In Uncategorized on 05/14/2021 at 13:14

I gave Judge Christian N. Weiler the sobriquet “Speedy” last September, in my blogpost “Fastest Promotion on Record,” 9/10/20.

Although it takes him some little time, Judge Speedy straightens out IRS counsel in Otay Project, LP, Oriole Management LLC, Tax Matters Partner, Docket No. 6819-20, filed 5/14/21.

IRS tries to amend its answer two (count ’em, two) days after the Otays replied to their answer. Rule 41 says you need leave of court to serve an amended pleading after an adversary has responded to yours.

So IRS moves for leave to file a second amendment to its answer, but that fares no better.

“Respondent filed the first amendment to his answer on October 21, 2020, just two days after petitioner replied to respondent’s answer on October 19, 2020. Since the first amendment to answer was not filed within the time an amendment could have been filed as a matter of course, it may be filed only by leave of Court.  However, no motion for leave to file accompanied the first amendment to answer. Therefore, the filing of respondent’s first amendment to answer violates Rule 41.

“In respondent’s second amendment to answer, lodged with his motion for leave to file, respondent seeks to clarify his position regarding Exhibit B to the answer, clarify the theories supporting his position in the case, and cure any issue under Rule 41(a) relating to respondent’s first amendment, by deleting the text ‘and the substantial understatement penalties under I.R.C. §§ 6662(b)(2) and 6662(d)’ from paragraph 11(l) of respondent’s first amendment to answer.” Order, at p. 2.

Note that IRS is up against a well-known and well-regarded white shoe law firm.

The test for leave is whether the counterparty is ambushed, like eve-of-trial or after discovery closed, and the amended pleading does more than “make the case harder or more expensive for the other party since this is likely to occur in any amendment to the pleadings.” Order, at p. 2. (Citation omitted).

Here, trial is not scheduled, and apparently IRS tipped off the Otays in a December phoneathon. So no ambush.

But here’s the bonus: Judge Speedy gives us some insight into what he thinks is speedy. “Furthermore, the motion for leave was filed some 3 months after the original answer, which does not strike the Court as dilatory under the circumstances of this case.” Order, at p. 2.

A docket search shows a major joust over summary J, with electrons flying in all directions. Maybe there’s no need for discovery, so all they’re talking about is law, and the proposed amendments are only explanatory.

So straightening out the procedural part, Judge Speedy lets IRS “…file a motion for leave to file an amended and restated answer in accordance with Rule 41(a) reflecting the contentions made in the first and second proposed amendments to the answer.” Order, at p. 3.

And calls for another phoneathon next month, after IRS sends in the amended and restated answer. Maybe some head-banging might settle the case.


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