Court Opinion

ID: 2654910
Source: CourtListenerOpinion
Date Created: 2014-02-27 05:12:55.13278+00
Date Added: 2024-06-11T09:11:52.716065
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               DISTRICT OF COLUMBIA COURT OF APPEALS

                                  No. 12-AA-466

          DISTRICT OF COLUMBIA OFFICE OF TAX AND REVENUE, PETITIONER,

                                         v.

               JOHN R. SHUMAN and SARA G. SHUMAN, RESPONDENTS.

                      Petition for Review of a Final order of the
               District of Columbia Office of Administrative Hearings
                                   (OTR-00008-11)

(Submitted October 22, 2013                         Decided December 19, 2013)

       Irvin B. Nathan, Attorney General for the District of Columbia, Todd S. Kim,
Solicitor General, Donna M. Murasky, Deputy Solicitor General, Mary L. Wilson,
Senior Assistant Attorney General, were on the brief for petitioner.

         John R. Shuman and Sara G. Shuman, pro se, filed a statement in lieu of
brief.

     Before THOMPSON, Associate Judge, and WAGNER and SCHWELB, Senior
Judges.

         SCHWELB, Senior Judge: In the 1984 film ―The Terminator‖ – a work of

fiction starring Arnold Schwarzenegger – artificially intelligent machines

attempted to exterminate what was then left of the human race. In the appeal now

before us, a man-made computer system did not go so far but, defying the will of

those who programmed it, it caused significant grief and distress to those who had
                                          2

a right to rely on its accuracy. Unfortunately, the machine involved belonged to

the branch of the District of Columbia government responsible for calculating and

collecting citizens‘ taxes. In this case, we are charged with resolving a controversy

that had its inception in an erroneous data entry made almost a decade ago into the

computer system of the District of Columbia‘s Office of Tax & Revenue (OTR),

and OTR‘s errant computer program has played a key role in the litigation.

      The taxpayers affected by this unfortunate data entry are respondents John

R. Shuman and Sara G. Shuman. It is now undisputed that the Shumans were

entitled to a refund of $790 from OTR with respect to their 2004 tax return, but this

amount was mistakenly entered into OTR‘s computer system as tax due from the

Shumans. This erroneous entry, and the prolonged inability of OTR (apparently

continuing to the present day) to correct it, have caused repeated and vexatious

problems for the taxpayers, cost the District and its agencies a great deal of money,

and raised troubling questions as to what, if any, authority the District‘s Office of

Administrative Hearings (OAH) may have to provide an effective remedy, and as

to whether the controversy was litigated in the appropriate forum.

      In this case, in the order under review, an Administrative Law Judge (ALJ)
                                         3

of the OAH granted extensive monetary and equitable relief, including the

equivalent of an injunction, the imposition of conditional monthly fines potentially

adding up to many tens of thousands of dollars, and the unconditional transfer of a

large amount of money from one District agency (OTR) to another (OAH). Such

remedies, to the extent that they are precedented at all, have heretofore been

associated with contempt proceedings before judicial rather than administrative

bodies. We conclude that the ALJ exceeded her authority in granting the relief that

she did, and we therefore reverse her decision and vacate the ALJ‘s order, without

prejudice to any proceedings the Shumans may choose to institute in the Superior

Court and any defenses that OTR may assert in that forum.

                        I. FACTUAL BACKGROUND

      Because of the complexity of this controversy and the repeated failure of

OTR to correct its errors and to avoid future mistaken claims against the Shumans,

we recite the history of the case in some detail. The Shumans timely filed a joint

income tax return in the District of Columbia for the 2004 tax year, and they paid

the tax due in full. The following year, the Shumans filed an amended return and

requested a refund in the amount of $790, which OTR duly issued to them. Two
                                         4

years later, however, on September 13, 2007, OTR sent the Shumans a ―Statement

of Account‖ advising them that they owed the District $790, together with interest

and penalties, for the 2004 tax year. Believing this claim to be unfounded, the

Shumans promptly contacted OTR and requested that the error be corrected. On

September 21, 2007 OTR issued another Statement of Account and effectively

confessed error, acknowledging that the Shumans had no outstanding tax liability

for 2004. The unfounded claim was thus withdrawn.

      When the Shumans filed their return for the 2007 tax year, however, they

requested a refund for that year in the amount of $4,132. OTR issued a refund

check in their favor, but for only $3,342, which was $790 less than the amount

requested. Undoubtedly more astonished than pleased, the Shumans immediately

inquired about the reduction of their refund, and they were once again reassured

that they would receive the balance. Nevertheless, on March 13, 2008, OTR sent

the Shumans a ―Notice of Offset‖ advising them that OTR had reduced their refund

for the 2007 tax year by $790 in order to satisfy an alleged tax liability for 2004.

By this time, the Shumans may have been a trifle bewildered, for the effective

confession of error which they had received half a year earlier had apparently come

to naught. On August 25, 2008, seeking a prompt and inexpensive remedy, the
                                         5

Shumans brought OAH into the case by filing a ―Taxpayer‘s Protest of a Proposed

Assessment‖ with that agency. The Shumans requested OAH to rule that OTR was

required to issue a $790 refund, which reflected OTR‘s error as to the 2004 tax

year and, consequently, the amount by which OTR had improperly reduced the

Shumans‘ refund for the 2007 tax year. A few days later, however, on September

4, 2008, OTR sent the Shumans another Notice of Offset, reiterating that their

refund for 2007 would be reduced by $790.

      At this point, having noted the discrepancies, OTR apparently launched an

investigation and discovered that the incorrect offset notices had been sent to the

Shumans as a result of the erroneous information, described at the outset of this

opinion, which had been entered into OTR‘s computer system with respect to the

2004 tax year. Specifically, the $790 refund that the District owed to the Shumans

for 2004 had been mistakenly entered into the system as an amount owed by the

Shumans to the District. On October 2, 2008, the ALJ, who has handled this

matter on behalf of OAH throughout these proceedings, exercised jurisdiction over

the case without immediate objection by OTR, and she held a status conference. A

representative of OTR agreed at this conference that the Shumans were entitled to

receive a refund check for the amount in dispute. OTR did indeed send the
                                          6

Shumans a check for $790 on October 21, 2008, as it had agreed to do, but OTR

seemingly nullified this action by issuing a new Notice of Offset on October 28,

2008, again claiming that the Shumans owed $790 in unpaid taxes for the 2004

year.   In addition, OTR sent the Shumans a refund check for $1,799.76, but

simultaneously issued an offset notice for $19,151. According to OTR, both of

these items pertained to the 2004 tax year.

        On January 15, 2009, the ALJ held another status conference to try to

resolve the issues raised by the most recent claims.         In conformity with

an assurance provided at this status conference, OTR certified that the Shumans

would have no tax liability for tax years 2004 to 2007 if they returned the

erroneously issued $1,799.76 refund check. The ALJ issued a final order on

February 2, 2009, directing the Shumans to return this check, and she ordered that

the case be dismissed without prejudice when that had been accomplished.

        This should surely have ended the matter, but it did not. On account of

persistent problems with its computer system, OTR continued to issue erroneous

forms and notices to the Shumans regarding the $790 refund. OTR issued an

Internal Revenue Service (―IRS‖) Form 1099-G for tax years 2004 and 2007, in
                                          7

which it incorrectly alleged that the Shumans had received $23,891 and $7,292 in

refunds for those years. In response, on February 9, 2009, the Shumans moved to

reopen the case, asserting that they had not received refunds in the claimed

amounts. At this point, half a year after the Shumans had complained to OAH,

OTR argued for the first time that OAH lacked jurisdiction over ―information‖

returns such as the IRS Form 1099-G because these forms do not assess a tax, and

because OAH‘s statutory jurisdiction is limited to dealing with tax assessments.

This claim of lack of jurisdiction is one of OTR‘s principal contentions before this

court.

         On February 26, 2009, OTR sent the Shumans still another Notice of Offset,

now asserting that the Shumans‘ refund for the 2004 tax year should be reduced by

$1,580, which of course is $790 doubled.         The Shumans promptly filed an

amended motion to vacate the dismissal and to reopen the case. On March 16,

2009, the ALJ granted the motion to reopen, and she stayed the motion to vacate

dismissal pending a status conference. At that conference, Pamela Westray, then

operations manager for OTR‘s Customer Service Administration, explained that a

―glitch‖ in OTR‘s computer system had caused the computer to generate the

erroneous notices automatically. Ms. Westray believed that she could override the
                                         8

automatic generation of the notices by ―suppressing‖ the Shumans‘ account for

2004 and by ―writing off‖ the incorrect outstanding balance. As we shall see,

however, it turned out that she was mistaken; the computer system, though

inanimate, would not be so easily diverted.

      On April 13, 2009, following the status conference, the ALJ issued an

order directing OTR to ―suppress‖ the Shumans‘s accounts for the tax years 2004

to 2007, and to submit written proof of compliance with her order within 30 days.

She also warned that if OTR sent another erroneous notice claiming tax due for the

2004 tax year, despite its certification that the Shumans had no further obligations

for 2004, OTR would be subject to potential monetary sanctions for failure to

comply with a lawful order. See D.C. Code § 2-1831.09 (b)(8) (2001). The ALJ

directed that the case remain open for six months, so that OTR‘s compliance with

the order could be monitored. On December 29, 2009, the Shumans not having

received any tax bills or notices concerning 2004 for more than six months, the

ALJ again ordered that the case be closed.        In her order, however, the ALJ

included the caveat that ―a[n]y further indication of OTR or its computers or

contractors sending another offset notice or a tax bill or taking any other action to

collect monies relating to [the Shumans‘] 2004 tax year account will subject
                                         9

Respondent OTR to the possibility of a monetary sanction being imposed.‖ In

other words, the ALJ was now going well beyond determining whether the

Shumans‘ protests were correct, and essentially enjoining OTR from sending any

further incorrect notices or bills, with possible monetary sanctions looming in the

background.

                       II. ENFORCEMENT PROCEEDINGS

      Enforcement issues first arose with a (comparatively) minor reporting

violation. OTR failed to submit written proof of compliance with the order by the

30-day deadline, and the ALJ ordered OTR to show cause why sanctions should

not be imposed. OTR responded that it had suppressed the Shuman‘ accounts

within the deadline as ordered, but acknowledged that it had failed to submit proof

of compliance to OAH. It does not appear that any specific sanctions were issued

as a result of this purely procedural failure on the part of OTR, although the ALJ

did mention it in her Final Order on Sanctions.

      Meanwhile, on June 3, 2009, the Shumans received a letter from

MuniServices LLC, a company that had a contract with OTR under which it was to

identify taxpayers who were believed not to have paid all of the taxes owed by
                                          10

them to the District of Columbia. According to MuniServices, the Shumans had

potential additional tax obligations as a result of their allegedly having done certain

kinds of business in the District. The Shumans responded that during the relevant

time period, they had not conducted in the District any of the types of business

described in the letter.    At the hearing on the order to show cause, OTR

acknowledged that its suppression of the Shumans‘s accounts had not been

communicated to MuniServices, which collected its information from a separate

data base. In addition, after the case had been closed, the Shumans received

another IRS Form 1099-G in which OTR erroneously reported that they had

received a refund of $1,580 in 2009 for the 2004 tax year. OTR also issued new

Notices of Offset on March 14, 15, and 16, 2011, all of which related to the

computer glitch surrounding the Shumans‘ tax account for the 2004 tax year. At

this point, three and one half years after OTR had first confessed error, the

Shumans again moved to reopen the case and requested that the ALJ enforce her

final order and impose sanctions.

      On May 11, 2011, the ALJ held a hearing to determine what, if any,

sanctions would be appropriate. OTR‘s witnesses testified that although OTR had

tried on numerous occasions to correct the Shumans‘ accounts, the computer
                                        11

system would not allow the attempted corrections to be preserved. OTR had

written off the $790 as uncollectable, but the computer system had failed to

recognize the write-off once it appeared that money was available to pay off the

supposed bad debt. OTR also presented testimony to the effect that the problems

with the ten-year-old computer program could not be resolved unless it was

replaced by an entirely new system. OTR, in other words, protested that it was

powerless to control the actions of its own computers, and that there was nothing

that OTR could do about it. As Mr. Shuman testified, however, ―[i]t is a sad day

when computers rule man. There must be human accountability for actions by

governments. It is too simple to just blame a machine or program for one's ills.‖

Following the hearing, the Shumans notified the ALJ that OTR had sent them a

refund check for $790, dated May 16, 2011, and a Notice of Offset in the amount

of $1,380, dated May 23, 2011

      On December 20, 2011, the ALJ issued the Final Order on Sanctions which

is the subject of this Petition for Review. The ALJ found that ―OTR willfully

failed to comply with this court‘s numerous orders to stop sending erroneous offset

notices and refund checks to [the Shumans] for the past two years.‖ She concluded

that ―OTR‘s conduct has created prejudice to the judicial system‖ by wasting
                                        12

OAH‘s resources and by delaying the litigation of other cases.1 With respect to

OTR‘s defense that it was not responsible because the computer program was at

fault, the ALJ would have none of it. She wrote:

            It is inconceivable that the District of Columbia Office of
            Tax and Revenue is willing to continue to blindly rely on
            a computer program that it knows produces erroneous
            documents and then sends the erroneous documents to
            taxpayers, apparently without either the knowledge or
            intervention of any OTR staff. It is further disconcerting
            that OTR made next to no attempt to remedy the problem
            while aware that taxpayers across the District will likely
            continue to receive incorrect notices of offset and refund
            checks as a result of its continuing errors. Moreover, the
            erroneous refund checks and Notices of Offset can create
            serious IRS tax implications for the affected parties.

      Turning to the remedy to be imposed, the ALJ analogized OTR‘s actions to

the type of conduct that warrants sanctions for civil contempt, criminal contempt,

discovery violations, and unnecessary consumption of judicial resources.      She

ordered OTR to pay $80,825.26, with interest, to OAH. This award, according to

the ALJ, represented ―the amount of money OTR erroneously claimed in Notices

of Offset or distributed to [the Shumans] in erroneous checks, all regarding their

      1
         The ALJ apparently assumed that the proceeding before OAH is part of
the ―judicial system.‖
                                         13

2004 tax account year.‖    In addition, the ALJ imposed fines of $250 per day for

the first month after December 31, 2011, if OTR failed to ―comply with [her]

orders and correct the malfunctions in its computer system or replace[] that system

with one that functions‖; $350 per day for the second month; $450 per day for the

third month; and an additional $100 per day each month thereafter. The daily fines

were thus to begin less than two weeks after the entry of the order.

      On December 30, 2011, OTR moved for reconsideration of the final order

on sanctions, for a stay of the final order, and for dismissal of the proceedings for

lack of jurisdiction. OTR argued that OAH lacked jurisdiction over claims for

refunds, and that even assuming that it did have jurisdiction, the ALJ was without

authority to order OTR to repair or replace its computer system, or to impose

monetary sanctions for failure to comply with the ALJ‘s orders. In the alternative,

OTR asserted that it had in fact complied with the orders. OTR also submitted an

affidavit from James Spaulding, the Associate Deputy Chief Financial Officer of

the District of Columbia Office of Budget and Planning, in which he represented

that funds for replacing OTR‘s computer system could be provided only from a

capital budget extending through fiscal year 2016, so that any attempt to

implement the ALJ‘s order would take several years to complete.
                                       14

      On March 15, 2012, in detailed separate orders, the ALJ denied all three

motions. She construed the Notices of Offset that OTR had sent to the Shumans as

Notices of Proposed Deficiency, equivalent in substance to proposed assessments,

and she therefore concluded that OAH had jurisdiction over the matter. The ALJ

also held that she had acted within OAH‘s statutory authority when she imposed

monetary sanctions for OTR‘s failure to comply with her order to discontinue

sending erroneous notices and tax bills to the Shumans.     She concluded that,

contrary to OTR‘s assertion, the remedies she had granted did not constitute

equitable relief. The ALJ also reasoned that because her order was necessary to

regulate the proceedings of the case, see D.C. Code § 2-1831.09 (b)(7), ―this

administrative court had authority to order OTR to fix its computer system,

because it fell within the scope of ‗regulating the proceedings.‘‖ Id. The ALJ

further commented that OTR could have complied with the order requiring it to

discontinue sending incorrect notices to the Shumans by ―designat[ing] an

employee to screen offset notices and remove any offset notice or other tax bill

relating to [the Shumans‘] 2004 tax return addressed to [the Shumans] prior to

mailing.‖ Finally, the ALJ concluded that she was authorized to impose monetary

sanctions against non-compliant parties, including other District of Columbia
                                          15

agencies, pursuant to § 2-1831.09 (b)(8), which (with exceptions not here relevant)

permits administrative law judges, to ―[i]mpose monetary sanctions for failure to

comply with a lawful order.‖

      Following the denial of its motions, OTR asked this court to summarily

reverse the ALJ‘ s order or, in the alternative, to stay the order pending its review

by this court. The Shumans did not file a response, and they have not played an

active part in the proceedings before this court. On May 25, 2012, this court

denied the motion for summary reversal but granted the requested stay pending

further order of this court. The stay remains in effect.

                                   III. ANALYSIS

      In its brief, OTR contends (1) that OAH lacked jurisdiction over the case;

(2) that, assuming jurisdiction, OAH lacked the remedial authority which the ALJ

purported to exercise; and (3) that, on the merits, the ALJ‘s order was arbitrary and

capricious. We largely reject OTR‘s first contention, agree with the second, and

do not reach the third.
                                           16

                                 A. JURISDICTION

      Whether OAH had jurisdiction over this proceeding depends entirely on

whether or not its exercise of jurisdiction was authorized by statute or regulation.

Ramos v. District of Columbia Dep’t of Consumer & Regulatory Affairs, 601 A.2d

1069, 1073 (D.C. 1992). ―An administrative agency is a creature of statute and

may not act in excess of its statutory authority.‖ See, e.g., District Intown Props.,

Ltd. v. District of Columbia Dep’t of Consumer & Regulatory Affairs, 680 A. 2d

1373, 1379 (D.C. 1996); Spring Valley Wesley Heights Citizens Ass’n v. District of

Columbia Bd. of Zoning Adjustment, 644 A.2d 434, 436–37 (D.C.1994); Davidson

v. District of Columbia Bd. of Medicine, 562 A.2d 109, 112 (D.C.1989). ―The

purported exercise of jurisdiction beyond that conferred upon the agency by the

legislature is ultra vires and a nullity.‖ District Intown, 680 A.2d at 1379 (citing

Auger v. District of Columbia Bd. of Appeals & Review, 477 A.2d 196, 209 (D.C.

1984)).

      The authority of OAH over tax protests is governed by the Tax Clarity Act

of 2000, D.C. Code §§ 47-1330 et seq., and by the Office of Administrative

Hearings Establishment Act of 2001, D.C. Code §§ 2-1831.01 et seq. The Tax

Clarity Act provides, in pertinent part:
                                         17

             Unless otherwise provided in this title, before a final
             assessment of a deficiency, interest, or penalties against a
             person, the Mayor shall send the person a proposed
             assessment. No later than 30 days after the proposed
             assessment is sent, the person may file a protest with the
             Office of Administrative Hearings, and shall serve a copy
             on the Mayor.

§ 47-4312 (a). ―If a protest is filed in a timely manner . . . the Mayor may not issue

a final assessment of the deficiency, interest, or penalties, and the Office of

Administrative Hearings shall decide, after providing an opportunity for a hearing,

whether the deficiency, interest, or penalties are proper.‖ § 47-4312 (c). With

exceptions not pertinent here, ―a final order of [OAH] in any matter in which a

protest has been filed shall have the same effect as a final assessment of a

deficiency, interest, or penalties, and the Mayor may undertake any lawful

collection efforts for any amount that such final order determines is due from any

person.‖ § 47-4312 (e).

      A taxpayer may also appeal any tax assessment to the Superior Court as an

alternative to filing a protest with OAH. § 47-4312 (d). The Tax Clarity Act

grants the Superior Court jurisdiction over claims brought by ―[a]ny person
                                          18

aggrieved by any assessment of a deficiency in tax determined and assessed by the

Mayor,‖ § 47-1815.01, provided that ―such person shall first pay such tax together

with penalties and interest due thereon to the D.C. Treasurer.‖

      The OAH Establishment Act confers on OAH jurisdiction ―over all

adjudicated cases of the Office of Tax & Revenue arising from tax protests filed

pursuant to § 47-4312.‖ § 2-1831.03 (b)(4). The Establishment Act requires

taxpayers to choose either OAH or the Superior Court as the exclusive forum for

tax protests:

                A person who has filed a protest of a proposed
                assessment under § 47-4312 and requested a hearing
                with [OAH] shall be deemed to have elected
                adjudication by the Office as the exclusive means of
                adjudication of all challenges to the proposed
                assessment, and to have waived any right to
                adjudication of a challenge to the proposed
                assessment in any other forum.

§ 2-1831.03 (j).

      OTR argues that OAH has jurisdiction only over protests of a ―proposed

assessment‖ of a ―deficiency, interest, or penalties against a person,‖ pursuant
                                         19

to § 47-4312 (a). OTR claims that the Shumans were requesting a tax refund

rather than protesting a proposed assessment, that refunds can be ordered only by

the Superior Court, and that OAH therefore lacked jurisdiction. According to

OTR, ―the Shumans originally challenged the March 13, 2008 Notice of Offset and

asked to secure the balance of the refund they were due on their 2007 taxes,‖ and

their request for a refund and the subsequent offset notices ―did not involve the

proposed assessment of a deficiency, interest, or penalty.‖

      In our view, this jurisdictional argument, first raised six months after the

case came before OAH, blinks reality and exalts form over substance to an

altogether unacceptable degree. The dispute engineered by OTR and its defective

computer program more than three years after the fact had its origin in a purported

underpayment of the Shumans‘ 2004 taxes, not of those to be paid in 2007.

Although the original notice to the Shumans was not called an ―assessment,‖ it was

in fact the first communication from OTR informing the Shumans that they

allegedly owed money on their 2004 taxes. Indeed, it was ―the mailing to the

taxpayer of a statement of taxes due,‖ and thus at least arguably a notice of

assessment for that reason alone. See § 47-3303. Had OTR made the claim that

the Shumans owed $790 on their 2004 return in timely fashion, there can be no
                                         20

doubt that the Shumans would have had the right either to challenge the assessment

before the OAH or to pay the disputed amount and sue for a refund in the Superior

Court. The legislature surely could not have intended that OTR‘s unreasonable

tardiness in asserting this claim with respect to the 2004 tax year (after having

earlier acknowledged that the Shumans owed nothing for 2004) would deprive

the taxpayers, who were not at fault in any way, of the most economical option

available to them, i.e. to bring the matter to the attention of the agency without the

expense and effort associated with taking it to court. To accept OTR‘s argument

would be to permit the sole party which was at fault to gain an advantage from its

own wrong, and to penalize the innocent parties, a result that courts, including

ours, consistently endeavor to avoid. See Glus v. Brooklyn E. Dist. Terminal, 359

U.S. 231, 232 (1959); J.J. v. B.A., 68 A.3d 721, 728 (D.C. 2003).

      The ALJ analyzed this issue effectively, in part, in her order denying OTR‘s

motion for reconsideration:

             Although OTR sent Petitioners a Notice of Offset, in
             essence the form was a Notice of Proposed Deficiency
             and not a Notice of Offset, as it related to an alleged
             liability for the 2004 tax year, and not an offset of a 2007
             obligation against a claimed refund for that year. OTR
             never sent Petitioners a Notice of Proposed Deficiency
                                         21

             for the $790.00, which is the proper procedure to inform
             a taxpayer of a tax liability. Therefore, because the
             Notice of Offset was the first notice Petitioners received
             regarding the 2004 tax liability, I have construed it as a
             Notice of Proposed Tax Deficiency.2

We agree with the ALJ. OTR‘s argument runs afoul of the principle that ―courts

deal with the substance, rather than the form, of transactions.‖ EDM & Assocs. v.

Gem Cellular, 597 A.2d 384, 388 (D.C.1991) (citations omitted). They do

not ―subordinate reality to legal form,‖ United States v. Reading Co., 253 U.S. 26,

62 (1920), nor do they ―permit themselves to be blinded or deceived by mere forms

of law,‖ contrary to the justice of the case. Chicago M & St. Paul R.R.Co., 247

U.S. 490, 501 (1918). ―Labels are not controlling,‖ and we must be guided by ―the

practical consequences of the existing situation.‖ EDM, 597 A.2d at 388. These

principles, in our view, compel us to reject OTR‘s jurisdictional argument.

      2
            The ALJ continued as follows: ―All subsequent Notices of Offset
Petitioners received from OTR arise out of the initial erroneous Notice of Proposed
Deficiency, and thus do not end this tribunal‘s jurisdiction, which existed initially,
and are treated as Notices of Proposed Tax deficiencies, however labeled.‖ This
conclusion is far more subject to challenge, for it is arguable that OAH‘s
jurisdiction ceased when OTR withdrew its claim that the Shumans owed an
additional amount for the 2004 tax year. See page 28, infra. Be that as it may,
however, we entertain no doubt that OAH had jurisdiction over the Shumans‘
initial claim.
                                        22

                    B. OAH’S REMEDIAL AUTHORITY

                           (1) General considerations.

      We turn now to the question whether the ALJ was authorized to impose the

remedies that she devised. Before addressing the statutes on which this issue turns,

we make two preliminary observations.

      First, our review of the order in question is not deferential. As we explained

in Washington v. District of Columbia Dep’t of Public Works, 954 A.2d 945, 948

(D.C. 2008), the proper construction of a statute raises a question of law, and we

review the order de novo. In re Doe, 855 A.2d 1100, 1102 (D.C.2004); Jackson v.

United States, 819 A.2d 963, 965 (D.C.2003) (citation omitted). ―[I]t is

emphatically the province and duty of the judicial department to say what the law

is . . . .‖ Harris v. District of Columbia Office of Worker’s Comp., 660 A.2d 404,

407 (D.C.1995) (quoting Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177, 2 L.Ed.

60 (1803)); see also United Parcel Serv. v. District of Columbia Dep’t Emp’t

Servs., 834 A.2d 868, 871 (D.C. 2003). Although we accord appropriate weight to

the interpretation of a statute by the agency which is charged with its enforcement,
                                         23

and which therefore ordinarily has subject matter expertise with respect to the

matter before the court, see Udall v. Tallman, 380 U.S. 1, 16, (1965); United

Parcel Serv., 834 A.2d at 871, the OAH is vested with the responsibility for

deciding administrative appeals involving a substantial number of different

agencies, and it cannot fairly be expected have the degree of expertise possessed

by more specialized administrative bodies. Washington, 954 A.2d at 948.

      Second, the kind of relief ordered here, including a directive to OTR to

repair or replace the computer system, to pay a substantial and continuously

increasing daily fine if OTR failed to do either (in an amount that could swiftly add

up to many tens of thousands of dollars if, as OTR claims, the new system could

not be installed for several years and the fine continued to accumulate), and to pay

more than $80,000 to another District of Columbia agency (specifically, to the

agency of which the ALJ is a part) appears to be totally unprecedented. The ALJ,

who obviously put a great deal of time and effort into this case, was unable, after

conducting much research on the issue, to cite a single decision in which an

administrative agency imposed the kinds of sanctions ordered here, and we are not

aware of any comparable precedent. If we were to affirm the ALJ‘s decision, that

would most assuredly be a ―first‖ and might well, in our view, make administrative
                                            24

law history.

      We begin by stating the underlying principles that govern the issue before

us. As we have noted in Part II A of this opinion, an administrative agency may

not act in excess of its statutory authority. ―The responsibility of determining

limits of statutory grants of authority . . . is a judicial function entrusted to the

courts by Congress by the statute establishing courts and marking their

jurisdiction.‖   Stark v. Wickard, 321 U.S. 285, 310 (1944).            ―Absent express

statutory or regulatory authority, a regulatory agency may not impose remedial

measures.‖ Davidson v. District of Columbia Bd. of Med., 562 A.2d 109, 112

(D.C. 1989) (citing Kuflom v. District of Columbia Bureau of Motor Vehicle

Servs., 543 A.2d 340, 346 (D.C. 1988)). In Ramos, 601 A.2d at 1073, in holding

that an administrative agency does not have inherent authority to award punitive

damages or counsel fees, we explained that

               [i]n contrast with judicial tribunals . . . administrative law
               tribunals — created by the legislature to serve dispute
               resolution and rulemaking-by-order functions within
               agencies of the executive branch — by definition and
               design do not have the inherent ―equitable authority‖ that
               courts in the judicial branch have derived from common
               law traditions and powers. Administrative law judges
               only possess narrowly defined statutory and regulatory
                                           25

             powers; they do not have the traditional equity power of
             courts to formulate remedies.

Further, an ALJ is not authorized to engage in a ―balancing of interests‖ which

reflect his or her sense of justice but which are not a part of the legislation at issue;

rather, he or she must decide the case in conformity with the provisions of the

statute in question, ―and nothing more.‖ District of Columbia Pres. League v.

DCRA, 646 A.2d 984, 990 (D.C. 1994) (emphasis in original).

                 (2) Injunctive relief and conditional coercive fines.

      In this case, the ALJ relied on three statutory provisions in support of the

order that OTR repair or replace the computer program and pay a daily fine if it

failed to do so: (1) § 2-1831.09 (b)(8), which authorizes an Administrative Law

Judge, in any case in which he or she presides, to impose monetary sanctions for

failure to comply with a lawful order; (2) § 47-4312 (c), which provides that OAH

has the responsibility to decide, after providing an opportunity for a hearing,

whether claimed deficiencies, or interest or penalties, are proper; and (3) § 2-

1831.09 (b)(7), which empowers ALJs to ―regulat[e] the parties and proceedings

before them.‖ Turning first to the last of these provisions, that authority is limited
                                         26

to ―what is commonly required to maintain control over aspects of the hearing

process such as pleadings, discovery, testimony, and attorney behavior.‖

Ramos, 601 A.2d at 1073-74. Examples of permissible exercise of such regulatory

authority are found in Mullin v. District of Columbia Rental Hous. Comm’n, 844

A.2d 1138, 1141 (D.C. 2004), holding that the Rental Housing Commission had

the power to dismiss an appeal for the plaintiff's failure to comply with a protective

order, and Brown v. District of Columbia Bd. of Zoning Adjustment, 413 A.2d

1276, 1279-84 (D.C. 1980), in which we ruled that the BZA could properly

entertain a motion to disqualify an attorney who had allegedly violated a

disciplinary rule.   We cannot agree with the ALJ‘s suggestion that the relief

granted in this case, including coercive conditional daily fines, ―regulates the

parties and proceedings‖ within the meaning of § 2-1831.09 (b)(7).

      Section 47-4312 (c), which directs OAH to determine whether a taxpayer‘s

protest of an assessment has merit, likewise provides scant support for the ALJ‘s

ruling.   Although the ALJ may – indeed, she must – make this limited

determination, the statute does not state that the ALJ is also authorized to ensure

more accurate future assessments, or to remedy any possible future recurrences.

Indeed, assuming dubitante that OAH‘s jurisdiction over the 2004 return continued
                                          27

after the agency initially confessed error, see note 2, supra, there is nothing in this

provision that could reasonably be construed as authorizing what was in effect

injunctive relief against OTR or the contempt-type relief that followed. While the

statute provides that OAH‘s decision shall operate as a final assessment upon

which OTR may undertake tax collection efforts, § 47-4312 (e), there is no

provision permitting OAH to enjoin OTR to ensure future compliance. In addition,

nothing in the OAH Establishment Act expands the agency's authority to permit it

to impose remedial measures of the kind at issue here. See § 2-1831.09 (b). The

case must therefore turn on whether or not the de facto injunctions, and the

conditional fines that followed, can be justified as remedies for failure by OTR to

comply with what OAH claims to have been lawful orders. We conclude that they

cannot.

      The ALJ apparently recognized that she was not authorized to grant

equitable relief, but she insisted that she had not done so. In her order denying

reconsideration, she wrote that she had ordered a monthly sanction for every month

that OTR did not comply with a lawful order, and that ―because OTR testified [sic]

that compliance can only be secured by fixing its computer system, it logically

follows OTR must fix its computer system in order to comply with the lawful
                                          28

order.‖ Therefore, according to the ALJ, ―the requirement for OTR to fix its

computer system does not exceed this court‘s authority by granting equitable relief.

Instead, the requirement is necessary to regulate the proceedings of this case.‖ Id.

But viewing the substance rather than the form of what was done, EDM, 597 A.2d

at 385, we must reject the notion that an order directing OTR to repair or replace

the computer system, followed by sanctions which, as we shall see, were consistent

with a judgment of civil contempt, did not constitute equitable relief. Reality, not

nomenclature, must control. We hold that for all practical purposes, the ALJ

issued injunctions, both by ordering OTR not to send the Shumans, in the future,

any further claims of underpayment of their 2004 tax and by effectively ordering

OTR to repair or replace its computer system.

      If, as we have held, the ALJ was without authority to enjoin OTR, it follows

a fortiori, that it was impermissible for her to impose financial penalties in order to

compel compliance with the injunctions. Because, by the terms of the judge‘s

order imposing sanctions, OTR would be subject to coercive monthly fines until it

complied with the injunction, that order was, in all but name, a judgment for civil

contempt, from which OTR could purge itself only by compliance. See, e.g.,

McComb v. Jacksonville Paper Co., 336 U.S. 187, 191 (1949); Langley v.
                                        29

Kornegay, 620 A. 2d 865, 866-67 (D.C. 1993). Indeed, in her Final Order on

Sanctions, the ALJ discussed civil contempt precedents in considerable detail, and

she concluded that ―the imposition of an ongoing monetary sanction on OTR is the

only effective means of forcing compliance with this court‘s order,‖ and that it

was ―important to motivate OTR to comply with future orders as well as deterring

its past continuing errors.‖

      The ALJ failed to acknowledge, however, that only judicial courts, and not

administrative agencies, have the authority to issue contempt sanctions. ―[T]he

power to cite for contempt has never been put directly into the hands of a federal

agency; rather the assistance of a federal court is obtained and its contempt power

enlisted in support of the agency by ‗enforcement‘ of the subpoena or order.‖ Use

of Contempt Power to Enforce Subpoenas and Orders of Administrative Agencies,

71 Harv. L. Rev. 1541, 1541-42 (1958). As the Supreme Court explained more

than a century ago in Interstate Commerce Comm’n v. Brimson,154 U.S. 447, 485

(1894) (abrogated on other grounds, Bloom v. Illinois, 391 U.S.194, 198-200

(1968)), an agency may not, ―under our system of government, and consistently

with due process of law, be invested with authority to compel obedience to its

orders by a judgment of fine or imprisonment.‖ With exceptions not here relevant,
                                        30

―the power to impose fine or imprisonment in order to compel the performance of

a legal duty imposed by the United States can only be exerted, under the law of the

land, by a competent judicial tribunal having jurisdiction in the premises.‖

Brimson, 154 U.S. at 485 (citations omitted).

      Relying on Brimson, the federal appellate courts have consistently

recognized this ―well-established principle.‖ See Atlantic-Richfield Co. (―ARCO‖)

v. United States Dep’t of Energy, 769 F.2d 771, 793 (D.C. Cir. 1984) N.L.R.B. v.

Interbake Foods, LLC, 637 F.3d 492, 497 (4th Cir. 2011); United States v.

Tennessee Air Pollution Control Bd., 185 F.3d 529, 532 n.3 (6th Cir. 1999); Matter

of Hipp, Inc., 895 F.2d 1503, 1515 (5th Cir. 1990); N.L.R.B. v. Int’l Medication

Sys., Ltd., 640 F.2d 1110, 1115-16 (9th Cir. 1981); In re Grand Jury Proceedings,

486 F.2d 85, 90 (3d Cir. 1973); Shasta Minerals & Chemical Co. v. Securities and

Exchange Comm’n, 328 F.2d 285, 286 (10th Cir. 1964); Sullivan v. Union

Stockyards Co. of Omaha, 26 F.2d 60, 61 (8th Cir. 1928). We discern no reason to

do otherwise, and we think it inconceivable that by enacting § 2-1831.09 (b), the

legislature intended to abrogate such a well-established and constitutionally based

principle, at least arguably in contravention of the constitutional separation of

powers.
                                          31

      Here, OAH sought to impose increasing coercive fines for every month that

OTR did not repair or replace its computer system. These sanctions sound in civil

contempt, they were based on the ALJ‘s analysis of the law of civil contempt, and

they go far beyond any relief that an administrative agency, as opposed to a court,

is authorized to issue. The appropriate forum for a suit to compel compliance with

an order of OAH is the Superior Court. Indeed, the OAH Establishment Act, § 2-

1831.09 (e) provides that ―[i]n addition to any other sanctions that an [ALJ] may

lawfully impose for the violation of any order . . . , an [ALJ], or a party in interest

in an adjudicated case, may apply to any judge of the Superior Court of the District

of Columbia for an order issued on an expedited basis to show cause why a person

should not be held in civil contempt for refusal to comply with an order . . . issued

by an [ALJ].‖

      If the Shumans wished to pursue this kind of relief, then a ―competent

judicial tribunal,‖ ARCO, 769 F. 2d at 993, was and (subject to any possible

defenses) remains, readily available.
                                       32

                           (3) The $80,835.46 award

      In addition to the civil contempt-style conditional coercive fines, the ALJ

ordered that OTR be ―sanctioned in the amount of $80,825.26, payable to this

administrative court, with interest accruing as allowed by law.‖ She imposed this

sanction because

            OTR‘s conduct has created prejudice to the judicial
            system.     This court wasted judicial resources3 by
            conducting multiple status conferences and hearings on
            Orders to Show Cause after the original ―Final‖ Order.
            Scheduling and conducting these hearings on this matter,
            solely because OTR failed to comply, delayed innocent
            litigants in other matters from litigating their claims.
            Long after February 2009, when proceedings in this case
            should have ended, this court has expended significant
            resources in the continued adjudication of this case
            because OTR failed to comply with court orders. In
            addition, [the Shumans] expended time and resources not
            only in litigating this case, but also in receiving and
            deciphering their Federal and state tax consequences due
            to OTR‘s negligence.

The ALJ found that the amount of this sanction ―represents the amount of money

OTR erroneously claimed in Notices of Offset or distributed to [the Shumans] in

      3
         Again, the ALJ appeared to equate administrative proceedings with the
judicial process.
                                          33

erroneous checks, all regarding the 2004 tax year.‖ How, if at all, this correlates to

wasted OAH resources is unclear.

      The only precedents cited by the ALJ for this very substantial sanction are

three decisions by United States District Courts in which the amounts awarded

were minimal in comparison to the more than $80,000 at issue here. See Olga’s

Kitchen of Hayward, Inc. v. Papo, 108 F.R.D. 695, 711 (E.D. Mich. 1985), aff’d in

part & rev’d in part on other grounds, 1987 U.S. App. LEXIS 2205 (6th Cir.1987)

($1000 to be paid to Clerk of the Court for the unnecessary consumption of judicial

resources etc.); Itel Containers Int’l. Corp. v. Puerto Rico Marine Mgmt., Inc., 108

F.R.D. 96, 106-07 (D.N.J. 1985) (sanction of $5000 to be paid to the government

for the abuse of the judicial process as it directly impacted upon the court; the court

stated, however, that if, on appeal, an award of $5000 was deemed excessive, ―it

would appear that no less than $500 would be appropriate); Nat’l Ass’n of

Radiation Survivors v. Turnage, 115 F.R.D. 543, 549 (N.D. Cal. 1987) (defendant

was originally ordered to pay an additional sum of $15,000 ―for the unnecessary

consumption of the court‘s time‖; this sum was initially to ―compensate unpaid law

students who assist in the work of the courts of this district,‖ but the court

subsequently ordered that the payment be made instead to the clerk of the court, so
                                         34

that the funds could be paid into the Treasury of the United States). Based on these

decisions, the ALJ evidently assumed that if United States District Courts had the

authority to order payments such as those described above, an ALJ was authorized

not only to do so but, in an appropriate case, to make the sanction many times

greater. The ALJ has not addressed at all the possibility that courts are authorized

to take certain remedial actions that administrative agencies may not, and that the

proper disposition of this petition for review may well turn on the difference.

      This case also differs from those relied upon by the ALJ in that the sanction

in question would require the transfer of more than $80,000 from one District of

Columbia agency to a second, by order of the proposed recipient agency. OTR has

not focused upon the propriety of OAH‘s decreeing a payment to itself, and the

ALJ apparently did not believe that a reasonable person might regard her presiding

over the case, and imposing a sanction substantially adding to the funds available

to her own agency, as raising a question as to whether the appearance of

impartiality had been maintained. See, generally, Scott v. United States, 559 A.2d

745, 749 (D.C. 1989) (en banc). This problem is further complicated by the fact

that in this court the Shumans‘ participation in the case has been minimal, so that

most of the disputation has been between the ALJ and counsel for OTR. The
                                         35

question regarding any possible appearance of partiality has not been adequately

briefed, however, and although we alert the parties to its existence, we do not base

our decision upon that ground.

      Because the question now under discussion, unlike those involving

injunctive relief and coercive conditional sanctions, is not essentially equitable in

nature, and because § 2-1831.09 (b)(8) authorizes the imposition of monetary

sanctions for violation of a lawful order, we are not prepared to rule that the

Brimson line of authority will bar an award for unnecessary consumption of

judicial resources in every case. The decisive question, however, is whether the

underlying orders, enjoining OTR from sending future incorrect notices, were

―lawful.‖ Although it may not appear unreasonable for an agency charged with

determining whether a proposed assessment was proper to have the authority,

when incorrect notices are thereafter issued repeatedly, to order the cessation of

such conduct, there is nothing in § 47-4312 (c) permitting the OAH to enjoin future

actions on the part of OTR. The taxpayers are not without a remedy in such a

situation, for the Superior Court can assuredly issue equitable relief in an

appropriate case. Accordingly, we are constrained to hold that the unconditional

award of $80,825.06 cannot be sustained as a permissible monetary sanction for
                                           36

violation of lawful orders.

         We caution, as we did at the outset of this opinion, that our reversal of the

ALJ‘s order is not intended to suggest that OTR‘s handling of this matter was

justifiable, or that responsibility for what occurred can be excused as the fault of

the computer program but not of OTR.            The problem in this case was not

necessarily any substantive weakness, but rather the fact that critical issues were

being argued in the wrong forum. Although they may be frustrating to lay persons,

such considerations matter.

                                 IV. CONCLUSION

         For the foregoing reasons, the decision of the OAH is reversed and the

Shumans‘ action is dismissed, without prejudice to further proceedings by the

Shumans in the Superior Court or to any defenses that may be presented in that

court.    Further, in the interests of justice, and although OTR has technically

prevailed in its Petition for Review, the District of Columbia shall not recover from

the Shumans the costs of these proceedings or any portion thereof.