* This disposition is not appropriate for publication and is not precedent except as provided by 9th Circuit Rule 36-3. NOT FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
THOMAS INVESTMENT PARTNERS, LTD.; et al., Plaintiffs - Appellants,
v. UNITED STATES OF AMERICA, Defendant - Appellee. No. 09-55638 D.C. No. 2:06-cv-07376-JFW-RZ
MEMORANDUM *

THOMAS DIVISION PARTNERSHIP, L.P.; et al., Plaintiffs - Appellants,
v. UNITED STATES OF AMERICA, Defendant - Appellee. No. 09-55639 D.C. No. 2:06-cv-07374-JFW-RZ

THOMAS MASTER INVESTMENTS, L.P.; et al., No. 09-55641 D.C. No. 2:06-cv-07377-JFW-RZ 

# FILED
JUL 20 2011 MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS2 Plaintiffs - Appellants,
v. UNITED STATES OF AMERICA, Defendant - Appellee.
HUNTINGTON/FOX INVESTMENTS, L.P.; et al., Plaintiffs - Appellants,
v. UNITED STATES OF AMERICA, Defendant - Appellee. No. 09-55642 D.C. No. 2:06-cv-07380-JFW-RZ

MAGUIRE PARTNERS MASTER INVESTMENTS, LLC and MAGUIRE PARTNERS, INC., as Tax Matters Partner, Plaintiffs - Appellants,
v. UNITED STATES OF AMERICA, Defendant - Appellee. No. 09-55650 D.C. No. 2:06-cv-07371-JFW-RZ

Appeal from the United States District Court1 The parties are familiar with the fact s of the case so we do not repeat them here. 3 for the Central District of California John F. Walter, District Judge, Presiding Argued and Submitted July 11, 2011 Pasadena, California Before: FERNANDEZ, RYMER, and TALLMAN, Circuit Judges. Plaintiffs - Appellants appeal the district court’s judgment in favor of the United States after a consolidated bench trial on their respective challenges to final partnership administrative adjustments (“ FPAA”) the IRS issued to each for tax years 2001 and 2002. 26 U.S.C. § 6226. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm. 1 I The district court did not abuse its discretion in admitting evidence demonstrating that the transactions at i ssue were Arthur Andersen proprietary tax products. Sochin v. Comm’r , 843 F.2d 351, 355 (9th Cir. 1988) (“We review the trial court’s decision to admit or exclude evidence based on the issue of relevancy for an abuse of discretion.”), abrogated on other grounds by Landreth v. Comm’r , 859 F.2d 643, 648–49 (9th Cir. 1988), as recognized by Keane v. Comm’r , 865 F.2d 1088, 1092 n.8 (9th Cir. 1989). Such evidence is highly relevant to the4 resolution of both factors of the economic substance inquiry applied by the court in this case. Goldberg v. United States , 789 F.2d 1341, 1344 (9th Cir. 1986); Karme v. Comm’r , 673 F.2d 1062, 1064 (9th Cir. 1982); accord Stobie Creek Invs., LLC v. United States ( Stobie I ), 82 Fed. Cl. 636, 658–59 (2008), aff’d , 608 F.3d 1366 (Fed. Cir. 2010) ( Stobie II ). Neither did the court abuse its discre tion by requiring that the parties submit their direct testimony by declaration. FTC v. Enforma Natural Prods., Inc. , 362 F.3d 1204, 1212 (9th Cir. 2004) (“We review i ssues relating to the district court’s management of trial for abuse of discreti on.”). The practice is explicitly authorized by Local Rule 43-1 of the Central Districtof California, and we have previously approved of its use in other cases. Kearney v. Standard Ins. Co. , 175 F.3d 1084, 1094–95 (9th Cir. 1999) (en banc) (citing In re Adair , 965 F.2d 777, 779 (9th Cir. 1992), with approval). Neither did the court abuse its “bro ad discretion” by consolidating the Appellants’ largely identical cases. Pierce v. Cnty. of Orange , 526 F.3d 1190, 1203 (9th Cir. 2008). The court appropriately determined that “the saving of time and effort consolidation would produce” outweighed “any inconve nience, delay, or expense that it would cause.” Huene v. United States , 743 F.2d 703, 704 (9th Cir. 1984) (citing Fed. R. Civ. P. 42(a)); see United States v. Howard , 480 F.3d 1005,5 1012 (9th Cir. 2007) (“We traditionally assu me that judges, unlike juries, are not prejudiced by impermissible factors.” (citation omitted)). We also reject Appellants’ claim thatthe court “ignored” their evidence and thereby abused its discretion. The record convinces us that the court appropriately considered the evidence Appellants offere d both at trial and by post-trial filings and simply resolved the disputed facts in the Government’s favor. Appellants’ disagreement with that resolution, without more, does not establish reversible
error. See Casebeer v. Comm’r , 909 F.2d 1360, 1365 (9th Cir. 1990) (rejecting the taxpayer’s claim that the court erred by not crediting his testimony because, while “such testimony [wa]s necessary ‘to prove that he had a bona fide profit motive,’ there is no requirement that the tax court believe him”). Finally, we agree with the court’s conclusion that Appellants were not legally entitled to a jury trial. Suits f iled against the United States must strictly comport with the terms under which sovereign immunity has been waived. Lehman v. Nakshian , 453 U.S. 156, 160–61 (1981). In authorizing FPAA suits, Congress expressly provided that such suits “be tried by the court without a jury.” Compare 28 U.S.C. § 2402, with 26 U.S.C. § 6226 (FPAA cause of action), and 28 U.S.C. § 1346(e) (jurisdiction for § 6226 suits). Appellants’ attempt to recast their claims as “action[s] in the nature of a re fund” in order to fall within the jury trial6 provision of § 2402 is contradicted not only by the clear terms of § 1346(e), but by the jurisdictional statement each pledin their respective complaints. II We likewise find no error in the district court’s conclusion under the economic substance doctrine that Appellant s’ transactions were legal shams. Sacks v. Comm’r , 69 F.3d 982, 986 (9th Cir. 1995) (reviewing de novo the legal standards applied and the court’s application of the law to the facts, but reviewing the court’s factual findings for clear error). First, the court appropriately c onsidered (1) whether Appellants demonstrated that either of the principals directing their respective transactions had a business purpose for engaging in the trans action other than tax avoidance and (2) whether either transaction had economic substance beyond the creation of tax benefits. Casebeer , 909 F.2d at 1363 (quoting Bail Bonds by Marvin Nelson, Inc. v. Comm’r , 820 F.2d 1543, 1549 (9th Cir. 1987)); see id. (rejecting the argument that both inquiries must be concluded agai nst the taxpayer “in order to hold that a transaction is a sham”). Further, in evaluating the legal import of “economic substance,” it correctly considered whether the transactions were “likely” to produce a non-tax economic benefit. Id. at 1365 (citation omitted); see Knetsch v. United States , 364 U.S. 361, 366 (1960) (concluding that a transaction was a sham7 because it “did not appreciably affect [the taxpayer’s] beneficial interest except to reduce his tax” (internal quotation marks omitted) (citation omitted)); Stobie II, 608 F.3d at 1377 (“[Transaction] lacked economic reality . . . [because] there was no reasonable possibility that the FXDOTs would return a profit.). Second, we find no error, let alone clear error, in any of the court’s factual determinations. Sacks , 69 F.3d at 986. We reject Appellants’ overstated contention that “the real world refutes the Government’s case.” The other price quotes Appellants received did not contemplate inclusion of the return-minimizing “Asian-style feature,” a material distinc tion. Moreover, the fact that Appellants must rely on a market downturn that occurre d nearly seven years after they entered into their transactions to show thattheir call-option spread transactions would ever have conferred a real-world benefit onl y bolsters the Government’s position. It underscores the district court’s determinati on that the transactions were “extremely unlikely” to confer a non-tax ec onomic benefit on Appellants. See, e.g. , Casebeer , 909 F.2d at 1365. Finally, we conclude that the court appr opriately applied the law to the facts. Sacks , 69 F.3d at 986. The evidence demons trated that the transactions were extremely unlikely to confer a non-tax bene fit and that both principals engaged in the transactions solely to create tax benef its. As such, the transactions amounted to2 Appellants waived their right to ch allenge the district court’s amended determination that a 20% negligence penalty should apply by not adequately contesting that determination in their opening briefs. Martinez-Serrano v. INS , 94 F.3d 1256, 1259 (9th Cir. 1996) (“Issues . . . not supported by argument are deemed abandoned.”). 8 legal shams, and the FPAAs were appropriate. Stobie II, 608 F.3d at 1375 (“The economic substance doctrine seeks to di stinguish between structuring a real transaction in a particular way to obtain a tax benefit, which is legitimate, and creating a transaction to generate a tax benefit, which is illegitimate.”). III Because we affirm the district court’s conclusion that the Appellants’ transactions were legal shams under th e economic substance doctrine, we do not reach the merits of its alternative holdings. 2 AFFIRMED
.