Unpublished Disposition, 902 F.2d 1578 (9th Cir. 1984)

MEMORANDUM^* 

Stephen and Dorothy Le Bid brought a Bivens action and a 42 U.S.C. § 1983 (1982) action seeking damages from Sally Hanson and Steven Fite, two officials of the Internal Revenue Service ("IRS"). The Le Bids contended that Hanson and Fite violated the Le Bids' fourth, fifth, eighth, and fourteenth amendment rights when the two officials auctioned the Le Bids' home following its seizure by the IRS pursuant to collection of the Le Bids' outstanding tax liability. The Le Bids alleged that they were refused the right to redeem their property prior to the sale pursuant to 26 U.S.C. § 6337(a) (1982). They also alleged that they were denied the protection of a temporary stay which purportedly had been issued to halt the sale of their property. Hanson and Fite filed a motion to dismiss, or in the alternative for summary judgment. They argued that the district court lacked jurisdiction over the Le Bids' claim on the grounds that the suit was barred by the doctrine of sovereign immunity. They also argue that they were protected from the suit under the doctrine of qualified immunity. The district court dismissed the Sec. 1983 claim, but ruled that the Bivens action should proceed to trial because genuine issues of material fact existed regarding the objective reasonableness of Hanson's and Fite's conduct. Hanson and Fite appealed. The district court had jurisdiction under 28 U.S.C. § 1331 (1982). This court has jurisdiction under 28 U.S.C. § 1291 (1982). We reverse the district court's denial of the defendants'-appellants' motion for summary judgment.

STANDARD OF REVIEW

The denial of a claim to qualified immunity is appealable under the collateral order doctrine notwithstanding the absence of a final judgment. Mitchell v. Forsyth, 472 U.S. 511, 530 (1985). However, " [t]he Supreme Court's grant of appellate jurisdiction under Mitchell is narrow. We have jurisdiction only to decide if defendants' conduct violated [ ] clearly established constitutional rights." Todd v. United States, 849 F.2d 365, 369 (9th Cir. 1988). Thus, following Mitchell and Todd we confine our review to the qualified immunity issue.

We review de novo a district court's denial of a federal official's qualified immunity claim. Todd, 849 F.2d at 368.

BACKGROUND

In 1980 and 1981, plaintiff-appellant, Stephen Le Bid was employed as a "craps" dealer at Caesars Palace Casino in Las Vegas, Nevada. The IRS audited the Le Bids' tax returns for those years and concluded that Stephen Le Bid had underreported his tip income.¹  Therefore, the IRS determined that the Le Bids were liable for additional taxes and statutory interest totalling approximately $13,000. The IRS then issued notices of deficiency to the Le Bids. The Le Bids did not pay the amount due and did not file a petition in tax court for a redetermination of the deficiency. Thereafter, the IRS issued a sequence of notices to the Le Bids that culminated in the seizure of their house by the IRS in preparation for its auction in satisfaction of the Le Bids' outstanding tax liability. Each step in this sequence was taken pursuant to the applicable sections of the Internal Revenue Code.

The auction was scheduled for December 19, 1984 at 10:00 a.m. The taxpayers arrived and told Hanson that they had been given a temporary restraining order to block the sale. However, they did not exhibit any document to evidence this claim and no one with authority to stop the sale instructed Hanson to halt the proceeding. The Le Bids' attorneys arrived after 9:30 a.m. and asked to see Fite. The attorneys told Fite that, through contacts with certain federal officials, they had secured an administrative stay of the sale from District Director Robert Potter. Fite telephoned Potter's office and was unable to verify this claim. After Fite communicated this information to the attorneys, they asked whether Fite would stop the sale in order to give them time to get the money, as they did not have it with them. At this point, the time was past 10:00 a.m. and the auction had commenced. At no time did the taxpayers or their attorneys present any cash or check or otherwise indicate their ability and intent to pay the taxes due. The property was sold within a few minutes for an amount in excess of the Le Bids' tax liability; they were credited with the surplus proceeds. Subsequently, the Le Bids exercised their statutory right to redeem the property by paying $56,000 to the purchaser. This amount included the price paid by the purchaser, certain interest required by statute, and attorneys' fees. After allowing for interest costs, the economic effect to the Le Bids of exercising their statutory right to redeem the property from the IRS prior to sale and of exercising their statutory right to redeem the property from the purchaser subsequent to the sale was the same.

DISCUSSION

We find that the Le Bids' claim is barred on qualified immunity grounds. Hanson and Fite enjoy qualified immunity from liability for civil damages unless their conduct violated clearly established statutory or constitutional rights of which a reasonable person would have known. Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982); Todd, 849 F.2d at 368-69. The crucial issue of this case is the determination of the proper interpretation of 26 U.S.C. § 6337(a). There is no dispute of fact that the Le Bids did not offer to redeem their property prior to the commencement of the auction. However, the Le Bids interpret the term "before sale" to mean prior to the completion of the auction. The IRS interprets the term to mean prior to the commencement of the auction. Whether or not we accept the Le Bids' interpretation of the statute, that interpretation was not clearly established at the time of the auction. A reasonable person could believe he was not violating Sec. 6337(a) when he required payment prior to commencement of the auction. Thus, under Harlow, Fite and Hanson are entitled to qualified immunity.

The Le Bids also argue that the IRS did not afford to them the benefit of an alleged agreement to stay the sale. The facts are undisputed that, at the auction, the Le Bids provided no evidence in support of their oral statement that they had obtained such a stay. But, even if we accept the Le Bids' claim that they had obtained a stay, there is no dispute that the Le Bids failed to take appropriate steps to communicate its existence in a timely manner. Under these facts, Fite and Hanson did not violate any of the Le Bids' clearly established constitutional or statutory rights.

CONCLUSION

We reverse the decision of the district court. REVERSED.