Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-90-08112/USCOURTS-ca10-90-08112-0/pdf.json

Parties Involved:
Kathy Nollsch
Appellant
United States of America
Appellee

Document Text:

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

KATHY NOLLSCH, 

Plaintiff-Appellant, 

J N 171991 

DOBERT L. HOECKER 

Clerk 

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No. 90-8112 

(D.C. No.C-89-328-J) 

(D. Wyo.) 

UNITED STATES OF AMERICA, 

Defendant-Appellee. 

ORDER AND JUDGMENT* 

Before McKAY, SEYMOUR, and EBEL, Circuit Judges. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); 10th Cir. R. 34.1.9. The cause is therefore ordered 

submitted without oral argument. 

Appellant Kathy Nollsch appeals from the district court's 

judgment awarding her damages and costs in her successful suit 

against the Internal Revenue Service (IRS) under 26 u.s.c. § 7431 

(1988) for the unauthorized disclosure of her tax returns. 

*This order and judgment has no precedential value and shall not 

be cited, or used by any court within the Tenth Circuit, except 

for purposes of establishing the doctrines of the law of the case, 

res judicata, or collateral estoppel. 10th Cir. R. 36.3. 

Appellate Case: 90-8112 Document: 010110120919 Date Filed: 06/17/1991 Page: 1 
Section 7431 provides in pertinent part: 

11 (a) In general. --

( l) Disclosure by employee of United States. -- If 

any officer or employee of the United States knowingly, 

or by reason of negligence, discloses any return or 

return information with respect to a taxpayer in 

violation of any provision of section 6103, such 

taxpayer may bring a civil action for damages against 

the United States in a district court of the United 

States. 

II 

"(c) Damages. -- In any action brought under subsection 

(a), upon a finding of liability on the part of the 

defendant, the defendant shall be liable to the 

plaintiff in any amount equal to the sum of --

(1) the greater of --

(A) $1,000 for each act of unauthorized 

disclosure of a return or return information with 

respect to which such defendant is found liable, or 

(B) the sum of --

(i) the actual damages sustained by the 

plaintiff as a result of such unauthorized 

disclosure, plus 

(ii) in the case of a willful disclosure 

or a disclosure which is the result of gross 

negligence, punitive damages, plus 

(2) the costs of the action." 

The district court granted summary judgment in favor of Ms. 

Nollsch on the issue of liability. After a trial to determine 

damages, the court held that Ms. Nollsch failed to prove she 

sustained actual damages due to the unauthorized disclosure. The 

court therefore denied her claim for punitive damages and awarded 

her $1,000. 

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Appellate Case: 90-8112 Document: 010110120919 Date Filed: 06/17/1991 Page: 2 
Ms. Nollsch first argues that the district court erred by not 

awarding her the $10,000 she prayed for in count three of her 

complaint for damages to her reputation and property. She claims 

that the government conceded this issue below. However, the 

record does not support a concession of Count III by the IRS. 

Moreover, not only did Ms. Nollsch not present evidence at trial 

to support this claim, she expressly maintained at that time that 

her actual damages amounted to only $2,607.45 -- none of which she 

attributed to damage to her reputation or property. Indeed, in 

her brief to this court, Ms. Nollsch seems to concede she did not 

attempt to prove damages under this theory. See Appellant's Brief 

at 9. But, even if she did, the amount of damages incurred is a 

question for the trier of fact that will not be disturbed on 

appeal unless it is clearly erroneous. Cf. Bill's Coal Co. v. Bd. 

of Public Utilities, 887 F.2d 242, 245 (10th Cir. 1989). Because 

Ms. Nollsch failed to designate the trial transcript as part of 

the record on appeal, we are unable to review the district court's 

determination on this issue. See United States v. Mobile 

Materials, Inc., 871 F.2d 902, 918 (10th Cir. 1989), cert. denied, 

110 S. Ct. 837 (1990); United States v. Hart, 729 F.2d 662, 671 

(10th Cir. 1984) ("It is the responsibility of the appellant to 

insure that all materials on which [she] seeks to rely are part of 

the record on appeal."), cert. denied, 469 U.S. 1161 (1985). 

Ms. Nollsch next contends that the IRS should have been 

subject to punitive damages, arguing that the district court erred 

by not finding that the unauthorized disclosure was willful or 

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Appellate Case: 90-8112 Document: 010110120919 Date Filed: 06/17/1991 Page: 3 
grossly negligent. Again, this issue is largely one of fact that 

is to be reviewed under the clearly erroneous standard. See 

United States v. Roberts, 898 F.2d 1465, 1468 (10th Cir. 1990) 

(where question involves primarily a factual inquiry, clearly 

erroneous standard appropriate). Therefore, it is also one we are 

unable to review without the aid of a trial transcript. 

Finally, Ms. Nollsch maintains that the district court erred 

by refusing to award as costs under 26 u.s.c. § 7430 (1988) and 28 

u.s.c. § 1920 (1988) expenditures for paralegal assistance and 

money lost due to the work she missed to prepare for the case. 

The IRS answers that section 7430 is inapplicable to an 

unauthorized disclosure case and that, by its terms, section 1920 

does not provide compensation for these types of costs. We review 

denial of litigation costs under an abuse of discretion standard. 

Meller v. Heil Co., 745 F.2d 1297, 1304 (10th Cir.), cert. denied, 

467 U.S. 1206 (1984). 

In order to be awarded costs under section 7430, a taxpayer 

must prove that she was the "prevailing party" within the meaning 

of the statute. Huckaby v. Dep't of Treasuryf 804 F.2d 297, 298 

(5th Cir. 1986). Section 7430(c)(4) provides the following 

definition of "prevailing party": 

"(A) In general. -- The term 'prevailing party' 

means any party to any proceeding to which subsection 

(a) applies (other than the United States or any 

creditor of the taxpayer involved) --

(i) which establishes that the position 

of the United States in the proceeding was not 

substantially justified, 

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Appellate Case: 90-8112 Document: 010110120919 Date Filed: 06/17/1991 Page: 4 
(ii) which 

(I) has substantially prevailed 

with respect to the amount in 

controversy, or 

(II) has substantially prevailed 

with respect to the most significant 

issue or set of issues presented. 

"(B) Determination as to prevailing party. -- Any 

determination under subparagraph (A) as to whether a 

party is a prevailing party shall be made by agreement 

of the parties or --

(i) in the case where the final determination with respect to the tax, interest, or 

penalty is made at the administrative level, 

by the Internal Revenue Service, or 

(ii) in the case where such final determination is made by a court, the court." 

§ 7430(c)(4) (emphasis added). There is no indication in the 

record before us that Ms. Nollsch attempted below to establish 

that the position of the United States was substantially 

unjustified. See Smith v. United States, 735 F. Supp. 1396, 1401 

(C.D. Ill. 1990) (fact that district court granted summary 

judgment in favor of plaintiff on issue of liability does not 

establish that position of government not substantially 

justified); see also Huckaby, 804 F.2d at 299 (same under prior 

version of§ 7430 requiring government's position to be 

"unreasonable"). Thus, we cannot say the court abused its 

discretion in denying costs under section 7430. 

Ms. Nollsch's costs must therefore be limited to those 

allowed under section 1920. That section provides: 

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Appellate Case: 90-8112 Document: 010110120919 Date Filed: 06/17/1991 Page: 5 
... • • I.or-

"A judge or clerk of any court of the United States 

may tax as costs the following: 

(1) Fees of the clerk and marshal; 

(2) Fees of the court reporter for all or any part 

of the stenographic transcript necessarily obtained for 

use in the case; 

(3) Fees and disbursements for printing and 

witnesses; 

(4) Fees for exemplification and copies of papers 

necessarily obtained for use in the case; 

(5) Docket fees under section 1923 of this title." 

Neither paralegal assistance nor time spent in preparation for 

self-representation are listed as allowable costs under section 

1920. Consequently, the court did not abuse its discretion in its 

award of costs. 

AFFIRMED. 

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Entered for the Court 

Stephanie K. Seymour 

Circuit Judge 

Appellate Case: 90-8112 Document: 010110120919 Date Filed: 06/17/1991 Page: 6