Court Opinion

ID: 4236157
Source: CourtListenerOpinion
Date Created: 2018-01-11 21:00:29.979105+00
Date Added: 2024-06-11T14:43:01.533752
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                             JAN 11 2018
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                           FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,                        No.   15-16869

              Petitioner-Appellee,               D.C. No.
                                                 2:12-cv-01994-GMN-PAL
 v.

THEODORE FREDERICK LEE,                          MEMORANDUM*

              Respondent-Appellant.

                    Appeal from the United States District Court
                             for the District of Nevada
                     Gloria M. Navarro, Chief Judge, Presiding

                    Argued and Submitted November 15, 2017
                            San Francisco, California

Before: RAWLINSON and BYBEE, Circuit Judges, and SMITH,** Chief District
Judge.

      Theodore Frederick Lee (Lee or Appellant) appeals from the district court’s

orders and accompanying judgment granting the United States’ (Government or

Appellee) motion to dismiss on mootness grounds and denying Lee’s motion for

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
              The Honorable William E. Smith, Chief United States District Judge
for the District of Rhode Island, sitting by designation.
reconsideration. We review de novo the district court’s grant of a motion to

dismiss for lack of jurisdiction. Viewtech, Inc. v. United States, 653 F.3d 1102,

1103–04 (9th Cir. 2011). The denial of a motion for reconsideration is reviewed

for abuse of discretion. Tracht Gut, LLC v. Los Angeles Cty. Treas. & Tax

Collector (In re Tracht Gut, LLC), 836 F.3d 1146, 1150 (9th Cir. 2016). We

affirm.

      In the course of the Internal Revenue Service’s (IRS) investigation of Lee, it

issued an administrative summons with respect to his federal income tax liabilities

for 2006. When Lee did not comply, the Government filed a petition to enforce the

administrative summons in the United States District Court for the District of

Nevada. Subsequent to the Government filing its petition to enforce, but prior to

the district court entering an enforcement order, Lee complied with the summons

by producing the documents and testimony requested. This prompted the

Government to move to dismiss on the basis of mootness, a motion the district

court granted. Pursuant to Rules 59 and 60 of the Federal Rules of Civil

Procedure, Lee moved for reconsideration of the district court’s dismissal order;

however, that motion was denied.

      First, Lee argues that the district court erred in finding that Lee’s compliance

with the IRS summons mooted any continuing interests or controversies. Lee’s

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argument is not persuasive. “An Article III federal court has ‘no authority to give

opinions upon moot questions or abstract propositions, or to declare principles or

rules of law which cannot affect the matter in issue in the case before it.’” United

States v. Golden Valley Elec. Ass’n, 689 F.3d 1108, 1112 (9th Cir. 2012) (quoting

Church of Scientology of Cal. v. United States, 506 U.S. 9, 12 (1992)). “If an

intervening circumstance deprives the plaintiff of a ‘personal stake in the outcome

of the lawsuit,’ at any point during litigation, the action can no longer proceed and

must be dismissed as moot.” Genesis Healthcare Corp. v. Symczyk, 133 S. Ct.
1523, 1528 (2013) (quoting Lewis v. Cont’l Bank Corp., 494 U.S. 472, 477–78

(1990)). Here, Lee voluntarily complied with the IRS summons, which was the

subject action prior to the Court issuing an enforcement order. This voluntary

production of the records sought was an intervening circumstance that rendered the

action moot.

      IRS summonses are not self-enforcing. See 26 U.S.C. § 7604. The IRS,

therefore, must seek enforcement from a federal district court. United States v.

Gilleran, 992 F.2d 232, 233 (9th Cir. 1993); see also United States v. Clarke, 134
S. Ct. 2361, 2367 (2014) (“Congress made enforcement of an IRS summons

contingent on a court’s approval.”). In the context of such proceedings, “the

district court is strictly limited to enforcing or denying IRS summonses.” United

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States v. Jose, 131 F.3d 1325, 1329 (9th Cir. 1997). Lee’s compliance with the

IRS summons took both options off the table. Because Lee’s compliance with the

summons obviated any need for an enforcement order by the district court, the

district court correctly dismissed the case as moot.

      Lee relies on Church of Scientology, 506 U.S. at 12–13, to suggest that

despite compliance, a district court may retain the authority to exclude or return the

evidence covered by the summons. Church of Scientology is distinguishable. In

that case, the district court entered a summons-enforcement order, and the

requested materials were delivered to the IRS while an appeal from that order was

pending. Id. at 10–11. Indeed, unlike here where compliance occurred before the

district court ruled on the Government’s petition, in Church of Scientology the

validity of the summons was still under review when compliance occurred.

Nothing remained for the district court to do once Lee complied. Thus, Church of

Scientology is inapposite.

      Additionally, we are unpersuaded by Lee’s suggestion that he has a due

process right to seek suppression of the records he voluntarily produced prior to an

enforcement order. Because a taxpayer may challenge an IRS summons at an

enforcement hearing, “[t]he taxpayer therefore has no liberty or property interest

protectable by due process prior to the enforcement of the summons.” Gilleran,

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992 F.2d at 233–34 (emphasis added). Lee’s additional arguments, which largely

attack the validity and good-faith nature of the summons, are not properly before

the Court and, in any event, do not alter our mootness determination. We have

considered Lee’s additional averments and deem them to be without merit.

      Finally, it was not an abuse of discretion for the district court to deny Lee’s

motion for reconsideration because Lee has failed to demonstrate any ground

sufficient for reconsideration. See Sch. Dist. No. 1J v. ACandS, Inc., 5 F.3d 1255,

1262–63 (9th Cir. 1993) (outlining standard of review and grounds justifying

reconsideration).

      Accordingly, the orders of the district court are AFFIRMED.

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