on traffickers the th amendment is born out of tax collection and trafficking the british tax collectors were using the power rid of assistance to seek out merchants unlawfully trafficking in colonie legal goods so they could you sure so they were just trying to seize the goods as it were they were seizing the goods they were they were getting the information they had the british prosecutors on hand be able to prosecute for the unlawful trafficking of the goods these were goods that were allowed under the under the colonies a war really got by the time we got to the boston tea party we were dealing with dutch tea and the british did not like the fact that it that the colonists were importing that dutch tea and they put a hefty tax on the tea they were using the roots of assistance to help them find the dutch t do the tax collection and then also prosecute the merchants so there's a lot in a lot of ways what's going on here is that we're going full circle two hundred and fifty years backpack case the basic facts that issue here the government claims that taxpayers are federally unlawful taxed drug traffickers the government seeks to impose a tax law reserved only for unlawful drug traffickers the government seeks information of drug trafficking without a grant of immunity even though it's been requested and reserving full rights to share and use the information for criminal prosecution of drug trafficking were attached to the complaint there was an affidavit attached to the complaint that was samantha murphy's its declaration but it didn't contain the usual we incorporated by reference type language  research was actually a factual detail she actually set forth the facts and there in her declaration to the answer my question is yes yes yes it was well it was a it wasn't just you know it wasn't just a reference to the facts in the case she actually stated the facts in her declaration there's so interesting lead the government filed a motion to dismiss but also incorporated a motion to enforce the summons under seventy six so for state and asking for the state of colorado in order to enforce the state of colorado to provide the reports the state of colorado was never served the room court's order remind me does the court make reference to any facts whatsoever other than were attached to the complaint i believe there was a single declaration by samantha murphy when i say plural because there was a declaration submitted by the tax collector to the revenue agent in support of he relied primarily on the affidavit of the tax collector on this so he did in the court did rely on the affidavit at least the what you would consider a summary judgment or do we just proceed on the record as is i believe that because there are disputed facts in the case it would have to be remanded for further proceedings there the you know part of that is a belief d well what is what is that all about i mean they were not in churches they tell my clerks that i'm to time this court the one of the primary issues here is what is the nature of the proceeding is this criminal is this civil is this cause i criminal what are we having here and the clark supreme court case clark and i made that bear on the my question about summary judgment yes precisely because these are issues of fact that have to be resolved i understand and so i don't think that the court is in a position unless the core was of the court considered materials in its decision submitted by the adverse party and you are arguing that the court should have converted the matter into a summary judgment proceeding i take it for you to traverse the material submitted by the adverse by your adverse party is that precisely my own i ask you do we have to remand you really the time of the ball's in your court because you have to decide where are prejudiced in some way by not being able to submit additional evidence or can we just as a panel say you should have been considered under summary judgment standards and we're going to do that but we would be prejudicing you if there was additional evidence that you proposed to submit we don't have my question i believe that we are prejudiced at this point of ruling on summary judgment right now because of the issues of the purpose was this and was was this in good faith and you would propose to introduce the evidence on that point yes and we would want the sky every on those issues we believe we believe that i mean there are a number of things to like the documents even though we are public documents that we provided to the court in the last few days these are documents that the government was denying existence of we we believe that they were out there but we can source documents and selling them within the last couple weeks we were able to source the documents we believe that if we were able to get in and get discovery we could find out more about the enter agency agreement  o bring down state legal marijuana and that this is rather then this is revenue raising this is disrupt and dismantle this is they've they've stated that they're legitimate purposes they're conducting an audit and they're trying to determine your cost a good soul and they're seeking data relevant to that determination how does that how is that not a legitimate purpose we've held enforcement of the their civil tax liability and that's not even an issue here those cases involve section two either i think as i recall and we're not even talking about that we're talking about their requests for information to help them verify as they would in any taxpayer audit the cost of goods sold i'm failing to understand why that is not legitimate purpose and why they didn't establish that with their affidavit and how you've non tax crimes based upon the information they receive in this audit this is not your typical they don't have to do that they've got that authority and the civil tax law to seek that information what what evidence is there that they're seeking it for a legitimate non legitimate per save made it very clear that these are unlawful dr drug traffickers they are trying to heal no there and that it's unlawful under federal law as they point out that's not a dish you that's  questioning that they had they wouldn't have to look hard to to determine that and that's that's a given big to disagree with that it's not an issue whether whether this is a violation of federal law colorado and would you answer my question about why this is why their stated purpose is not a legitimate purpose these are marijuana plants that they're trying to get information of marijuana plant tracking this is the same information that could be used in the prosecutor's hands to as the march eighty case says convict overwhelmingly but it could also be used to show their stated purpose which is relevant to the cost of goods so well and that that would be the stated pretty just like ready there was a revenue raising piece in march eddie rosso leary haynes outwards and there was always a revenue aspect of it but they said when you start getting into these areas permeated with criminal statutes we have to look at it differently that shapiro require required records doctrine goes out the window if we were looking at widgets instead of marijuana we would be in the area that i think that you're you're going to but because we are dealing with marijuana a federally controlled substance where they could look depending on the amount of plants they're wanting to find out how many plants depending on the number of represented united states i'd like to begin by talking about the council but let's get to the procedural aspect of the case st the rules are quite clear that if a court trial court is going to consider materials outside of the complaint in a traditional eleven rule of a motion to dismiss that the court is to convert the proceedings into summary a summary judgment  savings so that the court and consider materials outside the complaint four corners of the complaint to afford the parties the opportunity to engage in their traditional summary judgment practice its bits purely rules and i think this court did an excellent job of explaining precisely what the interaction between the powell standard and the civil rules of procedure are in its high desert opinion i think it made very clear in high desert that to the sent that there was a  decision that the civil rules are different that's wrong however the substantive law is the substantive law and sometimes as here the substantive law requires particular things about burdens and when you know a little hyper and h however what this court said and it's in line with what the supreme court has said in cases and it's not inconsistent with clarke that said in the situation where there's these dueling motions and there was a petition aquash and then there's a counter claim for enforcement that the court's role the proceedings are quote this is quote from desert summary in nature and discovery should be limited and the court's role is quote to ask only whether the i r s has issued the summons in good faith and then it went on to go through that typical powell burden shifting framework where as an initial matter the government has to make out of a claim that the power factors are satisfied and typically it does that by after david submission from the i r s agent and then that not burden is a slight one and then then there's a burden significant burden to rebut that and to show bad faith which  so that that's exactly the burden shifting framework that that the district court that the magistrate judge in the district court underwent here it did the court did cite bill real the prior pinion it was you know was it didn't undo the court's you know following of the of the standard and it's not in conflict with the way that this court laid it out in the desert one thing i want to be really and create a fairly light burden on the government to come forward with evidence that meet the prime aphasia case which the government clearly did hear one thing i want to be very clear on because i think it's there's been some confusion about this in the some of the twenty eight letters aquash the party who petitions to quash has to notify colorado of that petition and then colorado has a right to intervene and according to the statute expressly shall be bound by the decision in the investigation is pursuant to a legitimate purpose it's relevant exciter then the burden shifts to the taxpayer that's examined under clark under balance to financial management and under the terms of high desert itself the bird the taxpayer has to show that it has a defense based on its temperature e presentation regarding the issue of good faith that's right and i want  council as i understand it seeks to do and they say as i understand their position i guess it was beat for themselves is that but i think i heard him say that their burden is they can't meet that burden unless they introduce evidence on that point well the standard itself and this is been this is repeated in high desert and has been said in other cases that that unless the proceedings are supposed to be summary in nature and and discovery should be limited here i would point out that the substance of the good faith the claim that the government is not acting in good faith is a claim that somehow the government is either in this proceeding sneaking in a criminal investigation or was or will later use the information to pursue a criminal investigation this court also addressed that claim because it was the same claim that was sort of the central claim in high desert and what this court said in high desert is that the ira in fact was the quote the iris in fact has the authority to investigate whether a party is in a controlled substance in order to apply section two e and that the marijuana dispensary quote does not succeed in creating a genuine dispute a material fact on about the irises good faith on that ground statement you know he he says he says directly you know we're looking to substantiate income looking to verify gross receipts looking to verify cost of goods sold with respect to satis of the of staining akimbo as a anti that's trafficking in a controlled substance notes based on own website that sanny akimbo has been providing denver high quality cannabis in the sunnyside neighborhood since two thousand and ten right so that's that's the principle to the extent there's any information in here that's just for focused on to eat it's it's that rather seeking from submitting it or referring it for criminal prosecution well there's there's a standard so there's a section the standard that deals with that is section sixty one dollars of three of the internal revenue code and it has  information involved in many instances actually requires a department of justice to get to a court or to get a order from a magistrate or a district judge to obtain certain information other types of information can be well it is possible in general for right for the i r s subject to the limitations of sixty one or three to in certain circumstances provide information to the department of justice that would be relevant to a criminal matter that's that's a framework that congress says that it shou colorado law what these growers are doing is lawful nothing illegal about it under state law correct that's true under state law under federal law and this is where the rub comes in the the matter can be criminally prosecuted yes correct correct are so and that's purely why i asked the question is is there anything that  from referring it to criminal prosecutors in your answer as it's possible but there's that story framework that relates to the bad that's right out in in high desert we said that we were the taxpayers l like but what i do know is that percy drily if the if we proceed under summary judgment they would have been entitled to introduce that evidence whatever it may be if we proceed as the trial court proceeded without an opportunity for them to introduce their traditionally traduce of or at least i don't know if they were traduce of but under the rules of the words of the rule to traduce the previous affidavits they're there dot now able to do so and we just have to proceed as judge mort's points on the record as it is  an allegation that is substantial that the that it's the court should dispose of the proceedings on the papers before without evidence or hearing so i think in this is the government is going to you know use it in force me to obtain evidence of trafficking the that's that's appropriate this court says this this court says infact that the state that they don't but basically have standing to assert on behalf of the state of colorado that the state is being compelled to produce confidential information correct yes right that your one of your argument yes and i would say i guess we'd say two things one is it's not at all clear and there's no authority cited for the for the proposition that this kind of this closure actually violates state law so another talking your other argument is even without even without this amendment you're not it's not necessarily clear that the statue would prohibit the state from producing those records and that's a state objection to make that's right and  line of cases because it dealt with methodology powers we're dealing with the methodology is right now with regard to high desert high desert was not dealing with this issue of the reservation of rights to prosecute i don't believe the other thing too is that high desert was dealing with utility bills and bank statements we are dealing with the tracking of marijuana plants in here  i'd be but they the secretary in the secretary's discretion can transmit information and this plant tracking information which certainly qualify as information that could be transmitted in the in the commissioner's discretion to the prosecutors for criminal prosecution purposes i would i have a question about the procedural i see you have all you had that one page argument on page eighteen of your brief about the  and failing to apply the traditional summary judgment standards it's it's a one page argument and i don't i don't see anywhere where you make the argument that i think you're making today which is that the the error was that you need to do more discovery on this good faith and on your affirmative defense is the argument simply is a one page argument saying they applied the incorrect summary judgment standard where did you make this argument that we and she needed more discoveries and i think i'd have to take a look at our briefing but i'm sure it's in our briefing that what you have to take a look under a summary judgment standard and i think you ask the court to treat it as a summary judgment rather than a motion to dismiss right and so i'm going i'm kind of confused about the position now that well i mean she every man because you needed further discovery well part of what we have here it with regard to the summary judgment standard that we have we were given no ability to to make create the question of fact they were just looking at it as a summary pretty like the p standards provide for a very limited purdon on the part of the game and once they establish that burden you have the opportunity come back with what you come back with and that's what the district court applied that the powell standard what but it wasn't a summary judgment