CINCINNATI (Legal Newsline) – A conservative political group that funded watchdog litigation against Lois Lerner and the Internal Revenue Service won’t be making any money off its investment but has helped “correct a societal wrong,” court papers state.
Tea Party groups that settled discrimination claims against the IRS for $3.5 million plan to give half of it Citizens for Self-Governance, which spent $3.8 million covering their legal fees and expenses in class action litigation that accused the IRS of delaying and denying tax-exempt applications.
Mark Meckler, president of Citizens for Self-Governance, said in an April 3 interview, “There is zero chance of us being made whole.”
He said his organization did not request any award, but hoped plaintiffs would agree to reimburse his organization.
They did so on April 9, asking U.S. District Judge Michael Barrett to assign half of the settlement to Citizens for Self-Governance.
“Citizens for Self-Governance expended substantial resources to help correct a societal wrong and ensure appropriate relief for the class,” wrote Bill Randles of Kansas City, Mo., attorney for the class.
The settlement includes an apology from the IRS for discrimination in its treatment of applications for tax exemption based on the political viewpoints of Tea Party applicants.
Tea Party groups sued the IRS in 2013, after the IRS delayed and denied applications. Barrett certified the class action in 2016.
The IRS claimed until last year that it acted properly, but a change of administration resulted in a change of position.
One of the lawsuits ended on Dec. 8, when District Judge Reggie Walton signed a consent order that included an apology from IRS.
The order stated that Lerner, as director of the Exempt Organization Division, first became aware of applications from Tea Party groups in April or May 2010.
It stated, “For the next two years, Lerner failed to adequately manage the EO division employees who processed these applications.”
It stated, “Moreover, Lerner failed to inform upper level IRS management of the serious delays in processing applications for tax exempt status from tea party and other politically sensitive groups.”
It stated, “Consequently, it was a year before the IRS office of chief counsel became involved, and nearly two years before superiors in the IRS management chain were aware of the mismanagement of tea party and other sensitive advocacy applications.”
Randles listed the benefits of the class action in the motion to award fees and expenses to Citizens for Self-Governance.
He wrote that the class created a precedent that agents may not inspect taxpayer information for improper reasons such as viewpoint discrimination.
He wrote that the class established that the IRS violated the First Amendment by treating class members differently because of their viewpoints.
“Beyond establishing important legal precedent, this case has solidified the boundaries of appropriate and lawful conduct by IRS officials,” Randles wrote.
Randles wrote that the organization “became a target of IRS discovery due to its support of the class.”
He wrote that the IRS issued a third-party subpoena to the organization, forcing it to expend additional resources that aren’t included in the motion.
He wrote that District Judge Susan Dlott quashed the subpoena and told the IRS, “You’ve asked for everything but their used toilet paper.”
Meckler said that under President Obama, the IRS followed a strategy of “bleeding plaintiffs to death.”
“They dragged me in, and I had to show that I had a different interest from the class,” he said. “They tried to stop our third-party funding.”
He said career people at the IRS were abusive and cantankerous.
“Simple things were always a fight,” he said. “You’re litigating against someone with infinite resources.
“That’s not true for other litigants. That’s why they fight about everything.
“They definitely inflicted a lot of pain on us.”
Meckler praised the settlement, with reservations.
“I’m happy, at least halfway happy, with the results,” he said. “We still don’t know what happened in the IRS. I’m frustrated by that still.
“I would argue they still haven’t turned around… I expect more bad behavior until people are held accountable.
“We see no such reform.”
He said the class action produced valuable information.
“We as the citizens are sovereign in this country and the information belongs to us,” he said.
He dashed cold water on hopes that Barrett would unseal a deposition of former IRS supervisor Lerner. Plaintiffs have moved to unseal it, and the IRS has dropped its opposition.
“Lois Lerner pleaded the Fifth Amendment before Congress,” Meckler said.
“I can’t imagine that a lawyer who advised a client to take the Fifth before Congress wouldn’t advise her to take the Fifth in a deposition.”