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Nelson v. Pengilly

United States District Court, D. Nevada

August 7, 2017

VICTORIA L. NELSON, TRUSTEE Plaintiff,
v.
JAMES W. PENGILLY, JAMES W. PENGILLY, P.C., and UNITED STATES OF AMERICA, Defendants.

          DAVID A. HUBBERT ACTING ASSISTANT ATTORNEY GENERAL

          VIRGINIA CRONAN LOWE TRIAL ATTORNEY, TAX DIVISION U.S. DEPARTMENT OF JUSTICE

          STEVEN W. MYHRE ACTING UNITED STATES ATTORNEY COUNSEL FOR THE UNITED STATES

          MOTION FOR RELIEF FROM REQUIREMENT THAT INDIVIDUAL WITH FULL SETTLEMENT AUTHORITY ATTEND THE SETTLEMENT CONFERENCE

          PEGGY A. LEEN UNITED STATES MAGISTRATE JUDGE

         The United States of America (“United States”), by and through its undersigned counsel, hereby requests that the Court excuse the United States from the requirement that an individual with full settlement authority personally attend the Settlement Conference, currently set for August 29, 2017, at 9:30 a.m., in the chambers of United States Magistrate Judge Peggy A. Leen, Room 3071, Lloyd D. George United States Courthouse, 333 Las Vegas Boulevard South, Las Vegas, Nevada. The undersigned trial attorney will be present in person, and an individual with full settlement authority will be available by telephone.

         POINTS AND AUTHORITIES IN SUPPORT OF MOTION

         The Department's regulations delegate settlement authority for cases arising under the internal revenue law to a limited number of senior officials.[1] The regulations are designed to promote uniformity in settlements across the country and accountability of the officials acting upon the settlements. Department of Justice regulations confining settlement authority to selected officers and officials are valid and binding. See United States v. U.S. District Court for N. Mariana Islands, 694 F.3d 1051, 1054-55, nn. 3-4 (9th Cir. 2012); White v. United States Dep't of Interior, 639 F.Supp. 82, 88-90 (M.D. Pa. 1986), aff'd 815 F.2d 693 (3d Cir. 1987); Bohlen v. United States, 623 F.Supp. 595 (C.D. Ill. 1985). Trial Attorneys - including the undersigned - have no independent authority. Problems inherent in requiring government officials with full settlement authority to attend settlement conferences were recognized in Section 473(c) of the Judicial Improvements Act of 1990, Pub. L. No. 101-650, 104 Stat. 5089, 5093 (1990):

Nothing in a civil justice expense and delay reduction plan relating to the settlement authority provisions of this section shall alter or conflict with the authority of the Attorney General to conduct litigation on behalf of the United States, or any delegation of the Attorney General.

         The legislative history of the Judicial Improvements Act, likewise reveals that Congress was aware of, and believed district courts should account for:

the unique situation of the Department of Justice. The Department does not delegate broad authority to all trial counsel, but instead reserves that authority to senior officials in the United States Attorneys' Offices or in the litigating divisions in Washington. Clearly the Department cannot realistically send officials with full settlement authority to each settlement conference.

H. .R. Rep. No. 101-732, 101st Cong., 2d Sess. 16-17; S. Rep. No, 101-426, 101st Cong. 2d Sess. 59 (emphasis added). See also In re Stone, 986 F.2d 898 (5th Cir. 1993).

         The Advisory Committee Notes on the amendment to Rule 16, subdivision (c), of the Federal Rules of Civil Procedure, effective December 1, 1993, explain that:

[p]articularly in litigation in which governmental agencies or large amounts of money are involved, there may be no one with on-the-spot settlement authority, and the most that should be expected is access to a person who would have a major role in submitting a recommendation to the body or board with ultimate decision-making responsibility. The selection of the appropriate representative should ordinarily be left to the party and its counsel.

         Due to the amount at issue in this case, the Settlement Regulations vest full authority to compromise the case in Richard R. Ward, the Chief of the Tax Division's Civil Trial Section for the Western Region. Mr. Ward may then, in turn, delegate settlement authority to his Assistant Chief.[1] These officials' offices are in Washington, D.C., and they currently supervise 28 trial attorneys and 10 support staff members. They are directly responsible for several hundred active cases assigned to trial attorneys in their office, numerous additional cases pending in the Tax Divisions of the United States Attorneys' Offices in Los Angeles and San Francisco, and many more tax cases that are handled by Assistant United States Attorneys and Special Assistant United States Attorneys throughout the Western Region. ...


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