BRITTINGHAM v. UNITED STATES COMMR., INT. REV

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Docket Number

No. 71-1281.

Attorney(S)

Edward H. Forgotson, Ethan B. Stroud, Stroud Smith, Dallas, Tex., for plaintiff-appellant. Johnnie M. Walters, Asst. Atty. Gen., Meyer Rothwacks, John P. Burke, Joseph H. Reiter, Attys., Dept. of Justice, Tax Div., Washington, D.C., for defendants-appellees; Eldon B. Mahon, U.S. Atty., Kenneth J. Mighell, Asst. U.S. Atty., of counsel.

Judges

Robert Andrew Ainsworth
Joe McDonald Ingraham

Acts

Judiciary And Judicial Procedure — General Provisions — Procedure — Writs
Internal Revenue Code — Procedure And Administration — Judicial Proceedings — Proceedings By Taxpayers And Third Parties — Prohibition Of Suits To Restrain Assessment Or Collection
Judiciary And Judicial Procedure — Declaratory Judgments — Particular Proceedings — Creation Of Remedy

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Smart Summary

Factual and Procedural Background

Roberta M. Brittingham, a long-time resident of Mexico, employed a Los Angeles attorney in the mid-1950s and early 1960s to handle California state tax matters. The attorney corresponded extensively with Brittingham's two sons, Robert and Juan Brittingham, who managed her financial affairs. In 1969, Internal Revenue Service (IRS) agents investigated potential tax liabilities of the sons and obtained copies of 28 documents from the attorney’s office file, including correspondence between the attorney and the sons, letters involving the California State Franchise Tax Board, tax returns, and some communications involving Mrs. Brittingham.

The IRS used these documents to assess gift taxes against Juan Brittingham, which are now contested in multiple Tax Court cases involving the sons and others. Mrs. Brittingham is not a party to those proceedings.

Prior to this district court action, motions to suppress the documents were filed in the Tax Court on grounds of attorney-client privilege and attorney work product immunity. The Tax Court denied these motions, citing lack of jurisdiction to entertain suppression motions on behalf of a non-party (Mrs. Brittingham) and noting most documents were communications with the sons, who were not the attorney’s clients. The Tax Court’s denial was without prejudice, allowing objections to admissibility to be raised during the proceedings.

Mrs. Brittingham then filed an application in the district court seeking a "Writ of Mandatory Relief" under 28 U.S.C. § 1651 (the All Writs Act) to prevent the Commissioner of Internal Revenue from using the documents in evidence and to order their return. The district court dismissed the application for lack of jurisdiction and failure to state a claim, and this appeal followed.

Legal Issues Presented

Whether the district court has jurisdiction under the All Writs Act, 28 U.S.C. § 1651, to issue an order preventing the use of documents allegedly obtained in violation of attorney-client privilege.
Whether 26 U.S.C. §§ 7402(b) and 7604(a) confer independent jurisdiction on the district court to entertain such an application absent enforcement of an IRS summons.
Whether the district court should intervene preemptively to suppress evidence in ongoing Tax Court proceedings involving third parties.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
McIntire v. Wood, 7 Cranch 504 (1813)	The All Writs Act does not create independent jurisdiction but authorizes courts to issue writs only in aid of jurisdiction already acquired.	Used to establish that the district court must have independent jurisdiction before issuing writs under the All Writs Act.
Rosenbaum v. Bauer, 120 U.S. 450 (1887)	Same principle regarding the scope of the All Writs Act.	Supported the limitation on the All Writs Act's jurisdictional scope.
Covington C. Bridge Co. v. Hager, 203 U.S. 109 (1906)	Same principle regarding the All Writs Act jurisdiction.	Reinforced the court’s understanding of jurisdictional limits under the All Writs Act.
Hurt v. Cotton States Fertilizer Co., 159 F.2d 52 (5th Cir. 1947)	All Writs Act jurisdictional limits; cert. denied.	Further precedent on jurisdictional constraints for writs issuance.
Haggard v. Tennessee, 421 F.2d 1384 (6th Cir. 1970)	All Writs Act jurisdictional scope.	Supported the principle that All Writs Act does not create jurisdiction.
Reisman v. Caplin, 375 U.S. 440 (1964)	District court jurisdiction to enforce IRS summons and to prevent enforcement.	Distinguished as involving actual summons enforcement proceedings, not general jurisdiction.
United States v. Powell, 379 U.S. 48 (1964)	Jurisdiction to enforce IRS summons.	Used to show that jurisdiction arises only in summons enforcement contexts.
United States v. Roundtree, 420 F.2d 845 (5th Cir. 1969)	Jurisdiction to enforce IRS summons.	Confirmed jurisdictional limits consistent with Powell.
Campbell v. Guetersloh, 287 F.2d 878 (5th Cir. 1961)	Expressed judicial reluctance to preemptively interfere with tax investigations.	Supported the policy against premature judicial intervention in tax matters.
Zamaroni v. Philpott, 346 F.2d 365 (7th Cir. 1965), cert. denied 382 U.S. 903	Injunctions to suppress evidence in tax proceedings are improper preemptive interventions.	Used as persuasive authority to deny injunctive relief pretrial in tax cases.
Koin v. Coyle, 402 F.2d 468 (7th Cir. 1968)	Reinforces limits on injunctive relief in tax evidence disputes.	Supported the denial of injunctive relief in analogous circumstances.
Hamilton v. United States, 309 F. Supp. 468 (S.D.N.Y. 1969), aff'd 429 F.2d 427 (2nd Cir. 1970)	Similar principle barring pretrial injunctions in tax evidence matters.	Further support for denying the requested relief.
United States v. American Radiator and Standard Sanitary Corp., 388 F.2d 201 (3rd Cir. 1967), cert. denied 390 U.S. 922	Comity requires courts not to interfere with each other’s jurisdiction.	Applied to justify deference to Tax Court’s jurisdiction over evidence admissibility.
Alabama Power Co. v. TVA, 92 F.2d 412 (5th Cir. 1937)	Principles of comity and restraint between coordinate courts.	Supported the court’s refusal to interfere with Tax Court proceedings.
Douglas v. Jeannette, 319 U.S. 157 (1943)	Injunctions require showing of irreparable harm and lack of adequate legal remedy.	Established the standard for injunctive relief applied by the court.
Brown v. Board of Trustees of LaGrange Ind. Sch. Dist., 187 F.2d 20 (5th Cir. 1951)	Same standard for injunctive relief.	Reinforced the requirement of irreparable harm and inadequate remedy.
Clark v. Thompson, 206 F. Supp. 539 (S.D. Miss. 1962), aff'd 313 F.2d 637 (5th Cir. 1963), cert. denied 375 U.S. 951	Same standard for injunctive relief.	Supported the court’s application of injunctive relief criteria.
Stern v. South Chester Tube Co., 390 U.S. 606 (1968)	Same standard for injunctive relief.	Applied in the context of denying injunctive relief.
Chemical Corp. of America v. Anheuser-Busch, Inc., 306 F.2d 433 (5th Cir. 1962), cert. denied 372 U.S. 965	Consideration of irreparable harm as of the present time.	Used to assess the adequacy of remedies and irreparable harm.
Hunt v. Blackburn, 128 U.S. 464 (1888)	Confidentiality of attorney-client communications lost when disclosed in litigation.	Applied to conclude that confidentiality could not be restored.
Farnsworth v. Sanford, 115 F.2d 375 (5th Cir. 1940)	Same principle as Hunt regarding loss of privilege upon disclosure.	Supported the court’s conclusion on the state of privilege here.

Court's Reasoning and Analysis

The court began by confirming that the All Writs Act does not create independent jurisdiction; it only authorizes courts to issue writs in aid of jurisdiction already established on other grounds. The appellant argued that jurisdiction existed under 26 U.S.C. §§ 7402(b) and 7604(a), which empower district courts to enforce IRS summonses. However, the court noted that these statutes only apply in the context of actual summons enforcement proceedings, which were not present here.

The court then identified three independent reasons for denying relief:

Congressional Policy Against Premature Intervention: The court cited 26 U.S.C. § 7421(a), which prohibits suits to restrain tax assessment or collection, reflecting a strong congressional policy against preemptive judicial interference in tax matters. This policy was reinforced by 28 U.S.C. § 2201, which excludes federal taxes from declaratory judgment jurisdiction. The court also referenced prior cases expressing judicial reluctance to interfere with tax investigations prematurely.
Principles of Comity: The district court should not interfere with the Tax Court’s jurisdiction or decisions, especially when both courts have coordinate jurisdiction and their decisions are reviewable by the same appellate court. Interference would cause unnecessary conflict, waste judicial resources, and disrupt efficient justice administration.
Inadequacy of Injunctive Relief Criteria: Injunctive relief requires a showing of irreparable harm and lack of an adequate legal remedy. Here, confidentiality was already lost because the documents had been disclosed to taxing authorities and through a malpractice suit. The Tax Court had not yet ruled on admissibility, and any final ruling would be reviewable on appeal. Moreover, no tax liability had been asserted against Mrs. Brittingham at this time, undermining claims of imminent harm.

Based on these reasons, the court affirmed the district court's dismissal of the application for writ relief.

Holding and Implications

Affirmed.

The court upheld the district court’s dismissal of plaintiff’s application for a writ under the All Writs Act, finding no independent jurisdiction and no basis for injunctive relief. The decision means that preemptive judicial intervention to suppress evidence in tax proceedings involving third parties is disfavored, and that such matters are properly addressed within the Tax Court and through its appellate review. No new precedent was established beyond reaffirming existing jurisdictional and procedural principles. The direct effect is that plaintiff’s requested relief was denied, and the Tax Court retains authority over the evidentiary issues in the underlying tax cases.

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ROBERTA M. BRITTINGHAM, PLAINTIFF-APPELLANT, v. UNITED STATES COMMISSIONER OF INTERNAL REVENUE ET AL., DEFENDANTS-APPELLEES.

RONEY, Circuit Judge:

This appeal is from an order of the district court dismissing plaintiff's application for a "Writ of Mandatory Relief" sought pursuant to 28 U.S.C. § 1651. In her application plaintiff asserted that the Commissioner of Internal Revenue had in his possession certain documents which were obtained in violation of plaintiff's attorney-client privilege. She asked the district court to (1) prevent the Commissioner from introducing the documents in evidence in certain cases pending before the Tax Court, (2) prevent the Commissioner from using the documents for any other purpose, and (3) order that the documents be returned to her. The district court dismissed the case for the reasons that the court lacked jurisdiction and that plaintiff had failed to state a claim upon which relief could be granted. We affirm.

Plaintiff has resided for many years in Mexico. In 1955-1957 and again in 1963-1965 she employed a Los Angeles attorney to handle certain California state tax matters for her. In the course of his work for Mrs. Brittingham, the attorney engaged in a considerable amount of correspondence with her two sons, Robert M. Brittingham, of California, and Juan R. Brittingham, of Mexico, who managed most of plaintiff's financial affairs.

In January of 1969, two agents of the Internal Revenue Service called upon the attorney in his Los Angeles office and informed him that they were investigating the possible tax liability of Robert and Juan Brittingham. After questioning him about the work he had done for Mrs. Brittingham, the agents asked to see the attorney's office file. The attorney not only allowed the agents to examine the file but also provided them with copies of 28 of the documents contained therein. Specifically, the documents copied were as follows:

12 letters between the attorney and Robert Brittingham

6 letters between the attorney and the California State Franchise Tax Board

3 letters between the attorney and Juan Brittingham

1 letter from Robert Brittingham to Juan Brittingham

2 letters between the attorney and plaintiff

2 letters between plaintiff and the Tax Board

1954 and 1964 California Tax Returns of Mrs. Brittingham

The copies made by the two agents were sent to the Dallas office of the Internal Revenue Service where they were reviewed by a gift tax examiner, with the result that gift tax assessments were made against Juan Brittingham for making gifts to plaintiff and others. The validity of these assessments is being contested in the Tax Court in some 10 different civil cases involving Juan Brittingham, Robert Brittingham and various other individuals. Roberta Brittingham, plaintiff here, is not a party to any of the proceedings in the Tax Court.

Before the present action was filed in the District Court for the Northern District of Texas, the Brittinghams filed motions to suppress in the Tax Court. They alleged that the documents copied were obtained in violation of Mrs. Brittingham's attorney-client privilege and "in violation of the attorney work product immunity." These motions to suppress were denied on two grounds. First, the Tax Court treated the motions as having been brought on behalf of Mrs. Roberta Brittingham and felt that it had no jurisdiction to entertain a supplementary proceeding to suppress evidence instituted on behalf of someone who was not a party. Second, it noted that almost all of the documents in question were communications between the attorney and the two Brittingham sons, who were not his clients and, therefore, the attorney-client privilege did not come into play. The order of the Tax Court was made without prejudice, however, subject to "the right of either party to object to the introduction in evidence of any of the papers referred to in the motions and to the right of either party to present further evidence on the admissibility of the letters, instruments, documents, and correspondence referred to in the motions."

Plaintiff brought this action under 28 U.S.C. § 1651, which provides, in part, as follows:

(a) The Supreme Court and all courts established by Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.

It is settled that this section, known as the All Writs Act, by itself, creates no jurisdiction in the district courts. It empowers them only to issue writs in aid of jurisdiction previously acquired on some other independent ground. McIntire v. Wood, 7 Cranch 504, 3 L.Ed. 420 (1813); Rosenbaum v. Bauer, 120 U.S. 450, 7 S.Ct. 633, 30 L.Ed. 743 (1887); Covington C. Bridge Co. v. Hager, 203 U.S. 109, 27 S.Ct. 24, 51 L.Ed. 111 (1906); Hurt v. Cotton States Fertilizer Co., 159 F.2d 52 (5th Cir. 1947), cert. den., 331 U.S. 828, 67 S.Ct. 1351, 91 L.Ed. 1843; Haggard v. Tennessee, 421 F.2d 1384 (6th Cir. 1970).

Appellant would have us find the requisite independent jurisdiction in the district court by virtue of 26 U.S.C. Sections 7402(b) and 7604(a), Internal Revenue Code of 1954, as interpreted in Reisman v. Caplin, 375 U.S. 440, 84 S. Ct. 508, 11 L.Ed.2d 459 (1964); United States v. Powell, 379 U.S. 48, 85 S.Ct. 248, 13 L.Ed.2d 112 (1964), and United States v. Roundtree, 420 F.2d 845 (5th Cir. 1969). These two sections, which are almost identical in language, simply confer upon the district courts the power to enforce a summons issued under the Internal Revenue laws requiring a person to appear, testify or produce documents.

The cases relied upon by appellant are all cases in which a summons had actually been issued and the jurisdiction of the court was sought to enforce the summons (Powell and Roundtree) or to prevent enforcement of it ( Reisman). No cases have been cited to us, and we have found none, which hold that these sections give any jurisdiction to the district courts independent of summons enforcement proceedings. The argument that if the Commissioner had sought the documents by summons, the appellant would have been able to litigate its enforcement does not support jurisdiction. There is nothing to indicate that Congress intended by this statute to confer jurisdiction on the district courts to entertain suits based upon such a supposition.

But even if we could find some basis for independent jurisdiction upon which to posit an order under the All Writs Act, there are three sound reasons for the denial of relief in this case, wholly apart from any consideration of the merits of the matter.

First, it is a clearly expressed congressional policy that courts should not intervene preemptively in the tax collection process. 26 U.S.C. § 7421(a) provides:

[Except as provided in sections not applicable here] no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed.

28 U.S.C. § 2201 provides, in pertinent part,

In a case of actual controversy within its jurisdiction, except with respect to Federal taxes, any court of the United States, * * * may declare the rights and other legal relations of any interested party * * * [emphasis added].

This court has previously expressed its doubts about the wisdom of premature interference with the investigatory aspects of tax cases. Campbell v. Guetersloh, 287 F.2d 878 (5th Cir. 1961).

Other courts have had occasion to consider the very problems presented by the instant appeal and have found it inappropriate for the district court to act. In Zamaroni v. Philpott, 346 F.2d 365 (7th Cir. 1965), cert. den., 382 U.S. 903, 86 S.Ct. 238, 15 L.Ed.2d 157, the plaintiff sought to enjoin the District Director of Internal Revenue from using certain items of information, allegedly seized in violation of the Fourth Amendment, in proving tax deficiencies. The court stated that

[T]he underlying policy manifested by the provisions of both 26 U.S.C.A. § 7421(a) and 28 U.S.C.A. § 2201 leads us to the conclusion that collateral determination of the admissibility of evidence in an administrative tax proceeding or investigation is not a proper sphere for injunctive intervention in the exercise of equitable jurisdiction. ( 346 F.2d p. 366). [Footnote omitted].

The same result was reached in Koin v. Coyle, 402 F.2d 468 (7th Cir. 1968) and in Hamilton v. United States, 309 F. Supp. 468 (S.D.N.Y. 1969), aff'd 429 F.2d 427 (2nd Cir. 1970).

Second, comity dictates that courts of coordinate jurisdiction not review, enjoin or otherwise interfere with one another's jurisdiction. The Tax Court, within its limited jurisdiction, is of equal stature with the district court. In connection with those cases before it, it has the same power available to it as the district court. The decisions of each are fully reviewable by the same Court of Appeals. The proper exercise of restraint in the name of comity keeps to a minimum the conflicts between courts administering the same law, conserves judicial time and expense, and has a salutary effect upon the prompt and efficient administration of justice. There appears to be no valid reason for the district court to tell the tax court what evidence it should or should not admit. United States v. American Radiator and Standard Sanitary Corp., 388 F.2d 201 (3rd Cir. 1967), cert. den., 390 U.S. 922, 88 S.Ct. 858, 19 L.Ed.2d 983; Alabama Power Co. v. TVA, 92 F.2d 412 (5th Cir. 1937).

Third, an injunction should be granted only upon a showing of irreparable harm and lack of an adequate remedy at law. Douglas v. Jeannette, 319 U.S. 157, 63 S.Ct. 877, 87 L.Ed. 1324 (1943); Brown v. Board of Trustees of LaGrange Ind. Sch. Dist., 187 F.2d 20, 25 (5th Cir. 1951); Clark v. Thompson, 206 F. Supp. 539, 543 (S.D.Miss. 1962), aff'd, 313 F.2d 637 (5th Cir. 1963), cert. den., 375 U.S. 951, 84 S.Ct. 440, 11 L.Ed.2d 312 (1963); Stern v. South Chester Tube Co., 390 U.S. 606, 88 S.Ct. 1332, 20 L.Ed.2d 177 (1968). The situation must be viewed as of the present. Chemical Corp. of America v. Anheuser-Busch, Inc., 306 F.2d 433, 439 (5th Cir. 1962), cert. den., 372 U.S. 965, 83 S.Ct. 1089, 10 L.Ed.2d 129.

There is no longer any ability to thwart disclosure of the material allegedly protected by the attorney-client privilege. The exchange of correspondence has been disclosed to the United States taxing authorities and has been disclosed by the institution of a malpractice suit brought by plaintiff against her attorney. Hunt v. Blackburn, 128 U.S. 464, 9 S.Ct. 125, 32 L.Ed. 488 (1888); Farnsworth v. Sanford, 115 F.2d 375 (5th Cir. 1940). The court is powerless to restore confidentiality, so it appears that appellant's remedies at law are as adequate as any remedy as could be afforded by the district court. The Tax Court has not yet made any final ruling on the admissibility of the disputed documents. The decision of that Court, once rendered, will be fully reviewable here. Although appellant argues that there is a possibility that she may be liable as a transferee under Section 6901 of the Internal Revenue Code, no liability of any kind as yet has been asserted against her.

Affirmed.