Attachment not available electronically.
UNITED STATES COURT OF APPEALS
Filed 5/9/96
FOR THE TENTH CIRCUIT
________________________
ALVIN STJERNHOLM; ELSIE STJERNHOLM, )
)
Plaintiffs-Appellants, )
)
v. ) No. 95-1435
) (D.C. No. 94-S02412)
BARBARA PETERSON, DOROTHY A. BAN, ) (D. Colo.)
DEBBIE J. BROWN, individually and in their )
official capacities; INTERNAL REVENUE )
SERVICE; UNITED STATES OF AMERICA, )
)
Defendants-Appellees. )
__________________________
ORDER AND JUDGMENT*
_________________________
Before BRORBY, EBEL and HENRY, Circuit Judges.
__________________________
After examining the briefs and appellate record, this panel has determined unanimously that
oral argument would not materially assist the determination of this appeal. See Fed. R. App. P.
34(a); 10th Cir. R. 34.1.9. The cause is therefore ordered submitted without oral argument.
Mr. and Mrs. Stjernholm are pro se litigants whose tax liability was judicially established.
*
This order and judgment is not binding precedent, except under the doctrines of law of the case,
res judicata, and collateral estoppel. The court generally disfavors the citation of orders and judgments;
nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
2
The Stjernholms commenced this action asserting illegal and negligent conduct occurred when the
United States levied upon their property. The trial court dismissed their complaint and Mr. and Mrs.
Stjernholm appeal this decision. We affirm the decision of the trial court.
The facts are neither complex nor disputed. The tax liability of Mr. and Mrs. Stjernholm was
judicially established in 1991. See Stjernholm v. Commissioner, 933 F.2d. 1019, 1991 WL 88498
(10th Cir. May 22, 1991), aff’g 58 T.C.M. (CCH) 389 (1989). The United States seized property
belonging to Mr. and Mrs. Stjernholm in April 1992, and this property was then sold at auction in
June 1992. The property was seized and sold in the state of Wyoming. In August 1992, Mr. and
Mrs. Stjernholm published a "Public Notice" in a newspaper of general circulation in Cheyenne,
Wyoming. This notice reflected Mr. and Mrs. Stjernholm's opinion that the manner of the seizure
and sale of their property violated the "1989 Taxpayers Bill of Rights." It also charged their property
was sold for a small fraction of its value and the Stjernholms complained of procedural violations
and IRS employees' violations of the IRS Code and illegal activities concerning the seizure and sale
of their property.
Mr. and Mrs. Stjernholm commenced an earlier suit which was dismissed due to the fact they
had not exhausted their administrative remedies by filing a claim as required by the FTCA. In
dismissing this suit, the trial court stated damages could not "be awarded until and unless the
available administrative remedies have been exhausted."
Mr. and Mrs. Stjernholm commenced this action on October 21, 1994, in the District of
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Colorado, against the "United States," the "Internal Revenue Service" and three individuals who
were employed by the Internal Revenue Service, each being sued individually and in her official
capacity. The complaint set forth numerous causes of action, all of which can be characterized by
stating the Stjernholms alleged unconstitutional, illegal and negligent conduct concerning the
methods employed in seizing and selling their property.
The trial court granted Defendants' motions to dismiss. The Bivens1 claims against the IRS
employees were dismissed because the existing statutory design was deemed the exclusive remedy
for damages caused by the reckless or intentional disregard of the Internal Revenue Code and the
regulations thereunder. The action against the IRS employees was also dismissed for improper
venue, the court noting that the transfer of the action to Wyoming would be futile since Plaintiffs'
claim was barred by the statute of limitations. The trial court dismissed plaintiffs' claim against the
IRS employees under I.R.C. § 7433 after concluding the United States and not the individual
employees is the proper defendant under this statute. The trial court dismissed plaintiffs' Bivens
action against the United States after concluding the United States had not waived sovereign
immunity in such action. The claim, based upon the Federal Tort Claims Act, was dismissed as
barred by the tax exception clause in the FTCA. Finally, the court dismissed the claim under I.R.C.
§ 7433(d)(3) as being barred by the two-year statute of limitations based upon the public notice
published by Mr. and Mrs. Stjernholm.
1
Bivens v. Six Unknown Agents, 403 U.S. 388 (1971).
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Mr. and Mrs. Stjernholm appeal this decision asserting: (1) the trial court erred in dismissal
of the complaint on the basis of the law of the case and the statute of limitations and argued they
merely followed the instruction of the court contained in the dismissal of their first suit in bringing
this action; (2) the United States has waived its sovereign immunity under I.R.C. § 7433(a); (3) the
FTCA does not apply as the actions of the individual defendants were not actions taken in respect
of the assessment or collection of a tax; (4) The trial court's order in dismissing the first suit
authorized them to file a Bivens claim against the individual defendants following exhaustion and
it is clear that the action of the employees amounted to an "unjust taking"; (5) The Fifth Amendment
is available as a remedy; and (6) the trial court had no basis to raise the venue issue.
Individual federal employees may be sued for violating rights protected by the United States
Constitution; however, such suits are not authorized where Congress has "expressly precluded the
creation of such remedy by declaring that existing statutes provide the exclusive mode of redress."
See Bush v. Lucas, 462 U.S. 367, 373 (1983); National Commodity & Barter Ass'n v. Gibbs, 886
F.2d 1240, 1248 (10th Cir. 1989). Plaintiffs' sole remedy, therefore, is an action based upon the
provisions contained in the Internal Revenue Code.
26 U.S.C. § 7433 allows a taxpayer to bring a civil action against the United States for
damages arising from reckless or intentional violation of the IRS Code or Regulation by its officers
or employees. The conduct set forth by the plaintiffs against the individual defendants falls directly
within the provision of § 7433. Plaintiffs' remedy for these violations is solely against the United
States.
5
26 U.S.C. § 7433 contains a statute of limitations. It provides "an action to enforce liability
created under this section ... may be brought only within 2 years after the date the right of action
accrues." The applicable regulation provides "A cause of action under ... this section accrues when
the taxpayer has had a reasonable opportunity to discover all essential elements of a possible cause
of action." I.R.C. 7433(g)(2). The August 21, 1992 "Public Notice" published by Mr. and Mrs.
Stjernholm plainly shows they then knew all essential elements of their claim. The disallowance of
the claim filed by Mr. and Mrs. Stjernholm did not commence the running of the statute of
limitations. Mr. and Mrs. Stjernholm ask us to apply the case of Gonsalves v. United States, 782 F.
Supp. 164 (Maine 1994). This case is inapposite as the current regulation defining the
commencement of the accrual was not adopted until after Gonsalves was decided.
The remaining errors asserted by Mr. and Mrs. Stjernholm are not persuasive and warrant no
further discussion. We affirm the decision of the trial court for substantially the same reasons set
forth by the trial court in its concise and well reasoned Memorandum Opinion and Order, a copy
thereof being attached.
Entered for the Court:
WADE BRORBY
United States Circuit Judge
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