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United States v. Jose

filed: December 7, 1995.


Appeal from the United States District Court for the District of Hawaii. D.C. No. MISC-92-00169-DAE. David A. Ezra, District Judge, Presiding.

Before: Alex Kozinski and Michael Daly Hawkins, Circuit Judges, and Roslyn O. Silver,*fn* District Judge. Dissent by Judge Silver.


The Internal Revenue Service appeals the district court's order conditionally enforcing two summonses served on Laddie F. Jose as Trustee of the Jose Business Trust and Jose Family Trust. The IRS challenges the condition of enforcement that requires the Examination Division to give Jose five days notice before disclosing to any other division of the IRS documents produced by Jose. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we dismiss the appeal as not ripe.

The record indicates that the IRS represented to the district court that the documents requested of Jose were for civil tax examination purposes only, not for a criminal investigation. The record does not indicate that the Examination Division has attempted to disclose the documents to any other IRS division, thereby triggering the five-day notice requirement. Thus, any detrimental impact the district court's order may have on the IRS's investigation is, at this time, purely speculative. Accordingly, the IRS's appeal is not ripe for review. The appeal is DISMISSED.



SILVER, District Judge, Dissenting:

Because I would decide this case on the merits and not dismiss it for lack of ripeness, I respectfully Dissent.

The majority opinion is puzzling.

Courts have invoked the ripeness doctrine and refused to decide matters which would involve "entangling themselves in abstract disagreements. . . ." Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S. Ct. 1507, 1515, 18 L. Ed. 2d 681 (1967). Generally, those cases involve situations with very uncertain, remote or contingent events. Dames & Moore v. Regan, 453 U.S. 654, 101 S. Ct. 2972, 2991-92, 69 L. Ed. 2d 918 (1981); Webster v. Mesa, 521 F.2d 442, 444 (9th Cir. 1975)(a challenge to a statutory provision requiring independent candidates to win a total percentage vote in the primary election was not ripe because no independent candidate had ever been disqualified by the statute which made the issue hypothetical). Courts have also relied on the ripeness doctrine in refusing to hear cases where the facts needed further development. Wheeler v. Barrera, 417 U.S. 402, 94 S. Ct. 2274, 41 L. Ed. 2d 159 (1974) (the state should be given the opportunity to comply with a federal program before a decision on compliance could be made). Cases which do not have a concrete impact on the parties, Exxon v. Heinze, 32 F.3d 1399, 1404 (9th Cir. 1994); or where administrative or governmental action is not final, Kinzli v. Santa Cruz, 818 F.2d 1449, 1454 (9th Cir. 1987), have been found not to be ripe for decision.

But where the facts are clear and the district court's decision is erroneous the judiciary has a duty not to interpret the doctrinal roots of ripeness simply to avoid making a decision. Although it is now clear that the district court has abused its discretion, if the IRS proposes to transfer the case to the Criminal Investigation Division, the majority would have the Service make a second trip to this Court to argue the identical position already made in briefs and at oral argument which established the district court's error. The decision is invalid now and does not need the passage of time to enhance or remedy its invalidity. It is wrong today and it will be wrong tomorrow.

Furthermore, the ripeness doctrine recognizes that there is a need to decide a case when the prospect or fear of future events may have a real impact on the present affairs of the parties and cause potential harm. Santa Rosa Band of Indians v. Kings County, 532 F.2d 655, 657 n.1 (zoning ordinance of itself affected adversely the value of land and thereby constituted a sufficient threat of injury), cert. denied, 429 U.S. 1038, 97 S. Ct. 731, 50 L. Ed. 2d 748 (1976); Assiniboine & Sioux Tribes v. Board of Oil and Gas, 792 F.2d 782, 788 (9th Cir. 1986). In this case the restrictions imposed by the District Court Order have a chilling effect on the IRS's ability to conduct effective tax investigations, particularly in the criminal context. See Herbert L. Zuckerman, Check List of Do's and Don'ts in Handling a Tax Fraud Investigation, 29 NYU Instit. on Fed. Taxation, 987, 998 (1971) (time is a taxpayer's ally). To require the IRS to provide notice of a proposed transfer to the Criminal Investigation Division and then suspend the investigation for five days would communicate to the world that a criminal investigation had ensued which certainly could impede and compromise that investigation. It does not take a soothsayer to prognosticate what would happen if the IRS decided to convert the civil investigation to a criminal one and was then required to notify the taxpayer, now a putative defendant, of such proposed transfer. The five-day waiting period would inevitably destroy the effectiveness of any contemplated confidential criminal investigative tool such as a search warrant, arrest warrant, wire interception, or the initiation of a grand jury investigation.

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