updated 2:28 PM CEST, May 24, 2023

As DC District Court judge dismisses 'accidentals' challenge of U.S. renunciation fee regime, the plaintiffs appeal

A group of "accidental Americans" responded to the dismissal, on Friday, of their legal challenge of the U.S. government's citizenship renunciation regime, by filing an immediate appeal.

"We really didn't lose,"  said L. Marc Zell, of Zell & Associates International Advocates LLC, who has been handling the case on behalf of the Paris-based Association of Accidental Americans (AAA) and around 9 individual "accidental" plaintiffs from Europe and Asia, when asked to comment on the dismissal of the case. It had originally been filed in a U.S. District Court in Washington, DC in December, 2020.

"The district court judge was reluctant to decide the central issue in the case – namely, that U.S. citizens have a constitutional right to renounce their citizenship, which can only be abridged for compelling government reasons, and then only if narrowly tailored to do so.

"[Instead, she] basically teed up the case for the appellate court." 

Zell added that he and his team had "expected this case to end up there [in the appellate court] one way or another," and that they considered their position on appeal to be "quite strong."

In a statement issued this morning (Feb. 14), the AAA, a French non-profit society, said it and its fellow individual plaintiffs had "appealed the judgment of the District Court which dismissed their lawsuit that challenged the U.S. Department of State’s imposition of the US$2,350 fee as a precondition to renounce U.S. citizenship." 

AAA founder and president Fabien Lehagre added: "Our fight for the rights of accidental Americans [now] continues to the appellate level.

"We are obviously disappointed by the ruling. The court committed several significant and material errors that must be reviewed by the court of appeals.

"[But] we have appealed the decision, and will raise our arguments before the Court of Appeals.

"Our battle has just begun."

 The AAA statement said that the appeal was filed on Feb. 13, and will be heard before three judges of the U.S. Court of Appeals for the District of Columbia Circuit.

In their original lawsuit, the AAA and its co-plaintiffs had argued that the right of an individual to renounce their U.S. citizenship was "a fundamental, constitutional, natural and inherent right under the U.S. Constitution," and that the State Department’s fee was “essentially forcing" dual citizens like them "to remain U.S. citizens against their will."

Reduction in the US$2,350 fee

As reported, the U.S. State Department last month unexpectedly announced its "intent" to reduce the fee it charges those seeking to renounce their citizenships to US$450 from the US$2,350 fee mentioned in the accidental Americans' lawsuit – on the Friday before a scheduled hearing the following Monday in the accidental Americans' case.

Although this 81% reduction in the fee had been discussed "extensively" at that hearing, it wasn't mentioned by District Court Judge Tanya S. Chutkan in her dismissal of the accidentals' case, the AAA noted in its statement yesterday.

US$450 is what the State Department used to charge those wishing to renounce their citizenships between 2010 and 2015. Prior to 2010, the U.S. didn't charge those wishing to renounce. The government subsequently explained that the fee had had to be raised because the amount of work involved in processing renunciations had increased, in response to such legislation as 2010's Foreign Account Tax Compliance Act (FATCA). 

Although the State Department has yet to provide details as to when it intends to actually lower the renunciation/expatriation fee to US$450, the AAA said it understands the decision to do so "is still valid."

Meanwhile, with respect to District Court Judge Chutkan's decision to "grant Defendants' (U.S. State Department) Partial Motion to Dismiss and Partial Motion for Summary Judgment," which may be viewed by clicking here, some observers are saying that it appears to have been rooted in a perceived lack of clarity around the issue of whether the right to expatriate is, as the plaintiff's contend, protected by the U.S. Constitution. 

Crowd-funded legal challenge

The AAA announced its intention of launching a legal challenge to the US$2,350 renunciation fee in August of 2020, and as reported, reached its crowd-funding target of €20,000 to do so after just a month.

Among its many other current activities, the organization is currently looking to crowd-fund an anti-citizenship-based taxation (CBT) "lobbying and public relations campaign" that it is aiming to position alongside other efforts to replace the United States' globally-unique CBT-based tax regime with a residence-based tax system, like just about every other country in the world has, apart from Eritrea. It's calling its efforts in this area a "call to action to fight CBT."