LIEUTENANT OBTAINS
INJUNCTION PREVENTING DEPARTMENT FROM FIRING HIM BASED UPON TAX RETURN
DEDUCTIONS
In a case testing the
limits of the financial disclosure and injunctive relief provisions of
the Public Safety Officers’ Procedural Bill of Rights Act (POBR), a
Siskiyou County sheriff’s lieutenant has won a court order prohibiting
the county from using information in his state and federal income tax
returns as a basis for discipline.
Lieutenant Patrick
Kallstrom, a 22-year veteran of the Siskiyou County Sheriff’s
Department, was dismissed July 11, 2001, in part on allegations he had
falsely claimed business expense deductions on his state and federal tax
returns for 1997-1999. Motivated by political considerations, the
sheriff and the county spent thousands of dollars on an attorney and
investigator from a Long Beach management-side firm to develop cause for
terminating Kallstrom. The investigator obtained copies of Kallstrom’s
income tax returns from a third party who was suing Kallstrom’s wife
over an unpaid loan, and the sheriff used the returns to fire Kallstrom
for the allegedly false deductions.
POBR and Tax Statutes
Limit Financial Disclosures: Government Code section 3308 provides broad
protection for the financial privacy of peace officers by limiting the
purposes for which an employer may obtain an officer’s financial data.
The statute prohibits disclosure "unless such information is
obtained or required under state law or proper legal procedure[.]"
In Kallstrom’s case, his attorney in the loan dispute had provided the
returns to the plaintiffs under the Evidence Code privilege for
settlement discussions. (Evid. Code §§ 1152, 1153.5.) There was no
"state law or proper legal procedure" justifying the release
of the returns to Siskiyou County’s investigator.
California’s Revenue
and Taxation Code, and similar federal statutes, also provide strict
confidentiality for taxpayer returns (Rev. & Tax. Code §§ 19542,
19552.). The courts have expressly condemned the acquisition of tax
returns from third parties as an intolerable circumvention of this
privilege (Webb v. Standard Oil Co. (1957) 49 Cal.2d 509; Sav-On Drugs,
Inc. v. Superior Court (1975) 15 Cal.3d 1.).
Petition for Injunctive
Relief Linked POBR and Revenue Code Provisions: When the sheriff
rejected these arguments at Kallstrom’s Skelly hearing, the
lieutenant turned to the PORAC Legal Defense Fund and panel attorneys
David E. Mastagni and Christopher W. Miller of Mastagni, Holstedt &
Amick to seek relief in Superior Court. Using Government Code section
3309.5, Kallstrom filed a petition for mandatory injunctive relief in
Siskiyou County Superior Court. The petition argued the prohibitions
against financial disclosure set out in section 3308 and the Revenue and
Taxation Code, together with the evidentiary privileges for settlement
discussions, required the court to prevent Siskiyou County from firing
Kallstrom based on the income tax returns.
Despite vehement argument
from the county that section 3309.5 could not be used to seek injunctive
relief based on non-POBR statutes, the visiting judge hearing Kallstrom’s
petition accepted counsel’s argument provisions of the Revenue and
Taxation Code and the Evidence Code were proper grounds for deciding
whether there was a violation of section 3308. This preliminary decision
by the judge extended jurisdiction for those claims and defeated the
county’s argument that Kallstrom first had to pursue an administrative
remedy for violation of those non-POBR provisions.
While the judge found a
nexus existed between Kallstrom’s financial activities and his
position with the sheriff’s department, he rejected the county’s
claim that procuring the returns from a third party somehow nullified
the protections of the POBR and tax laws. He ruled the tax returns could
not be used as part of any disciplinary action because the returns are
deemed confidential by the Revenue and Taxation Code.
Kallstrom’s victory in
court now will be used to fight the disciplinary action. The ruling
should discourage Siskiyou County and other law enforcement agencies
from unwarranted and illegal invasions of employee confidentiality by
hired guns looking for any excuse to end a peace officer’s career.
ABOUT THE AUTHOR:
David E. Mastagni represents PORAC
LDF clients throughout northern California as an attorney with Mastagni,
Holstedt & Amick in Sacramento.
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