Bothke v. Fluor Engineers and Constructors, Inc.

• Decision Date: 24 January 1983
• Docket Number: No. 81-5457,81-5457
• Citation: 713 F.2d 1405
• Parties: 83-2 USTC P 9556 Hans BOTHKE, Plaintiff-Appellant, v. FLUOR ENGINEERS AND CONSTRUCTORS, INC., et al., Defendants, and W.J. Terry, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1405

713 F.2d 1405

83-2 USTC P 9556

Hans BOTHKE, Plaintiff-Appellant, v. FLUOR ENGINEERS AND CONSTRUCTORS, INC., et al., Defendants and W.J. Terry, Defendant-Appellee.

No. 81-5457.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Dec. 10, 1982.

Decided Jan. 24, 1983.

Hans Bothke, in pro. per.

Jonathan S. Cohen, John Dudeck, Washington, D.C., for defendant-appellee.

Appeal from the United States District Court for the Central District of California.

Before WRIGHT, KENNEDY, and BOOCHEVER, Circuit Judges.

EUGENE A. WRIGHT, Circuit Judge:

Bothke, a pro se litigant, appeals from an adverse summary judgment in his suit for damages against an Internal Revenue Service official for claimed constitutional violations in the allegedly wrongful levy of his wages. The district court held that the IRS official was absolutely immune or, alternatively, was protected by qualified immunity because she acted in good faith and within the scope of her authority. This panel affirmed in a memorandum disposition.

The case is now before us on petition for rehearing. Because there seems to be some uncertainty in this circuit over the type of immunity to which IRS agents are entitled, a fuller treatment of the matter is required. We construe Bothke's petition for rehearing as one for reconsideration, which is granted. The memorandum disposition of January 24, 1983 is withdrawn.

FACTS

Plaintiff-appellant Bothke filed a timely but unusual income tax return for 1977. On several lines he entered asterisks in lieu of dollar amounts. Under the amount to be refunded, he entered $1154.62, an amount corresponding to taxes his employer had withheld from his salary as shown on the W-2 form accompanying the return.

The asterisks were referenced to a lengthy exegesis on why he had not provided the information. The substance was that Bothke felt the IRS had mistreated him over his 1976 return by ignoring the figures he provided, by failing to help resolve questions about the return, and by assessing a deficiency before according him the prior administrative hearing its literature The IRS center at Fresno reviewed Bothke's return. On March 5, 1979, it sent him a notice of "Correction to Arithmetic" indicating that "based on the information received" the IRS had adjusted tax due on the return from zero to $6755.80, which, after subtracting withholdings and adding penalty and interest, left a balance due of $6177.87. Bothke responded on March 15 with an objection to the notice on numerous grounds.

                allegedly indicated he was entitled to.   It went on to state that he had concluded the IRS had acted in bad faith and deprived him of due process and, to protect his constitutional rights, on this return he was exercising his First, Fourth, Fifth, Sixth, Eighth, Ninth and Tenth Amendment rights not to provide the information
                

On May 2, a letter from the director of the Fresno IRS center told Bothke that the refund claimed on his tax return had been disallowed. This document is not in the appellate record, but it apparently referred to alleged claims by Bothke that the tax laws were unconstitutional.

On June 6, the manager of the tax control unit in Santa Ana sent another letter stating that although notices and demands had been made for payment of Bothke's 1977 taxes, no money had been received. It warned that unless within ten days the IRS received the amount due or heard from the taxpayer, his wages could be levied and his property seized. Eight days after the ten-day notice, Bothke wrote to the Fresno center objecting to both documents and denying he had challenged the constitutionality of the tax laws.

Bothke's case was later turned over to the field office at which defendant Terry worked. On August 3, 1979, Terry was given Bothke's Tax Delinquent Account (TDA). Her assigned duties were to investigate and collect delinquent accounts.

The TDA, a one-page agency form, had six printed lines to show some of the history of the case. The file did not contain a copy of Bothke's tax return. It is unclear what other documents, if any, were in the file sent to the field office.

Terry twice submitted a "Recommendation for Nonfiling of Notice of Tax Lien" noting, "Because of sensitivity of case, it is in best interest not to file F[ederal] T[ax] L[ien] until extensive research completed on T[ax] P[ayer] claims." During the litigation she stated that by "sensitivity" she was referring to the volume of correspondence the IRS had received from Bothke.

She made several requests to the Fresno IRS Center for a copy of Bothke's return. Her handwritten notations on the "TDA History Record" said, "Wanted to have a copy before seeing T[ax] P[ayer] because of delicacy [blank] of situation."

When no copy of the tax return arrived after some time, she elected to proceed without it. She visited Bothke's home on November 21, 1979 and, in his absence, left instructions for him to call. He did so, again protesting that the IRS had violated his rights. Terry told him that the tax must be paid and that the IRS would communicate with him.

On November 26, 1979, Terry served on his employer a levy of Bothke's wages. On November 29, she received a protest from Bothke by certified mail. He also made a written protest to his employer. The levy of $3,415.43 was executed several days later.

Bothke resigned from his job to prevent the further attachment of his wages. He then filed an amended return for 1977, using dollar amounts instead of asterisks. It indicated that a refund was due from the amounts withheld and levied. When Bothke sued another IRS agent regarding levy of other property, the Service elected as a policy matter to abate any then-existing assessment and release any liens with respect to his 1977 taxes.

He brought this suit in federal district court against his employer, the assistant legal counsel for his employer who had accepted the levy, and IRS agent Terry. He alleged violations of his constitutional The first two defendants were dismissed early from the case. On the magistrate's recommendation, the trial judge rendered summary judgment for defendant Terry, on the ground that she was either absolutely or qualifiedly immune, and dismissed the action.

rights and sought compensatory and punitive damages. ¹

I. Absolute Immunity

Executive officials have long enjoyed some form of immunity for acts performed in the course of their official duties. The underlying rationales are (1) the injustice of imposing personal liability on one whose public office obliges the exercise of discretion and (2) the danger that potential liability will compromise the forthright performance of official duties. See, e.g., Scheuer v. Rhodes, 416 U.S. 232, 239-40, 94 S.Ct. 1683, 1688, 40 L.Ed.2d 90 (1974).

The rules governing official immunity are largely of judicial making and have changed considerably over the years. Earlier cases wrestled with the issue with varying results. See id. 416 U.S. at 241, 94 S.Ct. at 1689. In some instances courts did not foreclose recovery on immunity grounds, see, e.g., Bates v. Clark, 95 U.S. 204, 24 L.Ed. 471 (1877), and were reluctant to formulate a rule that would do so irrespective of the circumstances, see O'Campo v. Hardisty, 262 F.2d 621, 625 (9th Cir.1958).

Eventually, executive officials performing discretionary functions were protected from damage suits by absolute official immunity, if they had acted within the "outer perimeter" of their duties. E.g., Barr v. Matteo, 360 U.S. 564, 575, 79 S.Ct. 1335, 1341, 3 L.Ed.2d 1434 (1959) (opinion of Harlan, J.).

This general rule was applied to IRS agents. Sowders v. Damron, 457 F.2d 1182, 1184 (10th Cir.1972); Bridges v. IRS, 433 F.2d 299, 300 (5th Cir.1970); David v. Cohen, 407 F.2d 1268, 1271-72 & n. 2 (D.C.Cir.1969); Bershad v. Wood, 290 F.2d 714, 716, 719 (9th Cir.1961).

A major change occurred when the Supreme Court concluded that absolute immunity was inappropriate for state executive officials sued under 42 U.S.C. § 1983 for violating federal rights. Scheuer v. Rhodes, 416 U.S. 232, 238-49, 94 S.Ct. 1683, 1687-93, 40 L.Ed.2d 90 (1974). The Court recognized that Congress had not intended to abrogate entirely the immunity accorded some officials by common law. Id. at 243, 94 S.Ct. at 1690. While judges and legislators acting within their traditional roles continued to enjoy absolute immunity, id. at 243-44, 94 S.Ct. at 1690, state executive officials would have only qualified immunity. Id. at 247-48, 94 S.Ct. at 1692.

The Court left the immunity question for federal officials to the courts of appeals when it acknowledged a damages remedy against those persons in suits for federal constitutional violations. Bivens v. Six Unknown Named Federal Narcotics Agents, 403 U.S. 388, 390-98, 91 S.Ct. 1999, 2001-06, 29 L.Ed.2d 619 (1971). This circuit reasoned that immunity accorded federal officials in Bivens actions should be no greater than that accorded state officials under section 1983 for identical violations. Mark v. Groff, 521 F.2d 1376, 1380 (9th Cir.1975).

Quoting Mark v. Groff, the Supreme Court agreed with this court and most circuits Significantly for our purposes here, Mark v. Groff was a suit against IRS officials, as were three of the other circuit cases cited and followed in Butz. See Weir v. Muller, 527 F.2d 872, 874 & n. 1 (5th Cir.1976) ²; Black v. United States, 534 F.2d 524, 527 (2d Cir.1976); G.M. Leasing Corp. v. United States, 560 F.2d 1011, 1015 (10th Cir.1977), cert. denied, 435 U.S. 923, 98 S.Ct. 1485, 55 L.Ed.2d 516 (1978).

                which had reached similar conclusions.   Butz v. Economou, 438 U.S. 478, 486 & n. 9, 498-500, 505-07, 98 S.Ct. 2894, 2900 & n. 9, 2906-07, 2910-11, 57 L.Ed.2d 895 (1978).   A different holding would "stand the constitutional scheme on its head."   Id. at 504, 98 S.Ct. at 2909.   Qualified immunity for federal executive officials struck a balance between the interests underlying immunity and the need for a

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