"Imminence" in Brandenburg

[Jonathan Miller]

Suppose someone were to say "play my numbers game and you will not have
to pay taxes on your winnings."  Surely the tax advice would not be
protected, since it is not separable from the invitation to play the
illegal lottery.  Why is this case any different?

Jonathan M. Miller
Professor of Law
Southwestern Law School
3050 Wilshire Blvd.
Los Angeles, CA 90010-1106
Tel. 213-738-6784

-----Original Message-----
From: conlawprof-bounces at lists.ucla.edu
[mailto:conlawprof-bounces at lists.ucla.edu] On Behalf Of Bhagwat,
Ashutosh A.
Sent: Monday, January 25, 2010 2:22 PM
To: Volokh, Eugene; CONLAWPROFS professors
Subject: RE: "Imminence" in Brandenburg

I can't see how it does satisfy Brandenburg -- this seems reminiscent of
the Paladin case, where the Court is stretching the Brandenburg test to
get the right result.

What's particularly odd is that given these facts, I don't see what his
"anti-tax" advocacy has to do with his underlying convictions.  Surely
the main crimes are the pyramid scheme and his failure to pay his own
taxes?

Ash Bhagwat
Professor of Law
University of California, Hastings College of the Law

-----Original Message-----
From: conlawprof-bounces at lists.ucla.edu
[mailto:conlawprof-bounces at lists.ucla.edu] On Behalf Of Volokh, Eugene
Sent: Monday, January 25, 2010 2:14 PM
To: 'CONLAWPROFS professors'
Subject: "Imminence" in Brandenburg

Any thoughts on this opinion decided today, U.S. v. Phipps, 2010 WL
254983 (5th Cir.)?  In particular, I wonder whether it's consistent with
Brandenburg and Hess v. Indiana to hold that this speech incites
"imminent lawless conduct" -- isn't it more like the advocacy of illegal
conduct at some unknown future time, which doesn't satisfy the
"imminence" requirement, according to Hess?  (I set aside the question
whether the speech could be restricted on other grounds.)

Eugene




For over twenty years, Phipps has operated self-styled "educational
programs dedicated to teaching others how to eliminate their debt and
live within their means." Despite notice from the United States Postal
Service ("USPS") that both of his prior, similarly structured endeavors
were considered illegal pyramid schemes, Phipps created the instant
program, Life Without Debt ("LWD"). Members were encouraged to
contribute between $2,000 and $100,000; Phipps claimed that a larger
contribution would engender larger returns. As with prior schemes,
members were required to recruit two new members prior to receiving any
payments; they also received educational literature and tapes with
anti-income tax messages. Notably, Phipps told participants that the
income received through LWD would not need to be reported to the IRS.
Phipps himself did not report any of his LWD income to the IRS.

During his ten years of operating LWD, Phipps received notices from the
states of Georgia, Oklahoma, and Maryland that LWD constituted a pyramid
scheme, and he may be subject to civil or criminal enforcement actions
as a result. Indeed, six LWD members were arrested in Florida for felony
and misdemeanor promotion of and participation in an illegal lottery.
Despite these warnings that his activities might be illegal, Phipps
continued to recruit new members through mass mailings, teleconference
calls, and seminars in major cities. Phipps sent periodic small payments
to members to encourage them to remain in the program, recruit new
members, or reinvest in larger payment plans. Though Phipps marketed LWD
as a compound-leveraging investment program that would generate large
sums of money for its investors, less than nine percent of LWD's
approximately 31,000 participants made a net profit above their initial
investment. Phipps "earned" $4,606,396 from LWD, $1,381,683 of which wa!
 
 s "participation income," and $3,224,782 of which he paid to himself
under aliases within the scheme.

A jury found Phipps guilty of mail and wire fraud and aiding and
abetting, corrupt endeavor to obstruct and impede the due administration
of the internal revenue laws, and income tax evasion. [FN1] Phipps was
sentenced to 210 months imprisonment, to be followed by three years of
supervised release. Phipps was also ordered to pay $1,402,446 in
restitution. Phipps now appeals the sufficiency of the evidence to
support his convictions and whether his sentence was properly
calculated....

Phipps alleges that his tax evasion advocacy was protected by the First
Amendment. This allegation is without merit. Telling his adherents that
he did not report his LWD income to the IRS and encouraging them to do
the same place Phipps' speech within the sphere of proscribed speech
likely to incite or produce "imminent lawless action." Brandenburg v.
Ohio, 395 U.S. 444, 447 (1969); see also United States v. Kelley, 864
F.2d 569, 577 (7th Cir.1989) (rejecting First Amendment protection of
"more than mere advocacy" where defendant told clients to keep tax
shelter information secret from the IRS and received commissions from
sales); United States v. Buttorff, 572 F.2d 619, 624 (8th Cir.1978)
(rejecting First Amendment protection of activity that went "beyond mere
advocacy of tax reform" in explaining to others how to avoid income tax
liability). Phipps has not shown that his behavior advising and
advocating tax evasion to LWD participants should be entitled to First
Amendment !
 
 protection....
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