Elvis E. Johnson v. Robert Sawyer, United States of America

JOHNSON, Plaintiff-Appellee, E. Elvis SAWYER, al., Defendants, et

Robert America,

United States

Defendant-Appellant.

No. 91-2763. Appeals, Court

United States

Fifth Circuit.

Dec. Houston, Woods, Atty.,

Ronald G. U.S. Tex., Div., Salem, Dept, Michael Tax J. Justice, Cohen, Allen, Gary R. Jonathan S. Chief, Pritts, Atty., Appellate Joy L. Sec- Justice, tion, Div., Dept, Tax Robert S. Director, Staff, Greenspan, Appellate Asst. National) (American Justice, Lewis, Atty., Company M. Insurance Dept, Jacob D.C., proficient defendant-appellant. early 1950s. Johnson was Washington, up company salesman who advanced White, I. Campagna, Robert Larry A. ladder, becoming eventually one of its sales White, Chamerlain, Hrdlicka, Johnson & moved from leaders. Johnson Houston, Tex., plaintiff-appel- for Williams, Missouri, of a where he was head sales lee. headquar- region, National’s to American Galveston, Texas. ters Galveston, After the move to Johnson he Eventually, to advance. be- continued GARWOOD, JOHNSON, Before President, came the Executive Vice Senior WIENER, Judges. Circuit Officer, Marketing the and a member Chief the of At the time of of Board Directors. WIENER, Judge: Circuit resignation, he in line to his forced was damages under the Feder- In for this suit company’s next Execu- become the Chief Act),1 (FTCA or the Act the al Torts Claims tive Officer. ap- Defendant-Appellant United States 1970s, the Internal Revenue the late court in of the district peals the decision (IRS) looking Mr. began into Service Plaintiff-Appellee Elvis E. the favor of Discrepancies returns. Mrs. Johnson’s tax from the His action arises Johnson. FTCA were discovered in the Johnsons’ records. private taxpayer in- of public dissemination due, part, discrepancies large by agents of the formation about Johnson (or the as the district court to erroneous error on the Finding no reversible IRS. them, “eccentric”) bookkeep- characterized part of liability, affirm that the issue of we Johnson, ing practices of Mrs. to whom court as well as judgment of the district delegated personal had his ex- Johnson damages with a modification special albeit large pense keeping, in measure to record element. But the pension the loss of family his business familiarize wife by the district explanation of absence unexpected in case matters of his demise.3 damages it for how calculated court of examining agent the An referred case IRS anguish, mental distress and emotional Investigation Division, to the IRS Criminal explanation remand for further reverse and eventually assigned Spe- the case quantum of dam- of or re-calculation Agent the criminal cial Stone. After inves- aspect ages awarded tigation completed, United States injuries. Department of recommended that Justice prosecuted his to be Johnson and wife I tax evasion.4 AND PROCEEDINGS FACTS investigation, of the During the course reported in of this case are facts part Mrs. had disclosed her Johnson published opin- detail in considerable deposition to a by submitting matter court.2 We therefore ions of the district Attorney office of the assistant U.S. as- opinion those facts set in this out case, signed James Powers. John- necessary give perspective of required to his upset son not want IRS to wife did significance presented by the issues regarding taxes and was ada- further their appeal. instant Eager mant she not indicted. would began selling arrangement insurance work en- out Elvis Johnson noninvolvement, Johnson American National Life sure his wife’s for a branch (1988) accounting 3. The nuances Mrs. Johnson's 1. 28 2671-2680 §§ U.S.C. (FTCA Act). opinion procedures are set out in the second F.Supp. court. at 1218-21. district See (S.D.Tex. Sawyer, 1991); Sawyer, F.Supp. 1126 Johnson v. 4. See U.S.C. (S.D.Tex.1986). bargain filing In the plea offer: was timed for late on the agreed to Powers’s after- plea Friday, guilty April noon of exchange Although for Johnson’s evasion, tax court accept plea, one count of refused to a nolo probation for him and would recommend satisfied probated to assess a sentence or further Mrs. not indict trouble on Johnson’s plea guilty. In a court- plea agreement Johnson. As a spectators, room devoid of Johnson entered accepted government also inclusion of guilty plea probated and received a designed keep the several measures sentence; imposed. no fine was becoming prosecution known to the case, In the instant FTCA the district general agreement provided public. found, among regarding other facts that: plea arrangement, that Johnson had (1) give in the case papers all filed would kept his closest business associates and plaintiff’s “Elvis name as Johnson” rath- apprised superiors problems of his with the Johnson,” ‘Johnny’ er than “E.E. IRS; position compa- and that with known; normally which he is ny secure, regardless was of the guilty (2) papers requiring Johnson’s street ad- plea, long as as there nowas scan- public give dress it as 1100 Milam would Street regarding problems. dal tax Johnson’s Houston, which was the of his address publicly American National a held was cor- attorney, no reference to and his address and poration, superiors did Johnson’s not Circle, at 25 Galveston Adler would be company want known outside the made; corpo- the second of the most senior officer (3) would seek the Government to have pleaded guilty ration had to a criminal tax presentence investigation completed charge. before the criminal information was filed Despite the extraordinary measures that so probation that the officer’s recommen- Attorney both and John- States judge dation could be made known taken, however, filed; public son’s counsel had the time the information was knowledge quickly on the heals followed (4) information would be on filed late plea. advising or con- Without afternoon, and the Friday case would sulting anyone else at the Powers De- judge brought immediately, be before the partment Justice, the IRS issued a news arraignment sentencing so and could April release on afternoon; Wednesday, 1981—the completed that same be and plea— day third business after Johnson’s (5) Attorney’s pub- office the U.S. beyond provisions that went well of the lish no release. and, plea agreement significantly, more dis- agreed pro- also to recommend Powers vital that was not con- closed information bation, oppose plea and not to of nolo tained the records of the court which contendere.5 pleaded guilty.7 had Johnson arrangement, gov- Faithful to that release, When he Johnson learned ernment filed a Criminal Information immediately attorney, single count contacted his who charging Johnson but as John- just immediately of tax evasion on his 1975 return.6 To called Powers. publicity, lawyer chance of accidental son’s Powers that he minimize the was told pended prison year supervised 5. 760 at 1221. one term and probation. Johnson, vice-president Id. n. 3. an executive Corporation, American National Insurance charged 7. The stated: IRS news rеlease criminal information with in a claiming deductions and alter- false business INSURANCE EXECUTIVE PLEADS GUILTY ing involving his documents IN TAX CASE GALVESTON, income tax returns. TEXAS—In U.S. District sentence, here, Johnson, 59, will Johnson addition to the Apr. E. Court Elvis taxes, plus penalties required pay plead guilty charge back to a federal tax [sic] Judge Hugh interest. evasion. son, Gibson sentenced John- Circle, at 1222. of 25 Adler six-month sus- Id. against judgment the United for the release and Johnson responsible $10,902,117. speak to lawyer should in the States amount that Johnson’s then Counsel called judg- the IRS. timely appealed someone with United States officials there that informed IRS and ment. that was information contained release disclosed as well to be supposed II Compounding the information. erroneous objections strenuous over the damage, and ANALYSIS counsel, issued a sec- the IRS of Johnson’s 17, 1981,8which cor- April release on ond the FTCA A. Johnson’s Claim Under regarding charge the exact an error rected pleaded guilty general had constitutes a waiver Johnson FTCA specific facts about im- government’s sovereign restated of the federal problems. Act, tax and his munity from tort claims.9 Under the against the autho- United States are suits information about Johnson’s Once rized case the tax evasion became guilty plea in known, the effects publicly widely so injury property, personal loss He tragic and swift. on his career were or injury by negligent or death caused positions at resign from his “asked” to was wrongful any employ- act or omission of National; and the CEO other American acting ee of the Government while within company the had been senior officials with scope employment, of office or the his (cid:127) keep posi- his willing to Johnson allow under circumstances where the United track, long but as tion and his career private person, lia- if a would be kept within the problem as tax his in the ble the claimant accordance with public not made known company and place act omis- law of the where the or his wife left Galves- large. Johnson and occurred.10 sion to the Missouri branch ton and returned provides The also the United Act begun he his career with where had office in “in same be liable tort the States will There Johnson National. American private extent as a manner and to the same Na- salesman American a worked under like circumstances.” individual retire the he was forced to tional until FTCA, mandatory retirement age sixty-five, of To recover under Johnson company employees other than age gov- all against must be able succeed executives, per- topmost who the few in a law tort cause of action. ernment state actively age until mitted serve theory negligence is: of state law Johnson’s Texas, negli- (1) in of a statute is violation IRS officials several sued Johnson per class gence se when a member release, press claiming in involved by in- persons protected the statute is disclosed tax information the release of violation; (2) by government jured subse- 26 U.S.C. violated § duty, him a under 26 U.S.C. owed § complaint to include quently amended tax any not to release of his confidential against the United States. an FTCA claim information; (3) through agents, its severed from those FTCA claim was government duty its to Johnson breached and tried against the individual defendants by issuing protected informa- under jury. a At the conclu- to the court without § release; (4) trial, granted press the breach the court tion sion of bench (1988). heading para- § first and third 9. See 28 U.S.C. 2674 8.The graphs were the of the second release paragraph second read: same as the first. The 1346(b); v. S.A 28 U.S.C. see United States § Johnson, vice-president for the an executive (Varig Empresa de Viacao Aerea Rio Grandense Corporation, Insurance- American National 797, 807-08, Airlines), 467 U.S. S.Ct. charged criminal information 81 L.Ed.2d 660 filing tax a false willful evasion and fraudulent tax return for 1975. § 11. 28 U.S.C. 2674. Id. at 1222. Unquestionably, duty 6103 caused 6103 creates a duty established § doing injury. applicable so sets an standard imposes government of care. It on the that the counters general duty confidentiality as to infor- statute, here of a federal breach by taxpayers. mation disclosed made Sec- liability under the FTCA. cannot establish broadly prohibits public tion 6103 disclo- irrefuta goes far as it that statement is As prohibition sure such information. That ble, addressing the full stops but it short of subject to but a excep- handful of narrow position. Johnson does import of Johnson’s provides; tions. Section simplistically that the not contend violation (a) rule. General liability. ipso facto creates FTCA of § Returns and return information shall Rather, he asserts that 6103 sets stan confidential, except as authorized that, Texas tort dard of behavior and by this title— law, statutory stan the violation of such (1) employee no officer or of the Unit- negligence per one who is dard is se when ed States ... shall disclose return or protection by the standard is dam afforded return information obtained him in aged by its violation. any manner in connection with his ser- question this court must an- The first employee vice as such an officer swer, then, premise is whether Johnson’s provisions otherwise or under the of this recognizes Texas a tort this situa- section. resounding

tion is correct. The answer is “Return information” is defined as “a tax- “yes.” Supreme Court has held Texas nature, source, payer’s identity, repeatedly that unexcused violation “[t]he income, deficiencies, amount of his ... ... setting applicable standard of a statute was, taxpayer’s whether the return is be- negligence as a matter of care constitutes ing, subject or will be examined or to other designed prevent if statute is to of law the investigation processing.”15 or And “tax- injury persons the class of to which an to 12 name, payer identity” is defined the as injured party belongs.” Johnson was the address, mailing taxpayer identifying num- clearly of the class that the a member ber, combination thereof.16 protect,13 none statute was written to information, general recognized Considering excuses for violation of a this of 'the specific questions in three protective apply statute this case.14 must answer Poole, 306, Metals, Inc., (Tex. Impson 14. In v. Structural 487 12. El Chico 732 S.W.2d 312 1987) 694, (citing Property Management (Tex.1972), Supreme Nixon v. Mr. S.W.2d the Texas 696 546, Co., (Tex.1985), Murray S.W.2d 549 (Second) 690 approved Court the Restatement of 633, Inc., Express, v. O & A 630 S.W.2d 636 & n. substantially stating Torts 288A as Texas law § (Tex. 1982)); Wolf, Moughon see 576 S.W.2d penal concerning civil for violation of a 603, (Tex.1978); Missouri P. R.R. v. Ameri categories provides Section 288A five statute. Statesman, (Tex.1977). can 552 S.W.2d statutory where a violation is ex- of situations They cused. are: as of a § 13. In amended goal sweeping tax code. The reform of the of (a) is because of the the violation reasonable the two-fold. Con- this amendment to code was incapacity; actor’s information, gress to stem the tide of wanted (b) the neither knows nor should know actor IRS, vоluntarily which was disclosed to the compliance; of the occasion for agen- being persons from disclosed to other (c) the actor is unable after reasonable dili- privacy of needs of those who cies because gence comply; or care to (i.e., taxpayers). all discloser information Con- (d) emergency the actor is confronted possible gress also reasoned that the abuses of misconduct; not due to his own system "seriously impair privacy of the could (e) compliance greater would involve a risk country's very the effectiveness of our success- or to others. of harm to actor voluntary system ful assessment is Id.; Express, n. 4. see O & A 630 S.W.2d mainstay 938, system.” S.Rep. the Federal tax No. of Sess., (1976), Cong., pt. 94th 2d at 317 6103(b)(2)(A). § U.S.C. reprinted U.S.C.C.A.N. 3747. See in 1976 generally Taxa- Mertens Law Federal Income 6103(b)(6). 16. Id. § Analysis tion: Tax Act 117-25 Reform ed., (James 1977). Doheny J. adopt the either Tenth or theory can to view of

determine whether (1) agents’ con- Did appeal: on this stand Seventh Circuits on issue. Tenth so, 6103?; (2) if did duct violate protected by § holds that Circuit information Texas negligence amount violation confidentiality, never its loses even § so, (3) negligence if law?; did tort in a when it is disclosed court record.20 injuries? cause Johnsons’ proximately holds that the “imme- The Seventh Circuit responses for all of these positive findWe information, at in diate source” of the least questions. being a cases of information taken from a record, opinion might confi- court control 6103 Violation § dentiality. Specifically, Circuit Seventh question here is The threshold has held that when the facts disclosed are 6103 occurred a violation whether § gleaned records, court no vio- § by releasing the all. Jоhnson asserts that occurs.21 The Seventh Circuit did lation him, the IRS protected information about however, as speculate, not to what out- clearly violated Some agents might in the “im- come a case in which released about Johnson the information is mediate source” of the information pro in his tax evasion discussed had been the taxpayer confidential records of but the him ceeding, information about but other also in a information can be found court proceeding in that neither discussed speculate record. Neither did that court appeared in the record of nor otherwise possible outcome of a case which Although provisions of 6103 ex court. disclosures,17 the “immediate source” the information provision spe no empt certain cifically exempts disclosures such as those tax records the information is case. made the instant in a be found court record.22 this government urges court The circumstances of instant case are adopt rule of the Ninth Circuit that required adopt that we are open is disclosed in once information among rule from those the several cir- stripped other manner or is some applied as the cuits one henceforth to be requirement confidentiality unnecessary circuit. a choice is Such may that information im- IRS release here because we are with fact faced States, Lampert punity.18 In v. United pattern yet unlike in ruled on one of “Congress stated that the Ninth Circuit Here, other those circuits. the “immediate sought prohibit only the disclosure of taxpay- source” of information was the tax return information” and confidential er’s confidential records the informа- tax is that return information held “[o]nce in court tion was contained record. domain, part public made a the tax- Thus, it never lost its entitlement to confi- longer right priva- payer may no claim 19 Thus, dentiality. Although rule we make no se- cy in information.” that cir- that lection, cuit that once information disclosed that holds we nevertheless observe even against proceeding taxpay- in a criminal if were to follow Ninth Circuit’s er, may release that information to IRS typified Lampert rule as in its decision violating press 6103. without § (which not), we do the disclosures made agents in the instant case would the IRS urging not to counters us Johnson rule accept Circuit’s but instead still constitute a violation of 6103. the Ninth § 899, See, (10th 6103(h)(4). Rodgers Hyatt, 17. 20. See e.g., 697 906 § id. v. F.2d States, Cir.1983); see United also Chandler v. Schrambling Accountancy 18. See William E. 1397, (10th Cir.1991) (follow- F.2d 887 1397-98 1485, Corp. F.2d v. 937 1488-89 United ing Rodgers Hyatt). — denied, -, (9th Cir.1991), U.S. cert. (1992). L.Ed.2d S.Ct. 21. Thomas F.2d 20-21 Cir.1989). denied, (9th Cir.1988), F.2d cert. 490 U.S. 109 S.Ct. L.Ed.2d 22. See id. plea arrangement. Immediately following press releases about Both of the discussion, con- in which Powers informed than was that more information contained plea plea arrangement, of all terms of the record of his Stone in the official tained True, upon items took it himself to hearing. several Stone nevertheless sentencing (Johnson’s Sassen, Sally press in the releases contact Public Affairs Officer contained name, and, one guilty plea plea his report last Johnson’s conviction on first and evasion, imposed, proscription pub- the sentence mentioning of tax count without he an executive prepared. the fact that a news release Sas- licity, have National) Stone, of the trial American the information from wrote sen took items contained release, But sеveral other record. and had it disseminated for up the (Johnson’s middle initial in releases checking those its accu- publication without ever many people), (he as “E.E.” to was known racy propriety or the of the sources its address, and his official home age, his ap- The release was then information. National23) were with American job title Stone, publication by who knew proved for arraignment or sen- at his not discussed Orth, better, the Branch and Michael record. The placed any public in tencing or Investigation, for Criminal who also Chief infor- concedes that additional have. knew better or at least should taken from Johnson had been mation about Although testify did not in the Stone taxpayer file or from the his confidential case, deposition he stated in a FTCA Johnson, and inserted investigation of IRS approved publication had Powers press in the release. made an release. But the district court held that the fact Lampert court finding that lied about explicit Stone ob- information in a was contained fact, taining approval.24 Pow- Power’s effect, record, prevented its re- public attorney taped in a had told Johnson’s ers constituting a violation lease by the telephone conversation credited contrast, case, by In the instant damaged if the news release the released significant portions of infor- Johnson, hell out of he “should sue the any public contained in mation were not them.” record, Lampert no convinc- so even record that There is no evidence that the entire ing argument can be made personnel involved creat- any of the IRS shielded and did not violate release was authorizing release ing or information see whether the checked to record of the appeared in it contained Texas Tort 6103 as a 2. Violation agent if an proceedings. Even tax evasion inescapable the conclusion We find relaxed stan- comply only with the tries to stan agents’ violations of the that the IRS must, a he or she at Lampert, dard of duty estab and thus the dard of behavior minimum, in the verify that the information negligence amounted to lished in § pro- in the court has been disclosed release law—if not either reckless under Texas ‍​​​​‌​​​‌‌‌‌​​​‌​‌​‌​​‌‌‌‌‌‌​​​‌​​‌‌​​‌​​‌‌​‌​​‌‍tort public record. ceedings other or some of that disregard or deliberate violation testified, trial, the court and Lam- At Even under the relaxed standard. meeting during early an be- rule, adopt, accepted, that again we do not

pert O’Connell, Agent and an actionably violated tween Johnson agents’ activities IRS assigned investigators initially pleaded one of standard. After Johnson 6103’s § case, candidly told John- to to the O’Connell agent called Powers guilty, special Stone that conviction and son the results of the ascertain F.Supp. during proceeding at 1229-30. only 24. reference

23.The job remark that was the court’s about Johnson’s terms "arrangements can made to relax [the be at 1222. Id. they parole] the extent that will of Johnson's performance of [John- with the not interfere position an executive for the American son’s] Company." Insurance National exemplary publicity the In- decimated Johnson’s business that favorable get can is Service when career. Revenue ternal big one down and he said bring a

they to thou- is a household word “your name Texas Tort and FTCA and I said “do of people” sands [Johnson] allowing We do not believe that a you you me think to tell that you mean law, a get court of such as used take me law be can what.you on me with have contrary of care to the conviction standard is said, my He records?” example, jurisprudence [O’Connell] of this circuit. For International, not, get your I name but can "probably in Moorhead v. Mitsubishi Aircraft newspapers and that mil have in the Inc., procedures the federal purpose.” accomplished my Flight in the found FAA Service Hand mentality appar- is “trophy hunting” applicable stan This book were found to set the agent special Stone in the actions of Also, ent Texas dard of care under tort law. through of the news release procuring his Mills, Inc.,29 Worley provid we Gibson Although both of them agent Sassen. ed, holding, in an alternative that under 6103’s stern have been must aware law, mix Texas the sale of certain seed taxpayer infor- on disclosure strictures negligence per ture se because the sale mation, re- they consciously effected the was forbidden 7 U.S.C. §§ coming directly from lease of information (1976).30 attempt- taxpayer record without Johnson’s Neither are we convinced that hold such information ing whether to determine ing is affected States public rec- or was In Tindall v. United States.32 Smith31 protected information was de- ord.27 The Tindall, Mississippi we construed tort law obviously liberately despite the publicized and found that had no efforts comprehensive extreme duty anticipated po to warn users of keep such details out of the prosecution dangers of In tential certain devices.33 judicial proceed- during the public record eight opinion, rejected footnote public view. ings, thereby out of proposition that a federal statute alone agents IRS acts omissions of the duty plaintiff. to the could establish proximately the statu- directly and caused case, the instant we remain consistent with twice to re- protected information torily as we do not find that Tindall itself large public at second leased —the find, duty. We do creates actionable vigorously lawyer Johnson’s time after recognizes per tort though, that Texas law Irrespec- problem. alerted the IRS to negligence se when a statute or ordinance inevitably might have come tive of what protect persons meant to a class of is vio literature, company out in and shareholder regardless of whether that statute concerning publicly, even lated — or federal, state, originates widely ordinance case, news pair disseminated county, city Similarly, action. we are public the first releases were disclosures immediately publicity today satisfied reach result we conviction— 466; see, added). e.g., (emphasis Air at Dal 30. Id. In re Crash Id. Airport, las/Fort Worth (N.D.Tex.1989) regulations— (relying on federal Again, we that we do not decide 27. restate specifically Air Control Man the Federal Traffic presence public of information in whether ual and Order 7110.65D—for the standard FAA record would shield release of informa- law), aff'd, 919 F.2d of care under Texas tort being only violation. We § tion from — U.S.-, denied, (5th Cir.1991), cert. disregard decide that the wanton of the stan- 112 S.Ct. 116 L.Ed.2d 228 regarding right by dard set Johnson's § privacy taxpayer vis-a-vis his information was (5th Cir.1963). by negligent and Sassen. 31. 324 F.2d 622 least behavior Stone (5th (5th Cir.1990). Cir.1987). 28. 32. 901 F.2d 53 Cir.1980). 33. Id. 56. 29.614 F.2d 464 Smith,

not inconsistent with our decision in turns or return information aegis under the Georgia which construed tort law.34 of various other subsections оf 6103. § Among the subsections listed in the above, government As we noted provision catch-all 6103(a)(3) is subsec- § only held can be liable under the FTCA “in (n). tion That the reference to subsection the same manner and to the same extent as (n) 6103(a)(3) implicitly if not explicitly § private individual under like circum persons private covers of the sector is con- stances.” We find that there are state recognition that, firmed in its in the course analogous liability imposed law torts government’s of the obtaining services government on the in the instant case.36 In sector, private from the “returns and re- analogies, addition to such we find that it is turn may information any disclosed to possible private for a actor to be held civil person ... to the extent necessary in con- ly liable under Texas tort law for a viola processing, nection with the storage, trans- tion 6103. § mission, maintenance, repair, testing, and procurement equipment, provid- and the grasp import point, To the full of this ing services, of other purpose of tax necessary operational is to focus on the administration.”37 Obviously, then, functional structure of which is § 6103(n) contemplates likelihood, nay, § “Confidentiality entitled and disclosure of certainty, that such confidential informa- returns and return information.” Subsec- tion will of necessity be disclosed to em- (a) general tion states the rule that returns ployees private independent sector con- and return information shall be confiden- providing goods tractors and services to tial, specifies then categories three broad the Treasury Department IRS, and the persons prohibited who are from disclos- express that the prohibitory language of ing First, such confidential information. 6103(a)(3) pro- is needed to extend its § (1) 6103(a)prohibits subsection of § scription private to such employ- sector officers employees making ees.38 Second, (2) disclosures subsection 6103(a)prohibits disclosure state offi- § Thus, example, if in Texas a non- employees cers and as well as those of governmental computer programmer or agencies, certain local who have or had computer maintenance worker were to be access to returns or return information un- furnished or should otherwise encounter Third, der complete picture, § the kind of confidential return information (3) 6103(a) prohibits subsection disclo- prohibited disclosure of which is by any person sure mention whatsoev- 6103(a), wrongful his or her disclosure in —no governmental employment er of or affilia- prohibition violation of the clearly could tion at level—who has access to subject re- such a worker to liability Texas tort Smith, 34. See 324 F.2d at 624-25. wrongful actors can be held liable for disclosure of confidential information. situation, analogous another the fed- 1346(b). 35. 28 U.S.C. eral regarding can be held liable air traffic that is made com- controllers— Texas, states, recognizes as does most other pensable under the FTCA—and their actions are libel, slander, the traditional torts of defama- regulated exclusively by almost federal rules tion, malpractice. Liability imposed is on But, attorneys and statutes. as the in the Avia- private actors when one who is entrusted with department Department tion of Justice's (e.g., lawyers, psychiatrists, such information attest, Torts Branch will an FTCAaction certain- bankers, "insider” investment and under some ly alleged lies for an state law tort when action circumstanсes, editors) reporters even a federal air traffic controller is accused of statutory regulatory under a mandate to negligence. yet maintain such confidences and he or she 6103(n). U.S.C. § rightly discloses that confidence. As the dissent out, 2680(h) points governmental retains im- Wiemerslage v. United F.2d 838 Cf. not, munity for libel and slander. We 1988) do how- (illustrating 902 Cir. that non ever, by pointing governmental employees rewrite the statute given to analo- are sometimes gous information). private situations in state law in which access to confidential tax return

1500 executive, the na- employee National to subjecting to analogous troubles, his case.39 ture of his and wife’s tax instant liability in the had fact that several of the board members 4. Causation already guilty plea his known about but resignation, not and the had called for his final element of is the Causation fact not asked additional that Johnson was theory must investi that we Johnson’s tort resign, pleaded guilty, even he to after that government insists the dis gate. The request the board felt forced to his until finding publication that trict court erred resignation following publication of the proximate was the of the news releases press Reviewing all of the cir- disagree. releases.41 damages. We cause Johnson’s leading to Johnson’s forced cumstances evidence, the trial uncontradicted On resignation, district court found that (the Clay president that Mr. court found proximate releases were the the IRS’s company) and several other and CEO of of that and all the disastrous cause (but Directors Board of members consequences that flowed from it. After Board), had been told majority of the own careful review of the record and of our his im- his tax troubles and Johnson about findings reasoning, district court’s Nevertheless, on the pending guilty plea. say prepared are not to that the court’s following Friday on which Monday finding clearly erro- proximate cause is entered, plea he was guilty Johnson’s was neous. (Clay’s) opinion it by Clay that told if Johnson remain would be best But, American National. after The De- B. Government’s Affirmative appeared, all of that press releases fenses Clay obviously changed. compelled felt to Contract, 1. Action Sounds in not Tort bring question of Johnson’s continued the full Board of Di- employment before government’s argument for re- first rectors, requested in turn Johnson’s which improperly the trial court versal court found that resignation. The district proceed allowed Johnson evidence,

this, demon- along with other the nature of the actions FTCA because conclusively that the news releases strated damaged Johnson was breach proximate cause of Johnson’s agreement made Johnson and between resignation job-related and all forced government argues that “the Powell. personal that followed. losses improperly decision District Court based its grounds IRS’s issuance Findings proximate cause on the that the [sic] fact, court, findings press in violation of the like other release was district agreement.” government mis- plea by this court under the clear are reviewed cause of ac- characterizes ly standard.40 The district both erroneous court’s the district as an American tion and basis for examined Johnson’s record Tex.Jur.3d, (1982), Negli only 53 four cases in 72 L.Ed.2d 39. Our research reveals — mentioned, -, denied, 6103(n) 129), gence none of which U.S. cert. Wiemer to the instant case. See are relevant S.Ct. L.Ed.2d 902; Pаlace, Ungaro slage, Inc., v. Desert F.2d at (D.Nev.1989); F.Supp. 1522 Crismar position speculate what 41.We are not in a (E.D.La. Corp. v. WL 98843 from the been omitted information would have 1989); Pennsylvania & Seal Co. v. Crown Cork (what press release a different result to cause Comm'n, Human Relations Johnson). damage information was critical clear, (E.D.Penn.1979). We it is howev believe if a release It is at least conceivable er, "private under like circum that a individual containing only the informa- had been issued Texas tort stances” could be held liable under agreed the informa- tion to with Powers protections for violation of the afforded law a record, appeared the same tion that in the court taxpayers by § 6103. however, Surely, might result have occurred. beyond jury to find that reason for the Airport, re Worth In Air Crash Dallas/Fort (5th Cir.) that was released (citing the confidential information Pullman- Swint, damage Johnson. caused the 456 U.S. 102 S.Ct. Standard v. judgment. Neither relied on breach of the 2. Preemption

plea agreement. government next asserts that above, As discussed Johnson’s assertions the remedial structure of 721743 of the § do, insists, recognized fit a theory as he Internal preempts Revenue Code the FTCA Additionally, Texas case tort under law. for resolution of claims such as Johnson’s. government’s argu- breach of contract government cites no direct authority rings particularly ment hollow when for proposition but relies on our hold in the realization that viewed the IRS was ing, Marsh,44 in Rollins v. that the FTCA party plea agreement not even a to the preempted was by the Civil Service Reform Department between Justice and (CSRA).45 Act of 1978 government’s Johnson, privity and thus had no with John- reliance on misplaced. There, Rollins is privity son.42 Without there can be no acknowledged that, we to preempt Moreover, of contract. breach FTCA, legislation new specify must com government never asserted that prehensive remedies that unmistakably pro liable to him because the IRS violated his vide the exclusive resolving method for agreement Department with the of Justice. type controversies of the by covered contrary, To consistently Johnson has legislation.46 In so acknowledging, we government’s that the asserted re- agreed with the conclusions reached earlier duty sults from violation of its toward him by Eighth and Ninth Circuits that the as established 6103. § provisions remedial of the CSRA were suf perceive government’s We ficiently comprehensive and exclusive to argument entire breach of contract to be a preempt the FTCA.47 label, herring. Irrespective red of its convinced, however, We are that even plea agreement in a criminal case is not a though may comprehensive, it is § contract in the civil A sense. breach of a similarly CSRA, exclusive. Unlike the plea agreement may affect such criminal which creates system a cohesive for the sentencing, matters as withdrawal of ‍​​​​‌​​​‌‌‌‌​​​‌​‌​‌​​‌‌‌‌‌‌​​​‌​​‌‌​​‌​​‌‌​‌​​‌‍a redress of employment prob- civil servants’ like; plea, sentencing appeals, and the but lems, merely provides remedies for § plea agreement of a gen breach never 6103; violations of nowhere does Con- § erates monetary civil remedies such as gress purport to make preemptive damages specific performance. Thus, § government of the FTCA. The reject government’s fails to cite breach of con to this court argument Congress tract out of evidence that doing, hand. In so however, passing intended for 7217 to plea we observe that a be the exclusive § agreement duty remedy does create for each every owed 6103 viola- § government defendant, tion.48 right and thus a We hold that to sue care, standard of the breach of which the under the FTCA for a tort might constitute a tort right arising under the duty from violation of the created circumstances. preempted is not 7217. § § plea agreement specified only 42. The comprehensive that the 48.It is true that 7217 is Department Justice would not issue a re- allowing terms of actions for breaches of lease. court, however, recognize § 6103. This must significant "comprehen- distinction between 43. U.S.C. which was in effect at the "preemptive.” sive" and Rollins and other au- arose, replaced by time this action § 7431. thorities instruct we must have us that some (5th Cir.1991). congressional 44. 937 F.2d 139-40 evidence of intent before we hold preempts that an enactment the FTCA. In this 95-454, (codified 45. Pub.L. No. 92 Stat. 1111 case, no such evidence of intent has been cited (1988)). seq. amended at 5 U.S.C. et § 1101 court, independent to this and our research re- unprepared say veals none. We are thus Rollins, F.2d at recovery a statute that allows for for all Id.; see Rivera v. United 924 F.2d congressional clearly violations evidences intent (9th Cir.1991); 951-52 Premachandra v. United preempt the FTCA. (8th Cir.1984). 393-94

1502 govern- Exception of Discretionary convicted tax evasion.53 Function

3. argues agents ment us the in the to that argues government next that merely carrying case out this instant are the so- claims barred they released information policy when the exception to discretionary function called But to even if we were about Johnson. statute, exception ex By the FTCA. argument as far as it grant thаt true of FTCA’s broad waiver from the cludes addressing goes, stops fully short of well immunity “[a]ny claim ... based sovereign discretionary of func- applicability the the performance or the the exercise upon exception in this case. tion a discretion perform failure to exercise duty on the of feder ary function policy there to The fact that IRS govern employee of the agency or an al persons release information about convict- in ment, or not the discretion whether automatically ed of tax evasion does abused.”49 volved be every taken in furtherance sterilize action however, discretionary func Clearly, policy. This has stated: of court every encompass exception does not tion government a discretion- Once the makes government employee of that involves act decision, discretionary ary function has discretion. This court some element of apply subsequent exception does ... noted that our “decisions previously poli- in carrying out that decisions made extraordinarily careful to avoid have been cy, though discretionary decisions “even discretionary any interpretation of the made those acts constantly are as how exception any that would embrace function 54 are carried out.” de merely because some governmental act government adqpts a discretion- When cision-making exercised power was ary policy, it must thereafter exercise con- questioned.”50 act official whose that actions taken vigilance stant to ensure Thus, govern virtually every act of a policy per- are not in furtherance of that emрloyee ment involves at least modicum negligently.55 formed choice, we must exercise restraint when except discretionary function applying the case, start, as In the instant did re If courts were not to exercise ion.51 IRS, court, given: in its district straint, insulated would be discretion, policy decided maintain thereby nearly liability,”52 all tort “from issuing persons con- news releases about frustrating very purposes that motivat general, that is of tax evasion. victed exam ed enactment of the FTCA—a classic policy decision which discre- the kind swallowing the rule. ple exception tionary exception is meant function discretion, other IRS has shield. When Stone and the In an exercise of IRS agents published here involved news policy publishing maintain a elected to Johnson, they were ostensi- persons run afoul of release about the names who acting express of this purpose bly furtherance criminal tax laws. The avowed however, Clearly, by policy the IRS. their policy is to deter future violations implementing publicity. purportedly The dis- actions aimed all who encounter negligent policy had were at least because recognized trict the IRS court in fact discretionary agents 6103—if upper-level decision those overlooked made an deliberately ignore it. persons they did not releases about disseminate Trevino, (quoting Wysinger 2680(a). 54. F.2d 1484 49. 28 865 U.S.C. States, 1252, (5th v. Cir. United 784 F.2d Corp., Dynamics v. General F.2d Trevino 1986)). denied, 935, (5th Cir.), cert. 493 U.S. 107 L.Ed.2d 317 S.Ct. States, Payton United 55. See F.2d Towing 51. Collins United (5th 1982) Co. v. (discussing Indian Cir. Cir.1986). 61, 76 350 U.S. S.Ct. (1955)). L.Ed. 48 Id. at 1226-27. discretionary function sessment or collection of tax or Just because cus- gov- shield the generally duty.”56 toms The district exception rejected liability “[gjovernment’s from FTCA otherwise position ernment mis- poliсy of the IRS arising from the decision deeds committed the individual defen- releases, it does not issue such news to in sufficiently dants this case ... were government is automatical- follow that the related to the assessment or collection of liability such when the ly shielded from 2680(c).”57 to fall under taxes § agents seeking to particular acts of the Again, we such findings review factual policy feder- implement that violate another for clear error. But even if this issue were law, express policy. Ac- regulation, al law, subject plenary one of and thus carry discretionary tions taken to out review, agree we would with the district policy must be taken with sufficient cau- argue court. To that the actions of the that, minimum, some tion to ensure at a IRS officers involved with the Johnson in the other federal law is not violated causally release news connected to then, saying, process. goes It without assessing the tasks of or collecting taxes simple if caution must be exercised to avoid credulity beyond strains the breaking point. negligence, greater even caution must be pur- informs us that the employed prevent disregard reckless pose publication of the instant effort was intentional or deliberate violations of law. potential to deter tax evaders and thus was case, agents’ the instant IRS in general furtherance of the more efforts protected release information about Therefore, of the IRS collect taxes. only negligent was not in the ab argues government, publicity aimed at stract; negligent it was as a matter of deterring future evasion should be included Texas law because 6103—was § statute — within assessment and collection ex- in the conduct. violаted We course 2680(c). emption of govern- We find the discretionary excep hold that the function position ment’s untenable. gov tion to the FTCA does not shield the A determination that the ambit of the agents ernment from for acts of its exception assessment and general in collection is so taken furtherance of a discre all-embracing as to tionary policy policy as the cover the news releases IRS —such through publication about Johnson’s conviction extend deter tax evasion would personal exception point of the names and other informa that the FTCA’s sovereign immunity tion tax evaders—when such acts are about waiver vis-a-vis taken in a manner that violates a federal wholly would subsumed in that IRS As the actions in the exception. statute. instant case an extension would effec- Such expressly prescribes violated tively exempt every every agent act of IRS applicable diligence, standard of those No case cited to this whatsoever. law qualify actions do not for shelter under the supports pervasive immunity such a wings discretionary excep of the function IRS, and found none for the we have inde- sheltering wings excep tion. The True, pendently.58 jurisprudence broad, tion are but not infinite. supports area the conclusion that the quite exemption is broad as it relates 4. Tax Assessment and Collection Ex- agents engaged activities with realistic ception assessing to the functions of or col- nexus case, lecting But in taxes. the instant ac- government urges yet another argument cepting government’s exception to the FTCA’s waiver of sover stretch the assessment and collection ex- eign immunity, purports onе that to eschew general ac- governmental liability emption under the to cover all deterrent FTCA here, arising though, as “[a]ny respect claim of the as- tivities of the IRS even 58.See, 2680(c). e.g., Wright U.S.C. v. United 719 F.2d 56. 28 (9th Cir.1983); Cappozzoli v. Tra- 1035-36 Cir.1981). cey, 57. 760 at 1227. 657-58 publicity its long paid the tax terrent within ambit of that may have since taxpayer exemption. reject gov- interest. deficiency penalties well as We therefore exemption argument. ernment’s every employee is axiomatic that It assessing or col- engaged is IRS Damages C. though those are the lecting even taxes District courts are allowed wide missions of the Ser- primary functions and setting damage discretion in awards.60 every equally It true that not vice. issues, fact a district court’s Like other agents who are thus official act those damages assessment of reviewed under assessing to sufficiently related engaged is clearly ap the standard.61 An erroneous to have the nexus re- collecting taxes or peals damages is court’s “reassessment of 2680(c). enjoy protection of quired to the ‘inherently subjective large part, involv expand exemption as far to We refuse ing interplay experience the of and emo gov- range already as the beyond its broad ”62 A tions as well as calculation.’ district suggests. ernment damages determination of cannot court’s States, we stat- Cappozzoli v. United by “simply this court because be reversed ed that we have sum.” awarded lesser engage in agent could tortious an IRS that, recognized in reviewing We have dam from sufficiently removed the conduct awards, age appellate are ad courts well assessing col- or agents official duties in question vised to within viеw award scope lecting beyond to be taxes as i.e., compare to objective framework — 2680(c),and at the same time of Section award under review awards in simi scope of his em- sufficiently within noted, however, lar have cases.64 We also against give rise an action ployment that “we cannot determine excessiveness United States.59 by comparing damage awards and that just such situation. Today we consider depends each case on its own facts.”65 argument accepting for sake Even case, the In the instant district court agents subject IRS the actions of $10,902.17: $5,902,117 awarded Johnson deterring at future tax eva- directed were loss, $5,000,000 for emo- economic others, actions were not “suf- by sion those anguish. tional distress and mental We assessing collecting ficiently related” to component now each review court’s responsibility from un- immune taxes be award. 2680(c). The attenuation of those der § exemption limits from the outer acts Damages 1. Economic great appertain. One of the is too The district court Johnson awarded officer; publication relations agents was a $5,902,117 resulting for the economic loss jobs agents whose special others resignation. from his That loss forced comprehend criminal tax violations vio- comprised following items: hand, can no we think of two lators. Off $3,675,917 earnings Loss of Loss of Loss of deferred tion jobs nexus to the functions of IRS with less 1,524,492 pension benefits collecting are assessing taxes. We sat- 664,208 compensa- 2680(c) plain language of isfied ex- and collection that its tax assessment 37,50066 Loss sale of Galveston o[n] never intended to include de- house ception was Izabal, 1028, M/V Lago 62. Sosa v. at 736 F.2d 59. 663 F.2d 658. (5th Cir.1984) (quoting v. Air Caldarera Eastern lines, Inc., Cir.1983)). (5th 705 F.2d 60. Wheat v. United 860 F.2d (5th Cir.1988) (citing v. United Co., Wakefield Batchkowsky 63. Penn Central (citing Id. (5th Cir.1985)); see Fed.R.Civ.P. 765 F.2d Cir.1975)). (2d 525 F.2d 52(a). Wheat, 64. See 860 F.2d Inc., Express, (citing 61. Id. Offshore Wakefield, 59). (citing Id. F.2d Cir.1988)). at 1233. appeal reasoning process government methodology, any, does if from either the losses quanta employed arriving Johnson’s lump at its sum award or his deferred his house sale of Galveston of five damages million dollars as for emo- compensation. does take anguish. tional distress and mental that Johnson’s calculations of position explicit record contains testimony of the losses, which the district court pension nature of the suffering, Johnsons’ as well they in that al- accepted, were erroneous discussion the district court about the recovery. find partial double We lowed effects that the news releases had on John- position to well taken. son, pain anguish they and the caused earnings The loss of was calculated cor- negative to him and his wife. These ef- rectly. properly pro- income was fects on Johnson’s life are well demonstrat- forward, salary he jected and all received ed the record of the trial. employee American as an National information, Irrespective if all that from the time he returned to Missouri until way knowing still have no how the dis- age sixty-five, prop- he attained the distress, trict court equated anguish, the erly deducted. The calculation of John- humiliation suffered the Johnsons however, pension, son’s was flawed. with an award of five million dollars. Al- Johnson testified that he would have re- though figure might appear to be $11,731 pension payments ceived lifetime high, juncture prepared this we are not a month had he not forced to leave his been agree either disagree with its accura- Instead, position. he executive will receive cy; simply we no have basis on which to per pen- month under his current $4858 consider the court’s determination. There- monthly sion —a differential of $6873.67 fore, only part judg- we remand this of the paid He have this been additional ment to the district court for verbalization (from money years age for twelve the or, if necessary, explana- recalculation and seventy, age, his executive retirement until tion, of it how arrived at the amount of age eighty-two, the the end of his actu- damages to which Johnson is entitled for arially expectancy). life calculated This anguish. emotional distress and mental $989,712.68 yields gross pension loss of loss, however, gross pen- From that the payments actually

sion that Johnson re- Ill ages sixty-five ceived between the seventy (As gov- must be subtracted. the CONCLUSION asserts, properly ernment Johnson cannot compensated wages be both for lost and as The district court committed no revers- pensioner during year peri- the same five finding ible error in that the actions of the od.) $291,480,69 equals This deduction leav- agents IRS violated and that when ing pension Johnson with lost benefits of injures persons such a violation of statute $698,232 $1,524,492 accepted rather than as protect- whose interests intended to are be by the district court. statute, ed the constitutes violation law, thereby implicating a tort under Texas produces properly

This recalculation $5,075,857, in the FTCA. Neither did the court err determined economic loss of $5,902,117. $826,260 exceptions proffered That amount rejecting less the various finding than the district court’s award. government, or in negligence agents of the IRS in actionable Damages for Emotional Distress and promulgating the releases was two news Anguish Mental proximate cause of the Johnsons’ dam- ages. pen- exception of Johnson’s opinion The district court’s is de With explanation recalculated— void of information or of the sion losses —which we have 12(months) 12(years). x x $6873. 67.Johnson testified that the difference was clearly per $7473 month. This is an arithmetic error, 12(months) 5(years). $4858. will correct. X X any employee of act or omission of determination of John- district court’s acting scope while within the damages clearly are not erro- Government special son’s employment, office or under circum- But, court revealed of his as the district neous. pri- if a stances where the United employed it in calcu- nothing the method person, would be liable to the claimant damages for vate emotional lating the Johnsons’ place with the in accordance law anguish, we remand mental distress the act or omission occurred." 28 where purpose of afford- case the limited added). 1346(b) (emphasis While its U.S.C. opportunity explain ing linguistics matter of abstract or, alternatively, recalcu- methodology phrase place “law-of the act or where explain its recalcu- damages and those late might thought omission occurred” appellate re- sufficiently permit lation law, applicable generally include view. not, long been settled that it does has reasons, judgment foregoing For the of the States un- that “the part; AFFIRMED court is of the district Act arises when the der the [FTCA] modified, and, as thus MODIFIED impose it.” law of state would Brown part; and REMANDED RENDERED v. United F.2d part. Cir.1981). Thus, even a violation Constitution, United States actionable un- GARWOOD, dissenting: Judgе, Circuit Bivens,3 is der not within the FTCA unless respectfully I dissent. complained of conduct is actionable un- view, nei my Johnson has established the local of the der law state where law, as action under Texas a ther cause occurred. at Brown Tort Claims Act by the Federal required follows, course, consistent- It and has any he material (FTCA),1 that suffered nor held, ly “the not in- been that FTCA was any of 26 damage result of violation as a federal statu- tended redress breaches of Lampert v. as construed 6103 U.S.C. § States, v. tory duties.” United Sellfors Cir.1988), 335, States, (9th 338 854 F.2d United 1362, Cir.1983). (11th As F.2d 1365 697 1034, 109 denied, 490 U.S. S.Ct. rt. ce 1931, Second Circuit said Chen v. United (1989) and 403 William 104 L.Ed.2d 622, Cir.1988): States, (2d 854 F.2d 626 Accountancy Co. Schrambling v. Unit E. require place’ “The FTCA’s of the ‘law Cir.1991), 1485, (9th 1488-89 States, F.2d 937 ed ment is satisfied direct violations — U.S.-, denied, 112 S.Ct. rt. ce Constitution, the Federal Contem See (1992), 956, 123 a 117 construction L.Ed.2d Mission, U.S.P.S., porary Inc. v. 648 accepts, arguendo, as majority which the Cir.1981); 97, (2d n. 2 Birn F.2d 104-05 correct.2 States, 319, F.2d v. 588 baum United Texas, law federal, not This is a (2d Cir.1978), or of federal statutes 328 claim. alone, standing regulations In Cecile 97, dus., States, F.2d Inc. v. 793 FTCA, subject exceptions, to diverse United Metal-U.S.A., (3d Cir.1986); sovereign immunity Art Inc. of the Unit- 100 waives 1151, 753 States, making it in tort "in the v. F.2d 1157-58 liable United ed Birnbaum, F.2d (D.C.Cir.1985); 588 and to the same extent as same manner 328; Block], like 656 circum- Nichols private individual [v. stances,” 28 U.S.C. 2674, for certain dam- ^[1436] 1444-45 [ (D.Mont.1987) ]. must alleged federal violations also con- negligent wrongful ages “caused 573, 1346, 1989) (5th (18 Wallington, 576 Cir. 889 F.2d 1. 28 2671-2680. §§ U.S.C. informa § 1905 restricted confidential U.S.C. tion). construction, prohib- 2. Under section 6103 "only confidential tax re- its the disclosure of prohibit does turn and hence information” Agents Feder- v. Six Unknown Named 3.Bivens once that in- of return information disclosure 388, Narcotics, 403 91 S.Ct. Bureau U.S. al public has been “made formation (1971). 1999, 29 L.Ed.2d 619 Lampert at I am in essential domain." agreement Lampert. v. United States Cf.

1507 ‘analogous task in a careful manner.” of duties See also Block violations stitute law,’ Neal, 289, 293, 1089, under local Cecile 460 imposed those v. U.S. 103 S.Ct.

Indus., (quoting 1092, Art ‍​​​​‌​​​‌‌‌‌​​​‌​‌​‌​​‌‌‌‌‌‌​​​‌​​‌‌​​‌​​‌‌​‌​​‌‍(1983). F.2d at 100 Although 75 L.Ed.2d 67 Indi 1158.)” Metal, F.2d at Towing expressly did not refer to state law, subsequent plain decisions have made also, v. United e.g., Zabala Clemente See application FTCA cases “the 1140, (1st Cir.1977) F.2d ‘Good Samaritan’ doctrine is at bottom a (“... specific behavior of feder- even where question of state statute, law.” United States v. by federal employees required al Impresa de Aerea of that statute S.A. Viacao Rio Gran liability to the beneficiaries Airlines), 797, (Varig Tort dense may founded on the Federal U.S. not be 12, 2755, recognizes Act if state law no com- n. 2765 n. 81 L.Ed.2d Claims S.Ct. (1984).

parable private liability”); Gelley v. Astra See also Sheridan United Products, Inc., F.2d States, 392, 400, Pharmaceutical 487 U.S. 108 S.Ct. Cir.1979) (“... (8th federally im- gov 101 L.Ed.2d 352 If the general spe- posed obligations, whether perform duty, ernment undertakes to cific, inquiry irrelevant to our under the are lighthouse such as to furnish a service or FTCA, imposes law a similar unless state traffic, negligently performs air direct upon private persons”). Our obligation duty, may then it be liable under the long followed this rule. Court has similarly private FTCA a situated enter if Smith, 624-25 States prise would be liable under the local law Cir.1963) (the “simply apply FTCA cannot good Supreme Samaritan rule.. As the negligence the claimed arises out of where explained in Court Sheridan: carry failure of the United States to “By voluntarily adopting regulations duty in statutory the con- out [federal] prohibit possession of firearms affairs” and is unavailable duct of its own require on the naval base and that all existence or nonexistence of” where “[t]he report personnel presence “depends entirely upon claim Federal firearm, voluntarily further statute”); Brown; Tindall v. United undertaking provide person care to a States, 53, Cir.1990) F.2d 56 at n. 8 901 armed, visibly visibly drunk and who (“a a regulation federal cannot establish

' responsibility the Government assumed law,” duty plaintiff to the under state owed ‘perform “good Samaritan” task [its] Smith). citing See also Bosco v. U.S. ” in careful Towing a manner.’ Indian Army Corps Engineers, 611 61, 65, States, 350 U.S. 76 Co. United 449, (N.D.Tex.1985). 454 122, 124, 100 L.Ed. 48 The S.Ct. say required that the state This is not to Appeals District Court and Court directly applicable one law must be petitioners’ both assumed that version of employees pre- federal or to the conduct of support recovery facts under would activity cise from which the claim arose. Maryland negligence theory on a if law Supreme made this clear in Court Indi- hospital had the naval been owned States, Towing 350 U.S. Co. United operated by private person.” a Id. 487 61, 63-64, 122, 124, L.Ed. 48 76 S.Ct. 100 400, (footnote 108 S.Ct. at 2555 U.S. (1955), where it relied on the “under like omitted). language of section 2674 in circumstances” applied theory in We have the same FTCA could holding that the United States be involving cases air traffic controllers. See for under the FTCA Coast liable States, F.2d 1075 v. United Gill negligence operation in the of its Guard’s (5th Cir.1970).4 lighthouse, asserting “it is hornbook tort teaching of these authorities is that undertakes to law that one who warn regula- danger thereby induces the violation of a federal statute or public of a liability give rise to FTCA perform ‘good reliance must Samaritan’ tion does (Tex. recognized ings Taylor, S.W.2d 4. Gill was a Texas case. Texas has Ass’n v. good 1976). Samaritan doctrine since well before See, e.g., the FTCA. Colonial Sav- enactment of negligence principles voke law offend state relаtionship between unless se, government, per where the agency and the employee or ing federal neg- act performance of such duties does former, if a is such that the party injured liability may under ligently, be found non-federal) person or (or least private relationship cre- state law because of duty law to under state entity, owe a would good Samaritan doctrine. See ated: the situ analogous in an the latter non-federal Towing v. United Indian Co. exists, relationship requisite If the ation. L.Ed. U.S. S.Ct. regulatory violation statutory or then the (1955).” Id. negligence evidence of may constitute analogous state of that the performance wholly on grounded claim is Where a given merely because But duty.5 law regulation, a federal statute or violation of negligence general doctrine of state has recovery merely on the ba- FTCA allow every violation not mean does per se general, abstract state doctrine sis federal by statute federal se, there of a negligence per requiring without intend a claim an for employee specific concluding suffices there be some basis claim beneficiary to be a un statutory private ed conduct or non-fed- that similar FTCA. purposes of the governmental employees clearly law der state eral would Otherwise, states FTCA analogous in such would be action- circumstances law, conduct ac to include to in dis- rewritten under state essence have been able federal law against virtue the United States: recov- tionable criminate allowed, against although like cir in analo- private ery individual under it is where “a private or munici- gous would not be liable circumstancеs the cumstances” Metal-U.S.A., employee not be pal employer Art Inc. would Thus in state law. (D.C.Cir. subject law. Plain- F.2d 1151 under state v. United sovereign immunity rejected ly, FTCA liabil the FTCA waiver of 1985), Circuit the D.C. go so predicated on of does not far. a violation ity sought to be notwithstanding that regulations, federal duty to disclose return in Here the negligence per se had a local law broad grounded entirely on the fed formation is intended plaintiffs doctrine and statute, Neither the eral U.S.C. § provisions regulatory beneficiaries court, majority, nor the district nor the “duties set The court observed: violated. any provision plaintiff-appellee, points not, therefore, auto do forth in law statutory analogous Texas or common law cognizable under lo matically create duties much less to section question is pertinent law. cal tort prohibit similar circumstances forth in the federal the duties set whether official, per municipal private or a state or forth in analogous to those set law are son, compara disclosing from information (citing Indian law.” Id. at local tort concerning an ble to that disclosed here Co.).6 And, Sellfors, in FTCA Towing felony recently in individual convicted of a aon federal statu to be based sought case 36 the the local courts. In its footnote violation, “We must the court stated: tory refers, or cita majority without elaboration upon insistence auto appellant’s reject first libel, authority, tion of torts of slan per negligence the state matically applying der, Texas possible law and defamation as Id., at 1367. Sell- 697 F.2d se law.” analogues made here. Howev to the claim say: on to er, went recognizes, majority as the libel and fors from federal slander excluded though specifically of a are violation “Even FTCA, 2680(h), presum automatically and so in- 28 U.S.C. duty statutory does Mills, Inc., Worley parties private law. See Gibson Similarly, an action between in (5th Cir.1980). duty under state to the other one who owe law, a seller to owed as duties such sold, goods holding buyer respect quality language cited with 6. This in may approval by consti- Cecile Indus- applicable law Circuit in federal Third violation of tries, (3d negligence at 100 duty Inc. v. United 793 F.2d 97 under a tute of that a breach Cir.1986). just of state per concept, violation as would se this, defamation, essentially the case such as where the statute violat- is ably is which Further, dis ed is a federal one and there is the information also a thing. same respect comprehen- every significant federal statute that creates a here was in closed public precise record. sive federal cause of action for the a matter of truthful and statutory alleged. violation in makes a similar coneluso- As The footnote also malpractice challenged effect at the time of the here professional ry reference releases, provided of confidential 26 U.S.C. arising from the disclosure as follows: psychiatrists or or by lawyers information patient. concerning a client or like Damages 7217. Civil for unautho- “§ authority cited. It seems to

Again, no is rized disclosure of returns and return strained, analogy quite is me that the information there is a broad and (a)

the instances cited per- any General rule.—Whenever relationship of trust and confidence general knowingly, negli- son reason of par voluntarily undertaken between gence, discloses a return return infor- ties, In relationship between the while (as 6103(b)) mation defined in section taxpayers is Revenue Service and ternal respect taxpayer to a with violation adversarial, involuntary, and at largely provisions of section such tax- Tellingly, majority rele length. arms payer may bring a civil action for dam- analogues to a gates its asserted Texas law ages against person, such and the district footnote, analysis no either of and makes courts of the United States shall have particular necessary elements for re jurisdiction any action commenced un- covery purported section 6103 provisions under such der the this section.

analogues (b) or of the facts here to determine liability good No faith but er- are es particular elements whether interpretation. liability roneous —No court. It is Nor did the district tablished. respect shall arise under this section with majority has relied exclusive plain that the any disclosure results (as court), the district ly on section 6103 did faith, erroneous, good interpretation but doing beyond so justification no of section 6103. general has a the mere fact that Texas (c) Damages. any brought suit —In negligence per For the doctrine of se.7 (a), provisions under the of subsection stated, previously simply will reasons upon finding on the claim not suffice to convert this federal law defendant, the defendant shall one under Texas law. plaintiff equal liable to the an amount to the sum of— Moreover, majority does not establish (1) damages by the actually any there Texas law doc- actual sustained negligence applicable plaintiff in a as a result of the unautho- per

trine of se (1)(12), (2) (e)(l)(D)(iii), majority apparently paragraph takes some сomfort 7. The prohibitions (n), (4)(B) (m), fact that the of section from the or subsection of subsection 6103(a) govern- ‍​​​​‌​​​‌‌‌‌​​​‌​‌​‌​​‌‌‌‌‌‌​​​‌​​‌‌​​‌​​‌‌​‌​​‌‍extend to certain state and local any informa- shall disclose return or return and, specified employees in some circum- ment stances, manner in con- tion obtained him 6103(a) private persons. Section or nection his service as such an officer with provides: provi- employee the or otherwise or under "(a) General rule.—Returns and return in- purposes For of this sions of this section. subsection, confidential, except and as formation shall be employee” "officer or the term by this title— authorized employee.” officer or includes a former (1) employee of the United no officer or 6103(a)(1) Obviously, clause is the section applicable case. The word "other” in to this State, (2) employee any any of no officer or (3) employees plainly federal excludes clause agency, support local child enforcement 6103(a)(2) clause. But even if section from that agency administering program any a local 6103(a)(3) by analogy, applied that or section (1)(7)(D) has or listed in subsection who law, analogous not an anal- be an would federal information had access to returns or return majority’s ogous discussion of state law. The section, under this 6103(a) (3) merely (2) clauses of section (3) (or employee person no other officer exclusively relies on thereof) serves to confirm that it returns or who has or had access to federal law. information subsection return 1510 per se cases negligence the return or return None the Texas

rized disclosure by majority cited involve situation and, in the case a will- information com- statutorily where there is created which is or a disclosure ful disclosure prehensive cause of action for statuto- punitive gross negligence, the result negli- to ry violation claimed constitute plain- no shall a but in case damages, gence per se.9 It to me evident that seems recovery receive less to tiff entitled the Texas courts would not create a com- $1,000 respect to with than the sum of statutory mon law cause of action for the such dis- unauthorized each instance situation, particularly in such a violation closure; and the statute violated is a federal one where (2) of the action. creating comprehensive the costs and the statute likewise for the is cause action violation (d) bringing action. —An for Period Indeed, possibly a federal one. what could any liability created un- enforce action to to motivate a Texas court create such may brought, be without section der this in If cause of action those circumstances? controversy, regard the amount to merely cause of action mirrored the Texas on years date which within purpose section what would be any time of action arises or the cause obviously served?10 Texas law could not discovery years by after within prevent recovery by authorized section the unauthorized disclosure.” plaintiff of just plain It as that Texas 7217. seems XII, 94-455, Title Added Pub.L. recovery provided could not enhance 4, 1976, 1202(e)(1), Oct. 90 Stat. § authorize such for section recov- 95-600, VII, Title and amended Pub.L. ery under circumstances which section 6, 1978, 701(bb)(7), Any 92 Stat. 2923.8 not it.11 law Nov. 7217 does allow such repealed passed re- to had an amendment the Texas Alcohol- In 1982 section 8. generally Beverage providing by Code if it placed 26 U.S.C. ic for civil apparent furnishing against party the United States to alco- an action allows for legislation beverage being person of section holic served was violations enacting presenting obviously repealing 7217 and section intoxicated to the extent of section legislation "ap- danger provided a clear himself and The Su- others. respect preme ply to disclosures made after the Court noted that was uncertain wheth- with law, [September observing of this Act er the act would become that it date of enactment 97-248, III, 357(c). by governor yet signed not Title had been Pub.L. 1982]." Hence, depends applicable upon its 7217 remains that tion, "effectiveness ... the ac- section disclosures, Id., challenged any, by and section if taken the Governor.” Til here inapplicable. Court noted S.W.2d at 314. The also legislation apparently placed "a much more on- plaintiff proof” erous burden of on the did than majority case cited is El The closest Court, however, opinion. the Court’s de- Poole, (Tex.1987). Corp. S.W.2d 306 Chico apply clined to this more onerous standard be- against on-premis- suits licensed Poole involved legislative cause “does its amendment selling liquor beverage distributors es govern arising terms a cause of action or accru- contrary persons Texas Alcoholic intoxicated ing plain date.” before its effective Id. The 1978). 101.63(a) (Vernon Beverage Code Ann. implication statutory of Poole is that the cause injured in collisions were individuals Plaintiffs during be of action would exclusive of court-creat- with cars driven those to whom negligence per theory ed actiоn under se recently dispensed had the alco- the defendants respect occurring statutory after violations beverages in violation of the referenced holic legislation went into effect. Supreme The Texas Court hand- Texas statute. 3, 1987, holding on June ed down its decision Clearly, state as courts are as well relying civilly liable and the defendants itself, available for suits under section 7217 Id., negligence per se. on doctrine grant jurisdiction purport its of federal does theAt time of the com- S.W.2d at 312-314. See, Levitt, e.g., exclusive. injuries, plained and indeed at the Tafflin of acts and 455, 792, 107 887 U.S. 110 S.Ct. L.Ed.2d opinion Supreme was time the Court’s handed down, spoke question statute no Texas example, under what circumstances there 11. For could Texas law allow civil whether or recovery proscribed liability 6103 disclo- for violation this or for section would be civil faith, good provisions though Alcoholic Bever- sure even it resulted "from similar of the Texas note, erroneous, interpretation age Supreme section 6103” Court did but Code. The Texas 1, 1987, however, legislature actionable under section on June and was hence not that 1511 preempted by section reasonable conclusion plainly be is that See, v. Logistics, Inc. e.g., complained of conduct the IRS em- Offshore Tallentire, 207, 231, 106 S.Ct. not, 477 U.S. ployees here and could not have Mobil 2499, (1986); 2485, L.Ed.2d 174 91 been, law; was, under actionable Texas it 618, Corp. Higginbotham, 436 U.S. v. Oil only, and was violation section 6103 2010, 2015, 625, L.Ed.2d 581 98 S.Ct. under actionable section 7217. Because Admin Brown v. General Services (1978); law, was not actionable Texas istration, 425 U.S. 820, 834-35, 96 S.Ct. liability United had no States under the 1969, (1976); United FTCA. 1961, L.Ed.2d 402 Demko, 149, 150-52, v. 385 U.S. States The section 6103 violation was not a 382, 383-84, (1966); 17 L.Ed.2d 258 S.Ct. damage. cause Marsh, 134, (5th Rollins v. 937 F.2d Gates, Atkinson v. McDоnald & Cir.1991); arguendo, majority accepts, that Co., 838 F.2d 808 (5th 1988); LeSassier Lampert correctly construes section 6103 Cir. USA, Inc., (5th v. Chevron 776 F.2d 506 accordingly and the violations here Cir.1985). Here deal a suit with are: disclosure of Johnson’s ini- middle employ grounded liability on the of federal (the press tial “E.” releases describe him as taken in the of their ees for actions course Johnson,” “Elvis E. while the information employment with the Internal Revenue Ser Johnson”); (59); age uses “Elvis releasing infor

vice federal income tax position title of his executive with Ameri- 6103(a)(1) contrary to section and so mation (the can Company press National Insurance civil under section as to create say vice-president releases “an executive Clearly in such instances section for the American National Insurance Cor- preemptive of As 7217 must be state law. poration,” but the trial record him refers to Boyle United remarked in Court “an executive for American National 500, 505, Technologies Corp., 487 U.S. Company”); Insurance and his street ad- 2510, 2514-15, (1988): 101 L.Ed.2d 442 S.Ct. releases, (the press dress which have “Gal- “Another area that we have found to be of veston, headers and Texas” use “here” to concern, peculiarly warranting federal Galveston, refer to describe Johnson as “of law, displacement of state is the civil liabili Circle”; Adler the information describes taken in ty of federal officials actions Galveston, Texas”).12 him as “a resident of duty. of their have held in course We scope April release would have many contexts that the of that liabili ty entirely is controlled law.” been in conformance with section 7217(b)? longer Could Texas law authorize a cealed and omitted from her return income 7217(d)? period knew was taxable.” Id. at limitations than that of section which she recovery Could Texas law authorize of more alleged here in relevant The information $1,000 7217(c) provided than the for in section as follows: “ 15, proof larger damages? actual April absent on ... the defendant ... ... JOHNSON, Galveston, a resident of ELVIS Texas, pleaded willfully knowingly attempt did and 12. The information to which Johnson charged large part guilty of the income a violation of 26 U.S.C. evade and defeat owing by felony provided pris States that then for a maximum tax due and him to United $10,000 year years preparing five and a fine for for the calendar and on term of willfully attempts any causing prepared, by signing “[a]ny person to be and caus- who ing signed, by mailing causing any imposed by to evade or defeat tax to be and and manner mailed, is, clearly law to be ... a false and fraudulent in- this title." The has been return, which was filed with the this Circuit since well before of the events come tax Service, issue, establishing stated a violation of section Internal Revenue wherein he finding represented requires a that the defendant "act that his taxable income $53,589.00 willfully knowingly specific year intent said calendar ed owing obligation,” thereon was income tax the amount of tax due and to evade his whereas, $18,374.50, Daniels, (5th as he then 617 F.2d Cir. the sum of States careless, knew, 1980), negligent, his taxable income for and that "a or unin and there well $59,784.18 upon which said taxable tentional understatement of income” is not "suf 1975 was Garber, an in- he owed to the United States ficient.” United States v. income $21,849.47 (Violation: 1979). Title must come tax of Cir. "The 97-98 Code, 7201).” willfully Section that the defendant con- United States demonstrate damage no middle ini- caused the to Johnson.” But .merely omitted the had “59,” explanation given dеlphic and the word is for this “E.,” figure the

tial expressly substitut- wholly while This “vice-president,” counterintuitive conclusion.14 implicit already clearly “Galveston” ing the a matter as to Johnson had the was which redacted, As so the Circle.” for Adler surely “25 proof of and that burden burden (brack- read follows release would press unrea- cannot have been sustained added): omitted; underscored eted material unexplained speculation. sonable and PLEADS EXECUTIVE “INSURANCE it. Nor this the whole of The district is CASE IN TAX GUILTY of minority court that a reasoned because GALVESTON, TEXAS—In U.S. Dis- April the knew Johnson’s board about here, Apr. John- Elvis trict Court [E.] release, guilty plea any press he before but charge son, plead guilty of [59,] resign days until was not forced to a few Judge Hugh Gibson tax evasion. release, (April 17) after the second and last Johnson, of Adler sentenced [25 Circle] therefore, press that the them- releases Galveston, suspended to a six-month him terminated. But selves caused to be pro- year supervised one prison term and pure reasoning. post-hoc, propter-hoc this is bation. press had No one testified that the releases Johnson, [vice-president] an executive posi- anything to do with Johnson’s loss of American National Insurance for the tion. district seems to assume charged in a criminal was Corporation, have that the board as whole would not evasion feder- with willful information that majority been told. The assumes filing false and fraudulent tax al tax change there of heart because of the return publicity. support There is evidence to no sentence, the Johnson In addition to assumption. either Johnson was a member taxes, plus pay back required to will be board, ranking and the second execu- interest.” penalties and Only company. tive the the board absolutely no evidence whatever is There position. him could remove suggest press tending to that such even fact the board knew of minority that a had, or was calculated would have release April take 10 conviction and failed to had, any different effect on John- to have nothing. April proves action before relations with American National son or his Moreover, undisputed the evidence is press releases Company than Insurance the whole board and all stockholders court, in The district actually issued.13 ef- publicly company, the stock large, held problem ignored this and treat- fect, simply traded, publicly of which was would have press entirety releases as ed informed, had if there to have been even Hence the proscribed under section 6103. any press had never release whatever. been finding of causation court’s factual district himself testified: majority has grounded on what as- is “Q. point you going to At some were legally incorrect foundation. is a sumed you tell Board were a tax felon? (footnote 41) “it majority asserts A. It would be in the footnotes of ... to find that beyond reason report, information that was released annual sir. confidential refers, is majority and been sentenced. There as did district information While court, thought anyone the fact that Johnson was known as not a of evidence that scintilla many people, there no evidence that “E.E.” to a section confiden- that the addition Johnson, Galveston, reference "Elvis domain) (non-public even had tial information Company Insurance execu- American National potential making any at all to difference tive,” identify sufficed to him. have (or anyone anyone with American National Furthermore, damage claims are al- else). high posi- entirely premised his on loss of most Yet, it is undis- tion with American National. identity, significant 14. The facts were Johnson’s puted gener- that the chief executive officer National, being his an executive with American concern, couple al as well as a counsel of that offense, felony all of were non- board, aware, before others on its confidential, public matters. domain release, guilty pleaded had that Johnson court, Q. gone have out to the seem to And would view the matter ifas John- legitimate expectations directors? son’s board of from the agreement Again, were frustrated. howev- A. to the shareholders. And er, the conviction stands and Johnson is Q. you And to the shareholders. And necessarily implied bound its findings. going regardless to do that whether He sought challenge never Having it. press there release? short, probated received sentence for done, A. It would have to have been presume willful, what we must was the yes, sir.” knowing, cheating and intentional circumstances, In these and on this bar- United States out of several thousand dol- record, wholly suggest ren it is fanciful to lars, protected by that sentence from press that the inclusion in the releases of punishment, more severe he now collects essentially minor matters whose disclo- several million dollars from the United prohibited by sure was section 6103 was a States because this public matter of rec- position loss of cause ord—which he admits all the shareholders American National or of material dam- publicly-held company would have to аge to him. specifically any- have been informed of way mentioned two brief Galves- —was Conclusion press ton releases. Neither the law nor the majority and the district court recite support recovery. facts Johnson has evidence, himself, principally from Johnson ear, purse indeed made a silk from a sow’s tending really indicate that he wasn’t and we should not countenance it. evasion, guilty felony tax mere but was worst, ly negligent carelessly relying on bookkeeping,

his wife’s confused and/or simply protect

that he sacrificed himself to Any wholly

his wife. such contention is wording with the

inconsistent infor pleaded guilty

mation to which Johnson necessary well as with the elements of Rodney In the Matter of: Dale COSTON section 7201 violation. See footnote 12 su Coston, and Billie Katherine pra. this case Johnson’s conviction— Debtors. challenged wholly which he has never — taking any position, bars him from Rodney Dale and Billie COSTON especially against in this suit the United Coston, Appellants, Katherine successfully prosecuted him See, against for his tax fraud it. e.g., Piper v. United 392 F.2d 464- MALVERN, Appellee. BANK OF Cir.1968); (5th Lefkowitz, Tomlinson v. No. 92-4399. (5th Cir.1964), F.2d 264-65 cert.

denied, Appeals, United Court of 379 U.S. 85 S.Ct. States also, Fifth Circuit. e.g., L.Ed.2d 556 See Thomas, States 4, 1993. Jan. Cir.1983). majority acknowledges ‍​​​​‌​​​‌‌‌‌​​​‌​‌​‌​​‌‌‌‌‌‌​​​‌​​‌‌​​‌​​‌‌​‌​​‌‍plea agreem Henslee, Long, Tex., there was no breach of the Tyler, Dale Josh ent,16 it, but nevertheless and the district appellants. Department

15. And we also as a matter know of common would not issue a that the Justice knowledge release," that this information would likewise finding press there is no or conclu- SEC, have to be disclosed to where it would Department the Justice sive evidence record, public be a matter of and to the invest- caused either release or failed to inform community. ment agreement. majority the IRS of the notes that neither Johnson nor the district court relied because, majority points 16. This is as the out plea agreement. on a claim of breach of the (fn. 42), agreement plea specified only "[t]he

Case Details

Case Name: Elvis E. Johnson v. Robert Sawyer, United States of America

Court Name: Court of Appeals for the Fifth Circuit

Date Published: Dec 29, 1992

Citation: 980 F.2d 1490

Docket Number: 91-2763

Court Abbreviation: 5th Cir.