In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 05-4788

SOPHIE A. SZOPA,

Plaintiff-Appellant,

v.

UNITED STATES OF AMERICA,

Defendant-Appellee.

____________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 05 C 1751—William J. Hibbler, Judge.

____________

SUBMITTED JULY 31, 2006—DECIDED AUGUST 21, 2006

____________

Before EASTERBROOK, WOOD, and SYKES, Circuit Judges.

EASTERBROOK, Circuit Judge. Our first opinion, 453 F.3d

455 (7th Cir. 2006), not only affirmed the district court’s

decision but also concluded that the appeal is frivolous

and granted the United States’ motion for sanctions. We

expressed skepticism, however, about the Tax Division’s

request to set the presumptive sanction in tax-protest cases

at $8,000, which it says is $3,000 less than the average

expense of handling frivolous appeals. We asked the parties

to file additional memoranda concerning the legal services

for which the United States must pay to defend such

appeals. The government’s response is packed with data but

does not allay our concerns.
2 No. 05-4788

Our first opinion used a back-of-the-envelope approach to

calculate that it costs the Tax Division about $1,136 per day

(or $142 per hour) for an experienced appellate lawyer,

including all support expenses. The statement that each

appeal costs $11,000 thus implied that it takes about two

working weeks to brief a frivolous appeal, a number we

found hard to believe. The response shows that our estimate

came pretty close: the Department of Justice uses $139 per

hour as the full cost (including fringe benefits and overhead) for lawyers who staff the Tax Division’s Appellate

Section. Thus our inference—that the Appellate Section

devotes something near 10 days to each frivolous appeal—turns out to be correct. The response tells us that the

average is 89 attorney hours, or 11+ work days per appeal.

Szopa’s appeal required 53 attorney hours (45 by the

attorney who wrote the brief and 8 hours for review within

the Appellate Section) plus 8 hours of paralegal time at $83

per hour, for a total of $8,031. And this for a 15-page brief.

That’s about four hours a page, or 53 words per hour at a

cost of $2.80 per word. (The brief contained about 2,800

words.)

In one respect the response is reassuring. We asked why

the cost of handling frivolous appeals had risen so fast since

1985, when the presumptive sanction of $1,500 was

adopted. It turns out that the $1,500 was based on the

average award by courts of appeals rather than the Tax

Division’s actual costs. So the proposed increase (from

$2,700 in 2005 dollars to the $11,000 average cost, and the

$8,000 per appeal sanction that the Department now wants

us to adopt) no longer looks like a rapid decline in the Tax

Division’s productivity. What is not reassuring is the fact

that productivity appears to have been low all along.

Investing 11 days (on average) of legal time per frivolous

appeal is not prudent; what makes an appeal frivolous,

after all, is that the arguments have been presented and

rejected before, and tax-protest appeals entail arguments
No. 05-4788 3

rejected many times. Why does it take 89 hours on average

(or 53 hours in Szopa’s case) to prepare a brief pointing this

out?

A court asked to award sanctions that compensate the

prevailing party for attorneys’ fees must ensure that the

time was reasonably devoted to the litigation. See, e.g.,

Budget Rent-a-Car System, Inc. v. Consolidated Equity LLC,

428 F.3d 717 (7th Cir. 2005) (holding that 13.7 hours of

high-priced time to prepare and file a motion to dismiss a

frivolous appeal was excessive). The Tax Division’s rates are

less than those of tax partners at private firms, but the

time devoted to frivolous appeals still must be reasonable

if the other side is to be called on to pay for it.

The Department’s memorandum observes: “We have . . .

long seen it as our responsibility, even in the most frivolous

cases, to spend the time necessary to parse through [sic] the

often convoluted and unintelligible arguments of tax

protesters so that their cases might be presented to the

court in as coherent a fashion as possible. Lawyers in the

private sector, who are not held to such a high standard by

the courts, are under no similar compunction.” The point is

well taken, and the assistance is much appreciated. Still,

the lawyers of the Tax Division are specialists, and when a

given point is made and rejected over and over—often

enough to be called frivolous when advanced again—it is

not asking too much for the Tax Division to find a lawyer

who has seen it before and can prepare a response in short

order. This is why our first opinion remarked that half of

the brief must have come from a word processor’s glossary:

The relation between a District Court and the Tax Court

under 26 U.S.C. §6330(d)(1) is hardly novel. We benefited

from a compact statement of that relation in the appellee’s

brief, but this cannot have been the first time that the Tax

Division prepared such a recap.

None of Szopa’s filings was unclear. Her brief was neatly

typed (unlike the scrawled longhand that we encounter
4 No. 05-4788

all too often) and took only 9 double-spaced pages to present

both the facts and the argument. Szopa’s brief made it

pellucid that everything depends on her assertion that the

federal income tax is not, after all, on “income” but is on

“employment” and that non-corporate citizens of the United

States need not pay “income taxes.” If that proposition is

wrong—as it is—then affirmance follows directly. The

district judge required less than one page to dispose of the

litigation. No explication was necessary. Yet the Tax

Division tells us that it still took 53 hours of tax specialists’

time to prepare and review a 15-page brief. That cannot be

understood as an investment necessary to translate a tax

protester’s gibberish into legal English.

The Tax Division has explained why the amounts chosen

as presumptive sanctions in 1986 and 1996 should not be

used as the basis for sanctions today. It has not adequately

justified a sanction that rests on an average of 89 hours

of legal time (the $11,000 figure) or even 57.5 hours (which

is what the requested $8,000 sanction works out to). Thirty

hours is more plausible, and even this strikes us as generous to the Tax Division. So we adopt a presumptive sanction

of $4,000 for a frivolous tax appeal. The choice

is necessarily arbitrary; and to the extent there is doubt

about whether this represents a reasonable average

investment in legal time we resolve it in favor of the victim

rather than the perpetrator of frivolous litigation. Consistent with our first opinion the presumptive award will

be doubled for a recidivist litigator. The Department is

free to request more when the case is especially complex

or the tax protester’s argument especially long and opaque.

Szopa is a recidivist, so her final sanction is $8,000,

payable immediately. We told Szopa in the first opinion

that if the interim award ($5,400) was not paid within 10

days, she would be barred from filing further civil suits

in the courts of this circuit under the terms of Support

Systems International, Inc. v. Mack, 45 F.3d 185 (7th Cir.
No. 05-4788 5

1995). She has not paid one cent, so the Mack order takes

effect today and will remain in force until the sanction

has been satisfied, though as Mack provides a motion for

modification may be filed after two years.

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—8-21-06