Paul GLUCK and Ina Gluck, Appellants, v. UNITED STATES of America, Appellee. Sidney STEIN; Stein & Stein; Stein‘s Foot Specialties, Inc., Appellee, v. UNITED STATES of America, Appellant.
Nos. 84-5323, 84-5282
United States Court of Appeals, Third Circuit
Argued Feb. 12, 1985. Decided Aug. 28, 1985.
Carl B. Levy (argued), Joseph G. Aronson, Livingston, N.J., for appellants in No. 84-5282.
Bruce Goldman (argued), Edwin Fradkin, John J. O‘Toole, Starr, Weinberg & Fradkin, Roseland, N.J., for appellee in No. 84-5323.
W. Hunt Dumont, U.S. Atty., Newark, N.J., Glenn L. Archer, Jr., Asst. Atty. Gen., Michael L. Paup, Charles E. Brookhart, William A. Whitledge (argued), Attys. Tax Div., U.S. Dept. of Justice, Washington, D.C., for appellee in No. 84-5282, and appellant in No. 84-5323.
Before GARTH, BECKER and ROSENN, Circuit Judges.
EDWARD R. BECKER, Circuit Judge.
These consolidated appeals present the question whether certain Internal Revenue Service summonses should be quashed because they resulted from grand jury information obtained by reason of a district court‘s
I. FACTS AND PROCEDURAL HISTORY
A. United States v. Gluck, No. 84-5282
At some time prior to November 1983, a federal grand jury sitting in the District of New Jersey conducted an investigation into the affairs of Franklin State Bank. During the course of this investigation, the grand jury examined records of bank accounts maintained by appellants Paul and Ina Gluck, among others. At the conclusion of the grand jury inquiry, the United States Attorney for the District of New Jersey, acting pursuant to
As required by
B. Stein v. United States, No. 84-5323
The Rule 6(e) order entered by the United States District Court for the District of New Jersey on November 19, 1982, also led the IRS to information concerning the tax liabilities of appellants in No. 84-5323, Sidney Stein, Stein & Stein (a corporation), and Stein‘s Foot Specialties (a partnership) (hereinafter collectively referred to as “the Steins“). Using this information, the IRS issued summonses to Franklin State Bank on April 13, 1983, seeking bank records necessary to calculate the amount of taxes allegedly owed by the Steins for the 1981 tax year. On April 27, the Steins filed, pursuant to
In the Gluck matter, after the district court refused to quash the summonses or to stay the execution of its judgment pending appeal, Franklin State Bank fully complied with the summonses. Relying on Vesco v. Securities and Exchange Commission, 462 F.2d 1350 (3d Cir.1972), the IRS argues that this action ended any controversy between the parties and mooted the Glucks’ appeal because the relief sought—prevention of compliance with the summonses—can no longer be granted. The Glucks respond that their appeal is not moot because this court can prevent the IRS from using information obtained as a result of summonses that should have been quashed.
The Glucks cite two cases from this circuit in support of their position. The first is United States v. Waltman, 525 F.2d 371 (3d Cir.1975), which concerned the contents of a diary characterized by the government as a corporate record with no fifth amendment protection, but claimed by the taxpayer to be a personal item privileged from disclosure. The district court ordered the diary produced and denied a stay pending appeal. Although the taxpayer surrendered the diary while the case was on appeal, this court held that the case was not moot, stating:
Because a stay was denied, the diary was produced. However, the case is not moot since if the diary is not a corporate record, the individual respondent is entitled to its return and appropriate suppression of the use of its contents.
The other case relied on by the Glucks is United States v. Friedman, 532 F.2d 928 (3rd Cir.1976), which also addressed the effect of compliance with an IRS summons during the pendency of an appeal challenging its validity. As in Waltman, this court denied the IRS‘s motion to dismiss the appeal as moot “because the controversy between the IRS and the taxpayers over these records [was] still very much alive.” Id. at 931. We stated:
If the taxpayers were to prevail in their contention that all summonses were illegal because they were issued solely to gather evidence for use in a criminal prosecution, then the records ... would have been obtained unlawfully. Such a ruling could affect the possible use of these records in any subsequent criminal or civil proceeding brought against the taxpayers.
Id.
The IRS concedes that both Waltman and Friedman are squarely on point and strongly supportive of the Glucks’ position. The Service contends, however, that these cases are at odds with Vesco and that, as the earlier case, Vesco is controlling. The IRS is correct in its contention that Vesco—if at odds with Waltman and Friedman—would, as the case decided earliest in time, be the controlling authority in this circuit and that the later cases would be ineffective to the extent of the conflict. See O. Hommel Co. v. Ferro Corp., 659 F.2d 340, 354 (3d Cir.1981), cert. denied, 455 U.S. 1017, 102 S.Ct. 1711, 72 L.Ed.2d 134 (1982) (“[A] panel of this court cannot overrule a prior panel precedent.... To the extent that [the later case] is inconsistent with [the earlier case, the later case] must be deemed without effect.“) We believe, however, that Vesco is distinguishable from Waltman, Friedman, and the case at bar.
In Vesco, the plaintiffs resisted compliance with an SEC subpoena requiring disclosure of certain documents on the ground that such disclosure would subject them to criminal penalties under Swiss banking law. After losing in the district court, plaintiffs appealed, but surrendered the documents while the appeal was pending. We held that “plaintiffs’ full compliance with the subpoena ... obviated the ‘case or controversy’ originally surrounding the subpoena,” 462 F.2d at 1351, and dismissed the appeal as moot.
There is an essential difference between Vesco and the later cases. In Vesco, the very act of surrendering the documents was the critical issue because, it was al-
III. DISCUSSION
A. The Applicable Law
In United States v. Powell, 379 U.S. 48, 85 S.Ct. 248, 13 L.Ed.2d 112 (1964), the Supreme Court set forth the test to be applied in determining the validity of an IRS summons that is challenged by a taxpayer. First, the IRS Commissioner has the burden of showing “that the investigation will be conducted pursuant to a legitimate purpose, that the inquiry may be relevant to that purpose, that the information sought is not already within the Commissioner‘s possession, and that the administrative steps required by the Code have been followed....” Id. 85 S.Ct. at 255. Once the Commissioner has met this burden, the taxpayer “may challenge the summons on any appropriate ground,” Reisman v. Caplin, 375 U.S. 440, 449, 84 S.Ct. 508, 513, 11 L.Ed.2d 459 (1964). One ground upon which a taxpayer may challenge an IRS summons is that enforcement of the summons would amount to an abuse of the court‘s process. The burden of proving such abuse is on the taxpayer. Powell, 379 U.S. at 58, 85 S.Ct. at 255; see Donaldson v. United States, 400 U.S. 517, 526-27, 91 S.Ct. 534, 540-41, 27 L.Ed.2d 580 (1971); United States v. McCarthy, 514 F.2d 368, 373 (3d Cir.1975).
There is no dispute in the cases at bar that the IRS has met its preliminary burden for securing enforcement of the summonses under Powell. The issue before us is whether enforcement would result in an abuse of process. The IRS, of course, argues that it would not. Moreover, the Service contends that the case may be disposed of on preliminary grounds without reaching the abuse of process question. We address these threshold issues next.
B. Threshold Issues
The IRS characterizes this case as one in which the taxpayers collaterally at-
These contentions are without merit. First, the cases are not moot because they raise not only the issue of grand jury secrecy—which, admittedly, cannot be restored—but also the question whether materials allegedly obtained in violation of this secrecy may be used as the basis for IRS summonses. The controversy between the parties over this latter question is very much alive. Second, on the issue of standing, there can be no doubt, after Powell, that the Glucks and Steins have standing to challenge the IRS summonses on the ground that enforcement would result in an abuse of the court‘s process. The fact that they are basing their claim of abuse of process on the alleged invalidity of a Rule 6(e) order (and the impermissible taint it is said to impart to the summonses) does not affect their standing in the summons enforcement proceeding.4
Finally, the Service‘s contention that suppression of evidence is not available in a summons enforcement proceeding stems from a mischaracterization of the case. The taxpayers do not argue that the district court should have applied the exclusionary rule and suppressed evidence prior to consideration of the validity of the challenged summonses. Rather, they are arguing that the alleged breach of grand jury secrecy by IRS agents should bar the IRS from receiving the court‘s aid in enforcing summonses issued to assist an investigation triggered by the information improperly obtained from the grand jury. See United States v. Beacon Federal Savings & Loan, 718 F.2d 49, 52-53 (2d Cir.1983). The quashing of summonses, not the suppression of evidence, is the remedy sought by the appellants here.5
Having disposed of these preliminary matters, we may now turn to the question whether the action by the IRS agents in the cases at bar renders enforcement of the summonses an abuse of process.
C. Would enforcement of the summonses constitute abuse of process?
The initial issue relevant to determining whether the summonses are enforceable is the retroactivity of the Supreme Court‘s decision in United States v. Baggot, 463 U.S. 476, 103 S.Ct. 3164, 77 L.Ed.2d 785 (1983). The parties agree that, if Baggot is not subject to retroactive application, the summonses are enforceable because the Rule 6(e) order leading to them would be valid and no illegal conduct would underlay the IRS‘s investigation of the taxpayers. See supra part III.A.
We believe that the question of the retroactive effect of Baggot is not a simple one; in any event, we need not answer the question here. Because we hold in favor of the government on other grounds, see infra at 758, we will assume without deciding that Baggot must be applied retroactively.6 Two corollaries follow from this assumption: (1) the Rule 6(e) order under attack in these appeals was invalid when issued; and (2) the IRS agents who initiated the investigation of both the Glucks and the Steins did so in reliance on information obtained in violation of grand jury secrecy.
The question thus remains: did this action by the IRS agents so taint the investigation that enforcement of the summonses would amount to an abuse of the court‘s process? As a first step in answering this question we look again to Powell, where the Court gave some indication as to the type of conduct by IRS agents that would constitute an abuse of process. The Court stated:
Such an abuse would take place if the summons had been issued for an improper purpose, such as to harass the taxpayer or to put pressure on him to settle a collateral dispute, or for any other purpose reflecting on the good faith of the particular investigation.
379 U.S. at 58, 85 S.Ct. at 255. The taxpayers do not contend in the cases at hand that the summonses were issued for an improper purpose. There is ample precedent, however, for the proposition that even when an IRS summons is issued for a proper purpose, illegal conduct by the agents during the investigation (and prior to the issuance of the summons) may so “reflect[] on the good faith of the ... investigation,” id., that enforcement would amount to an abuse of process.
In United States v. Bank of Commerce, 405 F.2d 931 (3d Cir.1969), for example, the taxpayer claimed “that the information which called [the IRS agent‘s] attention to the 1960 bank records [the records being summoned] was the product of an unlawful search and seizure, that this information—‘the leads‘—is tainted by the search and seizure and that, therefore, the bank records are also tainted and their production should not be compelled.” Id. at 934. This court held that “the district court should hear and determine appellant‘s Fourth Amendment claim and thus assure
It is clear from Bank of Commerce and Beacon Federal that quashal of a summons does not follow automatically from improper agency conduct. We do not believe that the conduct by the agents in the present cases, even if technically illegal, rises to the level necessary to justify a refusal to enforce the summonses. First, unlike the situations in Bank of Commerce and Beacon Federal, there is no contention here that the agents acted in violation of anyone‘s constitutional rights, only that they violated a rule of criminal procedure designed to protect the secrecy of grand jury materials. More important, the agents complied with the rule as it was widely interpreted at the time: they went before a district court for a Rule 6(e) order permitting them access to the grand jury materials, and the court granted them a facially valid order. The agents acted in good faith reliance thereon. In short, the conduct of the agents in no way reflects negatively on the good faith of the investigation, see Powell, 379 U.S. at 58, 85 S.Ct. at 255, and enforcement of the summons would not constitute an abuse of process.
Two Supreme Court cases dealing with the exclusionary rule in the fourth amendment context lend strong support to our conclusion: United States v. Peltier, 422 U.S. 531, 95 S.Ct. 2313, 45 L.Ed.2d 374 (1975) and United States v. Leon, 468 U.S. 897, 104 S.Ct. 3405, 82 L.Ed.2d 677 (1984). In Peltier, the Court considered whether it should apply the holding in Almeida-Sanchez v. United States, 413 U.S. 266, 93 S.Ct. 2535, 37 L.Ed.2d 596 (1973)—that a warrantless border patrol search approximately twenty-five miles from the border violated the fourth amendment—to exclude evidence from a search conducted under similar circumstances before Almeida-Sanchez was decided. The Court noted that if the law enforcement officers reasonably believed in good faith that evidence they had seized was admissible at trial, the ‘imperative of judicial integrity’ is not offended by the introduction into evidence of that material even if decisions subsequent to the search or seizure have broadened the exclusionary rule to encompass evidence seized in that manner. Peltier, 422 U.S. at 537, 95 S.Ct. at 2317. The court also stated that, in light of the good faith reliance of the officers on the state of the law as they found it, retroactive application of Almeida-Sanchez would have no deterrent effect. Id. at 538-39, 95 S.Ct. at 2318. Accordingly, it reversed the court of appeals’ determination that the evidence seized was to be excluded.
In Leon, police officers obtained a “facially valid search warrant,” 104 S.Ct. at 3410, from a state superior court prior to conducting a search of defendant‘s residence for contraband. The defendant was indicted by a federal grand jury and charged with conspiracy to possess and distribute cocaine, and a number of substantive drug counts. The United States District Court for the Central District of California concluded that, although the police officers had acted in good faith pursuant to what they believed to be a valid warrant, the search was invalid because the warrant was not supported by probable cause. The court thus suppressed evidence gathered during the search. The Court of Appeals for the Ninth Circuit affirmed. The Supreme Court held, however, that the marginal or nonexistent benefits produced by suppressing evidence obtained in objectively reasonable reliance on a subsequently invalidated search warrant cannot justify the substantial costs of exclusion. Id. at 3421.
IV. CONCLUSION
We hold, even assuming that the IRS summonses sought to be enforced in the cases before us were based upon information obtained in violation of grand jury secrecy, that the conduct of the IRS agents in relying on a facially valid Rule 6(e) order did not so taint the Service‘s investigation of the taxpayers as to render enforcement of the summonses an abuse of the court‘s process. Accordingly, we will reverse the judgment of the district court in United States v. Stein, No. 84-5323, which granted the Steins’ motion to quash and denied the IRS‘s motion for summary enforcement, and remand for the entry of judgment on both motions in favor of the IRS. We will affirm the judgment of the district court denying the Glucks’ motion to quash and granting the IRS‘s motion for summary enforcement in United States v. Gluck, No. 84-5282.
GARTH, Circuit Judge, dissenting:
Although I concur in the majority‘s ultimate holding that enforcement of the IRS summonses currently before us would not be an abuse of the court‘s process since the IRS agents acted in good faith reliance on a facially valid rule 6(e) order, I cannot agree that the appeal in United States v. Gluck at No. 84-5282 presents a live case or controversy. During the pendency of this appeal, full compliance was had with the summonses at issue in the Gluck mat-
Unlike the majority, I do not believe we should rely upon the completely speculative possibility that future criminal or civil proceedings may be instituted against the Glucks to endow their present appeal with a vitality it no longer possesses. Should the government initiate any subsequent proceedings against the Glucks, the Glucks may at that time move to suppress the use of any information which was obtained by the government as a result of compliance with the summonses. See, e.g., G.M. Leasing Corp. v. United States, 429 U.S. 338, 359, 97 S.Ct. 619, 632, 50 L.Ed.2d 530 (1977); Donaldson v. United States, 400 U.S. 517, 531, 81 S.Ct. 534, 542, 27 L.Ed.2d 580 (1971). Suppression, however, is not a remedy which is called for at this time or which we should fashion as an incident to a petition to quash. I would therefore dismiss the appeal in No. 84-5282 as moot.
I.
The prior case law in this circuit contains seemingly conflicting authority as to whether compliance with a summons or subpoena moots an appeal challenging its enforcement. Compare Vesco v. Securities and Exchange Commission, 462 F.2d 1350 (3d Cir.1972) with United States v. Waltman, 525 F.2d 371 (3d Cir.1975) and United States v. Friedman, 532 F.2d 928 (3d Cir.1976). In Vesco, the court held that full compliance with an SEC subpoena during the pendency of the appeal “obviated the ‘case or controversy’ originally surrounding the subpoena.” 462 F.2d at 1351. The Vesco court accordingly dismissed the appeal as moot.
In the later cases of Waltman, supra, and Friedman, supra, however, separate panels of this court concluded that compliance with an IRS summons during the pendency of an appeal which challenged the particular summons’ validity did not moot the appeal. Waltman involved a challenge to the enforcement of an IRS summons seeking production of an expense diary claimed by the taxpayer to be a personal record rather than a corporate record within the meaning of the summons. Friedman challenged the propriety of the government‘s purpose in issuing summonses to obtain certain individual and corporate records. Although Waltman and Friedman thus differed in the precise issues they presented, each court reasoned that compliance did not moot the respective appeals, since suppression of the involved records might result should the taxpayers prevail in their claims.
Significantly, neither the Waltman nor the Friedman court discusses the earlier and contrary Vesco holding. The majority here attempts to distinguish Vesco by emphasizing that the Vesco plaintiffs sought to resist production of subpoenaed documents on the grounds that disclosure would subject them to criminal penalties under Swiss law. The majority reasons that because an American court lacked power to direct the actions of Swiss authorities, compliance with the subpoena necessarily rendered the appeal moot. See Maj. op. at 754. In the majority‘s view, the crucial distinguishing factor is that no post-disclosure remedy fashioned by the Vesco court could have had extraterritorial effect.
This attempt to distinguish Vesco from Waltman and Friedman, while ingenious, is flawed. The Vesco court did not rely
I therefore cannot subscribe to the majority‘s effort to distinguish Vesco. To the extent that any conflict exists between Vesco and Waltman and Friedman, Vesco, as the earlier case, must control our decision. See O. Hommel Co. v. Ferro Corp., 659 F.2d 340, 354 (3d Cir.1981). Neither can I agree with the majority‘s statement that in the present case, unlike Vesco, “at issue is not only the act of turning the documents over to the government but also the use of information obtained from these documents.” Maj. op. at 754. As the majority itself notes, the Glucks’ central argument before us has been that the alleged breach of grand jury secrecy by IRS agents should bar the IRS from receiving the court‘s aid in acquiring information by use of a summons. Indeed, a review of the Glucks’ amended petition to quash discloses that their sole challenge is to the enforceability of the summonses. No question of suppression has been properly raised before this court. Nor can such a question be raised at this stage. See Donaldson, 400 U.S. at 531, 81 S.Ct. at 542 (“to the extent [a taxpayer] may claim an abuse of process, [he] may always assert ... that claim in due course at its proper place in any subsequent trial.“) In the absence of some further civil or criminal proceedings against the Glucks, the question of suppression remains completely speculative.
Other courts of appeals, which have considered the effect of compliance with an IRS summons during the pendency of an appeal, have uniformly held that compliance moots the appeal. See United States v. Kis, 658 F.2d 526, 532-35 (7th Cir.1981) (compliance with IRS summons moots appeal challenging its enforceability since court is unable to grant any relief and suppression should not be considered until government initiates some further proceedings in which use of evidence is sought); United States v. Arthur Andersen & Co., 623 F.2d 720 (1st Cir.1980) (compliance moots appeal; “in the absence of some compelling circumstances that militate in favor of our deciding an otherwise moot case, the “capable of repetition yet evading review” exception is not available to a litigant aggrieved by a summons or subpoena who could have avoided mootness by refusing to comply“); United States v. Deak-Perera Banking Corp., 610 F.2d 89 (2d Cir.1979) (same); Barney v. United States, 568 F.2d 116 (8th Cir.1978) (same); Kurshan v. Riley, 484 F.2d 952 (4th Cir.1973) (same); United States v. Lyons, 442 F.2d 1144 (1st Cir.1971) (mere possibility of future criminal proceedings does not in itself justify appellate consideration of the propriety of the summons when compliance has mooted appeal); Lawhon v. United States, 390 F.2d 663 (5th Cir.1968) (same). These courts have generally recognized that once compliance has mooted an appeal, to address the question of suppression of evidence in the absence of some actual criminal or civil proceeding is to do no more than deliver an advisory opinion.2 Unlike
II.
In light of our prior decision in Vesco and in light of the overwhelming weight of precedent in other courts of appeals, I would therefore hold that compliance with the summonses at issue has mooted the appeal in United States v. Gluck, No. 84-5282. The particular controversy that formed the subject of the Glucks’ appeal—the enforceability of the summonses—has ceased to exist. Nor can the mere possibility that some future proceeding may be instituted against the Glucks provide a live case or controversy capable of present resolution. I therefore respectfully dissent from that portion of the majority‘s opinion which holds the Gluck appeal is not moot.
III.
One further observation is necessary to explain my dissenting opinion, even though the ultimate outcome of the Gluck appeal remains unchanged. I have felt compelled to write at some length about the mootness issue in the Gluck appeal for two reasons. First, the question of mootness goes directly to our jurisdiction to entertain the appeal. As a court of limited jurisdiction, whose ability to decide questions of law is constitutionally defined by the case or controversy requirement of Article III, we are not empowered to decide abstract or purely hypothetical questions. In the absence of a concrete and continuing case or controversy, we lack jurisdiction and hence power to decide questions of law which can have no effect on the particular litigants before the court.
ensure that future proceedings, in which the introduction of information obtained by means of a challenged summons is sought, will be initiated. Whether the taxpayer himself or some third party complies is thus ultimately irrelevant to the mootness issue. This is necessarily so, since it is the very act of compliance, rather than the individual or institution which complies, that ends the controversy surrounding the enforceability of any particular summons. Until some subsequent proceeding is commenced, no concrete controversy demanding decision exists.
Second, although I believe the mootness of the Gluck appeal is manifest, the jurisprudence of this Circuit contains ostensibly conflicting authority as to whether compliance with an IRS summons moots an appeal challenging enforcement of that summons. As noted, the decision in Vesco requires that we dismiss the Gluck appeal as moot. The later cases of Waltman and Friedman, however, indicate a contrary result. However, neither Waltman nor Friedman discusses or distinguishes Vesco. They thus invite the particular difficulty encountered in the present appeal.
The question whether compliance with a summons moots an appeal challenging its enforceability is hardly esoteric. Rather, it is one that has arisen repeatedly in the past and that will undoubtedly arise in the future. The district courts in this Circuit should not be required to choose between purportedly conflicting decisions reached by various panels of this court. Of course, as I have earlier noted, to the extent that any conflict exists between Vesco and the later cases, precedent and our Internal Operating Procedures3 dictate that Vesco, as the earlier case, must control. See O. Hommel, 659 F.2d at 354. If, however, the full court feels that a widening conflict exists between Vesco and the developing law of this Circuit or that the rule of Vesco is not supportable and should be overturned, I would urge that the question, whether compliance engenders mootness, be considered by the court en banc. I believe that the integrity of our jurisprudence and the discharge of our function in guiding and informing the district courts require no less. Until an en banc hearing is ordered, Vesco must govern any decision on this issue.
Notes
(2) General Rule of Secrecy. A grand juror, an interpreter, a stenographer, an operator of a recording device, a typist who transcribes recorded testimony, an attorney for the government, or any person to whom disclosure is made under paragraph (3)(A)(ii) of this subdivision shall not disclose matters occurring before the grand jury, except as otherwise provided for in these rules. No obligation of secrecy may be imposed on any person except in accordance with this rule. A knowing violation of Rule 6 may be punished as a contempt of court.
(3) Exceptions.
(C) Disclosure otherwise prohibited by this rule of matters occurring before the grand jury may also be made—
(i) when so directed by a court preliminarily to or in connection with a judicial proceeding;
....
(D) A petition for disclosure pursuant to subdivision (e)(3)(C)(i) shall be filed in the district where the grand jury convened. Unless the hearing is ex parte, which it may be when the petitioner is the government, the petitioner shall serve written notice of the petition upon (i) the attorney for the government, (ii) the parties to the judicial proceeding if disclosure is sought in connection with such a proceeding, and (iii) such other persons as the court may direct. The court shall afford those persons a reasonable opportunity to appear and be heard.
Three separate IRS summonses are challenged in this appeal. In April 1983, two summonses, seeking various financial records of the Glucks, were issued to the Franklin State Bank. See app. at 3, 7. An additional summons was issued to the First National State Bank—Edison. See app. at 11. During the pendency of this appeal, each bank complied with the summonses.In McGarr v. United States, 736 F.2d 912, 918-19 (3d Cir.1984), we faced a similar situation. The appellant had filed a Rule 60(b) motion to extend the time for the filing of a notice of appeal, which is unauthorized by Rule 4(a) and was expressly foreclosed by this court in West v. Keve, 721 F.2d 91, 96 (3d Cir.1983). The motion was filed, however, within the time period prescribed by Rule 4(a)(5) for a motion to extend the time for an appeal. We noted that
We believe that similar action is called for here. We will treat the Glucks’ Rule 60(b) motion as a Rule 59(e) motion. Considered as such, the Glucks’ request for reconsideration of the judgment tolled the running of the time for appeal until April 5, 1984, when that request was denied. The notice of appeal of April 23 was thus timely filed.
The majority suggests that a distinction may be drawn between those cases in which a summons is issued directly to the taxpayer and those in which a summons is issued to a third party, such as a bank or other financial institution. See Maj. op. at 754, n. 3. Specifically, the majority argues that both the Kis and Andersen courts would establish a more lenient mootness standard when compliance results from the actions of a third party. Presumably, the rationale for such a relaxed standard is that a disinterested third party should not be required to resist a summons and risk contempt in order to keep a controversy live.However, because compliance may result from the actions of a third party does nothing to
It appears that some of these courts would nevertheless hold that this case is not moot given that compliance with the summons was carried out by someone other than the appellant, i.e., the bank. These courts distinguish between cases in which the summons is issued to the taxpayer/appellant and those in which it is issued to a third party where the taxpayer has intervened. They reason that it is unreasonable to expect a disinterested third party to resist a summons and risk contempt of court in order to keep a controversy live; thus they hold that compliance by the third party does not moot the appeal. See United States v. Kis, 658 F.2d at 534; United States v. Arthur Andersen & Co., 623 F.2d at 723-24.
See United States Court of Appeals for the Third Circuit, Internal Operating Procedures, Ch. VIII, § C (1983).Because of this similarity, cases involving the exclusionary rule provide some guidance for determining when a summons should be quashed. See infra part III.C.
The taxpayers argue that Baggot does not meet the threshold requirement for prospective application under Chevron Oil because it was clearly foreshadowed by several cases, including In re Grand Jury Proceedings, 309 F.2d 440 (3d Cir.1962); Robert Hawthorne, Inc. v. Director of Internal Revenue, 406 F.Supp. 1098 (E.D.Pa.1976); In re Grand Jury Investigation William H. Pflaumer & Sons, Inc., 53 F.R.D. 464 (E.D.Pa.1971). The IRS contends that Baggot simply “came out of the blue.”
We need not decide the relative importance of the two justifications for the abuse of process rule, however, because the quashing of the summonses in this case would promote neither judicial integrity nor deterrence of governmental misconduct.