Republicans Overseas (RO) has brought forward a lawsuit against the United States Department of the Treasury, United States Internal Revenue Service, and United States Financial Crimes Enforcement Network over FATCA, IGAs, and the FBAR.
In the back and forth of the litigation, the US Government continues to argue that none of the plaintiffs have any “standing” or have suffered any harm that is relevant for legal/litigation purposes. This is the latest (September 15, 2016) response of the Jim Bopp RO team to the the Government’s arguments. See the link.
A bit of text From the response brief:
“In pre-enforcement challenges, as here, plaintiffs are not required to violate laws to challenge them. One may comply with a statute though deeming it unconstitutional and challenge it as being an unconstitutional burden. See, e.g., Davis v. FEC, 554 U.S. 724 (2008)…”
“The Government says it has never sought to impose an FBAR penalty against Zell [who is also the attorney in the Israeli FATCA lawsuit] (Opp’n 65), but the Government has nowhere eschewed enforcement, so the provision is not moribund and pre-enforcement challenges allow one to challenge provisions before enforcement begins. He reasonably fears enforcement for noncompliance. (Am.Compl. ¶¶ 130, 132.)”
“The government never addresses Warth on this issue and ignores the other two cases, so the Government’s argument that the actions, e.g., of FFIs, are not fairly traceable to challenged provisions/agreements is already suspect for failing to engage the required analysis. For example, the Government says “Crawford’s alleged loss of business is not fairly traceable to the challenged provisions of FATCA because it results from the independent actions of third parties.” (Opp’n 46.) But that continued assertion cannot be taken seriously given the Government’s failure to show why the coercive aspects of the challenged provisions/IGAs on FFIs do not suffice for traceability under the coerced-harm, indirect-harm, contributing-factor authorities that the Government ignores.”
“Similarly, the Democrats Abroad study shows that FATCA/IGAs are causing widespread relationship harms: “‘their relationships with their non-American spouses are under strain.’” (Br. 26 (citation omitted).) And some Plaintiffs here verify they are experiencing the same such problems as many others have. Yet the Government dismissively cites the district court for the proposition that “disagreement with one’s spouse about a government policy is not a concrete injury on which a federal lawsuit is based.” (Opp’n 41.) But the court errs because the “disagreement” is based on asserted constitutional privacy and equal-protection rights and also on government-coerced actions that are the logical result of the Government’s actions in enacting FATCA, FBAR, and IGAs, e.g., the separation of accounts.”
“Another example of an erroneous non-traceability argument is the Government’s argument that Katerina Johnson suffers no harm because she is not a U.S. citizen and so not subject to any challenged provision/IGA. (Opp’n 66-67.) But of course, this argument ignores the indirect coercive-effect harm, described above, that she experiences as a result of being married to a U.S. Citizen. And the Government claims she “alleges no concrete injury from . . . separation” of her accounts from those of her spouse (Opp’n 79), but the separation itself is cognizable harm traceable to challenged provisions/IGAs. Thus, she has concrete injury that is traceable to government action.”
“The Government says Zell alleges “that his clients have suffered various indignities at the hands of Israeli banks” and alleges invasion of the attorney-client privilege that “belongs to the client alone.” (Opp’n 45 & n.13.) But while a client may waive the attorney-client privilege, absent such a waiver an attorney has a strong interest in preserving the privilege. And Plaintiff Zell verifies loss of business, as the Government acknowledges (Opp’n 47-48) and that his harms are ongoing (Am.Compl. ¶ 133, RE32-1, PageID# 462). Moreover, as a fiduciary and trustee he has a personal interest in protecting information about client accounts. And the Government concedes that the Israeli IGA requires disclosure of such accounts. (Opp’n 48.)”
“The Government argues that Plaintiffs never asserted loss of citizenship as a harm (Opp’n 44 n.12), but Plaintiffs clearly recited the loss of citizenship as a harm flowing from challenged provisions and agreements and then provided Plaintiffs who renounced citizenship on that very basis (Am.Compl. ¶¶ 5, 9, 69, 73-74 (Kuettel), 90, 96-97 (Nelson). So reading the complaint as a whole and giving implications to Plaintiffs, Plaintiffs made that claim. Anyway, Plaintiff Kish has now also renounced his citizenship due to challenged provisions/agreements, and recites the harm in his attached declaration (Exhibit A), so it is at issue.”