Stillahn v. S.crow Collateral Corp.

• Court: Court of Appeals for the Ninth Circuit
• Decided: May 22, 2026
• Docket: 25-460
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS MAY 22 2026 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

RICHARD B. STILLAHN; LISA R. LANG No. 25-460 STILLAHN, D.C. No. 13492-20 Petitioners - Appellees,

v. MEMORANDUM*

COMMISSIONER OF INTERNAL REVENUE,

Respondent - Appellee,

v.

S.CROW COLLATERAL CORP.,

Movant - Appellant.

NAT S. HARTY; APRIL D. HARTY, No. 25-7765 Petitioners - Appellees, D.C. No. 23354-21 v.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. v.

Non-Party - Appellant.

Appeal from a Decision of the United States Tax Court

Argued and Submitted April 23, 2026 San Francisco, California

Before: SCHROEDER, CHRISTEN, and FORREST, Circuit Judges.

S.Crow Collateral Corporation (SCCC) appeals from the tax court’s denials

of its motions to seal documents containing its return information in two different

tax proceedings. The issue before us is the same in both cases, and we have

consolidated the appeals for decision. SCCC is not a party to the underlying tax

proceedings, and the denials of the motions to seal are final collateral orders that

would not otherwise be reviewable on appeal. See Moses H. Cone Mem’l Hosp. v.

Mercury Constr. Corp., 460 U.S. 1, 11–12 (1983); Comm’r v. JT USA, LP, 630

F.3d 1167, 1172–73 (9th Cir. 2011); Ctr. for Auto Safety v. Chrysler Grp., LLC,

809 F.3d 1092, 1096 (9th Cir. 2016) (“[A]n order denying a motion to unseal or

seal documents is appealable either as a final order . . . or as a collateral order.”

(citation omitted)). We therefore have jurisdiction under 26 U.S.C. § 7482(a)(1).

The tax court denied the motions to seal because, although the material

sought to be sealed was return information generally entitled to confidentiality, 26

U.S.C. § 6103(a), the documents fell within the exception for transactional

2 25-460 & 25-7765 relationships with the parties. See id. § 6103(h)(4)(C) (explaining that return

information may be disclosed in tax administration proceedings if it “directly

relates to a transactional relationship between a person who is a party to the

proceeding and the taxpayer which directly affects the resolution of an issue in the

proceeding”). SCCC’s primary argument is that the tax court in both cases

improperly placed the burden on SCCC to prove that the exception did not apply.

In these cases, however, the underlying facts concerning the transactional

relationships of the parties are not in dispute, including the fact that SCCC was the

intermediary in the property sales which are the subject of the tax court

proceedings. Whether the transactional relationship exception in

section 6103(h)(4)(C) applies to the undisputed facts of these cases is thus a

question of law.

SCCC contends that the exception does not apply because there was no

direct contractual relationship between the taxpayers and SCCC. But the statute

requires only that (1) the return information “directly relates” to a “transactional

relationship” between a party to the tax proceedings and SCCC, and (2) that

transactional relationship “directly affects” the resolution of an issue in those

proceedings. Both criteria have been met. SCCC facilitated the monetized

installment sales at issue in these cases. The tax court properly concluded that in

order to determine whether the taxpayers misrepresented capital gains on their

3 25-460 & 25-7765 respective tax returns, the court had to assess the validity of the interrelated

transactions. Details regarding the nature of those transactions are contained in the

material sought to be sealed.

Thus, if the government had the burden to establish that the statutory

exception applied, it met it. The tax court accordingly did not abuse its discretion

by denying SCCC’s motions to seal in both cases.

AFFIRMED.1

1 The pending motions to seal in both cases are DENIED as moot. See Stillahn, Dkts. 13, 26; Harty, Dkts. 22, 35, 42.

4 25-460 & 25-7765