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LOJESKI v. BOANDL (04/22/86)

April 22, 1986

LOJESKI, SHIRLEY A., APPELLANT IN 85-1354 AND 85-1587
v.
BOANDL, RICHARD, REVENUE AGENT; ROSENBLUM, LARRY, GROUP MANAGER; MACHOWSKI, THEODORE J., REVIEWER; BEYER, WAYNE, CHIEF, EXAMINATION BRANCH THREE; WEISS, CARL, CHIEF, QUALITY REVIEW STAFF; HILGEN, ROBERT, CHIEF, EXAMINATION DIVISION; JESSUP, GEORGE, REVENUE OFFICER; PFEIFFER, RAYMOND, J., GROUP MANAGER; WEST JENNINGS L., CHIEF, COLLECTION DIVISION; WISE, THOMAS A., CHIEF, CRIMINAL INVESTIGATION DIVISION; RIDEOUTTE, JAMES T., DISTRICT DIRECTOR; INTERNAL REVENUE SERVICE, APPELLANT IN 85-1289 AND 85-1586



Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civil Action No. 84-3591).

Author: Stapleton

Stapleton, Circuit Judge:

Opinion OF THE COURT

Shirley A. Lojeski brought this action in the United State District court for the Eastern District of Pennsylvania alleging that Internal Revenue Service ("IRS") Revenue Agent Richard Boandl and Revenue Officer George Jessup had violated her rights under the Fourth and Fifth Amendments to the United States Constitution. Following a bench trial, the district court entered judgment against Boandl and Jessup for compensatory damages and attorney fees. They appeal that judgment. Ms. Lojeski cross-appeals from the district court's refusal to award punitive damages and a greater amount of compensatory damages. We reverse.

I.

Ms. Lojeski has resided with Thomas Treadway on her Pipersville, Pennsylvania, farm since 1980. In December of 1979, Revenue Agent Boandl commenced the examination of the tax returns of Thomas Treadway for the years 1977 through 1980. In February of 1982, Agent Boandl proposed to Mr. Treadway an adjustment of $247,000.00, including penalties and interest. Mr. Treadway rejected this proposal. Believing that Mr. Treadway had liquidated his real estate holdings and disbursed the proceeds to Ms. Lojeski in order to shield his assets from a tax assessment. Agent Boandl sought and receive the permission of his supervisor, Group Manager Larry Rosenblum, to apply a 26 U.S.C. § 6861 (1982) jeopardy assessment and a 26 U.S.C. § 6851 (1982) termination assessment against Mr. Treadway.

Pursuant to these assessments and under the authority of 26 U.S.C. § 6321 (1982). Revenue Officer George Jessup filed a lien against Ms. Lojeski's farm, on or about August 3, 1982. He also levied, under 26 U.S.C. § 6331 (1982), on her bank accounts, which contained over $20,000.00. However, Revenue Officer Jessup failed to obtain the approval of the IRS Regional Counsel, as required by the Internal Revenue Manual P 5424.33, before filing notices of lien and levy on the ground of nominee liability.

Pursuant to 26 U.S.C. § 7429(a) (1982), an administrative review of these actions was undertaken. On September 23, 1982, an IRS appeals officer, John Percaccio, concluded that the assessments against Mr. Treadway were not reasonable. Mr. Percaccio recommended abatement of the assessments.

Boandl and Jessup unsuccessfully appealed this decision. On November 30, 1982, then lien on Ms. Lojeski's farm was released and in January of 1983 Ms. Lojeski's bank account funds were returned with interest.

On July 15, 1984, Ms. Lojeski brought this Bivens action against appellants alleging violations of her Fifth Amendment procedural due process and Fourth Amendment rights. See Bivens v. Six Unknown Agents, 403 U.S. 388, 29 L. Ed. 2d 619, 91 S. Ct. 1999 (1971). She claimed damages flowing from threats of foreclosure on her farm, a lost opportunity to sell her farm, suspension of her horse breeding operation for lack of operating cash, a suit by a supplier for failure to pay a bill, the borrowing of money for living expenses, a lost opportunity to purchase health and life insurance policies, humiliation, and "degradation." Ms. Lojeski prevailed on her Fourth Amendment and Fifth Amendment due process claims. Although Ms. Lojeski was denied punitive damages, she was awarded compensatory damages. Thereafter, the district court awarded attorney fees under 26 U.S.C. § 7430 (1982).

II.

Boandl and Jessup assert that we need not reach the merits of this case. They claim that the district court's recognition of an implied cause of action under Bivens v. Six Unknown Agents, 403 U.S. 388, 29 L. Ed. 2d 619, 91 S. Ct. 1999 (1971), is improper because the Congress has provided exclusive statutory causes of action. See Bush v. Lucas, 462 U.S. 367, 76 L. Ed. 2d 648, 103 S. Ct. 2404 (1983); Carlson v. Green, 446 U.S. 14, 64 L. Ed. 2d 15, 100 S. Ct. 1468 (1980). Ms. Lojeski, they urge, could have brought civil actions against the United States under 26 U.S.C. § 7426(a) (1982) for wrongful levy on her bank accounts, under 26 U.S.C. § 7426(b) (1982) to enjoin the enforcement of levy, and under 28 U.S.C. § 2410 (1982) to quiet title to her farm. Appellees also assert that they enjoy either absolute immunity under Butz v. Economou, 438 U.S. 478, 57 L. Ed. 2d 895, 98 S. Ct. 2894 (1978), or qualified immunity under Harlow v. Fitzgerald, 457 U.S. 800, 73 L. Ed. 2d 396, 102 S. Ct. 2727 (1982).

Boandl and Jessup do not enjoy absolute immunity. This is clear from Mitchell v. Forsyth, 472 U.S. 511, 105 S. Ct. 2806, 86 L. Ed. 2d 411 (1985), where the Supreme Court refused to extend absolute immunity to the Attorney General of the United States. The Court held that when the Attorney General performs an investigatory function, he is not absolutely immune because that function is not historically immune, does not subject the Attorney General to "vexacious litigation," and is not restrained by the checks that prevent abuse of legislative and judicial authority. Id. 105 S. Ct. at 2813-2814.

The same reasoning applies here. There is nothing about the function performed by appellees on behalf of the IRS that is adjudicatory in nature. Therefore, the rationale of Economou, that judicial immunity should be extended to executive officials performing adjudicatory functions, does not apply. See Hicks v. Feeney, 770 F.2d 375, 379 n.2 (1985) ("Both Harlow and Forsyth teach that absolute immunity is a 'functional immunity,' related to the particular ...


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