Unpublished Disposition, 841 F.2d 1130 (9th Cir. 1987)Annotate this Case
U.S. CONSULTANTS, INC., Petitioner-Appellant,v.COMMISSIONER INTERNAL REVENUE SERVICE, Respondent-Appellee.
United States Court of Appeals, Ninth Circuit.
Submitted Dec. 11, 1987.* Decided Feb. 24, 1988.
Appeal from a Decision of the Tax Court of the United States.
Before ALARCON, BEEZER and WIGGINS, Circuit Judges.
U.S. Consultants, Inc. appeals from the dismissal of its petition for redetermination of a tax deficiency. The United States Tax Court dismissed the petition on the date of trial for lack of prosecution due to U.S. Consultants, Inc.'s failure to comply with the pretrial order and the rules of court concerning the filing of a stipulation of undisputed facts.
U.S. Consultants, Inc. contends that the Tax Court abused its discretion in granting the motion for failure to prosecute because the record does not show a history of intentional delay or willful misconduct.
We review a dismissal for failure to prosecute for abuse of discretion. Edelman v. Commissioner, 829 F.2d 828, 831 (9th Cir. 1987). A petition for redetermination of a tax deficiency may be dismissed for failure (1) to prosecute the action properly, (2) to comply with the rules of the Tax Court, or (3) to comply with a court order. Tax Ct.R. 123(b).
The Tax Court did not abuse its discretion in dismissing the petition. U.S. Consultants, Inc. failed to comply with the Tax Court rule that requires the parties to stipulate to all unprivileged facts "to the fullest extent to which complete or qualified agreement can or fairly should be reached." Tax Ct.R. 91(a). U.S. Consultants, Inc. also failed to identify and exchange documents and materials fifteen days before the calendar call or to provide the trial court with a status report or trial memorandum as required by the United States Tax Court's Standing Pre-Trial Order.
The fact that U.S. Consultants, Inc. appeared in propria persona through its president, Wade Davis, does not excuse the failure to comply with Tax Court's orders and rules. Carter v. Commissioner, 784 F.2d 1006, 1008 (9th Cir. 1986).
While it is true, as urged by U.S. Consultants, Inc., that the Tax Court must consider alternatives to the ultimate sanction of dismissal, a warning that failure to comply with a court order constitutes adequate consideration of alternatives. See Malone v. United States, No. 85-2244, slip op. at 10 (9th Cir. Nov. 23, 1987) ("warning a plaintiff that failure to obey a court order will result in dismissal can suffice to meet the 'consideration of alternative requirement' for dismissals under Fed. R. Civ. P. 41(b)). Henderson v. Duncan, 779 F.2d 1421, 1424 (9th Cir. 1986) (same) (cited in Edelson v. Commissioner, 829 F.2d at 831).
U.S. Consultants, Inc. also argues that the Tax Court abused its discretion by granting the Commissioner's motion because it was made orally and without prior notice. This contention is without merit. Tax Court Rule 123(b) allows the Tax Court to dismiss an action "at any time." The Tax Court's Standing Pre-Trial Order also notifies all parties that failure to comply with its requirement can result in dismissal of the action.
U.S. Consultants, Inc.'s argument that dismissal was improper because the record does not show intentional or bad faith is also unmeritorious. A showing of bad faith is not required to support a dismissal for failure to prosecute or comply with court rules. See Henderson v. Duncan, 779 F.2d 1421, 1425 (9th Cir. 1986) (a showing of bad faith is required under the court's inherent power to dismiss for lack of prosecution under Fed. R. Civ. P. 41(b)).
The record supports U.S. Consultants, Inc.'s assertion that no testimony was offered or received on the issue of compliance with discovery orders. Nevertheless, the failure to file a stipulation of undisputed facts or to provide a status report or trial memorandum fully supports the dismissal order.
The Tax Court did not abuse its discretion in dismissing the petition. The judgment is AFFIRMED.
WIGGINS, Circuit Judge. dissenting:
Consultants appeared pro se on the date fixed by the tax court for trial. The court had earlier denied an unopposed motion to continue the trial date to accommodate an attorney who announced his intention to appear on behalf of Consultants if the continuance were granted.
It is evident that on the date set for trial counsel for the Commissioner anticipated that Consultants would renew its motion for a continuance. However, when Consultants declared its willingness to proceed to trial, the Commissioner, without prior notice, moved the court to dismiss the proceedings for failure by Consultants to comply with the standing pretrial order regarding stipulations, the identify of witnesses and a summary of their testimony. The tax court granted the motion and this appeal followed. We review this decision of the tax court for abuse of discretion.
I regard the decision below as abusive. My decision is heavily influenced by the fact that Consultants was not represented by counsel. Nevertheless, it appears that it complied with all formal requests for discovery made by the Commissioner. At no time prior to the trial date did counsel for Commissioner complain about the insufficiency of the records previously made available to him.
When a taxpayer appears before the tax court without counsel, counsel for the government must do more than sit idly by until the trial date and then assert that it is entitled to a dismissal because the government was not adequately informed about the taxpayer's case.
The overall burden, of course, rests with the taxpayer. But the issue here is not the merits of the taxpayer's claim. It is a dismissal of that claim on motion of the government. The burden of supporting the motion is on the government, not the taxpayer.
I believe this is a case where the government was frankly surprised by the taxpayer's willingness to proceed to trial. The government was ill-prepared. The duty to prepare its case rests with the government, not the unrepresented taxpayer. Under such circumstances, the tax court should have considered less severe and more appropriate sanctions. In summary, it is an abuse of discretion to order a dismissal of the taxpayer's claim on the record before us.