National Organization for Marriage must bear its own attorneys' fees, holds the Fourth Circuit

Nat’l Org. for Marriage, Inc. v. United States, No. 14-2363 (4th Cir. Dec. 2, 2015).

An IRS employee unlawfully gave a journalist a document showing the donors to the National Organization for Marriage (NOM). The journalist then passed along the donor list to the Human Rights Campaign and the Huffington Post. NOM then sued the IRS under a law that allows taxpayers to sue the government for unlawfully disclosing their information and causing them damage. 

The government argued that NOM’s suit had to be dismissed because it couldn’t show proximate cause between the disclosure and the damage. The government pointed out that it was third parties, not the IRS, who had disseminated NOM’s donor list to ideological opponents. But the district court didn’t think the chain of causation was as attenuated as the government argued, and agreed with NOM that there would need to be a trial. The parties then entered into a consent judgment.

The law under which NOM sued generally allows prevailing taxpayers to recover their attorneys’ fees unless the IRS can establish that the position it took in the litigation was “substantially justified.” NOM now seeks its attorneys’ fees, arguing that the government’s position wasn’t substantially justified. 

The Fourth Circuit holds that NOM isn’t entitled to fees. Proximate cause is a notoriously vague concept, so the government can’t really be blamed for arguing that NOM couldn’t show proximate cause.