IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

Case No. 1:22-cv-24023-SCOLA/GOODMAN

KENNETH C. GRIFFIN,

 Plaintiff,

 v. 

INTERNAL REVENUE SERVICE, et al., 

 Defendants. 

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REPLY IN SUPPORT OF THE UNITED STATES’ MOTION FOR A LIMITED STAY 

OF DISCOVERY

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Plaintiff’s opposition to the United States’ motion to stay ignores the reality of this case. 

On September 29, 2023, everything changed. Prior to that date, the parties did not know that a 

contractor—Charles Edward Littlejohn—wrongfully disclosed Plaintiff’s return information to 

ProPublica. This revelation largely mooted Plaintiff’s first set of discovery which sought to 

ascertain who disclosed Plaintiff’s return information. It also required Plaintiff to amend his 

complaint. 

Plaintiff filed his two-count second amended complaint on November 13, 2023—less 

than 30 days ago. Although Plaintiff continues to assert a modest claim against the United States 

under 26 U.S.C. § 7431(a)(1) for the wrongful disclosure of his return information, the United 

States has a new defense to that claim because we now know that the source of the disclosure 

was a contractor. Section 7431(a)(1) does not waive the Government’s sovereign immunity for 

wrongful disclosures made by contractors like Littlejohn who were authorized to receive 

taxpayer return information under 26 U.S.C. § 6103(n).

Plaintiff does not seriously dispute that Littlejohn was a contractor who received 

Plaintiff’s return information under § 6103(n). Instead, he attacks that fact as a self-serving 

characterization and argues that Littlejohn could be considered an “employee” if the Court 

adopts a “control” test applied in the federal tort context. The case he cites for that proposition 

only mentions the “control test” in dicta, however, and it applied a strict construction of 

“employee of the United States” to find that § 7431(a)(1) did not waive sovereign immunity for 

the actions of an employee working for a state agency administering a federal program. Adelman 

v. Discover Card Servs. Inc., 915 F. Supp. 1163, 1165-1166 (D. Utah 1996). We submit that is 

the proper analysis to apply here and simply ask the Court to stay discovery directed to the 

United States until it has had a fair opportunity to address the central question whether 

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Littlejohn’s conduct is actionable under § 7431(a)(1) or § 7431(a)(2).

1 See ECF No. 68 at 5-6 

(discussing the appropriateness of a stay when the United States raises sovereign immunity as a 

defense).

Contrary to Plaintiff’s argument, discovery is not needed to resolve the sovereign 

immunity issue. The Court can decide this issue based on a plain reading of § 7431(a) and from 

documents in the public record that undermine any factual basis to the Second Amended 

Complaint. Plaintiff may not like that the individual responsible for the disclosure of his return 

information was a contractor. But that doesn’t make it any less true.

Additionally, a stay of discovery will not unduly prejudice Plaintiff. He filed what 

amounts to a new lawsuit less than a month ago. Despite a modest request for damages, litigation 

costs, and attorneys’ fees (which Plaintiff cannot recover under any circumstances), Plaintiff has 

taken a scorched earth approach to discovery that is disconnected from the central issues before 

this Court. He presents a false narrative that the United States has put up roadblocks and failed to 

cooperate throughout discovery. The United States responded fully to Plaintiff’s first discovery 

requests based on the information available. And, as Plaintiff’s complaints and theories of the 

case have evolved, the United States has actively worked to gather responsive information. For 

example, the IRS—before the parties’ November 28, 2023 discovery hearing—conducted a 

search to locate the government contracts that Mr. Littlejohn worked on, and we have turned 

those over to Plaintiff. Thus, it was unnecessary for the Government to seek a stay earlier. But 

1 Plaintiff contends the Littlejohn disclosure to ProPublica only represents one of three claims he 

brings under § 7431(a)(1), but he does not plead his “alternative” theories of relief with the 

required specificity. He alleges no facts to support his conclusory allegation that the IRS 

negligently disclosed return information to Littlejohn. Indeed, he cannot do so because 

Littlejohn was authorized to access that information under § 6103(n). ECF No. 64-3 ¶ 3. 

Similarly, his failure to safeguard theory finds no support in § 7431, which provides a remedy for 

the wrongful inspection and/or disclosure of return information. 

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now that we know the source of the disclosure was a contractor and that Plaintiff continues to 

seek discovery, a limited stay is proper for the Court to determine if Plaintiff’s claim falls within 

§ 7431(a)(1)’s limited waiver of sovereign immunity. Indeed, responding to more than 200 

discovery requests before the Court addresses whether sovereign immunity bars Plaintiffs’ claim 

imposes an undue burden on the United States, which can be sued only with its express consent. 

By contrast, any prejudice that Plaintiff may suffer is mitigated by his ability to obtain thirdparty discovery and the Government’s production of the contracts under which Littlejohn worked 

during the period at issue. 

Even if the motion to dismiss does not resolve this case in its entirety (though it should), 

a limited stay is still appropriate because a ruling on the motion will guide whether (and how) 

discovery should proceed. For example, if the Court accepts Plaintiff’s argument that Littlejohn, 

despite being a contractor, may be considered an employee for § 7431(a)(1), limited discovery 

on Littlejohn’s status as an “employee” under § 7431(a)(1) likely will be necessary. This is 

significantly narrower discovery than propounded by Plaintiff to date. Thus, until the parties 

know that this case will proceed, in whole or in part, discovery should be stayed. 

Dated: December 12, 2023 Respectfully Submitted

DAVID A. HUBBERT

Deputy Assistant Attorney General 

Stephanie A. Sasarak 

STEPHANIE A. SASARAK

Maryland Bar No. 1012160096 

MARY ELIZABETH SMITH

Maryland Bar No. 0712110235 

Trial Attorneys, Tax Division 

U.S. Department of Justice 

P.O. Box 14198 

Washington, D.C. 20044 

202-307-2089 (v) | 202-514-4963 (f) 

Mary.E.Smith@usdoj.gov

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Stephanie.A.Sasarak@usdoj.gov 

Counsel for the United States

Of counsel:

MARKENZY LAPOINTE

United States Attorney

Southern District of Florida

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CERTIFICATE OF SERVICE

I hereby certify that on December 12, 2023, I filed a copy of the foregoing document with 

the Clerk of Court using the CM/ECF system, which will send notification to counsel of record. 

Stephanie A. Sasarak

STEPHANIE A. SASARAK

Trial Attorney

 U.S. Dept. of Justice, Tax Division 

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