Comm. on Ways & Means v. U.S. Dep't of the Treasury

• Decision Date: 09 August 2022
• Docket Number: 21-5289
• Citation: 45 F.4th 324
• Parties: COMMITTEE ON WAYS AND MEANS, UNITED STATES HOUSE OF REPRESENTATIVES, Appellee v. UNITED STATES DEPARTMENT OF the TREASURY, et al., Appellees Donald J. Trump, et al., Appellants
• Court: U.S. Court of Appeals — District of Columbia Circuit

45 F.4th 324

COMMITTEE ON WAYS AND MEANS, UNITED STATES HOUSE OF REPRESENTATIVES, Appellee

v. UNITED STATES DEPARTMENT OF the TREASURY, et al., AppelleesDonald J. Trump, et al., Appellants

No. 21-5289

United States Court of Appeals, District of Columbia Circuit.

Argued March 24, 2022

Decided August 9, 2022

Cameron T. Norris argued the cause for appellants. With him on the briefs was William S. Consovoy.

Douglas N. Letter, General Counsel, U.S. House of Representatives, argued the cause for appellee Committee on Ways and Means, United States House of Representatives. With him on the brief were Todd B. Tatelman, Principal Deputy General Counsel, Stacie M. Fahsel, Associate General Counsel, Eric R. Columbus and Michelle S. Kallen, Special Litigation Counsel, Seth P. Waxman, Kelly P. Dunbar, David M. Lehn, Andres C. Salinas, Susan M. Pelletier, and Katherine V. Kelsh.

Gerard Sinzdak, Attorney, U.S. Department of Justice, argued the cause for Executive Branch appellees. With him on the brief were Sarah E. Harrington, Deputy Assistant Attorney General, and Michael S. Raab, Attorney. Mark R. Freeman, Attorney, entered an appearance.

Elizabeth B. Wydra and Brianne J. Gorod were on the brief for amicus curiae Constitutional Accountability Center in support of appellees.

Before: Henderson and Wilkins, Circuit Judges, and Sentelle, Senior Circuit Judge.

Opinion concurring in part and concurring in the judgment filed by Circuit Judge Henderson.

Sentelle, Senior Circuit Judge:

The Chairman of the United States House of Representatives Committee on Ways and Means filed a statutory request for documents from the Department of the Treasury related to then-President Donald J. Trump and related entities. Treasury initially objected to the request, and the Committee filed this lawsuit. After a change of administrations, Treasury acquiesced, stating that it intended to comply with the request. In the meantime, the Trump Parties intervened in the action. The district court ruled in favor of the Committee. Intervenors appeal. For the reasons set forth below, we affirm.

I. Background

As a general rule, Title 26, Section 6103 of the United States Code makes tax returns and return information confidential unless their release is authorized by an exception enumerated in that same section. 26 U.S.C. § 6103(a). Section 6103 includes a number of exceptions to the general rule of confidentiality but only one is at issue here. Section 6103(f)(1) provides that

[u]pon written request from the chairman of the Committee on Ways and Means of the House of Representatives ... the Secretary shall furnish such committee with any return or return information specified in such request ....

26 U.S.C. § 6103(f)(1). At bottom, this case simmers down to the constitutionality and application of § 6103(f)(1).

Operating separately from § 6103(f)(1), IRS regulations give the President's tax returns special consideration. While IRS audits are often random, the IRS has required the audit of the sitting President's tax returns since 1977. This Presidential Audit Program is a creature of IRS regulations and is not required or governed by statute. See Internal Rev. Man. § 3.28.3.5.3.

On April 3, 2019, Representative Richard Neal, Chairman of the Committee on Ways and Means ("the Chairman") invoked § 6103(f)(1) in a writing to the Commissioner of Internal Revenue ("the 2019 Request"). In the Request, the Chairman requested the federal income tax returns of then-President Donald J. Trump as well as Donald J. Trump Revocable Trust, DJT Holdings LLC, DJT Holdings Managing Member LLC, DTTM Operations LLC, DTTM Operations Managing Member Corp., LFB Acquisition Member Corp., LFB Acquisition LLC, and Lamington Farm Club, LLC doing business as Trump National Golf Club—Bedminster (collectively "Appellants" or "the Trump Parties"). In his letter, Chairman Neal stated that the Committee was "considering legislative proposals and conducting oversight related to our Federal tax laws, including, but not limited to, the extent to which the IRS audits and enforces the Federal tax laws against a President." JA 46.

On May 6, 2019, the Department of the Treasury responded that it did not intend to comply with the 2019 Request because it was not supported by a legitimate legislative purpose. This position was supported by an Office of Legal Counsel opinion issued on June 13, 2019, which concluded that the Chairman's stated reasons for requesting the tax information were pretextual.

In receipt of Treasury's denial, the Committee filed suit against the Internal Revenue Service and its Commissioner and the Department of the Treasury and its Secretary (collectively "Treasury") to force compliance with the 2019 Request. The Trump Parties intervened in the case soon after.

While the case was pending in the district court, Joseph R. Biden was elected as President of the United States. He was inaugurated on January 20, 2021.

In June 2021, the Chairman again wrote to the Secretary of the Treasury and Commissioner of the Internal Revenue Service. Invoking § 6103(f)(1), the Chairman requested the same information regarding the Trump Parties ("the 2021 Request"). However, in this Request, the Chairman provided more detail as to why the Committee wanted this information. Generally, Chairman Neal stated that the Committee continued "to consider and prioritize legislation on equitable tax administration, including legislation on the President's tax compliance, and public accountability" and legislation related to the IRS's mandatory audit program of the sitting President's returns.

Upon receipt of the 2021 Request, Treasury again consulted the Office of Legal Counsel. In July 2021, the Office released a second opinion, this time concluding that the 2021 Request was valid, and therefore that Treasury had no choice but to comply with it per the mandatory language of § 6103(f)(1).

After the second Office of Legal Counsel opinion was issued, Treasury informed the district court and the Trump Parties that it intended to comply with the 2021 Request and provide the Committee with the requested materials. The Committee then voluntarily dismissed the Complaint it had filed against Treasury. Upon learning that Treasury intended to comply with the 2021 Request, the Trump Parties, still intervenors at that time, filed a crossclaim against the Department of the Treasury and its Secretary as well as the Internal Revenue Service and its Commissioner. In addition, the Trump Parties filed a counterclaim against the Committee. These claims allege that the 2019 and 2021 Requests were unlawful and therefore Treasury should not comply with them.

Against both the Committee and Treasury, the Trump Parties asserted that the Request lacks a legitimate legislative purpose and violates the separation of powers. Against Treasury, the Trump Parties alleged that § 6103(f)(1) is facially unconstitutional and that compliance with the Request would be a violation of the First Amendment.

Across eight claims, the Trump Parties alleged that (1) the Request lacks a valid legislative purpose, (2) the Request violates the separation of powers, (3) Section 6103(f)(1) is facially unconstitutional, (4) the Treasury's change of position was motivated by retaliation and therefore violates the First Amendment, and (5) the Request violated the Trump Parties' Due Process rights. Both Treasury and the Committee filed motions to dismiss the cross and counterclaims for failure to state a claim.

In a thorough and well-reasoned memorandum opinion, the district court granted the motions to dismiss. Committee on Ways and Means v. U.S. Dep't of the Treasury , 575 F.Supp.3d 53 (D.D.C. 2021). First, the district court held that the 2021 Request was supported by the valid legislative purpose of the Committee's study of the Presidential Audit Program. Id. at 66-67. Per the district court, Congress could seek these records to inform legislation regulating "how many staff the IRS may assign to the audit of a sitting President" or legislation to ensure funding to the Presidential Audit Program. Id. at 66-67.

The district court then, after debating the pros and cons of various tests, applied Nixon v. Administrator of General Services (" Nixon v. GSA ") and determined that the Chairman's Request did not violate the separation of powers. Id. at 78-79, 81-82.

The district court went on to examine whether § 6103(f)(1) is facially unconstitutional by asking if the Trump Parties had shown that there was no set of circumstances under which the law would be valid. It determined that the Trump Parties had failed to do so. Id. at 80-81. It next found that Treasury's intent to comply with the 2021 Request is not out of retaliation against the Trump Parties, and therefore is not a violation of the First Amendment, because Treasury is required by statute to comply with a valid request. Id. at 81-82. Finally, the district court held that there was no violation of the Trump Parties' Due Process Rights. Id. at 82-83.

The Trump Parties timely appealed the district court's granting of the motions to dismiss.

II. Analysis

There are four issues before us on appeal: (1) Whether the Chairman's Request is supported by a legitimate legislative purpose, (2) whether the Chairman's Request violates the separation of powers, (3) whether § 6103(f)(1) is facially unconstitutional, and (4) whether Treasury's compliance with the Request would violate the First Amendment. We address each in turn.

We review the district court's granting of the motions to dismiss de novo . Cierco v. Mnuchin , 857 F.3d 407, 414 (D.C. Cir. 2017). To survive a motion to dismiss, the complaint must contain "sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). In evaluating the sufficiency of the complaint, we...