Schlabach v. United States of America, No. 2:2018cv00053 - Document 30 (E.D. Wash. 2019)
Court Description: ORDER DENYING PLAINTIFF'S MOTION FOR RECONSIDERATION PURSUANT TO RULE 59(a)(2); denying ECF No. 27 Motion for Reconsideration. The Court certifies that an appeal of this Order could not be taken in good faith. See 28 U.S.C. § 1915(a)(3); Fed. R. App. P. 24(a)(3)(A). Signed by Judge Salvador Mendoza, Jr. (TR, Case Administrator) (Service of Notice on parties not registered as users of the Court CM/ECF system accomplished via USPS mail.)
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Schlabach v. United States of America Doc. 30 1 FI LED I N THE U.S. DI STRI CT COURT EASTERN DI STRI CT OF WASHI NGTON 2 May 16, 2019 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 3 SEAN F. MCAVOY, CLERK 4 JOHN SCHLABACH, No. 2:18-cv-00053-SMJ 5 Plaintiff, 6 v. 7 8 ORDER DENYING PLAINTIFF’S MOTION FOR RECONSIDERATION PURSUANT TO RULE 59(a)(2) UNITED STATES OF AMERICA, and its agents, Defendant. 9 10 Before the Court, without oral argument,1 is pro se Plaintiff John Schlabach’s 11 Motion for Reconsideration Pursuant to Rule 59(a)(2), ECF No. 27. Schlabach asks 12 the Court to reconsider its March 25, 2019 order granting Defendant the United 13 States of America’s converted motion for summary judgment, ECF No. 25. Having 14 reviewed the file and relevant legal authorities, the Court denies Schlabach’s motion 15 for reconsideration. 16 Schlabach cites Federal Rule of Civil Procedure 59(a)(2) as authority for his 17 motion for reconsideration. ECF No. 27 at 1. But that rule governs a motion for a 18 new bench trial. See Fed. R. Civ. P. 59(a)(2). Because Schlabach filed his motion 19 20 1 Because oral argument is unnecessary, the Court decides Schlabach’s motion without it. See LCivR 7(i)(3)(B)(iii). ORDER DENYING PLAINTIFF’S MOTION FOR RECONSIDERATION PURSUANT TO RULE 59(a)(2) - 1 Dockets.Justia.com 1 for reconsideration within twenty-eight days of entry of judgment in favor of the 2 United States, the Court construes it as a motion to alter or amend the judgment 3 under Rule 59(e). See Rishor v. Ferguson, 822 F.3d 482, 489–90 (9th Cir. 2016); 4 Am. Ironworks & Erectors, Inc. v. N. Am. Constr. Corp., 248 F.3d 892, 898–99 (9th 5 Cir. 2001). 6 Altering or amending a judgment under Rule 59(e) “is an ‘extraordinary 7 remedy’ usually available only when (1) the court committed manifest errors of law 8 or fact, (2) the court is presented with newly discovered or previously unavailable 9 evidence, (3) the decision was manifestly unjust, or (4) there is an intervening 10 change in the controlling law.” Rishor, 822 F.3d at 491–92 (quoting Allstate Ins. 11 Co. v. Herron, 634 F.3d 1101, 1111 (9th Cir. 2011)); accord McDowell v. Calderon, 12 197 F.3d 1253, 1255 n.1 (9th Cir. 1999) (en banc). Schlabach fails to meet this 13 standard. 14 Schlabach argues the Court erred by relying on an irrelevant declaration and 15 irrelevant exhibits from an Internal Revenue Service (“IRS”) agent who lacks 16 personal knowledge to testify or authenticate documents. ECF No. 27 at 2–5. Thus, 17 Schlabach objects to this evidence under Federal Rules of Evidence 401, 602, 901, 18 and 902. Id. But Schlabach raises this objection for the first time in his motion for 19 reconsideration. See Kona Enterprises, Inc. v. Estate of Bishop, 229 F.3d 877, 890 20 (9th Cir. 2000) (stating a motion to alter or amend a judgment under Rule 59(e) ORDER DENYING PLAINTIFF’S MOTION FOR RECONSIDERATION PURSUANT TO RULE 59(a)(2) - 2 1 “may not be used to raise arguments or present evidence for the first time when they 2 could reasonably have been raised earlier in the litigation”); accord Rishor, 822 3 F.3d at 492. 4 While Schlabach claims he raised this objection earlier, his contention was 5 not evidentiary in nature. He wrote, “ECF No. 22-2 . . . In its entirety contains 6 unsubstantiated false, inflammatory, discriminatory, racist, slanderous, and 7 prejudicial claims against me and I hereby object to their admission into the court 8 record.” ECF No. 24 at 2. The Court addressed his contention, noting, “Schlabach 9 makes bald assertions objecting to the[ IRS agent’s] explanations but presents no 10 significant probative evidence to genuinely dispute them.” ECF No. 25 at 15. 11 Schlabach never previously objected on grounds of relevance, personal knowledge, 12 or authentication. 13 Regardless, Schlabach’s evidentiary analysis is incorrect. The evidence is 14 relevant because it tends to make it more probable that Schlabach is liable for 15 frivolous filing penalties. See Fed. R. Evid. 401. The IRS agent had personal 16 knowledge of the matters to which she testified because they are based on her 17 professional experience in the IRS Frivolous Return Program as well as her own 18 review and analysis of records in Schlabach’s file. See ECF No. 22-2 at 2–7; Fed. 19 R. Evid. 602. The IRS agent authenticated those records by demonstrating she has 20 knowledge of them and they are what they purport to be—“true and correct ORDER DENYING PLAINTIFF’S MOTION FOR RECONSIDERATION PURSUANT TO RULE 59(a)(2) - 3 1 cop[ies]” of “[p]ertinent information contained in the [IRS Frivolous Return 2 Program’s] Master Action History for John Schlabach.” ECF No. 22-2 at 6; see also 3 Fed. R. Evid. 901(a)(1). The Court did not err. 4 Schlabach argues the Court erred by relying on the IRS agent’s declaration 5 because it said “there is no evidence.” ECF No. 27 at 3. He is mistaken, as the 6 declaration says no such thing. See ECF No. 22-2. 7 Schlabach argues the Court erred by ignoring his affidavit, which 8 “completely contradicts” the IRS agent’s declaration. ECF No. 27 at 3–5. Contrary 9 to Schlabach’s assertion, the Court considered the entire record, cited his filings 10 numerous times, and ultimately concluded, under the applicable legal standard, that 11 he “failed to point to specific facts establishing a genuine dispute of material fact 12 for trial” and “failed to introduce the significant probative evidence required to 13 defeat summary judgment.” ECF No. 25 at 18; see also id. at 2. The Court noted 14 “Schlabach makes bald assertions objecting to the[ IRS agent’s] explanations but 15 presents no significant probative evidence to genuinely dispute them.” Id. at 15. The 16 Court also explained that, “to the extent Schlabach has identified genuine factual 17 disputes, they are not material because they do not affect the outcome of this 18 litigation.” Id. at 18. Throughout the process, the Court “[v]iew[ed] all evidence and 19 dr[e]w[] all reasonable inferences in the manner most favorable to Schlabach.” Id. 20 His claims still failed. See id. ORDER DENYING PLAINTIFF’S MOTION FOR RECONSIDERATION PURSUANT TO RULE 59(a)(2) - 4 1 Schlabach argues the Court erred by granting summary judgment in favor of 2 the United States without giving him an opportunity to obtain discovery. ECF No. 3 27 at 2–4. But Schlabach is not entitled to discovery where, as here, the Court 4 (1) lacks subject matter jurisdiction over three out of his four claims, and 5 (2) concludes his fourth claim is, as a matter of law, based on a frivolous tax position 6 that a reasonable person would know is meritless and reflects indefensible tax 7 evasion. See ECF No. 25 at 5, 7, 12, 16, 18. Discovery would not change either of 8 the Court’s determinations. The factual disputes Schlabach raises are immaterial to 9 the determinative issues in this case. 10 Schlabach argues the Court erred because the tax position he took could not 11 be frivolous where he cited to a valid federal statute. ECF No. 27 at 3. As the Court 12 noted, “Schlabach begins with the correct premise that currency is a redeemable 13 obligation of the United States. But from there, Schlabach distorts matters by 14 claiming the United States’ obligation to redeem currency automatically offsets his 15 tax obligation to the United States.” ECF No. 25 at 11–12; see also id. at 15–16. 16 This distortion, the Court concluded, “is frivolous . . . because it lacks any objective 17 basis in fact or law.” Id. at 16. It is irrelevant that Schlabach subjectively believed 18 his tax position was correct. Id. at 16–17. A reasonable person would know 19 Schlabach’s tax position is meritless and reflects indefensible tax evasion. Id. at 16. 20 Schlabach argues the Court erred by assuming, without evidence, that the tax ORDER DENYING PLAINTIFF’S MOTION FOR RECONSIDERATION PURSUANT TO RULE 59(a)(2) - 5 1 assessments were validly made in accordance with mandated procedures. ECF No. 2 27 at 3–4. The decision rests on ample evidence, as the Court previously directed 3 both parties to “submit all evidence pertinent to the summary judgment motion, as 4 it relates to the specific facts outlined.” ECF No. 19 at 12–13. The United States 5 then submitted the IRS agent’s declaration, which “explains how IRS personnel 6 followed supervisor approval procedures in determining argument codes 16 and 30 7 apply to Schlabach’s position.” ECF No. 25 at 14–15. While the United States did 8 not submit all evidence that conceivably could have been submitted, what it 9 submitted was sufficient to meet its burden of proving Schlabach is liable for 10 frivolous filing penalties. See id. at 7–9, 17–18. Nothing more was required. 11 Considering all, no grounds exist for the Court to grant Schlabach the 12 extraordinary remedy of altering or amending the judgment under Rule 59(e). The 13 Court will not reconsider the judgment in favor of the United States. 14 Accordingly, IT IS HEREBY ORDERED: 15 1. Plaintiff’s Motion for Reconsideration Pursuant to Rule 59(a)(2), ECF No. 27, is DENIED. 16 2. 17 The Court certifies that an appeal of this Order could not be taken in good faith. See 28 U.S.C. § 1915(a)(3); Fed. R. App. P. 24(a)(3)(A). 18 19 // 20 // ORDER DENYING PLAINTIFF’S MOTION FOR RECONSIDERATION PURSUANT TO RULE 59(a)(2) - 6 1 2 3 IT IS SO ORDERED. The Clerk’s Office is directed to enter this Order and provide copies to pro se Plaintiff and Defendant’s counsel. DATED this 16th day of May 2019. 4 5 SALVADOR MENDOZA, JR. United States District Judge 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 ORDER DENYING PLAINTIFF’S MOTION FOR RECONSIDERATION PURSUANT TO RULE 59(a)(2) - 7
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