In Liberty Global, Inc. v. United States (D. Colo. Dkt. 1:20-cv-03501-RBJ #46 Order dtd. 4/4/22), CL here and GS here, the Court granted summary judgment to Liberty Global holding IRS temporary regulations on § 245A invalid for not undertaking notice and comment before the effective date. (The docket entries and pleadings on the motion are available on Courtlistener here.) I am not so much concerned about the substantive issue of whether Liberty Global owes the tax in question. I am concerned about what I perceive as lack of sound analysis on the APA issues by parties and, as a result, by the Court.
Basically, the Court held that:
1. The regulation in issue was a legislative regulation, apparently
without analysis of the issue because “the parties do not dispute that the
temporary regulations are legislative rules.”
(Slip Op. 9.)
2. As a legislative regulation issued with a statement of good
cause for immediate effect, the good cause statement was not persuasive;
therefore the temporary regulation did not have immediate effect.
3. Implicit in #2 was that, if the good cause statement were
valid, the temporary regulation could have not only been effective immediately upon
promulgation but there was still the issue of whether good cause immediate effect would permit retroactivity under § 7805(b)(2) (although that may be implicit).
I think the Court’s holdings are consistent with mainstream judicial and scholarly current thinking. As readers of this blog know, I part company with mainstream current thinking on key premises relevant to this discussion. I provide key relevant points of departure, but those wanting detailed analysis can find it in John A. Townsend, The Report of the Death of the Interpretive Regulation Is an Exaggeration (SSRN last revised 12/15/21), here.
