Step Lightly on the Bedrock

I said it back five (count ’em, five) years ago: “Stipulations are the IEDs of litigation; they look so innocent, until they go off, taking your case with them.” See my blogpost “Baked,” 7/12/18, the story of Marty Washburn’s Baltic bakery fiasco. Judge Ronald I. (“Ingenuity”) Buch has a lot to say about “the bedrock of Tax Court practice,” citing Washburn, in Noel M. Parducci & Kenneth L. Parducci, et al. Docket No. 20894-19, filed 9/12/23.

Amongst the als is the irrepressible Dennis Lee Simpson, making his fourth (count ’em, fourth) appearance on this my blog. As I said in my blogpost “Inadmissible Admissions,” 2/27/23, Dennis Lee is the inventor of “Bamboozle Your Way to Victory at Discovery,” and a leading candidate for Wag of the Year honors.

IRS has five (count ’em, five) separate proposed stipulations of fact, supported by two USDCs, which found for Federal Trade Commission against Dennis Lee and the als. The Branerton play-nice elicited no joy, but Dennis Lee did put in two of his own proposed stips, so Judge Buch puts all seven in play with a Rule 91(f) deemed-agreed OSC.

First of all, relevance of the fact is off the table. If any responding party admits, the fact is admitted, relevance thereof to be determined at trial.

Second, want of knowledge is not a valid objection, if the fact at issue is otherwise supported by the proponent. Some of the USDC opinions are sufficient to support some asserted facts, but not all.

“The Commissioner cites the Findings of Fact in an FTC case as the primary source for most of the paragraphs contained in each Rule 91(f) Motion’s proposed stipulation. But a fact having been found in one proceeding does not mean that the parties are automatically bound by that fact in another proceeding. See Estate of Reis v. Commissioner, 87 T.C. 1016, 1028–29 (1986) (‘[t]he mere fact that a court in one opinion makes findings of fact is not a basis for the same or another court in another proceeding to . . . deem them to be indisputably established for purposes of the pending litigation.”). Therefore, the parties are not bound by these facts and are free to dispute the facts in the paragraphs that rely on the FTC Findings of Fact. In addition to the Findings of Fact in the FTC case, the Commissioner cites to Mr. Simpson’s informal discovery response, transcripts of individuals taken for purposes of the FTC case, and trial exhibits from the FTC case as support for his proposed stipulations. However, because the Court was not provided with copies of these sources with these motions, we cannot ascertain the accuracy of these statements. Therefore, the parties are not bound by these facts and are free to dispute the proposed stipulations that rely on these sources. Because [some als] and Mr. Simpson dispute the facts contained in these paragraphs, and the sources cited do not indisputably establish these facts, the parties are not deemed to have admitted these paragraphs.” Order, at p. 5. (Citation and names omitted). Remember, issue preclusion requires more than just a party’s presence in another judicial proceeding.

Third, Dennis Lee’s two proposed stips, one to IRS and one to one of the als, contain different facts. But these are consolidated cases; separate checks are a no-no. And Dennis Lee restates documents; these speak for themselves.

“Because these are consolidated cases, every party has to agree to the same set of facts for us to deem a fact admitted. Mr. Simpson’s proposed stipulations contained in his Rule 91(f) motions fail to provide the parties with the same set of facts, therefore we cannot deem any of the facts admitted. Furthermore, many of Mr. Simpson’s paragraphs simply restate the contents of documents, and the stipulation process is not to be used to stipulate to contents contained in documents. Documents speak for themselves. Therefore, we will deny both of Mr. Simpson’s Rule 91(f) Motions for order to show cause and not deem admitted any of the paragraphs contained in them.” Order, at p. 5.

But since Judge Buch has to mix-and-match IRS’ five stips to conform the pleadings to the proof, so to speak, we have a seven (count ’em, seven) page appendix with the facts Judge Buch deems admitted.