Bufkin v. Scottrade, Inc.
| Decision Date | 28 April 2020 |
| Docket Number | No. 19-12003,19-12003 |
| Parties | MICHAEL EDWARD BUFKIN, Plaintiff - Appellant, v. SCOTTRADE, INCORPORATED, apparently an Arizona corporation, officially and individually, JACOB J. LEW Secretary, the Department of the Treasury, officially and individually, d.b.a. U.S. Department of Treasury, TIMOTHY F. GEITHNER, Secretary, the Department of the Treasury, officially and individually d.b.a. U.S. Department of Treasury, JOHN KOSKINEN, Commissioner, Internal Revenue Service, officially and individually, DOUGLAS SHULMAN, Commissioner, Internal Revenue Service, officially and individually, et al., Defendants - Appellees. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
[DO NOT PUBLISH]
Non-Argument Calendar
D.C. Docket No. 2:17-cv-00281-JES-UAM Appeal from the United States District Court for the Middle District of Florida
Before JORDAN, NEWSOM, and TJOFLAT, Circuit Judges.
Michael Edward Bufkin, appearing pro se, appeals the District Court's orders dismissing his "tax" claims against Scottrade, Inc. and officials and staff of the Internal Revenue Service ("IRS") and the U.S. Department of Treasury (collectively, the "government parties") for selling the stocks in his Scottrade account and conspiring to have Scottrade give the funds to the IRS to satisfy a tax liability. He claims that he never "volunteered" to be a taxpayer, and thus that it was improper to take the funds from his trading account to satisfy his alleged tax liability. As best as we can tell from his complaint, he asserts a breach of contract claim against Scottrade for selling his shares at the request of the IRS and various claims against the government parties in both their official and individual capacities, including Bivens1 and intentional tort claims for violating his "right notto contract" with the IRS to pay taxes, conspiracy to obtain the funds in his Scottrade account and to violate his right not to contract with the IRS, failure to prevent the conspiracies under 42 U.S.C. § 1983, failure to train, and a request for administrative sanctions. Alternatively, he seeks a declaration that he is not a "taxpayer," guidance on how to terminate his obligations as a taxpayer, or "injunctive/mandamus relief" requiring the production of documents showing that Bufkin is indeed a taxpayer.
On appeal, Bufkin argues that the District Court erred by (1) denying his motion to strike the magistrate judge's order staying discovery; (2) granting the government parties' motion to dismiss his complaint against them; (3) granting Scottrade's motion to compel arbitration of the claims against it; and (4) permitting the clerk to sign and enter the judgments against him. The government parties have also moved for sanctions against Bufkin under Federal Rule of Appellate Procedure 38, on the ground that this appeal is frivolous. After careful review, we affirm the District Court's orders in all respects and grant the government parties' motion for sanctions.
Bufkin first appeals the District Court's denial of his motion to strike the magistrate judge's order staying discovery. He claims that the magistrate judge lacked the authority to make any decisions in his case because he did not consentto resolution by a magistrate judge, and so the District Court erred in denying his motion to strike the magistrate judge's order and the magistrate judge abused her discretion in staying discovery.
We review a district court's discovery orders for abuse of discretion. See Chudasama v. Mazda Motor Corp., 123 F.3d 1353, 1366 (11th Cir. 1997). The district court "may designate a magistrate judge to hear and determine any pretrial matter pending before the court," with certain listed exceptions for dispositive matters that do not apply here. 28 U.S.C. § 636(b)(1)(A). The district court reviews a magistrate judge's determinations on non-dispositive pretrial matters under the clearly-erroneous or contrary-to-law standard. Jordan v. Comm'r, Miss. Dep't of Corr., 947 F.3d 1322, 1327 (11th Cir. 2020) (citing 28 U.S.C. § 636(b)(1)(A)).
Here, the District Court was well within its discretion to refer this non-dispositive, pretrial discovery matter to the magistrate judge in accordance with § 636(b)(1)(A). Contrary to Bufkin's contention, the parties' consent is not required for a magistrate judge to resolve such discovery disputes.
Moreover, the magistrate judge did not clearly err in staying discovery pending the government parties' motion to dismiss and Scottrade's motion to compel arbitration. Under the Federal Arbitration Act ("FAA"), a court "shall on application of one of the parties stay" the proceedings if it finds that the issuepresented is "referable to arbitration under an agreement in writing for such arbitration," so that the parties may arbitrate the claims in accordance with the terms of the agreement. 9 U.S.C. § 3. Additionally, "[f]acial challenges to the legal sufficiency of a claim or defense, such as a motion to dismiss based on failure to state a claim for relief, should . . . be resolved before discovery begins." Chudasama, 123 F.3d at 1367. "Because a facial challenge to the legal sufficiency of a claim raises only questions of law, 'neither the parties nor the court have any need for discovery before the court rules on the motion.'" World Holdings, LLC v. Fed. Republic of Germany, 701 F.3d 641, 655 (11th Cir. 2012) (quoting Chudasama, 123 F.3d at 1367).
Scottrade filed a motion to compel arbitration in accordance with its written arbitration agreement with Bufkin, and the government parties filed a motion to dismiss for lack of subject-matter jurisdiction under Rule 12(b)(1) and failure to state a claim under Rule 12(b)(6), challenging the legal sufficiency of Bufkin's complaint. The magistrate judge took a "preliminary peek" at the motions and determined that they were likely meritorious and dispositive of the case. Given the potential for Bufkin's claims against Scottrade to be resolved in arbitration, and the likelihood that Bufkin's claims against the government parties could be fully resolved on the government parties' motion to dismiss, the magistrate judgeappropriately stayed discovery until these motions could be decided. As such, the District Court did not abuse its discretion in denying Bufkin's motion to strike.
Next, Bufkin appeals the District Court's order granting the government parties' motion to dismiss. The District Court found, as a preliminary matter, that Bufkin's argument that he is not a taxpayer because he did not volunteer to pay taxes is "patently frivolous," and so it dismissed his requests for injunctive and declaratory relief regarding his status as a taxpayer without further discussion. It then considered the various bases upon which the Court might exercise subject-matter jurisdiction over Bufkin's claims against the government parties in their official capacities. After determining that no such basis for jurisdiction existed, it dismissed those claims for lack of subject-matter jurisdiction. Moreover, with respect to Bufkin's claims against the government parties in their individual capacities, the Court found that none of the individuals were properly served, and so the Court lacked personal jurisdiction over the government parties with respect to those claims. In any event, the Court found that Bufkin had not alleged any well-plead constitutional violations under Bivens. We first address the District Court's rulings that it lacked subject-matter jurisdiction and personal jurisdiction over the government parties, and then consider the District Court's alternative dismissal under Rule 12(b)(6).
We review dismissal for lack of subject matter jurisdiction de novo. Christian Coal. of Fla., Inc. v. United States, 662 F.3d 1182, 1188 (11th Cir. 2011). Sovereign immunity limits the court's jurisdiction to hear claims against the United States to only those areas where Congress has expressly waived the immunity—i.e., where the federal government has consented to be sued. Id.; see also United States v. Mitchell, 463 U.S. 206, 212, 103 S. Ct. 2961, 2965 (1983) (). The immunity covers federal officials sued in their official capacities. See Davila v. Gladden, 777 F.3d 1198, 1209 (11th Cir. 2015). "In order to authorize official-capacity suits, Congress must clearly waive the federal government's sovereign immunity." Id. Statutes waiving immunity are thus strictly construed. Id.; Christian Coal. of Fla., 662 F.3d at 1188.
None of the statutes that Bufkin cites in his complaint support exercising subject-matter jurisdiction over his claims against the government parties in their official capacities. Bufkin cites 28 U.S.C. § 1330, which provides for district courts' original jurisdiction over actions against foreign states; § 1333, which provides for admiralty and maritime jurisdiction; and § 1339, which provides for "original jurisdiction of any civil action arising under any Act of Congress relatingto the postal service." Those statutes are plainly inapplicable here. He also cites § 1331, which provides for jurisdiction over civil claims arising under the constitution and laws of the United States (i.e., federal questions), and § 1343, which applies to federal civil rights violations by state officials, but neither of those statutes provide a waiver of sovereign immunity. See Beale v. Blount, 461 F.2d 1133, 1138 (5th Cir. 1972).2
The District Court considered several other potential grounds for exercising jurisdiction, including under the Federal Tort Claims Act ("FTCA") or as a claim for the recovery of taxes under 28 U.S.C. § 1346(a)(1), and correctly concluded that neither of those statutes authorized Bufkin's suit against the government parties in their official capacities, primarily because Bufkin had not taken steps to exhaust his administrative remedies.3 See Motta ex rel. A.M. v. ...
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