Court Opinion

ID: 4486135
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:34:12.764929+00
Date Added: 2024-06-11T15:02:46.126656
License: Public Domain

WHALEN, J., concurring: I concur with the result the majority reaches today, and agree that the specific allegations of fraud made by respondent, and taken to be true by reason of petitioner’s default, are sufficient to satisfy respondent’s burden of proof in this case. I also endorse the majority’s view that we should not require respondent to undertake the charade of putting on evidence to meet his burden of proof when he has affirmatively pleaded facts sufficient to sustain fraud, and petitioner then fails to deny those facts and appear for trial. I disagree, however, that it is necessary to overrule the Board of Tax Appeals’ decision in Miller-Pocahontas Coal Co. v. Commissioner,, 21 B.T.A. 1360 (1931) [Miller-Pocahontas). That decision is entirely consistent with the result the majority reaches today. In Miller-Pocahontas, there were no well-pleaded facts sufficient to establish the taxpayer’s liability for fraud. Rather, in response to the taxpayer’s petition, respondent “answered denying all the facts.” Miller-Pocahontas, supra at 1360-1361. Because respondent alleged nothing to be taken as true by the taxpayer’s default, respondent “offered no proof of fraud to sustain the 50 per cent penalty,” and the Board concluded that mere dismissed “in the absence or insufficiency of [such] evidence” could not support the fraud penalty determined by respondent. Miller-Pocahontas, supra at 1361. The majority seems to misinterpret Miller-Pocahontas as establishing the per se rule that we cannot grant respondent a default judgment for fraud under any circumstances. The holding in Miller-Pocahontas, however, is completely reconcilable with the result the majority reaches today. Both stand for the proposition that absent respondent’s allegations of fact, in effect admitted and taken to be true by the taxpayer’s default, dismissal cannot support fraud. In Miller-Pocahontas, respondent made no such allegations; in the case before us, he did. Because of this material factual difference, which the majority overlooks, Miller-Pocahontas contains no inconsistent rule of law that must be overruled in order to accommodate the result we reach today. Instead, the majority could have based its decision on extant law. If the majority is concerned with any gloss which it feels the years have placed on Miller-Pocahontas, i.e., that this Court lacks the capacity in all cases to default a taxpayer on the issue of fraud, it should remove that gloss, not overrule the case. Similarly, if the majority believes that a default before this Court is materially different, by virtue of our status as an article I court and our current Rules of Practice and Procedure, from a default before our predecessor, an article II Board, then the majority should distinguish the Board’s decision on such ground, rather than overrule it. I would hold for respondent, but, on grounds of judicial restraint and stare decisis, not overrule Miller-Pocahontas. Judicial restraint suggests that this Court reserve its prerogative to overrule a prior opinion for only those situations where the prior opinion, rendered vulnerable to reconsideration by intervening circumstances, is irreconcilable with the Court’s current position. To overrule a case which can be factually distinguished is a waste of judicial power. Furthermore, “we do not lightly decline to follow one of our prior decisions.” Threlkeld v. Commissioner, 87 T.C. 1294, 1304 (1986), affd. 848 F.2d 81 (6th Cir. 1988); Sylvan v. Commissioner,, 65 T.C. 548 (1975). Stare decisis, though not inflexible, demands “special justification” for departure from precedent. Arizona v. Rumsey, 467 U.S. 203, 212 (1984); Akron v. Akron Center for Reproductive Health, 462 U.S. 416 (1983); Helvering v. Hallock, 309 U.S. 106 (1940). As the Supreme Court recently stated, stare decisis is: the means by which we ensure that the law will not merely change erratically, but will develop in a principled and intelligible fashion. * * * While stare decisis is not an inexorable command, the careful observer will discern that any detours from the straight path of stare decisis in our past have occurred for articulable reasons, and only when the Court has felt obliged “to bring its opinions into agreement with experience and with facts newly ascertained.” Burnet v. Coronado Oil & Gas Co., 285 U.S. 393, 412 (Brandéis, J., dissenting). Our history does not impose any rigid formula to constrain the Court in the disposition of cases. Rather, its lesson is that every successful proponent of overruling precedent has borne the heavy burden of persuading the Court that changes in society or in the law dictate that the values served by stare decisis yield in favor of a greater objective. * * * [Vasquez v. Hillery, 474 U.S. 254, 265-266 (1986).] We are not at liberty to abandon our predecessor’s decision lightly. Because the majority could arrive at the same result without overruling Miller-Pocahontas, it should accord that decision continued vitality. WILLIAMS, J., agrees with this concurring opinion.