Washburn v. Shapiro

• Decision Date: 10 February 1976
• Docket Number: No. WPB-75-72-Civ-CF.,WPB-75-72-Civ-CF.
• Citation: 409 F. Supp. 3
• Parties: Paul C. WASHBURN, Plaintiff, v. Leslie S. SHAPIRO, Director of Practice of the Internal Revenue Service, et al., Defendants.
• Court: U.S. District Court — Southern District of Florida

409 F. Supp. 3

Paul C. WASHBURN, Plaintiff, v. Leslie S. SHAPIRO, Director of Practice of the Internal Revenue Service, et al., Defendants.

No. WPB-75-72-Civ-CF.

United States District Court, S. D. Florida.

February 10, 1976.

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Farish & Farish, West Palm Beach, Fla., for plaintiff.

F. Kendall Slinkman, U. S. Dept. of Justice, Washington, D. C., Robert W. Rust, U. S. Atty., Miami, Fla., for defendants.

ORDER

BACKGROUND

FULTON, Chief Judge.

On April 16, 1975, plaintiff, Paul C. Washburn, an accountant, filed his complaint in this Court seeking review of the administrative proceedings which resulted in his disbarment from practicing before the Internal Revenue Service. Jurisdiction in this Court is asserted by virtue of 28 U.S.C. §§ 1332, 1340, 1343; 26 U.S.C. § 7402; and 42 U.S.C. § 1983. The defendants are Leslie S. Shapiro, the Director of Practice of the Internal Revenue Service of the United States Department of the Treasury; Richard R. Albrecht, General Counsel for the Department of the Treasury; Kenneth L. Travis, an administrative law judge acting on behalf of the Department of the Treasury; Leonard J. Ralston, a retired administrative law judge, who acted on behalf of the Department of the Treasury; William E. Simon, Secretary of the Department of the Treasury; and the Department of the Treasury which is part of the executive department of the United States government.

On July 12, 1973, in this Court, Paul C. Washburn was convicted of violating 26 U.S.C. § 7206(2) which prohibits willfully and knowingly aiding, assisting, counselling, procuring or advising the preparation or presentation to the Internal Revenue Service of a tax return which is fraudulent or false as to any material matter. This conviction arose from Washburn's having prepared a joint return for Edward B. McLean, which return Washburn signed for both Mr. McLean and his wife. Washburn, however, had no power of attorney to sign on Mrs. McLean's behalf, and knew that she had filed a separate return. The conviction was affirmed by the Fifth Circuit Court of Appeals, 488 F.2d 139 (1973). Washburn then filed a motion for new trial on the ground of newly discovered evidence in this Court, which motion was denied on February 14, 1974. The Fifth Circuit affirmed this denial, 500 F.2d 575 (1974), and the Supreme Court denied Washburn's petition for certiorari, 419 U.S. 1106, 95 S.Ct. 776, 42 L.Ed.2d 801 (1975).

On October 10, 1973, the Director of Practice, United States Department of the Treasury, notified plaintiff that he was considering the institution of disbarment proceedings against the plaintiff. These proceedings were instituted on February 14, 1974. Plaintiff's attorney moved for a continuance of the disbarment hearing which was set for May 29, 1974 based on the then pending appeal to the Fifth Circuit of the district court's denial of Washburn's motion for new trial. The motion for continuance was denied, and the hearing was held as scheduled on May 29, 1974.

The plaintiff (respondent, therein) did not personally appear at the hearing; however, he was represented by his present counsel. His attorney did not submit any evidence on his behalf, but did file a motion to dismiss based on the ground that plaintiff had not yet been finally convicted. The Director of Practice proffered no live witnesses, but submitted eleven documentary exhibits, mostly over plaintiff's objection.

On June 28, 1974, Administrative Law Judge Leonard J. Ralston, before whom the hearing had been held, retired, and the case was transferred to Administrative Law Judge Kenneth L. Travis. Judge Travis entered his initial decision on September 3, 1974. In his decision Judge Travis concluded that Washburn's conviction of an offense under 26 U.S.C. § 7206(2) constituted a conviction of a criminal offense under the revenue laws of the United States for which he might be disbarred or suspended from practice before the Internal Revenue Service. He held that Washburn had been shown to be disreputable within the meaning of 31 C.F.R. § 10.50 in view of his criminal conviction and the conduct supporting it. He ordered the respondent disbarred from further practice before the Internal Revenue Service subject only to the condition that if his conviction were nullified the disbarment would be terminated. The plaintiff appealed that decision and on February 24, 1975, the General Counsel of the Treasury Department issued his decision affirming the initial decision of the administrative law judge. The General Counsel's decision constitutes the final administrative action in the matter.

Plaintiff alleges that the administrative proceeding which resulted in his disbarment was conducted in such a manner as to deprive him of his right to substantive and procedural due process of law. In count I plaintiff seeks an injunction enjoining the defendants from preventing him from practising before the Internal Revenue Service and requiring his reinstatement. In count II, he seeks damages.

Defendants have filed a motion to dismiss or in the alternative for summary judgment asserting that there is no genuine issue as to any material fact and that they are entitled to judgment as a matter of law. Plaintiff has cross-moved for summary judgment.

The Court has reviewed all of the evidence, the initial decision of the administrative law judge, the affirmance by the General Counsel of the Treasury Department, and the memoranda filed by the parties in connection with the pending motions. The Court concludes that defendants' motion should be granted for a number of reasons to be hereinafter enumerated.

SUBJECT MATTER JURISDICTION

The first ground raised in defendants' motion to dismiss or for summary judgment is that the action should be dismissed for lack of subject matter jurisdiction. Defendants contend that 28 U.S.C. § 1340 and 26 U.S.C. § 7402 are insufficient to confer jurisdiction in this Court. In response to this argument plaintiff requested leave to amend his complaint to add several additional statutes as bases for jurisdiction, which leave was granted. Since it appears that the Court does have jurisdiction by virtue of 28 U.S.C. § 1332, the Court need not decide whether jurisdiction was validly conferred by 28 U.S.C. § 1340 or 26 U.S.C. § 7402.

IMMUNITY FROM SUIT

Since all of the personal defendants were or are officials in the federal government, defendants argue that count II which seeks damages should be dismissed as to them on the ground of official immunity. In Barr v. Matteo, 360 U.S. 564, 575, 79 S.Ct. 1335, 1341, 3 L.Ed.2d 1434 (1959), Justice Harlan held that a federal officer is immune from a civil suit for damages if he performs "discretionary acts at those levels of government where the concept of duty encompasses the sound exercise of discretionary authority." Thus an official must be performing the type of discretionary function that entitled him to immunity from suit, and the act complained of must be within the outer perimeter of the official's line of duty. See also Romeo v. United States, 462 F.2d 1036 (5th Cir. 1972); Norton v. McShane, 332 F.2d 855 (5th Cir. 1964). The purpose of the doctrine is to ensure that government officials are free to exercise their duties without fear of damage suits in respect to acts done in the course of their duties. Barr v. Matteo, supra.

Plaintiff argues that the doctrine of official immunity has been eroded by 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). In Bivens, the Court held that a claim for damages for violation of a person's fourth amendment rights states a cause of action. The Court expressly declined to consider the question of defendants' immunity because it had not been considered by the lower courts. On remand, the Second Circuit held that the federal officers in question were not immune from suit for damages. 456 F.2d 1339, 1343 (2d Cir. 1972). The Second Circuit found that the federal officers were performing police duties and that making an arrest is not deemed to be a discretionary function. Since it found that the defendants were not "performing discretionary acts at those levels of government where the concept of duty encompasses the sound exercise of discretionary authority," Barr v. Matteo, supra, 360 U.S. at 575, 79 S.Ct. at 1341, they were not entitled to the doctrine of immunity as established by Justice Harlan. Thus it is clear that the Second Circuit did not erode but merely followed the guidelines set out in Barr v. Matteo, and found the doctrine not applicable on the facts of the case.

Although there is no clear test to distinguish acts of discretion, Justice Harlan held that "the broader the range of responsibilities and duties . . . the wider the scope of discretion . . .." Barr v. Matteo, supra, 360 U.S. at 573, 79 S.Ct. at 1340. It is clear that the defendants here were acting at those levels of government where the concept of duty encompasses the sound exercise of discretionary authority, and on the basis of Barr v. Matteo, are immune from civil suit for damages.

Defendants also argue that in addition to official immunity, defendants Travis and Ralston are also immune from suit for civil damages on the basis of judicial immunity. Pierson v. Ray, 386 U.S. 547, 87 S.Ct. 1213, 18 L.Ed.2d 288 (1967). Accordingly, the Court concludes that count II of the complaint in which damages is sought must be dismissed as to the personal defendants.

The Department of the Treasury is not an entity subject to suit and therefore should be dismissed from the complaint. Krouse v. United States Government Treasury Department Internal Revenue Service, 380 F.Supp. 219 (C.D. Cal.1974). See Blackmar v. Guerre, 342 U.S. 512, 72 S.Ct. 410, 96 L.Ed. 534 (1952) (Civil Service Commission could not be sued); United States Department of Agriculture v. Hunter, 171 F.2d 793 (5th Cir. 1949) (...