Ninth Circuit Rules That DOJ Tax Division Head Does Not Have to Attend Routine Settlement Conference

by Eversheds Sutherland (US) LLP

The Ninth Circuit in U.S. v. U.S. District Court for the Northern Mariana Islands (“Northern Mariana Islands”), No. 11-72940, 2012 WL 3984406, recently granted relief to the government and directed a district court to vacate orders that directed the government to send a representative with full authority to settle a civil tax refund lawsuit to an initial settlement conference. Although the appellate court held that the district court has the authority to order parties, including the federal government, to participate in mandatory settlement conferences, the Ninth Circuit found that the district court abused its discretion in ordering attendance by a representative with full settlement authority under the circumstances of the case. The Ninth Circuit cited two factors important to its determination: (1) the lowest-ranking official with settlement authority over the case was the Assistant Attorney General of the Tax Division (“Assistant Attorney General”) and it would be impractical to require the Assistant Attorney General to appear at all settlement conferences in all cases involving amounts within his or her settlement authority; and (2) the initial settlement conference was a matter of routine practice under the district court’s local rules, and the personal participation of the person able to make a final decision was not vital. While the practice of not sending a representative with ultimate settlement authority is fairly standard for the Department of Justice, the Ninth Circuit’s decision adds guidance with respect to an important issue for taxpayers, as settling a case can be more difficult when not dealing directly with the ultimate decision-maker.

The Department of Justice has promulgated specific regulations that identify the persons with authority to settle claims made against the United States. In the case of tax refund claims, authority to settle claims in excess of $2 million resides with the Assistant Attorney General of the Tax Division. 28 C.F.R. § 0.160. See also 26 U.S.C. § 6405 (also requiring review by the Joint Committee on Taxation where a refund amount exceeds $2 million). Settlements of less than $2 million may be accepted by other representatives of the Tax Division, pursuant to specific delegation procedures issued by the Assistant Attorney General. 76 Fed. Reg. 15212.

In Northern Mariana Islands, the underlying case was a tax refund case in which the taxpayer sought to recover more than $5 million in taxes, penalties and interest. Pursuant to a local rule that provided that the court may mandate attendance at a scheduled settlement conference by each party through a representative with full authority to settle the litigation, the district court issued an order scheduling a settlement conference before a settlement judge. The government moved for relief on three separate occasions arguing that because of the size of the claim, the lowest-ranking official authorized to settle the case was the Assistant Attorney General. The government proposed a compromise to send the trial attorneys responsible for the case, with the Section Chief of the Tax Division’s Office of Review1 available by telephone, rather than to send the Assistant Attorney General. The district court denied the government’s request and proposed compromise on each occasion. Finally, the government filed an emergency petition for a writ of mandamus to the Ninth Circuit and an emergency motion to stay the settlement conference.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Eversheds Sutherland (US) LLP | Attorney Advertising

Written by:

Eversheds Sutherland (US) LLP

Eversheds Sutherland (US) LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.