32 F.3d 1423 (10th Cir. 1994), 91-1376, Tavery v. United States

Docket Nº:91-1376.
Citation:32 F.3d 1423
Party Name:Mary Ann TAVERY, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
Case Date:July 20, 1994
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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32 F.3d 1423 (10th Cir. 1994)

Mary Ann TAVERY, Plaintiff-Appellant,

v.

UNITED STATES of America, Defendant-Appellee.

No. 91-1376.

United States Court of Appeals, Tenth Circuit

July 20, 1994

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Mary Ann Tavery, pro se.

James R. Walker of Rothgerber, Appel, Powers & Johnson, Denver, CO, amicus curiae, for plaintiff-appellant Mary Ann Tavery. [*]

Kevin M. Brown, Trial Atty., Tax Div., Dept. of Justice, Washington, DC (Shirley D. Peterson, Asst. Atty. Gen., James A. Bruton, Acting Asst. Atty. Gen., and Gary R. Allen, Jonathan S. Cohen, and Janet Kay Jones, Attys., Tax Div., Dept. of Justice, Washington, DC, and Michael J. Norton, U.S. Atty., Denver, CO, on the brief), for defendant-appellee.

Before HOLLOWAY, McKAY, and GARTH, [**] Circuit Judges.

HOLLOWAY, Circuit Judge.

Plaintiff-appellant Mary A. Tavery appeals a summary judgment in favor of defendant-appellee the United States. The district court dismissed Ms. Tavery's complaint alleging unlawful disclosures of tax return information by a government attorney in violation of 26 U.S.C. Sec. 6103. We affirm.

I

In her complaint against the United States, Ms. Tavery alleges that "[o]n or about April 13, 1989, United States Attorney John D. Steffan filed a brief in the case of The United States of America v. Colorado Reform Baptist Church, Inc., Civil Action No. 88-X-259[,] ... in which he violated USC [Sec.] 7431 by disclosing return information regarding plaintiff's Tax Returns without plaintiff's permission." I R. Doc. 1 at p 4. Rev. William Conklin, the husband of Ms. Tavery, was the records custodian of the church. 1 Ms. Tavery alleges that Mr. Steffan made the following statement in his brief:

[T]he Internal Revenue Service refunded $964.67, $2,045.63, and $651.39, all on March 8, 1989, in federal taxes and accruals to the Conklins. In addition, upon information and belief, Mrs. Conklin/Tavery is an engineer earning in excess of $40,000 a year. 2

Id. at p 5. Ms. Tavery further avers that the disclosure, quoted above, was "willful",

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"knowing[ ]" or "negligen[t]" and therefore "in violation of 26 U.S.C. [Sec.] 6103(c)-(h)." Id. at p 6.

Shortly after the filing of the instant complaint, Ms. Tavery filed a motion for summary judgment, claiming she was entitled to judgment on the basis of the government's allegedly unauthorized disclosure. I R. Docs. 5, 6. The government filed a brief opposing summary judgment for Ms. Tavery and supporting a cross-motion for summary judgment by the government. The government argued, inter alia, that Mr. Steffan's disclosure of tax information was authorized by 26 U.S.C. Sec. 6103(h)(4)(B) or (C), which provide:

A return or return information may be disclosed in a Federal or state judicial or administrative proceeding pertaining to tax administration, but only--

* * * * * *

(B) if the treatment of an item reflected on such return is directly related to the resolution of an issue in the proceeding; or

(C) if such return or return information directly relates to a transactional relationship between a person who is a party to the proceeding and the taxpayer which directly affects the resolution of an issue in the proceeding ...

I R. Doc. 9 at 8-11.

In an affidavit submitted in support of the government's response and cross-motion, Mr. Steffan stated that the information regarding Ms. Tavery's income was disclosed in Case No. 88-X-259 in the District of Colorado in connection with the right of Ms. Tavery's husband, Rev. William Conklin, to court-appointed counsel in subsequent potential contempt proceedings. I R. Doc. 8, Steffan Aff. at pp 5-10. 3 The information in question concerning Ms. Tavery was used by the government to support its argument that "Mr. Conklin could not establish his inability to pay his own attorney's fees, and thus was not entitled to appointed counsel." Id. at p 10. The affidavit stated that Mr. Steffan never worked on any case in the Department of Justice in which Ms. Tavery was a party and that accordingly he "was not given access by the Internal Revenue Service to any 'tax return information' of Ms. Tavery." Id. at p 3. The affidavit also expressed Mr. Steffan's belief that "the Internal Revenue Service was [not] the source of the information regarding Ms. Tavery's income, occupation or tax refunds." Id. at p 12. Accordingly, the government argued that Ms. Tavery's summary judgment motion should be denied because "[a] genuine issue of material fact remains: where did Mr. Steffan get the information which he used in the brief filed with the Court?" I R. Doc. 9 at 7-8.

In her brief filed in response to the government's cross-motion, Ms. Tavery argued that Mr. Steffan's claimed ignorance as to the source of the disclosed tax information proved actionable negligence in the admitted disclosure. I R. Doc. 10 at 1-2. 4 Ms. Tavery's response did not directly discuss the

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government's assertion that its disclosure was authorized under Sec. 6103(h)(4)(B) and (C). Id. at 1-3. In a declaration previously filed in support of her own motion, however, Ms. Tavery had pertinently stated her position "that [her] income is not related to the resolution of any issue in the case 88-X-259." I R. Doc. 5, Declaration in Support of Plaintiff's Memorandum of Law.

The district court denied Ms. Tavery's motion for summary judgment and granted the government's cross-motion. I R. Doc. 14. The court concluded that Ms. Tavery's income necessarily "had a substantial bearing on Reverend Conklin's ability to pay an attorney" and that the government's disclosure therefore "f[e]ll under either [subsection] (C) or (B) [of Sec. 6103(h)(4) ], and accordingly was not inappropriate." Id. at 2. 5 The complaint and action were dismissed. Ms. Tavery timely appealed the court's judgment. I R. Doc. 6.

II

While the ruling of the district judge was based on his conclusion that the government's

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disclosure came within either Sec. 6103(h)(4)(B) or (C), we conclude that the first exception, subsection (B), amply supports the summary judgment for the government. We are convinced that the challenged disclosure was covered by this exemption which applies "if the treatment of an item reflected on such return is directly related to the resolution of an issue in the proceeding." Sec. 6103(h)(4)(B). Therefore we do not reach the additional issue whether the information "directly relates to a transactional relationship between a person who is a party to the proceeding and the taxpayer which directly affects the resolution of an issue in the proceeding." Sec. 6103(h)(4)(C). 6

A

The government argues that in the underlying Case No. 88-X-259 in the District of Colorado, the issue of Rev. Conklin's qualifying as an indigent for appointment of counsel under the Criminal Justice Act was an "issue in the proceeding" within the meaning of Secs. 6103(h)(4)(B) and (C). As Mr. Steffan's affidavit shows, the district court ordered Rev. Conklin to comply with the court's previous order and the Internal Revenue Service summons to produce records. I R. Doc. 8, p 8. The order also directed, in part, that

to the extent that Rev. William Conklin seeks appointment of counsel to represent his interests, if any, in subsequent proceedings for Contempt of Court, Rev. Conklin is DIRECTED to appear before a Pretrial Services Officer ... and to provide, under oath, full and complete disclosure of his assets, income and liabilities, on or before April 14, 1989; it is further

ORDERED that financial an[d] other information submitted in connection with Rev. Conklin's application for appointed counsel shall be filed under seal and remain under seal until further order of the court; it is further

ORDERED that the United States shall address the issue of Rev. Conklin's right to appointed counsel in a brief to be filed on or before April 14, 1989....

I R. Doc. 9, Govt.Ex. A at 3-4 (emphasis added).

It was in that brief, ordered by the court to be filed, that government counsel made the disclosure concerning Ms. Tavery's approximate income and the tax refunds to the Conklins. The affidavit of Mr. Steffan concluded that he made the disclosure in good faith, honestly believing that the statement about Ms. Tavery was authorized by Sec. 6103(h)(4)(B). The government thus argues that even assuming the material disclosed was "return information," which it does not concede, the disclosure was prompted by the district court's order that the government address Rev. Conklin's eligibility for court-appointed counsel in a potential civil contempt proceeding. Brief for the Appellee at 17-18.

We are persuaded by the government's argument that in these circumstances the disclosure came within Sec. 6103(h)(4)(B). In the underlying case, Rev. Conklin's eligibility as an indigent for appointment of counsel was made an "issue in the proceeding" by the district judge's order for the government brief to address the issue. Because of a possible contempt proceeding in which Rev. Conklin could face loss of liberty, the court wanted to have information to determine Rev. Conklin's possible eligibility for appointment of counsel, i.e. whether he was financially

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unable to obtain adequate representation, 18 U.S.C. Sec. 3006A(a). See Walker v. McLain, 768 F.2d 1181, 1183 (10th Cir.1985), cert. denied, 474 U.S. 1061, 106 S.Ct. 805, 88 L.Ed.2d 781 (1986).

The scope of the relevant inquiry on the financial inability issue is broad. See United States v. Barcelon, 833 F.2d 894, 897 & n. 5 (10th Cir.1987) (detailing numerous factors to be considered, including "the availability of income to the defendant from other sources such as a spouse...."). The factors to consider include money sent to the...

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