Unpublished Disposition, 933 F.2d 1014 (9th Cir. 1988)Annotate this Case
Dennis N. HERSHEY, Plaintiff-appellee,v.UNITED STATES of America, Defendant-appellant.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted April 18, 1990.Decided May 16, 1991.
Before BEEZER and KOZINSKI, Circuit Judges, and KLEINFELD, District Judge* .
This is an appeal by the United States of an attorney's fee award. The United States sought $47,000 in "responsible person" penalties against Mr. Hershey, on account of unpaid withholding taxes relating to two firms, sent notice of the penalties to an address to which Mr. Hershey had no connection, imposed a lien on his property, and claimed another $125,000 in assessments relating to a third company. Mr. Hershey's attorney laid out the facts in correspondence with the Internal Revenue Service, demonstrating that the service was in error, but could obtain no response for seven months, and then no correction, so a year and a half after his first letter, Mr. Hershey's attorney filed a lawsuit against the United States. The United States at first resisted, but then after seven months of litigation, stipulated to the substantive relief sought. Mr. Hershey's attorney then moved for an award of attorneys fees under 26 U.S.C. § 7430. The United States did not file timely opposition to the motion, though it filed a late opposition. The district court granted the motion and awarded $5,925. The United States now appeals the correctness of this award.
In this case, Mr. Hershey's lawyer, Mr. Lieberman, charged a quite moderate fee in a case which was, for his client, a matter of considerable financial importance. The United States filed no timely opposition to Hershey's motion for attorneys fees. The trial judge nevertheless went to some lengths to study the facts and make findings with particularity, to assure that Hershey's attorney's position was justified. The matter appears to be of no great institutional importance, because the intricate statutory construction necessary for resolution of the dispute became obsolete before the appeal was heard, and the exact statutory language at issue was in effect only from 1986 to 1988. We do not see what institutional concerns explain this appeal of a decision involving a procedural error below by the government, an award for little money that was plainly justified on the facts, and a transitional statutory provision no longer in effect.
The procedural context of this case makes it turn more upon the force of local rules, than construction of the applicable attorneys' fees statute. We do not reach the question of whether, were we to review de novo the district judge's construction of the statute, we would agree with it, or whether we would, under an abuse of discretion standard, agree with his application of the statute to the facts before him. The decision must be affirmed because the district judge's application of local rules regarding absence of timely opposition to a motion, reviewed under an abuse of discretion standard, was within his discretion.
Congress has provided a statutory mechanism for promulgation of local rules by the district courts. This mechanism is carefully circumscribed to assure opportunity for public notice and comment before promulgation, review by the judicial council of the relevant circuit, and availability to the public. 28 U.S.C. § 2071. Federal Rule of Civil Procedure 83 carries out the statutory mandate. Local rules are "laws of the United States." United States v. Hvass, 355 U.S. 570 (1958). Local rules have been the subject of criticism in some areas. See Zambrano v. City of Tustin, 885 F.2d 1473, 1479-80 (9th Cir. 1989); Coquillette, Squiers and Subrin, The Role of Local Rules, ABA Journal Jan. 1989, p. 62. The 1988 amendments to 28 U.S.C. § 2071 appear to be designed to eliminate many of the problems giving rise to the criticisms. There can be no doubt about the power of district courts to promulgate and enforce reasonable local rules regulating the times allowed for opposition memoranda on motions, the subject of this case.
An attorney looks in vain in the Federal Rules of Civil Procedure for a rule telling him how much time he has to file an opposition to a motion. Instead, he learns from Rule 78 that he had better check the rules and orders of the district:
To expedite its business, the court may make provision by rule or order for the submission and determination of motions without oral hearing upon brief written statements of reasons in support and opposition.
Most of what really happens on the civil side before the district courts is motion practice. A district judge decides thousands of motions per year, many of them dispositive, and many of them involving genuine, difficult, important issues. The decisions typically shape the litigation context so much that, even when not on their face dispositive, they often have a controlling impact on the settlements made in most civil cases. This busy highway of fast moving motions requires some uniform traffic controls, which the local rules provide.
The district court for the District of Nevada duly promulgated rules governing the matter before us. At Rule 140-4, that court provided for a 15 day period to file an opposition to a motion:
Unless otherwise ordered by the court, an opposing party shall have 15 days after service of the moving party's points and authorities within which to file and serve a memorandum of points and authorities in opposition to the motion.
Federal Rule of Civil Procedure 6(e) adds 3 days when the motion was served by mail. Since Hershey filed his motion for attorney's fees on October 7, 1988, the United States had until October 25 to file its opposition. It filed none. Under Local Rule 140-6, its failure to file an opposition was required to be treated as a consent to the granting motion:
The failure of a moving party to file a memorandum of points and authorities in support of a motion shall constitute a consent to the denial of the motion. The failure of an opposing party to file a memorandum of points and authorities in opposition to any motion shall constitute a consent to the granting of the motion.
The United States argues that this consent rule did not apply, because it filed an opposition, albeit not until November 2, 1988.
This argument overlooks Local Rule 150. If a party seeks to file late, then it must obtain leave from the court:
Subject to the limitations stated in the Federal Rules of Civil and Criminal Procedure the time prescribed for the doing of any act as specified either in these rules or in Federal Rules of Civil and Criminal Procedure may be enlarged by the court by order made before the expiration of such time. The court may upon motion permit such act to be done after the expiration of the specified period where the failure to act was the result of excusable neglect. It shall be the duty of every party, attorney or other person applying to the court for an extension of time under this Rule, whether by motion or stipulation, to disclose the existence of all extensions to do such act which have previously been granted by the court or by the Clerk under the provisions to these Rules, and any extension obtained from the court in contravention of this Rule may be set aside at any time by the court.
Under this Rule, the judge may act upon a motion on the basis that it has been consented to, because a late opposition cannot be filed without leave of the court. The court and the party complying with the rules do not lose the benefit of the rule, when a party presents a late opposition, and has the good fortune to find a deputy clerk who stamps the document "filed" instead of "lodged" without computing whether it is late. Though the rule phrases the effect of no timely opposition as consent, that consent may, like the waiver of jury trial implied under Federal Rule of Civil Procedure 38(d) from a late filing of a jury demand, sometimes be a legal fiction. United States v. Warren, 601 F.2d 471, 473 (9th Cir. 1979). The rule may mean, in practical effect, "we are very busy here, and if you don't file your opposition on time, we are going to grant the motion, unless you can give us some excuse for being late, or granting the motion would work an injustice." Consent to the motion is not vitiated by late filing of an opposition, any more than waiver of jury trial is vitiated by late filing of a jury demand.
The United States argues that the district court implicitly elected not to enforce the 15 day opposition time, pursuant to Local Rule 100-5, which authorized the court "to change, dispense with or waive any of [the] Local Rules if the interests of justice so require." The United States, though, never sought to demonstrate any "excusable neglect" to the district court, which would justify leave for late filing, and never asked the district court to waive the rule in the interest of justice. The district judge did not say that he was waiving the rule because justice so required. Instead, he made a conclusion of law that the opposition was untimely, and that the untimeliness alone justified granting the plaintiff's motion:
15. The Opposition of the United States of America to Plaintiff's Motion for Attorney's Fees was filed in an untimely manner under Local Rule 140-6. Under such Rule, the failure of an opposing party to file a timely Memorandum of Points and Authorities in Opposition to the Motion constitutes a consent to the granting of the Motion, and, on that basis alone, would justify this Court's granting of Plaintiff's Motion.
Though the United States never asked for waiver of the rule, the district judge engaged sua sponte in the inquiry which such a request would require, and after a detailed analysis of the facts and the law, concluded that justice supported the taxpayer's motion.
The standard of review for enforcement of local rules is "abuse of discretion." Transamerica Corporation v. Transamerica Bancgrowth Corporation, 627 F.2d 963 (9th Cir. 1980). A district court's discretion in enforcing its local rules is rarely disturbed:
Only in rare cases will we question the exercise of discretion in connection with the application of local rules.
United States v. Warren, 601 F.2d 471 (9th Cir. 1979).
As a predicate for an appeal to this court, the United States should have sought leave in the district court to have its late opposition considered, by showing some excusable neglect. For the United states to prevail, it would have to demonstrate to us that the district judge's failure to waive enforcement of the local rules sua sponte was an abuse of discretion. That inquiry is not the same as the one we could conduct had the United States filed timely opposition to the motion in the district court, and had the district judge then construed and applied the statute as he did.
The United States suggests that the district court granted a default against the United States, which is prohibited by Federal Rule of Civil Procedure 55(e). But no "default judgment" was entered against the United States, Giampoli v. Califano, 628 F.2d 1190 (9th Cir. 1980), so Rule 55(e) does not speak to the case. The judgment in this case was pursuant to stipulation, not default. The attorney's fees award is an ancillary matter. Even if Rule 55(e) applied, it would allow judgment by default if "the claimant establishes a claim or right to relief by evidence satisfactory to the court." That was accomplished, as the district judge's extensive findings of fact demonstrate.
The United States takes the position the district court erred in awarding attorneys fees for the work done by the taxpayer's attorney prior to filing suit. The district judge found that 15.7 hours were spent in pre-litigation representation of the taxpayer, and 23.8 hours on post-litigation representation, and awarded fees based on the entire 39.5 hours, not just 23.8 hours. The difference is $2,355. If the district judge had made this award in the face of timely opposition, we would review for abuse of discretion in applying the Sec. 7430 statutory criteria under Pierce v. Underwood, 108 S. Ct. 2541, 2548 (1988). The statute limits attorneys fees to those "in connection with the civil proceeding." 26 U.S.C. § 7430(c) (1) (A) (ii) (III). Sliwa v. Commissioner of Internal Revenue, 839 F.2d Sec. 602 (9th Cir. 1988) held that only post-filing fees could be awarded under the 1986 version of the statute.
In the absence, though, of timely opposition to the taxpayer's motion for attorney's fees, the proper question for our review is not whether the district judge abused his discretion in finding that the 15.7 hours of pre-litigation time was included in the definition of reasonable litigation costs at 26 U.S.C. 7430(c) (1) (A) (ii) (iii), but rather whether the district judge abused his discretion in not waiving application of the local rule sua sponte. We find that he did not.
The government also contends that the district court erred in awarding attorney's fees at $150, a rate allowable only upon certain findings regarding cost of living or special factors such as limited availability of qualified attorneys for such proceedings. 26 U.S.C. § 7430(c) (1) (A) (ii) (III). The district judge found that an increase in the cost of living and also the specialized expertise of the taxpayer's attorney and limited availability of other attorneys to handle matters of this type in an efficient and cost effective manner justified a $150 rate, and took note of the taxpayer's attorney's ability to "handle matters of this type in an efficient and cost effective manner." We do not review these findings de novo or for abuse of discretion, because of the lack of timely opposition below. We review only for abuse of discretion in not waiving application of the local rule sua sponte, and find none.
The judgment of the district court is affirmed.