Germain Critiques Government's Response to Murphy's Cert. Petition

This morning, I blogged the Government's brief in opposition to the petition for certiorari filed by the taxpayer in Murphy v. IRS, 493 F.3d 170 (D.C. Cir. 7/3/07).  Following up on his earlier analysis of Ms. Murphy's cert. petition, Gregory Germain (Syracuse) comments on the Government's brief in opposition:

What is the goal of a brief opposing a petition for certiorari? Presumably, the goal is to convince the Court to deny the certiorari petition. Supreme Court Rule 10 requires compelling reasons for a grant of certiorari, such as a conflict among the circuits over an important legal issue, a conflict between a circuit court and the highest state court over an important federal question, or a serious procedural irregularity below that requires the Court to exercise its supervisory power. The rule concludes with the following admonition: “A petition for a writ of certiorari is rarely granted when the asserted error consists of erroneous factual findings or the misapplication of a properly stated rule of law.” Given this standard, which is well known to and routinely followed by the clerks reviewing certiorari petitions, why would the parties spend so much time in their briefs discussing the merits of the underlying case rather than emphasizing the relevant legal standard?

The government, in its 17 page opposition, devotes one sentence at the end of its long introduction, and one paragraph at the end of its brief, to the only issue likely to be of concern to the Supreme Court – whether the Court of Appeals’s decision creates a conflict between the circuits. The key sentence at the end of the government’s long introduction says it all: “[The Court of Appeals’s] decision does not conflict with any decision of this Court or of any other court of appeals.”

In my opinion, this sentence should have been put at the top of the brief, and the entire argument should have been structured to show that there is no conflict and thus no basis for certiorari. The Court does not care about the long procedural history and lengthy explanation of the lower courts’ rulings. The clerks can read the decisions for themselves; they don’t need the government to restate the decisions in laborious detail.

So my criticism of the government’s brief concerns its focus, not its content. The taxpayers have to make the case that the Court of Appeals’s decision in Murphy creates a circuit conflict. The government’s brief should focus solely on the taxpayer’s failure to do so.

Murphy argued that the Court of Appeals’s decision conflicts with some 1920s administrative rulings suggesting (after the Supreme Court’s narrow definition of “income” in Eisner v. Macomber) that emotional injury recoveries might not be “income” under the 16th Amendment or the then-existing taxing statutes, and with some later rulings and court decisions that held emotional injury damages to be exempt under the pre-1997 broad exclusion in IRC section 104. The government should have pointed out first and foremost that these are not circuit conflicts. Nevertheless, the government did a fine job of pointing out that the judicial definition of income and the language of IRC section 104 have changed, rendering these rulings irrelevant.

Murphy also argued that the Court of Appeals’s decision conflicts with the Supreme Court’s prior decisions in O’Gilvie, Glenshaw Glass, and with another circuit court’s decision in Dotson. The government properly explains, although with too much detail, that O’Gilvie and Dotson concerned the statutory language in IRC section 104 before the 1996 amendment which limited the exclusion to cases of “personal physical injury or physical sickness.” Similarly, Glenshaw Glass merely recognized that Congress had previously chosen to exempt personal injury awards when it decided that the fraud and anti-trust punitive damages award in issue was taxable. The problem for Murphy is that no court has held that emotional damages awards are non-taxable following Congress’s 1996 amendment to IRC Section 104. There are simply no relevant conflicting authorities from any court, let alone a circuit court of appeals.

Murphy has only one real chance at obtaining certiorari. The government recognizes in its final paragraph that “the court of appeals’ initial opinion received significant attention in the tax bar because of its erroneous holding that taxation of compensatory damages for nonphysical personal injuries is unconstitutional.” Indeed it did. Murphy’s only real chance is for the Supreme Court to ignore its usual rules and grant certiorari because it thinks Murphy’s case would be sexy. Supreme Court – Tax – Sexy? I don’t think so. Motion for certiorari denied.

Rich is the author of the most comprehensive article on Murphy, Taxing Emotional Injury Recoveries:  A Critical Analysis of Murphy v. IRS, 60 Ark. L. Rev. 185 (2007). Prior TaxProf coverage:

• Government Files Brief in Opposition to Cert. Petition in Murphy (3/19/08)
• Germain on Murphy's Cert. Petition (12/17/07)
• Murphy Files Cert. Petition in U.S. Supreme Court (12/14/07)