Court Opinion

ID: 4486064
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:34:09.675649+00
Date Added: 2024-06-11T12:16:29.793180
License: Public Domain

HAMBLEN, J., concurring: I agree with the majority, but Judge Whitaker raises important issues in his dissent which impel me to respond. For the reasons set forth below, I believe that the majority properly assumes that we have the power to dismiss these cases due to the petitioner’s fugitive status, and that the power was properly applied. Power of the Court Section 7453 provides, in relevant part, that “the proceedings of the Tax Court and its divisions shall be conducted in accordance with such rules of practice and procedure * * * as the Tax Court may prescribe.” Rule 123(b), promulgated pursuant to section 7453, provides, “For failure of a petitioner properly to prosecute or to comply with these Rules or any order of the Court or for other cause which the Court deems sufficient, the Court may dismiss a case at any time and enter a decision against the petitioner.” In the instant cases, the majority simply has interpreted the language contained in Rule 123(b), “or for other cause which the Court deems sufficient,” to allow the Court to dismiss a case due to a taxpayer’s status as a fugitive from justice. The majority’s use of Rule 123(b) is based upon a long line of civil cases in which Molinaro v. New Jersey, 396 U.S. 365 (1970) (per curiam), was applied by various Federal courts. Nevertheless, the dissent states, “The majority’s action is not predicated upon express statutory authority,” and “If we have the power to deny petitioner access to our court, we must support that action upon our inherent powers as do Article III courts.” I do not think the Court must rely upon inherent powers to dismiss the instant cases. See Braley v. Campbell, 832 F,2d 1504, 1510 (10th Cir. 1987) (“Because we have specific statutes and rules that authorize the imposition of monetary sanctions on attorneys, we need not explore the entire parameters of the courts’ inherent power to impose sanctions.”).1 Instead, the majority’s action in these cases is authorized by our rules of court, promulgated pursuant to the statutory delegation of power by Congress. The Federal courts that have based their application of Molinaro on inherent powers apparently were required to do so because there was not a rule of court that was broad enough to support the courts’ application of Molinaro. See, e.g., Ali v. Sims, 788 F.2d 954, 959 (3d Cir. 1986) (“At all events, the principles of Molinaro intersect with the principles underlying Fed.R.Civ.P. 37 & 41, which render a party’s misconduct a basis for the dismissal of his case.”).2  Furthermore, the dissent’s reliance upon Eash v. Riggins Trucking Inc., 757 F.2d 557 (3d Cir. 1985) (en banc), for the proposition that we do not have the power to dismiss the instant cases, appears misplaced. In Eash, the Court of Appeals for the Third Circuit decided that a District Court had the authority to order an attorney to pay the Government the cost of impaneling a jury as a sanction for the attorney’s abuse of the judicial process. The court in Eash set forth an analysis of the historical use of the term “inherent power,” stating that the term had been used in three general fashions. Eash v. Riggins Trucking Inc. v. Commissioner, 757 F.2d at 560-564. The first use of that term was referred to by the court as “irreducible inherent authority,” and the second use of that term was referred to by the court as those “powers ‘necessary to the exercise of all others.’ ” 757 F.2d 562. The third use of the term “inherent power” was referred to as “powers necessary only in the practical sense of being useful.” 757 F.2d 563. The discussion in Eash of the three uses of the term “inherent power” apparently was set forth to identify the various sources of inherent power and to analyze the ability of Congress to affect the courts’ inherent power through legislation. After summarizing a portion of Eash, the dissent suggests that the power is within the third category of inherent power set forth in Eash. The dissent then states, “The inherent powers recognized in our rules and by our actions are only those which enable the Tax Court to operate — those which arise out of necessity and are essential to performance of our statutory responsibilities.” (Emphasis supplied.) The quoted sentence from the dissent appears to suggest that our Rules and decisions do not indicate specifically that we have any powers that are within the third category. To the contrary, our Rules set forth specific powers that fall within the third category. For example, our Rules allow us to order the payment of counsel fees in specific situations. Rules 33(b), 70(e)(2), 81(g)(2), 90(d)(2), 104(c)(4), 121(f).3 The power to award attorney’s fees is given as an example by the court in Eash of powers falling within the third category. Eash v. Riggins Trucking Inc., 757 F.2d at 563, citing Alyeska Pipeline Service v. Wilderness Society, 421 U.S. 240, 259 (1975). I also take issue with the dissent’s assertion that the majority’s action in these cases is not taken for the purpose of protecting our process from abuse. Petitioner’s attempt to litigate the cases at bar while he remains a fugitive from justice is offensive. Allowing petitioner to litigate in this Court at his discretion would undermine the dignity of this Court and the Federal judicial system as a whole, and would therefore undermine the position of respect occupied by both this Court and the judicial system. Thus, dismissal of the instant cases does protect our process from abuse. Moreover, to the extent article III courts apply Molinaro to encourage a fugitive to submit to the jurisdiction of the judicial system in a criminal case or otherwise enforce a court’s jurisdiction in a criminal case, we would frustrate the policy underlying the action taken by those courts by giving the fugitive an alternate forum in which to litigate his civil case.4  The dissent also cites Estate of Rosenberg v. Commissioner, 73 T.C. 1014 (1980), as support for the argument that we lack the power to dismiss a case because a petitioner is a fugitive. In Estate of Rosenberg, the taxpayer filed its petition with this Court more than 90 days after the notice of deficiency was mailed to it. The taxpayer argued that we should exercise jurisdiction over its case based upon “principles of justice and fairness,” even though section 6213 required that it file its petition within 90 days after a notice of deficiency was mailed to it. Estate of Rosenberg v. Commissioner, 73 T.C. at 1016-1017. We held that we could not apply equitable principles to expand our jurisdiction beyond the limits of section 6213. See also Commissioner v. Gooch Milling & Elevator Co., 320 U.S. 418 (1943) (Supreme Court determined that equitable principles could not be applied to expand our jurisdiction where Congress had placed specific statutory limitations thereon). It is clear that the majority’s action in the instant cases does not serve to expand statutory limitations on our jurisdiction. Thus, Estate of Rosenberg, as well as Gooch Milling & Elevator Co., is inapposite to the issue involved here. The dissent seems to imply that we do not have the power to apply any doctrines that are equitable in nature. If that suggestion were correct, then we could not apply the doctrines of waiver, duty of consistency, estoppel, substantial compliance, and abuse of discretion.5 All of those doctrines are applied by this Court. While we cannot expand our jurisdiction through equitable principles, we can apply equitable principles in the disposition of cases that come within our jurisdiction.6  In summary, I conclude that we have the power to dismiss the cases at bar due to petitioner’s status as a fugitive from justice. Timeliness of Notice The dissent posits that even if we have the power to dismiss the instant cases, that power is discretionary, and the majority did not exercise the power properly. The dissent bases that criticism on the failure of respondent to argue for dismissal until respondent’s initial, post-trial brief. It is well established that respondent may rely upon a theory if he has provided petitioner with “fair warning” of his intention to proceed under that theory. Leahy v. Commissioner, 87 T.C. 56, 64 (1986); Schuster’s Express, Inc. v. Commissioner, 66 T.C. 588, 593 (1976), affd. per curiam 562 F.2d 39 (2d Cir. 1977); Rubin v. Commissioner, 56 T.C. 1155, 1163 (1971), affd. 460 F.2d 1216 (2d Cir. 1972).7 “Fair warning means that respondent’s failure to give petitioner notice of his intention to rely on a particular theory in the statutory notice of deficiency or the pleadings, must not have caused harm or prejudice to petitioner in petitioner’s ability to prepare [his] case.” William Bryen Co. and Subsidiaries v. Commissioner, 89 T.C. 689 (1987). See also Schuster’s Express v. Commissioner, supra at 593-594; Rubin v. Commissioner, supra at 1163. In Leahy, we recognized that an argument may not be made for the first time on brief unless it is shown that there is neither surprise nor need for additional evidence to be presented. Here, there appears to be no surprise — petitioner argued the issue in his reply brief and failed to object. The only evidence necessary to our legal determination (i.e., that petitioner is a fugitive from justice) was stipulated into the record. Moreover, Rule 41(b)(1) provides that issues may be tried by consent. Even petitioner concedes that we have the power — he only argues that we should not exercise it in these cases because his attorneys appeared in court for the trial. Thus, it appears that no additional evidence is required to decide the issue and that petitioner has not been prejudiced. The dissent would have us presume such prejudice. For this reason, the dissent believes that petitioner is entitled to a decision on the merits. The majority correctly concludes that petitioner’s fugitive status disentitles him to call upon the resources of the Court. See Molinaro v. New Jersey, 396 U.S. 365 (1970) (per curiam). Sterrett, Kórner, Swift, Jacobs, Gerber, Wright, Parr, Williams, and WELLS, JJ., agree with this concurring opinion.   Even Judge Whitaker recognizes the principle set forth in Braley v. Campbell, 832 F.2d 1504, 1510 (10th Cir. 1987), when he states that “powers which a court possesses only by virtue of a statutory grant are not inherent powers.”    The court in Ali v. Sims, 788 F.2d 954, 959 (3d Cir. 1986), did not rely upon a specific rule of court as support for its dismissal of the case.    These Rules are not based upon the specific delegation of power by Congress under sec. 7430 to award litigation costs or under sec. 7456(e), as amended and redesignated as sec. 7456(c) by secs. 1555(a) and 1556(b)(1), Pub. L. 99-514, 100 Stat. 2754-2755, to punish contempt of this Court’s authority by fine. Nevertheless, these Rules are justified as an exercise of power pursuant to sec. 7453 or, alternatively, as an exercise of inherent power.    It is not a prerequisite to the application of Molinaro that a litigant in a civil case be a fugitive from the court in the jurisdiction in which he seeks to litigate the civil case. For instance, in Doyle, the U.S. District Court for the District of Columbia dismissed a civil case brought by a fugitive from the U.S. District Court for the District of Connecticut, which is in another Federal judicial circuit. Doyle v. United States Department of Justice, 494 F. Supp. 842 (D. D.C. 1980), affd. per curiam 668 F.2d 1365 (D.C. Cir. 1981), cert. denied 455 U.S. 1002 (1982).    See generally H. Dubroff, The United States Tax Court — An Historical Analysis 489 (1979).    See generally H. Dubroff, supra at 492 (“The redetermination contemplated clearly comprehends a judicial format and in this context it seems entirely appropriate that * * * [the] Tax Court should apply the same doctrines and rules of construction as would any other court.”). Even the Court of Military Appeals, an article I court, applies Molinaro. See United States v. Schreck, 10 M.J. 226 (1981); United States v. Smith, 46 C.M.R. 247 (1973).    See also Dolin v. Commissioner, T.C. Memo. 1988-2.