UNITED STATES OF AMERICA v. BALICE et al
Filing
245
OPINION. Signed by Judge Kevin McNulty on 5/23/2018. (JB, )
Case 2:14-cv-03937-KM-JBC Document 245 Filed 05/24/18 Page 1 of 8 PageID: 3246
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
UNITED STATES OF AMERICA,
Plaintiff,
Civ. No. 14-cv-3937-KM-JBC
vs.
OPINION
MICHAEL BALICE et al.,
Defendants.
KEVIN MCNULTY, U.S.D.J.:
Mr. Balice has filed dozens of motions under various titles. The court
has, in several prior opinions, considered Mr. Balice’s arguments and rejected
them. (ECF Nos. 71, 102, 152, 167, 208, 210, 216). I have also required that he
seek leave of the Magistrate Judge before filing further motions. (See, e.g., ECF
Nos. 102, 152). Nevertheless, Mr. Sauce has submitted several more motions.
(ECF Nos. 229, 230, 233, 234, 236, 239).’ They might be rejected on the
ground that they were filed without leave. In the interest of efficiency, however,
I briefly consider them.
I.
MOTION TO ALTER OR AMEND ORDER OF SALE (ECF No. 229)
Mr. Salice requests reconsideration of the earlier order granting
summan judgment in favor of the United States. (ECF No. 229).
Reconsideration is denied for two reasons: (A) the motion is untimely and (B) it
raises no new arguments.
Some of which were held in abeyance during the pendency of a stay in
bankruptcy, but the stay has been lifted. I ordered the motions reinstated and set a
schedule for responding and reply briefs. (ECF no. 243)
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(A) First, Mr. Balice’s motion for reconsideration is untimely. Local Civil
Rule 7.1(i) provides that a motion for reconsideration must be served and filed
within fourteen days after the entry of the order. The order granting summary
judgment for defendant was issued on August 9, 2017. (ECF No. 211). Mr.
Balice did not file his motion for reconsideration until October 25, 2017—well
past the fourteen-day deadline. (ECF No. 229). Mr. Balice’s motion would be
untimely even under Federal Rule of Civil Procedure 59(e), which states that
“[al motion to alter or amend judgment must be filed no later than 28 days
after the entry of judgment.”
(B) Second, Mr. Balice’s motion does not raise arguments appropriate for
a motion for reconsideration. Reconsideration is proper in three situations:
(1) an intervening change in the law; (2) new, previously unavailable, evidence
has become available; or (3) to correct a clear error of law or prevent manifest
injustice. See N. River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194, 1218
(3d Cir. 1995); Carmichael v. Everson, No. 3-cv-4787, 2004 WL 1587894, at *1
(D.N.J. May 21, 2004). Mr. Balice claims that letters sent to him by the IRS
“directly contradict this court’s summary judgment decisions.” (ECF No. 229 at
¶
2). Mr. Balice does not specifically identify what is wrong with the IRS’s
accounting; he objects that the balance has changed. Each letter clearly sets
forth the “account balance before this change,” which is consistent with prior
records. (See ECF Nos. 2 19-6, 2 19-7). The IRS updated Mr. Balice’s account
balance because of ongoing, statutorily determined interest and penalties. This
is not new evidence, a new argument, or an intervening change in law that
could provide a basis for reconsideration. Therefore, Mr. Balice’s request for
reconsideration is denied.
II.
MOTION TO STAY ENFORCEMENT OF THE ORDER OF THE
COURT PENDING RESOLUTION OF APPEALS (ECF Nos. 230, 239)
Mr. Balice’s circumstances do not warrant a stay pending appeal. Courts
in the Third Circuit consider the following factors when considering such a
stay: (A) whether the stay applicant has made “a strong showing that they are
likely to succeed on the merits”; (B) whether the applicants will be irreparably
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injured absent a stay; (C) whether the issuance of the stay will substantially
injure the other parties interested in the proceeding; and (D) where the public
interest lies. Thomerv. Sony Comput. Entm’tAm. LLC, No. 9-cv-1894, 2013 WL
1868500, at *1 (D.N.J. May 3, 2013). Because granting a stay is “an exercise of
judicial discretion”, not a matter of right, a stay applicant “bears the burden of
showing the circumstances justify an exercise of that discretion.” Nken v.
Holder, 556 U.S. 418, 433-34 (2009).
(A) First, Mr. Balice has not made a “strong showing” that is he likely to
succeed on appeal. Mr. Sauce’s primary basis for appeal is that the Sixteenth
Amendment does not authorize enforcement of a direct tax without
apportionment. Mr. Balice previously made this argument to the Third Circuit
on an interlocutory basis. See Balice v. Comm’r, 634 F. App’x 349, 349-50 (3d
Cir. 2016). The Third Circuit held that “the type of tax-protestor arguments
that Balice raised have long been rejected as frivolous.” Id. at 350 & n. 1. Mr.
Balice cannot make a “strong showing” of likely success.
(B) Second, Mr. Balice has not demonstrated irreparable harm. The IRS
may seize Mr. Balice’s property’. However, if a court later ruled that he was not
liable for some or all of the payment, the damage could be undone by an order
requiring repayment with appropriate interest. See In re Carlson, 224 F.3d 716,
718 (7th Cir. 2000); Sherman a Nash, No. 1551-71, 1977 WL 1143, at *23
(D.N.J. Apr. 14, 1977). “The possibility that adequate compensatory or other
corrective relief will be available at a later date, in the ordinary course of
litigation, weighs heavily against a claim of irreparable harm.” Sherman, 1977
WL 1143, at *3 (citation omitted). Additionally, allegations of economic
hardship alone are usually insufficient to establish irreparable harm. See
Church of Scientology of Cal. v. United States, 920 F.2d 1481, 1489 (9th Cir.
1990); see also Bob Jones Univ. v. Simon, 416 U.S. 725, 745-46 (1974).
Mr. Balice also seeks a stay to avoid harms that would result from his
own actions. For instance, Mr. Balice argues that he “will be subject to
indefinite arrest and incarceration for contempt for refusing to vacate the
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premises [of his property] while appeals are pending.” (ECF No. 239
¶ 33). This
harm would result from Mr. Balice refusing to obey a court order—not from the
denial of a stay.
(C) and (D) Third,2 a stay would injure the public interest. A taxpayer
cannot delay the collection of taxes indefinitely by filing frivolous motions and
actions. The Government must “assess and collect taxes as expeditiously as
possible with a minimum of preenforcement judicial interference.” Bob Jones
Univ., 416 U.S. at 736. Mr. Balice has delayed resolution of this case numerous
times. The public’s interest in prompt enforcement of the tax laws weighs
heavily against granting a stay.
In sum, none of the factors weigh in favor of granting a stay. Mr. Balice’s
requests for a stay pending appeal are thus denied.
III.
MOTION TO VOID JUDGMENT FOR LACK OF SUBJECT-MATTER
JURISDICTION (ECF Nos. 233, 234)
Mr. Balice argues that this court lacks subject-matter jurisdiction to
adjudicate this matter. He argues that the new tax laws, effective January 1,
2018, re-enact “the same scheme of income taxation” that he has already
many times argued is unconstitutional. (ECF No. 233,
¶ 6). He claims this is
new evidence that allows him to relitigate this issue.
Mr. Balice has repeatedly filed motions to dismiss for lack of jurisdiction
and constitutional authority. (See, e.g., ECE Nos. 7, 8, 26, 27, 36, 47, 49). He
relies on the same sequence of arguments: The Constitution does not give
Congress the power to collect income taxes. Thus, Congress cannot pass laws
authorizing the collection of taxes. This court therefore lacks all jurisdiction to
hear income-tax cases. Mr. Balice’s argument remains unavailing.
As I have written previously, it is well settled that Congress has the
power to levy an income tax:
When the Government is a party to the proceeding, the third and fourth factors
for granting a stay merge. See Nken v. Holder, 556 U.S. 418, 435 (2009).
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The Sixteenth Amendment to the U.S. Constitution provides
that “[t]he Congress shall have power to lay and collect taxes on
incomes, from whatever source derived, without apportionment
among the several States, and without regard to any census or
enumeration.” U.S. Const. amend. XVI. Balice points out that the
Amendment does not contain an “enforcement provision.” (Dkt. No.
15, 20; Dkt. No. 26, ¶ 13). Therefore, he says, Congress has no
authority to pass legislation concerning the collection of taxes, and
this Court can have no jurisdiction. (Dkt. No. 36, ¶ 11)
True, the Sixteenth Amendment lacks a separate
“enforcement provision.” That is, it does not contain a statement
that “Congress shall have power to enforce this article by
appropriate legislation,” like the ones found in, for instance, the
Thirteenth, Fourteenth, Fifteenth, Eighteenth, and Nineteenth
Amendments. But those Amendments contain an enforcement
provision for a particular reason: their substantive provisions do
not themselves confer power upon Congress, but on the citizenry.
For instance, the Fifteenth Amendment provides that “[t]he right of
citizens of the United States to vote shall not be denied or abridged
by the United States or by any State on account of race, color, or
previous condition of servitude.” U.S. Const. Amd. XV. If the
drafters of the Fifteenth Amendment had simply left it at that, it
could be argued that they had failed to grant Congress the
authority to pass laws concerning discrimination in voting. Thus,
the Amendment explicitly grants Congress the power to enforce the
rights it granted to the citizens.
In the Sixteenth Amendment, though, no such clause was
necessary. The substantive language of the Sixteenth Amendment
itself confers power on Congress: “The Congress shall have the
power to lay and collect taxes on incomes
Once vested with this
power, under the Necessary and Proper clause Congress could
pass legislation to implement that power. See U.S. Const. art. I, § 8
(“Congress shall have Power
To make all Laws which shall be
necessary and proper for carrying into Execution the foregoing
Powers, and all other power vested by this Constitution in the
Government of the United States, or in any Department or Officer
thereof.”). Thus, no separate enforcement clause is necessary.
...“
...
Under Balice’s reading, the Sixteenth Amendment, although
it provides that “Congress shall have power” to lay and collect
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taxes, would remain a dead letter. It is difficult to imagine how
Congress might exercise that “power” unless through legislation.
Balice’s interpretation is illogical, and I reject it.
United States v. Balice, No. 14-cv-3937, 2015 WL 4251146, at *10il (D.N.J.
July 10, 2015). This court has jurisdiction over the present action pursuant to
28 U.S.C.
§ 1340 and 1345, in conjunction with 26 U.S.C. § 7402(a) and
7403. See United States v. Jones, 877 F. Supp. 907, 912 (D.N.J.), aff’d, 74 F.3d
1228 (3d Cir. 1995).
For those reasons, Mr. Balice’s motions for dismiss for lack of
subject-matter jurisdiction are denied.
IV.
MOTION TO RECUSE (ECF No. 236)
Mr. Balice has filed a motion seeking my recusal under 28 U.S.C.
and 28 U.S.C.
§ 144
§ 455. He argues that I have repeatedly demonstrated
an improper prejudicial favoritism for the Plaintiff United States
in its rulings and Orders issued in this action which have been
used by the court to improperly engineer judgment for the Plaintiff
United States by inventing an ungranted subject-matter jurisdiction
of the court that has been unlawfully taken and fraudulently used
by this court to enforce a direct unapportioned assessment of tax
improperly claimed as owed directly
(ECF No. 236, pp.
¶ 1). Mr. Balice also accuses the court of
ignoring the facts on the record of the action; for ignoring the law
as actually written; for ignoring the arguments of the litigating
parties as they have actually been argued in the pleadings on
the record; for locking the Defendant out of the courtroom; and for
denying all formal motions and informal requests for hearings
before the court made by Defendant
(ECF No. 236,
¶ 2).
One of the cited statutes, 28 U.S.C.
§ 455(a), provides that “[a]ny justice,
judge or magistrate judge of the United States shall disqualify himself in any
proceeding in which his impartiality might reasonably be questioned.” Under
Section 455(a), it is not the case that a judge should recuse himself where, in
his opinion, sitting would be inappropriate. The correct inquiry is whether the
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judge’s impartiality has been reasonably questioned. Karas u. Robbins, No. 8cv-5264, 2009 WL 5174654, at *1 (D.N.J. Dec. 17, 2009).
The other cited recusal statute, 28 U.S.C.
§
144, provides that
“[wihenever 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.” If the motion is made
pursuant to Section 144, another judge must rule on the recusal motion so
long as the supporting affidavit meets the “sufficiency test.” Karas, 2009 WL
5174654, at *1 (citing In re Kensington Int’l Ltd., 353 F.3d 211, 224 (3d Cir.
2003)). This Circuit has held that the challenged judge must determine only
the sufficiency of the affidavit, not the truth of the assertions. Mims v. Shapp,
541 F.2d 415, 417 (3d Cir. 1976). The Third Circuit has also held that the
allegations in such an affidavit must convince a reasonable person of the
Judge’s impartiality. NLRB v. New Vista Nursing & Rehab., 870 F.3d 113, 125
(3d Cir. 2017).
Recusal is not appropriate in these circumstances under either 28 U.S.C.
§
455 or 28 U.S.C.
impartiality.
f
§
144. Mr. Balice has not reasonably questioned my
Karas, 2009 WL 5174654, at *2. A reasonable person would
not be convinced of the court’s impartiality after reading Mr. Balice’s papers.
Mr. Balice’s motion is conclusory and devoid of factual allegations that would
render recusal appropriate.
Mr. Balice repeatedly argues that I have been prejudicially biased toward
finding that the United States government has the authority to tax his income.
The Third Circuit has held, inter alia, that Mr. Balice presents “the type of
tax-protester arguments that
...
have long been rejected as frivolous.” In re
Balice, No. 16-cv-l242, 644 F. App’3c 112, 113 (3d Cir. Mar. 11, 2016) (quoting
Balice v. Comm’r, No. 15-cv-2366, 634 F. App’x 349, 350 (3d Cir. 2016)). I have
declined to accept Mr. Balice’s legal arguments because long-standing
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precedent has found them unavailing. This is not bias; it is the application of
precedent.
Removai under 28 U.S.C.
§ 144 is also not appropriate. That section
requires an affidavit of fact that must convince a reasonable person of the
Judge’s impartiality. NLRB, 870 F.3d at 125. Mr. Balice’s affidavit simply
concludes that I have acted in a prejudicial manner. It does not include
assertions of fact in support of these conclusions. A conclusrny affidavit is not
sufficient for recusal. Smith v. Vidonish, 210 F. App’x 152, 155-56 (3d Cir.
2006) (holding that conclusory statements in a recusal affidavit need not be
credited).
A party may not make such unwarranted assumptions based on
the fact that the party was unsuccessful. Were this not the case,
any unsuccessful litigant would be able to disqualify the Judge
who rendered the unfavorable ruling. In short, a party’s
disagreement with a Court’s ruling is not a basis for recusal.
Karas, 2009 WL 5174654, at *2 (citing In re TMILitig.. 193 F.3d 613, 728 (3d
Cir. 1999)). Mr. Balice has presented mere conclusions that he has been
unsuccessful in asserting tax-protestor arguments and that therefore I have
been biased against him. Such conclusory allegations are not a proper basis for
recusal.
V.
CONCLUSION
For the foregoing reasons, Mr. Balice’s motions are denied. An
appropriate order accompanies this opinion.
Dated: May 23, 2018
KEVIN MCNULTY
United States District J
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