Court Opinion

ID: 64025
Source: CourtListenerOpinion
Date Created: 2010-04-26 05:07:12+00
Date Added: 2024-06-11T08:29:31.653955
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT United States Court of Appeals
                                                   Fifth Circuit

                                                                            FILED
                                                                         October 20, 2008

                                     No. 08-60346                     Charles R. Fulbruge III
                                   Summary Calendar                           Clerk

BILLY FRANKLIN

                                                  Petitioner–Appellant
v.

COMMISSIONER OF INTERNAL REVENUE

                                                  Respondent–Appellee

                                Appeal from a Decision
                            of the United States Tax Court
                                    No. 16141-06L

Before KING, DENNIS, and OWEN, Circuit Judges.
PER CURIAM:*
       Petitioner-appellant Billy Franklin appeals the Order of Dismissal and
Decision of the United States Tax Court. For the following reasons, we AFFIRM.
             I. FACTUAL AND PROCEDURAL BACKGROUND
       Franklin did not file an income tax return for tax year 2001. On June 13,
2005, the Commissioner of the Internal Revenue Service (the “Commissioner”)
assessed against Franklin a deficiency of $24,014, plus interest and penalties.

       *
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
                                  No. 08-60346

       On December 26, 2005, after Franklin failed to pay the amount, the
Internal Revenue Service (the “IRS”) sent him a notice of intent to levy and a
notice of his right to a “collection-due-process” (“CDP”) hearing. Franklin timely
requested such a hearing, specifying only that he wanted to address the issue of
whether “the IRS follows proper procedure.”
      From March to June 2006, the IRS’s Office of Appeals (“Appeals”) in
Memphis, Tennessee sent multiple letters to Franklin in order to initiate his
CDP hearing. The first letter to Franklin named the officer assigned to the case,
explained the basic appeals procedure, and referred him to the IRS website for
more information. Appeals also sent Franklin a CDP “document request form”
with a list of relevant documents that he was required to submit. Another letter
scheduled a telephone conference for July 26, 2006, and stated that, in order to
have a face-to-face conference, Franklin must provide “relevant, non-frivolous
issues in writing” or by phone within 14 days. In his response on July 21, 2006,
Franklin stated that he did not want a telephone hearing and that it was his
right to have a face-to-face hearing.
      On July 14, 2006, Appeals issued a notice of determination that sustained
the proposed levy.    Appeals verified that the IRS had met all legal and
administrative procedural requirements in assessing the deficiency. Appeals
also noted both that Franklin had not asserted any non-frivolous arguments
warranting a face-to-face CDP hearing and that Franklin had failed to submit
the requested tax returns and forms. Franklin timely petitioned the Tax Court
for review of Appeals’s notice of determination.
      During the months leading up to the Tax Court trial, Daniel Price, counsel
for the Commissioner, twice attempted to contact Franklin. First, Price sent
Franklin a summary of third party reports that formed the basis of the IRS’s
computation of his income. Second, Price sent Franklin a letter suggesting that
the two speak on the telephone to discuss settlement, a stipulation of facts, and

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                                         No. 08-60346

Franklin’s essentially “canned” communications.1 Price also included a request
for specific documents, such as records of income and expenses for 2001. In a
written response to these letters, Franklin refused to participate in a telephone
conference, objected to the description of his communications as “canned,” and
failed to submit any of the requested documents.
       On May 2, 2007, once the Tax Court set the date for trial, it sent notice to
Franklin and warned, “YOUR FAILURE TO APPEAR MAY RESULT IN
DISMISSAL OF THE CASE AND ENTRY OF DECISION AGAINST YOU.” The
notice also included the warning that “FAILURE TO COOPERATE MAY ALSO
RESULT IN DISMISSAL OF THE CASE AND ENTRY OF DECISION
AGAINST YOU.” In the accompanying pretrial order, the court ordered that “all
facts shall be stipulated to the maximum extent possible” and that “each party
shall submit [a] Pretrial Memorandum directly to the [judge] and opposing party
not less than 14 days before the first day of the trial session.”2 On May 24, 2007,
in response to the Commissioner’s request, the court ordered Franklin to produce
any documents “in his possession, custody, or control” that were responsive to
the Commissioner’s earlier request for documents. Franklin never produced
such documents, but did file a late motion to vacate the court’s order without
explaining his objections, the lateness of the motion, or his failure to comply with
the order. Likewise, after the Commissioner sent a proposed stipulation of facts,
Franklin responded by saying that he would not stipulate any facts “unless they
were part of the [CDP].” He also never responded to a subsequent court order
to show cause why the facts and evidence in the proposed stipulation should not

       1
         In his letter, Price wrote that he had “discovered other Tax Court collection due
process cases with basically identical correspondence and court filings.” Price warned that
following those who advocate “senseless and illegitimate legal theories” could ultimately result
in monetary sanctions under Internal Revenue Code § 6673.
       2
           After the trial date was rescheduled, Franklin received the same warnings and orders.

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                                     No. 08-60346

be deemed admitted.          On August 1, 2007, the court ordered that the
Commissioner’s stipulated facts were established.3
      On January 22, 2008, Franklin did not appear at his trial in the Tax
Court. One week later, the Tax Court dismissed the case for lack of prosecution
and ordered that the Commissioner may proceed with the collection action.
Franklin filed a timely motion to vacate, which the court subsequently denied.
      On April 4, 2008, Franklin filed his notice of appeal.
                          II. STANDARD OF REVIEW
      This court reviews a dismissal for failure to prosecute for abuse of
discretion. Stearman v. Comm’r, 436 F.3d 533, 535 (5th Cir. 2006); Tello v.
Comm’r, 410 F.3d 743, 744 (5th Cir. 2005).
                                 III. DISCUSSION
      This court will affirm a dismissal for failure to prosecute if (1) there is “a
clear record of delay or contumacious conduct by the plaintiff” and (2) either the
lower court expressly determined that lesser sanctions “would not prompt
diligent prosecution” or the court “employed lesser sanctions that proved to be
futile.” Stearman, 436 F.3d at 535; see also Tello, 410 F.3d at 744. A clear
record of delay or contumacious conduct is found if any of three aggravating
factors is present: (1) the plaintiff causes delay, (2) there is actual prejudice to
the defendant, or (3) the plaintiff’s intentional conduct results in delay.
Stearman, 436 F.3d at 535; Tello, 410 F.3d at 744. In Stearman, we noted that
such factors may be present when plaintiff’s actions include: “(1) failure to
appear at the calendar call and recall of his case; (2) failure to cooperate with the
Commissioner in preparing a stipulation of facts; (3) refusal to address the
merits of the case; (4) wilful ignorance of warnings to stop making frivolous

      3
        In its order, the court warned that a lack of response or evasive response from
Franklin would mean that the relevant “matter or portion thereof” would be “stipulated for
purposes of the present case.”

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                                  No. 08-60346

arguments; and (5) wasting the time and resources of the Tax Court.” 436 F.3d
at 535 (citing Tello, 410 F.3d at 744). Lesser sanctions are futile when, despite
a judge’s explicit warnings, a plaintiff neither cooperates nor appears at trial.
Id. at 537 (citing Rogers v. Kroger Co., 669 F.2d 317, 323 (5th Cir. 1982)).
      In the present case, there is a clear record of Franklin’s delay and
contumacious conduct. Franklin failed to appear at the Tax Court trial in
January 2008. He failed to cooperate with the Commissioner when he refused
to prepare the stipulation of facts and withheld the necessary documents that
the Commissioner explicitly requested and that the Tax Court subsequently
ordered. Franklin also did not file the pretrial memorandum that the pretrial
orders required. Additionally, lesser sanctions were futile because Franklin
neither cooperated nor appeared at trial despite explicit warnings from the Tax
Court.
      Furthermore, pro se litigants must obey discovery orders. Morton v.
Harris, 628 F.2d 438, 440 (5th Cir. 1980); see also Parker v. Comm’r, 117 F.3d
785, 787 (5th Cir. 1997) (“[P]ro se status is not a license to litter the dockets of
the federal courts with ridiculous allegations that the Internal Revenue Code is
the product of an illegal conspiracy.”). Thus, Franklin’s status as a pro se
litigant does not absolve him from his clear duties to obey the Tax Court’s
orders.
      Though we need not go any further to determine whether there was abuse
of discretion in the Tax Court, we will briefly address Franklin’s arguments.
Franklin’s primary argument is that the Tax Court conducted a trial de novo,
thus violating the ruling of the Eighth Circuit in Robinette v. Commissioner, 439
F.3d 455, 459 (8th Cir. 2006) (noting that judicial review of administrative
proceedings is not a de novo proceeding and is based only on the administrative
record (citing United States v. Carlo Bianchi & Co., 373 U.S. 709, 715 (1963))).

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                                  No. 08-60346

However, the Tax Court never conducted a trial. It merely dismissed Franklin’s
case for failure to prosecute because he failed to appear.
      Finally, Franklin’s argument that the IRS must conduct a face-to-face
CDP hearing is without merit. The Treasury Regulations state that, “[i]f a
taxpayer requests a CDP hearing . . . the CDP hearing will be held with
Appeals.” Treas. Reg. § 301.6330-1(d)(1). However, they also state that “[a] CDP
hearing may, but is not required to, consist of a face-to-face meeting,” Treas. Reg.
§ 301.6330-1(d)(2), Q&A D6 (emphasis added), and that only “a taxpayer who
presents in the CDP hearing request relevant, non-frivolous reasons for
disagreement with the proposed levy will ordinarily be offered an opportunity
for a face-to-face conference,” Treas. Reg. § 301.6330-1(d)(2), Q&A D7. Franklin,
having never specified anything beyond the vague claim that the IRS did not
“follow[] proper procedure,” failed to present a relevant, non-frivolous reason for
disagreement with the proposed levy.
      Therefore, the Tax Court did not abuse its discretion when it dismissed
Franklin’s case for failure to prosecute.
                              IV. CONCLUSION
      For the foregoing reasons, we AFFIRM the Tax Court’s Order of Dismissal
and Decision; costs shall be borne by Appellant.

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