In the meantime, related rulings were handed down in a civil case that had been brought against the Internal Revenue Service in late 2004 by two Texas lawyers, Harold W. Nix, and C. Cary Patterson. Nix and Patterson sued the IRS for refunds after the tax agency denied each of their claims for nearly $67 million in deductions stemming from their use of the BLIPS tax shelter in 2000. Their lawsuit was thought to be relevant to the KPMG tax shelter fraud case because BLIPS is one of the tax shelters alleged to be abusive by the prosecution in that matter. On 20 July 2006, Judge T. John Ward of United States District Court for the Eastern District of Texas ruled that the use of BLIPS by Nix and Patterson was essentially legitimate, because the I.R.S.'s application of tougher Treasury Department rules in 2003 to liabilities that occurred in BLIPS was "ineffective" and "not enforceable" because it was retroactive. The Internal Revenue Code generally prohibits retroactive regulations. In response to this ruling, prosecutors in the KPMG case have indicated that they will argue that the BLIPS shelter itself was technically valid, but that the way the defendants carried it out was fraudulent. In turn, lawyers for the defendants argue that no court of law has ever ruled that the tax shelters in question were illegal. And in February 2007, Judge Ward essentially reversed himself and ruled the tax shelter consisted of fake bank loans and therefore illegitimate, despite his previous ruling identified in the link above.