Court Opinion

ID: 185150
Source: CourtListenerOpinion
Date Created: 2011-02-05 02:28:21+00
Date Added: 2024-06-11T17:26:13.573437
License: Public Domain

211 F.3d 1305 (D.C. Cir. 2000)
Bruce E. Gardner, Appellantv.United States of America, Appellee
No. 99-5065
United States Court of AppealsFOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 13, 2000Decided May 19, 2000

Appeal from the United States District Court for the District of Columbia(No. 97cv03075)
Bruce E. Gardner, appearing pro se, argued the cause and  filed the briefs for appellant.
Annette M. Wietecha, Attorney, United States Department  of Justice, argued the cause for appellee.  With her on the  brief were Gilbert S. Rothenberg, Attorney, and Mary Lou  Leary, United States Attorney at the time the brief was filed.  Loretta C. Argrett, Assistant Attorney General, and Edward  T. Perelmuter, Attorney, entered appearances.
Before:  Edwards, Chief Judge, Henderson and Rogers,  Circuit Judges.
Opinion for the Court filed by Chief Judge Edwards.
Edwards, Chief Judge:

1
Bruce Gardner, appearing pro se,  appeals the District Court's dismissal of his complaint for  failure to prosecute and for lack of subject matter jurisdiction.  Mr. Gardner alleges that the Internal Revenue Service  ("the Service") unlawfully levied his property without first  sending a notice of federal tax deficiency to his last known  address.  The District Court dismissed this complaint sua  sponte for failure to prosecute under Fed. R. Civ. P. 41(b)  ("Rule 41(b)") and, upon defendant's motion, for lack of  subject matter jurisdiction.  On appeal, the Service defends  only the Rule 41(b) dismissal, abandoning any claim that  federal courts lack subject matter jurisdiction over Mr. Gardner's cause of action.

2
The District Court understandably sought to sanction Mr.  Gardner for failing to appear at a motions hearing.  Given  applicable Supreme Court and D.C. Circuit precedent, however, the District Court's dismissal in the context of the instant  case constitutes an abuse of discretion.  Mr. Gardner's nonappearance, while arguably irresponsible, did not justify a Rule  41(b) dismissal.  In addition, the District Court erroneously  found that it lacked subject matter jurisdiction over the  complaint.  Accordingly, we reverse and remand for further  proceedings on the merits.

I. BACKGROUND

3
Mr. Gardner formerly worked as an attorney in the Office  of Chief Counsel to the Service at the Treasury Department. He was terminated for his alleged failure to comply with  federal and state tax laws.  Mr. Gardner filed three complaints before the District Court, all related to his compliance  with federal and state tax laws;  all were dismissed by the  District Court.  One of the complaints was a tax refund  action, the dismissal of which this court summarily affirmed on October 8, 1999.  The second complaint, appealed along  with the instant case, seeks damages from a variety of  defendants for allegedly unlawful disclosures of Mr. Gardner's private tax information.  The instant case involves Mr.  Gardner's pro se complaint, filed December 23, 1997, claiming  that the Service unlawfully levied Mr. Gardner's bank account  for an alleged 1990 tax deficiency of almost $4,000 without  sending him a notice of deficiency and an opportunity to  challenge the assessment in the United States Tax Court. Mr. Gardner, seeking to enjoin the Service from levying his  property, bases his complaint on 26 U.S.C. S 6213(a) (Supp.  IV 1998).  Actions based on S 6213(a) to enjoin the Service's  assessment of a tax deficiency before the Service mails a  notice of deficiency to the taxpayer are exempt from the  Anti-Injunction Act of Internal Revenue Code, 26 U.S.C. S 7421(a) (Supp. IV 1998).

4
On February 18, 1998, the Service filed a motion to dismiss  for lack of subject matter jurisdiction pursuant to Fed. R. Civ.  P. 12(b)(1) ("Rule 12(b)(1)"), arguing that Mr. Gardner must  meet traditional equitable requirements (i.e., demonstrate  irreparable injury and the lack of an adequate remedy at law)  as a prerequisite to obtaining injunctive relief under S 6213(a).  On the day the Service filed its motion, Mr.  Gardner filed an amended complaint affirmatively pleading  grounds for equitable relief.  The District Court struck the  amended complaint from the record, because Mr. Gardner  had not sought leave to file.

5
After delays that no one attributes to Mr. Gardner, the  District Court scheduled a hearing on January 27, 1999, to  consider the motion to dismiss, along with motions to dismiss  filed in Mr. Gardner's other two cases.  On January 21, Mr.  Gardner moved to continue the motions hearing, contending  that a continuance was necessary because he had the flu and  he had suffered burns during a fire in his home.  The District  Court, after a teleconference held on January 22, denied Mr.  Gardner's motion.  The District Court indicated that it would  accommodate Mr. Gardner's physical condition during the  hearing.  Mr. Gardner failed to appear in court on January 27  and he telephoned the court later that evening to state that  he had slept through the hearing.

6
On January 28, Mr. Gardner filed a motion to reschedule  the hearing;  the motion also offered an explanation for his  absence from the January 27 hearing.  He included a doctor's  note stating that, on January 21, his physician treated him for  syncope and bronchitis, prescribed antibiotics, and instructed  Mr. Gardner to get bed rest.  He also made several claims to  the effect that his illness, the fire in his home, and his intense  preparation for the motions hearing had combined to deprive  him of necessary sleep and stamina.  According to plaintiff, he was so disoriented that, until he heard the evening news  on January 27,he was under the impression that it was  January 26.

7
On January 29, the District Court denied Mr. Gardner's  motion to reschedule the hearing.  The court also granted  defendant's motion to dismiss on two grounds.  First, the  District Court dismissed the complaint under Rule 41(b) for  failure to prosecute the complaint.  See Gardner v. United  States, Civ. Act. No. 97-3075, Mem. Op. & Order at 2 (D.D.C.  Jan. 29, 1999).  The court noted that it previously had denied  Mr. Gardner's motion for continuance and that Mr. Gardner  had stated that he would appear on January 27.  See id. at 1-2.  The court also declared that it had not intended to hear  argument on January 27, because it already had decided to  issue orally its ruling dismissing Mr. Gardner's complaint for  lack of subject matter jurisdiction.  See id. at 2.  The District  Court found that it lacked jurisdiction because Mr. Gardner  had failed to demonstrate irreparable injury and a lack of an  adequate remedy at law.  See id. at 4.  The court dismissed  as moot Mr. Gardner's motion for reconsideration of the  order striking his first amended complaint from the record.

8
Mr. Gardner moved for reconsideration, further detailing  the events leading up to his absence from the hearing.  He  stated that on January 12, 1999, he began taking Nyquil and  Chlortrimeton, an antihistamine, and that he was without  heat for one day in January because his house lost electricity  during an ice storm, exacerbating his illness.  Mr. Gardner  also revealed that, on January 18, a fire had broken out in his  children's room and he had sustained third-degree burns to  his hands while dragging a burning mattress from the house.  The court denied Mr. Gardner's motion for reconsideration. This appeal followed.

II. DISCUSSION
A.Rule 41(b) Dismissal

9
Under Rule 41(b), a court may dismiss an action "[f]or  failure of the plaintiff to prosecute or to comply with ... any  order of court."  In the instant case, the District Court  dismissed the complaint because Mr. Gardner failed to attend  the January 27, 1999, motions hearing.  We review for abuse  of discretion.  See Bristol Petroleum Corp. v. Harris, 901  F.2d 165, 167 (D.C. Cir. 1990).  While this is a deferential  standard, we have made it clear that, "under certain circumstances, dismissal may be an unduly severe sanction for a  single episode of misconduct."  Id.  A District Court may  dismiss under Rule 41(b) "only after less dire alternatives  have been explored without success."  Trakas v. Quality  Brands, Inc., 759 F.2d 185, 187 (D.C. Cir. 1985).

10
The Supreme Court established the framework for reviewing a sua sponte dismissal for failure to prosecute in Links v.  Wabash Railroad Co., 370 U.S. 626 (1962).  In Links, plaintiff's counsel missed a pretrial conference but did not inform  the court of his impending nonattendance until the day of the  conference.  See id. at 627-28.  The District Court, after  reviewing the history of the case (including plaintiff's repeated untimely responses to defendant's interrogatories),  found that plaintiff's counsel did not provide a reasonable  explanation for his nonappearance and dismissed the complaint for failure to prosecute.  See id. at 628-29.

11
The Court affirmed the dismissal, failing to find an abuse of  discretion because:  (1) the District Court relied only in part  on counsel's nonappearance;  (2) the excuse offered by counsel  was inadequate;  and (3) "it could reasonably be inferred from  his absence, as well as from the drawn-out history of the  litigation, that petitioner had been deliberately proceeding in  dilatory fashion."  Id. at 633 (footnote and citation omitted). The Court did not reach "whether unexplained absence from a pretrial conference would alone justify a dismissal with  prejudice if the record showed no other evidence of dilatorinesson the part of the plaintiff."  Id. at 634 (first emphasis  added).

12
As we previously have noted, it is important to recall that  the "lawyer's default [in Links] ... was merely the culmination of a protracted course of dilatory tactics and other  improper behavior in litigation that had dragged on for six  years."  Camps v. C & P Tel. Co., 692 F.2d 120, 122 (D.C. Cir.  1982) (footnote omitted).  In contrast, this court has held  "that dismissal is rarely if ever appropriate when there is but  a single instance of attorney-misconduct," as in the instant  case.  Id.  This is because the sua sponte dismissal of a  lawsuit on the merits is " 'a drastic step, normally to be taken  only after unfruitful resort to lesser sanctions.' "  Id. at 123  (quoting Jackson v. Washington Monthly Co., 569 F.2d 119,  123 (D.C. Cir. 1978));  see also Bristol Petroleum Corp., 901  F.2d at 167 ("[D]ismissal is in order only when lesser sanctions would not serve the interests of justice.").

13
There are three basic justifications for dismissal because of  attorney misconduct:  (1) prejudice to the other party;  (2)  failure of alternative sanctions to mitigate the severe burden  that the misconduct has placed on the judicial system;  and (3)  deterrence of future misconduct.  See Shea v. Donohoe  Constr. Co., 795 F.2d 1071, 1074 (D.C. Cir. 1986).  These  justifications are not easily met.  Prejudice, for instance,  must be "so severe[ ] as to make it unfair to require the other  party to proceed with the case."  Id.  Similarly, a malfeasant  party places a severe burden on the judicial system if "the  court [is required] to expend considerable judicial resources  in the future in addition to those it has already wasted,  thereby inconveniencing many other innocent litigants in the  presentation of their cases."  Id. at 1075-76.  The final  rationale, deterrence, justifies dismissals when there is some  indication that the client or attorney consciously fails to  comply with a court order cognizant of the drastic ramifications.  See id. at 1078.

14
Defendants have alleged no prejudice from Mr. Gardner's  failure to appear at the January 27 conference.  And given  the District Court's observation that it would not hear argument at the hearing and its intention to resolve the case on  jurisdictional grounds despite Mr. Gardner's failure to appear, his nonappearance cannot be said to have interfered  with the orderly administration of the trial court's business. Cf. id. at 1076-77 (concluding that "repeated failure to attend  status conferences" in that case did not constitute prejudice  to the judicial system).  Of the enumerated justifications for  sua sponte dismissal, then, only the last, deterrence, has any  application to the instant case.

15
Mr. Gardner's situation, however, is not one to which the  deterrence rationale speaks with great eloquence.  There are  three reasons for this:  first, this was Mr. Gardner's only  failure to comply with an order of the District Court;  second,  there is no evidence that Mr. Gardner acted in bad faith by  failing to appear at the hearing;  and third, the trial court  provided no warning to Mr. Gardner of the consequences of  nonappearance.  We also note that there is nothing in the  record to indicate that the District Court considered alternative sanctions for Mr. Gardner's misbehavior.

16
The District Court did not identify any prior instance of  misconduct on Mr. Gardner's part.  Indeed, the court observed that Mr. Gardner's absence was "atypical."  That Mr.  Gardner had never before failed to comply with the District  Court's orders argues in favor of reversal.  See Trakas, 759  F.2d at 188.  In addition, as in Trakas, there is no evidence in  the record of "bad faith, deliberate misconduct, or tactical  delay."  Id.  In fact, Mr. Gardner provided a supportable  explanation for why he failed to attend the hearing.  Finally,  the trial court did not warn Mr. Gardner that the case would  be dismissed if he failed to appear.  "Absent such advance  warning [of the consequences], dismissal to drive a lesson  home, we think, is more akin to overkillthan judicial discretion."  Camps, 692 F.2d at 125.  In short, dismissal in this  case was unwarranted.

17
We appreciate the difficulty faced by the District Court in  this case.  Mr. Gardner had filed three complaints before the  court.  One of the complaints consisted of 44 counts and  named as defendants the United States, the Service, the State  of California, and several individual Service employees,  among others.  Prior to dismissing the complaint in the  instant case, the District Court had denied Mr. Gardner's  motion for a continuance, and had been assured that Mr.  Gardner would attend the January 27 hearing.  In this circumstance, we cannot doubt that Mr. Gardner's failure to  appear was an annoying occurrence.  Nonetheless, given that  this was Mr. Gardner's only "failure ... to prosecute or to  comply with ... any order of court," Fed. R. Civ. P. 41(b), we  find that the District Court abused its discretion in dismissing  his case.  Here we do not have a case of an unexplained  absence from the motions hearing, or any evidence that Mr.  Gardner deliberately sought to delay adjudication of the  merits of his complaints.  Moreover, the record does not  show that the District Court considered the availability of a  lesser sanction.  While the District Court's decision in the  instant case may not " 'comprehend[ ] a pointless exaction of  retribution,' " Camps, 692 F.2d at 123 (quoting Jackson, 569  F.2d at 123), it does cross the line to abuse of discretion.  See,  e.g., Berry v. District of Columbia, 833 F.2d 1031, 1037 (D.C.  Cir. 1987) (reversing dismissal where attorney failed to file a  pretrial brief by specified date, failed to attend a status  conference, and failed to file a pleading specifically requested  by the court);  Tolbert v. Leighton, 623 F.2d 585, 587 (9th Cir.  1980) (finding abuse of discretion where the only evidence of  dilatoriness was attorney's failure to attend a pretrial conference, the court had not warned that nonappearance would  result in a dismissal, and the case was still "young").

18
We emphasize that we do not call into question the District  Court's denial of both Mr. Gardner's motion for a continuance  and his motion to reschedule the hearing, because those  decisions are not before us.  Nor does our disposition of this  case revive Mr. Gardner's tax refund complaint, the dismissal  of which this court summarily affirmed on October 8, 1999.We hold only that, given the particular facts of this case, the District Court abused its discretion in dismissing Mr. Gardner's complaint for failure to prosecute.

B. Subject Matter Jurisdiction

19
The District Court also dismissed Mr. Gardner's complaint  under Rule 12(b)(1), holding that Mr. Gardner was required  to plead equitable grounds for relief in order to obtain an  injunction under 26 U.S.C. S 6213(a).  Before this court, the  Government does not defend the District Court's Rule  12(b)(1) dismissal.  Accordingly, there is no longer any dispute between the parties as to whether a federal court may  entertain jurisdiction over Mr. Gardner's complaint.  This  does not moot the issue, however.  We are a court of limited  jurisdiction and must be satisfied through our own inquiry of  our power to hear this dispute.  See Mansfield, Coldwater &  Lake Michigan Ry. v. Swan, 111 U.S. 379, 382 (1884).  In  contrast to the issue of personal jurisdiction, parties may not  waive or concede a federal court's subject matter jurisdiction. See Jackson v. Ashton, 33 U.S. (8 Peters) 148, 148-49 (1834)  (reversing for lack of subject matter jurisdiction even though  appellee had "no objection to the court's proceeding in the  case.").

20
Mr. Gardner seeks an injunction preventing the Service  from levying his bank account to assess an alleged deficiency  in his 1990 federal tax return.  The Anti-Injunction Act, a  provision of the Internal Revenue Code, states that, "[e]xcept  as provided in section[ ] ... 6213(a), ... no suit for the  purpose of restraining theassessment or collection of any tax  shall be maintained in any court by any person, whether or  not such person is the person against whom such tax was  assessed."  26 U.S.C. S 7421(a).  The District Court must dismiss for lack of subject matter jurisdiction any suit that  does not fall within one of the exceptions to the AntiInjunction Act.  Mr. Gardner seeks to bring his suit within  one of S 7421(a)'s exceptions, arguing that the Service violated § 6213(a) by levying his bank account without first mailing  him a notice of deficiency.  For the purposes of deciding  whether we have jurisdiction over Mr. Gardner's complaint, we will accept as true his allegation that the notice of  deficiency was never mailed to him.

21
Section 6213(a) establishes the Service's authority and responsibility to send a notice of deficiency to a taxpayer prior  to initiating proceedings to assess the deficiency.  With a  notice of deficiency in hand, a taxpayer may file suit in Tax  Court challenging the assessment, and the Service is prohibited from enforcing the assessment until the Tax Court's  decision regarding the petition for review becomes final.  See  id. S 6213(a).  If the taxpayer does not file suit in Tax Court  in the time allotted after receipt of the notice of deficiency,  the Service may, among other things, impose a levy upon the  taxpayer's property, after notice, to recover unpaid taxes. See id. § 6331(a) (1994).

22
There is some dispute among the circuits whether a taxpayer must allege traditional grounds for equitable relief to  establish a prima facie claim under S 6213(a) (i.e., irreparable harm and lack of an adequate remedy at law).  The  District Court, following the Ninth Circuit, dismissed the  complaint, because Mr. Gardner failed to allege any equitable  grounds for relief.  See Mem. Op. & Order at 4 (citing Elias  v. Connett, 908 F.2d 521, 523 (9th Cir. 1990)).  The Ninth  Circuit is in the lead among those circuits that imply this  requirement in S 6213(a) claims, with the circuit's reasoning  set out in Cool Fuel, Inc. v. Connett, 685 F.2d 309, 313 (9th  Cir. 1982).

23
In Cool Fuel, the District Court had granted summary  judgment for the Service where a taxpayer alleging a violation of S 6213(a) had not met the requirements for equitable  relief.  The Ninth Circuit affirmed, finding both a presumption that equitable grounds be met for a court to issue an  injunction and "that section 6213 does not abolish equitable  tenets to support injunctive relief."  Id. (relying on Weinberger v. Romero-Barcelo, 456 U.S. 305 (1982)).  The court  emphasized S 6213(a)'s permissive language.  See Cool Fuel,  685 F.2d at 313 (noting that S 6213(a) provides that an  assessment based on a notice of deficiency "may be enjoined"  by a court).  Because a taxpayer retains the right to institute a refund suit after payment of taxes, and the taxpayer in Cool  Fuel could afford to pay the disputed tax prior to an adjudication of the alleged deficiencies, the court found that an  equitable remedy was not available.  The Third and Eleventh  Circuits have followed the Ninth Circuit's rule.  See Flynn v.  Eggers, 786 F.2d 586, 591 (3rd Cir. 1986);  Lovell v. United  States, 795 F.2d 976, 977 (11th Cir. 1986).

24
The Tenth Circuit, in Guthrie v. Sawyer, 970 F.2d 733, 73637 (10th Cir. 1992), reached a different result.  Having reviewed the circuits' competing opinions, we think that the  Tenth Circuit clearly has the best of the argument.  Accordingly, we hold, in accord with Guthrie, that

25
[t]he purpose of the statutory exception [in § 6213(a)] is to preserve the taxpayer's right to litigate his tax liability in Tax Court before paying the tax.  If the availability of a refund suit after payment prohibits the taxpayer from obtaining an injunction to protect his right to litigate first, that right is virtually meaningless.  Under this approach, this right would be available only upon a showing that the taxpayer could not pay the tax.  We have difficulty believingthat Congress intended to give with one hand and take back with the other.970 F.2d at 736.

26
The result that we reach is not contrary to the principles  announced in Romero-Barcelo.  In that case, the Supreme  Court merely observed that courts should "not lightly assume  that Congress has intended to depart from established [equitable] principles."  456 U.S. at 313.  In Romero-Barcelo,  however, the Court expressly distinguished Tennessee Valley  Authority v. Hill, 437 U.S. 153 (1978), in which the Court  held that "Congress had foreclosed the exercise of the usual  discretion possessed by a court of equity" when it passed the  Endangered Species Act, 16 U.S.C. SS 1531-1544.  Romero Barcelo, 456 U.S. at 313 (citing Tennessee Valley Authority,  437 U.S. at 173).  According to the Romero-Barcelo Court,  the difference was that in Hill, the statute providing the basis  for the challenge "contain[ed] a flat ban" on the challenged  activity.  456 U.S. at 314.  Similarly, here S 6213(a) flatly prohibits the activity challenged by Mr. Gardner.  See 26  U.S.C. S 6213(a) (providing that the Service shall begin "no  levy or proceeding" to collect on a notice of deficiency until a  period after the notice has been mailed to the taxpayer).This statutory scheme, in combination with the Guthrie  Court's reasoning, convinces us that Congress did not intend  that litigants need establish equitable grounds for injunctive  relief under S 6213(a).

27
We decline to follow Cool Fuel for a third reason.  The  Cool Fuel court cited Bob Jones University v. Simon, 416  U.S. 725, 742 n.16 (1974), to support its finding that "congressional history [of S 6213(a)] is barren of indicated intent to  abandon historical principles of equity jurisprudence."  685  F.2d at 313.  Bob Jones University involved an interpretation  of the Anti-Injunction Act, however, not S 6213(a).  In fact,  the Court explicitly noted that "[n]one of the exceptions in  S 7421(a) is relevant to this case."  Bob Jones University,  416 U.S. at 732 n.6.  Therefore, it is of no moment that the  Court in Bob Jones University held that traditional equitable  principles were applicable to an action under the Anti Injunction Act that did not fall into any of the enumerated  exceptions.  Of greater note, we think, is the Supreme  Court's failure to discuss traditional grounds for equity jurisdiction when holding that taxpayers to whom the Service had  not mailed notices of deficiency are entitled to bring suit  under S 6213(a).  See Laing v. United States, 423 U.S. 161,  183-85 & 184 n.27 (1976).

III. CONCLUSION

28
For the reasons articulated herein, we reverse the District  Court's decision and remand for proceedings on the merits.