Argued: December 2, 2016
Appeal from the United States District Court for the Eastern
District of New York
from a judgment of the United States District Court for the
Eastern District of New York (Gershon, J.), awarding
statutory damages of $1, 000 to each of the plaintiff
taxpayers on account of the Internal Revenue Service's
unauthorized disclosure of their tax information to an
unrelated third party. The district court granted summary
judgment to defendant-appellee United States of America,
rejecting the taxpayers' contentions that they were
entitled to statutory damages of more than $1, 000. On
appeal, plaintiff-appellant Gary Minda contends that the
district court erred in (1) limiting the award of statutory
damages to $1, 000, and (2) concluding that he was not
entitled to punitive damages as a matter of law.
Kathleen Pakenham, Cooley LLP, New York, NY, for
Plaintiff-Appellant Gary Minda.
Jennifer M. Rubin (Jonathan S. Cohen, on the brief), for
David A. Hubbert, Acting Assistant Attorney General, Tax
Division, Department of Justice, Washington, D.C., and
Bridget M. Rohde, Acting United States Attorney for the
Eastern District of New York, Brooklyn, NY, for
Defendant-Appellee United States of America.
Before: Livingston, Chin, and Carney, Circuit Judges.
case, the Internal Revenue Service (the "IRS")
conducted an examination of the 2007 income tax return of
Gary Minda and Nancy Findlay Frost. The IRS prepared a report
proposing changes to the return. Instead of sending the
report to Minda and Frost, however, the IRS sent the report,
which contained their names, social security numbers, and
financial information, to the wrong person -- an
unauthorized, unrelated third party.
and Frost brought this action below pursuant to 26 U.S.C.
§ 7431, which permits a taxpayer whose return or return
information has been unlawfully disclosed to bring a civil
action against the United States for damages. The government
conceded liability and acknowledged that Minda and Frost were
entitled to $1, 000 each in statutory damages for the
disclosure of the report. Minda and Frost argued, however,
that they were entitled to statutory damages of $1, 000 not
just for the disclosure of the report but for the disclosure
of each item of information contained in the report. They
also sought punitive damages.
government moved for summary judgment to dismiss these
additional claims. The district court granted the motion and
entered judgment accordingly. For the reasons set forth
below, we affirm.
facts are largely undisputed and may be summarized as
2009, an IRS employee prepared an examination report (the
"Report") proposing changes to the 2007 federal
income tax return filed by Minda and Frost. The Report
contained "dozens of items of return
information, " including their names, social security
numbers, and detailed financial information. Compl. ¶
about October 2010, the IRS mailed a copy of the Report to an
unrelated third party in Ohio, "Robert M." On
October 21, 2010, Robert M.'s attorney wrote to the IRS
advising that the IRS had erroneously sent the Report to his
In the packet sent to my client [Robert M.], there were nine
(9) pages, that dealt with Income Tax Examination changes for
a Gary Minda and T. Nancy Findlay Frost . . . . I assume you
will want to re-send them to the correct person. We are
sending a copy of this letter to these taxpayers (with any
confidential information related to my client redacted).
Compl. ¶ 9. The Report is eleven pages. Hence, it
appears that the IRS did not send the entire Report to Robert
M., but only nine of the eleven pages.
October 26, 2010, Minda and Frost learned of the disclosure
of the Report to Robert M. when they received a copy of the
attorney's letter to the IRS.
complained about the unauthorized disclosure to the IRS,
which then conducted an investigation. After interviewing a
number of individuals, the Treasury Inspector General for Tax
Administration (the "IG") made the following
• the Report, which was dated October 5, 2009, was
printed the week of September 28, 2009, for review by a