going on here and we want to use your money as bait that's his allegation and the governor and the money wasn't returned and it's millions of dollars and the government's response is we're immune that right yes under twenty six eighty see it falls within the tax exemption but the tax exemption requires that there of that whatever is claimed horizon in respect of the collection or assessment of tax it doesn't say you collect taxes from a taxpayer who owes money and when a scam artist is out there trying to rip off the government or rip off private parties i have difficulty seeing how that has to do with the collection or assessment of a tax as distinct from trying to keep the process from being fraudulent which is somewhat of a different now we know based on the allegations in the of the complaint that a fraudulent return was submitted and that someone went in with false identification in an attempt to cash that check i don't know at this point if it's clear that it was simple identity theft or if in fact a fraudulent return had been submitted claiming a greater refund that was but your response whatever merely that nuanced your response is that the government's not going to be accountable either way yes i think so because as based on the ethnic casualty case refunds fall within collection well it's not it's not absolute immunity no it's not no it's fall with outside his duties and here he was acting well within his duties to criminally investigate them for what if what if the what if the tax collector what if an i r s agent were on his way to pick up a check in settlement and ran a stop sign and hit somebody and driving i haven't driving a government car i understand your honor and i have to be honest i don't know what the government's defense of that action would be if it could be tied to pull action in some sort or i said gave you the facts and i'll use ways not is on his way to lunch he's on his way to a house to pick up a check in settlement they worked all this out spend long long hard negotiations and the agent is going to go over there and and and pick up the check he's driving a government car pulls through a stop sign hit somebody now what i might it is conceivable that the government under those possibly the what would be the purpose for that because this is what the f t c a was adopted for the first place was so that we didn't have to have the private bill so that if the sergeant on the air base pulls through in the jeep and hits it's the family in the van on their way to the barracks he maintained that twenty six a b c was a remedy for people who had no other remedy available now at least on the facts in this case he does have another remedy available in the court of federal claims but whether or not that may be successful  it is being tied directly to collection but i would also say that one of the policies underlying twenty six a t c is that the government or the i r s is collection of enforcement efforts not be dampened that the i r s is not  fell within their duties there could be i don't know how many car accidents there would be but there could be several hundred f t ca claims and that that would not only hamper the effect of the ability of the i r s to conduct its business by defending these lawsuits but as the f t c a is a waiver of seven or munity it would be opening the purse very strings to paying out and that's it well yes but that's if that's congress isn't tant and the government acts wrongfully then it ought to be paying people damages so are not sure the policy argument helps you but it seems to me that in this case the alleged damages arise in respect of the investigation of fraud against the united states and it's it seems quite far removed from the actual collection of attacks the actual assessment of attacks because it's not about that the investigation is about stealing from the government but stealing from the government in connection with a refund it's for example it is not so why should this be why do you think congress would have differentiated this from someone who is out of pocket because they were helping the reason why it would be treated differently and i think i've explained earlier that they view the collection of the revenue assessment of collection is the sacrosanct set of duties or responsibilities that they want to protect any fact pattern that comes close to this one i think well it's probably it's a probably a combination of cases at new casualty which talks about refund and i would also say that it was more than just stealing from the government these were tough this is necessarily the collection or assessment of a tax well that and this may be talking past your question in a criminal civil doesn't matter as long as a collection is an issue and we would maintain that the equipment to satisfy a tax lien that's assessment or collection right it's a third party but we're maintaining again that the refunds at issue here are part of the collection process and that refunds and determining whether those were bona fide refunds are part of view the third party question as only a piece of it because it seems to speaking for myself as i plod through these these issues it seems to me that claims by third parties could well fall into the collection assessment of a tax so being a third party doesn't doesn't mean that this doesn't apply but i'm more concerned about whether the basic activity in which the i r s is engaged here counts as like collection or assessment of attacks in the first place and that's my concern i understand your honor and i would repeat that we believe that the refund activity falls within collection but in regard to your earlier point about this being a criminal investigation although the district court didn't reach a section twenty six exception for the discretionary function under the federal tort claims act would also apply here it's a criminal investigation and clearly the government has discretion in the way it conducts a criminal investigation and have discretion to keep other people's money well there's they would have to conduct discovery if they went down that route look at whether policies or practices are in third issue when they induct conduct this kind of sting operation right then and that hasn't been reached in the district are you asking us to reach that in the first instance i think that you can because when you look at the pleading here and also in response to our briefing  the other side has not identified any statute any regulation or any policy that was violated by the conduct of the agent in this case your position counsel of the united states government could ask a citizen to participate in  in his words loaned money uses it as bait to not interrupt a sting operation and that it's the government has the discretion to keep that money we have to accept the allegations as pled in the complaint and i would say yes that falls under twenty six eighty yes it could very well be a taking problem and that goes back to my earlier point that something within the purview i believe of the court of federal claims action that's not a federal tort claim act they claim they would not be left without a without a remedy as i said there's nothing that's been pled in the complaint or in response to the internal revenue manual sites about discretion in conducting an investigation that has been rebutted and certainly that's public record are recognized your honor s difficult case and the facts as pled are unfortunate but is it is our position that either the tax exception or the discretionary function exception applies thank you thank you counsel very briefly under the discretionary function exemption there is no regulation policy or procedure which gives the government the discretion to violate the constitution and once we conduct discovery will be able to show the specific regulations that were involved having to go in and take somebody get somebody's house to get somebody out of the house in a very hostile situation in the process of doing that they ended up destroying part of a neighbor's property and these are the kinds of things that occur in wartime and things like that we've always held that the takings clause doesn't apply to those kinds of to those kinds of things when the government may be liable in takings but doesn't but it's not a constitutional to take property i agree with everything the court said but i don't think we're in that situation because there's going to be a regulation that will say ira that the agent does not have the authority to borrow money from the taxpayer without or if there is going to be a regulation i believe there will be a regulation you don't have if you don't want to speculate as public where it is you're i don't have a now and i'm speaking based on discovery that's been commenced in the other case but i think what we're going to find out is that the that the agents in question did not follow proper channels and they did not have the authority they did not get youth already ahead of time to borrow money and you get not get the authority ahead of time to make promises to pay it back and therefore they would have acted outside the discretion in taking those steps and the agents would have been out of there out of the out of their element out of their responsibilities even if your client had never discovered what was going on here yes i believe so out of compliance with their their and out of compliance with their own policies and procedures