McQueen v. U.S.
| Citation | 5 F.Supp.2d 473 |
| Decision Date | 30 March 1998 |
| Docket Number | No. H-91-0329.,No. 95-1453.,H-91-0329.,95-1453. |
| Parties | Alvy T. McQUEEN, Plaintiff, v. UNITED STATES of America, et al, Defendants. |
| Court | U.S. District Court — Southern District of Texas |
John A. Townsend, Townsend & Jones, Houston, TX, for Plaintiff.
Stuart D. Gibson, U.S. Department of Justice, Tax Division, Washington DC, Robert L. Bernard, Assistant U.S. Attorney, Houston, TX, for Defendants.
REVISED MEMORANDUM OPINION
On July 8, 1992, Alvy T. McQueen (McQueen) was indicted by a federal grand jury in the Southern District of Texas, charging twenty-four (24) counts of diesel fuel tax evasion. He plead guilty to Counts 1 and 23 of the indictment which charged him with willfully attempting to evade federal diesel fuel excise taxes. McQueen also waived indictment and voluntarily entered a guilty plea to an information charging one count of conspiracy to impede the collection of diesel fuel excise taxes. On March 16, 1993, Judge Melinda Harmon sentenced him to sixty-months (60) incarceration.
In subsequent civil proceedings, McQueen and his lawyer John Townsend (Townsend), have engaged in an oppressive litigation war against almost everyone connected with McQueen's criminal prosecution. In a prior action, McQueen unsuccessfully sought to recover damages from Texas State Comptroller Bob Bullock. See McQueen v. Bullock, 907 F.2d 1544 (5th Cir.1990), cert. denied, 499 U.S. 919, 111 S.Ct. 1308, 113 L.Ed.2d 243 (1991) (McQueen II). He now attempts to reassert many of the same claims which were previously rejected in McQueen v. Bullock against, Assistant United States Attorney (AUSA) Pecht (Pecht), who was in charge of the criminal prosecution against McQueen and IRS agents Susie Wong (Wong) and Mark Hughes (Hughes).
In this consolidated suit, McQueen alleges that:
1. Defendants, Pecht, Wong, and Hughes were in contempt of court, and therefore, personally liable for disclosing grand jury information, in violation of Federal Rule of Criminal Procedure 6(e) (Rule 6(e) Claim);
2. Such disclosure violated 26 U.S.C. § 6103(d), and consequently, the United States is liable for damages under 26 U.S.C. § 7431 (Section 6103(d) Claim);
3. Hughes disclosed information to Pecht in violation of 26 U.S.C. § 6103(h), and consequently, the United States is liable for damages under 26 U.S.C. § 7431 (Section 6103(h) Claim);
4. The Department of Justice refused to release documents in violation of the Freedom of Information Act, 5 U.S.C. § 552 (FOIA Claim);
5. Pecht, Wong, and Hughes conspired to subvert McQueen's substantive and procedural due process rights in a manner actionable under Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971) (Bivens Claim).
Presently before the court is the United States', Pecht's, Wong's and Hughes' (defendants) motion seeking partial summary judgment against McQueen pursuant to Fed. R.Civ.P. 56. The four issues addressed in this opinion are: 1) should the FOIA claim against the Department of Justice be severed from this case?; 2) should the Rule 6(e) claim be dismissed?; 3) should the Section 6103(d) claim be dismissed?; and 4) should the Section 6103(h) claim be dismissed?1
In response, McQueen filed his Motion for Judgment as a Matter of Law, seeking to prevail on the Rule 6(e), Section 6103(d), and Section 6103(h) claims.
The court has considered the parties' arguments in light of the applicable law and for the reasons stated below, the court will: 1) sever H-95-1453 from H-91-0329; 2) dismiss with prejudice H-95-1453 in its entirety; 3) dismiss with prejudice the Rule 6(e), Section 6103(d), and Section 6103(h) claims from H-91-0329; and 4) enter a case management order addressing the plaintiff's sole remaining claim from H-91-0329 — the FOIA claim.
McQueen states that around the time of the Project, a federal grand jury was conducting an industry-wide investigation of motor fuels tax evasion in the Houston area. He charges that because he was an individual involved in the motor fuels business, he was already a target of the grand jury investigation. He claims that the grand jury investigation was jointly conducted by AUSA Pecht and IRS agents Hughes and Wong. He further insinuates that both the Federal Bureau of Investigation (FBI) and the Texas State Comptroller's Office (STCO) were also involved in both the IRS administrative and the grand jury investigations, and therefore they were also investigating McQueen.2 McQueen argues that it follows that the IRS search warrant, which was executed in Colorado was issued in furtherance of the grand jury investigation. Specifically, McQueen asserts that Pecht, in the course of conducting the "industry-wide" grand jury investigation, in effect issued the Colorado search warrant because she saw Hughes' Application and Affidavit for Search Warrant wherein Hughes provided sufficient facts to show probable cause that McQueen committed tax fraud. He further argues that Pecht's subsequent opening of a federal grand jury investigation targeting McQueen was essentially a sham because all investigations were in effect merged into one, with McQueen the target.
In support of his position, McQueen offers a passage from a brief (Brief) filed by the United States in McQueen II. The passage states that prior to June 1988, the U.S. was Brief at 3 (internal citations omitted) (emphasis added).
On or about January 7, 1987, the IRS Criminal Investigation Division (CID) in Houston opened an Information Gathering Project (Project) to investigate the possible evasion of federal motor fuel taxes. Wong was initially assigned to coordinate the Project and Hughes was subsequently assigned to work with her.
The defendants maintain that evidence developed in the Project led to the opening of a federal grand jury investigation (Grand Jury I) which targeted an individual who is not a party to this suit. They acknowledge that AUSA Pecht was in charge of Grand Jury I and that both Hughes and Wong gathered evidence about the target pursuant to their duties on the Project.
Hughes states that sometime around June 7, 1988, he learned from an employee of the STCO that McQueen was being investigated by the STCO for tax fraud and that pursuant to that investigation, the STCO subpoenaed certain documents from McQueen. Later, Hughes learned from a confidential informant (CI) that McQueen was sending documents which had been subpoenaed by the STCO to Colorado for concealment and possible destruction. Hughes states that the IRS, based on the CI's information and evidence gathered in the Project, opened an administrative investigation of McQueen on June 17, 1988. Hughes, who was designated as the lead agent in the IRS administrative investigation, further maintains that although the IRS investigation was coincidental Grand Jury I, the two investigations were entirely unconnected. Finally, the defendants collectively maintain that when the IRS opened its administrative investigation of McQueen on June 17, 1988, McQueen was not the target of any federal grand jury investigation.
Pursuant to the IRS investigation, Hughes sought a search warrant to obtain the documents which McQueen had moved to Colorado. In seeking the search warrant, he was required to have an AUSA review and sign off on the request before presenting it to a magistrate.3 To meet that requirement, Hughes presented the search warrant application and an affidavit with enough evidence to raise probable cause for Pecht to sign off on before presenting it to the magistrate. Thereupon, Pecht advised Hughes that he needed the approval of a U.S. Magistrate Judge in the District of Colorado.
Hughes and Wong flew to Colorado on June 18, 1988. On that day, Magistrate Judge Clifton of the District of Colorado authorized Hughes and Wong to execute the search warrant. Later that day, Hughes, Wong, and other law enforcement officers seized documents and property pursuant to the search warrant. Hughes and Wong shipped these seized documents to an IRS-leased space in the federal courthouse in Houston. Defendants maintain that none of the evidence contained in Application and Affidavit for Search Warrant had been presented to or learned from any federal grand jury.
In a curious sequence of events which ultimately led two grand jury investigations targeting McQueen, sometime between June 20 and July 14, McQueen's lawyer, Townsend spoke to AUSA Pecht and volunteered to produce McQueen's business records which had not been seized pursuant to the IRS search warrant. On July 14, 1988, Hughes learned from his CI, that McQueen had begun shredding the documents which Townsend promised to produce. The next day Hughes relayed this information to Pecht who promptly opened a grand jury investigation of McQueen on a charge of obstruction of justice (Grand Jury II). Pecht assigned Hughes to assist with Grand Jury II and had Hughes serve a grand jury subpoena on Townsend. Also July 15, 1988, Pecht asked the IRS for and subsequently received authorization4 to expand Grand Jury I (hereinafter Grand Jury III) to target McQueen. The defendants steadfastly maintain, McQueen was not a target of Grand Jury I or any other federal grand jury investigation prior to July 15, 1988 and they also maintain that none of the documents seized pursuant to the Grand...
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