Opinion ID: 596389
Heading Depth: 2
Heading Rank: 2

Heading: The Government's Affirmative Defenses

Text: 53 The government's first argument for reversal is that the trial court improperly allowed Johnson to proceed under the FTCA because the nature of the actions that damaged Johnson was the breach of the agreement made between Johnson and Powell. The government argues that the District Court improperly based its decision on the grounds [sic] that the IRS's issuance of the press release was in violation of the plea agreement. The government mischaracterizes both Johnson's cause of action and the basis for the district court's judgment. Neither relied on breach of the plea agreement. 54 As discussed above, Johnson's assertions do, as he insists, fit a recognized theory of tort under Texas case law. Additionally, the government's breach of contract argument rings particularly hollow when viewed in the realization that the IRS was not even a party to the plea agreement between the Department of Justice and Johnson, and thus had no privity with Johnson. 42 Without privity there can be no breach of contract. Moreover, Johnson never asserted that the government was liable to him because the IRS violated his agreement with the Department of Justice. To the contrary, Johnson has consistently asserted that the government's liability results from violation of its duty toward him as established by § 6103. 55 We perceive the government's entire breach of contract argument to be a red herring. Irrespective of its label, a plea agreement in a criminal case is not a contract in the civil sense. A breach of a plea agreement may affect such criminal matters as sentencing, withdrawal of a plea, sentencing appeals, and the like; but the breach of a plea agreement never generates civil remedies such as monetary damages or specific performance. Thus, we reject the government's breach of contract argument out of hand. In so doing, however, we observe in passing that a plea agreement does create a duty owed by the government to the defendant, and thus a standard of care, the breach of which might constitute a tort under the right circumstances.
56 The government next asserts that the remedial structure of § 7217 43 of the Internal Revenue Code preempts the FTCA for resolution of claims such as Johnson's. The government cites no direct authority for this proposition but relies on our holding, in Rollins v. Marsh, 44 that the FTCA was preempted by the Civil Service Reform Act of 1978 (CSRA). 45 The government's reliance on Rollins is misplaced. There, we acknowledged that, to preempt the FTCA, new legislation must specify comprehensive remedies that unmistakably provide the exclusive method for resolving controversies of the type covered by the legislation. 46 In so acknowledging, we agreed with the conclusions reached earlier by the Eighth and Ninth Circuits that the remedial provisions of the CSRA were sufficiently comprehensive and exclusive to preempt the FTCA. 47 57 We are convinced, however, that even though § 7217 may be comprehensive, it is not similarly exclusive. Unlike the CSRA, which creates a cohesive system for the redress of civil servants' employment problems, § 7217 merely provides remedies for violations of § 6103; nowhere does Congress purport to make § 7217 preemptive of the FTCA. The government fails to cite to this court any evidence that Congress intended for § 7217 to be the exclusive remedy for each and every § 6103 violation. 48 We hold that Johnson's right to sue the government under the FTCA for a tort arising from violation of the duty created under § 6103 is not preempted by § 7217.
58 The government next argues that Johnson's claims are barred by the so-called discretionary function exception to the FTCA. By statute, that exception excludes from the FTCA's broad waiver of sovereign immunity [a]ny claim ... based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the government, whether or not the discretion involved be abused. 49 59 Clearly, however, the discretionary function exception does not encompass every act of a government employee that involves some element of discretion. This court has previously noted that our decisions ... have been extraordinarily careful to avoid any interpretation of the discretionary function exception that would embrace any governmental act merely because some decision-making power was exercised by the official whose act was questioned. 50 Thus, as virtually every act of a government employee involves at least a modicum of choice, we must exercise restraint when applying the discretionary function exception. 51 If courts were not to exercise restraint, the government would be insulated from nearly all tort liability, 52 thereby frustrating the very purposes that motivated enactment of the FTCA--a classic example of the exception swallowing the rule. 60 In an exercise of discretion, the IRS has elected to maintain a policy of publishing the names of persons who run afoul of the criminal tax laws. The avowed purpose of that policy is to deter future violations by all who encounter such publicity. The district court recognized that the IRS had made an upper-level discretionary decision to disseminate press releases about persons convicted of tax evasion. 53 The government argues to us that the agents in the instant case were merely carrying out this policy when they released the information about Johnson. But even if we were to grant that this argument is true as far as it goes, it stops well short of fully addressing the applicability of the discretionary function exception in this case. 61 The fact that there was an IRS policy to release information about persons convicted of tax evasion does not automatically sterilize every action taken in furtherance of the policy. This court has stated: 62 Once the government makes a discretionary decision, the discretionary function exception does not apply to subsequent decisions made in carrying out that policy, even though discretionary decisions are constantly made as to how those acts are carried out. 54 63 When the government adopts a discretionary policy, it must thereafter exercise constant vigilance to ensure that actions taken in furtherance of that policy are not performed negligently. 55 64 In the instant case, we start, as did the district court, with a given: The IRS, in its discretion, decided to maintain a policy of issuing news releases about persons convicted of tax evasion. In general, that is the kind of policy decision which the discretionary function exception is meant to shield. When Stone and the other IRS agents here involved published the news release about Johnson, they were ostensibly acting in furtherance of this express policy of the IRS. Clearly, however, their actions purportedly aimed at implementing the policy were at least negligent because those agents overlooked § 6103--if in fact they did not deliberately ignore it. 65 Just because the discretionary function exception would generally shield the government from FTCA liability otherwise arising from the policy decision of the IRS to issue such news releases, it does not follow that the government is automatically shielded from such liability when the acts of the particular agents seeking to implement that policy violate another federal law, regulation, or express policy. Actions taken to carry out a discretionary policy must be taken with sufficient caution to ensure that, at a minimum, some other federal law is not violated in the process. It goes without saying, then, that if caution must be exercised to avoid simple negligence, even greater caution must be employed to prevent reckless disregard and intentional or deliberate violations of law. 66 In the instant case, the IRS agents' release of protected information about Johnson was not only negligent in the abstract; it was negligent as a matter of Texas law because a statute--s 6103--was violated in the course of such conduct. We hold that the discretionary function exception to the FTCA does not shield the government from liability for acts of its agents taken in furtherance of a general discretionary policy--such as the IRS policy to deter tax evasion through the publication of the names and other personal information about tax evaders--when such acts are taken in a manner that violates a federal statute. As the actions in the instant case violated § 6103, which expressly prescribes an applicable standard of diligence, those actions do not qualify for shelter under the wings of the discretionary function exception. The sheltering wings of the exception are broad, but not infinite.
67 The government urges yet another exception to the FTCA's waiver of sovereign immunity, one that purports to eschew governmental liability under the FTCA for [a]ny claim arising in respect of the assessment or collection of any tax or customs duty. 56 The district court rejected the [g]overnment's position that any misdeeds committed by the individual defendants in this case ... were sufficiently related to the assessment or collection of taxes to fall under § 2680(c). 57 68 Again, we review such factual findings for clear error. But even if this issue were one of law, and thus subject to plenary review, we would agree with the district court. To argue that the actions of the IRS officers involved with the Johnson news release were causally connected to the tasks of assessing or collecting taxes strains credulity beyond the breaking point. The government informs us that the purpose of the instant publication effort was to deter potential tax evaders and thus was in furtherance of the more general efforts of the IRS to collect taxes. Therefore, argues the government, publicity aimed at deterring future evasion should be included within the assessment and collection exemption of § 2680(c). We find the government's position untenable. 69 A determination that the ambit of the assessment and collection exception is so all-embracing as to cover the news releases about Johnson's conviction would extend the exception to the point that the FTCA's waiver of sovereign immunity vis-a-vis the IRS would be wholly subsumed in that exception. Such an extension would effectively exempt every act of every IRS agent whatsoever. No case law cited to this court supports such a pervasive immunity for the IRS, and we have found none independently. 58 True, the jurisprudence in this area supports the conclusion that the exemption is quite broad as it relates to agents engaged in activities with a realistic nexus to the functions of assessing or collecting taxes. But in the instant case, accepting the government's argument would stretch the assessment and collection exemption to cover all general deterrent activities of the IRS even though, as here, the taxpayer may have long since paid the tax deficiency as well as penalties and interest. 70 It is axiomatic that not every employee of the IRS is engaged in assessing or collecting taxes even though those are the primary functions and missions of the Service. It is equally true that not every official act of those agents who are thus engaged is sufficiently related to assessing or collecting taxes to have the nexus required to enjoy the protection of § 2680(c). We refuse to expand this exemption as far beyond its already broad range as the government suggests. 71 In Cappozzoli v. United States, we stated that 72 an IRS agent could engage in tortious conduct sufficiently removed from the agents official duties of assessing or collecting taxes as to be beyond the scope of Section 2680(c), and at the same time sufficiently within the scope of his employment to give rise to an action against the United States. 59 73 Today we consider just such a situation. Even accepting for the sake of argument that the actions of the subject IRS agents were directed at deterring future tax evasion by others, those actions were not sufficiently related to assessing or collecting taxes to be immune from responsibility under § 2680(c). The attenuation of those acts from the outer limits of the exemption is too great to appertain. One of the agents was a publication relations officer; the others were special agents whose jobs comprehend criminal tax violations and violators. Off hand, we can think of no two IRS jobs with less nexus to the functions of assessing or collecting taxes. We are satisfied by the plain language of § 2680(c) that its tax assessment and collection exception was never intended to include deterrent publicity within its ambit of that exemption. We therefore reject the government's exemption argument.