Precedential Effect of Published Plurality Appellate Opinion That Majority of Panel Doesn't Accept (8/9/22)

In Trafigura Trading v. United States, 29 F.4th 286 (5th Cir. 3/25/21), CA5 here and GS here, the Court affirmed the district court judgment that the taxpayer was entitled to a refund.  The district court held that the reason for the refund was that the tax violated the Export Clause of the Constitution.  (For purposes of this blog, getting into the merits of the reason the tax violated the Export Clause is not important.)  On the Government’s appeal, the Fifth Circuit 3-judge panel affirmed, with one judge (Judge Ho) issuing a “plurality” opinion, another judge (Judge Wiener) concurring only in the judgment but not Judge Ho's opinion, and a third judge (Judge Graves) dissenting from Judge Ho's opinion.

The question that I and some colleagues have discussed recently, perhaps without definitive conclusion, is:

What is the precedential effect of the Fifth Circuit plurality opinion by Judge Ho, which as the F.4^th citation indicates was published?

Judge Ho’s opinion was only his opinion and was not approved by either Judge Wiener (concurring in judgment only) or by Judge Graves (dissenting).  The only judge on the panel who addressed the issue of precedential effect was Judge Graves who, in his dissenting opinion says (p. 796 n. 1):

    n2  Judge Wiener concurs only in the judgment, which means that Judge Ho’s opinion does not have a quorum and does not constitute precedent in this Circuit. Indest v. Freeman Decorating, Inc., 168 F.3d 795, 796 n.1 (5th Cir. 1999) (Wiener, J., concurring). Thus, I refer to it as the plurality when referencing any portion other than the judgment. 

This seems a straight-forward bar (if accurate) to precedential effect of Judge Ho’s opinion, but there is some confusion (at least in my mind) about the last sentence (saying Judge Ho’s non-precedential plurality opinion includes only “any portion other than the judgment.”  What does that mean?  Judge Ho’s opinion itself does not have a judgment.  There is a Fifth Circuit judgment (here) but it only says in relevant part that “the judgment of the District Court is affirmed.”  Presumably, this Fifth Circuit judgment is the judgment that Judge Graves refers to. 

 By contrast to the Fifth Circuit judgment, the district court judgment, here, says

Having determined that § 4611(b) violates the Export Clause of the United States Constitution, the Court orders the Government to refund Trafigura $5,215,924 in § 4611(b) taxes that Trafigira paid for the tax periods in issue, as well as statutory interest pursuant to 28 U.S.C.A. § 2422.  This is a Final Judgment and finally disposes of all claims and causes of action asserted by any party.

Technically, as I understand it, the district court judgment is only the amount that the United States owes the taxpayer.  The reason for that debt amount is not part of the judgment and in many judgments with which I am familiar the judgment only states that the taxpayer is entitled to a refund without elaboration of the reasons.  (Similarly in the Tax Court where judgment-equivalent “decisions” are rendered, they do not state the reasons for the tax, refund determined, or no deficiency.)  For the limited effect for which judgments are important (such as enforcing the judgment), merely stating the amounts is all that is required and, I think, is the judgment.

So, I infer that, since Judges Graves and Wiener did not concur with the Judge Ho’s opinion, Judge Ho’s opinion is not precedential.

One question is why the nonprecedential Trafigura Trading opinions were published, thus appearing in the West citator (and other citators with a published indication).  Neither of the opinions explain that, but the Fifth Circuit Local Rules 47.5.1 and 47.5.2, here, permit nonprecedential opinions to be published.  The Local Rules state in relevant part:

• “opinions that may in any way interest persons other than the parties to a case should be published.”

• “An opinion may also be published if it: Is accompanied by a concurring or dissenting opinion.”

• “An opinion will be published unless each member of the panel deciding the case determines that its publication is neither required nor justified under the criteria for publication.“

It appears that, so long as a single member of the panel wants publication, the opinions are published.  With Judges Wiener and Graves rejecting Judge Ho’s opinion, I think it is not unreasonable to speculate that Judge Ho wanted the opinion published.  (Caution: that is speculation only.)

Bottom line, from all of the above, my conclusion (although not unanimous in the discussion group) is that there is nothing precedential in Judge Ho's opinion except, perhaps, that the taxpayer is entitled to the refund amount awarded, for whatever precedential effect that may have.

I would appreciate hearing from any readers who have “opinions” on this subject, either pro or con.  Readers can share their “opinions” either as a comment (which some have difficulty getting to work) or by emailing to me at jack@tjtaxlaw.com.  If you advise me by email, please state whether I can share your opinions on the blog either with attribution by name or anonymously.

Of course, this is a good lesson that persons reading opinions need to read them carefully and even review the local rules to help discern what the opinions mean.

It is important to restate the obvious, even if Judge Ho’s plurality opinion is not “precedential” that does not mean that it is not persuasive (an issue as to which I am agnostic).

On the merits, the Government petitioned for rehearing en banc, a petition that was denied on May 23, 2022 by the panel without polling the Court.  (Perhaps one reason that the petition may have been denied is that the plurality opinion was not precedential, but that is speculation.) Mandate was issued 5/31/22, so petition for certiorari, if any, will be due 8/29/22.  Of course, the lack of precedential effect may work against the Supreme Court granting certiorari if a petition were filed.  And, presumably, lack of precedential effect means that the IRS need not grant refunds on the issue to other taxpayers in the Fifth Circuit.

Finally, Keith Fogg suggested that the following article might be useful in considering a similar issue in a Tax Court reviewed opinion context:  Kandyce Korotky, All for One, and Five for Sixteen? When the Tax Court’s “Majority” Opinion Isn’t (Procedurally Taxing Blog 4/10/18), here.  I agree that the blog is good and worthy of consideration.