Silver v. Internal Revenue Serv.
Decision Date | 01 November 2021 |
Docket Number | Civil No. 19-cv-247 (APM) |
Citation | 569 F.Supp.3d 5 |
Parties | Monte SILVER, et al., Plaintiffs, v. INTERNAL REVENUE SERVICE, et al., Defendants. |
Court | U.S. District Court — District of Columbia |
Lawrence Marc Zell, Zell, Aron & Co., Israel, for Plaintiffs Monte Silver, Monte Silver, Ltd.
Joseph A. Sergi, Nishant Kumar, U.S. Department of Justice, Tax Division, Washington, DC, for Defendants.
In this action, Plaintiffs Monte Silver ("Silver") and Silver, Ltd. ("Silver Limited") challenged the Internal Revenue Service's ("IRS") alleged failure to conduct a small business impact analysis under the Regulatory Flexibility Act ("RFA") when it promulgated a set of rules known as the "Transition Tax Regulations." See Silver v. IRS , 531 F.Supp.3d 346, 349-50 (D.D.C. 2021). Plaintiffs "asked the court to declare [the IRS's RFA certifications] invalid and to remand the proposed and final regulations to Defendants for compliance with the RFA." Id. at 355. They also demanded an order staying enforcement of the Regulations against small businesses until the IRS conducted an acceptable RFA analysis. See id. at 358-59. The court, however, entered judgment in favor of Defendants on two grounds: (1) Plaintiffs failed to establish Article III standing as they had not demonstrated an ongoing injury or an imminent threat of one, see id. at 361-63, and (2) Plaintiffs lacked "statutory standing" to bring a claim under the RFA because neither Plaintiff qualified as a "small entity that is adversely affected or aggrieved by final agency action," 5 U.S.C. § 611(a)(1) ; see Silver , 531 F.Supp.3d at 362-66. Plaintiffs now seek reconsideration of the court's decision. Pls.’ Mem. of P. & A. in Supp. of Their Mot. for Recons. and for Leave to Amend the Compl., ECF No. 70 . They also ask for leave to amend their complaint. See id.
For the reasons explained below, Plaintiffs’ motion for post-judgment relief is denied.
The court begins with Plaintiffs’ motion for reconsideration. Although Plaintiffs move for reconsideration under both Federal Rules of Civil Procedure 59(e) and 60(b), see Pls.’ Mem. at 1, because Plaintiffs filed their motion within 28 days of entry of judgment, the court considers the motion under Rule 59(e), see Slate v. Am. Broadcasting Cos., Inc. , 12 F. Supp. 3d 30, 37 (D.D.C. 2013). And, because the Rule 60(b) standard is "somewhat more restrictive" than that governing Rule 59(e), the court need only consider Plaintiffs’ arguments under the latter standard. See Slate , 12 F. Supp. 3d at 37 (quoting
11 CHARLES ALAN WRIGHT & ARTHUR R. MILLER , FEDERAL PRACTICE AND PROCEDURE § 2817 n.15 (3d ed. 1980)).
"A Rule 59(e) motion is discretionary and need not be granted unless the district court finds that there is an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice." Firestone v. Firestone , 76 F.3d 1205, 1208 (D.C. Cir. 1996) (internal quotation marks omitted). Importantly, a Rule 59(e) motion "may not be used to relitigate old matters, or to raise arguments or present evidence that could have been raised prior to the entry of judgment." Leidos, Inc. v. Hellenic Republic , 881 F.3d 213, 217 (D.C. Cir. 2018) (quoting Exxon Shipping v. Baker , 554 U.S. 471, 486 n.5, 128 S.Ct. 2605, 171 L.Ed.2d 570 (2008) ). It is also "not a vehicle to present a new legal theory that was available prior to judgment." Patton Boggs LLP v. Chevron Corp. , 683 F.3d 397, 403 (D.C. Cir. 2012).
As will be seen, Plaintiffs’ arguments and presentation of new evidence fail to satisfy the rigorous Rule 59(e) standard.
Plaintiffs first criticize the court's threshold determination, as part of its standing inquiry, that Plaintiffs sought both retrospective and prospective relief under the RFA. Pls.’ Mem. at 5. According to Plaintiffs, they Id. Plaintiffs’ argument is difficult to understand. Plaintiffs cite no case for the proposition that relief under RFA is sui generis and defies traditional categorization as either retrospective or prospective. Admittedly, the words "retrospective" or "prospective" do not appear in the RFA. See id. at 7 ( ). But that does not mean the court is not required to determine the type of relief requested to evaluate standing. To the contrary, as this court observed, "the Supreme Court has made clear that the ‘injury in fact’ requirement of standing varies depending on whether the plaintiff seeks prospective or retrospective relief." Silver , 531 F.Supp.3d at 358 (citing City of Los Angeles v. Lyons , 461 U.S. 95, 101–02, 105, 103 S.Ct. 1660, 75 L.Ed.2d 675 (1983) ). Plaintiffs do not seriously suggest, nor could they, that the remedial provisions of the RFA are not subject to this basic principle of Article III standing.
Plaintiffs wrongly criticize the court for having demanded that they show ongoing or imminent future injury to establish standing. Plaintiffs sought relief under Section 611 of the RFA, which permits a court to "defer[ ] the enforcement of the rule against small entities unless the court finds that continued enforcement of the rule is in the public interest," 5 U.S.C. § 611(a)(4)(B). See First Am. Compl., ECF No. 5, at 19 ( ). Such relief is properly categorized as "prospective." See Landgraf v. USI Film Prods. , 511 U.S. 244, 293, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994) (Scalia, J., concurring in the judgment) (mem.) ("the purpose of prospective relief is to affect the future rather than remedy the past") that ; cf. Verizon Md., Inc. v. Pub. Serv. Comm'n , 535 U.S. 635, 645, 122 S.Ct. 1753, 152 L.Ed.2d 871 (2002) ( ). It is also fairly considered "injunctive." See Injunction , BLACK'S LAW DICTIONARY (11th ed. 2019) ("A court order commanding or preventing an action."); Injunctive , BLACK'S LAW DICTIONARY (11th ed. 2019) ("That has the quality of directing or ordering; of, relating to, or involving an injunction."). The court therefore was required to determine whether Plaintiffs had established ongoing or imminent future injury as part of its standing inquiry. See Arpaio v. Obama , 797 F.3d 11, 19 (D.C. Cir. 2015) ( ).
To be fair, with the benefit of hindsight, the court's treatment of the relief sought by Plaintiffs as both prospective and retrospective arguably caused unnecessary confusion. See Silver , 531 F.Supp.3d at 358-61. The court's characterization of Plaintiffs’ request for declaratory relief as "retrospective" probably was incorrect. See id. Plaintiffs asked the court to declare "that Treasury's RFA Section 605(b) certifications are invalid" and remand to the agency to conduct an RFA analysis. Id. at 358. Such a declaration, if granted, would have deemed invalid the future effectiveness of the agency's RFA certification, thus making such relief prospective. See Verizon , 535 U.S. at 646, 122 S.Ct. 1753 ( ). Thus, even Plaintiffs’ demand for declaratory relief required them to show an ongoing or future injury to have standing. See Arpaio , 797 F.3d at 19.
In any event, the court ultimately conducted an inquiry into Plaintiffs’ claimed future injury and found that they had failed to carry their burden at the summary judgment stage. See Silver , 531 F.Supp.3d at 360-63. Plaintiffs say that determination was wrong. See Pls.’ Mem. at 9–14. The arguments they now make, however, do not satisfy the Rule 59(e) standard.
Plaintiffs insist that they successfully showed that they would incur future compliance costs, but in so doing Plaintiffs simply repackage the arguments made on summary judgment that the court found to be unsuccessful. See id. at 10 ( ). That is not proper on a Rule 59(e) motion.
Nor does Plaintiffs’ attempt to shore up the record warrant reconsideration. See id. at 10–11. Silver's new declaration attempts to challenge the court's ruling on standing that "Plaintiffs ... [had said] nothing about when Silver Limited might issue a dividend to Silver that would trigger the claimed compliance obligations." Silver , 531 F.Supp.3d at 362 ; see Pls.’ Mem. at 10–11. Silver now declares: "In 2021 due to certain education and housing commitments related to my children, I am forced to draw a dividend from Silver Limited." Pls.’ Mem., Decl. of Monte Silver, ECF No. 71-3 ] , ¶ 3. This dividend, Silver claims, will result in future compliance costs under the Transition Tax Regulations. See id. ¶¶ 6–11.
But Plaintiffs’ new evidence does not warrant reconsideration for two reasons. First, Silver's emerging financial circumstances did not exist at the...
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Silver v. Internal Revenue Serv.
...aside a one-time “transition tax” imposed by a regulation effecting the TCJA, a tax to which Plaintiffs were not subject and never paid. Id. at 10. Plaintiffs challenge regulations effecting the TCJA's provisions revising the “global intangible low-taxed income” (“GILTI”) of certain “contro......
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Silver v. Internal Revenue Serv.
...aside a one-time “transition tax” imposed by a regulation effecting the TCJA, a tax to which Plaintiffs were not subject and never paid. Id. at 10. Plaintiffs challenge regulations effecting the TCJA's provisions revising the “global intangible low-taxed income” (“GILTI”) of certain “contro......