Anonymous v. Commissioner

127 T.C. No. 6
UNITED STATES TAX COURT
ANONYMOUS, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 7199-06. Filed September 6, 2006.
P is a foreign national. A member of P’s family was
kidnapped several years ago and held for ransom. P filed a
motion to seal the record because P fears that P or other
family members might be targeted for another kidnapping if
information about P’s identity or financial circumstances
were publicly disclosed.
Held: The significant risk of physical harm to P and
P’s family outweighs the public interest in access to court
proceedings under these circumstances. P’s motion to seal
the record shall be granted, and P is permitted to proceed
anonymously.
Sealed, for petitioner.
Sealed, for respondent.
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OPINION
KROUPA, Judge: This matter is before the Court on
petitioner’s motion to seal court records. Petitioner requests
us to seal the record in this case and permit petitioner to
proceed anonymously. Petitioner has demonstrated a significant
risk of physical harm to petitioner and petitioner’s family
members if the record were to remain open. We conclude that it
is appropriate to seal the record and permit petitioner to
proceed anonymously.
Unless otherwise indicated, all section references are to
the Internal Revenue Code, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
Background
Petitioner is a foreign national. At the time petitioner
filed the petition, petitioner resided outside the United States.
A member of petitioner’s family was kidnapped and held for ransom
several years ago. Kidnappings are a rampant problem in the
country where petitioner and most of petitioner’s family reside.
Petitioner fears that petitioner or other members of petitioner’s
family might also be kidnapped and their lives placed in jeopardy
if petitioner’s identity or petitioner’s financial circumstances
were made public in this case. Petitioner filed the motion to
seal court records at the same time petitioner filed the
petition.
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Discussion
We shall begin by describing the general presumption of
openness that attaches to judicial proceedings. Generally,
official records of all courts shall be open and available to the
public for inspection and copying. Nixon v. Warner Commcns.,
Inc., 435 U.S. 589, 597 (1978); In re Coordinated Pretrial
Proceedings in Petroleum Prods. Antitrust Litig., 101 F.R.D. 34,
38 (C.D. Cal. 1984). Hearings and the evidentiary record of
proceedings before this Court shall be open to the public. Secs.
7458, 7461(a). Common law, statutory law, and the U.S.
Constitution all support this important principle. Nixon v.
Warner Commcns., Inc., supra; Willie Nelson Music Co. v.
Commissioner, 85 T.C. 914, 918 (1985); In re Coordinated Pretrial
Proceedings in Petroleum Prods. Antitrust Litig., supra. The
right to inspect and copy judicial records, however, is not
absolute. Nixon v. Warner Commcns., Inc., supra at 598. Courts
have supervisory power over their own records and files, and
access to records has been denied where the court files might
become a vehicle for improper purposes. Id.
Sealing the Record
This Court has broad discretionary power to control and
seal, if necessary, records and files in our possession. Willie
Nelson Music Co. v. Commissioner, supra. We may, in our
discretion, seal the record or portions of the record if justice
so requires and the party seeking such relief demonstrates good
cause. Sec. 7461(b)(1); Rule 103(a); AT&T Co. v. Grady, 594 F.2d
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594, 596 (7th Cir. 1978); Willie Nelson Music Co. v.
Commissioner, supra at 920; Tavano v. Commissioner, T.C. Memo.
1991-237, affd. 986 F.2d 1389 (11th Cir. 1993). To determine
whether sealing the record is appropriate, we must weigh the
presumption, however gauged, in favor of public access to
judicial records against the interests advanced by the parties.
Nixon v. Warner Commcns., Inc., supra at 602; AT&T Co. v. Grady,
supra at 598; Willie Nelson Music Co. v. Commissioner, supra at
919.
Taxpayers seeking to seal court records must come forward
with appropriate testimony and factual data to show good cause.
Estate of Yaeger v. Commissioner, 92 T.C. 180, 189 (1989); Willie
Nelson Music Co. v. Commissioner, supra at 920 (citing Wyatt v.
Kaplan, 686 F.2d 276, 283 (5th Cir. 1982); United States v.
United Fruit Co., 410 F.2d 553, 557 n.11 (5th Cir. 1969)); Tavano
v. Commissioner, supra. Taxpayers may not rely on conclusory or
unsupported statements to establish claims of harm that would
result from disclosure. Willie Nelson Music Co. v. Commissioner,
supra at 920; In re Coordinated Pretrial Proceedings in Petroleum
Prods. Antitrust Litig., supra at 44.
Good cause has been demonstrated and records sealed where
patents, trade secrets, or confidential information are involved
or where an individual’s business reputation will be hurt. See
In re Smith, 656 F.2d 1101 (5th Cir. 1981) (striking an
individual’s name from factual resumes on due process grounds as
resumes were prepared in criminal proceeding where the individual
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was not indicted); Crystal Grower’s Corp. v. Dobbins, 616 F.2d
458 (10th Cir. 1980) (sealing portions of record involving
documents alleged to be subject to attorney-client privilege or
work product doctrine); In re Sarkar, 575 F.2d 870 (C.C.P.A.
1978) (sealing record involving patent application proceeding so
that the information would remain a trade secret in the event of
an adverse decision); Sendi v. Prudential-Bache Sec., 100 F.R.D.
21 (D.D.C. 1983) (sealing parties’ tax returns to protect
confidentiality and privacy interests). Merely asserting
annoyance, embarrassment, or harm to a person’s personal
reputation, however, is generally insufficient to demonstrate
good cause and overcome the strong common law presumption in
favor of access to court records. Willie Nelson Music Co. v.
Commissioner, supra at 921, 925 (record not sealed where
nationally known entertainer sought to avoid public scrutiny or
news coverage of case); Tavano v. Commissioner, supra (record not
sealed where taxpayer had civil suit pending against employer and
did not want employer to learn facts of case).
Petitioner submitted affidavits together with supporting
documentation that demonstrate the severe degree of harm
petitioner and petitioner’s family members would risk if we did
not seal the record. These affidavits and documentation show
that a member of petitioner’s family was kidnapped several years
ago and that kidnapping is rampant in the country where
petitioner and most of petitioner’s family reside. Petitioner
fears that publicizing petitioner’s identity and financial
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circumstances will increase the risk that either petitioner or a
member of petitioner’s family will be the target of another
kidnapping and that petitioner’s life or the lives of
petitioner’s family will be placed in jeopardy. We find these
facts compelling. Petitioner has demonstrated through these
affidavits that physical harm has actually been inflicted against
a member of petitioner’s family, and there is a risk that the
same type of physical harm may be inflicted upon petitioner or
another member of petitioner’s family.
We must evaluate this risk of physical harm against the
public interest in access to judicial records. See Nixon v.
Warner Commcns., Inc., supra at 602; Does I Thru XXIII v.
Advanced Textile Corp., 214 F.3d 1058, 1069 (9th Cir. 2000); AT&T
Co. v. Grady, supra at 596; Willie Nelson Music Co. v.
Commissioner, supra at 919. After careful consideration of the
facts of this case, we find that the balance favors petitioner.
The risk of extreme physical harm to petitioner and petitioner’s
family outweighs the countervailing public interest favoring open
judicial proceedings.
Permission To Proceed Anonymously
Petitioner also requests permission to proceed anonymously.
There is no provision in our Rules that permits a taxpayer to
proceed anonymously.1 The Rules generally require taxpayers’
1
Written determinations of the Commissioner such as rulings,
determination letters, technical advice memoranda or Chief
Counsel Advice and background file documents are generally made
public with certain deletions of names, addresses, and other
(continued...)
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names to be included on pleadings and other papers filed with the
Court. See Rules 32(a) (requiring a party’s name to be set forth
on pleadings), 23(a) (requiring all papers filed to contain the
full name and surname of each petitioner), 60(a) (requiring a
case be brought by and in the name of a person against whom the
Commissioner determined the deficiency in the case of a
deficiency notice).
When there is no applicable Rule, we may prescribe the
procedure, giving particular weight to the Federal Rules of Civil
Procedure to the extent adaptable to the matter at hand. Rule
1(a). Where our Rules are silent, we have looked to the Federal
Rules of Civil Procedure and cases in other Federal courts
interpreting the Federal Rules of Civil Procedure for guidance.
See Willie Nelson Music Co. v. Commissioner, 85 T.C. at 917
(looking to decisions interpreting rule 26(c) of the Federal
Rules of Civil Procedure for guidance in interpreting Rule
103(a)); Allen v. Commissioner, 71 T.C. 577, 579 (1979).
Several U.S. Courts of Appeals have permitted litigation to
proceed anonymously. See, e.g., Does I Thru XXIII v. Advanced
Textile Corp., supra at 1067; James v. Jacobson, 6 F.3d 233, 238
(4th Cir. 1993); Doe v. Stegall, 653 F.2d 180, 185-186 (5th Cir.
1981). The Supreme Court and the U.S. Court of Appeals for the
District of Columbia Circuit have occasionally permitted
1
(...continued)
identifying information. Sec. 6110(a), (c). A person may act to
restrain disclosure of these materials, however, under the
procedures set forth in sec. 6110(f).
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anonymous litigation to proceed. Qualls v. Rumsfeld, 228 F.R.D.
8, 10 (D.D.C. 2005) (citing Roe v. Wade, 410 U.S. 113 (1973), and
Doe v. Sullivan, 938 F.2d 1370, 1374 (D.C. Cir. 1991)).
The decision whether to allow parties to proceed anonymously
is in the discretion of the trial court. James v. Jacobson,
supra at 238. A party may generally proceed anonymously when the
trial court reasonably determines that the need for anonymity
outweighs the prejudice to the opposing party and the general
presumption that the parties’ identities are public information.
See Does I Thru XXIII v. Advanced Textile Corp., supra at 1068.
Some factors to be considered in deciding whether a party may
proceed anonymously include whether the party challenges
governmental activity, whether the party is required to disclose
information of the utmost intimacy, and whether the party is
compelled to admit his or her intention to engage in illegal
conduct. Doe v. Stegall, supra at 185.
Petitioner has a unique need for anonymity in this case.
Petitioner fears that physical harm may come to petitioner or
petitioner’s family and their lives placed in jeopardy if
petitioner’s identity or financial circumstances were made public
in this case. We weigh this risk of physical harm against the
risk of prejudice to respondent and the public interest in
knowing the parties’ identities. See Does I Thru XXIII v.
Advanced Textile Corp., supra at 1068. We hold that petitioner
may preserve anonymity in the special circumstances of this
proceeding because petitioner’s need for anonymity outweighs
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prejudice to the opposing party and the public interest in
knowing the identities of parties to judicial proceedings. There
is little risk of prejudice to respondent here. Petitioner wants
only to keep the information from public view. Petitioner is
willing to provide sealed copies of documents to respondent.
Further, the risk of severe physical harm to petitioner and
petitioner’s family outweighs the general public interest in
knowing the parties’ identities. Accordingly, we conclude that
the balance is in petitioner’s favor, and petitioner may
therefore proceed anonymously.
Prior Public Disclosure of Information
Respondent objects to sealing the record here because some
of the information has already been disclosed in a different
judicial forum, and the records of that forum have not yet been
sealed. Respondent argues that we therefore cannot maintain or
protect petitioner’s privacy due to the previous disclosure. We
disagree. The public availability of some facts in another forum
should not bar protection against the risk of future harm caused
by disclosure in this Court. See Does I Thru XXIII v. Advanced
Textile Corp., supra at 1069 n.11 (“Past acts of bravery in the
face of danger is poor rationale for denying the courageous
individual protection against future harm.”); Estate of Yaeger v.
Commissioner, 92 T.C. at 183, 190. The prior disclosure of some
information does not preclude our decision to seal the record in
this Court and permit petitioner to proceed anonymously.
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Conclusion
After a careful review of the facts and circumstances of
this case, we find that the demonstrated risk of severe physical
harm to petitioner and petitioner’s family outweighs the public
interest in access to judicial records and to the identity of the
parties. There is little prejudice to respondent in permitting
petitioner to proceed anonymously. Accordingly, we shall grant
petitioner’s motion to seal the entire record and permit
petitioner to proceed anonymously. We do not address whether or
to what extent any later opinions in this case will be sealed.
To reflect the foregoing,
An appropriate
order will be issued.