TPs Never Die - They Just Keep Appealing

[The Observer]

I came across this appeal and looked at the earlier appeal (posted subsequently). It caught my interest, not only for the screwball argument about whether a law from 1791 was constitutional, but also because the prior appeal had the issue of where some members of the jury appeared to be seriously considering not convicting because of their disagreement with the law and their intepretation of the Constitution.

The cases imply that Mr. Stuler may have been a member of a tax-protest organization and I suspect that it might have been Save-A-Patriot. Anyone know anything about this trial and/or appeals?


LARRY L. STULER,
Appellant
v.
UNITED STATES OF AMERICA; INTERNAL REVENUE SERVICE;
FEDERAL BUREAU OF PRISONS; D. BLYNN, I.R.S. REVENUE OFFICER,
K. EISENBART, I.R.S. REVENUE OFFICER, MARY SOMMA, I.R.S.
CUSTODIAN OF RECORDS; FRANK REVAK, I.R.S. TAX AUDITOR,
JOHN DOE AGENTS, OF THE INTERNAL REVENUE
SERVICE; COMMISSIONER OF THE INTERNAL REVENUE SERVICE, EACH IN THEIR
OFFICIAL AND INDIVIDUAL CAPACITY; WILLIAM COHAN, ESQ.

Release Date: NOVEMBER 25, 2008


NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Civil No. 07-cv-00642)
District Judge: Honorable Alan N. Bloch

Submitted for Summary Action Pursuant to Third Circuit LAR 27.4
and I.O.P. 10.6 November 6, 2008

Before: SLOVITER, FUENTES and JORDAN, Circuit Judges

(Opinion filed November 25, 2008 )

OPINION

PER CURIAM

Appellant, Larry Stuler, appeals the District Court's order granting defendants' motions to dismiss his complaint pursuant to Fed. R. Civ. P. 12(b)(6). For essentially the reasons set forth by the District Court, we will affirm.

Because the parties are all too familiar with the facts and procedural history underlying this cause of action, we only briefly recount them here. On May 15, 2007, Stuler -- who was convicted in July 2001 of three counts of willfully failing to file federal income tax returns and sentenced to two years imprisonment followed by a year of supervised release -- initiated an action against the United States, the Internal Revenue Service ("IRS"), the Bureau of Prisons, named employees and/or former employees of these governmental bodies and agencies, and his former criminal defense attorney, William Cohan. Stuler's complaint was amended on two occasions. In his second amended complaint, Stuler asserted the following causes of action: 1) declaratory relief pursuant to the Declaratory Judgment Act; 2) intentional violation of the Internal Revenue Code and/or regulations under 26 U.S.C. section 7433; 3) wrongful levy under 26 U.S.C. section 7426; 4) unjust tax lien pursuant to 26 U.S.C. section 7432 and 28 U.S.C. section 2410; 5) civil rights violations under 42 U.S.C. sections 1983 and 1985; and 6) an independent action to invalidate his conviction as a result of fraud on the court. In addition to various forms of declaratory and injunctive relief, Stuler sought monetary damages in excess of five million dollars. The named defendants sought to have the second amended complaint dismissed pursuant to, inter alia, Fed. R. Civ. P. 12(b)(6). In an Order entered on April 8, 2008, the District Court granted the motions and dismissed the complaint in its entirety. This timely appeal followed.

We have jurisdiction over the instant appeal pursuant to 28 U.S.C. section 1291. Our review of a dismissal under Fed. R. Civ. P. 12(b)(6) is de novo. See Phillips v. County of Allegheny, 515 F.3d 224, 230 (3d Cir.2008). In considering a Rule 12(b)(6) motion, a court is required to "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008), quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n. 7 (3d Cir. 2002). See also Bell Atlantic Corp. v. Twombly, __ U.S. __, 127 S.Ct. 1955, 1969 n. 8 (2007). "'[S]tating . . . a claim requires a complaint with enough factual matter (taken as true) to suggest' the required element." Phillips, 515 F.3d at 234, (quoting Twombly, 127 S.Ct. at 1965). Stated differently, the "[f]actual allegations [of the complaint] must be enough to raise a right to relief above the speculative level." Id.

Having carefully reviewed the record and the parties' submissions, we conclude that the District Court's dismissal under Rule 12(b)(6) was proper even affording Stuler the liberal construction due a pro se litigant under Haines v. Kerner, 404 U.S. 519, 520 (1979). As the defendants argued and as the District Court concluded, the bulk of Stuler's complaint is little more than a thinly veiled attempt to attack his criminal conviction obtained at United States v. Stuler, W.D. Pa. Crim. No. 01-cr-00035, under the guise of a civil action./1/ Any such attack is, however, barred by the favorable termination rule of Heck v. Humphrey, 512 U.S. 477, 481-82 (1994). We affirmed Stuler's judgment of conviction on direct appeal, see United States v. Stuler, 39 Fed. Appx. 737 (3d Cir. 2002) and his motion to vacate sentence filed pursuant to 28 U.S.C. section 2255 was dismissed by the District Court in May 2006. Moreover, any Bivens claim that even arguably survives the Heck bar is precluded, inter alia, by the two year limitations period.

The remainder of Stuler's claims fare no better. His request for declaratory relief against the IRS is precluded insofar as Congress has preserved the immunity of the United States -- which the IRS shares -- from declaratory and injunctive relief with respect to all tax controversies except those pertaining to the classification of organizations under the Internal Revenue Code. See 28 U.S.C. section 2201(a); 26 U.S.C. section 7421(a). See also Murphy v. I.R.S., 493 F.3d 170, 174 (D.C. Cir. 2007). With respect to Stuler's allegations regarding violations under 26 U.S.C. sections 7426, 7432 and 7433, he has, inter alia, failed to allege the exhaustion of administrative remedies and thus deprived the District Court of jurisdiction to consider these claims. See Venen v. United States, 38 F.3d 100, 103 (3d Cir. 1994). While certain claims are cognizable against the United States under 28 U.S.C. section 2410, the sovereign immunity waived under that section extends "to a suit 'which challenges the validity of a federal tax lien and sale so long as the taxpayer refrains from contesting the merits of the underlying tax assessment itself.'" Robinson v. United States, 920 F.2d 1157, 1159 (3d Cir. 1991), quoting Aqua Bar & Lounge, Inc. v. United States, 539 F.2d 935, 939-40 (3d Cir. 1976). As the District Court correctly noted, Stuler most certainly contests the merits of the underlying tax assessment.

Finally, we can find no fault with the District Court's conclusion that, even assuming that an independent action alleging fraud on the court can be used to circumvent the limitations imposed on collateral attacks of a criminal conviction, the allegations contained in Stuler's complaint (which had been amended twice) fall far short of the particularity requirement needed to state such a claim. See, e.g., Lum v. Bank of America, 361 F.3d 217, 220 (3d Cir. 2004) ("Federal Rule of Civil Procedure 9(b) requires that the fraud be pled with specificity."). See also Herring v. United States, 424 F.3d 384, 386-87, 390 (3d Cir. 2005). We would further note that we denied no fewer than five such motions filed by Stuler on direct appeal following the entry our judgment affirming his criminal conviction. See United States v. Stuler, C.A. No. 01-3914 (Orders issued on 7/16/03, 11/3/03, 1/12/06, 6/8/06 and 7/13/06).

In his submission to this Court in opposition to appellees' motion for summary action, Stuler asks us to "rule on the constitutionality of the Act of Congress approved on March 3, 1791, that established 'internal duties' based upon a patent within the jurisdiction of Great Britain." See Response at 9. Although quite convoluted, Stuler's argument appears to be an attempt to challenge the District Court's jurisdiction over his criminal proceeding. We will decline Stuler's invitation. This Court, in its order disposing of Stuler's second of five motions seeking to recall the mandate in his direct criminal appeal, has previously concluded that the District Court did indeed have jurisdiction over the underlying criminal action. See C.A. No. 01-3914 (Order issued 11/3/03 concluding, in relevant part, that "the District Court had jurisdiction to adjudicate [the three federal offenses under 26 U.S.C. section 7203]."). We will not revisit that issue here.

Accordingly, because the District Court properly dismissed Stuler's complaint and no substantial question is presented by this appeal, we will grant appellees' motion and summarily affirm the order of dismissal. See Third Circuit LAR 27.4 and I.O.P. 10.6.

FOOTNOTE

/1/ Of course, Stuler's claim is properly considered as one brought under Bivens v. Six Unknown Federal Narcotics Agents, 403 U.S. 388 (1971)

[The Observer]

UNITED STATES OF AMERICA
v.
LARRY STULER
Appellant

Release Date: JUNE 25, 2002

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

On Appeal From The United States District Court
For the Western District of Pennsylvania
(D.C. Crim. No. 00-cr-00035)
District Judge: Honorable Alan N. Bloch

Submitted Pursuant to Third Circuit LAR 34.1(a)
May 3, 2002

BEFORE: ROTH and STAPLETON, Circuit Judges, and POLLAK,/*/ District Judge

(Opinion filed June 25, 2002)

OPINION OF THE COURT

STAPLETON, Circuit Judge:

[1] Appellant Larry Stuler was convicted of willful failure to file federal income tax returns in 1994, 1995 and 1996. He was sentenced to two years of imprisonment, one year of supervised release, and a fine of $ 20,000.

I.

[2] During individual voir dire, each juror selected gave a negative response to the following questions:

Do you have such strong feelings about the tax laws, or the tax
system of the United States, or the IRS that your feelings would
prevent you from rendering a fair and impartial verdict in this
case?

Do you have such strong feelings about individuals who have not
filed income tax returns, and/or not paid income taxes, or who
belong to organizations that seek evasion or abolition of the
individual income tax laws, that your feelings would prevent you
from rendering a fair and impartial verdict in this case?

Each of the jurors selected took the customary oath to "well and
truly try this case . . . and a true verdict render according to
the evidence and the law as given to you by the Court." App. II
at 182; App. III at 664.

[3] At the conclusion of evidence, the Court instructed the jury, inter alia, that it was the Court's job to determine the rules of law which they must follow even if they disagreed with them and that it is the Court's job to decide punishment and they should not consider or discuss it.

[4] On July 19, 2001, after deliberating for approximately four hours, the jury sent a note indicating they were at an impasse, and the Court delivered the following instruction in response without objection:

It is desirable if a verdict can be reached, but your verdict
must represent the conscientious judgment of each juror. It is
your duty, as jurors, to consult with one another and to
deliberate with a view to reaching an agreement, if you can do
so without violence to individual judgment. Each of you must
decide the case for yourself, but do so only after an impartial
consideration of the evidence in the case with your fellow
jurors.

In the course of your deliberations, do not hesitate to
reexamine your own views and change your opinion, if convinced
it is erroneous. But do not surrender your honest conviction as
to the weight or effect of evidence solely because of the
opinion of your fellow jurors or for the mere purpose of
returning a verdict.

While you may have honest differences of opinion with your
fellow jurors, during the deliberations, each of you should
seriously consider the arguments and opinions of the other
jurors. Do not hesitate to change your opinion, if after
discussion of the issues and consideration of the facts and
evidence in this case you are persuaded that your initial
position is incorrect.

However, I emphasize that no juror should vote for a verdict
unless it represents his or her conscientious judgment.

App. III at 647-48.

[5] During the second day of deliberations, after approximately three hours of deliberation, the jury sent the following note to the Court:

7/20/01

Your Honor

As a sworn juror, I/we feel obligated to bring to the Court's
attention a significant matter. On page 3 of your instructions,
our ". . . sworn duty is to decide the case without bias, or
prejudice, to any party. The law does not permit (us) to be
governed by sympathy, prejudice, bias, or public opinion. Both
the accused and the public expect that (we) will carefully and
impartially consider all evidence in the case, follow the
law/1/ as stated by the Court/1/ and reach a just
verdict based on the evidence, without regard for the
consequences./2/" Also, on page 1, "anything you may have
seen, or heard, outside the courtroom is not evidence/3/
and must be entirely disregarded. (Our) decision in this case
must be made solely on the evidence presented at the trial."

I/we recognize the last sentence of the Court's instructions: "I
caution you, however, . . . you should never state or specify
(the) numerical division at that time." I/we assure the Court
that I/we have done my best to make certain the "numerical
division" is not made known.

I/we have a fellow juror/jurors who have answered yes to each of
the three elements outlined on page 13; however, because of
his/her or their "votes and feelings against the system and
Constitution and the defendant's right to protest" he/she or
they will not vote guilty or would rather abstain.

I/we have repetitively re-read the Court's instructions, as well
have carefully presented all evidence to him/her or them.
Particularly, page 17, "If you find from your consideration of
all of the evidence that the government has proved beyond a
reasonable doubt each and every one of the elements discussed
above with regard to any of the counts set forth in the
indictment, then you should find the defendant guilty as to the
count."

Respectfully,

Sean Rollman
(Read and submitted by all jurors)

FOOTNOTES TO QUOTE

/1/He/she or they don't agree with the law as stated by
the Court's instructions.

/2/He/she or they do not want the defendant to serve a
jail term.

/3/Individual/individuals are relying on past items
he/she or they have heard about the Constitution in an
encyclopedia.

END OF FOOTNOTES TO QUOTE

Also, he/she or they are basing his/her or their decisions on
other cases they heard about.

App. III at 654-56, 659-62.

[6] After defense counsel objected to any further instructions to the jury, the Court advised the jury as follows:

It is the Court's job and only the Court to decide what rules of
law to apply to this case. You must follow all of these rules.
You may not follow some and ignore others. Even if you disagree
or do not understand the reasons for these rules of law, you're
bound by your oath that you took at the beginning of this trial
to follow the rules of law that have been set forth in the
instructions of this Court.

Members of the jury, in reaching a verdict, you may not consider
the consequences of your verdict. Under your oath, as jurors,
you cannot consider the punishment that may be imposed. The duty
of imposing sentence rests exclusively with the Court.

Your function is to weigh the evidence and decide the issue of
the defendant's guilt or non-guilt solely upon the evidence or
lack of evidence and the law, which I have given to you and
which you must apply.

In determining the facts you, the jury, are reminded that before
each member of the jury was accepted and sworn to act as a
juror, he or she was asked questions concerning competency,
qualifications, fairness and freedom from bias or prejudice. On
the faith of those answers, each juror was accepted by the
parties. Therefore, those answers are binding on each of you
jurors now as they were then and should remain so until the jury
is discharged from consideration of this case.

One of those questions asked was "Do you have such strong
feelings about the United States government, the criminal
justice system, or the prosecution of criminal cases, that your
feelings would prevent you from rendering a fair and impartial
verdict in this case?"

Each of you answered, under oath, that you did not have such
feelings.

You were also asked "Do you have such strong feelings about the
tax laws or the tax system of the United States or the Internal
Revenue Service that your feelings would prevent you from
rendering a fair and impartial verdict in this case?"

Each of you answered no, under oath, that you did not have those
feelings. During the course of the trial, you received all of
the evidence that you may properly consider to decide this case.
Anything that you may have seen, or heard, or read, outside of
the courtroom is not evidence and must be entirely disregarded.

Your decision in this case must be made solely on the evidence
presented at the trial. You may also not consider anything you
may have heard, or read, or read about in other court cases.

Prior to the start of this trial, an oath was administered to
you. That oath stated "You, and each of you, do solemnly swear
by Almighty God that you will well and truly try this issue
joined between plaintiff and defendant at Criminal No. 01-35 and
a true verdict render according to the evidence and the law as
given to you by the Court. So help you God."

Each of you has sworn to do that. It would be a violation of
your duty under the law and your oath as jurors if you do not do
that.

App. III at 673-75.

[7] Following a suggestion from the government that Fed. R. Crim. P. 23(b) and 24(c)(3) permitted replacement if one or more jurors was unable to comply with the Court's instructions, the Court inquired as to whether any juror was unwilling or unable to follow its instructions. There were no positive responses.

[8] The jury reached a verdict approximately 50 minutes later.

[9] We do not view the District Court's supplemental instructions and question as coercive or in any other way inconsistent with the teachings of United States v. Fioravanti, 412 F. 2d 407 (3d Cir. 1969), and its progeny. The Court did nothing more than address the matters raised in the jury's note by "encourag[ing] [them] to fulfill their duty" and confirming that they remained willing and able to do so. United States v. Eastern Medical Billing, 230 F. 3d 600, 615 (3d Cir. 2000). Nor do we believe that the District Court handled the proceeding in a way that violated Fed. R. Evid. 606(b) or the principles announced in United States v. Thomas, 116 F. 3d 606 (2d Cir. 1997), and United States v. Stansfield, 101 F. 3d 909 (3d Cir. 1996). It did not inquire into the deliberations of the jury, and it did not respond to a jury note, like the one in Thomas, revealing the view of individual jurors about the sufficiency of the government's evidence. Contrary to appellant's assertion, the Court's instructions did convey that being dead-locked was an acceptable result.

II.

[10] During closing argument, defense counsel referred to "lobbyists, who spend millions of dollars to influence the Congress of the United States to pass special rule to . . ." He was interrupted by the Court which characterized this as "improper argument" and suggested that counsel "go on to something else." Contrary to appellant's suggestion, the Court did not prevent defense counsel from making the point that the tax laws are complex. We perceive no impropriety.

[11] Later, in the course of an argument that appellant honestly believed he was not a person required to file an income tax return, defense counsel referred to the Dred Scott decision and asserted that the Supreme Court there ruled in 1862 that a person of African descent was not a person. The Court sustained the government's objection. The Supreme Court's holding that Dred Scott "was not a citizen of Missouri within the meaning of the Constitution of the United States" was not relevant to any issue in this case, and counsel was not foreclosed from making his concededly relevant argument.

[12] Appellant's final contention relates to a side comment made by defense counsel in the context of the following segment of argument:

If you'll recall, Mr. Stewart left his business card at the door
at 565 Addison, where Mr. Stuler has lived for the last eighteen
years. Although, the government would have you believe he's
lived there for the last thirty-two years, because they got the
wrong address on it. But that's okay. I mean, minor point.

You will see in all those exhibits that they say his address is
565 Addison. So, 1969, 1970, '71, '72, '73, '74, '75, '76, '77,
'78, '79, '80, he didn't move there until 1983. But, minor
point. Anyway, he was there from 1983 on.

The trash. September of 1997. It wasn't even created until
September of 1997. So, there it is. It says revised, September,
1997 right, right here on these hundred numbered pages from the
trash. But Mr. Stuler had stopped filing in 1981. And, for
whatever mistaken reason, the IRS says, well, he filed in 1982.

He, he didn't file in 1982, ladies and gentlemen. They got a
piece of paper that somebody prepared somewhere because they're
computer-made. Another mistake. That said that he filed and got
a refund. And he didn't file and he didn't get a refund.

MR. DILLON: Your Honor, I have to object.

THE COURT: Sustained. There is no evidence of that. Don't
argue things that aren't in evidence.

MR. COHAN: But I am going to argue the lack of evidence.
The lack of evidence to prove beyond a reasonable doubt
that Larry Stuler knew that he was a person required,
because of all the evidence that you have before you, that
Mr. Stuler didn't know that he was a person required.

Now, I am going to draw your attention to this special agent's
report that I asked Mr. Stewart about. And, perhaps, you will
recall that I drew his attention to page sixteen. . . .

App. III at 627-28.

[13] The Court was correct that there was no evidence that Stuler had not filed an income tax return in 1982. An IRS records custodian testified that Stuler filed a tax return and obtained a refund in 1982. This evidence was not challenged on cross- examination, and neither Stuler nor any other witness asserted that he did not file a tax return in 1982.

[14] It is quite true, as appellant stresses, that counsel was entitled to argue that the government's evidence was insufficient to prove Stuler's knowledge of his duty to file beyond a reasonable doubt. But counsel was permitted by the Court to make that argument once he made it clear that he was not mischaracterizing the evidence, but rather arguing that the evidence on the point was mistaken. Moreover, given the context, the fact that Stuler had filed from 1969-1980, and the record as a whole, we are confident beyond a reasonable doubt that this ruling of the Court did not affect the outcome.

III.

[15] The judgment of the District Court will be affirmed.

TO THE CLERK:

[16] Please file the foregoing Not Precedential Opinion.

/s/ Walter K. Stapleton
Circuit Judge

FOOTNOTE

/*/Honorable Louis H. Pollak, United States District Judge for the Eastern District of Pennsylvania, sitting by designation.