UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

____________________

No. 96-20667

____________________

ELVIS E. JOHNSON,

Plaintiff-Appellee,

versus

ROBERT C. SAWYER, et al.,

Defendants,

ROBERT C. SAWYER, et al.

,

Defendants-Appellants.

_________________________________________________________________

Appeals from the United States District Court

for the Southern District of Texas

_________________________________________________________________ August 21, 1997

Before SMITH, BARKSDALE, and BENAVIDES, Circuit Judges.

RHESA HAWKINS BARKSDALE, Circuit Judge:

Of the numerous issues raised in this appeal, two are critical

to our disposition: whether tax return information, once disclosed

in open court, loses its confidentiality such that its subsequent

publication by a federal employee does not violate 26 U.S.C. §

6103, which prohibits disclosure of such information except under

limited, non-applicable, circumstances; and whether, on remand,

this case must be reassigned.

For the second time, our court reviews a judgment in favor of

Elvis E. Johnson for the claimed wrongful disclosure of tax return

information in two 1981 press releases issued by the In ternal

Revenue Service following his guilty plea to, and conviction for,

income tax evasion. In 1995, our en banc court reversed Johnson’s

$10 mil lion Federal Tort Claims Act judgment against the United- 2 -

States and remanded for dismissal of that claim. J ohnson v.

Sawyer

, 47 F.3d 716, 737-38 (5th Cir. 19 95) (en banc). Johnson

t hen proceeded against IRS officers (Appellants) responsible for

the releases. Based partly on an instruction that the releases

wrongfully disclosed tax return information, the jury awa r ded

Johnson $9 million. Because that instruction was erroneous in part

and affected the outcome of this case, we VACATE and REMAND for a

new trial. And, to ensure, i nter alia

, the appearance of

impartiality, the case is to be REASSIGNED

.

I.

In 1981, Johnson was an executive with American National

Insurance Company (ANICO) and was employed at its headquarters in

Galveston, Texas. Johnson began in 1951 with ANICO as an agent in

Springfield, Missouri. Because of his success, he was transferred

to Galveston in 1971 . By 1976, he had become executive vicepresident and a member of the board of directors. He and Orson

Clay, ANICO’s president, reported directly to the board. In an

intra-company circular, Clay des cribed Johnson as “the most

successful fie ld man and home office executive in [ANICO’s]

history”.

In 1976, the IRS began auditing ANICO and its key executives,

including Johnson and his wife. Upon discovering discrepancies,

the examining agent referred the matter to the IRS Criminal

Investigation Division (CID), which assigned the case to appellant

Robert G. Stone, a Special Agent with the CID.- 3 -

Following an investigation, the CID referred the case to the

Department of Justice to prosecute Johnson and his wife for tax

evasion for the years 1974 and 1975. The case was assigned to

Assistant United States Attorney James L. Powers. In February

1981, Powers advised Johnson’s attorney, Robert I. White, that he

planned to seek an indictment of both Johnson and his wife; but, if

Johnson pled guilty to a one-count c riminal information that he

underpaid his 1975 taxes (by approximately $3,500), the Government

would not prosecute his wife for either 1974 or 1975, would not

prosecute Johnson for 197 4, and would recommend a probated

sentence.

According to Johnson, he kept ANICO’s executive committee,

president (Clay), and counsel fully apprised of the situation.

Evidently, White and Johnson were reassured that, even if Johnson

pled guilty to a crime, as long as there was no p ublicity that

would emb arrass ANICO, Johnson could continue with ANICO as

executive vice-president. White therefore determined to ensure

that Johnson’s identity would never be disclosed

— that if someone

looked at the district court file, he could not associate Johnson

with ANICO.

White notified Powers that publicity of a conviction would be

extremely damaging, and Powers evidently agreed, as he had with

White on other occasions for other defendants, to preserve

Johnson’s relative anonymity. Powers agreed to let White seek the

district court’s authorization to have the presentence

investigation performed before charges were filed. The comple ted- 4 -

presentence investigation report was delivered to the cou rt on 2

April 1981. Johnson’s case was to be heard on Friday, 10 April, at

4:00 p.m. in t he Galveston courthouse. White requested that the

criminal information be filed at the time of the hearing, along

with Johnson’s waiver of indictment and the plea bargain agreement;

and that the “Defendant’s Information” sheet give White’s office

address for Johnson’s address. Powers agreed to these precautions

and agreed that no press release would be issued concerning

Johnson. But, Powers did not advise the IRS of this “no publicity”

agreement.

At approx imately 4:00 p.m. on 10 April, proceedings on the

record commenced. White had ensured that the district judge (Judge

Gibson) had no other business that Friday afternoon, and Powers had

agreed to that time to minimize the risk of publicity. White and

Johnson searched the Galveston courthouse for members of the press

and found none, so the only people present for the hea ring were

Johnson, White, Powers, the district judge, and court per sonnel.

Johnson signed and filed a waiver of indictment.

The “Defendant Information” sheet, identifying Johnson as

“Elvis Johnson” of “1100 Milam St., 28th Floor, Houston, Texas

77002", was also filed. In fact, although Johnson’s full name is

Elvis E. Johnson, he was known as “Johnny” Johnson by friends,

ANICO executives and employees, and busines s acquaintances; he

signed all correspondence as “Johnny”. In addition, Johnson’s home

address was 25 Adler Circle, in Galveston.- 5 -

A criminal information, charging Johnson with tax evasion for

1975 in the amount of $3,474.97, was filed; and he signed and swore

to a written “Plea of Guilty”. After a F E D

. R. C RIM

. P. 11 hearing,

the court sentenced Johnson to six months confinement, suspended,

and one-year of supervised probation. None of the documents filed

on 10 April mentioned Johnson’s employment. (As discussed infra

,

properly excluded from evidence was the transcript of the plea

hearing; it reflects that the district judge did make reference to

Johnson being “an executive with American National In surance

C ompany”.) The following Monday, 13 April, a judgment of

conviction and sentence was filed.

According to Johnson, when returning from court on 10 April,

he not ified ANICO’s president (Clay) about what transpired, and

Clay responded favorably that the IRS matter was over and that he

(Johnson) should move forward because he was impo rtant to ANICO.

By the end of business on Tuesday, 14 April, Johnson informed other

members of ANICO’s executive committee that he had pled guilty to

a tax crime and put the matter behind him. Johnson testified that

he was not asked to resign; instead, he was told the “best interest

of the company is served by keeping you exactly where you are”.

The day before, however , Monday, 13 April, appellant Sally

Sassen, an IRS Public Affairs Officer, had prepared the following

press release about Johnson’s conviction, entitled “Insurance

Executive Pleads Guilty in Tax Case”:

GALVESTON, TEXAS--In U.S. District Court

here, Apr. 10, Elvis E. Johnson, 59, plead

[ sic] guilty to a charge of federal tax

evasion. Judge Hugh Gibson sentenced Johnson,- 6 - of 25 Adl er Circle, to a six-month suspended

prison term and one year supervised probation.

Johnson, an executive vice-president for

the American National Insurance C orporation,

was charged in a criminal information with

claiming false bu siness deductions and

altering documents involving his 1974 and 1975

income tax returns.

In addition to the sentence, Johnson will

be required to pay back taxes, plus penalties

and interest.

Sassen had prepared the release with the help of Special Agent

Stone, relying, with one exception (the paragraph regarding back

taxes, penalties and interest), solely on information she received

from him. She testified that she did not ask Stone about the source

of th at information, although she knew Stone had not been in the

courtroom for Johnson’s hearing on 10 Apr il. As noted, the last

paragraph of the release (penalty portion) was not based on

information received from Stone. It was boilerplate language in

the form Sassen used.

According to Stone, he learned of the conviction from Powers

on either Friday, 10 April, or Monday, 13 April. Stone testified

that, based on that conversation, he prepared on Monday, 13 April,

the following internal “Report of Legal Action”:

On [10 April 1981] AUSA JIM POWERS filed

a criminal information charging JOHNSON with

tax evasion under 26 US C 7201 for the years

1974 and 1975. JOHNSON plead [sic] guilty on

the same day to one count of 7201 for 1975 and

t he 1974 count was dismissed. Judge GIBSON

sentence d JOHNSON to 6 months to serve with

this 6 months being suspend ed and placed him

on 1 years supervised preparation [sic]. No

fine was assessed and no appeal is expe cted.

This legal action occurred in Galveston.- 7 -

In addition to not attending Johnson’s hearing, neither Sassen

nor Stone had any of the court documents. Stone, who was in

Houston, was not advised by Powers about either the plea agreement

or hearing in Galveston until approxi mately two hours before the

hearing, when Powers was leaving his Houston office to travel to

Galveston for the hearing. Because of such short notice, another

matter prevented Stone from attending the hearing. Stone, however,

did not check the public record before giving the information to

Sassen.

Sassen prepared the relea se in conformance with a District

Director’s Memorandum (DDM), directing her, following guilty pleas,

to prepare press releases based on information furnished by the

investigating special agent (Stone). Pursuant to the DDM, Stone

was to provid e the taxpayer’s age, occupation, home address, and

other facts to the Public Affairs Officer (Sassen) and was to

obtain the information from the IRS investigatory file for that

taxpayer. The DDM did not require inquiry as to whether

information taken from the file had been disclosed in the criminal

proceeding. The DDM did, however, state that “[t]he DPAO [Sassen]

will coordinate all CID releases with the Branch Chief, Criminal

Investigation Division, and the prosecuting U.S. Attorney”.

After preparing a draft of the release, Sassen telepho ned

Stone and read it to him (this was pre-FAX). Stone testified that

he copied it verbatim. According to Stone, he telephoned Powers

and read the release to him; but, Powers testified that he

remembered neither this telephone call nor basically anything else- 8 -

about the cas e. Stone then contacted Sassen and told her that

Powers had approved the release.

Sassen also called appellant Michael Orth, a CID supervisory

emp loyee, and read the release to him. IRS procedures then in

effect (1981) required that such releases be cleared at the

supervisory level. After Orth approved the release, Sassen mailed

it on 13 April to 21 media outlets in the Galveston area.

On 15 April, a Galveston journalist telephoned ANICO to

inquire about Johnson’s conviction. Johnson learned of the press

release and contacted White, who immediately contacted Powers. In

a telephone conversation surreptitiously recorded by White, Powers

denied any knowledge of the release and assumed the IRS was

responsible. Powers told White, “If they damaged your client in

some way, sue the hell out of them as far as I’m concerned”.

White also telephoned and wrote to the IRS about the release.

Among others, he spoke with appellant Dale V. Braun, who was Acting

District Director of the IRS Austin, Texas, District on that day

(15 April). It was then that the IRS realized that the release

contained erroneous information: that Johnson had been charged only

for 1975; and that the criminal information did not charge him with

claiming false business deductions or altering documents.

Braun contacted appellant Robert C. Sawyer, the Chief of the

CID in the Austin District, and Harold Friedman, the IRS Austin

District Counsel, and all agreed to withdraw the release. Sassen

informed the media outlet s that the release might contain errors

and asked that it not be publicized.- 9 -

The IRS then obtained a copy of the criminal information to

which Johnson had pled guilty and, following discussion on 16 April

among Sawyer, Sassen, Orth, Braun, and other IRS personnel, decided

to issue a revised release. IRS Counsel Friedman strongly advised

against issuing a second release because it would only compound

their potential liability. The revised release was identical to

the 13 April release, except for the following italicized portion

of the second (middle) paragraph:

Johnson, an executive vice-president for

the American National I nsurance Corporation,

was charged in a criminal information with

willful evasion of federal tax by f iling a

false and fraudulent tax return for 1975

.

(Emphasis added.)

Powers evidently participated in the process resulting in this

second release. An IRS special agent testified that, on 16 April,

as instructed by Ort h, he took a copy of the proposed revised

release to Powers, who was participating in a trial; that, during

a recess, he gave it to Powers for his review and approval; and

that Powers approved it. Consistent with his other testimony,

Powers did not recall the incident; he only recalled

discussing this issue with some lawyer some

years ago abo u t a correction of the press

release. I don’t remember a second press

release. Maybe there was one.

The IRS special agent then gave the proposed release to a

secretary with the comment that “Powers said this was okay”; the

secretary relayed that information to the Austin office. This

second release was issued on 17 April to the 21 media outlets that

received the first.- 10 -

According to Johnson, he informed ANICO president Clay and two

executive committee board members of the first release on 15 April

and provided C lay with a copy of the release that same day. On

learning from White that the IRS woul d not withdraw the 13 April

release and planned to issue a second, Johnson told Clay that all

ANICO board members should be informed. Clay advised Johnson that

he (Clay) would contact the entire board. On Saturday, 18 April,

and Monday, 20 April, Clay asked Johnson to resign from his

positions as executive vice-president and board member.

On the one hand, Clay tes tified that he was unaware of the

press release when he asked Johnson for his resignation. According

to Clay, the ANICO board decided that someone with a felony

conviction could not hold a high position within the corporation.

But, Johnson presented evidence that the “r eal problem” was the

publicity surrounding his conviction, not the fact of the

conviction. (Obviously, the jury accepted Johnson’s version.)

Johnson resigned on 20 April 1981.

Johnson was reassigned to ANICO’s off i ce in Springfield,

Missouri (where he began in 1951), as an associate regional

director. He served there at considerably diminished compensation

until 1986, when he reached the mandatory retirement age (65). He

then worked for ANICO as an agent, his starting position with it.

In 1983, Johnson filed this action again st Sawyer, Braun,

Sassen, and other IRS employees for wrongful disclosure of tax

return information, in violation of 26 U.S.C. § 6103. That section

provides:- 11 - (a) General Rule.— Ret urns and return

information shall be confidential, and except

as authorized by this title—

(1) no officer or employee of the United

States,

...

shall disclose any return or return

information obtained by h im in any manner in

connection with his service as such an officer

or an employe e or otherwise or under the

provisions of this section....

(b) Definitions.— For purposes of this section—

...

(2) Return information.— The term “return

information” means—

(A) a taxpayer’s identi ty , the

nature, source

, or amount of his income,

payments, receipts, deductions, exemptions,

credits, assets, liabilities, net worth, tax

liability

, tax withheld, deficiencies,

overassessments, or tax payments, whether the

taxpayer’s return was, is being, or will be

examined or subject to other investigation or

processing, or any other data, received by,

recorded by, prepared by, furnished to, or

collected by the Secretar y with respect to a

return or with respect to the determination of

the existence, or possible existence, of

liability (or the amount thereof) of any person under this title for any tax, penalty,

interest, f ine, forfeiture, or other

imposition, or offense....

Id. § 6103(a)(1),(b)(2)(A) (emphasis added).

Johnson sought recovery under 26 U.S.C. § 7217(a), which

permits an action for damages against “any person” who knowingly or

negligently discloses a return or return information (collectively,

“tax return information”) in violation of § 6103. No liability

attaches if the disclo sure “result[ed] from a good faith, but- 12 -

erroneous, interpretation of section 6103”. Id . § 7217(b).

Section 7217 was repealed in 1982 and re placed by § 7431, which

permits an action against the United States for damages for

disclosure by a fe deral employee in violation of § 6103. Tax

Equity and Fiscal Responsibility Act of 1982, Pub. L. No. 97-248,

§ 357, 1982 U.S.C.C.A.N. (96 Stat.) 324, 645-46. The legislation

provided that “amendments made by th is section shall apply with

respect to disclosures made after the date of enactment of this Act

[September 3, 1982].” I d. § 357(c), 1982 U.S.C.C.A.N. at 646.

Because the disclosures at issue took place in 1981, this action is

governed by § 7217, not § 7431.

Pursuant to § 7217, a plaintiff is entitled to his actual

dama ges sustained as a result of an unauthorized disclosure

(including pu nitive damages for willful or grossly negligent

disclosures) or t o liquidated damages of $1,000 per such

disclosure, whichever is greater, as well as the costs of the

action. 26 U.S.C. § 7217(c). It bears repeating that an

individual who discloses as the result of a “good faith, but

erroneous, interpretation” of § 6103 cannot incur liability. Id.

§ 7217(b).

Initially, Johnson claimed wrongful disclosure for four items

of tax return information: age; home address; that he was charged

with false business deductions and altering documents on his 1974

and 1975 returns; and that he would be required to pay back taxes,

plus penalties and interest.- 13 -

Johnson amended his complaint later in 1983 , adding a claim

against the United States under the Federal Tort Claims Act, 28

U .S.C. § 1346, 2671-2680, for negligent supervision. The United

States and the individual defenda nts moved to dismiss or for

summary judgm ent. The motions were denied without a written

opinion.

Johnson filed a second amended complaint in 1984, adding Stone

and Orth as defendants. He also claimed that a fifth item of tax

return information had been disclosed in the releases: that he was

executive vice-president of ANICO. The defendants again moved to

dismiss or for summary judgment on a variety of grounds, including

that, as a matter of law, none of the information contained in the

releases had been disclosed in violation of § 6103. Similarly,

Johnson moved for partial summary judgment, claiming, inter alia

,

that the releases, as a matter of law, wrongfully disclosed tax

return information.

In 1986, the district court ( Chief Judge Singleton) ruled on

the cross-motions, concluding that, as a matter of law, “issuing

the [releases] violated § 6103". Johnson v. Sawyer , 640 F. Supp.

1126, 1133 (S.D. Tex. 1986). The court determined that the

releases “disclosed” tax return information within the meaning of

§ 6103 and that none of the statu tory exceptions to the rule

against disclosure applied. Id. at 1131-32 & n.16.

Along a similar line, the Appellants had urged the court to

create a judicial exception for disclosure of material in which

Johnson “had no reasonable expectation of privacy

... because those- 14 -

items were incidental to information already in the public record”.

Id. at 1132. The court rejected that suggestion, explaining that

“Congress made the language of § 6103 quite clear: any disclosure

of return information is illegal ‘except as authorized by this

title ’”. I d. (quoting § 6103(a))(emphasis added by district

court).

Consequently, Johnson’s motion for partial summary judgment

was grante d on that issue. I d. at 1139. The court also denied

Appellants’ motion for su mmary judgment on the following issues:

that no individual Appellant other than Sassen could be held liable

under § 7217; that Appellants evi denced sufficient good faith to

preclude liability under § 7217; and that suit against Orth and

Stone was time-barred.

The claims against the individual defendants were severed, and

a bench trial was held on the FTCA claim in 1990. Johnson was

awarded approximately $10 million. J ohnson

, 760 F. Su pp. 1216,

1233 (S.D. Tex. 1991). Initially, our court affirmed the judgment,

Johnson v. Sawyer

, 980 F.2d 1490 (5th Cir. 1992) and 4 F.3d 369

(5th Cir. 1993), but our en banc court reversed and remanded with

directions to dismiss the FTCA claim. Johnson , 47 F.3d at 738.

While the case was on appeal, Chief Judge Singleton retired.

The case was reassigned to Judge Hoyt. On remand, Johnson filed a

third amended complaint, discarding the FTCA claim and adding a

claim that “identifying” him constituted a sixth item of wrongful

disclosure.- 15 -

A hotly, if not bitterly, contested jury trial was held in

1996. The jury found for Johnson, awarding $6 million in actual,

and $3 million in punitive, damages. The court awarded prejudgment interest at 6% per annum on $6 million commencing 4 August

1986, post-judgment interest on all sums awarded at 5.6% per annum,

attorneys’ fees of $1.2 million (20% of $6 million), and costs of

approximately $54,000.

II.

Appellants present a number of issues: that several jury

instructions are erroneous, including not instructing (1) that the

portions of the releases concerning the charges and penalties were

not tax return information and (2) that only Sassen can be liable

under § 7217 for a § 6103 violation; that Johnson’s claims against

Stone and Orth are time-barred; and that many evidentiary rulings

(including the exclusion of Johnson’s guilty plea hearing

transcript) and the awards for punitive damages, pre-judgme n t

interest, and attorneys’ fee s are erroneous. Moreover, should a

remand be necessary, they request that we exercise our supervisory

powers and reassign the case because “there are serious reasons to

question the trial judge’s appearance of impartiality”.

As is often the case, what is not in issue is as important, if

not mor e so, than what is. For example, Appellants do not

challenge the sufficiency of the evidence either (1) as to

causation for liability under § 7217, or (2) as to the “negligently

or knowin gly ... disclosing or permitting the disclosure of tax

return information” standard in an instruction challenged by all- 16 -

Appellants but Sassen. And, because we reverse and remand for a

new trial, we necessarily do not reach the issues as to punitive

damages, pre-judgment interest, and attorneys’ fees. Moreover, we

only describe, rather than decide , most of the challenges to

instructions and evidentiary rulings. We describe them simply to

assist the district court in deciding what is not law of the case.

On remand, both § 7217 liability and damages are in issue, as are,

of course, the issues we do not decide in this opinion.

A.

We rule on only two of the six challenged instructions. The

issues concerning the balance are reserved for the district court

on remand. Our standard of review for such claims is well-settled:

First, the challenger must demonstrate

that the charge as a whole creates

“substantial and ineradicable doubt whether

the jury has been properly guided in its

deliberations.” [ B ender v. Brumley

, 1 F.3d

271, 276 (5th Cir. 1993)]. Second, even if

the jury instructions were erroneous, we will

not reverse if we determine, bas ed upon the

entire record, that the challenged instruction

could not have affect ed the outcome of the

case. [ Id

. at 1276-77.]

FDIC v. Mijalis

, 15 F.3d 1314, 1318 (5th Cir. 1994); see also Davis

v. Ector Coun ty, Tex. , 40 F.3d 777, 786 (5th Cir. 1994). In

addition, to the extent there is claimed error in refusing to give

an instruction, the challenger must show “[a]s a threshold matter

... that [his] proposed instruction correct ly states the law”.

FDIC v. Henderson , 61 F.3d 421, 425 (5th Cir. 1995).- 17 - 1.

Pursuant to the 1986 summary judgment ruling, the district

court instructed the jury that, “as a matter of law the April, 1981

news releases

... did disclose tax return information in violation

of the law”. Appellants claim reversible error: that the 13 April

release contained, at most, only three items of confidential return

information (Johnson’s age, his a ddress, and the word “vicepresident”); and that, therefore, the jury should have been asked

to decide “whether disclosure of these altogeth er routine items

caused Johnson to lose his job”. Appellants maintain that, as a

matter of law, those items could not. They ask us to reverse and

render or, in the alternative, remand and reassign the case for a

new trial.

a.

Although we ultimately conc lude that the district court did

reversibly err in giving this part of the instruction, we must

first explain why the procedural posture of this case makes it

impossible to render judgment for Appellants.

Appellants assert that “their summary judgment motion should

have been granted in 1986". Their request that we review and

reverse the 1986 order is buried in t heir brief in the last

parag raph of the section discussing the liability instruction,

without supporting argument, authority, or citations to the record.

We have held repeatedly that we will not consider issues not

briefed b y the parties. S ee Webb v. Investacorp, Inc.

, 89 F.3d

252, 257 n.2 (5th Cir. 1996) (“An appellant abandons all issues not- 18 -

raised and argued in its initial brief on appeal.”) (quoting Cinel

v. Connick

, 15 F.3d 1338, 1345 (5th Cir. 1994)); McKethan v. Texas

Farm Bureau

, 996 F.2d 734, 739 n.9 (5th Cir. 1994) (failure to

sufficiently brief issue constitutes waiver of issue).

In any event, even if this issue had been properly presented,

Appellants would face other problems. They contend that the

district court er red in d enying their summary judgment motion in

1986. Appellants advance this contention despite the fact that the

instruction in issue was based on the 1986 grant of Johnson’s

motion for partial summary judgment. We have held repeatedly that

orders denying summary judgment are not reviewable on appeal where

final judgment adverse to the movant is rendered on the basis of a

subsequent full trial on the merits. See Black v. J.I. Case Co.

,

22 F.3d 568, 570-72 (5th Cir. 1994); W ells v. Hico ISD

, 736 F.2d

243, 251 n.9 (5th Cir. 1984). Because Appellants lost at trial, we

cannot review the denial of their summary judgment motion.

On the other hand, when, by summary judgment or some other

ruling, an issue is removed from those to be tried, that ruling can

be contested on appeal, assuming it was otherwise prope rly

preserved in the district court, including possibly being presented

again during trial. E.g.

, United States v. Graves

, 5 F.3d 1546,

1551 (5th Cir. 1993) (requiring party who uns uccessfully opposed

motion i n limine to lodge contemporaneous objection at trial to

preserve issue for appeal); United States v. Estes , 994 F.2d 147,

149 (5th Cir. 1993) (per curiam) (same). But, again, Appellants

challenge the denial of their motion, not the grant of Johnson’s.- 19 -

This is not a distinction without a difference. Obvious

evidentiary consideration s come into play, that we need not

elaborate on for purposes of this opinion.

More importantly, even if Appellants could raise this issue,

their position on appeal is different from the one they took in

1986. They contend now that the three items of return information

they now concede were disclosed in violation of § 6103 could not,

as a matte r of law, have caused Johnson’s resignation. But, in

1986, they did not raise lack of causation as a basis for summary

judgment. Instead, they asserted that “none of the information in

the press release was tax

... return information that could not

lawfully be disclosed under the circumstances of this case”

— i.e.

,

that nothing in the release violated § 6103. Obviously, these

contentions are not even similar: one, made in district court,

denies that a vio lation of § 6103 has occurred; the other, made

here, presumes that one has.

Although we can affirm a summary judgment on grou nds not

relied on by the district court, those grounds must at least have

been proposed or asserted in that court by the movant. S ee

Missouri Pac. R.R. v. Harbison-Fischer Mfg. Co. , 26 F.3d 531, 538

(5th Cir. 1994) (“[W]e can affirm the district court on the

alternate grounds asserted below. ”) (emphasis add e d); FDIC v.

Laguarta , 939 F.2d 1231, 1240 (5th Cir. 1991) (refusing to affirm

summary judgment on grounds “neither raised below

... nor even

raised sua sponte by the district court”); Frank C. Bailey Enter.,

Inc. v. Cargill, Inc.

, 582 F.2d 333, 334 (5th Cir. 1978). More- 20 -

importantly, we have held that, on appeal, we will not consider a

new ground in opposition to, or in defense of, summary judgment.

See Laguarta

, 939 F.2d at 1240. Thus, even were we to actually

review the denial of Appellants’ motion, lack of causation would be

a new ground on appeal, one not raised in district court (in 1986).

Of course, we could address the causation issue in the context

of a sufficiency challenge; but, as noted, it has not been

presented to us. Appellants did make Rule 50 motions at the

appropriate times during the trial on several grounds, including

lack of causation. However, they do not ask us to review the

denial of those motions or conduct a sufficiency review of the

evidence. Once again, Appellants’ failure to raise this issue

constitutes waiver and abandonment on appeal. S ee Webb

, 89 F.3d at

257 n.2; McKethan , 996 F.2d at 739 n.9.

b.

Because Appellants contend that the challenged instruction

failed to distinguish between information in the releases that was

wrongfully disclosed and information that was not wro ngfully

disclosed, we must first determine the § 6103 violation in the

releases. This requires us to answer a question explicitly left

open in our en banc opinion — namely, “whether to follow the rule

of Lampert v. United Sta tes , 854 F.2d 335, 338 (9th Cir. 1988),

that section 6103(a) does not bar disclosure of matters of public

record”. Johnson , 47 F.3d at 737 n.46.- 21 - i.

Section 6103 establishes a gene ral, salutary rule that

“returns” and “return information” shall be confidential. Church

of Scientology v. I.R.S. , 484 U.S. 9, 10 (1987). Disclosure by a

government employee is prohibited unless a specific statu t ory

exception provides for it. 26 U.S.C. § 6103 (forbidding disclosure

“except as authorized by this title ”) (emphasis added). Although

there are a number of exceptions, none includes the issuance of

press releases by the IRS. See id. ; Thomas v. United States , 890

F.2d 18, 20 (7th Cir. 1989).

One exception, however, authorizes discl osure of tax return

information in a judicial proceeding to determine a taxpaye r’s

civil or criminal tax liability. 26 U.S.C. § 6103(h)(4)(A).

Citing Lampert

, Appellants contend that once tax return information

is lawfully disclosed in such proceedings, it loses its

confidentiality, rendering § 6103's prohibition moot. Johnson,

citing Rodgers v. Hyatt

, 697 F.2d 899 (10th Cir. 1983), and Mallas

v. United States

, 993 F.2d 11 11 (4th Cir. 1993), counters that §

6103 prohibits disclosure despite prior publication of the

information in court. In the alternative, Johnson maintains that,

under the reasoning of Thomas v. United States , liability under §

6103 is premised on the source of the information, not its “public”

status (if any).

Lampert involved press releases issued by the United States

Attorney’s office and the IRS that summarized tax evasion charges

against three individuals. L ampert

, 854 F.2d at 336. The Ninth- 22 -

Circuit began its analysis by explaining that the rel eases

disclosed “return information” as defined by § 6103. I d. at 336-37

(citing Barrett v. United States

, 795 F.2d 446, 449 (5th Cir.

1986)). C ontra Johnson

, 47 F.3d at 732 n.34 (“[L]anguage, which on

its face purports only to describe the content of [a] criminal

information, is not return information under section 6103(a).”).

It then determined that, although § 6103 contained no exception

authorizing this disclosure, giving effect to that language would

frustrate the statute’s purpose

— to prohibit t he disclosure of

confidential return information. Id. at 338. (In so holding, it

declined to follow the ruling in 1986 by the district court in this

case. I d

. at 337.) The court determined that, once tax return

information is made a part of the public domain, a taxpayer “may no

longer claim a right of privacy in that information”. I d.

Therefore, when such information is lawfully disclosed in a court

proceeding, subsequent disclosure does not violate § 6103. Id.

The Ninth Circuit reaffirmed Lampert in Schrambling

Ac countancy Corp. v. United States , 937 F.2d 1485, 1489-90 (9th

Cir. 1991), when it held that tax return information included in

notices of federal tax liens and a bankruptcy petition lost their

confidentiality and “[could] be disclosed again without regard to

section 6103". As the court explained, “The relevant inquiry

s hould focus on whether the prior authorized disclosure ...

destroys the confidential nature of the information.” I d. at 1488-

89. Because tax liens are filed in the county recorder’s office

and are open for public inspection, the information in them is- 23 -

exposed to even greater publicity than in a judicial proc eeding.

Id. at 1489.

In Rowley v. United States , 76 F.3d 796 (6th Cir. 1996), the

Sixth Circuit recently adopted th e Ninth Circuit’s approach.

Rowley in volved IRS disclosure of information (via newspaper ad)

that, like the in formation in S chrambling

, had previously been

disclosed in a publicly recorded tax lien. I d. at 798. The Sixth

Circuit concluded that the prior, authorized, disclosure placed the

information in the public domain, stripping it of its

confidentiality. I d. at 801. The court did make an effort to

distinguish cases where the prior disclosure occurred in a judicial

proce eding, explaining that “the recording of a federal tax lien

... is designed to provide public notice and is thus qualitatively

different from disclosures made in judicial proceedings, which are

only incidentally made public”. Id.

The Fourth and Tenth Cir cuits, however, have rejected the

Ninth Circuit’s analysis. R odgers v. Hyatt

, from the Tenth

Circuit, involved disclosure of tax return information by an IRS

agent who had previously and lawfully disclosed that information in

testimony in open court, see 26 U.S.C. § 6103(h)(4)(A). Rodgers

,

697 F.2d at 899-900. However, the second, challenged, disclosure

was not governed by any of § 6103's exceptions. I d. at 904-06.

The Tenth Circuit explained that the issue in a § 6103 case is not

confidentiality

but rather, whether an unauthorized disclosure of

return in formation occurred. I d. at 906. The court noted that

“[e]ven assuming the loss of confidentiality in the content of the- 24 -

statements”, the disclosure was “clearly unauthorized” because it

lacked express statutory authorization. Id.

In Mall as v. United States , the Fourth Circuit followed the

Tenth Circuit. There, the IRS issued a series of revenue agent

reports to investors in a tax shelter, describing the convictions

(later reversed) and “financing scheme” of the two individuals who

set up the shelter. Mallas , 993 F. 2d at 1114-15. Noting that §

6103 contained no exception permitting disclosure of information

“within the publi c domain”, the Fourth Circuit declined the

Governme n t’s “invitation to usurp the legislative function by

adding a judicially created exception to those set forth by

Congress”. I d. at 1120. The court rejected the Government’s

contention that the Ninth Circuit ’s approach struck a better

balance between taxpayer interests in privacy and the Government’s

interest in disclosing tax return information to administer the tax

laws: “It is for Congress

... not this court, to ‘strike a balance’

between these interests. Congress has done so in section 6103,

without articulating the exception advanced by the Government ...

and adopted by the Ninth Circuit....” Id. at 1121.

The Seventh Circuit took a slightly different approach to §

6103 in Thomas v. United States , in which a taxpayer contested an

assessment of taxes and lost in the United States Tax Court.

Thomas

, 890 F.2d at 19. The IRS then prepared a press release and

mailed it to the taxpayer’s hometown newspaper. Id. The Seventh

Circuit e xplained that it refused to “retreat” from its earlier

statement that § 6103 is a “general prohibition against the- 25 -

disclosure of tax return information unless expressly authorized by

an exception”. Id. at 21 (quoting Wiemerslage v. United States

, 838

F.2d 899, 902 (7th Cir. 1988)). However, it also refused to “take

sides” in the conflict over wheth er disclosure of tax return

information in a public record “bars the taxpayer from complaining

about any subsequent disclosure”. Id. at 20.

Instead, in rul ing for the Government, the Seventh Circuit

reasoned: “The information disclosed in the press release did not

come from [the taxpayer’s] tax return

— not directly, at any rate.

It came from the Tax Court’s opin ion.” I d. at 20. For that

reason, the Government was not di sclosing tax return information

within the meaning of § 6103, because “a return, or some internal

docume nt based on a return” was not the immediate s ource of the

information. I d. at 20-21. When the source of the information is

a public document, the definition of return information simply does

not come into play, and there is no § 6103 violation. I d. A

contrary holding, the court noted, would have seri ous First

Amendment implications. I d. (citing Co x Broadcasting Corp. v.

Cohn , 420 U.S. 469 (1975)).

Consistent with the district court’s summary judgment in 1986,

we decline to follow the Ninth and Sixth Circuits and judicially

create an exception to § 6103 for tax return information disclosed

in “public records”. Our analysis of the text of § 6103, the

legis lative history, and the pertinent case law compels us to

conclude that there is simply no basis for creating such an

exception. Instead, we follow the approach of the Fourth and Tenth- 26 -

Circuits, modified by the Seventh Circuit’s “source” anal ysis in

Thomas . If the immediate source of the information claimed to be

wrongfully disclosed is tax return information (“return” or “return

information” pursuant to § 6103), the disclosure violates § 6103,

regardless of whether that information has been previously

disclosed (lawfully) in a judicial proceeding and has therefore

arguably lost its taxpayer “confidentiality”.

Section 6103, enacted as part of the Tax Reform Act of 1976,

Pub. L. No. 94-455, § 1202, 1976 U.S.C.C.A.N. (90 Stat.) 1520,

1667-88, enumerates 13 separate (and quite detailed) exceptions to

§ 6103, providing for disclosure to various fed eral and state

agencies and employees for a var iety of purposes. I d. Despite

this elaborate structure, it is undisputed that the plain text of

§ 6103 contains no express exceptions permitting disclosure of tax

return information t h at has arguably lost its confidentiality

because it has been made available to the public via disclosure in

open court. The circuits concur on this point, including the Ninth

Circuit. S ee Lampert

, 854 F. 2d at 338. (“[A] strict, technical

reading of the statute supports the taxpayers’ position [that for

a government employee to disclose any return information,

confident ial or not, there must exist an applicable exception to

section 6103(a)].”); Mallas

, 993 F.2d at 1120; Rodgers

, 697 F.2d at

906; cf. Thomas, 890 F.2d at 20 (“[Section 6103] makes federal tax

returns confidential with exceptions that do not incl ude the

issuance of press releases by the [IRS].”).- 27 -

As the Supreme Court stated, “When we find the terms of a

statute unambiguous, judicial inquiry is complete except in rare

and exceptional circumstances ... [such as] where the application

of the statute as written will produce a result ‘demonstrably at

odds with the intentions of its drafters.’” D emarest v.

Manspeaker

, 498 U.S. 184, 190 (1991) (quoting Griffin v. Oceanic

Contractors, Inc. , 458 U.S. 564, 571 (1982)) (citations omitted);

Consumer Prod. Safety Comm’n v. GTE Sylvania, Inc. , 447 U.S. 102,

108 (1980) (“[T]he starting point for interpreting a statute is the

language of the statute itself. Absent a clearly expressed

legislative intention to the contrary , that language must

ordinarily be regarded as conclusive.”); U nited States v.

Rodriguez-Rios , 14 F.3d 1040, 1044 (5th Cir. 1994) (en banc).

Restated, we follow the plain meaning of a statute unless it

would lead to a result “so bizarre that Congress ‘could not have

intended’ it”. D emarest

, 498 U.S. at 191 (quoting Griffin

, 458

U .S. at 575); s ee United States v. Turkette

, 452 U.S. 576, 580

(1981) (“absurd results are t o be avoided”); s ee also RodriguezRios , 14 F.3d at 1044 (“We are authorized to deviate from the

literal language of a statute only if the plain language would lead

to absurd results, or if such an interpretation would defeat the

intent of Congress.”); Almendarez v. Barrett-Fisher Co. , 762 F.2d

1275, 1278 (5th Cir. 1985) (“Literal application of statutory

language is

... inappropriate if it would lead to

... unreasonable

results.”).- 28 -

At first

— even second, third, or fourth

— glance, it appears

that, to find a violation of § 6103 for disclosure of tax return

information that was in most, if not all , respects previously

disclosed in a court proceeding, is to reach an absurd result.

But, in applying this rule of statutory construction, we must apply

a reasoned, objective method for determining whether a result is

actually “absurd” or whether, instead, it is simply per sonally

disagreeable. In general, courts look to two sources to make this

call

— other provisions of the statute and legislative history. In

this regard, two most instructive cases are Demarest v. Manspeaker

and Consumer Product Safety Commission v. GTE Sylvania, Inc.

At issue in Demarest was whether 28 U.S.C. § 1821 required

payment of witness fees to a convicted state prisoner who testified

at a federal trial pursuant to a writ of habeas corpus a d

testificandum

. Demarest , 498 U.S. at 185. The plain language of

the statute provided that “a witness in attendance at any court of

the United States

... shall be paid

... $30 per day” and made no

exceptions for incarcerated w itnesses. I d. (quoting 28 U.S.C. §

1821(a),(b)). A unanimous Supreme Court held that the statute

required payment of the witness fee. Id. at 188-91.

T he Court looked to two other provisions in the statute,

includi ng a section providing for payment of a subsistence

allowance (in addition to the daily fee) to witnesses “other than

a witness who is incarcerated” and a section making detained aliens

ineligible for either the daily fee or the subsistence allowance.

Id. at 187-88. The Court noted, “[This] shows that Congress was- 29 -

thinking about incarcerated individuals whe n it drafted the

s tatute.” I d. In other words, because other sections of the

statute revealed that Congress had considered the possibility that

prisoners might be witnesses in federal court, reading the section

at issue to allow payment of the fee would not yield an “absurd”

result or one that was at odds with congressional intent. Id. at

190-91.

GTE Sylvania involved § 6(b)(1) of the Consumer Product Safety

Act (CPSA), which regulates the “public disclosure” of information

collected by the Consumer Product Safety Commission (CPSC)

regarding consumer products. G TE Sylvania

, 447 U.S. at 10 4-05.

Under § 6(b)(1), a product manufacturer must be notified 30 days

before public disclosure of information and given the opportunity

to submit comments about the information to be disclosed. Id. at

105. In this case, the CPSC had received accident reports from

manufacturers. I d. at 106. After receiving Freedom of Information

Act (FOIA) requests from two consumer groups, the CPSC decided to

release these reports without complyi ng with § 6(b)(1)’s

notice/comment requirements. Id.

Section 6(b)(2) of the CPSA contains specific exceptions to

the notification requirements of § 6(b)(1), none of which include

disclosure in response to a FOIA request. I d. at 109.

Nevertheless, the CPSC took the position that § 6(b)(1) applied

only when it made affirmative disclosures and not when it simply

responded to FOIA requests. I d. at 107-08. The Court rejected

that position: “The fact that Congress was aware of the- 30 -

relationship between § 6 and the FOIA when it enacted the CPSA is

exhibited by the fact that the Congress in [a different part of §

6 ] specifically incorporated by reference the nine exemptions of

the FOIA”. Id. at 109. In addition, another section of the CPSA

made disclosu re of certain information subject to § 6(b)(1),

whether the discl osure was an affirmative act by the CPSC or a

response to a FOIA request. I d. at 110. Thus, the Court could not

conclude that the failure to include FOIA requests w ithin the

exceptions to § 6(b)(1) was unintentional. Id.

In addition to looking to other parts of the statute, the

Court looked to the legislative history of the CPSA. Upon

examining that history, the Court concluded that “for purposes of

§ 6(b)(1)”, no dis tinction was made between information

“affirmatively disclosed” and information released pursuant to

FOIA. I d. at 111-16. The restrictions of § 6(b)(1) were meant to

govern the CPSC’s disclosure of information in all circumstances,

not only when the disclosure was pursuant to the CPSC’s initiative.

Id. at 112-13.

Turning to § 6103, we note that immediately following the

express disclosure exceptions (§ 6103(c)-(o)) is a provision that

explains the procedures by which disclosure requests are made to

the IRS. 26 U.S.C. § 6103(p). Part of that provision is a list of

“Safeguards”, requiring that certain federal agencies to which the

IRS may lawfully disclose return information must, inter alia : (1)

establish a system of records to keep track of all disclosure

requests, the date of request, and the reason for the request; (2)- 31 -

establish a secure area in which to store the information; and (3)

restrict the access of persons to that information. I d. §

6103(p)(4)(A)-(F). However, these record-keeping/security

requirements “shall cease to apply with respect to any return or

return information if, and to the extent that, such return or

return information is disclosed in the course of any judicial or

administrative proceeding and made a part of the public record

thereof”. Id. § 6103(p)(4).

For example, if t he IRS discloses tax return information to

the Department of Commerce (DOC) for statistical use, id. §

6103(j)(1), the DOC does not have to comply with § 6103(p)(4)

safeguards if the information has already been disclosed publicly

in a judicial proceeding. However, the fact that the DOC does not

have to be as vigilant about the information does not mean that it

(or the IRS, for that matter) can disclose that information in, for

example, a press release. That information is still subject to §

6103(a)’s general rule of no n-disclosure; § 6103(p)(4) does n ot

create an exception to that rule.

Section 6103(p)(4) does, however, indicate that, when Congress

drafted § 6103, it considered the possibility that some tax return

information might be otherwise available to the public — e.g. , in

court r ecords, because it had been disclosed in a judicial

proceeding. For that reason, Congress deemed it unnecessary for

those federal agencies to follow the safeguards in § 6103(p)(4) for

keeping the documents in a safe place and ensuring that access to

them was restricted. That, however, is the only provision Congress1 Of course, in describing this proposed exception to §

6103 as an exception for “publicized” or “public record” tax return

information, we are not holding that the IRS, or any other federal

agency, is prohibited from publishing the contents of a public

record, such as a judicial opinion, see Thomas

, 890 F.2d at 20-21,

provided it is the public record that is the immediate source

. Rather, as we explain infra

, we simply hold that the fact that tax

return information is otherwise avail able in the public record

—

and therefore arguably has lost its confidentiality

— does not

remove § 6103's proscription against improper disc losure of tax

return information.

In addition, although Appellants’ conte n tion is that tax

return information disclosed in a judicial proceeding has lost its

confidentiality and, therefore, the protection of § 6103, we refer

more broadly to this proposed exception as one for “public record”

tax return information. It seems that the logical implication of

Appellants’ position is that any tax return information otherwise

available t o the public — whether it be in court records or real

estate filings — would likewise have lost its confidentiality and

the protection of § 6103.

- 32 - chose to make in § 6103 regarding this “publicized” tax return

information. Under the reasoning of D em arest and GTE Sylvania

,

then, it is difficult to conclude that Congress’ failure to include

an exception for “public record” tax return information in the

exceptions to § 6103 was unintentional. 1 S ee Lindh v. Murphy

, No.

96-6298, 1997 WL 338568, at *4 (June 23, 1997) (reading provision

expressly applying Antiterrorism and Effective Death Penalty Act’s

amendments to Chapter 154 to pending cases as “implicit” indication

that amendments to Chapte r 153 were meant to apply only to cases

filed after effective date of act).

More generall y, § 6103(m) indicates that Congress also

considered the possibility that the IRS would need to disclose tax

return information to the news media in certain circumstances. One

of § 6103's exceptions, subsection (m), permits disclosure of

taxpayer identity information to, inter alia

, “the press and other- 33 -

med ia for purposes of notifying persons entitled to tax refunds

when the Secretary, after reasonable effort and lapse of time, has

been unable to locate such persons”. 26 U.S.C. § 6103(m)(1). We

note that this exception does not allow the IRS to disclose tax

return information to identify individuals convicted of tax

offenses ( e.g. , Johnson) or, more broadly, individuals who appear

in court concerning civil or criminal tax liability. Again, we

cannot conclude that Congress’ failure to include in § 6103 the

exception Appellants press upon us was unintentional. Hence,

applying the plain meaning of the statute leads to neither an

absurd result nor one that is demonstr ably at odds with

congressional intent.

Furthermore, as in GTE Sylvania

, the legi s lative history

supports the conclusion that Congress considered the relationship

between § 6103 and “public record” tax return information. In

discussing the § 6103(p)(4) safeguard procedure, the Senate Finance

Committee noted: “The r ecord-keeping requirements would not apply

in certain situations, including disclosure of returns and return

information open to the public generally”. S. R EP

. N O . 94-938, at

343 (1976), r eprinted in 1976 U.S.C.C.A.N. 3439, 3773 (emphasis

added). Importantly, the committee did n ot say that the rule of

nondisclosure does not apply where the information is open to the

public generally.

In addition, Congress considered a taxpayer’s privacy interest

in tax return information when enumerating the exceptions to §

6103. In evaluating the areas in which tax return information was- 34 -

for merly subject to disclosure and deciding whether to maintain

such disclosure provision, the committee “balance[d] the particular

office or agency’s need for the informat ion involved with the

citizen’s right to privacy and the related impact of the disclosure

upon the continuation of compliance with our country’s voluntary

assessment system”. I d. at 318, 1976 U.S.C.C.A.N. at 3747. In

spite of this consideration, however, Congress chose not to create

an exception for “public record” tax return information.

In judicially creating that excep t ion, the Sixth Circuit

explained: “[T]he approach we ado pt today strikes the proper

balance between a taxpayer’s reasonable expectation of privacy and

the government’s legitima t e interest in disclosing tax return

information to the extent necessary for tax administration

functions.” Rowley , 76 F.3d at 802. We, however, agree with the

Fourth Circuit: “It is for Congress

... to ‘strike a balance’

between these interests [and it] has done so in section 6103,

without articulating [this] exception.” M allas

, 993 F.2d at 1121.

We are a federal appellate court, not a super-legislature; we are

not vested with plenary authority to re-evaluate the policy choices

made by our e lected representatives. S ee T HE F EDERALIST N O

. 78

(Alexander Hamilton) (“The courts must declare the sense of the

law; and if they should be disposed to exercise WILL instead of

JUDGMENT, the consequence would equally be the substitution of

their pleasure for that of the legislative body.”)

Section 6 103 provides blanket protection to tax return

information. If we recognized an exception for “public record” tax2 Before the Tax Reform Act of 1976, all returns were

described as “public records”, although they were open to

inspection only under regulations app roved by the President, or

under Presidential order. S ee S. R EP

. N O

. 94-938, at 315, 318, 1976

U.S.C.C.A.N. at 3744, 3747. Despite that limitation, Congress

decided that, und er the new law, “returns and return information

should generally be treated as confidential”. I d. at 318, 1976

U.S.C.C.A.N. at 3747 (emphasis added). In other words, § 6103(a)’s

description of tax return information a s “confidential” does not

represent a congressional conclusion that all such information is,

in fact, confidential or private. Rather, it is simply a directive

to treat that information as if it is confidential — i.e. , not to

disclose it unless authorized by exception.

- 35 - return information, as the Ninth and Sixth Circuits have, we would

be concluding that § 6103 distinguishes between confidential

(private) and non-confidential (public) tax return information.

See Lampert

, 854 F.2d at 338 (“Once tax return information is made

a part of the public domain, the taxpayer may no longer claim a

right of privacy in that information.”); see also Rowley , 76 F.3d

at 801-02 (information in public domain loses confidentiality and

protection of § 6103). Appellants ask us to hold that § 6103 makes

that distinction.

But, again, this flies in the face of § 6103. It states that

“[r]eturns and return information shall be confidential

, and except

as authorized by this title

... shall [not be] disclose[d]”; not

that “ [confidential] [r]eturns and return information ... shall

[not be] disclose[d]”. (Emphasis added.) This is a critical,

indeed dispositive, difference. 2

We recognized in our en banc opinion that § 6103 protects more

than simply “confidential” or “private” return information:

[S]ection 6103 is a regulation of the conduct

of those who in the course of their duties as

government employees or contractors glean3 We say “arguably” because, as the Seventh Circuit has

noted, it is a legal fiction that “every item of information

contained in a public document is known to the whole world, so that

further dissemination c an do no additional harm to privacy”.

Thomas , 890 F.2d at 21. Like the Seventh Circuit, we eschew the

idea that “only secrets [can] be confidences”. Id.

- 36 - information from tax returns. The regulation

is prophylactic

, proscribing disclosure by

such an individual of any such information so

obtained by him. Plainly, Congress was not

determining that all the information on a tax

return would always be truly private and

intimate or embarrassing. Rather, it was

simply determining that since much of the

information on tax returns does fall within

that category, it was better to proscribe

disclosure of all return information, rather

than rely on ad hoc d eterminations by those

with official access to returns as to whether

particular items were or were not private,

intimate or embarrassing. Because such

determinations would inevitably sometimes err, ultimately a broa d prophylactic proscription

would result in less disclosure by return

handlers of such sensitive matters than would

a more precisely tailored enactment.

Johnson, 47 F.3d at 735 (footnote omitted). As an explicit

construction of § 6103, this statement is law of the case,

regardless of whether it was ultimately necessary to dec ide the

issues necessary for that opinion. See Conway v. Chemical Leaman

Tank Lines, Inc.

, 644 F.2d 1059, 1062 (5th Cir. 1981) (“As a

general rule if the issues were decided, either expressly or by

necessary implication, those determinations of law will be binding

on remand and on a subsequent appeal.”) (quoting Lehrman v. Gulf

Oil Corp. , 500 F.2d 659, 663 (5th Cir. 1974)).

Thus, § 6103's protection does not disappear s imply because

tax return information has been disclosed in the public record and

has therefore arguably lost its confidentiality. 3 In enacting §4 The brand new Taxpayer Browsing Protection Act, H.R. 1226

(5 Aug. 1997) (to be codified at 26 U.S.C. §§ 7213A and 7431) is

further proof of this. This law makes it unlawful for any federal

employee “willfully to inspect, except as authorized in this title,

any return or return information”. I d. § 2(a). In addition, a

taxpayer may sue the United States under § 7431 for civil damages

for an unauthorized inspection. Id. § 3(a).

That Congress deemed si mply browsing through a tax return,

even if no tax return information is ultimately disclosed, to be

serious enough to merit criminal and civil pe nalties strengthens

our interpretation of § 6103, which recognizes that all tax return

information is protected , not simply the “private” or

“confidential” portions. In addition, although we hesitate to

infer too much from this new law, we note that, on its face, it too

does no t distinguish between “public” and “private” tax return

information. Hence, a federal employee may be subject to criminal

and civil liability even if he only browses through portions of a

r eturn or return information, and even though that data is

otherwise available in public records.

- 37 - 6103 as a prophylactic ban, Congress was determining that a

taxpayer has a statutorily cr eated “privacy” interest in a ll his

tax return inf ormation, despite the fact that some of it is not

ent irely “secret”. 4 In another context, the Supreme Court has

recognized that an individual can have a privacy interest in such

information. S ee United States Dep’t of Justice v. Reporters Comm.

for Freedom of th e Press. , 489 U.S. 749, 770 (1989) (“[T]he fact

that ‘an even t is not wholly “private” does not mean that an

individual has no interest in limiting disclosure or dissemination

of the information.’”) (citation omitted).

That interest is furthered by a construction of § 6103 that

premises a violation on the source of the information claimed to be

wrongfully disclosed, not its public or n on-confidential s tatus

.

See Thomas

, 890 F.2d at 21 (return information not disclosed if

immediate source is not return or internal document b ased on- 38 -

return). Again, our en banc court has already interpreted § 6103

as having precisely that focus. In comparing § 6103 and the Texas

tort of public disclosure of embarrassing private facts, our court

noted:

Unlike section 6103(a), the Texas tort

... is not concerned with the identity of the

party making the disclosure, or his sources,

but merely with whether the information

disclosed is both private and intimate or embarrassing, and also not of public concern,

none of which factors are relevant under the

terms of section 6103(a). The Texas tort and

section 6103( a) address totally distinct

subject matters and impose distinctly

different duties: the latter, applicable only

to certain individuals who in connection with

t heir government-related duties obtain tax

return information, enjoins them not to

disclose any of it so obtained, even though it

is not private and not intimate or embarrassing and is of public concern....

Johnson , 47 F.3d at 735-36. Therefore, if tax return information

is the immediate source for the inform ation claimed to be

wrongfully disclosed, it makes no difference that the information

is neither “private” nor “confidential”.

For this reason, we find unpersuasive Appellants’ contention

that this construction of § 6103 raises First Amendment concerns.

For support, they cite the statement in our en banc opinion that,

if § 6103 barred disclosure of matters of public record, “such a

bar, at least as to recent federal felony convictions, would appear

in some tension with [ Cox Broadcasting Corp. v. Cohn

, 420 U.S. 469

(1975)]”. J

ohnson

, 47 F.3d at 737 n.46. That statement, however,

is dicta

, because we expressly left open the question of whether to

adopt the rule in Lampert

. Id.- 39 -

More i mportantly, a closer inspection of C ox Broadcasting

r eveals that there are no First Amendment implications to our

d ecision here. C ox Broadcasting involved a civil action brought

under a Georgia statute that made it a misdemeanor to publicize or

broadcast a rape victim’s name. C ox Broadcasting

, 420 U.S. at 471-

72. A reporter, present in court when several rape defendants pled

guilty, learned the victim’s name from examining the indictments,

which were available for his inspection in the courtroom. Id. at

472-73. He later broadcast a news report about the court

proceedings, and the report named the victim. I d. at 473-74. The

Court concluded that Georgia could not “impose sanctions on the

publication of truthful informat ion contained in official court

records”. Id. at 495.

The Court stressed the importance of having a free press to

report on the operation and administration of our government,

especially judicial proceedings like criminal prosecutions, which

are events of legitimate concern to the public. I d. at 491-92, 495

(“[A] public benefit is performed by the reporting of the true

contents of [pu blic] records by the m edia

. The freedom of the

press to publish that information appears to us to be of critical

importance to our type of government....”) (emphasis added). But

Government employees

— e.g.

, IRS agents

— are not members of the

media and therefore have no First Amendment responsibility to

report on criminal proceedings or other government operations.

Moreover, the med ia’s source in C ox Broadcasting was court- 40 -

documents, not information protected by a non-disclosure statute,

such as § 6103.

In addition, the Court noted that accurate reports of judicial

proceedings have special protection under the First Amendment. I d.

at 492. But, as noted above, that protection arises only when the

source of those reports is public records or personal observation

of the events in court: “What transpires in the court room is

public property.... T hose who see and hear what transpired can

report it with impunity.” I d. at 492 (quoting Craig v. Harney

, 331

U.S. 367, 374 (1947)) (emphasis added); id. at 491 (framing issue

in case as “whether the State may impose sanctions on the accurate

publication of the name of a rape victim obtained from public

records

— more specifically, from judicial records which are

maintained in connection with a public prosecution and which

themselves are open to public inspection”) (emphasis added); id. at

495 (“ Public records by their very nature are of interest to those

concerned with the administration of government, and a public

benefit is performed by the reporting of the true contents of the

records by the media.”) (emphasis added).

That the Court did not address the issue present in our case

is evident from the following disclaimer in the opinion:

Appellants have contended that whether

they derived the information in question from

public records or instead through their own investigation, the First and Fourteenth

Amendments bar any sanctions from being

imposed by the State because of the

publication. Because appellants have

prevailed on more limited grounds, we need not

address this broader challenge....5 It is clear from the record that “identity” refers to

Johnson’s middle initial (“E”). Under § 6103(b)(6), “taxpayer

identity” includes “the name of a person with respect to whom a

return is filed”.

- 41 - Id. at 497 n.27. In other words, C ox Broadcasting ’s holding is

limited to its factual context. Because under our analysis, § 6103

is violated only when tax return informa tion — which is not a

public record open to public inspection — is the immediate source

of the in formation claimed to be wrongfully disclosed, the First

Amendment concerns in Cox Broadcasting are not implicated here.

ii.

Given this interpretation of § 6103, we must decide what tax

return information was wr ongfully disclosed in the releases. At

the beginning of the 1996 trial, Johnson claimed six items: his

age; his home address; the fact that he was executive vicepresident of ANICO; the statement that he was charged with false

busine ss deductions and altering documents on his 1974 and 1975

returns; the statement that he would be required to pay back taxes

plus penalties and interest; and his middle initial. 5

But, our en banc opinion had already conclu ded that the

statements about altering documents (charge portion) and about the

penalties for J o hnson’s conviction (penalty portion) were not

“return information” within the meaning of § 6103. J ohnson

, 47

F.3d at 732 n.34 (for charge portion: “language, which on its face

purports only to describe the content of the criminal information,

is not return information under section 6103(a)”; for penalty

portion: “[it] in substance merely describes the known, universally6 For this reason, Appellants conceded at oral argument

that the public record exception they urge (and which we reject)

would not apply to these three items and that, therefore, Johnson

is entitled, at a minimum, to statutory liquidated damages of

$1, 000 per disclosure for the wrongful disclosure of these three

items. S ee 26 U.S.C. § 7217(c)(1) (repealed). In its 1986 summary

judgment, the district court held that, under § 7217(c)(1), Johnson

would be entitled to $21,000 because Sassen sent the release to 21

news outlets. J

ohnson

, 640 F. Supp. at 1135-36, 1139. Neither

party has contested that aspect of the summary judgment ruling.

Accordingly, it is law of the case.

- 42 - applicable legal consequences of willfully and knowingly filing a

false and fraudulent income tax return understating the tax due by

several thousand dollars”). Because neither of these two portions

were tax return information, their inclusion in the press releases

did not violate § 6103.

In addition, Appellants have conceded in this appeal

— for the

first time during this case

— that Johnson’s age, home address, and

the word “vice-president” were wrongfully disclosed. 6 Appellants

maintain that the district judge who sentenced Johnson in 1981

(Judge G ibson) referred to him as an “executive with American

National Insurance Company”; therefore, they could disclose

Johnson’s affiliation with ANICO to that extent. Under their view,

bec a use Johnson’s specific job title, vice-president, was not

mentioned in open court, it could not be disclosed.

Neither Stone nor Sassen, however, attended the court

proceedings at which Johnson pled guilty. Nor, prior to the

release, did they examine the official transcript. Moreover, they

could not have seen the transcript; it did not exist when the

releases were issued. (The court reporter did not transcribe his7 Appellants contend, for the first time on appeal, that a

criminal docket sheet obtained f rom the district court by the

Department of Justice’s Office of Professional Responsibility

includes Johnson’s middle initial. That initial does not appear on

the sheet entered in evidence by Johnson.

Obviously, underlying this contention is a most serious and

p otentially wide-ranging charge. Appellants ask us to take

judicial notice of the sheet that they claim includes that initial.

This we cannot do. For starters, even though they claim that the

sheet “is on file in the district court”, Appellants have not had

that sheet included in the record on appeal. Nor is there a record

before us t hat sheds light on which sheet is correct. In short,

this contention is for another day and another forum, to possibly

include the district court on remand.

- 43 - notes and file the transcript until July 1981, over three months

after the releases were issued.)

In fact, Stone ad mitted that a ll of the identifying

information given to Sassen that is a t issue in this case — age,

middle initia l, home address, and occupation (executive vice

president of ANICO)

— came either from Johnson’s return file or

from information “in his [Stone’s] head” (that is, information that

Stone had gathered during the course of investigating Johnson).

Stone testified that all information gathered a bout a taxpayer,

including data learned in the course of an investigation that is

not actually present in a return or the return file, is protected

by § 6103. Because neither public (court) records nor knowledge of

the open court reference was the source for Johnson’s occupation,

any disclosure of his affiliation with ANICO, and not simply the

word “vice-president”, was a violation of § 6103.

As fo r Johnson’s middle initial (E), there is a dispute,

outside this record

, over whether it was previously discl osed in

public on the d ocket sheet for the 1981 criminal proceeding. 7- 44 -

However, because a § 6103 violation is premised on the s o urce of

the information claimed to be wrongfully disclosed, we need not

determine whether the middle initial is in the public record,

because it is not relevant to the que stion of whether § 6103 was

violated. As noted above, in providing Sassen with the identifying

information in the releases, Stone relied on Johnson’s return file

or information he had otherwise gathered about Johnson, not on any

public (court) document. Therefore, the middle initial disclosure

was a violation of § 6103.

In sum, four items in the releases were wrongfully disclosed:

Johnson’s middle initial (E), his age (59), his home address (25

Adler Circle), and his occupation (executive vice-president for the

American National Insurance Corpora tion). The rest of the

information in the releases was not wrongfully disclosed; this

includes the two statements (charge and penalty portions) that our

en banc court previously held were not § 6103 return information.

Johnson , 47 F.3d at 732 n.34.

With the offending, identifying, information removed, the

first release would have read as follows:

GALVESTON, TEXAS--In U.S. District Court

here, Apr. 10, Elvis Johnson pled guilty to a

charge of federal tax evasion. Judge Hugh

Gibson sentenced Johnson to a six-month

suspended prison term and one year supervised

probation.

Johnson was charged in a criminal

information with claiming false b usiness

deductions and altering documents involving

his 1974 and 1975 income tax returns.- 45 - In addition to the sentence, Johnson will

be required to pay back taxes, plus penalties

and interest.

c.

Johnson concede s on appeal that the charge and penalty

portions did not constitute disclosure of tax return information.

Again, the charge portion (most of the second paragraph) concerns

crimes with which Johnson had been charged, including the erroneous

information i n the first release; the penalty portion (third

paragraph), his being “required to pay back taxes, plus penalties

and interest”. Unfortunately, the jury was instructed otherwise.

It was instructed that,

as a matter of la w, the April 1991 news

releases at issue i n this case d id disclose

tax return information in violation of the

law

. You have to decide whether one or more

of the Defendants negligently or knowingly

disclosed or permitted disclosure of this tax

return information.

(Emphasis added.)

Appellants maintain that this instruction caused the jury to

understand th at all of the information in the releases was

wrongfully disclosed; and that this aff ected the outcome of the

case, mandating reversal and remand for a new trial. Johnson

counters that there was no error because he

did not contend at trial that those [charge

and penalty] portions of the press release

were tax return information or that they

caused Johnson damages. Johnson argued only

that inclusion of these statements in the

press release was relevant to Appellants’

negligent and knowing conduct.- 46 -

Our st andard of review bears repeating. Appellants “must

demonstrate that the charge as a whole creates substantial and

ineradicable doubt whether the jury has been properly guided in its

delib erations”; and, even then, “we will not reverse if we

determine, ba sed upon the entire record, that the challenged

instruction could not have affected the outcome of the case.”

Mijalis , 15 F.3d at 1318 (internal quotations omitted).

There is no dispute that the Appell ants timely and properly

objected to the given ins truction. Concomitantly, their written

proposed instructions stated that the charge and penalty portions

were not return information. Accordingly, their proposed

instruction correctly stated the law.

At the conclusion of the narrowing of issues colloquy at the

start of trial, the court ruled that it (through Chief Judge

Singleton) had already ruled that there had been a disclosure of

tax return information; and that the ruling stood. It later asked

counsel: “How do you then submit to the jury the issue of the

disclosure of confidential information? The jury can’t go back in

the jury room and say, now what was disclosed? The jury can’t be

confused about what constituted [tax return] information or what

remains.” We conclude that, because of the instruction and the

evidence as to what was, or was not, tax retu rn information, the

jury was confused in that fashion.

Along this same line, at the charge conference, the court

worked fr om the proposed instructions submitted by Johnson. As

noted, it rejected Appellants’ instructions, including those- 47 -

concerning the charge and penalty portions not constituting return

information. It did so without explaining why. (Pursuant to

comments the court made to Appellants’ c ounsel during a bench

conference, it appears that the court may have felt that the

penalty portion was an improper disclosure, notwithstanding our en

banc ruling to the contrary.)

As required, we have considered the charge as a whole. We

conclude that the “substantial and ineradicable doubt whether the

jury has been properly guided” prong is met.

Moving to the “affected the outcome” prong, we review the

entire record in making that call. We complied with that duty, and

then some. This record has been examined, and re-examined; it has

been dissected in minute detail.

Obviously, in determining whether the erroneous instruction

“affected the outcome”, an important aspect is th e positions, or

bases for liability, advanced by counsel at trial, as well as the

evidence adduced. Such bases and evidence are the soil in which

the instructions are planted; they bear on the jury’s application

of the law (instructions) to the evidence.

Despite his claim here that he “did not contend at trial that

[the charge and penalty] portions of the press release were tax

retur n information or that they caused [him] damages”, Johnson

repeatedly did just the opposite at trial, either expressly or by

implication. This had an effect on the district judge’s

evidentiary rulings, which of course, bore on the evidence to which

t he instruction was applied. Likewise, this affected the jury’s- 48 -

application of the instructions to the evidence. As hereinafter

described, different counsel for Johnson took different lines of

a ttack. They were out of step not only as to whether the charge

and penalty portions were imprope r disclosures of tax return

information but also as to how Johnson’s conviction shoul d be

utilized or presented. Both aspects were elements in the

instructions affecting the outcome.

Concerning the charge and penalty portions, Johnson’s amended

complaint claimed that they were tax return information. He made

this a contested issue of law in the pretrial order.

Along that line, in addressing at the start of trial what

issues remained for the jury, in the light of Chief Judge

Singleton’s 1986 and 1991 rulings a nd our en banc opinion,

Appellants noted that the latter held that the charge and penalty

portions did not constitute tax return information. In response,

Johnson urged that the summary judgment granted him in 1986 had not

been overturned, and stated: “There are comments made by the Fifth

Circuit in their [en banc] opinion that certain things did not

constitute tax return information, but

... [the court] did not

overrule the finding by Chief Judge Singleton that tax information”

had been disclosed. A lengthy colloquy ensued between the court

and counsel as to the effect of our en banc opinion.

Unfortunately, how to deal with what was not tax return information

— the charge and penalty portions

— got lost in the shuffle. Even

more unfortunate, it rema ined lost throughout the balance of the

trial.- 49 -

There is no dispute that Johnson’s conv iction could be

revealed in a press release. And, again, it is undisputed that the

charge and penalty portions were not tax return infor mation;

the refore, the information contained in these portions was not

improperly disclosed. The causation issue for the jury was

whether, as a result of only the improperly disclosed information,

not simply because there were press releases, Johnson lost his job.

In other words, a key issue was whether identifying information in

the releases that was disclosed in violation of § 6103 caused that

job loss. Admittedly, a very strong argument can be made that, but

for the improperly disclosed information, which identified him,

Johnson would not have been linked with the person made the subject

of the press releases. (See the redacted release, s upra .)

Johnson’s counsel, however, did not take that position consistently

at trial. And, the jury instruction prevented that issue from

being clearly presented to the jury.

The error in the instruction was assisted in its “effect on

the outcome” metamorphosis by the actio ns of Johnson’s counsel

throughout the trial. For example, in his voir dire, Johnson’s

counsel stated: “The IRS publicized [Johnson’s conviction], and as

a result of publicizing that, he lost his career, plain and simple.

That’s what this case is about.” But, again, that is not what the

case is about. Later in voir dire, Johnson’s counsel stated that

it “was a violation of law to issue that press release”. Now,

reading between the lines, perhaps Johnson’s counsel meant that it

was a violation of law to disclose part of the information in the- 50 -

rel ease. That, however, is not what was said to the jury. The

foregoing statements are fairly typical of overstatements made by

Johnson’s counsel throughout trial, including in questioning

witnesses.

The tactic employed in voir dire was utilized i n Johnson’s

opening statement. The press releases, rather than the portions

that constituted an improper disclosure of tax return information,

were attacked, as was Johnson’s conviction.

Johnson’s counsel often questioned witnesses about the

specific improperly d isclosed tax return information; but, they

kept undo ing that by attacking the press releases in t oto

,

confusing the issue. It may well be that, as claimed by Johnson,

such attacks were relevant; that the mistakes or errors relating to

the charge and penalty portions supported finding negligent or

knowing disclosure of the four items of tax return information. In

any event, care should have been taken in adducing such proof. It

was not.

For example, in questioning John son’s own expert, Johnson’s

c ounsel asked him to agree that, in issuing a press release, the

“need for speed, to get it out now,

. .. should not be allowed to

overcome a need to make sure it’s right”. But, again, the issue at

trial was not whether the press release was “right”; it was whether

the release contained improperly disclosed tax return information.

Perhaps, that is what counsel meant through the use of the word

“right”. And, several questions leading up to that question had- 51 -

been along that line. But, again, Johnson’s counsel kept undoing

his case through use of such overbroad questions.

These questions focus the jury, somewhat ambiguously, on the

errors in the first release (which are not return information) and

suggest that those errors are what caused Johnson’s dismissal.

Again, negligence in drafting the charge and penalty portions of

the release may support an infere nce of knowing or negligent

disclosure of the four items of tax return information (because the

release was written all at once, not piecemeal), but this

distinction must be made clear to the jury. It was not.

As another ex ample, Johnson’s counsel asked one of the

Appellants to agree that he “didn’t take out any of the identifying

information, and you didn’t tell Ms. Sassen to take out anything

about Mr. Johnson owing back taxes, penalti es, or interest, did

you?” Again, by linking the penalty portion with the identifying

information, this question suggests that the penalty portion was §

6103 “return information”, when our en banc court had already held

to the contrary.

Johnson’s coun sel compounded the error by next asking: “The

fact that Mr. Johnson will be required to pay back taxes, penalties

and interest, where does that appear in a Court re cord or other

public record?” This question again implies that the penalty

portion was improperly taken from Johnson’s return file (which

implies that it was § 6103 “return information” in the first

place). And the next question only reinforces this implication:

“How do you determine, Mr. Sawyer, if somebody owes back taxes?- 52 -

You have to look at their tax files, don’t you? You can’t get that

from the public record or the Court record in this case?” Given

that both Stone and Sassen admitted that Johnson’s return file was

the source of the identifying informa tion, questioning about the

charge and penalty portions was unnecessary to prove that § 6103

was violated.

As reflected in the foregoing examples, we conclude that the

erroneous instruction affected the outcome. Based on our reading

of the whole record, it is possible that the jury determined that

the charge and penalty portions were “return information” and that

they damaged Johnson in some way. If that is so, the jury may have

found Appellants liable under § 7217 for conduct that did not

violate § 6103 in the first place. In short, when the jury applied

the erroneous instruction to such evidence, we have no doubt that

the error in the instruction

— indicating that the charge and

penalty portions were improperly disclosed — affected the outcome

of the case, both as to liability and as to damages.

As stated, in determining whether the instruction affected the

outcome, we obviously did so against the backdrop of the record.

Our conclusio n that the erroneous instruction did affect the

outcome is buttressed by the jury’s susceptibility to applying the

instruction improperly d ue to appeals to prejudice by Johnson’s

counsel against the IRS and its personnel. Johnson’s closing

argument included an attack on his conviction, as had been done in

his opening statement. But, the conviction was not at issue; it

was not open to attack. Of course, the conviction tied directly- 53 -

into the charge and penalty portions, which the instruction implied

were improperly disclosed.

Johnson’s conviction was a trigger point for the jury, a point

pulled improperly and repeatedly by one of Johnson’s lawyers. He

stated: “So they find what they consider to be a $3,000 discrepancy

in his return, $3,500. So they undertake to make a criminal case

of it. They spend four years on it.” He later asked the jury:

“Who is the next trophy kill? Me? You?”, and then stated:

My CPAs pour over and prepare my tax returns.

I guess I’m going to have to sit down and read

them real close myself and go over everything.

I got [sic] a big enough name. Boy, they

would love to put it up on the wall.

(Amaz ingly, Appellants’ counsel did not object to these remarks.

We are confident that such appeals to prejudice will not reoccur on

remand.)

Each of the jurors had a set of the instructions. Because of

the complexity and intricacy of the issues in this case, a correct

jury instruction was needed more than ever. The jury did not

receive one. Because the instruction both improperly guided the

jury and affected the outcome, we must vacate and remand for a new

trial.

2.

The court instructed that the Appellants could be liable under

§ 7217 for “negligently or knowingly ... disclosing or permitting

the disclosure of tax return information”. (Emphasis added.)

Asserting that only Sassen made a “disclosure” within the meaning

of § 6103, the other Appellants maintain that persons who permit- 54 -

disclosures or wh o negligently supervise others who make

disclosures cannot be held liable under § 7217.

Appellants moved at trial for judgment as a matter of law on

this issue and raised timely objections in each instance at the

charge co nference. On the other hand, they do not challenge the

sufficiency of the evidence. Therefore, at issue is only whether,

as a matter o f law, they could disclose by their own actions,

including by permitting another to do so.

We find no error. “Disclosure” is defined by § 6103 as “the

making k nown to any person i n any manner whatever a return or

return information”. 26 U.S.C. § 6103(b)(8) (emphasis added). We

agree with Johnson that, under the plain meaning of the statute,

IRS agents like Stone and IRS supervisors like Orth, Braun, and

Sawyer can “make known” return information in “some manner” without

actually putting their names on a press release and mailing it to

a news outlet. In this regard, we are informed by C handler v.

United States

, 687 F. Supp. 1515 (C.D. Utah 1988), aff’d

, 887 F.2d

1397 (10th Cir. 1989). (There is a dearth of law on this point.)

In Chandler

, an IRS telle r received a penalty check that

failed to contain a taxpayer identification number (TIN). Id. at

1516. The teller accessed the taxpayer account via computer but

mistakenly transcribed the number onto the check. I d.

Consequently, the taxpayer’s account was not credited with those

funds, and an IRS revenue officer mailed a notice of levy to the

taxpayer’s place of emplo yment to collect the penalty. I d. The

taxpayer brought suit against the United States under 26 U.S.C. §- 55 -

7431. S ee su pra (§ 7217 and § 7431 contain same definition of

disclosure and same predicate for liability).

Because the Government conceded that the notice of levy

disclosed tax return information, 687 F. Supp. at 1516 n.1, the

issue was whether the disclosure was the result of negligence (or

willfulness). The court concluded that several IRS officers were

negligent, including the teller. Id. at 1521. The court reached

this conclusion despite the fact that it was the revenue officer

who actually mailed the n otice of levy and despite the fact that

the teller’s only contribution to that action was in transcribing

the TIN incorrectly. Id. Nevertheless, the negligent conduct of

the teller was actionable under § 7431.

We agree with Chandler that § 7217 expands the universe of

liability beyond the federal employee who actually “publishes” tax

return information. Other individuals in the chain of causation

who contribute to a wrongful disclosure (either by acting or by

failing to act) are proper party-defendants in a § 7217 action.

Stone, who supplied the tax return information to Sassen for the

first release, and supervisors Orth, Braun, and Sawyer, who

approved and/ or were personally involved in the first or second

release are equally as subject to liability under § 7217 as Sassen,

who distributed both releases. Therefore, it was not error to

instruct the jury in that regard.

3.

Because r e solution of Appellants’ challenge to four more

instructions must be left to the district court on remand, based on- 56 -

the record developed on retrial, we do not reach these issues. On

the other hand, we discuss them simply to assist the district court

on remand in deciding what is, and is not, law of the case.

a.

The district court denied Appellants’ proposed instruction

that Securities a nd Exchange Commission regulations would have

required ANICO to file a public report that Johnson had been

convicted of tax evasion. In our en banc opinion, we judicially

noticed the SEC regulations that would require ANICO to file a

report with the SEC that disclosed the fact t hat a director or

executive officer had been involved in a legal proceeding that was

“ material to an evaluation of the ability or integrity” of that

person. J

ohnson

, 47 F.3d at 733-34 & n.36 (quoting 17 C.F.R. §

229.401(f)) (emphasis added). We suggested that Johnson’s

conviction would be material under these regulations. I d. at 736-

37 (“The law has long considered conviction of any felony as

material to an evaluation of the integrity of the person so

convicted.”).

But, no evidence on materiality was presented. Because we

remand for a new trial, and because of the possible factual

underpinn ings for this claim, including the questions of whether

the SEC report would be relevant to the causation issue or to

mitigation of damages, we decline to address this claim, assuming

arguendo it was even properly presented here. Whether this

instruction should be given is best left to the district court,

when this matter is tried anew.- 57 - b.

The jury was instructed with respect to Sassen:

In judging whether defendant Sassen was negligent and/or knowingly violated the law,

you should ask yourself, did defendant Sassen

coordinate a s she was required to do with

Branch Chief defendant Orth, and with the

prosecuting attorney, U.S. Attorney Powers?

The basis of this instruction was the earlier described DDM which

stated: “The DPAO [Sassen] will coordinate all CID releases with

the Branch Chief, Criminal Investigation Division [Orth], and the

prosecuting U.S. Attorney [Powers].” Appellants maintain that

noncompliance with an internal agency guideline does not give rise

to an actionable claim.

One of Appellants’ own witnesses, the IRS official who signed

this DDM, testified that Sa ssen was required to follow the

guidelines in the DDMs in issuing press releases. In other words,

there was no dispute that Sasse n should have followed the

“coordination” directive in issuing t he two releases. She

testified about her understanding of the term “coor dinate” and

about her actions in that regard, such as communicating with Stone.

But, as discussed, Sassen also admits that she did not communicate

with Powers.

Again, because this matter will be tried anew, and because of

the factual nature of this issue, we will not address it. It

remains for the district court on retrial.

c.

According to Appellants, the court did not explain to the jury

which side had the burden of proo f on each element of Johnson’s- 58 -

case. Although Appellants maintain that the court properly

instructed the jury that Johnson carried that burden on the element

of proximate cause (Question No. 3), they contend that the jury may

have been misled into thinking that Appellants bore the burden of

disproving that they were negligent (Question No. 1). Once again,

this question is best left to the court on re mand in framing its

instructions.

d.

The district court refused to read to the jury the facts

stipulated in the pre-trial order. This is yet another question

best left to the court on remand. For example, even if stipulated

facts are to be presented to the jury by instruction or otherwise,

not all of them necessarily would be. One of the stipulated facts

was that th e judge who sentenced Johnson referred to him as an

“executive for the American National Insurance Company”. This is

the stipulation Appel lants especially wanted presented. But, as

the district court ruled, and as discussed supra and infra

, that

fact is not legally relevant; therefore, on remand, it should not

be presented to the jury, despite being stipulated to factually.

B.

Stone and Orth maintain that they should have been dismissed

because Johnson’s second amended complaint, which added them as

defendants, was filed approximately 16 months after the limitations

period had run. (Section 7217 has a two year period that runs from

the date of the wrongful disclosure. 26 U.S.C. § 7217(d)

(repealed).) Johnson responds that under F E D

. R. C IV

. P. 15(c), the- 59 -

second amended complaint relates back to the timely filed original

complaint. In its 1986 ruling, the district court denied summary

judgment for Stone and Orth on this issue on the grounds that the

elements of Rule 15(c) were satisfied

. Johnson , 640 F. Supp. at

1134-35. This was the only occasion on which they presented this

issue.

We have no occasion to re-examine that ruling because Stone

and Orth have failed to preserve this issue for review. First, as

discussed, we cannot review the 1986 denial of their summary

judgment motion; such interlocutory orders are not to be reviewed

where final judgment adverse to the movant is rendered on the basis

of a subsequent full trial on the merits. S ee Black

, 22 F.3d at

570.

And second, Stone a nd Orth did not re-urge the limitations

issue in their Rule 50 motions at trial. Such motions should

include all possible grounds, legal and factual, for judgment as a

matter of law. Id. at 571 n.5 (rejecting dual system for

evaluating denials of summary judgment). We decline to exercise

our discretion to address this issue on appeal. S ee, e.g,

Highlands Ins. Co. v. National Union Fire Ins. Co. , 27 F.3d 1027,

1031-32 (5th Cir. 1994).

C.

Appellants contest several evidentiary rulings. But,

[w]e will not reverse a district court’s

evidentiary rulings unless they are erroneous

and substantial prejudice results. The burden

of proving substantial prejudice lies with the

party asserting error.- 60 -

Mijalis

, 15 F.3d at 1318-19; see F ED

. R. E VID

. 103. We decide only

one of the claims.

1.

Conce rning the transcript of Johnson’s guilty plea hearing

being excluded, Appellants intended to rely on it to show that

Johnson’s affiliation with ANICO was disclosed in court at the plea

hearing on 10 April, before the first release. But under our

construction of § 6103, it is irrelevant whether that tax return

information was disclosed in open court. Neither Stone nor Sassen

was present in court when Johnson pled guilty. Both admitted that

the source of the information in the release was Johnson’s return

file, not the transcript or other court documents. (Moreover, the

transcript could not have been the source; it was not filed until

24 July 1981, over three months after the releases were issued.)

Consequently, the transcript was properly excluded.

2.

As was done for most of the challenged instructio ns, the

remaining claims are presented simply to clarify what is, and is

not, law of the case.

a.

Appellants contest two of Johnson’s e xpert witnesses, James

Caldwell and Tim Millis, being allowed to testify. They maintain

that both Caldwell and Millis offered opinions on legal questions

such as whether Appellants had violated the law and whether their

conduct was intentional and reckless. Our standard of review in

s uch instances, however, is very limited: “The decision to ad mit- 61 -

expert testimony lies within the district court’s sound discretion

and will not be overturned un less manifestly erroneous.” U nited

States v. Willey

, 57 F.3d 1374, 1389 (5th Cir. 1995). In any

event, this issue remains for the court on remand. Obviously, it

will be framed by the issues and evidence presented.

b.

Clay, President and CEO of ANICO in 1981, was a key witness

because he supported Appellants’ contention that it was the fact of

Johnson’s conviction, not the publicity surrounding it, that cost

Johnson his job. Clay testified that he asked Johnson to resign on

Thursday, 16 April, before learning of the release and after a

conference with two members of the board of directors (Duncan and

Randall) and a telephone poll of most of the rest of the board.

The district court did not allow Clay to test ify as to what

the other directors, particularly Duncan and Randall, had said to

him (Clay). In the proffer of that testimony, Clay stated that

Duncan and Randall had told him to dismiss Johnson immediately

because “they could not have a senior officer of the company,

particularly a fiduciary-type company, with a felony conviction

being a senior officer”.

Of course, this testimony is hearsay, F ED

. R. E VID

. 801(c); it

was offered for the truth of the matter stated — i.e. , that ANICO

“dismissed” Johnson because of the conviction, not because of the

press release. This is yet another issue that is best left to the

district court on remand. It must be decided based on the evidence

presented at the new trial and, in fact, may not even arise.- 62 - c.

Appellants appear to contend that the trial court erred in

permitting Irwin Herz, one of ANICO’s outside counsel in 1981, to

give hearsay testimony. He testified, with a limiting instruction

from the court, about his discussions with one of ANICO’s most

influential board members regarding Johnson. According to Herz,

that board member told him that Johnson had been terminated because

of publicity stemming from his guilty plea, not because of the

convicti on itself. This is another issue, assuming it is

presented, for the court at the trial on remand.

d.

As noted, an individual is not liable for an unauthorized

disclosure based on “a good faith, but erroneous, interpretation of

section 6103". 26 U.S.C. § 7217(b). Appellants maintain that they

were erroneously prohibited from presenting evidence concerning

their good faith defense

— that reliance on internal manuals and

regulations is relevant to that defense.

At trial, the DDM requirement that Sassen “coordinate” all

press releases with Powers was highly disputed. Johnson maintained

that the DDM required Sassen to actually contact Powers; Appellants

countered that Sassen could coordinate with Powers indirectly, via

Stone. Appellants attempted to present testimony from Robert

McKeever, the district director of the Austin District in 1981, and

H.C. Longley, the acting district director who signed the DDM, as

to the meaning of “coordi nate” in the DDM. The court refused to

allow that testimony.- 63 -

Once again, this is an issue that must be decided at the trial

on remand.

D.

The final issue is Appellants’ request that, on remand, this

case be reassigned because Judge Hoyt did not have the requisite

“appearance of impartiality”. A federal appellate court has

supervisory powers to do so as part of a remand order. See 28

U.S.C. § 2106 (“[A] court of appellate jurisdiction may

... require

such further proc eedings to be had as may be just under the

circumstances.”); Liteky v. United States

, 114 S. Ct. 1147, 1156-57

(1994) (source of this supervisory power is § 2106 and recusal

statute, 28 U.S.C. § 455(a)); In Re John H. McBryde

, No. 95-11082,

1997 WL 367349, at *24 (5th Cir. July 2, 1997); U nited States v.

Microsoft Corp.

, 56 F.3d 1448, 1463 (D.C. Cir. 1995); Haines v.

Liggett Group, Inc.

, 975 F.2d 81, 98 (3d Cir. 1992); United States

v. Torkington

, 874 F.2d 1441, 1446 (11th Cir. 1989); Davis & Cox v.

Summa Corp.

, 751 F.2d 1507, 1523 (9th Cir. 1985); United States v.

Robin , 553 F.2d 8, 10 (2d Cir. 1977) (en banc). For most obvious

reasons, “[t]he power to reassign pending cases is an extraordinary

one”; it is “rarely invoked”. I n Re John H. McBryde

, 1997 WL

367349, at *24.

Several circuits invoke such powers not just when actual bias

or prejudice exists but when the facts “might reasonably cause an

objective observer to question [the judge’s] impartiality”.

Microsoft

, 56 F.3d at 1463 (quoting Liljeberg v. Health Servs.

Acquisition Corp.

, 486 U.S. 847, 865 (1988)); see Haines

, 975 F.2d- 64 -

at 98 (purpose of reass ignment is “to avoid both bias and the

appearance of bias”); Torkington , 874 F.2d at 1446 (“Reassignment

is appropriate where the trial judge has engaged in conduct that

gives rise to the appearance of impropriety or a lack of

impartiality in the mind of a reasonable member of the public.”).

Other circuits have adopted a more formal test, in which the

following three factors are considered:

(1) whether the original judge would

reasonably be expected upon remand to have

substantial difficulty in putting out of his

or her mind previously-expressed views or findings determined to be erroneous or based

on evidence that must be rejected, (2) whether

reassignment is advisable to preserve the

appearance of justice, and (3) whether

reassignment would entail waste and

duplication out of proportion to any gain in

preserving the appearance of fairness.

Davis & Cox v. Summa Corp.

, 751 F.2d 1507, 1523 (9th Cir. 1985)

(quoting Robin

, 5 53 F.2d at 10); s ee Robin

, 553 F.2d at 10. We

need not decide which test to utilize. We conclude that, under

either test, reassignment is required.

In explaining why this case must be reassigned, we view it in

the light of its tortured, expansive (and expensive) history. The

district judg e was given a hotly contested, extremely emotional

case that had been pending for more than ten years, one that was

the subject of extensive opinions by a different district judge in

1986 and 1991 and by our en banc court in 1995, by which law of the

case on some points had been established. And, there was some

tension between our en banc and the district court opinions.- 65 -

Moreover, there was immediate, continuing, and ever-increasing

tension between the district judge and one of Appellants’ counsel,

who had tried the earlier FTCA claim. Added to this volatile mix

was the tension between the Appellant s and Powers, the Assistant

United States Attorney who had handled the tax conviction in 1981;

as described, he basically remembered nothing. The closest he came

to remembering anything was reviewing a press release

— apparently

the second (revised) release.

Accordingly, the district judge was justifiably concerned

about truthfulness by the witnesses. Although we question the

extent, and manner by which, he p ressed that concern, as well as

the extent and manner of his being at odds with the abovereferenced Appellants’ counsel, that, of course, is not why we

conclude that this case must be reassigned. The district judge was

on the scene; we will not, and cannot, question h is decisions in

these regards. See Liteky , 114 S. Ct. at 1157.

And, we have no doubt that the district judge could put out of

his mind, or disregard, his prior conclusions on those matters we

have found on this appeal to be erroneous, especially the erroneous

jury instruction that compels a new trial. On the other hand,

reassignment of this case is required because of the necessity to

preserve the appearance of impartiality, fairness, and justice.

(The loss of efficiency and economy pales in comparison to this.)

Suffice it to say, few indeed are those who would list the IRS

and its personnel as an e ntity or individuals with which or whom

they want to deal. Tax return preparation and tax payment are- 66 -

enjoyed by few, if any. Many transfer this dislike to those who

collect those taxes and administer our tax system. This has been

true since taxes were first levied and collected. But, no one can

dispute that persons in the tax collection business, just like

anyone else, are entitled to a fair trial. We know that the

district judge agrees.

Likewise, no on e can dispute that, generally, the American

public is entitled to know about the business of its courts and the

proceedings in them. We so noted in our en banc opinion. J ohnson

,

47 F.3d at 736 n.41, 737 & n.45.

Toward that end, press releases are one means to so advise the

American public. The need or reason for releases about tax

convictions was one of the numerous matters hotly contested at

trial. Appellants posit they are needed to help promote or ensure

voluntary tax compliance and to let the public know that everyone,

no matter his status or station, is treated the same; Johnson

counters that the release was to trumpet “bagging a trophy”. But,

as stated, the press release qua press release was not at issue; at

issue was improper disclosure of tax return information.

Nor was Johnson’s conviction at issue. In our en banc

opinion, we noted that, regarding the FTCA ruling, Chief Judge

Singleton “apparently credited all [the Johnsons’] testimony”

concerning the fact that “he was not guilty of tax evasion and that

he was wholly unaware that any items claimed as business expenses

on his return were factually false or overstated”. J ohnson

, 47

F.3d at 722. We commented that, “[i]n so doing, the court in- 67 -

effect rejected the government’s contention that ‘this is a matter

of res judicata

, it’s not ope n to attack.’ In this respect, the

district court clearly erred”. I d

. at 722 n.13. This

notwithstanding, Judge Hoyt appeared to, if not expressly, disagree

with the very fact of the conviction and of the events leading up

to it. For example, in a heated colloquy with Appellants’ counsel

outside the presence of the jury, Judge Hoyt stated:

This is no ga me down here. This is serious,

and it’s so serious it scares me to death;

that I coul d be prosecuted by somebody who

decides that they [sic] are not going to let

me pay $3500 in taxes.

Along this line, as discussed infra

, the dist rict court’s posttrial opinion replows the ground of Johnson’s conviction and again

implies that it was improper.

The court’s tension with, and appearance of b ias against,

Appellants was immediate. For example, the court asked the

following question during voir dire:

Now, how many of you have a bone to pick,

other than me

, with the Internal Revenue

Service?” Let’s see a show of frank hands....

You don’t have to worry about it . See, you

are on hallowed ground now. I don’t care what

an IRS agent might want to do to you, you can

raise your hand.

(Emphasis added.) S uch comments might simply have been intended to

put the potential jurors at ease. But, it was not an isolated

incident; this bias or antagonism, see Liteky

, 114 S. Ct. at 1157,

toward Appellants in particular, and the Internal Revenue Service

in general, continued, if not increased, throughout the trial.- 68 -

In the above-referenced colloquy, in which the court commented

about the IRS not allowing payment of “$3,500 in taxes”, the court

had earlier commented:

This is not something that’s insignificant.

All of you probably wou ld be in the

penitentiary if they had prosecuted you [under

the criminal statute for improper tax

information disclosure]. So don’t make the

mistake of lying here, because you open yourself up to prosecution.

D uring yet another of the many contentious colloquies wit h

Appellants’ counsel, in which the court was expressing dismay

because Appellants were testifying that they believ ed the

disclosures had not been improper (which arguably bore on their

“good faith, but erroneous, interpretation” of § 6103 defense), the

court stated:

And yet they would get on the witness stand

and testify that they believe that they can

release this information this very day.

Is that because they disagree with [the

court’s 1986] ruling or because you [Appellants’ counsel] told them that my ruling

isn’t right?

You see, if they had read these opinions,

any person with any common sense would not get

on the witn ess stand and say, in the face of

the Judge who just told them, there is

something wrong with your thinking here; and

they get up there and they say, well, you

know, I could still do this.

I [as the court] have already ruled as a

m atter of law they can’t. I [as the court]

did that in 1986. I [as the court] did it

again in 1991.

If they have not read these opinions,

then they should, because there is no basis in

common sense, not in law or fact, but no basis

in common sense for anybody to get on the- 69 - witness stand and tell a person to their face,

who has the job and responsibility of

determining what the rule of law is and how to

interpret it: Judge, you di d it, but piss on

you. I have a different opinion

.

(Emphasis added.) In another ruling, the court stated: “It seems

to me the problem is one of di singenuousness on the part of

witnesses getting up here and saying they don’t know anything.

They’re lying through their teeth. That’s all that means.”

Yet another example of this tension, evidencing a “high degree

of antagonism”, see Liteky , 114 S. Ct at 1157, and the appearance

of a lack of impartia lity, that we must remove through

reassignment, is reflected in a dispute between the court and

Appel lants’ counsel over the definition of hearsay, during which

the court stated: “Oh, excuse the hell ou t of me. That’s what I

learned in la w school....” And, at the conclusion of the trial,

after the verdict was rendered and the jury released, the court

stated to counsel:

Let me just make a couple of observations

before you leave this afternoon. I have been

concerned, as far as the lawyers are

concerned, about the conduct of the lawyers in

this case. I am also concerned about how we

spend our money in this United States of

America; and I sa y that because I don’t know

ho w in the world you can present a defense,

[Appellants’ counsel], by having people say,

first of all, they didn’t do it, th en say, I

did what I did in good faith, and then say,

but I would do it again.

There is no good faith defense to

anything of this sort as a matter of law when

those kind of options are put to the jury

because the answers are internally in conflict

with each other.- 70 - And now we all know why those folk [sic]

are hanging out in Minnesota, because some of

us are so arrogant, in the work we do for the

people o f the United States, that there are

other people who are waiti n g for the next

revolution.

And they’re going to bring it abo ut if

you and I and others like us don’t do

something now to st op this kind of insanity.

This is insane. And the tax payers should not

be paying 10

- $15 million out because it

doesn’t cost you anything to come down here to

try this case.

It is a sad day for the government and

for the United States of America.

Good Luck.

The final , and perhaps most illustrative, instances of the

appea rance of partiality are found in the district court’s posttrial opinion, referenced earlier . One example suffices. A

factual background section entitled “PUBLICIZING THE ‘TROPHY’” had

an explanatory footnote:

In the opening statement, the United States

Attorney from the Department of Justice

described the Johnson case as a “trophy case.”

Apparently, the IRS takes special pride in

publicizing prosecuting a person who hold[s]

an executive position in a large corporation.

But, the “opening statement” comment attributed to Appellants’

counsel was made instead by Johnson’s:

I was, frankly, stunned by something I heard

yesterday said [during voir dire] by the

Uni ted States Attorney sent all the way down

from Washington, D.C.[,] to defend the IRS

agents. He stood before you and he told you

what, essentially, their position was. He

said, you know, the IRS can choose to

prosecute a lot of peo ple, but we engage in

selective prosecution. If we can find

somebody with a big name, somebody w ho’s an

executive in an important company, that’s who- 71 - we love to pr osecute, because they are a

trophy

.

Even though it was only $3500, Johnny Johnson

got selected because Johnny Johnson was a

trophy

. Do you remember him telling you that?

Now, he didn’t use all the words I have used,

but that’s what he said.

And they want a t rophy because they want

publicity, and he told yo u that; and then he

said that we particularly love to get this

publicity around April the 15th when people

have to file their taxes. Remember those

words? His words not mine.

The press release that wa s issued by the IRS

concerning Johnny Johnson was issued on April

the 13th, April the 13th. You will get to see

the press release with your own eyes, and you

will get to see the date.

(Emphasis added.)

What Appellants’ counsel had actually said during voir dire

was quite different:

Now, despite the great size of the Internal

Revenue Service and what we constantly hear of

as the resources of the United States, the

Cri minal Investigation Division can only

investigate and prosecute a small percentage

of the cases that come to their attention, so

that within the Internal Revenue Service there

i s a very involved procedure whereby men an d

women known as revenue agents make referrals

from the examination division to the criminal

division.

Most of those cases never are tak en to a

criminal prosecution because along the way the

people in the Criminal Investigation Division

decide its doesn’t have prosecution merit,

there isn’t enough money involved, or the

p erson is too old to serve a jail term; and

then it has to go through the Department of

Justice, because the Internal Revenue Service

cannot prosecute a case itself.

Once it goes to the Internal Revenue Service

-

- the Department of Justice, the Department of- 72 - Justice makes a further cut in those cases and

kicks a whole bunch out, so that by the end of

the year, of all the thousands and thousands

of matters that comes to the attention of the

Criminal Investigation Division of the

Internal Revenue Service, only a very small

n umber, just over a thousand for this entire

country, are prosecuted.

Now, having those limited resources, partly

because that’s all they can get, and partly

because we don’t want to turn this nation into

a police stat e, one of the ways that the

Internal Revenue Service had determined to

best enforce the laws is a make sure that when

someone is prosecuted and punished for a

federal tax crime, in this case a felony, that

everybody knows about i t, and so they have a

public affairs office, and the public affairs

office makes press releases, and the press releases are intended to tell the people of

the United States two things:

No. 1, pay your taxe s and be fair with your

government, and be fair with your fellow

taxpayers, because if you don’t, we have this

elite group of highly skilled agents out there

who are going to catch you and they are going

to prosecute you.

And No. 2, the message to the vast majority of

honest, hard-working tax-paying American

citizens is this: We are making sure that

other people are like you. We are making sure

... everyone out there is toeing the line like

you and paying your taxes and being fair with

Uncle Sam and your neighbor ; and so, they

write press releases, and they send them out

to radio station and to newspapers, and they

especially do that in the period right before

tax day, April 15th of each year.

Now, the Internal Revenue Service has a

pro blem. The local television news likes to

do exciting things. They like sound bites.

They like to look at thi ngs with agents

breaking into houses and pulling out drugs and

saving children from wells and so on and so

on. The fact that somebody has attempted to

evade their federal income taxes does not get

their attention; and therefore these press

releases have to be made and sent to th ese8 The absolute necessity for impartiality and the

appearance of same, and our concomitant duty to always attempt to

ensure them, regardless of how unpleasant it may be to have a case reassigned, evokes the following passage which incoming new cadets

- 73 - organizat ions, and a lot of times they don’t

publish them, but that’s what they’re doing.

Now, there is a difference, of course, between

street crime that goes on television every night and what we euphemistically call “white

collar crime,” which is what tax evasion is.

Is there anybody here who believes that it is

unfair to make a press release about somebody

who h as evaded or attempted to evade their

federal incomes taxes?

(No response)

[Appellants’ counsel] Is there anybody who

thinks that it should be excused because

somebody is high up in the executive suite and

they commit a felony, that th e public should

not know about them; that all the public

should know about is the people who are out

there dealing drugs or robbing banks; that

somehow that is different; that somebody who

is high up in a n executive suite is entitled

to have all of these things squashed quietly,

late in th e afternoon, far away, using an

incorrect address, and in an attempt to use a

different name so that nobody can tell that it

was really him who was prosecuted.

Anybody believes that? Anybody thinks that

would be fair?

This “trophy” saga is a vivid illustration of why this case

must be reassigned (and, as discussed supra , bears on why it must

be retried).

We know that the district judge agrees that an appearance of

partiality or bias must be remedied. And, it goes without saying

that this reassignment is most extraordinary and ordered most

reluctantly. That notwithstanding, our duty is clear. 8(plebes) at the United States Military Academy (West Point) were,

and it is hoped still are, required to memorize. A few words may

be incorrect or out of order, due to memory dimmed somewhat by the

passage of 35 years; nevertheless, the message is crystal clear:

But an officer on duty knows no one. To be

partial is to dis honor both himself and the

object of his ill-advised favor. What will be

thought of him who winks at and over l ooks

offenses in one, which he causes to be

punished in another; and contrast him with the

soldier who does his duty faithfully,

notwithstanding that it occasionally wars with

his private conduct and feelings. The conduct

of one will be em ulated and venerated; the

other, detested as a satire upon soldiership

and honor.

General Douglas MacArthur, one of West Point’s, as well as this

Nation’s, greatest sons, proclaimed, and at the same time

cautioned: “There is no substitute for victory”. The same is true

of judicial impartiality. Some things never change; nor should

they. Again, we know the district judge is of this view.

- 74 - III.

It is past time for this opinion to end. It is far past time

for this case to end; indeed, to be put to rest. It has been

pending for almost 15 years. We are confident that through

insightful case management and procedures, such as a comprehensive

pretrial order and in limine and other rulings which otherwise

narrow the issues, limiting instructions, and carefully drawn jury

instructions, this case can be tried in a manner that is fair to

both sides and will result in a correct judgment.

The judgment of the district court is VACATED and this matter

is REMANDED for further proceedings consistent with this opinion.

On remand, both § 7217 liability and damages are in issue. The- 75 -

Chief Judge of the United States District Court for the Southern

District of Texas is to REASSIGN this case.

VACATED and REMANDED; INSTRUCTIONS ISSUED