Court Opinion

ID: 9474871
Source: CourtListenerOpinion
Date Created: 2023-08-05 05:11:27.223055+00
Date Added: 2024-06-11T17:44:22.997009
License: Public Domain

THORNBERRY, Circuit Judge,
dissenting:
The issue in this case is whether the phrase “position of the United States in the civil proceeding” in 26 U.S.C. § 7430(c)(2)(A)(i) refers to the government’s litigation position only, or to its prelitigation position as well. Because I believe that the phrase refers to the government’s litigation position only, I respectfully dissent.
The majority properly begins its analysis with an examination of § 7430’s text. The majority demonstrates convincingly that as used elsewhere in § 7430, the phrase “civil proceeding” means proceedings before a court only. See § 7430(a), (c)(l)(A)(ii), (c)(l)(A)(iv).1 This textual analysis should have been conclusive. There is, after all, nothing in the language or legislative history of § 7430 to suggest that Congress used the “civil proceeding” phrase differently in § 7430(c)(2)(A)(i) than it did elsewhere in the statute. But the majority does not stop; not content to parse the text of § 7430, it goes on to consider the statute in light of recent amendments to the Equal Access to Justice Act, an entirely separate statute.
Initially, I find surprising the majority’s inference that in amending the EAJA to clarify its terms, Congress meant by implication to amend § 7430 as well. I think it more plausible that when Congress amends one statute but does not amend a second, similar statute, it means the two statutes to be construed differently. But my objection to the majority’s reliance on the EAJA is more specific; I believe that the majority misapprehends the significance of the differences between the EAJA and § 7430.
Most obvious is the textual difference between the two statutes. The EAJA refers to the “position of the United States,” 28 U.S.C. § 2412(d)(1)(A), while § 7430(c)(2)(A)(i) speaks of the “position of the United States in the civil proceeding.” (Emphasis added.) The D.C. Circuit has concluded, and I agree, that the phrase “in the civil proceeding” in § 7430(c)(2)(A)(i) indicates “a focus narrower than the EAJA’s.” Baker v. Commissioner, 787 F.2d 637, 641 n. 8 (D.C.Cir.1986). The majority dismisses this textual difference, noting that the “in the civil proceeding” phrase is a mere “shard” from which the shape of the entire “pot” — presumably § 7430 — cannot alone be gleaned. This casual dismissal of a significant textual difference is particularly odd in light of the majority’s assertion earlier in its opinion that the “crucial issue” in this case is the *393proper interpretation of the “civil proceeding” language.2
There are other significant differences between § 7430 and the EAJA. Section 7430, enacted in 1982, removed taxpayer litigation from the scope of the EAJA. See Pub.L. No. 97-248, § 292(c), 96 Stat. 324, 574 (1982). Section 7430 places taxpayers at a disadvantage compared to civil litigants proceeding under the EAJA. Under § 7430(c)(2)(A)(i), for example, the taxpayer has the burden of showing that the government’s position was unreasonable; under the EAJA, the government has the burden of showing that its position was reasonable. See Russell v. National Mediation Board, 775 F.2d 1284, 1288 (5th Cir.1985). Section 7430(b)(2) provides that the taxpayer may not obtain litigation costs unless he has exhausted his administrative remedies; the EAJA contains no such requirement. Section 7430(b)(1) establishes an attorney fee cap of $25,000; the EAJA does not set a limit on total fees.3
I infer from these differences, disfavoring taxpayer litigants, that Congress may well have intended to disfavor them in defining the “position” phrase as well. This interpretation of Congress’ intent squares with the textual difference between the two statutes. The majority, however, views these differences in quite a different light. After examining the statutes and noting that Congress has placed taxpayers at a disadvantage, the majority comes to a startling conclusion: “These differences sufficiently disfavor taxpayer litigants as compared to other civil litigants without further placing them at a disadvantage by narrowly construing the scope of the phrase ‘position of the United States in the civil proceeding.’ ” Thus the majority, evidently believing that Congress has unfairly skewed § 7430 against the taxpayer, attempts to set matters right by giving the “position” phrase a broad reading. Although I respect the majority’s concern for fairness, I cannot agree with its freewheeling approach to statutory construction.
Near the end of its opinion the majority concludes that the “position” phrase in § 7430(c)(2)(A)(i) does not include the IRS’s position throughout the administrative proceedings; “rather, the inquiry should focus on the IRS’s position at the time the taxpayer’s petition was filed.” This limitation, like the majority’s rule itself, has warrant in neither the language nor the legislative history of § 7430.4 I find it even more *394telling, however, that the limitation finds no analog in the EAJA’s position phrase, which earlier in its opinion the majority treats as a virtual twin of § 7430(c)(2)(A)(i). Under the EAJA as amended, the “position of the United States” includes “the action or failure to act by the agency upon which the civil action is based.” Pub.L. No. 99-80, § 2(c)(2), 99 Stat. 183, 185 (to be codified at 28 U.S.C. § 2412(d)(2)(D)). This provision does not purport to limit the inquiry to the agency’s position at the time the litigant files suit. In construing § 7430, therefore, the majority treats Congress’ amendment of the EAJA as conclusive in one context and ignores it entirely in another.
If I were drafting a statute or formulating a common law rule to govern the award of litigation costs in tax cases, I might well endorse the majority’s approach. But that is not our role; we are construing a statute duly enacted by Congress. In so doing we must adhere to the congressional intent as revealed in the words of the statute. My reading of § 7430 persuades me that Congress intended the phrase- “position of the United States in the civil proceeding” to refer to the government’s litigation position only. Because I believe that the majority substitutes its own notion of fairness for the clear command of the statutory text, I must, with respect, dissent.

. The majority might have added that in an analogous context, this Court recently concluded that the phrase “ ‘action or proceeding’ commonly refers to some sort of adversary proceeding in the nature of a traditional lawsuit.” Arriola v. Harville, 781 F.2d 506, 510 (5th Cir.1986) (referring to attorney fee provision in the Voting Rights Act).

. In one respect the EAJA directly conflicts with the majority’s interpretation of § 7430. The recent amendments to the EAJA provide that the "position of the United States” includes "in addition to the position taken by the United States in the civil action, the action or failure to act by the agency upon which the civil action is based.” Pub.L. No. 99-80, § 2(c)(2), 99 Stat. 183, 185 (to be codified at 28 U.S.C. § 2412(d)(2)(D)) (emphasis added). In this context, Congress plainly used the phrase “in the civil action” to refer to proceedings before a court. If the majority is correct in its suggestion that "civil action” in the EAJA has roughly the same meaning as "civil proceeding” in § 743Ó, then it follows that the “civil proceeding” phrase also encompasses court proceedings only.

. The EAJA does limit the maximum hourly fee a lawyer may recover to $75 per hour "unless the court determines that an increase in the cost of living or a special factor ... justifies a higher fee.” 28 U.S.C. § 2412(d)(2)(A). Section 7430 does not contain an hourly fee cap for attorney fees.

. In support of its limitation, the majority cites Baker v. Commissioner, 787 F.2d 637, 641 (D.C.Cir.1986), and United States v. Balanced Financial Management, Inc., 769 F.2d 1440, 1450-51 (10th Cir.1985). The single sentence that the majority quotes from Baker — "Nor do we take issue with the Tax Court’s conclusion that the Commissioner’s legal position, at the time Baker filed his petition with that court, appeared to be within the pale of reason" — is far too conclusory and ambiguous to lend the majority’s position much support. The majority’s citation to Balanced Financial Management is even less apposite. There, the government commenced a civil contempt proceeding against the taxpayers. Thus, the government was in the position of plaintiff and the taxpayers were in the position of defendants. When the government is the plaintiff, its litigation position plainly includes the position it takes in instituting the litigation. See id. at 1450-51 & n. 12. Here, by contrast, the government was the defendant before the Tax Court. I do not see how the government as defendant can have a litigation position before it has filed its answer or otherwise made its position formally known to the court.