Court Opinion

ID: 8917548
Source: CourtListenerOpinion
Date Created: 2022-11-27 05:42:03.306211+00
Date Added: 2024-06-11T17:09:07.726456
License: Public Domain

CLARK, Chief Judge,
concurring in the judgment:
I agree with the result but not the analysis of the majority. Because the analysis appears to me to depart unnecessarily from prior precedent and from a logical and realistic application of the Anti-Injunction Act, I consider it necessary to specially concur.
I
The majority refuses to address the continued validity of anomalous jurisdiction. Yet virtually all the cases it relies on in support of its result concerned anomalous jurisdiction. It refuses to address the matter despite a confused body of caselaw in need of clarification. Compare Richey v. Smith, 515 F.2d 1239 (5th Cir.1975) and Hunsucker v. Phinney, 497 F.2d 29 (5th Cir.1974), cert. denied, 420 U.S. 927, 95 S.Ct. 1124, 43 L.Ed.2d 397 (1974), with Crenshaw County Private School Foundation v. Connally, 474 F.2d 1185 (5th Cir.1973); Bowers v. United States, 423 F.2d 1207, 1208 (5th Cir.1970).
The doctrine of anomalous jurisdiction was necessitated by the jurisdictional amount requirement in 28 U.S.C. § 1331. The exercise of jurisdiction was “anomalous” because the federal courts had created their own jurisdiction without any constitutional or statutory basis in the face of inconsistent, if not antithetical, Congressional expression. With the elimination of the jurisdictional amount requirement, anomalous jurisdiction — once a necessary evil— has become a superfluous anachronism.
It is impossible to imagine a case in which anomalous jurisdiction would have existed that did not involve a federal question. This case illustrates that anomalous jurisdiction is a dead letter. Linn alleges that *1286IRS agents are violating rights guaranteed him under the fourth and fifth amendments. The remedy he seeks is an order enjoining the agents from continuing to violate those rights. His action is one arising under the Constitution. See Gully v. First National Bank, 299 U.S. 109, 112, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936). Jurisdiction thus obtains under § 1331. Compare Hun-sucker at 36 (§ 1331 jurisdiction not established because jurisdictional amount not satisfied).
When anomalous jurisdiction prevailed, the court was forced to examine the merits of the controversy before determining whether it had jurisdiction to decide the controversy. Anomalous jurisdiction did not exist unless the facts demonstrated that there was a “callous disregard” of the taxpayer’s constitutional rights and that equitable relief would be appropriate. Hun-sucker at 34. In order to make these findings, it was obviously necessary to delve into the merits of the case. There may be other instances in the law where we indulge such an illogical inquiry, but those instances should be kept to a minimum. Because jurisdiction will always exist under § 1331, there is no longer any need to exercise anomalous jurisdiction in cases such as the one at bar. The doctrine should be put to the rest.
II
The majority wisely refuses to apply an anomalous jurisdiction analysis in this case. In declining to do so, however, it creates a new approach that is unrealistic, inconsistent with the purposes of the Anti-Injunction Act, and unnecessary.
Under the majority’s analysis, the district court is required to label a given lawsuit as either a “search and seizure case” or a “tax case.” I submit that it is more realistic to recognize that the court is addressing a search and seizure issue within the broader context of an action to collect taxes. If a taxpayer’s only concern is that his constitutional rights be vindicated, a Bivens suit will do. That is not this case. Here, the taxpayer is attempting to thwart the IRS’s discovery process for the sole purpose of preventing the assessment of taxes against him.
In choosing the proper label, the majority directs the district courts to determine whether the “primary purpose” of the taxpayer’s lawsuit is “to recover his property,” or to “restrain ... the collection of information that would aid in the assessment of taxes.” The two goals are not mutually exclusive. Just as in the instant case, the typical taxpayer’s goal in this situation is to restrain the collection of information that would aid in the assessment of taxes by-recovering his property. The recovery of documents is nothing more or less than a means to an end. If the collection process of the IRS is stymied, the threatened assessment of taxes is too. In my view, the majority has directed the district court to perform an impossible feat.
The majority’s approach is also inconsistent with the purposes of the Anti-Injunction Act. The object of the Act is to “withdraw jurisdiction from the state and federal courts to entertain suits seeking injunctions prohibiting the collection of federal taxes.” Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 5, 82 S.Ct. 1125, 1128, 8 L.Ed.2d 292 (1962). See also Lange v. Phinney, 507 F.2d 1000, 1003 (5th Cir.1975). Congress intended to protect the government’s need to assess and collect taxes as expeditiously as possible with a minimum of preenforcement judicial interference. Bob Jones University v. Simon, 416 U.S. 725, 736, 94 S.Ct. 2038, 2045, 40 L.Ed.2d 496 (1974); Enochs, 370 U.S. at 7, 82 S.Ct. at 1129; Smith v. Rich, 667 F.2d 1228, 1230 (5th Cir.1982). Therefore, in virtually all situations, the Act directs that the legal right to disputed sums be determined in a refund suit. The tax collector is protected from litigation until that time. Bob Jones University, 416 U.S. at 737, 94 S.Ct. at 2046; Enochs, 370 U.S. at 7, 82 S.Ct. at 1129; Rich at 1230. In keeping with its protective purposes, the Act has been interpreted broadly. It is applicable not only to the assessment and collection of taxes, but to activities which are intended to or may *1287culminate in the assessment or collection of taxes as well. Kemlon Products & Development Co. v. United States, 638 F.2d 1315, 1320 (5th Cir.), modified on other grounds, 646 F.2d 223, cert. denied, 454 U.S. 863, 102 S.Ct. 320, 70 L.Ed.2d 162 (1981) (quoting United States v. Dema, 544 F.2d 1373, 1376 (7th Cir.1976), cert. denied, 429 U.S. 1093, 97 S.Ct. 1106, 51 L.Ed.2d 539 (1977)). See also Rich at 1230; Campbell v. Guetersloh, 287 F.2d 878 (5th Cir.1961).
According to the majority, all a taxpayer need do is style his complaint in terms of a fourth amendment violation and he can thereby avoid the proscriptions of the Act. There is no sound reason for carving out an exception for cases where the taxpayer is discerning enough to plead a fourth amendment violation. Whether a taxpayer styles his case in constitutional terms or otherwise, the ultimate effect of the court’s assumption of jurisdiction is to exercise jurisdiction where it has been withdrawn, and to interfere with the “government’s need to assess and collect taxes as expeditiously as possible with a minimum of preenforcement judicial interference.” Bob Jones, 416 U.S. at 736, 94 S.Ct. at 2045. See especially Bowers v. United States, 423 F.2d 1207 (5th Cir.1970) (Anti-Injunction Act applied despite taxpayer’s fifth amendment challenge).
Finally, I believe that the judicially created exception fashioned by the majority is simply unnecessary. Congress has already mandated detailed procedures for the adjudication of tax cases. To say that the taxpayer may not thwart the IRS investigation is not to say that his claim will never be heard. In a criminal case, the majority concedes that the question whether information “should be suppressed as fruit of the poisonous tree can be litigated at a future suppression hearing if the government should seek to use that information.” In a civil case, the taxpayer’s constitutional rights are safeguarded in a summons enforcement proceeding. See 26 U.S.C. §§ 7402(b) and 7604. No constitutional abridgement need go unremedied.
Congress has explicitly commanded that taxpayers are not to interfere with the normal information-gathering process of the IRS until either a summons enforcement proceeding or a refund suit in a civil case, or a suppression hearing in a criminal case. It is not for this court to manufacture an exception that ignores the clearly enunciated and fair procedures set out by Congress. For these reasons, the Anti-Injunction Act should be applied in this case. The IRS is conducting its investigation in order to determine the tax liability of Linn and/or his corporation. The summons directing the production of documents is part of the normal information-gathering process of the IRS fully within the scope of the Anti-Injunction Act.
Ill
The following scheme seems to me to be preferable to that adopted by the majority. First, the district court should determine whether it has federal question jurisdiction under 28 U.S.C. § 1331. Here, it has. Second, the court should apply the Anti-Injunction Act. Third, the court should determine whether the Enochs exception, discussed below, applies. If the exception does not apply, the court lacks jurisdiction and should dismiss the case. If it does apply, the court should assume jurisdiction.
Despite the normally broad reach of the Anti-Injunction Act, the Supreme Court has fashioned an exception to the Act that permits actions for injunctive relief in circumstances which do not undermine the Act’s purposes. The limits of the exception were defined in Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 82 S.Ct. 1125, 8 L.Ed.2d 292 (1962).1 First, it must be clear *1288that under no circumstances could the government ultimately prevail. “Only if it is apparent that, under the most liberal view of the law and the facts, the United States cannot establish its claim, may the suit for an injunction be maintained.” Id. at 7, 82 S.Ct. at 1129. Second, equity jurisdiction must otherwise exist. The taxpayer must prove that he will suffer irreparable injury for which no legal remedy is adequate. Id. If both prongs of the Enochs test are met, then despite the Anti-Injunction Act, the court may grant the taxpayer injunctive relief. See C.I.R. v. Shapiro, 424 U.S. 614, 627, 629, 96 S.Ct. 1062, 1070, 1071, 47 L.Ed.2d 278 (1976); Rich at 1230-31; Kemlon Products & Development Co. at 1321.2
It remains to be determined whether Linn has successfully proven his entitlement to injunctive relief under the Enochs exception. To satisfy the first prong of the test, Linn must prove that under no circumstances can the IRS prevail in this action. In Mason v. Pulliam, 557 F.2d 426 (5th Cir.1977), the taxpayer voluntarily complied with an IRS request to produce documents. Within a week, the taxpayer changed his mind and demanded that the IRS return his documents. When the IRS refused, the taxpayer brought an action requesting the district court to order a return of the documents. The district court granted the relief and this court affirmed. We held that, when the basis for a search or seizure is consent, the government must conform to the limitations placed upon the right to search or seize by the taxpayer. Unless there is an agreement as to the duration of the search, the taxpayer retains the right to withdraw his consent and reinvoke his constitutional rights. Id. at 429. In so holding, we rejected the government’s argument that, once the taxpayer voluntarily hands over the materials, he forever waives his fourth and fifth amendment rights with respect to those materials. Id. at 428. Accord United States v. Ward, 576 F.2d 243 (9th Cir.1978).
The facts in this case are strikingly similar to those in Mason. Linn, through his attorney, voluntarily handed over several documents to agent Wigginton. Within an hour, the attorney realized that a mistake had been made. He called Wigginton, wrote her a letter, and appeared personally to inform Wigginton that the consent, admittedly given, was withdrawn as to Linn’s personal records. Wigginton refused to return the documents. Mason teaches that, by doing so, Wigginton went beyond the scope of Linn’s consent to search and in the process, violated Linn’s constitutionally guaranteed rights.
The IRS attempts to distinguish Mason by pointing out that Linn’s production of documents was in response to a summons, whereas in Mason, there was no summons. I view this basis for distinction as illusory. An IRS summons does not compel an unwilling taxpayer to produce documents without court intervention. 26 U.S.C. §§ 7402(b) and 7604; Rich at 1232. Linn’s voluntary compliance with the nonbinding summons and abandonment of his legal remedy under 26 U.S.C. § 7604 amounted to a consent to seize and search his documents. Under Mason, he was entitled to withdraw that consent. When he did so, the IRS was obligated to stop the search.
The IRS argues that United States v. Ponder, 444 F.2d 816 (5th Cir.), cert. denied, 405 U.S. 918, 92 S.Ct. 944, 30 L.Ed.2d 788 (1971) is closer to the mark than Mason. I disagree. In Ponder, we rejected a taxpay*1289er’s attempt to withdraw his consent. But we expressly refused to consider what that taxpayer’s position would have been had he demanded the return of his records for the declared purpose of protecting his constitutional rights. Id. at 820 n. 5A. Yet that is precisely Linn’s declared purpose here. Ponder is not on point.
Linn has shown that, because of our holding in Mason, the claims of the IRS have no chance of success. Thus, the first prong of the Enochs test has been satisfied. But in order to recover, Linn must also prove that any legal remedies he may have are inadequate to repair the injury that might be caused by the government’s action.
Linn is currently under investigation by a federal grand jury. Several of his associates have been served with subpoenas to appear before that body. The investigation is being conducted by the Criminal Division of the IRS. It is apparently part of a larger investigation denominated “Narcotics Project P72624.” Linn has a reasonable basis to believe that he will be indicted on criminal charges in the near future. The disputed documents could prove to be a determinative factor if the IRS is permitted to use them.
The IRS argues that only a wrongful indictment causes irreparable harm. This argument has been put to rest in prior cases. In Hunsucker, we said that a criminal indictment carries a danger of stigmatization that is not removed by a determination in the criminal trial that the evidence on which the indictment is based was inadmissible. Id. at 33. See also Richey at 1243 n. 10 (quoting In re Fried, 161 F.2d 453, 458-59 (2d Cir.), cert. denied, 332 U.S. 807, 68 S.Ct. 106, 92 L.Ed. 385 (1947)). The possible use of the disputed documents in securing an indictment constitutes a “likelihood of substantial and immediate irreparable injury” for which Linn has no effective legal remedy. City of Los Angeles v. Lyons, - U.S. -, -, 103 S.Ct. 1660, 1670, 75 L.Ed.2d 675 (1983). See also Richey at 1244 n. 11 (inadequacy of exclusionary rule). Therefore, the second, as well as the first prong of the Enochs test has been satisfied. With deference to the majority’s contrary note, I perceive that neither determination requires the court to decide the merits of whether (1) Linn owes any tax, (2) the records are corporate or personal, or (3) the summons is valid. Because Linn’s claim falls within the Enochs exception, it is not barred by the Anti-Injunction Act.
IV
Despite my disagreement with the majority’s reasoning, I agree with its conclusion that the district court erred in dismissing for lack of jurisdiction. I believe we also agree that it is not necessary for the IRS to actually hand over physical possession of the disputed documents. That clearly is my view. It is imperative, however, that the IRS prove its right to retain possession of the documents and any copies thereof. As indicated by the majority, the proper vehicle for this proof is a summons enforcement proceeding. In that proceeding, the IRS may attempt to show that the disputed documents are indeed corporate and covered by the summons. Linn may choose to argue, among other things, that the records are not corporate, or that the summons was issued in bad faith. See generally United States v. Rylander, - U.S. -, - -, 103 S.Ct. 1548, 1551-54, 75 L.Ed.2d 521 (1983); United States v. LaSalle National Bank, 437 U.S. 298, 318, 98 S.Ct. 2357, 2368, 57 L.Ed.2d 221 (1978); United States v. Powell, 379 U.S. 48, 57-58, 85 S.Ct. 248, 254-55, 13 L.Ed.2d 112 (1964). Finally, I agree that, because the district court dismissed for lack of jurisdiction and, as a result, did not decide the merits of these substantive claims, it would be inappropriate for us to do so at this time.

. Enochs represents the culmination of a turbulent, somewhat inconsistent history of interpretation of the Act by the Supreme Court. The case immediately preceding Enochs was Miller v. Standard Nut Margarine Co., 284 U.S. 498, 52 S.Ct. 260, 76 L.Ed. 422 (1932). In Miller, the Court ruled that “extraordinary and exceptional circumstances” could render the Act’s provisions inapplicable. Miller at 509, 52 S.Ct. at 263. Under the interpretation adopted in Miller, the Act demanded nothing more than equity doctrine had demanded before the Act’s pas*1288sage. Miller effectively repealed the Act. The Court in Enochs severely limited the potential reach of Miller, and reaffirmed the strict interpretation of the Act that had generally obtained prior to that case. See Bob Jones University v. Simon, 416 U.S. 725, 742-46, 94 S.Ct. 2038, 2048-50, 40 L.Ed.2d 496 (1974) for a succinct discussion of how the Supreme Court caselaw developed prior to Enochs.

. See also McCabe v. Alexander, 526 F.2d 963, 965 (5th Cir. 1976); Lange v. Phinney, 507 F.2d 1000, 1003 (5th Cir.1975); Lucia v. United States, 474 F.2d 565, 568 (5th Cir. 1973) (en banc); Crenshaw County Private School Foundation v. Connally, 474 F.2d 1185 (5th Cir. 1973); United States v. Doyal, 462 F.2d 1357, 1358 (5th Cir. 1972); Bowers v. United States, 423 F.2d 1207, 1208 (5th Cir.1970).