1

I N THE UNI TED STATES DI STRI CT COURT FOR THE

EASTERN DI STRI CT OF VI RGI NI A

Al exandr i a Di vi si on


THE NATI ONAL ORGANI ZATI ON )
FOR MARRI AGE, I NC. , )
)
Pl ai nt i f f , )
)
v. ) 1: 13cv1225 ( J CC/ I DD)
)
THE UNI TED STATES OF AMERI CA, )
I NTERNAL REVENUE SERVI CE, )
)
Def endant . )

M E M O R A N D U M O P I N I O N

Pl ai nt i f f The Nat i onal Or gani zat i on f or Mar r i age, I nc.
( NOM) has f i l ed t hi s act i on al l egi ng t hat t he Uni t ed St at es of
Amer i ca, t hr ough agent s of t he I nt er nal Revenue Ser vi ce ( I RS) ,
vi ol at ed 26 U. S. C. 6103 by i mpr oper l y di scl osi ng i t s
conf i dent i al t ax r et ur n i nf or mat i on. ( Compl . [ Dkt . 1] at 1- 2. )
Cur r ent l y bef or e t he Cour t i s t he Gover nment s Mot i on f or
Summar y J udgment . ( Summ. J . Mot . [ Dkt . 67] at 1. ) For t he
r easons set f or t h bel ow, t he Cour t wi l l gr ant i n par t and deny
i n par t t he Gover nment s mot i on.
I. Background
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NOM i s a soci al wel f ar e associ at i on pur por t edl y
or gani zed t o pr ot ect mar r i age and t he f ai t h communi t i es t hat

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The f ol l owi ng f act s ar e t aken f r omt he par t i es Local Rul e 56( B) st at ement s,
summar y j udgment br i ef s, and ot her evi dence submi t t ed by t he par t i es. They
ar e undi sput ed unl ess ot her wi se i ndi cat ed.
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sust ai n i t acr oss t he Uni t ed St at es. ( Pl . s Opp n [ Dkt . 73] at
1. ) As a t ax- exempt or gani zat i on, NOM must f i l e a For m990
annual l y wi t h t he I RS. See 26 U. S. C. 6033. Schedul e B t o
For m990 ( Schedul e B) l i st s donor s who have cont r i but ed $5, 000
or mor e dur i ng t he r epor t i ng per i od.
I n J anuar y 2011, Mat t hew Mei sel ( Mei sel ) submi t t ed
an appl i cat i on t o t he I RS f or copi es of NOM s publ i cl y avai l abl e
t ax r et ur ns. ( Pl . s Opp n at 4- 5. ) Out si de of t he f act t hat
Mei sel i dent i f i ed hi msel f as a member of t he medi a, t he
speci f i cs of hi s r equest ar e unknown because, pur suant t o I RS
pol i cy, hi s r equest was dest r oyed af t er f or t y- f i ve days. ( Id.
at 4. ) Mei sel s appl i cat i on was f or war ded t o Wendy Pet er s
( Pet er s) , a cl er k i n t he I RS s Ret ur n and I ncome Ver i f i cat i on
Ser vi ces uni t ( RAVI S uni t ) . ( Gov t s Mem. [ Dkt . 68] at 5;
Pl . s Opp n at 4- 5. )
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On J anuar y 19, 2011, Pet er s emai l ed Peggy Ri l ey
( Ri l ey) , an I RS medi a r el at i ons speci al i st , t o ver i f y Mei sel s
st at us as a member of t he medi a because i t was t hen I RS pol i cy
t o expedi t e medi a r equest s. ( Gov t Ex. 3. ) Ri l ey r esponded
t hat she woul d l ook i nt o t he mat t er . ( Id.)
On J anuar y 21, 2011, Pet er s pr i nt ed copi es of NOM s
2007 For m990 and t he or i gi nal and amended For m990 f or 2008.

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Mei sel was subpoenaed i n t hi s mat t er but chose t o i nvoke t he Fi f t h
Amendment i n r esponse t o counsel s quest i oni ng. ( Gov t s Mem. at 27 n. 11. )
Accor di ngl y, hi s ver si on of event s i s pr esent l y unknown.
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( Gov t Ex. 8. ) When Pet er s accessed and vi ewed t hese document s,
a uni que t r acki ng number was cr eat ed i n an I RS dat abase cal l ed
t he St at i st i cs of I ncome Exempt Or gani zat i ons Ret ur n I mage
Net wor k ( SEI N) . ( Gov t s Mem. at 5- 6. ) Thi s t r acki ng number
was al so i mpr i nt ed as a wat er mar k on each page of t he pr i nt ed
copi es. ( Id.) Pet er s cl ai ms t hat she di d not al t er t hi s
wat er mar k. ( Id. at 6. )
On J anuar y 24, 2011, Pet er s agai n emai l ed Ri l ey
r egar di ng Mei sel s cl ai med st at us as a member of t he medi a.
( Gov t Ex. 3. ) I t i s uncl ear whet her Ri l ey ever r esponded.
On J anuar y 31, 2011, Pet er s accessed t he I RS s
I nt egr at ed Dat a Ret r i eval Syst em( I DRS) and cr eat ed an I RS
3983C l et t er . ( Gov t s Mem. at 6- 7; Pl . s Opp n at 6. ) An I RS
3983C l et t er i s t he st andar d r epl y t o publ i c r equest s f or
i nf or mat i on. ( Id.) The Gover nment cont ends t hat t hi s l et t er
was pr oduced i n r esponse t o Mei sel s appl i cat i on. ( Gov t Mem.
at 7. ) NOM, however , di sagr ees wi t h t hi s posi t i on because I DRS
r ecor ds do not i dent i f y t he r eci pi ent of a 3983C l et t er or t he
document s at t ached t her et o. ( Pl . s Opp n at 6. ) Never t hel ess,
i t i s undi sput ed t hat an unr edact ed copy of NOM s amended 2008
For m990 bear i ng t he above ment i oned wat er mar k was t her eaf t er
sent t o Mei sel al ong wi t h such a l et t er . ( Gov t s Mem. at 6- 7;
Pl . s Opp n at 6. )
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The par t i es agr ee t hat , i n r esponse t o publ i c r equest s
f or t ax i nf or mat i on, I RS pr ocedur es r equi r e t he omi ssi on of
donor i nf or mat i on l i st ed i n For m990. ( Gov t s Mem. at 7; Pl . s
Opp n at 7. ) Her e, t he Gover nment cont ends t hat Pet er s f or got
t o r edact t he names and addr esses of NOM s donor s bef or e sendi ng
t he amended 2008 For m990 t o Mei sel . ( Gov t s Mem. at 7. ) NOM
di sput es t hi s asser t i on, cl ai mi ng t he r ecor d i s uncl ear
r egar di ng who was r esponsi bl e f or sendi ng [ Mei sel ] an r edact ed
copy of NOM s Schedul e B, and why any t r ansmi t t al f r omt he I RS
t o [ Mei sel ] occur r ed. ( Pl . s Opp n at 7. )
On Mar ch 28, 2012, Mei sel sent Kevi n Ni x ( Ni x) , a
Campai gn Medi a Di r ect or f or t he Human Ri ght s Campai gn ( HRC) , a
copy of NOM s amended 2008 For m990, Schedul e B. ( Gov t s Mem.
at 7. ) The copy sent t o Ni x cont ai ned a r edact i on of t he
numer i cal wat er mar k di scussed above. ( Pl . s Opp n at 7. ) The
HRC t hen f or war ded t he Schedul e B t o a j our nal i st at t he
Huf f i ngt on Post , who publ i shed i t al ong wi t h an ar t i cl e f ocusi ng
on t he f act t hat an Al abama st at e pol i t i cal act i on commi t t ee
associ at ed wi t h Mi t t Romney made a $10, 000 donat i on t o NOM i n
2008. ( Gov t s Mem. at 8. )
The Tr easur y I nspect or Gener al f or Tax Admi ni st r at i on
was abl e t o di gi t al l y un- r edact t he wat er mar k, r eveal i ng t hat
t he number 100560209 was i mpr i nt ed on each page of t he Schedul e
B publ i shed by t he Huf f i ngt on Post . ( Gov t s Mem. at 8; Pl . s
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Opp n at 7. ) Quer yi ng t hi s number i n t he SEI N dat abase al l owed
I RS admi ni st r at or s t o i dent i f y Pet er s as t he i ndi vi dual who
accessed and pr i nt ed t he document at i ssue. ( Id.) At t he t i me
of t he di scl osur e, Pet er s was unawar e of NOM s mi ssi on or t hose
of i t s pol i t i cal opponent , t he HRC. ( Gov t s Mem. at 9; Pl . s
Opp n at 7. ) Pet er s had al so never hear d of Mei sel . ( Id.)
On May 15, 2012, Fr ed Kar ger ( Kar ger ) , a sel f -
pr ocl ai med opponent of NOM, f i l ed a compl ai nt wi t h t he St at e of
Cal i f or ni a s Fai r Pol i t i cal Pr act i ces Commi ssi on ( FPPC) ,
al l egi ng t hat NOM vi ol at ed var i ous st at e el ect i on l aws dur i ng
2008. ( Gov t s Mem. at 10- 11. ) Kar ger s cl ai ms wer e based, at
l east i n par t , on i nf or mat i on gar ner ed f r omNOM s Schedul e B.
( Pl . s Opp n at 8. ) I ndeed, hi s or i gi nal compl ai nt cont ai ned
scr een shot s of NOM s Schedul e B, as publ i shed by t he HRC.
( Id.) NOM hi r ed l egal counsel t o pr ot ect t he conf i dent i al donor
i nf or mat i on di scl osed by Kar ger , and ul t i mat el y NOM was absol ved
of any wr ongdoi ng. ( Id. at 8- 10. )
On Oct ober 3, 2013, NOM i nst i t ut ed t he i nst ant
act i on, seeki ng damages pur suant t o 26 U. S. C. 7431 f or
unl awf ul i nspect i on and di scl osur e of conf i dent i al t ax
i nf or mat i on . . . i n vi ol at i on of 26 U. S. C. 6103. ( Compl . at
1. ) Accor di ng t o NOM, t he di scl osur e di scussed above was par t
of a del i ber at e at t empt t o chi l l t he Fi r st Amendment act i vi t y of
NOM, i t s donor s, and ot her s who associ at e wi t h NOM. ( Id.) NOM
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i s seeki ng act ual damages i n t he f or mof l ost cont r i but i ons and
l egal f ees i ncur r ed i n i nvest i gat i ng t he di scl osur e and
pr event i ng f ur t her di ssemi nat i on of i t s donor i nf or mat i on.
( Compl . at 22- 23. ) NOM i s al so cl ai mi ng puni t i ve damages
because, accor di ng t o i t s r eadi ng of t he above f act s, t he I RS s
di scl osur e was done wi l l f ul l y or as a r esul t of gr oss
negl i gence. ( Id. at 21. )
Pr esent l y bef or e t he Cour t i s t he Gover nment s Mot i on
f or Summar y J udgment . Al t hough t he Gover nment admi t s t hat an
I RS st af f member i mpr oper l y di scl osed an unr edact ed copy of
NOM s Schedul e B i n vi ol at i on of 7431, t he f ol l owi ng i ssues
ar e now i n di sput e: ( 1) whet her NOM i s ent i t l ed t o puni t i ve
damages; ( 2) whet her t he exami nat i on of NOM s conf i dent i al t ax
i nf or mat i on by Pet er s and ot her s wer e aut hor i zed i nspect i ons
under t he st at ut e; ( 3) whet her NOM s l egal expenses f or
i nvest i gat i ng t he di scl osur e ar e r ecover abl e damages; and ( 4)
whet her NOM s cl ai med damages ar e subj ect t o an of f set agai nst
donat i ons r ecei ved because of t he publ i ci t y sur r oundi ng t hi s
case. ( Gov t s Mem. at 1- 4. )
Havi ng been f ul l y br i ef ed, t he Gover nment s mot i on i s
now bef or e t he Cour t .
II. Standard of Review
I t i s wel l set t l ed t hat a mot i on f or summar y j udgment
shoul d be gr ant ed onl y i f t he pl eadi ngs, deposi t i ons, answer s
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t o i nt er r ogat or i es, and admi ssi ons on f i l e, t oget her wi t h t he
af f i davi t s, i f any, show t hat t her e i s no genui ne i ssue as t o
any mat er i al f act and t hat t he movi ng par t y i s ent i t l ed t o
j udgment as a mat t er of l aw. Fed. R. Ci v. P. 56( c) ; see also
Celotex Corp. v. Catrett, 477 U. S. 317, 32223 ( 1986) . The
bur den i s on t he movi ng par t y t o est abl i sh t hat t her e ar e no
genui ne i ssues of mat er i al f act i n di sput e and t hat i t i s
ent i t l ed t o j udgment as a mat t er of l aw. See Anderson v.
Liberty Lobby, Inc., 477 U. S. 242, 256 ( 1986) .
Wher e, as i n t hi s case, t he nonmovi ng par t y has t he
bur den of pr oof at t r i al , t he movi ng par t y need onl y demonst r at e
t hat t her e i s a l ack of evi dence t o suppor t t he non- movant s
cl ai m. See Celotex, 477 U. S. at 32325. I n r esponse t o such a
showi ng, t he par t y opposi ng summar y j udgment must go beyond t he
pl eadi ngs and pr of f er evi dence t hat est abl i shes each of t he
chal l enged el ement s of t he case, demonst r at i ng t hat genui ne
i ssues of mat er i al f act do exi st t hat must be r esol ved at t r i al .
See id. at 324; Anderson, 477 U. S. at 248.
I n r evi ewi ng t he r ecor d on summar y j udgment , t he Cour t
must dr aw any i nf er ences i n t he l i ght most f avor abl e t o t he
non- movant and det er mi ne whet her t he r ecor d t aken as a whol e
coul d l ead a r easonabl e t r i er of f act t o f i nd f or t he non-
movant . Brock v. Entre Computer Ctrs., Inc., 933 F. 2d 1253,
1259 ( 4t h Ci r . 1991) ( ci t at i ons omi t t ed) . [ A] t t he summar y
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j udgment st age t he j udge s f unct i on i s not hi msel f t o wei gh t he
evi dence and det er mi ne t he t r ut h of t he mat t er but t o det er mi ne
whet her t her e i s a genui ne i ssue f or t r i al . Anderson, 477 U. S.
at 249.
The nonmovi ng par t y, however , must show mor e t han some
met aphysi cal doubt as t o t he mat er i al f act s. [ T] he non- movi ng
par t y may not r est upon mer e al l egat i on or deni al s of hi s
pl eadi ng, but must set f or t h speci f i c f act s showi ng t hat t her e
i s a genui ne i ssue f or t r i al . Hughes v. Bedsole, 48 F. 3d
1376, 1381 ( 4t h Ci r . 1995) ( quot i ng Anderson, 477 U. S. at 256) .
Concl usor y al l egat i ons, unsubst ant i at ed asser t i ons, i mpr obabl e
i nf er ences, unsuppor t ed specul at i on, or onl y a sci nt i l l a of
evi dence wi l l not car r y t hi s bur den. See Anderson, 477 U. S. at
249- 50. Ther e must be evi dence on whi ch t he j ur y coul d
r easonabl y f i nd f or t he non- movi ng par t y. Id. at 252. The
j udge s i nqui r y, t her ef or e, unavoi dabl y asks whet her r easonabl e
j ur or s coul d f i nd by a pr eponder ance of t he evi dence t hat t he
opposi ng par t y i s ent i t l ed t o a ver di ct .
III. Analysis
A. Statutory Framework
As not ed above, NOM al l eges t hat t he i nspect i on and
di scl osur e of i t s t ax r et ur n i nf or mat i on vi ol at ed 26 U. S. C.
6103 and 7431. These pr ovi si ons gener al l y pr ovi de t hat i t i s
unl awf ul f or a f eder al of f i ci al t o i nspect and/ or di scl ose a
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t axpayer s t ax r et ur n absent aut hor i zat i on. See Lampert v.
United States, 854 F. 2d 335, 336 ( 9t h Ci r . 1988) ( 26 U. S. C.
6103( a) , of t he I nt er nal Revenue Code l ays down a gener al r ul e
t hat r et ur ns and r et ur n i nf or mat i on . . . shal l be
conf i dent i al . ( ci t at i on and i nt er nal quot at i on mar ks omi t t ed) ) .
The t ext of 26 U. S. C. 7431 est abl i shes a ci vi l cause
of act i on [ i ] f any of f i cer or empl oyee of t he Uni t ed St at es
knowi ngl y, or by r eason of negl i gence, i nspect s or di scl oses any
r et ur n or r et ur n i nf or mat i on wi t h r espect t o a t axpayer i n
vi ol at i on of any pr ovi si on of sect i on 6103[ . ] 26 U. S. C.
7431( a) . Once l i abi l i t y i s pr oven, t hi s pr ovi si on per mi t s t he
f ol l owi ng damages:
[ D] ef endant shal l be l i abl e t o t he pl ai nt i f f
i n an amount equal t o t he sumof

( 1) t he gr eat er of

( A) $1, 000 f or each act of unaut hor i zed
i nspect i on or di scl osur e of a r et ur n or
r et ur n i nf or mat i on wi t h r espect t o whi ch
such def endant i s f ound l i abl e, or

( B) t he sumof

( i ) t he act ual damages sust ai ned by t he
pl ai nt i f f as a r esul t of such
unaut hor i zed i nspect i on or di scl osur e,
pl us

( i i ) i n t he case of a wi l l f ul
i nspect i on or di scl osur e or an
i nspect i on or di scl osur e whi ch i s t he
r esul t of gr oss negl i gence, puni t i ve
damages, pl us

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( 2) t he cost s of t he act i on, pl us

( 3) i n t he case of a pl ai nt i f f whi ch i s
descr i bed i n sect i on 7430( c) ( 4) ( A) ( i i ) ,
r easonabl e at t or neys f ees, except t hat i f
t he def endant i s t he Uni t ed St at es,
r easonabl e at t or neys f ees may be awar ded
onl y i f t he pl ai nt i f f i s t he pr evai l i ng
par t y[ . ]

26 U. S. C. 7431( c) . I n shor t , f or each negl i gent di scl osur e or
i nspect i on, a pl ai nt i f f may r ecover st at ut or y damages of $1, 000
or , al t er nat i vel y, act ual damages. And, i f t he i nspect i on or
di scl osur e i s wi l l f ul or gr ossl y negl i gent , a pl ai nt i f f may be
ent i t l ed t o puni t i ve damages. See Mallas v. United States, 993
F. 2d 1111, 1125- 26 ( 4t h Ci r . 1993) .
Wi t h t he above st andar ds i n mi nd, t he Cour t wi l l t ur n
t o t he i ssues r ai sed i n t he Gover nment s mot i on.
B. Punitive Damages
The Gover nment f i r st ar gues t hat NOM, as a mat t er of
l aw, cannot demonst r at e t hat t he di scl osur e of i t s 2008 Schedul e
B was t he r esul t of gr oss negl i gence or wi l l f ul ness as
r equi r ed t o r ecover puni t i ve damages under 7431( c) . ( Gov t s
Mem. at 17- 19. ) Havi ng r evi ewed t he r ecor d, t he Cour t agr ees.
As det ai l ed above, 7431( c) aut hor i zes puni t i ve
damages onl y i f t he di scl osur e was wi l l f ul or gr ossl y negl i gent .
Wi l l f ul conduct i s t hat whi ch was done wi t hout gr ound f or
bel i evi ng t hat i t was l awf ul or conduct mar ked by a car el ess
di sr egar d of whet her one has a r i ght t o act i n such manner . . .
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. Conduct t hat i s gr ossl y negl i gent i s t hat whi ch i s ei t her
wi l l f ul or mar ked by want on or r eckl ess di sr egar d of t he r i ght s
of anot her . Barrett v. United States, 100 F. 3d 35, 40 ( 5t h
Ci r . 1996) ( ci t at i ons and i nt er nal quot at i on mar ks omi t t ed) ; see
also Scrimgeour v. Internal Revenue, 149 F. 3d 318, 324- 25 ( 4t h
Ci r . 1998) ( t o r ecover puni t i ve damages based on t he i mpr oper
r el ease of conf i dent i al t ax r et ur n i nf or mat i on, t he t axpayer has
t he bur den of demonst r at i ng t hat t he di scl osur e was wi l l f ul or
gr ossl y negl i gent ) . Accor di ngl y, i n or der t o sur vi ve summar y
j udgment , NOM, as t he par t y wi t h t he bur den of pr oof as t o t hi s
i ssue, was r equi r ed t o pr oduce suf f i ci ent evi dence f r omwhi ch
t he f act f i nder coul d concl ude t hat t he di scl osur e was wi l l f ul
or gr ossl y negl i gent . See Celotex, 477 U. S. at 32325. NOM has
not car r i ed t hi s bur den.
NOM has pr of f er ed no evi dence t hat i t s unr edact ed t ax
i nf or mat i on was wi l l f ul l y di scl osed. The r ecor d pr ovi des a
speci f i c t i mel i ne evi denci ng t hat NOM s Schedul e B was r el eased
i nadver t ent l y as par t of a si ngl e empl oyee s mi st ake. ( Gov t s
Mem. at 8- 9. ) NOM s at t empt t o di scr edi t t hi s t heor y by
poi nt i ng out t hat I RS r ecor ds ar e i ncompl et e r egar di ng pr eci sel y
what happened i n t hi s case i s i nsuf f i ci ent t o cr eat e a mat er i al
i ssue of f act as t o t he sour ce of t he di scl osur e. See Anderson,
477 U. S. at 247- 48 ( [ T] he mer e exi st ence of some al l eged
f act ual di sput e bet ween t he par t i es wi l l not def eat an ot her wi se
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pr oper l y suppor t ed mot i on f or summar y j udgment . ) . The emai l
evi dence, deposi t i on t est i mony, wat er mar k, and ent r i es f r omSEI N
and I DRS compel t he concl usi on t hat Pet er s acci dent al l y
f or war ded an unr edact ed copy of NOM s 2008 Schedul e B i n
r esponse t o Mei sel s r equest . ( See Gov t s Mem. at 7- 9. ) NOM
has pr oduced no evi dence f r omwhi ch a r easonabl e j ur or coul d
concl ude ot her wi se, and t her ef or e i t s unsubst ant i at ed asser t i on
t hat anot her sour ce coul d have i nt ent i onal l y r el eased t he
Schedul e B f al l s f l at . See Anderson, 477 U. S. at 249- 50 ( I f
t he evi dence i s mer el y col or abl e, or i s not si gni f i cant l y
pr obat i ve, summar y j udgment may be gr ant ed. ) ; City of Richmond
v. Atl. Co., 273 F. 2d 902, 910 ( 4t h Ci r . 1960) ( The gener al
r ul e r equi r es t hat t he evi dence must gener at e an act ual r at i onal
bel i ef i n t he exi st ence of a di sput ed f act , and t hat evi dence
whi ch l eaves t he i ssue t o sur mi se or conj ect ur e, l eavi ng t he
mi nds of t he j ur or s i n equi poi se, i s never suf f i ci ent [ . ] ) .
NOM s ar gument t hat t he di scl osur e was i nt ent i onal
because t he Schedul e B was gi ven t o a known pol i t i cal act i vi st
and al t er ed t o obscur e i t s i nt er nal I RS mar ki ngs i s si mi l ar l y
unf ounded. ( Gov t Ex. 1. ) The evi dence i s unr ef ut ed t hat
Pet er s di d not know Mei sel or have any connect i on t o t he HRC
when she di scl osed t he i nf or mat i on. Fur t her mor e, NOM has f ai l ed
t o pr oduce a shr ed of pr oof t hat anyone at t he I RS al t er ed or
obscur ed t he wat er mar k. I n shor t , NOM s al l egat i ons of
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wi l l f ul ness ar e unsuppor t ed by any evi dence and t hus
i nsuf f i ci ent . See Celotex, 477 U. S. at 323 ( [ A] f t er adequat e
t i me f or di scover y and upon mot i on, [ summar y j udgment i s
appr opr i at e] agai nst a par t y who f ai l s t o make a showi ng
suf f i ci ent t o est abl i sh t he exi st ence of an el ement essent i al t o
t hat par t y s [ cl ai m] , and on whi ch t hat par t y wi l l bear t he
bur den of pr oof at t r i al . ) ; Messing v. CSX Transp., Inc., No.
98- 1516, 1999 WL 14122, at *2- 3 ( 4t h Ci r . J an. 15, 1999)
( af f i r mi ng di smi ssal on summar y j udgment wher e pl ai nt i f f f ai l ed
t o pr oduce any evi dence suppor t i ng hi s cl ai ms) .
The r ecor d i s equal l y def i ci ent concer ni ng NOM s
asser t i on of gr oss negl i gence. Under 7431( c) ( 1) ( B) ( i i ) ,
gr ossl y negl i gent conduct i s t hat whi ch i s . . . mar ked by
want on or r eckl ess di sr egar d of t he r i ght s of anot her . I n
cont r ast , si mpl e negl i gence i s t he l ack of due car e.
Scrimgeour, 149 F. 3d at 323- 24 ( ci t at i ons omi t t ed) . The
evi dence i n t hi s case pl ai nl y f al l s i n t he l at t er cat egor y. As
di scussed above, t he onl y l ogi cal concl usi on f r omt he r ecor d i s
t hat Pet er s f ai l ed t o pr epar e t he document s cor r ect l y and
car el essl y sent Mei sel an unr edact ed copy of NOM s 2008 Schedul e
B. These act i ons do not , as a mat t er of l aw, r ef l ect any
gr eat er l evel of cul pabi l i t y t han si mpl e negl i gence. See Mallas
v. United States, No. 94- 2138, 1995 WL 290401, at *3 ( 4t h Ci r .
May 15, 1995) ( st at i ng t hat t o est abl i sh gr oss negl i gence, t he
14

di scl osur e must r epr esent a f l agr ant vi ol at i on of 26 U. S. C.
6103) .
The i nst ant case i s si mi l ar t o Miller v. United
States, 66 F. 3d 220 ( 9t h Ci r . 1995) , i n whi ch t he Ni nt h Ci r cui t
af f i r med t he di st r i ct cour t s concl usi on t hat an unaut hor i zed
di scl osur e by an I RS agent t o a newspaper r epor t er , who
subsequent l y publ i shed t he i nf or mat i on, was negl i gent , but not
wi l l f ul or gr ossl y negl i gent . Id. at 224. Speci f i cal l y, t he
cour t hel d:
The di st r i ct cour t cor r ect l y vi ewed t he
di scl osur e as a moment ar y and i nsi gni f i cant
over si ght . To quot e t he cour t , Wel l , I
t hi nk t hi s i s an oops case. OOPS, oops.
The onl y evi dence t o count er t hi s f i ndi ng i s
t he f act t hat [ t he agent ] knew t hat Levi n
was a r epor t er and t hat [ t he agent ] had been
t r ai ned not t o di scl ose t axpayer
i nf or mat i on. Even t hough [ t he agent s]
unaut hor i zed di scl osur e of t axpayer r et ur n
i nf or mat i on t o a r epor t er i s mor e ser i ous i n
t he abst r act t han an unaut hor i zed di scl osur e
t o a pr i vat e ci t i zen, we concl ude t he
di st r i ct cour t di d not cl ear l y er r i n
f i ndi ng t hat [ t he agent s] di scl osur e was
t he r esul t of si mpl e negl i gence. I n t he
mai n, t he r ecor d suggest s t hat [ pl ai nt i f f ]
and her at t or neys have at t empt ed t o conver t
a pr over bi al mol ehi l l i nt o Ft . Knox.

Id. Al t hough f act ual l y di st i ngui shabl e, Miller hi ghl i ght s t he
pr i nci pl e t hat an i nadver t ent di scl osur e, such as t hat pr esent ed
her e, does not r i se t o t he l evel of gr oss negl i gence.
Appar ent l y r ecogni zi ng t hat Pet er s conduct f al l s f ar
shor t of gr oss negl i gence, NOM dedi cat es a si gni f i cant por t i on
15

of i t s br i ef t o at t acki ng t he I RS s i nt er nal pr ocedur es f or
pr ocessi ng such r equest s. ( Pl . s Opp n at 14 ( [ T] he r ecor d
evi dence demonst r at es a syst emat i c f ai l ur e by t he Gover nment
mar ked by r eckl ess di sr egar d of i t s st at ut or i l y mandat ed dut y
t o pr ot ect t he conf i dent i al donor i nf or mat i on of exempt
or gani zat i ons. ) . ) Speci f i cal l y, NOM st at es:
Whi l e t he act ual di scl osur e may have been
i nadver t ent , i t was br ought about by, among
ot her t hi ngs: ( 1) over br oad access t o non-
publ i c r et ur n i nf or mat i on ( St at ement of
Mat er i al Fact s t hat Ar e i n Di sput e ( SoDF)
13, 52) ; ( 2) l ack of checks and bal ances i n
di scl osur e pr ocess ( SoDF 47, 51) ; ( 3) l ack
of under st andi ng by seni or management as t o
who had access ( SoDF 53) ; ( 4) l ack of basi c
t r ai ni ng as t o conf i dent i al i t y pr ocedur es
( SoDF 50) ; ( 5) l ack of super vi si on as t o
conf i dent i al i t y pr ocedur es ( SoDF 47, 51) ;
and ( 6) f ai l ur e t o heed seni or
admi ni st r at or s concer ns.

( Id.) I n ot her wor ds, NOM i nsi st s t hat I RS pr ocedur es wer e so
i nher ent l y def i ci ent dur i ng t he r el evant t i me per i od t hat t he
di scl osur e must be t he r esul t of gr oss negl i gence. The Cour t
f i nds t hi s ar gument unconvi nci ng.
3


3
I n i t s r epl y, t he Gover nment ar gues t hat t he Cour t shoul d excl ude t hi s
cl ai mof gr oss negl i gence because i t was never i dent i f i ed dur i ng di scover y.
( Gov t s Repl y [ Dkt . 77] at 5- 6 ( ci t i ng Fed. R. Ci v. P. 37) . ) The Cour t
agr ees t hat NOM f ai l ed t o di scl ose t hi s t heor y of t he case i n vi ol at i on of
Rul e 37, and t hus excl usi on i s appr opr i at e. See In re Methyl Tertiary Butyl
Ether Prods. Liab. Litig., No. 100- 1898, 2014 WL 494522, at *2- 4 ( S. D. N. Y.
Feb. 6, 2014) ( excl udi ng pl ai nt i f f s t heor y of l i abi l i t y under Rul e 37
because i t was not di scl osed i n r esponse t o def endant s di scover y r equest s) ;
Rambus, Inc. v. Infineon Techs. AG, 145 F. Supp. 2d 721, 727 ( E. D. Va. 2001)
( not i ng t hat Rul e 37( c) ( 1) aut omat i cal l y i mposes t he pr ecl usi on sanct i on
unl ess t he noncompl yi ng par t y can show t hat t her e i s subst ant i al
j ust i f i cat i on f or t he f ai l ur e t o make t he di scl osur e and t hat t he f ai l ur e t o
16

Even t aki ng t he def i ci enci es not ed by NOM at f ace
val ue, no r easonabl e j ur y coul d concl ude t hat t he pr ocedur es i n
pl ace wer e so f undament al l y f l awed as t o const i t ut e gr oss
negl i gence. I t i s undi sput ed t hat t he I RS r est r i ct ed access t o
conf i dent i al mat er i al and mandat ed t hat al l empl oyees r edact
donor i nf or mat i on bef or e di scl osi ng a For m990. ( Gov t s Mem.
at 7; Pl . s Opp n at 7. ) The I RS s at t empt t o del et e
conf i dent i al i nf or mat i on demonst r at es t he agency s
consi der at i on of and concer n f or pl ai nt i f f s pr i vacy i nt er est s
such t hat i t s act i ons cannot be l abel ed want on or r eckl ess.
Sterling v. United States, 826 F. Supp. 570, 572 ( D. D. C. 1993) .
Al t hough t he I RS has si nce changed i t s pr ocedur es t o avoi d t he
ver y ci r cumst ances of t hi s case, ( Pl . s Opp n at 10- 12) , i t s
pr i or syst emf al l s f ar shor t of gr oss negl i gence under any
def i ni t i on of t he t er m. See Sullivan v. Veterans Admin., 617 F.
Supp. 258, 259- 62 ( D. D. C. 1985) ( f i ndi ng t hat t he def endant -
agency di d not act i nt ent i onal l y or wi t h f l agr ant [ ] di sr egar d
[ of ] an i ndi vi dual s r i ght s i n r el easi ng a r epor t t hat
i nadver t ent l y i ncl uded one i nst ance of conf i dent i al
i nf or mat i on because [ w] hi l e t he [ agency] was not compl et el y
successf ul i n del et i ng al l t he per sonal l y i dent i f i abl e
r ef er ences t o pl ai nt i f f , i t s at t empt t o do so demonst r at es t hat

di scl ose was har ml ess) . Never t hel ess, because t hi s ar gument i s a
nonst ar t er , t he Cour t wi l l addr ess t he mer i t s bel ow.
17

agency s consi der at i on of and concer n f or pl ai nt i f f s pr i vacy
i nt er est s) ; Scrimgeour, 149 F. 3d at 321- 26 ( r ul i ng t hat agency
empl oyees wer e not gr ossl y negl i gent i n r el easi ng conf i dent i al
i nf or mat i on al t hough t he r equest s f or such i nf or mat i on wer e
f aci al l y f l awed) ; Jones v. United States, 207 F. 3d 508, 509- 12
( 8t h Ci r . 2000) ( I RS agent s t i p of i mpendi ng r ai d t o
conf i dent i al i nf or mant , who i nf or med a t el evi si on st at i on, di d
not const i t ut e gr oss negl i gence) . Thi s concl usi on i s conf i r med
by t he f act t hat , ot her t han t hi s case, t her e i s no r ecor d of a
RAVI S cl er k f ai l i ng t o r edact a Schedul e B. ( Gov t s Mem. at
9. ) Fur t her mor e, adopt i ng NOM s posi t i on woul d i mpl y t hat any
i nadver t ent di scl osur e pr i or t o 2011 was gr ossl y negl i gent
sol el y by vi r t ue of t he I RS s pr ocedur es. Thi s vi ew i s not
bor ne out by t he case l aw.
Fi nal l y, NOM s ar gument t hat summar y j udgment i s
i nappr opr i at e because t he exi st ence of puni t i ve damages i s
i nher ent l y a f act ual i ssue mi sses t he mar k. ( Pl . s Opp n at
12. ) Cont r ar y t o NOM s posi t i on, summar y j udgment i s not
al t oget her pr ecl uded on i ssues t hat ar e t ypi cal l y quest i ons of
f act f or t he j ur y. See Hanover Ins. Co. v. N. Bldg. Co., No.
132675, 2014 WL 1810586, at *6 ( 7t h Ci r . May 8, 2014) ( Legal
damages, l i ke l i abi l i t y, can be det er mi ned vi a t he summar y
j udgment mechani sm. ) ; Kirbyson v. Tesoro Ref. & Mktg. Co., 795
F. Supp. 2d 930, 947 ( N. D. Cal . 2011) ( gr ant i ng summar y j udgment
18

on puni t i ve damages cl ai mbased on l ack of evi dence) ; Bhandari
v. VHA Sw. Cmty. Health Corp., No. CI V 090932 J B/ GBW, 2011 WL
1336512, at *19 ( D. N. M. Mar . 30, 2011) ( same) . Summar y j udgment
i s appr opr i at e on a cl ai mf or puni t i ve damages wher e, as i s t he
case her e, t he pl ai nt i f f has f ai l ed t o car r y hi s bur den of
pr oduci ng suf f i ci ent evi dence t o cr eat e a t r i abl e i ssue of f act
and onl y one concl usi on i s possi bl e f r omt he r ecor d. See Nelson
v. Lake Charles Stevedores, L.L.C., No. 2: 11CV1377, 2014 WL
1339827, at *3- 8 ( W. D. La. Apr . 2, 2014) ( gr ant i ng def endant s
mot i on f or summar y j udgment as t o pl ai nt i f f s r equest f or
puni t i ve damages wher e t her e i s no set of ci r cumst ances under
whi ch t he pl ai nt i f f coul d r ecover ) .
NOM has made no showi ng f r omwhi ch a r easonabl e j ur y
coul d f i nd t hat t he di scl osur e of i t s Schedul e B was t he r esul t
of wi l l f ul ness or gr oss negl i gence. NOM, t her ef or e, i s not
ent i t l ed t o r ecover puni t i ve damages, and t he Cour t wi l l gr ant
t he Gover nment s mot i on wi t h r espect t o t hi s cl ai m.
C. Inspection of NOMs Tax Return Information
Apar t f r omt he di scl osur e of i t s Schedul e B di scussed
above, NOM cl ai ms t hat i t i s ent i t l ed t o st at ut or y and act ual
damages, or puni t i ve damages, [ because] i t s r et ur n i nf or mat i on
was unl awf ul l y i nspect ed. ( Pl . s Opp n at 15. ) Accor di ng t o
NOM, [ t ] he r ecor d evi dence demonst r at es t hat var i ous I RS agent s
[ i mper mi ssi bl y] i nspect ed NOM s 2008 Schedul e B ( or i gi nal and
19

amended ver si ons) pr i or t o and i mmedi at el y af t er t he unl awf ul
di scl osur e was publ i ci zed[ . ] ( Id.) The Gover nment has moved
f or summar y j udgment as t o t hi s cl ai m, ar gui ng t hat NOM has
f ai l ed t o pr oduce suf f i ci ent evi dence showi ng t hat t hese
i nspect i ons wer e unaut hor i zed. ( Gov t s Mem. at 16. )
I t i s uncont est ed t hat 7431 pr ovi des f or ci vi l
l i abi l i t y when an I RS empl oyee i mper mi ssi bl y i nspect s a
t axpayer s r et ur n i nf or mat i on, and accor di ng t o I RS r ecor ds, t he
f ol l owi ng empl oyees accessed NOM s 2008 Schedul e B on t he dat es
not ed:
Wendy Pet er s 01/ 21/ 11
Conni e Peek 04/ 05/ 12 ( t wi ce)
Sher r y Whi t aker 04/ 13/ 12 ( t wi ce)
Kat hi Pal mer 04/ 05/ 12
Uni dent i f i ed Manager 04/ 13/ 12 ( t wi ce)
Laur i ce Ghougasi an 04/ 05/ 12

( Pl . s Opp n at 17. ) NOM ar gues t hat whet her t hese i nspect i ons
wer e aut hor i zed . . . i s a quest i on of di sput ed f act t hat
pr ecl udes summar y j udgment on t hi s i ssue. ( Id. at 15. ) For t he
r easons set f or t h bel ow, t he Cour t di sagr ees.
NOM bear s t he bur den of pr oof as t o t hi s i ssue. See
Flippo v. United States, 670 F. Supp. 638, 641 ( W. D. N. C. 1987)
( I n or der f or t he Pl ai nt i f f t o pr evai l under Sect i on 7431( a) ( 1)
he must show by a pr eponder ance of t he evi dence . . . t hat t he
di scl osur e was unaut hor i zed[ . ] ) . Thus, i n r esponse t o t he
Gover nment s mot i on f or summar y j udgment , NOM was r equi r ed t o
20

pr of f er evi dence f r omwhi ch a t r i er of f act coul d r easonabl y
f i nd t hat t hese i nspect i ons wer e unaut hor i zed. See Celotex, 477
U. S. at 32325. NOM has agai n f ai l ed t o meet i t s bur den.
Wi t h r egar d t o t he 2011 i nspect i on, NOM cl ai ms t hat
Pet er s aut hor i t y i s i n di sput e because t her e i s not hi ng bef or e
t he Cour t i ndi cat i ng t hat she accessed NOM s Schedul e B i n
r esponse t o a pr oper t hi r d- par t y r equest . ( Pl . s Opp n at 17
( The Gover nment s ar gument t hat Ms. Pet er s i nspect i ons of
NOM s 2008 Schedul e Bs wer e aut hor i zed depends on i t s
unsubst ant i at ed assumpt i on t hat Mr . Mei sel speci f i cal l y
r equest ed copi es of NOM s 2008 Schedul e Bs. . . . Yet t he
Gover nment s assumpt i on f i nds no suppor t i n t he r ecor d. ) . ) I n
essence, NOM asks t he Cour t t o i nf er t hat Pet er s l acked
aut hor i t y based on t he absence of a compl et e audi t t r ai l
r egar di ng her act i ons and t he speci f i cs of Mei sel s r equest .
( Id.) Thi s ar gument i s unper suasi ve. No r easonabl e j ur y coul d
f i nd i n NOM s f avor based sol el y on t hi s negat i ve i nf er ence when
t he r emai ni ng evi dence over whel mi ngl y i ndi cat es t hat Pet er s
i nspect ed t he r et ur n whi l e per f or mi ng her of f i ci al I RS dut i es.
( See Gov t s Mem. at 7- 8. ) To f i nd t hat NOM coul d pr evai l f r om
t hi s sci nt i l l a of evi dence woul d r equi r e t he bui l di ng of one
i nf er ence upon anot her , whi ch i s not appr opr i at e under Rul e 56.
Beale v. Hardy, 769 F. 2d 213, 214 ( 4t h Ci r . 1985) . Accor di ngl y,
t he Cour t wi l l gr ant t he Gover nment s mot i on wi t h r espect t o t he
21

2011 i nspect i on. See Hughes, 48 F. 3d at 1384 ( not i ng t hat t o
avoi d summar y j udgment , t he par t y who bear s t he ul t i mat e bur den
of pr oof at t r i al must pr esent evi dence f r omwhi ch a r at i onal
j ur y mi ght f i nd i n t hei r f avor ) .
The r ecor d i s equal l y def i ci ent concer ni ng t he
r emai ni ng i nspect i ons. Ci t i ng t o a si ngl e l i ne i n an emai l
obt ai ned dur i ng di scover y, NOM ar gues t hat t her e i s a di sput ed
quest i on of f act whet her some, al l or none of t hese i nspect i ons
wer e t r ul y f or t ax admi ni st r at i on pur pose or wer e i nst ead out of
mer e cur i osi t y. ( Pl . s Opp n at 17- 18. ) The emai l at i ssue i s
aut hor ed by Davi d Hami l t on, t he SEI N dat abase manager , and i t
r eads i n f ul l :
FYI , i t l ooks l i ke t he On- Li ne- SEI N audi t
syst em wor ks. The ar t i cl e l i nked bel ow
t al ks about an i l l egal di scl osur e of an
unr edact ed r et ur n t o a web si t e. Even
t hough t he wat er mar k was cr udel y r emoved,
t he t r acki ng number was obt ai ned by
exami ni ng t he under - l ayer s of t he PDF.
Quer yi ng t he Access_Audi t t abl e f or t he
r et ur n i d showed 6 user s had accessed t he
r et ur n and one of t he t r acki ng number s
mat ched t he one t hat was r emoved. The ot her
5 user s wer e TEGE hi gher ups t aki ng a l ook
once t he di scl osur e was r epor t ed i n t he
pr ess.

Yay! Somet hi ng wor ked t he f i r st t i me!

( Pl . s Ex. 7. ) The Cour t f i nds t hi s si ngl e emai l i nsuf f i ci ent
t o cr eat e a mat er i al i ssue of f act as t o whet her t he r emai ni ng
i nspect i ons wer e unaut hor i zed. See Reese v. Natl R.R.
22

Passenger Corp., No. CI V. A. 96109C, 1999 WL 195729, at *2
( W. D. Va. Mar . 26, 1999) ( gr ant i ng summar y j udgment wher e
pl ai nt i f f s opposi t i on r el i ed on t he t hi n r eed of a si ngl e
answer t o an i nt er r ogat or y) . The r est of t he emai l chai n,
whi ch NOM nat ur al l y f ai l s t o addr ess, conf i r ms t hat each of t he
i ndi vi dual s i dent i f i ed above, out si de of Pet er s, wer e somehow
i nvol ved i n t he I RS s r esponse t o t he di scl osur e. ( See Pl . s
Ex. 7. ) The I RS s i nt er nal i nvest i gat i on r epor t f ur t her
conf i r ms t hat al l of t he i nspect i ons per f or med i n Apr i l 2012
wer e done as par t of t he I RS s i nt er nal r esponse. ( Pl . s Ex. 3
at 5 ( STACY FI SHER added t hat besi des t he accesses t hat she and
her associ at es have per f or med i n Apr i l 2012, no ot her I RS
empl oyees have accessed t he NOM s 2008 account [ . ] ) . ) Based on
t hi s evi dence, no r easonabl e f act f i nder coul d concl ude t hat t he
i nspect i ons at i ssue wer e anyt hi ng but of f i ci al t ax
admi ni st r at i on busi ness. See 26 U. S. C. 6103( h) ( 1) ( per mi t t i ng
t he i nspect i on by or di scl osur e [ of r et ur ns] t o of f i cer s and
empl oyees of t he Depar t ment of t he Tr easur y whose of f i ci al
dut i es r equi r e such i nspect i on or di scl osur e f or t ax
admi ni st r at i on pur poses) .
Accor di ngl y, because t her e i s no evi dence bef or e t he
Cour t upon whi ch NOM coul d pr evai l , t he Cour t wi l l di smi ss i t s
unl awf ul i nspect i on cl ai ms.

23

D. Actual Damages
Sect i on 7431( c) pr ovi des t hat a t axpayer who
est abl i shes t hat hi s r et ur n i nf or mat i on was di scl osed i n
vi ol at i on of 6103 has a choi ce bet ween ei t her st at ut or y
damages of $1, 000 f or each act of unaut hor i zed di scl osur e or
t he sumof hi s act ual damages pl us, i n t he case of a wi l l f ul
di scl osur e or a di scl osur e whi ch i s t he r esul t of gr oss
negl i gence, puni t i ve damages. 26 U. S. C. 7431( c) .
I n t hi s case, NOM i s cl ai mi ng t he f ol l owi ng act ual
damages: $12, 500 i n at t or neys f ees i n connect i on wi t h i t s
r esponse t o t he Kar ger l awsui t di scussed above; and $46, 086. 37
i n at t or neys f ees expended dur i ng i t s ef f or t s t o det er mi ne t he
sour ce of t he di scl osur e and pr event f ur t her di ssemi nat i on of
i t s Schedul e B. ( Gov t s Mem. at 9- 10; Pl . s Opp n at 7. ) The
Gover nment cl ai ms t hat [ n] one of t hese al l eged damages ar e
r ecover abl e because, as a mat t er of l aw, t he act ual damages
cl ai med wer e not sust ai ned as a r esul t of t he I RS i nadver t ent
di scl osur e, but r at her wer e t he r esul t of t he i nt er veni ng
act i ons of t hi r d par t i es[ . ] ( Gov t s Mem. at 24. )
The case l aw i s admi t t edl y spar se r egar di ng what i s
necessar y t o est abl i sh act ual damages under 7431( c) . Each
cour t t o have addr essed t hi s i ssue, however , has uni f or ml y
concl uded t hat t hat t he common l aw el ement s of causat i on
act ual and pr oxi mat e cause - must be pr oven. See, e.g., Jones
24

v. United States, 9 F. Supp. 2d 1119, 1137 ( D. Neb. 1998) ; see
also Paroline v. United States, __ U. S. __, 134 S. Ct . 1710,
1720 ( 2014) ( r eci t i ng t he common maxi mt hat a pl ai nt i f f must
pr ove bot h pr oxi mat e cause and act ual cause t o r ecover damages
t hat ar e a r esul t of a par t i cul ar def endant s conduct ) .
The Supr eme Cour t s r ecent di scussi on of causat i on i n
Paroline i s par t i cul ar l y hel pf ul her e:
As a gener al mat t er , t o say one event
pr oxi mat el y caused anot her i s a way of
maki ng t wo separ at e but r el at ed asser t i ons.
Fi r st , i t means t he f or mer event caused t he
l at t er . Thi s i s known as act ual cause or
cause i n f act . The concept of act ual cause
i s not a met aphysi cal one but an or di nar y,
mat t er - of - f act i nqui r y i nt o t he exi st ence .
. . of a causal r el at i on as l aypeopl e woul d
vi ew i t .

Ever y event has many causes, however , and
onl y some of t hem ar e pr oxi mat e, as t he l aw
uses t hat t er m. So t o say t hat one event
was a pr oxi mat e cause of anot her means t hat
i t was not j ust any cause, but one wi t h a
suf f i ci ent connect i on t o t he r esul t . The
i dea of pr oxi mat e cause, as di st i nct f r om
act ual cause or cause i n f act , def i es easy
summar y. I t i s a f l exi bl e concept . . .
t hat gener al l y r ef er s t o t he basi c
r equi r ement t hat . . . t her e must be some
di r ect r el at i on bet ween t he i nj ur y asser t ed
and t he i nj ur i ous conduct al l eged[ . ] . . .
The concept of pr oxi mat e causat i on i s
appl i cabl e i n bot h cr i mi nal and t or t l aw,
and t he anal ysi s i s par al l el i n many
i nst ances. Pr oxi mat e cause i s of t en
expl i cat ed i n t er ms of f or eseeabi l i t y or t he
scope of t he r i sk cr eat ed by t he pr edi cat e
conduct . . . . A r equi r ement of pr oxi mat e
cause t hus ser ves, inter alia, t o pr ecl ude
l i abi l i t y i n si t uat i ons wher e t he causal
25

l i nk bet ween conduct and r esul t i s so
at t enuat ed t hat t he consequence i s mor e
apt l y descr i bed as mer e f or t ui t y.

134 S. Ct . at 1719 ( ci t at i ons omi t t ed) . Wi t h t hese pr i nci pl es
i n mi nd, t he Cour t wi l l t ur n t o t he speci f i c quest i ons r ai sed i n
t he Gover nment s mot i on. I n gener al , t he Gover nment ar gues t hat
t he NOM has f ai l ed t o pr ove bot h act ual and pr oxi mat e cause.
( Gov t s Mem. at 24. )
The Cour t has l i t t l e t r oubl e concl udi ng t hat t he
unl awf ul di scl osur e of NOM s Schedul e B was t he act ual cause of
i t s cl ai med damages. Act ual cause, or cause i n f act , r equi r es
pr o[ of ] t hat t he wr ongf ul act i n f act caused t he har m; t hat i s,
t he pl ai nt i f f must pr ove t hat but f or t he wr ongf ul act , t he
har mwoul d not have occur r ed. Jones, 9 F. Supp. at 1138. The
Gover nment concedes t hat i t unl awf ul l y di scl osed NOM s Schedul e
B t o a t hi r d- par t y. ( Gov t s Mem. at 2. ) The damages not ed
above wer e pl ai nl y a di r ect r esul t of t hi s di scl osur e. For
exampl e, i t i s cl ear beyond quest i on t hat t he di scl osur e gai ned
si gni f i cant medi a cover age t hat r esul t ed i n NOM r et ai ni ng
counsel t o i nvest i gat e t he l eak. I n ot her wor ds, but f or t he
di scl osur e, NOM woul d not have i ncur r ed t he cost s i t now seeks
t hr ough t hi s act i on. See Paroline, 134 S. Ct . at 1722 ( The
t r adi t i onal way t o pr ove t hat one event was a f act ual cause of
anot her i s t o show t hat t he l at t er woul d not have occur r ed but
f or t he f or mer . Thi s appr oach i s a f ami l i ar par t of our l egal
26

t r adi t i on[ . ] ( ci t at i on omi t t ed) ) . The Gover nment s ar gument
t hat NOM cannot pass t he but f or t est because i t wi l l i ngl y
i ncur r ed t hese expenses i s unsuccessf ul . ( See Gov t s Mem. at
27. ) Thi s ar gument has no r el at i on t o t he Cour t s i nqui r y,
whi ch si mpl y asks woul d t he i nj ur y have occur r ed wi t hout t he
def endant s conduct . See Eggleston v. Wal-Mart Stores East, LP,
No. 3: 05 CV 721, 2006 WL 1050654, at *3 ( E. D. Va. Apr . 20,
2006) . The answer i n t hi s case, wi t hout quest i on, i s no.
The i ssue of pr oxi mat e cause i s a cl oser cal l si mpl y
by vi r t ue of i t s nebul ousness. As not ed above, pr oxi mat e cause
i s a f l exi bl e concept not easi l y def i ned or i mpl ement ed.
Paroline, 134 S. Ct . at 1719. Gener al l y, pr oxi mat e cause r ef er s
t o t he not i on t hat t her e must be some di r ect r el at i on bet ween
t he i nj ur y asser t ed and t he i nj ur i ous conduct al l eged. Holmes
v. Sec. Investor Prot. Corp., 503 U. S. 258, 268 ( 1992) .
Pr oxi mat e cause i s desi gned t o pr ecl ude l i abi l i t y i n si t uat i ons
wher e t he causal l i nk bet ween conduct and r esul t i s so
at t enuat ed t hat t he consequence i s mor e apt l y descr i bed as mer e
f or t ui t y. Paroline, 134 S. Ct . at 1719 ( ci t at i on omi t t ed) .
The pr oxi mat e cause i nqui r y i s of t en expl i cat ed i n t er ms of
f or eseeabi l i t y or t he scope of t he r i sk cr eat ed by t he pr edi cat e
conduct . Id. Boi l ed down, t he pl ai nt i f f must pr ove t hat t he
har mwas a r easonabl e and pr obabl e [ f or eseeabl e] consequence
of t he wr ongf ul act ; t hat i s, t he pl ai nt i f f must pr ove t hat ,
27

consi der i ng ot her pot ent i al causes, i t i s sensi bl e t o i mpose
l i abi l i t y upon t he def endant . Jones, 9 F. Supp. at 1138
( ci t at i ons omi t t ed) ; see also Goddard v. Protective Life Corp.,
82 F. Supp. 2d 545, 554 ( E. D. Va. 2000) ( The quest i on of
pr oxi mat e cause i s gener al l y a quest i on f or det er mi nat i on by a
j ur y. . . . Such a det er mi nat i on becomes a mat t er of l aw i f
undi sput ed f act s ar e suscept i bl e of onl y one i nf er ence.
( ci t at i on omi t t ed) ) .
Havi ng consi der ed t he par t i es ar gument s, t he Cour t i s
per suaded t hat t he har ms f or whi ch NOM seeks damages wer e bot h
f or eseeabl e and wi t hi n t he scope of r i sk associ at ed wi t h t he
I RS s conduct . Congr ess del i ber at el y exempt ed f r omdi scl osur e
t he names and addr esses of an or gani zat i on s donor s. See 26
U. S. C. 6104( b) . Thi s choi ce demonst r at es i t s under st andi ng
one t hat i s assumed by t he I RS t hat such i nf or mat i on, i f
di scl osed publ i cl y, coul d expose an or gani zat i on and i t s donor s
t o a mul t i t ude of har ms. See Diamond v. United States, 944 F. 2d
431, 434 ( 8t h Ci r . 1991) ( The need t o mi ni mi ze di scl osur es i s
par t i cul ar l y i mpor t ant when i t i s r emember ed t hat our vol unt ar y
assessment syst emof t ax act i on i s i n l ar ge measur e dependent
upon t he r eal i zat i on of a t axpayer s expect at i on t hat t he
i nf or mat i on r equi r ed of hi mf or t hi s pur pose woul d be kept
conf i dent i al . ( ci t at i on omi t t ed) ) ; Johnson v. Sawyer, 640 F.
Supp. 1126, 1132 ( S. D. Tex. 1986) ( Congr ess enact ed . . .
28

[ Sect i on] 6103 t o pr ot ect t axpayer s r easonabl e expect at i on t hat
i nf or mat i on submi t t ed t o t he I RS woul d r emai n conf i dent i al . ) .
As such, i t was cer t ai nl y f or eseeabl e t hat r el easi ng NOM s
Schedul e B t o a member of t he medi a coul d r esul t i n i t s
publ i cat i on, and t hat NOM woul d t ake l egal act i on t o pr event
f ur t her har m. Whi l e t he Gover nment may not have pr edi ct ed t he
pr eci se conduct at i ssue her e, one cannot r easonabl y concl ude
t hat NOM s l egal expenses wer e unf or eseeabl e, and t hat i s al l
t he el ement of pr oxi mat e cause r equi r es. See Griggs v.
Firestone Tire & Rubber Co., 513 F. 2d 851, 861 ( 8t h Ci r . 1975)
( [ T] he l aw does not r equi r e pr eci si on i n f or eseei ng t he exact
hazar d or consequence whi ch i n f act t r anspi r es; i t i s suf f i ci ent
i f what occur r ed was one of t he ki nd of consequences whi ch mi ght
r easonabl y be f or eseen. ( ci t at i on and i nt er nal quot at i on mar ks
omi t t ed) ) .
The case Jones v. United St at es, 9 F. Supp. 2d 1119
( D. Neb 1998) , suppor t s t hi s concl usi on. I n Jones, an I RS agent
al er t ed a conf i dent i al i nf or mant about an upcomi ng sear ch
war r ant r ai d on a t axpayer who was under i nvest i gat i on. Id. at
1123- 25. The i nf or mant t hen not i f i ed t he medi a, whi ch was out
i n f ul l f or ce f or t he execut i on of t he war r ant , causi ng
si gni f i cant har mt o t he t axpayer s r eput at i on and busi ness. Id.
at 1128. Fol l owi ng a bench t r i al , t he cour t hel d t hat bot h
el ement s of causat i on wer e met . Id. at 1137- 44. Jones not onl y
29

i l l ust r at es t he gener al posi t i on t hat pr oxi mat e cause i s an
i ssue of f act of t en sui t ed f or t r i al , but al so t hat mi suse of
t axpayer i nf or mat i on by t hi r d par t i es i s one of t he ki nd of
consequences of an unaut hor i zed di scl osur e whi ch mi ght
r easonabl y be f or eseen. Id. at 1144.
The Gover nment s cl ai mt hat t he above damages ar e
unr ecover abl e because t hey ar i se out of act s by non- I RS
per sonnel , sever al st eps r emoved f r omany conduct by t he I RS i s
unconvi nci ng. ( Gov t s Mem. at 26. ) Thi s ar gument i gnor es
r el evant pr oxi mat e causat i on i ssues, namel y, whet her t he
i nt er veni ng act i ons wer e a r easonabl e and pr obabl e consequence
of t he di scl osur e. See Rawl v. United States, 778 F. 2d 1009,
1015- 16 ( 4t h Ci r . 1985) . The i ndependent act i ons of Mei sel , t he
HRC, and ot her s cannot i mmuni ze t he I RS f r omr esponsi bi l i t y i n
t hi s case gi ven i t was cl ear t hat publ i cat i on was l i kel y and t he
har ms cl ai med ( i.e. l egal expenses) wer e cer t ai nl y a f or eseeabl e
consequence of publ i cat i on. The f act t hat a t hi r d- par t y was
i nvol ved i n t hi s chai n of event s does not f or ecl ose f i ndi ng
pr oxi mat e cause on t hese f act s. See Jones, 9 F. Supp. 2d at
1137- 44.
4


4
Whi l e t he mai n t hr ust of t he Gover nment s ar gument i s di r ect ed at
causat i on, i t al so br i ef l y cl ai ms t hat at t or neys f ees, such as t hose
expended her e, ar e not r ecover abl e as act ual damages under 7431( c) . ( See
Gov t s Mem. at 27. ) The Gover nment does not ci t e any aut hor i t y i n suppor t
of t hi s posi t i on, and t he Cour t has f ound not hi ng t hat r emot el y suggest s t hi s
ar gument hol ds wat er . See Jones, 9 F. Supp. 2d at 1149 ( Li ngui st i cal l y,
30

The Gover nment s posi t i on t hat i t i s not r esponsi bl e,
as a mat t er of l aw, f or t he cost s associ at ed wi t h t he subsequent
mi suse of NOM s conf i dent i al t axpayer i nf or mat i on i s unt enabl e
on t he f act s pr esent ed. Accor di ngl y, t he Cour t wi l l deny t he
Gover nment s mot i on as t o t hi s i ssue.
E. Mitigation
Last l y, t he Gover nment ar gues t hat NOM shoul d not be
al l owed t o r ecover t he amount s i t seeks because i t has f ul l y
mi t i gat ed / of f set any damages. ( Gov t s Mem. at 28. )
Accor di ng t o t he Gover nment , NOM has r ecei ved at l east $75, 000
i n aggr egat e donat i ons f r omdonor s who had never donat ed t o NOM
bef or e Mar ch 30, 2012 t he dat e [ i t ] l ear ned of t he
di scl osur e. ( Id. at 28- 29. ) Thus, i t woul d be i ncongr uous
wi t h f undament al pr i nci pl es of l aw t o al l ow Pl ai nt i f f t o r ecover
damages when i t has al r eady mi t i gat ed and of f set t hose al l eged
damages by sol i ci t i ng and r ecei vi ng donat i ons usi ng t he i nst ant
l awsui t and t he ver y act i on i t has compl ai ned about . ( Id. at
29. )
The Cour t wi l l not gr ant summar y j udgment as t o t hi s
i ssue. Put t i ng asi de t he par t i es di sagr eement as t o t he
col l at er al sour ce r ul e, see Sloas v. CSX Transp. Inc., 616 F. 3d
380, 389 ( 4t h Ci r . 2010) ( The col l at er al sour ce r ul e hol ds t hat

t her e i s no l i mi t at i on on t he r each of act ual damages, so l ong as t hat
damage i s somet hi ng t hat . . . exi st s i n f act . ( ci t at i on omi t t ed ) ) .
31

compensat i on f r oma col l at er al sour ce shoul d be di sr egar ded i n
assessi ng t or t damages. ( ci t at i on omi t t ed) ) , t her e i s a
cont i nui ng f act ual di sput e as t o whet her t he ci t ed cont r i but i ons
wer e caused by t he di scl osur e, and i f so, i n what amount . The
Gover nment essent i al l y asks t hi s Cour t t o deci de t hat ever y
donat i on NOM r ecei ved dur i ng 2012 occur r ed as a r esul t of t he
di scl osur e. The r ecor d, however , i s i nsuf f i ci ent t o r each t hi s
concl usi on as a mat t er of l aw. See Hylind v. Xerox Corp., 481
F. App x 819, 824 ( 4t h Ci r . 2012) ( The def endant bear s t he
bur den of demonst r at i ng t hat i t i s ent i t l ed t o an of f set . ) .
The onl y evi dence on t hi s i ssue i s NOM s admi ssi on t hat 2012 was
a r ecor d year f or donat i ons and i t r ecei ved $46, 086. 37 f r om
sol i ci t at i ons t hat r ef er enced t he di scl osur e. ( Gov t s Mem. at
28- 29. ) These f act s al one ar e i nsuf f i ci ent , as t hey do not
conf i r mt hat t he cont r i but i ons wer e caused by t he di scl osur e as
opposed t o some ot her i mpet us.
Accor di ngl y, t he Cour t wi l l deny t he Gover nment s
mot i on t o t he ext ent i t seeks a j udgment concer ni ng mi t i gat i on.
IV. Conclusion
For t he r easons st at ed above, t he Cour t wi l l gr ant t he
Gover nment s Mot i on f or Summar y J udgment and di smi ss NOM s
unl awf ul i nspect i on cl ai m, ( Compl . 110- 17) , and i t s r equest
f or puni t i ve damages, ( Compl . 120, 122, 134) . The Cour t wi l l
deny t he Gover nment s mot i on i n al l ot her r espect s. I n l i ght of
32

t hi s r ul i ng and t he Gover nment s admi ssi on t hat i t i mpr oper l y
r el eased t he Schedul e B, ( see Gov t s Mem. at 2) , t he onl y
i ssues r emai ni ng f or t r i al concer n NOM s damages f r omt hi s
si ngl e di scl osur e.
An appr opr i at e or der wi l l f ol l ow.

/ s/
J une 3, 2014 J ames C. Cacher i s
Al exandr i a, Vi r gi ni a UNI TED STATES DI STRI CT COURT J UDGE