United States District Court, E.D. Washington
ORDER DENYING PLAINTIFF'S MOTION FOR
RECONSIDERATION PURSUANT TO RULE 59(A)(2)
SALVADOR MENDOZA, JR. United States District Judge.
the Court, without oral argument,  is pro se Plaintiff
John Schlabach's Motion for Reconsideration Pursuant to
Rule 59(a)(2), ECF No. 27. Schlabach asks the Court to
reconsider its March 25, 2019 order granting Defendant the
United States of America's converted motion for summary
judgment, ECF No. 25. Having reviewed the file and relevant
legal authorities, the Court denies Schlabach's motion
cites Federal Rule of Civil Procedure 59(a)(2) as authority
for his motion for reconsideration. ECF No. 27 at 1. But that
rule governs a motion for a new bench trial. See
Fed. R. Civ. P. 59(a)(2). Because Schlabach filed his motion
for reconsideration within twenty-eight days of entry of
judgment in favor of the United States, the Court construes
it as a motion to alter or amend the judgment under Rule
59(e). See Rishor v. Ferguson, 822 F.3d 482, 489-90
(9th Cir. 2016); Am. Ironworks & Erectors, Inc. v. N.
Am. Constr. Corp., 248 F.3d 892, 898-99 (9th Cir. 2001).
or amending a judgment under Rule 59(e) “is an
‘extraordinary remedy' usually available only when
(1) the court committed manifest errors of law or fact, (2)
the court is presented with newly discovered or previously
unavailable evidence, (3) the decision was manifestly unjust,
or (4) there is an intervening change in the controlling
law.” Rishor, 822 F.3d at 491-92 (quoting
Allstate Ins. Co. v. Herron, 634 F.3d 1101, 1111
(9th Cir. 2011)); accord McDowell v. Calderon, 197
F.3d 1253, 1255 n.1 (9th Cir. 1999) (en banc). Schlabach
fails to meet this standard.
argues the Court erred by relying on an irrelevant
declaration and irrelevant exhibits from an Internal Revenue
Service (“IRS”) agent who lacks personal
knowledge to testify or authenticate documents. ECF No. 27 at
2-5. Thus, Schlabach objects to this evidence under Federal
Rules of Evidence 401, 602, 901, and 902. Id. But
Schlabach raises this objection for the first time in his
motion for reconsideration. See Kona Enterprises, Inc. v.
Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000)
(stating a motion to alter or amend a judgment under Rule
59(e) “may not be used to raise arguments or
present evidence for the first time when they could
reasonably have been raised earlier in the
litigation”); accord Rishor, 822 F.3d at 492.
Schlabach claims he raised this objection earlier, his
contention was not evidentiary in nature. He wrote,
“ECF No. 22-2 . . . In its entirety contains
unsubstantiated false, inflammatory, discriminatory, racist,
slanderous, and prejudicial claims against me and I hereby
object to their admission into the court record.” ECF
No. 24 at 2. The Court addressed his contention, noting,
“Schlabach makes bald assertions objecting to the[ IRS
agent's] explanations but presents no significant
probative evidence to genuinely dispute them.” ECF No.
25 at 15. Schlabach never previously objected on grounds of
relevance, personal knowledge, or authentication.
Schlabach's evidentiary analysis is incorrect. The
evidence is relevant because it tends to make it more
probable that Schlabach is liable for frivolous filing
penalties. See Fed. R. Evid. 401. The IRS agent had
personal knowledge of the matters to which she testified
because they are based on her professional experience in the
IRS Frivolous Return Program as well as her own review and
analysis of records in Schlabach's file. See ECF
No. 22-2 at 2-7; Fed.R.Evid. 602. The IRS agent authenticated
those records by demonstrating she has knowledge of them and
they are what they purport to be-“true and correct
cop[ies]” of “[p]ertinent information contained
in the [IRS Frivolous Return Program's] Master Action
History for John Schlabach.” ECF No. 22-2 at 6; see
also Fed. R. Evid. 901(a)(1). The Court did not err.
argues the Court erred by relying on the IRS agent's
declaration because it said “there is no
evidence.” ECF No. 27 at 3. He is mistaken, as the
declaration says no such thing. See ECF No. 22-2.
argues the Court erred by ignoring his affidavit, which
“completely contradicts” the IRS agent's
declaration. ECF No. 27 at 3-5. Contrary to Schlabach's
assertion, the Court considered the entire record, cited his
filings numerous times, and ultimately concluded, under the
applicable legal standard, that he “failed to point to
specific facts establishing a genuine dispute of material
fact for trial” and “failed to introduce the
significant probative evidence required to defeat summary
judgment.” ECF No. 25 at 18; see also Id. at
2. The Court noted “Schlabach makes bald assertions
objecting to the[ IRS agent's] explanations but presents
no significant probative evidence to genuinely dispute
them.” Id. at 15. The Court also explained
that, “to the extent Schlabach has identified genuine
factual disputes, they are not material because they do not
affect the outcome of this litigation.” Id. at
18. Throughout the process, the Court “[v]iew[ed] all
evidence and dr[e]w all reasonable inferences in the manner
most favorable to Schlabach.” Id. His claims
still failed. See id.
argues the Court erred by granting summary judgment in favor
of the United States without giving him an opportunity to
obtain discovery. ECF No. 27 at 2-4. But Schlabach is not
entitled to discovery where, as here, the Court (1) lacks
subject matter jurisdiction over three out of his four
claims, and (2) concludes his fourth claim is, as a matter of
law, based on a frivolous tax position that a reasonable
person would know is meritless and reflects indefensible tax
evasion. See ECF No. 25 at 5, 7, 12, 16, 18.
Discovery would not change either of the Court's
determinations. The factual disputes Schlabach raises are
immaterial to the determinative issues in this case.
argues the Court erred because the tax position he took could
not be frivolous where he cited to a valid federal statute.
ECF No. 27 at 3. As the Court noted, “Schlabach begins
with the correct premise that currency is a redeemable
obligation of the United States. But from there, Schlabach
distorts matters by claiming the United States'
obligation to redeem currency automatically offsets his tax
obligation to the United States.” ECF No. 25 at 11-12;
see also Id. at 15-16. This distortion, the Court
concluded, “is frivolous . . . because it lacks any
objective basis in fact or law.” Id. at 16. It
is irrelevant that Schlabach subjectively believed his tax
position was correct. Id. at 16-17. A reasonable
person would know Schlabach's tax position is meritless
and reflects indefensible tax evasion. Id. at 16.
argues the Court erred by assuming, without evidence, that
the tax assessments were validly made in accordance with
mandated procedures. ECF No. 27 at 3-4. The decision rests on
ample evidence, as the Court previously directed both parties
to “submit all evidence pertinent to the summary
judgment motion, as it relates to the specific facts
outlined.” ECF No. 19 at 12-13. The United States then
submitted the IRS agent's declaration, which
“explains how IRS personnel followed supervisor
approval procedures in determining argument codes 16 and 30
apply to Schlabach's position.” ECF No. 25 at
14-15. While the United States did not submit all evidence
that conceivably could have been submitted, what it submitted
was sufficient to meet its burden of proving Schlabach is
liable for frivolous filing penalties. See Id. at
7-9, 17-18. Nothing more was required.
all, no grounds exist for the Court to grant Schlabach the
extraordinary remedy of altering or amending the judgment
under Rule 59(e). The Court will not reconsider the judgment
in favor of the United States.