United States of America v. Bigley et al

Filing 238

ORDER denying 231 and 232 Motions to Disqualify Judge. The Motions for Reconsideration contained in those documents are referred back to Judge Holland for further ruling. Signed by Judge G Murray Snow on 8/10/17.(DXD)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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United States of America,
Plaintiff,

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ORDER

v.

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No. CV-14-00729-PHX-HRH

Michael A Bigley, et al.,

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Defendants.

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Pending before the Court are the Verified Motion for Relief from Order and for

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Disqualification of Judge of Defendant Michael A. Bigley, (Doc. 231), and the Motion

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for Relief from Order and for Disqualification of Judge Holland of Defendants Robert B.

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Kelso and Raeola D. Kelso, (Doc. 232). The underlying action is presided over by Judge

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H. Russel Holland; the consideration of Defendants’ motions for disqualification was

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assigned to this Court by random lot. For the reasons set forth below, the Court denies

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the motions for disqualification and refers the motions for reconsideration back to Judge

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Holland.

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BACKGROUND

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The United States commenced a civil action on April 8, 2014 against Michael A.

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Bigley, Carolyn E. Bigley, Robert B. Kelso, Raeola D. Kelso, and ISA Ministries

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(together, “the Defendants”) to obtain a judgment for outstanding income taxes from

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2004–2007. The United States alleged that the Bigleys, in an effort to defraud present

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and future creditors, fraudulently transferred ownership of their real property to the

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Kelsos and to ISA Ministries. The United States sought to enforce federal tax liens on

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Defendants’ real property, because it represented substantially all of the Bigleys’ assets.

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The case was assigned to Judge Holland, a visiting senior judge from the District of

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Alaska.

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Throughout the proceedings, Defendants raised repeated challenges to Judge

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Holland’s decisions as well as his ability to hear the case at all. They argued, among

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other things, that the district courts of the United States can entertain actions initiated by

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the “United States,” but not by—as here—the “United States of America”; that the

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United States District Court for the District of Arizona is not actually an Article III court

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but an Article I legislative court; and that Judge Holland, as a visiting senior judge,

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lacked authorization to hear the case. These arguments were rejected.

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The United States moved for summary judgment against the Bigleys and the

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Kelsos and for default judgment against ISA Ministries. On May 10, 2017, Judge

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Holland granted those motions. In, his order, Judge Holland reiterated his rejection of the

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Defendants’ jurisdictional arguments. (Doc. 227 at 2–3.)

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On June 6, 2017, Michael Bigley and the Kelsos filed the motions now pending

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before this Court.

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jurisdictional authorization to preside over the action. (Doc. 231 at 3–7; Doc. 232 at 2–

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7.) Defendants further assert that Judge Holland demonstrated bias by issuing discovery

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sanctions against them, denying the Bigleys’ request to dismiss the action, and granting

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the government’s summary judgment motion. (Doc. 231 at 1–2.) Defendants assert that

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Judge Holland, by granting the government’s Motion for Summary Judgment, deprived

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Defendants of due process, insofar as Defendants were denied the right to a jury trial on

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disputed facts, denied the right to testify and demonstrate errors in the government’s

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exhibits, and deprived of real property as a result of the judgment entered against them.

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(Doc. 231 at 8–13; Doc. 232 at 8–10.) The motions thus largely take issue with legal

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rulings Judge Holland made (in some cases multiple times), and further assert that the

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rulings demonstrate that Judge Holland must be disqualified from presiding over the case.

In their motions, Defendants assert that Judge Holland lacked

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Judge Holland requested that the pending motions be referred for an independent

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judicial evaluation of whether the Defendants’ allegations merit his recusal. (Doc. 234.)

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The consideration of the motions was assigned to this Court by random lot. The United

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States has filed a response to the motions insofar as they seek Judge Holland’s

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disqualification, (Doc. 235), and the Defendants have replied, (Doc. 237). Michael

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Bigley also filed a document entitled “Notice to Principal is Notice to Agent, Notice to

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Agent is Notice to Principal” in which he purported to order “all Officers of the Court

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including all Judges and Attorneys” to cease and desist “any actions bringing harm to

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[Bigley] in any way” and threatening suit for any such harm. (Doc. 236.)

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DISCUSSION
I.

Legal Standard
Two statutes govern whether a federal judge must recuse in a particular case. The

first, 28 U.S.C. § 144 states:
Whenever a party to any proceeding in a district court makes
and files a timely and sufficient affidavit that the judge before
whom the matter is pending has a personal bias or prejudice
either against him or in favor of any adverse party, such judge
shall proceed no further therein, but another judge shall be
assigned to hear such proceeding. The affidavit shall state the
facts and the reasons for the belief that bias or prejudice
exists, . . . A party may file only one such affidavit in any
case. It shall be accompanied by a certificate of counsel of
record stating that it is made in good faith.
28 U.S.C. § 144. The second statute, 28 U.S.C. § 455, further specifies:
(a) Any justice, judge, or magistrate of the United States shall
disqualify himself in any proceeding in which his impartiality
might reasonably be questioned.
(b) He shall also disqualify himself in the following
circumstances:
(1) Where he has a personal bias or prejudice
concerning a party, or personal knowledge of disputed
evidentiary facts concerning the proceeding.

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28 U.S.C. § 455.

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The substantive standard for recusal under 28 U.S.C. § 144 and 28 U.S.C. § 455 is

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“whether a reasonable person with knowledge of all the facts would conclude that the

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judge’s impartiality might reasonably be questioned.” See United States v. Hernandez,

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109 F.3d 1450, 1453–54 (9th Cir. 1997) (quoting United States v. Studley, 783 F.2d 934,

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939 (9th Cir. 1986)); see also United States v. Holland, 519 F.3d 909, 914 (9th Cir. 2008)

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(“The reasonable person in this context means a well-informed, thoughtful observer, as

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opposed to a hypersensitive or unduly suspicious person.”).

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statutory provisions the Supreme Court has determined that the judge’s impartiality

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generally must stem from an “extrajudicial source.” See id. (quoting Liteky v. United

In interpreting these

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States, 510 U.S. 540, 554–56 (1994)).

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constitute a valid basis for a motion to disqualify. This is because “opinions formed by

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the judge on the basis of facts introduced or events occurring in the course of the current

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proceedings, or of prior proceedings do not constitute a basis for a bias or partiality

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motion unless they display a deep-seated favoritism or antagonism that would make fair

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judgment impossible.”

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dissatisfaction, annoyance, and even anger, that are within the bounds of what imperfect

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men, and women, even after having been confirmed as federal judges, sometimes

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display” are not sufficient to merit recusal. Id. at 555–56. “A judge’s ordinary efforts at

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courtroom administration—even a stern and short-tempered judge’s ordinary efforts at

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courtroom administration—remain immune.” Id. Thus, statements made in ruling on

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particular motions establish bias only in extremely rare circumstances.

A court’s judicial rulings “almost never”

Liteky, 510 U.S. at 555.

Even “expressions of impatience,

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The moving party bears the burden of proving facts sufficient to justify recusal.

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See Holland, 519 F.3d at 913 (noting disqualification is a fact-driven inquiry). The mere

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filing of an affidavit of disqualification pursuant to 28 U.S.C. § 144 does not amount to

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sufficient proof. Pursuant to the terms of the statute, the Court must first determine

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whether the claims of bias are legally sufficient before determining that the Court “shall

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proceed no further” on the movant’s case. The statute “must be given the utmost strict

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construction to safeguard the judiciary from frivolous attacks upon its dignity and

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integrity, and to prevent abuse and to insure orderly functioning of the judicial system.”

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Rademacher v. City of Phoenix, 442 F. Supp. 27, 29 (D. Ariz. 1977) (citations omitted).

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Allegations that are merely conclusory are not legally sufficient.

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$292,888.04 in U.S. Currency, 54 F.3d 564, 566 (9th Cir. 1995); United States v. Vespe,

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868 F.2d 1328, 1340 (3d Cir. 1989).

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II.

United States v.

Analysis

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A.

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Defendants have failed to timely file their recusal motions, as required by statute.

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See 28 U.S.C. § 144. The Ninth Circuit has not defined a fixed time after which a party

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is held to have untimely filed a recusal motion after ascertaining grounds for such a

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motion. However, it is generally held that parties that suspect possible bias or prejudice

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toward them must not withhold filing recusal motions until their dispute has been

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resolved on the merits. See E. & J. Gallo Winery v. Gallo Cattle Co., 967 F.2d 1280,

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1295 (9th Cir. 1992) (“To hold otherwise would encourage parties to withhold recusal

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motions, pending a resolution of their dispute on the merits, and then if necessary invoke

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section 455 in order to get a second bite at the apple.”). Here, Defendants stated they

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suspected bias or prejudice toward them throughout the proceedings, but did not file

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recusal motions until over a month after a judgment was already entered against them.

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Further, Defendants have not provided any facts demonstrating good cause for delaying

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the filing of recusal motions. See Studley, 783 F.2d at 939 (noting a motion for recusal

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filed after a judgment is entered is “presumptively untimely absent a showing of good

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cause for its tardiness”).

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Even assuming the timeliness of the Defendants’ motions, Judge
Holland’s rulings on jurisdiction and his fitness to preside as a visiting
senior judge, and other alleged legal errors during the proceedings, do
not require his recusal.

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The Defendants allege no extrajudicial sources by which Judge Holland might

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have developed a bias against them, nor do they identify any conduct on his part, apart

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from his rulings in the case, by which they ask this Court to infer bias. Indeed, Michael

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B.

The Defendants’ motions for recusal are untimely.

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Bigley states in his affidavit that Judge Holland “has demonstrated gross incompetency in

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the application of law to fact in accordance with Rules of Law that it must be construed

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as bias or prejudice against the Defendant . . . .” (Doc. 233 at 1.) But only in the “rarest

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of circumstances” will judicial rulings evidence the degree of favoritism or antagonism

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toward a litigant necessary to require a judge’s recusal. Liteky, 510 U.S. at 555.

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No such rare circumstances exist here. Defendants’ argument that the “United

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States” is a different entity from the “United States of America” has been characterized in

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other courts as “either purposefully comedic or malicious with the intent to harass or

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waste the limited resources of the court.” United States v. Wacker, 173 F.3d 865, 1999

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WL 176171, at *2 (10th Cir. 1999) (unpublished). Defendants’ argument that the United

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States District Courts are not Article III courts has likewise been thoroughly repudiated

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elsewhere. See, e.g., United States v. Robertson, No. 2:13-cr-141-JAD-VCF, 2014 WL

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4956208, at *6–8 (D. Nev. Oct. 2, 2014).

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Likewise, Judge Holland’s determination that he is qualified to preside over the

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case shows no bias or partiality. It has long been settled that a senior judge may sit by

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designation in another district or circuit.

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The act [of assuming senior status] does not, and indeed could
not, endue him with a new office, different form but
embracing the duties of the office of judge. He does not
surrender his commission, but continues to act under it. He
loses his seniority in office, but that fact, in itself, attests that
he remains in office. A retired District Judge need not be
assigned to sit in his own district. And if a retired judge is
called upon by the Chief Justice or a Senior Circuit Judge to
sit in another district or circuit, and he responds and serves
there, his status is the same as that of any active judge.

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Booth v. United States, 291 U.S. 339, 350–51 (1934) (internal citations omitted)

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(emphasis added). That Judge Holland rejected meritless arguments in no way suggests

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bias against the Defendants.

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Similarly, Defendants’ allegations of legal errors with respect to discovery

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sanctions, the denial of their motion to dismiss, and granting of the government’s motion

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for summary judgment are not extrajudicial in nature and do not serve as a basis for

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recusal.

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favoritism toward the opposing party, are not sufficient to justify recusal. See Studley,

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783 F.2d at 939 (noting a judge’s prior adverse ruling is not sufficient cause for recusal

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absent evidenced bias or favoritism (citation omitted)).

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provided any factual allegations suggesting that Judge Holland’s actions require his

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recusal.

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Adverse rulings against the Defendants, without any evidence of bias or

Defendants have thus not

IT IS THEREFORE ORDERED that Defendants’ Motions to Disqualify Judge

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Holland, as contained in Doc. 231 and Doc. 232, are DENIED.

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Reconsideration also contained in those documents are referred back to Judge Holland for

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further ruling.
Dated this 10th day of August, 2017.

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Honorable G. Murray Snow
United States District Judge

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The Motions for