U.S. v. Jones

• Citation: 581 F.2d 816
• Decision Date: 11 August 1978
• Docket Number: No. 78-1287,78-1287
• Parties: 78-2 USTC P 9641 UNITED STATES of America and Gene E. Turley, Special Agent, Internal Revenue Service, Petitioners-Appellees, v. Stephen JONES, Respondent-Appellant, G. Maurene Townsend, Intervenor-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

Page 816

581 F.2d 816

78-2 USTC P 9641

UNITED STATES of America and Gene E. Turley, Special Agent, Internal Revenue Service, Petitioners-Appellees, v. Stephen JONES, Respondent-Appellant, G. Maurene Townsend, Intervenor-Appellant.

No. 78-1287.

United States Court of Appeals,

Tenth Circuit.

Submitted on Briefs July 17, 1978.

Decided Aug. 11, 1978.

Stephen Jones, Enid, Okl., filed memorandum opposing summary dismissal on behalf of appellant Jones.

M. Carr Ferguson, Gilbert E. Andrews, Charles E. Brookhart, and William A. Whitledge, Tax Div., Dept. of Justice, Washington, D. C., filed motion to dismiss on behalf of appellees.

Before LEWIS, BARRETT and LOGAN, Circuit Judges.

PER CURIAM.

This controversy began when the government petitioned the district court under 26 U.S.C. §§ 7402(b) ¹ and 7604(a) for judicial enforcement of an administrative summons issued by the Internal Revenue Service. The summons in question had been directed to an attorney (a third-party recordkeeper under 26 U.S.C. § 7609(a)(3)(E)) and sought information regarding his financial arrangements with a certain client who was the target of the IRS investigation.

Upon the filing of the government's petition for enforcement, Judge Chandler directed the entry of an order designating Charles R. Jones, a full-time United States Magistrate, ". . . to hear and determine all matters herein" in accordance with the local rules of the district court. A show cause order was promptly issued and the matter set for hearing. The respondent-attorney answered the government's petition and, in addition, the taxpayer sought to intervene in the enforcement proceedings as a matter of right under 26 U.S.C. § 7609(b)(1). The taxpayer's motion to intervene By appropriate motion, the government seeks dismissal of this and other related appeals for lack of appellate jurisdiction. In support of its motion, the government relies on our recent decision in United States v. First National Bank of Rush Springs, 576 F.2d 852 (10th Cir. filed May 16, 1978) in which we held that courts of appeal have no jurisdiction to review, directly, an order of a United States Magistrate enforcing an IRS summons and that review of such an order must, in the first instance, be sought in the district court. Appellants strenuously resist the motion to dismiss.

was granted and the case proceeded to a full-dress hearing before the magistrate. Evidence was offered both in support of and in opposition to enforcement. At the conclusion of the hearing, the magistrate found that aside from the claim by respondent and intervenor of an attorney-client privilege, the government had made a sufficient showing for enforcement of the summons. Following the submission of briefs on the issue of privilege, the magistrate, by memorandum opinion, rejected that claim and directed the government to prepare an appropriate order. Subsequently, an order purporting to compel compliance with the summons was signed by the magistrate, filed and entered on the district court's judgment docket. No further orders of any type were entered in the district court. This appeal is taken by respondent and intervenor from the magistrate's enforcement order.

The jurisdictional problem presented by this appeal is cut from the same fabric as the issue which confronted us in First National Bank of Rush Springs. In these cases, our attention focuses on not so much the role of the magistrate in the conduct of proceedings under §§ 7402(b) and 7604(a), but rather the effect of a magistrate's enforcement order and our authority under 28 U.S.C. § 1291 to review it. To resolve these questions, we look to the relevant decisions of the Supreme Court and this court, as well as, the Federal Magistrate's Act (28 U.S.C. § 631 Et seq.), the summons enforcement statutes and the district court's local rules.

When the government sought enforcement of the IRS summons, it invoked the jurisdiction of the District court under §§ 7402(b) and 7604(a). There is no indication that the petition for enforcement was presented directly to the magistrate. Rather, the magistrate's role was predicated solely on Judge Chandler's order under § 636(b)(3) designating him to conduct such further proceedings as were authorized by Rule 31 of the district court's local rules. ²

In pertinent part, Rule 31(3) states: ". . . a magistrate may perform the duties authorized by 28 U.S.C. § 636(b) and Rule 31(1), (g) through (n) and Rule 31(2), supra, Upon specific designation by a judge of the court or pursuant to a general order of the court . . . In performing such duties the magistrate shall conform to the general procedural rules of this court and The instructions of the judge to whom the case is assigned." (emphasis supplied). Rule 31(2)(m) authorizes a magistrate presiding in Oklahoma City to: "Issue an attachment or order to enforce obedience to an Internal Revenue Service Summons to produce records or to give testimony. 26 U.S.C. § 7604(b)". These sections, when read together, give more than ample indication that a magistrate in the Western District of Oklahoma has authority to conduct certain types of proceedings only on the "specific designation of a judge" and that the judge retains continuing and overall responsibility for the case.

Under the Federal Magistrate's Act, a district court may designate a magistrate to perform certain specific duties and: ". . . such additional duties as are not inconsistent with the Constitution and laws of the United States." The Supreme Court has made it clear that a magistrate exercising "additional duties" jurisdiction is continually subject to the inherent supervisory power of the district judge and that the Appellants argue that this court should accept jurisdiction because they have no right of review in the district court. This contention is meritless and we reject it. The district court's rules clearly and expressly provide that: "Any party may appeal from a magistrate's determination made under this Rule within ten (10) days after issuance of the magistrate's order . . .". Rule 31(1)(h). See also, Rule 31(1)(j). The provisions for review of a magistrate's determination which are embodied in the district court's local rules follow closely the appeal procedure set out in § 636(b)(1). In sum, we conclude that appellate-type review of "any portion" of the magistrate's order was available to appellants in the district court and, for reasons unknown, they apparently elected to bypass it.

judge retains the ". . . ultimate responsibility for decision making in every instance . . .". Mathews v. Weber, 423 U.S. 261, 270, 96 S.Ct. 549, 554, 46 L.Ed.2d 483 (1976). From the record, it appears that Judge Chandler's order of designation merely sent the enforcement matter to the magistrate for a limited purpose. Even under the most expansive reading, the judge's order and the local rules cited therein will not support a claim that the district court's Article III decisional power had been delegated to the magistrate. In any event, it is doubtful under Mathews whether such would be possible.

The question remains: Of what effect is the magistrate's order and how may it eventually be brought to this court for review? Notwithstanding appellants' failure to seek review in the district court, the magistrate's order is probably inchoate under provisions of the district court's rules and Mathews without the express approval and order of a judge. In relevant part Rule 31(1) (L ) provides: ". . . if there are no objections . . . within the time provided by this rule the findings and recommendations of the magistrate Shall become final and binding as to all parties upon the approval and order of the judge to whom the case is assigned." (emphasis supplied). Similarly, Rule 31(1)(n) states: ". . . . The entry of final judgment in Any civil case . . . shall be made by a judge . . . or at the direction of a judge." (emphasis supplied). These sections of Rule 31, in our view, simply restate the Mathews requirement that the final decision "in every instance" be made by an Article III judge. The appealability of the judge's order is, of course, governed by 28 U.S.C. § 1291 and Rule 4(a), F.R.A.P.

The appeal is dismissed for lack of a final judgment in accord with the views expressed in First National Bank of Rush Springs.

APPENDIX

RULE 31

UNITED STATES MAGISTRATES

1. Each United States Magistrate appointed by this Court is authorized to perform the duites ^* prescribed by 28 U.S.C. § 636(a), and may also:

(a) Exercise all the powers and duties conferred or imposed upon United States commissioners by law or the Federal Rules of Criminal Procedure;

(b) Administer oaths and affirmations, impose conditions of release under 18 U.S.C. § 3146, and take acknowledgements, affidavits and depositions;

(c) Try persons accused of minor offenses committed within this district in accordance with 18 U.S.C. § 3401, order a presentence investigation report on any such person who is convicted or pleads guilty or nolo contendere, and sentence such persons;

(d) Conduct removal proceedings and issue warrants of removal in accordance with Rule 40, Federal Rules of Criminal Procedure;

(e) Conduct extradition proceedings, in accordance with 18 U.S.C. § 3184; and (f) Supervise proceedings conducted pursuant to letters rogatory, in accordance with 28 U.S.C. § 1782.

(g) In accordance with 28 U.S.C. § 636(b)(1)(A), any magistrate who presides in Oklahoma City may hear and determine any pretrial motion or other pretrial matter, other than those motions specified in subparagraphs (i), (j), (k) and (L ), infra.

(h) Any party may appeal from a magistrate's determination made under this Rule within ten (10) days after issuance of the magistrate's order, unless a different time is prescribed by the magistrate or a judge. Such party shall file with the Clerk of the Court, and serve on all parties, a written notice of appeal which shall specifically designate the order or part...