Pleasant v. Lovell, Civ. A. No. 83 F 2251.

• Decision Date: 12 February 1987
• Docket Number: Civ. A. No. 83 F 2251.
• Citation: 654 F. Supp. 1082
• Parties: John S. PLEASANT, et al., Plaintiffs, v. Larry LOVELL, Larry Hyatt, Vernon Pixley, Kenneth Batson, and Tim Fortune, Defendants.
• Court: U.S. District Court — District of Colorado

654 F. Supp. 1082

John S. PLEASANT, et al., Plaintiffs, v. Larry LOVELL, Larry Hyatt, Vernon Pixley, Kenneth Batson, and Tim Fortune, Defendants.

Civ. A. No. 83 F 2251.

United States District Court, D. Colorado.

February 12, 1987.

John S. Pleasant, Englewood, Colo., pro se.

William A. Cohan, Carl E. Stahl, Denver, Colo., for plaintiffs.

Robert N. Miller, U.S. Atty., Dahil D. Goss, Asst. U.S. Atty., Denver, Colo., Angelo I. Castelli, James M. McCarten, Trial Attys., Tax Div., Office of Special Litigation, U.S. Dept. of Justice, Washington, D.C., for defendants.

MEMORANDUM OPINION AND ORDER

SHERMAN G. FINESILVER, Chief Judge.

This case involves the question of liability of several agents of the Internal Revenue Service Criminal Investigative Division ("IRS/CID"), who allegedly violated the constitutional rights and privileges of plaintiffs. Plaintiffs in this action were members of the National Commodity and Barter Association ("NCBA") during 1979 and 1980. Defendants are five Agents of the CID.

The parties have filed cross motions for summary judgment. Each party contends, and cross motions for summary judgment authorize the Court to assume, that no genuine issues of material fact exist. Thus, we treat the parties' motions, briefs, and exhibits, along with other pleadings and written submissions, as the body of evidence which would have been brought before the Court at a trial on the merits. The case has been bifurcated as to liability and damages. Accordingly, this Opinion only discusses issues of liability.

Jurisdiction is properly grounded on 28 U.S.C. §§ 1331 and 1343, U.S. Const. amends. I and IV, and the rationale of Bivens v. Six Unknown Narcotics Agents, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971).

For the reasons set forth below, defendants' Motion to Dismiss or for Summary Judgment is GRANTED. Plaintiffs' Cross Motion for Partial Summary Judgment is DENIED.

I.

By way of background, it appears that the late John Grandbouche organized the NCBA sometime prior to July 1979. The NCBA may be loosely referred to as an association of individuals who believe that tax laws are violative of the United States Constitution.

During late August and early September of 1979, plaintiff John Pleasant became acquainted with Ms. Pauline Adams, who was then employed in the office of the United States Bankruptcy Trustee in Denver, Colorado. On September 9, 1986, Mr. Pleasant elicited Ms. Adams' assistance in obtaining some sample bankruptcy pleadings. Mr. Pleasant described his activities at the NCBA to Ms. Adams, and discussed the goals of the NCBA with her. Ms. Adams expressed an interest in learning more about the organization, and subsequently was introduced to John Grandbouche.

On September 19, 1979, either Mr. Grandbouche or Mr. Pleasant asked Ms. Adams to assist the NCBA in preparing some pleadings to be filed in court the next day. Ms. Adams was directed to go to Mr. Grandbouche's home that evening where she was provided a typewriter and a place to work. During the course of the evening, Ms. Adams overheard discussions about the means employed by the NCBA to effectuate their goals of tax protestation. The nature of the conversations were of considerable concern to Ms. Adams.

On September 20, 1979, unsolicited by any government agent, Ms. Adams contacted the IRS to report the discussions which she overheard the night before. Special Agent Larry Lovell of the CID answered Ms. Adams' call. Defendant Lovell met with Ms. Adams that day. Later that evening, defendant Lovell and another IRS/CID agent met with Ms. Adams at her residence.

On October 3, 1979, defendant Lovell spoke with IRS Inspector Steve Simer concerning information that Ms. Adams had provided. Defendant Lovell told Inspector Simer that Ms. Adams had overheard conversations by Mr. Grandbouche and others concerning a tire shooting incident involving an IRS officer's car. On October 4, Inspector Simer asked defendant Lovell to identify the confidential informant for his use as a source of information. Defendant Lovell explained that the source had requested to remain anonymous. On October 5, Defendant Lovell informed defendants Vernon Pixley, Group Manager of the Denver Office of the CID and Larry Hyatt, Chief of the Denver Office of the CID, about Inspector Simer's request to meet Ms. Adams, and of Ms. Adams request to keep her identity confidential. Defendant Hyatt instructed defendant Lovell to prepare a request to "number" Ms. Adams as a "restricted source confidential informant". Within a week, the request was approved by the District director, and Ms. Adams' identifying data was sealed and placed in a safe.

On October 5, 1979, Ms. Adams telephoned defendant Lovell at his residence to discuss the possibility of working on a full-time basis for the NCBA. One of the leaders of the NCBA had told Ms. Adams that she would be paid $1,500 per month for her efforts. In a Memorandum to the file dated October 5, defendant Lovell stated:

I explained to CI Confidential Informant, i.e. Ms. Adams that a position with (deleted) and the organization would allow CI to gather and receive valuable information about the protest movement. I also stressed the CI's safety, and explained that a decision to take the position with (deleted) should be made entirely by the CI and with the CI's safety and financial situation in mind. I also told CI that if the position is accepted, caution should be exercised to prevent entrapment by the CI or illegal acts by the CI.

Ms. Adams accepted the position with NCBA.

Throughout the Fall of 1979, Ms. Adams gathered information from members of the NCBA and relayed that information to agents of the IRS. On October 23, 1979, Ms. Adams met with defendants Hyatt, Pixley, and defendant Lovell, as well as Special Agent Thomas P. McAndrews, who is not a defendant in this case. At the meeting, Ms. Adams gave the agents "materials which included numerous letters and correspondence to JOHN GRANDBOUCHE or NATIONAL BARTER AND EXCHANGE and what appeared to be a textbook or instructional material of some kind" (Memorandum to File dated October 23, 1979). Agent McAndrews copied the documents, returned the originals to defendant Lovell, who then gave them back to Ms. Adams.

At the October 23 meeting, Ms. Adams described statements she claimed to have overheard at NCBA, which defendants characterize as threats to the lives of a federal judge and IRS personnel. Ms. Adams' statements were corroborated by the report of Special Agent Larry Thompson, who had attended a public meeting on October 20, 1979 at which NCBA personnel made similarly threatening statements. Based on this evidence, defendant Hyatt sought and received emergency authorization to conduct electronic surveillance of the NCBA by consensual monitoring. Ms. Adams carried a concealed microphone/transmitter into the NCBA offices on October 25, 29 and 30, 1979. Conversations transmissible by the microphone secreted on her person were broadcast to the defendants, who monitored and tape-recorded those conversations. On October 30, 1979, the consensual monitoring was abandoned because no evidence of any murder plot or other crime had surfaced. However, nineteen persons associated with NCBA were identified. In a related case, the issue of whether the consensual monitoring activities violated constitutional rights was decided negatively by Judge Jim Carrigan of this federal court. Grandbouche v. Adams, 529 F.Supp. 545, 547-48 (D.Colo.1982). Judge Carrigan's opinion was adopted by this Court in our Order dated June 22, 1984.

On October 26, 1979, Ms. Adams informed defendant Lovell that she had been approached by an individual named Robert Bennett, who asked her to purchase guns for him. Ms. Adams previously had told Mr. Bennett that she could purchase weapons for him. When actually confronted with the issue, Ms. Adams told defendant Lovell that she could not purchase guns because she was a convicted felon. On October 30, 1979, defendant Lovell conveyed that fact to defendant Pixley. On October 31, 1979, a background check was done on Ms. Adams. The background check confirmed that Ms. Adams had been convicted of a felony, and that she had received probation with a community service requirement. The check also revealed that Ms. Adams had previously provided information to the Colorado Bureau of Investigation, which led to the conviction of several drug traffickers.

On November 1, 1979, defendants Lovell and Pixley were informed by Ms. Adams that Mr. Grandbouche had asked her to take the Grandbouche/NCBA office trash to her home to burn it. Ms. Adams asked defendants Lovell and Pixley if they would like to examine the trash before she burned it. The assistance offered by Ms. Adams was purely voluntarily; it did not result from a request or enticement by the government agents. Defendants Lovell and Pixley accepted her offer and admonished her only to bring them the trash that Mr. Grandbouche had thrown out. From November 1, 1979 through December 17, 1979, either defendant Pixley or Lovell met with Ms. Adams periodically to pick up the Grandbouche/NCBA office trash.

On three occasions, November 13, 15, and 19, Ms. Adams provided defendants with items not contained in the trash. These three items consisted of a clearly labeled "Mailing List" which identified plaintiffs and their associates in the NCBA, a copy of a tape recording which Mr. Grandbouche sealed and asked Ms. Adams to mail, and 183 affidavits from members designating support for the political objectives of the NCBA. Items contained in the trash included documents and things which identified associational bank accounts and financial institutions used by the NCBA, its members and supporters.

During November 1979, defendant Lovell requested that a federal grand jury be impaneled to investigate Mr. Grandbouche and other individuals. With the approval of defendants Pixley and Hyatt, his request was referred to the ...