NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT JUN 05 2015
MOLLY C. DWYER, CLERK
THOMAS G. CAMPBELL, No. 13-55442 U.S. COURT OF APPEALS
Plaintiff - Appellant, D.C. No. 2:11-cv-09944-RSWL-
v. JC
UNITED STATES OF AMERICA,
Defendant - Appellee.
Appeals from the United States District Court
for the Central District of California
Ronald S.W. Lew, Senior District Judge, Presiding
MARTIN SCOTT, husband and No. 13-55712
MARGARET SCOTT, wife,
D.C. No. 2:12-cv-00389-ODW-RZ
Plaintiffs - Appellants,
v.
MEMORANDUM*
INTERNAL REVENUE SERVICE
COMMISSIONER,
Defendant,
and
UNITED STATES OF AMERICA,
Defendant - Appellee.
Otis D. Wright, II, District Judge, Presiding
*
This disposition is not appropriate for publication and is not precedent except as
provided by 9th Cir. R. 36-3.
STEVEN D. WYMAN and LAUREL A. No. 13-55990
WYMAN,
D.C. No. 5:12-cv-01266-VAP-SP
Plaintiffs - Appellants,
v.
UNITED STATES OF AMERICA,
Defendant - Appellee.
Appeals from the United States District Court
for the Central District of California
Virginia A. Phillips, District Judge, Presiding
Argued and Submitted April 10, 2015
Pasadena, California
Before: SILVERMAN and BEA, Circuit Judges and QUIST,** Senior District
Judge.
The plaintiffs in these consolidated appeals are retired Los Angeles County
firefighters who have service-connected disabilities. The plaintiffs each filed a
separate action in district court seeking a tax refund, and the district court granted
summary judgment to the Government in each of the cases. We exercise
jurisdiction under 28 U.S.C. § 1291, we review the district courts’ conclusions of
**
The Honorable Gordon J. Quist, Senior District Judge for the U.S. District Court
for the Western District of Michigan, sitting by designation.
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law de novo, see Nakano v. United States, 742 F.3d 1208, 1210 (9th Cir. 2014),
and we affirm.
1. A Los Angeles County employee who retires with a service-connected
disability is entitled to receive a pension equal to half the employee’s final salary.
Cal. Gov’t Code § 31727.4. If the employee qualifies for a service pension in an
amount greater than half the employee’s final salary, however, the employee
receives the service pension amount. Id. Each of the plaintiffs received a pension
equal to the amount of his service pension, which was calculated based on years of
service.
2. Section 104(a)(1) of the Internal Revenue Code specifically excludes
from taxation “amounts received under workmen’s compensation acts as
compensation for personal injuries or sickness.” 26 U.S.C. § 104(a)(1). Treasury
Regulation §1.104-1(b) provides that “section 104(a)(1) does not apply to a
retirement pension or annuity to the extent that it is determined by reference to the
employee’s age or length of service . . . even though the employee’s retirement is
occasioned by an occupational injury or sickness.” Treas. Reg. § 1.104-1(b). The
portion of each of the plaintiff’s pensions that exceeds half his final salary is
determined by reference to his length of service, and thus not excludable pursuant
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to Treasury Regulation §1.104-1(b). See Sewards v. Comm’r, -- F. 3d --, No. 12-
72905, 2015 WL 2214705, at *5 (9th Cir. May 12, 2015).
3. The plaintiffs argue that the IRS lacked authority to issue Treasury
Regulation §1.104-1(b), and it is thus invalid. The Treasury Department has
authority to issue “all needful rules and regulations for the enforcement of [the
Internal Revenue Code.].” 26 U.S.C. § 7805(a). To determine whether a Treasury
regulation issued under that grant of authority is valid, courts apply the analysis
announced in Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S.
837, 842-43 (1984). Mayo Found. for Med. Educ. & Research v. United States,
562 U.S. 44, 52 (2011). That analysis is satisfied here because § 104(a)(1) does
not directly address the precise question at issue and the regulation is a reasonable
interpretation of § 104(a)(1). See Sewards, 2015 WL 2214705, at *5.
4. The plaintiffs’ argument that Supreme Court precedent prohibits
applying Chevron deference in this case is unavailing. The IRS has not interpreted
§ 104(a)(1) in an inconsistent manner, nor has the Supreme Court interpreted that
statute in a way that conflicts with Treasury Regulation § 1.104-1(b). Accordingly,
the cases that the plaintiffs cite are inapposite. See United States v. Home
Concrete & Supply, LLC, 132 S. Ct. 1836 (2012); Rowan Companies v. United
States, 452 U.S. 247 (1981).
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5. Finally, the IRS is not bound to treat the entirety of Campbell’s and
Wyman’s pensions as excludable simply because it did so previously. Because
there are no court decisions addressing whether those pensions are taxable, the law
of the case doctrine is not applicable. See United States v. Lummi Indian Tribe,
235 F.3d 443, 452 (9th Cir. 2000). Nor does the doctrine of equitable estoppel
apply in this case, as Campbell and Wyman have failed to demonstrate that the IRS
engaged in affirmative misconduct or that they were injured by the IRS’s conduct.
See Baccei v. United States, 632 F.3d 1140, 1147 (9th Cir. 2011) (listing elements
of an equitable estoppel claim).
AFFIRMED.
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