Uptergrove et al v. United States of America et al, No. 1:2008cv01800 - Document 24 (E.D. Cal. 2009)
Court Description: MEMORANDUM, DECISION, AND ORDER DENYING plaintiffs' motion for reconsideration, document 19 ; order signed by Judge Oliver W. Wanger on 7/27/2009. (Rooney, M)
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1 2 3 4 UNITED STATES DISTRICT COURT 5 FOR THE EASTERN DISTRICT OF CALIFORNIA 6 7 CHARLES WAYNE UPTERGROVE, MARTHA GENE UPTERGROVE, 8 9 10 11 1:08-CV-01800-OWW-SMS Plaintiffs, v. MEMORANDUM DECISION RE PLAINTIFFS’ MOTION FOR RECONSIDERATION UNITED STATES OF AMERICA, UNITED STATES ATTORNEY MCGREGOR W. SCOTT, TRIAL ATTORNEY G. PATRICK JENNINGS, U.S. MARSHALS OFFICE, MARILYN COLLINS, DOES 1-100, 12 Defendants. 13 14 I. INTRODUCTION 15 Plaintiffs Charles Wayne Uptergrove and Martha Gene 16 Uptergrove (collectively “Plaintiffs”), appearing pro se, have 17 filed suit against the United States of America (“United States”), United States Attorney McGregor Scott (“Scott”), Trial 18 Attorney G. Patrick Jennings with the Tax Division of the United 19 States Department of Justice (“Jennings”), the United States 20 Marshals Office (“U.S. Marshals”), Internal Revenue Service 21 (“IRS”) employee Marilyn Collins (“Collins”), and Does 1-100 22 (collectively “Defendants”). The complaint, brought under 42 U.S.C. § 1983, alleged that Defendants violated Plaintiffs’ 23 Seventh Amendment rights. Plaintiffs sought no damages, but 24 requested “equitable relief and injunctive relief against 25 defendants permanently restraining them from seizing and selling” 26 1 1 their home. (Doc. 1, Compl. at 13.) An April 17, 2009 memorandum decision granted Defendants’ 2 3 motion to dismiss for lack of subject matter jurisdiction 4 pursuant to Federal Rule of Civil Procedure 12(b)(1) and for 5 failure to state a claim pursuant to Federal Rule of Civil 6 7 Procedure 12(b)(6). (Doc. 16.) Judgment was filed May 4, 2009. (Doc. 18, dated April 29, 2009.) Before the court for decision are Plaintiff’s “Motion to Set 8 Aside Vacate ‘Judgment in a Civil Case’ Dated 4/29/2009,” and 9 related request for judicial notice. 1 (Doc. 19.) 10 11 12 II. BACKGROUND A. 13 14 Underlying Claims and Prior Lawsuits. Plaintiffs’ claim arises from facts relating to two prior lawsuits. (Compl. ¶ 1.) The first lawsuit, In re Charles 15 Uptergrove, DBA Urc Trucking, No. LA 88-14691-NRR, involving 16 Plaintiff Charles Wayne Uptergrove (“Charles”), began as a 17 Chapter 7 bankruptcy proceeding, but was later converted to a 18 Chapter 11 bankruptcy proceeding. 19 United States v. Uptergrove, No. 1:06-CV-01630-AWI-LJO (E.D. Cal. 20 Sept. 24, 2008) (“Uptergrove I”), the United States sought to 21 reduce Plaintiffs’ federal tax liabilities to judgment and 22 foreclose on real property owned by Plaintiffs. 23 2.) 24 25 26 27 28 (Id.) In the second lawsuit, (Doc. 10-2 at Due to Plaintiffs’ refusal to cooperate during discovery, the district court ordered sanctions and warned Plaintiffs that 1 Plaintiffs request judicial notice of various proceedings, “papers, pleadings, orders, and judgments” filed in related cases in this District and before the bankruptcy court. See Doc. 19 at 10. These are all judicially noticeable public documents. Plaintiffs’ request is GRANTED as to the existence of the filed documents, but not of their contents to the extent they refer to disputed matters. 2 1 failure to comply with the order could result in a default 2 judgment. 3 default judgment was subsequently entered against them, ordering 4 the sale of real property to satisfy unpaid federal tax 5 liabilities and unpaid sanctions. 6 (Id.) Plaintiffs did not comply with the order and a (Id.) currently on appeal to the Ninth Circuit. Uptergrove I is (Id.) Plaintiffs allege here that in bringing Uptergrove I, Scott 7 and Jennings “intentionally, knowingly, willfully, falsified 8 factual allegations against [Plaintiff] Martha Uptergrove in 9 which they falsely alleged that she was owner, operator, or 10 11 12 employee, of a business called Ikon Roofing, and owed taxes from income relating to said business....” (Compl. ¶ 2.) Plaintiffs allege that Martha Gene Uptergrove (“Martha”) was not involved 13 with Ikon Roofing, rather, she was employed by the Madera Water 14 District. 15 from the Madera Water District due to the alleged unlawful 16 levying from her paycheck by the IRS. 17 seek damages for the alleged termination. (Compl. ¶ 3.) Martha alleges that she was terminated (Id.) Martha does not Plaintiffs further allege that IRS Agent Collins falsely 18 19 represented that Martha was an owner of Ikon Roofing. 20 4, 5.) 21 22 (Compl. ¶¶ Plaintiffs allege that Collins’ false statement prompted the IRS to issue a wage levy order to Martha’s employer, and the seizing of Charles’s property. (Compl. ¶ 5.) Plaintiffs also allege that Defendant United States “intentionally omitted [and] 23 excluded ... evidence ...” in Uptergrove I. (Compl. ¶ 10.) 24 25 26 27 B. April 17, 2009 Dismissal. The April 17, 2009 Decision found Plaintiffs’ complaint to be an impermissible collateral attack upon Uptergrove I: 28 3 1 2 3 4 “The collateral attack doctrine precludes litigants from collaterally attacking the judgments of other courts.” Rein v. Providian Fin. Corp., 270 F.3d 895, 902 (9th Cir. 2001) (citing Celotex Corp. v. Edwards, 514 U.S. 300, 313 (1995)). The United States Supreme Court made clear: 8 [I]t is for the court of first instance to determine the question of the validity of the law, and until its decision is reversed for error by orderly review, either by itself or by a higher court, its orders based on its discretion are to be respected. 9 Celotex, 514 U.S. at 313 (quoting Walker v. Birmingham, 5 6 7 388 U.S. 307, 314 (1967)(quotations omitted). 10 11 12 13 14 15 16 This case is a collateral attack upon Uptergrove I because the only relief sought here by Plaintiffs is equitable and injunctive relief to restrain Defendants from “seizing and selling the property” at issue in Uptergrove I. (Doc. 10-2 at 3.) (Doc. 16 at 6-7.) Plaintiffs’ argument that “a judicially created exception to the Anti-Injunction Act permits them to collaterally attack the 17 prior judgment” was rejected: 18 19 20 21 22 23 24 25 26 The Anti-Injunction Act, 26 U.S.C. § 7421(a), bars lawsuits aimed at restraining the assessment or collection of taxes. Plaintiffs contend that an exception to the Anti-Injunction Act, as provided in Enochs v. Williams Packing & Navigation Co., Inc., 370 U.S. 1, 7 (1962), allows them to collaterally attack the judgment in Uptergrove I. (Doc. 12-2 at 14, 17.) [FN 2] The Anti-Injunction Act reads in pertinent part: “Except as provided . . . no suit for the purpose of restraining the assessment 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. § 7421(a). 27 28 4 Enochs permits a lawsuit to enjoin collection of taxes 1 if: (1) “under no circumstances could the Government ultimately prevail;” and (2) the taxpayer will suffer irreparable injury without injunctive relief. Enochs, 370 U.S. at 7; see also Bob Jones Univ. v. Simon, 416 U.S. 725, 742-46 (1974); Elias v. Connett, 908 F.2d 521, 525 (9th Cir. 1990). A plaintiff has the burden of pleading and proving facts to show that the government cannot ultimately prevail. Comm’r v. Shapiro, 424 U.S. 614, 628-29 (1976). The Enochs exception, however, is only applicable during the pendency of the original tax collection action, i.e., Uptergrove I, and is only triggered when the government cannot ultimately prevail. See Enochs, 370 U.S. at 7 (discussing the exception in terms of the underlying tax collection action, i.e., the original proceeding). Plaintiffs cannot assert the Enochs exception here because the government did prevail in Uptergrove I (the original tax collection action), making it impossible for them to establish that the government could not prevail in that case. 2 3 4 5 6 7 8 9 10 11 12 13 (Id. at 7-8.) 14 Plaintiffs’ claims could not survive on any alternative 15 16 basis. Section 1983, upon which the complaint was grounded, does 17 not permit actions against federal employees or officials, the 18 only defendants in the case. 19 claims had been brought under Bivens v. Six Unknown Named Agents, 20 (Id. at 9.) Even if Plaintiffs’ 403 U.S. 388, 397 (1971), each individual defendant was immune 21 from suit. (Id. at 9-11.) 22 23 24 25 26 III. DISCUSSION A. Timeliness Under Rule 59(e) Federal Rule of Civil Procedure 59(e) permits a motion to alter or amend judgment to be filed “no later than 10 days after 27 the entry of the judgment.” The time limit specified in Rule 28 5 1 59(e) is jurisdictional and cannot be extended. 2 Younger, 739 F.2d 1464, 1467 (9th Cir. 1984). 3 Scott v. Plaintiffs’ missed that deadline, filing their motion on May 27, 2009, almost a 4 month after judgment was entered on May 4, 2009. No rule 59(e) 5 motion can be maintained, as it is time-barred. 6 7 B. Application of Rule 60(b). 8 9 Plaintiffs’ motion may alternatively be treated under 10 Federal Rule of Civil Procedure 60(b), which provides six 11 possible grounds for relief from a final judgment, order or 12 proceeding: 13 14 15 16 17 18 On motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b); 20 (3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party; 21 (4) the judgment is void; 22 (5) the judgment has been satisfied, released or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or 19 23 24 25 (6) any other reason that justifies relief. “Rule 60(b) reconsideration is generally appropriate in three 26 instances: (1) when there has been an intervening change of 27 28 controlling law, (2) new evidence has come to light, or (3) when 6 1 necessary to correct a clear error or prevent manifest 2 injustice.” 3 United States v. Westlands Water Dist., 134 F. Supp. 2d 1111, 1131 (E.D. Cal. 2001) (citing Sch. Dist. No. 1J, 4 Multnomah County v. ACandS, Inc., 5 F.3d 1255, 1262 (9th Cir. 5 1993)). 6 7 Here, Plaintiffs seek to set aside the judgment and suggest 8 that the district court committed “clear plain error” by 9 dismissing their case. 10 read and understand, appears to reiterate many of the points made 11 in Plaintiffs’ complaint and opposition to the motion to dismiss. 12 Their motion, which is very difficult to For example, Plaintiffs complain that the complaint filed against 13 them by the United States was based on “unsupported factual 14 15 allegation[s],” Doc. 19 at 6; that the individual defendants were 16 “attack[ing]” Plaintiffs,’ causing them harm, id.; and that the 17 prosecutors of the underlying tax case against Plaintiffs made 18 fraudulent statements and misled Plaintiffs and the court in ways 19 that eventually led to a “fraudulently obtained default 20 judgment,” id. at 7-8. 21 Plaintiffs argue that “committing fraud and intentional 22 concealment has nothing to do with the duties and functions of 23 24 tax assessments or collections under the law,” and, therefore, 25 that this lawsuit is not a collateral attack upon the judgment in 26 Uptergrove I. 27 committed “clear plain error” by holding otherwise. Plaintiffs maintain that the district court 28 7 To the 1 extent that such an argument is cognizable under Rule 60(b) at 2 all, it is not well founded. 3 The Anti-Injunction Act states that “[e]xcept as provided ... no suit for the purpose of restraining 4 the assessment or collection of any tax shall be maintained in 5 any court by any person, whether or not such person is the person 6 7 against whom such tax was assessed.” 26 U.S.C. § 7421(a). The 8 act prohibits collateral lawsuits that would have the effect of 9 restraining the collection of taxes. 10 States, 671 F.2d 969, 971 (6th Cir. 1982). 11 which seeks to hold individual officers of the United States 12 See Dickens v. United Plaintiffs’ lawsuit, liable for alleged misconduct and fraudulent statements made in 13 the context of collecting taxes from Plaintiffs, is covered by 14 15 16 the Anti-Injunction Act’s bar against collateral attacks on tax collection actions. The district court previously rejected 17 Plaintiffs’ argument that the exception to the anti-injunction 18 act created in Enochs applies here. 19 20 21 22 23 24 25 26 27 28 Enochs permits a lawsuit to enjoin collection of taxes if: (1) “under no circumstances could the Government ultimately prevail;” and (2) the taxpayer will suffer irreparable injury without injunctive relief. Enochs, 370 U.S. at 7; see also Bob Jones Univ. v. Simon, 416 U.S. 725, 742-46 (1974); Elias v. Connett, 908 F.2d 521, 525 (9th Cir. 1990). A plaintiff has the burden of pleading and proving facts to show that the government cannot ultimately prevail. Comm’r v. Shapiro, 424 U.S. 614, 628-29 (1976). The Enochs exception, however, is only applicable during the pendency of the original tax collection action, i.e., Uptergrove I, and is only triggered when the government cannot ultimately prevail. See Enochs, 370 U.S. at 7 (discussing the exception in terms of the underlying tax collection action, i.e., the original proceeding). 8 1 2 3 Plaintiffs cannot assert the Enochs exception here because the government did prevail in Uptergrove I (the original tax collection action), making it impossible for them to establish that the government could not prevail in that case. 4 (Doc. 16 at 7-8.) Plaintiffs present no new law or argument that 5 would warrant reversal of this holding. 6 7 Similarly, Plaintiffs argue that the district court 8 committed “clear plain error” when it granted the motion to 9 dismiss this lawsuit as a collateral attack on a prior judgment 10 because Uptergrove I was not yet final. 11 suggest that the district court’s ruling is not “final” because 12 it is on appeal. This is not the law. Plaintiffs appear to For example, a judgment 13 of a trial court is “final” for purposes of collateral estoppel 14 15 unless and until it is reversed on appeal. See Collins v. D.R. 16 Horton, Inc., 505 F.3d 874, 882 (9th Cir. 2007). 17 applies if a Rule 59 motion is pending before the trial court. 18 Tripati v. Henman, 857 F.2d 1366, 1367 (9th Cir. 1988). 19 20 The same rule Plaintiffs complain that individuals who commit “fraud in the name of the Public” should not be allowed to “hide behind the 21 veil of a claim of Sovereign Immunity,” where the court can 22 exercise its equitable jurisdiction over the parties. Although 23 24 there are some statutes which waive the United States’ sovereign 25 immunity with respect to equitable relief, e.g., the 26 Administrative Procedure Act, 5 U.S.C. § 702 (permitting suit for 27 injunctive relief against federal agency action under certain 28 9 1 circumstances), the Anti-Injunction act bars entry of injunctive 2 relief that would interfere with the collection of taxes. 3 Plaintiffs’ motion also arguably invokes Rule 60(b)(3), 4 which permits relief from final judgment in cases where the 5 opposing party has committed fraud, misrepresentation, or 6 7 misconduct. For the most part, Plaintiffs’ allegations of fraud 8 concern conduct during the course of Uptergrove I and other prior 9 lawsuits. 10 basis of a motion for relief from judgment in this case. 11 extent that Plaintiffs suggest opposing counsel committed fraud 12 Any such conduct, if it occurred, cannot form the To the or misconduct by arguing that Enochs does not apply in this case, 13 any such suggestion is without merit. Enochs does not apply 14 15 16 here. Making this argument was certainly not misconduct, as it was legally correct. 17 Finally, Plaintiffs’ motion does not satisfy the stringent 18 requirements of Rule 60(b)(6), which is a “catch-all” provision 19 that is used “sparingly as an equitable remedy to prevent 20 manifest injustice.” Lehman v. United States, 154 F.3d 1010, 21 1017 (9th Cir. 1998). For Rule 60(b)(6) relief, the moving party 22 must show “both injury and that circumstances beyond its control 23 24 prevented timely action to protect its interests.” Id. 25 or lack of diligence is not to be remedied through Rule 26 60(b)(6).” Id. 27 28 10 “Neglect 1 2 3 4 IV. CONCLUSION For the reasons set forth above, Plaintiffs motion to set aside the April 29, 2009 Judgment, construed as a motion for relief from judgment under Rule 60(b) is DENIED. 5 6 7 8 9 SO ORDERED Dated: July 27, 2009 /s/ Oliver W. Wanger___ Oliver W. Wanger United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11
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