Save-A-Patriot files writ with SC

[The Observer]

SAVE-A-PATRIOT FELLOWSHIP AND JOHN B. KOTMAIR, JR.,
Petitioners,
v.
UNITED STATES OF AMERICA
Respondent.

Release Date: JANUARY 02, 2008

IN THE
SUPREME COURT OF THE UNITED STATES

On Petition for Writ of Certiorari to the
United States Court of Appeals for
the Fourth Circuit

PETITION FOR WRIT OF CERTIORARI

George E. Harp
Counsel of Record
610 Marshall St.
Ste. 619
Shreveport, La 71101
(318) 424-2003

QUESTIONS PRESENTED

The United States District Court for Maryland issued a permanent injunction against unincorporated association Save-A-Patriot Fellowship and its fiduciary John B. Kotmair, Jr. under the provisions of Internal Revenue Code sections 7402(a) and 7408. The Fourth Circuit Court of Appeals affirmed for the "reasons stated by the district court." Questions presented are:

1. Whether the District Court for Maryland has jurisdiction under sections 7402(a) and 7408 of the Internal Revenue Code to enjoin the advocacy or sale of politically dissenting opinions concerning the meaning and interpretation of the tax laws.

2. Whether the District Court for Maryland's order to produce a list of a political association's members to the government, where such production is unrelated to preventing Petitioners' misconduct, violates the First Amendment.

3. Whether the Fifth Amendment's guarantee of due process requires the District Court to comply with the specificity of terms required under the Federal Rule of Civil Procedure 65(d) when issuing an injunction under the authority of sections 7402(a) and 7408 of the Internal Revenue Code.

TABLE OF CONTENTS

TABLE OF AUTHORITIES

OPINIONS BELOW

JURISDICTION

CONSTITUTIONAL, STATUTORY, AND REGULATORY PROVISIONS

STATEMENT

REASONS FOR GRANTING THE PETITION

I. THE DECISION BELOW ENLARGES THE SCOPE OF THE INJUNCTION AUTHORITY
GRANTED BY THE INTERNAL REVENUE CODE

A. Scope of injunction authority under 26 USC section 7408 is
limited by penalty statutes involved

B. Failure to strictly construe 26 USC section 6700 sets the
federal circuits in conflict with this Court's commercial speech
jurisdiction

C. Failure to strictly construe 26 USC section 6701 results in a
not legal theory departing from all federal circuit holdings

II. THE FOURTH CIRCUIT'S DISREGARD OF SUBJECT MATTER JURISDICTION
RESULTED IN AN INJUNCTION ORDER WHICH CANNOT BE RECONCILED WITH THE
FIRST AMENDMENT

III. THE ORDER TO PRODUCE CUSTOMER AND MEMBER LISTS INFRINGES PRIVACY
IN ASSOCIATION

A. The order is outside the scope of proper injunctive relief

B. An exacting scrutiny of compelled disclosure is required to
preserve privacy in freedom of association

IV. THE FOURTH CIRCUIT'S DISREGARD OF FRCP 65(D) THREATENS
DEPRIVATION OF LIBERTY WITHOUT DUE PROCESS

CONCLUSION

TABLE OF AUTHORITIES

Cases

Andersen v. U.S., 298 F.3d 804 (9th Cir. 2002)

Bates v. City of Little Rock, 361 U.S. 516 (1960)

Belk v. Charlotte-Mecklenburg Board of Education, 269 F.3d 305
(4th Cir. 2001)

Bolger v. Youngs Drug Products Corp., 463 U.S. 60 (1983)

Breard v. City of Alexandria, La., 341 U.S. 622 (1951)

Buckley v. Valeo, 424 U.S. 1 (1976)

Cantwell v. State off Connecticut, 310 U.S. 296 (1940)

Central Hudson Gas & Electric Corp. v. Public Service Commission
of New York, 447 U.S. 557 (1980)

Commissioner of Internal Revenue v. Acker, 361 U.S. 87 (1959)

Federal Communications Commission v. American Broadcasting
Co., 347 U.S. 284 (1954)

Fifth Ave. Peace Parade Committee v. Gray, 480 F.2d 326 (2nd
Cir. 1973)

Gibson v. Florida Legislative Comm., 372 U.S. 539 (1963)

Grosjean v. American Press Co., 297 U.S. 233 (1936)

Keppel v. Tiffin Savings Bank, 197 U.S. 356 (1905)

Marshall v. Bramer, 828 F.2d 355 (6th Cir., 1987)

Marshall v. Stevens People and Friends for Freedom, 669 F.2d
171 (4th Cir. 1981)

McIntyre v. Ohio Elections Commission, 514 U.S. 334 (1995)

Mills v. Alabama, 384 U.S. 214 (1966)

NAACP v. Alabama, 357 U.S. 449 (1958)

NAACP v. Button, 371 U.S. 415 (1963)

New York Times Co. v. Sullivan, 376 U.S. 254 (1964)

Petition of Public National Bank, 278 U.S. 101 (1928)

Pittsburgh Press Co. v. Pittsburgh Commission on Human Relations,
413 U.S. 376 (1973)

Save-A-Patriot Fellowship v. U.S., 962 F.Supp 695 (1996)

Schmidt v. Lessard, 414 U.S. 473 (1974)

Shelton v. Tucker, 364 U.S. 479 (1960)

Thompson v. Western States Medical Center, 535 U.S. 357 (2002)

U.S. v. Bell, 414 F.3d 474 (3rd Cir. 2005)

United States v. William J. Benson, 1:04-cv-07403 (N.D.Ill.)

U.S. v. Buttorf, 761 F.2d 1056 (5th Cir., 1985)

U.S. v. Estate Preservation Services, 202 F.3d 1093 (9th Cir. 2000)

U.S. v. Hammoud, 381 F. 3d 316 (4th Cir. 2004)

U.S. v. Oregon State Medical Society, 343 U.S. 326 (1952)

U.S. v. Rumely, 345 U.S. 41 (1953)

U.S. v. Schiff, 379 F.3d 621 (9th Cir., 2004)

Valentine v. Chrestensen, 316 U.S. 52 (1942)

Village of Schaumburg v. Citizens for a Better Environment,
444 U.S. 620 (1980)

Virginia State Board of Pharmacy v. Virginia Citizens Consumer
Council, Inc., 425 U.S. 748 (1976)

Constitution

First Amendment

Fifth Amendment

Statutes

26 U.S.C. section 6662
26 U.S.C. section 6700
26 U.S.C. section 6701
26 U.S.C. section 7203
26 U.S.C. section 7402
26 U.S.C. section 7408

Federal Rules

FRCP Rule 65(d)

PETITION FOR WRIT OF CERTIORARI

Petitioners Save-A-Patriot Fellowship (SAPF) and John B. Kotmair, Jr. respectfully petition for a writ of certiorari to review the judgment of the United States Court of Appeals for the Fourth Circuit in this case.

OPINIONS BELOW

The unpublished per curiam opinion of the Court of Appeals is reported at 234 Fed.Appx. 65 (App. 2). The order denying petitioners' petitions for rehearing en banc is unreported (App. 1). The opinion of the U.S. District Court for the District of Maryland is reported at 2006 WL 4846388 (App. 4). The permanent injunction order of the District Court is unreported (App. 28).

JURISDICTION

The opinion of the Fourth Circuit Court of Appeals was filed on July 26, 2007. The order denying the petitions for rehearing en banc was filed on October 1, 2007. This Court has jurisdiction under 28 U.S.C. section 1254(1).

CONSTITUTIONAL, STATUTORY, AND
REGULATORY PROVISIONS INVOLVED

The constitutional, statutory, and regulatory provisions involved are set forth in the Appendix. They are: the First and Fifth Amendments (App. 43), 26 U.S.C. sections 6700, 6701, 7402(a), and 7408 (App. 44-49), and Federal Rules of Civil Procedure 65(d) (App. 50).

STATEMENT

This action arises from the District Court's grant of an injunction against an unincorporated association advocating dissenting political opinions with regard to the interpretation of the tax laws of the United States. Under the authority granted by 26 U.S.C. section 7408,/1/ the District Court held that the actions and speech of SAPF can be enjoined because they violate section 6700 and section 6700, which penalize commercial speech related to abusive tax shelters and aiding and abetting understatements of liability, respectively. The Court also held that section 7402(a) gave it general authority to enjoin the bulk of SAPF political advocacy under the theory that such advocacy interfered with and caused irreparable harm to the IRS.

1. Petitioner SAPF is a 23-year-old unincorporated association founded by its current fiduciary Kotmair. Save-A-Patriot Fellowship v. U.S., 962 F. Supp 695 (1996). Members join SAPF in order to more effectively advocate their dissenting views, and to assist each other in exercising their constitutional and due process rights. SAPF describes itself in its mission statement:

The S.A.P. Fellowship is a 1st Amendment association dedicated to
seeing that the IRS and other government personnel obey the law.
Our association recognizes the necessity of taxation . . . but we
also recognize that this necessity has provisions in the law, and
the government, in meeting its exigencies, may not extend its
activities beyond the law.

The Fellowship actively promotes the study of the law and the
assertion of one's rights in accordance with the law. It does not
"protest" or "object" to any tax, income or otherwise, and is NOT
a "tax protest" organization.

. . . Fellowship members believe that many [IRS] employees
routinely misapply and illegally enforce the: provisions of the
law and that the public must find a way to hold them within the
law. To that end the Fellowship educates the public, shows in its
publications what the law actually says, and attempts to clarify
the limitations of various tax laws as was intended by Congress.
The Fellowship does not advocate or condone unlawful resistance,
protest, or other like actions.

The dissenting political message advocated by SAPF and at odds with numerous federal court decisions is that Congress did not enact the income tax laws to tax American citizens. App. 16. Without question, this message is not a popular one. SAPF has distributed this political message through the sale of Just The Facts, a 12-hour video seminar on the tax laws, Piercing the Illusion, a book written by John Kotmair, newsletters, and various other publications and audio and video presentations.

2. The District Court for Maryland granted Respondent, the United States of America ("the government"), an injunction under IRC sections 7402(a) and 7408 upon summary judgment motion, despite numerous procedural objections and genuine issues of disputed fact. The injunction is vague and overbroad in its terms, enjoining such activities as assisting persons with correspondence to the IRS, assisting persons with court filings related to taxes, and even distributing newsletters, books, manuals and videotapes or engaging in "similar conduct that substantially interferes with the administration and enforcement of the internal revenue laws." App. 28-32).

3. Petitioners filed timely motions for new trial and for modification of the injunction, arguing that the opinion and order were not specific in terms as mandated by Federal Rule of Civil Procedure 65(d) and that summary judgment was not warranted in light of the disputed issues of material fact. Both motions were denied. App. 33.

4. Petitioners filed a timely appeal in the Fourth Circuit on the grounds which give rise to the questions for review in this Court: (1) that the injunction lacked the specificity required by Federal Rule of Civil Procedure 65(d); (2) that the jurisdictional statutes invoked did not establish the subject matter jurisdiction necessary to effect an injunction against SAPF's activities and speech; and (3) that the order to provide the private personal information of Save-A-Patriot Fellowship members violates the First Amendment rights of freedom of association and privacy in such associations. The Fourth Circuit affirmed the issuance of the injunction, "for the reasons stated by the district court." (234 Fed. Appx. 65, at **1) Petitioners filed timely petitions for rehearing en banc, which were subsequently denied on October 1, 2007.

5. In its decision, the District Court acknowledged that to "prove a violation of section 6700 that would then warrant the issuance of an injunction under section 7408," the government had to prove that:

(1) the defendants organized or sold, or participated in the
organization or sale of: an entity, plan, or arrangement; . . .
(2) they made or caused to be made, false or fraudulent
statements concerning the tax benefits to be derived from the
entity, plan, or arrangement; . . . Estate Preservation,
202 F.3d at 1098. App. 12.

Having determined that the false statements subject to penalty must concern the tax benefits to be derived from the entity, plan, or arrangement, the District Court proceeded to identify statements it described only as "falsehoods about the tax laws" (App. 14. FN6) as violative of section 6700.:

. . . SAPF represented, inter alia: that taxable income is
limited to "income that has been 'earned' while living and
working in certain 'foreign' countries or in the U.S. possessions
and territories;" that there is no requirement for most Americans
to file tax returns or have taxes withheld from their wages; and
that one can "quit" the Social Security program. App. 16.

The District Court did not find these statements were made concerning any tax benefits said to result from participation in a plan or arrangement, but rather statements made "to encourage individuals to join its 'Fellowship,' and make use of its products and services." It was noted by the District Court that "Defendants readily acknowledge that courts have consistently rejected the truth of each of these propositions [about the tax laws] . . . they simply choose to reject and ignore those holdings." App. 16.

In response to SAPF's argument that all the statements complained of by the government were in fact dissenting opinions it holds about the operations of the tax laws -- as acknowledged by the District Court, supra -- and not statements made concerning tax benefits of SAPF membership, products, or services, the District Court substituted an element of its own design: an unstated implication, derived, in the Court's view, from the sales of "forms, letters, and 'paralegal' services," that "only those that follow SAPF's plan will be able to reap those benefits [potentially available to any American citizen]." App. 15.

On appeal, SAPF argued the failure of the District Court to identify even one statement which met the section 6700 requirement -- that such statement (s) be "false" only with regard to "tax benefits to be derived from the entity, plan or arrangement" -- rendered the summary judgment erroneous. SAPF further argued that the statements identified by the District Court did not violate the elements established by Congress in the plain words of section 6700, and hence were beyond the jurisdiction of the District Court to enjoin.

Petitioners informed the Fourth Circuit that consideration of this element of section 6700 was raised for the first time in the Federal Circuits, and that an important question, existed as to the scope of injunctions reached without consideration of this element. The Fourth Circuit failed to construe the statute or make any conclusion of law.

6. In its decision, the District Court acknowledged that "to establish a violation of section 6701 warranting an injunction under section 7408," the government must prove:

(1) the defendant prepares, assists in, procures, or advises the
preparation of any portion of a return, affidavit., claim, or
other document; [and that] (3) the defendant knows that such
portion [if used in connection with any material matter arising
under the internal revenue laws] would result in an
understatement of the liability for tax of another person. . . .
App. 18.

Having acknowledged that the underlying crime aided and abetted by a section 6701 violation is an "understatement of the liability for tax," the District Court identified that crime as cognizable "by . . . simply refus[ing] to file a return." App. 19. The District Court held this crime was aided and abetted by Petitioners' "prepar[ing] correspondence for its members that it knows will be used (and in fact, has been used) in connection with matters material to the internal revenue laws." App. 18. The Court identified the letters as "protest letters" (App. 17) and described the manner in which they were employed:

When the IRS sends notices to SAPF members exposing the
frivolousness of the "U.S.-Sources" argument and requesting that
they file properly completed income tax returns, SAPF . . .
submits to the IRS on behalf of its members a number of different
formletter responses. . . . Kotmair, without denying SAPF sends
the letters, simply affirms that "[t]he documents in question
contain true statements from the law." App. 6.

On appeal, SAPF argued that the underlying crime which must be aided and abetted to invoke the jurisdiction of section 6701 -- the "understatement of liability" -- is not the crime of failure to file defined and penalized under section 7203, but is instead the crime penalized under section section 6662, specifically defined as involving cases where a return is filed. Since the District Court made no finding that any SAPF member (or customer) had been aided or abetted in the commission of a crime involving the filing of a return, SAPF argued that the essential element necessary to find a violation of this aiding and abetting statute was missing.

Petitioners informed the Fourth Circuit that consideration of this element of section 6701 in the absence of return preparation was raised for the first time in the Federal Circuits, and that an important question existed as to the scope of injunctions reached without consideration of this element. The Fourth Circuit failed to construe the statute or address the issue in its opinion.

7. The District Court held it had jurisdiction under section 7402 (App. 20) to order Petitioners to produce lists to the United States of two categories of individuals: (1) SAPF members, whether full or associate, and (2) customers who purchased SAPF products and services. App. 31. In spite of the government's admission that it already knew many of the individuals for whom Mr. Kotmair had written to the IRS, the Court determined that this list was needed because of a "possibility" that many do not file returns, and concluded that such injunctive relief was "an appropriate means to alleviate some of the harm caused by Defendants' conduct and to mitigate further harm." App. 24.

On appeal, Petitioners argued that SAPF's status as a membership organization espousing political views was already established in Kotmair v. United States, supra, and submitted that this order would chill the First Amendment right to freedom of association and threatened the destruction of the organization altogether. The Fourth Circuit failed to apply the strict scrutiny necessary to prevent infringement of this First Amendment protection.

8. The District Court granted a stay pending appeal, recognizing "the potential immediate impact from enforcement of the injunction on Defendants outweighs the harm to Plaintiff occasioned by a brief delay in enforcement," and that "As to the precise permissible scope of the injunctive relief, . . . there are issues raised that are sufficiently 'serious, substantial, difficult and doubtful, as to make them fair ground for litigation.'" App. 37.

Although the District Court recognized that fundamental rights may be infringed upon by the broad scope of the injunction granted, the Fourth Circuit declined to address the issues surrounding the permissible scope of injunctive relief upon appeal.

REASONS FOR GRANTING THE PETITION

The Fourth Circuit has affirmed the issuance of an injunction employing such broad and general language it cannot be reconciled with the requirements of F.R.C.P 65(d), nor with the standards of due process (including prior notice) established by this Court. Unlike cases decided in the federal circuits before, where the courts of appeals narrowed the prohibitions to conform with the protections of the First Amendment failed to provide the necessary specificity or any narrowing interpretation of the injunction. This Court's supervisory control is needed to protect Petitioners from the irreparable harm of being forced to curtail all First-Amendment protected activity to avoid inadvertent contempt charges.

The injunction also conflicts with the holdings of this Court by forcing Petitioners to provide the private personal information about its members, violating the right to freedom and privacy in associating with others to advocate their political beliefs. This case is ripe for review on this issue because Petitioner SAPF, unlike the prior cases brought under section 6700, is a bona fide unincorporated political association engaged in political advocacy.

Finally, the injunction restrains Petitioners from expressing their political beliefs by mischaracterizing such beliefs as "false commercial speech." This case presents a good forum to decide this important federal question because the Courts below utterly failed to particularize how any of Petitioners' speech falls into the category of commercial speech so as to be subject to prohibition.

This Court has developed a substantial body of law regarding the protection afforded by the First Amendment to commercial speech. This body of law was developed within the context of laws and regulations which laid restraints upon commercial speech. In recent years, the federal circuits have begun to develop a body of law with respect to the protection afforded by the First Amendment to commercial speech which is at odds with the decisions of this Court, and this Court's review is needed to prevent the inferior courts from overreaching.

Political speech, receiving core First Amendment protection, is subject only to legislative restrictions tailored to serve an overriding state interest. See, e.g., McIntyre v. Ohio Elections Commission, 514 U.S. 334, 347 (1995). Restrictions on commercial speech are subject to the intermediate scrutiny set forth by Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, 447 U.S. 557 (1980). The advertisement of illegal activity receives no First Amendment protection at all. See, e.g., Pittsburgh Press. Co., 413 U.S. 376, at 388 (1973). These varying levels of protection have rendered the label the federal courts give speech paramount in determining the level of protection such speech is afforded. With the rise of recent case law in the Circuits respecting section 6700 and section 6701 -- see, e.g., U.S. v. Schiff, 379 F.3d 621 (9th Cir., 2004), U.S. v. Bell, 414 F.3d 474 (3rd Cir. 2005) -- it has become apparent that the manipulation of these labels to enjoin speech disfavored by the IRS threatens to deprive political dissent regarding the income tax laws of the protections of the First Amendment. This Court's guidance is needed to reset the standards both for the penalty statute construction and misuse of commercial speech doctrine divorced from underlying legislation.

I. THE DECISION BELOW ENLARGES THE SCOPE OF THE INJUNCTION
AUTHORITY GRANTED BY THE INTERNAL REVENUE CODE.

A. Scope of injunction authority under 26 USC section 7408 is limited by penalty statutes involved.

IRC section 7408 confers jurisdiction upon a District Court to enjoin "engaging in such conduct or in any other activity . . . (1) subject to penalty under section 6700, 6701 []." App. 49. Since only activities "subject to penalty" can be enjoined, the court's first duty must necessarily be to determine the precise activities subject to penalty under sections 6700 and 6701.

This Court has repeatedly affirmed that penalty statutes are to be strictly construed against the government:

The law is settled that 'penal statutes are to be construed
strictly,' Federal Communications Commission v. American
Broadcasting Co., 347 U.S. 284, 296, and that one 'is not to
be subject to a penalty unless the words of the statute plainly
impose it,' Keppel v. Tiffin Savings Bank, 197 U.S. 356,
362. Commissioner of Internal Revenue v. Acker, 361 U.S.
87, 91 (1959). (internal citations omitted)

In order to construe penalty statutes, courts are to take every word of the statute under consideration. "No rule of statutory construction has been more definitely stated or more often repeated than the cardinal rule that 'significance and effect shall, if possible, be accorded to every word.'" Petition of Public National Bank, 278 U.S. 101, 104 (1928).

The District Court, quoting U.S. v. Buttorf, 761 F.2d 1056, noted that when an injunction is explicitly authorized by statute, proper discretion requires its issue if the "prerequisites for the remedy have been demonstrated." App. 12. The prerequisites are, according to section 7408, that "the person has engaged in any conduct subject to penalty" under sections 6700 or 6701. App. 11. While the District Court acknowledged all the elements of such conduct, see supra, the element of a statement made concerning the tax benefits to be derived from participation in a plan or arrangement was missing from its findings. Thus, although the Court found several statements, its failure to test those statements against the statutory elements required to be proved allowed the government to evade its burden of "proving each element necessary for the issuance of an injunction by a preponderance of the evidence." (citing United States v. Estate Preservation Services, 202, F. 3d 1093, 1098 (9th Cir. 2000). App. 12.

In affirming the District Court, the Fourth Circuit deviated from this cardinal rule in rendering judgment, which in turn led to a failure to strictly construe the statutes against the government, and ultimately resulted in an injunction which lies outside the jurisdiction of the statutes invoked, and consequently, in determining the scope of an injunction which can issue under section 7408.

B. Failure to strictly construe 26 USC section 6700 sets the federal circuits in conflict with this Court's commercial speech jurisdiction.

This Court first offered a clear and narrow definition of commercial speech in Pittsburgh Press Company v. Pittsburgh Commission on Human Relations, 413 U.S. 376, at 385 (1973) as that speech which "propose[s] a commercial transaction." Since then, this Court has expanded upon that definition to hold that commercial speech is also "expression related solely to the economic interest of the speaker and its audience." Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, 447 U.S. 557, 561 (1980). In Bolger v. Youngs Drug Products Corp., 463 U.S. 60 (1983), at 67, the Court acknowledged three characteristics which defined commercial speech: it is a type of advertisement; it refers to a specific product, and the speaker must have an economic motive for the expression.

This Court's body of law regarding commercial speech, however, has been in the main built from challenges to enacted statutes which specifically restrict some form of advertisement. See e.g., Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976), (challenge of Virginia statute declaring it unprofessional conduct for licensed pharmacist to advertise prices of prescription drugs); Breard v. City of Alexandria, La., 341 U.S. 622 (1951) (appeal of conviction of city ordinance regulating solicitors, peddlers, hawkers, itinerant merchants or transient vendors of merchandise); Valentine v. Chrestensen, 316 U.S. 52 (1942) (action to enjoin enforcement of New York Sanitary Code section prohibiting distribution of handbills); Bolger v. Youngs Drug Products Corp., supra (challenge of federal statute prohibiting unsolicited mailing of contraceptive advertisements); Central Hudson Gas & Elec. Corp. v. Public Service Commission of New York, 447 U.S. 557 (1980) (challenge of Commission regulation which banned promotional advertising by the utility); Cantwell v. State of Connecticut, 310 U.S. 296 (1940) (appeal of conviction of Connecticut statute prohibiting solicitation of money for alleged religious, charitable, or philanthropic causes without approval of Secretary of Public Welfare); See also Thompson v. Western States Medical Center, 535 U.S. 357 (2002), Village of Schaumburg v. Citizens for a Better Environment, 444 U.S. 620 (1980).

From such controversies, the thrust of First Amendment jurisprudence with regard to commercial speech is that it can be prohibited by appropriate legislation without violating the protections of the First Amendment.

On the other hand, traditional First Amendment jurisprudence still recognizes that "the Constitution protects expression and association without regard . . . to the truth, popularity, or social utility of the ideas and beliefs which are offered." National Association for Advancement of Colored People v. Button, 371 U.S. 415, 444 (1963). Political advocacy, including criticism of government, is still the core of the protections guaranteed by the First Amendment. As this Court noted in Mills v. Alabama, 384 U.S. 214 (1966), at 218:

. . . there is practically universal agreement that a major
purpose of that Amendment was to protect the free discussion of
governmental affairs. This of course includes discussions of . .
. structures and forms of government, the manner in which
government is operated or should be operated, and all such
matters relating to political processes.

This point was amplified in New York Times Co. v. Sullivan, 376 U.S. 254, 274 (1964):

Authoritative interpretations of the First Amendment guarantees
have consistently refused to recognize an exception for any test
of truth -- whether administered by judges, juries, or
administrative officials -- and especially one that puts the
burden of proving truth on the speaker.

At least one key distinction between political speech and commercial speech, then, is that commercial speech, if false, can be banned by appropriate legislation, while political speech, even if false, may not be banned.

This state of affairs is directly related to the instant petition. IRC section 6700(a)(2)(A) does indeed deal with a narrow class of false commercial speech -- i.e., "statement[s] with respect to the allowability of any deduction or credit, the excludability of any income, or the securing of any other tax benefit by reason of holding an interest in the entity or participating in the plan or arrangement which the person knows or has reason to known is false or fraudulent as to any material matter." [emphasis added] App. 44. Further, such statements must be made in connection with the sale of an interest in the plan or arrangement as established at section 6700(a)(1)(B). The strict construction against the government required in the case of penalty statutes, however, will not serve to extend subject matter jurisdiction from this narrow class of false commercial speech to other types of commercial speech, not even if they are labeled "false."

Since the legislative prohibition on commercial speech under section 6700 is limited to that narrow class identified above, Congress has seen to it that the prohibition, if properly construed and applied, would survive even the strict scrutiny applied to restrictions on political speech -- that is, the statute is already narrowly tailored to serve an overriding state interest in suppressing the proliferation of abusive tax shelters.

Carried outside subject matter jurisdiction created by a penalty statute which must be strictly construed, however, an injunction against "commercial speech regarding the tax laws" (App. 30, 31) stands, even on its face, as an offense not only against political speech, but against the body of commercial speech jurisprudence established by this Court. It is impossible for Petitioners to know what "commercial speech" constitutes with respect to the tax laws in general, since speech made about the tax laws per se fails all three tests suggested by Bolger, supra.

The District Court's finding represents the new departure from traditional commercial speech jurisprudence which has been developed over recent years in the federal circuits without the guidance of the Supreme Court. The Schiff and Bell cases, supra, cited by the District Court, represent this second body of commercial speech case law.

Unlike the case law discussed earlier, this second body does not arise from challenges to laws that explicitly restrict commercial speech, but from civil actions begun by the government under the IRC, ostensibly under section 6700. In effect, however, this body has divorced the notion of "commercial speech" from any underlying legislative decree. Note the absence of any qualifications related to the narrow scope of section 6700 in the passage from the District Court's ruling:

Because much of the speech, however, relates to the sale of SAPF
products and services, it is commercial speech, and it is well
established that commercial speech, if fraudulent, can be
enjoined. [citations omitted] Because Defendants' representations
about the tax laws and the efficacy of their products is clearly
fraudulent, that speech can be enjoined without running afoul of
the First Amendment.

The advantage to the government of a new body of commercial speech law unmoored from any actual legislative or regulatory restrictions is clear. Once the government disagrees with the political views of persons such as Petitioners -- that is, it holds the opinion that such views are false, but cannot prohibit them under traditional First Amendment jurisprudence, it simply relabels the offending speech "commercial," and enjoins it as such, quite apart from considering any particular demands placed upon it by the legislative decree.

"[R]elating to the sale of products and services" is not the same standard as "doing no more than proposing a commercial transaction." After all, how much of what kind of relation is enough to convert fully protected political speech into less protected commercial speech? Without some objective standard, the government would have virtually unlimited ability to enjoin any speech of which it disapproves. As in this case, political speech concerning the meaning, application and effects of the tax laws is one category of speech it continues to actively suppress.

Once unmoored from any statute which specifically restricts a class of speech, the doctrine of commercial speech established by this Court works to deprive Petitioners and all other persons labeled "tax protestors" by the government of their right to hold, advocate and disseminate dissenting views regarding the operation and meaning of the internal revenue laws. The Court's intervention is urgently needed to set straight this abuse of the commercial speech doctrine, once again mooring it firmly to consideration of the underlying statutes at issue in a given case. If the Court does not address this important question, not only is the freedom of speech of an especially despised (by the government) group suppressed, the doctrine of commercial speech developed by this Court will be subverted by the new doctrine set loose by the federal circuits.

C. Failure to strictly construe 26 USC section 6701 results in a novel legal theory departing from all federal circuit holdings.

The District Court departed from all former rulings in finding that the crime aided and abetted by a section 6701 violation, the "understatement of the liability for tax," was cognizable by a refusal to file a return. App. 19.

All the federal circuits have consistently applied the provisions of section 6701 where the factual element of advising on the preparation of returns, preparing documents to be used in returns, or preparing returns is present. See, e.g., United States v. Bell, 414 F.3d 474 (3rd Cir. 2005), Abdo v. United States, 234 F.Supp.2d 553 (M.D.N.C. 2002), Aff'd. 63 Fed.Appx. 163 (4th Cir. 2003). These decisions have been in keeping with the jurisdiction afforded by section 6701, in that the underlying crime aided and abetted to invoke the penalty of section 6701 -- the "understatement of liability of tax" -- is a crime specifically penalized under section section 6662(d):

Sec. 6662. Imposition of accuracy-related penalty on
underpayments

(a) Imposition of penalty. If this section applies to any
portion of an underpayment of tax required to be shown on a
return, there shall be added to the tax an amount equal to
20 percent of the portion of the underpayment to which this
section applies.

(b) Portion of underpayment to which section applies. This
section shall apply to the portion of any underpayment which
is attributable to 1 or more of the following:

(1) Negligence or disregard of rules or regulations.

(2) Any substantial understatement of income
tax.

(3) Any substantial valuation misstatement under
chapter 1.

(4) Any substantial overstatement of pension
liabilities.

(5) Any substantial estate or gift tax valuation
understatement.

. . .

(d) Substantial understatement of income tax

(1) Substantial understatement

(A) In general. For purposes of this section,
there is a substantial understatement of income
tax for any taxable year if the amount of the
understatement for the taxable year exceeds the
greater of --

(i) 10 percent of the tax required to be
shown on the return for the taxable year, or

(ii) $ 5,000. . . .

(2) Understatement

(A) In general. For purposes of paragraph (1),
the term "understatement" means the excess
of --

(i) the amount of the tax required to be
shown on the return for the taxable year,
over

(ii) the amount of the tax imposed which
is shown on the return, reduced by any rebate
(within the meaning of section
6211(b)(2)).

[emphasis added]

The District Court held that the documents prepared by SAPF in violation of section 6701 were "formletter responses" which Kotmair affirmed "contain true statements about the law." App. 6. These letters were recognized by the Court as responses to notices the IRS sent to SAPF members. In other words, the IRS initiated contact with the members, and the members wrote back to the IRS with the assistance of SAPF. App. 6.

While the Internal Revenue Code specifically penalizes filed returns which show "understatement of liability," Petitioners have been unable to identify any law which specifically penalizes the writing of letters in response to an IRS inquiry. Since IRS inquiries generally request a response, and these letters appear to constitute, according to the novel theory proposed by the District Court, aiding and abetting the crime of "refusal to file" -- the question arises as to whether the individual SAPF member has any right to answer IRS inquiries with what the member considers "true statements about the law" in the face of governmental disagreement with his position.

The right to petition is a fundamental right guaranteed by the First Amendment. If an individual commits no crime by writing a letter advocating his view and understanding on the meaning of the tax laws to a governmental agency, then any individual who assists him in the preparation of such letter cannot be held to aid and abet a crime.

In creating a novel construction of its own, the District Court disregarded the relevant case history correctly construing the provisions of section 6701, and exceeded the scope of injunction authority conveyed by section 7408. This overreach of judicial power infringes the petition rights of individuals to advocate opinions with which the courts or the IRS disagrees.

The District Court's dramatic departure from established statutory construction calls for this Court's supervisory control to re-establish the correct standards in light of likely harm to the petition rights of SAPF members and the public.

II. THE FOURTH CIRCUIT'S DISREGARD OF SUBJECT MATTER
JURISDICTION RESULTED IN AN INJUNCTION ORDER WHICH
CANNOT BE RECONCILED WITH THE FIRST AMENDMENT.

Subsection 7402(a), the only other statute cited by the government for jurisdictional purposes, authorizes only such injunctions "as may be necessary or appropriate for the enforcement of the internal revenue laws." Any part of the injunction order issued in this case which does not fall within the subject matter jurisdiction of one or the other of these two statutes is unauthorized. The "necessary or appropriate" language ties the subject matter jurisdiction of section 7402(a) to some underlying internal revenue law to be enforced. Otherwise, there could be no basis for a review of the issuing court's finding that the order was indeed "necessary or appropriate." Without an underlying statute establishing the elements necessary to prove a violation thereof, it is impossible to make a determination that those elements exist.

While the District Court properly recognized that bankruptcy filings and Freedom of Information Act requests were outside the scope of sections 7408 and 7402(a), (App. 10), it failed to recognize the same lack of jurisdiction to enjoin other lawful activities of Petitioners.

Further, as the District Court noted, in order for an injunction to issue under the provisions of section 7402(a), the traditional equitable factors for granting injunctions must exist. These factors must exist for each element of the injunction arising from section 7402(a). In other words, the existence of harm from one activity does not and cannot extend the scope of the injunction to include activities which do not result in such harm. In the present case, the District Court found that "the government is sustaining irreparable harm in the form of the expenditures of time and money to respond to Defendants' frivolous filings as well as the lost revenue from SAPF customers who either fail to file returns or file returns understating their tax liability." [Emphasis added] (App. 21) Thus, of the harm found by the District Court, the first relates only to "responding to Defendants' frivolous filings," and does not authorize enjoining anything else. The second harm is acknowledged to result from actions taken by persons other than Petitioners -- persons who are not parties to this suit -- and so does not authorize enjoining Petitioners from doing anything whatsoever.

Using harm adduced from one activity to justify enlarging the scope of an injunction to others cannot be reconciled with the protection afforded under the First Amendment to engage in the advocacy of political opinions, a protection this Court recognized in New York Times Company v. Sullivan, 376 U.S. 254, 269 (1964):

t is a prized American privilege to speak one's mind, although
not always with perfect good taste, on all public institutions,'
and this opportunity is to be afforded for 'vigorous advocacy' no
less than 'abstract discussion.'" [internal citations omitted)]

It cannot be denied that "vigorous advocacy" includes, inter alia, writing letters to government agencies and government representatives, organizing community meetings, distributing public education materials, and communicating one's views in a variety of ways for the purpose of policy and social change: the very activities engaged in by Petitioners for over twenty years.

III. THE ORDER TO PRODUCE CUSTOMER AND MEMBER LISTS
INFRINGES PRIVACY IN ASSOCIATION

A. The order is outside the scope of proper injunctive relief.

In affirming the District Court's order to produce detailed lists of all SAPF members, both full and associate, the Fourth Circuit's ruling that such production is an "appropriate means" to provide reparations for past harm conflicts with this Court's holding in U.S. v. Oregon State Medical Society, 343 U.S. 326, 333 (1952), that the:

. . . sole function of an action for injunction is to forestall
future violations. It is so unrelated to punishment or
reparations for those past that its pendency or decision does not
prevent concurrent or later remedy for past violations by
indictment or action for damages. . . .

In Belk v. Charlotte-Mecklenburg Board of Education, 269 F.3d 305 (4th Cir., 2001), the Fourth Circuit also recognized that an injunction may not be used for punishment or reparations (Id., at 347), but this same Circuit ignored its own precedents in upholding the forced disclosure of member information from Petitioners.

The Fourth Circuit's conflict with this Court's established precedents regarding the scope of injunctive relief is highlighted by a recent decision of the United States District Court for the Northern District of Illinois in a factually similar case: United States of America v. William J. Benson, case number 1:04-cv-07403. (N.D.Ill.) There, the District Court denied the government's prayer to order Benson to turn over a list of customers who had purchased the "plan" he sold, reaching the opposite conclusion than the one made by the District Court for Maryland with respect to proper injunctive relief:

The government has not shown that the request for the customer
list is appropriate injunctive relief in light of the claims and
allegations in this case . . . Benson's customers . . . violated
no laws simply by purchasing the Reliance Defense Package or
related package. Nor can it be assumed that Benson's customers
did not pay their taxes merely because they purchased the
[package] . . . The customer list is not related to preventing
future misconduct by Benson. . . . The request by the
Government for the customer list is beyond the scope of Benson's
wrongdoing in the instant action . . ." [emphasis added] App.
39-41.

That court has now addressed the issue of compelled disclosure of lists where purchasers of a tax "plan" were involved, and has disagreed with this Circuit that this is appropriate. While that case has not yet run its course, and may be reviewed by the Seventh Circuit, the threat of imminent harm to members and customers of SAPF, while customers of another "tax protestor" are not compelled to be disclosed, makes this a matter in need of urgent clarification by this Court, before such conflicting holdings result in a manifest, discriminatory injustice: some persons' right to privacy in purchasing and reading dissenting material upheld, while other persons' identical right is not.

B. An exacting scrutiny of compelled disclosure is required to preserve privacy in freedom of association.

This Court has repeatedly held that:

. . . compelled disclosure [of membership lists], in itself, can
seriously infringe on privacy of association and belief
guaranteed by the First Amendment,.E.g., Gibson v. Florida
Legislative Comm., 372 U.S. 539 (1963); NAACP v.
Button, 371 U.S. 415 (1963); Shelton v. Tucker, 364
U.S. 479 (1960); Bates v. Little Rock, 361 U.S. 516
(1960); NAACP v. Alabama, 357 U.S. 449 (1958). We long
have recognized that significant encroachments on First Amendment
rights of the sort that compelled disclosure imposes cannot be
justified by a mere showing of some legitimate governmental
interest. Since NAACP v. Alabama, we have required that
the subordinating interests of the State must survive exacting
scrutiny." Buckley v. Valeo, 424 U.S. 1, 64 (1976). [some
internal citations omitted]

In upholding the order for disclosure of the lists, the Fourth Circuit violated its own standard in Marshall v. Stevens People and Friends for Freedom, 669 F.2d 171 (4th Cir. 1981). "[C]ompelled disclosure of affiliation with groups engaged in advocacy may constitute an effective restraint on freedom of association." Id., at 176. This principle has been recognized by the other Circuits as well. See, e. g., Fifth Ave. Peace Parade Committee v. Gray, 480 F.2d 326, 334 (2nd Cir., 1973); Marshall v. Bramer, 828 F.2d 355, 359 (6th Cir.,1987); Andersen v. U.S., 298 F.3d 804, (9th Cir., 2002). In U.S. v. Hammoud, 381 F. 3d 316 (4th Cir. 2004), the Fourth Circuit further recognized that the right to freedom and privacy in one's associations exists even in the face of some unlawful activity of the group: "It is a violation of the First Amendment to punish an individual for mere membership in an organization that has legal and illegal goals" (emphasis added). Id., at 328.

To pass muster under the strict scrutiny demanded by Buckley, supra, the request for disclosure of members' and customers' identities must be closely related to a compelling governmental interest. In contrast to the District Court's determination that the list was needed because of a "possibility" that many do not file returns -- hardly evocative of a compelling governmental interest -- the District Court for Illinois concluded:

The Government has not provided a compelling reason why Benson's
customer list should be disclosed and the customers be
investigated and scrutinized by the Government solely because
they bought the Reliance Defense Package or related package.
U.S. v. Benson, supra, App. 40.

The ruling of the Fourth Circuit has now accomplished what it said only three years ago in Hammound, supra, would violate the right to freedom of association, by stripping all SAPF members of privacy in association, without a showing of any individual intent to further "illegal aims."

This Court should vacate and remand this stifling of personal liberties based on 'guilt by association.'

As the court in Benson stated, "Nor should Benson's customers, who the Government itself depicts as victims, be branded as potential co-conspirators with Benson and tax cheats solely because they bought the Reliance Defense Package or related package." U.S. v. Benson, supra, App. 41. Similarly, subjecting SAPF members to investigations, audits, and other types of governmental scrutiny merely because they have joined in advocating SAPF's political message, is the epitome of the dangers recognized by the Supreme Court in Buckley, supra.

The decision below established no connection between any SAPF members and any enjoined activity, and so requiring the disclosure of their private personal information, and subjecting them to harassment solely for being SAPF members, is certain to chill the exercise of rights to speech and association by dissuading members from renewing their membership, and non-members from joining the Fellowship in the first place.

The District Court's demand that the names of purchasers of Petitioners' books and other materials is also similar to the situation in U.S. v. Rumely, 345 U.S. 41 (1953), where a Congressional committee was trying to force a publisher to disclose the names of those who bought his materials. Like Rumely, Petitioners here "bid[] for the minds of men in the market place of ideas. The aim of the historic struggle for a free press was 'to establish and preserve the right of the English people to full information in respect of the doings or misdoings of their government.' Grosjean v. American Press Co., 297 U.S. 233, 247, 56 S.Ct. 444, 448, 80 L.Ed. 660. That is the tradition behind the First Amendment. Censorship or previous restraint is banned." Rumely, ibid., at 56 (concurring opinion of Justice Douglas).

Justice Douglas went on to explain the process by which disclosure ultimately infringes on the right to free speech and free thought:

[The First Amendment] expresses the confidence that the safety of
society depends on the tolerance of government for hostile as
well as friendly criticism, that in a community where men's minds
are free, there must be room for the unorthodox as well as the
orthodox views. . . . A requirement that a publisher disclose the
identity of those who buy his books, pamphlets, or papers is
indeed the beginning of surveillance of the press. . . . Once the
government can demand of a publisher the names of the purchasers
of his publications, the free press as we know it disappears.
Then the spectre of a government agent will look over the
shoulder of everyone who reads. The purchase of a book or
pamphlet today may result in a subpoena tomorrow. Fear of
criticism goes with every person into the bookstall. The subtle,
imponderable pressures of the orthodox lay hold. Some will fear
to read what is unpopular what the powers-that-be dislike. . . .
The books and parephlets that . . . preach an unpopular policy in
domestic or foreign affairs, that are in disrepute in the
orthodox school of thought will be suspect and subject to
investigation. The press and its readers will pay a heavy price
in harassment. . . . fear will take the place of freedom in the
libraries, bookstores, and homes of the land. Through the
harassment of hearings, investigations, reports, and subpoenas
government will hold a club over speech and over the press.
Congress could not do this by law. Rumely, supra, at 57
(concurring opinion of Justice Douglas).

[The Observer]

IV. THE FOURTH CIRCUIT'S DISREGARD OF FRCP 65(D) THREATENS
DEPRIVATION OF LIBERTY WITHOUT DUE PROCESS

FRCP Rule 65(d) requires every order granting an injunction to "(A) state the reasons why it issued; (B) state its terms specifically; and (C) describe in reasonable detail -- and not by referring to the complaint or other document -- the act or acts restrained or required."

In Schmidt v. Lessard, 414 U.S. 473, at 476 (1974), this Court held that the specificity provisions of Rule 65(d) are no mere technical requirements; rather, "[t]he Rule was designed to prevent uncertainty and confusion on the part of those faced with injunction orders, and to avoid the possible founding of a contempt citation on a decree too vague to be understood. [internal citations omitted] Since an injunctive order prohibits conduct under threat of judicial punishment, basic fairness requires that those enjoined receive explicit notice of precisely what conduct is outlawed." This Court also recognized a second purpose for the rule, that "n the absence of specific injunctive relief, informed and intelligent appellate review is greatly complicated, if not made impossible." Id. at 477.

The injunction against Petitioners employs vague generalities to describe the forbidden conduct, with the end result that Petitioners have no objective standard by which to gauge compliance. One of the most glaring examples of this is paragraph 1k of the order, which prohibits Petitioners from: "Selling or distributing any newsletter, book, manual, videotape, audiotape, or other material containing false commercial speech regarding the internal revenue laws or speech likely to aid or abet others in violating the internal revenue code." [Emphasis added] App. 34.

As explained supra, SAPF distributes its political message by way of books, newsletters, and audio and video presentations. The vagueness of the passage quoted above leaves Petitioners uncertain whether or not they have been prohibited from selling any of these materials, since to their knowledge and belief, none of the materials contain "false commercial speech regarding the internal revenue laws." Notwithstanding, since there are no other materials in which the enjoined category of speech might possibly be found, Petitioners are aware that continuing to sell their materials could be considered by the government to be a violation of the injunction.

This is a far cry from the "explicit notice of precisely what conduct is outlawed" required by Schmidt, supra, and Rule 65(d). If the District Court has determined that some portion of SAPF's materials are prohibited, then Rule 65(d) requires it to inform Petitioners of exactly which portions have been so banned. In making this decision, the District Court had only a small sample of the materials SAPF makes available -- e.g., one page of the 350-page Piercing the Illusion, newsletters originally published in 1998 and 1999 (but none from the years since), and not one minute of the video Just The Facts -- even though all of these materials had been provided to the United States in discovery.

In light of the dearth of SAPF publications before it, the District Court made an unjustifiable finding that "much" of the unseen materials contained offending speech. App. 22. Because it had no materials to review, it was impossible for the Court to cite the speech to be prohibited with the particularity required by Rule 65(d). When Petitioners applied to the District Court for modification of the injunction pursuant to Rule 65(d), the District Court brushed off Petitioners' plea to inform them of the exact speech enjoined with the words, "Defendants' confusion is self-induced." App. 34.

Petitioners now find themselves between the horns of a dilemma. Either they must cease sales of all SAPF materials, depriving them of their right to dissenting political speech, but ensuring that contempt proceedings cannot be brought, or they must guess at what is meant by the phrase "false commercial speech regarding the internal revenue laws" (App. 30, paragraph k), and pay the price of contempt convictions for guessing wrong.

This problem is compounded by this Court's commercial speech jurisprudence, discussed supra. Petitioners are unsure of what kind of advertisements might be made concerning the tax laws, but they are sure that none of the materials they distribute contain any such advertisements. Of course, as this Court recognized in Schmidt, supra, fairness, as well as Rule 65(d), prohibit forcing Petitioners to guess at what it must refrain from doing.

Likewise, Petitioners have no subjective standard by which to determine what speech, if any, is "likely to aid or abet violations of the tax laws." If the Court found that some such speech exists (which should be a necessary condition of including it in the injunction), then Rule 65(d) mandates that it be identified with particularity.

As noted supra, the distinction between banning speech through legislative enactment and through judicial fiat is blurring. Unlike Petitioners, none of the defendants of the actions under section 6700 in the federal courts appear to have challenged whether the IRC provides the necessary subject matter jurisdiction for prohibiting the advocacy -- including the right to petition, association and speech m of opinions which dissent from the majority of courts on issues of tax law.

Petitioners raised this issue for the first time in the Circuit Court, but that Court failed to address it, having affirmed solely on the reasons given by the District Court -- before whom the issues related to subject matter jurisdiction were never raised.

There is no question that this Court has upheld laws restricting false commercial speech in many instances, yet a recognition of the authority of legislatures to restrict such speech does not give carte blanche to the executive or judicial branches to do the same, as has been the recent experience in the Circuits. In the present case, the government has not cited any statute, regulation or ordinance which is claimed to prohibit the commercial speech "relating to" products and services. Instead, it has banned the speech of Petitioners by merely asserting that it is allowed to do so.

This highlights the second reason given in Schmidt, supra for the specificity requirement of Rule 65(d) -- because without it, an "informed and intelligent appellate review is greatly complicated, if not made impossible."

CONCLUSION

The petition for writ of certiorari should be granted.

Respectfully submitted.

FOOTNOTE

/1/ All references to statutory sections refer to sections of Title 26, the Internal Revenue Code, unless otherwise indicated.

[Cobalt Shiva]

I predict a no cert . . .

[Imalawman]

Ditto.

[Nikki]

... without comment.

[Dr. Caligari]

... without comment

Denials of cert. are always without comment.

And I agree with the prediction that cert. will be denied. The Petition does not itself raise frivolous issues, but it doesn't raise anything cert-worthy, either.

[Leftcoaster]

Not that it would matter if it did come before the court since the TP community would either:

• a) Say that the court is suppressing the truth, because the taxes pay their salaries or,
  b) The justices didn't understand the law. And,
  c) They will continue to peddle their wares until they're safely locked up, and then pass on the torch to some other lost soul who is dedicated to the cause

In either event, they are sure to declare total victory, caper back to Suijuris or LH and mutter to themselve about what 'the truth' really is.

[scam a patriot]

It will be a good day when this scumbag Kotmair gets his prison cell.

[LPC]

Cert. denied. Save-A-Patriot Fellowship v. United States, 234 Fed. Appx. 65 (4th Cir. 2007), cert. den. No. 07-1145 (4/14/2008).