Tuesday, August 7, 2018

Ninth Circuit Withdraws Altera Opinions (8/7/18; 8/13/18)

The Ninth Circuit has withdrawn its opinions in Altera Corp. et al. v. Commissioner, ___ F.3d ___, 2018 WL 3542989, 2018 U.S. App. LEXIS 20524 (9th Cir. 2018), here., The withdrawal is by a one-sentence order dated 8/7/18 here.  The one sentence is:  "The Opinions filed July 24, 2018, are hereby withdrawn to allow time for the reconstituted panel to confer on this appeal."  There is no indication that there will be a need for oral argument, but, I suppose, Judge Graber could make the decision on that.  (That would mean that Judge O'Malley of the Court of Appeals for the Federal Circuit would have to make another trip to San Francisco.)

The reconstituted panel consists of the two on the original panel--Judges Thomas and O'Malley, and a new one, Susan P. Graber, substituted for the deceased Judge.  Readers will recall that the earlier opinions were split with Judge Thomas holding for the Government and Judge O'Malley holding for the taxpayer.  The earlier opinions were issued with the deceased judge, Judge Reinhardt, having indicated his agreement with Judge Thomas prior to death, so Judge Thomas' opinion was the majority opinion.  I presume the reconstitution was caused by the issuance of the opinions after the death of Judge Reinhardt and the commotion that resulted from issuance of the deciding vote after death.

For the write up on the original up see Developments - Federal Tax Procedure Book 2018 Editions and Altera (Federal Tax Crimes Blog 7/25/18; 7/27/18), here.

I am sure that there will be much speculation on which way Judge Graber will decide.  For those with the time and interest in such speculations, perhaps a good place to start is her Wikipedia page here.  She was appointed by President Clinton.

Addendum 8/13/18 10:22AM:

The Tax Litigation Blog here, has posted this Tax Notes Today Article:  Kristen A. Parillo,  Ninth Circuit Withdraws Altera Opinion New Judge to Weigh In, 2018 TNT 153-1 (8/8/18), here.  Excerpts:

On the process: 
Graber will need to view a recording of the oral arguments and review the briefings filed in the case, said [Brian] Goldman. She can then share her opinion informally with the other panel members, Chief Judge Sidney R. Thomas, who wrote the majority opinion, and Judge Kathleen M. O’Malley, who wrote the dissent. Then the panel will issue a new decision, Goldman said.
On the speculated outcome: 
However, the decision is unlikely to change, said A. Lavar Taylor of the Law Offices of A. Lavar Taylor LLP. The forcefulness of Thomas and O’Malley in their opinions means neither one is likely to change their mind, and Graber is expected to side with Thomas, he said. 
“I don’t bet, but if I did, I would bet on Judge Graber upholding the regulations,” Taylor said.
And, arguing both sides, see Ninth Circuit Withdraws Controversial Altera Opinion and Will Allow New Judge to Make Ultimate Determination (Orrick Tax Law Update |9/9/18), here.

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