Jacobowitz v. United States

Citation424 F.2d 555
Decision Date15 July 1970
Docket NumberNo. 134-68.,134-68.
PartiesSamuel JACOBOWITZ v. The UNITED STATES.
CourtCourt of Federal Claims

Sanford N. Leeds, New York City, attorney of record for plaintiff.

Joseph F. DiStefano, Washington, D. C., with whom was Asst. Atty. Gen., William D. Ruckelshaus, for defendant, R. W. Koskinen, Washington, D. C., of counsel.

Before COWEN, Chief Judge, and LARAMORE, DURFEE, DAVIS, COLLINS, SKELTON, and NICHOLS, Judges.

ON PLAINTIFF'S MOTION AND DEFENDANT'S CROSS-MOTION FOR SUMMARY JUDGMENT

SKELTON, Judge.

Samuel Jacobowitz, plaintiff, a non-veteran career employee with more than 22 years of government service, filed this suit for back pay on the ground that his discharge from his position as a GS-9 Revenue Officer in the Internal Revenue Service was procedurally defective and that the decision removing him was arbitrary and capricious and not supported by substantial evidence. We have concluded that judgment should be entered for the plaintiff.

This case is before us on plaintiff's motion and defendant's cross-motion for summary judgment.

On May 6, 1965, a notice of proposed adverse action was issued to plaintiff by the District Director of the Internal Revenue Service at Hackensack, New Jersey. This notice contained three charges, namely:

CHARGE I. "Gross negligence in failure to promptly process checks received from taxpayers in violation of Section 1942.52 and Section 142.60 of the Rules of Conduct for Internal Revenue Service Employees (Revised October 1963) and failure to follow the procedures in Internal Revenue Manual, Part V, Section 5926.1 concerning receipt of Remittances."

There were two specifications of the above charge, substantially as follows:

(1) That on June 16, 1964 (the previous year), Plaintiff had submitted to the Cashier a certified check in the amount of $1,224.70 which plaintiff had signed for by registered mail on March 25, 1964.
(2) That on June 26, 1964, while reviewing plaintiff\'s cases, there was found a check in the amount of $32.63 payable to Internal Revenue Service, attached to a TY-14 delinquency investigation, which check was dated October 20, 1963.
CHARGE II. "False statements and falsification of records in violation of Section 1942.55 of the Rules of Conduct for Internal Revenue Employees (Revised October 1963) and failure to follow the procedures in Internal Revenue Manual, Part V, Section 5931, concerning Form 795."

There were fourteen Specifications under the foregoing Charge, of which Specification 4 was typical. It stated:

Specification 4. On your "Daily reports of Collection Activity", Forms 795, for the dates and times shown below, you reflected official stops at the premises of James Squicciarini, trading as Park Avenue Bakery, 118 Park Avenue, East Rutherford, New Jersey. In each instance, Forms 795 contained the notation "taxpayer not in — left message to contact me at the office." In an affidavit given to the Service on November 25, 1964, you stated that in all instances where the taxpayers were not in, you left a message on Form 2246 to contact you at the Hackensack Internal Revenue Service Office.
                Date of Form 795 Time Shown for Stops
                         July 14, 1964                       4:05 P.M. -  4:25 P.M
                         July 21, 1964                       4:05 P.M. -  4:20 P.M
                         August 4, 1964                      1:30 P.M. -  1:45 P.M
                         August 6, 1964                      1:40 P.M. -  1:50 P.M
                         August 10, 1964                    12:05 P.M. - 12:15 P.M
                         August 13, 1964                     1:05 P.M. -  1:20 P.M.
                         August 18, 1964                     3:10 P.M. -  3:20 P.M.
                         August 21, 1964                     2:05 P.M. -  2:20 P.M.
                         August 26, 1964                     2:00 P.M. -  2:15 P.M.
                         August 28, 1964                     3:30 P.M. -  3:40 P.M.
                         October 28, 1964                    2:45 P.M. -  2:55 P.M.
                
On your Daily Report, Form 795, for October 30, 1964, you reflected an official stop at the premises of James Squicciarini, and "desired information received."
Investigation revealed that the first contact made by someone from the Internal Revenue Service at the premises of James Squicciarini, 118 Park Avenue, East Rutherford, New Jersey, was made during the afternoon of October 30, 1964.

The substance of the 14 specifications under Charge II was that plaintiff had not in fact made the calls upon the delinquent taxpayers which he reported that he had made.

CHARGE III. "Failure to make effective use of time and failure to take effective collection action in performance of official Duties."1

The plaintiff made an oral reply to these charges on July 12, 1965, in which he denied all of the charges. At that time, he offered written statements of persons involved in 8 of the 14 specifications of Charge II, showing he had in fact made the calls described in the specifications. He also asked for a formal hearing and requested that all of the taxpayers be produced by subpoena at the hearing and before any final decision was made. The District Director advised plaintiff, on August 26, 1965, without any further hearing, that all of the charges and specifications thereunder were sustained and plaintiff was dismissed from his position effective September 10, 1965. The plaintiff appealed this decision to the Regional Commissioner of the IRS and requested a hearing.

The Regional Commissioner granted plaintiff a hearing which was held on October 13, 1965, before a hearing examiner. The IRS did not produce any of the taxpayers as witnesses at the hearing, nor anyone else who had any actual knowledge of whether or not the plaintiff made the calls on the taxpayers as stated in his reports and which the IRS contended he did not make. The only witnesses of the IRS at the hearing were its inspectors who were sent out to investigate the case by talking to some of the taxpayers and others long after the calls were reported by plaintiff to have been made. All the inspectors knew was what someone else told them about plaintiff's not having made the calls, which at most was mere allegation and rumor and altogether hearsay.

The IRS introduced into evidence at the hearing the written statements the inspectors had obtained from some of the delinquent taxpayers on whom plaintiff said he called, and which statements stated plaintiff had not called on them as reported. These statements were introduced over the objection of plaintiff that they were hearsay and denied him the right of cross-examination. Plaintiff demanded the right to cross-examine the absent taxpayers who made the statements. It will be recalled that at the time of his oral reply to the charges before the hearing, plaintiff requested that all of the taxpayers be produced by the IRS at the hearing. This was not done. During the hearing, when it became apparent the IRS was not going to produce the taxpayers as witnesses, the plaintiff again demanded that they be produced and that he be given the right to cross-examine them. He requested that the hearing be adjourned until this could be done. The IRS objected to the production of the taxpayers at the hearing even though they were its witnesses and it relied on their statements to sustain the charges against the plaintiff. It contended that the examiner did not have the power to subpoena them, which was true. However, it should be pointed out that the IRS made no showing whatever that the taxpayers had been asked to appear as witnesses, nor that it had made any effort to have them present, nor that the taxpayers had refused or were unable to be present. The plaintiff, on the other hand, tried to produce the taxpayers at the hearing as witnesses and succeeded in producing three of them but failed to obtain the presence of the others. Plaintiff says on page 64 of his motion for summary judgment:

Plaintiff made every effort to produce the taxpayers at the hearings. He was successful in producing three (Mr. and Mrs. Squicciarini and Mrs. Jean Travis), * * *.

The defendant denies that plaintiff made an effort to produce the taxpayers as witnesses. It is true that the record does not show what effort plaintiff made to produce them, but the fact that he did produce three of them indicates that he did make an effort to have all of them appear as witnesses and supports his statement to that effect.

The plaintiff appeared in person at the hearing before the IRS examiner and testified in his own behalf. He denied each and every specification in Charges II and III and said they were not true. He testified that he made every call on the delinquent taxpayers as shown on his reports, and he introduced into evidence written statements of eight of the fourteen taxpayers involved which stated he had in fact called on them as reported. Three of the taxpayers appeared in person and testified at plaintiff's request and they said plaintiff had called on them. The plaintiff offered in evidence a tape recording he had made of his conversations with the taxpayers after the charges had been filed to show by the voices of the taxpayers their admission that he had called on them. The examiner not only refused to admit the tape into evidence, but also refused to even listen to it before he rejected it.

The plaintiff offered to testify that the charges were filed because of bias and prejudice against him by his superior because he had filed two grievance procedures against his superior previously and had received a 90-day letter because of it. The examiner refused this testimony.

The plaintiff admitted the facts set forth in Charge I, but said it was a frequent occurrence in the IRS for checks to get misplaced temporarily and it was not a matter of concern to anyone. This was later confirmed by other IRS employees who testified at the hearing. Plaintiff also testified that his group clerk should have found the checks when they were in the files. The late cashing of these...

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  • Gilbert v. Johnson
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    ...hearings as long as the evidence upon which a decision is based is both substantial and has probative value, Jacobowitz v. United States, 424 F.2d 555, 191 Ct.Cl. 444 (1970). Whether the hearsay constitutes substantial evidence must be weighed in light of the whole record. Reil v. United St......
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