In Uncategorized on 06/24/2016 at 17:36

I said a long time ago that if governmental deliberative and pre-decisional processes make your day, there’s no accounting for tastes. Well, today you’ve got a bonanza, as Judge Laro has written a law review case note on Guidant LLC f.k.a. Guidant Corporation, and Subsidiaries, et al., Docket No. 5989-11, filed 6/24/16.

You’ll remember my little blogpost “Quick Peek,” 5/12/16. Well, they “got ‘er done,” as the Cable Guy says, and there are 26 Selected Documents on the no-fly list.

IRS is quibbling only about a sentence or two here and there in some of the no-flies, but they want others off the table.

Judge Laro is thorough. First there’s the commonlaw definition of the privilege, but that seems to apply here.

Next there’s the delegate question, as to who can invoke, but the IRS lawyer on the case swears she’s one of the chosen few and that does it.

Next there’s third-party contractor reports, but here the contractor is above the fray, that is, hasn’t an economic interest in the outcome, so the report, even if later made public, is pre-decisional and equivalent to a report from one of IRS’ own wonks, so deliberative.

Next there’s waiver. “Respondent had originally withheld the entirety of Exhibit A.26 but now claims privilege only as to four lines in that document. However, respondent’s release of his privilege claim cites a page that plainly does not meet the narrative description of its content in respondent’s First Supplemental Memorandum. Since this attempted waiver of privilege is incoherent, we err on the side of caution and do not find that respondent waived privilege as to this document.” Order, at p. 7.

Looks like IRS may have its own Case of the Incoherent Accountant.

The pre-decisional threshold, like a certain festival, raises four questions. The big ones are when was the document prepared, and did it go from subordinate to decider (sounds deliberative) or the other way (sounds like policy already arrived at)? Of course, the document had to relate to the decision at issue, and the decider had to take the document into account in reaching the decision.

And of course a lot of the stuff “discuss substantive questions related to the report and the process of its production. Since they include statements of advice, deliberation, and recommendation, they fall within the privilege.” Order, at p. 11.

This is a fourteen (count ‘em, fourteen) page order. So we get to page eleven, and the stuff is privileged. Game over, right?

Not quite.

“The deliberative process privilege is not absolute.  It ‘is qualified in that it [recognizes] there are instances in which justice will require disclosure of such material. A balancing of interests is required; the gravity of the individual’s need for disclosure must be weighed against the harm that disclosure may do to intragovernmental candor.’  Ultimately, the privilege ‘is merely meant to save possible embarrassment of governmental officials that would result from dissemination of certain of their statements to the public.’ Ostensibly, ‘[t]he prospect of such embarrassment would inhibit free expression in rendering advice and recommendations necessary to effective policy- and decision making’.” Order, at pp. 11-12. (Citations omitted).

So do the Guidants clear the bar?


“In this case, the Selected Documents are exclusively under respondent’s control and petitioner cannot obtain the information contained in them by other means, the potential transfer pricing adjustment is approximately $3.5 billion, and respondent is a litigant with interests directly adverse to those of petitioner.” Order, at p. 12.

But wait, there’s more.

“Respondent has not established that his employees would become fearful of public scrutiny or even embarrassed if the Selected Documents were disclosed. It is the lot of public servants that they are on occasion in the public light, and at issue here is nothing that would implicate national security or the safety and wellbeing of respondent’s employees or contractors. The Selected Documents are not ‘so candid or personal in nature that public disclosure is likely in the future to stifle honest and frank communication within the agency.’ Moreover, Exhibits A.15 and A.16 demonstrate that respondent’s employees assumed that the Freedom of Information Act might apply to at least the consultant’s report.” Order, at p. 12. (Citation omitted).

But is the stuff relevant? Here’s where Taishoff’s summary J approach is a winner. “In denying petitioner’s motion for partial summary judgment in this case, we held that respondent had not abused his discretion as a matter of law, but we left open the ultimate decision on that question until the factual record is fully developed and we have been able to give all facts their due weight. Since the Selected Documents, taken together and in their entirety, have potential probative value with respect to the issues in this case, we find that the first factor of the balancing inquiry also favors petitioner.” Order, at p. 13 (Citation omitted, but see my blogpost “Before Truth,” 5/29/16. And I was wrong; this isn’t going to settle.)

You can see where this is going.

Hidden evidence, yuuuge deficiency, evidence necessary for the trial, equals turn it loose, IRS.

Takeaway- Ya gotta love summary J. Really can help, even if you lose.



Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: