UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

Michael Duane, Smith,

Plaintiff-Appellant,

v.

MILLIE R. KITCHEN, RANDY

KOMISAREK, and KEITH WOODS,

Defendants-Appellees.

No. 97-1237

ORDER

Filed on September 15, 1998

Before BRORBY, EBEL and KELLY, Circuit Judges.

On the court’s own motion, the order and judgment originally filed on

December 12, 1997, shall be published. The published opinion is attached to this

order.

Entered for the Court

Patrick Fisher, Clerk of Court

 By:

 Keith Nelson

 Deputy Clerk
*After examining the briefs and appellate record, this panel has determined

unanimously that oral argument would not materially assist the determination of this

appeal. See Fed. R. App. P. 34(a); 10th Cir. R. 34.1.9. The cause therefore is ordered

submitted without oral argument.

F I L E D

United States Court of Appeals

Tenth Circuit

DEC 12 1997

PATRICK FISHER

Clerk

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

Michael Duane, Smith,

Plaintiff-Appellant,

v.

MILLIE R. KITCHEN, RANDY

KOMISAREK, and KEITH WOODS,

Defendants-Appellees.

No. 97-1237

Appeal from the United States District Court

for the District of Colorado

(D.C. No. D.C. No. 96-D-2558)

Submitted on the briefs:*

Michael Duane, Smith, Pro Se.

Robert A. Kitsmiller and Richard C. Hopkins of Podoll & Podoll, P.C., Denver,

Colorado, for Defendants-Appellees.

Before BRORBY, EBEL and KELLY, Circuit Judges.

EBEL, Circuit Judge.
1During the proceedings below, the appellant vigorously objected to the

district court’s practice of captioning all documents in this case with Smith’s full

name in all capital letters. (See Aplee. Supp. App., at 53, 84-87.) In light of the

fact that Smith actually received notice of all materials filed in this case, we

cannot see what prejudice Smith suffered as a result of the district court’s

practice. Nevertheless, we see no reason why the caption in this case cannot be

amended to reflect Smith’s preferred typography, including a comma after his

middle name. As a result, the court has directed that the caption in this appeal be

modified.

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Plaintiff-appellant filed this civil rights suit seeking damages for alleged

violations of the United States Constitution by certain private officers and

employees of a private bank in Colorado. Finding the appellant’s claims

eminently frivolous, we affirm the district court’s dismissal of this case. 

Furthermore, we invoke our power under Fed. R. App. P. 38 to order the appellant

to show cause why he should not be sanctioned for the frivolousness of this

appeal.

I.

Plaintiff-appellant Michael Duane, Smith (“Smith”)1

 filed this case seeking

damages for a cornucopia of alleged violations of his rights, including claims of

mail fraud, perjury, and civil rights conspiracy. The wicker holding Smith’s

basket of claims together is his contention that the defendants have deprived him
2The appellees have informed the court that Smith also brought suit against

the Secretary of the Treasury and various IRS agents for this tax levy. According

to the appellees, this case is still pending in the U.S. District Court for the

District of Colorado. We note that the appellant has failed to comply with 10th

Cir. R. 28.2, requiring a clear statement of whether there have been any prior or

related appeals in this case. Such a statement would have indicated that Smith

previously sought a writ of mandamus from the Tenth Circuit in this case. The

petition was denied in In re Smith, No. 97-1208 (10th Cir. June 19, 1997)

(unpublished order).

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of his property without due process of law, in violation of Smith’s rights under

the Fifth Amendment. Smith brought his claim for money damages -- seeking

$1,750,000 -- under the Ku Klux Klan Act of 1871, 42 U.S.C. § 1983. 

Smith’s almost $2 million claim arose out of a tax levy for $2,176.35 by the

Internal Revenue Service against Smith. The IRS had issued a Notice of Levy to

Colorado National Bank, ordering the bank to turn over any moneys it held in

Smith’s accounts. The bank complied with this notice, turning over the money

remaining in Smith’s checking account. Smith then brought this suit against the

individual defendants, who are officers and/or in-house counsel for Colorado

National Bank.2

After it was docketed in the district court, Smith’s case was referred to

Magistrate Judge Donald E. Abram for pre-trial matters. Smith seems to have

contended that the Judge Abram lacked jurisdiction to supervise the case, and

Smith refused to appear for a pre-trial conference after being ordered to do so. In

response to this contempt, Judge Abram ordered Smith to pay $200 to the
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defendants’ counsel by January 31, 1997. As of April 10, 1997, Smith had failed

to pay this sanction, and the record before us includes no indication that Smith

has ever paid the sanction, nor has he challenged the sanction in the proceedings

below or here on appeal.

Rather than answering Smith’s complaint under Fed. R. Civ. P. 12(a), the

defendants filed a Rule 12(b)(6) motion to dismiss Smith’s complaint. The

defendants contended that they were immune from liability under 26 U.S.C. §

6332(e). After conducting a hearing on the motion, the magistrate judge

recommended that Smith’s complaint be dismissed in light of 26 U.S.C.

§ 6332(e).

Smith filed a pleading titled “Refusal for Fraud,” which the district court

interpreted as raising objections to the magistrate’s recommended disposition. In

its decision, following a de novo review of the record, the district court

reaffirmed the magistrate judge’s conclusion that the defendants were entitled to a

complete defense under 26 U.S.C. § 6332(e). The district court also noted that

any claim by Smith that these defendants had violated his due process rights

under the Fifth Amendment must fail because the defendants are not federal

government actors.

In his appeal here, Smith has reasserted his claim of a Fifth Amendment

violation by these defendants. Smith also has raised a variety of ancillary claims:
3Because Smith’s complaint was dismissed under Fed. R. Civ. P. 12(b)(6),

we review the district court’s determination de novo, taking the facts as alleged in

Smith’s complaint as true. See Chemical Weapons Working Group, Inc. v. United

States Dep’t of the Army, 111 F.3d 1485, 1490 (10th Cir. 1997). Furthermore, we

have applied the principle of generous construction to Smith’s pleadings in light

of the fact that he is not represented by counsel. See Riddle v. Mondragon, 83

F.3d 1197, 1202 (10th Cir. 1996).

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that the magistrate judge lacked jurisdiction to consider the defendants’ motion to

dismiss; that Smith’s right to counsel was abridged by the magistrate judge’s

refusal to allow a “non-bar counselor” to assist Smith; that Smith should have

been allowed to pursue discovery in response to the defendants’ motion to

dismiss; and that the district court should have clarified its jurisdiction to hear

constitutional claims.

II.

The frivolity of Smith’s claims must be dealt with seriously because of the

waste of resources Smith has inflicted on the court and the appellees. First, Smith

has brought his claim for damages under 42 U.S.C. § 1983.3

 This statute provides

a private cause of action against “[e]very person who, under color of any statute

. . . of any State or Territory or the District of Columbia, subjects, or causes to be

subjected, any citizen of the United States . . . to the deprivation of any rights,

privileges, or immunities secured by the Constitution and laws” of the United

States. See 42 U.S.C. § 1983 (emphasis added). As the text itself makes clear,
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this statute imposes liability only for actions taken under state law. See District

of Columbia v. Carter, 409 U.S. 418, 424-25 (1973); Wheeldin v. Wheeler, 373

U.S. 647, 650 n.2 (1963). It simply does not apply to actions taken under federal

law. See Kotmair v. Gray, 505 F.2d 744, 746 (4th Cir. 1974) (per curiam)

(holding that section 1983 does not reach conduct by bank employees complying

with an IRS levy under 26 U.S.C. § 6331); see also Morse v. North Coast

Opportunities, Inc., 118 F.3d 1338, 1343 (9th Cir. 1997) (awarding attorney’s fees

to defendant and characterizing plaintiff’s claim under section 1983 as

“unreasonable” and “meritless” when defendants’ underlying conduct arose under

color of federal law). Thus, because Smith’s complaint alleges conduct under

color of federal law, i.e. the Internal Revenue Code, there is no liability under 42

U.S.C. § 1983.

Second, even if we were generously to construe Smith’s complaint as

raising a Bivens-style claim for conduct under color of federal law (which it does

not), see Bivens v. Six Unknown Named Federal Narcotics Agents, 403 U.S. 388

(1971), the claim still would be deficient as a matter of law because the

underlying constitutional right that Smith asserts -- due process under the Fifth

Amendment -- does not apply to the conduct of private actors who are defendants

in this case. The Fifth Amendment establishes that “[n]o person shall . . . be

deprived of life, liberty, or property, without due process of law.” U.S. Const.
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amend V. From the earliest interpretations of this amendment, courts have agreed

that the Fifth Amendment protects against actions by the federal government. See

Barron v. The Mayor & City Council of Baltimore, 32 U.S. (7 Pet.) 243, 247, 250-

51 (1833). The amendment provides no protection against private actions by

private individuals. See Public Utils. Comm’n v. Pollak, 343 U.S. 451, 461

(1952); cf. The Civil Rights Cases, 109 U.S. 3, 23-25 (1883) (interpreting state

action requirement under the Fourteenth Amendment). A private individual falls

within the scope of our Constitution’s due process guarantees only when the

private actor may “be fairly said to be a state actor.” See Lugar v. Edmondson

Oil Co., 457 U.S. 922, 937 (1982); Gilmore v. Salt Lake Community Action

Program, 710 F.2d 632, 635-36 (10th Cir. 1983) (applying the state action tests

under the Fourteenth Amendment to a claim under the Fifth Amendment, to find

no federal action in a local community action program regulated and funded in

part by the federal government). In this case, where the only “act” by the

defendants was to comply with a lawful levy from the Internal Revenue Service,

no reasonable person could conclude that the defendants can fairly be

characterized as governmental actors.

Third, even if we could fairly characterize the defendants’ conduct as

government action, they are entitled to a complete defense under 26 U.S.C. §

6332(e). As part of its policy of encouraging efficient collection of federal taxes
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and voluntary compliance with the tax laws, see United States v. National Bank of

Commerce, 472 U.S. 713, 721 (1985), Congress has declared that any person who

honors an IRS levy against a taxpayer’s property “shall be discharged from any

obligation or liability to the delinquent taxpayer and any other person with respect

to such property . . . .” 26 U.S.C. § 6332(e). Although there may be some

disagreement between the circuits as to whether section 6332(e) creates a

“defense” or an “immunity,” this provision clearly bars money damages against a

person who has complied with an IRS levy. See Kentucky ex rel. United Pac. Ins.

Co. v. Laurel County, 805 F.2d 628, 636 (6th Cir. 1986) (holding that defendants

were entitled to a “complete defense” under prior version of section 6332(e));

Burroughs v. Wallingford, 780 F.2d 502, 503 (5th Cir. 1985) (holding defendants

“immune” from liability as a result of prior version of section 6332(e)) Schiff v.

Simon & Schuster, Inc., 780 F.2d 210, 212 (2d Cir. 1985) (holding that the

defendants were discharged from liability as a result of prior version of section

6332(e)). In Smith’s case, he has offered no fact or law to contradict the clear

mandate of section 6332(e). As a result, we hold that the defendants here are

discharged from any potential liability to Smith arising from their compliance

with the IRS levy on Smith’s checking account.
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III.

Smith’s ancillary claims are equally meritless. On appeal, Smith appears to

be contending that he never consented to a trial of his case by a magistrate judge

under 28 U.S.C. § 636(c). However, his case was not “tried” by a magistrate

judge. Instead, the district court referred the defendants’ motion to dismiss to the

magistrate judge for a hearing and recommendations under 28 U.S.C. §

636(b)(1)(B). The magistrate judge delivered his recommended findings and

conclusions to the district court, which then considered the plaintiff’s objections,

all as required by, and in compliance with, 28 U.S.C. § 636(b)(1)(C). The district

court’s dismissal of Smith’s complaint under Rule 12(b)(6) did not violate

Smith’s right to a jury trial under the Seventh Amendment: When Smith failed to

plead any facts that would overcome the defendants’ complete defenses, there

were no facts to be “tried” by a jury. In this posture, Smith’s lack of consent to

the magistrate judge is simply irrelevant.

Smith’s next issue involves his allegation that the magistrate judge denied

him his Sixth Amendment right to effective assistance of counsel by refusing to

allow Smith to use “non-bar counsel.” We need not consider Smith’s rather

implausible argument that a plaintiff in a civil rights suit has a Sixth Amendment

right to counsel because Smith has waived this issue on appeal. Smith failed to

raise this issue in his objections to the magistrate judge’s recommended findings
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and conclusions. As a result, he may not raise the claim now. See Ayala v.

United States, 980 F.2d 1342, 1352 (10th Cir. 1992); Moore v. United States, 950

F.2d 656, 659 (10th Cir. 1991); (see also Aplee. Supp. App., at 43 (warning the

plaintiff that he risked waiver of his right to appeal if he failed to raise his

objections before the district court)).

Smith also contends that the dismissal of his complaint prevented him from

pursuing discovery against the defendants. Smith has failed to point to any facts

that he might discover either through depositions or interrogatories that would be

material to the court’s consideration of the Rule 12(b)(6) motion. Nevertheless,

even if Smith had pointed out how discovery would be useful for the motion to

dismiss, he has waived this claim by failing to raise it before the district court.

Smith’s final contention of error involves his complaint that the district

court should have responded to his argument that by captioning its documents

“UNITED STATES DISTRICT COURT,” the court below was functioning as a

“territorial” court rather than as an Article III court. Smith has raised this

argument at every stage of this litigation, but he has yet to clarify his point. As

best we can determine, Smith has cobbled together stray quotations from various

sources to claim that a federal district court can function either as a “territorial”

court under Article I or as a “constitutional” court under Article III. Without

giving any credence to Smith’s bizarre argument, and despite our inability to see
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how Smith’s distinction would matter in this case, we hold that the United States

District Court for the District of Colorado was fully empowered under Article III

to consider Smith’s constitutional claims.

IV.

In their brief, the appellees have asked this court to award them their

attorneys fees and costs under Fed. R. App. P. 38 because of the frivolousness of

Smith’s appeal. See Burroughs v. Wallingford, 780 F.2d 502, 503 (5th Cir. 1986)

(awarding double costs and attorneys fees for a frivolous appeal of a dismissal

under 26 U.S.C. § 6332). We note, however, that we may not award such a

sanction under Rule 38 without a separately filed motion or notice. See Fed. R.

App. P. 38, advisory committee’s note (1994 Amendment). Nevertheless, we

have concluded that Smith’s conduct both here and in the district court cannot be

overlooked; to tolerate Smith’s conduct in this case is to risk allowing Smith to

inflict this conduct on other courts in this circuit. See Support Sys. Int’l, Inc. v.

Mack, 45 F.3d 185, 186 (7th Cir. 1995) (per curiam). Therefore, under Rule 38,

we now order the appellant Michael Duane, Smith to show cause why he should

not be sanctioned in the amount of $500, payable to the attorneys for the

defendants. Furthermore, this sanction shall include the additional condition that

the Clerk of Court for this circuit shall not accept any new appeals from Smith in
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any civil matters, excluding habeas corpus petitions, until Smith has certified,

under oath, that he has satisfied this sanction. Cf. Mack, 45 F.3d at 186.

In summary, then, we AFFIRM the judgment of the district court, and we

ORDER the appellant to SHOW CAUSE why he should not be sanctioned for his

frivolous appeal.