Liberty and justice for all United States persons abroad

More on Republican Overseas Legal Challenge to FATCA

This article in the Washington Times (a conservative newspaper) found by JustMe provides some background information on the Republican Overseas Legal Challenge to FATCA effort.

http://www.washingtontimes.com/news/2014/may/5/superlawyer-jim-bopp-takes-on-mccain-backed-tax-ac/#ixzz30uZESpud

The tweet that was sent out by Michael DeSombre (“Republicans Overseas will be launching legal challenge to FATCA”) did not mention that funds need to be raised for the U.S. legal challenge. I expect that the Republicans will be successful in raising the monies. My understanding is that there will be a separate organization related to Republicans Overseas raising these funds – similar to our own Canadian “ADCS/ADSC”.

Irrespective of whether you like Republicans, or worry about their motives, the world will better off if either Republicans Overseas or ADCS/ADSC is successful in killing the bad FATCA law.

Jim Bopp, the mean bulldog lawyer who would lead the charge mentions here some (but not necessarily all) of the U.S. laws that might be contradicted by FATCA:

Mr. Bopp told The Times that he plans to attack the act on three legal grounds: that it violates the Senate’s sole possession of foreign treaty power, the Eighth Amendment’s ban on cruel or unusual punishment and the 14th Amendment’s personal privacy guarantee.

Some research convinced Mr. Bopp that the act violates the treaty powers that the Constitution grants members of the U.S. Senate. The U.S. government has forged agreements with foreign governments to have their banks reveal all financial matters about their American customers or face huge penalties.

These country-to-country agreements are in effect treaties but ones that no U.S. department or agency bothered to seek the U.S. Senate’s advice on or approval for, he plans to argue.

Finding senators to serve as plaintiffs in a drive to get the Supreme Court to acknowledge the act’s unconstitutionality is task No. 1 for Mr. Bopp and the board of Republicans Overseas.

Mr. Bopp, as general counsel to Republicans Overseas, presented to its board two other constitutional objections: violation of the Eighth Amendment’s prohibition against unusual punishment in the form of gargantuan monetary penalties and violation of the 14th Amendment’s ban on unreasonable search and seizure of the financial assets of Americans abroad.

Republicans Overseas now wants a litigation vs. legislative approach:

“Seeking legal rather than legislative remedy on behalf of Americans living abroad before the scheduled July 1 full implementation of the law is the only available course for now,” said Solomon Yue, the Republicans Overseas chief operating officer and an Oregon RNC member.

The Republican Overseas position differs from that of Republican Senator McCain and Democrat Levin:

Mr. McCain and Mr. Levin see it differently. They not only want to sustain the law, but they also want to strengthen it.

In a joint report by their Senate permanent subcommittee on investigations, the two lawmakers signed on to a call for “the U.S. Treasury and the IRS [to] close gaping loopholes in FATCA that have no statutory basis.”

@George says:

“Can’t you see the pincer movement? The Charter Challenge in the North and the Republican Overseas in the South.”

77 thoughts on “More on Republican Overseas Legal Challenge to FATCA

  1. Legal back and forth between the Bopp team and U.S. Government lawyers in the FATCA/FBAR/IGA lawsuit. We are suing IRS, Treasury, and FINCEN in U.S. District Court in Southern Ohio.

    Today (December 29, 2015) Bopp filed a Memorandum opposing Government’s Motion to Dismiss.

    Part of Memorandum says for example:

    “The Government claims that the two central harms Plaintiffs assert—(i) the bank-record searches and reporting and (ii) the problems in getting banking services for essential everydayliving accounts—are not traceable to government action so that Plaintiffs lack standing. (Doc. No. 27, PageID 327-329.)

    Regarding the harm of unwanted searches and reporting described above, the Government argues that challenged FATCA and IGA provisions do not actually make foreign financial institutions search and report. (Doc. No. 27, PageID 352.) In regards to banking difficulties experienced by Plaintiffs (and myriad others, see Doc. No. 32-1, PageID 431-33 (discussing Democrats Abroad study)), the Government argues that these pervasive problems for Americans overseas are merely the result of third-party decisions. (Doc No. 27, PageID 328-329.)

    The Government’s argument ignores the law on causation for standing purposes. For example, in Warth v. Seldon, the Supreme Court recognized that harm caused “indirectly” by a law is enough for standing. 422 U.S. 490, 504-05. It cited Roe v. Wade, 410 U.S. 113, 124 (1973), which allowed a pregnant woman to challenge a law forbidding doctors from doing abortions. That Texas law controlled doctors, not Jane Roe, but her indirect harm from the law regulating doctors was sufficient to give her standing.4

    Even where an injury might be avoidable, and thus arguably self-inflicted, standing remains where the government action “remains a contributing factor.” Natural Resources Defense Counsel v. U.S. Food and Drug Admin., 710 F.3d 71, 84-85 (2d Cir. 2013).

    Regarding the unwanted searches and reporting, as noted above, the Government argues that FATCA and the IGAs regulate foreign financial institutions, not Plaintiffs, and FATCA and the IGAs do not require the institutions to do such activity. Of course there is a 30% penalty on all U.S. payments to the financial institution if it does not search out and report information on U.S. accounts. The very purpose of that penalty is to cause foreign financial institutions to search out and report information on U.S. accounts, so Plaintiffs (and myriad other Americans abroad) are clearly harmed, even if it might be deemed “indirectly,” by FATCA and the IGAs. They have standing just as Jane Roe did as a result of her harm that was caused indirectly. Regarding banking difficulties suffered by Plaintiffs (and myriad others, studied by Democrats Abroad), those are also fairly traceable to FATCA and the IGAs. Banks that do not
    want to either comply with FATCA and the IGAs or face the 30% penalty take the third option of closing down U.S. accounts when the effective date of FATCA or the IGAs approaches (because no bank would want to await the effective date and be caught in noncompliance due to the penalty).

    That is enough for causation as a harm caused indirectly.”

  2. If I’m reading this right, Bopp is indirectly citing Roe v Wade as precedent for causation of harm? How delicious.

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