Payne v. United States

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
For the Fifth Circuit September 8, 2004
Charles R. Fulbruge III
Clerk
No. 03-21031
JERRY S. PAYNE, ET AL.,
Plaintiffs,
JERRY S. PAYNE,
Plaintiff-Appellant,
VERSUS
UNITED STATES OF AMERICA; ET AL.,
Defendants,
UNITED STATES OF AMERICA,
Defendant-Appellee.
Appeal from the United States District Court
For the Southern District of Texas, Houston
( H-95-CV-1364 )
Before KING, Chief Judge, and DeMOSS, and STEWART, Circuit Judges.
PER CURIAM:*
Appellant Jerry Payne filed suit against the United States to
recover damages for alleged unlawful disclosure of confidential tax
*
Pursuant to 5TH CIR. R. 47.5, the Court has determined that this
opinion should not be published and is not precedent except under
the limited circumstances set forth in 5TH CIR. R. 47.5.4.
return information by Internal Revenue Service (“IRS”) Special
Agent Daniel Batista during a criminal investigation. Payne v.
United States, 91 F. Supp. 2d 1014 (S.D. Tex. 1999). This wrongful
disclosure claim was tried to the court, and at the conclusion of
the trial, the district court found that: (1) Batista made a large
number of third-party contacts in the course of his investigation
of Payne without first determining whether the information sought
was otherwise reasonably available; (2) Batista did not consider
himself under any obligation to seek necessary information from
Payne; (3) Batista disclosed numerous items of return information
to these third parties, including the fact that Payne was subject
to a criminal investigation; (4) there was no evidence that any of
the disclosures of return information were necessary to obtain the
information Batista sought; (5) Batista’s disclosures did not
result from a good faith, but erroneous, interpretation of the
applicable statutory provision; (6) Batista’s improper disclosures
damaged Payne's law practice; (7) Batista grossly abused his
discretion in making the numerous third-party contacts without
first affording Payne the opportunity to provide the needed
information and in particular by inquiring about Payne’s
involvement with illegal drugs; and (8) the United States’s
litigation position was unreasonable given that Batista made no
determination as to whether the information he sought was otherwise
reasonably available. The district court awarded Payne $1,536,680
in actual damages, $1,000 in punitive damages, and $105,361 in
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attorney’s fees and costs.
On appeal, another panel of this Court reversed the judgment
of the district court and remanded the case for further findings in
light of this Court’s decision in Gandy v. United States, 234 F.3d
281 (5th Cir. 2000), which was issued subsequent to the district
court’s disposition of the case. Payne v. United States, 289 F.3d
377, 385 (5th Cir. 2002). On remand, the district court, applying
the teachings of Gandy, ordered that Payne take nothing, finding
that although the IRS agent improperly disclosed Payne’s
confidential return information, no liability attached because such
disclosures resulted from the agent’s good faith, but erroneous,
interpretation of the Internal Revenue Code. Payne v. United
States, 290 F. Supp. 2d 742, 759 (S.D. Tex. 2003). Payne timely
appealed.
Having carefully reviewed the entire record of this case and
having fully considered the parties’ respective briefing and
arguments, we find no reversible error in the district court’s
amended findings of fact and conclusions of law. We therefore
AFFIRM the amended final judgment of the district court for the
reasons stated in its order.
AFFIRMED.
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