The Solicitor General Would Have the SCOTUS Overrule Freytag v. Commissioner

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Our Villanova colleague, Tuan Samahon, who serves as co-counsel in the Kuretski case and who argued the case for the taxpayers before the D.C. Circuit, provides an assessment of the Solicitor General’s brief opposing cert. in the case. Those of you not familiar with this case will find links in his comments to earlier posts on this case. You can also look to SCOTUSblog, which featured the case as its “petition of the day” earlier this week. The case concerns the ability of the President to remove Tax Court judges and whether the removal power granted to the President in IRC 7443(f) providing that “Judges of the Tax Court may be removed by the President, after notice and opportunity for public hearing, for inefficiency, neglect of duty, or malfeasance in office, but for no other cause” violates the constitutional separation of powers because Tax Court judges exercise judicial, not executive, power. Keith

On April 2, the Solicitor General filed his brief opposing cert. in Kuretski v. Commissioner, a separation-of-powers case which challenges the Tax Collector in Chief’s superintendence over the U.S. Tax Court through his removal power of its judges at section 7443(f).  For the original cert. petition, see the Procedurally Taxing blog post from Dec. 2, 2014.  This means that the decision on whether to grant cert. will be made by the Supreme Court in mid-May. The case’s merits turn on the nature of the power the Tax Court exercises — whether it merely exercises executive power but in a mode of decision making most common to courts, that is, case-by-case adjudication, or whether it exercises a portion of the judicial power of the United States, as the taxpayers argue and the Freytag majority said.


In Kuretski, the D.C. Circuit had noted an inconvenient “wrinkle” in reaching its conclusion for the Commissioner that the Tax Court exercises only executive power. The panel needed to interpret the Supreme Court’s 1991 precedent Freytag v. Commissioner to not really say what the majority seemed plainly to say: the Tax Court “exercises a portion of the judicial power of the United States” and “exercises judicial, rather than executive, legislative, or administrative power.” The Freytag majority explained its constitutional conclusion was not clause bound — and indeed, could not be because the broad separation-of-powers principle is “embedded in the Appointments Clause.” It examined cognate provisions in a whole Constitution “analytic method” that resulted in its view that the Tax Court exercises judicial power, albeit wielded by judges without Article III tenure.

Nonetheless, the D.C. Circuit glossed the Freytag majority as meaning only that the Tax Court was, for the limited purposes of interpreting the excepting provision of the Appointments Clause, a part of “the Courts of Law.” Armed with that narrowed view of Freytag, the D.C. Circuit concluded Freytag didn’t really control the characterization of power and that any separation-of-powers problem with the President’s removal authority over Tax Court judges simply vanished if the judges really exercised only executive power, as the panel believed. In doing so, the D.C. Circuit’s Kuretski panel seemed to adopt the separate Freytag concurrence, penned by Justice Scalia, not the majority’s controlling opinion. DOJ hadn’t asked the D.C. Circuit to ignore or revisit the Freytag majority — and the D.C. Circuit would have been powerless to overrule it — but its argument drew heavily from Scalia’s characterization of the Tax Court’s power as executive, not judicial. A fair appraisal of Freytag might have required DOJ to argue candidly for the majority opinion’s overruling or at least an argument for its overruling sub silentio — both weak positions, particularly in an inferior court of appeals. Several commentators acknowledged the D.C. Circuit’s apparent fudge in preferencing the concurrence over the majority rationale.

Unsurprisingly, then, the SG asks the SCOTUS to overrule the Freytag majority’s reasoning with Justice Scalia’s separate Freytag concurrence, should the SCOTUS take the case. The SG discreetly tucked away that invitation to overrule Freytag in a footnote (note 3). There it preserves the argument without calling too much attention to the tension between the SG’s simultaneous positions that (1) Kuretski does not deserve review and (2) the Commissioner may well lose if Freytag‘s majority controls.

Several tax proceduralists have noted the confusion over the Tax Court’s status. A cert. grant would allow the SCOTUS to clarify that Freytag‘s majority approach remains the law of the land and that the opinion meant what it said: the Tax Court exercises judicial, not executive, power.


  1. Jason T. says

    Apples meet oranges (and, ultimately, strawberries) when the Kuretskis’ counsels rely on Freytag to reverse Kuretski.

    In Freytag, the Supreme Court had to decide only whether the Tax Court is one of the “courts of law” or is a “Department” under the Appointments Clause. Faced with that two-track choice and limited purpose, the Court narrowly chose “courts of law.” As the D.C. Circuit recognized, however, that choice does not help determine whether the Tax Court is, or is not, part of the judicial branch for statutory purposes.

    Like the Tax Court, the U.S. Court of Appeals for the Armed Forces is an Article I “court of record” that exercises judicial power on a “case-by-case” basis. But no one would claim, as Kuretski counsels have argued about the Tax Court, that this other Article I court is in either the judicial or the legislative branch.

    Indeed, 10 U.S.C. sec. 941 says the U.S. Court of Appeals for the Armed Forces is sited in the Defense Department for “administrative purposes only.” That language prevents anyone in the Defense Department from interfering with the court’s duties. To further protect the court’s operations, Congress limited the President’s ability to remove these Executive Branch judges solely for specified cause only after notice and hearing. Nearly two decades later, Congress did likewise with the Tax Court.

    The 1969 legislative creation of the Article I “court of record” known as the United States Tax Court changed nothing but a name. Like the U.S. Court of Appeals for the Armed Forces, and notwithstanding the judicial nature of its powers, the Tax Court remains in the Executive Branch. Congress has never said otherwise; indeed, it still funds the Tax Court with executive branch appropriations. The only material difference between the two Article I courts of record is the Tax Court did not require a “for administrative purposes only” protection because it already was independent from all executive departments.

    I agree with Professor Hickman’s view, which the post links to, that Kuretski is merely “academic folderol.” One’s arguing that the Tax Court is an Article III court is akin to his arguing that a strawberry is a berry.

  2. Last time I checked, tax laws were under Article I of the Constitution.

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