Opinion ID: 4680715
Heading Depth: 3
Heading Rank: 2

Heading: The meaning of recklessness

Text: The Safeco Court stated that “[w]hile the term recklessness is not selfdefining, the common law has generally understood it in the sphere of civil liability as conduct violating an objective standard: action entailing an unjustifiably high risk of harm that is either known or so obvious that it should be known.” 551 U.S. at 68, 127 S. Ct. at 2215 (internal quotations and citations omitted). Both the Fourth Circuit and the Third Circuit have adopted the Safeco standard in the context of the FBAR penalty: [C]ivil recklessness requires proof of something more than mere negligence: “It is [the] high risk of harm, objectively assessed, that is the essence of recklessness at common law.” Safeco, 551 U.S. at 69, 127 S. Ct. 2201. Thus, as the Third Circuit has held, when imposing a civil penalty for an FBAR violation, willfulness based on recklessness is established if the defendant “(1) clearly ought to have known that (2) there was a grave risk that an accurate FBAR was not being filed and if (3) he was in a position to find out for certain very easily.” Bedrosian, 912 F.3d at 153 (cleaned up). 15 USCA11 Case: 19-14464 Date Filed: 04/23/2021 Page: 16 of 28 Horowitz, 978 F.3d at 89; accord Norman, 942 F.3d at 1115 (citing Safeco and Bedrosian and holding: “the failure to learn of the filing requirements coupled with other factors, such as efforts taken to conceal the existence of the accounts and the amounts involved, may lead to a conclusion that the taxpayer acted willfully” (internal quotation omitted)). We join our sister circuits in holding that the appropriate standard of willfulness to warrant the FBAR penalty is—borrowing from Safeco—“an objective standard: action entailing an unjustifiably high risk of harm that is either known or so obvious that it should be known.” We turn next to address Rum’s argument that, in applying the Safeco standard of recklessness, the district court erred in failing to conclude that there were genuine issues of fact.