Aloe Vera of America, Inc., et al v. USA, No. 10-17136 (9th Cir. 2012)
Annotate this CaseThis appeal presented the question, among others, of what event triggered the running of the statute of limitations for a claim for wrongful disclosure of a tax return pursuant to 26 U.S.C. 7431(d). The court concluded that the statute of limitations began to run when plaintiff knows or reasonably should know of the government's allegedly unauthorized disclosures. The court also concluded, in the circumstances presented in this case, that the statute of limitations did not begin to run when plaintiffs became aware of a pending general investigation that would involve disclosures, but only later when they knew or should have known of the specific disclosures at issue. Accordingly, the court affirmed in part and reversed in part.
Court Description: The panel affirmed in part and reversed in part the district court’s summary judgment in favor of the United States in an action claiming that the United States improperly disclosed tax information to the Japanese National Tax Administration (NTA) during the course of a joint investigation. In a prior appeal of this case, the panel concluded that the two-year statute of limitations in 26 U.S.C. § 7431(d) is jurisdictional and applied to Aloe Vera’s claims under § 7431(a), and remanded for the district court to make factual findings and determine whether there is subject matter jurisdiction. The panel also held that the statute of limitations under 26 U.S.C. § 7431(d) for a claim of wrongful disclosure of a tax return is subject to inquiry notice, and begins to run when the plaintiff knows or reasonably should know of the government’s allegedly unauthorized disclosures. On remand, the district court ruled that some of Aloe Vera’s claims were barred by the statute of limitations and dismissed them. In this appeal, the panel held that inquiry notice is not triggered by a single generalized event, but rather by the plaintiff’s actual or constructive knowledge of each particular disclosure. The panel concluded that one of Aloe Vera’s two claims was barred by the statute of limitations. As to the remaining claim that was not time-barred, the panel remanded because genuine issues of material fact (regarding whether the government knowingly relayed false information to the NTA) precluded summary judgment. The panel held that extending immunity to the government under the good-faith exception of § 7431(b) would eviscerate 26 U.S.C. § 6103’s basic purpose of protecting against malevolent government disclosure of tax return information. Judge Wallace concurred in the majority’s opinion, but dissented as to the remand because the plaintiffs failed to carry their burden of establishing that their claims are not barred by the statute of limitations.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.