Hefti v. McGrath, 88-1013C(6).

• Decision Date: 31 March 1992
• Docket Number: No. 88-1013C(6).,88-1013C(6).
• Citation: 784 F. Supp. 1426
• Parties: Charles HEFTI and Marion Hefti, Plaintiffs, v. Kevin McGRATH, et al., Defendants.
• Court: U.S. District Court — Eastern District of Missouri

784 F. Supp. 1426

Charles HEFTI and Marion Hefti, Plaintiffs, v. Kevin McGRATH, et al., Defendants.

No. 88-1013C(6).

United States District Court, E.D. Missouri, E.D.

February 6, 1992.

As Amended on Grant of Reconsideration March 31, 1992.

COPYRIGHT MATERIAL OMITTED

Charles and Marion Hefti, Charles Shaw, St. Louis, Mo., for plaintiffs.

Robert Millstone, Trial Atty., Office of Sp. Litigation, Tax Div., U.S. Dept. of Justice, Washington, D.C., Henry J. Fredericks, Asst. U.S. Atty., St. Louis, Mo., for defendants.

MEMORANDUM

GUNN, District Judge.

This matter is before the Court on defendants' motion to dismiss, or in the alternative, for summary judgment with respect to plaintiffs' third amended complaint and plaintiffs' opposition thereto. The parties have incorporated by reference the arguments set forth in their motions to dismiss or, in the alternative, for summary judgment with respect to plaintiffs' second amended and first amended complaints and the responses and replies thereto. The Court has therefore considered the arguments presented in those pleadings in resolving the present motion. Many arguments raised by the parties are purely legal and have been treated here under the rubric applicable to motions to dismiss for failure to state a claim. Under this analysis, the dismissal of a claim is proper if, taking all well-pleaded facts as true and construing them in the light most favorable to the plaintiffs, it is clear that plaintiffs can prove no set of facts in support of their claim which would entitle them to relief. Cite

In certain instances, which will be noted below, the Court has found it necessary to consider matters outside the pleadings which have been presented to it by way of affidavit or exhibit. Where such matters have been considered by the Court, the Court will treat defendants' motion as a motion for summary judgment.

Under Rule 56 of the Federal Rules of Civil Procedure, a movant is entitled to summary judgment if he can "show that there is no genuine issue as to any material fact and that he is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); First Security Savings v. Kansas Bankers Surety Co., 849 F.2d 345, 349 (8th Cir. 1988); Agristor Leasing v. Farrow, 826 F.2d 732, 734 (8th Cir.1987). In passing on a motion for summary judgment, a court is required to view the facts and inferences that reasonably may be derived therefrom in the light most favorable to the non-moving party. Holloway v. Lockhart, 813 F.2d 874, 876 (8th Cir.1987); Economy Housing Co. v. Continental Forest Products, Inc., 757 F.2d 200, 203 (8th Cir.1985). The burden of proof is on the moving party and a court should not grant a summary judgment motion unless it is convinced that there is no evidence to sustain a recovery under any circumstances. Foster v. Johns-Manville Sales Corp., 787 F.2d 390, 392 (8th Cir.1986). As the Supreme Court has stated:

The inquiry performed is the threshold inquiry of determining whether there is the need for a trial — whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

This is a Bivens (Bivens v. Six Unknown Federal Narcotics Agents, 403 U.S. 388, 392-97, 91 S.Ct. 1999, 2002-05, 29 L.Ed.2d 619 (1970)) action filed by taxpayers Charles M. and Marion Hefti (the Heftis) against various revenue agents, IRS appeals officers and IRS attorneys. On December 20, 1991 the Court granted plaintiffs leave to file a third amended complaint restating their Bivens claim and adding civil rights conspiracy and RICO claims. In their third amended complaint plaintiffs allege that Revenue Agent Kevin McGrath searched their home on or about August 15, 1983 during the course of an IRS audit of plaintiffs' business for the tax years 1980-1982. See Third Amended Complaint at ¶ 7. They further allege that McGrath and his supervisor, James Jewik, conducted a second inspection of their residence on or about December 1, 1983. Id. at 8. Plaintiffs allege that the purported reason for these inspections was to gather information needed for the audit process. Plaintiffs contend that the inspections were unnecessary because the IRS had conducted previous searches of their home and had previously obtained the information sought in these inspections. Id.

In paragraph 9 of their third amended complaint, plaintiffs also allege that IRS Appeals Officer Thomas Wettig represented to them during the course of a February 14, 1985 meeting that their pursuit of the IRS appeals process would be fruitless. Plaintiffs base this contention on the following statement by Wettig: "No matter what we talk about or what you bring in, or what you show me, or anything else, is going to make any more difference than one to three thousand dollars, if it makes that much difference at all." Id. at ¶ 9. Plaintiffs further allege that Wettig refused to allow plaintiffs to taperecord a meeting at the IRS offices on or about February 21, 1985. Id. at ¶ 10. Plaintiffs also allege that IRS attorney James Kutten made the following statement to them: "It is your right to have the office wherever you want to have it. It is something to consider to avoid the problem. As long as you have an office in the home, you are going to have that problem. It is not going to go away." Id. at ¶ 11. In paragraph 12 of the third amended complaint, plaintiffs charge that Chief Appeals Officer Frank Brafman refused to allow plaintiffs to have a witness present during a meeting at the IRS Appeals office on February 22, 1985. In addition, they allege that they were required to contact the IRS several times before they were able to arrange the aforementioned meeting which was attended by Associate Chief of Appeals Edward Besekrus and Appeals Officer Wettig. Id. at ¶ 12. Plaintiffs characterize their meetings with IRS appeals officers as "sham attempts to satisfy administrative requirements" and "occasions for defendants to subject plaintiffs to scare tactics and verbal abuse." Id.

Plaintiffs also challenge the scope of a May 16, 1985 search of their home by IRS attorney James Kutten and agent Thomas Wettig. Id. at ¶ 13. They contend that this inspection exceeded the directive of the tax court limiting the inspection solely to business areas within their home. They further assert that IRS personnel took photographs of their residence during this inspection and that they have been unable to recover these photographs from the IRS. Id. In paragraph 14 plaintiffs allege that Kutten and unidentified "accomplices" moved furniture and took photographs of business areas to make them appear as though they were residential areas of the home. Plaintiffs also charge that at some time between August 1983 and February 1986 portions of their financial and tax records were destroyed or lost by unspecified persons conducting an inspection of their records "under the guidance of Kevin McGrath." Id. at ¶ 15. Plaintiffs also allege that unidentified IRS agents harassed them at their home on February 12, 1986, the eve of their trial in the Tax Court. Id. at ¶ 16. Finally, plaintiffs allege that Kutten falsely stipulated before the Tax Court that the IRS had furnished the Tax Court with "true and correct photocopies" of plaintiffs' records. Id. at ¶ 17. On the basis of the foregoing factual allegations, plaintiffs allege violations of their rights under the fourth, fifth and fourteenth amendments and seek monetary damages.

In addition, the third amended complaint alleges a conspiracy among and between the defendants to interfere with plaintiffs' right to equal protection of the laws and a RICO claim based upon the allegations set out in paragraphs 14, 15 and 17 of the third amended complaint.

Sovereign Immunity

In their motions to dismiss, or in the alternative, for summary judgment defendants initially raise the defense of sovereign immunity. Specifically, they contend that insofar as plaintiffs have alleged that defendants are sued in their official capacities the claims against them are in fact claims against the United States which are barred by the doctrine of sovereign immunity. Sovereign immunity bars the assertion of a suit against the United States absent a specific waiver of such immunity. United States v. Mitchell, 445 U.S. 535, 538, 100 S.Ct. 1349, 1351, 63 L.Ed.2d 607 (1980). The application of this doctrine cannot be avoided by naming individual employees or officers of the federal government as defendants. See Hagemeier v. Block, 806 F.2d 197, 202 (8th Cir. 1986), cert. denied, 481 U.S. 1054, 107 S.Ct. 2192, 95 L.Ed.2d 847 (1987). Plaintiffs contend that sovereign immunity does not apply because they have asserted Bivens claims against the defendants in their individual capacities. Upon review of these arguments the Court concludes that plaintiffs' claims against defendants in their official capacities are barred by the doctrine of sovereign immunity, but that plaintiffs' claims against defendants in their individual capacities should stand in the face of such immunity. See id.

Claims for money damages against federal officials, acting under color of title, for violations of plaintiffs' constitutional rights have long been recognized. See, e.g., Bivens v. Six Unknown Federal Narcotics Agents, 403 U.S. 388, 392-97, 91 S.Ct. 1999, 2002-05, 29 L.Ed.2d 619 (1970). In Butz v. Economou, the Supreme Court noted that "the cause of action recognized in Bivens would ... be `drained of meaning' if federal officials were entitled to absolute immunity for their constitutional transgressions." Butz v. Economou, 438 U.S. 478, 501, 98 S.Ct. 2894, 2908, 57 L.Ed.2d 895 (1978). The Supreme Court therefore held that qualified immunity from damages, rather than absolute immunity premised upon sovereign immunity, should be the general rule when federal...