In Uncategorized on 08/01/2019 at 18:05

Cross Refined Coal, LLC, USA Refined Coal, LLC, Tax Matters Partner, Docket No. 19502-17, filed 8/1/19, has been a good source of blogfodder, but today that Obliging Jurist, Judge David Gustafson, has outdone himself.

Here is an essay on the trial subpoena to nonparties per Section 7456(a)(1), and its proclivity to subvert Rule 70(a)(2) and the play-nice discovery that pervades Tax Court litigation. And give us stealth on steroids.

IRS hits six (count ‘em, six) nonparties with trial subpoenas, the Cross Colliers want them quashed, but the nonparties apparently don’t care.

“We are sympathetic to petitioner’s complaint about the possible difficulty it might suffer from having to review newly produced documents during trial for purposes of determining whether petitioner should object to their admission into evidence. However, we do not yet know whether there will in fact be any documents produced by the third parties, nor whether respondent will offer them into evidence, nor in what quantities. If respondent’s use of the subpoenas actually were to result in prejudice to petitioner, then its objections on that basis could be evaluated at that time.

“Our standing pretrial order does requires that exhibits be exchanged before trial, and sometimes an exception to this requirement is made in the case of documents received from a third party at the trial session, where the proffering party had no prior opportunity to receive and exchange them. However, if respondent’s use of the subpoenas in this case were to result in a large number of previously undisclosed documents being offered at trial, we would expect to inquire about whether the last-minute production of the documents was actually imposed on respondent through no fault of his own, or whether instead the subpoenas were a blameworthy last-minute attempt to obtain documents that he could have attempted to obtain in time to comply with the standing pretrial order. But we will not now try to anticipate and adjudicate that dispute, since it may not even arise. For that reason,we will deny without prejudice petitioner’s request, ‘[i]n the alternative, … [that] the Court should prohibit the introduction of subpoenaed documents at trial.’” Order, at p. 2. No quash, though.

True, we don’t know what, if anything, the six, or any of them, has or has not. But if there is any serious doubt about what any of them has, this is the biggest fishing expedition since Jonah’s unsuccessful bail on the trip to Nineveh.

And the prospect that, at calendar call, or worse, on a date and time certain, six eighteen-wheelers pull up to the courthouse, each drops its tailgate, and turns a forklift loose on forty million (count ‘em, forty million) documents, is too frightening to contemplate.

If you think I’m being unusually hyperbolic, re-read my blogpost “The Forty Million – Part Deux,” 5/15/15.

Discovery geeks may salivate, but trial lawyers blench.

This is a golden opportunity for wags, wits, wiseguys and wiseacres to play games.

Time for a legislative fix.

And, Judge Gustafson, please oblige this poor blogger by designating orders like these. Even though you must admonish the Cross Colliers “Petitioner cites orders in its motion, but we remind petitioner that ‘Orders shall not be treated as precedent’. Rule 50(f).” Order, at p. 2.





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