Professor Gilbert Rothenberg '75 Faces Former Student Tom Goldstein '95 in Cohen v. U.S.
Gilbert S. Rothenberg ‘75 was used to seeing Tom Goldstein ‘95 (pictured, at right) sitting across from him in classrooms at 
American University Washington College of Law. Rothenberg taught Goldstein Federal Personal Income Tax when the SCOTUSblog creator was a law student.
“During law school, [Tom] was both inquisitive and challenging, the latter when he disagreed with a court decision,” Rothenberg said.
“He was absolutely one of my favorite professors, and Tax was one of my favorite classes,” Goldstein said of Rothenberg. “Hearing it from the horse’s mouth, and learning from someone who had a leading role in that field made all the difference.”
But on Wednesday, Sept. 29 in the U.S. Court of Appeals for the DC Circuit, Rothenberg sat opposite Goldstein in a far different role – as his opponent in the en banc Cohen v. U.S. – a tax law case that pits the IRS against taxpayers.
Goldstein and Rothenberg had discussed the case several times over lunch when it was in its earlier stages, prior to becoming involved in the case.
“I think that we found out we were on opposite sides of the case at about the same time,” Goldstein said. “When it went to en banc in the Court of Appeals, we had to responsibly argue for our sides.”
The issue in the case is whether a taxpayer who seeks a refund can mount an Administrative Procedure Act (APA) challenge to an IRS program without going through the normal channels required to perfect a refund suit (filing a refund claim, then waiting six months to sue, etc.). No court has ever upheld such an APA challenge, and thus a decision in the taxpayers’ favor would be truly unprecedented. It would also wreak havoc with IRS’s internal administration, which (thus far) has been free from judicial interference of the type the plaintiffs now seek.
Barbara Sarshik, an adjunct professor at American University Washington College of Law, was waiting to observe the latest round of arguments in the case, which were to be made en banc – an event so rare, she hadn’t yet seen one in her many years of practicing appellate litigation.
“Most appellate arguments are before a panel of three judges. The dynamic here is all different. There are nine judges asking questions for different reasons, using the questions to drive the conversation. It’s partly about substance, and partly about managing the procedure and decorum. It’s like watching your kids play soccer for years, and then moving the game indoors, where it is so different and more fast paced,” Sarshik said.
Rothenberg and Goldstein were separated only by the lectern as they waited for the judges to enter the courtroom. They didn’t speak to one another, but conferred with their respective teams in low voices. Law students murmured quietly as courtroom staffers connected computer equipment and admonished observers against cell phone usage.
Cohen v. U.S. contests the IRS’s collection of a phone tax refund, which added up to approximately $8 billion for the government tax agency. The argument pivoted on whether the IRS’s procedure for taxpayers to secure a refund was too difficult and therefore, unlawful. Rothenberg was arguing for the IRS. Goldstein, who spoke first, represented the plaintiffs – taxpayers affected by the phone tax.
“This tax has been collected illegally, now the question is how to get it back,” Goldstein told the nine judge panel. “In this case, there’s a debate between the Declaratory Judgement Act and the Anti-Injunction Act and which applies here. To be honest, we don’t care.”
This statement drew a reaction from Chief Judge David Sentelle, who asked Goldstein to explain himself.
“The Administrative Procedure Act (APA) says that if we have no other way to bring an injunction, we cannot pursue under the APA,” Goldstein said. “We can go into court when there’s no remedy outside of court.”
“My concern is that you’re challenging a regulatory procedure without testing the procedure,” Santelle said.
Toward the end of Goldstein’s allotted time, a tone sounded and a few extra minutes were allowed for the judges panel to further test the argument as it had been presented. Then it was Rothenberg’s turn.
“The remedy they [the taxpayers] seek is that, bottom line, they want their money back,” Rothenberg said. “This program was designed to make it easier.”
“This program was designed to make it easier?” Sentelle interrupted.
Rothenberg said that approximately 90 million taxpayers affected had sought their refunds, and that 10-20 million had not.
“Every taxpayer that Mr. Goldstein represents could get their tax refund,” Rothenberg said.
Earlier in the arguments, Chief Judge Sentelle had expressed concerns about the precedent that could be set by litigation challenging federal agency procedure. Toward the end of the argument, Judge Brett Kavanaugh sought to temper those concerns.
“I think this is an important case in that this is a billion dollar case,” Kavanaugh said. “The only door that would be opened is the IRS regulations with regard to refunds.”
Rothenberg argued otherwise, saying that no court has ever upheld such an APA challenge, and thus a decision in the taxpayer’s favor would be truly unprecedented. He also contended it would wreak havoc with IRS’s internal administration, which thus far has been free from judicial interference.
“They are seeking a refund, theirs is not a proper suit and for the court to accept jurisdiction in this case would be completely unprecedented,” Rothenberg said.
At the closing of Goldstein’s rebuttal, the judges left as a group. Rothenberg and Goldstein shook hands, and returned to their desks to convene with their teams.
“There’s a lot of respect,” Goldstein said. “This is his field. He’s a specialist in tax appeals. That’s what he does. Whereas, that’s one percent of what I do. You have to recognize you’re dealing with someone who not just thinks about this day in and day out, but to a certain extent, shapes policy. He taught me tax, so I was very respectful of his expertise. “
“He was a superb student, and is now a superb appellate advocate; no surprise there,” Rothenberg said. “Tom and I have stayed in contact with each other since law school, and we get together for lunch once a year or so, just to keep in touch.”
