Crawford v. U.S. Dep't of the Treasury, No. 16-3539

CourtUnited States Courts of Appeals. United States Court of Appeals (6th Circuit)
Writing for the CourtBOGGS, Circuit Judge.
Citation868 F.3d 438
Docket NumberNo. 16-3539
Decision Date18 August 2017
Parties Mark CRAWFORD; Rand Paul, in his official capacity as member of the United States Senate; Roger Johnson; Daniel Kuettel; Stephen J. Kish; Donna-Lane Nelson; L. Marc Zell, Plaintiffs-Appellants, v. UNITED STATES DEPARTMENT OF the TREASURY; United States Internal Revenue Service ; United States Financial Crimes Enforcement Network, Defendants-Appellees.

868 F.3d 438

Mark CRAWFORD; Rand Paul, in his official capacity as member of the United States Senate; Roger Johnson; Daniel Kuettel; Stephen J. Kish; Donna-Lane Nelson; L. Marc Zell, Plaintiffs-Appellants,
v.
UNITED STATES DEPARTMENT OF the TREASURY; United States Internal Revenue Service ; United States Financial Crimes Enforcement Network, Defendants-Appellees.

No. 16-3539

United States Court of Appeals, Sixth Circuit.

Argued: January 24, 2017
Decided and Filed: August 18, 2017
Rehearing En Banc Denied September 26, 2017


ARGUED: James Bopp, Jr., THE BOPP LAW FIRM, PC, Terre Haute, Indiana, for Appellants. Richard Caldarone, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellees. ON BRIEF: James Bopp, Jr., Richard E. Coleson, Courtney Turner Milbank, THE BOPP LAW FIRM, PC, Terre Haute, Indiana, for Appellants. Richard Caldarone, Gilbert S. Rothenberg, Teresa E. McLaughlin, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellees.

Before: BOGGS, SILER, and MOORE, Circuit Judges.

OPINION

BOGGS, Circuit Judge.

In 2010, Congress passed the Foreign Account Tax Compliance Act (FATCA), a law aimed at reducing tax evasion by United States taxpayers holding funds in foreign accounts. FATCA imposes account-reporting requirements (and hefty penalties for noncompliance) on both individual taxpayers and foreign financial institutions (FFIs). FFIs are further required to deduct and withhold a "tax" equal to 30% of every payment made by the FFI to a noncompliant (or "recalcitrant") account holder. To implement FATCA worldwide, the United States Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) have concluded intergovernmental agreements (IGAs), which facilitate FFIs' disclosure of financial-account information to the United States government, with more than seventy countries. Separately from FATCA and the IGAs, the Bank Secrecy Act imposes a foreign bank account reporting (FBAR) requirement on Americans living abroad who have aggregate foreign-account balances over $10,000; willful failure to file an FBAR invites a penalty of 50% of the value of the reportable accounts or $100,000, whichever is greater .

Plaintiffs—who include Senator Rand Paul and several individuals who claim to be subject to FATCA and the FBAR—sought to enjoin the enforcement of FATCA, the IGAs, and the FBAR, and they now appeal the dismissal of their lawsuit for lack of standing. For the reasons that follow, we affirm the judgment of the district court.

I

A. The Parties

Plaintiffs' original verified complaint asserts claims against three defendants: Treasury, which administers FATCA and the FBAR; the IRS (an office of Treasury that also administers FATCA and the FBAR); and the United States Financial Crimes Enforcement Network (FinCEN), a Treasury Department bureau with administrative authority over the FBAR. Each of the seven plaintiffs alleges a unique set of harms:

Mark Crawford

Plaintiff Mark Crawford is an American citizen living in Albania with a residence in Dayton, Ohio. Crawford owns Aksioner, a brokerage firm in Albania that is a partner of Saxo Bank in Copenhagen. Crawford alleges injury because Saxo will not allow Aksioner to accept clients who are United States citizens "in part because the bank does not wish to assume the burdens that would be foisted on it by FATCA." Crawford also claims that Aksioner—which he owns —denied Crawford's own application for a brokerage account, and that Crawford

868 F.3d 444

has suffered financial harm because FATCA is "forcing him to turn away prospective American clients living in Albania."

Senator Rand Paul

Senator Rand Paul claims that he "has been denied the opportunity to exercise his constitutional right as a member of the U.S. Senate to vote against the FATCA IGAs." Senator Paul claims that he would vote against the IGAs if they were submitted to the Senate for advice and consent under Article II, Section 2, of the United States Constitution, or if they were submitted to the whole Congress for approval as "congressional-executive agreements." Senator Paul does not otherwise challenge FATCA, and he does not in any way challenge the FBAR.

Roger Johnson

Plaintiff Roger Johnson is an American citizen living in Brno, Czech Republic. Johnson is married to Katerina Johnson, a Czech citizen with whom Johnson previously shared joint financial accounts before they separated their accounts to avoid subjecting Katerina's account information to disclosure under FATCA.

Stephen J. Kish

Plaintiff Stephen J. Kish is a Canadian citizen living in Toronto. Kish was also an American citizen at the time Plaintiffs' complaint was filed, but he has since renounced his American citizenship. Kish and his wife, a Canadian citizen, share a joint bank account at a Canadian bank. Kish alleges that "FATCA has at times caused some discord between" Kish and his wife because Kish's wife "strongly opposes the disclosure of her personal financial information from [the] joint bank account to the U.S. government." Kish's wife, however, is neither a plaintiff nor a proposed plaintiff in this litigation.

Daniel Kuettel

Plaintiff Daniel Kuettel is a Swiss citizen and former American citizen living in Bremgarten, Switzerland. Kuettel and his wife—a citizen of Switzerland and the Philippines—have a daughter (a citizen of the United States, the Philippines, and Switzerland) and a son (a citizen of the Philippines and Switzerland), both minors. Kuettel alleges that he renounced his citizenship in 2012 "because of difficulties caused by FATCA." For instance, Kuettel alleges that before renunciation, his efforts to refinance his mortgage with Swiss banks were unsuccessful but that he "was able to refinance his home with a Swiss bank shortly thereafter." Kuettel also alleges that he has a college-savings account for his daughter in his own name at a Swiss bank and wishes to transfer it to his daughter, but that he has refrained from doing so for fear that if he does, either he or his daughter or the account will be subject to the FBAR penalty "if the IRS determines that his daughter has 'wilfully' failed to file an FBAR." Kuettel alleges that his daughter is incapable of filing the FBAR or of renouncing her United States citizenship because "she is only ten years old and too young to shoulder such an obligation," and Kuettel does not wish to file the FBAR on his daughter's behalf as FinCEN would ordinarily require the parent of a minor child to do.

Donna-Lane Nelson

Plaintiff Donna-Lane Nelson is a Swiss citizen and former American citizen living in both Geneva, Switzerland, and Argèles-sur-Mer, France. Nelson claims that she renounced her citizenship when, after FATCA was enacted, her Swiss bank (UBS) "notified her that she would not be

868 F.3d 445

able to open a new account if she ever closed her existing one[,] because she was an American." Nelson subsequently married an American citizen with whom she shares a joint bank account at BNP Paribas in France. Nelson alleges that she "has had her private financial account information disclosed to the IRS and the Treasury Department despite the fact that she is not a U.S. citizen," although Plaintiffs' pleadings provide no further insight as to the nature of this alleged disclosure, such as who made it, when it was made, or what it contained. Nelson has also had to prove or explain to UBS, BNP Paribas, and Raiffeisen (another European bank) that she is not a United States citizen.

L. Marc Zell

Plaintiff L. Marc Zell is an American and Israeli citizen living in Israel. Zell, an attorney, alleges that "[b]ecause of FATCA, [he] and his firm have been required by their Israeli banking institutions to complete IRS withholding forms ... as a precondition for opening trust accounts for both U.S. and non-U.S. persons and entities" (emphasis added). Zell alleges that the "Israeli banking officials have stated that they will require such submissions regardless of whether the beneficiary is a U.S. person ... because the trustee is or may be a U.S. person," and that, as a result, "banks have required [him] and his firm to close the trust account in some cases, and in other instances the banks have refused to open the requested trust account." Zell alleges that he holds in trust certain client securities that are required by Israeli financial regulations to be "held by a qualified Israeli financial institution," but Zell's Israeli financial institution has requested Zell to transfer the securities elsewhere "because both he and the beneficiary in this instance are U.S. citizens." Finally, Zell alleges that his non-United States clients have been required by Israeli banks "to fill out the IRS forms even though they have no connection with the United States," and that "banking officials have stated that the mere fact a U.S. person trustee or his law firm is acting as a fiduciary is reason enough to require non-U.S. person beneficiaries to" report their identities and assets to the...

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55 practice notes
  • State v. U.S. Dep't of State, No. 18-5478
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • July 24, 2019
    ...v. Byrd , 521 U.S. 811, 823, 117 S.Ct. 2312, 138 L.Ed.2d 849 (1997) (footnote omitted). See also Crawford v. U.S. Dep’t of Treasury , 868 F.3d 438, 453–54 (6th Cir. 2017) ("An apparent exception to the general rule against legislative standing arises when the legislators are suing on a vote......
  • Cahoo v. Fast Enters. LLC, Case Number 17-10657
    • United States
    • United States District Courts. 6th Circuit. United States District Court (Eastern District of Michigan)
    • March 25, 2021
    ...injury results from a "third party's voluntary and independent actions or omissions." Crawford v. United States Dep't of Treasury , 868 F.3d 438, 455 (6th Cir. 2017) (emphasis in original) (citing Bennett v. Spear , 520 U.S. 154, 169, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997) ); see Turaani v.......
  • Ogle v. Ohio Civil Serv. Emps. Ass'n, Case No. 2:18-cv-1227
    • United States
    • United States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
    • July 17, 2019
    ...prospective relief, evidence of past injury alone is insufficient to establish standing. Crawford v. United States Dep't of Treasury , 868 F.3d 438, 455 (6th Cir. 2017), cert. denied sub nom. Crawford v. Dep't of Treasury , ––– U.S. ––––, 138 S. Ct. 1441, 200 L.Ed.2d 717 (2018). An individu......
  • Turaani v. Sessions, Case No. 17–cv–14112
    • United States
    • United States District Courts. 6th Circuit. United States District Court (Eastern District of Michigan)
    • June 7, 2018
    ...the Sixth Circuit has noted, "have constitutional authority to decide only ‘cases’ and ‘controversies.’ " Crawford v. Dep't of Treasury , 868 F.3d 438, 452 (6th Cir. 2017) (quoting U.S. CONST. art. III § 2) (citing Muskrat v. United States , 219 U.S. 346, 31 S.Ct. 250, 55 L.Ed. 246 (1911) )......
  • Request a trial to view additional results
58 cases
  • State v. U.S. Dep't of State, No. 18-5478
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • July 24, 2019
    ...v. Byrd , 521 U.S. 811, 823, 117 S.Ct. 2312, 138 L.Ed.2d 849 (1997) (footnote omitted). See also Crawford v. U.S. Dep’t of Treasury , 868 F.3d 438, 453–54 (6th Cir. 2017) ("An apparent exception to the general rule against legislative standing arises when the legislators are suing on a vote......
  • Cahoo v. Fast Enters. LLC, Case Number 17-10657
    • United States
    • United States District Courts. 6th Circuit. United States District Court (Eastern District of Michigan)
    • March 25, 2021
    ...injury results from a "third party's voluntary and independent actions or omissions." Crawford v. United States Dep't of Treasury , 868 F.3d 438, 455 (6th Cir. 2017) (emphasis in original) (citing Bennett v. Spear , 520 U.S. 154, 169, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997) ); see Turaani v.......
  • Ogle v. Ohio Civil Serv. Emps. Ass'n, Case No. 2:18-cv-1227
    • United States
    • United States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
    • July 17, 2019
    ...prospective relief, evidence of past injury alone is insufficient to establish standing. Crawford v. United States Dep't of Treasury , 868 F.3d 438, 455 (6th Cir. 2017), cert. denied sub nom. Crawford v. Dep't of Treasury , ––– U.S. ––––, 138 S. Ct. 1441, 200 L.Ed.2d 717 (2018). An individu......
  • Turaani v. Sessions, Case No. 17–cv–14112
    • United States
    • United States District Courts. 6th Circuit. United States District Court (Eastern District of Michigan)
    • June 7, 2018
    ...the Sixth Circuit has noted, "have constitutional authority to decide only ‘cases’ and ‘controversies.’ " Crawford v. Dep't of Treasury , 868 F.3d 438, 452 (6th Cir. 2017) (quoting U.S. CONST. art. III § 2) (citing Muskrat v. United States , 219 U.S. 346, 31 S.Ct. 250, 55 L.Ed. 246 (1911) )......
  • Request a trial to view additional results

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